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Law360 (April 8, 2020, 2:39 PM EDT) --
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| Brandon Young |
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| Jacob Itzkowitz |
Meanwhile, California Gov. Gavin Newsom has been active in exercising his executive order authority in response to the COVID-19 crisis. Over the past month, the governor has issued more than a dozen executive orders intended to address COVID-19, ranging from business closures, limitations on price-gouging, changes to opening meeting and records laws, evictions, and even the period for review of proposed, nonemergency regulations.[1]
With several executive orders now online, the next round of changes in law and policy to address the COVID-19 crisis may come from the legislative and administrative spheres, bringing into view how emergencies will be addressed under new statutes or regulations. Local governments have already started with this work. For example, in Los Angeles, the city council recently passed a new supplemental paid sick leave ordinance using what is known as an urgency clause.
This article offers a high-level overview of the process for instituting urgency clauses and emergency regulations, what constitutes "urgency" or an "emergency," and the requirements of these emergency powers under California law.
What is an urgency clause?
In California, an urgency clause permits a legislative body — either the state or a local government — to pass legislation that takes effect immediately upon enactment, i.e., when signed by the relevant executive officer. According to the California Constitution, "[u]rgency clauses are those necessary for the immediate preservation of public peace, health, or safety."[2]
Urgency clauses must be accompanied by "[a] statement of facts constituting the necessity," and the proposed legislative enactment requiring urgency be subject to a two-thirds vote. The twin requirements of necessity and a supermajority vote illustrate that urgency clauses are used sparingly compared with normal legislation.
What is the standard for review of an urgency clause?
While infrequent, litigants occasionally challenge the validity of an urgency clause. The courts have applied a heightened standard of review, explaining that "a declaration of urgency by the Legislature will not be declared invalid unless it appears clearly and affirmatively from the Legislature's statement of facts that a public necessity does not exist."[3]
Doubts over whether a particular legislative enactment is necessary for the immediate preservation of public peace, health or safety "should be resolved in favor of the legislative action."[4] Accordingly, courts do not second-guess a legislative determination of urgency unless a declaration of urgency is so clearly insufficient on its face that it can be seen that the urgency does not exist.
What limitations apply to urgency clauses?
A statute with an urgency clause may not "grant any franchise or special privilege, or create any vested right or interest."[5] Only a handful of cases discuss the "franchise or special privilege" and "vested right or interest" exceptions to a legislative body's power to enact urgency measures.
A special privilege is one "granted to a person or class of persons to the exclusion of others and in derogation of the common right."[6] Likewise, a "franchise" is generally regarded as "[a] right conferred by the government, esp. one given to a public utility, to use property for a public use but for private profit."[7] Finally, a "vested right" is a "right belonging completely and unconditionally to a person as a property interest which cannot be impaired or taken away without the consent of the owner."[8] However, in all instances, these terms are neither fully defined nor developed in California case law.
What happens if an urgency clause is invalidated?
Where courts have overturned an urgency clause, the rest of the statute has remained valid, and only the time by which the law took effect has changed. Courts explain that "if the urgency clause of legislation is found constitutionally unsound, the remainder of the statute is nonetheless valid, and takes effect 'at the regular time appointed by law.'"[9] However, at least conceptually, any immediate action taken pursuant to legislation passed with an urgency clause that is later deemed void could itself be voided if the legislation is held invalid.
What are emergency regulations?
The California Administrative Procedure Act, similar to its federal counterpart, includes an emergency rulemaking process intended to expedite the notice and comment periods for a particular regulation. Specific requirements for emergency rulemakings may differ depending on the California state agency, but there must be an "emergency." Emergency regulations are those where the government demonstrates that there is "a situation that calls for immediate action to avoid serious harm to the public peace, health, safety, or general welfare."[10]
How long do emergency regulations last?
Emergency regulations have a limited life span. First, the regulations are subject to review and approval within 30 days, and can be ordered repealed if the Office of Administrative Law, or OAL, determines that the agency did not follow required emergency procedures or if the regulation is otherwise deficient for failure to meet the requirements of the California Administrative Procedure Act.[11]
Among other items, the OAL will review an emergency regulation using standards defined in the Government Code for "necessity," "authority," "clarity," "consistency," "reference" and "nonduplication."[12] Even after approval, emergency regulations may last for only 180 days unless the agency takes steps to ratify the regulation.[13]
How must agencies demonstrate that an emergency exists?
Certain statutes may expressly define what constitutes an emergency, but in general, a finding of emergency must be established by specific facts, supported by substantial evidence that an emergency exists and there is a need for the immediate adoption of a proposed regulation.[14] Notably, courts accord substantial deference to agency findings of emergency, but will overturn emergency regulations for abuse of discretion.[15]
For example, a court rejected a finding of fiscal emergency by the Department of Health Care Services based solely on budget constraints.[16] Thus, a finding of emergency based only on convenience is not enough.
What happens to an emergency regulation if there is no emergency?
Emergency regulations lacking a sufficient emergency justification, or where the promulgating agency failed to comply with the required process, will be disapproved.[17] As with urgency clause legislation, it is conceivable that any actions taken under the emergency regulation could be voided if the regulation is subsequently disapproved.
Why does this matter?
California has been one of the earliest and most active states to take strong actions in response to COVID-19. While the recent focus has been on executive orders, emergency legislative and regulatory actions are just as crucial. State agencies and local governments will likely continue to push forward urgency legislation or emergency regulations that could have profound short-term impacts on businesses and personal liberties.
The legal landscape could be changing, and court decisions could resolve some of the unknown or rarely disputed aspects of urgency clauses and emergency regulations. Given the wide cross-section of companies and persons affected by the emergency actions in place or to be implemented, procedural-based challenges to those actions could increase. Clients and practitioners alike should be aware of the opportunities and limitations of bringing such challenges.
Brandon D. Young is a partner and Jacob Itzkowitz is an associate at Manatt Phelps & Phillips LLP.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
[1] See Office of Governor Gavin Newsom, Executive Orders, available at https://www.gov.ca.gov/category/executive-orders/.
[2] Cal. Const. art. IV, § 8(d).
[3] Amwest Surety Ins. Co. v. Wilson
(1995) 11 Cal.4th 1243, 1253-54.[4] Id.
[5] Cal. Const. art. IV, § 8(d).
[6] See PRIVILEGE, Black's Law Dictionary (10th ed. 2014).
[7] See FRANCHISE, Black's Law Dictionary (10th ed. 2014).
[8] Merriam-Webster Law Dictionary.
[9] People v. Camba
(1996) 50 Cal. App. 4th 857, 863.[10] Gov. Code § 11342.545.
[11] Gov. Code § 11349.6(d). The OAL is required to post notice of the filing on its website and to allow interested persons five calendar days to submit comments, unless the emergency situation "clearly poses such an immediate serious harm that delaying action to allow public comment would be inconsistent with the public interest." The OAL will order the repeal of an emergency regulation if it fails to meet the standards of Gov. Code § 11349.1 or "if it determines that the agency failed to comply with this chapter [the California Administrative Procedure Act]."
[12] Gov. Code § 11349.1.
[13] In order to ratify an emergency regulation, an agency must follow the steps required in Cal. Gov. Code §§ 11346.2 – 11347.3, including the standard notice and comment period for non-emergency regulations.
[14] Gov. Code § 11346.1(b)(2).
[15] See Doe v. Wilson
, 57 Cal. App. 4th 296, 306 (1997) (emergency regulations to bring California into compliance with new federal law prohibiting state program of "paying for routine prenatal care for illegal aliens," illegal under federal law, was "an unforeseen situation calling for immediate action").[16] California Med. Assn. v. Brian
(1973) 30 Cal. App. 3d 637, 657 (fiscal constraints on DHCS not sufficient to create emergency situation).[17] Gov. Code § 11349.6(b).
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