In Coast Community College District v. Commission on State Mandates, the Supreme Court today held that several community college districts might not be entitled to compensation for new state regulations imposing conditions that could threaten the districts’ state aid. The California Constitution requires reimbursement by the state “[w]henever the Legislature or any state agency mandates a new program or higher level of service on any local government.”
The court’s opinion by Justice Joshua Groban found it significant that the regulations do not legally compel the districts to adopt new standards, even though the districts “face the risk of potentially severe financial consequences if they chose not to do so.” “[T]he regulations induce rather than obligate compliance,” the court said.
But, the court also said, inducing compliance could be enough to require reimbursement under “the concept of ‘practical compulsion,’ a theory of mandate that arises when a statutory scheme does not command a local entity to engage in conduct, but rather induces compliance through the imposition of severe consequences that leave the local entity no reasonable alternative but to comply.” However, the court left it to the Court of Appeal to analyze that theory in the first instance.
Justice Goodwin Liu wrote a separate concurrence asserting the Court of Appeal on remand should determine not only the practical compulsion issue, but also a new theory of legal compulsion. He would not foreclose a legal compulsion rationale for reimbursement: “the fact that neither the parties nor the courts below have discussed [the additional theory] is exactly why I would not go as far as the court does today.”
The court reverses the Third District Court of Appeal’s opinion, which the Supreme Court had already depublished when it granted review.