Stanford Law School - Robert Crown Law Library

Filed 6/19/06

IN THE SUPREME COURT OF CALIFORNIA

INDEPENDENT ENERGY PRODUCERS )
ASSOCIATION et al.,
Petitioners,
S135819
v.
) Ct.App.
3
C050115
BRUCE McPHERSON, as Secretary
of State, etc.,
Respondent;
ROBERT FINKELSTEIN et al.,
Real Parties in Interest.

As in the recent case of Costa v. Superior Court (2006) 37 Cal.4th 986
(Costa), we granted review in this case after a lower court, in an expedited
preelection decision, directed that a proposed initiative measure — in this case,
Proposition 80 — be withheld from the November 8, 2005, election ballot. Unlike
the situation presented to this court in Costa, however, in the present case the
lower court’s action was not based upon a determination that the initiative failed to
comply with a procedural requirement relating to the circulation of the initiative
petition. Here, the lower court’s decision rested upon its conclusion that in light of
the subject matter of the initiative measure at issue — which concerned energy
regulation and contained several provisions conferring additional regulatory

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authority upon the California Public Utilities Commission (PUC) —the proposed
measure was not one that, under the California Constitution, lawfully could be
adopted by a vote of the people through the initiative process but rather was one
that could be enacted only by the Legislature. Specifically, the Court of Appeal
interpreted article XII, section 5 of the California Constitution — which provides
in part that “[t]he Legislature has plenary power, unlimited by the other provisions
of this constitution but consistent with this article, to confer additional authority
and jurisdiction upon the [PUC]” — to mean that only the Legislature, and not the
electorate through the initiative process, has the authority to enact statutory
provisions that confer additional authority upon the PUC. In light of its
understanding of this constitutional language, the Court of Appeal held that the
provisions embodied in Proposition 80 could not be enacted through the initiative
process and ordered the Secretary of State to withhold the measure from the
November 2005 election ballot.
At the time the Court of Appeal issued its expedited preelection decision,
the period for public inspection of the material to be included in the ballot
pamphlet was about to commence. Therefore, the proponents of Proposition 80 —
real parties in interest in this proceeding — immediately filed an emergency
petition for writ of mandate with this court (which we treated as a petition for
review of the Court of Appeal’s decision), challenging the conclusion reached by
that court and seeking to have the measure restored to the November 2005 ballot.
After considering the emergency petition at conference, we unanimously voted to
grant review, issuing an order that stated in part: “As the Court of Appeal
recognized, California authorities establish that ‘it is usually more appropriate to
review constitutional and other challenges to ballot propositions or initiative
measures after an election rather than to disrupt the electoral process by preventing
the exercise of the people’s franchise, in the absence of some clear showing of
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invalidity.’ (Brosnahan v. Eu (1982) 31 Cal.3d 1, 4.) Because, unlike the Court
of Appeal, at this point we cannot say that it is clear that article XII, section 5, of
the California Constitution precludes the enactment of Proposition 80 as an
initiative matter, we conclude that the validity of Proposition 80 need not and
should not be determined prior to the November 8, 2005, election. Accordingly,
the Secretary of State and other public officials are directed to proceed with all the
required steps to place Proposition 80 in the ballot pamphlet and on the ballot of
the special election to be held on November 8, 2005. After that election, we shall
determine whether to retain jurisdiction in this matter and resolve the issues raised
in the petition.”
Pursuant to our order, Proposition 80 was included in the ballot pamphlet
and on the election ballot for the November 8, 2005, election. At that election, the
voters rejected Proposition 80.
In light of the defeat of Proposition 80 at the November 2005 election, the
underlying challenge to that measure itself is moot. Nonetheless, as in Costa, we
have concluded that it is appropriate for this court to retain the matter and issue an
opinion in order to provide guidance for the future on two general issues presented
by the case: (1) the circumstances under which preelection review is warranted
for the type of challenge to an initiative measure that is presented in this case — a
type of challenge that, as we shall explain, is distinguishable in a significant
respect from the type of challenge at issue in Costa — and (2) the important legal
issue whether article XII, section 5, of the California Constitution (hereafter,
article XII, section 5) precludes the use of the initiative process to enact statutes
conferring additional authority upon the PUC.
For the reasons set forth below, we have reached the following conclusions
with respect to these two issues. On the first issue, we explain initially that the
general rule set forth in Brosnahan v. Eu, supra, 31 Cal.3d 1 (Brosnahan I) —
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recognizing a strong presumption against preelection resolution of a challenge to
an initiative measure — is inapplicable to the challenge raised here, because the
challenge is not based on the alleged unconstitutionality of the substance of the
initiative measure but rather on the contention that the measure in question is not
the type of measure that may be adopted through the initiative process.
Nonetheless, as we further explain, although preelection resolution of this type of
a challenge is not presumptively improper, the challenge here at issue — unlike
the type of challenge at issue in Costa — generally will not become moot after an
election if the measure is adopted, and thus such a claim reasonably is susceptible
to judicial resolution either before or after an election. As a consequence, when
such a challenge is brought prior to an election, a court should recognize that the
need for an expedited preelection resolution of the claim is less compelling than
with regard to the type of claim at issue in Costa. Accordingly, in such a case a
court should take into consideration the availability of postelection relief in
deciding whether it is preferable to resolve the issue in the often charged and
rushed atmosphere of an expedited preelection review, or instead to leave the
challenge for resolution with the benefit of the full, unhurried briefing, oral
argument, and deliberation that generally will be available after the election.
On the second issue, we conclude that the Court of Appeal erred in
interpreting article XII, section 5 as precluding the people, through the initiative
process, from adopting a statutory provision that grants additional authority to the
PUC. Past California decisions establish that language in the California
Constitution recognizing the authority of the Legislature to take specified action
generally is interpreted to encompass the exercise of such legislative power either
by the Legislature or by the people through the initiative process. Although the
Court of Appeal was of the view that the specific wording of article XII, section 5
required an exception to this general proposition, as we shall explain the language
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of that constitutional provision is at most ambiguous. Particularly when this
language is read in light of the origin and purpose of the provision, it is clear that
the constitutional provision cannot reasonably be interpreted to bar the people,
through the initiative process, from enacting a statute or statutes conferring
additional authority upon the PUC.
Accordingly, we conclude that the judgment of the Court of Appeal must
be reversed.
I
For the past decade and a half, the subject of energy regulation and
deregulation has been a significant issue for California government. As explained
in the analysis of Proposition 80 prepared by the Legislative Analyst (Ballot
Pamp., Special Elec. (Nov. 8, 2005) (Ballot Pamphlet) analysis of Prop. 80 by
Legis. Analyst, pp. 50-53), in the early 1990’s California began a process of
restructuring electricity service by introducing competition in the generation of
electricity, with the ultimate objective of achieving lower rates for consumers. In
1996, the Legislature adopted a deregulation plan that among other things (1)
required the large investor-owned utilities (IOU’s) that generated and supplied the
bulk of electricity within California — including Pacific Gas & Electric Company,
Southern California Edison Company, and San Diego Gas & Electric Company —
to sell their fossil fuel power plants to independent generators, and (2) instituted a
transition plan under which the PUC would continue to regulate the rates charged
by IOU’s to electricity customers for an interim period, but that was intended
ultimately to result in rates determined in a competitive market in which customers
alternatively could choose to have an IOU purchase and deliver electricity on their
behalf or instead to purchase electric power directly from so-called independent
electric service providers (ESP’s). (In addition to IOU’s and ESP’s, electricity
also is provided to customers in some areas of California by publicly owned
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electric utilities, such as the Los Angeles Department of Water and Power and the
Sacramento Municipal Utility District.) By the late 1990’s, a number of ESP’s
had begun operation in California, generally serving large industrial and
commercial businesses and some state and local governmental entities. The ESP’s
were required to register with the PUC for licensing purposes, but their rates and
terms of service explicitly were not subject to PUC regulation.
In 2000 and early 2001, an energy crisis arose in California in part as a
result of sharply increasing electricity demand, lagging investment in new power
plants, and other factors that led to electricity shortages and steeply rising
electricity prices. In response to the energy crisis, the state began to purchase
electricity on behalf of the IOU’s by entering into long-term electricity contracts,
and suspended several aspects of the energy deregulation plan pending the
expiration of such contracts.
The initiative measure that ultimately was designated Proposition 80 was
drafted to address a number of perceived problems created by the state’s existing
energy deregulation plan. The initiative measure included numerous provisions
dealing with a range of subjects. For purposes of the issues that we address in this
proceeding, the most significant feature is the measure’s proposal to confer upon
the PUC additional “jurisdiction, control, and regulation” over the ESP’s,
specifying that the scope of such PUC regulation would include the enforcement
of requirements relating to energy procurement, contracting standards, and energy
efficiency.1 The proponents submitted a copy of the measure to the Attorney

1
Among other changes, the initiative proposed (1) to add to section 218.3 of
the Public Utilities Code — the existing section defining “electric service
provider” — the following sentence: “An electric service provider is subject to the
jurisdiction, control, and regulation of the commission, and the provisions of this
part, pursuant to subdivision (f) of Section 394,” and (2) to add a new
(footnote continued on next page)
6

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General for preparation of a title and summary, and thereafter circulated for
signature a petition setting forth the initiative.2
On June 20, 2005, the Secretary of State certified that the measure had
obtained the requisite number of signatures to qualify for the ballot, and
designated the matter as Proposition 80 to be submitted to the voters at the
November 8, 2005, special election. Shortly thereafter, on June 29, 2005,
petitioners Independent Energy Producers Association, California Retailers
Association, and Steven Kelly (hereafter petitioners) filed an original petition for

(footnote continued from previous page)
subdivision (f) to Public Utilities Code section 394, providing: “Registration with
the commission is an exercise of the licensing function of the commission, and
registration by an electric service provider constitutes agreement of the electric
service provider to the jurisdiction, control, and regulation of its rates and terms
and conditions of service by the commission. The commission shall exercise such
jurisdiction, control, and regulation of electric service providers in their provision
of electrical service in the same manner as its exercise of jurisdiction, control, and
regulation of electrical corporations, including, but not limited to, enforcement of:
energy procurement and contracting standards and requirements; resource
adequacy requirements; energy efficiency and demand response requirements;
renewable portfolio standards; and appropriate assignment of costs among
customers to prevent cost shifting.” (Ballot Pamp., supra, text of proposed laws,
Prop. 80, §§ 3, 9, pp. 73, 75.)
2
The title and summary prepared by the Attorney General for the initiative
measure stated as follows: “Electric Service Providers. Regulation. Initiative
Statute. [¶] Subjects electric service providers, as defined, to control and
regulation by California Public Utilities Commission. [¶] Imposes restrictions on
electricity customers’ ability to switch from private utilities to other electric
providers. [¶] Provides that registration by electric service providers with
Commission constitutes providers’ consent to regulation. [¶] Requires all retail
electric sellers, instead of just private utilities, to increase renewable energy
resource procurement by at least 1% each year, with 20% of retail sales procured
from renewable energy by 2010, instead of current requirement of 2017. [¶]
Imposes duties on Commission, Legislature and electrical providers.” (Ballot
Pamp., supra, official title and summary of Prop. 80, p. 50.)
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writ of mandate in the Court of Appeal, seeking preelection review of the measure
and contending that in light of the provisions of article XII, section 5 of the
California Constitution, “[a] constitutional amendment would be required to
confer on the people the right to use the statutory initiative to implement [the]
changes” proposed by Proposition 80. The petition requested that the Court of
Appeal issue a writ directing the Secretary of State to refrain from submitting the
initiative measure to the voters.
On July 5, 2005, the Court of Appeal, after an initial review of the petition,
issued an alternative writ of mandate. Because the deadline for submitting the
ballot pamphlet to the state printer for the November 8, 2005, election was
August 15, 2005, the court ordered expedited briefing and oral argument, directing
real parties in interest to file a return by July 11 and petitioners to file a replication
by July 15, and setting oral argument for July 20. The Court of Appeal heard oral
argument as scheduled, issuing its opinion two days later on July 22, 2005.
Initially, with regard to the procedural question of preelection review, the
Court of Appeal noted that although as a general rule court review of an initiative
measure is more appropriate after an election, “this general rule applies only to a
claim that a substantive provision of the initiative is unconstitutional; it does not
apply where the electorate lacks the power to adopt the proposal in the first
instance.” Because, in the court’s view, “Proposition 80 is unquestionably invalid
on its face because . . . it runs afoul of a plain and unambiguous provision of our
state Constitution . . . that effectively precludes use of the initiative process to
accomplish what Proposition 80 proposes to do,” the Court of Appeal concluded
that “preelection review is proper, indeed essential.”
In reaching its determination on the merits of the constitutional claim, the
appellate court concluded that the language of article XII, section 5 “plainly and
unambiguously” grants only the Legislature, and not the people through the
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initiative process, the power to grant additional authority upon the PUC. Because
that court viewed the language of article XII, section 5 as unambiguous, it
dismissed the contention of real parties in interest that the background and origin
of this constitutional language must properly be considered in interpreting the
provision and that such history demonstrates that the language in question cannot
reasonably be interpreted as a limitation on the scope of the initiative power.
Finally, having determined that the provisions of Proposition 80 purporting to
confer additional authority upon the PUC could not be adopted by initiative, the
Court of Appeal went on to conclude that those provisions were not severable
from the remainder of the initiative measure. Accordingly, the court ruled that a
writ of mandate should issue directing the Secretary of State to refrain from taking
any steps to place Proposition 80 in the ballot pamphlet or on the November 8,
2005, election ballot.
As noted above, after the Court of Appeal issued its opinion, real parties in
interest filed an emergency petition for writ of mandate in this court, challenging
the Court of Appeal’s removal of Proposition 80 from the ballot. Treating the
issue as a petition for review, we granted review. Observing that “unlike the Court
of Appeal, at this point we cannot say that it is clear that article XII, section 5, of
the California Constitution precludes the enactment of Proposition 80 as an
initiative measure,” we concluded that the validity of Proposition 80 “need not and
should not be determined prior to the November 8, 2005, election.” We directed
the Secretary of State and other public officials to proceed with all the steps
required to place Proposition 80 in the ballot pamphlet and on the special election
ballot, and stated that after the election we would determine whether to retain
jurisdiction in this matter and resolve the issues raised in the petition.
Pursuant to our order, the materials related to Proposition 80 were included
in the ballot pamphlet and the voters were given the opportunity to vote on the
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measure at the November 8, 2005, special election. At that election, Proposition
80 was defeated.
Because Proposition 80 was not adopted by the voters, the legal challenge
to the measure is now moot. Nonetheless, as in our recent decision in Costa,
supra, 37 Cal.4th 986, 1005, we conclude that it is appropriate to retain
jurisdiction and issue an opinion in this matter to provide future guidance on two
issues: (1) the circumstances under which preelection review is appropriate for the
type of constitutional challenge here at issue, and (2) the question whether article
XII, section 5 of the California Constitution precludes the use of the initiative
power to confer additional authority upon the PUC.
II
As noted above, our order granting review cited and relied upon the general
statement in Brosnahan I, supra, 31 Cal.3d 1, 4, that “it is usually more
appropriate to review constitutional and other challenges to ballot propositions or
initiative measures after an election rather than to disrupt the electoral process by
preventing the exercise of the people’s franchise, in the absence of some clear
showing of invalidity.” As we pointed out in our recent decision in Costa, supra,
37 Cal.4th, 986, 1005, however, “in Senate of the State of Cal. v. Jones (1999) 21
Cal.4th 1142 (Senate v. Jones), we noted that decisions after Brosnahan I ‘have
explained that this general rule applies primarily when a challenge rests upon the
alleged unconstitutionality of the substance of the proposed initiative, and that the
rule does not preclude preelection review when the challenge is based upon a
claim, for example, that the proposed measure may not properly be submitted to
the voters because the measure is not legislative in character or because it amounts
to a constitutional revision rather than an amendment. [Citations.]’ (21 Cal.4th at
p. 1153.)” Under the authorities cited in Senate v. Jones, preelection review of an
initiative measure may be appropriate when the challenge is not based on a claim
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that the substantive provisions of the measure are unconstitutional, but rests
instead on a contention that the measure is not one that properly may be enacted
by initiative. (See, e.g., American Federation of Labor v. Eu (1984) 36 Cal.3d 687
[initiative may not be used to apply for the convening of a federal constitutional
convention]; McFadden v. Jordan (1948) 32 Cal.2d 330 [initiative may not be
used to revise, rather than to amend, California Constitution].) Because the claim
raised here is that the California Constitution permits only the Legislature, and not
the people through the initiative process, to confer additional authority upon the
PUC, the decisions noted in Senate v. Jones establish that preelection review of
such a claim is not necessarily or presumptively improper.
Nonetheless, although the strong presumption against preelection review
does not apply to such a claim, we believe it is appropriate for a court presented
with this type of preelection challenge to keep in mind that unlike the type of
procedural challenge relating to the petition-circulation process at issue in our
recent decision in Costa, supra, 37 Cal.4th 986 — a type of claim that, as
explained in Costa, generally can be remedied only prior to an election and that
usually will become moot after an election (see id. at pp. 1006-1007) — a
contention that an initiative measure is invalid because the measure cannot
lawfully be enacted through the initiative process is a type of claim that generally
will not become moot if the initiative is approved by the voters at the election.
(See, e.g., Bramberg v. Jones (1999) 20 Cal.4th 1045 [postelection decision
invalidating initiative that instructed, and indirectly attempted to coerce, federal
and state legislators to propose a specific federal constitutional amendment];
Raven v. Deukmejian (1990) 52 Cal.3d 336, 349-356 [postelection decision
invaliding one section of Proposition 115 as a constitutional “revision” that could
not be adopted by initiative].) Because this type of claim is potentially susceptible
to resolution either before or after an election, there is good reason for a court to
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be even more cautious than when it is presented with the type of procedural claim
at issue in Costa before deciding that it is appropriate to resolve such a claim prior
to an election rather than wait until after the election. Of course, as this court
noted in Senate v. Jones, supra, 21 Cal.4th 1142, 1154, potential costs are incurred
in postponing the judicial resolution of a challenge to an initiative measure until
after the measure has been submitted to and approved by the voters,3 and such
costs appropriately can be considered by a court in determining the propriety of
preelection intervention. Nonetheless, because this type of challenge is one that
can be raised and resolved after an election, deferring judicial resolution until after
the election — when there will be more time for full briefing and deliberation —
often will be the wiser course.
As explained above, in the present case the Court of Appeal intervened
prior to the election and directed that the initiative measure be removed from the
ballot only after concluding that the measure was “unquestionably invalid on its
face.” In light of that court’s view on the merits, its decision to intervene prior to
the election is understandable. Because, unlike the Court of Appeal, from our
initial review prior to the election we were not convinced that article XII, section 5
properly should be interpreted to preclude the enactment of Proposition 80 through
the initiative process, we granted review and directed that the proposition be
placed on the November 8, 2005, election ballot, deferring a definitive judicial
resolution of the issue until after the election.

3
“ ‘The presence of an invalid measure on the ballot steals attention, time,
and money from the numerous valid propositions on the same ballot. It will
confuse some voters and frustrate others, and an ultimate decision that the measure
is invalid, coming after the voters have voted in favor of the measure, tends to
denigrate the legitimate use of the initiative procedure.’ ” (Senate v. Jones, supra,
21 Cal.4th at p. 1154.)
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III
In light of the defeat of Proposition 80 at the November 8, 2005, election,
the legal challenge to that initiative measure is moot. Nonetheless, because the
Court of Appeal decision — although no longer published or citable in light of our
grant of review (Cal. Rules of Court, rule 976(d)) — potentially may cast doubt on
the constitutional viability of any future initiative measure that purports to confer
additional authority upon the PUC (an issue likely to recur), and because it appears
preferable to have the question of the proper interpretation of article XII, section 5
resolved in a setting that affords the opportunity for full briefing, oral argument,
and unrushed deliberation, we have concluded it is appropriate to retain the case to
resolve the issue by opinion in this proceeding. For the reasons discussed below,
we conclude that article XII, section 5 does not preclude the use of the initiative
power to confer additional authority upon the PUC.
A
Although the question before us ultimately involves the proper
interpretation of article XII, section 5, the resolution of this issue implicates the
meaning and scope of additional provisions of the California Constitution —
article IV, section 1, and article II, section 8, relating to the people’s initiative
power.
California Constitution article IV, section 1(hereafter, article IV, section I)
provides in full: “The legislative power of this State is vested in the California
Legislature which consists of the Senate and Assembly, but the people reserve to
themselves the powers of initiative and referendum.” (Italics added.)
California Constitution article II, section 8, subdivision (a) (hereafter,
article II, section 8) provides in full: “The initiative is the power of the electors to
propose statutes and amendments to the Constitution and to adopt or reject them.”
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In describing the initiative power in Associated Home Builders etc. Inc. v.
City of Livermore (1976) 18 Cal.3d 582, this court explained: “The amendment of
the California Constitution in 1911 to provide for the initiative and referendum
signifies one of the outstanding achievements of the progressive movement of the
early 1900’s. Drafted in light of the theory that all power of government
ultimately resides in the people, the amendment speaks of the initiative and
referendum, not as a right granted the people, but as a power reserved by them.
Declaring it ‘the duty of the courts to jealously guard the right of the people’
[citation], the courts have described the initiative and referendum as articulating
‘one of the most precious rights of our democratic process’ [citation]. ‘[I]t has
long been our judicial policy to apply a liberal construction to this power
whenever it is challenged in order that the right be not improperly annulled. If
doubts can reasonably be resolved in favor of the use of this reserve power, courts
will preserve it.’ [Citations.]” (18 Cal.3d at p. 591, fns. omitted; see also Carlson
v. Cory (1983) 139 Cal.App.3d 724, 728 [“In response to this broad constitutional
reservation of power in the people, the courts have consistently held that the
Constitution’s initiative and referendum provisions should be liberally construed
to maintain maximum power in the people. [Citations.] Any doubts should be
resolved in favor of the exercise of these rights. [Citations.]”].) In addition, past
decisions relating to the initiative have explained that “the power of the people [to
enact statutes] through the statutory initiative is coextensive with the power of the
Legislature.” (Legislature v. Deukmejian (1983) 34 Cal.3d 658, 675, italics added;
see, e.g., Santa Clara County Local Transportation Authority v. Guardino (1995)
11 Cal.4th 220, 253.)
Article XII, section 5 — a provision of the article of the state Constitution
relating to public utilities — provides in full: “The Legislature has plenary power,
unlimited by the other provisions of this constitution but consistent with this
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article, to confer additional authority and jurisdiction upon the commission [that
is, the PUC], to establish the manner and scope of review of commission action in
a court of record, and to enable it to fix just compensation for utility property
taken by eminent domain.”
B
Although the Court of Appeal was of the view that the language of
article XII, section 5 quoted above is clear and unambiguous on its face, and can
reasonably be interpreted only to mean that the Legislature alone, and not the
people through the initiative process, can confer additional authority and
jurisdiction upon the PUC, in our view the language of article XII, section 5 is
reasonably susceptible to two alternative interpretations: (1) that, as the Court of
Appeal suggested, the Legislature and only the Legislature — notwithstanding the
provisions of article IV, section 1 and article II, section 8, recognizing the people’s
reserved right to enact legislation through the initiative power — has plenary
power to confer additional authority and jurisdiction upon the PUC, or (2) that the
Legislature or the electorate exercising its legislative power through the initiative
process “has plenary power, unlimited by the other provisions of this constitution
but consistent with this article, to confer additional authority and jurisdiction upon
the [PUC] . . . .” As we shall explain, the Court of Appeal’s limited view of the
potential meaning of this provision fails adequately to take into account the
numerous California decisions that have held, in a variety of contexts, that
language in the California Constitution establishing the authority of “the
Legislature” to legislate in a particular area must reasonably be interpreted to
include, rather than to preclude, the right of the people through the initiative
process to exercise similar legislative authority.
This court’s decision in Kennedy Wholesale, Inc. v. State Bd. of
Equalization (1991) 53 Cal.3d 245 (Kennedy Wholesale) is a representative and
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instructive case in point. In Kennedy Wholesale, this court addressed a multi-
pronged constitutional challenge to Proposition 99, an initiative measure passed by
the voters that increased the tax on cigarettes and other tobacco products and
allocated the revenue of the increased tax to meet various tobacco-related
problems. The plaintiff’s initial claim in Kennedy Wholesale was that Proposition
99 violated the provisions of article XIII A, section 3 of the California
Constitution (hereafter, article XIIIA, section 3), which, in 1991, specified in
relevant part: “any change in State taxes enacted for the purpose of increasing
revenues . . . must be imposed by an Act passed by no less than two-thirds of all
members elected to each of the two houses of the Legislature . . . .” The plaintiff
in Kennedy Wholesale asserted that these words in article XIII A, section 3 signify
“that only the Legislature can raise taxes.” (53 Cal.3d at p. 249.)
Although the court in Kennedy Wholesale recognized that the literal
language of article XIII A, section 3 was susceptible to the plaintiff’s proposed
interpretation, it rejected the plaintiff’s assertion that it was appropriate to enforce
this provision “according to its ‘plain meaning’ without considering the section’s
history or other indications of the voter’s intent” (Kennedy Wholesale, supra, 53
Cal.3d at p. 249). The court concluded instead that the provision “is ambiguous
when read in the context of the whole Constitution.” (Ibid.) Pointing to the
language of article IV, section 1, reserving to the people the powers of initiative
and referendum, the court noted that “[t]o interpret [article XIII A, section 3] as
giving the Legislature exclusive power to raise taxes would implicitly repeal
article IV, section 1, pro tanto. [Article XIII A, s]ection 3, however, does not even
mention the initiative power, let alone purport to restrict it.” (53 Cal.3d at p. 249.)
The court further reasoned: “[T]o avoid repeals by implication ‘we are bound to
harmonize . . . constitutional provisions’ that are claimed to stand in conflict.
[Citation.] In addition, because plaintiff is arguing for a limitation on the initiative
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power, we must also bear in mind that the initiative power is ‘ “ ‘one of the most
precious rights of our democratic process’ ” ’ [citations] and that we must ‘resolve
any reasonable doubts in favor of the exercise of this precious right.’ ” (53 Cal.3d
at pp. 249-250.)
Having concluded that article XIII A, section 3 was ambiguous when read
in the context of the entire Constitution, the court in Kennedy Wholesale, supra, 53
Cal.3d 245, went on to consider the voters’ intent in adopting article XIII A,
section 3 as part of Proposition 13 and observed: “Nothing in the official ballot
pamphlet supports the inference that the voters intended to limit their own power
to raise taxes in the future by statutory initiative. To the contrary, the arguments
in favor of Proposition 13 adopt a populist theme that cannot easily be reconciled
with plaintiff’s interpretation of the measure.” (53 Cal.3d at p. 250.) Accordingly,
the court in Kennedy Wholesale ultimately concluded that article XIII A, section 3
could not reasonably be interpreted to preclude the voters from utilizing the
initiative power to raise taxes. (Id. at pp. 250-251.)
Other California cases have reached a similar conclusion when faced with
analogous claims. In State Comp. Ins. Fund v. State Bd. of Equalization (1993) 14
Cal.App.4th 1295 (State Comp. Ins. Fund), for example, an insurance company
challenged a provision of Proposition 103, a statutory initiative measure
authorizing an increase in the rate of the insurance premium tax imposed on
insurers pursuant to article XIII, section 28 of the California Constitution. When
Proposition 103 was adopted in 1989, article XIII, section 28 provided in pertinent
part: “(b) An annual tax is hereby imposed on each insurer doing business in this
state . . . at the rates . . . hereinafter specified. . . . [¶] (d) The rate of the tax to be
applied to the basis of the annual tax in respect to each year is 2.35 percent. . . .
[¶] (h) The taxes provided for by this section shall be assessed by the State Board
of Equalization. [¶] (i) The Legislature, a majority of all the members elected to
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each of the two houses voting in favor thereof, may by law change the rate or rates
of taxes herein imposed upon insurers.” (Italics added.)
In State Comp. Ins. Fund, supra, 14 Cal.App.4th 1295, the plaintiff insurer
contended in part that although article XIII, section 28, subdivision (i), authorized
the Legislature to change the rate of taxes otherwise specified by the Constitution
itself, the provision did not authorize the people through the initiative process to
modify such rates. Observing that “ ‘[t]he reserved power to enact statutes by
initiative is a legislative power, one that would otherwise reside in the
Legislature,’ ” and that “[a]part from procedural differences, the electorate’s
lawmaking powers are identical to the Legislature’s” (14 Cal.App.4th at p. 1300),
the appellate court in State Comp. Ins. Fund rejected the insurer’s contention.
That court concluded that “the constitutional grant of power to the Legislature in
article XIII, section 28, subdivision (i), entails a similar grant of power to the
electorate to legislate through the initiative process.” (Id. at p. 1299.) In reaching
this conclusion, the court pointedly noted that “[t]he language ‘the Legislature
may’ is found throughout article XIII and in many other places in the California
Constitution. It would be absurd to attribute to the framers of the Constitution an
intention to limit the initiative power in the many and varied contexts in which the
phrase appears.” (Id. at p. 1300, fns. omitted, italics added.) (See also Carlson v.
Cory, supra, 139 Cal.App.3d 724, 728-729.)
The Court of Appeal below found Kennedy Wholesale and the other cases
we have cited distinguishable from the present case, because the constitutional
provisions at issue in those cases did not contain the language — “The Legislature
has plenary power, unlimited by the other provisions of this constitution . . .” —
that appears in article XII, section 5. The Court of Appeal concluded that the
quoted language plainly and unambiguously precludes the use of the initiative
power to confer additional authority upon the PUC.
18

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In reaching this conclusion, the Court of Appeal initially relied upon a
number of dictionaries that define “plenary” to mean “complete,” “absolute,” or
“unqualified,” declaring that “the usual and ordinary meaning of the phrase
‘plenary power’ connotes total power, to the exclusion of all others.” (Italics
added.) Real parties in interest take issue with the Court of Appeal’s
understanding of the term “plenary,” pointing out that the word “exclusive” does
not appear in the dictionary definitions cited by the Court of Appeal, and that in
other contexts courts explicitly have rejected the contention that the term “plenary
power” means exclusive power. (See, e.g., Natural Resources v. Upper Val.
Landfill (Vt. 1997) 705 A.2d 1001, 1008 [“Defendants argue that by granting the
superior court ‘plenary powers’ . . . , the Legislature intended to grant the superior
court exclusive jurisdiction. Defendants’ construction is contrary to the plain
meaning of ‘plenary,’ which means ‘complete’ and ‘unqualified,’ not exclusive.
See Black’s Law Dictionary 1038 (5th ed. 1979)”].)
In further support of its reading of the constitutional provision in question,
the Court of Appeal maintained that the additional language in article XII,
section 5 stating that the Legislature’s plenary power is “unlimited by the other
provisions of this constitution” can be interpreted only to include and preempt the
provisions of the California Constitution relating to the initiative power. Real
parties in interest argue, however, that it is by no means clear that this language
properly must or should be interpreted to refer to or trump the constitutional
provision reserving the people’s right to enact legislation through the initiative
power, pointing out that the Court of Appeal’s expansive reading of this language
logically would signify that a statute passed by the Legislature pursuant to article
XII, section 5 would not be subject to any provision of the California Constitution,
including, for example, the provision authorizing the Governor to veto a bill
approved by the Legislature. (Cal. Const., art. IV, § 10.) Real parties in interest
19

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maintain that the language in article XII, section 5 has not been, and reasonably
cannot be, interpreted so expansively to exclude the application of provisions like
those relating to the initiative power or the gubernatorial veto. (Cf. S. H. Chase
Lumber Co. v. Railroad Com. (1931) 212 Cal. 691, 702-706 (lead opn. of
Richards, J.), 707 (conc. opn. of Seawell, J.) [interpreting language of
constitutional predecessor of article XII, section 5 as preserving private property
owners’ constitutional rights in eminent domain actions as guaranteed by article I,
former section 14 (now art. I, § 19) of the California Constitution].)4
Particularly in light of the numerous past California authorities holding that
constitutional references to the Legislature’s authority to take specified action
generally are not interpreted to limit the initiative power, we agree with real
parties in interest that the language relied upon by the Court of Appeal is not
unambiguous and cannot reasonably be interpreted only as having the effect of
precluding the people’s exercise of their reserved initiative power. Rather, we
conclude that the wording of the provision at most creates an ambiguity, and that it
is appropriate and necessary to consider the origin and background of this
constitutional language to determine whether, in light of the purpose and objective

4
Although petitioners rely upon a passage in Pacific Telephone etc. Co. v.
Eshleman (1913) 166 Cal. 640, 658-659, indicating that the constitutional
language in question should be given a broad and all-encompassing interpretation,
later cases — such as S.H. Chase Lumber Co. v. Railroad Com., supra, 212 Cal.
691, and a number of more recent decisions of this court interpreting analogous
language set forth in article XIV, section 4 of the California Constitution (“plenary
power, unlimited by any provision of this Constitution”) relating to the
Legislature’s authority to create and enforce a complete system of workers’
compensation (see Greener v. Workers’ Comp. Appeals Bd. (1993) 6 Cal.4th 1028,
1037-1038 & fn. 8; Hustedt v. Workers’ Comp. Appeals Bd. (1981) 30 Cal.3d 329,
342-346) — have explained that such constitutional language cannot be given an
unreasonably expansive construction unrelated to the purpose and intended scope
of the constitutional provision in which that language appears.
20

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of the constitutional provision, it is reasonable to interpret it in the manner
proposed by the Court of Appeal. As we shall explain, our examination of the
background and purpose of this constitutional provision leads us to conclude that
the view adopted by the Court of Appeal is not the most reasonable interpretation
of this provision.
The crucial language of article XII, section 5 — “[t]he Legislature has
plenary power, unlimited by the other provisions of this constitution but consistent
with this article, to confer additional authority and jurisdiction upon the
commission” — derives from a constitutional provision relating to the
administrative predecessor of the PUC, the Railroad Commission, that was
enacted through a constitutional amendment approved by the voters at a special
statewide election held on October 10, 1911. The measure in question —
Assembly Constitutional Amendment No. 6 (ACA No. 6) — substantially
amended former section 22 of article XII, a provision included in the 1879
Constitution that created and granted specified authority to a state railroad
commission.
ACA No. 6 proposed a significant revision of the composition, selection,
and power of the then existing Railroad Commission. The measure expanded the
number of railroad commissioners from three to five, provided for the appointment
of all commissioners by the Governor rather than by election from districts, and
spelled out the broad power of the commission to establish rates and to examine
the books, records, and papers of all railroad and other transportation companies.5

5
In setting forth the powers of the commission, the measure stated: “Said
commission shall have the power to establish rates of charges for the
transportation of passengers and freight by railroads and other transportation
companies, and no railroad or other transportation company shall charge or
demand or collect or receive a greater or less or different compensation for such
(footnote continued on next page)
21

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The measure also included the following paragraph: “No provision of this
constitution shall be construed as a limitation upon the authority of the legislature
to confer upon the railroad commission additional powers of the same kind or
different from those conferred herein which are not inconsistent with the powers
conferred upon the railroad commission in this constitution, and the authority of
the legislature to confer such additional powers is expressly declared to be plenary
and unlimited by any provision of this constitution.” (Ibid.)
As noted, the voters approved ACA No. 6 at the October 1911 election, and
the amended version of article XII, section 22 became part of the Constitution.
The constitutional language in question was carried over when article XII, section
22 was amended in 1946 to change the name of the Railroad Commission to the
Public Utilities Commission. In 1974, as part of a comprehensive revision of
article XII that reorganized and greatly reduced the length and complexity of the
prior constitutional provisions related to public utilities, the language initially
adopted in 1911 was revised and moved to article XII, section 5, with no change in
meaning intended. (See Cal. Const., art. XII, § 9 [“The provisions of this article
restate all related provisions of the Constitution in effect immediately prior to the

(footnote continued from previous page)
transportation of passengers or freight, or for any service in connection therewith,
between the points named in any tariff of rates, established by said commission,
than the rates, fares and charges which are specified in such tariff. The
commission shall have the further power to examine books, records and papers of
all railroad and other transportation companies; to hear and determine complaints
against railroad and other transportation companies; to issue subpoenas and all
necessary process and send for persons and papers; and the commission and each
of the commissioners shall have the power to administer oaths, take testimony and
punish for contempt in the same manner and to the same extent as courts of
record; the commission may prescribe a uniform system of accounts to be kept by
all railroad and other transportation companies.” (ACA No. 6.)
22

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effective date of this amendment and make no substantive change”].)
Accordingly, it is appropriate to consider the purpose and intent of this language,
as initially incorporated into the California Constitution in 1911, in arriving at the
most reasonable interpretation of the present constitutional provision.
In 1911, the election statutes provided for the preparation and mailing to
the voters, prior to an election, of a document similar to the current ballot
pamphlet, containing the text of each proposed constitutional amendment that
would appear on the ballot along with legislatively-prepared statements setting
forth reasons for and against the adoption of each proposed amendment. (See
former Pol. Code, §§ 1195, 1195a, enacted by Stats. 1909, ch. 154, § 1, p. 254,
Stats. 1909, ch. 142, § 1, p. 245.) With regard to the constitutional amendment
proposed by ACA No. 6, the argument in favor of the measure — after detailing
all of the specific changes in the Railroad Commission’s composition and powers
proposed by the measure — explained the reasons underlying the pertinent
language of ACA No. 6 as follows: “Finally, it is proposed to amend the section
so as to remove all doubt of the right of the legislature to confer additional powers
upon the commission. Under the amendment as presented for adoption, the
legislature may give to the railroad commission such powers as it sees fit without
any restriction whatever, provided only that the powers thus given are not
inconsistent with the powers specifically conferred in the constitution.” (Sect. of
State, Proposed Amends. to Const. with Legislative Reasons, Special Elec.
(Oct. 10, 1911), Reasons Why ACA No. 6 Should Be Adopted.)
The constitutional amendment embodied in ACA No. 6 was part of the
reform program of the progressive movement that had gained control of the
California Legislature and the governorship in the preceding election (see Key &
Crouch, The Initiative and Referendum in Cal. (1938) pp. 433-436), and additional
insight into the background and purpose of the constitutional language in question
23

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is provided by a passage contained in the first inaugural address of Governor
Hiram Johnson, the leader of the progressive movement, that was delivered on
January 3, 1911. In a portion of the address discussing the so-called railroad
question, Governor Johnson stated in part: “For many years in the past, shippers,
and those generally dealing with the Southern Pacific Company, have been
demanding protection against the rates fixed by that corporation. The demand has
been answered by the corporation by the simple expedient of taking over the
government of the State; and instead of regulation of the railroads, as the framers
of the new Constitution [that is, the Constitution of 1879] fondly hoped, the
railroad has regulated the State. [¶] To Californians it is quite unnecessary to
recall the motive that actuated the framers of the new Constitution when Article
XII was adopted. It was thought that the Railroad Commission thereby created
would be the bulwark between the people and the exactions and extortions and
discriminations of the transportation companies. That the scheme then adopted
has not proved effective has become only too plain. That this arose because of the
individuals constituting the Railroad Commission is in the main true, but it is also
apparent there has been a settled purpose on the part of the Southern Pacific
Company not only to elect its own Railroad Commission, but also whenever those
Commissioners made any attempt, however feeble, to act, to arrest the powers of
the Commission, and to have those powers circumscribed within the narrowest
limits. All of us who recall the adoption of the new Constitution will remember
that we then supposed the most plenary powers were conferred upon the
Commission. It has been gravely asserted of late, however, by those representing
the Railroad Company, and they insist that in the decisions of our courts there is
foundation for the assertion, that the Constitution does not give the Commission
power to fix absolute rates. . . . [¶] . . . [¶] It is asserted that some ambiguity
exists in the portion of the language of Section 22 of Article XII of the
24

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Constitution, which fixes the penalty when any railroad company shall fail or
refuse to conform to rates established by the Commission or shall charge rates in
excess thereof, and it is claimed that the use of the last phrase ‘or shall charge
rates in excess thereof’ excludes the power to punish discrimination [in rates] by
the railroad companies. The rational construction of the language used can lead to
no such conclusion; but if you believe there is any ambiguity in the constitutional
provision as it now exists, or any doubt of the power conferred by it upon the
Railroad Commission, I would suggest that this matter be remedied by a
constitutional amendment.” (Gov. Hiram Johnson, Inaugural Address (Jan. 3,
1911) Assem. J. (1911 Sess.) pp. 48-49, italics added.) The amendment of former
section 22 of article XII, embodied in ACA No. 6, apparently was a direct
response to Governor Johnson’s suggestion.
In light of the ballot argument in favor of ACA No. 6, and the portion of
Governor Johnson’s inaugural address quoted above, it seems evident that the
intent of the constitutional language in question was simply to make clear the
existence of broad legislative power to grant the Railroad Commission any
additional authority that was deemed necessary for the commission’s proper
regulation of the conduct of railroad companies, and to eliminate any potential
legal argument that other provisions of the Constitution — such as the provision
barring railroads from imposing rates in “excess of” the approved rates — should
be interpreted to limit the type of authority that could be conferred upon the
Railroad Commission. Nothing in this material suggests that this provision was
intended to grant such authority to the Legislature alone, to the exclusion of any
25

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other entity that might then or thereafter possess legislative power to confer
authority upon the Railroad Commission.6
Indeed, under the broader view provided by the historical background of
the entire October 1911 election, it is even clearer that it would be unreasonable
for us to interpret the constitutional language in question in the manner suggested
by the Court of Appeal. The constitutional amendment containing the language at
issue was only one part of a much broader reform program championed by the
progressive movement. The October 1911 special election contained a quite

6
Although the parties identify only ACA No. 6 as the origin of the current
language of article XII, section 5, a second measure on the October 10, 1911,
special election ballot also contained language similar to that now found in article
XII, section 5. Senate Constitutional Amendment No. 47 (SCA No. 47) proposed
amending article XII, former section 23 to grant the Legislature the authority to
significantly expand the power of the Railroad Commission by affording the
commission the authority to supervise and regulate all “public utilities” — not
only railroad and other transportation companies — and by defining “public
utility” very broadly. After setting forth its broad definition of public utility, the
measure went on to provide: “The railroad commission shall have and exercise
such power and jurisdiction to supervise and regulate public utilities in the State of
California, and to fix the rates to be charged for commodities furnished, or
services rendered by public utilities as shall be conferred upon it by the legislature,
and the right of the legislature to confer powers upon the railroad commission
respecting public utilities is hereby declared to be plenary and to be unlimited by
any provision of this constitution.” (Cal. Const., art. XII, former § 23, as amended
by voters, Oct. 10, 1911, italics added.)

Unlike the argument relating to ACA No. 6, the argument in favor of
SCA No. 47 did not specifically discuss the italicized language of the proposed
amendment, but, as with ACA No. 6, nothing in the materials related to SCA
No. 47 suggests that this language was intended to exclude the potential use of the
initiative power in this area. SCA No. 47 was approved by the people at the
October 1911 election, and the language in question remained a part of article XII,
former section 23 until the comprehensive revision of article XII in 1974, when
this language, along with the similar language in article XII, former section 22,
was revised and moved to article XII, section 5. (See County of Sonoma v. State
Energy Resources Conservation etc. Com. (1985) 40 Cal.3d 361, 366-368.)
26

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extraordinary array of more than 20 proposed constitutional amendments, and
perhaps the most prominent of all the measures placed before the voters at that
special election were the proposed constitutional amendments creating and
incorporating into the California Constitution the electorate’s rights of initiative,
referendum, and recall.7
Governor Hiram Johnson, in a separate part of his first inaugural address
that preceded the passage quoted above relating to the Railroad Commission,
emphasized the central importance of the initiative, the referendum, and the recall
to the fundamental objectives of the progressive movement, declaring: “How best
can we arm the people to protect themselves . . . ? If we can give to the people the
means by which they may accomplish such other reforms as they desire, the means
as well by which they may prevent the misuse of the power temporarily
centralized in the Legislature, and an admonitory and precautionary measure
which will ever be present before weak officials, and the existence of which will
prevent the necessity for its use, then all that lies in our power will have been done
in the direction of safeguarding the future and for the perpetuation of the theory
upon which we ourselves shall conduct this government. This means for
accomplishing other reforms has been designated the ‘Initiative and the
Referendum,’ and the precautionary measure by which a recalcitrant official can
be removed is designated the ‘Recall.’ And while I do not by any means believe
the initiative, the referendum, and the recall are the panacea for our political ills,
yet they do give to the electorate the power of action when desired, and they do

7
In addition to the provisions relating to the initiative, referendum, and recall
and those revising and expanding the authority of the Railroad Commission, the
October 10, 1911, ballot contained significant measures relating, among other
subjects, to women’s suffrage, civil service, workers’ compensation, biennial
legislative sessions, harmless error in criminal cases, and local home rule.
27

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place in the hands of the people the means by which they may protect themselves.
I recommend to you, therefore, and I most strongly urge, that the first step in our
design to preserve and perpetuate popular government shall be the adoption of the
initiative, the referendum, and the recall. I recognize that this must be
accomplished, so far as the State is concerned, by constitutional amendment. But I
hope that at the earliest possible date the amendments may be submitted to the
people, and that you take the steps necessary for that purpose.” (Gov. Hiram
Johnson, Inaugural Address (Jan. 3, 1911) Assem. J. (1911 Sess.) pp. 47-48.)
The Legislature responded by submitting (among many other measures)
two proposed constitutional amendments to the voters at the October 10, 1911,
special election, one relating to the initiative and referendum (Sen. Const. Amend.
No. 22, amending Cal. Const., art. IV, § 1 (SCA No. 22)) and the other relating to
the recall (Sen. Const. Amend. No. 23, adding Cal. Const., art. XXIII (SCA
No. 23)). The argument in favor of the adoption of the measure relating to the
initiative and referendum stated in part: “Objection has been made that these
powers would deprive the legislature of its functions. . . . [¶] It is not intended
and will not be a substitute for legislation, but will constitute that safeguard which
the people should retain for themselves, to supplement the work of the legislature
by initiating those measures which the legislature either viciously or negligently
fails or refuses to enact; and to hold the legislature in check, and veto or negative
such measures as it may viciously or negligently enact. All objections finally and
ultimately center in a distrust of democracy; in a challenge of the people to govern
themselves. The voters are to decide by the adoption, or rejection, of this
amendment to the constitution, as to whether self-government is a success or
failure; as to whether the people believe in themselves. . . . [¶] Are the people
capable of self-government? If they are, this amendment should be adopted. If
they are not, this amendment should be defeated.” (Sect. of State, Proposed
28

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Amends. to Const. with Legislative Reasons, Special Elec. (Oct. 10, 1911),
Reasons Why SCA No. 22 Should Be Adopted.)
Both the measure relating to the initiative and referendum and the measure
relating to the recall passed overwhelmingly, each by more than a three-to-one
favorable vote. (See Sect. of State, Statement of the Vote of California, Special
Elec. (Oct. 10, 1911), p. 5.)
When the October 10, 1911, election is viewed as a whole, it appears most
improbable that ― at the same election in which the voters overwhelmingly
approved a far-reaching measure incorporating a broad initiative power as part of
the California Constitution ― they intended, without any direct or explicit
statement to this effect, to limit the use of the initiative power by virtue of the
language set forth in ACA No. 6. Indeed, the Court of Appeal’s interpretation of
the language of article XII, section 5 is all the more problematic when considered
in light of the progressive movement’s historic distrust of the Southern Pacific
Railroad and of that entity’s perceived ability to elect and control the members of
the California Legislature. Because, as indicated by the quoted passage from
Governor Johnson’s inaugural address (see, ante, pp. 24-25), the proponents of
these constitutional amendments strongly believed that the Southern Pacific’s
earlier control over the Legislature and the Railroad Commission had stymied
effective regulation of the Southern Pacific in the past, it defies reason to suggest
that those who drafted and those who voted to adopt the constitutional language in
question intended to single out the jurisdiction and authority of the Railroad
Commission as the one subject area in which the people’s reserved right to initiate
legislation could not be exercised, even if the need should arise. Viewing the
constitutional language in context, we conclude it is much more reasonable to
harmonize with each other the initiative and Railroad Commission constitutional
amendments adopted at the October 1911 special election, and to interpret them as
29

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authorizing the people, through the initiative process, to adopt statutory provisions
granting additional authority or jurisdiction to the Railroad Commission.8

8
Although we agree with the ultimate conclusion advanced by real parties in
interest, we find one portion of their argument unpersuasive. In addition to
including the language quoted above, from which the current language of article
XII, section 5 is derived, ACA No. 6 specified: “The provisions of this section
shall not be construed to repeal in whole or in part any existing law not
inconsistent herewith, and the ‘Railroad Commission Act’ of this state approved
February 10, 1911, shall be construed with reference to this constitutional
provision and any other constitutional provision becoming operative concurrently
herewith. And the said act shall have the same force and effect as if the same had
been passed after the adoption of this provision of the constitution and of all other
provisions adopted concurrently herewith, except that the three commissioners
referred to in said act shall be held and construed to be the five commissioners
provided for herein.” (Italics added.) Real parties in interest suggest that this
passage’s reference to other constitutional provisions that might be adopted
concurrently with ACA No. 6 likely was to the initiative constitutional amendment
that also was on the October 10, 1911, ballot, and they maintain that “[t]he clear
implication of this language is that, if the initiative provisions in SCA [No.] 22
should pass, they would apply to allow amendments by initiative to the Railroad
Commission Act.”

In our view, it is much more likely that this passage in ACA No. 6 was
intended to refer to a number of other constitutional amendments on the
October 10, 1911, ballot that dealt specifically with the powers of the Railroad
Commission, rather than to the initiative amendment. As noted above (see, ante,
p. 26, fn. 6), SCA No. 47 on the October 1911 ballot contained a proposed
amendment to article XII, former section 23 authorizing the Legislature to expand
the Railroad Commission’s jurisdiction to include a wide range of public utilities.
In addition, Assembly Constitutional Amendment No. 50 (ACA No. 50) on the
same ballot contained a proposed amendment to article XII, former sections 20
and 21 that, among other matters, required a railroad company to obtain
permission from the Railroad Commission before raising rates and explicitly
authorized the Railroad Commission to grant exemptions from a separate
constitutional provision that generally prohibited a railroad from charging a lower
rate for a long haul than for a short haul. We believe it is much more reasonable
to interpret the language of ACA No. 6 as directing that the Railroad Commission
Act “shall be construed with reference” to these other measures related to the
Railroad Commission, rather than as requiring that the Railroad Commission Act
be construed with reference to the initiative measure. (See Sect. of State,
(footnote continued on next page)
30

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Accordingly, in view of the longstanding California decisions establishing
that references in the California Constitution to the authority of the Legislature to
enact specified legislation generally are interpreted to include the people’s reserved
right to legislate through the initiative power, and in light of the background and
purpose of the relevant language of article XII, section 5, we conclude that this
constitutional provision does not preclude the people, through their exercise of the
initiative process, from conferring additional powers or authority upon the PUC.9

(footnote continued from previous page)
Proposed Amends. to Const. with Legislative Reasons, Special Elec. (Oct. 10,
1911), Reasons Why ACA No. 50 Should Be Adopted [“The amendment is one of
the series composed of Senate Constitutional Amendment No. 47 and Assembly
Constitutional Amendments Nos. 6 and 50, and as an amendment in the direction
of efficient railroad rate regulation should unquestionably be ratified by the
people”].)

Accordingly, contrary to the argument of real parties in interest, we
conclude that the reference in ACA No. 6 to other constitutional provisions
considered at the same election provides no additional support for their position.
Nonetheless, for the other, more persuasive reasons discussed above, we conclude
that the Court of Appeal erred in its interpretation of article XII, section 5.
9
To avoid any potential misunderstanding, we emphasize that our holding is
limited to a determination that the provisions of article XII, section 5 do not
preclude the use of the initiative process to enact statutes conferring additional
authority upon the PUC. We have no occasion in this case to consider whether an
initiative measure relating to the PUC may be challenged on the ground that it
improperly limits the PUC’s authority or improperly conflicts with the
Legislature’s exercise of its authority to expand the PUC’s jurisdiction or
authority. Should these or other issues arise in the future, they may be resolved
through application of the relevant constitutional provision or provisions to the
terms of the specific legislation at issue.
31

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IV
For the reasons discussed above, we conclude that the judgment of the
Court of Appeal must be reversed. Because Proposition 80 was defeated at the
November 8, 2005, election, the challenge to that proposition in this proceeding is
moot. Accordingly, the judgment of the Court of Appeal is reversed and the
matter is remanded to that court with directions to dismiss the proceeding as moot.
GEORGE, C. J.
WE CONCUR:

KENNARD, J.
BAXTER, J.
WERDEGAR, J.
CHIN, J.
MORENO, J.
CORRIGAN, J.
32

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See next page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion Independent Energy Producers Association v. McPherson
__________________________________________________________________________________

Unpublished Opinion

Original Appeal
Original Proceeding
Review Granted XXX 131 Cal.App.4th 298
Rehearing Granted

__________________________________________________________________________________

Opinion No.

S135819
Date Filed: June 19, 2006
__________________________________________________________________________________

Court:

County:
Judge:

__________________________________________________________________________________

Attorneys for Appellant:

Nielsen, Merksamer, Parrinello, Mueller & Naylor, James R. Parrinello and Richard D. Martland for
Petitioners.

__________________________________________________________________________________

Attorneys for Respondent:

Bill Lockyer, Attorney General, Louis R. Mauro, Assistant Attorney General, Christopher E. Krueger,
Vickie P. Whitney and Hiren Patel, Deputy Attorneys General, for Respondent.

Remcho, Johansen & Purcell, Robin B. Johansen, Thomas A. Willis; Utility Reform Network and Michael
Peter Florio for Real Parties in Interest.

Bill Lockyer, Attorney General, and James Humes, Chief Assistant Attorney General, as Amici Curiae.

1

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Counsel who argued in Supreme Court (not intended for publication with opinion):

Richard D. Martland
Nielsen, Merksamer, Parrinello, Mueller & Naylor
1415 L Street, Suite 1200
Sacramento, CA 95814
(916) 446-6752

Robin B. Johansen
Remcho, Johansen & Purcell
201 Dolores Avenue
San Leandro, CA 94577
(510) 346-6200

2

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Opinion Information

Date:	Docket Number:
Mon, 06/19/2006	S135819

Disposition
Jun 19 2006	Opinion: Reversed

Dockets
Jul 25 2005	Petition for writ of mandate/prohibition filed   By counsel for petitioners {Robert Finkelstein et al.,}.
Jul 25 2005	Exhibit(s) lodged   One volume
Jul 25 2005	Retained for consideration (mandate/prohibition & stay)   Election Matter
Jul 26 2005	Order filed   The "Emergency Petition for Writ of Review," filed on July 25, 2005, is refiled as a Petition for Review from the Court of Appeal's decision in Independent Energy Producers Association et al. v. McPherson (Finkelstein et al., Real Parties in Interest) (July 22, 2005, C050115) ___ Cal.App.4th ___ [05 C.D.O.S. 6448]. The matter is retitled as follows: INDEPENDENT ENERGY PRODUCERS ASSOCIATION et al., Petitioners, v. BRUCE McPHERSON, as Secretary of State, etc., Respondent; ROBERT FINKELSTEIN et al., Real Parties in Interest.
Jul 27 2005	Order filed   The order filed on July 26, 2005 is hereby amended to read in its entirety: The "Emergency Petition for Writ of Mandate," filed on July 25, 2005, is refiled as a Petition for Review from the Court of Appeal's decision in Independent Energy Producers Association et al. v. McPherson (Finkelstein et al., Real Parties in Interest) (July 22, 2005, C050115) ___ Cal.App.4th ___ [05 C.D.O.S. 6448]. The matter is retitled as follows: INDEPENDENT ENERGY PRODUCERS ASSOCIATION et al., Petitioners, v. BRUCE McPHERSON, as Secretary of State, etc., Respondent; ROBERT FINKELSTEIN et al., Real Parties in Interest.
Jul 27 2005	Petition for review granted (civil case)   Petition for review GRANTED. The stay issued by the Court of Appeal as part of its July 22, 2005, decision, restraining the Secretary of State from taking any steps, pending the finality of the Court of Appeal's decision, to place Proposition 80 in the ballot pamphlet or on the ballot of the special election to be held on November 8, 2005, is vacated. As the Court of Appeal recognized, California authorities establish that "it is usually more appropriate to review constitutional and other challenges to ballot propositions or initiative measures after an election rather than to disrupt the electoral process by preventing the exercise of the people's franchise, in the absence of some clear showing of invalidity." (Brosnahan v. Eu (1982) 31 Cal.3d 1, 4.) Because, unlike the Court of Appeal, at this point we cannot say that it is clear that article XII, section 5, of the California Constitution precludes the enactment of Proposition 80 as an initiative measure, we conclude that the validity of Proposition 80 need not and should not be determined prior to the November 8, 2005 election. Accordingly, the Secretary of State and other public officials are directed to proceed with all the required steps to place Proposition 80 in the ballot pamphlet and on the ballot of the special election to be held on November 8, 2005. After that election, we shall determine whether to retain jurisdiction in this matter and resolve the issues raised in the petition. Votes: George, C.J., Kennard, Baxter, Werdegar, Chin, and Moreno, JJ.
Jul 29 2005	Received Court of Appeal record   file jacket
Aug 9 2005	Request for extension of time filed   for RPIs (Finkelstein and Florio) to file the opening brief on the merits, to 9-20-05.
Aug 9 2005	Certification of interested entities or persons filed   by resp.
Aug 11 2005	Certification of interested entities or persons filed   by RPIs
Aug 11 2005	Extension of time granted   to 9-20-05 for RPIs to file the opening brief on the merits.
Aug 11 2005	Certification of interested entities or persons filed   by petnrs
Sep 20 2005	Opening brief on the merits filed   by RPIs
Sep 20 2005	Request for judicial notice filed (granted case)   by RPIs
Sep 28 2005	Filed:   Letter from AG on behalf of resp Mc Pherson
Oct 12 2005	Answer brief on the merits filed   by petnrs
Oct 12 2005	Request for judicial notice filed (granted case)   by petnrs
Nov 1 2005	Reply brief filed (case fully briefed)   by RPIs
Nov 1 2005	Request for judicial notice filed (granted case)   (2nd request) by RPIs
Mar 29 2006	Supplemental briefing ordered   The parties are invited to file supplemental briefing addressing the question whether, and, if so, under what circumstances, the kind of initiative challenge that is at issue in this case should be resolved prior to, rather than after, an election. The parties may file simultaneous supplemental letter briefs on this issue on or before April 10, 2006, and may file simultaneous reply briefs on or before April 17, 2006.
Apr 3 2006	Filed:   letter from Dep. Attorney Genereal Vickie P. Whitney for Respondent, Bruce McPherson stating that the Secretary of State takes no position on the question posed in the invitation for supplemental briefing.
Apr 4 2006	Case ordered on calendar   Tuesday, May 2, 2006, at 9:00 a.m., in San Francisco
Apr 7 2006	Supplemental brief filed   Independent Energy Producers Association, California Retailers Association, petitioners by Richard D. Martland, counsel
Apr 10 2006	Supplemental brief filed   Office of the Attorney General as amicus curiae by Chief Assistant Attorney General, James Humes.
Apr 10 2006	Supplemental brief filed   Petitioners, Independent Energy Producers, et al., by counsel, Richard D. Martland.
Apr 10 2006	Supplemental brief filed   Real Parties in Interest, Robert Finkelstein, et. al. by counsel, Robin B. Johansen.
Apr 13 2006	Received:   letter from California PUC, Randolph L. Wu, general counsel re: amicus letter.
Apr 17 2006	Supplemental brief filed   Independent Energy Producers Association et al., Petitioners by Richard D. Martland, counsel Reply letter
Apr 17 2006	Supplemental brief filed   Robert Fonkeltein, Real Party in Interest by Robin Johansen, counsel Reply letter
Apr 19 2006	Letter sent to:   Randolp L. Wu, General Counsel of the Public Utilities Commission in response to his letter dated April 13, 2006.
May 2 2006	Cause argued and submitted
May 19 2006	Request for judicial notice granted   the requests for judicial notice filed by real parties in interest on September 20 2005 and November 1, 2005, and the request for judicial notice filed by petitioners on October 12, 2005, are granted.
Jun 19 2006	Opinion filed: Judgment reversed   and remanded to that court with directions to dismiss the proceeding as moot. Opinion by: George, C.J. -- joined by Kennard, Baxter, Werdegar, Chin, Moreno, and Corrigan, JJS. [Remanded to Third District Court of Appeal]
Jul 20 2006	Remittitur issued (civil case)
Aug 3 2006	Received:   receipt for remittitur CA 3.

Briefs
Sep 20 2005	Opening brief on the merits filed
Oct 12 2005	Answer brief on the merits filed
Nov 1 2005	Reply brief filed (case fully briefed)

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