California Supreme Court Rules Proposition 35 Repealed Prior Laws That Limited Outsourcing State Work

In Professional Engineers in California Government v. Kempton, (— Cal.Rptr. 3d —, 2007 WL 1077169, Cal., Apr. 12, 2007), the California Supreme Court considered the scope of Proposition 35, a measure enacted by the voters in 2000 to repeal the constitutional ban on the outsourcing of work to private contractors by government agencies.

The Court found that the measure implicitly repealed prior statutes regulating private contracting, ruling that it freed agencies to pursue outsourcing without further action by the Legislature.


In 2000, California voters approved Proposition 35, which amended the state constitution to allow government agencies to outsource work to private contractors. Professional Engineers in California Government (“Engineers”), the association representing state-employed engineers, sued the state Department of Transportation (“Caltrans”) and its director, Jeff Morales, (who was later replaced by Will Kempton) in an effort to stop Caltrans from outsourcing engineering work. Engineers’ petition asserted that Proposition 35 did not repeal statutes requiring the Legislature to authorize outsourcing. The trial court and the Court of Appeal both denied Engineers’ petition, and Engineers appealed to the California Supreme Court.


Reviewing the language of Proposition 35, the Court concluded that although it did not explicitly repeal the prior statutes regulating outsourcing, “the constitutional and statutory provisions of the initiative as a whole, impliedly repeal these statutes.”

Those provisions, the Court said, “demonstrate a clear intent by the electorate to supersede prior law” that limited outsourcing. Furthermore, the provisions cannot be reconciled with the existing statutes that restrict such contracting. “We therefore conclude that Proposition 35 impliedly repealed the particular statutes at issue here,” the Court said.

The Court also rejected Engineers’ assertion that the phrase “State of California” in Proposition 35, referred specifically to the Legislature. “State of California” commonly refers to all three branches of government—legislative, executive, and judicial—the court said. Further, the initiative does refer specifically to the Legislature in some of its provisions, the Court noted, proving that the drafters were “perfectly capable” of designating the Legislature with jurisdiction over outsourcing had they so intended. It is “inconceivable” that they would not have done so, the Court added.

The Court of Appeals’ judgment was affirmed.

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