COAN v. STATE OF CALIFORNIA

OPINION

MOSK, J.

I concur in the judgment.

While it may be late in the constitutional day to raise the issue, my unyielding respect for the traditional federalism upon which our republic was established impels me to reach agreement with the majority result solely on the basis of the Tenth Amendment to the Constitution. For the same reason I find no merit in the jurisdictional point raised by the dissent. My position is substantially that of Justices Douglas and Stewart, dissenting in Maryland v. Wirtz (1968) 392 U.S. 183, 201 [20 L.Ed.2d 1020, 1033, 88 S.Ct. 2017].

The asserted power of the federal government over state government salaries in this case rests upon the commerce clause and may be exercised only if some relationship can be demonstrated to exist between the activity to be regulated and interstate commerce. If the state acts in a proprietary capacity, usually some such relationship, albeit tenuous, can be found. ( Employees v. Missouri Public Health Dept. (1973) 411 U.S. 279 [36 L.Ed.2d 251, 93 S.Ct. 1614].) Under those circumstances the distinction is between "the State as government and the State as trader" ( New York v. United States (1946) 326 U.S. 572, 579 [90 L.Ed. 326, 332, 66 S.Ct. 310]). Certainly if federal funds are involved, as e.g., for highway construction and maintenance, the employees paid by or expending such funds — even though their immediate employer is the state — may be subject to acts of Congress. ( Oklahoma v. Civil Service Comm'n (1947) 330 U.S. 127, 142 [91 L.Ed. 794, 805-806, 67 S.Ct. 544].)

But if all employees of the state — including those occupying purely governmental positions created by the state, paid with funds raised by the state, performing services entirely intrastate in character — are subject to whimsical control of the Congress and federal administrative agencies, "then the National Government could devour the essentials of state sovereignty, though that sovereignty is attested by the Tenth Amendment." (Douglas, J., dissenting in Maryland v. Wirtz, supra, at p. 205 [20 L.Ed.2d at p. 1036].) Chief Justice Stone also warned, concurring in New York v. United States, supra, at p. 587 [90 L.Ed. at p. 336], that the national government may not "interfere unduly with the State's performance of its sovereign functions of government."

Ever since Chief Justice Marshall sustained reciprocal immunity of the state and federal governments from intergovernmental taxation in McCulloch v. Maryland (1819) 17 U.S. (4 Wheat.) 316, 429-430 [4 L.Ed. 579, 607], it should have been clear that the "notion that the sovereign position of the States must find its protection in the will of a transient majority of Congress is foreign to and a negation of our constitutional system." (Douglas and Black, JJ., dissenting, New York v. United States, supra, at p. 594 [90 L.Ed. at p. 340].) A number of high court opinions have spoken in generality of the merits inherent in a healthy federalism. (See, e.g., Powell, J., concurring in Johnson v. Louisiana (1972) 406 U.S. 356, 376 [32 L.Ed.2d 152, 167-168, 92 S.Ct. 1620]; Harlan, J., dissenting in Duncan v. Louisiana (1968) 391 U.S. 145, 172 [20 L.Ed.2d 491, 509, 88 S.Ct. 1444]; Goldberg, J., concurring in Pointer v. Texas (1965) 380 U.S. 400, 414 [13 L.Ed.2d 923, 932, 85 S.Ct. 1065]; Clark, J., in Ker v. California (1963) 374 U.S. 23, 31 [10 L.Ed.2d 726, 736, 83 S.Ct. 1623].) In Atlantic C.L.R. Co. v. Engineers (1970) 398 U.S. 281, 285 [26 L.Ed.2d 234, 240, 90 S.Ct. 1739], Justice Black, speaking for the court reminded us: "When this Nation was established by the Constitution, each State surrendered only a part of its sovereign power to the national government. But those powers that were not surrendered were retained by the States. . . ."

One need not disparage the motive of achieving national economic stability, as Chief Justice Hughes pointed out in Schechter Corp. v. United States (1935) 295 U.S. 495, 550 [79 L.Ed. 1570, 1591, 55 S.Ct. 837, 97 A.L.R. 947], to deny to the federal government the right to fix wages in an intrastate enterprise. For however laudable the statutory purpose, Justice Cardozo taught us, "the Tenth Amendment preserves a field of autonomy against federal encroachment." ( Hopkins Savings Assn. v. Cleary (1935) 296 U.S. 315, 337 [80 L.Ed. 251, 259, 56 S.Ct. 235, 100 A.L.R. 1403].)

Some contemporary authorities, considered during the exigencies of the second world war, have reached contrary conclusions in circumstances somewhat analogous to the facts in this case. Unfortunately the imperatives of concentrated bigness — our national dimension in geography, population, industry, labor, technology — have resulted in a correlative concentration of power in the biggest government. Perhaps the trend toward centralized authority and judicial acquiescence in it are irreversible (but see Harlan, J., concurring and dissenting in Williams v. Florida (1970) 399 U.S. 78, 133 [26 L.Ed.2d 446, 472-473, 90 S.Ct. 1893]); nevertheless I suggest that a fait accompli is not necessarily desirable or constitutionally permissible. Expediency must never cause us to abdicate our responsibility to hold even generally accepted concepts to the light of constitutional scrutiny.

If we examine application of this federal act in the light of the commerce clause, we would at once experience the utter futility of trying to detect activity in interstate commerce by a janitor in the State Capitol, a stenographer in the Governor's office, an administrative assistant to a state legislator, a law clerk in this court, or, for that matter, by every state employee who is hired by the state, paid by the state and whose sphere of service is jurisdictionally circumscribed by the borders of the state. Thus this could be a classic case in which to take a firm constitutional stand for state independence in its governmental function, however anachronistic such action may seem to those who over the years have bent constitutional principles to fleeting expediency.

We issued an alternative writ of mandate. The respondent State of California, exercising the sovereign power reserved to it under the Tenth Amendment, should have responded by performing the acts incident to state sovereignty: paying the funds provided in the California Budget Act of 1973. Since the State failed to do so, a peremptory writ of mandate becomes necessary.

SULLIVAN, J.

I dissent. This court does not have jurisdiction of the subject matter of these proceedings.

Section 211 of the Economic Stabilization Act (the Act) unequivocally provides that "[t]he district courts of the United States shall have exclusive original jurisdiction of cases or controversies arising under this title, or under regulations or orders issued thereunder. . . ." (Italics added.) The sole question to be answered in order to determine the jurisdictional issue is whether this is a case or controversy "arising under" the Act.

In paragraph V of the petition for writ of mandate, it is alleged that Congress, in enacting the Economic Stabilization Act, "did not grant authority to the President or any federal administrative body to regulate or control the internal affairs of sovereign states of the United States"; that the Cost of Living Council, Office of Wage Stabilization ordered the Governor not to carry out the salary increases except as authorized by the council; and that "[n]otwithstanding the lack of constitutional authority on the part of the Cost of Living Council, Office of Wage Stabilization, to promulgate and enforce such an order, respondents have obeyed, and threaten to continue to obey, such order, all in violation of their legal duties. . . ." In view of these allegations, as will be shown, I conclude that this case does indeed arise under the Act and therefore falls within the provisions of section 211.

To determine the meaning of "arising under" it is helpful to review some decisions interpreting section 1331, subdivision (a), of title 28 of the United States Code. This subdivision, setting forth the requirements for "federal question" jurisdiction, provides in pertinent part: "The district courts shall have original jurisdiction of all civil actions wherein the matter in controversy . . . arises under the Constitution, laws, or treaties of the United States." (Italics added.) Starin v. New York (1885) 115 U.S. 248 [29 L.Ed. 388, 6 S.Ct. 28], a leading case on federal question jurisdiction, provides a clear insight into the meaning of the critical words: "If from the questions it appears that some title, right, privilege, or immunity, on which recovery depends, will be defeated by one construction of the Constitution or a law of the United States, or sustained by the opposite construction, the case will be one arising under the Constitution or laws of the United States. . . ." ( Id. at p. 257 [29 L.Ed. at p. 390], italics added.)

Later federal cases supply us with more detailed explanations as to whether a case arises under federal law. In Eastern Air Lines, Inc. v. Flight Engineers Internat'l. Ass'n (5th Cir. 1965) 340 F.2d 104, cert. den., 382 U.S. 811 [15 L.Ed.2d 59, 86 S.Ct. 23], the court quoted from earlier cases the "test of federal jurisdiction where it is asserted under the `federal question' section. . . . `The test is the familiar one that it must appear from the complaint that the construction of a federal statute will have an adverse effect on the right of recovery if the statute is construed [in] one rather than another way.'" ( Id. at p. 106, italics added.) And in Ivy Broadcasting Co. v. American Tel. Tel. Co. (2d Cir. 1968) 391 F.2d 486, the court clearly indicates that an action brought to enforce a "federal right" is not a prerequisite to federal question jurisdiction. "The test we have stated for determining whether a complaint presents a federal question is . . . whether a properly pleaded `state created' claim itself presents a `pivotal question of federal law,' for example because an act of Congress must be construed or `"federal common law" govern[s] some disputed aspect' of the claim." ( Ivy, supra, at p. 489; italics added.) The court continued: "A case may `arise under' federal law, even though the claim is created by state law, if the complaint discloses a need for the interpretation of an act of Congress." ( Id. at p. 492.)

The posture of the case before us clearly meets the test as defined in Ivy. In their application for a writ of mandate, petitioners allege that the Budget Act of 1973 provides for specified salary increases for all state employees; that the Cost of Living Council, Office of Wage Stabilization ordered respondents State of California and Governor Reagan to withhold all such wage and salary increases in excess of those permitted by the council; that the United States Congress, in enacting the Economic Stabilization Act of 1970 did not grant authority to the President or any federal administrative agency to regulate or control the internal affairs of the sovereign states; that notwithstanding the lack of constitutional authority on the part of the Cost of Living Council, the various respondents have obeyed its order; and that respondents have failed to comply with their respective legal duties and have wrongfully refused to carry out the Budget Act by not processing the salary increases. To put it another way the issues of the constitutionality of the Economic Stabilization Act and of its validity as applied to state employees are raised by petitioners; they are not interposed by way of defense. Thus by the very language of the petition, the outcome of the instant proceedings depends on a determination which must be made as to the constitutionality and validity of the Act. As in Ivy, petitioners have brought a special proceeding of a civil nature (Code Civ. Proc., § 1085) based on a "state created claim" which itself "presents a `pivotal question of federal law,' . . . because an act of Congress must be construed. . . ." It is clear that the case before us arises under the Act, and we are therefore precluded from assuming jurisdiction since section 211 of the Act expressly reserves adjudication of such issues to the federal courts.

The majority take the position that we have jurisdiction, relying on the recent case of Employees v. Missouri Public Health Dept. (1973) 411 U.S. 279 [36 L.Ed.2d 251, 93 S.Ct. 1614], in which the Supreme Court held that a nonconsenting state could not be subjected to a suit in a federal court brought by its citizens, absent express language to that effect in a federal statute. Thus, the majority argue, we must have jurisdiction in the instant matter since otherwise the state employees would be deprived of any forum in which to litigate their cause. I find this rationale unconvincing. I know of no barrier which would preclude the State of California from bringing suit against the United States or the appropriate federal agency in the United States District Court for proper adjudication of the question. Further, there is every indication that the state would be willing to pursue this remedy on behalf of its employees, or in the alternative, to consent to a suit brought by the employees in federal court.

In Missouri it was stated that we cannot by implication assume an intent on the part of Congress to subject a state to a federal remedy, where one is not expressly provided. By the same token, when Congress explicitly states that the federal courts shall have exclusive original jurisdiction, we cannot imply, as do the majority, that this was not the meaning intended by Congress merely because certain persons may be left with no direct remedy against a state. It cannot be doubted that Congress has the power to preserve exclusive jurisdiction in the federal courts in cases and controversies arising under the Constitution or laws of the United States. ( Bowles v. Willingham (1944) 321 U.S. 503, 511-512 [88 L.Ed. 892, 901-902, 64 S.Ct. 641].) When this power is clearly exercised, as it is in section 211 of the Act, any attempt to override such instructions from Congress is forbidden by the supremacy clause of the Constitution of the United States. (U.S. Const., art. VI, cl. 2.)

The majority claim that there is a further reason ("although not necessarily determinative") why the jurisdiction provisions of section 211 of the Act are not applicable here. They argue that the Act itself does not apply to state employees' salaries and that therefore the jurisdictional provisions of the Act cannot apply to the instant case. This reasoning is clearly faulty.

Subject matter jurisdiction has been defined as the "power to hear or determine the case." ( Abelleira v. District Court of Appeal (1941) 17 Cal.2d 280, 288 [ 109 P.2d 942, 132 A.L.R. 715].) Without that power, a court is not competent to adjudicate the substantive issues before it. Thus, where a statute by its terms reserves jurisdiction of any case arising thereunder to the federal courts, a state court cannot first decide that the statute is inapplicable to a given controversy and thereby circumvent the jurisdictional restrictions in the statute itself. That such a result is incongruous is particularly evident where, as here, the applicability of the statute is the central substantive issue of the case. The majority would have us decide the substantive issue before determining whether we have the power to make such a decision. I conclude therefore that irrespective of the merits of the petition, we are bound by the supreme law of the land (U.S. Const., art. VI, cl. 2) to dismiss it since it is clear that we do not have jurisdiction of the matter.

Further, even if it be assumed for the sake of argument that this court possesses some sort of residuary jurisdiction over the subject matter of this proceeding, we should nevertheless as a matter of sound judicial policy decline to exercise our original jurisdiction in the circumstances (see Cal. Const., art. VI, § 10). Having disposed of the jurisdictional issue, the majority proceed to determine what they choose to denominate the substantive issue of the validity of the Act as applied to state employees' salaries. But the plain fact is that there is no substantive issue for us to decide since by their answer, respondents have admitted petitioners' allegations that Congress did not grant authority to the President or to any federal agency to regulate the internal affairs of a sovereign state. The sole allegation put in issue by respondents' return to the alternative writ is the question of jurisdiction; this issue having been determined, no controversy between the parties remains to be decided. That portion of the majority opinion dealing with the application of the Act is therefore merely advisory, and thus in excess of jurisdiction, since "[t]he rendering of advisory opinions falls within neither the functions nor the jurisdiction of this court." ( People ex rel. Lynch v. Superior Court (1970) 1 Cal.3d 910, 912 [ 83 Cal.Rptr. 670, 464 P.2d 126].)

This view of the posture of this case is further borne out by statements made at oral argument by the Attorney General. In answer to the court's question whether this was indeed an adversary proceeding, the Attorney General replied, "That's a good question," and later stated: "I felt that it was necessary that in order to have some type of an adversary proceeding here . . . that the United States should be allowed to present their arguments here." Clearly, then, except for the question of subject matter jurisdiction raised by respondents by way of demurrer, the parties to the action are in agreement. As to the substantive matters there is no controversy to be considered and determined by this court. For this court to issue the writ of mandate which both parties seek is simply to allow ourselves to be used for the purpose of providing our imprimatur to the parties' agreed position. This we should emphatically refuse to do.

Respondents have been ordered by the Cost of Living Council not to pay wage and salary increases except to the extent permitted by the council. Faced with the stern sanctions of the Act for failure to obey this order, respondents curiously seem content to seek comfort in a judgment rendered in a proceeding which is not adversary in nature — indeed in which they appear to be in complete agreement with petitioners. I fail to see how any such judgment carries the hallmark of a contested case "pressed before the Court with that clear concreteness provided when a question emerges precisely framed and necessary for decision from a clash of adversary argument exploring every aspect of a multi-faced situation embracing conflicting and demanding interests, . . ." ( United States v. Fruehauf (1961) 365 U.S. 146, 157 [5 L.Ed.2d 476, 483, 81 S.Ct. 547]; italics added.)

In summary, I conclude that we have no jurisdiction to decide the case at bench since according to the clear language of the federal statute all cases arising under the Act must be brought in the United States District Courts. Moreover, even on the assumption that we did have jurisdiction of the subject matter, I am of the view that this is not a case in which we should exercise our original jurisdiction. Accordingly, I would discharge the alternative writ of mandate and dismiss the petition for the peremptory writ.

Wright, C.J., concurred.

TOBRINER, J.

I dissent.

Although I believe that this court has jurisdiction over the subject matter of this proceeding, I am convinced both that Congress has the power to limit state employee salary increases and that Congress intended the President and his administrative delegatees to possess this power.

Respecting, first, the jurisdictional issue, I concur with the majority's conclusion that this controversy falls outside the scope of exclusive federal district court jurisdiction. Section 210, subdivision (a), of the Economic Stabilization Act, the focus of much attention in the majority's opinion, appears intended merely to eliminate the amount-in-controversy requirement that a stabilization act claimant would have to satisfy were he to found a federal court action upon the general federal question jurisdictional statute. ( 28 U.S.C. § 1331, subd. (a).) Nothing within section 210, subdivision (a), suggests that Congress intended to prevent state courts from entertaining suits raising claims under the stabilization act.

Section 211, subdivision (a), on the other hand, draws a distinction between actions "arising under" the act or related regulations and actions in which the constitutionality of the act or the validity of related agency action is raised by way of defense. Congress appears to have intended that federal district courts should have exclusive original jurisdiction over those cases which "aris[e] under" the federal stabilization laws and regulations but not those in which issues concerning the validity of the stabilization act or related executive branch action are introduced by the defense. Although Justice Sullivan points out that plaintiff Coan alleged in his mandate petition that the stabilization act did not delegate the authority to regulate state salaries, I am convinced that the presence of this allegation in his petition does not render this controversy one that "aris[es] under" the act or related regulations and orders.

It has long been established in the context of determining whether a federal district court has original federal question jurisdiction under United States Code, title 28, section 1331, subdivision (a), that a plaintiff cannot affect jurisdictional boundaries by anticipatorily pleading federal defenses. (E.g., Gully v. First National Bank (1936) 299 U.S. 109, 112-113 [81 L.Ed. 70, 71-72, 57 S.Ct. 96]; White v. Sparkill Realty Corp. (1930) 280 U.S. 500, 512 [74 L.Ed. 578, 583, 50 S.Ct. 186]; Louisville Nashville R.R. v. Mottley (1908) 211 U.S. 149, 152-154 [53 L.Ed. 126, 127-128, 29 S.Ct. 42]. See also Bator, Mishkin, Shapiro Wechsler, Hart Wechsler's The Federal Courts and the Federal System (2d ed. 1973) pp. 883-885; Wright, Federal Courts (1963) § 18, pp. 52-55; Mishkin, The Federal "Question" in the District Courts (1953) 53 Colum.L.Rev. 157, 164, 176-184.) Although Justice Sullivan correctly observes that an action "arises under" federal law if the federal issue "appear[s] from the complaint" ( Eastern Air Lines, Inc. v. Flight Engineers Internat'l Ass'n (5th Cir. 1965) 340 F.2d 104, 106, cert. den., 382 U.S. 811 [15 L.Ed.2d 59, 86 S.Ct. 23], quoting Dickson v. Edwards (5th Cir. 1961) 293 F.2d 211, 215), the complaint must be properly composed; it may not include material unnecessary to establish plaintiff's claim for relief. (See Marshall v. Desert Properties Co. (9th Cir. 1939) 103 F.2d 551, 552, cert. den., 308 U.S. 563 [84 L.Ed. 473, 60 S.Ct. 74].) And although the case before us concerns the jurisdiction of a state rather than a federal court, I discern no dispositive reason why the anticipatory defense principle should not apply in the present context. Just as an aspiring federal court plaintiff cannot affect jurisdictional boundaries by prematurely interjecting federal defenses, so a resistant state court defendant cannot affect jurisdictional boundaries by exploiting the verbosity of its adversary.

All that plaintiff Coan need have alleged to establish a facially sufficient claim for relief was that he was a state employee entitled to the full pay increase prescribed by the California Budget Act of 1973. Reference in his petition to the existence and validity of the order of the Cost of Living Council was unnecessary to a complete description of his claim. His action thus cannot be said to "aris[e] under" the stabilization act or a regulation or order issued pursuant thereto. I conclude, therefore, that we possess the requisite jurisdiction over the subject matter.

Turning next to the question whether Congress has the power to limit state employee salary increases, I submit that it does. (See California Teach. Ass'n v. Newport Mesa Unified Sch. Dist. (C.D.Cal. 1971) 333 F. Supp. 436, 444-445.) The power finds its source in the commerce clause (U.S. Const., art. I, § 8), and the critical inquiry is whether Congress could reasonably have thought that the regulated activities or events substantially affect interstate commerce. (See generally Atlanta Motel v. United States (1964) 379 U.S. 241 [13 L.Ed.2d 258, 85 S.Ct. 348]; Moore v. Mead's Fine Bread Co. (1954) 348 U.S. 115 [99 L.Ed. 145, 75 S.Ct. 148]; Labor Board v. Jones Laughlin (1937) 301 U.S. 1 [81 L.Ed. 893, 57 S.Ct. 615, 108 A.L.R. 1352].) The validity of the proposition that significant sums of money placed in the hands of large numbers of state employees can have a substantial impact upon national demand and monetary stability is surely obvious. Indeed, the proposition appears jurisprudentially unimpeachable in light of the United States Supreme Court's celebrated holding that personal consumption of home-grown wheat by farmers can sufficiently affect interstate markets to justify congressional regulation of the wheat consumed. ( Wickard v. Filburn (1942) 317 U.S. 111 [87 L.Ed. 122, 63 S.Ct. 82].) To focus upon whether the regulated events physically occur wholly within the borders of a state is to resurrect old and discarded learning. (See, e.g., United States v. E.C. Knight Co. (1895) 156 U.S. 1 [39 L.Ed. 325, 15 S.Ct. 249]. Cf. Hopkins v. United States (1898) 171 U.S. 578 [43 L.Ed. 290, 19 S.Ct. 40].) "If it is interstate commerce that feels the pinch, it does not matter how local the operation which applies the squeeze." ( U.S. v. Women's Sportswear Assn. (1949) 336 U.S. 460, 464 [93 L.Ed. 805, 811, 69 S.Ct. 714]; see also Atlanta Motel v. United States, supra, at pp. 268, 271 [13 L.Ed.2d at pp. 274, 276]; United States v. Darby (1941) 312 U.S. 100, 119 [85 L.Ed. 609, 619-620, 61 S.Ct. 451, 132 A.L.R. 1430].)

Nor do I believe that the Tenth Amendment and the fact that the regulatee is a state sovereign precludes congressional regulation in this instance. To be sure, there may be special limits upon the ambit of Congress' commerce clause power with respect to the activities of state governments (see Maryland v. Wirtz (1968) 392 U.S. 183, 204-205 [20 L.Ed.2d 1020, 1035-1036, 88 S.Ct. 2017] (Douglas, J., dissenting); Note, State Sovereignty as a Limitation upon the Federal Commerce Power (1936) 45 Yale L.J. 1118), just as there are limits on Congress' ability to affect such activities by exercising its article I, section 8 powers to "provide" for the "general welfare" (see generally United States v. Butler (1936) 297 U.S. 1 [80 L.Ed. 477, 56 S.Ct. 312, 102 A.L.R. 914]; but cf. Oklahoma v. Civil Service Comm'n (1947) 330 U.S. 127 [91 L.Ed. 794, 67 S.Ct. 544]; Steward Machine Co. v. Davis (1937) 301 U.S. 548 [81 L.Ed. 1279, 57 S.Ct. 883, 109 A.L.R. 1293]), and "lay and collect taxes." (See generally New York v. United States (1946) 326 U.S. 572 [90 L.Ed. 326, 66 S.Ct. 310]; Metcalf Eddy v. Mitchell (1926) 269 U.S. 514 [70 L.Ed. 384, 46 S.Ct. 172].)

I concede, in short, that a balance must be struck between the interests which support the federal regulatory power and the need to minimize interference with the essential functions of state government. But the locus of this balance is not best discovered by invoking a specter of destruction of state government by Congress. Although Chief Justice Marshall was correct that "the power to tax involves the power to destroy" ( McCulloch v. Maryland (1819) 17 U.S. (4 Wheat.) 316, 429 [4 L.Ed. 579, 607]), the reasoning underlying Justice Holmes' admonition "not . . . while [the United States Supreme Court] sits" ( Panhandle Oil Co. v. Mississippi (1928) 277 U.S. 218, 223 [72 L.Ed. 857, 859, 48 S.Ct. 451, 56 A.L.R. 583] (dissenting opinion) reveals the essence of the task. (See also New York v. United States, supra, at pp. 577, 583 [90 L.Ed. at pp. 330-331, 334].) Courts, in part, are in the very business of striking balances and are sufficiently capable of insuring that principles and positions are not extrapolated to unjustifiable extremes.

Fully cognizant, then, of the importance of preserving viable state government, I nevertheless submit that the present situation is not one in which congressional action poses a threat to the life or integrity of our 50 state sovereigns. As far as I can discern, a state's principal interest in raising its employees' salaries is based on its need to compete effectively with private industry for qualified personnel. As long, however, as the federal government properly controls the salaries of private employees, there is little reason to fear that private salaries will increase faster than state salaries.

A state may further have an interest in seeing that its employees are well paid and comfortable. Since, however, a state has a similar interest in the welfare of privately employed persons and since this latter interest does not preclude federal control of private salaries, there can be no claim that a state's interest in the welfare of those it employs precludes congressional control of their salaries. I conclude, therefore, that although the target of federal regulation is an activity of state government, the regulation does not interfere unacceptably with state sovereignty in this instance.

Confronting, finally, the question of congressional purpose, I do not agree with the majority's conclusion that Congress did not intend to delegate the power to control state employee salary increases. Although the majority is correct that "an unexpressed purpose of Congress to set aside state regulation of internal affairs is not lightly to be inferred" (see, e.g., Penn Dairies v. Milk Control Comm'n (1943) 318 U.S. 261, 275 [87 L.Ed. 748, 756, 63 S.Ct. 617]; Parker v. Brown (1943) 317 U.S. 341, 351 [87 L.Ed. 315, 326, 63 S.Ct. 307]), the present situation seems to be one in which such an inference is proper.

A primary purpose of the stabilization act, as stated in its section 202, is to "stabilize the economy [and] reduce inflation" in part by "stabiliz[ing] . . . wages [and] salaries." (See Amalgamated Meat Cutters Butcher Work. v. Connally (D.D.C. 1971) 337 F. Supp. 737, 749.) Given this purpose, I have great difficulty believing that Congress intended to exempt the salaries of the nation's more than 10 million state and local governmental employees without clarifying this intention either with explicit statutory language or at least some exposition to this effect in the legislative record. Because large accessions of disposable income in the hands of so substantial a segment of the labor force could significantly affect demand and monetary stability, I cannot assume without basis that Congress intended to deny the executive branch the flexibility to prevent such accessions.

Moreover, were state employees' salaries left unregulated, the federal government might encounter difficulty enforcing controls on private salaries. Critical to the success of much economic regulation is that the regulated parties must be convinced that they are receiving equitable treatment. Were state employees' salaries left free to rise, many private employees might resist controls placed on their salaries. (Cf. Davies Warehouse Co. v. Bowles (1944) 321 U.S. 144, 157-158 [88 L.Ed. 635, 644-645, 64 S.Ct. 474] (Douglas, J., dissenting); Remarks of Senator Tower, 117 Cong. Record (1971) 43, 674.)

The majority's assurance that the pocketbook concerns of state taxpayers afford a sufficient restraint on salaries like that of plaintiff Coan fails to remove doubts that Congress intended to leave such salaries unregulable. State employees typically maintain potent legislative lobbies, and at least two states — California and Ohio — have adopted pay increases which the presumably expert federal administrators later determined were unacceptably inflationary. Nor does the fact that a California statute commands the State Personnel Board to consider salary levels in the private sector when adjusting salary ranges for state civil service employees (Gov. Code, § 18850) squarely reach the issue. We are concerned, here, with Congress' intent with respect to the entire nation and cannot assume that Congress was willing to rely upon California law and whatever similar prescriptions operate in other states to restrain public employees' salaries.

I conclude, in sum, that Congress intended that state employees' compensation should be amenable to federal control so that Congress could accomplish the objectives of the stabilization act. As acknowledged by the majority, federal legislation must be read to apply to the activities of state governments, absent congressional instruction to the contrary, when such application appears necessary to effectuate the legislation's purposes. (See generally California v. United States (1944) 320 U.S. 577, 585-586 [88 L.Ed. 322, 330-331, 64 S.Ct. 352]; United States v. California (1936) 297 U.S. 175, 185-187 [80 L.Ed. 567, 573-574, 56 S.Ct. 421]; 3 Sutherland, Statutes and Statutory Construction (3d ed. 1943) § 6302, pp. 192-193.)

The majority nevertheless takes the position and apparently finds dispositive that through its opinions, the United States Supreme Court has instructed Congress that the judiciary will not apply federal legislation to the activities of state governments unless Congress explicitly mandates this result. Congress, however, appears to have ignored this instruction at least in the present instance. I draw this inference from the fact that both the Senate and its Committee on Banking, Housing and Urban Affairs rejected proposals which would have explicitly exempted state employees' salaries from control. One can speculate, of course, that these rejections do not indicate the Senate's desire to give the President and his delegatees the power to regulate state salaries but rather reflect the Senate's belief that an explicit exemption would have been redundant given the presumption that state activities are unaffected when a statute fails to address the issue. To so conclude, however, is to assume that the many senators who supported the exemption proposals failed to accept or comprehend the Supreme Court's message. Such a conclusion also ascribes unlikely motives to the senators who rejected the proposals. A more probable explanation is that the Senate and its committee disapproved explicit exemption because they intended that state employees' salaries should be regulable. (Cf. California v. Taylor (1957) 353 U.S. 553, 564-565 [1 L.Ed.2d 1034, 1041-1042, 77 S.Ct. 1037].)

In the end, I fear that the majority may have been influenced by a belief that California's state employees deserve the full raises prescribed by the Budget Act of 1973. Our task, however, is to ascertain the power and intent of Congress, not to pass on the economics or equity of a particular pay increase. The latter is the function of the Cost of Living Council and the subject of whatever appeals lie therefrom.

I would deny the relief requested.