COUNTY OF ALAMEDA, Plaintiff and Respondent, v. BOARD OF RETIREMENT OF THE ALAMEDA COUNTY EMPLOYEES' RETIREMENT ASSOCIATION, Defendant and Respondent; ROGER L. CARNES, Real Party in Interest and Appellant, 46 Cal. 3d 902

Opinion EAGLESON, J. In this case, we are called upon to determine the appropriate standard of review to be applied by the superior court when a county seeks a writ of mandate (Code Civ. Proc., § 1094.5) to review a decision of its retirement board granting a service-connected disability pension to a deputy sheriif. We conclude that the independent judgment test applies. When a local government entity is required to contribute to an employee benefit fund of the type involved here (Gov. Code, § 31450 et seq.), an administrative award of those benefits warrants such review under Interstate Brands v.

Unemployment Ins. Appeals Bd. (1980) 26 Cal.3d 770 [163 Cal.Rptr. 619, 608 P.2d 707]. Facts The undisputed facts concern real party in interest, Roger L. Carnes (Carnes), who was initially employed as a deputy sheriif by plaintiff County of Alameda (County) in 1969. As a result of his employment, Carnes became a member of the Alameda County Employees’ Retirement Association. In 1979, Carnes, who was then about 35 years old, applied for a service-connected disability retirement with defendant, Board of Retirement of the Alameda County Employees’ Retirement Association (Board).

In his application, he claimed that various work-related auto and slip-and-fall accidents injured his back, and required him to undergo surgery to remove a herniated disc. As a result of the surgery, Carnes assertedly could no longer perform the usual duties of a deputy sheriff. The Board conducted a hearing at which both sides presented evidence on the issue of Carnes’s alleged permanent incapacitation. Carnes testified that he was incapable of engaging in any strenuous physical activity, and could not perform certain sheriff’s duties, such as those related to pursuing and subduing suspects.

Although he recovered well from the surgery, he felt compelled to accept a sales job with another employer which involved only “light” physical work. He further testified that persistent back pain and weakness required him to forego such recreational activities as skiing, racquetball, horseback riding, and performing daily feed-and-care tasks at his horse-boarding business. The one expert medical opinion introduced on Carnes’s behalf was provided by Dr. Indeck.

He stated that no medical disability prevented Carnes from performing any of the physical duties listed in the official job description for deputy sheriff. In Dr. Indeck’s opinion, Carnes was indeed incapacitated, but only in the sense that repeated lifting or bending, or a strenuous altercation, might cause additional stress or strain to the back. County’s evidence consisted, in part, of a film taken by a private investigator four days before the hearing. The film (as well as testimony by the investigator) depicted Carnes shoveling horse manure at his stables, and bending and moving with apparent ease.

County also introduced the testimony of Dr. Powlan, an orthopedic surgeon who had examined Carnes in person and studied his X-rays. Dr. Powlan stated that Carnes had “recovered very well” from a “cleanly done” operation. There were no signs of any ongoing or fresh irritation in the injured area. Dr. Powlan further opined that the deputy sheriff’s job would have no more harmful physical effect on Carnes’s back than his new job as a salesman. A third and final medical opinion was given by Dr. Handon, the Board’s independent medical advisor.

He reviewed Carnes’s medical history and concluded that “disability is totally unproven on an objective ground.” Dr. Handon insisted that Carnes had recovered well from his surgery and could physically perform his duties as a deputy sheriff.

After the hearing, the Board concluded that Carnes was “permanently incapacitated for the performance of the usual duties of the deputy sheriff position within the meaning of the retirement law of 1937 (Gov[.] Code, § 31724),” and that his “incapacitation results from injury arising out of [and] occurring in the course of his employment.” County petitioned the superior court for a writ of mandate (Code Civ. Proc., § 1094.5) to compel the Board to set aside its decision and enter an order denying Carnes’s application for disability retirement.

Following a hearing, the court independently reviewed and weighed the evidence in the administrative record, and granted the requested relief. On appeal, Carnes argued that the trial court should have limited itself to determining whether the Board’s decision was supported by substantial evidence. The Court of Appeal disagreed and affirmed the judgment. It concluded that the trial court had properly exercised its independent judgment under our decision in Interstate Brands, supra, 26 Cal. 3d at page 770, and had made findings which were supported by substantial evidence. Discussion Code of Civil Procedure

section 1094.5, subdivision (c), provides alternative standards for judicial review of the evidentiary basis of an administrative agency’s adjudicatory decision: “Where it is claimed that the findings are not supported by the evidence, in cases in which the court is authorized by law to exercise its independent judgment on the evidence, abuse of discretion is established if the court determines that the findings are not supported by the weight of the evidence.

In all other cases, abuse of discretion is established if the court determines that the findings are not supported by substantial evidence in the light of the whole record.” The foregoing language does not attempt to specify which cases are reviewable under the “weight of the evidence” and “substantial evidence” standards. The sole legislative guidance on this point is that the courts may independently weigh the evidence whenever “authorized by law” to do so.

In using this language, the Legislature simply intended to codify existing rules governing the applicable standard of judicial review. (Tex-Cal Land Management, Inc. v. Agricultural Labor Relations Bd. (1979) 24 Cal.3d 335, 343 [156 Cal.Rptr. 1, 595 P.2d 579].) In other words, the courts are left with the ultimate task of deciding which cases warrant such review. (Unterthiner v. Desert Hospital Dist. (1983) 33 Cal.3d 285, 293-294 [188 Cal.Rptr. 590, 656 P.2d 554]; Bixby v.

Pierno (1971) 4 Cal.3d 130, 140 [93 Cal.Rptr. 234, 481 P.2d 242].) In Bixby, supra, 4 Cal.3d at pages 138-140, we approached this task by observing that the independent judgment test had its historical roots in the notion that agencies lacking in judicial power are precluded from performing judicial functions.

We recognized that the essence of this function is to make binding determinations on conflicting evidence, particularly where constitutional liberty and property interests are involved. (Ibid.) To uphold such a decision by a “nonjudicial” agency, without allowing the court to reweigh the evidence, would offend separation of powers principles and then-existing constitutional constraints on the allocation of the state’s judicial power. (See Strumsky v.

San Diego County Employees Retirement Assn. (1974) 11 Cal.3d 28, 34-44 [112 Cal.Rptr. 805, 520 P.2d 29].) Accordingly, as we noted in Bixby, supra, 4 Cal.3d at pages 138-140, the independent judgment test was first applied to administrative adjudications which threatened to deprive the aggrieved party of a constitutionally protected property right. In Drummey v.

State Bd. of Funeral Directors (1939) 13 Cal.2d 75, 84-85 [87 P.2d 848], for example, this court held that professional licenses which had been administratively suspended or revoked were valuable property rights which warranted a judicial weighing of the evidence in order to afford due process of law. (See also, Laisne v. Cal. St. Bd. of Optometry (1942) 19 Cal.2d 831, 840 [123 P.2d 457].) However, decisions which merely affected the initial acquisition of such a right did not warrant similar attention. (McDonough v.

Goodcell (1939) 13 Cal.2d 741, 752-753 [91 P.2d 1035, 123 A.L.R. 1205].) Bixby acknowledged this heritage and concluded that independent judicial review is required whenever a “fundamental vested right” is at stake. (4 Cal.3d at p. 144.) We have interpreted this concept as including, but not being limited to, individual rights guaranteed under the due process and equal protection clauses of the state and federal Constitutions. (See Berlinghieri v.

Department of Motor Vehicles (1983) 33 Cal.3d 392, 396-399 [188 Cal.Rptr. 891, 657 P.2d 383].) Our primary concern in Bixby was to provide “a doctrinal basis through which such review could be extended to ‘decision^] or class[es] of decisions’ which, although not involving vested property rights in the traditional sense, nevertheless had [a significant] impact on the individual . . . .” (Interstate Brands, supra, 26 Cal.3d at p. 779; quoting Bixby, supra, 4 Cal.3d at p. 144.) We have seen a steady expansion in the class of rights which fits this description. (See e.g., Berlinghieri v.

Department of Motor Vehicles, supra, 33 Cal.3d at p. 398 [right to retain a driver’s license]; Frink v. Prod (1982) 31 Cal.3d 166, 179 [181 Cal.Rptr. 893, 643 P.2d 476] [right of needy applicant to welfare benefits]; Transcentury Properties, Inc. v.

State of California (1974) 41 Cal.App.3d 835, 844 [116 Cal.Rptr. 487] [right to continue developing property without complying with coastal development legislation].) Of particular interest is Interstate Brands, supra, 26 Cal.3d at page 770, which extended the fundamental vested rights doctrine to an employer who sought review of an administrative decision rendering certain employees eligible for unemployment insurance benefits. The trial court exercised its independent judgment on the evidence and reversed the award.

The Unemployment Insurance Appeals Board appealed, contending that this standard of review was limited under Bixby, supra, 4 Cal.3d at page 130, to cases involving important personal or economic rights of individuals. The employer, it was asserted, had no interest under the unemployment insurance system which similarly warranted independent scrutiny by the reviewing court. In analyzing this argument, we noted that there was no reciprocity between the right of the employee to independent judicial review, and the right of the employer.

Although the employees had a fundamental vested right in their eligibility-to-benefits determination, the employer could not also invoke the independent judgment test unless it could claim its own such right. (Interstate Brands, supra, 26 Cal.3d at pp. 780-781.) Nonetheless, we found that the employer had a direct pecuniary interest in avoiding erroneous charges against its unemployment insurance reserve account.

We emphasized that, under the applicable statutory scheme, the employer “is required by law to make contributions to the unemployment fund [citation]; that the rate of those contributions, expressed as a percentage of average base payroll, is based upon the ratio between its average base payroll and the net balance in its reserve account [citations]; and that . . . ‘[a]ny final decision of the administrative tribunal which awards benefits to a claimant has the effect of depleting an employer’s reserve account [and may thereby adversely affect his rate of contributions]. . . .’” (Interstate Brands, supra, 26 Cal.3d at p. 781; quoting Chrysler Corp. v.

California Emp.etc. Com. (1953) 116 Cal.App.2d 8, 14 [253 P.2d 68].) The County Employees Retirement Law of 1937 is structured in an analogous fashion. (Gov.

Code, § 31450 et seq.) County is required to participate in the retirement system, which is funded by both County and employee-member contributions. (§§ 31580-31607, 31639-31639.85.) The Board, which is a separate legal entity, is responsible for managing the system. (§ 31520.) The Board’s actuary periodically evaluates the mortality, service, and compensation experience of the members and their beneficiaries, as well as the assets and liabilities of the system. (§ 31453.) Based on the results of this survey, the Board recommends to the County’s board of supervisors any changes that should be made in rates of interest, member contributions, and county and district appropriations. (Ibid.) If the board of supervisors fails to make sufficient appropriations to cover the cost of the Board’s recommendations, the county auditor is required to transfer from any money available in any county treasury fund the amount which should have been appropriated by the board of supervisors. (§ 31584.) Under this scheme, there are two ways in which County “pays into” the system.

It does so by complying with the periodically readjusted rate of contribution (§§ 31453.5, 31454), and by funding any deficits in the system (§ 31454.5). It is manifest that the “mortality, service, and compensation experience” of the system’s participants will reflect an increase in the rate of successful service connected disability claims. (§ 31453.) Such early retirement awards also undoubtedly influence the overall “assets and liabilities” of the fund (ibid.), and may thereby alter the results of the actuarial survey conducted for that reporting period.

Since any change in the actuarial outlook may affect future county and district appropriations, a public employer who is required to contribute to the system has a direct pecuniary interest in challenging these kinds of awards. Accordingly, the only discernible difference between this case and Interstate Brands, supra, 26 Cal.3d at page 770, is the identity of the employer. However, we see no reason to establish a different rule here simply because the employer is public rather than private. Each case involves a statutory scheme which requires the employer to make certain benefit fund contributions.

An award rendering the employee eligible for benefits under either scheme is likely to have the same effect on the employer’s rate of contribution. To require a trial court to apply a different standard simply because two different employers are involved is to make a distinction which is neither required by law nor supported in reason. The purpose of the independent judgment test is to ensure that certain disputes receive a careful and judicious reevaluation of the evidence.

A standard of review resting on the identity of the litigants, rather than the nature of their dispute, does nothing to further this purpose. Such a distinction also would be indefensible from a practical standpoint. In particular, dissimilar treatment of employers for purposes of judicial review would lead to arbitrary and disparate treatment of employees. Under Interstate Brands, supra, 26 Cal.3d at page 770, the employee who prevails at the administrative level must undergo the rigorous scrutiny of independent judicial review if the award is challenged by a private employer.

If we were to apply a different standard in an identical case involving a public employer, the employee would retain his or her favorable award as long as it survived the less exacting substantial evidence standard. This result interjects confusion into the proceedings and is absurd. For the foregoing reasons, the Court of Appeal properly concluded that the independent judgment test had been correctly applied by the trial court.

The Court of Appeal also properly observed that it was obligated to uphold the trial court’s decision if the underlying findings were clearly supported by substantial evidence in the record. (See Bixby, supra, 4 Cal.3d 130, 143, fn. 10.) Since there was ample medical and documentary evidence supporting the trial court’s finding that Carnes was not permanently incapacitated within the meaning of

section 31724 (see Harmon v. Board of Retirement (1976) 62 Cal.App.3d 689, 694-696 [133 Cal.Rptr. 154]), that decision was correctly upheld on appeal. The judgment of the Court of Appeal is affirmed. Lucas, C. J., Panelli, J., Arguelles, J., and Kaufman, J., concurred. At the time of our decision in Bixby, supra, 4 Cal.3d at page 130, former provisions of

article VI,

section 1 of the California Constitution had long been interpreted as precluding the Legislature from vesting judicial powers in agencies of statewide jurisdiction. Their decisions, therefore, were not reviewable by certiorari, which lies only to review judicial action and which contemplates that findings based on substantially conflicting evidence are binding on the reviewing court. (See Standard Oil Co. v. State Board of Equal. (1936) 6 Cal.2d 557, 559 [59 P.2d 119].) Under this view, however, local agencies and state agencies of purely local jurisdiction did not operate under similar constraints.

Thus, their factual findings were entitled to greater deference. (Strumsky, supra, 11 Cal.3d at pp. 37-38.) As noted in Strumsky, an amendment to

article VI,

section 1 in 1950, has obviated the need to continue distinguishing between “local” and “statewide” agencies. (Id. at pp. 41-44.) The independent judgment test is now available in mandate proceedings to review the adjudicatory decisions of both types of agencies, as long as a fundamental vested right of the aggrieved party is at stake. (Id. at pp. 44-45.) All further statutory references are to the Government Code unless otherwise indicated.