If you don't see images in this message, click "Display Images" or the equivalent.
Advertise in The Nooner to reach over 8,000 readers
The Nooner for Saturday, May 23, 2020, presented by SYASL Partners
"Welcome to Santa Monica, the home of the three-piece suit.
- Santa Monica Mayor Kevin McKeown on CNN
Happy Saturday! I'll be (relatively) short today because y'all are sick of me. My afternoon will be cuddling with EDD data and working on the website.
The Senate Budget subcommittee on health and human services scheduled for today was moved to tomorrow because of an anticipated large rally calling for a full reopen everywhere at the State Capitol.
So, kids, today is a free day! Carpe diem! I would just say that it's likely smart to avoid the maskless throngs at the State Capitol.
Tomorrow's revised schedule is:
Monday is still Sub 1 on Education at 10am in Room 4203 for everything education.
What a holiday weekend.
BEEZINESS: If you are a SacBee subscriber and have been going through the hell of the web site requiring a new sign in for each article, apparently it can be fixed on a case-by-case basis. They did it for me last night and so far, so good. But it requires a contact with customer service. I don't feel so bad about my website glitches now since I'm a one-person show.
CHURCHES: On the day when President Trump falsely stated that he had the right to overturn state and local public health orders to mandate church openings, the Ninth Circuit Court of Appeals upheld a San Diego federal judge's ruling against a preliminary injunction to the stay-at-home order prohibiting in-person religious gatherings during the stay-at-home order. The suit was filed by a Chula Vista church.
We conclude that appellants have not demonstrated a sufficient likelihood of success on appeal. Where state action does not “infringe upon or restrict practices because of their religious motivation” and does not “in a selective manner impose burdens only on conduct motivated by religious belief,” it does not violate the First Amendment.
The vote was 2-1, with Daniel P. Collins dissenting. Collins was appointed to the Ninth Circuit by President Trump last year for his first role wearing a robe. It was a diversion from practice of consultation with home-state senators and thus senators Feinstein and Harris (along all Democrats) opposed his confirmation. However, the American Bar Association rated Collins "unanimously well qualified." The two in the majority were Barry Silverman (Clinton) and Jacqueline Nguyen (Obama).
The dissent in the ruling is a great read for ConLaw geeks and the evaluation of strict scrutiny for a First Amendment claim, although I disagree with the conclusion.
The plaintiffs could seek an en banc ruling of the full Ninth Circuit or appeal to the Supreme Court. Of course, the Supreme Court is essentially done for the year with only decision days left through June.
Meanwhile, yesterday a federal lawsuit was filed in Nevada on the same point.
HOMELESS: As California scrambles to deal with the homelessness issue only amplified by the COVID-19 crisis, the federal government reversed courses yesterday and said "uh-huh" to up to two dozen projects across the state. Theresa Clift reports for the Bee:
Vincent Mammano, California division director for the Federal Highway Administration, sent a letter to Caltrans officials May 7 informing them the federal government was withdrawing approval for the Sacramento shelter as well as a 200-bed shelter planned to open this spring in San Francisco’s Bayview neighborhood. The letter also says the agency is reviewing approvals for two other shelters in San Francisco’s SoMa neighborhood as well as one in Los Angeles’ San Pedro neighborhood. Caltrans “improperly issued” the National Environmental Policy Act determination for those sites, the letter says.
After questions surfaced about the San Francisco and LA locations, the agency re-examined its approval of the Sacramento site, a May 14 letter from FHA to Caltrans said.
Although the site is actually a vacant lot located underneath portions of Highway 50 and Highway 99, it’s considered in the “highway right of way,” according to the letter. FHA has a policy to use the “right of way” exclusively for transportation uses “in order to ensure traffic can flow as safely and efficiently as possibly,” with rare exceptions, the letter said.
more after the jump...
AB 5 MEET BALLOT: Late yesterday, the Secretary of State's Office informed county clerks that the ballot measure sponsored by Uber, Lyft, and DoorDash to amend AB 5 (Gonzalez) as it relates to transportation network companies has qualified for the November 3 ballot.
The language of the initiative is what the companies unsuccessfully sought in the AB 5 negotiations -- a "hybrid" between the legal status employee and independent contractor. I guess it's what you call "IC with benefits." Of course, opponents would suggest the benefits are not equal to what could be achieved if drivers for the transportation and delivery companies would receive if categorized as employees, perhaps in a union.
I can't predict what will happen like I normally would. November is as unclear of an election as I have seen in my 25 years around the Capitol and 28 years of voting. Will in-person canvassing (including ballot "harvesting" in an all-mail election) be possible? What will be the biggest theme on voters' minds. If someone tries to sell you a plan that is perfect, ask for the Girl Scouts cookies instead.
Beyond Uber and Lyft which relatively few people are using right now because we're not going anywhere, there are several companies that will want the initiative to pass. Many consumers have been using Instacart, Amazon Fresh/Whole Foods delivery, Grubhub, Doordash, etc. for the first time. Uber is the "bad guy" in the political argument, but the political clout gained by these brands during stay-at-home can't be understated.
Meanwhile, the opponents of the ballot measure have potent arguments about how the model screws the drivers and, in the restaurant space, other businesses. I wouldn't mind paying $5 in tips and service charge for the Co Mai's Kitchen Vietnamese if I felt like I was giving someone (driver) work and the restaurant some business. However, to the extent I get off my ass and walk one-half mile to the restaurant and give them 30% more for the food plus a tip.
I don't know how voters will feel come November. Nobody does.
Proponents will remind voters of their pandemic experience. "Remember how you got that food or groceries? AB 5 is trying to kill that. We want to do more to help for our partner drivers and businesses."
Opponents will say "Gig drivers were particularly screwed in the pandemic with no benefits and tenuous unemployment benefits. The Legislature foresaw situations like this and confirmed the Supreme Court of California's recognition of decades of wrongful treatment of employees."
Both arguments are politically solid, something I rarely say.
Upon the measure's qualification, opponents issued a press release, including this comment:
“This attempt by Uber and Lyft to buy their way out of providing basic protections to their own workers and shift the burden to taxpayers isn’t going to fly,” said Art Pulaski, the Executive Secretary-Treasurer of the California Labor Federation, AFL-CIO. “We’re confident voters will reject this cynical measure to ensure these multi-billion dollar companies play by the same rules as all other law-abiding businesses.”
The future of the "gig" companies post-pandemic is unclear. Uber has laid off 25% of its full-time employees as its network has largely come to a halt and its Jump bikes and scooters were removed from city streets. That said, you have billions in private equity in the mix and the company won't simply disappear.
These are wild times indeed.
STATE EMPLOYEES: In the Bee, Wes Venteicher looks at the negotiations of state employee bargaining units and Governor Newsom's administration to find where to achieve the 10% reduction in state employee compensation sought in the May Revision. It ain't easy, but it's also clear that the employee-side is not fighting the reduction, but rather negotiating for the best way to achieve the desired $2.8 billion in savings for the fiscal year beginning July 1 in the manner most favorable to employees.
IT HERTZ SO BAD: As I wrote previously, the car rental giant Hertz filed for Chapter 11 (restructuring) bankruptcy after the markets closed yesterday. While it may have been expected based on the essentially full shutdown of leisure travel, the company has been in trouble for awhile and needed everything to work perfectly to balance its highly leveraged obligations.
The precipitous decline in both business and leisure travel is decimating companies in the sector. Yesterday, the day before one of the biggest three-day weekends of the year saw 348,673 passengers pass through TSA security. Last year for the same day it was 2,792,670.
The parking lots of unused arenas and stadiums, including Sleep Train in Sacramento and Dodgers Stadium in LA, have become parking lots for rental cars. Expect a huge sell-off of "lightly used" cars by Hertz and others shortly. A big question is just how much has life changed permanently. Far more business meetings, conferences, and conventions are going to be virtual for at least this year. Next year or the year after? Nobody knows.
Why is this in The Nooner? Well, harken back to yesterday and my write-up on the state's unemployment report. California's variable economy is hugely reliant on hospitality and leisure. The rental car market is a very good indicator as to how that economy is doing, particularly for many low-to-middle income residents.
On a similar now, during my morning walk around Southside Park, I listened to this great episode of NPR's Planet Money about J. Crew entitled J. Screwed. The familiar company has used fascinating financial gymnastics over the years. If you're walking outside or tending to your tomatoes and like business geekery, I recommend it.
cakeday and NEW classifieds after the jump...
CAKEDAY: Happy birthday to Mike Young!