On July 6, 2010, I reported on a recent Court of Appeal decision that supported Governor Schwarzenegger's attempt to reduce state employees' salaries to the federal minimum wage.  The Court of Appeal's holding did not require the Controller to reduce salaries.  Thus, the Governor went back to Superior Court.  As reported in this Sacramento Bee article, Judge Patrick Marlette sided with Controller John Chiang last Friday.  State employees are not out of the woods as a further hearing is scheduled for late August.  It will be interesting to see which gets resolved first - the budget or the battle between the Governor and the Controller.