BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           1714 (Fuentes)
          
          Hearing Date:  6/28/2010        Amended: 6/16/2010
          Consultant:  Bob Franzoia       Policy Vote: None
          _________________________________________________________________ 
          ____
          BILL SUMMARY:  AB 1714, an urgency measure, would appropriate  
          $1,490,000 from two funds to the Department of Justice (DOJ) to  
          pay settlements in (1) Humphries v Lockyer, (2) Gardner v.  
          Schwarzenegger, and (3) Berg v. California Horse Racing Board.   
          Any funds appropriated in excess of the amount required for the  
          payment of these claims shall revert to the General Fund and to  
          the Horse Racing Fund on June 30 of the fiscal year in which the  
          settlement is paid.
          _________________________________________________________________ 
          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2010-11      2011-12       2012-13     Fund
           Appropriation          $1,098                           General   
           $392                                         Special*  

          * Horse Racing Fund 
          _________________________________________________________________ 
          ____

          STAFF COMMENTS: Pursuant to the committee's rules, the Suspense  
          File rule does not apply to the provisions of this bill as  
          judgments and settlements are considered valid obligations of  
          the state.  Additionally, judgments and settlements may have  
          time sensitivity.
          
           Humphries v. Lockyer, et al., Ninth Circuit Court of Appeals   
          ($536,000)  
           
          Craig and Wendy Humphries were arrested on suspicion of having  
          physically abused their teenage daughter.  When the criminal  
          case was dismissed, the couple obtained a finding of factual  
          innocence.  Nevertheless, pursuant to the Child Abuse Neglect  
          and Reporting Act (CANRA), the Los Angeles Sheriff's Department  
          reported the couple to DOJ's Child Abuse Central Index (CACI).   
          CANRA requires reporting when the investigating authority  
          determines that the claim of child abuse is "not unfounded,"  










          regardless of whether the suspect was actually charged or  
          arrested.  The Humphries sued the Sheriff's Department and DOJ,  
          alleging the CANRA was an unconstitutional denial of due  
          process.

          After losing in the trial court on defense motions seeking  
          summary judgment, the Humphries appealed.  The Ninth Circuit  
          Court reversed, finding CANRA and CACI to be unconstitutional,  
          because, in part, California offered no procedure for the  
          Humphries to remove their listing on the database as suspected  
          child abusers and thus, clear their names.

          Prevailing civil rights suit plaintiffs are generally entitled  
          to attorney's fees.  The Humphries argued to the Ninth Circuit  
          Court that they were entitled to over $1.2 million 

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          AB 1714 (Fuentes)

          in attorney's fees and expenses for the appellate portion of the  
          case.  The state opposed this claim as premature.  The Ninth  
          Circuit Court decided the claim was not premature and referred  
          it to an Appellate Commissioner.  In that proceeding, the  
          commissioner recommended the Humphries be awarded $592,580.92.   
          Under the commissioner's recommendation, $533,323 of the total  
          would be charged to the state. 

          The commissioner's fee recommendation was adopted by the Ninth  
          Circuit Court.  Including anticipated interest, it is projected  
          that the amount due the Humphries under this appellate attorney  
          fee decision will be $536,000.

           Gardner, et al., v. Schwarzenegger, et al., First District Court  
          of Appeal  ($562,000)  
           
          Proposition 36 enacted the Substance Abuse and Crime Prevention  
          Act of 2000.  The act diverted certain nonviolent drug offenders  
          to noncustodial drug counseling and treatment in lieu of  
          incarceration.  SB 1137 (Ducheny) Chapter 63/2006, authorized  
          jail sanctions when nonviolent drug offenders violate conditions  
          of Proposition 36 probation.  SB 1137 also specified that if any  
          of its provisions were found unconstitutional, the entire  
          legislative measure would be placed on the ballot in the next  
          statewide election.

          Plaintiffs sued to invalidate SB 1137 as inconsistent with the  










          purposes of Proposition 36.  The trial court agreed, finding  
          that the provisions in SB 1137 relating to short-term jail  
          sanctions for offenders who violate their Proposition 36  
          probation, and provisions excluding violent offenders from  
          probation, are inconsistent with the purposes of Proposition 36.

          The Court of Appeal agreed with the trial court's analysis.  The  
          Court of Appeal also found that Section 9 of SB 1137, which  
          allows for every provision of SB 1137 to be placed on the ballot  
          if any part is found unconstitutional, is itself  
          unconstitutional because it effectively provides for a  
          referendum without satisfying the legal prerequisites.

          Plaintiffs sought attorney's fees.  In 2009, plaintiffs were  
          awarded fees and costs in the amount of $425,821, plus interest.  
           Plaintiffs then pursed a claim for fees incurred for litigating  
          the underlying fee question itself, i. e., a fee on fee claims.   
          This resulted in an additional $83,834 plus interest.  The  
          Department of Finance has requested the total amount of $562,000  
          for the underlying fee award, settlement of the fees on fees  
          claim, and accrued interest.

           Berg v. California Horse Racing Board, Superior Court of  
          California, County of Sacramento  ($392,000)

          Pamela A. Berg worked as a horse racing steward for the  
          California Horse Racing Board (board) from 1998 to 2006.  Berg  
          filed her First Amended Complaint on March 20, 2009.  Her  
          lawsuit alleged discrimination and harassment based on age and  
          gender, and for retaliation, in violation of the Fair Employment  
          and Housing Act (FEHA).  In her deposition, Berg alleged that  
          board superiors gave improper preferences to less-

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          AB 1714 (Fuentes)

          qualified male racing stewards when making assignments to  
          California's larger race tracks.  Berg also claimed the board's  
          failure to make such assignments, to honor her 2006-2007  
          contract, and to contract for her services after her 2006-2007  
          contract had expired, amounted to retaliation for her existing  
          discrimination claims in violation of the FEHA.  

          Following a review of the allegations and discovery, the board  
          reached settlement with Berg.  By its terms, Berg will receive  
          $400,000, of which $100,000 will be in the form of a ten-year  










          annuity with an approximate cost to the board of $92,000.  

          The claim is to be paid from the Horse Racing Fund, and any  
          amounts in excess of that needed to pay the settlement,  
          including the purchase of the annuity, will revert to the Horse  
          Racing Fund.  The Horse Racing Fund (8550-3153) receives  
          revenues from license fees.