BILL ANALYSIS AB 1714 Page 1 ( Without Reference to File ) CONCURRENCE IN SENATE AMENDMENTS AB 1714 (Fuentes) As Amended June 30, 2010 2/3 vote. Urgency ----------------------------------------------------------------- |ASSEMBLY: |76-1 |(June 1, 2010) |SENATE: |30-1 |(July 1, 2010) | ----------------------------------------------------------------- Original Committee Reference: APPR. SUMMARY : Appropriates $21,490,000 from the General Fund (GF) to the Department of Justice (DOJ) to pay settlements in Humphries v Lockyer, et al ($536,000), Gardner, et al, v Schwarzenegger, et al ($562,000), Berg v. California Horse Racing Board ($392,000) and Jaycee Lee Dugard, et al ($20,000,000). Any funds appropriated in excess of the amount required for the payment of these claims shall revert to the GF. The Senate amendments add appropriations for two new settlements: Berg v. California Horse Racing Board ($392,000) and Jaycee Lee Dugard, et al ($20,000,000). AS PASSED BY THE ASSEMBLY , this bill appropriated funds for two settlements: Humphries v Lockyer, et al ($536,000) and Gardner, et al, v Schwarzenegger, et al ($562,000), FISCAL EFFECT : This bill appropriates $21,490,000 (GF) to pay for four settlements, and specifies that any funds appropriated in excess of the amount required will revert to the GF. COMMENTS : 1)Rationale . This bill is one of two annual bills carried by the Appropriations chairs to provide appropriation authority for state judgments and settlements as approved by the DOJ and the Department of Finance (DOF). 2)Case background . a) Humphries v. Lockyer, et al, Ninth Circuit Court of Appeals Case No. 05-56467 - $536,000 AB 1714 Page 2 Craig and Wendy Humphries were arrested on suspicion of physically abusing 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 L.A. Sheriff's Department reported the couple to DOJ's Child Abuse Central Index (CACI). CANRA requires such 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 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 that they were entitled to over $1.2 million in attorney's fees and expenses for the appellate portion of the case. The State opposed this claim as premature. The Ninth Circuit decided the claim was not premature, and referred it to an Appellate Commissioner. In that proceeding, the commissioner recommended the Humphries be awarded the $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. Including anticipated interest, it is projected that the amount due the Humphries under this appellate attorney fee decision will be $536,000. b) Gardner, et al, v. Schwarzenegger, et al, First District Court of Appeal Case No. 125000 - $562,000 The Substance Abuse and Crime Prevention Act of 2000 was enacted by the voters as Proposition 36 in 2000. It AB 1714 Page 3 diverted certain nonviolent drug offenders to noncustodial drug counseling and treatment in lieu of incarceration. In 2006, SB 1137, Chapter 63, 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 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 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 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 pursued a claim for fees incurred from litigating the underlying fee question itself -- a fees on fees claim. This resulted in an additional $83,834, plus interest. DOF has requested the total amount of $562,000.00 for the underlying fee award, settlement of the fees-on-fees claim, and accrued interest. c) Berg v. California Horse Racing Board, Superior Court of California, Sacramento County - $392,000 Pamela A. Berg worked as a horse racing steward for the California Horse Racing Board (board) from 1998 to 2006. Berg filed a lawsuit alleging discrimination and harassment based on age and gender, and for retaliation, in violation of the Fair Employment and Housing Act (FEHA). Berg alleged board superiors gave improper preferences to less- qualified male stewards when making assignments to California's larger race tracks. Berg also claimed the board's failure to make such assignments, to honor her AB 1714 Page 4 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 settled. Berg will receive $400,000, of which $100,000 will be in the form of a 10-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. d) Jaycee Lee Dugard, et al, mediated settlement agreement - $20,000,000 Jaycee Lee Dugard was 11 years old when she was kidnapped in 1991 near her home in SouthLake Tahoe by Phillip Garrido and his wife, Nancy Garrido. Ms. Dugard was transported to the Garridos' home in Antioch, California and hidden in a makeshift shed in their backyard, where she was repeatedly raped over the course of years. Ms. Dugard gave birth to two daughters, one in August 1994 and one in November 1997, both fathered by Garrido. Ms. Dugard and her daughters were hidden in this shed with minimal access to medical services, education, or social contact, for 18 years. In August 2009, while Garrido was supervised by California parole authorities, an investigation by state parole and local law enforcement led to the arrest of Phillip and Nancy Garrido, the discovery of Ms. Dugard's identity, and the reunion of Ms. Dugard and her daughters with their family. In 1977, Garrido was convicted in state and federal court for kidnapping and raping a 25-year-old woman. A federal court sentenced him to 50 years for kidnapping, while a Nevada court imposed a five-years-to-life term for forcible rape. In January 1988, after serving 11 years of a federal sentence, the federal government paroled Garrido and released him to Nevada authorities to serve his sentence. Seven months later, Nevada paroled Garrido, returning him to federal parole authorities to serve the remainder of his federal parole term. In 1999, Garrido was discharged from federal parole and returned to the jurisdiction of Nevada parole. Under terms of an interstate parole compact, CDCR assumed parole supervision because Garrido lived in AB 1714 Page 5 Antioch, California. Through her attorneys, Ms. Dugard and her daughters filed claims with the California Victim Compensation and Government Claims Board. Those claims were held in abeyance pending the outcome of mediation. Ms. Dugard's attorneys asserted potential claims for 1) failure to discharge a mandatory duty; 2) negligence; 3) negligent hiring, training, retention, and supervision; and, 4) infliction of emotional distress. i) Failure to discharge a mandatory duty : Plaintiffs support this claim by alleging defendants failed to give Garrido a high control parole classification; failed to refer Garrido for a mental health assessment; failed to investigate a suspected parole violation; and failed to electronically monitor Garrido. ii) Negligence : Plaintiffs assert the exercise of parole functions, and the supervision of parole functions, was negligent. Plaintiffs allege discretionary immunity would not apply because the acts and omissions related to operational and low-level ministerial tasks. That claim is supported by the allegations described above, and that as a result parole agents failed to locate the backyard shed. iii) Negligent Hiring, Training, Retention, and Supervision : This allegation is supported by the circumstances referenced above. iv) Intentional Infliction of Emotional Distress : Plaintiffs assert a claim for Intentional Infliction of Emotional Distress, which has three elements: 1) extreme and outrageous conduct by the defendant with the intention of causing emotional distress; 2) the plaintiff suffered extreme emotional distress; and, 3) plaintiffs' injuries were caused by the defendant's conduct. To satisfy the first element, the alleged conduct must exceed all bounds of behavior usually tolerated in a civilized community. Following review of the allegations, CDCR, through counsel, agreed to submit the Dugard claims to mediation for a recommended resolution. On June 24, 2010, the matter as AB 1714 Page 6 mediated before retired judge Daniel Weinstein of JAMS, an established mediation ad arbitration service. CDCR denies the specific allegations made in the Dugard claims, yet acknowledges it missed opportunities to identify Ms. Dugard, as documented in the Inspector General's November 2009 report, which concluded CDCR failed to properly supervise and classify Garrido and thus failed to locate the victims. According to DOJ attorneys, while CDCR is legally protected by well-established immunities, DOJ recognizes this case has a unique and tragic character. Although defendant's chances of prevailing on parts of a dispositive motion, DOJ states a potential damages award by a jury could be extremely high. DOJ states the settlement posture was guided by several considerations. First, it is a virtual certainty Ms. Dugard and her daughters will require counseling for the rest of their lives. Second, Ms. Dugard's daughters have received no formal education, and neither is currently equipped to handle the academic or social challenges that school - and society - will pose, nor has Ms. Dugard received any education since her abduction. In addition, the plaintiffs have received minimal, if any, medical care for years. CDCR, through DOJ, has stipulated to settle the claims of Ms. Dugard and her two children for the total sum of $20 million. DOF has approved the expenditure. 3) Related legislation . SB 911 (Kehoe), Chapter 26, Statutes of 2010 provides for the appropriation of funds for state judgments and settlements. Analysis Prepared by : Geoff Long / APPR. / (916) 319-2081 FN: 0005118