BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 1714
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          (  Without Reference to File  )

          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


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             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  

             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  


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               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  


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               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  

             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  

             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  


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               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  


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            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  

           Analysis Prepared by  :    Geoff Long / APPR. / (916) 319-2081 

                                                              FN:  0005118