BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 730 (Kehoe)
Hearing Date: 1/17/2012 Amended: 1/11/2012
As proposed to be amended
Consultant: Bob Franzoia Policy Vote: Not Applicable
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BILL SUMMARY: SB 730, an urgency measure, would appropriate
$13,262,000 from the State Parks and Recreation Fund and the
General Fund to the Department of Justice to pay five
settlements. Any funds appropriated in excess of the amounts
required for payment of these claims shall revert to the State
Parks and Recreation Fund and the General Fund on June 30 of the
fiscal year in which the final payment is made.
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Fiscal Impact (in thousands)
Major Provisions 2012-13 2013-14 2014-15 Fund
Appropriation $1,500 Special*
$11,762 General
* The State Parks and Recreation Fund receives revenue from
fees, rentals and returns collected for the use of any state
park system area, except certain state park areas listed in the
Public Resources Code Section 5010 (b). Revenue received must
not exceed $7 million for each fiscal year; excess revenue is
deposited in the General Fund
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File. 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.
Aaron Ciccotti, Harold Ciccotti, and Bradley Ciccotti v. State
of California
Merced County Superior Court No. CV000577
$1.5 million settlement
SB 730 (Kehoe)
Page 1
On October 23, 2009, plaintiffs, Aaron Ciccotti, Harold
Ciccotti, and Bradley Ciccotti, brought an action against the
California Department of Parks and Recreation. This action
arises out of an accident that took place on June 19, 2009 at
the Los Banos Creek Reservoir in Gustine, California. While
there, plaintiff Aaron Ciccotti was struck by a large tree that
stood by his campsite and collapsed on top of him. As a result
of this accident, plaintiff Aaron Ciccotti underwent three
surgeries to his clavicles and his right knee. Plaintiffs
Harold Ciccotti (Aaron's brother) and Bradley Ciccotti (Aaron's
minor son) claimed that they observed the accident. The
complaint included a cause of action for general negligence and
a cause of action for dangerous condition of public property.
The matter was resolved through a $1.5 million settlement.
Environmental Protection Information Center, et al v. California
Department of Forestry and Fire Protection, et al and
Steelworkers of American, et al, v. California Department of
Forestry and Fire Protection, et al.
Humboldt County Superior Court, No. CV990445 and No. CV990452
$5.5 million for two settlements
In 1999, petitioner Environmental Protection Information Center
(EPIC) filed a lawsuit against the Department of Forestry and
the Department of Fish and Game challenging the agencies'
approvals of certain permits--the sustained yield plan and
incidental take permit--pertaining to the harvesting activity on
the Pacific Lumber Company's timberland. In a separate lawsuit,
petitioner United Steelworkers of America sued the Department of
Forestry over its approval of Pacific Lumber Company's sustained
yield plan. Petitioners alleged abuse of discretion and
violations of the Forest Practice Act and the California
Environmental Quality Act, among other things. From 1999 to
2010, the parties litigated the cases in the trial court, the
Court of Appeal and the Supreme Court. Ultimately, the
appellate courts found certain provisions of the incidental take
permit and the sustained yield plan invalid. Petitioners moved
for attorneys' fees, initially requesting nearly $14 million for
their work in invalidating the sustained yield plan and certain
provisions of the incidental take permit. In 2011, the agencies
and the petitioners settled the attorneys' fees issue. Through
this agreement, the agencies will pay EPIC $3.5 million, plus
interest, and the Steelworkers $2 million, plus interest.
SB 730 (Kehoe)
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California School Boards Association, et al. v. State of
California
San Diego Superior Court Case No. 37-2007-0082249
$312,000 settlement
Plaintiffs identified thirty eight mandated programs which will
cost the school districts more than $160 million to implement,
for which only $38,000 was budgeted. The Court found that
although the state agreed to pay the difference between the cost
and the amount budgeted, the practice of underfunding the
mandates violated Article XIII B, §6 of the California
Constitution. Following remand to the trial court, the
Department of Finance successfully negotiated a settlement of
attorneys' fees and costs with plaintiffs, which was then
incorporated into a court order.
Mather Development Partners IV, L.P. v. EdFund, Inc., et al
Sacramento County Superior Court No. 34-2011-00095194
$4,500,000 settlement
In October 2006, Mather entered into a 10-year commercial lease
agreement with the California Student Aid Commission's (CSAC)
auxiliary organization, EdFund, a nonprofit public benefit
corporation. The State of California did not sign the lease,
but CSAC and EdFund jointly solicited bids for the lease and
shared a planning committee for the move to Mather's newly
constructed buildings. Under an Operating Agreement between
EdFund and CSAC, EdFund paid the lease payments and then sought
approval and reimbursement from CSAC. On July 20, 2010, the
U.S. Department of Education, informed CSAC and the California
Department of Finance that its guaranty agency agreement with
CSAC would be terminated by October 31, 2010. With the transfer
of the portfolio from EdFund to another entity, EdFund's entire
line of business, and its corresponding ability to generate
revenue ceased to exist. EdFund therefore repudiated the lease
effective December 31, 2010.
Mather claimed losses exceeding $40 million due the breach of
the commercial lease and the failure to properly wind-down the
state's non-profit corporation. The claims against the state
included breach of contract, negligent misrepresentation,
fraudulent conveyance of funds, third party beneficiary
liability arising under the CSAC/EdFund Operating Agreement, and
a violation of Corporations Code 6713. This mediated settlement
SB 730 (Kehoe)
Page 3
resolves all issues of liability against the state arising out
of the breach of the long term lease agreement lease agreement
and the dissolution of EdFund.
The proposed amendment would add the following claim:
Entertainment Merchants Association v. Edmund Brown: Attorney
Fees
United States Supreme Court, Case No. 08-1448, referred to Ninth
Circuit, Case No. 07-16620
$950,000
Plaintiffs challenged California's violent video game law (Civil
Code Sections 1746-1746.5), which made it illegal to sell
extremely violent video games to children under age 18.
Defendants sought certiorari of a decision of the Ninth Circuit
Court of Appeals concluding that the statute violated the First
Amendment. The United States Supreme Court ruled against
Defendants on appeal and affirmed the Ninth Circuit's decision.
The Supreme Court referred Plaintiff's motion for attorneys'
fees in the Supreme Court proceedings to the Ninth Circuit, and
Defendants have negotiated a settlement of those fees. These
fees are for proceedings in the Supreme Court only; the parties
had previously settled fee requests in both the district court
and the Ninth Circuit.