BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 1615 (Gatto) - Claims against the state
Amended: May 15, 2014 Policy Vote: N/A
Urgency: Yes Mandate: No
Hearing Date: June 23, 2014
Consultant: Mark McKenzie
This bill does not meet 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 settlement are considered valid obligations of the
state. Additionally, judgments and settlements may have time
sensitivity.
Bill Summary: AB 1615, an urgency measure, would appropriate
$2,698,000 from the State Board of Chiropractic Examiner's Fund
and $157,000 from the General Fund to the Department of Justice
(DOJ) to pay two settlements. Any funds appropriated in excess
of the amounts required for payment of these claims shall revert
to the respective funds.
Fiscal Impact:
One-time appropriation of $2,698,000 in 2013-14 from the
State Board of Chiropractic Examiner's Fund to DOJ to pay
the settlement in Arbuckle v California Board of
Chiropractic Examiners, et al.
One-time appropriation of $157,000 in 2013-14 from the
General Fund to DOJ to pay the settlement in Planning and
Conservation League v. State, et al.
Background: This bill is one of several annual bills carried by
the chairs of the Appropriations Committees to provide
appropriation authority for legal settlements approved by DOJ
and the Department of Finance (DOF). These settlements were
entered into lawfully by the state upon advice of counsel (DOJ).
They are binding state obligations.
Proposed Law: This bill would appropriate special fund and
General Fund revenues to DOJ to pay the following settlements:
Arbuckle v. California Board of Chiropractic Examiners, et al.
AB 1615 (Gatto)
Page 1
(Court of Appeal, Third District, California, 2013 WL 3467054)
$2,698,000 Settlement, payable from the State Board of
Chiropractic Examiner's Fund.
This lawsuit resulted from a whistleblower complaint filed June
17, 2002. The complaint was filed by a Board of Chiropractic
Examiners (Board) employee, Carole Arbuckle, who alleged that
the Board and former executive officer took adverse employment
actions against her in retaliation for reporting that the
Board's chair had failed to pay her license renewal fee and that
the Board failed to take action against the chair for practicing
without an active license. On January 27, 2003, the State
Personnel Board (SPB) filed a Notice of Findings that
recommended dismissal of the whistleblower retaliation
complaint. The plaintiff failed to file a petition for hearing
and the Notice of Findings was adopted by the SPB.
On February 21, 2003, Arbuckle filed a civil action against the
Board, alleging various unlawful retaliations related to the
whistleblower complaint. On February 25, 2011, and after a
number of appeals, the court awarded a final judgment in favor
of Arbuckle and ordered the Board to pay $2,106,201 ($1,175,000
for the judgment, $926,452 in attorneys' fees, and $4,749 for
plaintiff's costs and disbursements), plus interest at a rate of
7% per year from the date of the original jury verdict (July 28,
2010). The estimated interest from July 28, 2010 to July 31,
2014, is $591,757.45. The Board has exhausted all appeals in
the case and the judgment is final.
Planning and Conservation League v. State
(Super Ct., Alameda County, 2013, No. RG 12626904)
$157,000 Settlement, payable from the General Fund.
This settlement represents the judgment granted in favor of the
Planning and Conservation League against the Controller. The
lawsuit involved a constitutional challenge to judicial review
provisions in AB 900 (Buchanan), Chap. 354/2011, which provides
for expedited judicial review of challenges to "environmental
leadership projects." The judgment in the case declared Public
Resources Code section 21185, subdivision (a)(1), enacted as
part of AB 900, to be facially unconstitutional. This
provision required California Environmental Quality Act
challenges to environmental leadership projects to be filed
directly in the Court of Appeal. The judgment enjoins the State
AB 1615 (Gatto)
Page 2
Controller from spending funds to implement the code provision.
This statute was amended by SB 743 (Steinberg), Chap. 386/2013,
following the ruling in the Planning and Conservation League
case and now allows such challenges to be brought in any court
with jurisdiction to hear writ petitions, including superior
courts.
Staff notes that plaintiffs initially sought almost $700,000 in
attorneys' fees, but the court ruled the fee request was not
reasonable, and instead determined that a more reasonable amount
for attorneys' fees was $155,000. The total settlement amount
of $157,000 in the bill includes $155,000 for attorneys' fees,
$395 for other costs, and accrued interest.
Related Legislation:
AB 234 (Gatto), Statutes of 2013, appropriated $20.7 million to
DOJ to pay for two settlements.
SB 371 (De Leon), Statutes of 2013, appropriated $15.6 million
to DOJ to pay for two settlements.
Staff Comments: AB 1615 includes an urgency clause to avoid
incurring any unnecessary post-judgment interest. The amount of
the claim to pay the settlement in Arbuckle v California Board
of Chiropractic Examiners, et al. includes interest through July
31, 2014. In this case, the post-judgment interest on the
Board's portion of the judgment is $403.93 per day.