BILL ANALYSIS Ó
SB 371
Page 1
Date of Hearing: May 24, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 371 (De Leon) - As Amended: April 10, 2013
Policy Committee:
AppropriationsVote:NA
Urgency: Yes State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill appropriates $15,557,808 (GF) to the Department of
Justice (DOJ) to pay two settlements. Any funds appropriated in
excess of the amounts required for payment of these claims
revert to the GF.
FISCAL EFFECT
One-time GF appropriation of $15,557,808 to DOJ in 2012-13 as
follows:
$15,517,808 to pay the settlement in Ragatz v. State of
California (CalFire), Solano Superior Court.
$40,000 to pay the settlement in Doe v. State of California, Los
Angeles Superior Court.
COMMENTS
1)Rationale. This bill is one of several bills carried by the
chairs of the Appropriations Committees each year 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.
2)Case Background
a) Ragatz v. State of California (CalFire).
This is a personal injury claim arising from a traffic
SB 371
Page 2
accident where plaintiff Rachel Ragatz struck the rear end
of a Cal Fire truck. Photographs of the accident scene show
the Cal Fire truck's rear tires were three feet into the
roadway at the time of the collision, supporting a finding
of full liability. The Cal Fire truck's brake lights were
activated, however the hazard lights on the vehicle were
not activated. The impact was substantial, as Ms. Ragatz's
small SUV's hood was crushed and the jaws-of-life were used
to extricate her from her vehicle. Ms. Ragatz sustained
permanent, life-altering brain injuries when her vehicle
collided with the state fire vehicle, which may have been
obscured by smoke. The plaintiff is young, faces uncertain
employment prospects, and a lifetime of care. She further
cannot drive a car, vote, or live independently due to her
conservatorship.
DOJ believes this settlement is fair based on future
medical care, loss of earning capacity and the need for
future daily living assistance.
b) Doe v. State of California.
On September 10, 2010, the plaintiffs filed suit, alleging
state had failed to ensure public school districts do not
charge impermissible pupil fees. Governor Brown's signing
of AB 1575 (Lara), Chap 776/2012, on September 29, 2012,
provided the plaintiffs with the relief they sought by
their amended complaint, with the exception of attorney's
fees.
(AB 1575 prohibits the assessment of fees by public schools
on pupils for specified educational activities, requires
the State Department of Education to distribute guidance to
public schools regarding pupil fees, and establishes a
complaint process to address allegations of the imposition
of unlawful pupil fees.)
Plaintiffs' counsel, the American Civil Liberties Union,
billed approximately $192,000 in fees and costs in
litigating this case. Plaintiffs requested $95,000 in
attorney's fees to settle the case, $47,500 from the State,
and $47,500 from the education defendants. To avoid the
expense of litigating the attorney's fees issue, the
parties have agreed to resolve the attorney's fees. The
State Department of Education and the State Board of
SB 371
Page 3
Education have agreed to the proposed settlement and have
made payment from existing resources, while DOJ negotiated
a reduced amount of $40,000.
DOJ contends the petitioners had a strong basis for an
attorney's fees claim based on the catalyst theory of
recovery.
3)The Motor Vehicle Insurance Account (MVIA) is essentially a
state insurance fund into which state departments pay a
premium, based on a five-year rolling average of the
department's costs, to cover the costs of vehicle accident
liability and settlements. For example, over the past three
years, including 2013-14 as projected, the MVIA averaged $38
million per year in expenditures, and $45 million in revenue.
Generally accident settlements involving a state vehicle would
be paid from the MVIA. Due to the size of the Ragatz claim,
however, and with two more large settlements looming, the
Department of Finance recommended the Ragatz claim be paid
straight from the GF since the MVIA cannot bear the cost of
these large settlements in one year, and the CalFire's
increased premium would require a GF increase to its budget to
cover the drain on the MVIA.
a) SB 1558, (Kehoe), chaptered 2012, appropriated $2.6
million to pay for one settlement.
b) SB 730 (Kehoe), chaptered in February 2012, appropriated
$13 million to DOJ to pay for six settlements.
Analysis Prepared by : Geoff Long / APPR. / (916) 319-2081