BILL ANALYSIS Ó
AB 1693
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ASSEMBLY THIRD READING
AB
1693 (Gonzalez)
As Amended Ver:
2/3 vote. Urgency
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |15-0 |Gonzalez, Bloom, |0 |
| | |Bonilla, Bonta, | |
| | |Calderon, Daly, | |
| | |Eggman, Eduardo | |
| | |Garcia, Roger | |
| | |Hernández, Holden, | |
| | |Obernolte, Quirk, | |
| | |Santiago, Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: This urgency bill appropriates $10.6 million from the
General Fund (GF) to the Department ofJustice (DOJ) to pay two
legal settlements, as follows:
1)Pacific Merchant Shipping Association v. The Board of Pilot
Commissioners for the Bays of San Francisco, et al., $387,088;
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and
2)Ruelas, et al. vs State of California, et al., $10.2 million.
Any funds appropriated in excess of the amounts required for the
claims revert back to the appropriate Fund or Account.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, one-time General Fund appropriation of $10,552,088 to
DOJ for the two legal settlements.
COMMENTS:
1)Purpose. This bill is one of the 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)Pacific Merchant Shipping Association v. The Board of Pilot
Commissioners for the Bays of San Francisco, et al., $387,088.
This is a case that involved a Port Agent who refused to turn
over records relating to the assignments and work hours of
harbor pilots in the San Francisco Bay. The state argued that
such Port Agents are not agents of the state and that their
records are not subject to the Public Records Act (PRA).
Although the Port Agent designation was created by statute,
Port Agents are not employed by any state agency and do not
act as the agent of any state agency. Instead, this Port
Agent works for the private San Francisco Bar Pilots, in their
private offices. Port Agents are merely regulated by the
state through the Board of Pilot Commissioners.
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Although the Attorney General represented the Port Agent in
his alleged "official capacity" in the litigation, this was
only done to present arguments to the court that the Port
Agent is not a state officer or state official who is himself
subject to the PRA. Moreover, the Attorney General argued
throughout the litigation that the State of California is
neither responsible for the Port Agent's activities or for
payment of any judgment rendered against him in PRA
litigation.
A San Francisco Superior Court judgment found in favor of the
plaintiffs (Pacific Merchant Shipping Association) and awarded
them their fees and costs. The judgment is not directed to
any state agency; instead, it directs the Port Agent, in his
official capacity, to pay $387,088.15 as fees and costs
incurred by Pacific Merchant Shipping Association (PMSA) in
the PRA litigation. For purposes of this judgment, however,
the Attorney General's representation of the Port Agent in his
alleged official capacity makes it necessary to comply with
the court's ruling that a judgment be paid through the
Attorney General's annual claims bill.
The Department of Justice notes that while the state is
conclusively obligated to pay the judgment in PMSA, the State
of California does not concede that a Port Agent is a state
officer or state official and will continue to argue that the
state should not be liable for the actions of Port Agents in
any future litigation.
3)Ruelas, et al. vs State of California, et al., $10,164,000.
This case initially involved four former wards who had been
incarcerated at Heman G. Stark Youth Correctional Facility.
The wards alleged that a youth correctional counselor had
sexually abused them during their incarceration, and that two
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members of facility management knew about the counselor's
propensities but failed to take appropriate action.
A 2010 jury verdict found in favor of all four plaintiffs'
claims for $1,077,896. Parties stipulated to punitive damages
of $100,000 for the counselor and $50,000 each for the two
defendants from management. The court awarded costs and
attorneys' fees at $7,228,136.47, bringing the total judgment
amount to $8,506,032.47.
The state appealed this case to the Fourth District Court of
Appeal; that court issued a final ruling in October, 2016.
One of the plaintiffs' judgments was reversed; the trial
court's judgments for the remaining three were almost entirely
affirmed. A rehearing took place, and the opinion was upheld
with only slight modifications. This rehearing represented
the final opportunity for the state to contest the awarded
judgment.
In February 2016, the California Department of Corrections and
Rehabilitation entered into a settlement with the three
prevailing plaintiffs, agreeing to pay a total of $10 million
in exchange for a waiver of punitive damages against all
defendants, a waiver of any further claims to attorneys' fees
and costs, and the filing of acknowledgments of full
satisfaction of the judgments.
Per the settlement agreement, interest began to accrue on the
$10 million as of April 23, 2016; approximately $1,367.12 will
be added per day to the amount owed until payment is complete.
The Department of Finance estimates that a payment should be
completed within 120 days of the due date; therefore, a
maximum of $164,000 in potential interest has been added to
the principal. In the event that a lesser amount of interest
has accrued at the time of payment, the excess appropriation
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will revert to the General Fund
Analysis Prepared by: Pedro Reyes / APPR. /
(916) 319-2081 FN: 0003007