BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1693|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
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THIRD READING
Bill No: AB 1693
Author: Gonzalez (D)
Amended: 5/10/16 in Assembly
Vote: 27 - Urgency
SENATE APPROPRIATIONS COMMITTEE: 5-0, 6/20/16
AYES: Lara, Beall, Hill, McGuire, Mendoza
NO VOTE RECORDED: Bates, Nielsen
ASSEMBLY FLOOR: 69-3, 5/23/16 - See last page for vote
SUBJECT: Claims against the state: payment
SOURCE: Author
DIGEST: This bill, an urgency measure, appropriates $10.55
million from the General Fund to the Department of Justice (DOJ)
for the payment of a judgment and a settlement in two lawsuits
against the state. Any funds appropriated in excess of the
amounts required for payment of these claims reverts to the
General Fund.
ANALYSIS: This bill is one of several annual bills carried by
the chairs of the Appropriations Committees to provide
appropriation authority for legal judgments and settlements
approved by DOJ and the Department of Finance (DOF). Settlements
are entered into lawfully by the state upon advice of counsel
(DOJ), and they are binding state obligations.
This bill appropriates General Fund revenues to DOJ to pay the
following settlements:
AB 1693
Page 2
Settlement agreement for Ruelas, et.al. v. State of California,
et al.
(Superior Court of California, County of San Bernardino, Case
No. CVRS083017) $10 million settlement, plus interest, payable
from the General Fund.
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 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. DOJ notes that, absent the
settlement, state liability would likely be in the range of $11
million as a result of additional potential costs related to the
appeal.
Per the settlement agreement, interest began to accrue on the
principal amount of the judgments ($7,128,593.55) as of April
23, 2016, and approximately $1,367.12 will be added per day to
the amount owed until payment is complete. DOF 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
AB 1693
Page 3
added to the principal. In the event that a lesser amount of
interest has accrued at the time of payment, the excess
appropriation will revert to the General Fund.
Judgment against the state in Pacific Merchant Shipping
Association v. The Board of Pilot Commissioners for the Bays of
San Francisco, et al.
(Superior Court of California, County of San Francisco, Case No.
CPF-12 512320) $387,088, payable from the General Fund.
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.
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.
Following the decision, the Port Agent provided more than 1,000
square feet of documents in response to a new PRA request
submitted by the Pacific Merchant Shipping Association (PMSA).
PMSA then filed a motion for attorney fees and costs connected
to the litigation, and the San Francisco Superior Court entered
a judgment against the Port Agent. 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 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.
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DOJ 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.
FISCAL EFFECT: Appropriation: Yes Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee:
One-time appropriation of $10,164,000 in 2016-17 from the
General Fund to DOJ to pay the settlement in Ruelas, et.al. v.
State of California, et al.
One-time appropriation of $387,088 in 2016-17 from the General
Fund to DOJ to pay the judgment in Pacific Merchant Shipping
Association v. The Board of Pilot Commissioners for the Bays
of San Francisco, et al.
SUPPORT: (Verified 6/21/16)
None received
OPPOSITION: (Verified 6/21/16)
None received
ASSEMBLY FLOOR: 69-3, 5/23/16
AYES: Achadjian, Alejo, Atkins, Baker, Bigelow, Bloom, Bonilla,
Bonta, Brown, Burke, Calderon, Campos, Chang, Chau, Chiu, Chu,
Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Frazier, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Hadley, Roger Hernández, Holden, Irwin, Jones,
Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,
Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,
Nazarian, Obernolte, O'Donnell, Olsen, Quirk, Ridley-Thomas,
Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond,
AB 1693
Page 5
Ting, Waldron, Weber, Wilk, Williams, Wood, Rendon
NOES: Travis Allen, Grove, Wagner
NO VOTE RECORDED: Arambula, Brough, Chávez, Eggman, Beth
Gaines, Gallagher, Harper, Patterson
Prepared by:Mark McKenzie / APPR. / (916) 651-4101
6/22/16 15:15:16
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