BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 302|
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THIRD READING
Bill No: SB 302
Author: Lara (D)
Amended: 5/7/15
Vote: 27 - Urgency
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/4/15
AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen
SUBJECT: Claims against the state: appropriation
SOURCE: Author
DIGEST: This bill, an urgency measure, appropriates
$24,106,173.50 from the General Fund, and $141,250 from the
Athletic Commission Fund, to specified departments for the
payment of four settlements. Any funds appropriated in excess
of the amounts required for payment of these claims shall revert
to the respective funds.
ANALYSIS: 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 the
Department of Justice (DOJ) and the Department of Finance. These
settlements were entered into lawfully by the state upon advice
of counsel. They are binding state obligations.
This bill appropriates special fund and General Fund revenues to
DOJ and specified state entities to pay the following
settlements:
California First, LP v. California Department of General
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Services, et al.
(San Francisco County Superior Court, Case No. CGC10-505436)
$24 million settlement, payable from the General Fund.
In this lawsuit, the prospective buyers of 11 state-owned
properties filed a complaint against the Department of General
Services (DGS) and its Director on March 10, 2011. The
plaintiffs had won a bid to purchase the state properties for
$2.3 billion, and sued to compel the state to proceed with the
sale or pay monetary damages and other relief totaling $1
billion. DGS filed a cross-complaint alleging that the parties'
contract had terminated and that the state could therefore not
be compelled to complete the sale. The trial commenced in
November of 2014 after several failed motions by the state to
dismiss the case or reduce the claim amounts, and the parties
entered into voluntary mediation. A settlement was reached on
February 19, 2015, after lengthy negotiations. Under the terms
of the settlement, DGS will make a lump-sum payment of $24
million to California First, and all claims by both parties will
be released.
Charles R. "Chuck" Reed, et al. v. Fair Political Practices
Commission.
(Sacramento Superior Court, Case No. 34-2013-80001709)
$106,173.50 settlement, payable from the General Fund.
In late 2013, San Jose Police Offers' Association President Jim
Unland filed a case against San Jose Mayor Chuck Reed and his
pension reform committee before the Fair Political Practices
Commission (FPPC), arguing that Reed had violated state law when
he redirected $100,000 from his political action committee to an
independent expenditure group that supported the 2012 reelection
campaign of City Councilmember Rose Herrera. Existing law,
Government Code 85501, prohibits candidate controlled committees
from funding independent expenditures in support of or
opposition to other candidates. FPPC determined that Reed had
violated that law, but concluded that he had done so
unintentionally because he was not up for reelection and did not
consider himself to be a candidate, and imposed a $1.00 fine
(FPPC No. 12/761).
On December 13, 2013, Reed filed a petition with the Superior
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Court to appeal the fine, and challenge the decision, alleging
that Section 85501 is facially unconstitutional because it
suppresses campaign contribution speech. In March 2014, the
court ruled that Reed was a "candidate" under the Political
Reform Act, but that Section 85501 is unconstitutional on its
face in that it violates public officials' First Amendment
rights to free speech and engagement in the political process.
As a result of this judgment, Reed demanded that FPPC pay his
attorneys' fees and costs pursuant to the Civil Code of
Procedure. Following settlement negotiations with FPPC's
counsel, an agreement was reached where Reed agreed to accept a
reduced balance of fees amounting to $106,173.50. FPPC approved
the settlement in July 2014.
Sarah Waklee v. California State Athletic Commission, Department
of Consumer Affairs.
(Sacramento County Superior Court, Case No. 2012-00135227)
$71,250 settlement, payable from the Athletic Commission Fund.
This lawsuit resulted from an employment dispute. The complaint
was filed by an employee of the State Athletic Commission, Sarah
Waklee, who worked for the Commission since 2004, becoming Lead
Athletic Inspector in 2007. Ms. Waklee filed suit in the
Sacramento Superior Court on November 5, 2012, against the
Department of Consumer Affairs (DCA) and several other employees
of the Commission, alleging preferential treatment, harassment,
and gender discrimination.
In late 2014, following depositions and upon calculating current
and prospective litigation costs, the DCA, in consultation with
the Attorney General's office, negotiated and accepted a
settlement agreement with Waklee. The settlement offer included
a dismissal of the suit with prejudice; Waklee's resignation
from the Commission; and a payment to Waklee in the amount of
$95,000.00 on or before June 30, 2015. DCA was able to absorb
$23,750 within its existing spending authority. The
appropriation in this bill will pay the remaining $71,250 from
the Athletic Commission Fund.
Dwayne Woodward v. California State Athletic Commission,
Department of Consumer Affairs.
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(Los Angeles County Superior Court, Case No.BC487180)
$70,000 settlement, payable from the Athletic Commission Fund.
This lawsuit also resulted from an employment dispute. The
complaint was filed by an employee of the State Athletic
Commission, Dwayne Woodward, a 30-year employee who worked for
the Commission as an inspector. Mr. Woodward filed suit in the
Los Angeles Superior Court in August of 2012 against DCA and the
Commission, alleging, among other things, age discrimination,
retaliation, and harassment in violation of the Fair Employment
and Housing Act.
Woodward sought a total of $1.9 million in damages, including
$750,000 for age discrimination, $750,000 for retaliation,
$164,954.24 for lost earnings, $100,000 for attorney fees, and
$123,715.68 for three years of future earnings. After several
good-faith negotiations, the parties concluded that it would be
in their best interests to settle their disputes to avoid the
expense, inconvenience, and uncertainty of a trial. The January
15, 2015 settlement calls for dismissal of the suit with
prejudice, and a payment from DCA to the plaintiff in the amount
of $70,000 (with $35,000 due by June 30, 2015, and $35,000 due
by July 15, 2015). This claim is to be paid through an
appropriation from the Athletic Commission Fund.
Related/Prior Legislation
AB 1615 (Gatto, Chapter 142, Statutes of 2014) appropriated
$2.86 million to DOJ for the payment of two settlements.
AB 234 (Gatto, Chapter 449, Statutes of 2013) appropriated $20.7
million to DOJ for the payment of two settlements.
SB 371 (De Leon, Chapter 9, Statutes of 2013) appropriated $15.6
million to DOJ for the payment of two settlements.
FISCAL EFFECT: Appropriation: Yes Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee:
One-time appropriation of $24 million in 2015-16 from the
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General Fund to DGS to pay the settlement in California First,
LP v. California Department of General Services, et al.
One-time appropriation of $106,173,50 in 2015-16 from the
General Fund to the FPPC to pay the settlement in Charles R.
"Chuck" Reed, et al. v. Fair Political Practices Commission.
One-time appropriation of $71,250 in 2015-16 from the Athletic
Commission Fund to DCA to pay the settlement in Sarah Waklee
v. California State Athletic Commission, Department of
Consumer Affairs.
One-time appropriation of $70,000 in 2015-16 from the Athletic
Commission Fund to DCA to pay the settlement in Dwayne
Woodward v. California State Athletic Commission, Department
of Consumer Affairs.
SUPPORT: (Verified5/8/15)
None received
OPPOSITION: (Verified5/8/15)
None received
Prepared by:Mark McKenzie / APPR. / (916) 651-4101
5/8/15 15:09:17
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