BILL ANALYSIS Ó
SB 302
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SENATE THIRD READING
SB
302 (Lara)
As Amended May 7, 2015
2/3 vote. Urgency
SENATE VOTE: 35-0
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|Committee |Votes |Ayes |Noes |
| | | | |
| | | | |
|----------------+------+--------------------+----------------------|
|Appropriations |17-0 |Gomez, Bigelow, | |
| | |Bonta, Calderon, | |
| | |Chang, Daly, | |
| | |Eggman, Gallagher, | |
| | | | |
| | | | |
| | |Eduardo Garcia, | |
| | |Gordon, Holden, | |
| | |Jones, Quirk, | |
| | |Rendon, Wagner, | |
| | |Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: Appropriates $24,106,173.50 from the General Fund, and
$141,250 from the Athletic Commission Fund, to specified
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departments for the payment of the following four settlements:
1)California First, LP v. California Department of General
Services, et al.
a) $24 million settlement, payable from the General Fund.
2)Charles R. "Chuck" Reed, et al. v. Fair Political Practices
Commission
a) $106,173.50 settlement, payable from the General Fund.
3)Sarah Waklee v. California State Athletic Commission, Department
of Consumer Affairs
a) $71,250 settlement, payable from the Athletic Commission
Fund.
4)Dwayne Woodward v. California State Athletic Commission,
Department of Consumer Affairs.
a) $70,000 settlement, payable from the Athletic Commission
Fund.
FISCAL EFFECT: According to the Assembly Appropriations
Committee:
1)One-time General Fund appropriations of $24 million to the
Department of General Services and $106,173.50 to FPPC.
2)One time appropriation of $141,250 from the Athletic Commission
Fund to the Department of Consumer Affairs.
Any funds appropriated in excess of the amounts required for
payment of these claims will revert to the respective funds.
COMMENTS:
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 Department of Justice
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and the Department of Finance (DOF). These settlements were
entered into lawfully by the state upon advice of counsel
(Department of Justice). They are binding state obligations.
Background. These are the four cases:
California First, LP v. California Department of General
Services, et al.
In this lawsuit, the prospective buyers of 11 state-owned
properties filed a complaint against 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. 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.
In late 2013, San Jose Police Officers' 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 PAC to an independent
expenditure group that supported the 2012 reelection campaign of
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City Councilmember Rose Herrera. Existing law, Government Code
Section 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
Court to appeal the fine, and challenge the decision, alleging
that Government Code 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 Government Code 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.
Kevin Marilley, et al. v. California Department of Fish and
Game.
This case involved a group of commercial fishermen who were not
California residents but fished in California waters. One of
these fishermen, Kevin Marilley, filed a class action suit in
the United States District Court in May of 2011 against the
Director of the California Department of Fish and Game (later
appeals were filed against the Director of the Department of
Fish and Wildlife), alleging that California's fishing license
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statutes, which charge nonresident fishermen two to three times
more than the fees assessed on resident competitors, are
unconstitutional. The fishermen and the state filed
cross-motions for summary judgment.
The United States District Court granted summary judgment in
favor of the plaintiffs, finding that the differential fees
violate the Privileges and Immunities Clause of Article IV of
the US Constitution, and concluding that the state failed to
demonstrate a substantial state interest. On December 10, 2013,
the plaintiffs moved for an award of attorney's fees and court
costs. After negotiations, and upon recommendation from the
Department of Justice, the Department of Fish and Wildlife
accepted the proposed settlement of fees accrued by the
plaintiffs though April 18, 2014, in the amount of $1,034,570.
The state has filed an appeal in the Ninth Circuit Court of
Appeals and the payment of these fees and costs are stayed until
that appeal is resolved. However, in the event that the
decision is upheld, prompt payment will be required.
Sarah Waklee v. California State Athletic Commission, Department
of Consumer Affairs.
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 State Athletic 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
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settlement agreement with Waklee. The settlement offer included
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
This lawsuit also resulted from an employment dispute. Mr.
Woodward filed suit in August of 2012 against DCA and the State
Athletic 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, ad $35,000 due by
July 15, 2015). This claim is to be paid through an
appropriation from the Athletic Commission Fund.
Analysis Prepared by:
Pedro Reyes / APPR. / (916) 319-2081 FN: 0000788
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