BILL ANALYSIS Ķ
SB 1187
Page 1
Date of Hearing: August 10, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 1187
(Lara) - As Amended August 3, 2016
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Urgency: Yes State Mandated Local Program: NoReimbursable: No
SUMMARY:
This urgency bill appropriates $36.5 million from the General
Fund (GF) to the Department of Justice (DOJ) to pay two legal
settlements, as follows:
1)Ballona Wetlands Land Trust v. Santa Monica Bay Restoration
Commission, $235,400; and
2)Pauma Band of Luiseņo Mission Indians of the Pauma & Yuima
Reservation v. State of California, et al., $36.2 million.
Any funds appropriated in excess of the amounts required for the
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claims revert back to the General Fund.
FISCAL EFFECT:
One-time GF appropriation of $36,470,547.01 to DOJ for the two
legal settlements. However, this figure does not include
$85,139.60 in interest for the Pauma Band of Luiseņo Mission
Indians of the Pauma & Yuima Reservation settlement. The GF
appropriation will need to be increased to $36.6 million, and
the Pauma Band of Luiseņo Mission Indians of the Pauma & Yuima
Reservation settlement total will be $36.3 million.
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)Ballona Wetlands Land Trust v. Santa Monica Bay Restoration
Commission, $235,400. This claim is the result of litigation
involving a California Public Records Act (PRA) dispute.
Petitioners, the Ballona Wetlands Land Trust (Land Trust)
sought records from the Santa Monica Bay Restoration
Commission (Commission) with the goal of proving that the
Commission had misused public grant funds in its management of
a restoration project.
The Commission responded by saying that the majority of the
records sought regarding the project were in the possession of
a separate, nongovernmental entity: a private non-profit
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called the Santa Monica Bay Restoration Foundation
(Foundation). The Land Trust alleged that these two entities
(the Commission and the Foundation) were virtually identical,
with shared staff and a joint work plan, and that the
Foundation should be subject to PRA requests relating to that
partnership. The Land Trust was told that only a subset of
the requested records would be disclosed, and in response,
filed a petition for writ of mandate in February of 2015.
In March of 2016, the Superior Court found in favor of the
Land Trust, awarding attorney's fees and compelling the
Commission to disclose certain Foundation documents that the
Court declared to be public records, but not all documents
requested by the Land Trust. Attorneys for DOJ collaborated
with counsel for the Commission to negotiate a settlement of
$220,000 for the payment of a portion of the Land Trust's
attorney's fees and costs. The agreement also provides for
the payment of interest on the settlement amount at a rate of
7 percent per annum, calculated daily from March 1, 2016, the
date the Court issued its Final Statement of Decision.
This bill provides an appropriation that includes the
settlement amount of $220,000 plus $15,400, or the equivalent
of a full year of interest payment. A portion of the interest
amount will revert to the General Fund, assuming the bill is
enacted this month.
3)Pauma Band of Luiseņo Mission Indians of the Pauma & Yuima
Reservation v. State of California, et al., $36.2 million. In
September, 2009, Pauma sued the State seeking rescission of
its 2004 amended Triable-State gaming compact (2004
Amendment). In support of is rescission claim, Pauma alleged
that the State misrepresented the number of gaming device
licenses available under the parties' previous 1999
Tribal-State gaming compact. (1999 Compact) when the State
communicated that the license pool was exhausted December,
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2003. Pauma claimed that the misrepresentation induced it to
enter into the 2004 Amendment, which contained higher fees
than the 1999 Compact. In support of the Pauma's claim that
it was entitled to rescission of the 2004 Amendment as a
result of the misrepresentation, Pauma relied on a 2009
district court decision in another case, Cachil Dehe Band of
Wintun Indians of the Colusa Indian Community v. California,
in which the court determined that the 1999 Compact did in
fact authorize more licenses than the state said were
available. In 2010, the Ninth Circuit upheld the Colusa
decision.
In 2014, the district court granted summary judgment to Pauma,
finding that, pursuant to the Colusa II decision, the State
had misrepresented the number of gaming device licenses under
the 1999 Compact and that Pauma had been induced to enter into
the 2004 Amendments as a result. The district court thus
ordered the 2004 Amendment rescinded and Pauma restored to
it's 1999 Compact's license fee provisions, resulting in a
refund of $36,235,147.01 due to Pauma from the State,
representing the total fees Pauma paid the Sate under the 2004
Amendment over what it would have paid had it remained under
the 1999 Compact.
The state appealed the summary judgment in favor of Pauma. A
divided panel of the Ninth Circuit issued a published decision
upholding the district court's summary judgment in favor of
Pauma on the misrepresentation claim. The court upheld the
monetary award against the state, though the court regarded
the monetary relief as restitution flowing from rescission of
the 2004 Amendment rather than specific performance, and found
that the State had waived its Eleventh Amendment sovereign
immunity from monetary restitution awards by express waiver
language in the compacts.
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The State filed a petition for a writ of certiorari in the
United States Supreme Court, and the court denied the State's
petition on June 27, 2016. All avenues of appeal having been
exhausted, the judgment is final and the sum of $36,235,147.01
is due and payable to Pauma.
Analysis Prepared by:Pedro Reyes / APPR. / (916)
319-2081