BILL ANALYSIS
AB 93
Page 1
Date of Hearing: May 6, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 93 (De Leon) - As Amended: April 29, 2009
Policy Committee:
AppropriationsVote: N/A
Urgency: Yes State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill, an annual judgment and settlement bill, appropriates
$11.4 million (GF) to pay for six settlements approved by the
Department of Justice (DOJ) and the Department of Finance (DOF).
FISCAL EFFECT
This bill appropriates $11,402,374 (GF) to pay for six judgments
and settlements, and specifies that any funds appropriated in
excess of the amount required will revert to the GF in June
2009.
COMMENTS
Case Background .
1)In re Marriage cases , San Francisco Superior Court, Judicial
Council Coordinated Proceeding No. 4365 - $245,373.95 for
combined settlement and judgments.
This action involved six coordinated and/or consolidated cases
dealing with California's ban on same-sex marriages. At the
State Supreme Court, the Attorney General's (AG's) office
represented the State of California and Attorney General
Brown. The State Supreme Court invalidated the previous ban on
same-sex marriage, concluding that Family Code sections 300 &
308.5 violated the California Constitution. Several prevailing
parties filed motions for attorneys' fees and costs before
Judge Richard Kramer, the trial judge who originally heard the
case. The state settled with one party (the Tyler petitioners)
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and Judge Kramer awarded attorneys' fees and costs to several
parties in the following amounts:
a) $160,000 in a negotiated settlement of the Tyler
attorneys' fees motion. Per agreement, no interest will
accrue on this amount;
b) $58,094 in attorney's fees to the Clinton petitioners.
This amount accrues 7% interest from the judgment date of
November 21, 2008.
c) $3,198 in costs awarded to the Clinton petitioners.
d) $6,442.27 in costs to the Rymer petitioners.
e) $5,639.68 in costs to Petitioner City and County of San
Francisco.
2)League of United Latin American Citizens (LULAC) v. Wilson ,
United States District Court Case No. 94-7569 - $990,000
judgment.
This action involves a successful challenge to Proposition 187
(1994), which denied various public services to undocumented
aliens, but was found to be preempted by federal law. In April
2001, the district court awarded $776,124 in attorneys' fees
and costs to the LULAC plaintiffs, plus interest. However, in
June 2001, these plaintiffs filed a motion to supplement this
award. The Legislature appropriated funds to pay this claim in
AB 1738, which was chaptered September 5, 2001. Due to the
pendency of the motion to supplement the fee award, however,
the claim was never paid, and the funds reverted to the GF. In
2007, LULAC counsel withdrew the motion to supplement the fee
award, and requested payment of approximately $950,000. The
requested appropriation of $990,000 includes an estimate of
anticipated interest.
3)Bank of America v. California, San Francisco Superior Court,
Case No. 401775 - $8,500,000 judgment.
This action arose from a prior action filed against Bank of
America by a former bank executive under California's False
Claims Act (State of California ex rel. Patrick Stull v. Bank
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of America). The Stull action alleged the bank had cheated the
state and several local governments in the handling of bond
issuances. Following an investigation, the A.G.'s office and
local agencies intervened in the case, which eventually
resulted in a $187.3 million dollar settlement. The Stull
settlement agreement contained an indemnity clause intended to
protect the bank from claims against the funds it was
delivering to the state and local governments, should other
claimants come forward.
The State of Alaska learned of the Stull litigation and began
its own investigation into the bank's handling of Alaska
bonds. The bank entered into settlement negotiations and
settled Alaska's claims for $35 million. The bank then claimed
California was required to indemnify it against nearly half of
Alaska's claim because many Alaskan bond issues had been
handled by the bank's California subsidiaries and were covered
by the Stull indemnity clause. California rejected the bank's
indemnity claim, and the bank filed this action.
In 2003, the bank prevailed on the majority of its claims at
trial. Settlement negotiations reduced the bank's demands for
$24 million to $6.5 million, plus post-judgment interest (now
approximately $1.2 million). The court of appeal affirmed the
trial court's ruling in January 2009. The bank's judgment is
now final and must be paid.
4)Video Software Dealers Assoc. v. Schwarzenegger , Ninth Circuit
Case No. 07-16620 - $96,000 Attorneys Fees Settlement.
This case is a constitutional challenge to California's
violent video game law brought under the First Amendment and
the Equal Protection and Due Process Clauses of the United
States Constitution. The district court granted summary
judgment to the plaintiffs, permanently enjoining enforcement
of the video game law. In SB 242 (Torlakson, 2008), the
Legislature appropriated $286,577.00 in settlement of an award
of attorneys fees and costs to the plaintiffs following their
successful challenge in the district court. This settlement
preserved the state's authority to appeal the district court's
judgment. On February 20, 2009, the Ninth Circuit Court of
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Appeal affirmed the lower court's decision.
As the prevailing parties, the plaintiffs are entitled to
attorneys fees and costs on appeal. Plaintiff's motion for
attorneys fees and costs demanded $117,000, but they have
agreed to settle the claim for $95,000 plus $1,000 in post
judgment interest.
5)Whyte v. California Department of Justice , Kern County
Superior Court Case No. S-1500-CV-244826 - $996,000
Settlement.
This litigation involves DOJ's administration of the Child
Abuse Central Index (CACI), a database that tracks reports of
child abuse, an obligation DOJ has pursuant to the Child Abuse
Reporting and Negligence Act. The case arose when the
plaintiff requested DOJ to disclose, pursuant to the
Information Practices Act, all information in DOJ's possession
under the CACI system related to the plaintiff. DOJ directed
the plaintiff to agencies that were the original sources of
CACI information, but did not provide complete disclosure of
all information in its own possession. In September 2002, the
plaintiff filed an action claiming DOJ's administration of
CACI violated his right to privacy, guaranteed by the
California Constitution and the California Information
Practices Act of 1977. The case was litigated for more than
seven years, including a lengthy trial. Ultimately, the court
ruled in the plaintiff's favor on all causes of action, and
DOJ paid the plaintiff's money damages award of $50,000 from
its own budget. As a result of this litigation, DOJ has
changed its policies related to "self inquiries" under CACI.
Negotiations over the plaintiff's attorneys fees commenced in
May 2008 with a demand for more than $2,000,000. Following
negotiations, the parties have agreed to a $930,000 fee award,
with interest, commencing on April 1, 2009. The A.G.'s office
believes there is considerable risk in rejecting this
settlement and having a judge award attorneys fees.
6)California Pro-Life Counsel v Randolph , Ninth Circuit Court of
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Appeals Case Nos. 08-17359 and 08-17473 - $575,000 Settlement.
This case involved a challenge to enforcement of Political
Reform Act reporting requirements by the Fair Political
Practices Commission and the A.G. The essence of CPLC's action
is that specified statutes violate CPLC's 1st and 14th
Amendment rights by subjecting them to onerous reporting
requirements for ballot measure advocacy. After eight years of
litigation and two published Ninth Circuit opinions, the court
entered judgment against the FPPC and the A.G.
Plaintiff filed a motion for attorneys fees and costs seeking
$730,000. On September 30, 2008, the court granted the
plaintiff's motion, in part, awarding $550,000. After the
plaintiff and A.G. filed cross appeals, the Ninth Circuit
ordered the parties to mediation. The A.G.'s office believes
the settlement is an appropriate resolution of the plaintiff's
claim for attorneys' fees and costs, and is in the best
interests of the state owing to the risks of further
litigation and the possibility of incurring additional costs
on the appeal.
Analysis Prepared by : Geoff Long / APPR. / (916) 319-2081