BILL ANALYSIS
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THIRD READING
Bill No: AB 93
Author: De Leon (D)
Amended: 4/29/09 in Assembly
Vote: 27 - Urgency
SENATE APPROPRIATIONS COMMITTEE : 10-0, 6/29/09
AYES: Kehoe, Cox, Corbett, Leno, Oropeza, Price, Runner,
Walters, Wolk, Yee
NO VOTE RECORDED: Denham, Hancock, Wyland
ASSEMBLY FLOOR : 73-0, 5/14/09 - See last page for vote
SUBJECT : Claims against the state
SOURCE : Department of Justice
DIGEST : This bill appropriates $11,402,373.95 General
Fund to the Department of Justice for the payment of: (1)
a settlement in the amount of $245,373.95 for the case of
In re Marriage Cases, San Francisco Superior Court,
Judicial Council Coordination Proceeding 4365; (2)
litigation costs in the amount of $990,000 related to the
settlement in the case of League of United Latin American
Citizens v. Wilson, United States District Court Case No.
94-7569 MRP; (3) judgment costs in the amount of $8,500,000
in the case of Bank of America v. State of California, San
Francisco Superior Court Case No. 401775; (4) a settlement
in the amount of $96,000 related to the settlement of legal
fees in the case of Video Software Dealers Association v.
Schwarzenegger, Ninth Circuit Court of Appeals Case No.
CONTINUED
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07-16620; (5) a settlement for legal fees in the amount of
$996,000 in the case of Whyte v. California Department of
Justice, Kern County Superior Court Case No.
S-1500-CV-244826; (6) a settlement in the amount of
$575,000 related to the case California Pro-Life Council,
Inc. v. Randolph, Ninth Circuit Court of Appeals Case Nos.
08-17359 and 08-17473. Any funds appropriated in excess of
the amounts actually required for the payment of the
judgment and settlements revert to the General Fund on June
30 of the fiscal year in which the final payment is made.
ANALYSIS : This bill appropriates $11,402,374 General
Fund (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.
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) 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 seven
percent 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; and (e) $5,639.68 in costs to Petitioner
City and County of San Francisco.
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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 immigrants, 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 (Assembly Budget Committee), Chapter
258, Statutes of 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 - $8.5 million 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 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 AG'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
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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)
of 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 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 attorney's 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 (DOJ), Kern
County Superior Court Case No. S-1500-CV-244826 -
$996,000 Settlement.
This litigation involves the DOJ's administration of the
Child Abuse Central Index (CACI), a database that tracks
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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
million. Following negotiations, the parties have agreed
to a $930,000 fee award, with interest, commencing on
April 1, 2009. The AG's Office believes there is
considerable risk in rejecting this settlement and having
a judge award attorneys fees.
6.California Pro-Life Counsel (CPLC) v Randolph, Ninth
Circuit Court of 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 Attorney General
(AG). 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 Fair Political Practice
Commission and the AG.
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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 AG filed cross
appeals, the Ninth Circuit ordered the parties to
mediation. The AG'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.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 7/1/09)
Department of Justice (source)
Department of Finance
ASSEMBLY FLOOR :
AYES: Adams, Anderson, Arambula, Beall, Bill Berryhill,
Tom Berryhill, Blakeslee, Block, Blumenfield, Brownley,
Buchanan, Caballero, Charles Calderon, Carter, Chesbro,
Conway, Cook, Coto, Davis, De La Torre, De Leon, DeVore,
Duvall, Emmerson, Eng, Evans, Feuer, Fletcher, Fong,
Fuller, Galgiani, Garrick, Gilmore, Hagman, Hall, Harkey,
Hayashi, Hernandez, Hill, Huber, Huffman, Jeffries,
Jones, Knight, Krekorian, Lieu, Logue, Bonnie Lowenthal,
Mendoza, Miller, Monning, Nava, Nestande, Niello,
Nielsen, John A. Perez, V. Manuel Perez, Portantino,
Price, Ruskin, Salas, Silva, Skinner, Solorio, Audra
Strickland, Swanson, Torlakson, Torres, Torrico, Tran,
Villines, Yamada, Bass
NO VOTE RECORDED: Ammiano, Fuentes, Furutani, Gaines, Ma,
Saldana, Smyth
DLW:do 7/1/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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