BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 206
                                                                  Page  1

          Date of Hearing:   July 6, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                    SB 206 (Kehoe) - As Amended:  March 15, 2011 

          Policy Committee:                              
          AppropriationsVote:

          Urgency:     Yes                  State Mandated Local Program: 
          No     Reimbursable:               

           SUMMARY 

           This bill appropriates 600,000 from the State Board of 
          Chiropractic Examiners' Fund to the State Board of Chiropractic 
          Examiners to pay for the stipulated settlement in Catherine 
          Hayes v. Board of Chiropractic Examiners.  Any funds 
          appropriated in excess of the amount required for the payment of 
          these claims shall revert to the fund.

           FISCAL EFFECT 

           This bill appropriates $600,000 from the fee-based Chiropractic 
          Examiners' Fund, which has a projected reserve of about $2 
          million. 

           COMMENTS

          1)Rationale  . This bill is one of two annual bills carried by the 
            Appropriations chairs to provide appropriation authority for 
            state judgments and settlements approved by the Department of 
            Finance. 

           2)Case background . 

            Catherine Hayes v. Board of Chiropractic Examiners, Sacramento 
            County Superior Court. The board agreed to a stipulated 
            settlement of $600,000 with former Board Executive Officer, 
            Catherine Hayes.  

            Hayes alleged the board retaliated against her, terminating 
            her employment as a result of her testimony and cooperation in 
            criminal investigations and prosecutions of chiropractors in 








                                                                  SB 206
                                                                  Page  2

            the County of San Joaquin relating to the practice of 
            manipulation under anesthesia. Hayes alleged the board (a) 
            conspired to affect the outcome of criminal prosecutions by 
            voting to recognize manipulation under anesthesia as falling 
            within the chiropractic scope of practice; (b) intimidated 
            witnesses in related criminal proceedings; (c) violated the 
            Bagley-Keene Open Meetings Act through serial communications 
            outside the board meetings; and (d) engaged in gender 
            discrimination in hiring and compensating executive officers. 

            Recently the board, represented by the Department of Justice 
            (DOJ), suffered an adverse verdict at trial in a case in which 
            DOJ advised there was little or no liability exposure. The 
            jury award exceeded $1,000,000 in compensatory damages, with 
            an award of attorney's fees and costs in excess of $1,000,000 
            to be determined by the court.  According to the board, the 
            facts and circumstances of the Hayes dispute, combined with 
            the recent experience at trial compelled the settlement 
            resolution.

           3)Related Legislation  . 

             a)   AB 140 (Fuentes), which appropriates $232,000 funds for 
               two state settlements, passed the Assembly 79-0 and is 
               pending in the Senate. 
             
              b)   AB 1714 (Fuentes) and SB 911 (Kehoe), both chaptered in 
               2010, appropriated funds for state settlements last year. 




          Analysis Prepared by  :    Geoff Long / APPR. / (916) 319-2081