Existing law prohibits a person from filing or recording a lawsuit, lien, or other encumbrance, pertaining to actions arising in the course and scope of the duties of a public officer or employee, against a public officer or employee, knowing that it is false, with the intent to harass the public officer or employee or to influence or hinder the public officer or employee in discharging his or her official duties. Existing law also provides that a person who records or files a lawsuit, lien, or encumbrance against a public officer or employee in violation of this prohibition, as specified, is liable for a civil penalty not to exceed $5,000. Existing law requires a court to issue an order striking and releasing a lien or other encumbrance against a public officer or official in violation of this prohibition, and it allows a court to award costs and reasonable attorneys fees in that instance.

Existing law permits a public officer or employee whose property is subject to a lien or other encumbrance in violation of this prohibition to petition the superior court of the county in which the person resides or in which the property is located for an order directing the lien or other encumbrance claimant to appear at a hearing before the court and show cause why the lien or other encumbrance should not be stricken and other relief should not be granted.

This bill would repeal and recast these provisions and instead prohibit a person from filing or recording, or directing another to file or record, a lawsuit, lien, or other encumbrance against any person or entity, knowing that it is false, with the intent to harass the person or entity or to influence or hinder the person in discharging his or her official duties if the person is a public officer or employee. The bill would also provide that a person who files a lawsuit, lien, or other encumbrance against any person or entity in violation of this prohibition is liable for a civil penalty not to exceed $5,000.

This bill would allow any person or entity subject to a lien or other encumbrance in violation of its prohibitions to petition the superior court of the county in which the person or entity resides or in which the property is located for an order directing the lien or other encumbrance claimant to appear at a hearing before the court and show cause why the lien or other encumbrance should not be stricken and other relief should not be granted. The bill would expand the requirement for a court to issue an order striking and releasing a lien or other encumbrance to apply to a lawsuit, lien, or other encumbrance against any person or entity. The bill would also make other conforming changes.

Existing law prohibits a person from filing or recording a lawsuit, lien, or other encumbrance, pertaining to actions arising in the course and scope of the duties of a public officer or employee, against a public officer or employee, knowing that it is false, with the intent to harass the public officer or employee or to influence or hinder the public officer or employee in discharging his or her official duties. Existing law also provides that a person who records or files a lawsuit, lien, or encumbrance against a public officer or employee in violation of this prohibition, as specified, is liable for a civil penalty not to exceed $5,000. Existing law requires a court to issue an order striking and releasing a lien or other encumbrance against a public officer or official in violation of this prohibition, and it allows a court to award costs and reasonable attorneys fees in that instance.

Existing law permits a public officer or employee whose property is subject to a lien or other encumbrance in violation of this prohibition to petition the superior court of the county in which the person resides or in which the property is located for an order directing the lien or other encumbrance claimant to appear at a hearing before the court and show cause why the lien or other encumbrance should not be stricken and other relief should not be granted.

This bill would repeal and recast these provisions and instead prohibit a person from filing or recording, or directing another to file or record, a lawsuit, lien, or other encumbrance against any person or entity, knowing that it is false, with the intent to harass the person or entity or to influence or hinder the person in discharging his or her official duties if the person is a public officer or employee. The bill would also provide that a person who files a lawsuit, lien, or other encumbrance against any person or entity in violation of this prohibition is liable for a civil penalty not to exceed $5,000.

This bill would allow any person or entity subject to a lien or other encumbrance in violation of its prohibitions to petition the superior court of the county in which the person or entity resides or in which the property is located for an order directing the lien or other encumbrance claimant to appear at a hearing before the court and show cause why the lien or other encumbrance should not be stricken and other relief should not be granted. The bill would expand the requirement for a court to issue an order striking and releasing a lien or other encumbrance to apply to a lawsuit, lien, or other encumbrance against any person or entity. The bill would also make other conforming changes.

Existing law prohibits a person from filing or recording a lawsuit, lien, or other encumbrance, pertaining to actions arising in the course and scope of the duties of a public officer or employee, against a public officer or employee, knowing that it is false, with the intent to harass the officer or employee or to influence or hinder the public officer or employee in discharging his or her official duties. Existing law also provides that a person who records or files a lawsuit, lien, or encumbrance against a public officer or employee in violation of this prohibition, as specified, is liable for a civil penalty not to exceed $5000. Existing law requires a court to issue an order striking and releasing a lien or other encumbrance against a public officer or official in violation of this prohibition, and it allows a court to award costs and reasonable attorney fees in that instance.

Existing law permits a public officer or employee whose property is subject to a lien or other encumbrance in violation of this prohibition to petition the superior court of the county in which the person resides or in which the property is located for an order directing the lien or other encumbrance claimant to appear at a hearing before the court and show cause why the lien or other encumbrance should not be stricken and other relief should not be granted.

This bill would repeal and recast these provisions and instead prohibit a person from filing or recording, or directing another to file or record, a lawsuit, lien, or other encumbrance against any person or entity, knowing that it is false, with the intent to harass the person or entity or to influence or hinder the person in discharging his or her official duties if the person is a public officer or employee. The bill would also provide that a person who files a lawsuit, lien, or other encumbrance against any person or entity in violation of this prohibition is liable for a civil penalty not to exceed $5000.

This bill would allow any person or entity subject to a lien or other encumbrance in violation of its prohibitions to petition the superior court of the county in which the person or entity resides or in which the property is located for an order directing the lien or other encumbrance claimant to appear at a hearing before the court and show cause why the lien or other encumbrance should not be stricken and other relief should not be granted. The bill would expand the requirement for a court to issue an order striking and releasing a lien or other encumbrance to apply to a lawsuit, lien, or other encumbrance against any person or entity. The bill would also make other conforming changes.

(1)Existing law prohibits a person from filing or recording a lawsuit, lien, or other encumbrance, pertaining to actions arising in the course and scope of the duties of a public officer or employee, against a public officer or employee, knowing that it is false, with the intent to harass the officer or employee or to influence or hinder the public officer or employee in discharging his or her official duties. Existing law also provides that a person who records or files a lawsuit, lien, or encumbrance against a public officer or employee in violation of this prohibition, as specified, is liable for a civil penalty not to exceed $5000. Existing law requires a court to issue an order striking and releasing a lien or other encumbrance against a public officer or official in violation of this prohibition, and it allows a court to award costs and reasonable attorney fees in that instance.

Existing law permits a public officer or employee whose property is subject to a lien or other encumbrance in violation of this prohibition to petition the superior court of the county in which the person resides or in which the property is located for an order directing the lien or other encumbrance claimant to appear at a hearing before the court and show cause why the lien or other encumbrance should not be stricken and other relief should not be granted.

This bill would repeal and recast these provisions and instead prohibit a person from filing or recording, or directing another to file or record, a lawsuit, lien, or other encumbrance against any person or entity, knowing that it is false, with the intent to harass the person or entity or to influence or hinder the person in discharging his or her official duties if the person is a public officer or employee. This The bill would also provide that a person who files a lawsuit, lien, or other encumbrance against any person or entity in violation of this prohibition is liable for a civil penalty not to exceed $5000.

This bill would allow any person or entity subject to a lien or other encumbrance in violation of its prohibitions to petition the superior court of the county in which the person or entity resides or in which the property is located for an order directing the lien or other encumbrance claimant to appear at a hearing before the court and show cause why the lien or other encumbrance should not be stricken and other relief should not be granted. This The bill would expand the requirement for a court to issue an order striking and releasing a lien or other encumbrance to apply to a lawsuit, lien, or other encumbrance against any person or entity. The bill would also make other conforming changes.

Existing law prohibits a person from filing or recording a lawsuit, lien, or other encumbrance, pertaining to actions arising in the course and scope of the duties of a public officer or employee, against a public officer or employee, knowing that it is false, with the intent to harass the officer or employee or to influence or hinder the public officer or employee in discharging his or her official duties. Existing law also provides that a person who records or files a lawsuit, lien, or encumbrance against a public officer or employee in violation of this prohibition, as specified, is liable for a civil penalty not to exceed $5000. Existing law requires a court to issue an order striking and releasing a lien or other encumbrance against a public officer or official in violation of this prohibition, and it allows a court to award costs and reasonable attorney fees in that instance.

Existing law permits a public officer or employee whose property is subject to a lien or other encumbrance in violation of this prohibition to petition the superior court of the county in which the person resides or in which the property is located for an order directing the lien or other encumbrance claimant to appear at a hearing before the court and show cause why the lien or other encumbrance should not be stricken and other relief should not be granted.

This bill would repeal and recast these provisions and instead prohibit a person from filing or recording, or directing another to file or record, a lawsuit, lien, or other encumbrance against any person or entity, knowing that it is false, with the intent to harass the person or entity or to influence or hinder the person in discharging his or her official duties if the person is a public officer or employee. This bill would also provide that a person who files a lawsuit, lien, or other encumbrance against any person or entity in violation of this prohibition is liable for a civil penalty not to exceed $5000.

This bill would allow any person or entity subject to a lien or other encumbrance in violation of its prohibitions to petition the superior court of the county in which the person or entity resides or in which the property is located for an order directing the lien or other encumbrance claimant to appear at a hearing before the court and show cause why the lien or other encumbrance should not be stricken and other relief should not be granted. This bill would expand the requirement for a court to issue an order striking and releasing a lien or other encumbrance to apply to a lawsuit, lien, or other encumbrance against any person or entity. The bill would also make other conforming changes.

 THIRD READING  

Bill No: AB 1267

Author: Bloom (D)

Amended: 4/27/15 in Assembly

Vote: 21

SENATE JUDICIARY COMMITTEE: 7-0, 6/16/15

AYES: Jackson, Moorlach, Anderson, Hertzberg, Leno, Monning, Wieckowski

ASSEMBLY FLOOR: 76-0, 5/7/15 - See last page for vote

SUBJECT: Lawsuits, liens, and other encumbrances

SOURCE: Anti-Defamation League

DIGEST: This bill prohibits a person from filing or recording a lawsuit, lien, or other encumbrance against any person or entity, knowing that it is false, with the intent to harass the person or entity or, in the case of a public officer or employee, to influence or hinder the person in discharging his or her official duties. This bill authorizes a court to issue a civil penalty not to exceed $5,000 for violating the prohibition, and allows any person or entity subject to a lien or other encumbrance filed or recorded in violation of the prohibition to petition the superior court for an order directing the claimant to show cause why the lien or other encumbrance should not be stricken and other relief should not be granted.

ANALYSIS: Existing federal law provides that whoever files, attempts to file, or conspires to file, in any public record or in any private record which is generally available to the public, any false lien or encumbrance against the real or personal property of an officer or employee of the United States or of any agency in any branch of the United States Government, as specified, on account of the performance of official duties by that individual, knowing or having reason to know that such lien or encumbrance is false or contains any materially false, fictitious, or fraudulent statement or representation, shall be fined or imprisoned for not more than 10 years, or both. (18 U.S.C. Sec. 1521.)

Existing state law:

1. Provides that every person who knowingly procures or offers any false or forged instrument to be filed, registered, or recorded in any public office within this state, which instrument, if genuine, might be filed, registered, or recorded under any law of this state or of the United States, is guilty of a felony. (Pen. Code. Sec. 115(a).)

2. Authorizes the awarding of sanctions against a party who, when filing a pleading, petition, written notice of motion, or other similar paper with a court, falsely certifies that, among other things, the filing is not being presented primarily for an improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. (Code Civ. Proc. Sec. 128.7.)

3. Provides that a county recorder shall not refuse to record any instrument, paper, or notice that is authorized or required by statute, court order, or local ordinance that relates to the recordation of any instrument, paper, or notice that relates to real property to be recorded on the basis of its lack of legal sufficiency. (Gov. Code Sec. 27201(a).)

4. States that no person shall file or record a lawsuit, lien, or other encumbrance, including, but not limited to, a notice of lis pendens, against a public officer or employee, knowing it is false, with the intent to harass the officer or employee or to influence or hinder the public officer or employee in discharging his or her official duties. Existing law specifies that this prohibition applies only to lawsuits, liens, or other encumbrances pertaining to actions that arise in the course and scope of the public officer’s or employee’s duties, and that a person who knowingly records or files, or directs another to record or file, a lawsuit, lien, or encumbrance in violation of this prohibition shall be liable for a civil penalty not to exceed $5,000. (Gov. Code Sec. 6223.)

5. Provides that a public officer or employee whose property is subject to a lien or other encumbrance in violation of the above provision may petition the superior court of the county in which the person resides or in which the property is located for an order, which may be granted ex parte, directing the lien or other encumbrance claimant to appear at a hearing before the court and show cause why the lien or other encumbrance should not be stricken and other relief should not be granted, as specified. Existing law states that the court shall schedule the hearing no earlier than 14 days after the date of the order. (Code Civ. Proc. Sec. 765.010.)

6. Provides that if the court determines that the lien or other encumbrance is in violation of the above prohibition, the court shall issue an order striking and releasing the lien or other encumbrance and may award costs and reasonable attorney fees to the petitioner to be paid by the lien or other encumbrance claimant. Existing law states that if the court determines that the lien or other encumbrance is valid, the court shall issue an order so stating and may award costs and reasonable attorney fees to the encumbrance claimant to be paid by the petitioner. (Code Civ. Proc. Sec. 765.030.)

7. Provides that any lien or encumbrance claimant who records or files, or directs another to record or file, a lien or other encumbrance in violation of the above prohibition shall be liable to the owner of the property bound by the lien or other encumbrance for a civil penalty of up to $5,000. (Code Civ. Proc. Sec. 765.040.)

8. States that if a lien or other encumbrance is recorded or filed in violation of the above prohibition, the state or local agency that employs the public officer or employee may provide counsel for the public officer or employee in an action brought under these procedures. (Code Civ. Proc. Sec. 765.060.)

This bill:

1. Recasts and expands the above provisions to state that a person shall not file or record, or direct another to file or record, a lawsuit, lien, or other encumbrance, including a notice of lis pendens, against another person or entity knowing it is false, with the intent to harass the person or entity or to influence or hinder the person in discharging his or her official duties if the person is a public officer or employee.

2. Provides that a person or entity whose property is subject to a lien or encumbrance in violation of the above provision may petition the superior court of the county in which the person or entity resides or in which the property is located for an order, which may be granted ex parte, directing the lien or other encumbrance claimant to appear at a hearing before the court and show cause why the lien or other encumbrance should not be stricken and other specified relief should not be granted.

3. Specifies that the court shall schedule the hearing no earlier than 14 days after the date of the order, and that the scheduled date of the hearing shall allow adequate time for notice of the hearing.

4. Defines “harass” to mean engaging in knowing and willful conduct that serves no legitimate purpose, and “entity” to mean both government and private entities.

5. Makes other technical and conforming changes.

Background

According to a report by the Senate Office of Research from September of 1997, anti-government extremists are engaging in “paper terrorism” by filing false liens and other encumbrances on the property of government agencies, public officers, and public employees. One anti-government ideology in particular – known as the “sovereign citizen” movement – employs this tactic frequently as a way to retaliate against perceived injustices. A recent New York Times article states:

Sovereign citizens believe that in the 1800s, the federal government was gradually subverted and replaced by an illegitimate government. They create their own driver’s licenses and include their thumbprints on documents to distinguish their flesh and blood person from a “straw man” persona that they say has been created by the false government. When writing their names, they often add punctuation marks like colons or hyphens. Adherents to the movement have been involved in a host of debt evasion schemes and mortgage and tax frauds. (Erica Goode, In Paper War, Flood of Liens Is the Weapon, New York Times (Aug. 23, 2013) <http://www.nytimes.com/2013/08/24/us/ citizens-without-a-country-wage-battle-with-liens.html> [as of June 10, 2015].)

In 1998, the Legislature passed SB 1759 (Ayala, Chapter 779, Statutes of 1998) and SB 2154 (Schiff, Chapter 211, Statutes of 1998), which specifically prohibited the filing of false liens, encumbrances, or lawsuits against public officials with the intent to harass them or hinder the discharge of their duties. These bills also enacted a fast-track process by which public officials could petition the superior court for an order directing the claimant to show cause why their lien or other encumbrance should not be stricken, and to receive a hearing on the court’s show cause order no earlier than 14 days.

This bill expands and recasts the prohibition on filing false liens, encumbrances, or lawsuits to include all persons or entities, and expands the fast-track process to allow any aggrieved party against whom these false lawsuits, liens, or other encumbrances have been filed to receive a hearing before a court no earlier than 14 days of the court issuing a show cause order.

Comments

The author writes:

The sovereign citizen movement is an extreme anti-government movement whose members believe our government has no authority or jurisdiction over them and that they do not need to obey its laws and regulations. The movement dates back to 1970 but has had a surge of popularity since 2009, accompanied by a wide range of criminal activity that includes violence, scams and frauds.

One of the most popular sovereign citizen tactics is known as paper terrorism, which refers to the use of bogus legal documents and filings, or the misuse of legitimate ones, in order to intimidate, harass, threaten, or retaliate against public officials, law enforcement officers, or private individuals. Acts of paper terrorism can range from simple and straightforward filings, such as frivolous lawsuits, to more complex strategies, such as filing IRS forms that fraudulently allege victims have been paid large sums of money on which they declared no taxes. The most popular paper terrorism tactic is the use of bogus liens or other documents to cloud title to property owned by victims. Whatever the ploy, the result creates serious legal and financial problems for those targeted.

The goal of AB 1267 is to further protect Californians from paper terrorism by strengthening already existing laws. California law already protects public officers and employees who are targeted by these false encumbrances by allowing them to utilize a fast track removal process. AB 1267 extends such protection to individuals and businesses so they may all use this expedient process. When public officers and employees are targeted by a false encumbrance, they are entitled to seek civil remedies (up to $5000). AB 1267 permits individuals and businesses to also pursue these remedies.

The sponsor, Anti-Defamation League (ADL), states:

Although the ADL is encouraged by the positive steps the State of California has already taken to fortify existing paper terrorism protections, there is more to do. For instance, California currently provides a fast track removal process and civil remedies for false filings. These code sections, however, only apply to public officers and employees, while sovereign citizens also target others. AB 1267 expands these protections to individuals – including the spouses and relatives of public officers, as well as private citizens and businesses. This bill will bring California in line with the ten states that currently provide a fast track removal process to individuals and businesses, and the twenty-five states that provide civil remedies for false filings.

Related/Prior Legislation

SB 346 (Dutton, 2007) would have prohibited a person from filing a lien or other encumbrance without providing evidence to a recording clerk of the pendency of an action or the issuance of a judgment upon which the lien is based, and would have required the Secretary of State to revise the Uniform Commercial Code Financing Statement (UCC-1) to require a lien claimant to attach documentation sufficient to provide evidence of the pendency of an action or the issuance of a judgment upon which the lien is based, as specified. The bill died in the Senate Judiciary Committee.

SB 1759 (Ayala, Chapter 779, Statutes of 1998) modified the prohibitions enacted in SB 2154 (Schiff, Chapter 211, Statutes of 1998) to specify that an encumbrance includes, but is not limited to, a notice of lis pendens, and created an expedited action, filed pursuant to a complaint form established by the Judicial Council, requesting the striking or release of a lien or other encumbrance recorded in violation of those prohibitions. The bill also prohibited consumer credit reporting agencies from reporting a document which acts as a lien or other encumbrance but which has together with it a court order striking or releasing the lien or other encumbrance, as specified.

SB 2154 (Schiff, Chapter 211, Statutes of 1998) prohibited a person from filing a lawsuit or recording or filing a lien or other encumbrance, against a public officer or employee, knowing it is false, with the intent to harass the officer or employee or influence or hinder the public officer or employee in discharging his or her official duties. The bill specified that the above provision would apply only to lawsuits, liens, or other encumbrances pertaining to actions that arise in the course and scope of the public officer’s or employee’s duties, and provided that a person who violates these provisions would be liable for a civil penalty not to exceed $5,000.

FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No

SUPPORT: (Verified 6/16/15)

Anti-Defamation League (source)

California District Attorneys Association

California Police Chiefs Association

California State Association of Counties Excess Insurance Authority

OPPOSITION: (Verified 6/16/15)

None received

ASSEMBLY FLOOR: 76-0, 5/7/15

AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins

NO VOTE RECORDED: Campos, Dodd, Roger Hernández, Steinorth

Prepared by: Tobias Halvarson / JUD. / (916) 651-4113

6/19/15 14:48:04

**** END ****

SENATE JUDICIARY COMMITTEE

Senator Hannah-Beth Jackson, Chair

2015-2016 Regular Session

Bill No: AB 1267 (Author:Bloom)

Version: April 27, 2015

Hearing Date: June 16, 2015

Fiscal: No

Urgency: No

Consultant: TH

SUBJECT

Lawsuits, liens, and other encumbrances

DESCRIPTION

This bill would prohibit a person from filing or recording a lawsuit, lien, or other encumbrance against any person or entity, knowing that it is false, with the intent to harass the person or entity or, in the case of a public officer or employee, to influence or hinder the person in discharging his or her official duties. This bill would authorize a court to issue a civil penalty not to exceed $5,000 for violating the prohibition, and would allow any person or entity subject to a lien or other encumbrance filed or recorded in violation of the prohibition to petition the superior court for an order directing the claimant to show cause why the lien or other encumbrance should not be stricken and other relief should not be granted.

BACKGROUND

According to a report by the Senate Office of Research from September of 1997, anti-government extremists are engaging in “paper terrorism” by filing false liens and other encumbrances on the property of government agencies, public officers, and public employees. One anti-government ideology in particular – known as the “sovereign citizen” movement – employs this tactic frequently as a way to retaliate against perceived injustices. A recent New York Times article states:

Sovereign citizens believe that in the 1800s, the federal government was gradually subverted and replaced by an illegitimate government. They create their own driver’s licenses and include their thumbprints on documents to distinguish their flesh and blood person from a “straw man” persona that they say has been created by the false government. When writing their names, they often add punctuation marks like colons or hyphens. Adherents to the movement have been involved in a host of debt evasion schemes and mortgage and tax frauds. (Erica Goode, In Paper War, Flood of Liens Is the Weapon, New York Times (Aug. 23, 2013) <http://www.nytimes.com/2013/08/24/us/citizens-without-a-country-wage-battle-with-liens.html> [as of June 10, 2015].)

In 1998, the Legislature passed SB 1759 (Ayala, Ch. 779, Stats. 1998) and SB 2154 (Schiff, Ch. 211, Stats. 1998), which specifically prohibited the filing of false liens, encumbrances, or lawsuits against public officials with the intent to harass them or hinder the discharge of their duties. These bills also enacted a fast-track process by which public officials could petition the superior court for an order directing the claimant to show cause why their lien or other encumbrance should not be stricken, and to receive a hearing on the court’s show cause order no earlier than 14 days.

This bill would expand and recast the prohibition on filing false liens, encumbrances, or lawsuits to include all persons or entities, and would expand the fast-track process to allow any aggrieved party against whom these false lawsuits, liens, or other encumbrances have been filed to receive a hearing before a court no earlier than 14 days of the court issuing a show cause order.

CHANGES TO EXISTING LAW

Existing federal law provides that whoever files, attempts to file, or conspires to file, in any public record or in any private record which is generally available to the public, any false lien or encumbrance against the real or personal property of an officer or employee of the United States or of any agency in any branch of the United States Government, as specified, on account of the performance of official duties by that individual, knowing or having reason to know that such lien or encumbrance is false or contains any materially false, fictitious, or fraudulent statement or representation, shall be fined or imprisoned for not more than 10 years, or both. (18 U.S.C. Sec. 1521.)

Existing law provides that every person who knowingly procures or offers any false or forged instrument to be filed, registered, or recorded in any public office within this state, which instrument, if genuine, might be filed, registered, or recorded under any law of this state or of the United States, is guilty of a felony. (Pen. Code. Sec. 115(a).)

Existing law authorizes the awarding of sanctions against a party who, when filing a pleading, petition, written notice of motion, or other similar paper with a court, falsely certifies that, among other things, the filing is not being presented primarily for an improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. (Code Civ. Proc. Sec. 128.7.)

Existing law provides that a county recorder shall not refuse to record any instrument, paper, or notice that is authorized or required by statute, court order, or local ordinance that relates to the recordation of any instrument, paper, or notice that relates to real property to be recorded on the basis of its lack of legal sufficiency. (Gov. Code Sec. 27201(a).)

Existing law states that no person shall file or record a lawsuit, lien, or other encumbrance, including, but not limited to, a notice of lis pendens, against a public officer or employee, knowing it is false, with the intent to harass the officer or employee or to influence or hinder the public officer or employee in discharging his or her official duties. Existing law specifies that this prohibition applies only to lawsuits, liens, or other encumbrances pertaining to actions that arise in the course and scope of the public officer’s or employee’s duties, and that a person who knowingly records or files, or directs another to record or file, a lawsuit, lien, or encumbrance in violation of this prohibition shall be liable for a civil penalty not to exceed five thousand dollars ($5,000). (Gov. Code Sec. 6223.)

Existing law provides that a public officer or employee whose property is subject to a lien or other encumbrance in violation of the above provision may petition the superior court of the county in which the person resides or in which the property is located for an order, which may be granted ex parte, directing the lien or other encumbrance claimant to appear at a hearing before the court and show cause why the lien or other encumbrance should not be stricken and other relief should not be granted, as specified. Existing law states that the court shall schedule the hearing no earlier than 14 days after the date of the order. (Code Civ. Proc. Sec. 765.010.)

Existing law provides that if the court determines that the lien or other encumbrance is in violation of the above prohibition, the court shall issue an order striking and releasing the lien or other encumbrance and may award costs and reasonable attorney fees to the petitioner to be paid by the lien or other encumbrance claimant. Existing law states that if the court determines that the lien or other encumbrance is valid, the court shall issue an order so stating and may award costs and reasonable attorney fees to the encumbrance claimant to be paid by the petitioner. (Code Civ. Proc. Sec. 765.030.)

Existing law provides that any lien or encumbrance claimant who records or files, or directs another to record or file, a lien or other encumbrance in violation of the above prohibition shall be liable to the owner of the property bound by the lien or other encumbrance for a civil penalty of up to five thousand dollars ($5,000). (Code Civ. Proc. Sec. 765.040.)

Existing law states that if a lien or other encumbrance is recorded or filed in violation of the above prohibition, the state or local agency that employs the public officer or employee may provide counsel for the public officer or employee in an action brought under these procedures. (Code Civ. Proc. Sec. 765.060.)

This bill would recast and expand the above provisions to state that a person shall not file or record, or direct another to file or record, a lawsuit, lien, or other encumbrance, including a notice of lis pendens, against another person or entity knowing it is false, with the intent to harass the person or entity or to influence or hinder the person in discharging his or her official duties if the person is a public officer or employee.

This bill would provide that a person or entity whose property is subject to a lien or encumbrance in violation of the above provision may petition the superior court of the county in which the person or entity resides or in which the property is located for an order, which may be granted ex parte, directing the lien or other encumbrance claimant to appear at a hearing before the court and show cause why the lien or other encumbrance should not be stricken and other specified relief should not be granted.

This bill would specify that the court shall schedule the hearing no earlier than 14 days after the date of the order, and that the scheduled date of the hearing shall allow adequate time for notice of the hearing.

This bill would define “harass” to mean engaging in knowing and willful conduct that serves no legitimate purpose, and “entity” to mean both government and private entities.

This bill would make other technical and conforming changes.

COMMENT

1. Stated need for the bill

The author writes:

The sovereign citizen movement is an extreme anti-government movement whose members believe our government has no authority or jurisdiction over them and that they do not need to obey its laws and regulations. The movement dates back to 1970 but has had a surge of popularity since 2009, accompanied by a wide range of criminal activity that includes violence, scams and frauds.

One of the most popular sovereign citizen tactics is known as paper terrorism, which refers to the use of bogus legal documents and filings, or the misuse of legitimate ones, in order to intimidate, harass, threaten, or retaliate against public officials, law enforcement officers, or private individuals. Acts of paper terrorism can range from simple and straightforward filings, such as frivolous lawsuits, to more complex strategies, such as filing IRS forms that fraudulently allege victims have been paid large sums of money on which they declared no taxes. The most popular paper terrorism tactic is the use of bogus liens or other documents to cloud title to property owned by victims. Whatever the ploy, the result creates serious legal and financial problems for those targeted.

The goal of AB 1267 is to further protect Californians from paper terrorism by strengthening already existing laws . . . California law already protects public officers and employees who are targeted by these false encumbrances by allowing them to utilize a fast track removal process. AB 1267 extends such protection to individuals and businesses so they may all use this expedient process. When public officers and employees are targeted by a false encumbrance, they are entitled to seek civil remedies (up to $5000). AB 1267 permits individuals and businesses to also pursue these remedies.

The sponsor, Anti-Defamation League (ADL), states:

Although the ADL is encouraged by the positive steps the State of California has already taken to fortify existing paper terrorism protections, there is more to do. For instance, California currently provides a fast track removal process and civil remedies for false filings. These code sections, however, only apply to public officers and employees, while sovereign citizens also target others. AB 1267 expands these protections to individuals – including the spouses and relatives of public officers, as well as private citizens and businesses. This bill will bring California in line with the ten states that currently provide a fast track removal process to individuals and businesses, and the twenty-five states that provide civil remedies for false filings.

2. Expansion to Private Individuals and Entities

This bill would expand California’s existing protections for public officers and employees against the filing of false liens, encumbrances, and lawsuits to all individuals and entities. While the tactic of harassing individuals through these false filings seems primarily directed toward public officials, some reports indicate that retaliatory harassment of this kind is occasionally directed against private individuals and entities. For example, the Anti-Defamation League reports that false liens have been used in the past by a disgruntled employee to harass General Electric, and by disgruntled customers to harass banks and lending institutions, title companies, and attorneys. (See Mark Pitcavage, Paper Terrorism’s Forgotten Victims: The Use of Bogus Liens Against Private Individuals and Businesses (Jun. 29, 1998) <http://archive.adl.org/mwd/ privlien.html> [as of June 10, 2015].) By explicitly prohibiting the filing of false liens and encumbrances with intent to harass any individual or entity, and allowing a court to award a $5,000 civil penalty per violation against infringers, this bill’s provision could further deter individuals who may consider engaging in this form of harassment. Additionally, expanding the fast track removal process currently reserved for public officers and employees to all victims of this form of harassment will likely help victims quickly clear up questionable liens that harm the marketability of their property.

3. Impact to Judicial Resources

It is unclear whether expanding the fast track removal process to all parties would impose a significant additional burden on judicial resources. Pursuant to this bill, the court must schedule a hearing no earlier than 14 days from an order requiring the claimant (person filing the lien on the property) to appear before the court and show cause why the lien should not be stricken. Although the net effect of this bill would be to require courts to order additional hearings – it is unclear how many hearings would actually be ordered. Based on media reports regarding the filing of false liens and encumbrances, it appears that the majority of these filings are directed at public officials, not private individuals and entities. As such, the expansion of the fast track process proposed in this bill may not have a significant impact on the courts. However, if such fraudulent filings are underreported or if the tactics of individuals engaged in such campaigns of harassment change, the impact to judicial resources could be more substantial.

Support: California District Attorneys Association; California Police Chiefs Association; CSAC Excess Insurance Authority

Opposition: None Known

HISTORY

Source: Anti-Defamation League

Related Pending Legislation: None Known

Prior Legislation:

SB 346 (Dutton, 2007) would have prohibited a person from filing a lien or other encumbrance without providing evidence to a recording clerk of the pendency of an action or the issuance of a judgment upon which the lien is based, and would have required the Secretary of State to revise the Uniform Commercial Code Financing Statement (UCC-1) to require a lien claimant to attach documentation sufficient to provide evidence of the pendency of an action or the issuance of a judgment upon which the lien is based, as specified. This bill died in the Senate Judiciary Committee.

SB 1759 (Ayala, Ch. 779, Stats. 1998) modified the prohibitions enacted in SB 2154 (Schiff, Ch. 211, Stats. 1998) to specify that an encumbrance includes, but is not limited to, a notice of lis pendens, and created an expedited action, filed pursuant to a complaint form established by the Judicial Council, requesting the striking or release of a lien or other encumbrance recorded in violation of those prohibitions. This bill also prohibited consumer credit reporting agencies from reporting a document which acts as a lien or other encumbrance but which has together with it a court order striking or releasing the lien or other encumbrance, as specified.

SB 2154 (Schiff, Ch. 211, Stats. 1998) prohibited a person from filing a lawsuit or recording or filing a lien or other encumbrance, against a public officer or employee, knowing it is false, with the intent to harass the officer or employee or influence or hinder the public officer or employee in discharging his or her official duties. This bill specified that the above provision would apply only to lawsuits, liens, or other encumbrances pertaining to actions that arise in the course and scope of the public officer’s or employee’s duties, and provided that a person who violates these provisions would be liable for a civil penalty not to exceed $5,000.

Prior Vote:

Assembly Floor (Ayes 76, Noes 0)

Assembly Judiciary Committee (Ayes 10, Noes 0)

**************

ASSEMBLY THIRD READING

ATR Bill Id:AB 1267

Author:(Bloom)

As Amended Ver:April 27, 2015

Majority vote

SUMMARY: Extends an existing law that prohibits a person from filing or recording lawsuits, liens, and other encumbrances against a public official or employee for purposes of harassment, and that provide corresponding remedies to the victims thereof, to any person or entity subject to such lawsuit, lien, or encumbrance. Specifically, this bill:

1. Prohibits a person from filing or recording a lawsuit, lien, or encumbrance against another person or entity, knowing it is false, with the intent to harass the person or entity or to influence or hinder the person in discharging his or her official duties if the person is a public officer or employee. Subjects any person who knowingly violates this provision to a $5,000 civil penalty.

2. Permits a person or entity that is subject to lien or encumbrance that violates the provisions of this bill to petition the appropriate superior court. Requires the court to order the lien or other encumbrance claimant to appear at a hearing before the court and show cause why the lien or other encumbrance should not be stricken and other appropriate relief granted. If the court finds that lien or encumbrance was unlawfully filed, the court shall strike the lien or encumbrance and award costs and reasonable attorney's fees to the petitioner. If the court finds that the lien or encumbrance is valid, it shall issue an order so stating and award costs and reasonable attorney's fees to the lien or encumbrance claimant.

EXISTING LAW:

1. Prohibits a person from filing or recording a lawsuit, lien, or other encumbrance, as specified, against a public officer or employee, knowing it is false, with the intent to harass the officer or employee or to influence or hinder the public officer or employee in discharging his or her official duties. Subjects any person who knowingly violates this provision to a $5,000 civil penalty.

2. Permits a public officer or employee whose property is subject to a lien or encumbrance that violates the above provision to petition the appropriate superior court for an order directing the lien or encumbrance claimant to appear at a hearing to show why the lien or encumbrance should not be stricken and other appropriate relief granted. If the court finds that the lien or encumbrance was unlawfully filed, the court shall strike the lien or encumbrance and award costs and reasonable attorney's fees to the petitioner. If the court finds that the lien or encumbrance is valid, it shall issue an order so stating and award costs and reasonable attorney's fees to the lien or encumbrance claimant.

3. Makes a person who knowingly procures or offers any false or forged instrument to be filed, registered, or recorded in any public office within this state, as specified, guilty of a felony, and provides a process to allow a judge to declare an instrument void, as specified.

FISCAL EFFECT: None

COMMENTS: Sponsored by the Anti-Defamation League, this bill seeks to address the problem of "paper terrorism" – or the practice of filing legal documents, knowing that they are false and meritless, in order to harass, intimidate, threaten, or retaliate against both public officials and private citizens. The author and sponsor are particularly concerned by extremist anti-government groups, especially the so-called "sovereign citizen" movement. For example, one "sovereign citizen" member in Chico, California, filed false liens against judges, lawyers, Internal Revenue Service officers, and private witnesses who were involved in his trial for various kinds of tax fraud. In November of 2014, he was sentenced to three years in federal prison.

Existing Law Protects Public Officials and Public Employees. Existing law prohibits a person from filing a knowingly false lawsuit, lien, or encumbrance against a public official or employee for the purposes of harassing the official or employee, or attempting to influence or interfere with the official or employee in the carrying out of his or her official duties. Existing law also provides expedited procedures by which a public official or employee may seek civil remedies and have a false lien or encumbrance removed from the record. Specifically, existing law allows a public official or employee to file a petition with the superior court for an order requiring the person who filed the false and harassing document to appear before the court and show cause why the lien or encumbrance should not be stricken from the record. (In the case of a falsely filed lawsuit, there is, of course, no need to require the person who recorded the false document to appear before the court since there is already a lawsuit.) If the court finds that the lien or encumbrance was filed only to harass or unduly influence the official or employee, the court will strike the lien or encumbrance and award costs and reasonable attorney's fees to the victim. If, on the other hand, the court finds that the lien or encumbrance was lawfully and legitimately recorded, then the lien or encumbrance stays on the books and the person wrongly accused of recording the false document will be awarded costs and attorney's fees. The person who filed the false lawsuit, however, would be subject to a $5,000 civil penalty.

This straight-forward bill simply applies the existing prohibitions and remedies relative to false lawsuits, liens, and encumbrances against public officials and employees to instances in which false and harassing lawsuits, liens, and encumbrances are filed or recorded against any person or entity. The rationale for this extension, according to the author, is an alleged resurgence in "paper terrorism" by groups like the "sovereign citizens" movement that target both public officials and private persons.

The need for this bill, according to the author, is illustrated by at least three California cases in the past year where members of the sovereign citizens' movement filed harassing liens against California public officials, mostly judges and Internal Revenue Service employees and agents. In each of these cases the persons who filed the false liens against public officials were prosecuted. These cases illustrate the recent nature of the problem, but they also reveal the limitation of existing law: private persons subject to the same liens would not have had the same remedies. This bill seeks to address that shortcoming in existing law. The author believes that this bill will appropriately extend to private citizens protections currently available only to public officials and public employees.

Analysis Prepared by: Thomas Clark / JUD. / (916) 319-2334 FN: 0000263

Date of Hearing: May 5, 2015

ASSEMBLY COMMITTEE ON JUDICIARY

Mark Stone, Chair

ABPCA Bill Id:AB 1267

Author:(Bloom) – As Amended Ver:April 27, 2015

SUBJECT: Lawsuits, liens, and other encumbrances

KEY ISSUE: Should an existing law that prohibits filing a lawsuit, lien, or other encumbrance against a public official for purposes of harassment be extended to prohibit such filings to harass a private person or entity?

SYNOPSIS

Existing law prohibits a person from filing or recording a lawsuit, lien, or other encumbrance against a public official or employee, knowing that it is false, with the intent to harass the official or employee or to influence or hinder the official or employee in carrying out his or her official duties. This bill would extend existing law protections to all persons who are the victims of such filings or recordings. This bill would also extend the associated remedies now only available to public officials to all other persons. According to the Anti-Defamation League (ADL), a number of extremist groups – especially, the anti-government "sovereign citizen" movement – have increased their use of these tactics since 2009. And while they often target government officials, given their ideology, they also sometimes target private citizens. This bill seeks to protect these private victims from "paper terrorism" by giving them the same options currently available to public officials and public employees: the ability to seek civil remedies and remove the false lien or encumbrance from the record. The bill is sponsored by the ADL and supported by the California Police Chiefs Association, the California District Attorneys Association, and CSAC Excess Insurance Authority, a Joint Powers public agency. There is no known opposition.

SUMMARY: Extends an existing law that prohibits a person from filing or recording lawsuits, liens, and other encumbrances against a public official or employee for purposes of harassment, and that provide corresponding remedies to the victims thereof, to any person or entity subject to such lawsuit, lien, or encumbrance. Specifically, this bill:

1. Prohibits a person from filing or recording a lawsuit, lien, or encumbrance against another person or entity, knowing it is false, with the intent to harass the person or entity or to influence or hinder the person in discharging his or her official duties if the person is a public officer or employee. Subjects any person who knowingly violates this provision to a $5,000 civil penalty.

2. Permits a person or entity that is subject to lien or encumbrance that violates the provisions of this bill to petition the appropriate superior court. Requires the court to order the lien or other encumbrance claimant to appear at a hearing before the court and show cause why the lien or other encumbrance should not be stricken and other appropriate relief granted. If the court finds that lien or encumbrance was unlawfully filed, the court shall strike the lien or encumbrance and award costs and reasonable attorney's fees to the petitioner. If the court finds that the lien or encumbrance is valid, it shall issue an order so stating and award costs and reasonable attorney's fees to the lien or encumbrance claimant.

EXISTING LAW:

1. Prohibits a person from filing or recording a lawsuit, lien, or other encumbrance, as specified, against a public officer or employee, knowing it is false, with the intent to harass the officer or employee or to influence or hinder the public officer or employee in discharging his or her official duties. Subjects any person who knowingly violates this provision to a $5,000 civil penalty. (Government Code Section 6223.)

2. Permits a public officer or employee whose property is subject to a lien or encumbrance that violates the above provision to petition the appropriate superior court for an order directing the lien or encumbrance claimant to appear at a hearing to show why the lien or encumbrance should not be stricken and other appropriate relief granted. If the court finds that the lien or encumbrance was unlawfully filed, the court shall strike the lien or encumbrance and award costs and reasonable attorney's fees to the petitioner. If the court finds that the lien or encumbrance is valid, it shall issue an order so stating and award costs and reasonable attorney's fees to the lien or encumbrance claimant. (Code of Civil Procedure Section 765.010. and 765.030.)

3. Makes a person who knowingly procures or offers any false or forged instrument to be filed, registered, or recorded in any public office within this state, as specified, guilty of a felony, and provides a process to allow a judge to declare an instrument void, as specified. (Penal Code Section 115.)

FISCAL EFFECT: As currently in print this bill is keyed non-fiscal.

COMMENTS: Sponsored by the Anti-Defamation League (ADL), this bill seeks to address the problem of "paper terrorism" – or the practice of filing legal documents, knowing that they are false and meritless, in order to harass, intimidate, threaten, or retaliate against both public officials and private citizens. The author and sponsor are particularly concerned by extremist anti-government groups, especially the so-called "sovereign citizen" movement. For example, one "sovereign citizen" member in Chico, California, filed false liens against judges, lawyers, Internal Revenue Service officers, and private witnesses who were involved in his trial for various kinds of tax fraud. In November of 2014, he was sentenced to three years in federal prison.

Existing Law Protects Public Officials and Public Employees. Existing law prohibits a person from filing a knowingly false lawsuit, lien, or encumbrance against a public official or employee for the purposes of harassing the official or employee, or attempting to influence or interfere with the official or employee in the carrying out of his or her official duties. Existing law also provides expedited procedures by which a public official or employee may seek civil remedies and have a false lien or encumbrance removed from the record. Specifically, existing law allows a public official or employee to file a petition with the superior court for an order requiring the person who filed the false and harassing document to appear before the court and show cause why the lien or encumbrance should not be stricken from the record. (In the case of a falsely filed lawsuit, there is, of course, no need to require the person who recorded the false document to appear before the court since there is already a lawsuit.) If the court finds that the lien or encumbrance was filed only to harass or unduly influence the official or employee, the court will strike the lien or encumbrance and award costs and reasonable attorney's fees to the victim. If, on the other hand, the court finds that the lien or encumbrance was lawfully and legitimately recorded, then the lien or encumbrance stays on the books and the person wrongly accused of recording the false document will be awarded costs and attorney's fees. The person who filed the false lawsuit, however, would be subject to a $5,000 civil penalty.

This straight-forward bill simply applies the existing prohibitions and remedies relative to false lawsuits, liens, and encumbrances against public officials and employees to instances in which false and harassing lawsuits, liens, and encumbrances are filed or recorded against any person or entity. The rationale for this extension, according to the author, is an alleged resurgence in "paper terrorism" by groups like the "sovereign citizens" movement that target both public officials and private persons.

The need for this bill, according to the author, is illustrated by at least three California cases in the past year where members of the sovereign citizens' movement filed harassing liens against California public officials, mostly judges and Internal Revenue Service employees and agents. In each of these cases the persons who filed the false liens against public officials were prosecuted. These cases illustrate the recent nature of the problem, but they also reveal the limitation of existing law: private persons subject to the same liens would not have had the same remedies. This bill seeks to address that shortcoming in existing law.

Recent Amendments Remove Proposed County Recorder Program. The bill was recently amended twice: first to include, and then to remove, provisions that would have given a county recorder the discretion to refuse filings if it has a reasonable belief that the documents filed for recording are false, fraudulent, or being filed for some other unlawful purpose. The recent amendments would also have required county recorders to develop a fraud alert program by which a person who subscribes to that program will be notified whenever another person attempts to file a lien or other claim against the subscriber's property. However, the author agreed to delete this portion of the bill until all the implications and workability of such a program could be considered by the county recorders and other interested groups. At some point the author may seek to amend the bill once again to establish such a program, so that property holders will know when someone has filed a harassing and unlawful lien or encumbrance against the property.

ARGUMENTS IN SUPPORT: According to the author, the impetus for this bill primarily arises out of concerns about the tactics of extremist groups like the "sovereign citizen movement" and its recent "surge of popularity since 2009." According to the author, one of the most popular sovereign citizen tactics is known as "paper terrorism," which refers to "the use of bogus legal documents and filings, or the misuse of legitimate ones, in order to intimidate, harass, threaten, or retaliate against public officials, law enforcement officers, or private individuals." The author contends that acts of "paper terrorism" can range from "simple and straightforward filings, such as frivolous lawsuits, to more complex strategies, such as filing IRS forms that fraudulently allege victims have been paid large sums of money on which they declared no taxes. The most popular paper terrorism tactic is the use of bogus liens or other documents to cloud title to property owned by victims. Whatever the ploy, the result creates serious legal and financial problems for those targeted."

ADL, the sponsor, is similarly concerned about the tactics of the "sovereign citizen" movement and related groups. The ADL writes that while it is "encouraged by the positive steps the State of California has already taken to fortify existing paper terrorism protections, there is more to do. For instance, California currently provides a fast track removal process and civil remedies for false filings" these provisions "only apply to public officers and employees, while sovereign citizens also target others." ADL believes, therefore, that AB 1267 will appropriately extend "these protections to individuals – including the spouses and relatives of public officers, as well as private citizens and businesses." ADL notes that AB 1267 will "bring California in line with the ten states that currently provide fast track removal process to individuals and businesses, and the twenty-five states that provide civil remedies for false filings."

Prior Related Legislation: AB 1686 (Wagner, Chapter 455, Statutes of 2014) amended California Penal Code Section 615, which generally prohibits the filing of false or forged documents, to allow a judge to declare an instrument void when there is a finding that that instrument is forged or false.

REGISTERED SUPPORT / OPPOSITION:

Support

Anti-Defamation League (ADL) (sponsor)

California District Attorneys Association

California Police Chiefs Association

CSAC Excess Insurance Authority, a Joint Powers Authority

Opposition

None on file

Analysis Prepared by: Thomas Clark / JUD. / (916) 319-2334