Existing law requires the Attorney General, when there is not a sufficient appropriation for the payment of certain claims, settlements, or judgments, to report the claims, settlements, and judgments to the chairperson of either the Senate Committee on Appropriations or the Assembly Committee on Appropriations, who is then required to cause introduction of legislation appropriating necessary funds for payment.

This bill would appropriate $813,000 from the General Fund and $5,420,541.90 from the Motor Vehicle Account within the State Transportation Fund to the Attorney General to pay the settlement in specified cases.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing law requires the Attorney General, when there is not a sufficient appropriation for the payment of certain claims, settlements, or judgments, to report the claims, settlements, and judgments to the chairperson of either the Senate Committee on Appropriations or the Assembly Committee on Appropriations, who is then required to cause introduction of legislation appropriating necessary funds for payment.

This bill would appropriate $813,000 from the General Fund and $5,420,541.90 from the Motor Vehicle Account within the State Transportation Fund to the Attorney General to pay the settlement in specified cases.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing law requires the Attorney General, when there is not a sufficient appropriation for the payment of certain claims, settlements, or judgments, to report the claims, settlements, and judgments to the chairperson of either the Senate Committee on Appropriations or the Assembly Committee on Appropriations, who is then required to cause introduction of legislation appropriating necessary funds for payment.

This bill would appropriate $6,233,541.90 $813,000 from the General Fund and $5,420,541.90 from the Motor Vehicle Account within the State Transportation Fund to the Attorney General to pay the settlement in specified cases.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing law requires the Attorney General, when there is not a sufficient appropriation for the payment of certain claims, settlements, or judgments, to report the claims, settlements, and judgments to the chairperson of either the Senate Committee on Appropriations or the Assembly Committee on Appropriations, who is then required to cause introduction of legislation appropriating necessary funds for payment.

This bill would appropriate an unspecified amount $6,233,541.90 from the General Fund to the Attorney General to pay an undesignated judgment. the settlement in specified cases.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing law requires the Attorney General, when there is not a sufficient appropriation for the payment of certain claims, settlements, or judgments, to report the claims, settlements, and judgments to the chairperson of either the Senate Committee on Appropriations or the Assembly Committee on Appropriations, who is then required to cause introduction of legislation appropriating necessary funds for payment.

This bill would appropriate an unspecified amount from the General Fund to the Attorney General to pay an undesignated judgment.

This bill would declare that it is to take effect immediately as an urgency statute.

SENATE THIRD READING

STR Bill Id:SB 939

Author:(Portantino)

As Amended Ver:August 16, 2018

2/3 vote. Urgency

SENATE VOTE: 30-4

SUMMARY:

This bill, an urgency measure, appropriates approximately $6.2 million to the attorney general (AG) to pay settlements for court cases. Specifically, this bill:

1. Appropriates $5,420,541.90 from the Motor Vehicle Account (MVA) to pay the settlement in the case of Woosley v. the State of California (Los Angeles County Superior Court Case No. CA00499).
2. Appropriates $813,000 from the General Fund (GF), as follows:
   1. $492,000 to pay the settlement in Suction Dredge Mining Cases (Superior Court of California, County of San Bernardino, Coord. Case No. JCCP4720).
   2. $321,000 to pay the settlement in Valerie Thompson v. California State Rivers and Mountains (Superior Court of California, County of Los Angeles, Case No. BC649436).

FISCAL EFFECT:

One-time appropriations of $5,420,541.90 from the MVA and $813,000 from the GF.

COMMENTS:

1. Background. 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 the Department of Justice (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. Purpose. This bill, an urgency measures, appropriates approximately $5.4 million from the GF and $813,000 from the GF to fund settlement in the following cases:
3. Woosley v. State of California (Los Angeles County Superior Court Case No. CA 000499). $5,420,541.90 final judgment on attorneys' fees and costs, payable from the General Fund. This claim involves the payment of attorneys' fees and costs arising out of a 1978 class-action lawsuit regarding the payment of taxes and fees on out-of-state vehicles. Specifically, Charles Patrick Woosley, on behalf of himself and a class, alleged that the assessment of vehicle license fees and use taxes collected by the Department of Motor Vehicles (DMV) on certain out-of-state vehicles violated the Commerce Clause of the U.S. Constitution. In late 1976, DMV revised use tax calculations so that in state and out-of-state purchases were charged the same amount. The trial court divided the cases into two classes: 2.8 million persons who paid excess license fees or use taxes from within three years prior to October 20, 1977, and a "post-1976 class" of about 14 million who paid excess use tax on out-of-state vehicles after November 14, 1976. In 1985, a judgment was filed in favor of these classes.

In 1992, the California Supreme Court affirmed the lower court rulings, but held that the post-1976 class was improper, and limited the other class to Mr. Woosley and those persons who timely filed valid claims for refunds. This reduced the class and the amount of refunds to approximately $2 million, and these amounts have already been paid.

This claim is to pay the court-ordered award on the plaintiff's attorney fees and costs associated with the litigation of this case between 1978 and 1992. In 2007, the trial court issued a statement of decision, awarding $23 million to class counsel and Mr. Woosley. After multiple trial court and appellate court decisions regarding the attorneys' fees and costs, the court issued a stipulated final judgment on July 11, 2018 that incorporates and finally determines all outstanding awards of attorneys' fees and costs, plus accrued interest, and continued interest of 7% per year from May 1, 2018 until paid in full. Specifically, as of May 1, 2018 the judgment provides payments to the Gansigner Firm for approximately $2.8 million, to the Busetti Firm for approximately $1.2 million, to the Jones Bell Firm for approximately $229,000, and to Mr. Woosley for approximately $1 million.

On August 7, 2018, the DOF approved payment of the award for attorneys' fees and costs plus accrued interest through October 31, 2018 in the amount of $5,421,000.

1. Suction Dredge Mining Cases (Superior Court of California, County of San Bernardino, Coord. Case No. JCCP4720). $492,000 settlement, payable from the General Fund. Suction dredge mining is a method of mining gold deposits from rivers and streams by using vacuum hoses to remove mineral deposits from streambeds and returning water, gravel, and other materials to the river. On August 9, 2009, the Governor signed SB 670 (Wiggins), Chapter 62, Statutes of 2009, which established a statewide moratorium on the use of any vacuum or suction dredge equipment in any river, stream, or lake until the Director of the Department of Fish and Wildlife (DFW) certified that specified activities occurred. In addition, DFW revised suction mining regulations and associated environmental review requirements that further restricted suction dredge mining and closed numerous waters to suction dredge mining altogether.

The plaintiffs in these coordinated cases alleged, among other things, that the actions of the state and DFW constitute an unconstitutional taking of the plaintiffs' mining claims, are preempted by federal law, and are in violation of the California Environmental Quality Act (CEQA), and the lawsuits filed on March 14, 2013 sought damages of $500,000 per claim for each plaintiff, or other amounts as proved at trial.

On February 26, 2018, the court entered a judgment in the coordinated takings case in favor of the defendants, finding that the plaintiffs' taking claims are moot because of the subsequent enactment of SB 637 (Allen), Chapter 680, Statutes of 2015, which requires miners to obtain a permit under the federal Clean Water Act as a condition of suction dredge mining. The plaintiffs have indicated their intent to appeal.

Although the state prevailed in the takings case, the DOJ indicates that there is a significant risk that the judgment may be reversed on appeal, which may result in costly litigation. On July 17, 2018, the parties agreed to a settlement that provides for a payment of $475,000 to the plaintiffs in exchange for an agreement to drop any appeals and a promise not to sue the state for any claims related to the takings case.

On August 7, 2018, the Department of Finance approved payment of the $475,000 settlement and an additional $17,000 to cover any interest, which will begin to accrue on January 17, 2019. Assuming this bill is enacted this year, the interest would revert to the General Fund.

1. Valerie Thompson v. California State Rivers and Mountains (Superior Court of California, County of Los Angeles, Case No. BC649436). $321,000 settlement, payable from the General Fund. On February 6, 2017, Valerie Thompson, an employee of the California Rivers and Mountains Conservancy (RMC) since 2003, filed a civil lawsuit against the RMC and its Executive Director Mark Stanley, alleging discrimination based on race, age, and disability; harassment; retaliation; failure to provide reasonable accommodation for her disability; failure to engage in the interactive process; failure to investigate; failure to prevent discrimination, harassment, and retaliation; and for injunctive relief.

On July 12, 2018 the parties signed a settlement agreement that provides for a payment of $300,000 to Valerie Thompson and dismissal of the lawsuits against the RMC and Mark Stanley and all claims, except workers compensation claims, without any admission of liability, fault, or wrongdoing by the defendants. Under the terms of the agreement, Ms. Thompson will be temporarily reassigned until payment is made, and agrees to retire or resign with 60 days of approval of the settlement funds. No documents pertaining to Ms. Thompson's Department of Fair Employment and Housing complaint, the lawsuit, or workers compensation claims will be contained in her personnel file. The RMC will not take steps to adversely affect her employment prospects, and will provide her a neutral letter of reference, as specified.

The DOJ indicates that the cost of litigation in this case is expected to approach the cost of the settlement, and should the plaintiff prevail on even one of the 12 counts, the costs would significantly exceed the cost of the settlement. On August 7, 2018, the DOF approved payment of the $300,000 settlement, and an additional $21,000 to cover any interest, which begins to accrue if payment is not made by January 7, 2019. Assuming this bill is enacted this year, the interest would revert to the GF.

Analysis Prepared by: Jay Dickenson / APPR. / (916) 319-2081 FN: 0005142

Date of Hearing: August 29, 2018

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

SBPCA Bill Id:SB 939

Author:(Portantino) – As Amended Ver:August 16, 2018

Urgency: Yes State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill, an urgency measure, appropriates approximately $6.2 million to the attorney general (AG) to pay settlements for court cases. Specifically, this bill:

1. Appropriates $5,420,541.90 from the Motor Vehicle Account (MVA) to pay the settlement in the case of Woosley v. the State of California (Los Angeles County Superior Court Case No. CA00499).
2. Appropriates $813,000 from the General Fund (GF), as follows:
   1. $492,000 to pay the settlement in Suction Dredge Mining Cases (Superior Court of California, County of San Bernardino, Coord. Case No. JCCP4720).
   2. $321,000 to pay the settlement in Valerie Thompson v. California State Rivers and Mountains (Superior Court of California, County of Los Angeles, Case No. BC649436).

FISCAL EFFECT:

One-time appropriations of $5,420,541.90 from the MVA and $813,000 from the GF.

COMMENTS:

1. Background. 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 the Department of Justice (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. Purpose. This bill, an urgency measures, appropriates approximately $5.4 million from the GF and $813,000 from the GF to fund settlement in the following cases:
3. Woosley v. State of California (Los Angeles County Superior Court Case No. CA 000499). $5,420,541.90 final judgment on attorneys’ fees and costs, payable from the General Fund. This claim involves the payment of attorneys’ fees and costs arising out of a 1978 class-action lawsuit regarding the payment of taxes and fees on out-of-state vehicles. Specifically, Charles Patrick Woosley, on behalf of himself and a class, alleged that the assessment of vehicle license fees and use taxes collected by the Department of Motor Vehicles (DMV) on certain out-of-state vehicles violated the Commerce Clause of the U.S. Constitution. In late 1976, DMV revised use tax calculations so that in state and out-of-state purchases were charged the same amount. The trial court divided the cases into two classes: 2.8 million persons who paid excess license fees or use taxes from within three years prior to October 20, 1977, and a “post-1976 class” of about 14 million who paid excess use tax on out-of-state vehicles after November 14, 1976. In 1985, a judgment was filed in favor of these classes.

In 1992, the California Supreme Court affirmed the lower court rulings, but held that the post-1976 class was improper, and limited the other class to Mr. Woosley and those persons who timely filed valid claims for refunds. This reduced the class and the amount of refunds to approximately $2 million, and these amounts have already been paid.

This claim is to pay the court-ordered award on the plaintiff’s attorney fees and costs associated with the litigation of this case between 1978 and 1992. In 2007, the trial court issued a statement of decision, awarding $23 million to class counsel and Mr. Woosley. After multiple trial court and appellate court decisions regarding the attorneys’ fees and costs, the court issued a stipulated final judgment on July 11, 2018 that incorporates and finally determines all outstanding awards of attorneys’ fees and costs, plus accrued interest, and continued interest of 7% per year from May 1, 2018 until paid in full. Specifically, as of May 1, 2018 the judgment provides payments to the Gansigner Firm for approximately $2.8 million, to the Busetti Firm for approximately $1.2 million, to the Jones Bell Firm for approximately $229,000, and to Mr. Woosley for approximately $1 million.

On August 7, 2018, the DOF approved payment of the award for attorneys’ fees and costs plus accrued interest through October 31, 2018 in the amount of $5,421,000.

1. Suction Dredge Mining Cases (Superior Court of California, County of San Bernardino, Coord. Case No. JCCP4720). $492,000 settlement, payable from the General Fund. Suction dredge mining is a method of mining gold deposits from rivers and streams by using vacuum hoses to remove mineral deposits from streambeds and returning water, gravel, and other materials to the river. On August 9, 2009, the Governor signed SB 670 (Wiggins), Chapter 62, Statutes of 2009, which established a statewide moratorium on the use of any vacuum or suction dredge equipment in any river, stream, or lake until the Director of the Department of Fish and Wildlife (DFW) certified that specified activities occurred. In addition, DFW revised suction mining regulations and associated environmental review requirements that further restricted suction dredge mining and closed numerous waters to suction dredge mining altogether.

The plaintiffs in these coordinated cases alleged, among other things, that the actions of the state and DFW constitute an unconstitutional taking of the plaintiffs’ mining claims, are preempted by federal law, and are in violation of the California Environmental Quality Act (CEQA), and the lawsuits filed on March 14, 2013 sought damages of $500,000 per claim for each plaintiff, or other amounts as proved at trial.

On February 26, 2018, the court entered a judgment in the coordinated takings case in favor of the defendants, finding that the plaintiffs’ taking claims are moot because of the subsequent enactment of SB 637 (Allen), Chapter 680, Statutes of 2015, which requires miners to obtain a permit under the federal Clean Water Act as a condition of suction dredge mining. The plaintiffs have indicated their intent to appeal.

Although the state prevailed in the takings case, the DOJ indicates that there is a significant risk that the judgment may be reversed on appeal, which may result in costly litigation. On July 17, 2018, the parties agreed to a settlement that provides for a payment of $475,000 to the plaintiffs in exchange for an agreement to drop any appeals and a promise not to sue the state for any claims related to the takings case.

On August 7, 2018, the Department of Finance approved payment of the $475,000 settlement and an additional $17,000 to cover any interest, which will begin to accrue on January 17, 2019. Assuming this bill is enacted this year, the interest would revert to the General Fund.

1. Valerie Thompson v. California State Rivers and Mountains (Superior Court of California, County of Los Angeles, Case No. BC649436). $321,000 settlement, payable from the General Fund. On February 6, 2017, Valerie Thompson, an employee of the California Rivers and Mountains Conservancy (RMC) since 2003, filed a civil lawsuit against the RMC and its Executive Director Mark Stanley, alleging discrimination based on race, age, and disability; harassment; retaliation; failure to provide reasonable accommodation for her disability; failure to engage in the interactive process; failure to investigate; failure to prevent discrimination, harassment, and retaliation; and for injunctive relief.

On July 12, 2018 the parties signed a settlement agreement that provides for a payment of $300,000 to Valerie Thompson and dismissal of the lawsuits against the RMC and Mark Stanley and all claims, except workers compensation claims, without any admission of liability, fault, or wrongdoing by the defendants. Under the terms of the agreement, Ms. Thompson will be temporarily reassigned until payment is made, and agrees to retire or resign with 60 days of approval of the settlement funds. No documents pertaining to Ms. Thompson’s Department of Fair Employment and Housing complaint, the lawsuit, or workers compensation claims will be contained in her personnel file. The RMC will not take steps to adversely affect her employment prospects, and will provide her a neutral letter of reference, as specified.

The DOJ indicates that the cost of litigation in this case is expected to approach the cost of the settlement, and should the plaintiff prevail on even one of the 12 counts, the costs would significantly exceed the cost of the settlement. On August 7, 2018, the DOF approved payment of the $300,000 settlement, and an additional $21,000 to cover any interest, which begins to accrue if payment is not made by January 7, 2019. Assuming this bill is enacted this year, the interest would revert to the GF.

Analysis Prepared by: Jay Dickenson / APPR. / (916) 319-2081

 THIRD READING  

Bill No: SB 939

Author:

:

Vote:

SENATE APPROPRIATIONS COMMITTEE: 5-1, 8/13/18

AYES: Portantino, Beall, Bradford, Hill, Wiener

NOES: Bates

NO VOTE RECORDED: Nielsen

SUBJECT:

SOURCE: Author

DIGEST:

This bill, an urgency measure, appropriates $813,000 from the General Fund and $5.42 million from the Motor Vehicle Account to the Department of Justice (DOJ) for the payment of three specified claims against the state; and provides that any funds appropriated in excess of the amounts required for payment of the claims would revert to the state.

ANALYSIS: This bill is one of several annual bills carried by the chairs of the Appropriations Committees 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.

This bill appropriates General Fund revenues to DOJ to pay the following legal settlements:

1. Woosley v. State of California (Los Angeles County Superior Court Case No CA 000499). $5,420,541.90 final judgment on attorneys’ fees and costs, payable from the Motor Vehicle Account. This claim involves the payment of attorneys’ fees and costs arising out of a 1978 class-action lawsuit regarding the payment of taxes and fees on out-of-state vehicles. Specifically, Charles Patrick Woosley, on behalf of himself and a class, alleged that the assessment of vehicle license fees and use taxes collected by the Department of Motor Vehicles on certain out-of-state vehicles violated the Commerce Clause of the U.S. Constitution. In late 1976, DMV revised use tax calculations so that in state and out-of-state purchases were charged the same amount. The trial court divided the cases into two classes: 2.8 million persons who paid excess license fees or use taxes from within three years prior to October 20,1977, and a “post-1976 class” of about 14 million who paid excess use tax on out-of-state vehicles after November 14, 1976. In 1985, a judgment was filed in favor of these classes.
   
   In 1992, the California Supreme Court affirmed the lower court rulings, but held that the post-1976 class was improper, and limited the other class to Mr. Woosley and those persons who timely filed valid claims for refunds. This reduced the class and the amount of refunds to approximately $2 million, and these amounts have already been paid.
   
   This claim is to pay the court-ordered award on the plaintiff’s attorney fees and costs associated with the litigation of this case between 1978 and 1992. In 2007, the trial court issued a statement of decision, awarding $23 million to class counsel and Mr. Woosley. After multiple trial court and appellate court decisions regarding the attorneys’ fees and costs, the court issued a stipulated final judgment on July 11, 2018 that incorporates and finally determines all outstanding awards of attorneys’ fees and costs, plus accrued interest, and continued interest of 7% per year from May 1, 2018 until paid in full. Specifically, as of May 1, 2018 the judgment provides payments to the Gansigner Firm for approximately $2.8 million, to the Busetti Firm for approximately $1.2 million, to the Jones Bell Firm for approximately $229,000, and to Mr. Woosley for approximately $1 million.
   
   On August 7, 2018, the DOF approved payment of the award for attorneys’ fees and costs plus accrued interest through October 31, 2018 in the amount of $5,421,000. The legal staff at the DOF has opined that the Motor Vehicle Account is the appropriate fund source for the payment of this judgment. Assuming this bill is enacted by the end of September, some portion of the interest would revert to the General Fund. Staff notes that this claim currently accrues approximately $1,003 in interest per day.
2. Suction Dredge Mining Cases (Superior Court of California, County of San Bernardino, Coord. Case No. JCCP4720). $492,000 settlement, payable from the General Fund. Suction dredge mining is a method of mining gold deposits from rivers and streams by using vacuum hoses to remove mineral deposits from streambeds and returning water, gravel, and other materials to the river. On August 9, 2009, the Governor signed SB 670 (Wiggins, Chapter 62, Statutes of 2009), which established a statewide moratorium on the use of any vacuum or suction dredge equipment in any river, stream, or lake until the Director of the Department of Fish and Wildlife (DFW) certified that specified activities occurred. In addition, DFW revised suction mining regulations and associated environmental review requirements that further restricted suction dredge mining and closed numerous waters to suction dredge mining altogether.
   
   The plaintiffs in these coordinated cases alleged, among other things, that the actions of the state and DFW constitute an unconstitutional taking of the plaintiffs’ mining claims, are preempted by federal law, and are in violation of CEQA, and the lawsuits filed on March 14, 2013, sought damages of $500,000 per claim for each plaintiff, or other amounts as proved at trial.
   
   On February 26, 2018, the court entered a judgment in the coordinated takings case in favor of the defendants, finding that the plaintiffs’ taking claims are moot because of the subsequent enactment of SB 637 (Allen, Chapter 680, Statutes of 2015), which requires miners to obtain a permit under the Clean Water Act as a condition of suction dredge mining. The plaintiffs have indicated their intent to appeal.
   
   Although the state prevailed in the takings case, the DOJ indicates that there is a significant risk that the judgment may be reversed on appeal, which may result in costly litigation. On July 17, 2018, the parties agreed to a settlement that provides for a payment of $475,000 to the plaintiffs in exchange for an agreement to drop any appeals and a promise not to sue the state for any claims related to the takings case.
   
   On August 7, 2018, the DOF approved payment of the $475,000 settlement and an additional $17,000 to cover any interest, which will begin to accrue on January 17, 2019. Assuming this bill is enacted this year, the interest would revert to the General Fund.
3. Valerie Thompson v. California State Rivers and Mountains (Superior Court of California, County of Los Angeles, Case No. BC649436). $321,000 settlement, payable from the General Fund. On February 6, 2017, Valerie Thompson, an employee of the California Rivers and Mountains Conservancy (RMC) since 2003, filed a civil lawsuit against the RMC and its Executive Director Mark Stanley, alleging discrimination based on race, age, and disability; harassment; retaliation; failure to provide reasonable accommodation for her disability; failure to engage in the interactive process; failure to investigate; failure to prevent discrimination, harassment, and retaliation; and for injunctive relief.
   
   On July 12, 2018, the parties signed a settlement agreement that provides for a payment of $300,000 to Valerie Thompson and dismissal of the lawsuits against the RMC and Mark Stanley and all claims, except workers compensation claims, without any admission of liability, fault, or wrongdoing by the defendants. Under the terms of the agreement, Ms. Thompson will be temporarily reassigned until payment is made, and agrees to retire or resign with 60 days of approval of the settlement funds. No documents pertaining to Ms. Thompson’s Department of Fair Employment and Housing complaint, the lawsuit, or workers compensation claims will be contained in her personnel file. The RMC will not take steps to adversely affect her employment prospects, and will provide her a neutral letter of reference, as specified.
   
   The DOJ indicates that the cost of litigation in this case is expected to approach the cost of the settlement, and should the plaintiff prevail on even one of the 12 counts, the costs would significantly exceed the cost of the settlement.
   
   On August 7, 2018, the DOF approved payment of the $300,000 settlement, and an additional $21,000 to cover any interest, which begins to accrue if payment is not made by January 7, 2019. Assuming this bill is enacted this year, the interest would revert to the General Fund.

Related/Prior Legislation

AB 1773 (Gonzalez Fletcher, Chapter 67, Statutes of 2018) appropriated $11.095 million from the General Fund to DOJ for the payment of three specified claims against the state.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee:

• One-time appropriation of $5,420,541.90 from the Motor Vehicle Account in 2018-19 to DOJ to pay the settlement in the case of Woosley v. State of California (Los Angeles County Superior Court Case No CA 000499).
  
• One-time General Fund appropriation of $492,000 in 2018-19 to DOJ to pay the settlement in Suction Dredge Mining Cases (Superior Court of California, County of San Bernardino, Coord. Case No. JCCP4720).
• One-time General Fund appropriation of $321,000 in 2018-19 to DOJ to pay the settlement in the case of Valerie Thompson v. California State Rivers and Mountains (Superior Court of California, County of Los Angeles, Case No. BC649436).

SUPPORT: (Verified 8/17/18)

None received

OPPOSITION: (Verified 8/17/18)

None received

Prepared by:

8/18/18 12:29:00

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2017 - 2018 Regular Session

SB 939 (Portantino) - Claims against the state: appropriation

This bill does not meet the criteria for referral to the Suspense File. Pursuant to the committee’s rules, the Suspense File rule does not apply to the provisions of this bill as judgments and settlement are considered valid obligations of the state. Additionally, judgments and settlements may have time sensitivity.

Bill Summary:

SB 939, an urgency measure, would appropriate $6.23 million from the General Fund to the Department of Justice (DOJ) for the payment of three specified claims against the state. Any funds appropriated in excess of the amounts required for payment of the claims would revert to the General Fund.

Fiscal Impact:

• One-time General Fund appropriation of $5,420,541.90 in 2018-19 to DOJ to pay the settlement in the case of Woosley v. State of California (Los Angeles County Superior Court Case No CA 000499).
  
• One-time General Fund appropriation of $492,000 in 2018-19 to DOJ to pay the settlement in Suction Dredge Mining Cases (Superior Court of California, County of San Bernardino, Coord. Case No. JCCP4720).
  
• One-time General Fund appropriation of $321,000 in 2018-19 to DOJ to pay the settlement in the case of Valerie Thompson v. California State Rivers and Mountains (Superior Court of California, County of Los Angeles, Case No. BC649436).

Background:

This bill is one of several annual bills carried by the chairs of the Appropriations Committees 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.

Proposed Law:

SB 939, an urgency measure, would appropriate $6,233,541.90 from the General Fund to pay the following settlements:

1. Woosley v. State of California (Los Angeles County Superior Court Case No CA 000499). $5,420,541.90 final judgment on attorneys’ fees and costs, payable from the General Fund.
   
   This claim involves the payment of attorneys’ fees and costs arising out of a 1978 class-action lawsuit regarding the payment of taxes and fees on out-of-state vehicles. Specifically, Charles Patrick Woosley, on behalf of himself and a class, alleged that the assessment of vehicle license fees and use taxes collected by the Department of Motor Vehicles on certain out-of-state vehicles violated the Commerce Clause of the U.S. Constitution. In late 1976, DMV revised use tax calculations so that in state and out-of-state purchases were charged the same amount. The trial court divided the cases into two classes: 2.8 million persons who paid excess license fees or use taxes from within three years prior to October 20,1977, and a “post-1976 class” of about 14 million who paid excess use tax on out-of-state vehicles after November 14, 1976. In 1985, a judgment was filed in favor of these classes.
   
   In 1992, the California Supreme Court affirmed the lower court rulings, but held that the post-1976 class was improper, and limited the other class to Mr. Woosley and those persons who timely filed valid claims for refunds. This reduced the class and the amount of refunds to approximately $2 million, and these amounts have already been paid.
   
   This claim is to pay the court-ordered award on the plaintiff’s attorney fees and costs associated with the litigation of this case between 1978 and 1992. In 2007, the trial court issued a statement of decision, awarding $23 million to class counsel and Mr. Woosley. After multiple trial court and appellate court decisions regarding the attorneys’ fees and costs, the court issued a stipulated final judgment on July 11, 2018 that incorporates and finally determines all outstanding awards of attorneys’ fees and costs, plus accrued interest, and continued interest of 7% per year from May 1, 2018 until paid in full. Specifically, as of May 1, 2018 the judgment provides payments to the Gansigner Firm for approximately $2.8 million, to the Busetti Firm for approximately $1.2 million, to the Jones Bell Firm for approximately $229,000, and to Mr. Woosley for approximately $1 million.
   
   On August 7, 2018, the Department of Finance approved payment of the award for attorneys’ fees and costs plus accrued interest through October 31, 2018 in the amount of $5,421,000. Staff notes that the appropriation request is from the Motor Vehicle Account, rather than the General Fund. The legal staff at the Department of Finance opined that the Motor Vehicle Account is the appropriate fund source for the payment of this judgment. The author intends to amend the bill to change the fund source from the General Fund to the Motor Vehicle Account.
2. Suction Dredge Mining Cases (Superior Court of California, County of San Bernardino, Coord. Case No. JCCP4720). $492,000 settlement, payable from the General Fund.
   
   Suction dredge mining is a method of mining gold deposits from rivers and streams by using vacuum hoses to remove mineral deposits from streambeds and returning water, gravel, and other materials to the river. On August 9, 2009, the Governor signed SB 670 (Wiggins), Chap. 62/2009, which established a statewide moratorium on the use of any vacuum or suction dredge equipment in any river, stream, or lake until the Director of the Department of Fish and Wildlife (DFW) certified that specified activities occurred. In addition, DFW revised suction mining regulations and associated environmental review requirements that further restricted suction dredge mining and closed numerous waters to suction dredge mining altogether.
   
   The plaintiffs in these coordinated cases alleged, among other things, that the actions of the state and DFW constitute an unconstitutional taking of the plaintiffs’ mining claims, are preempted by federal law, and are in violation of CEQA, and the lawsuits filed on March 14, 2013 sought damages of $500,000 per claim for each plaintiff, or other amounts as proved at trial.
   
   On February 26, 2018, the court entered a judgment in the coordinated takings case in favor of the defendants, finding that the plaintiffs’ taking claims are moot because of the subsequent enactment of SB 637 (Allen), Chap. 680/2015, which requires miners to obtain a permit under the Clean Water Act as a condition of suction dredge mining. The plaintiffs have indicated their intent to appeal.
   
   Although the state prevailed in the takings case, the DOJ indicates that there is a significant risk that the judgment may be reversed on appeal, which may result in costly litigation. On July 17, 2018, the parties agreed to a settlement that provides for a payment of $475,000 to the plaintiffs in exchange for an agreement to drop any appeals and a promise not to sue the state for any claims related to the takings case.
   
   On August 7, 2018, the Department of Finance approved payment of the $475,000 settlement and an additional $17,000 to cover any interest, which will begin to accrue on January 17, 2019. Assuming this bill is enacted this year, the interest would revert to the General Fund.
3. Valerie Thompson v. California State Rivers and Mountains (Superior Court of California, County of Los Angeles, Case No. BC649436). $321,000 settlement, payable from the General Fund.
   
   On February 6, 2017, Valerie Thompson, an employee of the California Rivers and Mountains Conservancy (RMC) since 2003, filed a civil lawsuit against the RMC and its Executive Director Mark Stanley, alleging discrimination based on race, age, and disability; harassment; retaliation; failure to provide reasonable accommodation for her disability; failure to engage in the interactive process; failure to investigate; failure to prevent discrimination, harassment, and retaliation; and for injunctive relief.
   
   On July 12, 2018 the parties signed a settlement agreement that provides for a payment of $300,000 to Valerie Thompson and dismissal of the lawsuits against the RMC and Mark Stanley and all claims, except workers compensation claims, without any admission of liability, fault, or wrongdoing by the defendants. Under the terms of the agreement, Ms. Thompson will be temporarily reassigned until payment is made, and agrees to retire or resign with 60 days of approval of the settlement funds. No documents pertaining to Ms. Thompson’s Department of Fair Employment and Housing complaint, the lawsuit, or workers compensation claims will be contained in her personnel file. The RMC will not take steps to adversely affect her employment prospects, and will provide her a neutral letter of reference, as specified.
   
   The DOJ indicates that the cost of litigation in this case is expected to approach the cost of the settlement, and should the plaintiff prevail on even one of the 12 counts, the costs would significantly exceed the cost of the settlement.
   
   On August 7, 2018, the Department of Finance approved payment of the $300,000 settlement, and an additional $21,000 to cover any interest, which begins to accrue if payment is not made by January 7, 2019. Assuming this bill is enacted this year, the interest would revert to the General Fund.

Related Legislation:

AB 1773 (Gonzalez Fletcher), Chap. 67/2018, appropriated $11.095 million from the General Fund to DOJ for the payment of three specified claims against the state.

Proposed Author Amendments:

The author is proposing amendments to change the fund source on the Woosley claim to the Motor Vehicle Account, rather than the General Fund.

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