Under existing law, if sufficient appropriations are not available for the payment of certain claims, settlements, or judgments, the Attorney General is required 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 the funds necessary for payment.

This bill would appropriate $19,289,000 from the General Fund to the Attorney General, to be allocated according to a particular schedule, in order to pay claims, judgments, or settlements against the state arising from several specified actions.

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

Under existing law, if sufficient appropriations are not available for the payment of certain claims, settlements, or judgments, the Attorney General is required 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 the funds necessary for payment.

This bill would appropriate $19,289,000 from the General Fund to the Attorney General, to be allocated according to a particular schedule, in order to pay claims, judgments, or settlements against the state arising from several specified actions.

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

Under existing law, if sufficient appropriations are not available for the payment of certain claims, settlements, or judgments, the Attorney General is required 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 the funds necessary for payment.

This bill would appropriate $19,289,000 from the General Fund to the Attorney General, to be allocated according to a particular schedule, in order to pay claims, judgments, or settlements against the state arising from several specified actions.

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

Under existing law, if sufficient appropriations are not available for the payment of certain claims, settlements, or judgments, the Attorney General is required 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 the funds necessary for payment.

This bill would appropriate an unspecified amount $19,289,000 from the General Fund to the Attorney General General, to be allocated according to a particular schedule, in order to pay the judgment in an unspecified case. claims, judgments, or settlements against the state arising from several specified actions.

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

Under existing law, if sufficient appropriations are not available for the payment of certain claims, settlements, or judgments, the Attorney General is required 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 the funds necessary for payment.

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

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

SENATE THIRD READING

STR Bill Id:SB 1481

Author:(Caballero)

As Amended Ver:June 19, 2024

2/3 vote. Urgency

SUMMARY

This bill appropriates $19.289 million from the General Fund (GF) to the Attorney General (AG) to settle five claims against the state. The bill specifies that any funds appropriated in excess of the amounts required for payment of the claims would revert to the General Fund. Specifically, this bill makes one-time appropriations from the GF to the AG, as follows: (a) $13.300 million for payment of claims, settlements or judgments against the state arising from Davis v. State of California (San Diego County Superior Court Case No. 37-2020-00030315-CU-NP-NC); (b) $2.724 million for the payment of claims, settlements or judgments against the state arising from California Water Curtailment Cases (Santa Clara County Superior Court Case No. 1-15-CV-285182; JCCP 4838), to be deposited into the State Treasurer's Special Deposit Fund; (c) $1.625 million for the payment of claims, settlements or judgments against the state arising from Souliotes v. California Victim Compensation Board (Los Angeles County Superior Court Case Nos. BS170608 and 21STCP03535); (d) $1.577 million for the payment of claims, settlements, or judgments against the state arising from Welchen v. Bonta, et al. (United States District Court, Eastern District of California, No. 2:16-cv-00185-TLN-DB); and (e) $63,000 for the payment of claims, settlements or judgments against the state arising from Aubin v. Bonta (United States District Court, Northern District of California, No.21-cv-7938 NC).

Major Provisions

None.

COMMENTS

1. Purpose. This bill is one of several annual bills, authored by chair of either the Senate Appropriations Committee or the Assembly Appropriations Committee, to provide appropriation authority for legal settlements approved by 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. Background.
   1. Davis v. State of California (San Diego County Superior Court Case No. 37-2020-00030315-CU-NP-NC). $13.300 million for payment of claims, settlements or judgments against the state. On May 21, 2024, the Department of Finance approved payment of the settlement and requested inclusion of an appropriation of $13,300,000 from the General Fund in the annual claims bill. No additional interest will accrue on this claim.
   2. California Water Curtailment Cases (Santa Clara County Superior Court Case No. 1-15-CV-285182; JCCP 4838). $2.724 million judgment ordering payments pursuant to a settlement agreement. On April 11, 2024, the Department of Finance approved payment of the settlement through an appropriation of $2,724,000 from the General Fund, which includes $78,000 in potential interest that will begin to accrue on August 4, 2024.
   3. Souliotes v. California Victim Compensation Board (Los Angeles County Superior Court Case Nos. BS170608 and 21STCP03535). $1.625 million for the payment of claims, settlements or judgments against the state. On March 1, 2024, the Department of Finance approved payment of the settlement and requested inclusion of an appropriation of $1,625,000 from the General Fund in the annual claims bill. Pursuant to the settlement agreement, no additional interest will accrue on this claim if the bill appropriating funds for this settlement is chaptered this year and the Petitioner receives the settlement amount during the 2024 calendar year. However, interest will begin to accrue on the settlement amount 180 days after the date of the settlement (commencing July 3, 2024) at a rate of seven percent per annum if the appropriation is not approved and payment is not received by the end of 2024.
   4. Welchen v. Bonta, et al. (United States District Court, Eastern District of California, No. 2:16-cv-00185-TLN-DB). $1.577 million for the payment of claims, settlements, or judgments against the state. On March 26, 2024, the Department of Finance approved a settlement payment of $1,577,000, appropriated from the General Fund, for payment of the negotiated attorney's fees and costs. No additional interest will accrue on this claim
   5. Aubin v. Bonta (United States District Court, Northern District of California, No.21-cv-7938 NC). $63,000 for the payment of claims, settlements or judgments against the state. The Department of Finance approved a settlement payment of $63,000 from the General Fund for payment of the agreed-upon fees and costs on March 26, 2024. No additional interest will accrue on this claim.
3. Related Legislation. AB 2755 (Wicks) appropriates $523,000 from the General Fund to DOJ for the payment of three specified claims against the state. The bill has passed both houses of the Legislature.

Arguments in Support

None on file.

Arguments in Opposition

None on file.

FISCAL COMMENTS

One-time appropriation from the GF to the AG in the amount of $19.289 million.

VOTES

SENATE FLOOR: 32-0-8

YES: Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dodd, Durazo, Eggman, Glazer, Gonzalez, Hurtado, Laird, Limón, McGuire, Menjivar, Min, Newman, Padilla, Portantino, Roth, Rubio, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk

ABS, ABST OR NV: Allen, Dahle, Grove, Jones, Nguyen, Niello, Ochoa Bogh, Seyarto

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

UPDATED

VERSION: June 19, 2024

CONSULTANT: Jay Dickenson / APPR. / (916) 319-2081 FN: 0003698

Date of Hearing: July 2, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

SBPCA Bill Id:SB 1481

Author:(Caballero) – As Amended Ver:June 19, 2024

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

SUMMARY:

This bill appropriates $19.289 million from the General Fund (GF) to the Attorney General (AG) to settle five claims against the state. The bill specifies that any funds appropriated in excess of the amounts required for payment of the claims would revert to the General Fund.

Specifically, this bill makes one-time appropriations from the GF to the AG, as follows:

1. $13.300 million for payment of claims, settlements or judgments against the state arising from Davis v. State of California (San Diego County Superior Court Case No. 37-2020-00030315-CU-NP-NC).
2. $2.724 million for the payment of claims, settlements or judgments against the state arising from California Water Curtailment Cases (Santa Clara County Superior Court Case No. 1-15-CV-285182; JCCP 4838), to be deposited into the State Treasurer’s Special Deposit Fund. (The bill authorizes the State Controller to issue a separate warrant to eligible claimants as directed by the Department of Justice.)
3. $1.625 million for the payment of claims, settlements or judgments against the state arising from Souliotes v. California Victim Compensation Board (Los Angeles County Superior Court Case Nos. BS170608 and 21STCP03535).
4. $1.577 million for the payment of claims, settlements, or judgments against the state arising from Welchen v. Bonta, et al. (United States District Court, Eastern District of California, No. 2:16-cv-00185-TLN-DB).
5. $63,000 for the payment of claims, settlements or judgments against the state arising from Aubin v. Bonta (United States District Court, Northern District of California, No.21-cv-7938 NC).

FISCAL EFFECT:

One-time appropriation from the GF to the AG in the amount of $19.289 million.

COMMENTS:

1. Purpose. This bill is one of several annual bills, authored by chair of either the Senate Appropriations Committee or the Assembly Appropriations Committee, to provide appropriation authority for legal settlements approved by 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. Background.
   1. Davis v. State of California (San Diego County Superior Court Case No. 37-2020-00030315-CU-NP-NC). $13.300 million for payment of claims, settlements or judgments against the state.

This claim involves a case filed against the California Department of Parks and Recreation (DPR), the City of Encinitas, and several other defendants alleging dangerous condition of public property and wrongful death. On August 2, 2019, there was a coastal bluff collapse in which large blocks of sandstone fell from the urbanized cliff overlooking Grandview Beach near Leucadia State Beach that claimed the lives of three people: Elizabeth Charles, Annie Davis Clave, and Julie Davis. On August 25, 2020, the survivors filed a lawsuit in the San Diego Superior Court against DPR, along with other defendants, for dangerous condition of public property under Government Code section 835 and wrongful death.

DPR’s demurrer was overruled and the department subsequently filed a motion for summary judgment. While that motion was pending, the parties attended mediation and negotiated mutually acceptable terms of settlement. On January 2, 2024, the parties agreed to a tentative settlement in which the state agreed to pay a total amount of $13,300,000 for its portion of the settlement, to be apportioned among the different plaintiffs in accordance with the settlement agreements in exchange for a full and complete release of all claims related to the incident.

On May 21, 2024, the Department of Finance approved payment of the settlement and requested inclusion of an appropriation of $13,300,000 from the General Fund in the annual claims bill. No additional interest will accrue on this claim.

• 1. California Water Curtailment Cases (Santa Clara County Superior Court Case No. 1-15-CV-285182; JCCP 4838). $2.724 million judgment ordering payments pursuant to a settlement agreement.
     
     This claim involves a challenge to the actions of the State Water Resources Control Board (SWRCB) that prohibited water diversions by certain water rights holders in light of drought conditions. On June 12, 2015 the SWRCB’s Executive Director issued a notice informing water rights claimants who divert from the Sacramento and San Joaquin River watersheds that there was only sufficient water to supply water right holders with a priority of 1902 or earlier. In five separate lawsuits, petitioners sued the State Water Resources Control Board (SWRCB) claiming that the notice was an order that deprived them of property without due process, and that the SWRCB did not have jurisdiction to order holders of pre-1914 water rights to stop diverting under Water Code section 1052. The cases were all coordinated under Judicial Council Coordinated Proceeding Number 4838 in Santa Clara County Superior Court, and included the following cases: Byron-Bethany Irrigation District v. California State Water Resources Control Board, et al. (Contra Costa County Superior Court Case No. N150967); The West Side Irrigation District, et al. v. California State Water Resources Control Board, et al. (Sacramento County Superior Court Case No. 34-2015-80002121); and San Joaquin Tributaries Authority, et al., v. California State Water Resources Control Board (Stanislaus County Superior Court Case No. 2015366).
     
     On February 21, 2018, the trial court held the SWRCB did not have jurisdiction over petitioners to issue the notice if they are pre-1914 diverters, there is no water available for post-1914 diverters, and that SWRCB violated petitioners’ due process rights by issuing the notices without first holding an evidentiary hearing. SWRCB appealed the jurisdictional issue and petitioners appealed the denial of their attorneys’ fees and costs. On November 18, 2022, the appellate court affirmed the trial court in full on the merits appeal, and the costs awarded, and partially reversed the trial court’s denial of all attorneys’ fees. On remand, the trial court granted petitioners their attorneys’ fees on appeal on April 5, 2023.
     
     SWRCB and petitioners subsequently agreed on amounts to settle the various attorneys’ fees and costs in a stipulation and proposed order, which was signed by the court on February 6, 2024. The order provides that SWRCB: (1) will pay Byron Bethany Irrigation District’s (BBID) trial court fees of $929,484.98, appellate fees of $592,981.96, trial court costs of $12,964.75, and appellate costs of $568.31, for a total of $1,536,000; (2) will pay San Joaquin Tributaries Authority (SJTA) and South San Joaquin Irrigation District (SSJID) $64,497.50 for fees related to the merits appeal, $48,987.40 for fees related to the fees appeal, and trial court fees of $475,830.25, for a total of $589,315.15; and (3) will pay Central Delta Water Agency (CDWA), South Delta Water Agency (SDWA), and BBID as successor in interest to the West Side Irrigation District (WSID) $500,000 in fees for the trial court level, $12,252.50 in fees for the merits appeal, $8,554 in fees for the costs and fees appeal, and trial court costs of $241.08, for a total of $521,047.58. The fees and costs total $2,646,362.73. The order stipulates that interest will begin to accrue 180 days from the due date of the order at a rate of seven percent per annum.
     
     On April 11, 2024, the Department of Finance approved payment of the settlement through an appropriation of $2,724,000 from the General Fund, which includes $78,000 in potential interest that will begin to accrue on August 4, 2024. Any funds appropriated in excess of the amount required for payment of the settlement will revert to the General Fund.
  2. Souliotes v. California Victim Compensation Board (Los Angeles County Superior Court Case Nos. BS170608 and 21STCP03535). $1.625 million for the payment of claims, settlements or judgments against the state.

This claim involves entitlement to certain pre-judgment interest, attorney’s fees, and costs, and interest over numerous actions filed in relation to a claim for compensation in an erroneous conviction case filed with the California Victim Compensation Board (CalVCB). In 2018, George Souliotes (petitioner) brought a petition challenging the CalVCB’s initial decision on May 18, 2017 to deny compensation under Penal Code section 4900 after petitioner had been released from prison (Los Angeles County Superior Court Case No. BS170608 (First Petition).) In September 2021, after remand from the trial court, CalVCB’s Board adopted a new proposed decision recommending that the Legislature appropriate $841,820 for Souliotes’s claim for compensation under Penal Code section 4900 (see this Committee’s analysis of SB 632, Chap. 133/2022 for details regarding the erroneous conviction claim and the approved appropriation). After CalVCB issued a new decision recommending compensation, petitioner filed a new writ petition seeking prejudgment interest, attorneys’ fees, and costs (Los Angeles County Superior Court Case No. 21STCP03535 (Second Petition).) The Second Petition was based upon the same facts as the First Petition, and addressed the same legal issues regarding whether petitioner is entitled to pre-judgment interest, attorneys’ fees, and costs. The parties stipulated to stay proceedings in the Second Petition, pending resolution of the proceedings in the First Petition.

After several years of litigation in the First Petition proceedings, including a petition for review before the Supreme Court, petitioner prevailed on December 28, 2022, when the court of appeal, upon transfer from the Supreme Court, issued an unpublished decision concluding Senate Bill 446 (Glazer), Chap. 490/2021, showed the Legislature’s intent that findings made pursuant to Schlup v. Delo (1995) 513 U.S. 298, constituted a finding of factual innocence even under former Penal Code section 1485.55, subdivision (a). Thus, an automatic recommendation of petitioner’s claim under Penal Code section 4900 within 30 days of it being submitted to CalVCB would have been required (Souliotes v. Cal. Victim Comp. Bd. (Dec. 28, 2022, No. B295163).) The court awarded petitioner his costs on appeal but otherwise remanded to the trial court to decide “Souliotes’ entitlement, if any, to pre-judgment interest and other relief, including attorneys’ fees and costs.” (Ibid.)

On April 24, 2023, petitioner sent a demand letter for $2,300,106.68, including $1.9 million in attorneys’ fees, $330,981.68 in pre-judgment interest, and $69,125 for litigation expenses. Petitioner claimed interest and attorneys’ fees would continue to accrue until a final judgment or the parties reached a settlement. The parties subsequently entered into a settlement agreement on January 5, 2024 that resolves all of petitioner’s claims for attorneys’ fees, pre-judgment interest, and costs arising out of the trial court actions and the appeals, and requires petitioner to dismiss all actions following the payment of the settlement amount. In exchange, CalVCB agreed to pay a total of $1,625,000. The settlement agreement provides that the payment is subject to an appropriation by the Legislature by the end of the 2024 calendar year. Both the Government Operations Agency and the Governor’s Office approved the settlement.

On March 1, 2024, the Department of Finance approved payment of the settlement and requested inclusion of an appropriation of $1,625,000 from the General Fund in the annual claims bill. Pursuant to the settlement agreement, no additional interest will accrue on this claim if the bill appropriating funds for this settlement is chaptered this year and the Petitioner receives the settlement amount during the 2024 calendar year. However, interest will begin to accrue on the settlement amount 180 days after the date of the settlement (commencing July 3, 2024) at a rate of seven percent per annum if the appropriation is not approved and payment is not received by the end of 2024.

• 1. Welchen v. Bonta, et al. (United States District Court, Eastern District of California, No. 2:16-cv-00185-TLN-DB). $1.577 million for the payment of claims, settlements, or judgments against the state.

This claim involves a constitutional challenge of statutes requiring counties to implement bail schedules, which provide the terms upon which a person may be released before arraignment. Gary Wayne Welchen (plaintiff), an indigent resident of Sacramento County, was arrested and assigned pre-arraignment bail in the amount of $10,000. On January 29, 2016, he filed a class action complaint against the Attorney General and Sacramento County Sheriff, alleging that Penal Code § 1269b, and the County’s 2016 pre-arraignment bail schedule violates his due process and equal protection rights by discriminating on the basis of wealth. The complaint alleged that the Attorney General “requires the County of Sacramento to enact a bail schedule, thereby creating a wealth-based detention scheme,” because he “is charged with the enforcement of California’s laws,” including Penal Code § 1269b.

The Attorney General’s motion to dismiss on Eleventh Amendment immunity grounds was rejected, and the plaintiff subsequently moved for partial summary judgment as to liability. The Attorney General opposed on the grounds that: (1) Plaintiff’s claims were moot, and (2) Eleventh Amendment immunity applies because there is no showing that the Attorney General is responsible for implementing or enforcing Sacramento County’s bail schedule. The court granted partial summary judgment against the Attorney General, holding that the bail schedule violates plaintiff’s substantive due process rights, plaintiff’s claims fell under the “capable of repetition yet evading review” exception to mootness, and the Attorney General is subject to the Ex Parte Young exception to Eleventh Amendment immunity.

On September 5, 2023, the court issued its order granting injunctive relief. The order enjoins the Attorney General, “in its role as supervisor over the Sheriff,” from “using or enforcing the 2016 Sacramento County pre-arraignment bail schedule” or “any subsequent pre-arraignment bail schedules in Sacramento County that set specific dollar amounts for bail by reference solely to criminal charges,” without allowing for bail modifications based on “ability to pay, risk of nonappearance, or threat of public safety before trial.” The court also entered judgment in plaintiff’s favor consistent with the order granting injunctive relief.

The Ninth Circuit has determined that the State is liable for attorneys’ fees and costs in cases challenging the constitutionality of bail schedules because the sheriff of the relevant county acts as the state’s agent while enforcing those bail schedules. Buffin v. California, 23 F.4th 951, 954 (9th Cir. 2022). Therefore, to avoid further litigation, the parties negotiated a settlement agreement under which the Attorney General agreed to pay $1,576,832.37 to resolve Plaintiff’s claim for attorneys’ fees and costs. The fee settlement was entered on February 1, 2024

On March 26, 2024, the Department of Finance approved a settlement payment of $1,577,000, appropriated from the General Fund, for payment of the negotiated attorney’s fees and costs. No additional interest will accrue on this claim

• 1. Aubin v. Bonta (United States District Court, Northern District of California, No.21-cv-7938 NC). $63,000 for the payment of claims, settlements or judgments against the state.

This claim involves a constitutional challenge to SB 742 (Pan), Chap. 737/2021. This statute was enacted against the backdrop of the rollout of vaccines for COVID-19 in 2021. This measure was enacted to help ensure access to vaccine clinics and the vaccines distributed there in the context of numerous protests in the summer and fall of 2021 that blocked access to vaccination sites. The statute made it unlawful to knowingly approach within 30 feet of any person entering or exiting a vaccination site for the purpose of obstructing, injuring, harassing, intimidating, or interfering with that person. It adopted a broad definition of “harassing” that encompassed approaching someone without consent to pass a leaflet or handbill, display a sign, or engage in oral protest, education, or counseling with that person. The statute also stated that lawful labor picketing was not a violation of its provisions.

On October 10, 2021, a group of anti-abortion activists brought suit against Attorney General Rob Bonta, in his official capacity, challenging the constitutionality of SB 742. They contended that SB 742 violated their First Amendment rights by infringing their ability to engage in protest or outreach activities outside of reproductive clinics that provide vaccines, such as the HPV vaccine. They also alleged that SB 742 was unconstitutionally vague. The plaintiffs filed a motion for a temporary restraining order enjoining enforcement of SB 742, which was granted by the court on December 23, 2021, holding plaintiffs were likely to succeed on their First Amendment challenge and enjoining SB 742 in full. In light of the court’s ruling on the temporary restraining order and the ongoing proceedings in two other cases brought challenging the same statute, the parties elected to move straight to summary judgment proceedings while the temporary restraining order remained in place rather than first separately briefing a motion for a preliminary injunction.

The court issued its ruling on cross-motions for summary judgment, and held that SB 742 violated the First Amendment with its prohibition on approaching for purposes of harassing, struck down that portion of the law, and severed the remainder. The court’s ruling was consistent with U.S. Supreme Court cases that had struck down similar buffers around abortion clinics as First Amendment violations, namely McCullen v. Coakley (2014) 573 U.S. 464, which struck down a 30-foot buffer around abortion clinic entrances, and Schenck v. Pro-Choice Network of Western New York (1997) 519 U.S. 357, which struck down a 12-foot buffer around abortion clinic entrances and those entering or exiting abortion clinics. Final judgment was issued on March 29, 2023 in the plaintiff’s favor, and the Attorney General did not appeal the judgment.

The parties entered into a settlement for attorneys’ fees and costs for a total of $62,565.16 following negotiations. The court approved the stipulation and awards of attorney’s fees and costs in favor of the plaintiffs on January 31, 2024. The Department of Finance approved a settlement payment of $63,000 from the General Fund for payment of the agreed-upon fees and costs on March 26, 2024. No additional interest will accrue on this claim.

• 1. Related Legislation. AB 2755 (Wicks) appropriates $523,000 from the General Fund to DOJ for the payment of three specified claims against the state. The bill has passed both houses of the Legislature.

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

Date of Hearing: July 2, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

SBPCA Bill Id:SB 1481

Author:(Caballero) – As Amended Ver:June 19, 2024

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

SUMMARY:

This bill appropriates $19.289 million from the General Fund (GF) to the Attorney General (AG) to settle five claims against the state. The bill specifies that any funds appropriated in excess of the amounts required for payment of the claims would revert to the General Fund.

Specifically, this bill makes one-time appropriations from the GF to the AG, as follows:

1. $13.3 million for payment of claims, settlements or judgments against the state arising from Davis v. State of California (San Diego County Superior Court Case No. 37-2020-00030315-CU-NP-NC).
2. $2.724 million for the payment of claims, settlements or judgments against the state arising from California Water Curtailment Cases (Santa Clara County Superior Court Case No. 1-15-CV-285182; JCCP 4838), to be deposited into the State Treasurer’s Special Deposit Fund. (The bill authorizes the State Controller to issue a separate warrant to eligible claimants as directed by the Department of Justice.)
3. $1.625 million for the payment of claims, settlements or judgments against the state arising from Souliotes v. California Victim Compensation Board (Los Angeles County Superior Court Case Nos. BS170608 and 21STCP03535).
4. $1.577 million for the payment of claims, settlements, or judgments against the state arising from Welchen v. Bonta, et al. (United States District Court, Eastern District of California, No. 2:16-cv-00185-TLN-DB).
5. $63,000 for the payment of claims, settlements or judgments against the state arising from Aubin v. Bonta (United States District Court, Northern District of California, No.21-cv-7938 NC).

FISCAL EFFECT:

One-time appropriation from the GF to the AG in the amount of $19.289 million.

COMMENTS:

1. Purpose. This bill is one of several annual bills, authored by chair of either the Senate Appropriations Committee or the Assembly Appropriations Committee, to provide appropriation authority for legal settlements approved by 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. Background.
   1. Davis v. State of California (San Diego County Superior Court Case No. 37-2020-00030315-CU-NP-NC).
   2. California Water Curtailment Cases (Santa Clara County Superior Court Case No. 1-15-CV-285182; JCCP 4838).
   3. Souliotes v. California Victim Compensation Board (Los Angeles County Superior Court Case Nos. BS170608 and 21STCP03535).
   4. Welchen v. Bonta, et al. (United States District Court, Eastern District of California, No. 2:16-cv-00185-TLN-DB).
   5. Aubin v. Bonta (United States District Court, Northern District of California, No.21-cv-7938 NC).

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

 THIRD READING  

Bill No: SB 1481

Author: Caballero (D)

Amended: 6/19/24

Vote: 27 - Urgency

SENATE APPROPRIATIONS COMMITTEE: 5-0, 6/17/24

AYES: Caballero, Ashby, Becker, Bradford, Wahab

NO VOTE RECORDED: Jones, Seyarto

SUBJECT: Claims against the state: appropriation

SOURCE: Author

DIGEST:

This bill, an urgency measure, appropriates approximately $19.3 million from the General Fund to the Department of Justice (DOJ) for the payment of five specified claims against the state. Any funds appropriated in excess of the amounts required for payment of the claims will revert to the General Fund.

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. Aubin v. Bonta (United States District Court, Northern District of California, No. 21-cv-7938 NC). $62,565.16 settlement, payable from the General Fund. This claim involves a constitutional challenge to SB 742 (Pan), Chap. 737/Statutes of 2021. This statute was enacted against the backdrop of the rollout of vaccines for COVID-19 in 2021. This measure was enacted to help ensure access to vaccine clinics and the vaccines distributed there in the context of numerous protests in the summer and fall of 2021 that blocked access to vaccination sites. The statute made it unlawful to knowingly approach within 30 feet of any person entering or exiting a vaccination site for the purpose of obstructing, injuring, harassing, intimidating, or interfering with that person. It adopted a broad definition of “harassing” that encompassed approaching someone without consent to pass a leaflet or handbill, display a sign, or engage in oral protest, education, or counseling with that person. The statute also stated that lawful labor picketing was not a violation of its provisions.
   
   On October 10, 2021, a group of anti-abortion activists brought suit against Attorney General Rob Bonta, in his official capacity, challenging the constitutionality of SB 742. They contended that SB 742 violated their First Amendment rights by infringing their ability to engage in protest or outreach activities outside of reproductive clinics that provide vaccines, such as the HPV vaccine. They also alleged that SB 742 was unconstitutionally vague. The plaintiffs filed a motion for a temporary restraining order enjoining enforcement of SB 742, which was granted by the court on December 23, 2021, holding plaintiffs were likely to succeed on their First Amendment challenge and enjoining SB 742 in full. In light of the court’s ruling on the temporary restraining order and the ongoing proceedings in two other cases brought challenging the same statute, the parties elected to move straight to summary judgment proceedings while the temporary restraining order remained in place rather than first separately briefing a motion for a preliminary injunction.
   
   The court issued its ruling on cross-motions for summary judgment, and held that SB 742 violated the First Amendment with its prohibition on approaching for purposes of harassing, struck down that portion of the law, and severed the remainder. The court’s ruling was consistent with U.S. Supreme Court cases that had struck down similar buffers around abortion clinics as First Amendment violations, namely McCullen v. Coakley (2014) 573 U.S. 464, which struck down a 30-foot buffer around abortion clinic entrances, and Schenck v. Pro-Choice Network of Western New York (1997) 519 U.S. 357, which struck down a 12-foot buffer around abortion clinic entrances and those entering or exiting abortion clinics. Final judgment was issued on March 29, 2023 in the plaintiff’s favor, and the Attorney General did not appeal the judgment.
   
   The parties entered into a settlement for attorneys’ fees and costs for a total of $62,565.16 following negotiations. The court approved the stipulation and awards of attorney’s fees and costs in favor of the plaintiffs on January 31, 2024. The Department of Finance approved a settlement payment of $63,000 from the General Fund for payment of the agreed-upon fees and costs on March 26, 2024. No additional interest will accrue on this claim.
2. Davis v. State of California (San Diego County Superior Court Case No. 37-2020-00030315-CU-NP-NC). $13.3 million settlement, payable from the General Fund. This claim involves a case filed against the California Department of Parks and Recreation (DPR), the City of Encinitas, and several other defendants alleging dangerous condition of public property and wrongful death. On August 2, 2019, there was a coastal bluff collapse in which large blocks of sandstone fell from the urbanized cliff overlooking Grandview Beach near Leucadia State Beach that claimed the lives of three people: Elizabeth Charles, Annie Davis Clave, and Julie Davis. On August 25, 2020, the survivors filed a lawsuit in the San Diego Superior Court against DPR, along with other defendants, for dangerous condition of public property under Government Code section 835 and wrongful death.
   
   DPR’s demurrer was overruled and the department subsequently filed a motion for summary judgment. While that motion was pending, the parties attended mediation and negotiated mutually acceptable terms of settlement. On January 2, 2024, the parties agreed to a tentative settlement in which the state agreed to pay a total amount of $13,300,000 for its portion of the settlement, to be apportioned among the different plaintiffs in accordance with the settlement agreements in exchange for a full and complete release of all claims related to the incident.
   
   On May 21, 2024, the Department of Finance approved payment of the settlement and requested inclusion of an appropriation of $13,300,000 from the General Fund in the annual claims bill.
3. Souliotes v. California Victim Compensation Board (Los Angeles County Superior Court Case Nos. BS170608 and 21STCP03535). $1,625,000 settlement, payable from the General Fund. This claim involves entitlement to certain pre-judgment interest, attorney’s fees, and costs, and interest over numerous actions filed in relation to a claim for compensation in an erroneous conviction case filed with the California Victim Compensation Board (CalVCB). In 2018, George Souliotes (petitioner) brought a petition challenging the CalVCB’s initial decision on May 18, 2017 to deny compensation under Penal Code section 4900 after petitioner had been released from prison. (Los Angeles County Superior Court Case No. BS170608 (First Petition)) In September 2021, after remand from the trial court, CalVCB’s Board adopted a new proposed decision recommending that the Legislature appropriate $841,820 for Souliotes’s claim for compensation under Penal Code section 4900 (see this Committee’s analysis of SB 632, Chap. 133/Statutes of 2022 for details regarding the erroneous conviction claim and the approved appropriation). After CalVCB issued a new decision recommending compensation, petitioner filed a new writ petition seeking prejudgment interest, attorneys’ fees, and costs. (Los Angeles County Superior Court Case No. 21STCP03535 (Second Petition)) The Second Petition was based upon the same facts as the First Petition, and addressed the same legal issues regarding whether petitioner is entitled to pre-judgment interest, attorneys’ fees, and costs. The parties stipulated to stay proceedings in the Second Petition, pending resolution of the proceedings in the First Petition.
   
   After several years of litigation in the First Petition proceedings, including a petition for review before the Supreme Court, petitioner prevailed on December 28, 2022, when the court of appeal, upon transfer from the Supreme Court, issued an unpublished decision concluding Senate Bill 446 (Glazer), Chap. 490/Statutes of 2021, showed the Legislature’s intent that findings made pursuant to Schlup v. Delo (1995) 513 U.S. 298, constituted a finding of factual innocence even under former Penal Code section 1485.55, subdivision (a). Thus, an automatic recommendation of petitioner’s claim under Penal Code section 4900 within 30 days of it being submitted to CalVCB would have been required. (Souliotes v. Cal. Victim Comp. Bd. (Dec. 28, 2022, No. B295163)) The court awarded petitioner his costs on appeal but otherwise remanded to the trial court to decide “Souliotes’ entitlement, if any, to pre-judgment interest and other relief, including attorneys’ fees and costs.” (Ibid.)
   
   On April 24, 2023, petitioner sent a demand letter for $2,300,106.68, including $1.9 million in attorneys’ fees, $330,981.68 in pre-judgment interest, and $69,125 for litigation expenses. Petitioner claimed interest and attorneys’ fees would continue to accrue until a final judgment or the parties reached a settlement. The parties subsequently entered into a settlement agreement on January 5, 2024 that resolves all of petitioner’s claims for attorneys’ fees, pre-judgment interest, and costs arising out of the trial court actions and the appeals, and requires petitioner to dismiss all actions following the payment of the settlement amount. In exchange, CalVCB agreed to pay a total of $1,625,000. The settlement agreement provides that the payment is subject to an appropriation by the Legislature by the end of the 2024 calendar year. Both the Government Operations Agency and the Governor’s Office approved the settlement.
   
   On March 1, 2024, the Department of Finance approved payment of the settlement and requested inclusion of an appropriation of $1,625,000 from the General Fund in the annual claims bill. Pursuant to the settlement agreement, no additional interest will accrue on this claim if the bill appropriating funds for this settlement is chaptered this year and the Petitioner receives the settlement amount during the 2024 calendar year. However, interest will begin to accrue on the settlement amount 180 days after the date of the settlement (commencing July 3, 2024) at a rate of seven percent per annum if the appropriation is not approved and payment is not received by the end of 2024.
4. California Water Curtailment Cases (Santa Clara County Superior Court Case No. 1-15-CV-285182; JCCP 4838). $2,646,362.73 judgment ordering payments pursuant to a settlement agreement, plus potential interest of $78,000, payable from the General Fund. This claim involves a challenge to the actions of the State Water Resources Control Board (SWRCB) that prohibited water diversions by certain water rights holders in light of drought conditions. On June 12, 2015 the SWRCB’s Executive Director issued a notice informing water rights claimants who divert from the Sacramento and San Joaquin River watersheds that there was only sufficient water to supply water right holders with a priority of 1902 or earlier. In five separate lawsuits, petitioners sued the State Water Resources Control Board (SWRCB) claiming that the notice was an order that deprived them of property without due process, and that the SWRCB did not have jurisdiction to order holders of pre-1914 water rights to stop diverting under Water Code section 1052. The cases were all coordinated under Judicial Council Coordinated Proceeding Number 4838 in Santa Clara County Superior Court, and included the following cases: Byron-Bethany Irrigation District v. California State Water Resources Control Board, et al. (Contra Costa County Superior Court Case No. N150967); The West Side Irrigation District, et al. v. California State Water Resources Control Board, et al. (Sacramento County Superior Court Case No. 34-2015-80002121); and San Joaquin Tributaries Authority, et al., v. California State Water Resources Control Board (Stanislaus County Superior Court Case No. 2015366).
   
   On February 21, 2018, the trial court held the SWRCB did not have jurisdiction over petitioners to issue the notice if they are pre-1914 diverters, there is no water available for post-1914 diverters, and that SWRCB violated petitioners’ due process rights by issuing the notices without first holding an evidentiary hearing. SWRCB appealed the jurisdictional issue and petitioners appealed the denial of their attorneys’ fees and costs. On November 18, 2022, the appellate court affirmed the trial court in full on the merits appeal, and the costs awarded, and partially reversed the trial court’s denial of all attorneys’ fees. On remand, the trial court granted petitioners their attorneys’ fees on appeal on April 5, 2023.
   
   SWRCB and petitioners subsequently agreed on amounts to settle the various attorneys’ fees and costs in a stipulation and proposed order, which was signed by the court on February 6, 2024. The order provides that SWRCB: (1) will pay Byron Bethany Irrigation District’s (BBID) trial court fees of $929,484.98, appellate fees of $592,981.96, trial court costs of $12,964.75, and appellate costs of $568.31, for a total of $1,536,000; (2) will pay San Joaquin Tributaries Authority (SJTA) and South San Joaquin Irrigation District (SSJID) $64,497.50 for fees related to the merits appeal, $48,987.40 for fees related to the fees appeal, and trial court fees of $475,830.25, for a total of $589,315.15; and (3) will pay Central Delta Water Agency (CDWA), South Delta Water Agency (SDWA), and BBID as successor in interest to the West Side Irrigation District (WSID) $500,000 in fees for the trial court level, $12,252.50 in fees for the merits appeal, $8,554 in fees for the costs and fees appeal, and trial court costs of $241.08, for a total of $521,047.58. The fees and costs total $2,646,362.73. The order stipulates that interest will begin to accrue 180 days from the due date of the order at a rate of seven percent per annum.
   
   On April 11, 2024, the Department of Finance approved payment of the settlement through an appropriation of $2,724,000 from the General Fund, which includes $78,000 in potential interest that will begin to accrue on August 4, 2024. Any funds appropriated in excess of the amount required for payment of the settlement will revert to the General Fund.
5. Welchen v. Bonta (United States District Court, Eastern District of California, No. 2:16-cv-00185-TLN-DB). $1,576,832.37 settlement, payable from the General Fund. This claim involves a constitutional challenge of statutes requiring counties to implement bail schedules, which provide the terms upon which a person may be released before arraignment. Gary Wayne Welchen (plaintiff), an indigent resident of Sacramento County, was arrested and assigned pre-arraignment bail in the amount of $10,000. On January 29, 2016, he filed a class action complaint against the Attorney General and Sacramento County Sheriff, alleging that Penal Code § 1269b, and the County’s 2016 pre-arraignment bail schedule violates his due process and equal protection rights by discriminating on the basis of wealth. The complaint alleged that the Attorney General “requires the County of Sacramento to enact a bail schedule, thereby creating a wealth-based detention scheme,” because he “is charged with the enforcement of California’s laws,” including Penal Code § 1269b.
   
   The Attorney General’s motion to dismiss on Eleventh Amendment immunity grounds was rejected, and the plaintiff subsequently moved for partial summary judgment as to liability. The Attorney General opposed on the grounds that: (1) Plaintiff’s claims were moot, and (2) Eleventh Amendment immunity applies because there is no showing that the Attorney General is responsible for implementing or enforcing Sacramento County’s bail schedule. The court granted partial summary judgment against the Attorney General, holding that the bail schedule violates plaintiff’s substantive due process rights, plaintiff’s claims fell under the “capable of repetition yet evading review” exception to mootness, and the Attorney General is subject to the Ex Parte Young exception to Eleventh Amendment immunity.
   
   On September 5, 2023, the court issued its order granting injunctive relief. The order enjoins the Attorney General, “in its role as supervisor over the Sheriff,” from “using or enforcing the 2016 Sacramento County pre-arraignment bail schedule” or “any subsequent pre-arraignment bail schedules in Sacramento County that set specific dollar amounts for bail by reference solely to criminal charges,” without allowing for bail modifications based on “ability to pay, risk of nonappearance, or threat of public safety before trial.” The court also entered judgment in plaintiff’s favor consistent with the order granting injunctive relief.
   
   The Ninth Circuit has determined that the State is liable for attorneys’ fees and costs in cases challenging the constitutionality of bail schedules because the sheriff of the relevant county acts as the state’s agent while enforcing those bail schedules. Buffin v. California, 23 F.4th 951, 954 (9th Cir. 2022). To avoid further litigation, the parties negotiated a settlement agreement on February 1, 2024, under which the Attorney General agreed to pay $1,576,832.37 to resolve Plaintiff’s claim for attorneys’ fees and costs.
   
   On March 26, 2024, the Department of Finance approved a settlement payment of $1,577,000, appropriated from the General Fund, for payment of the negotiated attorney’s fees and costs. No additional interest will accrue.

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

According to the Senate Appropriations Committee:

• One-time General Fund appropriation of $63,000 to DOJ in 2024-25 to pay the settlement arising from Aubin v. Bonta. (United States District Court, Northern District of California, No. 21-cv-7938 NC)
  
• One-time General Fund appropriation of $13.3 million to DOJ in 2024-25 to pay the settlement arising from Davis, et al. v. State of California, et al. (San Diego County Superior Court Case No. 37-2020-00030315-CU-NP-NC)
  
• One-time General Fund appropriation of $1.625 million to DOJ in 2024-25 to pay the settlement arising from Souliotes v. California Victim Compensation Board. (Los Angeles County Superior Court Case Nos. BS170608 and 21STCP03535)
  
• One-time General Fund appropriation of $2.724 million to DOJ in 2024-25 to pay the settlement arising from California Water Curtailment Cases. (Santa Clara County Superior Court Case No. 1-15-CV-285182; JCCP 4838)
  
• One-time General Fund appropriation of $1.577 million to DOJ in 2024-25 to pay the settlement arising from Welchen v. Bonta. (United States District Court, Eastern District of California, No. 2:16-cv-00185-TLN-DB)

SUPPORT: (Verified 6/19/24)

South San Joaquin Irrigation District

OPPOSITION: (Verified 6/19/24)

None received

ARGUMENTS IN SUPPORT: The South San Joaquin Irrigation District is a member of the San Joaquin Tributaries Association that was awarded a court ordered payment as a result of 2015 litigation. This action would satisfy the court order.

Prepared by: Mark McKenzie / APPR. / (916) 651-4101

6/19/24 11:53:27

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anna Caballero, Chair

2023 - 2024 Regular Session

SB 1481 (Caballero) - Claims against the state: appropriation

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 1481, an urgency measure, would appropriate approximately $19.3 million from the General Fund to the Department of Justice (DOJ) for the payment of five 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 $63,000 to DOJ in 2024-25 to pay the settlement arising from Aubin v. Bonta (United States District Court, Northern District of California, No. 21-cv-7938 NC).
  
• One-time General Fund appropriation of $13.3 million to DOJ in 2024-25 to pay the settlement arising from Davis, et al. v. State of California, et al. (San Diego County Superior Court Case No. 37-2020-00030315-CU-NP-NC).
  
• One-time General Fund appropriation of $1.625 million to DOJ in 2024-25 to pay the settlement arising from Souliotes v. California Victim Compensation Board (Los Angeles County Superior Court Case Nos. BS170608 and 21STCP03535).
  
• One-time General Fund appropriation of $2.724 million to DOJ in 2024-25 to pay the settlement arising from California Water Curtailment Cases (Santa Clara County Superior Court Case No. 1-15-CV-285182; JCCP 4838).
  
• One-time General Fund appropriation of $1.577 million to DOJ in 2024-25 to pay the settlement arising from Welchen v. Bonta (United States District Court, Eastern District of California, No. 2:16-cv-00185-TLN-DB).

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 1481, an urgency measure, would appropriate$19,289,000 from the General Fund to pay the following settlements:

1. Aubin v. Bonta (United States District Court, Northern District of California, No. 21-cv-7938 NC). $62,565.16 settlement, payable from the General Fund.
   
   This claim involves a constitutional challenge to SB 742 (Pan), Chap. 737/2021. This statute was enacted against the backdrop of the rollout of vaccines for COVID-19 in 2021. This measure was enacted to help ensure access to vaccine clinics and the vaccines distributed there in the context of numerous protests in the summer and fall of 2021 that blocked access to vaccination sites. The statute made it unlawful to knowingly approach within 30 feet of any person entering or exiting a vaccination site for the purpose of obstructing, injuring, harassing, intimidating, or interfering with that person. It adopted a broad definition of “harassing” that encompassed approaching someone without consent to pass a leaflet or handbill, display a sign, or engage in oral protest, education, or counseling with that person. The statute also stated that lawful labor picketing was not a violation of its provisions.
   
   On October 10, 2021, a group of anti-abortion activists brought suit against Attorney General Rob Bonta, in his official capacity, challenging the constitutionality of SB 742. They contended that SB 742 violated their First Amendment rights by infringing their ability to engage in protest or outreach activities outside of reproductive clinics that provide vaccines, such as the HPV vaccine. They also alleged that SB 742 was unconstitutionally vague. The plaintiffs filed a motion for a temporary restraining order enjoining enforcement of SB 742, which was granted by the court on December 23, 2021, holding plaintiffs were likely to succeed on their First Amendment challenge and enjoining SB 742 in full. In light of the court’s ruling on the temporary restraining order and the ongoing proceedings in two other cases brought challenging the same statute, the parties elected to move straight to summary judgment proceedings while the temporary restraining order remained in place rather than first separately briefing a motion for a preliminary injunction.
   
   The court issued its ruling on cross-motions for summary judgment, and held that SB 742 violated the First Amendment with its prohibition on approaching for purposes of harassing, struck down that portion of the law, and severed the remainder. The court’s ruling was consistent with U.S. Supreme Court cases that had struck down similar buffers around abortion clinics as First Amendment violations, namely McCullen v. Coakley (2014) 573 U.S. 464, which struck down a 30-foot buffer around abortion clinic entrances, and Schenck v. Pro-Choice Network of Western New York (1997) 519 U.S. 357, which struck down a 12-foot buffer around abortion clinic entrances and those entering or exiting abortion clinics. Final judgment was issued on March 29, 2023 in the plaintiff’s favor, and the Attorney General did not appeal the judgment.
   
   The parties entered into a settlement for attorneys’ fees and costs for a total of $62,565.16 following negotiations. The court approved the stipulation and awards of attorney’s fees and costs in favor of the plaintiffs on January 31, 2024. The Department of Finance approved a settlement payment of $63,000 from the General Fund for payment of the agreed-upon fees and costs on March 26, 2024. No additional interest will accrue on this claim.
2. Davis v. State of California (San Diego County Superior Court Case No. 37-2020-00030315-CU-NP-NC). $13.3 million settlement, payable from the General Fund.
   
   This claim involves a case filed against the California Department of Parks and Recreation (DPR), the City of Encinitas, and several other defendants alleging dangerous condition of public property and wrongful death. On August 2, 2019, there was a coastal bluff collapse in which large blocks of sandstone fell from the urbanized cliff overlooking Grandview Beach near Leucadia State Beach that claimed the lives of three people: Elizabeth Charles, Annie Davis Clave, and Julie Davis. On August 25, 2020, the survivors filed a lawsuit in the San Diego Superior Court against DPR, along with other defendants, for dangerous condition of public property under Government Code section 835 and wrongful death.
   
   DPR’s demurrer was overruled and the department subsequently filed a motion for summary judgment. While that motion was pending, the parties attended mediation and negotiated mutually acceptable terms of settlement. On January 2, 2024, the parties agreed to a tentative settlement in which the state agreed to pay a total amount of $13,300,000 for its portion of the settlement, to be apportioned among the different plaintiffs in accordance with the settlement agreements in exchange for a full and complete release of all claims related to the incident.
   
   On May 21, 2024, the Department of Finance approved payment of the settlement and requested inclusion of an appropriation of $13,300,000 from the General Fund in the annual claims bill. No additional interest will accrue on this claim.
3. Souliotes v. California Victim Compensation Board (Los Angeles County Superior Court Case Nos. BS170608 and 21STCP03535). $1,625,000 settlement, payable from the General Fund.
   
   This claim involves entitlement to certain pre-judgment interest, attorney’s fees, and costs, and interest over numerous actions filed in relation to a claim for compensation in an erroneous conviction case filed with the California Victim Compensation Board (CalVCB). In 2018, George Souliotes (petitioner) brought a petition challenging the CalVCB’s initial decision on May 18, 2017 to deny compensation under Penal Code section 4900 after petitioner had been released from prison (Los Angeles County Superior Court Case No. BS170608 (First Petition).) In September 2021, after remand from the trial court, CalVCB’s Board adopted a new proposed decision recommending that the Legislature appropriate $841,820 for Souliotes’s claim for compensation under Penal Code section 4900 (see this Committee’s analysis of SB 632, Chap. 133/2022 for details regarding the erroneous conviction claim and the approved appropriation). After CalVCB issued a new decision recommending compensation, petitioner filed a new writ petition seeking prejudgment interest, attorneys’ fees, and costs (Los Angeles County Superior Court Case No. 21STCP03535 (Second Petition).) The Second Petition was based upon the same facts as the First Petition, and addressed the same legal issues regarding whether petitioner is entitled to pre-judgment interest, attorneys’ fees, and costs. The parties stipulated to stay proceedings in the Second Petition, pending resolution of the proceedings in the First Petition.
   
   After several years of litigation in the First Petition proceedings, including a petition for review before the Supreme Court, petitioner prevailed on December 28, 2022, when the court of appeal, upon transfer from the Supreme Court, issued an unpublished decision concluding Senate Bill 446 (Glazer), Chap. 490/2021, showed the Legislature’s intent that findings made pursuant to Schlup v. Delo (1995) 513 U.S. 298, constituted a finding of factual innocence even under former Penal Code section 1485.55, subdivision (a). Thus, an automatic recommendation of petitioner’s claim under Penal Code section 4900 within 30 days of it being submitted to CalVCB would have been required (Souliotes v. Cal. Victim Comp. Bd. (Dec. 28, 2022, No. B295163).) The court awarded petitioner his costs on appeal but otherwise remanded to the trial court to decide “Souliotes’ entitlement, if any, to pre-judgment interest and other relief, including attorneys’ fees and costs.” (Ibid.)
   
   On April 24, 2023, petitioner sent a demand letter for $2,300,106.68, including $1.9 million in attorneys’ fees, $330,981.68 in pre-judgment interest, and $69,125 for litigation expenses. Petitioner claimed interest and attorneys’ fees would continue to accrue until a final judgment or the parties reached a settlement. The parties subsequently entered into a settlement agreement on January 5, 2024 that resolves all of petitioner’s claims for attorneys’ fees, pre-judgment interest, and costs arising out of the trial court actions and the appeals, and requires petitioner to dismiss all actions following the payment of the settlement amount. In exchange, CalVCB agreed to pay a total of $1,625,000. The settlement agreement provides that the payment is subject to an appropriation by the Legislature by the end of the 2024 calendar year. Both the Government Operations Agency and the Governor’s Office approved the settlement.
   
   On March 1, 2024, the Department of Finance approved payment of the settlement and requested inclusion of an appropriation of $1,625,000 from the General Fund in the annual claims bill. Pursuant to the settlement agreement, no additional interest will accrue on this claim if the bill appropriating funds for this settlement is chaptered this year and the Petitioner receives the settlement amount during the 2024 calendar year. However, interest will begin to accrue on the settlement amount 180 days after the date of the settlement (commencing July 3, 2024) at a rate of seven percent per annum if the appropriation is not approved and payment is not received by the end of 2024.
4. California Water Curtailment Cases (Santa Clara County Superior Court Case No. 1-15-CV-285182; JCCP 4838). $2,646,362.73 judgment ordering payments pursuant to a settlement agreement, plus interest of $78,000, payable from the General Fund.
   
   This claim involves a challenge to the actions of the State Water Resources Control Board (SWRCB) that prohibited water diversions by certain water rights holders in light of drought conditions. On June 12, 2015 the SWRCB’s Executive Director issued a notice informing water rights claimants who divert from the Sacramento and San Joaquin River watersheds that there was only sufficient water to supply water right holders with a priority of 1902 or earlier. In five separate lawsuits, petitioners sued the State Water Resources Control Board (SWRCB) claiming that the notice was an order that deprived them of property without due process, and that the SWRCB did not have jurisdiction to order holders of pre-1914 water rights to stop diverting under Water Code section 1052. The cases were all coordinated under Judicial Council Coordinated Proceeding Number 4838 in Santa Clara County Superior Court, and included the following cases: Byron-Bethany Irrigation District v. California State Water Resources Control Board, et al. (Contra Costa County Superior Court Case No. N150967); The West Side Irrigation District, et al. v. California State Water Resources Control Board, et al. (Sacramento County Superior Court Case No. 34-2015-80002121); and San Joaquin Tributaries Authority, et al., v. California State Water Resources Control Board (Stanislaus County Superior Court Case No. 2015366).
   
   On February 21, 2018, the trial court held the SWRCB did not have jurisdiction over petitioners to issue the notice if they are pre-1914 diverters, there is no water available for post-1914 diverters, and that SWRCB violated petitioners’ due process rights by issuing the notices without first holding an evidentiary hearing. SWRCB appealed the jurisdictional issue and petitioners appealed the denial of their attorneys’ fees and costs. On November 18, 2022, the appellate court affirmed the trial court in full on the merits appeal, and the costs awarded, and partially reversed the trial court’s denial of all attorneys’ fees. On remand, the trial court granted petitioners their attorneys’ fees on appeal on April 5, 2023.
   
   SWRCB and petitioners subsequently agreed on amounts to settle the various attorneys’ fees and costs in a stipulation and proposed order, which was signed by the court on February 6, 2024. The order provides that SWRCB: (1) will pay Byron Bethany Irrigation District’s (BBID) trial court fees of $929,484.98, appellate fees of $592,981.96, trial court costs of $12,964.75, and appellate costs of $568.31, for a total of $1,536,000; (2) will pay San Joaquin Tributaries Authority (SJTA) and South San Joaquin Irrigation District (SSJID) $64,497.50 for fees related to the merits appeal, $48,987.40 for fees related to the fees appeal, and trial court fees of $475,830.25, for a total of $589,315.15; and (3) will pay Central Delta Water Agency (CDWA), South Delta Water Agency (SDWA), and BBID as successor in interest to the West Side Irrigation District (WSID) $500,000 in fees for the trial court level, $12,252.50 in fees for the merits appeal, $8,554 in fees for the costs and fees appeal, and trial court costs of $241.08, for a total of $521,047.58. The fees and costs total $2,646,362.73. The order stipulates that interest will begin to accrue 180 days from the due date of the order at a rate of seven percent per annum.
   
   On April 11, 2024, the Department of Finance approved payment of the settlement through an appropriation of $2,724,000 from the General Fund, which includes $78,000 in potential interest that will begin to accrue on August 4, 2024. Any funds appropriated in excess of the amount required for payment of the settlement will revert to the General Fund.
5. Welchen v. Bonta (United States District Court, Eastern District of California, No. 2:16-cv-00185-TLN-DB). $1,576,832.37 settlement, payable from the General Fund.
   
   This claim involves a constitutional challenge of statutes requiring counties to implement bail schedules, which provide the terms upon which a person may be released before arraignment. Gary Wayne Welchen (plaintiff), an indigent resident of Sacramento County, was arrested and assigned pre-arraignment bail in the amount of $10,000. On January 29, 2016, he filed a class action complaint against the Attorney General and Sacramento County Sheriff, alleging that Penal Code § 1269b, and the County’s 2016 pre-arraignment bail schedule violates his due process and equal protection rights by discriminating on the basis of wealth. The complaint alleged that the Attorney General “requires the County of Sacramento to enact a bail schedule, thereby creating a wealth-based detention scheme,” because he “is charged with the enforcement of California’s laws,” including Penal Code § 1269b.
   
   The Attorney General’s motion to dismiss on Eleventh Amendment immunity grounds was rejected, and the plaintiff subsequently moved for partial summary judgment as to liability. The Attorney General opposed on the grounds that: (1) Plaintiff’s claims were moot, and (2) Eleventh Amendment immunity applies because there is no showing that the Attorney General is responsible for implementing or enforcing Sacramento County’s bail schedule. The court granted partial summary judgment against the Attorney General, holding that the bail schedule violates plaintiff’s substantive due process rights, plaintiff’s claims fell under the “capable of repetition yet evading review” exception to mootness, and the Attorney General is subject to the Ex Parte Young exception to Eleventh Amendment immunity.
   
   On September 5, 2023, the court issued its order granting injunctive relief. The order enjoins the Attorney General, “in its role as supervisor over the Sheriff,” from “using or enforcing the 2016 Sacramento County pre-arraignment bail schedule” or “any subsequent pre-arraignment bail schedules in Sacramento County that set specific dollar amounts for bail by reference solely to criminal charges,” without allowing for bail modifications based on “ability to pay, risk of nonappearance, or threat of public safety before trial.” The court also entered judgment in plaintiff’s favor consistent with the order granting injunctive relief.
   
   The Ninth Circuit has determined that the State is liable for attorneys’ fees and costs in cases challenging the constitutionality of bail schedules because the sheriff of the relevant county acts as the state’s agent while enforcing those bail schedules. Buffin v. California, 23 F.4th 951, 954 (9th Cir. 2022). Therefore, to avoid further litigation, the parties negotiated a settlement agreement under which the Attorney General agreed to pay $1,576,832.37 to resolve Plaintiff’s claim for attorneys’ fees and costs. The fee settlement was entered on February 1, 2024
   
   On March 26, 2024, the Department of Finance approved a settlement payment of $1,577,000, appropriated from the General Fund, for payment of the negotiated attorney’s fees and costs. No additional interest will accrue on this claim.

Related Legislation:

AB 2755 (Wicks), which is currently pending on the Senate Floor, would appropriate $523,000 from the General Fund to DOJ for the payment of three specified claims against the state.

Proposed Author Amendments:

Make the following technical changes:

• On page 2, line 13, add the word “County” after “San Diego” (to read “San Diego County Superior Court”).
• On page 2, line 24, delete the word “Deposits” and insert “Deposit” (to read “Special Deposit Fund”).
• On page 2, line 25, delete the word “Treasurer” and insert “Controller” (to read “the State Controller may issue a separate warrant”).

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