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 $6,773,000 from the General Fund to the Attorney General for the payment of claims, settlements, or judgments against the state arising from 2 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 $6,773,000 from the General Fund to the Attorney General for the payment of claims, settlements, or judgments against the state arising from 2 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 $6,772,677.21 $6,773,000 from the General Fund to the Attorney General for the payment of claims, settlements, or judgements against the state arising from 2 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. $6,772,677.21 from the General Fund to the Attorney General for the payment of claims, settlements, or judgements against the state arising from 2 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 383

Author:(Portantino)

As Amended Ver:April 12, 2023

2/3 vote. Urgency

SUMMARY

This bill appropriates from the General Fund (GF) $6.77 million to the Attorney General (AG), as follows:

1. $3.7 for the payment of claims, settlements, or judgements against the state arising from Wetlands Preservation Foundation v. Department of Water Resources, et. al (San Joaquin County Superior Court, July 9, 2020, No. STK-CV-UWM-2018-8957).
2. $3.07 for the payment of claims, settlements, or judgements against the state arising from California DUI Lawyers Association, et. al v. Department of Motor Vehicles, et. al (Los Angeles County Superior Court, April 15, 2022, No. BC553552).

The bill specifies that any funds appropriated in excess of the amounts actually required for the payment of this judgment shall revert to the General Fund within 45 days after final payment is made.

Major Provisions

None.

COMMENTS

This bill is one of several annual bills carried by either the chair of the Assembly Appropriations Committee or the chair of the Senate Appropriations Committee to provide appropriation authority for legal settlements approved by the Department of Justice (DOJ) and the Department of Finance (DOF). The state entered into these settlements lawfully, upon advice of counsel (DOJ). The settlements are binding state obligations.

SB 383, an urgency measure, would appropriate approximately $6.8 million from the General Fund to pay the following settlements:

1. Wetlands Preservation Foundation v. Department of Water Resources, et. al (San Joaquin County Superior Court, July 9, 2020, No. STK-CV-UVM-2018-8957). $3.7 million settlement, payable from the General Fund.

This claim involves the management of public resources, including the conditions for protecting Staten Island in the Sacramento-San Joaquin River Delta, as specified in a conservation easement held by the Department of Water Resources (DWR) on land owned by The Nature Conservancy (TNC). As part of the agreement to purchase Staten Island with state bond funding, TNC is the property owner and recorded a permanent conservation easement to DWR with the specified intent to preserve agricultural lands, protect wildlife habitat, protect a floodplain area from potential inappropriate and incompatible development, and potentially have a role in future flood management and water improvement activities. TNC is responsible for managing the day-to-day operations on Staten Island, and DWR prepares annual reports of its monitoring of TNC's compliance with the conservation easement.

The Wetlands Preservation Foundation (WPF, Plaintiffs) filed a petition for writ of mandate and complaint for injunctive relief against DWR and TNC (Defendants) in the Superior Court of San Joaquin County on July 23, 2018, and an amended complaint on October 9, 2018, alleging destruction of public trust natural resources, public nuisance, private nuisance and breach of contract. The court issued a final judgment on August 18, 2020, in favor of WPF and against DWR for destruction of public trust natural resources and issued a writ of mandate commanding DWR to conduct a baseline study or evaluation of Staten Island such that it is capable of exercising its discretion in its oversight and monitoring of Staten Island pursuant to the conservation easement. The court ruled in favor of the Defendants and against the Plaintiffs on the remaining causes of action for public nuisance, private nuisance and breach of contract.

On September 3, 2020, WPF appealed the judgment and on October 19, 2020, DWR cross-appealed. WPF appeal argued that DWR should take enforcement action against TNC to require levee improvements and other physical changes to Staten Island. These cases were consolidated with a related appeal of the trial court order designating the prevailing party for purposes of award of costs and attorneys' fees. Given the cost and uncertainty of further litigation, the parties reached a settlement agreement on December 29, 2022, that specifies a payment by DWR of $3,625,000 to resolve all claims for attorneys' fees and costs by WPF arising from the actions and that requires the dismissal of WPF's appeal of the trial court ruling.

On January 24, 2023, DOF approved the settlement payment of $3.7 million from the General Fund, which includes the settlement amount and $75,000 for potential interest. Staff estimates that interest will not accrue if this bill is enacted prior to the 2023-24 fiscal year.

1. California DUI Lawyers Association, et. al v. Department of Motor Vehicles, et. al (Los Angeles County Superior Court, April 15, 2022, No. BC553552). $3.07 million judgment, payable from the General Fund.

This claim involves a state and federal constitutional due process challenge to the administrative hearing process used by the Department of Motor Vehicles (DMV) to consider whether driving privileges should be suspended when a person has been detained or arrested on suspicion of "driving under the influence" (DUI) and registers an excessive blood alcohol level, refuses a chemical test or insists on taking a blood test rather than a breath test. Under these circumstances, the arresting officer or DMV serves the driver with a specified notice suspending driving privileges within 30 days and explains the driver's right to an adjudicative administrative hearing before the effective date of the suspension if the driver requests a hearing within 10 days. The administrative hearing is referred to as an "administrative per se" (APS) hearing, which is separate and apart from the criminal justice system, and the task of the DMV hearing officer is to determine whether the arresting officer had reasonable cause to believe the person was driving, the person was lawfully arrested and the person refused a blood alcohol test or was driving with a blood alcohol concentration of 0.08% or higher. If the hearing officer determines that the evidence establishes these facts, the license will be administratively suspended, but if the three conditions are not satisfied, any pending or actual administrative order will be set aside.

On August 1, 2014, the California DUI Lawyers Association and Steven Mandel (Plaintiffs) filed a complaint in California Superior Court alleging the DMV's APS hearing system deprives Plaintiffs' clients of the procedural due process rights under both the U.S. and California Constitutions. The complaint is based upon the allegation that the APS hearing officers are not impartial because they often serve in other capacities at DMV that are subordinate to DMV management, and that APS decisions to set aside a driver's license suspension are subject to ex parte review, criticism and reversal by DMV management. The Plaintiffs complaint further alleges that payment of managers to review the set asides of administrative suspensions and speaking to hearing officers about the substance of their decisions constitutes an illegal expenditure of public funds. The superior court granted summary adjudication in favor of the Plaintiffs on violations of due process rights under the California Constitution and for illegal expenditure of public funds, but ruled against the Plaintiffs on the cause of action regarding due process rights under the U.S. Constitution. On December 13, 2022, however, the district court of appeal reversed the judgment and entered a new order granting summary judgment on all counts in favor of Plaintiffs, permanently enjoined the DMV from maintaining an APS hearing structure that violates due process rights, as specified, and ordered the DMV to pay Plaintiffs for their attorneys' fees and costs, plus specified interest.

On February 10, 2023, DOF approved the payment of approximately $3.07 million from the General Fund for the judgment for attorneys' fees and costs, plus specified interest. Staff notes that, pursuant to the final judgment, a portion of the attorneys' fees and costs are currently accruing interest, but interest on other parts of the judgment will not begin accruing until June 12, 2023.

According to the Author

Arguments in Support

None on file.

Arguments in Opposition

None on file.

FISCAL COMMENTS

1. One-time General Fund appropriation of $3,700,000.00 in the 2022-23 fiscal year to DOJ to pay the settlement arising from Wetlands Preservation Foundation v. Department of Water Resources, et. al (San Joaquin County Superior Court, July 9, 2020, No. STK-CVUVM-2018-8957).
2. One-time General Fund appropriation of $3,073,000 in the 2022-23 fiscal year to pay the judgment arising from California DUI Lawyers Association, et. al v. Department of Motor Vehicles, et. al (Los Angeles County Superior Court, April 15, 2022, No. BC553552).

VOTES

SENATE FLOOR: 36-0-4

YES: Allen, Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Glazer, Gonzalez, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Umberg, Wahab, Wiener, Wilk

ABS, ABST OR NV: Grove, Hurtado, Padilla, Stern

ASM APPROPRIATIONS: 16-0-0

YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Robert Rivas, Sanchez, Weber, Ortega

UPDATED

VERSION: April 12, 2023

CONSULTANT: Jay Dickenson / APPR. / (916) 319-2081 FN: 0000427

Date of Hearing: May 17, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

SBPCA Bill Id:SB 383

Author:(Portantino) – As Amended Ver:April 12, 2023

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

SUMMARY:

This bill appropriates from the General Fund (GF) $6.77 million to the Attorney General (AG), as follows:

1. $3.7 for the payment of claims, settlements, or judgements against the state arising from Wetlands Preservation Foundation v. Department of Water Resources, et. al (San Joaquin County Superior Court, July 9, 2020, No. STK-CV-UWM-2018-8957).
2. $3.07 for the payment of claims, settlements, or judgements against the state arising from California DUI Lawyers Association, et. al v. Department of Motor Vehicles, et. al (Los Angeles County Superior Court, April 15, 2022, No. BC553552).

The bill specifies that any funds appropriated in excess of the amounts actually required for the payment of this judgment shall revert to the General Fund within 45 days after final payment is made.

FISCAL EFFECT:

1. One-time General Fund appropriation of $3,700,000.00 in the 2022-23 fiscal year to DOJ to pay the settlement arising from Wetlands Preservation Foundation v. Department of Water Resources, et. al (San Joaquin County Superior Court, July 9, 2020, No. STK-CVUVM-2018-8957).
2. One-time General Fund appropriation of $3,073,000 in the 2022-23 fiscal year to pay the judgment arising from California DUI Lawyers Association, et. al v. Department of Motor Vehicles, et. al (Los Angeles County Superior Court, April 15, 2022, No. BC553552).

COMMENTS:

This bill is one of several annual bills carried by either the chair of the Assembly Appropriations Committee or the chair of the Senate Appropriations Committee to provide appropriation authority for legal settlements approved by the Department of Justice (DOJ) and the Department of Finance (DOF). The state entered into these settlements lawfully, upon advice of counsel (DOJ). The settlements are binding state obligations.

SB 383, an urgency measure, would appropriate approximately $6.8 million from the General Fund to pay the following settlements:

1. Wetlands Preservation Foundation v. Department of Water Resources, et. al (San Joaquin County Superior Court, July 9, 2020, No. STK-CV-UVM-2018-8957). $3.7 million settlement, payable from the General Fund.

This claim involves the management of public resources, including the conditions for protecting Staten Island in the Sacramento-San Joaquin River Delta, as specified in a conservation easement held by the Department of Water Resources (DWR) on land owned by The Nature Conservancy (TNC). As part of the agreement to purchase Staten Island with state bond funding, TNC is the property owner and recorded a permanent conservation easement to DWR with the specified intent to preserve agricultural lands, protect wildlife habitat, protect a floodplain area from potential inappropriate and incompatible development, and potentially have a role in future flood management and water improvement activities. TNC is responsible for managing the day-to-day operations on Staten Island, and DWR prepares annual reports of its monitoring of TNC’s compliance with the conservation easement.

The Wetlands Preservation Foundation (WPF, Plaintiffs) filed a petition for writ of mandate and complaint for injunctive relief against DWR and TNC (Defendants) in the Superior Court of San Joaquin County on July 23, 2018, and an amended complaint on October 9, 2018, alleging destruction of public trust natural resources, public nuisance, private nuisance and breach of contract. The court issued a final judgment on August 18, 2020, in favor of WPF and against DWR for destruction of public trust natural resources and issued a writ of mandate commanding DWR to conduct a baseline study or evaluation of Staten Island such that it is capable of exercising its discretion in its oversight and monitoring of Staten Island pursuant to the conservation easement. The court ruled in favor of the Defendants and against the Plaintiffs on the remaining causes of action for public nuisance, private nuisance and breach of contract.

On September 3, 2020, WPF appealed the judgment and on October 19, 2020, DWR cross-appealed. WPF appeal argued that DWR should take enforcement action against TNC to require levee improvements and other physical changes to Staten Island. These cases were consolidated with a related appeal of the trial court order designating the prevailing party for purposes of award of costs and attorneys’ fees. Given the cost and uncertainty of further litigation, the parties reached a settlement agreement on December 29, 2022, that specifies a payment by DWR of $3,625,000 to resolve all claims for attorneys’ fees and costs by WPF arising from the actions and that requires the dismissal of WPF’s appeal of the trial court ruling.

On January 24, 2023, DOF approved the settlement payment of $3.7 million from the General Fund, which includes the settlement amount and $75,000 for potential interest. Staff estimates that interest will not accrue if this bill is enacted prior to the 2023-24 fiscal year.

1. California DUI Lawyers Association, et. al v. Department of Motor Vehicles, et. al (Los Angeles County Superior Court, April 15, 2022, No. BC553552). $3.07 million judgment, payable from the General Fund.

This claim involves a state and federal constitutional due process challenge to the administrative hearing process used by the Department of Motor Vehicles (DMV) to consider whether driving privileges should be suspended when a person has been detained or arrested on suspicion of “driving under the influence” (DUI) and registers an excessive blood alcohol level, refuses a chemical test or insists on taking a blood test rather than a breath test. Under these circumstances, the arresting officer or DMV serves the driver with a specified notice suspending driving privileges within 30 days and explains the driver’s right to an adjudicative administrative hearing before the effective date of the suspension if the driver requests a hearing within 10 days. The administrative hearing is referred to as an “administrative per se” (APS) hearing, which is separate and apart from the criminal justice system, and the task of the DMV hearing officer is to determine whether the arresting officer had reasonable cause to believe the person was driving, the person was lawfully arrested and the person refused a blood alcohol test or was driving with a blood alcohol concentration of 0.08% or higher. If the hearing officer determines that the evidence establishes these facts, the license will be administratively suspended, but if the three conditions are not satisfied, any pending or actual administrative order will be set aside.

On August 1, 2014, the California DUI Lawyers Association and Steven Mandel (Plaintiffs) filed a complaint in California Superior Court alleging the DMV’s APS hearing system deprives Plaintiffs’ clients of the procedural due process rights under both the U.S. and California Constitutions. The complaint is based upon the allegation that the APS hearing officers are not impartial because they often serve in other capacities at DMV that are subordinate to DMV management, and that APS decisions to set aside a driver’s license suspension are subject to ex parte review, criticism and reversal by DMV management. The Plaintiffs complaint further alleges that payment of managers to review the set asides of administrative suspensions and speaking to hearing officers about the substance of their decisions constitutes an illegal expenditure of public funds. The superior court granted summary adjudication in favor of the Plaintiffs on violations of due process rights under the California Constitution and for illegal expenditure of public funds, but ruled against the Plaintiffs on the cause of action regarding due process rights under the U.S. Constitution. On December 13, 2022, however, the district court of appeal reversed the judgment and entered a new order granting summary judgment on all counts in favor of Plaintiffs, permanently enjoined the DMV from maintaining an APS hearing structure that violates due process rights, as specified, and ordered the DMV to pay Plaintiffs for their attorneys’ fees and costs, plus specified interest.

On February 10, 2023, DOF approved the payment of approximately $3.07 million from the General Fund for the judgment for attorneys’ fees and costs, plus specified interest. Staff notes that, pursuant to the final judgment, a portion of the attorneys’ fees and costs are currently accruing interest, but interest on other parts of the judgment will not begin accruing until June 12, 2023.

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

 THIRD READING  

Bill No: SB 383

Author: Portantino (D)

Amended: 4/12/23

Vote: 27 - Urgency

SENATE APPROPRIATIONS COMMITTEE: 7-0, 4/10/23

AYES: Portantino, Jones, Ashby, Bradford, Seyarto, Wahab, Wiener

SUBJECT: Claims against the state: appropriation

SOURCE: Author

DIGEST:

This bill appropriates $6.773 million from the General Fund to the Department of Justice (DOJ) for the payment of two 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.

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 judgment and legal settlement:

1. Wetlands Preservation Foundation v. Department of Water Resources, et. al (San Joaquin County Superior Court, July 9, 2020, No. STK-CV-UVM-2018-8957). $3.7 million settlement, payable from the General Fund.

This claim involves the management of public resources, including the conditions for protecting Staten Island in the Sacramento-San Joaquin River Delta, as specified in a conservation easement held by the Department of Water Resources (DWR) on land owned by The Nature Conservancy (TNC). As part of the agreement to purchase Staten Island with state bond funding, TNC is the property owner and recorded a permanent conservation easement to DWR with the specified intent to preserve agricultural lands, protect wildlife habitat, protect a floodplain area from potential inappropriate and incompatible development, and potentially have a role in future flood management and water improvement activities. The TNC is responsible for managing the day-to-day operations on Staten Island, and DWR prepares annual reports of its monitoring of TNC’s compliance with the conservation easement.

On July 23, 2018, the Wetlands Preservation Foundation (WPF, Plaintiffs) filed a petition for writ of mandate and complaint for injunctive relief against DWR and TNC (Defendants) in the Superior Court of San Joaquin County on July 23, 2018, and an amended complaint on October 9, 2018, alleging destruction of public trust natural resources, public nuisance, private nuisance, and breach of contract. The court issued a final judgment on August 18, 2020 in favor of WPF and against DWR for destruction of public trust natural resources and issued a writ of mandate commanding DWR to conduct a baseline study or evaluation of Staten Island such that it is capable of exercising its discretion in its oversight and monitoring of Staten Island pursuant to the conservation easement. The court ruled in favor of the Defendants and against the Plaintiffs on the remaining causes of action for public nuisance, private nuisance, and breach of contract. On September 3, 2020, WPF appealed the judgment and on October 19, 2020, DWR cross-appealed. The WPF appeal argued that DWR should take enforcement action against the TNC to require levee improvements and other physical changes to Staten Island. These cases were consolidated with a related appeal of the trial court order designating the prevailing party for purposes of award of costs and attorneys’ fees. Given the cost and uncertainty of further litigation, the parties reached a settlement agreement on December 29, 2022 that specifies a payment by DWR of $3,625,000 to resolve all claims for attorneys’ fees and costs by WPF arising from the actions, and requires the dismissal of WPF’s appeal of the trial court ruling.

On January 24, 2023, the DOF approved the settlement payment of $3.7 million from the General Fund, which includes the settlement amount and $75,000 for potential interest. Staff estimates that interest will not accrue if this bill is enacted prior to the 2023-24 fiscal year.

1. California DUI Lawyers Association, et. al v. Department of Motor Vehicles, et. al (Los Angeles County Superior Court, April 15, 2022, No. BC553552). $3.073 million judgment, payable from the General Fund.

This claim involves a state and federal constitutional due process challenge to the administrative hearing process used by the Department of Motor Vehicles (DMV) to consider whether driving privileges should be suspended when a person has been detained or arrested on suspicion of “Driving Under the Influence” (DUI) and registers and excessive blood alcohol level, refuses a chemical test, or insists on taking a blood test rather than a breath test. Under these circumstances, the arresting officer or DMV serves the driver with a specified notice suspending driving privileges within 30 days and explaining the driver’s right to an adjudicative administrative hearing before the effective date of the suspension if the driver requests a hearing within 10 days. The administrative hearing is referred to as an “Administrative Per Se” (APS) hearing, which is separate and apart from the criminal justice system, and the task of the DMV Hearing Officer is to determine whether the arresting officer had reasonable cause to believe the person was driving, the driver was lawfully arrested, and the person refused a blood alcohol test or was driving with a blood alcohol concentration of 0.08% or higher. If the Hearing Officer determines that the evidence establishes these facts, the license will be administratively suspended, but if the three conditions are not satisfied, any pending or actual administrative order will be set aside.

On August 1, 2014, the California DUI Lawyers Association and Steven Mandel (Plaintiffs) filed a complaint in California Superior Court alleging the DMV’s APS hearing system deprives Plaintiffs’ clients of the procedural due process rights under both the U.S. and California Constitutions. The complaint is based upon the allegation that the APS Hearing Officers are not impartial because they often serve in other capacities at DMV that are subordinate to DMV management, and that APS decisions to set aside a driver’s license suspension are subject to ex parte review, criticism, and reversal by DMV management. The Plaintiffs complaint further alleges that payment of managers to review the set asides of administrative suspensions and speaking to Hearing Officers about the substance of their decisions constitutes an illegal expenditure of public funds. The Superior Court granted summary adjudication in favor of the Plaintiffs on violations of due process rights under the California Constitution and for illegal expenditure of public funds, but ruled against the Plaintiffs on the cause of action regarding due process rights under the U.S. Constitution. On December 13, 2022, however, the District Court of Appeal reversed the judgment and entered a new order granting summary judgment on all counts in favor of Plaintiffs, permanently enjoined DMV from maintaining an APS hearing structure that violates due process rights, as specified, and ordered DMV to pay Plaintiffs for their attorneys’ fees and costs, plus interest.

On February 10, 2023, the DOF approved the payment of $3.073 million from the General Fund for the judgment for attorneys’ fees and costs, plus specified interest. Staff notes that, pursuant to the final judgment, a portion of the attorneys’ fees and costs are currently accruing interest, but interest on other parts of the judgment will not begin accruing until June 12, 2023.

Related/Prior Legislation

SB 1355 (Portantino, Chapter 74, Statutes of 2022), an urgency measure, appropriated $8.8 million from the General Fund to DOJ for the payment of two specified claims against the state.

SB 1358 (Portantino, Chapter 426, Statutes of 2022), an urgency measure, appropriated approximately $2.9 million from the General Fund to DOJ for the payment of a specified claim against the state, and also appropriated $247 from the Motor Vehicle Account to the Department of General Services for the payment of a specified state claim under the Government Claims Program.

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

According to the Senate Appropriations Committee:

• One-time General Fund appropriation of $3.7 million in 2022-23 to DOJ to pay the settlement arising from Wetlands Preservation Foundation v. Department of Water Resources, et. al (San Joaquin County Superior Court, July 9, 2020, No. STK-CV-UVM-2018-8957).
• One-time General Fund appropriation of $3.073 million in 2022-23 to DOJ to pay the judgment arising from California DUI Lawyers Association, et. al v. Department of Motor Vehicles, et. al (Los Angeles County Superior Court, April 15, 2022, No. BC553552)

SUPPORT: (Verified 4/11/23)

None received

OPPOSITION: (Verified 4/11/23)

None received

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

4/12/23 14:04:19

**** END ****

SENATE COMMITTEE ON

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

SB 383 (Portantino) - 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 383, an urgency measure, would appropriate approximately $6.8 million from the General Fund to the Department of Justice (DOJ) for the payment of two 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 $3.7 million in 2022-23 to DOJ to pay the settlement arising from Wetlands Preservation Foundation v. Department of Water Resources, et. al (San Joaquin County Superior Court, July 9, 2020, No. STK-CV-UVM-2018-8957).
  
• One-time General Fund appropriation of $3,072,677.21 in 2022-23 to pay the judgment arising from California DUI Lawyers Association, et. al v. Department of Motor Vehicles, et. al (Los Angeles County Superior Court, April 15, 2022, No. BC553552).

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 383, an urgency measure, would appropriate approximately $6.8 million from the General Fund to pay the following settlements:

1. Wetlands Preservation Foundation v. Department of Water Resources, et. al (San Joaquin County Superior Court, July 9, 2020, No. STK-CV-UVM-2018-8957). $3.7 million settlement, payable from the General Fund.
   
   This claim involves the management of public resources, including the conditions for protecting Staten Island in the Sacramento-San Joaquin River Delta, as specified in a conservation easement held by the Department of Water Resources (DWR) on land owned by The Nature Conservancy (TNC). As part of the agreement to purchase Staten Island with state bond funding, TNC is the property owner and recorded a permanent conservation easement to DWR with the specified intent to preserve agricultural lands, protect wildlife habitat, protect a floodplain area from potential inappropriate and incompatible development, and potentially have a role in future flood management and water improvement activities. The TNC is responsible for managing the day-to-day operations on Staten Island, and DWR prepares annual reports of its monitoring of TNC’s compliance with the conservation easement.
   
   On July 23, 2018, the Wetlands Preservation Foundation (WPF, Plaintiffs) filed a petition for writ of mandate and complaint for injunctive relief against DWR and TNC (Defendants) in the Superior Court of San Joaquin County on July 23, 2018, and an amended complaint on October 9, 2018, alleging destruction of public trust natural resources, public nuisance, private nuisance, and breach of contract. The court issued a final judgment on August 18, 2020 in favor of WPF and against DWR for destruction of public trust natural resources and issued a writ of mandate commanding DWR to conduct a baseline study or evaluation of Staten Island such that it is capable of exercising its discretion in its oversight and monitoring of Staten Island pursuant to the conservation easement. The court ruled in favor of the Defendants and against the Plaintiffs on the remaining causes of action for public nuisance, private nuisance, and breach of contract. On September 3, 2020, WPF appealed the judgment and on October 19, 2020, DWR cross-appealed. The WPF appeal argued that DWR should take enforcement action against the TNC to require levee improvements and other physical changes to Staten Island. These cases were consolidated with a related appeal of the trial court order designating the prevailing party for purposes of award of costs and attorneys’ fees. Given the cost and uncertainty of further litigation, the parties reached a settlement agreement on December 29, 2022 that specifies a payment by DWR of $3,625,000 to resolve all claims for attorneys’ fees and costs by WPF arising from the actions, and requires the dismissal of WPF’s appeal of the trial court ruling.
   
   On January 24, 2023, the Department of Finance approved the settlement payment of $3.7 million from the General Fund, which includes the settlement amount and $75,000 for potential interest. Staff estimates that interest will not accrue if this bill is enacted prior to the 2023-24 fiscal year.
   
2. California DUI Lawyers Association, et. al v. Department of Motor Vehicles, et. al (Los Angeles County Superior Court, April 15, 2022, No. BC553552). $3,072,677.21 judgment, payable from the General Fund.
   
   This claim involves a state and federal constitutional due process challenge to the administrative hearing process used by the Department of Motor Vehicles (DMV) to consider whether driving privileges should be suspended when a person has been detained or arrested on suspicion of “Driving Under the Influence” (DUI) and registers and excessive blood alcohol level, refuses a chemical test, or insists on taking a blood test rather than a breath test. Under these circumstances, the arresting officer or DMV serves the driver with a specified notice suspending driving privileges within 30 days and explaining the driver’s right to an adjudicative administrative hearing before the effective date of the suspension if the driver requests a hearing within 10 days. The administrative hearing is referred to as an “Administrative Per Se” (APS) hearing, which is separate and apart from the criminal justice system, and the task of the DMV Hearing Officer is to determine whether the arresting officer had reasonable cause to believe the person was driving, the driver was lawfully arrested, and the person refused a blood alcohol test or was driving with a blood alcohol concentration of 0.08% or higher. If the Hearing Officer determines that the evidence establishes these facts, the license will be administratively suspended, but if the three conditions are not satisfied, any pending or actual administrative order will be set aside.
   
   On August 1, 2014, the California DUI Lawyers Association and Steven Mandel (Plaintiffs) filed a complaint in California Superior Court alleging the DMV’s APS hearing system deprives Plaintiffs’ clients of the procedural due process rights under both the U.S. and California Constitutions. The complaint is based upon the allegation that the APS Hearing Officers are not impartial because they often serve in other capacities at DMV that are subordinate to DMV management, and that APS decisions to set aside a driver’s license suspension are subject to ex parte review, criticism, and reversal by DMV management. The Plaintiffs complaint further alleges that payment of managers to review the set asides of administrative suspensions and speaking to Hearing Officers about the substance of their decisions constitutes an illegal expenditure of public funds. The Superior Court granted summary adjudication in favor of the Plaintiffs on violations of due process rights under the California Constitution and for illegal expenditure of public funds, but ruled against the Plaintiffs on the cause of action regarding due process rights under the U.S. Constitution. On December 13, 2022, however, the District Court of Appeal reversed the judgment and entered a new order granting summary judgment on all counts in favor of Plaintiffs, permanently enjoined DMV from maintaining an APS hearing structure that violates due process rights, as specified, and ordered DMV to pay Plaintiffs for their attorneys’ fees and costs, plus specified interest.
   
   On February 10, 2023, the Department of Finance approved the payment of approximately $3.07 million from the General Fund for the judgment for attorneys’ fees and costs, plus specified interest. Staff notes that, pursuant to the final judgment, a portion of the attorneys’ fees and costs are currently accruing interest, but interest on other parts of the judgment will not begin accruing until June 12, 2023.

Related Legislation:

SB 1355 (Portantino), Chap. 74/2022, an urgency measure, appropriated $8.8 million from the General Fund to DOJ for the payment of two specified claims against the state.

SB 1358 (Portantino), Chap. 426/2022, an urgency measure, appropriated approximately $2.9 million from the General Fund to DOJ for the payment of a specified claim against the state, and also appropriated $247 from the Motor Vehicle Account to the Department of General Services for the payment of a state claim for the reissuance of a stale dated warrant (expired check) under the Government Claims Program.

Proposed Author Amendments:

Correct a drafting error and revise the amount of the claim against the DMV to $3,073,000 to match the amount requested by DOF. Staff notes that any amounts appropriated in excess of the amount required to satisfy the claim will revert to the General Fund.

-- END --