Legal Pad

Is New Funding Formula Key to Governor's Judicial Happiness?

[Cheryl Miller]

In the quest to answer Governor Jerry Brown's call to make trial court funding more equitable, a group of judges and court executives may have come up with a solution.

The Funding Methodology Subcommittee, a Judicial Council bunch led by Sacramento County Superior Court Judge Laurie Earl, has unveiled a model that purports to link individual court allocations with their workloads, not their historical -- and historically unequal -- funding levels.

The formula is complex and a little wonky, and it still has some holes. It would be phased in through 2018. Bottom line, some-better off courts would lose money under the plan while others that have gone begging would gain. But Earl and her subcommittee colleagues aren't making public yet the full list of winners and losers.

"It's a very, very rough draft, and there's more tweaking to be done," she said Tuesday after briefing the Trial Court Funding Working Group. (That's the panel appointed by the governor and chief justice to analyze the success of 16 years of state funding for courts).

She did say her own court would lose funding under the plan. So would Santa Clara County Superior Court. Courts in Riverside, San Bernardino, Kings, Riverside and Los Angeles would also benefit, at least under the formula's first draft.

In addition to tweaking its model, Earl's group has a formidable sales job ahead of it. Will judges from courts that would lose money still back the plan? Will organized labor?

The group's best hope may be convincing the governor that the funding formula is fair, or at least more fair than the current method. A satisfied governor may be more inclined to retore branch funding, and that should mean more money for everyone. That may be why the proposal seems to have some momentum behind it.

Earl's subcommittee is presenting its model to judges and court executives in private meetings around the state. The Sacramento judge said she expects to make the proposal final before it goes to the Judicial Council in late April.

Trial Court Reserves Still on Negotiating Table

[Cheryl Miller]

Four days before the state constitutional deadline to pass a budget, the spending plan for California's courts remains a murky work in progress. But an Assembly document released Monday may offer a few clues.

The 108-page "plan" the Assembly Budget Committee will consider Tuesday suggests the judicial branch won't escape the $544 million in cuts proposed by the governor. The state's swipe of $240 million in construction funds appears to be a foregone conclusion. The judiciary is also expected to lose another $300 million, but whether it all comes from trial court reserves as the governor proposed was the topic of ongoing negotiations late Monday.

The Assembly's budget plan hints that lawmakers are considering a different formula. One proposal floated around the Capitol Monday called for a 15 percent cut to the Administrative Office of the Courts -- lower than the 30 percent one assemblyman put forward last month. Some $240 million would still be drained from trial court reserves and another $45 million in cuts would be made at the Judicial Council's discretion. Higher appellate filing fees are also on the table.

That could all change by Tuesday's committee meeting. But it's clear that the governor's plan to effectively end trial courts' ability to keep reserves is unpopular with lawmakers. What's less obvious is whether, with so many other cuts in the state budget, the governor's office and legislators have any interest in sparring over the courts' issues.

The Senate Budget Committee is scheduled to meet at 2 p.m. on Tuesday.

 

Chief Justice Calls Out Lawmakers Over AB 1208 Shenanigans

SACRAMENTO – The battle in the state Assembly over AB 1208 may be over, but Chief Justice Tani Cantil-Sakauye isn’t walking away without a few parting shots.

In a speech to court executives and presiding judges last week, the chief justice accused Assembly members of parroting “meritless, false claims” about the Judicial Council and the Administrative Office of the Courts during the AB 1208 floor debate on Jan. 30.

(Here’s the entire 19-minute speech. The AB 1208 discussion starts around the 5:15 mark. The AOC has also released an abridged version of the speech.) 

Cantil-Sakauye also accused Assembly Speaker John Perez, D-Los Angeles, of reneging on pre-vote assurances that members would be allowed “to vote their conscience, that it wouldn’t be the subject of political maneuvering.” The chief justice said she was disturbed to learn that, after only 32 Assembly members voted “aye” on the first roll call, Perez worked the floor to help bill author Charles Calderon find another nine votes to secure AB 1208’s passage.

“It’s one thing to lose an argument based on merit. It’s another thing when the facts are not represented,” Cantil-Sakauye said. The bill, she added, isn’t headed to the Senate “on its own legs.”

In response, Perez spokesman John Vigna would only say “The Chief Justice certainly has an opportunity to present her case to the Senate.”

Maybe the chief justice’s remarks were simply aimed at rallying her troops for the possible fight ahead in the Senate. And only she and the speaker really know what was promised or not promised in terms of pressure on Assembly members.

But on its face, the indignation comes across as a bit naïve, especially when you consider Cantil-Sakauye worked for two years in the Deukmejian administration. Anyone who watched the AB 1208 debate in the Assembly Judiciary Committee last May could see the speaker was behind this bill from the start – and that he was willing to use his political clout to move it. And as for the speaker working votes after the first roll call on AB 1208, that’s the sausage-making process that goes on in the Capitol. Love it or hate it, it happens all the time, particularly on bills that are a tough vote for lawmakers.

Senate President Pro Tem Darrell Steinberg, D-Sacramento, has said he has no immediate plans to send AB 1208 to a committee hearing. In her speech, Cantil-Sakauye said she is grateful for the time-out and the time it gives the branch to focus on the budget. The judiciary, she said, is seeking another $100 million from the state’s general fund, $50 million in “redirections” from within the branch budget, $100 million from trial courts’ reserves “for [their] own needs” plus the $50 million in new fees included in the governor’s spending proposal.

That’s a big wish list from a branch whose leader just poked the Assembly and its leader with a sharp verbal stick.

Judges Can't Accept Gifts. Can Branch?

[Cheryl Miller]

"Under no circumstance shall a judge accept a gift, bequest, or favor if the donor is a party whose interests have come or are reasonably likely to come before the judge."--  Judicial Canon 4D(5)

The California Code of Judicial Ethics is pretty clear about judges eschewing gifts. But what if the gift recipient is not a judge but the whole judicial branch? And what if the gift isn't a tchotchke but a much-needed $20 million?

On Thursday, most Judicial Council members seemed pretty giddy about billionaire Patrick Soon-Shiong's eight-figure offer of cash and services to help install the Court Case Management System. And who could blame them? The state isn't exactly showering the courts with money these days.

No one questioned, at least not publicly, whether such a generous gift (the council is calling it a "grant") might spawn some ethical dilemmas for the branch. Those who quietly put the preliminary deal together insist there are no strings attached. But Soon-Shiong is, by all accounts, a brilliant, wealthy businessman who has a lot of interests -- financial and otherwise. What happens the next time Soon-Shiong or a company of his winds up in court? (Medical device developers never get sued, do they?)

If, as expected, the Judicial Council approves a letter of intent today, branch negotiators will have 12 weeks to draft a final agreement with Soon-Shiong. Presumably, the two parties could hash out conflict concerns then.

The whole issue is reminiscent of California's on-again off-again dalliance with selling state-owned buildings, including the Supreme Court complex, to private investors. Reporters and judges have joked about imagined corporate sponsorships like Justice by Jack-in-the-Box or Coca-Cola Courthouse. Maybe the state's dire budget cuts have infused those whimsies with a little more reality.

The Judicial Council is scheduled to discuss Soon-Shiong's CCMS offer at approximately 11:20 today.

Branch leaders: It's time to gamble on new court funding

[Cheryl Miller]

Three days into the simultaneous conventions of the State Bar and the California Judges Association, the leaders of both groups – plus the visiting chief justice – have synched their talking points.

Their message to Long Beach convention-goers has been clear: The courts’ financial situation is horrible. Next year will be worse unless the governor and lawmakers restore some money. The judicial branch taking an unfair share of state reductions. The branch is not like the DMV or another state agency. It deserves a guaranteed funding source to avoid the annual budget battles.

Such a measure “would embed into our state constitution a mandatory indexing formula designed to fundamentally change how the justice system is funded,” new State Bar President Jon Streeter said.

"We need a new funding mechanism," added David Rubin, the newly minted president of the California Judges Association.

No one was offering specifics. Like who would pony up for an initiative campaign. Or why voters, who have historically ranked courts right down there with prisons in funding importance, would give the judiciary special treatment.

“We feel that the gravity of the problems of the judicial branch is not fully understood,” said Chief Justice Tani Cantil-Sakauye.

Returning the branch’s good friend SAL would help a lot, too, she added. SAL, or state appropriations limit, was an automatic growth factor that boosted trial courts'funding annually without a demonstrated need. From 2000 to 2006 that factor averaged 5.3 percent – a tidy sum that added tens of millions annually. But when the budget crisis hit in 2009, the Legislature revoked the courts’ SAL.

Restoring SAL would be an impressive feat, especially with the governor signaling that the budget is likely to include more spending cuts next year. But Cantil-Sakauye didn’t appear fazed Saturday when she referenced her past as a blackjack dealer in preparing for the fight ahead.

“I always note the wager,” she said, “but I wait and watch for the tell.”.

 

Small Claims Get a Little Bigger

[Cheryl Miller]

Gov. Jerry Brown signed legislation today that will increase small claims court jurisdiction from $7,500 to $10,000 in most cases. The increase, backed by the Judicial Council, is the first in six years.

“For individuals with damages of less than $10,000 justice is difficult to come by, and the usual result is to settle at the jurisdictional limit,” said the bill’s author, Sen. Joe Simitian, D-Palo Alto. “Senate Bill 221 will help close that gap, and provide civil litigants access to a process that is fair, timely and affordable.”

Litigants will still be barred from filing more than two claims above $2,500 a year in small claims court. And until July 2015 the $7,500 cap will remain on bodily injury claims resulting from car accidents. Insurers had raised concerns that the $10,000 limit would stop them from defending their customers -- even as they are contractually obligated to do -- against lawsuits brought in small claims court.

Although some have suggested that increasing the small claims limit will encourage more litigation, statistics from the Administrative Office of the Courts show that the number of small claims filings has dropped by about a third over the last decade. The number of small claims lawsuits remained relatively flat after the last increase in 2005.

The new limit will take effect on Jan. 1.

 

New state budget cuts $150 million more from judiciary

[Cheryl Miller]

The Legislature will consider a revised budget Wednesday that includes $150 million in unallocated cuts to the judicial branch.

Curtis Child, chief lobbyist for the Administrative Office of the Courts, said the hit will “definitely cut deep into court operations” and could lead to a new round of court closures and cutbacks to programs, including courthouse construction and the Court Case Management System.

“These kinds of reductions on top of the $200 million in reductions that were made in spring would be absolutely devastating to the branch,” Child said.

Legislative Democrats have cobbled together a budget that relies almost entirely on cuts, fund shifts and deferred payments after failing to reach a deal with Republicans to put tax extensions on the ballot. Without the tax issue, Democrats can approve most of the budget on a majority vote – without a single “aye” from Republicans.

The budget would also reinstate the sale of 11 state-owned buildings, including the attorney general building in Sacramento and the Supreme Court’s home in the Civic Center Complex. Gov. Jerry Brown canceled the much-criticized sale in February, which led to a lawsuit by the investor group that agreed to buy the buildings.

The Judicial Council has yet to vote on a plan to absorb the $200 million cuts prescribed by the original state budge enacted in March. The Legislature directed the Council to offset most of the cuts with money from construction funds.

The latest round of cuts is sure to be a central theme in Chief Justice Tani Cantil-Sakauye’s State of the Judiciary address to the Legislature on June 30.

 Update: Just before 9:30 p.m., the chief justice issued the following statement in response to the proposed budget cut:

“This budget proposal is devastating and crippling to the judicial branch and to the public it serves. Courts have taken massive reductions over the past few years, and already took $200 million in reductions for next year.

“Courts affect every part of our state’s life — including convicting criminals and freeing the innocent; enhancing public safety; enforcing contracts; providing a forum for resolving business disputes; and protecting children, the elderly, consumers, the environment — in short, protecting the people’s rights.

"With these cuts courts cannot provide these fundamental services or protect the rights of Californians. By marginalizing the courts, California strikes a blow against justice."

 

CCMS Developer Fined for Not Disclosing Lobbying Activities

[Cheryl Miller]

The company that is developing the controversial Court Case Management System has agreed to pay the state $8,000 to settle charges that it failed to properly report two years of lobbying activities.

Deloitte Consulting paid lobbyist Frank Molina $122,500 between Jan. 1, 2008 and Dec. 31, 2009. Deloitte’s contract with Molina called on the lobbyist to file quarterly reporting statements as required by law, according to the Fair Political Practices Commission. But Molina never did and Deloitte never confirmed that he had, the FPPC said.

“The lobbyist had assured Deloitte Consulting that the reports had been timely filed,” Deloitte spokesman Jonathan Gandal said in prepared statement. “Once Deloitte Consulting learned that the reports had not been filed, it filed the reports and terminated its contract with the lobbyist.  We regret that this situation occurred and have instituted rigorous new steps to verify proper future reporting.”

The reports for those two years reflect Deloitte’s efforts to advance the CCMS project as public scrutiny intensified. Disclosures show Molina lobbied state lawmakers, the Administrative Office of the Courts and the Legislature’s Joint Legislative Audit Committee on the benefits of CCMS. JLAC voted in February 2010 to audit the CCMS program; that audit, released in February, raised troubling questions about the project’s management.

In 2008, the company also worked to defeat Assembly Bill 730, legislation that would have barred IT firms found liable for breach of contract from bidding on new public contracts for five years. The bill was aimed squarely at Deloitte, which had developed an allegedly faulty payroll system for the Los Angeles Unified School District. AB 730 died in the state Senate.

The FPPC has proposed fines for three other Molina clients who did not ensure that the lobbyist filed the proper forms with the state. The full commission must still approve the penalties at its April 11 meeting.

Lawmaker Tells Courts Cuts Shouldn't Stop at $200M

[Cheryl Miller]

As if the governor’s plan to whack $200 million from the judiciary’s budget wasn’t bad enough, a Democratic lawmaker suggested Thursday that the branch should look for even more places to ax.

State Sen. Lois Wolk, D-Davis, told branch leaders that $200 million might not be enough given the $25 billion deficit the state is facing. “You ought to do a little bit more, considering the cuts on the table,” Wolk said at a budget subcommittee hearing at the Capitol, where protesters were camped on the steps outside to decry proposals to slash health and human services programs.

The judiciary’s goal, she continued, should be “not to reduce the amount of the [$200 million] allocation but to, in fact, increase that a little bit.”

Justices Turn Governor Away on Sale of State Buildings

[Greg Mitchell]

Gov. Arnold Schwarzenegger's deal to sell 11 state office buildings, including the court complex in San Francisco that houses the state Supreme Court, First District and AOC, won't go through any time soon. Today, the state Supreme Court -- in the form of seven court of appeal justices filling in for the recused Supremes -- turned away Schwarzenegger's request that they undo the Sixth District's decision to hold the sale up to consider a challenge filed by Joseph Cotchett's firm.

Critics contend the deal, which would fill a billion-dollar hole in the budget, is a bad one for taxpayers. They contend it isn't clear who exactly would own the buildings, and where the purchase money would come from, and say the lease payments over the next 20 years will eclipse the sale price.

With today's order, the decision on whether to proceed with the sale may fall to new Gov. Jerry Brown, assuming the Sixth District ultimately clears it and assuming the buyers are still interested in doing the deal once the appeal is concluded.