The deadliest fire in California history is still raging, and there still hundreds of people unaccounted for in this ongoing tragedy. In addition to earning that moniker, the Camp Fire is also “the most destructive in California history … 8,817 structures have been destroyed, including 7,600 homes.”

Like the fires in 2017, Pacific Gas & Electric (PG&E) appears to be the focus of the finger pointing. There’s already talk of lawsuits directed at PG&E – should they be the ones found responsible for the Camp Fire. California State Senator Jerry Hill is in the camp of those who believe PG&E is to blame, telling Politico, “The main culprit here is the spark, and what cause the spark. … Here, PG&E reported a break in their line where the Camp Fire started. It looks like there’s a causal relationship there.”

Politico is further reporting that Sen. Hill is “having a number of conversations” about introducing legislation in the 2019-2020 session that would create a statewide publicly owned utility company – a la SMUD here in Sacramento – as an alternative to investor owned utility like PG&E.

Sen. Hill is a well-known antagonist of PG&E, so his stance is not surprising. And it also needs repeating the Cal Fire is still investigating the cause of the Camp Fire, so it could very well mean that PG&E is not responsible this time.

However, if PG&E is found responsible for the Camp Fire, things could get very expensive for the utility very quickly. That’s because SB 901 – last year’s grand compromise on wildfire liability – allows utilities like PG&E to pass on the cost of lawsuits to ratepayers for 2017’s wildfires and for wildfires sparked after Jan. 1, 2019, leaving PG&E shareholders on the hook for the Camp Fire it be determined PG&E was liable. Should that be the case, I would not be surprised if PG&E sponsored legislation in 2019 in an attempt to shift costs of the Camp Fire from shareholders and on to ratepayers.

Looking ahead – between potential lawsuits, the cost of lobbying, and dealing with unbridled rage of Northern Californians who have lost their loved ones, their homes, and their possessions – it is increasingly looking like PG&E will have hell to pay in the near future.

Election Day (Tuesday, November 6) is just 4 days away, which means it is crunch time for those who haven’t finished making up their minds on the races up and down the ballot as well as the ballot initiatives facing voters in this midterm election.

If you want to learn more about some of the candidate races, you can refer back to our series on what California’s Constitutional Officers actually do, or you can revisit some of Chris Micheli’s post comparing the powers of the Governor and the US President.

As for the ballot initiatives, McGeorge recently had it’s California Initiative Review forum where students analyzed the initiatives and presented their objective and non-partisan analysis to the public. We recently posted a brief analysis of the propositions here on CAP⋅impact, but if you want a more in depth analysis of the initiatives, feel free to check out The CAP⋅impact Podcast where we’ve been posting the audio for the Initiative Review – including audience questions. The audio from the two sections of the California Initiative Review are below, and you’ll find the third and final audio segment in the podcast’s feed on Monday.

Lastly, if you’re not sure where your polling place is, there is a handy Find Your Polling Place tool on the Secretary of State’s website that will tell you where you need to go to vote on November 6.

California Initiative Review – Part 1: Bond Measures

California Initiative Review – Part 2: Taxes & Time

The consumer litigation finance industry in the state of New York is currently unregulated. The industry is not new, it has been around for about two decades, but it is starting to gain increased scrutiny. Companies in the industry help litigants make ends meet while they wait for settlements to be paid out, and only collect on their loan if the litigant is successful. However, there are reports of these companies charging interest rates of as high as 124 percent on those loans.

New York’s state legislature is considering legislation to regulate the industry with S. 3911 and A. 8966. S. 3911 would define consumer litigation financing agreements as those where the amount of funding is no more than $500,000. It also puts in place other restrictions, including a cap on charges of 16% of the funded amount.

  1. 8966 is largely similar, but notably does not define consumer litigation financing agreements as those where the funding amount is less than $500,000. It focuses much more on the details of the contracts but leaves the definition of what a consumer litigation financing agreement much more open than its Senate counterpart.

Maya Steinitz, Professor of Law at the University of Iowa College of Law and Visiting Professor of Law at Harvard Law School offered testimony on May 16, 2018 at the New York State Senate Committee on Consumer Protection regarding these two bills. Her testimony specifically focused on consumer litigation financing. Professor Steinitz notes areas in these proposed new regulations that can be improved upon to make the legislation more effective at protecting consumers.

She even notes that S. 3911 is going in the “correct direction” by exempting “contracts offering non-recourse financing of more than $500,000 from its scope.” This is a step in the right direction “in the sense that the Senate bill attempts to focus its protection on those individuals who are less sophisticated litigants.” While the exemption for contracts financing over $500,000 is a step in the right direction, it’s an “imperfect way to capture the difference between different kinds of litigation finance consumers.” Borrowing from the field of securities regulations – which distinguishes between unsophisticated and sophisticated investors she suggests “protecting ‘unsophisticated plaintiffs’” and advises “amending sections 2 and 4 of the Senate bill to read … “‘Consumer litigation funding company’ shall mean a person or entity that enters into a consumer litigation funding contract to provide non-recourse funding to an unsophisticated plaintiff” and “‘Consumer litigation funding contract’ shall mean a contract to provide non-recourse funding to an unsophisticated plaintiff.”” Essentially, to best protect consumers, she argues that the legislature create separate classes of litigants and that the regulations protect those who need the most protecting.

Another concern that Professor Steinitz expressed to the Committee was that “the combination of the compensation of the third part litigation funders and the attorneys’ contingency fees would, separately or combined, leave the wronged or injured plaintiffs without meaningful recovery and remediation.” Her suggestion to address this would be to have “the statute directly guarantee a minimum return to the plaintiff.

She further elaborates that the legislation “should ensure a minimum recovery of no less than 50%, barring extraordinary circumstances, to the plaintiff.” This would necessitate defining “Net Recovery” in statute, and she suggests that the definition of Net Recovery be “the total amount awarded to the consumer less the disbursements of the litigation–including filing fees, transcript costs, expert witness fees, and similar expenses—advanced by the attorney. The charges of the consumer litigation finance company and any attorneys’ fees shall not be included in the calculation of the Net Recovery.”

Both the Assembly and Senate bills are still under review, and Steinitz’s suggested amendments have not yet been added to either piece of legislation. However, it is not unlikely that the bills will undergo further amendment as they progress through New York’s legislature, and Steinitz’s suggestions may still be added.

As I discussed yesterday in my post “How California Municipalities are experimenting with voting,” cumulative voting is an electoral process in which voters have a number of votes equal to the number of seats to be elected. For example, if in an election there were three seats up for election, voters would have three votes that they could cast however they chose to – all for one candidate, or divided among multiple candidates. I also discussed yesterday that Mission Viejo is potentially going to be the first California city to adopt this electoral process. This sets up the obvious question, why adopt a new-to-California voting system?

The Southwest Voter Registration Education Project (SVREP) recently filed suit against Mission Viejo. Again, one asks why? Well, about one in five residents of Mission Viejo is Latinx, however for over a decade the city council has had no Latinx representation. The California Voting Rights Act prohibits district-based voting that would impair a protected class from appropriate representation. Specifically stated the CVRA was designed with “legislative intent to eliminate minority vote dilution.”

After a study, public hearings, and analysis by the city and SVREP, the city maintained their district-based voting. SVREP responded to the decision to maintain district-based voting with a lawsuit. The claim was that Mission Viejo’s district-based voting was a violation of the California Voting Rights Act.

The litigation ended with a settlement plan. SVREP and the City of Mission Viejo agreed that the district-based voting was to be replaced with the cumulative voting system. The city also agreed to put all five council seats up for election every four years. This means that every voter in Mission Viejo will have five votes to use however they wish, including casting all five votes for the same candidate in every city council election.

“If they can get 20 percent of voters to cast all of their votes for that one candidate, well then, they ought to have a voice,” SVREP’s attorney Kevin Shenkman said.

 

 

 

San Francisco has had a lively debate over their Ranked Choice Voting policy since its inception. Ranked choice voting (RCV) is where voters rank candidates by preference on their ballots. A candidate who wins the majority of first-choice votes is declared the winner. If no candidate wins on first-choice, the candidate with the fewest is eliminated and the second-choice on the eliminated candidate becomes first-choice for the remaining candidates. This is repeated until a candidate has won the majority of first-choice votes. Complicated? Maybe it’s easier to show you:

Candidate 1 has 450 votes or 40% of the votes

Candidate 2 has 300 votes or 26.67% of the votes

Candidate 3 has 200 votes or 17.78% of the votes

Candidate 4 has 175 votes 15.56% of the votes

Candidate 1 has a plurality, but not a majority. Rather than have Candidates 1 and 2 run head to head against each other in another election Candidate 4 is eliminated and the voters who selected them will now have their second-choice votes counted as first-choice. Assuming 75% of Candidate 4’s voters have Candidate 1 as their second choice and 25% have Candidate 2 as their second choice. When Candidate 4’s votes are redistributed, the outcome is:

Candidate 1 now has 582 votes or 51.73% of the votes

Candidate 2 now has 343 votes of 30.48% of the votes

Candidate 3 now has 200 votes or 17.78% of the votes

Candidate 1 now has a majority and is elected.

But this voting system can also get tricky. What if all of Candidate 4’s voters had Candidate 2 as their second choice? The result would instead look like this:

Candidate 1 has 450 votes, or 40% of the votes.

Candidate 2 has 475 votes, or 42.22% of the votes.

Candidate 3 has 200 votes, or 17.78% of the votes.

In this scenario, since neither Candidates 1 nor 2 have a majority. Candidate 3 is eliminated and their votes are redistributed based on who they have as their second choice candidate. And depending on how that breaks down, Candidate 1 – who led after the first round of votes were counted – could win or Candidate 2 – who led after the second round of votes were counted – could win.

California only has four cities that use ranked choice voting– San Francisco, Oakland, San Leandro, and Berkeley.

But now, another debate has been added to the mix. San Francisco city officials are recommending that instead of only having 3 ranked-choice selections, voters can select up to 10 candidates. The limitation of 3 ranked-choice selections was due to voting machine restrictions, but now San Francisco will have new ballots and machines that can be used as soon as the November 2019 election.

But ranked voting isn’t the only unconventional voting system in California, for long… Mission Viejo announced on July 27 that starting in 2020, it will put a cumulative voting structure in place. Mission Viejo would be the first city in California to implement this voting system.

For example, assume three of Missions Viejo’s City Council seats are up for election and there are five candidates running for those three seats. A voter in Mission Viejo would have three votes – one for each open City Council position – that they could cast however they choose. That could mean casing all three votes for one candidate, two votes for one candidate and one for another, or one vote for three different candidates.

Cumulative Voting is a method of election in which voters have a number of votes equal to the number of seats to be elected. Voters can assign as many of their votes to a particular candidate or candidates as they wish. Most commonly, it has been used to resolve voting rights cases for city council, county commission, and school board elections.

The difference between ranked choice voting and cumulative voting is this- in ranked choice voting – like traditional voting in California and the rest of the US – one candidate can receive a maximum of one vote from a voter. Cumulative voting, however, allows a voter as many votes for a candidate (or candidates) as there are opening seats.

The U.S. Senate is considering two pieces of legislation that would increase protections for Special Counsel Robert Mueller should they become law. The two bills, S. 1735 by Senators Graham (R – South Carolina) and Booker (D – New Jersey) and S. 1741 by Senators Tillis (R – North Carolina) and Coons (D – Delaware), approach this goal in two different ways. Both add a provision that a special counsel can only be fired for “good cause.”

S. 1735 requires that before a special counsel can be fired, the Attorney General must first file an action with the United States District Court for the District of Columbia and the House and Senate Judiciary Committees contemporaneously. Further, a three-judge panel must hear the action, and the special counsel can then only be removed if the court issues “an order finding misconduct, dereliction of duty, incapacity, conflict of interest, or other good cause, including violation of policies of the Department of Justice.”

S. 1741 reverses that process while keeping the standard for removing a special counsel the same. So instead of the Attorney General going to Congress and the court first, the Attorney General instead first informs the special counsel in writing the reason for the removal. After that, the removed special counsel “may file an action with paragraph (2) that the removal was in violation of this section” and that action must be heard within 14 days by a three judge panel. If the panel determines the special counsel’s removal violates the requirements in the bill, they would get their job back. Interestingly, S. 1741 is retroactive to May 17, 2017 – when Robert Mueller was appointed special counsel.

The last action either of these bills saw was at a September 26, 2017 hearing in the Senate Judiciary Committee, at which Akhil Reed Amar – Sterling Professor of Law and Political Science at Yale University – pointed out serious constitutional flaws in the bills, and proposed a way to achieve the goal of the bills without inviting constitutional challenges.

Invoking Edmond v US, Professor Amar points out that “the Court declared that an inferior officer must truly be … inferior (!) and must in general answer to some superior officer. … At present, a special counsel such as Robert Mueller is inferior (and thus constitutionally kosher) precisely because he can be fired at will  – surely by the AG, and probably also by the President” in his testimony to the committee.

Put another way, in what Amar calls “The Inferior-Means-Inferior Principle”:

Special counsels are not confirmed by the Senate; thus they are only permitted if inferior. But these bills aim to make them independent. One simply cannot both be truly independent and truly inferior. A truly inferior officer must have a superior officer within his own branch to whom he answers and who can countermand or remove him if the superior loses confidence in the inferior.”

This is just one of multiple examples that Amar cites in his argument as to why S. 1735 and S. 1741 fail to pass constitutional muster. He proposes, instead, that the Senate “revise its committee structure to create a new and powerful Standing Committee on Presidential Oversight.”

The committee he envisions “should at all times have an equal number of Republicans and Democrats regardless of which party controls the Senate as a whole” where “the Republican caucus should choose the Democratic members of Presidential Oversight Committee and the Senate Democratic caucus should choose the Republican members.” Further, “each committee caucus should by rules and traditions be given broad authority to insist on hearings; each Committee caucus, if unanimous or if backed by at least one senator from across the aisle for each caucus defector, should itself have subpoena power. This Committee should also have a generous budget to hire professional career prosecutors and investigators, akin to career staff attorneys in the Justice Department itself” and “this new Senate Oversight Committee should at all times be chaired by a member of the party opposite to that of the US President.”

As stated before, nothing has happened with either bill since last September, so it is yet to be seen if Professor Amar’s concerns and ideas appear in amended legislation.

Yesterday was the deadline for ballot initiatives that had qualified for the ballot – that is, they received the requisite number of signatures – to be pulled from November’s ballot. In fact, three initiatives were withdrawn from the ballot for this November.

The three initiatives that Californians will not be voting on come November are an initiative pushed by paint companies like Sherwin-Williams and ConAgra that “would have blunted a state appeals court ruling that made the companies liable for the cleanup” of lead pain in homes according to Liam Dillon of the Los Angeles Times. The initiative would’ve blunted that appeals court ruling by shifting the financial burden to taxpayers.

An initiative pushed by Bay Area real estate developer Alastair Mactaggart that would have vastly expanded consumer protections related to their data online was pulled after a deal was worked out between Mactaggart and legislators. The compromise legislation, according the New York Times creates “one of the most significant regulations overseeing the data-collection practices of companies in the United States,” granting “consumers the right to know what information companies are collecting about them, why they are collecting that data, and with whom they are sharing it.” The new protections go into effect in January 2020.

The third initiative that was pulled was one that would have required local governments to specify how new revenues raised were going to be spent, and also increased the vote requirement for new revenue measures – read: new taxes – to be a two-thirds supermajority. That initiative, which was backed by the beverage industry, was pulled from the ballot “in exchange for a ban on new soda taxes until 2031.”

That leaves 12 measures on the ballot for voters to decide on. Ben Christopher at CALmatters pulled together an excellent summary of the initiatives, which you can find here. And as a quick overview, voters will be faced with two repeal measures – one to repeal the recently passed gas tax and another to repeal the Costa-Hawkins Act which has limited local governments’ ability to enact rent control measures. There will also be four bond measures – water, children’s hospitals, affordable housing, and supportive housing for those suffering from mental illnesses. The other seven initiatives include:

  • A change to Prop. 13 allowing “older or disabled homeowners to take their lowered property tax base with them when they move,”
  • An initiative to split California into three states, an expansion of 2008’s Proposition 2,
  • A carve-out allowing private ambulance services to require their EMTs to remain on call during meal and rest breaks
  • Ending daylight savings time in California, and
  • Requiring companies that run dialysis clinics “to pay back insurers profits over 15 percent of qualifying business costs.”

As I mentioned before in my post about the repeal of Costa-Hawkins, there is a lot of money to be spent this election cycle. That will be one of the big fights, along with the gas tax repeal and the dialysis clinics initiative. Governor Brown has already voiced his opposition to the gas tax repeal via Twitter. I would not be surprised if he spends a good portion of his nearly $15 million war chest on defeating the repeal. The dialysis initiative has well-heeled groups on both side of it as well, with the SEIU-UHW on the proponent side, and DaVita – a company that netted $1 billion last year – fighting the initiative off.

Earlier today, Professor Leslie Gielow Jacobs – Director of the Capital Center for Law & Policy at McGeorge School of Law – offered her reaction to Justice Kennedy’s announcement that he will be retiring from the Supreme Court of the United States, effective July 31, 2018. She gave her thoughts on the Capital Public Radio program Insight with Beth Ruyak. You can find some excerpts from her conversation with Beth below, and you can find the entirety of their conversation here.

On the space Justice Kennedy occupied on the Court:

“I have a fond place in my heart for what we call ‘swing justices.’ That is, if you’re the person in the middle, you’re certainly looking very, very carefully at the facts of each case the circumstances. That might cause you to go one way or another and you’re not as strict, maybe, ideologically one way or the other.”

On which cases will be Justice Kennedy’s legacy:

“Gay marriage is the biggest change. He was the one who came on to the Court and began writing these opinions and he was always assigned the majority opinion in that area of interpreting the Constitution, and the Equal Protection Clause, and gay rights. His influence there is profound. … If I had to choose a legacy, it’d be the gay rights cases.”

On things to look for in the next nominee for the Supreme Court:

“I would predict the next Justice would be late forties, early fifties.”

 

 

 

The Role of the Judicial Branch in the Legislative Process (transcript)

Today’s podcast is on the role of the judicial branch in the lawmaking process here in California. Members of the state and federal judiciary branches play a role in California lawmaking in the actual legislative process, as part of our state government system of checks and balances. When California statutes or regulations are legally challenged, for example, then the state or federal court that makes a determination establishes a public policy for the state.

Of course, California statutes and regulations may be challenged on either federal or state constitutional grounds. As a result, both state and federal courts may play a role in the state lawmaking process. In addition to these legal challenges, both federal and state courts may be called upon to interpret California statutes or regulations.

Statutory interpretation is a primary role of the judicial branch of government in the state lawmaking process. In fact, courts are regularly called upon to interpret state statutes and regulations, sometimes to the dismay of elected officials in the executive or legislative branches of government.
This third branch of government does play a crucial role in the lawmaking process when the courts determine what the legislative intent was of a statute, or whether a regulation comports with the Administrative Procedure Act, or whether a statute or regulation is constitutional. This, of course, is the most critical role of the judicial branch in the state lawmaking process.

Occasionally, the California Legislature passes a law that does not comport with the state or federal constitutions. Despite claims by judges that they leave lawmaking to the elected branches of government, when judges modify statutes or issue a determination of how a statute or regulation is to be interpreted and applied, then judges do, to some degree, become a critical part of the state policy making process.

Hence, from my perspective, all three branches of state government do, in fact, play a role in the development of state public policy.

 

 

 

The Role of State Agencies in Policy Making (transcript)

Today’s podcast is about state agencies and their role in public policy development. California’s agencies – including departments, board, and commissions – engage in a fair amount of public policy making through both their rule making authority, as well as their interpretation and enforcement of existing statutes and regulations.

These state agencies are the ones who generally run the day-to-day operations of state government, and they’re charged with implementing the statutes adopted by the Legislature and signed into law by the Governor. With over 200 of these agencies in California state government, there are many state agencies that do policy development by adopting regulations and implementing statutes. They can also engage in policy making when issuing guidelines, legal opinions, management memos, and other sorts of written documents wherein they interpret and implement laws and regulations.

Generally speaking, the authority of state agencies to adopt policy through their rule making process is defined and often restricted by state statute. These statutes usually prescribe each agency’s authority to adopt policy. And of course, it’s an established principle of administrative law that an agency cannot go beyond its legally prescribed authority to regulate. On the other hand, many statutes confer broad powers to some state agencies regarding matters that directly affect the public generally. The regulations and administrative practices of these agencies often affect millions of Californians in their daily lives.

It’s important to understand the rule making process and the role of state agencies in conducting rule making. One interesting phenomenon is that businesses cannot rely in good faith upon the written determinations issued by state agencies. State agencies’ written interpretation is often not given significant legal weight by a reviewing court. In other words, despite being charged with interpreting, implementing, and enforcing California statutes and regulations, individuals and businesses that obtain written guidelines from state agencies have little to no protection from legal liability if they follow that written guidance.