Brown signs bill to for judges’ back pay lawsuit legal fees

SACRAMENTO -- Gov. Jerry Brown has signed a bill approving legal fees in two cases against the state.

AB 1773 includes $955,000 for legal fees in a highly publicized case involving judges seeking back pay. It also contains $140,000 for plaintiffs' counsel in a complaint against Attorney General Xavier Becerra. That case resulted in a change in state law that clarifies when state agencies can hire counsel besides the attorney general.

The expenditures are part of annual legislation settling claims against the state once they are approved by the state Department of Finance and the Department of Justice.

The bill also approves a $10 million settlement to a bicyclist who became severely disabled after being hit in Sacramento by a state worker driving a state car. Onate v. State Employment Development Department, 00191904 (Sacramento Super. Ct., filed March 28, 2016).

The complaint seeking back pay was filed against then-State Controller John Chiang by Robert M. Mallano just before he retired as the presiding justice of Division One of the Second District Court of Appeal in 2014. Mallano et al. v. Chiang et al., BC533770 (L.A. Super. Ct., filed Jan. 22, 2014). Chiang and the Legislature attempted to freeze the salary and benefits of judges, along with other state workers, between the 2008-09 and 2013-14 fiscal years, during the worst of the financial crisis. Mallano filed a class action on grounds that judge pay was governed by a separate statute which demands mandatory yearly increases.

Los Angeles County Superior Court Judge Elihu M. Berle ruled in Mallano's favor. This was affirmed by the 2nd District Court of Appeals last year. The court rejected the Department of Justice's arguments that the statute created a formula that did not require raises for judges when many other state workers were seeing their take home pay go down.

"Defendants' interpretation is inconsistent with the plain language of the statute," wrote Justice Victoria M. Chavez for the unanimous court. Chavez said the law provided only for salary increases, not decreases. She noted the judges did not seek raises for two fiscal years in which the formula dictated their pay should stay flat.

The case then went back to Berle, who ordered the state to pay $36 million in back pay and benefits, along with $4 million in interest, but no damages. This came out to roughly $16,500 per active judge and $7,200 for each retired judge.

Mallano's legal team was led by Raoul D. Kennedy, of counsel with Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates. Kennedy did not return a call seeking comment.

The other settlement comes from a taxpayer lawsuit arguing several state agencies were violating the law by hiring in-house counsel without statutory authority and the necessary written consent of the state attorney general. Cervantez v. Becerra, RG17848408 (Alameda Super. Ct., filed Feb. 2, 2017).

Plaintiff Gabriell Cervantez was represented by Eduardo G. Roy, the founding partner of Prometheus Partners LLP in San Francisco. Attempts to reach Roy were unsuccessful.

Cervantez agreed to drop his case last year after the Legislature amended a judiciary omnibus bill to clarify the requirements for agencies to hire both in-house and outside counsel besides the Department of Justice. AB 103 enshrines the "Attorney General as counsel for the representation of state agencies and employees in judicial and administrative adjudicative proceedings."

Under the terms of the bill, agencies must "obtain the written consent of the attorney general before employing in-house counsel to represent those agencies in any judicial or administrative adjudicative proceeding and before contracting with outside counsel." The bill also states that agencies can hire in-house counsel for advisory and other purposes.

Incidentally, AB 103 is also one of the laws that has been at issue in the Donald Trump administration's challenge to California's "sanctuary state" policies. Another provision contained in the nearly 35,000-word bill allows the attorney general to inspect federal immigration lockups inside California. U.S. v. California, 18-CN-00490-JAM-KJN (E.D. Cal., filed March 6, 2018).

The $11 million price tag for settlements is fairly typical of what the Legislature approves each year. A similar bill signed last year, SB 535, appropriated $31.5 million to pay the judgment in Mercury Insurance Company v. Jones, 15-00770552 (Orange Super. Ct., Feb. 9, 2015).

That case stemmed from the reversal of a $27.6 million judgment Insurance Commissioner Dave Jones had won against Mercury over alleged illegal rate setting, plus interest.