$40 million approved to pay judges who won lawsuit while money for new judges postponed

SACRAMENTO -- A key California Senate budget subcommittee has approved $40 million to pay a legal judgment to 3,400 active and retired state judges.

The money was included in Gov. Gavin Newsom's annual May budget revision, unveiled last week. Much of the other business of the Legislature has shut down this week as several budget subcommittees, each tasked with a different portion of state government, have been digging into Newsom's proposed spending changes.

The subcommittee, which covers the Department of Justice and the Department of Corrections and Rehabilitation as well as courts, approved the fund without debate on Tuesday. Assuming it is passed by the full Legislature and signed as part of a budget trailer bill, this money will pay off the claims in the case. Mallano v. Chiang, BC533770 (L.A. Super. Ct., filed Jan. 22, 2014).

Robert M. Mallano -- who retired as presiding justice of the 2nd District Court of Appeal, Divsion 1, in 2014 -- led a group of judges who challenged then-Controller John Chiang's decision to attempt to freeze judges' pay and benefits during fiscal years running from 2008 to 2014.

Los Angeles County Superior Court Judge Elihu M. Berle ruled in the judges' favor in 2016, awarding $35 million in damages plus interest. The total award was upheld on appeal in 2017 and finalized after the state Supreme Court declined to hear the case in October. Last year, Gov. Jerry Brown signed a bill approving $955,000 to pay the plaintiffs' attorney fees.

Mallano's side was led by attorneys with Skadden, Arps, Slate, Meagher & Flom LLP in Palo Alto.

The committee, led by Sen. Nancy Skinner, D-Berkeley, also approved a proposed $6.2 million be added to the retirement fund for state judges.

But it also declined to take action on one of the biggest priorities of the judicial branch: Newsom's proposal to fund 25 new judge positions. These would come out of 50 positions approved in a bill signed in 2007; to date, only two of these have been funded.

Newsom proposed to spend $30.4 million to fund new judges and support staff in the 2019-2020 fiscal year, and $36.5 million the year after.

Leah Rose-Goodwin, manager of the Judicial Council's Office of Court Research, testified the new judge positions would be apportioned to courts after September, when the agency expects to finish an update of the workload standards used to evaluate courts. These numbers go into the Judicial Needs Assessment, a report that comes out every two years.

But Anita Lee, principal fiscal & policy analyst with the Legislative Analyst's Office, said same assessment shows some courts have more judges than they need. "They [the Legislature] could consider reallocating judgeships from courts that have more judges than their assessed needs to courts that have less," she said.

The imbalance Lee referred to is a longstanding issue in state courts. It has come about in part because of the Legislature's role in allocating judgeships and the lack of an automatic method for updating the number of judges in each county. This has resulted in fast-growing counties like Riverside and San Bernardino being short of judges while long-established counties in the Bay Area sometimes have more than they officially need.

Skinner opted to hold the item, saying she wanted to get an update from the Judicial Council on workload standards. The deadline to approve the final state budget is June 15.

If the positions are ultimately approved, it could give Newsom a chance to make an early impact on the state's judiciary after predecessor Jerry Brown filled every slot before leaving office. The most recent Judicial Vacancy Report from the Judicial Council shows only 20 open superior court judgeships across the state.