sr-032310-13eItem i3-E
March 23, 2010
March 3, 2010
Senator Mark Desaulnier
Chair, Senate Budget Subcommittee 4
State Capital, Room 5019
Dear Chairman Desaulnier:
On March 4, your committee will be discussing a budget proposal to change the nature of how
the Department of Justice (DOJ) gets reimbursed for representing client agencies. Currently,
DOJ has a typical "fee, for service" relationship with special fund agencies which get treated as
"billable clients." These agencies either have special funding to pay for litigation, online items in
their budget for litigation. However, the DOJ bills the General Fund for legal services in support
the remaining agencies and departments, including the Coastal Commission, BCDC, State Lands
Commission, the Delta Protection Commission, Department of Corrections and others.
As we understand the current proposal, the DOJ is seeking authorization to begin billing these
client departments by moving the estimated litigation money for these agencies out of the DOJ
General Fund authorization to a Legal Services Revolving Fund (LSRF). As proposed in the
DOJ BCP, no line items are being added to agency budgets and the money seems to appear as a
lump sum within the LSRF, with no amounts sub-assigned to any of the agencies. The
Commission has significant concerns about the change to billable status and the possible
mechanism of lumping the litigation funds for multiple agencies into one fund. Specifically,
most of the Commission's litigation is in the form of defending Commission decisions. If the
amount in any given year is not be sufficient to cover legal expenses, the Commission would
either have to decide not to defend its decisions, or to request a deficiency appropriation.
Implementation of the Coastal Act requires upholding policies that apply to highly controversial
projects with litigious and well-funded constituencies. As a result, the Commission is sued over
its decisions, both by project applicants, projecf opponents and by violators against whom the
Commission has issued an order. There is no way to anticipate from one year to the next how
many lawsuits may be brought against the Commission, when cases will become most active
(usually not the same year filed) or how long the cases will continue. Although the Commission
has a good track record in court, well-funded litigants often appeal lower court losses to higher
courts, which demands resources regardless of the merits of the appeal. In addition, in order to
pursue any monetary penalties for Coastal Act violations, as provided for in the Coastal Act, the
Commission must pursue those penalties in court. Urilike many other state agencies, the
Commission does not have administrative civil penalty authority, and cannot impose fines even
for minimal amounts without going through expensive litigation. Thus, the Commission and the
AG only pursue the most egregious cases in the courts.
If annual estimates for legal services in any given budget year prove inadequate for the
Commission's needs, the Commission's choices would be:
Not defend the Commission's action
Not bring an enforcement action against an egregious violator
Implement core program reductions to create budget savings to cover the cost of legal
services.
All of these options would result in diminished protections for public trust coastal resources, and
removal of incentive to comply with the law. Further, as currently structured, other agencies
could use a disproportionate shaze of the LSRF, leaving the Commission without adequate
litigation fandmg.
The DOJ's stated justification for this funding shift is that reductions in their legal services
budgefhave resulted in a reduced capacity to defend non-billable clients. As a result, DOJ
represents that they have had to authorize departments to hire outside counsel, resulting in
increased costs to the state. We-would point out that this has not been the case with the Coastal
Commission; we have not asked for, nor has DOJ authorized, the hiring of outside counsel
because of DOJ capacity issues. In addition, our legal counsel and enforcement staff work
closely with the AG to determine which cases to pursue. Because most of the Commission's
litigation is administrative writ litigation, meaning that the record is limited and wide-ranging
discovery such as depositions and document production generally is not allowed, the
Commission's litigation costs are relatively low.
DOJ also argues that the "checks and balances" inherent in their relationship with billable
clients is missing from their relationship with non-billable clients. We have not found that to be
the case. In fact, we work very closely with the. Land Law attorneys to determine which cases to
elevate and/or appeal and how best to conserve legal resources of both agencies.
Lastly, this proposal would create a substantial new case management and oversight workload
for the Commission at a time when our staff resources are at historic and unsustainable levels of
inadequacy.
Robust enforcement and a vigorous defense against outside litigation is the foundation of any
resource protecfion agency. Departments should not be forced to choose which policies to
enforce or which actions to defend. If these non-special fund resource protection agencies are
given a limited legal services budget, coastal protection and water quality will suffer
dramatically, and deparkments will have to choose between upholding the law or cutting
programs.
We respectfully request that your committee consider confining this proposal to the Department
of Corrections, which is where we understand the impetus for change arose. Alternatively, we
believe that if this proposal is applied beyond the Department of Correcfions, the Public Rights
Division be excluded from the transition. The Public Rights Division entails a fundamentally
different aspect of litigation on behalf of the state, as its departments are defending public
interest policy matters. If you are inclined to give this matter further consideration, we would
like to suggest that the other Budget Subcommittees with affected departments be given the
opportunity to review and discuss, with the ability to provide input into your fmal decision.
Thank you for considering the Coastal Commission's concerns on this important matter.
Sincerely,
Sarah Christie
Legislative Director
California Coastal Commission
Cc: Brian Brown, Bryan Ehlers, Rosanna Carvacho, Kealii Bright, Joe Stephenshaw, William
Craven, Dan Chia