I see you have the Calgov2002 in as a keyword !
I will add the things for the bumplist!
calgov2002:
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Posted on 06/17/2002 12:08:15 PM PDT by John Jorsett
SACRAMENTO – The legal bills continue to pile up as Gov. Gray Davis tries to extricate himself from an embarrassing quagmire of his own making.
Davis is counting on a state appeals court to spare taxpayers from an $88.5 million award to attorneys who helped secure smog-fee refunds of $300 plus interest for more than 1 million motorists.
The state has paid outside counsel more than $500,000 to contest an arbitration panel's decision in favor of the attorneys, who include representatives of some of San Diego's most prominent law firms.
Davis insisted on submitting the question of legal fees to binding arbitration. A large share of the award, which was supposed to be kept confidential, would go to Milberg Weiss Bershad Hynes & Lerach. The San Diego firm and one of its partners, Bill Lerach, have been generous campaign donors to Davis and other Democrats.
When the panel's decision was exposed, an embarrassed Davis decided to challenge it in court. Legal fees already have eclipsed a half-million dollars as the case approaches a July 15 hearing.
Now the expensive debate is bubbling back to the surface at a time when Davis is grappling with a $23.6 billion budget deficit.
To close the gap, the governor proposes to slash services, double the state's vehicle license fee and go on a borrowing spree.
The appeal is a risk Davis had to take, administration officials say. If the award stands, it will add that much more to the state's financial woes.
Administration officials say private counsel hired to pursue the appeal will be a bargain if the state can wrangle a more favorable settlement.
"We've already seen a victory in Superior Court. It was a home run for the taxpayers," said Hilary McLean, a Davis spokeswoman.
The $500,000 could add $10 to monthly aid checks for every blind person in San Diego County, provide health insurance for 17,000 working poor or spare deep cuts to a program that helps victims of domestic violence.
McLean defended the decision to bring in outside counsel instead of relying on the Attorney General's Office.
"This is a specialized area of law and a unique case challenging the arbitration system," she said.
A smog-fee refund account created in 2001 has helped the state cover some other bills.
Slightly more than 1 million motorists received smog-fee refunds averaging $390 as of April 30. The state believes 1.7 million motorists could qualify.
Taking advantage of the smaller-than-expected response, Davis shifted $214 million, or one-third of the original allocation, back to the general fund. About $58 million remains to cover refunds for tardy motorists who have a year left to apply.
The governor's new budget proposal does not include any money for the disputed legal fees.
"We don't expect to pay it," said Sandy Harrison, a spokesman for the Department of Finance.
But the state probably will have to write a check of some size, if not $88.5 million. In the early stages of the case, a Court of Appeal awarded the firms $18 million. Another state agency offered to pay $1 million.
It was a similar fiscal crisis that got the state into this jam. Facing a huge deficit, lawmakers in 1990 enacted a smog impact fee on cars being registered in California for the first time. In doing so, they ignored warnings from their own attorneys who said the fee wouldn't hold up in court.
The state's attorneys were right. A Court of Appeal tossed out the fee in 1999 and Davis decided not to appeal. The Legislature expanded the pool of eligible motorists and set aside $665 million.
During the Capitol debate, San Diego attorney Leonard Simon asked legislative leaders to guarantee the firms $18 million, according to court documents. The figure was based on the appellate court's original ruling that $365 million should be repaid to a smaller pool of motorists.
Simon warned lawmakers in a confidential memo that the firms would seek "substantially more" in "further litigation" unless they agreed to $18 million.
In response, Davis and lawmakers struck a deal with the firms, delegating that decision to a confidential binding arbitration. (Sacramento County Superior Court Judge Joe Gray later described the $88.5 million as a reward for "lobbying, not lawyering.") "We chose not to set a fee and not to limit the authority of arbitrators," Senate President John Burton, D-San Francisco, said in a declaration.
Lerach said in his declaration that "we agreed there would be no floor and no ceiling." The three-member arbitration panel, chaired by retired state Supreme Court Justice Malcolm Lucas, unanimously ruled that the law firms were entitled to 13.3 percent of the $665 million set aside by lawmakers.
The panel reconsidered after protests from Davis and others, but only Lucas backed away in a 2-1 vote to uphold the $88.5 million award. It's generally thought to be the largest such arbitration award against the state.
All parties agreed to keep the $88.5 million award secret. When word leaked out, the Davis administration initially defended the decision.
A few days later, Davis moved to contain the political damage. He branded the decision "excessive by any reasonable standard" and ordered an appeal. He won Round 1 in a lower court.
Meanwhile, the state's legal bill could soar. The attorneys have demanded interest that is adding about $1 million every six weeks, according to the attorneys' figures.
In addition to Lerach's firm, the other San Diego law firms involved are Sullivan Hill Lewin Rez & Engel and Blumenthal Ostroff & Markham.
A very interesting mental image! Actually, it seems quite appropriate.
I see you have the Calgov2002 in as a keyword !
I will add the things for the bumplist!
calgov2002:
|
calgov2002: for old calgov2002 articles. calgov2002: for new calgov2002 articles. Other Bump Lists at: Free Republic Bump List Register |
Is Davis really this stupid or does he have help....?
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