Attorneys say the city’s plight mirrors that of Catholic dioceses hit by AB 218 lawsuits—though without the same level of bankruptcy filings.
The City of Santa Monica is weighing a fiscal emergency due to civil sexual abuse payouts, though attorneys say it may not signal broader financial crises for other local governments.
“I think the wave has crested,” said plaintiffs‘ attorney Paul A. Mones. “There will still be some payouts because there are cases still working their way through the courts.”
The “wave” refers to cases filed under AB 218, a 2019 law that created a three–year window (2020-2022) for civil lawsuits over otherwise time–barred sexual abuse claims.
The law is best known for helping push five Catholic dioceses in California to seek Chapter 11 protection. Mones, the founder of Paul Mones PC in Los Angeles, has been involved in diocesan litigation in California and elsewhere. He said the situation for schools and local governments mirrors that of the dioceses, though without the same level of bankruptcy filings.
“This has become a crisis for counties, cities, school districts and special districts,” said Ben Adler, director of public affairs for the California State Association of Counties. “There is just no question at all the insurance market can’t handle all of these claims.”
Adler added that this means insurance costs are rising for all public entities, not just not just the ones facing abuse claims. This can mean cuts to law enforcement, firefighting, and other public services.
The good news for municipalities, Mones said, is that claims had to be filed before the end of 2022—and there is not a huge reservoir of unfiled cases. The bad news is that the lawsuits already filed could continue to play out for another five years, with possible large verdicts or settlements still pending.
Santa Monica’s situation is also unusual. Hundreds of men have come forward to claim that a deceased police department employee abused them in the 1980s and 1990s. Eric Uller killed himself in 2018 after facing criminal charges; he had allegedly spent years trolling for victims while volunteering for a police department nonprofit that operated after–school programs. The number of abuse claims against Uller alone appears to rival the allegations against entire dioceses involving dozens of alleged abusers.
The city had already approved around $230 million in settlements as of two years ago. But the budget implications have continued to reverberate. City leaders have discussed selling a beloved public library and considered other unpopular steps. According to a report prepared for a city council meeting Tuesday, the city still faces up to 180 claims.
The council will debate whether to declare a fiscal emergency. Under California law, this would allow them to take steps like passing an unbalanced budget, imposing layoffs or labor contract changes that would otherwise be prohibited, reducing services or raising taxes. Such a move often precedes Chapter 9 municipal bankruptcies.
When lawmakers were debating AB 218, associations representing local governments and schools warned it could create a fiscal disaster and that they would have difficulty defending themselves against decades–old accusations.
“Counties are often unable to defend themselves in these claims because state law requires the destruction of most juvenile records within five years to ensure confidentiality,” Adler said.
Legislative fiscal committees also echoed this concern, warning of large and unknown costs. These predictions came true—though perhaps not to the extent some feared. Los Angeles County alone faced more than 7,000 lawsuits, many tied to abuse in foster care and probation facilities between the 1980s and 2010s. This summer, the county reached a tentative $4 billion settlement, one of the largest civil payouts in state history.
Leaders in neighboring Ventura County have warned it could face billions in claims. In March, the San Francisco Unified School District settled two cases for $4.5 million. School districts from Oakland to Santa Barbara are also facing claims. Meanwhile, a tight state budget and a wave of federal cuts have increased uncertainty for local governments.
Yet state lawmakers have repeatedly rebuffed efforts to lessen the sting of AB 218. In March, Sen. Ben Allen, D–Santa Monica, introduced a bill that would have raised the standard of proof in AB 218 cases against schools that had not yet been heard in court. It died without getting a vote.
A currently active bill, SB 577 by Sen. John Laird, D–Santa Cruz, would increase certification requirements for these cases and eliminate treble damages for abuse that is covered up.
“There is an evolving sense on the part of the Legislature that there are people we need to take care of,” Mones said. “This whole movement on behalf of abused people was really a form of a civil rights revolution.”
https://www.dailyjournal.com/article/387401-santa-monica-weighs-fiscal-emergency-as-abuse-claims-mirror-dioceses-crises