Board May Take Control of Settlements
Orange County has spent more than $12 million over the last six years to settle lawsuits using an unusual system that bypasses any review or scrutiny from the elected Board of Supervisors.
Unlike all other urban counties in California, Orange County makes these payments without either public notice or approval from the supervisors. Rather, the out-of-court settlements are ratified by a committee of county officials.
That might change next week, when the Board of Supervisors discusses changing procedures to require board approval for large claims settlements.
Supervisor Todd Spitzer is proposing the change, arguing the board needs to review the terms of big-money payouts and better determine whether broader changes in county policy are needed.
“Nowhere else can attorneys settle a lawsuit without their clients’ approval,” Spitzer said. “We, as the representatives of the taxpayers, are the clients.”
Documents show that the settlements run the gamut: $590,000 in the case of a road department driver who struck and killed a pedestrian in 1990; $900,000 in the case of a deputy accidentally shot and killed during a training exercise six years ago; $95,000 in a 1997 case involving a jail inmate allegedly beaten by guards.
Some of the payments dealt with such sensitive issues as sexual harassment and police misconduct, yet none was voted on by supervisors.
All other Southern California counties require board approval for large settlements. Officials say the system works and may at times discourage inflated claims.
“I have heard of judges telling plaintiffs ‘do you really want the [county counsel] to have to go to the board with this?’ as an encouragement to settle for less,” said Nathan Northup, San Diego’s senior deputy county counsel. San Diego’s board must approve settlements larger than $25,000.
“But it is also unlikely that someone with a large claim will settle for less than $25,000 to avoid a board review,” Northup said.
In the last fiscal year, Orange County paid more than $1 million in settlements, including the excessive force claim, two civil rights violation claims filed by county employees (total: $240,000) and three sexual harassment lawsuits against former Assistant Sheriff Dennis LaDucer.
The LaDucer case is shaping up to be one of the largest payouts in Orange County history. Three of five sexual harassment lawsuits filed by female employees of the Sheriff’s Department against the former high-ranking official have been settled for a total of $737,577. With lawyers’ fees, the tab is close to $1 million.
The $12-million committee-approved lawsuit settlements in the last six years represent about a fifth of the $60 million in claims and court judgments paid out by Orange County during this period. The payments ranged from slip-and-fall cases to medical malpractice claims.
The claims committee--which is made up of the county’s chief executive officer, the county counsel and the auditor-controller--approved 45 settlements during the six-year period. None was turned down.
Over the last decade, Orange County has spent more than $111 million in liability judgments and settlements. That’s only a fraction of what a much larger county like Los Angeles spent in the same period, more than $500 million. San Diego County spent about $54 million.
Direct comparisons are impossible because municipalities differ widely in their risk exposure. Most counties could not provide breakdowns of their out-of-court settlements.
*
Spitzer said he has nothing against the officials who now approve settlements, saying they do an “exemplary” job. But he added that he worries the lack of board supervision may create at least the perception that Orange County is not as aggressive in litigating claims.
“It may be that the reputation of San Diego is that you’re in for a dogfight,” he said. “And Orange County is viewed as an easy target. . . . The perception is that a bureaucrat is more quick to settle because he wants to go on to the next case. We are not going to play anybody’s deep pockets.”
A pattern of claims or a large lawsuit against the county may point to endemic problems that need to be addressed with changes in law or funding, Spitzer added.
A slew of accidents involving county automobiles, for example, may mean the county needs better driver training or safer cars.
“If you delegate completely to a committee, some of those issues might not come to the attention of the board, and that is problematic,” added Santa Clara County counsel Ann Ravel, where supervisors review settlements over $50,000.
Orange County officials defend the way they handle claims settlements but stressed that they don’t oppose looking at changes.
Sharon Lightholder, the county’s risk management manager, said the claims committee is made up of experts who are best-equipped to review each case and understand the legal and liability issues involved.
“This is not a math problem, not a scientific question of at what temperature does water boil. It requires a certain amount of technical judgment,” Lightholder said.
She pointed out that the county allocates less money as a percentage of its total budget for liability and other claims than most public entities in the country.
Despite the lack of direct oversight by the board, the county has a good track record of taking corrective measures when a lawsuit exposes problems, Lightholder added.
In light of LaDucer’s case, for example, the county has provided additional sexual harassment training to all its employees, and the Sheriff’s Department implemented a program to increase awareness.
According to Karen Kiddy, the Sheriff’s Department’s human resources manager, all employee evaluations in the department are now accompanied by a discussion of the county’s sexual harassment policy, and complaints can now be taken directly to her.
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Liability Claims
Here is how different counties approve settlements of liability lawsuits. Orange County is the only county in Southern California that does not require Board of Supervisors approval for large settlements.
WHO APPROVES, BY DOLLAR AMOUNT
Orange County
An Administrator: under $50,000
Claims Committee: $50,000
Board of Supervisors: NA
*
Los Angeles County
An Administrator: under $20,000
Claims Committee: between $20,000 and $99,999
Board of Supervisors: $100,000 or more
*
San Diego* County
An Administrator: under $25,000
Claims Committee: NA
Board of Supervisors: $25,000 or more
*
Ventura County
An Administrator: under $50,000
Claims Committee: NA
Board of Supervisors: $50,000 or more
*
San Bernardino County
An Administrator: under $50,000
Claims Committee: NA
Board of Supervisors: $50,000 or more
*
Riverside County
An Administrator: under $50,000
Claims Committee: NA
Board of Supervisors: $50,000
*
Santa Clara County
An Administrator: under $25,000
Claims Committee: between $25,000 and $49,999
Board of Supervisors: $50,000 or more
*
Sacramento** County
An Administrator: under $50,000
Claims Committee: NA
Board of Supervisors: $50,000 or more
*
San Francisco County
An Administrator: under $50,000
Claims Committee: NA
Board of Supervisors: $50,000 or more
NA: Not applicable
*A panel of attorneys from the county counsel’s office reviews claims between $10,000 and $25,000 and lawsuits between $5,000 and $25,000.
**The county executive office has authority to settle multiple party claims of up to $100,000, but up to $50,000 per claimant.
Graphics reporting by DANIEL YI / Los Angeles Times Source: County counsel and risk managers of the counties listed.
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