Board Reclaims Suit-Settlement Authority

With Orange County paying out greater sums to settle lawsuits, supervisors agreed unanimously Tuesday to take back the authority ceded two decades ago to county executives to approve out-of-court settlements of $50,000 or more.

Orange County is the only urban county in California that has allowed its staff to approve large settlement payouts without approval from the Board of Supervisors, a practice that dates back to the 1970s.

The new policy takes effect Sept. 1.

“Right now, none of us know why we’re settling these cases or if the dollar figures are appropriate,” said Supervisor Todd Spitzer, who brought the issue to the board.

Proposed settlements in workers’ compensation and general liability cases will continue to be reviewed by a committee of county officials. But supervisors decided Tuesday to add the board’s chairman and vice chairman to the committee, and to turn the committee’s decisions into recommendations for board approval when the amount reaches $50,000.

“I believe this is a wise course of action,” Supervisor Tom Wilson said.

Board Chairman Charles V. Smith said the lack of board oversight has been a mistake that “must be corrected.” He said other oversight issues also need to be addressed, including the inability of supervisors to have final authority over some planning decisions.

“We need to be looking into [these issues] and come back to the board with proper legislation,” he said.

A Los Angeles Times review revealed that Orange County has spent more than $12 million in the past six years to settle lawsuits, many involving such sensitive allegations as sexual harassment, police misconduct and civil-rights violations.

In the past fiscal year, Orange County paid more than $1 million in settlements, including a lawsuit alleging excessive force, two civil-rights claims by county employees and three sexual harassment lawsuits filed against former Assistant Sheriff Dennis LaDucer.

None of the settlements came with board approval or oversight.

Adding board approval to the process will allow supervisors to better exercise their fiduciary responsibility to taxpayers and to decide if broader changes in county policies are needed, Spitzer said.

The policy shift brings Orange County in line with every other county in Southern California. Los Angeles County, for example, requires board approval for any settlement of more than $100,000; San Diego County’s board must approve claims for $25,000 or more.

Smith said most cities in Orange County also require council approval of large settlement amounts.

The unanimous vote, however, came as a surprise after two supervisors expressed concerns about the new policy. Supervisor Jim Silva said he wanted to ensure that the county would be able to protect sensitive lawsuit negotiations from being leaked, while Supervisor Cynthia Coad said she was unaware of any problems with the current system.

“One can say that there have been no problems, but on the other hand, how do you know [there’s a problem] if the elected representatives responsible for overseeing taxpayer dollars have never been apprised of these cases,” Spitzer countered.

The committee’s work will continue to be held in closed sessions, and the board’s deliberations also will be conducted behind closed doors, County Counsel Laurence W. Watson said.

Spitzer raised the settlement issue during budget hearings this summer. The county is self-insured up to $10 million, which means that any claims up to that amount are paid from county coffers.

During budget hearings, risk-management officials told supervisors they were looking into obtaining an additional $10-million insurance policy because of increased settlement payouts made in the past year.

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Liability Claims

How select counties in California approve liability claims.

* 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 counsels and risk managers of the counties listed.