Public entities push to curb liability as sex abuse verdicts mount

Two sixth grade boys who had been sexually assaulted by their public-school teacher in the 1990s were among the first to sue as adults 27 years later under a new state law that suspended the statute of limitations in such cases. A Riverside County jury awarded them $135 million in 2023.

Now that big outcome is Exhibit A in a campaign by officials in Los Angeles County, Ventura County and elsewhere to challenge the law and limit their liability as many more cases come to trial and, they contend, the specter of fiscal ruin looms.

They've taken their protest to the Legislature, which will hold a Sacramento hearing on the issue Thursday, and to the state Supreme Court, which is considering a petition for review of the law's constitutionality.

So many plaintiffs took advantage of the law that litigation exploded as sexual abuse victims alleged long-ago misconduct in public entities such as public schools, foster care systems and juvenile detention halls and camps.

"It is not an exaggeration to call the stakes existential for the County," Los Angeles officials wrote to the state Supreme Court in late February, pleading with the justices to find the law unconstitutional.

The officials said Los Angeles County faces lawsuits from more than 7,018 plaintiffs under the law.

"If all these cases were to proceed to verdict, the estimated liability could be in the tens of billions of dollars and bankrupt the County," the filing to the high court said. 

Brian J. Panish, the lawyer who won the $135 million verdict for the Riverside County plaintiffs, responded, "The claims of unconstitutionality have been repeatedly rejected by the courts in California and are just another example of defendants' failure to accept responsibility." 

The case he won, Blair v. Moreno Valley School District, CVR12102718 (Riverside Co. Super. Ct., filed June 7, 2021), is among the verdicts and settlements that "present an ominous warning for public entities," Los Angeles county's attorneys wrote to the Supreme Court. Others include a $102.5 million jury award to two plaintiffs in Santa Clara County; a $35 million award to a single plaintiff in Los Angeles County and another Riverside County case that led to a $25 million settlement.

"Even if a minority of claims against the County produced comparable judgments, the resulting debt would be many billions of dollars over the next few years," said the pleading, prepared by LA County's outside counsel at Miller Barondess LLP.

A representative for the County Counsel said, "Los Angeles County's interest in maintaining its ability to provide essential services to its nearly 10 million residents in no way detracts from its commitment to protect those under its custodial care, especially minors."

The argument is part of a multibillion-dollar showdown between lawyers like Panish who represent childhood sexual assault victims and their opposing counsel on defense.

"In the Blair case the school district admitted they had been negligent in retaining a sexual predator that they were aware of and a teacher who repeatedly abused two young boys and robbed them of their enjoyment of life," emailed Panish of Panish Shea Ravipudi LLP.

"The school district and its insurance company thought they could hoodwink the jury despite the overwhelming evidence of extensive abuse. The jury was not fooled." He said the district rejected a much lower settlement offer before the trial began.

At issue is the Child Victims Act, AB 218, passed in 2019, when state lawmakers opened a three-year lookback window allowing adult survivors of childhood sexual assault to sue over previously time-barred claims. 

Thousands called lawyers to report they'd been victimized in schools, churches and foster care settings. Decades-old childhood sexual assault cases came to crowd court dockets before the lookback window closed at the end of 2022. 

A ruinous surge of damages verdicts and settlements bankrupted Catholic dioceses, tested school districts' liability insurance policy limits and threatened to swamp municipal budgets. Defendant municipalities protest they're hobbled by the difficulty of responding to old allegations. More than 90% of plaintiffs claim abuse prior to 2000, Los Angeles County said, adding that many claimants do not identify their alleged aggressor by name.

On Thursday in Sacramento lawmakers on the Senate Budget Committee will hear a fiscal crisis team report that claims filed to date total more than $6 billion, potentially draining municipal resources and justifying legislative changes. And the committee will hear a sharp clapback from the plaintiffs' bar, which has produced its own counter-report accusing defendant local agencies of seeking to duck accountability for survivors' pain with "a relentless battle against AB 218."

John C. Manly of Manly Stewart & Finaldi APC, which specializes in sexual abuse cases, will defend AB 218 at the hearing. 

"For over 40 years school districts, unsupervised and corrupt joint powers authorities and insurers concealed from parents that thousands of California public school teachers, coaches and school personnel raped and sexually brutalized thousands of California school children," he emailed.

"The school bureaucrats, unions and the JPAs all want to keep this material secret, which will allow the status quo to continue. And as to what I'm going to say at the hearing, let's just say it's not going to be pretty."

It was lawyers like Manly and Panish whom Los Angeles officials had in mind when they complained to the Supreme Court that after AB 218 passed that "plaintiffs' law firms canvassed radio, social media, and other media channels with ads to attract putative plaintiffs. The plaintiffs' bar has much to gain from such litigation, with a typical stake of 40 percent in any recovery."

At the Supreme Court, Ventura County, strongly backed by Los Angeles County, is petitioning for review of an appellate affirmance of AB 218. County of Ventura v. Superior Court (D.A.), S289121 (Ca. S. Ct., filed Feb. 3, 2025).

Foes of AB 218 were encouraged to take their attack to the high court by a strong dissent from the affirmance by Justice Kenneth R. Yegan of the 2d District Court of Appeal. He wrote that there is no way for municipal defendants to effectively respond to cases decades old. The legislative goal of aiding victims is laudable, Yegan said, "but civil litigation contemplates an adversarial process." Because many of the claims are old--he noted delays of 35 years in one claim in his court and 50 years in another--a fair process "is illusory in most of these stale cases."

Because witnesses are often dead or unavailable and perpetrators sometimes unidentified, "There is no practical way for the entities to defend themselves," Yegan concluded, warning that the result will be "financial catastrophe at the local level." County of Ventura v. Superior Court (Victoria Diaz), B341258 (2d Cal. App., op. filed Jan. 23, 2025).

An earlier appellate affirmance of AB 218 that trial courts have relied upon found the law constitutional. West Contra Costa Unified School District v. Superior Court of Contra Costa County, 103 (5th Cal. App. 1243 2024).

But that opinion is problematic because it ignores due process protections for defendant public entities and doesn't adequately consider the state Constitution's gift clause prohibition on giving public funds to private persons, Yegan wrote in urging the Supreme Court to grant the petition for review due to "the seriousness of the issue and magnitude of the cost to the public fisc." 

Ventura County's petition for review and the supporting letter from Los Angeles County are careful to commend AB 218's intent.

"It is beyond dispute that sexual abuse is abhorrent and violative, particularly when committed on children," the Los Angeles County letter says. "The County takes seriously its obligation to investigate and address claims of such detestable misconduct."

Panish said that hardly squares with counties' bid to defang the law. 

"Extending statutes of limitation gives victims of childhood sexual abuse a chance at justice and accountability," he argued. 

"Many survivors take years, even decades to process their trauma and come forward. Abusers and their employers should not escape justice due to procedural time limits. And the revival statute helps identify repeat offenders and prevent further abuse."