Laird walks tightrope with bill to limit financial fallout from sex abuse lawsuits

To start his second term as state senator, John Laird has put his name on more than 30 proposed bills that range from streamlining affordable housing in the coastal zone and placing tighter safety rules on battery storage facilities, to easing post-disaster rebuilds and homeless shelters. 

Yet, none has required Laird to walk such a wobbly tightrope while balancing two unwieldy interests as his attempt to ensure that justice for sexual abuse victims does not bankrupt school districts and other public institutions. 

“It has really been a jigsaw puzzle,” Laird told Lookout over the phone on Wednesday. “It’s politically thankless but we have to do this. It tries to help public entities, but on the other side, there are genuine victims and the last thing you want to do is injure them twice.” 

Formally known as Senate Bill 577, Laird’s proposal attempts to shield public entities — essentially publicly funded or run enterprises such as local governments, school districts and foster systems — from the extraordinary costs of lawsuits that allege sometimes decades-old instances of sexual abuse. Santa Cruz had its own example in December when the Santa Cruz City Schools district agreed to pay $4.5 million to settle two sexual abuse incidents that occurred in the 1980s. 

In April, Los Angeles County saw something of much greater magnitude: a $4 billion settlement for nearly 7,000 claims of child sexual abuse in county-run juvenile facilities and foster homes stretching back to the 1980s. In Carpinteria in Santa Barbara County, the cost of defending a handful of similar lawsuits has forced a school district to trim staff. A settlement in those cases could bankrupt the district or force it into a receivership because, as the San Francisco Chronicle reported, “it won’t be able to compensate the victims while also educating its students.” In January, Berkeley Unified School District agreed to pay $13.5 million to nine women it failed to protect from sexual abuse dating back to 1999. 

The lawsuits all came on the heels of a 2019 state bill, Assembly Bill 218 from former Southern California legislator Lorena Gonzalez, that temporarily expanded the statute of limitations on childhood sexual assault claims to 40 years of age or five years after the discovery of an injury (the previous deadline was the later of 26 years old and three years post discovery of injury). This set off a litigious flood that surprised even the bill’s author, swamping primarily school districts up and down the state. Although lawsuits taking advantage of AB 218 had to be filed by the start of 2023, many are still active. A January report from the state’s Fiscal Crisis and Management Assistance Team estimated that “the dollar value of claims brought to date because of AB 218 is $2-$3 billion for local educational agencies. Other local public agencies’ costs will exceed that value by a multiplier.” 

The cost of these lawsuits has created existential financial implications for school districts. In Santa Cruz, schools spokesperson Sam Rolens said the district has been able to absorb the cost of the lawsuit it settled, but emphasized that all $4.5 million comes out of the same taxpayer-financed general fund that pays for educator salaries, supplies and you-name-it.  

“Any dollar the school district has to pay in litigation costs is money that the community and the state has given us to instruct and support our students,” Rolens told Lookout.

Laird’s bill tries to soften the fiscal shock of a multimillion-dollar — or billion-dollar — settlement and help school districts guard against some of the more spurious lawsuits. The bill is still working its way through Senate committees, but as it stands, SB 577 would give more flexibility to public entities that want to use bonds to help fund the settlements, and allows judges greater discretion to structure an incremental settlement payment rather than a single lump sum. It also proposes an “intercept” program, which would allow the state controller to essentially garnish a school district’s state revenue to incrementally pay off the cost of a settlement. 

The biggest changes, however, would trim the statute of limitations for childhood claims of sexual abuse that occurred before Jan. 1, 2024, to the later of 40 years old or three years — instead of five — after the discovery of a related injury. The bill would also make it more difficult for a public entity to be found liable when a person over 40 years old alleges historic childhood sex abuse. For claims made after April 15, 2025, victims who meet that age threshold would have to prove the school district or other public agency was guilty of gross negligence, a higher standard that implies a severe lack of care or reckless disregard for others. As the law stands today, victims need only prove a public entity committed a wrongful or negligent act. 

Laird told Lookout the bill is his way of mitigating what is expected to be a difficult budget year that will severely limit the state’s ability to give more funding to schools and local governments. 

“Basically, school districts and local governments need money and we don’t have money to give them,” Laird said. “My strategy was to get anything that can help cities and schools and doesn’t require a lot of cash.” 

The bill was popular in the Senate Judiciary Committee, which voted unanimously to advance it, 13-0, on April 22. A hearing is scheduled with the Senate Appropriations Committee on May 12. 

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