MOORLACH UPDATE — Constitutionally Flawed Legislation — November 5, 2019

CalMatters brings up so many memories of Floor debates.  Topics like the use of video cameras and forcing crisis pregnancy centers to post a sign that abortions are available.  Reporters can use hidden cameras, but others doing investigations cannot? Do Chevrolet dealers have to inform customers that there is a Ford dealer down the street?

I warned that Assemblyman David Chiu’s bill would fail the constitutionality test in court.  It cost taxpayers more than $870,000 for the Attorney General to unsuccessfully defend his bill, in addition to the $2.1 million paid to the successful litigants (see MOORLACH UPDATE — Sacred Votes — May 26, 2019).  The Legislature continues to pursue bills that will meet a similar fate.

Crying about some perceived windfall by the plaintiffs just doesn’t hold water.  As someone who used to bill hourly for my time as a Certified Public Accountant, paying attorney fees is just compensation for the time invested.  If this bothers you, good. Don’t pass and sign legislation that comes with an automatic court case.

As for the selling of body parts, it occurred, resulting in a $7.8 million settlement by the offenders to the Orange County District Attorney two years ago..

25th Anniversary Look Back

It was the calm before the storm, but I had to vent.  So I wrote a rather lengthy editorial submission and faxed it to editorial writer Harold Johnson of the OC Register on October 15, 1994.  The subject title on the transmittal cover sheet was “Financial Maniacs” and here’s what I wrote:

In the genre of “you just don’t realize how bad it really is” comes this lengthy response. Give me your input.  Is this a Sunday editorial? Should I contact “California Political Review”? Do you have suggestions for editing it down in size?  Should we leave it alone (after all, self-fulfilling prophecies aren’t always fun)? Call me at XXX-1040 as these issues will not go away.

I don’t believe I ever heard back from the OC Register‘s editorial board in the weeks that followed.

However, on December 7th, the day after Orange County filed for Chapter 9 bankruptcy, I received a call from Commentary Editor Ken Grubbs, asking me if I would like to submit my thoughts.  I said that I had already prepared a piece almost two months prior. He asked me to fax it to him. So I used the same transmittal cover sheet, changed the date and fax number and added Ken’s name.

It was the lead op-ed, top-of-the-fold, for that Sunday’s Commentary section on December 11th.  I had recommended the title, “Oust the Financial Maniacs,” the OC Register‘s choice was “The Moorlach memo:  a predictable crash.” They also provided this preamble for the piece:

Last June, Costa Mesa accountant John Moorlach, in his losing campaign to unseat then County Treasurer Robert L. Citron, warned that Mr. Citron’s investment practices were risky.  Shortly after the election, still concerned about the county investment strategy, Mr. Moorlach wrote an analysis of the situation.  That analysis — revised in October before the county admitted its investment pool had dropped $1.5 billion in value — appears below.

My piece had 10 sections, so I may provide one section every other day during the month of November.  For the previous LOOK BACK, see MOORLACH UPDATE — Scary Departures — October 31, 2019.

City CAFR Rankings – June 30, 2018

I hope to accompany the Moorlach Memo LOOK BACKS with 10 sections of this year’s rankings of California’s 482 Unrestricted Net Positions per capita for the year ended June 30, 2018.

We are still waiting for the comprehensive annual financial reports (CAFRs) from some 20 cities.  It’s hard to believe that some cities are this delayed in fulfilling their reporting obligation to their residents.I pointed out last year that the city of Compton (#412) had not prepared a CAFR since 2013 (see MOORLACH UPDATE — City CAFR Rankings – Vol. 2 — February 8, 2018).  No wonder Compton was ranked the worst for cities facing fiscal challenges in the recently released list by the California State Auditor, after reviewing the same data for all of California’s cities for the year ended June 30, 2017 (see

How an abortion rights law ended up bankrolling anti-abortion forces in CA



California lawmakers knew the reproductive FACT Act had constitutional issues, but passed it anyway. Now that the U.S. Supreme Court has overturned it, legal penalties have been a windfall for attorneys fighting abortion here and nationally.

In 2015, California Democrats passed a state law aimed at ensuring pregnant women get a complete picture of their options, including the right to an abortion. Little did they know that, four years later, their effort would yield a $2 million windfall for conservative legal campaigns to restrict abortion and LGBTQ rights.

In an irony for the annals of California’s resistance, court documents show that reproductive rights advocates have paid a steep price for the failure of the Freedom, Accountability, Comprehensive Care, and Transparency, or FACT Act, which sought to compel anti-abortion crisis pregnancy centers to disclose their license status and let women know that public family programs provide abortions.

Backed by abortion rights activists and overturned last year by the U.S. Supreme Court on free speech grounds, the law has generated an unintended bounty of attorney’s fees that now help underwrite conservative litigation and lawyers. Among them: the defense of the anti-abortion activist David Daleiden, who clandestinely videotaped Planned Parenthood physicians, and the legal aid group led by one of President Donald Trump’s best-known lawyers, Jay Sekulow.

Assemblyman David Chiu, the law’s author and a lawyer, noted that the FACT Act was upheld by most lower courts, including the U.S. 9th Circuit Court of Appeals, only to be reversed when the five justices appointed by Republican presidents prevailed over the four justices who are Democratic presidential appointees.

“This was constitutional until it wasn’t,” Chiu said.

Kevin Snider of the conservative Pacific Justice Institute of Sacramento countered that he and others who testified against Chiu’s bill told legislators that it would be challenged as a First Amendment violation.

“They failed to heed a warning,” Snider said, “and decided to bow down to abortion rights constituents at taxpayer expense.”

In any case, the consequences of the FACT Act are a far cry from the blue-state retort California Democrats intended in 2015 to Republican-controlled states that were limiting abortions by, for example, mandating waiting periods and counseling for women who wanted the procedure.

Chiu, a San Francisco Democrat, and his co-author, Democratic Assemblywoman Autumn Burke of Los Angeles, had — at the urging of NARAL Pro-Choice America, a national abortion rights league — taken aim at so-called “crisis pregnancy” centers. Typically staffed by religious-based abortion opponents, the centers advertise to women searching for information on unwanted pregnancies and abortion, but then seek to steer them into carrying their pregnancies to term by, for example, insisting they view ultrasound images of their fetuses.

Chiu wanted to compel unlicensed crisis pregnancy centers to post signs making clear they provided no medical care. Centers with medical licenses, meanwhile, were to be required to post signs that read:

“California has public programs that provide immediate free or low-cost access to comprehensive family planning services (including all FDA-approved methods of contraception), prenatal care, and abortion for eligible women.”

Lawmakers knew the bill raised First Amendment issues. Government cannot pass laws that infringe on speech. Nor can government compel speech, though there are exceptions, as the Assembly Judiciary Committee staff made clear in its analysis.

“It is well-settled law,” the committee staffers wrote in 2015, “that the government is ‘free to prevent the dissemination of commercial speech that is false, deceptive, or misleading’ without violating the First Amendment.”

Opponents included the National Institute of Family & Life Advocates, a Virginia organization that “exists to protect life-affirming pregnancy centers that empower abortion-vulnerable women and families to choose life for their unborn children.”

“Forcing speech is not the solution,” NIFLA, which operates more than 100 crisis pregnancy centers in California, said in its letter against the bill.

The debate was not a new one in the country’s forever war over abortion. But the bill became a bullseye when that war turned especially hot in the summer of 2015.

Daleiden, a young anti-abortion activist from the college town of Davis, had lied to gain entry to abortion conferences and surreptitiously videotaped conversations which he then edited and released, saying the tapes depicted Planned Parenthood selling fetal “body parts.” They didn’t. But Daleiden’s tapes became fodder for presidential debates, congressional inquiry, and, ultimately, part of Republican lawmakers’ talking points in Sacramento as they tried to derail Chiu’s legislation.

“Now, we’re finding out that maybe a strong motivation for abortion is not to help someone in need, … but it is maybe to harvest. Maybe there has been a huge conflict of interest and the nation is waking up to it,” Sen. John Moorlach, an Orange County Republican, said in his Senate floor speech opposing the legislation.

Sen. Richard Pan, a Sacramento Democrat and a pediatrician, responded by pointing out that the sale of fetal tissue is illegal: “If someone is doing that, they should be prosecuted.”

The bill passed on a party line vote and was signed into law by Gov. Jerry Brown.

Lawyers representing crisis pregnancy centers quickly sued. The state won in most lower courts and on appeal.

But in a 5-4 decision authored by Justice Clarence Thomas, the high court in June 2018 sided with the religious organizations, concluding in National Institute of Family and Life Advocates vs. Attorney General Xavier Becerra that the state could not compel them to post signs that violated their religious beliefs.

The decision reverberated beyond crisis pregnancy centers. Democrats who had been pushing to ban so-called gay conversion therapy abandoned the effort, seeing little chance that the legislation would withstand a legal challenge, given the precedent established in NIFLA v. Becerra.

The decision also had dollar signs attached to it.

Under longstanding federal law, the victors in suits to enforce basic rights such as free speech are entitled to attorneys fees. Court documents, most of which were obtained by the San Francisco-based First Amendment Coalition, a government accountability nonprofit, and shared with CalMatters, show that the 2018 decision resulted in a gusher for the advocates who challenged Chiu’s law.

Some $2.03 million was spread among five conservative organizations:

  • Alliance Defending Freedom of Arizona, $958,535. Its lawyers were among the lead counsel in the NIFLA case. Lately, the alliance has been defending a Trump administration rule that would open the way for federal grants to religious-based groups that refuse to help gay and lesbian couples adopt.
  • Liberty Counsel of Florida, $399,999. The legal aid group also is defending Trump’s new adoption rule.
  • American Center for Law & Justice of Washington, DC., $247,748. It fashions itself as a conservative version of of the American Civil Liberties Union. Its chief counsel, Sekulow, is a chief lawyer for President Trump.
  • Pacific Justice Institute of Sacramento, $244,475. Chief counsel Snider proudly notes that the Southern Poverty Law Center calls his organization a “anti-LGBT hate group.” As Snider sees it, he defends religious organizations whose teachings are at odds with gay rights.
  • The Scharpen Foundation of Riverside County, $172,613. Founder Scott Scharpen is a board member of Alliance Defending Freedom, and his foundation sued the state over the law. It operates Go Mobile for Life, a traveling center based in a van in Riverside County that offers “limited” ultrasound and “abortion facts — procedures, emotional, mental, spiritual, & physical risks.” Go Mobile for Life says its “unwavering goal” is that women carry their pregnancies to term.

Daleiden, now 30, also appears to be among the beneficiaries of the decision. He has spent much of the past two months in the San Francisco courtroom of U.S. District Judge William Orrick, surrounded by a legal team of no fewer than 16 lawyers and paralegals, all working free of charge, as lawyers representing Planned Parenthood press their suit alleging that he illegally video-taped physicians for the nonprofit, which supports reproductive rights.

Lawyers representing Daleiden and his co-defendants come from three of the organizations that received payments as a result of the litigation over Chiu’s bill — the Alliance Defending Freedom, Liberty Counsel and the American Center for Law & Justice.

Daleiden and his co-defendant, Sandra Merritt, also face criminal charges brought by Becerra, and are represented by many of the same attorneys. Among their defense arguments is that they were citizen journalists working undercover to expose what they saw as crimes.

Payments of attorneys’ fees are a regular part of the court system. The state often collects fees when it prevails.

Despite the millions paid to abortion opponents in the settlement struck earlier this year by deputies to Becerra, Chiu believes the FACT Act was “a fight worth having.”

“Access to reproductive health care is under attack,” Chiu said. “These fake health centers threaten the health of women. We shouldn’t put a price on that.”

This story was made possible with information obtained by The First Amendment Coalition, a San Francisco-based nonprofit focused on government transparency and accountability. The coalition, which was not involved in the NIFLA case or litigation, regularly uses the California Public Records Act to keep the public informed the actions of government agencies.


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