[00:00:00] Speaker 02:
Good morning, your honors.

[00:00:02] Speaker 02:
Good morning.

[00:00:02] Speaker 02:
May it please the court, Deputy Attorney General Randy Zach, on behalf of Defendants Appellants.

[00:00:06] Speaker 04:
Counsel, before you begin, I just want to make certain.

[00:00:09] Speaker 04:
Has the stay motion been renewed before the mayor's panel?

[00:00:16] Speaker 02:
Yes, your honor.

[00:00:17] Speaker 02:
This panel granted that motion in a one sentence.

[00:00:20] Speaker 04:
Oh, OK.

[00:00:21] Speaker 04:
So the state motion is in effect.

[00:00:22] Speaker 02:
That's correct.

[00:00:23] Speaker 04:
The state is in effect.

[00:00:25] Speaker 02:
I confused you.

[00:00:28] Speaker 02:
I'm sorry.

[00:00:28] Speaker 02:
You did confuse me, but I'll try to get back on track.

[00:00:32] Speaker 02:
I'm going to try to reserve five minutes for rebuttal, but I'll see how well I do.

[00:00:37] Speaker 02:
Defendants' tremendous efforts over the last 25 years have resulted in California inmates

[00:00:43] Speaker 02:
having better access to mental health providers than California's general adult population.

[00:00:48] Speaker 04:
Well, Counsel, the reason for that is the state has taken them into custody.

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And so once the state takes someone into custody, they have the responsibility for them.

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You don't have the responsibility for the general populace.

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But because you've taken them into custody, then that imposes upon you the obligation to meet their constitutional needs.

[00:01:06] Speaker 04:
You don't have that obligation for the general populace, but you do have that for the people you've

[00:01:13] Speaker 04:
incarcerated.

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Defendants do not disagree with that.

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Defendants are not trying to shirk their duties to provide 8th Amendment adequate health care, mental health care, by any means.

[00:01:26] Speaker 02:
But that isn't the only reason California inmates have better access to mental health care supplies.

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The reason is because defendants have made great strides since the early 1995 judgment.

[00:01:36] Speaker 01:
Let's stipulate that's right.

[00:01:39] Speaker 01:
Let's stipulate the state certainly tried to do some things and spent some money

[00:01:43] Speaker 01:
But do you contend that the state actually complied with the district court's orders?

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And specifically, do you challenge the determination by the district court that they did not comply?

[00:02:00] Speaker 02:
with the 10% vacancy rate.

[00:02:01] Speaker 01:
OK, so if that's the case, then it really gets down to what the defenses might be.

[00:02:05] Speaker 01:
Impossibility is one of them.

[00:02:08] Speaker 01:
Let's start with that.

[00:02:09] Speaker 01:
Sure.

[00:02:09] Speaker 01:
Does impossibility require absolute impossibility, or is it just what might be reasonable?

[00:02:16] Speaker 01:
What's the standard we look at here?

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In our view, the standard is it doesn't require literal impossibility.

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And I think Falstaff teaches that in two ways.

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One is Falstaff says for impossibility, you have to weigh all the evidence.

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And if it was literal impossibility, all of the evidence wouldn't matter.

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Only the one fact that made it impossible would matter.

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So in Falstaff, for example, that would be was the document actually destroyed or was it outside of their possession in some manner.

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That's not what Falstaff did.

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looked at all the, all the evidence, including the party's attempt to find the documents and its counsel's attempt to find the documents, and said, based on all of that evidence, we think it's impossible.

[00:03:01] Speaker 01:
Okay, so, you know, I get your, I know I have a tough issue here, but, so, this has been going on forever, but we're talking here about a 2017 order, all kinds of

[00:03:16] Speaker 01:
pushes and shoves and trying to get people to comply.

[00:03:19] Speaker 01:
And finally, the judge just says, you know, I'm putting you on notice here.

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I'm done with this.

[00:03:24] Speaker 01:
I need you to comply.

[00:03:26] Speaker 01:
And you did some things, but you didn't do all, and you've conceded that.

[00:03:30] Speaker 01:
So what I'm struggling with here is we've got an order by the judge who's trying to get you to fully comply with the order.

[00:03:39] Speaker 01:
Let's assume, hypothetically, the order was one, two, three, four, five, six, seven, eight, nine, 10.

[00:03:44] Speaker 01:
And you say, hey, we complied with eight.

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The judge says, no, no, you've got to do it 9 and 10 as well.

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What's your best argument that under applicable law complying with 8 but not 10 in my hypothetical is enough?

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So I think I want to clarify just one concession.

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Dependents do not concede that

[00:04:07] Speaker 01:
They didn't take all reasonable steps, which is a separate- I understand that, but what I thought you said was you didn't take all that the judge ordered you to do.

[00:04:15] Speaker 01:
You said you took all reasonable steps.

[00:04:17] Speaker 01:
That's different.

[00:04:17] Speaker 01:
Correct.

[00:04:18] Speaker 01:
Okay.

[00:04:18] Speaker 02:
I just wanted to clarify that.

[00:04:19] Speaker 02:
Yeah.

[00:04:19] Speaker 02:
But in terms of impossibility, that's what- In terms of impossibility, and I guess Your Honor's question goes to substantial compliance as well, because I think they do provide context for- Those are two different issues.

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Impossibility, what's your best argument that it was impossible?

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for the state to comply with the order?

[00:04:39] Speaker 02:
Yes, Your Honor.

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And I think it goes back to the contextual and all evidence requirement that Falstaff requires the district court to undertake.

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And that is defendants achieved pretty good, but I agree, not perfect results in the context of a mental health provider shortage, trying to hire at a correctional institution, and with, amongst other things, some of their hands tied behind their back because of the

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program guide and other requirements that make it less attractive to work at CDCR as opposed to other places.

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And this is not unique to CDCR.

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It's not even unique to public institutions.

[00:05:18] Speaker 02:
Private Kaiser and many other private institutions, I think is a well-known fact, cannot hire enough mental health care providers.

[00:05:25] Speaker 02:
And that does not mean, as Your Honor pointed out earlier, that we're trying to shirk our duty.

[00:05:29] Speaker 02:
Oh, I never said that.

[00:05:31] Speaker 02:
I never said that you were trying to shirk your duty.

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I just asked what.

[00:05:34] Speaker 02:
So impossibility, I think, is a contextual analysis.

[00:05:37] Speaker 02:
And I think our defendant's efforts over the past 25 years, because that's how long back the nationwide mental health shortage has been going, plus all of their efforts in the last five years have shown that the task is currently impossible.

[00:05:52] Speaker 04:
Could we talk about some of those efforts?

[00:05:54] Speaker 04:
One of the ones that stood out to me was working conditions.

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That's not something that is beyond the control of the state.

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And there were some references in the record that jail cells were made into offices for the psychologists and psychiatrists.

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There was no heating and air in some of them.

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There were vermin in some of them.

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And so that's something that the state could easily remedy.

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And why wouldn't that be a failure to use reasonable efforts to attract people if you have working conditions that are less than ideal?

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Even if you hire people there, if their working conditions are intolerable, they're not going to stay.

[00:06:47] Speaker 02:
Yes, Your Honor.

[00:06:47] Speaker 02:
And I'm glad you brought up working conditions, because I do think it is a factor.

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I think it's a factor that in some ways are immutable and in other ways perhaps not immutable.

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And no matter what, if you're working for CDCR, you're working at a correctional institution.

[00:07:04] Speaker 02:
And some of those working conditions, none of the ones necessarily you mentioned, but working conditions for a correctional institution are necessarily unchangeable.

[00:07:12] Speaker 04:
What about the ones I mentioned?

[00:07:14] Speaker 04:
Why would a psychologist or a psychiatrist have to work in a jail cell?

[00:07:20] Speaker 02:
I can't speak directly to

[00:07:22] Speaker 02:
why they would or would they not.

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But I do know that CDCR provides substantial salary premiums compared to private institutions and other nationwide and state.

[00:07:31] Speaker 04:
But what does that have to do with the working conditions?

[00:07:33] Speaker 02:
Well, I think salaries is a large factor about where somebody chooses to work.

[00:07:38] Speaker 04:
Working conditions are a large factor as well.

[00:07:41] Speaker 02:
I agree.

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And I think to go back to working conditions, as Your Honor

[00:07:45] Speaker 02:
pointed out other things could have made it easier for CDCR to hire more people like telework and telepsychiatry, but those things were limited by the district court.

[00:07:54] Speaker 02:
Again, tying CDCR's hands behind the back while imposing on it a task that in our view was impossible.

[00:08:02] Speaker 01:
What I struggle with

[00:08:04] Speaker 01:
doctor, and I may be saying her name wrong, Dr. Grulish, I think, was really your primary witness about the labor economy.

[00:08:12] Speaker 01:
She talked about things, talked about things that the state had done.

[00:08:17] Speaker 01:
But clearly and candidly admitted that the state had not done everything that it could do.

[00:08:22] Speaker 01:
Part of it was what my colleague just mentioned in terms of working conditions.

[00:08:27] Speaker 01:
She did not think it was impossible for the state to hire sufficient social workers.

[00:08:33] Speaker 01:
So what do we do with that?

[00:08:34] Speaker 01:
I didn't see anybody besides her that said that compliance with the 2017 order was in quotes impossible.

[00:08:42] Speaker 02:
Yes, Your Honor, so I think a couple of points.

[00:08:43] Speaker 02:
I don't read Dr. Grulich's, maybe it's Dr. Grulich, I'm not sure.

[00:08:47] Speaker 01:
What would call her Dr. G?

[00:08:49] Speaker 01:
Why not?

[00:08:50] Speaker 02:
I'm not sure she'll appreciate that.

[00:08:52] Speaker 02:
I don't read Dr. Grulich's testimony as saying that it is possible to comply, nor do I read her testimony as saying there are other steps that CDCR would have finished.

[00:09:02] Speaker 04:
But is it fair to say she said it's not impossible?

[00:09:05] Speaker 02:
She said that.

[00:09:08] Speaker 02:
It depends, I think is what she said.

[00:09:09] Speaker 02:
She said it's, it is possible certainly for some employers, including CDCR, to hire more employees.

[00:09:16] Speaker 02:
But that doesn't mean it's possible to hire and retain those hundreds of employees that defendants would need in this, CDCR would need in this case to reach that level.

[00:09:25] Speaker 01:
Let's just say, I'm going to cite you to the record here.

[00:09:27] Speaker 01:
What I saw was that she was saying at 5SER 1289 through 90,

[00:09:36] Speaker 01:
and 5 SER 1290 and 91, that it was possible to hire sufficient social workers and medical assistants.

[00:09:44] Speaker 01:
So just take those two, for example.

[00:09:46] Speaker 01:
Nobody else testified about that.

[00:09:47] Speaker 01:
So you've got the state's own witness saying, no, it's not impossible to do this.

[00:09:52] Speaker 01:
You can do that.

[00:09:53] Speaker 01:
What do we do with that?

[00:09:55] Speaker 02:
Sorry about that.

[00:09:56] Speaker 02:
If I remember that testimony correctly, I could go back and grab it.

[00:09:59] Speaker 02:
But my memory of that is that she was saying given

[00:10:03] Speaker 02:
these statistics that plaintiff's counsel gave, which did not take into account the facts that actually mattered in terms of how many social workers were already employed, how many social workers were looking for a job, how many social workers would work at a prison to begin with, how many social workers would work in locations where prisons were located.

[00:10:25] Speaker 02:
So I think Dr. Grulick was testifying about theoretical possibility there.

[00:10:29] Speaker 01:
Well, that's not the way I read it.

[00:10:32] Speaker 01:
I mean, first of all, we're dealing with a specific number, which is the 2017 order set a 10 percent vacancy rate.

[00:10:40] Speaker 01:
The state clearly didn't do that, and that's what Dr. Krulich testified about, if I understand it.

[00:10:46] Speaker 01:
She originally testified about all the things that you had done, and the court acknowledged that.

[00:10:52] Speaker 01:
But then she talked specifically about these things that could be done with respect to social workers and medical assistants and so on.

[00:11:02] Speaker 01:
She also talked about the conditions that my colleague talked about that were easily rectifiable.

[00:11:07] Speaker 01:
And as I understand it, the state seems to concede that's the case.

[00:11:12] Speaker 01:
So what we're dealing with is my example of the you've got eight, but you need 10, according to the district court.

[00:11:19] Speaker 01:
And what do we do with that?

[00:11:20] Speaker 02:
So I did want to get

[00:11:22] Speaker 02:
So I want to maybe take that in two parts if I can.

[00:11:25] Speaker 03:
OK.

[00:11:25] Speaker 02:
The first part is Dr. Grulick was employed by defendants to talk about compensation-related measures.

[00:11:32] Speaker 02:
So she had no knowledge or expertise.

[00:11:35] Speaker 01:
Well, let's say nobody else talked about anything other than her.

[00:11:38] Speaker 02:
I don't think that's true, Your Honor.

[00:11:40] Speaker 02:
Dr. Mehta, one of the defendants here, testified extensively.

[00:11:43] Speaker 02:
And so did other defendants in charge of HR staffing testify during the hearing.

[00:11:48] Speaker 02:
About staffing issues?

[00:11:49] Speaker 02:
About staffing issues, yes, Your Honor.

[00:11:51] Speaker 02:
Um, but then I also want to talk to you because I guess I didn't get to it before the eight out of 10 example.

[00:11:56] Speaker 02:
And I think that really goes to, um, both substantial compliance and impossibility, but we've talked about impossibility kind of extensively at this point.

[00:12:05] Speaker 02:
So I want to focus on substantial compliance and.

[00:12:08] Speaker 04:
What's our standard of review on that?

[00:12:10] Speaker 04:
Whether if the district court made a finding that there was not substantial compliance, what's our standard of review?

[00:12:16] Speaker 02:
If the district court correctly set the full compliance level, then it would be abuse of discretion.

[00:12:22] Speaker 02:
But here, the district court did not correctly set the full compliance level.

[00:12:26] Speaker 02:
And that's because it misinterpreted its prior orders, which said, you have to meet 10%.

[00:12:32] Speaker 02:
And it said, no, those orders, in fact, mean 0%.

[00:12:35] Speaker 02:
And substantial compliance means 10%.

[00:12:37] Speaker 04:
Well, are you saying that you met the 10%?

[00:12:41] Speaker 02:
No, you're right.

[00:12:42] Speaker 04:
Oh, it doesn't matter how she interpreted it.

[00:12:44] Speaker 04:
If you didn't even meet the 10%,

[00:12:46] Speaker 04:
10% that you acknowledge was the standard, it doesn't matter if she changed it, right?

[00:12:53] Speaker 02:
Sorry.

[00:12:55] Speaker 02:
It does matter for the substantial compliance analysis because if full compliance is 10%, as it should have been, and as the course prior order said so.

[00:13:04] Speaker 02:
then substantial compliance must be something less than 10%.

[00:13:07] Speaker 02:
And the district court instead fined defendants for every vacancy below that 10% vacancy.

[00:13:12] Speaker 04:
Well, I think I read the state as saying that the 10% was kind of a grace.

[00:13:19] Speaker 04:
It should be complied with fully, but the 10% she would give you the leeway of 10% would be substantial compliance.

[00:13:26] Speaker 02:
That is not the state's position, that is plaintiff's position.

[00:13:29] Speaker 02:
The state's position was all previous orders, including the ones leading up to the contempt proceedings, said 10% is the full compliance level.

[00:13:38] Speaker 04:
Okay, so where can we go in the record to confirm that 10% would be a complete compliance?

[00:13:46] Speaker 02:
Yes, Your Honor.

[00:13:47] Speaker 02:
We cited numerous orders in the brief.

[00:13:49] Speaker 04:
OK, give me the strongest citation to support the argument that 10% vacancy rate would be full compliance.

[00:13:57] Speaker 02:
Yes, Your Honor.

[00:13:58] Speaker 02:
Volume 7, ER 1451.

[00:14:00] Speaker 02:
ER 1451?

[00:14:01] Speaker 04:
That's correct, Your Honor.

[00:14:04] Speaker 02:
OK.

[00:14:04] Speaker 02:
And that was the original 2002 order saying 10% is compliance.

[00:14:09] Speaker 02:
And it says, defendants must maintain the vacancy at a maximum of 10%.

[00:14:14] Speaker 02:
And it doesn't say anything about substantial compliance.

[00:14:16] Speaker 02:
It doesn't say anything about 0%.

[00:14:18] Speaker 02:
And then that same 2002 order setting the 10% level is repeated and quoted in later orders by the district.

[00:14:24] Speaker 04:
Okay.

[00:14:25] Speaker 04:
So in your view, if the 10% vacancy is full compliance, what would be substantial compliance in your view?

[00:14:34] Speaker 02:
So in our view, substantial compliance could be what defendants have done here, which is

[00:14:40] Speaker 02:
achieve or nearly achieve that full compliance level?

[00:14:42] Speaker 04:
Well, what nearly achieved wouldn't be it.

[00:14:44] Speaker 04:
If you say 10% is what the court said is full compliance, then if you had, so in my view, the state is saying we had full compliance for some jobs at some periods of time.

[00:15:01] Speaker 04:
Is that correct?

[00:15:02] Speaker 02:
I think that is one of the things substantial compliance looks at.

[00:15:07] Speaker 02:
Yes, the state did not fully comply for all the years as necessary.

[00:15:11] Speaker 04:
For any of the years that the state fully complied?

[00:15:14] Speaker 02:
We got the state in 2021.

[00:15:15] Speaker 04:
That's a yes or no.

[00:15:17] Speaker 04:
For any of the years did the state fully comply?

[00:15:20] Speaker 02:
No, Your Honor, not that I'm aware.

[00:15:21] Speaker 02:
There might have been, you know, one or two months, but not.

[00:15:24] Speaker 01:
I want to be sure we don't let this concept of substantial compliance take control here, because I think you're relying upon Chairs versus Burgess, which is an 11th Circuit opinion, which I would argue is perhaps overturned by the Supreme Court's opinion in Turner, but our own

[00:15:39] Speaker 01:
in case law, in file staff, in affordable media, in hook and so on, suggests that impossibility means it's not physically possible.

[00:15:48] Speaker 01:
You couldn't do it.

[00:15:50] Speaker 01:
And that's not substantial compliance.

[00:15:52] Speaker 01:
And to my colleague's point, 10 percent is 10 percent, and that's not hard to understand.

[00:15:57] Speaker 01:
Either you complied or you didn't comply.

[00:15:59] Speaker 02:
Yes, Your Honor, I think there's two clarifications.

[00:16:02] Speaker 02:
We do cite chairs for impossibility.

[00:16:05] Speaker 02:
We rely on this court's decision in labor community for substantial compliance, and labor community says, you're supposed to holistically look at all the evidence.

[00:16:13] Speaker 02:
And in labor community, full compliance under the consent decree, this court pointed out that was only 9%.

[00:16:21] Speaker 02:
it affirmed the district court's order of finding substantial compliance.

[00:16:24] Speaker 02:
Despite full compliance, only 9% of the time.

[00:16:28] Speaker 02:
But to your honor's question about impossibility, you are correct that we do cite chairs and we also cite foul staff.

[00:16:34] Speaker 02:
And I think foul staff supports defendants here just as much as chairs does.

[00:16:37] Speaker 02:
Because as the dissent pointed out in foul staff, there was no evidence that the documents that needed to be returned had been destroyed.

[00:16:47] Speaker 02:
And the dissent also pointed out

[00:16:49] Speaker 02:
that the district court had at least implicitly made a finding that it was possible to return those documents.

[00:16:53] Speaker 02:
They were somewhere there.

[00:16:55] Speaker 02:
But the majority said no.

[00:16:57] Speaker 02:
That defendants had sufficiently shown impossibility because of the steps they had taken to search for it.

[00:17:04] Speaker 01:
I guess what I struggle with, I mean, I don't question your good faith, you're a good lawyer, but this has been going on for so long.

[00:17:12] Speaker 01:
In this particular case, 2017, what more could the district judge do to get you all to comply other than have this order?

[00:17:22] Speaker 01:
And 10% is 10%, it's pretty easy.

[00:17:25] Speaker 01:
to figure out what is required, and your own people and you in candor concede that technically you did not comply.

[00:17:34] Speaker 01:
You're saying you made substantial efforts, but the question is, is that what's reasonable here?

[00:17:40] Speaker 01:
Is that what we're talking about?

[00:17:43] Speaker 01:
What's your best argument?

[00:17:45] Speaker 01:
Maybe it's chairs, I don't know, but what is your best argument that we should not

[00:17:50] Speaker 01:
take the 2017 10% order at its face.

[00:17:55] Speaker 01:
It's not hard to understand.

[00:17:57] Speaker 01:
You didn't comply with that.

[00:17:58] Speaker 01:
So what do we do with that?

[00:18:00] Speaker 02:
So I think there's a lot baked into that question, but I think our best argument is that

[00:18:06] Speaker 02:
Even if the district court was frustrated by defendant's inability to comply fully with the 10% staffing rate, the district court was not entitled to impose $170 million in fines plus millions more without providing the appropriate due process.

[00:18:21] Speaker 02:
And the appropriate due process here was criminal protections.

[00:18:25] Speaker 02:
Criminal due process protections, including the right to a jury, proof beyond a reasonable doubt, and indeed a willfulness finding, which the district court never made and never gave

[00:18:34] Speaker 04:
What's your best case to support your argument that this case rolls to the level of coronal contempt?

[00:18:44] Speaker 02:
I think Bagwell speaks directly to the facts here.

[00:18:47] Speaker 02:
The district court imposed retrospective fines for actions that defendants took or inactions that defendants took in past months from April 2023 to May 2024, $120 million in fines for actions that defendants can't change.

[00:19:04] Speaker 01:
But basically, if I understand correctly, the parties have agreed on where those monies would go, which is basically to pay for what needed to be done, right?

[00:19:15] Speaker 02:
Defendants were ordered to meet and confer with plaintiff's counsel to determine, like to figure out how to spend these monies.

[00:19:21] Speaker 02:
That's not a concession.

[00:19:22] Speaker 01:
So this is not money that would go to the court for parties and fixing up the building or whatever.

[00:19:27] Speaker 01:
This is to go to the very thing that the court ordered you to do in the first place.

[00:19:34] Speaker 02:
That is correct.

[00:19:36] Speaker 02:
We have some disputes about what those issues are.

[00:19:38] Speaker 02:
But I'd like to talk about perhaps the more important issue, which is just because the court has designated a use for the funds doesn't mean it's not a criminal sanction and a punitive sanction.

[00:19:48] Speaker 02:
And it doesn't make it a coercive sanction.

[00:19:51] Speaker 02:
So that use of the funds.

[00:19:53] Speaker 04:
Well, how is it punitive if it's remedial?

[00:19:56] Speaker 02:
The bagwell doesn't say that just because you're using the funds for

[00:20:04] Speaker 02:
some other purpose that might be remedial, they are civil.

[00:20:07] Speaker 02:
Bagel says something different.

[00:20:09] Speaker 02:
It says there are hallmarks of criminal contempt and punitive sanctions.

[00:20:12] Speaker 02:
And one of them is, was there a purgability?

[00:20:15] Speaker 02:
And there was no purgability here.

[00:20:16] Speaker 02:
That's one factor.

[00:20:17] Speaker 02:
That's one factor.

[00:20:18] Speaker 02:
The other one is seriousness.

[00:20:20] Speaker 02:
And it can be beyond dispute that $170 million in fines are very serious.

[00:20:26] Speaker 02:
It trumps anything, any of the previous cases that I found that discussed seriousness.

[00:20:31] Speaker 02:
Another factor

[00:20:32] Speaker 02:
was were the violations for out of court conduct of a complex injunction.

[00:20:38] Speaker 02:
That is also true here.

[00:20:40] Speaker 02:
And then another factor which Bagwell talked about was a complex factual finding need

[00:20:45] Speaker 02:
And here there was four days of testimony, including two expert witnesses and numerous exhibits.

[00:20:51] Speaker 02:
That is the exact sort of factual finding that juries are made for.

[00:20:55] Speaker 04:
Was this argument made to the district court that this was a criminal?

[00:20:59] Speaker 02:
Yes, your honor.

[00:21:00] Speaker 02:
And I think it's, I'm glad you raised that.

[00:21:02] Speaker 04:
What was the district court's ruling on that?

[00:21:04] Speaker 02:
So the district court rejected the argument before hearing any briefing whatsoever.

[00:21:08] Speaker 02:
In June, 2023, before the criminal content proceedings began, the district court issued an order saying both parties brief how they should go forward.

[00:21:30] Speaker 02:
Defendants tell me what defenses you plan on raising.

[00:21:32] Speaker 02:
But defendants do not raise that this is criminal contempt proceedings because I will not entertain arguments about that.

[00:21:39] Speaker 02:
The district court said that.

[00:21:41] Speaker 02:
And defendants tried to do the best they could given that order.

[00:21:47] Speaker 02:
In their closing brief, they cited to Bagwell, they cited to Falstaff and said, if these are going to be civil proceedings like you told me they were, you have to provide a purge clause, district court.

[00:21:57] Speaker 02:
You have to provide a subsequent opportunity after the contempt order

[00:22:02] Speaker 02:
for us to perch.

[00:22:04] Speaker 02:
And the district court didn't do that.

[00:22:05] Speaker 02:
I had well over my time.

[00:22:06] Speaker 02:
We'll give you a couple minutes for rebuttal.

[00:22:09] Speaker 04:
All right.

[00:22:25] Speaker 00:
Good morning again.

[00:22:26] Speaker 00:
Lisa Ells again for the plaintiffs.

[00:22:29] Speaker 00:
I'd like to

[00:22:31] Speaker 00:
proceed according to the way that this court proceeded.

[00:22:34] Speaker 04:
Could you start with the criminal contempt, if you don't mind?

[00:22:37] Speaker 00:
Absolutely.

[00:22:37] Speaker 04:
Since that's fresh on my mind.

[00:22:38] Speaker 00:
Yes.

[00:22:39] Speaker 00:
So there is no question here that the court took the paradigmatic coercive civil contempt, that is a quote from Parsons, and the court here followed the exact same method

[00:22:52] Speaker 00:
that the court followed in Parsons that this court then upheld.

[00:22:55] Speaker 00:
They issued a prospective conditional fines in February of 2023 saying, I'm gonna give you a grace period of a month.

[00:23:05] Speaker 00:
I'm going to give you three months after that.

[00:23:09] Speaker 00:
And if you can for any of those months be in compliance, we won't have any contempt proceeding at all.

[00:23:15] Speaker 00:
But if not, I'm gonna start accruing fines.

[00:23:18] Speaker 00:
and those are prospective under Bagwell.

[00:23:21] Speaker 00:
Bagwell explicitly discusses how for this kind of per diem conditional fine going forward, the purge opportunity is to reduce or avoid through compliance.

[00:23:32] Speaker 04:
Council, I'm sorry.

[00:23:34] Speaker 04:
The difficulty I'm having with this is that the fines were imposed before contempt finding.

[00:23:42] Speaker 04:
Is there a case that

[00:23:44] Speaker 04:
permits a court to impose fines before finding contempt?

[00:23:49] Speaker 00:
Parsons.

[00:23:53] Speaker 00:
Also Salazar in the District of Columbia.

[00:23:55] Speaker 04:
Well, that's no good for you.

[00:23:57] Speaker 00:
But Parsons is directly on point.

[00:23:59] Speaker 00:
In fact, in that case, the court gave even less notice.

[00:24:03] Speaker 00:
The court only gave two months notice from comply immediately to fines will accrue starting in two months.

[00:24:09] Speaker 00:
Very little notice.

[00:24:11] Speaker 00:
There's a lot more notice here.

[00:24:12] Speaker 04:
Was there a contempt finding in Parsons first?

[00:24:15] Speaker 04:
No.

[00:24:15] Speaker 00:
Second, on the second occasion, like six months later.

[00:24:19] Speaker 00:
So fines accrued for many, many, many months, and then the court adjudicated contempt.

[00:24:24] Speaker 00:
I think it was, I think it was, the initial order saying the fines will start accruing, you have to start immediately complying was October.

[00:24:34] Speaker 00:
Two months later, the court said, OK, the fines are accruing.

[00:24:37] Speaker 00:
And then I think it was six months after that, in June of the next year, the court adjudicated contempt and said, you owe these fines.

[00:24:45] Speaker 00:
all of that directly on point, the same process the court used here.

[00:24:50] Speaker 00:
And Parsons, as well as Ironworkers Local 433, which is also this circuits case, both of those discuss why that makes sense.

[00:24:59] Speaker 00:
Because for you to have a purge opportunity, for you to be able to come into compliance, you have to have some warning.

[00:25:07] Speaker 04:
Counsel, could we go back to Parsons?

[00:25:10] Speaker 04:
Yes.

[00:25:10] Speaker 04:
So I'm looking at page 452 of Parsons.

[00:25:17] Speaker 04:
The third paragraph, the district court issued an order to show cause.

[00:25:21] Speaker 04:
Yes.

[00:25:22] Speaker 04:
In which it explained that although defendants have been given wide latitude to revise their remediation plans over the last two years, they failed.

[00:25:30] Speaker 04:
And the district court ordered that effectively immediately they shall comply with 11 performance measures and that to show cause why the court should not impose a civil contempt sanction of $1,000 per incident commencing

[00:25:45] Speaker 04:
the month of December 17.

[00:25:48] Speaker 04:
So they were given an order to show cause.

[00:25:51] Speaker 00:
Exactly the same situation here.

[00:25:53] Speaker 00:
That is what the February order did, February 23.

[00:25:56] Speaker 04:
Was it an order to show cause?

[00:25:57] Speaker 00:
Yes.

[00:25:59] Speaker 04:
Where in the record can I look to see that the district court fashioned this as an order to show cause?

[00:26:11] Speaker 00:
I'll find that site for you, Your Honor.

[00:26:13] Speaker 00:
All right.

[00:26:19] Speaker 04:
The other question I have about the fines is, am I correct in my understanding that the fines were doubled, the amount of fines was doubled?

[00:26:29] Speaker 04:
Correct.

[00:26:29] Speaker 04:
And what's the basis for that?

[00:26:34] Speaker 04:
What legal basis did the court have to double the fines?

[00:26:37] Speaker 00:
Yeah, so the fines are based on the actual monthly salary of each of these positions.

[00:26:43] Speaker 00:
They're doubled because the monthly salary doesn't account for things like pension.

[00:26:48] Speaker 00:
and health care and other costs that the state is saving that are beyond salary.

[00:26:54] Speaker 00:
But also what Stone says is that it has to be enough to make it hurt.

[00:27:00] Speaker 00:
If it's not going to be anything more than the state would get away with anyway, then it's not coercive.

[00:27:06] Speaker 00:
It has to be sufficiently coercive.

[00:27:07] Speaker 04:
But there has to be some link to the amount

[00:27:11] Speaker 00:
Yes.

[00:27:12] Speaker 04:
And the infraction.

[00:27:13] Speaker 04:
So that was my difficulty with just doubling it.

[00:27:16] Speaker 04:
It looked a little bit like it was arbitrary for the court to just double it without any explanation as to why this amount was the amount that would hurt, but was also not more than was warranted by the infraction.

[00:27:32] Speaker 04:
And that's a difficulty for me.

[00:27:36] Speaker 00:
Yeah, so the same order from February 2023 that is the OSC explains the basis for the fines.

[00:27:43] Speaker 00:
That's at ER 1233 through 39.

[00:27:47] Speaker 00:
And what the court says in that order is that the fines, again, they take account for the salary savings.

[00:27:54] Speaker 00:
The state has already budgeted this money to pay these people.

[00:27:57] Speaker 00:
And it's budgeted, in fact, much more than the doubling of fines.

[00:28:02] Speaker 00:
There was a filing that was of undisputed facts before the district court that the parties agreed to in advance of the trial.

[00:28:10] Speaker 00:
And one of those facts is that the savings is actually much more than the doubling of the fines.

[00:28:15] Speaker 01:
Can I ask you this?

[00:28:16] Speaker 01:
At what point was there a meeting of counsel to decide how these monies, if paid, would be used?

[00:28:25] Speaker 00:
Yeah, so that post-dated the contempt order and it post-dated this court's initial denial of the stay motion.

[00:28:34] Speaker 00:
So there were a series of meetings in, I believe it was August of this year, and that resulted in the expenditure plan, which, by the way, included many, many, many of the steps that we suggested would have been reasonable for the state to take earlier that it did not take, including, for instance, addressing working conditions.

[00:28:55] Speaker 01:
For purposes of our analysis, what role should the ultimate use of any coercive fines be taken into account?

[00:29:07] Speaker 01:
It sounds like they're just requiring the court, I mean the state, to do what you believe they were supposed to do in the first place.

[00:29:16] Speaker 00:
Yes, so the contempt order makes clear that the way the fines will be used is to essentially

[00:29:24] Speaker 00:
go toward improving the staffing in the prisons.

[00:29:27] Speaker 00:
But then it left to the discretion, the state, to the state to develop exactly what it intended to do with that money.

[00:29:34] Speaker 00:
So again, I think the sort of import of that is under Bagwell, you look at what the character of the contempt order was, the character of the fines, and the use of the fines is very clearly coercive.

[00:29:49] Speaker 01:
And in a way, it almost seems like since the state has some discretion on how this is used, and it's supposed to be used for the state's obligation, that's another purging mechanism.

[00:29:59] Speaker 01:
Is that right?

[00:29:59] Speaker 00:
Yes, I think, Your Honor, and I want to just take a step back to all of the purge opportunities.

[00:30:05] Speaker 00:
Even after the trial, the state could have reduced or avoided fines.

[00:30:12] Speaker 00:
Again, that is the Bagwell standard for purging.

[00:30:14] Speaker 00:
It is not paying nothing.

[00:30:17] Speaker 00:
They could have reduced by either coming into compliance or the district court issued a tentative and said, look, here's what I'm going to do.

[00:30:24] Speaker 00:
I'm going to fine you.

[00:30:25] Speaker 00:
But I'm also going to give you time with a circuit mediator to try and show me that you have the will and determination to come into compliance.

[00:30:33] Speaker 00:
The clear implication of that is that there wouldn't have been any fines.

[00:30:36] Speaker 00:
There wouldn't have been a contempt order if they had taken advantage of that opportunity.

[00:30:42] Speaker 04:
Counsel, could you point me to ER 1233,

[00:30:45] Speaker 04:
through 39 for the order to show cause language.

[00:30:49] Speaker 04:
Could you point me to the precise language there that sets forth an order to show cause?

[00:31:05] Speaker 00:
I'm not sure that it uses the words order to show cause.

[00:31:08] Speaker 04:
OK.

[00:31:08] Speaker 04:
Normally, it's a precise order.

[00:31:10] Speaker 04:
Yeah.

[00:31:10] Speaker 04:
Judges know how to do orders to show cause.

[00:31:13] Speaker 04:
And it's usually a separate document that sets forth the order to show cause.

[00:31:17] Speaker 04:
OK.

[00:31:18] Speaker 04:
So that's the one question.

[00:31:18] Speaker 04:
The second is, point me to the language in 1233 to 39 that explains why the fine was doubled.

[00:31:31] Speaker 00:
Your Honor, it's at ER 1235 through 36.

[00:31:35] Speaker 04:
OK, what's the language?

[00:31:37] Speaker 04:
Let me see.

[00:31:45] Speaker 04:
I don't see an explanation for why it's doubled there.

[00:32:00] Speaker 00:
Your Honor, I may need a second to check our briefing, because it may have actually been in a later order.

[00:32:07] Speaker 00:
It's certainly in our briefing.

[00:32:09] Speaker 00:
If you look at our answers.

[00:32:10] Speaker 04:
I don't look at the briefs for answers.

[00:32:12] Speaker 04:
I look at the record for answers.

[00:32:14] Speaker 00:
Apologies, Your Honor.

[00:32:14] Speaker 00:
I don't have that exact citation.

[00:32:17] Speaker 00:
All right, that's fine.

[00:32:18] Speaker 00:
It was explained by the court in one of the orders leading up to the actual contempt order.

[00:32:25] Speaker 00:
And notably in their reply brief, defendants do not take up the argument that the fines were not properly tethered.

[00:32:33] Speaker 04:
But that's a question I have.

[00:32:35] Speaker 00:
Fair, Your Honor.

[00:32:36] Speaker 00:
And I apologize that I don't have the exact citation for that.

[00:32:39] Speaker 04:
Thank you.

[00:32:41] Speaker 00:
Your Honor, I think that unless there are further questions on this criminal contempt portion, I would like to just point out that every one of the cases that defendants cite are very clearly determinative fines that were retrospective.

[00:32:57] Speaker 00:
They were issued for things that at the point the fines were levied.

[00:33:01] Speaker 00:
There was nothing that could be done to change the behavior, to come into compliance.

[00:33:06] Speaker 00:
That's very different than the situation we have here.

[00:33:09] Speaker 00:
Bagwell talks about how you can cut off the fines for a conditional coercive civil contempt by complying.

[00:33:17] Speaker 00:
And at that point, your future fines will be forgiven, even if your past fines were not.

[00:33:23] Speaker 00:
And that's at 829 of Bagwell.

[00:33:24] Speaker 00:
There's also a star footnote explaining the same concept.

[00:33:28] Speaker 00:
You can cut off future fines, but like imprisonment, you don't get the time you served back because you turn over the keys on day 10.

[00:33:36] Speaker 00:
Those 10 days are gone.

[00:33:38] Speaker 00:
So I'd like to turn quickly to impossibility.

[00:33:42] Speaker 00:
Just a couple of quick points.

[00:33:44] Speaker 00:
Rylander, which is a Supreme Court case, makes it explicit that it is literal physical compliance.

[00:33:51] Speaker 00:
That is the standard for impossibility.

[00:33:55] Speaker 00:
Moreover, Rylander makes very clear it is the contender's burden of production.

[00:34:02] Speaker 00:
to affirmatively show through clear, through conditional and detailed evidence that impossibility was literally impossible.

[00:34:10] Speaker 00:
You could not have done it.

[00:34:12] Speaker 00:
None of the cases that the state has cited, including Falstaff, concern anything less.

[00:34:18] Speaker 00:
Falstaff was a situation where the contemptor

[00:34:22] Speaker 00:
had lost the documents, essentially, that were required to be turned over from a protective order.

[00:34:29] Speaker 00:
And the other side that wanted the documents back performed a full investigation, depositions, everything authorized by the court, and they agreed looking any further is futile.

[00:34:41] Speaker 00:
No one can find these documents.

[00:34:42] Speaker 00:
They're gone.

[00:34:43] Speaker 01:
So from your perspective under Weilander and indeed some of our cases, substantial compliance is not the measure.

[00:34:50] Speaker 01:
It's literal compliance.

[00:34:52] Speaker 00:
Yes, that's specific to the impossibility.

[00:34:55] Speaker 00:
That's what I mean.

[00:34:56] Speaker 00:
Yes, literal impossibility.

[00:34:58] Speaker 00:
It's very clear.

[00:34:59] Speaker 00:
Not a single witness of theirs testified to literal impossibility.

[00:35:04] Speaker 00:
In fact, Dr. Mehta said it was possible to comply, and Dr. Grulich similarly testified that she has no opinion as to whether it's possible to comply or not.

[00:35:15] Speaker 00:
She affirmatively refused to say it was impossible to comply.

[00:35:19] Speaker 00:
Um, stepping towards the, um, the, the reasonable steps the state could have taken in addition to the working conditions that we've already discussed, which very clearly could have been addressed.

[00:35:32] Speaker 00:
Uh, there are some many, many, many other uncontested facts that the state didn't take until after being found in contempt, rolling out a hybrid program they knew as of 2020.

[00:35:44] Speaker 00:
that psychologists and social workers valued during the pandemic the opportunity to work remotely.

[00:35:52] Speaker 00:
And nonetheless, even as they watched those clinicians specifically walk out the door in the three years following, they didn't implement a hybrid policy until August of this year.

[00:36:03] Speaker 00:
They didn't even start that.

[00:36:04] Speaker 04:
The opposing council says when they tried to fully implement teleworking that you all objected to it.

[00:36:11] Speaker 00:
Yeah.

[00:36:12] Speaker 00:
So there's like, there are two slightly different things that do kind of overlap.

[00:36:16] Speaker 00:
Hybrid is partially working.

[00:36:18] Speaker 00:
So, so that's, they are developing a hybrid program as we speak separately on the telemental health.

[00:36:24] Speaker 00:
They have already begun rolling out a program.

[00:36:27] Speaker 00:
So although we're disputing the contours of it in negotiations right now, that program exists.

[00:36:32] Speaker 00:
They're feeling clinical roles through that program.

[00:36:35] Speaker 04:
But the question is, do you object to,

[00:36:37] Speaker 04:
For instance, if they wanted to go fully telehealth for mental health visits, would you object to that?

[00:36:46] Speaker 00:
I think we probably would, but they're not even proposing that.

[00:36:49] Speaker 00:
They're proposing 100 total clinicians through their telemental health program.

[00:36:54] Speaker 04:
I thought I heard the state attorney said that you all put the kibosh on them going more fully telehealth, and he can address that when he comes back, but I thought that was his position.

[00:37:07] Speaker 00:
No.

[00:37:08] Speaker 00:
First of all, there's two separate policies.

[00:37:10] Speaker 00:
The telepsychiatry policy has been in place for years and they've had great success with that.

[00:37:17] Speaker 04:
But is there a limited number, that's the point, are there a limited number of psychiatrists that you will accept as providing

[00:37:25] Speaker 04:
clinical services to the inmates?

[00:37:28] Speaker 00:
Yes, there are limitations.

[00:37:29] Speaker 00:
But 75% of the class is treated by telepsychiatry right now.

[00:37:33] Speaker 00:
And they have open positions in telepsychiatry.

[00:37:36] Speaker 00:
So they can't even fill the positions that they have.

[00:37:38] Speaker 00:
It's not like an expansion would help them here.

[00:37:41] Speaker 00:
But as to telemental health, the most important part is that they, again, in 2020, when their psychologists and social workers said, hey, we love this remote work, just like everybody else in America,

[00:37:54] Speaker 00:
But they gave them the opportunity to do that.

[00:37:57] Speaker 00:
Dr. Grulich testified it was a great option.

[00:38:00] Speaker 00:
And then they cut it off.

[00:38:03] Speaker 00:
And then they watched those clinicians walk out the door over the next three years.

[00:38:07] Speaker 00:
They didn't do anything to initiate a telemental health program until June 2023, four months after the order to show cause or the fine structure, the order in February 2023 that gave notice of

[00:38:22] Speaker 00:
possibly impending fines.

[00:38:25] Speaker 00:
So that's another situation where they waited until the end, until after contempt.

[00:38:31] Speaker 00:
They could have done that three years earlier.

[00:38:32] Speaker 00:
They knew their telepsychiatry program had been a great success.

[00:38:36] Speaker 00:
But again, they did nothing.

[00:38:38] Speaker 00:
They sat for three years.

[00:38:39] Speaker 00:
Another great example is they have recently expanded the type of clinicians that can treat Coleman class members.

[00:38:47] Speaker 00:
to include marriage and family counselors.

[00:38:50] Speaker 00:
Again, they did that after the contempt order.

[00:38:52] Speaker 00:
There was testimony during the trial

[00:38:55] Speaker 00:
that they had tried using those clinicians before but had boarded the efforts.

[00:38:59] Speaker 00:
They are treating patients in other capacities in CDCR right now.

[00:39:02] Speaker 00:
They didn't do anything with that until after the contempt order.

[00:39:06] Speaker 00:
There are 34,000 marriage and family counselors in California.

[00:39:10] Speaker 00:
That is a great pool that we stipulated, by the way, and the court approved their ability to use those clinicians to treat class members.

[00:39:18] Speaker 00:
They didn't do that until after contempt.

[00:39:21] Speaker 00:
Another example is, I think maybe the easiest example to understand is, for compensation, they didn't even keep up with inflation.

[00:39:33] Speaker 00:
It is uncontested, and the court makes that finding, that it is uncontested their wages did not keep up with inflation in the years following the pandemic.

[00:39:41] Speaker 00:
So again, however much they say they're paying premiums above California wages, which by the way, they're not paying anything above California wages for medical assistance, a category in which they're 71% compliant, would be pretty easy to raise those salaries and improve care.

[00:40:01] Speaker 00:
But turning back to the other categories, however much they're saying they pay above the California wages as a premium, they're not even keeping up with inflation.

[00:40:11] Speaker 00:
So the actual cost to people, to the clinicians, is getting harder and harder to pay their money and pay their rent and food, right?

[00:40:21] Speaker 00:
Another thing they could have done.

[00:40:24] Speaker 00:
So anyway, there are many, many, many examples.

[00:40:27] Speaker 00:
Hiring time takes six months.

[00:40:29] Speaker 00:
Six months, 108 business days.

[00:40:33] Speaker 00:
There's no way you can compete in a market like that.

[00:40:35] Speaker 00:
And that is true at 31 out of 32 prisons.

[00:40:39] Speaker 00:
At one prison, they've reduced it to four months.

[00:40:42] Speaker 00:
Only at one.

[00:40:44] Speaker 00:
So anyway, there are many, many, many opportunities here that they could have taken that they did not take.

[00:40:51] Speaker 00:
They've done many of those things after being held in contempt.

[00:40:54] Speaker 00:
That's not sufficient to avoid contempt.

[00:40:57] Speaker 00:
It is improving compliance in some respects, which is great.

[00:41:00] Speaker 00:
But that, again, doubles down and shows you that it's coercive, civil contempt.

[00:41:04] Speaker 00:
It's not criminal.

[00:41:06] Speaker 00:
And finally, as to substantial compliance, unless the court has further questions.

[00:41:10] Speaker 00:
I do, but go ahead and finish.

[00:41:11] Speaker 00:
Great, OK.

[00:41:12] Speaker 00:
As to substantial compliance,

[00:41:15] Speaker 00:
So in Ray Dueldeque, the main decision in this circuit on what it means to have substantial compliance in this context, it allows for minor technical noncompliance only.

[00:41:29] Speaker 00:
That is what substantial compliance is, minor technical noncompliance.

[00:41:34] Speaker 00:
As you've alluded to earlier, the cold hard facts are that we're nowhere near that.

[00:41:39] Speaker 00:
We're not talking about being a couple of percentage points below whatever the threshold you're saying it is.

[00:41:44] Speaker 00:
They are at 41% empty, 41% vacant for psychologists, 43% vacant for MAs.

[00:41:53] Speaker 00:
Social workers, almost 30%.

[00:41:55] Speaker 00:
These are not in the realm where there is anything near substantial compliance.

[00:42:01] Speaker 00:
And the holistic test that defendants keep referring to, you know, it's a 74-page opinion.

[00:42:08] Speaker 00:
It's a pretty holistic analysis.

[00:42:11] Speaker 00:
And the court has found that they're just nowhere near compliant.

[00:42:15] Speaker 00:
And even defense counsel does not contest that.

[00:42:18] Speaker 00:
There's never been a month in which they've been compliant.

[00:42:20] Speaker 00:
So substantial compliance is kind of a red herring.

[00:42:23] Speaker 04:
All right, Kelsey, I wanted to ask you as a practical matter, what happens if we affirm the district court's ruling?

[00:42:33] Speaker 04:
What happens to the fines just keep accumulating until all of the vacancies are filled to the court's satisfaction?

[00:42:40] Speaker 04:
Where do we go from here?

[00:42:41] Speaker 00:
Yeah, I mean, the first thing that happens is that the expenditure plan that defendants came up with to try and use the money that's accumulated today will actually get spent.

[00:42:52] Speaker 00:
You know, in that expenditure plan, it promised bonuses, and those bonuses were going to hit before the holidays.

[00:43:00] Speaker 00:
And because of the stay order, they're not.

[00:43:02] Speaker 00:
So people knew they were going to get money.

[00:43:04] Speaker 00:
They planned on it.

[00:43:06] Speaker 00:
And they're not getting it.

[00:43:07] Speaker 00:
And I think if you want to talk about retaining people, promising them money and then taking it away is a great way to lose people.

[00:43:14] Speaker 04:
Well, but so the money will be spent.

[00:43:18] Speaker 04:
And if that doesn't bring the vacancies to the rate that the court has set, then more fines would be imposed.

[00:43:25] Speaker 04:
And at some point,

[00:43:28] Speaker 04:
Would the fines ever cease?

[00:43:29] Speaker 04:
Would the fines only cease when these vacancies are to the point where the court ordered?

[00:43:36] Speaker 04:
Is that what you envision?

[00:43:38] Speaker 00:
Yes, that's what we envision.

[00:43:39] Speaker 00:
And frankly, I think it's entirely possible.

[00:43:42] Speaker 00:
They've made a number of great steps, again, after the contempt finding, to do things that really will improve their ability to hire and retain people.

[00:43:51] Speaker 00:
So I don't think it's impossible.

[00:43:53] Speaker 00:
No one here thinks it's impossible.

[00:43:55] Speaker 00:
For the contempt trial, they had to hire 18 medical assistants to be in compliance.

[00:44:00] Speaker 00:
It's hard to imagine how that's impossible.

[00:44:03] Speaker 04:
All right.

[00:44:03] Speaker 04:
Thank you, counsel.

[00:44:04] Speaker 04:
We'll give you two minutes for rebuttal.

[00:44:19] Speaker 02:
Thank you, your honors.

[00:44:23] Speaker 02:
I want to start with Parsons.

[00:44:25] Speaker 02:
and with the not order to show cause.

[00:44:27] Speaker 02:
So there was no order to show cause issued in February 2023.

[00:44:30] Speaker 02:
It was just a prospective fine schedule.

[00:44:33] Speaker 02:
But Parsons is distinguishable for a different reason as well as that one.

[00:44:37] Speaker 02:
And that's Parsons said these fines are compensatory.

[00:44:40] Speaker 02:
They're to fix injuries to the plaintiff class.

[00:44:44] Speaker 02:
And because they were compensatory, and they were also partially coercive, but mostly because they were compensatory, Parsons says these are civil and not criminal.

[00:44:53] Speaker 02:
But here,

[00:44:54] Speaker 02:
Nobody, the district court, plaintiffs, or at any time have said the $170 million based off of double the salary, the average maximum salary for providers is compensatory.

[00:45:08] Speaker 02:
And that's because they can't claim that.

[00:45:10] Speaker 02:
Because compensatory civil sanctions have to be calibrated to some showing of harm.

[00:45:16] Speaker 02:
Cases in this court say that.

[00:45:18] Speaker 02:
Bagwell says that.

[00:45:19] Speaker 02:
The Supreme Court's decision in Goodyear says there has to be a causal relationship.

[00:45:23] Speaker 02:
And there was just no evidence on that.

[00:45:25] Speaker 02:
And then I would also like to say that Bagwell specifically talked about these sorts of prospective fines schedules, and it said that doesn't make something coercive because that's just coming into compliance.

[00:45:39] Speaker 02:
And Bagwell makes clear that a purge opportunity has to come subsequent after the contempt order, after the fines have been imposed.

[00:45:48] Speaker 02:
And that didn't happen here.

[00:45:49] Speaker 02:
There was $120 million in backwards-looking fines that were retrospective, and defendants had no ability to purge them.

[00:45:57] Speaker 02:
Plaintiffs admit in their briefing that that $120 million is unconditional and determinate, and there's no post-contempt opportunity to purge it, and that puts it squarely within bagwell.

[00:46:07] Speaker 04:
But does that make a difference that the funds are going to be used to remedy the

[00:46:14] Speaker 04:
issues that the court had with the mental health treatment.

[00:46:18] Speaker 04:
That doesn't make a difference?

[00:46:19] Speaker 02:
I don't believe it does, Your Honor.

[00:46:21] Speaker 02:
I'm not aware of any decision that says the district court's use of the funds allows it to fine any amount it wants, unrelated to a harm or anything else.

[00:46:32] Speaker 02:
And that's exactly what the district court did here.

[00:46:34] Speaker 02:
It could be up to $1 billion in five years if defendants continue to be unable, because of external factors,

[00:46:42] Speaker 02:
to fully comply with the court's orders.

[00:46:45] Speaker 02:
And then, I think I'm over time, so I'm, well, I'm happy to- You can sum it up.

[00:46:51] Speaker 02:
Thank you.

[00:46:52] Speaker 02:
So, defendants asked that this court reverse the district court's contempt orders because it did not provide defendants criminal due process protections they were entitled to before imposing nearly $170 million in fines, plus millions more every month when defendants are unable to comply with the staffing orders

[00:47:10] Speaker 04:
So what do you envision that we would just tell the district court that the fines were not permissibly imposed and then we would be back to square one where the district court would be trying to get compliance with this order.

[00:47:27] Speaker 04:
What good is that?

[00:47:29] Speaker 02:
I think it's a lot of good.

[00:47:31] Speaker 02:
The first is defendants get the due process they're entitled to.

[00:47:34] Speaker 02:
But the district court had lots of options short of fining defendants $170 million.

[00:47:39] Speaker 02:
If the district court believed that the various measures, which were not defendants' measures in the spending plan that was subsequently adopted by the court, if the district court believed those were the right steps to bring down the compliance rate, it could have issued an injunction.

[00:47:53] Speaker 02:
It could have told defendants to use that money in those ways, and as long as it complied with the PLRA.

[00:47:59] Speaker 02:
or if the district court believed that working conditions were the problem.

[00:48:03] Speaker 02:
It could have issued an injunction to do that.

[00:48:05] Speaker 04:
But was it required to do that?

[00:48:06] Speaker 04:
This is a discretionary decision.

[00:48:09] Speaker 04:
And the district court, oh, I mean, the history of this case, the district court has worked with the state over the years to try to get compliance, even went to mediation.

[00:48:18] Speaker 04:
The Ninth Circuit mediators are the best in the country and were not able to get a resolution of the case.

[00:48:26] Speaker 04:
It's just that the district court

[00:48:29] Speaker 04:
tried a number of ways to resolve this case.

[00:48:32] Speaker 02:
Sorry, Your Honor.

[00:48:33] Speaker 02:
The district court was not required to issue an injunction, but those were other least possible measures that the district court could have used to create compliance.

[00:48:42] Speaker 02:
$170 million with no reference to any reasonable compensatory fines or anything else is just not the least possible power.

[00:48:51] Speaker 02:
And I will just say about the Ninth Circuit mediator, Bagwell says that is not enough.

[00:48:56] Speaker 02:
specifically because defendants did not have keys to their own prison when they go to a mediation.

[00:49:01] Speaker 02:
Instead, they had to agree with plaintiffs, and then likely the special master had to approve, and then ultimately the district court had to approve.

[00:49:06] Speaker 04:
I understand that, but I know our mediators are just really great in terms of bringing people to the table and resolving things.

[00:49:12] Speaker 04:
And so that speaks of volumes to me that they weren't able to do it.

[00:49:16] Speaker 04:
But that, of course, that has legally no significance in this case.

[00:49:20] Speaker 04:
But it's just something that stood out to me.

[00:49:24] Speaker 04:
All right, thank you, counsel.

[00:49:25] Speaker 04:
Thank you to both counsels.

[00:49:26] Speaker 04:
The case just argued is submitted for a decision by the court and we are adjourned.