BILL ANALYSIS Ó AB 1267 Page 1 Date of Hearing: May 5, 2015 ASSEMBLY COMMITTEE ON JUDICIARY Mark Stone, Chair AB 1267 (Bloom) - As Amended April 27, 2015 SUBJECT: Lawsuits, liens, and other encumbrances KEY ISSUE: Should an existing law that prohibits filing a lawsuit, lien, or other encumbrance against a public official for purposes of harassment be extended to prohibit such filings to harass a private person or entity? SYNOPSIS Existing law prohibits a person from filing or recording a lawsuit, lien, or other encumbrance against a public official or employee, knowing that it is false, with the intent to harass the official or employee or to influence or hinder the official or employee in carrying out his or her official duties. This bill would extend existing law protections to all persons who are the victims of such filings or recordings. This bill would also extend the associated remedies now only available to public officials to all other persons. According to the Anti-Defamation League (ADL), a number of extremist groups - especially, the anti-government "sovereign citizen" movement - have increased their use of these tactics since 2009. And while they often target government officials, given their ideology, they also sometimes target private citizens. This bill seeks to AB 1267 Page 2 protect these private victims from "paper terrorism" by giving them the same options currently available to public officials and public employees: the ability to seek civil remedies and remove the false lien or encumbrance from the record. The bill is sponsored by the ADL and supported by the California Police Chiefs Association, the California District Attorneys Association, and CSAC Excess Insurance Authority, a Joint Powers public agency. There is no known opposition. SUMMARY: Extends an existing law that prohibits a person from filing or recording lawsuits, liens, and other encumbrances against a public official or employee for purposes of harassment, and that provide corresponding remedies to the victims thereof, to any person or entity subject to such lawsuit, lien, or encumbrance. Specifically, this bill: 1)Prohibits a person from filing or recording a lawsuit, lien, or encumbrance against another person or entity, knowing it is false, with the intent to harass the person or entity or to influence or hinder the person in discharging his or her official duties if the person is a public officer or employee. Subjects any person who knowingly violates this provision to a $5,000 civil penalty. 2)Permits a person or entity that is subject to lien or encumbrance that violates the provisions of this bill to petition the appropriate superior court. Requires the court to order the lien or other encumbrance claimant to appear at a hearing before the court and show cause why the lien or other encumbrance should not be stricken and other appropriate relief granted. If the court finds that lien or encumbrance was unlawfully filed, the court shall strike the lien or encumbrance and award costs and reasonable attorney's fees to the petitioner. If the court finds that the lien or encumbrance is valid, it shall issue an order so stating and award costs and reasonable attorney's fees to the lien or AB 1267 Page 3 encumbrance claimant. EXISTING LAW: 1)Prohibits a person from filing or recording a lawsuit, lien, or other encumbrance, as specified, against a public officer or employee, knowing it is false, with the intent to harass the officer or employee or to influence or hinder the public officer or employee in discharging his or her official duties. Subjects any person who knowingly violates this provision to a $5,000 civil penalty. (Government Code Section 6223.) 2)Permits a public officer or employee whose property is subject to a lien or encumbrance that violates the above provision to petition the appropriate superior court for an order directing the lien or encumbrance claimant to appear at a hearing to show why the lien or encumbrance should not be stricken and other appropriate relief granted. If the court finds that the lien or encumbrance was unlawfully filed, the court shall strike the lien or encumbrance and award costs and reasonable attorney's fees to the petitioner. If the court finds that the lien or encumbrance is valid, it shall issue an order so stating and award costs and reasonable attorney's fees to the lien or encumbrance claimant. (Code of Civil Procedure Section 765.010. and 765.030.) 3)Makes a person who knowingly procures or offers any false or forged instrument to be filed, registered, or recorded in any public office within this state, as specified, guilty of a felony, and provides a process to allow a judge to declare an instrument void, as specified. (Penal Code Section 115.) FISCAL EFFECT: As currently in print this bill is keyed non-fiscal. AB 1267 Page 4 COMMENTS: Sponsored by the Anti-Defamation League (ADL), this bill seeks to address the problem of "paper terrorism" - or the practice of filing legal documents, knowing that they are false and meritless, in order to harass, intimidate, threaten, or retaliate against both public officials and private citizens. The author and sponsor are particularly concerned by extremist anti-government groups, especially the so-called "sovereign citizen" movement. For example, one "sovereign citizen" member in Chico, California, filed false liens against judges, lawyers, Internal Revenue Service officers, and private witnesses who were involved in his trial for various kinds of tax fraud. In November of 2014, he was sentenced to three years in federal prison. Existing Law Protects Public Officials and Public Employees. Existing law prohibits a person from filing a knowingly false lawsuit, lien, or encumbrance against a public official or employee for the purposes of harassing the official or employee, or attempting to influence or interfere with the official or employee in the carrying out of his or her official duties. Existing law also provides expedited procedures by which a public official or employee may seek civil remedies and have a false lien or encumbrance removed from the record. Specifically, existing law allows a public official or employee to file a petition with the superior court for an order requiring the person who filed the false and harassing document to appear before the court and show cause why the lien or encumbrance should not be stricken from the record. (In the case of a falsely filed lawsuit, there is, of course, no need to require the person who recorded the false document to appear before the court since there is already a lawsuit.) If the court finds that the lien or encumbrance was filed only to harass or unduly influence the official or employee, the court will strike the lien or encumbrance and award costs and reasonable attorney's fees to the victim. If, on the other hand, the court finds that the lien or encumbrance was lawfully AB 1267 Page 5 and legitimately recorded, then the lien or encumbrance stays on the books and the person wrongly accused of recording the false document will be awarded costs and attorney's fees. The person who filed the false lawsuit, however, would be subject to a $5,000 civil penalty. This straight-forward bill simply applies the existing prohibitions and remedies relative to false lawsuits, liens, and encumbrances against public officials and employees to instances in which false and harassing lawsuits, liens, and encumbrances are filed or recorded against any person or entity. The rationale for this extension, according to the author, is an alleged resurgence in "paper terrorism" by groups like the "sovereign citizens" movement that target both public officials and private persons. The need for this bill, according to the author, is illustrated by at least three California cases in the past year where members of the sovereign citizens' movement filed harassing liens against California public officials, mostly judges and Internal Revenue Service employees and agents. In each of these cases the persons who filed the false liens against public officials were prosecuted. These cases illustrate the recent nature of the problem, but they also reveal the limitation of existing law: private persons subject to the same liens would not have had the same remedies. This bill seeks to address that shortcoming in existing law. Recent Amendments Remove Proposed County Recorder Program. The bill was recently amended twice: first to include, and then to remove, provisions that would have given a county recorder the discretion to refuse filings if it has a reasonable belief that the documents filed for recording are false, fraudulent, or being filed for some other unlawful purpose. The recent amendments would also have required county recorders to develop a fraud alert program by which a person who subscribes to that AB 1267 Page 6 program will be notified whenever another person attempts to file a lien or other claim against the subscriber's property. However, the author agreed to delete this portion of the bill until all the implications and workability of such a program could be considered by the county recorders and other interested groups. At some point the author may seek to amend the bill once again to establish such a program, so that property holders will know when someone has filed a harassing and unlawful lien or encumbrance against the property. ARGUMENTS IN SUPPORT: According to the author, the impetus for this bill primarily arises out of concerns about the tactics of extremist groups like the "sovereign citizen movement" and its recent "surge of popularity since 2009." According to the author, one of the most popular sovereign citizen tactics is known as "paper terrorism," which refers to "the use of bogus legal documents and filings, or the misuse of legitimate ones, in order to intimidate, harass, threaten, or retaliate against public officials, law enforcement officers, or private individuals." The author contends that acts of "paper terrorism" can range from "simple and straightforward filings, such as frivolous lawsuits, to more complex strategies, such as filing IRS forms that fraudulently allege victims have been paid large sums of money on which they declared no taxes. The most popular paper terrorism tactic is the use of bogus liens or other documents to cloud title to property owned by victims. Whatever the ploy, the result creates serious legal and financial problems for those targeted." ADL, the sponsor, is similarly concerned about the tactics of the "sovereign citizen" movement and related groups. The ADL writes that while it is "encouraged by the positive steps the State of California has already taken to fortify existing paper terrorism protections, there is more to do. For instance, California currently provides a fast track removal process and civil remedies for false filings" these provisions "only apply to public officers and employees, while sovereign citizens also AB 1267 Page 7 target others." ADL believes, therefore, that AB 1267 will appropriately extend "these protections to individuals - including the spouses and relatives of public officers, as well as private citizens and businesses." ADL notes that AB 1267 will "bring California in line with the ten states that currently provide fast track removal process to individuals and businesses, and the twenty-five states that provide civil remedies for false filings." Prior Related Legislation: AB 1686 (Wagner, Chapter 455, Statutes of 2014) amended California Penal Code Section 615, which generally prohibits the filing of false or forged documents, to allow a judge to declare an instrument void when there is a finding that that instrument is forged or false. REGISTERED SUPPORT / OPPOSITION: Support Anti-Defamation League (ADL) (sponsor) California District Attorneys Association California Police Chiefs Association CSAC Excess Insurance Authority, a Joint Powers Authority AB 1267 Page 8 Opposition None on file Analysis Prepared by:Thomas Clark / JUD. / (916) 319-2334