Thank you very much. I've been asked, as Vinnie said, to provide a basic introduction to how receivers can work and how they have worked in California. The concept of a receivership is hundreds of years old. It was first implemented in the chancery courts in England as early as the 16th century in the context of business litigation.
So when a corporation was failing and was in, say, bankruptcy proceedings in court, courts would sometimes appoint a receiver to manage the affairs of the corporation in order to secure the assets for the pendency of the litigation. And that would happen when, again, the business was failing, and the people running it, the officers of the corporation or the managers, could not be trusted to manage the assets in a way that was consistent with the court's ultimate decision-making. So the concept has been around for a long time. It's not uncommon in the business world. And it also has been used in US courts, again, not infrequently, in the business world.
In the 1960s, for the first time, a federal court imported the concept from the business world to the civil rights realm and applied this remedy of a receivership to the civil rights context in school desegregation cases. So the courts were presented with situations in which they had not a failed corporation, but a failed institution, a school district that operated based on racist, segregationist principles, that violated the rights of students and refused to reform. So faced with the recalcitrance of the local institution and the serious harm being inflicted on students, the federal courts appointed receivers to manage and run those institutions.
The reason this concept was importable into the civil rights realm is something called equity jurisdiction. So federal courts have equitable jurisdiction to fashion remedies that meet the needs of the situation. So equity is something that is distinguished from sort of the strict rules of law. Equity gives courts the ability to be a little bit creative. In fact, courts have a duty to secure remedies to fix violations of federal rights.
So the courts in these cases have used their equitable jurisdiction to appoint a receiver to be a little bit creative in situations in which the institution is failing, the harm is very significant, the defendants are recalcitrant or hellbent on refusing to comply with the court's orders, or some combination of incompetence and malfeasance, and no other efforts have succeeded. The court feels helpless in the face of the situation in which people's rights are being trampled on, and the solutions are not working.
So since the '60s, when this method has been used in desegregation cases, federal courts have appointed receivers in prison and jail cases and in a few scattered other cases involving local and state agencies. It is a remedy that has been used very sparingly. It is very drastic, but it is something that can be effective when no other course is effective in securing the remedies in the case.
I want to talk for a minute about the powers of a receiver. Vinnie touched on it briefly, and I wanted to expand that a little and talk about how that looks in the California context. So first of all, the receiver's powers derive entirely from the federal court's powers, and they're established by federal court order. One of the most interesting aspects of a federal court's authority that the receiver can make use of is the ability to waive state laws as needed to remove barriers to a remedy in a case.
So for example, in California, early on, the receiver asked the federal court to waive state laws that set forth a peer review process that made it practically impossible to fire incompetent doctors. So in fact, the union, the union representing the doctors, came in on the side of the receiver on this. It was something that they had talked about, worked out, and the union supported it. So the federal court made some adjustments and made it possible for the receiver to remove that barrier to remove the incompetent doctors.
A receiver is not all-powerful, so the receiver has to work within the governmental framework. And just brief civics reminder, we have separation of powers with an executive, judicial, and a legislative branch, right? So when a receiver is appointed, basically it's the judicial branch reaching into the executive branch and saying, "We're going to take that over for now, because you can't do it," okay?
But ordinarily, when you have a state or local agency, the funding is secured through the legislative branch, right? So the executive submits a budget to the legislature, who then determines what will be funded. That separation of powers principle doesn't go away just because there's a receiver. The receiver doesn't commandeer funds from the legislature. You still have to go through whatever budgetary processes are necessary. And I raise this because it's a limitation on the power of the receiver. And if you have a situation where you have not just a recalcitrant executive, but you have a recalcitrant legislature, then the federal court has a pretty significant problem.
We did face this concern in California early in the receivership, when the receiver had established a building program, a multi-billion dollar building program, because California built a huge number of prisons without the medical facilities to treat people who were incarcerated in them. And as a result, people were suffering and dying, because there weren't facilities to treat them. Some prisons in the exam spaces that doctors and nurses used didn't even have hand-washing capabilities.
So the receiver had a whole plan to build medical hospital prisons and to build out clinic space in existing prisons, multi-billion dollar. The legislature and the governor balked at that, and there was a bit of a standoff that was resolved ultimately through negotiation, and a reduced building program was passed through and was funded. So that's sort of a taste of how the receiver's powers are significant, but also need to be negotiated with other branches of government.
So I wanted to talk next about a few of the choices that a judge would face if deciding to appoint a receiver. So one of the choices the judge faces, and again, judges have incredible leeway here, right? They're kind of making this up. They have the opportunity to try to fashion the receivership to meet the needs of the particular situation. There's not much of a playbook here.
So one of the choices the judge faces is whether to replace the current administrators or to provide a receiver who has essentially a parallel authority structure that is meant to work in collaboration with the current head of corrections. And that's kind of what we have in California. The receiver runs and operates all of the medical decision-making, so has the power to hire, fire, negotiate with unions, everything like that, on the medical side.
But in reality, the receiver exercises that authority sparingly and often works in collaboration with the Secretary of the Department of Corrections. Particularly during the pandemic, they would often issue memos to all staff and to all incarcerated people together and work hand in hand. I think, as far as I can tell, a lot of the back and forth between the receiver and the secretary took place behind the scenes, and they tried to present a united front, which, I think, is far, far more effective in the long run.
Another choice a court could face is whether to appoint someone as receiver who looks like the people they're working with, a corrections administrator, a corrections chief? Or do you appoint someone as a receiver who has very different skillset, a turnaround specialist, a management specialist, someone who's a fixer, basically?
In California, our receiver running medical care in the entire prison system is a law professor, who had been called in, Clark Kelso. He had been called in by the state in other situations prior to stepping in as receiver to fix messes. He was somebody who fixes things, who knows how to hire the best staff, who knows how to bring good minds to the problems and to solve them.
One of the benefits of appointing someone who does not look like the people in the system, someone from outside the system, is that they operate with a certain degree of independence. They don't have preformed alliances. They're outside of the political process, and that can be very valuable.
Another question for the court is how to find a receiver. It's a tough call. Do you have the parties propose various alternatives, or do you hire a search firm? Do you do a national search?
And finally, one of the most important questions the judge would face is how to return the system back to the defendants. How do you wind up a receivership? Do you set a rigid timeline that hurries people along the way and gives people some security that the state or the local government will have the powers returned to them? Do you apply metrics and measurements that determine when the system is capable of self-governance?
As you can tell from my language, I certainly favor the latter. I think timelines are made to be broken, particularly in governmental matters, and you want to set yourself up for success. So in California, the receiver has a process of delegation of individual prisons back to the state when the receiver makes the determination that they're capable of managing medical care on their own.
And to this point, the receiver has delegated slightly more than half of the prisons back to the state. There's a process by which we, as plaintiff's counsel, are allowed to research, and review, and discuss, and debate, and oppose those decisions, so there's input from both sides.
The receiver has retained control of systemic processes. So for example, COVID response is in the hands of the receiver, and that has been an important part of the process. And presumably, once all the individual prisons are delegated, then there will be a process of delegating the overall management processes back to the state.
So I wanted to talk for just a minute, in the few minutes I have remaining, or going over, I'm not really sure where my time is. I wanted to talk just for a minute, a little bit more directly about the California experience and why we ended up with the receiver. And I'm going to read a quote to you from the judge's opinion in 2005, making the determination that a receivership was warranted in this context.
This also appears in the materials on the Vital City website, but I think it's important to hear the words of the judge. And this is Judge Thelton Henderson, who is an extraordinary figure in the judicial and civil rights world, who has since retired from the case.
But in making the determination to appoint a receiver, the judge said this: "By all accounts, the California prison medical care system is broken beyond repair. The harm already done in this case to California's prison inmate population could not be more grave, and the threat of future injury and death is virtually guaranteed in the absence of drastic action."
"The court has given defendants every reasonable opportunity to bring its prison medical system up to constitutional standards, and it is beyond reasonable dispute that the state has failed. Indeed, it is uncontested, an uncontested fact, that on average, an inmate in one of California's prisons needlessly dies every six or seven days due to constitutional deficiencies in the medical delivery system. This statistic, awful as it is, barely provides a window into the waste of human life occurring behind California's prison walls due to the gross failures of the medical delivery system."
So I read those words particularly because I think they resonate in this context and because the court found that the bureaucratic incompetence, intransigence, and learned incapacity made it impossible for the state to manage the system without further grievous harm to the people in its custody. And so with that, I will turn it back to the Chicago crew to describe their efforts in that direction.