Child sexual abuse lawsuits could cost state up to $13.7M a year, fiscal analysis finds

A proposed Colorado law would require the state to budget up to $13.7 million in liability payments and legal fees for 55 child sexual misconduct lawsuits per year, according to a fiscal analysis by nonpartisan legislative staff.

Under Senate Bill 21-88, people who survived sexual abuse as children would be able to sue institutions — from the Catholic Church to Boy Scouts of America — at any time after the abuse occurred.

Potentially culpable entities would also include those tied to state government, such as juvenile detention, youth programs run by colleges and universities, and History Colorado day camps. And the state of Colorado expects plenty of possible lawsuits if the bill passes.

A nonpartisan fiscal note attached to the legislation recommends that state lawmakers budget $13.7 million a year in 2022 and 2023 to pay damages and fight lawsuits alleging sexual misconduct against children enrolled in youth programs and activities.

That’s just an estimate, since there’s no way of knowing how much sexual misconduct — both reported and unreported — has occurred in the history of publicly managed youth programs in Colorado, how many lawsuits would be filed, or how many of those lawsuits would result in a judgment against the state. But the estimate certainly paints a bleak picture, said Raana Simmons, director of public affairs for the Colorado Coalition Against Sexual Assault.

The assumption is that “there is so much substantiated institutional cover-up of child sexual abuse in Colorado’s public entities that it would result in a $13 million judgment against the state of Colorado,” Simmons said.

Bill Zepernick, fiscal notes manager for Legislative Council Staff, said he hoped staff’s analysis overestimated the amount of cash that might be needed.

The process by which the state funds liability payments is somewhat complicated, Zepernick said.

“All the state agencies pay into a fund based on claims that occur, and then that’s used to pay out the claims,” he explained, “and then that kind of gets refilled, refreshed, through the budget every year. … A big change like this could deplete that fund potentially, and so that’s why there’s an upfront (cost).”

Limited data on child sexual misconduct

Any legislation considered by the Colorado General Assembly gets a fiscal analysis, called a “fiscal note,” developed by the nonpartisan Legislative Council Staff. The fiscal note summarizes the bill, explains how it would impact state and local government budgets, and discusses how it would be implemented.

“Fiscal notes are based on a set of assumptions that take into account information collected from state agencies, local governments, and other entities or sources,” according to Legislative Council Staff’s website.

SB-88’s fiscal note states its analysis is based on “current incident rates reported in the Division of Youth Services,” as well as “the total number of youth served in Colorado state programs and activities conducted by institutions of higher education and History Colorado,” which is 60,000 children. The analysis assumes that 55 child sexual misconduct lawsuits would be filed each year and that one in two cases would result in a judgment against the state.

“I would say that this is a difficult thing to estimate, because we don’t have perfect data on how many cases are out there,” Zepernick said in an interview.

Under SB-88, someone who experienced sexual misconduct as a child enrolled in a state youth program would be able to bring a claim against a department, program employee or agent of the Colorado government. The Colorado Governmental Immunity Act currently caps liability for any single person or entity at $387,000, and the fiscal note assumes that cap would still apply.

Zepernick said analysts took a recently reported rate of sexual misconduct within the state’s juvenile detention facilities and applied it to the estimated number of children who participate each year in state youth programs and activities.

That rate came from a 2019 report required under the national Prison Rape Elimination Act, covering incidents reported at Division of Youth Services facilities.

Between 2017 and 2019, there were an average of 36 allegations a year of employee-on-youth sexual abuse allegations within DYS, the report shows. Between two and three allegations each year were found to be substantiated, and the rest were unsubstantiated or unfounded.

DYS serves approximately 4,100 children, while institutions of higher education serve 30,000 children in their youth programs, and History Colorado serves 30,000, according to fiscal analyst Sonia Hatfield. The DYS rate of around three substantiated allegations per 4,100 children each year was applied to the entire population of children served in state youth programs to estimate how many lawsuits the state would face under SB-88.

While the analysts thought DYS facilities may have a higher rate of abuse than other youth programs, Zepernick said they decided not to revise the estimate lower, due to the retroactive nature of the bill that would allow people to sue over misconduct that occurred decades in the past.

“We have pretty much no idea how many of those cases are going to come out,” he said.

Under SB-88, a managing organization would be liable for damages if it “knew or should have known” at any point in the past that an employee or volunteer posed a risk of sexual misconduct against children and did not supervise the employee or keep them away from children; or if the organization “knew or should have known” that a youth program posed a risk of sexual misconduct against children and did nothing to reasonably address the risk or warn families.

If the legislation were to pass, the fiscal note recommends that the General Assembly designate $13.7 million to the Department of Personnel and Administration for next year’s budget and another $13.7 million the following year.

Most of that money — $10.6 million — would be budgeted for paying damages in lawsuits that alleged child sexual misconduct by a state entity, employee or agent. Another $3 million would be be allocated for the state’s legal expenses.

The fiscal note assumes that 50% of lawsuits filed under SB-88 would result in a judgment against the state.

The Colorado Governmental Immunity Act’s caps on liability payments don’t apply to nonprofits outside of government, such as the Catholic Church or Boy Scouts of America.

A special report from the Colorado attorney general’s office, released in 2019, reported 166 victims of child sexual abuse committed by 43 Roman Catholic priests over 70 years in the Archdioceses of Denver, Pueblo and Colorado Springs. A follow-up report in 2020 reported 46 additional victims and implicated nine more priests.

The most recent abuse reported by the attorney general’s office occurred in 1999.

“We have sought to address our past and make sure we’re doing everything we can to protect children today,” Brittany Vessely, executive director of the Colorado Catholic Conference, testified to the Senate Judiciary Committee on March 11.

Vessely pointed out that the financial burden of litigation under SB-88 would fall on parishioners and people the church serves through social ministries.

Bill would hand survivors new power

“We’ve got a measure here that provides the Legislature an opportunity to change course,” Sen. Jessie Danielson, a Democrat from Wheat Ridge, said to introduce SB-88 at the March 11 hearing. “For the last many decades, we’ve been failing the survivor community. We’ve had opportunities to provide them with measures that would assist them with healing and justice for … 20 years now.”

The related Senate Bill 21-73, which had already passed through the Senate unanimously, was a “big step forward,” Danielson said at the time. That legislation has since passed the House. SB-73 is forward-looking only, meaning it doesn’t apply to survivors for whom the statute of limitations has already expired. However, the bill would allow child sexual assault survivors who have not turned 24 — and future survivors — to, at any point in time after the assault occurred, sue their abusers and any institutions that turned a blind eye to abuse.

SB-88’s sponsors include Danielson and Sen. Rhonda Fields of Aurora, a Democrat; along with Democratic Rep. Dafna Michaelson Jenet of Pueblo and Republican Rep. Matt Soper of Delta.

SB-73 “still leaves a big gap in what we are able to accomplish for the survivor community,” which is where SB-88 comes in, Danielson said at the committee hearing. The latter bill introduces a new cause of action under which survivors of child sexual misconduct could sue over the incidents no matter how long ago they occurred.

“There is a worldwide epidemic of child sexual abuse, with at least 1 in 5 girls and 1 in 13 boys being sexually assaulted before their 18th birthday — that is, 13% of all children,” Kathryn Robb, executive director of nonprofit lobbying organization CHILD USAdvocacy, testified at the hearing. “Allowing sex abuse survivors to identify hidden predators in Colorado is in the best interest of Colorado.”

An anonymous survivor who testified before the committee said he had been sexually abused by a troop leader in the Boy Scouts of America, who has since been criminally convicted. The survivor suffers from post-traumatic stress disorder, obsessive compulsive disorder and anxiety, but is not entitled to a civil claim against the abuser or the organization.

“Let me remind the committee that most sexual assault survivors are not going to come forward before the current statute of limitations,” the survivor testified. “They may come forward decades later, and we as a state must provide an avenue for this. … We are complex emotional beings that need time to process our trauma.”

But opponents to SB-88, including the Colorado Catholic Conference, say it is unconstitutional and does not provide adequate due process for the accused.

“The bill would impose liability on private and public institutions for failing to comply with statutes that weren’t enacted at the time of the alleged misconduct,” reads an analysis of the bill on the Conference website. “It also holds organizations liable even if they had no reason to believe that the abuser was a danger to children. Finally, the bill revives claims that are barred by the statute of limitations even though the Colorado Supreme Court and Office of Legislative Legal Services (OLLS) have said it is unconstitutional.”

“Passing a bill with constitutional and due process problems will only delay opportunities for survivors to receive compensation and it will not promote true restorative justice,” the Conference added.

During the committee hearing, Sen. Bob Gardner, a Colorado Springs Republican, raised questions about the legality of SB-88. He pointed out that no other Colorado law has similarly created a new cause of action that would allow people to sue over past misconduct.

The bill “reaches back, and it imposes a new duty and a liability based on a past breach of that duty and says that the harmed person, the victim, can sue this organization for that harm,” Gardner said. “You didn’t know you had a duty, but you did, and if you breached it, you’re going to be liable.”

Gardner was the lone no vote against SB-88 in the Senate Judiciary Committee. The committee voted 4-1 on March 11 to refer the bill to the Senate Appropriations Committee. A hearing date had not been set as of the time of publication.