By Molly Burke, Hearst Fellow
Sep 27, 2024
https://www.sfchronicle.com/politics/article/prop-34-aids-healthcare-19789238.php
Activists affiliated with AIDS Healthcare Foundation, Unite Here Local 11 and the Coalition for Economic Survival protest Proposition 34 outside the California Apartment Association’s regional Los Angeles headquarters on Sept. 5. Mark Von Holden/Associated Press
If you check California’s official voter guide — or even the text of the proposed law — for information on Prop 34, they’ll tell you the measure requires “certain providers” to spend virtually all of the money they receive from a federal prescription drug program on patient services.
But the measure’s backers have repeatedly pointed to one group that would likely be subject to the requirements. And that group says it’s being illegally targeted.
Whether Prop 34 really singles out one specific nonprofit or could also apply to a handful of other groups is a matter of fierce debate between supporters and opponents, but one thing seems clear: The question will go to the courts if Prop 34 passes.
Opponents say Prop 34 is intended at undercutting the AIDS Healthcare Foundation, a Los Angeles-based, politically active organization serving HIV and AIDS patients.The group is the primary sponsor of the Yes on 33 campaign, which aims to remove restrictions on rent control from state law, and has spent at least $41 million supporting the measure. It also sponsored rent control ballot measures unsuccessfully twice before, in 2018 and 2020.
“This is a revenge initiative,” said Michael Weinstein, president of the nonprofit. “It’s a transparent fig leaf. It doesn’t cover anything.”
The measure contains a number of parameters laying out to whom it would apply, some of them seemingly unrelated to patient care and that mirror the unique nature of the AIDS Healthcare Foundation. It applies to organizations that have spent $100 million in any 10-year-period on issues other than direct patient care and that have operated multifamily housing with at least 500 reported high-severity violations.
AIDS Healthcare Foundation likely meets the income requirements in Prop 34, having made more than $2 billion in 2022, according to tax documents. The organization has also faced scrutiny for safety violations in housing it operates in Los Angeles, including dangerous conditions and disrepair in its Skid Row properties, a Los Angeles Times investigation found.
Proponents of the measure — which would require affected organizations to spend at least 98% of their revenue on direct patient care — claim that the law, if passed, could apply to other organizations that are part of the federal 340B drug pricing program.
The battle over Prop 34 is inextricably linked to Prop 33.
Prop 34 is primarily supported by the California Apartment Association, which has given at least $29 million to the Yes on 34 campaign. The group, which represents landlords and owners of apartments and rental homes, has also spent more than $34 million opposing Prop 33, the rent control measure pushed by AIDS Healthcare Foundation.
Nathan Click, a spokesperson for the Yes on 34 campaign, said that while AIDS Healthcare Foundation is “certainly one of the worst public actors of the 340B program, they’re not the only one.”
Click said government agencies tasked with enforcement of the measure would be charged with deciding who it applies to.
“Therefore, there is no guarantee today any entity or entities will end up being subject (sic) the measure’s terms,” Click said in a statement. “All speculation of who may or may not be covered is based purely on news reports that have not been independently confirmed.”
Click said that in addition to AIDS Healthcare Foundation, three other providers could potentially be subject to Prop 34: CVS, Bon Secours and CommonSpirit Health. Click cited their involvement in the 340B program and housing, as well as spending on issues other than direct patient care, as potential factors that could subject them to the measure.
CVS declined to comment, and Bon Secours and CommonSpirit Health did not respond to the Chronicle’s requests for comment.
Weinstein, however, said he does not believe any of the other groups would meet Prop 34’s requirements.
That could mean legal problems for the measure, said Matthew Coles, a law professor at UC Law SF. Opponents of the measure will argue that Prop 34 is what’s called a bill of attainder.
The U.S. Constitution prohibits bills of attainder — which target an individual or a small group with punishment through legislation, rather than the judicial process.
“They were a significant source of concern for drafters in the Constitution at the time it was written,” Coles said. “They haven’t come up a whole lot since then, I think partly because they just strike everybody as really wrong.”
While the AIDS Healthcare Foundation is not named in Prop 34, it’s possible the group could still successfully argue that the measure qualifies as a bill of attainder. David A. Carrillo, executive director of UC Berkeley School of Law’s California Constitution Center, said that bills of attainder inflict “punishment without a judicial trial on either named individuals or easily ascertainable members of a group.”
AIDS Healthcare Foundation turned to the California Supreme Court this summer to try and remove Prop 34 from the ballot. The court refused to pull the measure, an extreme step it has taken only rarely. But the justices said AIDS Healthcare Foundation could challenge Prop 34 in court if it passes.
The decision was touted as a victory by Prop 34 supporters. But Coles said that the decision doesn’t indicate whether Prop 34 is a bill of attainder, but rather a choice to let the issue go to voters before hearing arguments on its constitutionality.
Jerry Flanagan, litigation director at Consumer Watchdog, an advocacy organization, supports AIDS Healthcare Foundation in its legal battle.
“The idea is we’ll get back to this just after the November ballot, and then we’ll deal with the substance of the argument,” Flanagan said. He said he remains hopeful that the court would strike down the measure if it passes, because it gave no indication of its stance on the argument when it ruled voters could consider it.
Carrillo and Coles pointed to two main requirements that AIDS Healthcare Foundation must prove to show Prop 34 is unconstitutional.
“The key questions are whether the statute would apply to others, and whether the law’s requirements fairly constitute punishment,” Carrillo said.
Coles thinks that the argument that Prop 34 is singling out AIDS Healthcare Foundation is likely to be more clear-cut in a legal battle given the measure’s specific requirements of who is affected.
On top of targeting organizations that make money from the federal340B drug pricing program, as the AIDS Healthcare Foundation does, it would apply to organizations that own multifamily dwellings and have racked up at least 500 safety violations in those units — qualifiers that also apply to the group.
“How come the prescription drug program should be regulated by the state only for organizations that make over $100 million a year? Why the tie to operating dwellings that, over the years, have 500 or more safety violations? What’s that got to do with a prescription drug program?” Coles asked. “I haven’t heard a good answer to either of those two questions.”
Coles said he thinks the more interesting question will be whether Prop 34 constitutes a punishment. The measure would not jail or punish Weinstein or AIDS Healthcare Foundation in a way reminiscent of a sentencing after a trial — which are clearly punishments, Coles said. Instead, it would take away the ability of the organization to use its revenue for political action, including as it has three times in placing rent control measures, like Prop 33, on the ballot.
“Their intention is to handicap (the organization’s advocacy), and if they’re successful, this will be used against any or every other advocacy group in any other arena,” Weinstein said. “It’s a very, very dangerous precedent.”
Reach Molly Burke: molly.burke@hearst.com
