Good Fences Make Good Regulators
The Recorder
By Mike McKee
November 14, 2006
Government agencies with internal legal teams were put on notice
Monday that ex parte communications between their staff
prosecutors and decision makers are no longer allowed.
That decision by the California Supreme Court will force several
agencies, including the state attorney general's office, to
institute policies to ensure that every case they handle is free
of prosecutorial bias.
"Any state agency that engages in adversarial proceedings has
to read and understand this decision," said Ralph Saltsman, a
partner in Playa del Rey's Solomon, Saltsman & Jamieson who
represented the victorious plaintiffs. "It's going to govern
how state agencies in California do business."
Tuesday's ruling reverses decisions by the state Department
of Alcoholic Beverage Control that had suspended the liquor
licenses of three Southern California businesses. Between May and
August 2002, a bartender working for Daniel Quintanar had been
accused of selling beer to an obviously intoxicated customer,
while separate establishments operated by Richard Kim and KV Mart
were hit for selling alcoholic beverages to an underage decoy.
An administrative law judge recommended that all three cases be
dismissed because of insufficient proof. Afterward, however, the
prosecuting staff attorney for the Department of Alcoholic
Beverage Control filed a routine report with then-chief counsel
Matthew Botting that detailed what happened in the hearings.
Botting rejected the judge's recommendation and ordered
suspensions ranging from 15 to 25 days.
On appeal, the plaintiffs argued that the suspensions
should be overturned because Botting — the prosecutor's
supervisor — was a biased advocate, not a neutral decision
maker.
The state Alcoholic Beverage Control Appeals Board — which
reviews department decisions — and Los Angeles' Second District
Court of Appeal agreed. Both held that the department's failure to
separate its prosecutorial and adjudicatory functions violated the
California Administrative Procedure Act, which limits contact
between internal agency prosecutors and superiors who make final
decisions on cases.
In Monday's unanimous ruling, the Supreme Court held that agency
prosecutors cannot secretly communicate with the agency's decision
maker about the substance of a case prior to a final decision.
"The agency head," Justice Kathryn Mickle Werdegar
wrote, "is free to speak with anyone in the agency and to
solicit and receive advice from whomever he or she pleases —
anyone except the personnel who served as adversaries in a
specific case."
Werdegar also ruled that plaintiffs don't have to prove whether ex
parte communication played a role in an agency's final
decision, nor can the agency "raise as a shield" a
defense that the communication made no difference.
"Under the APA," Werdegar wrote, "the mere
submission of ex parte substantive comments, without more,
is illegal."
Amici curiae, including the AG's office, had argued that
such a ruling could be costly and disruptive. Specifically, the
AG's office had argued that upholding the lower court could expose
agencies to more claims of bias, force complex internal
restructuring or compel the hiring of private lawyers.
Werdegar indicated, however, that the impact of her ruling might
be much narrower. She even rejected the appeal court's suggestion
that agencies be required to set up mandatory screening procedures
to bar improper contact and that prosecutors be forbidden from
filing hearing reports with superiors.
"The APA," she wrote, "bars only advocate-decision
maker ex parte contacts, not all contacts."
Werdegar said prosecutors with the Department of Alcoholic
Beverage Control could continue filing hearing reports, "so
long as [they] provide licensees a copy of the report and the
opportunity to respond."
John Peirce, chief counsel for the Sacramento-based Department of
Alcoholic Beverage Control, called the ruling
"reasonable" and said he was pleased it had rejected the
more stringent demands suggested by the appeal court.
"It's done in such a way," he said, "that we
obviously can and will comply with it."
The ruling is Department of Alcoholic Beverage Control v.
Alcoholic Beverage Control Appeals Board (Quintanar), 06
C.D.O.S. 10464.
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