BILL ANALYSIS
AB 1461
Page 1
Date of Hearing: April 21, 2009
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Mary Hayashi, Chair
AB 1461 (Ruskin) - As Introduced: February 27, 2009
SUBJECT : Shorthand reporting.
SUMMARY : Prohibits a firm, partnership, sole proprietorship,
or other business entity providing or arranging for shorthand
reporting services, from doing or failing to do any act that
constitutes unprofessional conduct under any statute, rule or
regulation pertaining to shorthand reporters or shorthand
reporting.
EXISTING LAW :
1)Provides for the certification and regulation of shorthand
reporters by the Court Reporters Board of California (Board)
and makes a violation of these provisions a crime.
2)Prohibits a shorthand reporting corporation from doing or
failing to do any act that constitutes unprofessional conduct
under any statute, rule or regulation pertaining to shorthand
reporters or shorthand reporting.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of the bill . According to the author's office, "This
bill would close a loophole which allows businesses to
circumvent ethics standards, laws, and regulations written to
govern shorthand court reporting? The problem occurs in two
places: the ownership level of a business and the structure of
a business. The law covers those individuals licensed by the
Board? (and) those businesses structured as "corporations," but
the law does not cover those businesses owned by unlicensed
individuals that are structured in any way other than as a
corporation; for example, a limited partnership or sole
proprietorship.
"Consequently, businesses owned and operated by unlicensed
individuals structured as partnerships are exploiting this
loophole which allows them to disregard various ethics
AB 1461
Page 2
standards, laws and regulations that govern court reporting.
This creates serious inequities in the business practices of
shorthand reporting in the state. Aside from gift-giving, there
are many serious infringements including inappropriately selling
transcripts to non-parties and reformatting transcripts with
smaller margins than legally permitted (thus driving up the per
page cost to the client). Questionable behavior such as this is
punishable by the Board against licensees and corporations but
not punishable against firms structured as partnerships owned by
unlicensed individuals."
Background . The Board licenses and disciplines certified
shorthand reporters who, as officers of the court, are
responsible for competently and neutrally reporting depositions
in legal cases. The Board ensures the integrity of judicial
records by administering a competency test to ensure new court
reporters possess the basic skills needed for the job,
authorizing the minimum curriculum which court reporting schools
offer, and disciplining licensees when necessary. All of the
Board's activities are funded from licensing and examination
fees. The Board currently has over 7,600 licensees.
According to the Board, businesses owned by unlicensed
individuals that are structured differently than a corporation
and that hire individual court reporters to provide services to
third-party clients are not regulated by the Board. When a
court reporter turns over his or her transcript to the agency,
the agency then has control of the transcript. Under the
current scheme, the individual licensee is responsible for the
reporting services even after the product leaves their control.
If a business performs an action or lack of action in violation
of the same laws that regulate the individual reporter, there is
no protection or resource that allows the consumer to satisfy
their complaint. The Board provided two examples:
Example One : The Board has a mandatory transcript format law
that specifies the size of the text and number of lines on a
page. This standardization allows the consumer to be aware of
their costs for a deposition, based on a "page rate." Under the
current lack of agency oversight, the agency can take a
transcript, reformat it to the size that is particular to their
agency, and increase the number of pages, thus increasing the
cost to the consumer. No action can be taken against the agency
for charging more for a transcript than the current laws allow
the individual reporter to charge for the same information.
AB 1461
Page 3
Example Two : Non-parties to depositions are allowed a copy of
the transcript after a notice has been given to all parties that
allow a time period to seal the record. Absent that filing, the
non-party has a legal right to a copy of the transcript. When
an individual reporter turns over his or her transcript to the
agency, the agency can refuse to send the transcript to a
legally entitled non-party. There is no rule that prevents this
situation from occurring.
Support . According to the President of the California Court
Reporters Association, "AB 1461 will help provide a clear
statute in law that requires all parties in the business of
deposition reporting in California to follow the same rules.
Also, as the owner of my own reporting firm, I will no longer be
disadvantaged by some businesses that now are not required to
comply with reporting rules and ethical standards that are
imposed on me? The fact that some businesses include incentive
gift-giving in deposition rates or don't follow formatting
guidelines established by the state increases the price of the
deposition to the consumer."
The Deposition Reporters Association writes, "The job performed
by licensed deposition professionals is one of the most
important in the State. Their integrity, impartiality, and
competence are essential to the reasoned and fair administration
of justice in California. They are, in fact, officers of the
court - extensions of the court in private depositions taking
place in law offices every day. As the 2005 Joint Committee on
Boards, Commissions and Consumer Protection observed: "In civil
cases, millions of dollars, life-long careers, and the fate of
whole businesses enterprises can hinge on what was said or what
was not said in a deposition."
The DRA further contends, "These licensed officers of the court
are responsible for competently and neutrally reporting
depositions in what is often contentious, bitter, and complex
litigation? Businesses exploiting the loophole offer gifts in
egregious excess of the legal amount, taking business away from
the ethically-bound firms, the vast majority of which are
women-owned, small businesses."
According to the Board, "The Board holds the position that the
consumer is best protected when all businesses who offer court
reporting services in the State of California are subject to the
AB 1461
Page 4
same laws. AB 1461 affirms that the Board has enforcement
authority over all business entities (that) provide court
reporting service."
The Consumer Federation of California writes, "Court reporters
play an important role in our system of justice. They create a
full and impartial written record of courtroom proceedings,
arbitration hearings and deposition testimony in civil and
criminal cases. These cases often impact consumers, and it is
essential that the court reporting industry be governed by
consistent rules that apply across the board to all industry
participants? Unregulated entities compete with regulated court
reporters, but are free to provide incentive payments to
clients. One out-of-state firm with California offices offer
clients points for every $50 spent on their services. Clients
can turn in accumulated points for gifts that include travel and
booking at a Miami Beach penthouse. These entities are also
exempt from regulations regarding formatting of transcripts, and
can reformat documents to increase their billing rates."
REGISTERED SUPPORT / OPPOSITION :
Support
California Court Reporters Association (CCRA) (sponsor)
Deposition Reporters Association (DRA) (sponsor)
California Official Court Reporters Association (COCRA)
Consumer Attorneys of California
Consumer Federation of California
Court Reporters Board of California (Board)
International Federation of Professional and Technical, Local 21
(IFPTE Local 21)
Service Employees International Union (SEIU)
Opposition
None on file.
Analysis Prepared by : Joanna Gin / B. & P. / (916) 319-3301