BILL ANALYSIS Ó AB 2570 Page 1 Date of Hearing: May 16, 2012 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair AB 2570 (Hill) - As Introduced: February 24, 2012 Policy Committee: Business and Professions Vote: 6 - 3 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill prohibits licensees of any board, bureau or program under the Department of Consumer Affairs (DCA) from including any "regulatory gag clause" in civil settlement agreements. FISCAL EFFECT Minor and absorbable enforcement costs for the various DCA boards and bureaus to enforce the provisions of this legislation. COMMENTS 1)Purpose . This bill is intended to close a loophole in current law that allows a licensee under the supervision of DCA to prohibit a consumer who settles a civil suit from also filing a complaint or cooperating with the licensee's regulator -- either DCA or one of its affiliated boards. This agreement is known as a regulatory gag clause. This bill is modeled on an existing statute that prohibits attorneys from including gag clauses in malpractice settlements. 2)Background . DCA contains approximately 40 boards, bureaus, commissions and divisions, most of which oversee licensed professions such as physicians, accountants, contractors, professional engineers, nurses, and counselors. These boards and bureaus are generally responsible for licensing, setting and enforcing standards for practice of the professions through a disciplinary program designed to detect and investigate licensee misconduct and, in appropriate cases, revoke, suspend, or restrict occupational licenses to protect AB 2570 Page 2 the public. \ 3)Opposition . According to the policy analysis dated April 24, 2012, the California Chamber of Commerce, the Civil Justice Association of California, the American Council of Engineering Companies, California, and the California Board of Accountancy oppose this bill. The California Board of Accountancy (CBA) states, "The CBA is opposed to the limitation on its disciplinary discretion. The CBA considers all available information when imposing discipline on a licensee including any civil suit settlement. In addition, the CBA opposes the gag clause as it may deter settlements that would benefit consumers and cost them money in litigation expenses." Analysis Prepared by : Julie Salley-Gray / APPR. / (916) 319-2081