BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  SB 636
          Author:   Hill (D)
          Amended:  1/15/14
          Vote:     21

           
          PRIOR VOTES NOT RELEVANT

           SENATE ENERGY, UTILITIES & COMMUNIC. COMMITTEE  :  8-0, 1/14/14
          AYES:  Padilla, Cannella, De León, DeSaulnier, Hill, Knight,  
            Pavley, Wolk
          NO VOTE RECORDED:  Fuller, Corbett, Wright

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8


          SUBJECT  :    Public Utilities Commission:  proceedings

           SOURCE  :     Author


           DIGEST  :    This bill prohibits any Public Utilities Commission  
          (PUC) employee, agent or officer that is personally involved in  
          the prosecution or in the supervision of an adjudication case  
          from participating in, or advising PUC on, the decision of that  
          case or the decision of a factually related proceeding.

           ANALYSIS  :    

          Existing law:

          1.Requires the Governor to designate one of the commissioners as  
            president who is authorized to direct and prescribe duties of  
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            an attorney (general counsel), executive director, and other  
            staff and preside at PUC meetings.  

          2.Authorizes the PUC to appoint a general counsel to represent  
            the PUC in all actions, to commence, prosecute or intervene in  
            proceedings as directed by the president, to advise the PUC  
            and each commissioner on all matters, and to perform all  
            duties that the president or a vote of the PUC may require. 

          3.Establishes within the PUC an independent Office of Ratepayer  
            Advocates (ORA), to be staffed with attorneys from the office  
            of the PUC general counsel (Legal Division), and requires the  
            PUC to develop procedures and a code of conduct to ensure that  
            ORA advocates on a particular case or proceeding are not  
            advising decisionmakers on the same case or proceeding. 

          This bill:

          1.Prohibits an officer, employee, or agent of the PUC that is  
            personally involved in the prosecution or in the supervision  
            of the prosecution of an adjudication case from participating  
            in the decision of the case or in the decision of any  
            factually related proceeding. 

          2.Permits an officer, employee, or agent of the PUC that is  
            personally involved in the prosecution or in the supervision  
            of the prosecution of an adjudication case to participate in  
            reaching a settlement of the case, but prohibits the officer,  
            employee, or agent from participating in the decision of the  
            PUC to accept or reject the settlement, except as a witness or  
            counsel in an open hearing or a specified closed hearing.

           Background

          Due process requires separation of functions  .  The  
          constitutional guarantee of procedural due process includes the  
          right to have legal disputes and proceedings resolved by a  
          neutral, impartial and unbiased adjudicator and tribunal.  This  
          generally requires that a judge or other decisionmaker be  
          advised by an attorney who is different from the attorney  
          serving as prosecutor or advocate in a proceeding.  A leading  
          California Supreme Court case is Morongo Band of Mission Indians  
          v. State Water Resources Control Board (45 Cal.4th 731 (2009),  
          which involved a board proceeding to revoke a water license  

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          where an attorney prosecuting the case also served as advisory  
          counsel for the board in its decision on an unrelated matter.   
          The court held that contemporaneously serving as adviser to a  
          decisionmaker in one case while prosecuting an unrelated case  
          before that same decisionmaker does not by itself violate due  
          process as long as an agency's internal separation of functions  
          are observed.

           PUC's separation of functions  .  The California Administrative  
          Procedures Act (APA) requires a state agency's adjudicative  
          function to be separated from the investigative, prosecutorial,  
          and advocacy functions.

          The PUC, as an independent constitutional entity, has long been  
          exempt from the APA and instead is governed by provisions in the  
          Public Utilities Code.  These provisions do not require  
          separation of advocacy and advisory functions for all PUC  
          employees or even all attorneys in the PUC Legal Division.   
          Existing law requires the general counsel, head of the Legal  
          Division, to both prosecute cases on behalf of PUC and advise  
          commissioners.  However, provisions governing ORA (which has  
          attorneys assigned to it from the Legal Division), requires PUC  
          to develop a code of conduct and procedures to ensure that an  
          employee does not both advocate and advise decisionmakers in the  
          same case.

           PUC guidelines and practices  .  A 1997 memorandum from the PUC  
          executive director to staff on "Conflict of Roles: Guidelines &  
          Procedures" requires separation of functions for PUC staff under  
          the following general principle: 

            "Commission staff who have been personally involved in  
            preparing or presenting an adjudicatory case shall not serve  
            in an advisory role in the same adjudicatory proceeding, or  
            any factually related adjudicatory proceeding."

          But the memo emphasizes that its provisions are only guidelines  
          and also gives the executive director and general counsel  
          authority to waive the guidelines.  The PUC states that this  
          memo and its "current practice of keeping attorneys separated on  
          a case-by-case basis" complies with the California Supreme  
          Court's Morongo decision.  

          On January 7, 2014, the commissioners issued a memorandum to the  

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          general counsel and Legal Division attorneys with a report from  
          an outside expert on ethical duties and responsibilities of PUC  
          attorneys and a directive that legal ethics training will be  
          forthcoming.  The PUC hired the outside expert in August 2013  
          after an internal dispute last summer involving PUC attorneys  
          and supervisors working on an enforcement action against Pacific  
          Gas and Electric (PG&E) in connection with the San Bruno gas  
          pipeline explosion.

           Comments
           
          According to the author's office, this bill is necessary to  
          codify the requirement to separate advocacy and advisory  
          functions at the PUC because the PUC's current policy requiring  
          separation is not binding and can be waived at the discretion of  
          the general counsel and executive director.  The author's office  
          describes two incidents demonstrating the need for this bill  
          involving the general counsel serving both as adviser to the  
          commissioners and directing the prosecuting attorneys to take  
          specified actions in the PUC's penalty proceeding against PG&E  
          for the San Bruno gas pipeline explosion.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No



          JG:k  1/21/14   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  NONE RECEIVED

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