BILL ANALYSIS Ó SENATE COMMITTEE ON BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT Senator Jerry Hill, Chair 2015 - 2016 Regular Bill No: SB 270 Hearing Date: April 20, 2015 ----------------------------------------------------------------- |Author: |Mendoza | |----------+------------------------------------------------------| |Version: |April 14, 2015 | ----------------------------------------------------------------- ---------------------------------------------------------------- |Urgency: |No |Fiscal: |Yes | ---------------------------------------------------------------- ----------------------------------------------------------------- |Consultant|Mark Mendoza | |: | | ----------------------------------------------------------------- Subject: Court Reporters Board of California: civil actions: corporations. SUMMARY: Authorizes the Court Reporters Board of California to take court action against an out-of-state individual and corporation who unlawfully renders court reporting services in California by providing injunctive relief and penalties for acts in violation of the CRB's professional and ethical rules for certified shorthand reporters. Existing law: 1) Provides for the certification and regulation of short hand reporters and for the regulation of shorthand reporting corporations by the Court Reporters Board (CRB) within the Department of Consumer Affairs (DCA). (Business and Professions Code (BPC) § 8000 et seq.) 2) Provides that no person shall engage in the practice of shorthand reporting, as defined, unless that person is the holder of a certificate in full force and effect issued by the CRB. (BPC § 8016) 3) Defines shorthand reporting as the making, by means of written symbols or abbreviations in shorthand or machine shorthand writing, or verbatim record of any oral court proceeding, deposition, court ordered hearing or arbitration, or proceeding before any grand jury, referee, or court SB 270 (Mendoza) Page 2 of ? commissioner and the accurate transcription thereof. (BPC § 8017) 4) Specifies that any violation of the Shorthand Reporters Act (Act) is a misdemeanor. (BPC § 8019) 5) Provides that CRB, in addition to its authority to take disciplinary action, shall have the authority to issue administrative citations or assess fines for the violation of any rules and regulations adopted by the CRB. (BPC § 8027.5) 6) Provides that a shorthand reporting corporation is a corporation authorized to render professional services, as defined, as long as that corporation and all of its shareholders, officers, directors, and employees rendering professional services who are certified shorthand reporters (CSR) are in compliance with specified provisions of law. (BPC § 8040) 7) Specifies that it constitutes unprofessional conduct and a violation of the Act for any licensed person to violate, attempt to violate, assist in or abet the violations of, or conspire to violate any specified provisions of law, including any other specified provisions of law. (BPC § 8042) 8) Provides that a shorthand reporting corporation shall not do or fail to do any act the doing of which or the failure to do which would constitute unprofessional conduct under and statute, rule or regulation which pertains to shorthand reporters or shorthand reporting. (BPC § 8046) 9) Requires that a shorthand reporting corporation in conducting its practice shall observe and be bound by such statutes, rules and regulations to the same extent as a person holding a license. (BPC § 8046) 10)Provides for professional standards of practice for certified shorthand reporters including that no CSR may enter into, arrange, or participate in a relationship that compromises the impartiality of the CSR, including, but not limited to, a relationship in which compensation for reporting services is based upon the outcome of the proceeding, or in which a gift, SB 270 (Mendoza) Page 3 of ? incentive, reward or anything of value is provided by a person or entity which is associated with the proceeding being reported. (California Code of Regulations, Title 16 § 2475) This bill: 1) Authorizes the CRB to bring a civil action in superior court to enjoin any person, corporation, or corporation organized under the laws of a state of the United States other than this state, from rendering court reporter services in this state without ever being issued a license by the CRB or authorization to render court reporter services in this state by satisfying the requirements of the Act; and provides that the CRB may request that the Attorney General to bring this action. 2) Authorizes the court, in addition to any other remedy authorized by law, to impose a $1000 to $2500 monetary penalty against the person or corporation rendering services without a license or authorization, and that the court may also order restitution and the return of any payments made to the person or corporation. 3) Authorizes the court to also enjoin a person or corporation from taking any action that would otherwise constitute a violation of any statute or regulation of the CRB pertaining to the impartiality of the CSR, including, but not limited to, the violation of the professional standards of practice of the CSR and provides that the court may impose a $2500 monetary penalty and restitution for any acts undertaken by any person or corporation rendering court reporter services in this state. 4) Provides that the court may designate that any transcript prepared by any person or corporation subject to any court action brought by the CRB does not qualify as a certified transcript but requires that CSR be reimbursed for the production of the transcript in accordance with specified transcript fees. 5) Provides that it shall be a misdemeanor for any person or corporation to knowingly render court reporting services in this state without ever being issued a license by the CRB or SB 270 (Mendoza) Page 4 of ? being authorized to render court reporter services in this state. 6) Permits reasonable investigation and enforcement costs to the CRB or Attorney General responsible for filing the court action. 7) Makes other technical and conforming changes. FISCAL EFFECT: Unknown. This bill has been keyed "fiscal" by Legislative Counsel. COMMENTS: 1. Purpose. The bill is sponsored by the California Court Reporters Association . According to the Author, "The CRB has relied on sections from both the B&P Code and Corporation Code in order to piece together their jurisdiction over entities that have never been licensed to render court reporting services in our state. Entities who are incorporated under the law of another state, and who are not licensed in California, have stated, in the past, that they are outside of the board's jurisdiction because they are not licensed by the board in this state. The board has found that these entities have also violated gift giving rules, jeopardizing the impartiality of the court reporting profession. SB 270 clarifies the boards existing authority over entities rendering court reporting services in the state by explicitly providing remedies for those entities that are in violation of California's professional standards. This clear authority will ensure that all entities rendering court reporting services in California are following the professional standards required in our state." 2. Court Reporters Board of California vs. U.S. Legal. In 2010, the CRB found that U.S. Legal, a Texas based corporation, was providing court reporting services in California and offering incentives and/or gifts in exchange for depositions, a violation of California's professional standards. U.S. Legal argued that the Board lacked jurisdiction to issue citations. SB 270 (Mendoza) Page 5 of ? In the subsequent 2012 case, Court Reporters Board of California v. U.S. Legal, the Court agreed with U.S. Legal and found that the CRB has no authority to impose sanctions and fines against U.S. Legal for noncompliance with anti-gift-giving regulations. The Court stated that "there is no statutory authorization for such a power, and this Court cannot simply invent one." According to the Court, although U.S. Legal was rendering court reporting services in California and was in violation of gift-giving regulations, there was no explicit authority in current statute authorizing the board to impose sanctions or fines against U.S. Legal. NOTE: Double-referral to Senate Committee on Rules. SUPPORT AND OPPOSITION: Support: Orange County Superior Court Reporters Association (OCSCRA) Opposition: None on file as of April 14, 2015. -- END --