BILL ANALYSIS Ó
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 270|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
THIRD READING
Bill No: SB 270
Author: Mendoza (D)
Amended: 5/5/15
Vote: 21
SENATE BUS, PROF. & ECON. DEV. COMMITTEE: 9-0, 4/20/15
AYES: Hill, Bates, Berryhill, Block, Galgiani, Hernandez,
Jackson, Mendoza, Wieckowski
SENATE JUDICIARY COMMITTEE: 5-1, 4/28/15
AYES: Jackson, Hertzberg, Leno, Monning, Wieckowski
NOES: Anderson
NO VOTE RECORDED: Moorlach
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/18/15
AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen
SUBJECT: Court Reporters Board of California: civil actions:
corporations
SOURCE: Author
DIGEST: This bill authorizes the Court Reporters Board of
California (CRB) 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.
ANALYSIS:
SB 270
Page 2
Existing law:
1) Provides for the certification and regulation of shorthand
reporters and for the regulation of shorthand reporting
corporations by the CRB within the Department of Consumer
Affairs. (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
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)
SB 270
Page 3
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, 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
SB 270
Page 4
by satisfying the requirements of the Act; and provides that
the CRB may request that the Attorney General bring this
action.
2) Authorizes the court, in addition to any other remedy
authorized by law, to impose a $1,000 to $2,500 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 $2,500
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
being authorized to render court reporter services in this
state.
6) Requires the courts to award reasonable investigation and
enforcement costs and authorize the award of any portion of
unallocated penalties, if CRB or the Attorney General is
granted an injunction.
SB 270
Page 5
Background
Existing law provides the CRB with the authority to certify and
regulate shorthand reporters who perform a vital function for
the courts and litigants in providing official, verbatim records
of a variety of proceedings. The importance of this
transcription function by licensed individuals is reflected in
California law, which requires that an official reporter of the
superior court take down in shorthand all testimony, objections
made, rulings of the court, exceptions taken, arraignments,
pleas, sentences, arguments of the attorneys to the jury, and
statements and remarks made and oral instructions given by the
judge or other judicial officer, in specified cases. Existing
law also provides that the report of the official reporter of
any court, when transcribed and certified as being a correct
transcript of the testimony and proceedings in the case, is
prima facie evidence of the testimony and proceedings.
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 CRB lacked jurisdiction to issue
citations.
In the subsequent 2012 case, Court Reporters Board of California
v. U.S. Legal, the court held that CRB lacked jurisdiction to
issue citations and fines over an out-of-state corporation
rendering court reporting services, without authorization to do
so in California, that had violated professional rules.
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 CRB to impose citations or fines
against U.S. Legal because it was not authorized to do business
in California. This bill, in addition to other legal remedies,
authorizes CRB under this new section to bring an action or
request the Attorney General to bring an action to enjoin any
unlicensed or unauthorized person, corporation, or foreign
corporation from rendering court reporter services in this state
SB 270
Page 6
and, in doing so, to seek certain penalties, including fines and
restitution, as specified.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
According to the Senate Appropriations Committee:
Unknown additional CRB enforcement costs, dependent upon the
number of complaints investigated and enforcement actions. If
additional staff is needed, costs could be in the range of
$100,000 annually. (Court Reporters Fund)
Unknown additional fine revenues, which are also dependent
upon the number of successfully adjudicated cases. In
addition, there could be reimbursements for enforcement and
investigation costs that are awarded by the courts. (Court
Reporters Fund)
SUPPORT: (Verified5/19/15)
California Court Reporters Association
Orange County Superior Court Reporters Association
OPPOSITION: (Verified5/19/15)
SB 270
Page 7
Esquire Deposition Services, LLC
Magna Legal Services
U.S. Legal Support, Inc.
Veritext Corporation
ARGUMENTS IN SUPPORT: The California Court Reporters
Association (source) writes that "court reporters ensure the
integrity of judicial records and are unmatched in their ability
to produce a real-time transcript of court proceedings. The
Board should have undisputed authority to ensure that any entity
rendering court reporting services in California is upholding
the state's professional and ethical standards."
ARGUMENTS IN OPPOSITION: The firms, Esquire Deposition Services
LLC, Magna Legal Services, U.S. Legal Support, Inc., and
Veritext Corporation jointly argue that "putting reputable and
legitimate non-California entities out of business in California
will stifle the technological innovations so important in the
modern, competitive legal marketplace."
Prepared by:Mark Mendoza / B., P. & E.D. / (916) 651-1868
5/20/15 16:19:34
**** END ****