BILL ANALYSIS Ó
SB 270
Page 1
Date of Hearing: August 10, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 270
(Mendoza) - As Amended August 4, 2016
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|Policy |Judiciary |Vote:|7 - 3 |
|Committee: | | | |
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| |Business and Professions | |9 - 6 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY: This bill provides the Court Reporters Board (CRB)
with broad powers of enforcement, as specified, over foreign or
domestic corporations that offer or arrange for court reporter
services in California. Specifically, this bill:
1)Authorizes the CRB to seek injunctive relief or issue
citations, fines, and other penalties against corporations,
persons or entities, whether foreign or domestic, that for a
fee or other financial consideration, offer, offer to arrange
for, render, or provide the services of a certified shorthand
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reporter, for violations regarding the taking of oral
depositions within the Civil Discovery Act, the rendering of
shorthand reporting services by professional corporations, the
licensing law for shorthand reporters, and the Professional
Standards of Practice for shorthand reporters.
2)Provides that nothing in this bill is to be construed to
authorize or prohibit the provision of shorthand reporting
services by an unlicensed, foreign corporation.
FISCAL EFFECT:
Minor and absorbable costs to the CRB for a potential increase
in complaint volume resulting in potentially higher citations.
COMMENTS:
1)Purpose. According to the author, "SB 270 addresses a
complex problem that pits California Court Reporting firms
and licensed court reporters against out-of-state
corporations. These corporations not only arrange for
shorthand reporting services, they also determine the fees
charged to parties and set timelines for the delivery of
transcripts, among other things. All of these activities
are strictly regulated to ensure impartiality in the
handling of transcripts, legal documents, that are
essentially an extension of a court proceeding.
Corporations, either foreign or domestic, that are not
headed by a licensed court reporter believe they can
ignore and violate ethical rules and laws of impartiality
and objectivity when they are arranging for court
reporting services. These corporations have interpreted
current law to mean they are not subject to the
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jurisdiction of the board because they are not licensees.
This has created an un-fair playing field within the
industry. Most disturbing is that under current law,
licensed court reporters find themselves liable for the
ethical violations of these companies; even if the
reporter has no knowledge of or involvement in the
violation."
2)Background. The CRB is responsible for licensing and
disciplining certified shorthand reporters, approximately
7,000 in California. Currently, in California, certified
shorthand reporters work in two separate capacities: a) as an
"official reporter" who works as a court reporter employed by
a state court, or b) as a "freelance reporter" who is hired
privately by court reporting businesses, firms, or attorneys
to report depositions. Both official and freelance reporters
are required to meet the same educational and examination
qualifications, which are established by the CRB. In order to
qualify for licensure as a certified shorthand reporter, an
individual must have a high school education, twelve months
(or 1,400 hours) of full-time work experience related to
making records of hearings, a passing score on the California
State Hearing Reporters Examination, and completion of a
course from an approved court-reporting school. In addition to
the licensing and discipline functions, the CRB specifies the
professional standards of practice for professionals.
According to the author, the need for this bill stems from the
inability of the CRB to take appropriate disciplinary action
against a foreign (out-of-state) corporation that was accused
of operating in violation of the CRB's professional standards
of practice-a problem identified by a Santa Clara Superior
Court decision. In that case, the CRB issued a citation to
defendant U.S. Legal, assessing a fine of $2,500 for violation
of professional standards, specifically the prohibition on
gift-giving. U.S. Legal refused to pay the fine, and
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challenged in court the Board's jurisdiction to issue the
citation under California law. The CRB argued that the
defendant was a foreign corporation as defined under the
Moscone-Knox Professional Corporations Act, and therefore a
"shorthand reporting corporation" as otherwise defined under
the Business and Professions Code which is subject to the
regulation.
In holding for the defendant, the court found that neither the
Moscone-Knox Act nor the Business and Professions Code
extended authority to the CRB to issue citations to foreign
corporations like U.S. Legal that do not meet the statutory
definition of "foreign professional corporation," by virtue of
the fact that they do not actually hold a license or
certificate in this state. Accordingly, this bill would
provide such enforcement authority to the CRB.
3)Arguments in Support. The California Court Reporters
Association writes in support:
SB 270 provides specific authority for the board to
seek injunctive relief to stop individuals and
corporations that are providing services in California
without having ever been licensed in our state, or to
impose penalties if they are also in violation of
California's professional standards. 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.
4)Arguments in Opposition. A coalition of deposition service
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companies remains opposed to the bill. These companies are
Esquire Deposition Services, LLC; Magna Legal Services; U.S.
Legal Support, Inc. and Veritext Corp. They state:
The bill effectively creates a new quasi- licensing
program for companies "offering" court reporting
services, regulating activities which courts have
expressly concluded do not constitute the practice of
court reporting. The bill illogically and
inappropriately attempts to apply regulations
applicable to the practice of court reporting to the
business of deposition services companies, thereby
disrupting perfectly legitimate business relationships,
and leaving companies completely unsure of which
activities are permitted and which are not. Further,
the bill would give the Court Reporters Board
unfettered authority to issue citations and penalties
against companies which will not even enjoy the
protections of a property interest in a license. The
effect will be to drive business out of the state and
make litigation more costly and less efficient.
Analysis Prepared by:Jennifer Swenson / APPR. / (916)
319-2081