BILL ANALYSIS Ó
SB 270
Page 1
SENATE THIRD READING
SB
270 (Mendoza)
As Amended August 4, 2016
Majority vote
SENATE VOTE: 29-9
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Business & |9-6 |Salas, Bloom, Dodd, |Brough, Baker, |
|Professions | |Eggman, Gomez, |Chávez, Dahle, |
| | |Holden, Mullin, Ting, |Gatto, Jones |
| | |Wood | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Judiciary |7-3 |Mark Stone, Alejo, |Wagner, Gallagher, |
| | |Chau, Chiu, Cristina |Maienschein |
| | |Garcia, Holden, Ting | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |14-5 |Gonzalez, Bloom, |Bigelow, Gallagher, |
| | |Bonilla, Bonta, |Jones, Obernolte, |
| | |Calderon, Daly, |Wagner |
| | |Eggman, Eduardo | |
| | |Garcia, Holden, | |
| | |Quirk, Santiago, | |
SB 270
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| | |Weber, Wood, Chu | |
| | | | |
| | | | |
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SUMMARY: Provides the Court Reporters Board (CRB) with broad
powers of enforcement, as specified, over foreign or domestic
corporations that offer or arrange for shorthand reporting
services, as specified, in California. Specifically, this bill:
1)Authorizes the CRB to seek injunctive relief or issue
citations, fines, and other penalties in accordance of
existing law 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 reporter for violations
of the following provisions that relate to shorthand
reporting:
a) Chapter 9 of Title 4 of Part 4 (commencing with Section
2025.010) of the Code of Civil Procedure;
b) Part 4 of Division 3 of Title 1 (commencing with Section
13400) of the Corporations Code (CORP));
c) Chapter 12 of Division 3 (commencing with Section 8000)
of the Business and Professions Code (BPC); and,
d) Section 2475 of Title 16 of the California Code of
Regulations (CCR).
2)Provides that nothing in this bill shall be construed to
authorize or prohibit an individual without a certificate to
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practice shorthand reporting as specified in BPC Section 8017,
or construed to authorize or prohibit the provision of
shorthand reporting services by a foreign corporation in
violation of CORP Section 13401(c) or construed to authorize
or prohibit violations of BPC Section 8044.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, this bill will result in minor and absorbable costs
to the CRB for a potential increase in complaint volume
resulting in potentially higher citations.
Purpose. This bill is sponsored by the California Court
Reporters Association. According to the author, "[this bill]
strengthens the authority of the CRB to regulate or prevent
unlicensed individuals and corporations from unlawfully
rendering court reporting services in California by issuing
fines or injunctions for acts in violation of the CRB's
professional and ethical rules for certified shorthand
reporters.
Under current law, the CRB has limited authority to impose
penalties on any court reporter or court reporting corporation
that is rendering services without a court reporting license.
However, for unlicensed entities, the CRB has had challenges in
imposing fines for any violations. This has jeopardized the
integrity of the court reporting profession and places at a
disadvantage licensed businesses that provide court reporting
services."
Court Reporters Board. The CRB is responsible for licensing and
disciplining certified shorthand reporters. Certified shorthand
reporters are responsible for reporting depositions in legal
cases as well as court proceedings. Since 1972, the CRB has
permitted the certification of individuals and at one time, the
registration of shorthand reporting corporations. Currently,
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the CRB oversees approximately 7,000 certified shorthand
reporters. The CRB establishes the educational requirements for
certification including authorizing the minimal educational
standards and approving schools. In order to qualify for
licensure as a certified shorthand reporter, an individual must
have a high school education, 12 months (or 1,400 hours) of
full-time work experience related to making records of hearings,
obtain a passing score on the California State Hearing Reporters
Examination, and complete a course from an approved
court-reporting school. Currently, in California, certified
shorthand reporters work in two separate capacities: 1) as an
"official reporter" who works as a court reporter employed by a
state court, or 2) 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. Currently, the CRB does not separately license
or register court reporting corporations.
Enforcement Authority. In addition to the CRB's licensing
function, the CRB is also tasked with enforcement-related
activities for shorthand reporters who violate the practice act.
BPC Section 8025 states that a license to practice as a
shorthand reporter may be suspended, revoked, or denied, or
other disciplinary action may be taken against a certificate
holder for a number of reasons including unprofessional conduct,
or loss or destruction of stenographic notes that prevents the
production of a transcript, among others. In addition to the
provisions of BPC Section 8025, the CRB specifies through
regulation the professional standards of practice (16 CCR
Section 2475), which include acting without bias toward, or
prejudice against, any parties and/or their attorneys; not
entering into, arranging, or participating in a relationship
that compromises the impartiality of the certified shorthand
reporter, including but not limited to a relationship in which
compensation for reporting services is based upon the outcome of
the proceeding; and maintaining confidentiality of information,
among others.
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Under current law, the CRB has the authority to carry out its
licensing and enforcement authority against any person or
corporation, as defined in CORP Section 13401. According to the
author, the CRB has limited authority to impose penalties on any
court reporter or court reporting corporation that is rendering
services without a court reporting license. While the CRB does
not register or certify corporations in California, BPC Sections
8044 and 8046 provide the CRB with the explicit authority over
corporations incorporated in California because each director,
shareholder, and officer of a shorthand reporting corporation is
required to be a licensed shorthand reporter; however, the same
authority is not specified in statute for foreign corporations
providing or arranging for court reporting services in
California. This bill aims to increase the CRB's disciplinary
reach to include those entities or corporations which for a fee
offer, offer to arrange for, render, or provide the services of
a shorthand reporter, by permitting the CRB to discipline
entities for specified violations including those corporations
(foreign or domestic) who are arranging for shorthand reporting
services, as specified.
Scope of Practice. BPC Section 8017 defines shorthand reporting
as the making by means of written symbols or abbreviations in
shorthand or machine shorthand writing, of a 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 transcript thereof.
16 CCR Section 2403 further specifies that the practice of
shorthand reporting includes services for actions in superior
court such as delivering a copy of the original transcript in a
computer-readable form, as specified, labeling disks of
transactions with the case name and court number, and the dates
of the proceedings contained on the disk, among others. For a
deposition, 16 CCR Section 2403 includes making a full or
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partial copy of a transcription available, notifying all parties
who attended a deposition of requests made by other parties for
either an original copy of the transcript, or any portion
thereof, and securely sealing the transcript in an envelope or
package, as specified. These provisions are aggregated from
various sections in the Code of Civil Procedure and the Civil
Code.
Professional Corporations and The Moscone-Knox Professional
Corporation Act (Act). BPC Section 8044 specifies that each
director, shareholder, and officer of a shorthand reporting
corporation must be a licensed shorthand reporter. Business
models for shorthand reporting corporations and other service
providers vary throughout the state. While there are a number
of licensee-owned corporations in California, there are a number
of businesses that do not hold themselves out to be court
reporting corporations. These corporations claim to be
litigation service providers that only arrange for court
reporting services, but are not actually responsible for the
making of the written record.
According to the author, the need for this bill is in response
to the CRB's inability to take the appropriate disciplinary
actions against a foreign corporation who was accused of
operating in violation of the CRB's professional standards of
practice; specifically, 16 CCR Section 2475(b)(8) which
prohibits any person or business under the jurisdiction of the
CRB from either directly or indirectly giving or receiving any
gift, incentive, reward, or anything of value to or from any
person or entity associated with a proceeding being reported
that is more than $100.
Court Reporters Board of California v. U.S. Legal Support, Inc.,
1-11-CV197817. In 2010, the CRB took disciplinary action
against a corporation, charging it with violating 16 CCR Section
2475(b)(8) by issuing a citation and fine. The corporation
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argued that the CRB lacked the jurisdictional authority to issue
a citation to the company, and did not pay the fine.
As a result, a formal case was brought against U.S. Legal
Support, Inc. in 2012. The court held that the CRB lacked the
jurisdictional authority to issue citations and fines to an
out-of-state corporation rendering court reporting services in
California without authorization to do so. As the court noted
in its decision, although U.S. Legal Services, Inc. was
rendering court reporting services in California and was in
violation of the gift giving rules as defined in the CRB's
regulations, there was no explicit authority in statute
authorizing CRB to impose citations or fines because the
corporation was not authorized to do business in California
under the BPC. This bill will authorize the CRB, under this new
section, 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, renders, or provides
the services of a certified shorthand reporter, for violations
of specified areas of law.
The issue of professional conduct was raised in the CRB's 2015
Sunset Review Report. As noted in the Committee Background
Paper, according to the CRB, additional complaints have been
received about overcharging for court transcripts, a violation
of Government Code 69950 and is direct consumer harm; the
overcharging of one party for transcripts is in practice
cost-shifting, or akin to giving a large gift. This is a
practice whereby a court reporting firm offers to charge the
noticing party a nominal amount if the noticing party chooses to
utilize the services of that firm. The costs of the transcripts
are then shifted over to the defending attorney(s), who has no
ability to choose the shorthand reporter and is essentially
stuck with the bill presented in order to obtain a transcript.
While the practice is not specifically illegal on its face, the
CRB is concerned about the serious ethical considerations that
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arise out of this type of scenario. As a result, it is
important for the CRB to ensure that the same rules that apply
to all licensees that serve to protect consumers are enforced
against all entities that provide shorthand reporting services.
The authority granted by the bill allows the CRB to take
enforcement actions for violations of the laws which comprise
virtually all of the applicable statutes and regulations
governing shorthand reporters.
Analysis Prepared by:
Elissa Silva / B. & P. / (916) 319-3301 FN:
0004065