BILL ANALYSIS
AB 2537
Page 1
Date of Hearing: April 13, 2010
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
AB 2537 (Silva) - As Amended: April 6, 2010
SUBJECT : State agencies: adjudications: presiding officers.
SUMMARY : Requires agencies conducting adjudicative proceedings
with a presiding officer who is an administrative law judge
(ALJ) to develop regulations to allow a peremptory challenge
(PC) of that presiding officer, as specified.
1)Requires an agency that conducts an adjudicative proceeding to
provide by regulation for PC of a presiding officer who is an
ALJ.
2)Exempts agencies with five or fewer ALJs from developing PC
regulations if the agency has an internal appellate review
system for ALJ disqualification requests in which the
determination is made by the agency itself.
EXISTING LAW :
1)Provides for the conduct of administrative adjudication
proceedings of state agencies through the Administrative
Procedure Act.
2)Provides for the disqualification of a presiding officer for
bias, prejudice, or interest in the proceeding.
3)Authorizes an agency that conducts an adjudicative proceeding
to provide by regulation for PC of the presiding officer.
4)Provides for PC of a judge, court commissioner, or referee in
superior court.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office,
"Parties in administrative law proceedings have a substantial
stake in the outcome of that proceeding, and should have the
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same right to have their matters heard by a fair and impartial
trier of fact as parties in a court proceeding. Many state
agencies, including the largest, the Office of Administrative
Hearings (OAH) under the Department of General Services, provide
for PCs of ALJs believed to be biased, prejudiced, or interested
in the matter, similar to that provided to civil litigants under
Code of Civil Procedure 170.6.
"Other agencies, however, do not permit PCs of ALJs - and may
not even provide an effective internal appeals process. At best
this means that a party whose request for disqualification has
been denied by an ALJ must prepare detailed and costly
declarations, typically including extensive hearing transcript
documentation, to appeal the denial of disqualification. At
worst, in cases where the agency in question does not have an
effective appeals process - or even places appeals in the hands
of the same ALJ who denied the initial request for his or her
disqualification - it means that the party must seek relief in
court, unnecessarily delaying a decision on the merits of the
case at great expense to both the party and the agency.
"AB 2537 will rectify this inconsistent and unequal unfair
situation by providing that all agencies must permit parties the
opportunity to excuse administrative law judges on PC. By doing
so, the bill will increase fairness, and should reduce costs for
both the administrative litigants and the agencies themselves."
Background . A PC is disqualification without cause. In the
case of this bill, PCs are presented as a motion by a party to
an administrative proceeding to remove the trier of fact without
giving a reason.
Presently, state agencies conducting adjudicative proceedings
are permitted to develop regulations governing PCs for their
presiding officers, whether ALJs or not. Some agencies, such as
OAH, which provides ALJs for 1,400 local and state government
agencies, do allow PCs for ALJs in certain circumstances. Other
agencies, such as the Department of Motor Vehicles and the Air
Resources Board, do not. This creates an inconsistent
administrative adjudication structure in the state.
Existing law provides that adjudicative officers are subject to
disqualification for bias, prejudice, or interest in the
proceeding. However, the methods of determining
disqualification vary widely between agencies, and some agencies
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even permit the officer in question to determine his or her own
level of bias. Permitting a PC would streamline this process
and create a greater sense of fairness.
The case of Sutter Medical Center Sacramento (SMCS) v. Shewry,
2007, illustrates the current problem. In this administrative
proceeding before the Department of Health Care Services' Office
of Administrative Hearings (OAHA), SMCS filed a voluminous
request for disqualification of an ALJ, with detailed
declarations and extensive pages of evidentiary support from
transcripts. The challenged ALJ responded to this detailed
request for disqualification with a brief order that did not
address any of the specific grounds raised, and denied his own
disqualification with a conclusory finding of no bias, no
prejudice, and no interest in the proceeding. SMCS sought
reconsideration before the OAHA Chief ALJ, who ruled that no
administrative review of an ALJ's finding against
disqualification was available. SMCS then had to proceed to
superior court, at significant time and expense, to litigate and
obtain an order requiring disqualification of the ALJ. This not
only caused significant expense, but the administrative delays
related to implementing the court's writ were significant,
further delaying a decision on the merits of the case.
A party to a civil or criminal matter in superior court may
issue one PC against a judge, court commissioner, or referee.
ALJs hear no less important cases than those in superior court:
disciplinary matters, terms of employment, tax concerns, health
care and business regulations fall in the purview of
administrative proceedings. The author of this bill argues that
these parties should have the same ability to remove a trier of
fact they feel is biased as those in a superior court. However,
this bill creates an exemption for agencies having 5 or fewer
available ALJs, if that agency has an internal appellate review
system for ALJ disqualification requests in which the
determination is made by the agency itself. This was borne out
of a concern from some agencies that their limited staff
resources would make the automatic removal unduly burdensome.
This bill does not require agencies to develop PC regulations
for non-ALJ presiding officers, however; this option is still
permissive. The author's office states that there have been no
demonstrated problems with non-ALJ presiding officers.
AB 2537
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Committee amendments :
Remove "appellate" from 11425.40(e) to clarify the review system
as a non-judicial process.
REGISTERED SUPPORT / OPPOSITION :
Support
Conference of California Bar Associations (sponsor)
Opposition
None on file.
Analysis Prepared by : Sarah Weaver / B., P. & C.P. / (916)
319-3301