BILL ANALYSIS
Bill No: AB
2537
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2009-2010 Regular Session
Staff Analysis
AB 2537 Author: Silva
As Amended: April 14, 2010
Hearing Date: June 9, 2010
Consultant: Chris Lindstrom
SUBJECT
State agencies: adjudications: presiding officers.
DESCRIPTION
AB 2537 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.
Specifically, the bill:
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 review
system for ALJ disqualification requests in which the
determination is made by the agency itself.
EXISTING LAW
Existing law provides for the conduct of administrative
adjudication proceedings of state agencies through the
Administrative Procedure Act.
Existing law provides for the disqualification of a
AB 2537 (Silva) continued
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presiding officer for bias, prejudice, or interest in the
proceeding.
Existing law authorizes an agency that conducts an
adjudicative proceeding to provide by regulation for PC of
the presiding officer.
Existing law provides for PC of a judge, court
commissioner, or referee in superior court.
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BACKGROUND
Purpose of the 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 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 [Section] 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
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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 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.
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 five 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.
Sutter Medical Center Sacramento (SMCS) v. Shewry . The
case of Sutter Medical Center Sacramento (SMCS) v. Shewry,
2007, arguably illustrates the current problem in law. 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
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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.
PRIOR/RELATED LEGISLATION
SB 523 (Kopp), Chapter 938, Statutes of 1995 . Adds the
administrative adjudicatory provisions of the
Administrative Procedures Act.
SUPPORT: As of June 4, 2010:
Conference of California Bar Associations (Sponsor)
OPPOSE: None on file as of June 4, 2010.
FISCAL COMMITTEE: Senate Appropriations Committee
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