BILL ANALYSIS                                                                                                                                                                                                    �






                             SENATE JUDICIARY COMMITTEE
                             Senator Noreen Evans, Chair
                              2011-2012 Regular Session


          SB 1374 (Harman & Correa)
          As Amended April 23, 2012
          Hearing Date: May 8, 2012
          Fiscal: No
          Urgency: No
          TW
                    

                                        SUBJECT
                                           
                 Liability:  Reliance on Administrative Regulation 

                                      DESCRIPTION  

          This bill would provide that any person who relies upon a 
          written order, ruling, approval, interpretation, or enforcement 
          policy of a state agency is not liable or subject to punishment 
          for a violation of a civil statute or regulation in a judicial 
          or administrative proceeding if the person pleads and proves to 
          the trier of fact that, at the time of the alleged act or 
          omission, the person did both of the following: 
           sought an applicable written order, ruling, approval, 
            interpretation, or enforcement policy from the state agency 
            charged with interpreting that particular area of law; and 
           relied upon and conformed to the applicable written order, 
            ruling, approval, interpretation, or enforcement policy.

                                      BACKGROUND  

          After the Bacon-Davis Act of 1931 (40 U.S.C.S. Sec. 276a et 
          seq.), the Walsh-Healy Public Contracts Act of 1936 (41 U.S.C.S. 
          Sec. 35 et seq.), and the Fair Labor Standards Act of 1938 (29 
          U.S.C.S. Sec. 201 et seq.) were enacted to provide labor 
          standards and employee protections, Congress found that these 
          Acts had been "interpreted judicially in disregard of 
          long-established customs, practices, and contracts between 
          employers and employees, thereby creating wholly unexpected 
          liabilities, immense in amount and retroactive in operation, 
          upon employers. . . ."  (29 U.S.C.S. Sec. 251.)

          For this reason, Congress enacted the Portal-to-Portal Act of 
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          1947, which was intended to relieve and protect interstate 
          commerce from practices which burden and obstruct it, protect 
          the right of collective bargaining, and define and limit the 
          jurisdiction of the courts.  (29 U.S.C.S. Sec. 251.)  At that 
          time and in order to avoid substantial employer losses for labor 
          violations of the recently enacted statutes, the 
          Portal-to-Portal Act provided an affirmative defense for 
          employers who failed to pay minimum wages or overtime 
          compensation in reliance on the interpretations and opinions of 
          the Wage and Hour Division of the Department of Labor.  (29 
          U.S.C.S. Sec. 259(a).)  

          In 2011, SB 883 (Correa, 2011) was introduced and provided 
          affirmative defenses for employers similar to those provided 
          under the Portal-to-Portal Act.  The bill also would have 
          applied to all actions and proceedings that had not resulted in 
          a final judgment, regardless of whether the action or proceeding 
          was commenced, or based upon an alleged act or omission that 
          occurred, before, on, or after the effective date of the bill.  
          SB 883 was double-referred to the Senate Labor and Industrial 
          Relations Committee and this Committee.  The measure was set for 
          hearing in the Senate Labor and Industrial Relations Committee 
          but was pulled from calendar by the author.

          This bill, sponsored by the California Chamber of Commerce, is 
          similar to SB 883 and the Portal-to-Portal Act, and would shield 
          an individual from liability if he or she relied upon a written 
          order, ruling, approval, interpretation, or enforcement policy, 
          as specified. 

                                CHANGES TO EXISTING LAW
           
           Existing federal law  , the Portal-to-Portal Act, provides that, 
          in any action or proceeding based on any act or omission, no 
          employer shall be subject to any liability or punishment for or 
          on account of the failure of the employer to pay minimum wages 
          or overtime compensation under the Fair Labor Standards Act of 
          1938, as amended, the Walsh-Healey Act, or the Bacon-Davis Act, 
          if he pleads and proves that the act or omission complained of 
          was in good faith in conformity with and in reliance on any 
          written administrative regulation, order, ruling, approval, or 
          interpretation, of the agency of the United States, as specified 
          in, or any administrative practice or enforcement policy of such 
          agency with respect to the class of employers to which he 
          belonged.  (29 USCS Sec. 259(a).)  

                                                                      



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           Existing federal law  provides that such a defense, if 
          established, shall be a bar to the action or proceeding, 
          notwithstanding that after such act or omission, such 
          administrative regulation, order, ruling, approval, 
          interpretation, practice, or enforcement policy is modified or 
          rescinded or is determined by judicial authority to be invalid 
          or of no legal effect.  (Id.)

           This bill  would provide that any person who relies upon a 
          written order, ruling, approval, interpretation, or enforcement 
          policy of a state agency is not liable or subject to punishment 
          for a violation of a civil statute or regulation in a judicial 
          or administrative proceeding if the person pleads and proves to 
          the trier of fact that, at the time of the alleged act or 
          omission, the person did both of the following: 
          1.sought an applicable written order, ruling, approval, 
            interpretation, or enforcement policy from the state agency 
            charged with interpreting that particular area of law; and 
          2.relied upon and conformed to the applicable written order, 
            ruling, approval, interpretation, or enforcement policy.

           This bill  would permit this affirmative defense to apply even 
          if, after the act or omission occurred, the order, ruling, 
          approval, interpretation, or enforcement policy upon which the 
          person relied is modified, rescinded, or determined by a court 
          to be invalid or of no legal effect.  

          This bill  would specify that the affirmative defense shall not 
          apply if the alleged act or omission occurred after the order, 
          ruling, approval, interpretation, or enforcement policy upon 
          which the person relied is modified, rescinded, or determined by 
          judicial authority to be invalid or of no legal effect.

           This bill  would provide that its provisions apply to all actions 
          and proceedings that have not resulted in a final judgment on or 
          after January 1, 2013, regardless of whether the action or 
          proceeding was commenced, or based upon, an alleged act or 
          omission that occurred before, on, or after January 1, 2013. 

           This bill  would provide that nothing in the bill shall be 
          construed to give any greater legal weight to an order, ruling, 
          approval, interpretation, or enforcement policy than it would 
          otherwise have in the absence of the bill.

           This bill  would specify that nothing in the bill shall be 
          construed to require a state agency to issue an order, ruling, 
                                                                      



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          approval, interpretation, or enforcement policy. 

                                        COMMENT
           
          1.  Stated need for the bill  
          
          The author writes:
          
            Currently, employers and other citizens of California are 
            expected to seek out advice from state agencies regarding how 
            to comply with various laws.  However if a citizen receives 
            written advice from a state agency regarding how to comply 
            with the law, follows that advice, and is later sued based 
            upon their actions, there is no benefit or security from the 
            fact that their actions were in conformity with the advice 
            they received from a state agency.  . . . 

            Residents of California should be able to rely upon the 
            written advice and guidance they receive from state agencies 
            that are created for the very purpose of interpreting and 
            enforcing the laws of this state.  Residents should not be 
            held liable and punished for believing and trusting what the 
            state instructs them to do.  SB 1374 seeks to provide 
            residents with the security in knowing they can rely upon 
            information they receive from the government.  

          A coalition of business groups in support of this bill write:

            California has more than 500 agencies that are charged with 
            the responsibility and authority to interpret and enforce 
            laws.  Citizens of California are expected and encouraged to 
            seek out guidance and information from these various agencies 
            to determine how to comply with California's numerous laws and 
            regulations.  Ironically, however, if an individual or 
            business seeks guidance from one of these agencies and relies 
            upon the information they are provided, they are given no 
            protection or benefit if litigation is ultimately filed to 
            challenge the agencies' advice.  

            For example, the California Department of Insurance (DOI) 
            regulates and enforces insurance laws.  Pursuant to 
            Proposition 103, various lines of insurance must seek prior 
            written approval from the DOI regarding any rate that is 
            charged to consumers.  In fact, the approved rate is the only 
            rate an insurance company subject to this process is allowed 
            to charge.  Yet, if an insurance company charges the required 
                                                                      



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            rate and a consumer challenges the rate on the basis it is 
            unfair or discriminatory, the insurance company is provided no 
            benefit for the fact that it was specifically directed by a 
            state agency to charge the rate at issue.  

            Similarly, the Division of Labor Standards Enforcement (DLSE) 
            is a state agency that is charged with the responsibility and 
            authority to enforce the wage, hour, and working condition 
            labor laws.  As a part of its effort to fulfill this 
            responsibility, the DLSE issues opinion letters on various 
            wage, hour, and working condition topics, as well as an 
            enforcement manual that sets forth the DLSE's interpretation 
            and position on these issues.  Currently, employers are 
            encouraged to refer to the DLSE's written materials for 
            "guidance" on these topics when there is no published, 
            on-point case available.  However, employers are provided with 
            no certainty that they will be shielded from liability if they 
            comply in good faith with the DLSE's written opinions or 
            interpretations.

            SB 1374 eliminates this problem and provides citizens of 
            California the security to know that if they seek out and 
            receive written advice from state agencies regarding how to 
            comply with the law, they can actually rely upon that 
            information.  SB 1374 provides such citizens with legal 
            protection if their actions are challenged in litigation and 
            they can prove that their actions were based upon guidance 
            received from a state agency.  This policy provides 
            credibility to California's state agencies charged with the 
            responsibility to enforce such laws and will help to eradicate 
            the negative public perception of state government. 

            Notably, there is already precedent in the law for giving 
            individuals protection when they rely on the advice of 
            government.  In California, a taxpayer may be relieved of all 
            taxes, interest, and penalties if they can demonstrate that 
            the taxpayer's failure to remit taxes was based upon the 
            taxpayer's reasonable reliance upon the written advice of the 
            chief counsel of the Franchise Tax Board.  Similarly, the 
            federal government allows the same defense for employers who 
            rely in good faith upon the advice, opinion letters, and 
            guidance of the Department of Labor regarding the Fair Labor 
            Standards Act.  See 29 U.S.C. sections 258-259.  In its 
            findings and declaration of policy regarding the 
            Portal-to-Portal Act, in which this affirmative defense is 
            found, Congress recognized that "uncertainty on the part of 
                                                                      



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            industry," as well as "the difficulties in the sound and 
            orderly conduct of business and industry," could negatively 
            impact commerce.  Accordingly, Congress enacted the 
            Portal-to-Portal Act, which included this affirmative defense 
            for employers who rely upon the interpretations and opinions 
            of the Wage and Hour Division of the Department of Labor.  
             
            Echoing the same concerns here, uncertainty for California 
            citizens regarding the correct application of California's 
            numerous laws and regulations detrimentally impacts the 
            state's economy and is a significant burden for those trying 
            to conduct business.  Providing certainty through SB 1374 will 
            assist in relieving this burden on employers and every other 
            citizen of California, thereby producing a better business 
            environment, growth in the economy, and improve public 
            perception of our government.  

          2.  Portal-to-Portal Act  

          This bill would allow an employer, in reliance on a written 
          order of the Division of Labor Standards Enforcement (DLSE), to 
          claim an affirmative defense against an employee's wage claim if 
          the employer proves that he or she sought an applicable order 
          from the DLSE and relied upon and conformed to the order.  This 
          affirmative defense is similar to that provided under the 
          Portal-to-Portal Act, which allows an employer to escape 
          liability for Federal Labor Standards Act (FLSA) violations if 
          the employer shows that it acted in good faith conformity with, 
          and in reliance upon, a written regulation, order, ruling, 
          approval, or interpretation of Department of Labor's Wage and 
          Hour Division, or any administrative practice or enforcement of 
          the Division with respect to the class of employers to which it 
          belonged.  (29 U.S.C.S. Sec. 259.)  

          Supporters of this bill argue that, under existing law, 
          "employers are provided with no certainty that they will be 
          shielded from liability if they comply in good faith with the 
          DLSE's written opinions or interpretations."  Further, the 
          author argues that Californians should not be held liable and 
          punished for believing and trusting what the state instructs 
          them to do.   

          On the other hand, Consumer Attorneys of California argue in 
          opposition that this bill "would insulate employers and other 
          private individuals who rely on agency interpretations from 
          liability, even if those interpretations are in direct conflict 
                                                                      



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          with relevant law."  In support of this argument, the California 
          Labor Federation, also in opposition to this bill, states:

            SB 1374 would eliminate all liability for employers if they 
            asked for and relied upon a state agency's interpretation of a 
            regulation or statute.  This approach would make it harder to 
            protect workers' rights and erode the incentive to comply with 
            the law.  To begin with, if a worker is not paid wages owed, 
            he or she suffers harm regardless of the employer's rationale. 
             By eliminating liability, this bill would punish a worker for 
            something he or she had no control over.  There is no good 
            policy reason for letting an employer off the hook for not 
            paying a worker the wages he or she has earned.

            In addition, this type of safe harbor presumes that an 
            employer provides accurate information to a state agency.  For 
            example, if an employer contacts the Division of Labor 
            Standards Enforcement �DLSE] to ask about classifying a worker 
            as an independent contractor, he or she could withhold 
            relevant facts that would lead the agency to advise them that 
            this worker was actually an employee.  Then the employer could 
            use that opinion, based upon inaccuracies, to avoid liability 
            for cheating the worker and the state through deliberate 
            misclassification.  In essence, this proposal invites game 
            playing.

          Opponents of this bill also argue that the bill politicizes the 
          role of enforcement agencies and cite to the Schwarzenegger 
          Administration's efforts to change enforcement practices and 
          underlying regulations on meal periods.

          California Rural Legal Assistance Foundation (CRLAF), an 
          opponent of this bill, argues that:

            SB 1374 would extend an unprecedented 'safe harbor' against 
            wage liability to an employer who successfully seeks, and 
            relies on, an opinion letter issued by the �DLSE].  This 
            unwise and unwarranted policy is certain to create significant 
            pressures on future administrations to carve out 
            employer-specific DLSE opinions which would bring them within 
            the immunity offered by this bill. 

            For example, a recently-settled class action by CRLAF for $2.2 
            million in allegedly unpaid off-the-clock wages might create 
            an incentive for that agricultural employer and farm labor 
            contractor to try to tweak the factual circumstances of 
                                                                      



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            employment in the future in order to solicit a favorable 
            opinion from a sympathetic DLSE.

            At issue in that case was what constituted "hours worked" 
            under state and federal law.  Previous opinion letters by DLSE 
            on this subject make clear that what constitutes "hours 
            worked" is "highly fact specific" for which there is "no 
            bright line."  This bill would create a powerful incentive for 
            that employer to try to restructure and tweak the conditions 
            of employment in order to create enough of a factual 
            difference from prior opinion letters to secure what would be 
            an employer-specific exemption that would stand until the 
            opinion letter was withdrawn, revised or overturned by 
            litigation.  SB 1374 not only invites this mischief, but, in 
            our view, makes it inevitable.

          Additionally, courts have held that a good faith defense under 
          the Portal-to-Portal Act relieves an employer for liability for 
          liquidated damages under collective bargaining agreements "'if 
          the employer shows to the satisfaction of the court that the act 
          or omission giving rise to such action was in good faith and 
          that �the employer] had reasonable grounds for believing that 
          �its] act or omission was not a violation of the �FLSA].'"  
          Thomas v. Howard Univ. Hosp. (1994) 39 F.3d 370, 372.  The 
          Thomas court reasoned as follows:  

            The Portal-to-Portal Act added another provision, the one with 
            which we are concerned, giving courts discretion to disallow 
            liquidated damages "if the employer shows to the satisfaction 
            of the court that the act or omission giving rise to such 
            action was in good faith and that �the employer] had 
            reasonable grounds for believing that �its] act or omission 
            was not a violation of the Fair Labor Standards Act." . . .

            In most instances an employer will be able to satisfy 
            �Section] 260's "reasonable grounds" requirement only if it 
            has relied on a reasonable, albeit erroneous, interpretation 
            of the �FLSA] or of the regulations issued thereunder. . . .  
            Relief for employers in those circumstances was at the heart 
            of the Portal-to-Portal Act of 1947.  At the time, judicial 
            interpretations contrary to "long-established customs, 
            practices, and contracts" had created "wholly unexpected 
            liabilities" for overtime compensation, "including liquidated 
            damages." . . .  In actions commenced after �Section] 260's 
            effective date, Congress gave the courts discretion to reduce 
            the liability of those employers surprised by a judicial or 
                                                                      



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            administrative interpretation of the Fair Labor Standards Act 
            -- employers, that is, who had reasonable grounds for thinking 
            the law was other than it turned out to be. (Id. at 373; 
            internal citations omitted.)

          As such, with respect to violations of overtime compensation 
          claimed by an employee, as long as the employer reasonably 
          relied, mistakenly, on an interpretation of the FLSA, the 
          employer could avoid liability for liquidated damages simply 
          because of a good faith belief that the overtime compensation 
          was being properly computed.  

          This bill would provide for immunity from liability based on a 
          mistaken interpretation of law as provided in the 
          Portal-to-Portal Act, which potentially would allow an employer 
          to pervert the justice system by utilizing a labor order 
          misinterpreting existing law to the detriment of the employee.  
          The California State Pipe Trades Council, the California State 
          Association of Electrical Workers, and the Western States 
          Council of Sheet Workers argue that "this bill will allow state 
          agencies to usurp the power of the judiciary in their 
          adjudicatory role in resolving labor disputes."  This bill would 
          permit an affirmative defense to apply even if, after the act or 
          omission occurred, the order, ruling, approval, interpretation, 
          or enforcement policy upon which the person relied is later 
          modified, rescinded, or determined by a court to be invalid or 
          of no legal effect.  

          3.  Precedence of affirmative defense of reliance on public agency 
            opinion  

          In addition to wage cases, this bill would apply to any and all 
          persons who are involved in litigation based upon a violation in 
          which the defendant may claim an affirmative defense for relying 
          on a state agency order.  This affirmative defense has the 
          effect of eliminating a court's discretion over whether the 
          individual was civilly liable for harm caused by the violation.  


          Supporters of this bill argue that "there is already precedent 
          in the law for giving individuals protection when they rely on 
          the advice of government."  

              a.   Taxpayer relief  

            For example, supporters state that California taxpayers, who 
                                                                      



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            fail to pay taxes because they reasonably relied on the 
            written advice of the California Franchise Tax Board (FTB), 
            can be relieved of all taxes, interest, and penalties.  

            The California Taxpayers Bill of Rights, Revenue and Taxation 
            Code Section 21012(a), provides taxpayers relief from assessed 
            taxes, interest and penalties in certain situations where 
            taxpayers relied upon written advice of the FTB.  In order to 
            receive relief from taxes, interest, and penalties, the 
            taxpayer must meet several criteria as follows:  
                 the person or representative requested in writing that 
                                                                FTB advise him or her whether a particular prospective 
               activity or transaction is subject to tax, and fully 
               described the facts and circumstances of the transaction or 
               activity in the request. A request for a Chief Counsel 
               Ruling shall specifically so state; 
                 FTB responded in writing, stating whether the described 
               activity is subject to tax, or stating the conditions under 
               which the activity or transaction is subject to tax. ;
                 the person reasonably relied upon the advice and did not 
               remit the tax due; and
                 the ruling has not been rescinded or revoked before the 
               taxpayer relied upon it or before the occurrence of the 
               transaction or activity.  (FTB Notice 2009-09.)

            FTB Notice 2009-09 also provides that under no circumstances 
            may a taxpayer rely upon an FTB Chief Counsel Ruling issued to 
            another taxpayer.  Further, in order for a taxpayer to receive 
            relief from failing to pay taxes, the original request or 
            application for exemption must not have contained any 
            misrepresentation of material facts.

            This bill does not contain these same limitations on relief.  
            Rather, this bill would provide relief from liability to any 
            person who relies upon a written order, ruling, approval, 
            interpretation, or enforcement policy of a state agency, 
            regardless of whether the order, ruling, approval, 
            interpretation, or enforcement policy relied upon was 
            addressed to the person claiming the affirmative defense under 
            this bill yet based upon that person's particular facts.  

            Further, the California Employment Lawyers Association, an 
            opponent of this bill, argues that:

               SB 1374 is not limited to labor practices.  Indeed, any 
               determined business could use this bill to exempt itself 
                                                                      



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               from any law it doesn't like.  In effect, the bill creates 
               a private right of repeal for any business that is 
               sufficiently determined and clever or dishonest enough to 
               obtain the desired exemption.  That is an affront to the 
               right of the people to enact laws and see them enforced and 
               interferes in a fundamental way with the role of the 
               legislature.  (Emphasis in original.)

            Additionally, this bill does not provide any judicial review 
            of possible misrepresentation of facts by the defendant, or 
            any other person who requested the opinion from a state 
            agency.  Instead, this bill would allow the defendant relief 
            from liability based upon the defendant's interpretation of 
            the agency's opinion, leaving the court to decide whether the 
            interpretation was reasonable under the circumstances claimed 
            by the defendant.

              a.   Employer relief  

            Supporters also argue that there is precedence for this bill 
            in the Portal-to-Portal Act, which provides employers 
            protection from liability when they reasonably rely on a DLSE 
            order.  The court in Thomas v. Howard Univ. Hosp. (1994) 39 
            F.3d 370 provided an instructive discussion on the need for 
            enacting the Portal-to-Portal Act as follows:

               Section 207(a)(1) of the Fair Labor Standards Act of 1938, 
               commonly known as the "maximum hours provision," entitles 
               an employee who works more than forty hours in a "workweek" 
               to receive from his employer "one and one-half times the 
               regular rate at which he is employed" for such "excess" 
               work. . . .  The original Act rendered employers who 
               violated the maximum hours provision automatically liable 
               not only for unpaid overtime compensation, but also for an 
               equivalent amount in "liquidated damages." . . .  In the 
               mid-1940's, the Supreme Court construed - or as a later 
               Congress thought, misconstrued - "workweek" to include 
               activities preliminary and incidental to the employee's 
               work. . . .  This construction retroactively transformed 
               the workweeks of thousands of employees into more than 
               forty hours and laid at the doors of their employers 
               millions of dollars in "wholly unexpected liabilities" for 
               overtime compensation and liquidated damages. . . .  
               Congress took quick, corrective action, passing the 
               Portal-to-Portal Act of 1947 . . . to extinguish those 
               "unexpected liabilities," and to define "workweek" to 
                                                                      



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               exclude certain preliminary activities.  (Id. at 371.)

            Unlike the need in the Portal-to-Portal Act, the author has 
            not provided any materials to support an impending crisis 
            necessitating a broad affirmative defense, as provided in this 
            bill.  Further, other than the Portal-to-Portal Act, the 
            author has not provided any additional statutory support 
            showing other instances where an affirmative action may be 
            claimed for reliance on a state agency decision.  For these 
            reasons, the Committee may want to consider whether it is 
            appropriate to provide the broad affirmative defense in this 
            bill without reviewing substantial support showing the need 
            for this type of liability protection or other statutes 
            providing such a broad immunity from liability.

          4.  Jacobs Farm/Del Cabo, Inc. v. Western Service, Inc.
           
          The Community Alliance with Family Farmers (CAFF), an opponent 
          of this bill, argues that this bill essentially overturns the 
          court decision in  Jacobs Farm/Del Cabo, Inc. v. Western Service, 
          Inc.  (2010) 190 Cal.App.4th 1502, "where the appellate court 
          found that California's statutory and regulatory oversight of 
          pesticide use was intended primarily to ensure safety standards 
          and not to displace private common law tort remedies for harm 
          caused by pesticides."

          In Jacobs Farm, the defendant claimed a defense based in part 
          upon collateral estoppel; a deputy commissioner found that the 
          defendant had not violated the law.  The Jacobs Farm court, in 
          denying the defendant's collateral estoppel claim reasoned:

            Almost 60 years ago, the Attorney General issued an opinion 
            with which we agree today.  The opinion was rendered in 
            response to questions about the effect of the then newly 
            enacted provisions requiring a permit for the application of 
            potentially injurious agricultural chemicals.  Responding to 
            concern that compliance with permit requirements might relieve 
            pesticide applicators from liability for negligent acts, the 
            Attorney General opined:  "Nowhere does it state that if one 
            has secured the necessary permit and has observed all the 
            established rules and regulations, he should be held blameless 
            for his negligent act.  The rules and regulations as 
            established from time to time will undoubtedly indicate the 
            manner in which an individual who desires to be free of 
            negligence should operate.  The mere fact, however, that he 
            follows the rules and regulations does not in itself guarantee 
                                                                      



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            he is free of negligence.  And nowhere is he relieved of 
            responsibility for his negligent acts." (18 Ops.Cal.Atty.Gen. 
            221, 223 (1951).)

            In sum, to the extent defendant argues that the deputy 
            commissioner's decision should have had some preclusive effect 
            upon plaintiff's claims for damages, we reject it.  In this 
            regard, the statutory scheme and the common law are 
            complementary, not conflicting.  Plaintiff's lawsuit had no 
            effect upon the commissioner's ability to regulate pesticide 
            use or upon the validity of the deputy commissioner's 
            conclusion as it pertained to defendant's liability under the 
            pesticide laws.  Similarly, the deputy commissioner's 
            determination that defendant had complied with the law did not 
            bar plaintiff from pursuing defendant for damages arising from 
            its alleged lack of due care. (Id. at 1525.)

          CAFF argues that:

            SB 1374 would extend the protection from being sued that is 
            afforded to government employees when they misinterpret the 
            law to private parties who rely on such misinterpretations.  
            In the Jacob's Farm case, this would have meant that the 
            defendant would not have been liable for the contamination of 
            the organic crops because defendant relied on a 
            misinterpretation of the pesticide laws by the Agricultural 
            Commissioner.

            In our experience, the Agricultural Commissioners and the 
            Department of Pesticide Regulation commonly misinterpret the 
            pesticide laws in this manner and have been under a lot of 
            political pressure to do so.  Volatilization of pesticides and 
            herbicides is a common phenomenon and will become worse in the 
            US EPA approves Dow's petition for 2-4d-resistant corn.  To 
            create a law like SB 1374 that allows private parties to hid 
            behind the immunity granted government employees, who are 
            themselves subject to political pressure by the very people 
            they are regulating, is to create even more opportunity for 
            private parties to pressure government employees to interpret 
            laws in their favor.

          5.  Bill would impact pending litigation 
           
          This bill would expressly apply to all actions and proceedings 
          that have not resulted in a final judgment on or after January 
          1, 2013, regardless of whether the action or proceeding was 
                                                                      



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          commenced, or based upon, an alleged act or omission that 
          occurred before, on, or after January 1, 2013.

          In the past, this Committee has raised concerns about bills that 
          interfere with pending litigation.  Any such interference could 
          result in a direct financial windfall to a private party, 
          prevent a court from deciding an action based upon the laws in 
          place at the time the cause of action accrued, or create a 
          situation where the Legislative branch is used to circumvent the 
          discretion and independence of the Judicial branch. 


           Support  :  Agricultural Council of California; Air Conditioning 
          Trade Association; American Council of Engineering Companies - 
          California; American Forest and Paper Association; Associated 
          Builders and Contractors of California; Associated General 
          Contractors; Association of California Insurance Companies; Brea 
          Chamber of Commerce; Building Owners and Managers Association of 
          California; California Aerospace Technology Association; 
          California Association of Bed & Breakfast Inns; California 
          Association of Health Facilities; California Association of 
          Licensed Security Agencies, Guards and Associates; California 
          Attraction and Parks Association; California Building Industry 
          Association; California Business Properties Association; 
          California Chapter of American Fence Association; California 
          Delivery Association; California Fence Contractors' Association; 
          California Framing Contractors Association; California Grocers 
          Association; California Hospital Association; California Hotel 
          and Lodging Association; California Independent Grocers 
          Association; California Independent Oil Marketers Association; 
          California League of Food Processors; California Manufacturers 
          and Technology Association; California Metals Coalition; 
          California New Car Dealers Association; California Retailers 
          Association; California Trucking Association; Chambers of 
          Commerce Alliance of Ventura & Santa Barbara Counties; Chemical 
          Industry Council of California; Civil Justice Association of 
          California; Consumer Specialty Products Association; CSAC Excess 
          Insurance Authority; Engineering Contractors' Association; 
          Flasher Barricade Association; Fresno Chamber of Commerce; 
          Fullerton Chamber of Commerce; Golden State Builders Exchanges; 
          Greater Riverside Chamber of Commerce; International Council of 
          Shopping Centers; Marin Builders Association ; Messenger Courier 
          Association of America; NAIOP of California, the Commercial Real 
          Estate Development Association; National Association of Mutual 
          Insurance Companies; National Federation of Independent 
          Business; Network of Domestic Referral Agencies; Orange County 
                                                                      



          SB 1374 (Harman & Correa)
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          Business Council; Pacific Association of Domestic Insurance 
          Companies; Personal Insurance Federation of California; 
          Plumbing-Heating-Cooling Contractors Association of California; 
          Santa Clara Chamber of Commerce and Convention-Visitors Bureau; 
          Simi Valley Chamber of Commerce; TechAmerica; United 
          Contractors; Western Electrical Contractors Association, Inc; 
          Western Growers Association

           Opposition  :  California Conference Board of the Amalgamated 
          Transit Union; California Employment Lawyers Association; 
          California Labor Federation; California Nurses Association; 
          California Rural Legal Assistance Foundation; California State 
          Association of Electrical Workers; California State Pipe Trades 
          Council; California Teamsters Public Affairs Council; Community 
          Alliance with Family Farmers; Consumer Attorneys of California; 
          Engineers and Scientists of California; Food & Water Watch; 
          International Longshore & Warehouse Union; Professional & 
          Technical Engineers, Local 21; UNITED HERE; United Food and 
          Commercial Workers Union, Western States Council; Utility 
          Workers Union of America, Local 132; Western States Council of 
          Sheet Workers

                                        HISTORY
           
           Source  :  California Chamber of Commerce 

           Related Pending Legislation  :  None Known

           Prior Legislation  :  SB 883 (Correa, 2011) See Background.

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