BILL ANALYSIS � 1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
SB 636 - Hill Hearing Date: January 14,
2014 S
As Amended: January 6, 2014 FISCAL B
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DESCRIPTION
The California Constitution establishes the California Public
Utilities Commission (CPUC) with five members appointed by the
Governor and approved by the Senate for staggered six-year terms
and grants the CPUC authority to regulate public utilities
subject to control by the Legislature. (Cal. Const. Article II,
Section 1)
Current law requires the Governor to designate one of the
commissioners as president who is authorized to direct and
prescribe duties of an attorney (general counsel), executive
director, and other staff and preside at CPUC meetings. (Public
Utilities Code 305)
Current law authorizes the commission to appoint a general
counsel to represent the CPUC in all actions, to commence,
prosecute or intervene in proceedings as directed by the
president, to advise the commission and each commissioner on all
matters, and to perform all duties that the president or a vote
of the commission may require. (Public Utilities Code 307)
Current law establishes within the CPUC an independent Office of
Ratepayer Advocates (ORA), to be staffed with attorneys from the
office of the CPUC general counsel (Legal Division), and
requires the CPUC to develop procedures and a code of conduct to
ensure that ORA advocates on a particular case or proceeding are
not advising decisionmakers on the same case or proceeding.
(Public Utilities Code 309.5)
This bill prohibits any CPUC employee or officer that is
assigned to prosecute, testify in, or supervise prosecution of,
an adjudication case from participating in, or advising the
commission on, the decision of that case or the decision of a
factually related proceeding.
BACKGROUND
Due Process Requires Separation of Functions - The
constitutional guarantee of procedural due process includes the
right to have legal disputes and proceedings resolved by a
neutral, impartial and unbiased adjudicator and tribunal. This
generally requires that a judge or other decisionmaker be
advised by an attorney who is different from the attorney
serving as prosecutor or advocate in a proceeding. A leading
California Supreme Court case is Morongo Band of Mission Indians
v. State Water Resources Control Board (45 Cal.4th 731 (2009),
which involved a board proceeding to revoke a water license
where an attorney prosecuting the case also served as advisory
counsel for the board in its decision on an unrelated matter.
The court held that contemporaneously serving as adviser to a
decisionmaker in one case while prosecuting an unrelated case
before that same decisionmaker does not by itself violate due
process as long as an agency's internal separation of functions
are observed.
CPUC's Separation of Functions - The California Administrative
Procedures Act (APA) requires a state agency's adjudicative
function to be separated from the investigative, prosecutorial,
and advocacy functions (Sections 11425.10 and 11425.30 of the
Government Code).
The CPUC, as an independent constitutional entity, has long been
exempt from the APA and instead is governed by provisions in the
Public Utilities Code. These provisions do not require
separation of advocacy and advisory functions for all CPUC
employees or even all attorneys in the CPUC Legal Division.
Current law requires the general counsel, head of the Legal
Division, to both prosecute cases on behalf of the commission
and advise commissioners (Public Utilities Code 307). However,
provisions governing ORA (which has attorneys assigned to it
from the Legal Division), requires the commission to develop a
code of conduct and procedures to ensure that an employee does
not both advocate and advise decisionmakers in the same case
(Public Utilities Code 309.5(d)).
CPUC Guidelines and Practices - A 1997 memorandum from the CPUC
executive director to staff on "Conflict of Roles: Guidelines &
Procedures" requires separation of functions for CPUC staff
under the following general principle:
"Commission staff who have been personally involved in
preparing or presenting an adjudicatory case shall not
serve in an advisory role in the same adjudicatory
proceeding, or any factually related adjudicatory
proceeding."
But the memo emphasizes that its provisions are only guidelines
and also gives the executive director and general counsel
authority to waive the guidelines. The CPUC states that this
memo and its "current practice of keeping attorneys separated on
a case-by-case basis" complies with the California Supreme
Court's Morongo decision.
On January 7, 2014, the commissioners issued a memorandum to the
general counsel and Legal Division attorneys with a report from
an outside expert on ethical duties and responsibilities of CPUC
attorneys and a directive that legal ethics training will be
forthcoming. The CPUC hired the outside expert in August 2013
after an internal dispute last summer involving CPUC attorneys
and supervisors working on an enforcement action against Pacific
Gas and Electric (PG&E) in connection with the San Bruno gas
pipeline explosion.
COMMENTS
1. Author's Purpose . According to the author, this bill is
necessary to codify the requirement to separate advocacy
and advisory functions at the CPUC because the CPUC's
current policy requiring separation is not binding and can
be waived at the discretion of the general counsel and
executive director. The author describes two incidents
demonstrating the need for this bill involving the general
counsel serving both as adviser to the commissioners and
directing the prosecuting attorneys to take specified
actions in the CPUC's penalty proceeding against PG&E for
the San Bruno gas pipeline explosion.
2. Making Separation of Functions Mandatory . This bill
fills a gap in current law and CPUC practice by making
separation of advocacy and advisory functions mandatory.
Current law requiring separation of these functions at the
CPUC applies only to ORA and not to all CPUC attorneys or
the general counsel. Moreover, the 1997 guidelines,
apparently developed to implement the ORA statutory
provisions, can be waived by the executive director and
general counsel.
3. Conflict with General Counsel Statutory Duties . This
bill prohibits any employee who prosecutes a case, or
"supervises" the prosecution of a case from advising the
commission on that case or factually related proceeding.
Assuming the general counsel supervises all attorneys in
the Legal Division, including those assigned to prosecute
cases, this provision potentially conflicts with the
general counsel's statutory duty to advise each
commissioner on any matter. Thus, given the author's
intent that this bill apply to the general counsel, the
author and committee may wish to consider amending the bill
to make its provisions notwithstanding Section 307 of the
Public Utilities Code.
4. Limit Advisory Role When "Personally Involved" in
Advocacy . This bill prohibits an advisory role for any CPUC
"officer, employee, or agent of the commission that is
assigned to assist in the prosecution of, to testify in, or
to supervise the prosecution of an adjudication case."
Regarding SB 611 (Hill, 2013) with provisions substantially
similar to this bill, the CPUC stated that the bill was
"unnecessary and would result in duplicative bureaucracy
and unjustified expense."
The CPUC guidelines minimize the need for duplication by
limiting the advisory prohibition to staff who are
"personally involved" in the prosecution function, defined,
in relevant part, to mean "substantial involvement in the
case, and not merely marginal or trivial
participation?meaningful participation that is likely to
affect an individual with a commitment to a particular
result in the case." Moreover, it is unclear whether
testifying in an adjudication case would always constitute
advocacy. Thus, to help minimize the need for duplicative
staff and supervisors, the author and committee may wish to
consider amending the bill to apply the advisory
prohibition to any "officer, employee, or agent of the
commission that is personally involved in the prosecution
or the supervision of prosecution of an adjudication case."
5. Related Legislation . SB 611 (Hill, 2013), required CPUC
separation of advocacy and advisory functions, modified
power of CPUC president, gave the Division of Ratepayer
Advocates independent structure and budget process, and
made other changes to CPUC authority; amended with
unrelated provisions and pending in the Assembly Committee
on Public Safety.
POSITIONS
Sponsor:
Author
Support:
None on file.
Oppose:
None on file.
Jacqueline Kinney
SB 636 Analysis
Hearing Date: January 14, 2014