BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session SB 270 (Mendoza) - Court Reporters Board of California: civil actions: corporations ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: May 5, 2015 |Policy Vote: B., P. & E.D. 9 - | | | 0, JUD. 5 - 1 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: Yes | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: May 18, 2015 |Consultant: Mark McKenzie | | | | ----------------------------------------------------------------- This bill does not meet the criteria for referral to the Suspense File. Bill Summary: SB 270 would authorize the Court Reporters Board of California (CRB) to bring a civil action against a person or corporation rendering court reporter services without a CRB license. The bill requires the court to award reasonable investigation and enforcement costs if the CRB or Attorney General is granted an injunction. Fiscal Impact: Unknown additional CRB enforcement costs, dependent upon the SB 270 (Mendoza) Page 1 of ? number of complaints investigated and enforcement actions. If additional staff is needed, costs could be in the range of $100,000 annually. (Court Reporters Fund) Unknown additional fine revenues, which are also dependent upon the number of successfully adjudicated cases. In addition, there could be reimbursements for enforcement and investigation costs that are awarded by the courts. (Court Reporters Fund) Background: Existing law provides the CRB with the authority to certify and regulate shorthand reporters who perform a vital function for the courts and litigants in providing official, verbatim records of a variety of proceedings. The importance of this transcription function by licensed individuals is reflected in California law, which requires that an official reporter of the superior court take down in shorthand all testimony, objections made, rulings of the court, exceptions taken, arraignments, pleas, sentences, arguments of the attorneys to the jury, and statements and remarks made and oral instructions given by the judge or other judicial officer, in specified cases. Existing law also provides that the report of the official reporter of any court, when transcribed and certified as being a correct transcript of the testimony and proceedings in the case, is prima facie evidence of the testimony and proceedings. In 2010, the CRB found that U.S. Legal, a Texas based corporation, was providing court reporting services in California and offering incentives and/or gifts in exchange for depositions, a violation of California's professional standards. U.S. Legal argued that the Board lacked jurisdiction to issue citations. In the subsequent 2012 case, Court Reporters Board of California v. U.S. Legal, the Court agreed with U.S. Legal and found that the CRB has no authority to impose sanctions and fines against the company for noncompliance with anti-gift-giving regulations. According to the Court, although U.S. Legal was rendering court reporting services in California and was in violation of gift-giving regulations, there was no explicit authority in current statute authorizing the board to impose sanctions or fines against U.S. Legal. SB 270 (Mendoza) Page 2 of ? Proposed Law: SB 270 would authorize the CRB to bring a civil action, or ask the Attorney General to bring an action, to enjoin any unlicensed person, corporation, or foreign corporation from rendering court reporter services in this state without ever being issued a license by CRB, or authorized to render court reporter services, as specified. This bill would authorize the CRB to seek certain penalties, including fines and restitution, and would require the courts to award reasonable investigation and enforcement costs and authorize the award of any portion of unallocated penalties, if CRB or the Attorney General is granted an injunction. The bill would also authorize courts to designate that any transcript prepared by any person or corporation subject to an action brought under this bill does not qualify as a certified transcript. Finally, this bill would make it a misdemeanor for any person or corporation to knowingly render court reporter services in this state without ever being issued a license or authorized to render those services. Staff Comments: This bill would provide CRB with the authority to take legal action against individuals or corporations that provide court reporting services without obtaining a license and complying with the requirements of the relevant court reporters statutes. The fiscal impacts of the bill would depend upon the number of complaints and enforcement actions taken by the CRB, which is currently unknown. The bill would likely have an impact on enforcement workload, however, and to the extent the bill results in more than 10 complaints annually, the CRB would need additional staff to manage the increased workload, at a cost in the range of $100,000 annually. Any potential penalty revenues would also be unknown and dependent upon future enforcement actions, but these revenues could serve to offset the additional investigation and enforcement costs. CRB indicates that any costs to update regulations would be minor SB 270 (Mendoza) Page 3 of ? and could be absorbed within existing resources. -- END --