Blinder, Robinson & Co. v. Tom

• Decision Date: 21 May 1986
• Citation: Blinder, Robinson & Co. v. Tom, 226 Cal.Rptr. 339, 181 Cal.App.3d 283 (Cal. App. 1986)
• Parties: BLINDER, ROBINSON & CO., INC., Plaintiff and Appellant, v. Franklin TOM, as Commissioner, etc., et al., Defendants and Appellants. Civ. B009330.
• Court: California Court of Appeals

Page 339

226 Cal.Rptr. 339

181 Cal.App.3d 283

BLINDER, ROBINSON & CO., INC., Plaintiff and Appellant, v.Franklin TOM, as Commissioner, etc., et al., Defendants and Appellants.

Civ. B009330.

Court of Appeal, Second District, Division 4, California.

May 21, 1986.

Review Denied Sept. 11, 1986.

Hahn, Cazier & Smaltz, Donald C. Smaltz, Robert L. Hess and Thomas H. Mabie, Alan C. Jacobson, Arthur F. Mathews and Wilmer, Cutler & Pickering, Los Angeles, for plaintiff and appellant.

Franklin Tom, G.W. McDonald, George A. Crawford and Diane Coleman, Los Angeles, for defendants and appellants.

McCLOSKY, Associate Justice.

AppellantBlinder, Robinson & Co., Inc.(hereafter BR) appeals from that part of the judgment of the Los Angeles Superior Court which denied petitioner's "Verified Petition for Depositions of Robert Davenport, Thomas J. Amy and Rodney K. Vincent" after the commissioner of corporations (commissioner) filed an accusation against BR.

CONTENTIONS

Appellant contends that (1) the commissioner abused his discretion by denying petitioner(appellant herein) the opportunity to obtain testimony relevant to the admissibility and weight of the only evidence alleged in support of the accusation and to obtain evidence in mitigation, asserting that (a) BR has a right to challenge the commissioner's proposed use of judicial notice and asserting further that (b) BR is entitled to obtain and present evidence in mitigation; and (2) the procedure for obtaining compulsory process for out-of-state witnesses embodied in Government Code section 11511 is unconstitutional as a violation of due process, both on its face and as applied in these proceedings, asserting that (a)Government Code section 11511 is unconstitutional on its face because it vests the commissioner with discretion to determine the materiality of deposition testimony from out-of-state witnesses and constitutes an impermissible combination of prosecutorial and adjudicatory functions and that (b) the commissioner's determination of the materiality of the requested deposition testimony pursuant to Government Code section 11511, as applied, violated BR's due process rights.

FACTS AND RELEVANT PROCEDURAL HISTORY

On October 18, 1984, the commissioner filed an accusation before the Department of Corporations of the State of California seeking to revoke BR's broker-dealer certificate, pursuant to Corporations Code section 25212, subdivision (c), which authorizes the commissioner to revoke a broker-dealer's license after finding revocation to be in the public interest.The commissioner alleged therein that prompt revocation was imperative and in "the public interest" because BR's "Uniform Application for Broker Dealer Registration"(form BD) shows that BR is subject to at least two currently effective injunctive orders entered in the State of Virginia and the United States District Court for the District of Colorado.These, the accusation alleged, were as follows:

"A. VIRGINIA______

"On January 20, 1982, the Virginia Corporations Commission permanently enjoined Respondent from acting as an unregistered broker-dealer.The Order was upheld on March 9, 1984 by a 'court of competent jurisdiction,' the Virginia Supreme Court.

"...

"B.UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO______.

"On June 8, 1982, the United States District Court permanently enjoined Respondent from violating certain of the federal securities laws, including the anti-fraud provisions, after a complaint was filed by the Denver Regional Office of the Securities Exchange Commission.The Order of Permanent Injunction is currently in effect."

On October 25, 1984, pursuant to Corporations Code section 25212, BR submitted its "Notice of Defense," requesting a hearing on the commissioner's intended action.On November 5, 1984, the commissioner served his "Notice of Request to Take Compulsory Judicial Notice" on BR.The "notice" requested that the administrative law judge take "compulsory judicial notice" of the United States District Court and Virginia State Corporation Commission injunctions.(Evid.Code, § 452, subd. (d)and§ 453.)

Pursuant to Government Code section 11511, BR served the commissioner with a verified petition for depositions on December 19, 1984, wherein it sought an order from the commission for the taking of the depositions of out-of-state residents Robert Denver, Thomas J. Amy and Rodney K. Vincent, all of whom were employees of the United States Securities and Exchange Commission(hereafter SEC)Denver Regional Office, Robert Shaftan, Irwin Lampert and Phillip Lowery, three private attorneys, and lastly, the deposition of Lewis Brothers, Jr., Esquire, Division of Securities, Virginia State Corporation Commission.

In that verified petition for depositions, BR set forth its reasons for needing the testimony of these individuals.These were that the commissioner was proceeding against it based exclusively on the existence of the injunctions and that the only items of evidence the commissioner intended to present in the revocation hearing were certified copies of the injunctions, as to which he would ask the administrative law judge to take mandatory judicial notice.BR further alleged that it had an absolute right under Evidence Code section 455 to present evidence to the administrative law judge " 'relevant to (1) the propriety of taking judicial notice of the matter; and (2) the tenor of the matter to be noticed.' "It averred that the evidence it sought to present by way of deposition was relevant to the propriety and tenor of any judicial notice.In addition, BR asserted that the commissioner apparently intended to present no evidence directed to the question of what penalty would be appropriate.BR averred that it also wished to obtain the deposition testimony because it would be relevant and material to the issue of whether any sanction would be appropriate, and, if so, what that sanction should be.

By letter dated December 27, 1984, the commissioner denied BR's verified petition for depositions and asserted that the administrative hearing was not an appropriate forum to raise questions about the injunctions.

BR then filed a petition for a writ of mandate in the Los Angeles Superior Court(pursuant to Code Civ.Proc., § 1085), to compel the commissioner to petition the Superior Court of Sacramento County for an order to take the requested out-of-state depositions.

On January 8, 1985, the superior court issued an alternative writ of mandate, commanding the commissioner to show cause why a peremptory writ should not be issued.Commissioner filed a reply memorandum of points and authorities.

Before the hearing on the peremptory writ of mandate, BR obtained sworn testimony from the three nongovernmental proposed deponents who were appellant's attorneys and withdrew its request for the depositions of those three witnesses.The superior court trial judge granted BR's request for a peremptory writ of mandate with respect to Mr. Brothers of the Virginia State Corporation Commission and ordered the commissioner to apply to the superior court in Sacramento County for an order for the taking of that deposition.The trial judge, however, denied the issuance of a peremptory writ with respect to the three employees of the SEC's Denver Regional Office.It is from that denial that this appeal is taken.

We shall hold that the superior court did not err in declining to issue the writ of mandate with respect to the proposed depositions of the SEC employees.

DISCUSSION

Apart from Government Code section 11511, ¹appellant has no common law right to take the prehearing depositions it seeks.(Stevenson v. State Bd. of Medical Examiners(1970)10 Cal.App.3d 433, 440, 88 Cal.Rptr. 815;Shivley v. Stewart(1966)65 Cal.2d 475, 55 Cal.Rptr. 217, 421 P.2d 65;Romero v. Hern(1969)276 Cal.App.2d 787, 790, 81 Cal.Rptr. 281;Everett v. Gordon(1968)266 Cal.App.2d 667, 72 Cal.Rptr. 379.)

I

We therefore first consider appellant's contention that the procedure for obtaining compulsory process for out-of-state witnesses embodied in Government Code section 11511 is unconstitutional as a violation of due process, both on its face and as applied in these proceedings.

"Procedural due process does not require a trial before a court.A proceeding before an administrative officer or board is adequate if the basic requirements of notice and opportunity for hearing are met.[Citation.]And the sufficiency of the notice and hearing is determined by considering the purpose of the procedure, its effect on the rights asserted, and other circumstances.(Anderson Nat. Bank v. Luckett(1944)321 U.S. 233, 64 S.Ct. 599, 606, 88 L.Ed. 692, 705['The fundamental requirement of due process is an opportunity to be heard upon such notice and proceedings as are adequate to safeguard the right for which the constitutional protection is invoked'- ];Ohio Bell Tel. Co. v. Pub. Utilities Com.(1939)301 U.S. 292, 304, 57 S.Ct. 724, 730, 81 L.Ed. 1093, 1101.)"(5 Witkin, Summary of Cal. Law (8th ed. 1974) Constitutional Law, § 299, p. 3588.)The precise procedural formalities required by due process are undefinable and vary according to the factual context."[P]rocedural due process in the administrative setting does not always require application of the judicial model."(Dixon v. Love(1977)431 U.S. 105, 115, 97 S.Ct. 1723, 1729, 52 L.Ed.2d 172;emphasis in original.)

The Administrative Procedure Act(Act)Government Code section 11500, et seq. codifies numerous rights in proceedings before administrative agencies.Included among those rights is the right of each party to call and examine witnesses and rebut evidence against it.(Gov. Code, § 11513.)To give substance to the right, a party must, of course, have the ability to compel the attendance of witnesses on relevant material matters.To compel the attendance of such out-of-state witnesses the Act provides in pertinent part that "[o]n ...