Haas v. County of San Bernardino

• Citation: 27 Cal.4th 1017,119 Cal.Rptr.2d 341,45 P.3d 280
• Decision Date: 06 May 2002
• Docket Number: No. S076868.,S076868.
• Court: United States State Supreme Court (California)
• Parties: Theodore L. HAAS, Plaintiff and Respondent, v. COUNTY OF SAN BERNARDINO et al., Defendants and Appellants.

119 Cal.Rptr.2d 341

27 Cal.4th 1017

45 P.3d 280

Theodore L. HAAS, Plaintiff and Respondent, v. COUNTY OF SAN BERNARDINO et al., Defendants and Appellants.

No. S076868.

Supreme Court of California.

May 6, 2002.

Alan K. Marks, County Counsel, and Alan L. Green, Deputy County Counsel, for Defendants and Appellants.

Liebert, Cassidy & Frierson, Larry Frierson, Calistoga, and Jacqueline Kramer Loveless, Santa Rosa, for California School Boards Association's Education Legal Alliance as Amicus Curiae on behalf of Defendants and Appellants.

Richards, Watson & Gershon, Michael G. Colantuono, Los Angeles, Roy A. Clarke, Gabriel K. Coy, Century City; Cohen & Goldfried and Robert M. Goldfried, Beverly Hills, and the California State Association of Counties as Amici Curiae on behalf of Defendants and Appellants.

Roger Jon Diamond, Santa Monica, for Plaintiff and Respondent.

WERDEGAR, J.

In this case, we consider a due process challenge to the manner in which some counties select temporary administrative hearing officers. The Government Code authorizes counties to appoint hearing officers to preside when a state law or local ordinance provides that a hearing be held or that findings of fact or conclusions of law be made by any county board, agency, commission or committee. (Gov.Code, § 27721.)¹ Exercising this statutory authority, some counties have adopted the practice of selecting temporary administrative hearing officers on an ad hoc basis and paying them according to the duration or amount of work performed. Plaintiff contends this practice gives hearing officers an impermissible financial interest in the outcome of the cases they are appointed to decide, because the officers' prospects for obtaining future ad hoc appointments depend solely on the county's goodwill and because the county, in making such appointments, may prefer those officers whose past decisions have favored the county.² We agree. Counties that appoint temporary administrative hearing officers must do so in a way that does not create the risk that favorable decisions will be rewarded with future remunerative work. The ad hoc procedure used here does create that risk. We thus affirm the Court of Appeal's decision upholding the superior court's writ of mandate disqualifying the hearing officer.

BACKGROUND

Plaintiff Theodore L. Haas operates a massage clinic in San Bernardino County (the County) under a license issued by the County. When a deputy sheriff reported that a massage technician had exposed her breasts and proposed a sexual act, the County Board of Supervisors (the Board) revoked Haas's license. Haas timely appealed the notice of revocation, and the Board set the matter for hearing. The notice identified a local attorney, Abby Hyman, as the hearing officer. In his answer to the notice, Haas objected that "the County may not hire its own hearing officer to conduct the hearing, said relationship having created ... an actual conflict of interest and/or potential conflict of interest in violation of the Due Process Clauses of the Federal and State Constitutions." Haas proposed, instead, that the County contract with the state Office of Administrative Hearings for the services of an administrative law judge (Gov.Code, § 27727; see ante, 119 Cal.Rptr.2d at 343, fn. 1, 45 P.3d at p. 282, fn. 1), or that Haas hire the hearing officer. Both suggestions were rejected.

Haas renewed his objection to the hearing officer when the hearing convened. Haas's attorney, Roger Jon Diamond, argued that Hyman had an impermissible financial interest in the case, arising from the manner in which the County had selected and paid her, and moved that she recuse herself. Hyman denied the motion, but nevertheless permitted Diamond to pursue the matter for purposes of making the record.

Diamond briefly inquired into the County's arrangements with Hyman. Hyman stated that she had not previously served as a hearing officer and had been hired to hear only the matter at hand. Deputy County Counsel Alan Green, representing the County, explained that he had hired Hyman to avoid using again the same temporary hearing officer who had already recommended that Haas's license be revoked.³ Green, who had not previously met Hyman, had selected her based on his coworkers' recommendations and made the arrangements by calling her personally prior to the hearing. Green explained that he did not negotiate the billing rate with Hyman; instead, he informed her that she would be paid the same rate that county counsel charged the County's internal clients for attorneys' time.⁴

During the course of this discussion, Green volunteered, "The intent is that we will use Ms. Hyman on assignment, as the occasion suggests, in the future if she's interested in doing it and if the case should arise." Diamond pursued the matter with further questions to Green, who several times confirmed that he foresaw employing Hyman in the future on an ad hoc basis. When asked, "Is Ms. Hyman's contract with the County only for this case or for future cases?" Green answered, "It's open-ended as far as that's concerned." When asked, "But the County does anticipate using the services of Ms. Hyman in future cases?" Green answered, "Sure." Hyman had not replaced Horspool, Green explained; instead, he anticipated the County might use either attorney "as their schedules permit." Shortly thereafter the discussion returned to the subject of future employment. Diamond asked Green, "And so certainly you've advised [Hyman] that she might be needed on future hearings." Green responded, "I probably have. I don't recall expressly doing so." When Hyman interjected, "I don't recall that," Diamond asked, "But that's certainly within possibility?" to which Green replied, "Certainly." Diamond then asked, "And she knows that?" Green replied, "I would assume so." (Hyman was, of course, present during this exchange.) To Diamond's further question, "And she's only paid for the work she actually performs; is that right?" Green responded, "In connection with this hearing, correct."

After briefly discussing Hyman's credentials, Diamond asked Green why he did "not select a hearing officer from the Office of Administrative Hearings of the State of California pursuant to Section 12.275⁵ of the County Code?" Green answered, tautologically, "Because the County elected to hire a hearing officer independently to serve in this capacity." Diamond then asked, "But you, as the moving party, are, in effect, paying the hearing officer?" Green responded, "So?" When Hyman interjected, "Would you like to split my bill? I don't care," Diamond replied, "The trouble is, we will not be paying for your services in future cases where the County retains your services."

A brief discussion of the motion ensued. Diamond drew analogies to a prosecutor's being permitted to file cases before the judge of his choice, and to Code of Civil Procedure section 170.1, subdivision (a)(6)(C), which provides that a judge shall be disqualified when "a person aware of the facts might reasonably entertain a doubt that the judge would be able to be impartial." "It's not whether there's actual prejudice or bias," Diamond argued, "It's the appearance. I would submit that if you ask ten persons on a street corner whether they would be comfortable at a hearing where the opposing side contracted with the judge, they would feel that that creates the appearance of prejudice even if there's no actual bias or prejudice." Diamond again offered to pay for the hearing officer if the County would contract for one with the state Office of Administrative Hearings. He also inquired whether the office of County Hearing Officer purportedly established by the San Bernardino County Code⁶ in fact existed. Green explained that no "independent department" with that title existed; as Green understood the matter, Hyman held the office and had been "retained to serve in that capacity" for purposes of the hearing. Hyman then confirmed that she continued to be privately employed as an attorney, that payment for the hearing would go to her personally rather than to her employer, and emphatically declined to answer the question whether she was "taking time off from [her] work to be here?" Diamond at that point reiterated his objection to Hyman's conducting the hearing, and the hearing proceeded to other matters. During the hearing, which lasted one hour and 45 minutes, two witnesses were called: the deputy sheriff who reported the violation, and Haas. Haas did not materially challenge the deputy's account of the incident. He did, however, through his attorney, attempt to show that no similar incident had previously occurred at his establishment. He also argued that revocation—the sole penalty authorized in the San Bernardino County Code for such violations—was disproportionately harsh. The hearing officer took the matter under submission and rendered a brief written decision 47 days later recommending revocation.

Haas pursued his administrative appeal, which took the form of a written request for a hearing before the Board. In that request, Haas reiterated his objection to the hearing officer. At the hearing, the Board approved the hearing officer's recommendation.

Haas petitioned for a writ of administrative mandamus. (Code Civ. Proc., § 1094.5.) The superior court granted the writ. The judgment and writ merely direct the Board, without further explanation, to set aside the decision revoking Haas's license. The transcript of the hearing before the superior court, however, indicates the court accepted Haas's claim that the hearing officer should have recused herself. The court declined to instruct the County how to select a hearing officer but indicated that the use of a state administrative law judge would be acceptable.

The Board appealed, and the Court of Appeal affirmed. The court rejected Haas's argument "that the possibility of the County retaining Hyman as a hearing officer in the future,"...