Government
Apr. 27, 2017
Bill to control out-of-state court reporting companies advances
The Court Reporters Board of California won a battle on Tuesday in their long-running fight to bring out-of-state deposition transcribing services under their jurisdiction.
Daily Journal Staff Writer
SACRAMENTO — The Court Reporters Board of California won a battle on Tuesday in their long-running fight to bring out-of-state deposition transcribing services under their jurisdiction.
The Assembly Business and Professions Committee passed AB 1660, a board-sponsored bill that would subject out-of-state providers to the same registration and ethical requirements as in-state court reporters.
The bill's supporters said it evens the playing field between in-state and out-of-state court reporting companies. Opponents said AB 1660 would improperly extend the state governing board's authority in order to give a competitive advantage to in-state providers. A similar bill made it to the Assembly floor two years ago, but did not advance.
"Unlike other industry members who are following court reporting laws and ethics, out-of-state firms have tried to rewrite existing law by saying they are exempt, to retain an unfair competitive advantage," said board president Davina Hurt.
"This bill and this concept has failed to proceed through this committee repeatedly over the years," said Mike Belote, who lobbies for a coalition of large, out-of-state firms, including Texas-based U.S. Legal Support Inc. and Esquire Deposition Solutions LLP, which is headquartered in Atlanta.
"This is tantamount to bringing an insurance company within the jurisdiction of the State Bar of California because they hire a lawyer to defend you," Belote added.
Supporters countered with a Sunday letter to the committee noting that both Georgia and Texas give their equivalent court reporter boards jurisdiction over out-of-state providers.
The committee also voted down AB 1631, a bill supported by Belote's coalition. It would have forced out-of-state firms to comply with a board rule that bars reporting firms from giving gifts worth more than $100 to a particular law firm in a year. However, it would have vested enforcement power in the attorney general's office, not the board.
The board and its supporters opposed that measure. They instead support a similar but tougher bill, SB 484, that would prevent law firm employees and others from accepting "any gift, incentive, reward, or anything of value" in return from scheduling deposition reporting contracts.
That bill doesn't vest authority in the board either, but it does allow district attorneys and city attorneys to enforce these rules.
SB 484 passed off the Senate floor on Monday and now heads to the Assembly. The Deposition Reporters Association of California, which supports both SB 484 and AB 1660, has circulated examples of ads from out-of-state firms offering incentives like gift cards and spa visits.
The board licenses 7,000 court reporters within the state, who must pass several training requirements. These rules apply to both "official reporters" who work directly for courts, and freelancers hired by law firms or deposition reporting agencies.
The board does not register companies. However, in 2013 it passed regulations clarifying that the ethical rules governing court reporters also apply to California-based firms that employee court reporters.
AB 1660 would force companies to register with the board. It would make it illegal for licensed court reporters to work for a company that is not registered with the board.
The board attempted to assert authority over out-of-state providers in 2010, when it cited U.S. Legal for excess gift-giving and imposed a $2,500 fine. U.S. Legal responded with a letter stating the board lacked jurisdiction and the company would not pay the fine.
The board then sued, but Santa Clara County Superior Court Judge Aaron Persky ruled against it.
"No plausible reading of the Corporations Code and the Business and Professions Code gives the board the authority to issue citations to foreign [i.e. out-of-state] corporations," the judge wrote. Court Reporters Board of California v. U.S. Legal Support, Inc., CV-197817 (S.C. Super. Ct., filed April 1, 2011).
malcolm_maclachlan@dailyjournal.com
Malcolm Maclachlan
malcolm_maclachlan@dailyjournal.com
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