Government
Apr. 26, 2017
Court reporting firms battle over proposed legislation
A bill moving through the state Senate would bar law firm employees from accepting "any gift, incentive, reward, or anything of value" in exchange for giving business to court reporting firms.
A bill moving through the state Senate would bar law firm employees from accepting "any gift, incentive, reward, or anything of value" in exchange for giving business to court reporting firms.
The stated goal of SB 484is to stop what supporters characterize as kickback schemes, in which attorneys or legal secretaries accepts gift cards, iPads or other compensation in exchange for choosing one firm over another.
"This bill would simply level the playing field in terms of in-state and out-of-state court reporting firms," the bill's author, Sen. Richard Roth, D-Riverside,told the Senate Judiciary Committee on Tuesday.It passed 5-2.
But the politics of SB 484 are anything but simple. The bill also represents the latest in a series of battles between small, local court reporting firms and large national companies. Two other bills are pending in the state Assembly that could change how reporting firms are regulated.
SB 484 is sponsored by the Deposition Reporters Association of California,which has been circulating ads by reporting firms offering televisions and Los Angeles Dodger tickets as inducements to book a certain number of depositions or to book by a certain date.
Theassociation claims such inducements can lead to lower quality work and cause tax implications, since such gifts are considered taxable by the IRS.
The large, out-of-state firms favor banning such giveaways, according to their lobbyist, Mike Belote. Belote is the president of California AdvocatesInc.,which lobbies in Sacramento for several large national reporting firms, including Esquire Deposition Solutions LLP and U.S. Legal Support Inc.
But Belote is still seeking several amendments, including one that would allow a reporting firm to take law partners out for a meal.
Senate Judiciary Chair Hannah-Beth Jackson, D-Santa Barbara,noted how the field used to be known for independent contractors. Many were women who transcribed depositions at home in between child care duties, she said, and "couldn't afford to take someone out to a $100 dinner" in order to garner more business.
The two sides have already agreed on several amendments. These include lowering the potential fine for $20,000 to $5,000 per violation, and clarifying that it would be up to theattorneygeneral or local district attorneys and city attorneys to bring fines.
But the larger question of how court reporting companies are regulated will continue to be debated.
Antonia Pulone, legislative chair of the Deposition Reporters Association and founder of Pulone Reporting Services in San Jose,testified that the in-state firms registered with Court Reporters Board of Californiaare limited to $100 in gifts to each law firm per year.
"Most of this gift giving is being done by out-of-state agencies that aren't statutorily authorized to be working here in California, and therefore our court reporters board hasn't the authority to penalize them," she said.
"There are many open questions about the jurisdiction of the Court Reporting Board that are not the subject of this bill, which I think we will agree to disagree about," Belote countered.
Belote's clients are sponsoring a separate bill, AB 1631,that would ban most kickbacks. The bill would vest enforcement power in the stateattorneygeneral's office, potentially undermining the authority of the Court Reporters Board.
Another bill, AB 1660,would instead mandate that any company offering court reporting services in the state would need to be registered with the Court Reporters Board, no matter where they were based.
Both bills are scheduled to face their first votes on Tuesday in the Assembly Business and Professions Committee.
Malcolm Maclachlan
malcolm_maclachlan@dailyjournal.com
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