Governor vetoes bill to regulate out-of-state transcribing services

SACRAMENTO — The Court Reporters Board of California failed in its bid to regulate out-of-state deposition transcribing services.

Gov. Jerry Brown wrote that he vetoed a board-backed bill Sunday because of litigation brought by in-state court reporters themselves. AB 1660 would have required out-of-state providers to meet the same ethics and registration requirements as in-state providers.

“This bill affects matters that are currently under review by an appellate court,” Brown wrote in his veto message. “I would prefer to await the outcome of that case before deciding on the issues raised by this bill.”

Monyeen Black, president of the Deposition Reporters Association of California, said she was “disappointed but encouraged.” Her group and the California Court Reporters Association co-sponsored AB 1660.

“The veto message, unlike most, didn’t endorse the status quo or reject the need for a fair regulatory playing field,” Black said.

For years, California court reporting firms have claimed they are being undercut by companies that aren’t required to meet the same ethical guidelines. These companies can offer bonuses for repeat customers that court reporters and in-state companies can’t.

Many of these companies, Black said, face far more regulation in their home states than in California.

The board regulates California’s 7,000 court reporters, who must register and pass a series of training requirements. AB 1660 would have extended the board’s power to the court reporting companies themselves.

The case Brown referenced is Holly Moose & Associates v. U.S. Legal Support Inc., CV258886 (S.C. Super. Ct., filed Jan. 10, 2014).

Moose runs a San Rafael-based court reporting service. She alleged the Texas company engaged in fraud and illegal business practices by offering court reporting services without a license. Her claim was dismissed in June, partially on standing, but Moose appealed to the 6th District Court of Appeal.

Mike Belote is a lobbyist representing U.S. Legal and Atlanta-based Esquire Deposition Solutions LLP. He said his clients were concerned about ambiguous language in AB 1660 and how its provisions might affect larger companies that offer a diversity of legal services.

“It was attempting to take a regulatory structure that applies to the practice of court reporting and apply those laws and regulations to businesses who may do a lot of things besides court reporting,” Belote said.

Belote’s clients sponsored another bill, AB 1631, that would have barred cash or cash-equivalent bonuses. But it would have protected these companies’ ability to offer long-term discounted contracts. It stalled in committee but is eligible to be taken up next year.

Another case, Court Reporters Board of California v. U.S. Legal Support Inc., CV197817 (S.C. Super. Ct., filed April 1, 2011), stemmed from an effort to enforce a $2,500 fine against U.S. Legal for improper gift-giving to clients.

It was also dismissed when the judge ruled “no plausible reading” of state business law gave the board the authority to fine out-of-state companies.