VIA FEDERAL EXPRESS
Presiding Justice Scotland and Associate Justices
California Court of Appeal, Third Appellate District
900 N Street, Room 400Sacramento, CA 95814-4869
RE: Supplemental Letter Brief - Appellants’ Reply
Fair Political Practices
Commission v. Californians Against Corruption et al (C038246)
Dear Presiding Justice Scotland and Associate
Justices:
Appellants Californians Against
Corruption, Carl Russell Howard and Stephen Cicero demonstrated in their
initial letter brief that the de facto officer doctrine does not apply in this
particular case as a matter of law, and that even if it did apply, Ahuja and
Tribe exceeded the scope of even their apparent authority and thus were not in
fact de facto officers. The FPPC disagreed,
but even a cursory analysis of the FPPC’s position shows that the FPPC is
wrong.
I. THE DE FACTO OFFICER DOCTRINE DOES NOT APPLY TO THIS CASE.
A. Howard And Cicero Are Making A Direct Attack, Not A
Collateral Attack.
The de facto officer doctrine
precludes a collateral attack, but not a direct attack, on an officer’s
qualifications. The parties agree on
this general point but disagree about whether Howard and Cicero’s claim here is
direct or collateral.
Howard and Cicero showed that a
direct attack is one where the officer’s qualifications are directly at issue
in the case, and a collateral attack is one where the officer’s qualifications
are not directly at issue but a party is claiming that a judgment or order is
invalid because the officer issuing the order had not properly been appointed.
(AOLB 2-4,[1]
citing People v. Bowen (1991) 231 Cal.App.3d 783 and Ensher,
Alexander & Barsoom v. Ensher (1965) 238 Cal.App.2d 250.)
Howard and Cicero are making a
direct attack because in this particular lawsuit, Ahuja and Tribe’s
qualifications are directly at issue.
Unlike most administrative agencies, the FPPC cannot simply have the
courts rubber stamp its orders.
Instead, to obtain a civil judgment, the FPPC must show that its fine
was “imposed following the procedures set forth in this title and implementing
regulations” (Gov. Code, § 91013.5, subd. (a)). One of these procedures is the requirement that a probable cause
hearing be conducted by the FPPC’s executive director. (Gov Code, § 83116; Cal.Code Regs., tit. 2, § 18361, subd. (d)(4).) Here, Howard and Cicero have shown that the
presiding officer at their probable cause heating, Ahuja, was not the executive
director and had not properly been delegated the authority to conduct such
hearings. Since the necessary
procedures were not followed, the FPPC cannot meet one necessary statutory
requirement of its cause of action.
This attack is direct, not collateral, and thus the de facto officer
doctrine does not apply..
In response, the FPPC claims that
Howard and Cicero may only attack Ahuja (and presumably Tribe’s) authority in
an action “‘brought directly for that purpose’” and notes that the FPPC, not
Howard and Cicero, brought this action.
(RLB 3, quoting People v. Bowen (1991) 231 Cal.App.3d 783, 790,
quoting People v. Sassovich (1866) 29 Cal. 480, 485.) The FPPC misses the point. The holding of People v. Sassovich is
simply that a criminal defendant may not collaterally attack a judgment by
attacking the judge’s qualifications.
But if a plaintiff’s cause of action explicitly requires that the
plaintiff show that a government officer was in fact properly appointed, then
his appointment is directly at issue and the de facto officer doctrine does not
apply at all. Thus, as noted in the
opening letter brief (and ignored in the FPPC’s respondent’s brief), if a judge
were in a dispute with his pension fund and the precise length of his service
were directly relevant to the dispute, nothing would preclude the judge and the
pension fund from litigating the issue of when the judge actually assumed or
left office.
The FPPC also notes that Howard
and Cicero could have attacked Ahuja (and presumably Tribe’s) qualifications in
the underlying administrative hearing and in the petition for a writ of
administrative mandamus. (RLB 4.) The FPPC’s admission is puzzling. Presumably, if the de facto officer doctrine
applied to this case at all, it would preclude Howard and Cicero from attacking
Ahuja and Tribe’s authority in the underlying action and in the writ
proceedings, just as a criminal defendant may not attack the judge’s
qualifications either in the trial court or on appeal. Since the FPPC concedes that the de facto
officer doctrine would not apply in the underlying hearing or the writ petition,
there is no reason why it should be permitted here as well.[2]
Finally, the FPPC argues that
Howard and Cicero may not assert this claim here because Government Code,
section 91013.5 is an enforcement statute, and it would “transform FPPC
collection actions into burdensome, quo warranto proceedings.” (RLB 4.)
The FPPC is simply wrong. As
Howard and Cicero noted in their appellants’ reply brief, the FPPC does not
have the burden of proving in every case that it complied with every
procedure. Instead, the defendants have
the burden of production to show that some procedure was not properly
followed. Thus, the FPPC would be
required to set forth evidence on whether it followed a particular procedure
only in the rare and exceptional case, like this one. (See ARB 16 fn. 4.)
B. The Appointment Requirements Here Were Enacted To Protect
People Subject To The FPPC’s Authority.
Howard and Cicero demonstrated
that the de facto officer doctrine does not apply to cases — like this one —
where the appointment requirements are imposed specifically to protect parties
subject to the officer’s authority.
(AOLB 4-9.) This common-sense
limitation has be recognized or adopted by numerous courts and commentators.
The FPPC does not dispute that
this limitation on the de facto officer doctrine exists. Instead, it claims that this limitation does
not apply here. The FPPC notes that
many administrative agencies can appoint an executive director, and thus “any
harm suffered by Appellants as a result of an invalid appointment of an
executive director is the same harm that would be suffered by any member of the
public.” (RLB 5.)
The FPPC misunderstands Howard and
Cicero’s argument. The problem here is
not that the FPPC simply failed to appoint an executive director and that
Howard and Cicero, like the rest of the public, was left with a less efficient
government agency. The problem is that
Chairman of the FPPC, acting unilaterally and thus illegally, improperly tried
to delegate the authority to conduct probable cause hearings to an FPPC staff
member, and this person imposed an $808,000 fine on Howard and Cicero.[3] Howard and Cicero’s harm here was
considerably greater than members of the public in general.
The requirement that hearing
officers must be appointed by a carefully balanced non-political and
non-partisan board is imposed for the protection of people subject to the board’s
authority. As the Illinois Supreme
Court recognized in a closely analogous situation, this requirement is
essential to ensure that the hearing officer is as impartial and non-partisan
as possible. (AOLB 7-9, discussing Daniels
v. Industrial Commission (2002) 201 Ill.2d 160 [775 N.E.2d
936].) And that is particularly
important here, where the FPPC is regulating constitutionally protected
political speech.
C. Collateral Estoppel Bars the FPPC from Asserting That the De
Facto Officer Doctrine Applies Here.
In Horcher v. FPPC (Super.
Ct. Sacramento County, 1996, No. 96CS00804), the Superior Court held that an improperly
appointed “Acting Executive Director” of the FPPC cannot issue valid
orders. In the Horcher case,
the FPPC never argued that de facto officer doctrine applied. The same issue is presented here, and
collateral estoppel precludes the FPPC from now rearguing the underlying issue,
and even from adding defenses that it could have raised, but did not, like the
de facto officer doctrine.
In response, the FPPC tries to
excuse its failure to raise this defense in the Horcher case by noting
that the de facto officer doctrine applied only to collateral attacks on its
orders and claiming that the Horcher case involved a direct attack on
its orders.
The FPPC has it exactly
backwards. Horcher involved a
collateral attack on the hearing officer’s qualifications, and this case
involves a direct challenge. Horcher
involved a petition for a writ of administrative mandamus, and the petitioner
there was asserting that the underlying order was invalid because the “Acting
Executive Director” was not properly appointed. Since the appointment of the “Acting Executive Director” was not
directly at issue but was only an indirect way of attacking the underlying
order, the Horcher case involved an ordinary collateral attack, exactly
like the ones in In re Redevelopment Plan for Bunker Hill (1964) 61
Cal.2d 21, People v. Bowen (1991) 231 Cal.App.3d 783, Ensher,
Alexander & Barsoom v. Ensher (1965) 238 Cal.App.2d 250 and numerous
other cases.[4] In contrast (as discussed extensively
above), this case involves a direct attack, since whether the FPPC followed the
proper procedures is directly at issue here.
The truth is much simpler. The FPPC failed to raise the de facto
officer doctrine in Horcher for the same reason it failed to raise the
doctrine in the trial court and in its respondent’s brief here: it simply did not know about the
doctrine. Nonetheless, this is not a
valid exception to collateral estoppel.
A court has already determined that the Chairman of the FPPC may not
delegate to other staff members the authority to conduct probable cause
hearings, and the FPPC cannot now relitigate this issue.
D. The De Facto Officer Doctrine Should Not Be Followed.
Howard and Cicero also argued that
the de facto officer doctrine is simply bad law and should not be
followed. The FPPC did not respond to
this argument, and Howard and Cicero reassert it here.
II. AHUJA AND TRIBE WERE NOT DE FACTO OFFICERS SINCE THEY WERE
OPERATING OUTSIDE THE SCOPE OF THEIR APPARENT AUTHORITY.
This case involves an improper
delegation of authority, not an improper appointment. FPPC Chairman Mehta did
not purport to appoint Ahuja and Tribe as “Acting Executive Directors” or
anything else. Ahuja and Tribe already
held other positions with the FPPC, and Mehta merely purported to delegate to
them certain duties that had been explicitly deleted to the Executive Director,
including the authority to conduct probable cause hearings. (AA 400.)
The Chairman of the FPPC lacked the authority to make this delegation,
and in any case, this delegation was improper and therefore void. (See AOLB 12 fn. 5.) Thus, this case is not analogous to the
governor appointing a judge who did not satisfy a residency requirement;
instead, it is analogous to the attorney general purporting to delegate to the
court clerk the authority to conduct trials and enter judgment.
As noted in the opening letter
brief, the de facto officer doctrine is limited to acts within the scope and
apparent authority of the officer’s position. (See AOLB 11-12, citing In re
Redevelopment Plan for Bunker Hill, supra, 61 Cal.2d at p. 42, and Ensher,
supra, at p. 255.) Since Mehta
lacked the authority to delegate the authority to conduct probable cause
hearings, and in any case the FPPC had already explicitly delegated such
authority to the Executive Director, Ahuja did not have even the apparent
authority to conduct probable cause hearings.
In the context of this case, he was not a de facto officer.
The FPPC offers two
responses. First, it claims that “Under
Government Code, section 83108, the Chairman of the FPPC has power to act on
behalf of the Commission between monthly meetings of the commissioners.” (RLB 2 fn 1.) The FPPC asserted this in its Respondents Brief (see RB 26-28),
and as Howard and Cicero noted in their Appellants’ Reply Brief, this statute
does not apply here (see ARB 23-24). This statute provides, “The Commission may
delegate authority to the chairman or the executive director to act in the name
of the Commission between meetings of the Commission.” (Gov. Code, § 83108, emphasis added.) Thus, the FPPC has the right to
delegate this authority to the Chairman, but the authority is not actually
delegated until the FPPC actually does so.
Nothing in the record suggests that the FPPC ever delegated this
authority to Chairman Mehta. Moreover,
the FPPC has already explicitly delegated the authority to conduct probable
cause hearings to the executive director.[5] Nothing suggests that the FPPC would then
allow the Chairman to circumvent this explicit delegation of authority to the
Executive Director by delegating this authority to others.
The FPPC also cites People v.
Kwolek (1995) 40 Cal.App.4th 1521, superceded by statute on other grounds,
as recognized in People v. Blackburn (1999) 72 Cal.App.4th 1520, 1534,
and notes that the de facto officer doctrine applies to temporary appointments
as well as permanent ones. (RLB
3.) This is a red herring. Howard and Cicero never contended that it
was the temporary nature of Ahuja’s appointment that rendered it invalid. This purported delegation was invalid,
regardless of whether it was temporary or permanent.
CONCLUSION
The FPPC is a non-judicial
administrative agency regulating core protected political speech. Its members are carefully appointed by
different government officials, and it is carefully balanced to make sure it is
as apolitical and non-partisan as possible.
It has delegated the authority to conduct probable cause hearings to its
executive director, an officer who must be appointed by the entire FPPC, acting
as a body. But here, its chairman —
acting alone — improperly delegated to an staff member the authority to conduct
probable cause hearings. That staff
member imposed an $808,000 fine, the largest in the FPPC’s history, on Howard
and Cicero, two individuals running a grass-roots campaign against an
established politician who kept poor records, failed to file the proper
reports, and dared to challenge the FPPC’s authority. The importance of the accountability requirements is manifest in
this case.
The Legislature sensibly required
that the judicial system verify that the FPPC followed its own procedures
before providing it with a civil judgment based on one of its orders. The FPPC did not do so here. Since Howard and Cicero have shown that the
proper procedures were not followed, they have directly negated one necessary
element of the FPPC’s cause of action.
The FPPC cannot avoid this hole in its prima facie case by relying on
the de facto officer doctrine. The
judgment should be reversed.
Respectfully submitted,
Bruce Adelstein
Attorney for Defendants and
Appellants
CALIFORNIANS AGAINST CORRUPTION,
CARL RUSSELL HOWARD, and STEPHEN J. CICERO
cc: Carl Russell Howard
Stephen Cicero
(See proof of service for service
copies)
[1]/ Howard
and Cicero’s Appellants’ Opening Letter Brief will be referred to as “AOLB”,
and the FPPC’s Respondent’s Letter Brief will be referred to as “RLB.”
[2]/ Of
course, there are several potential reasons why any defense might be barred in
this proceeding, and these issues are discussed extensively in the underlying
briefs. (See AOB 15-30 and ARB 3-18.)
[3]/ By
analogy, suppose that the governor failed to appoint a judge to fill a superior
court vacancy. The public in general
would suffer from a slightly less efficient judicial system, and no single
person would be specifically harmed by this.
But if the governor purported to delegate the authority to conduct
trials and enter judgment to the court clerk, and the court clerk did so and
sentenced a defendant to pay an $808,000 fine, that defendant surely would have
been harmed by the improper delegation.
[4]/ If the
FPPC had raised the de facto officer doctrine in the Horcher case, it
ultimately might not have prevailed on this issue, for all the other reasons
discussed here. But the FPPC could
certainly have raised it.
[5]/ The
statute requires that the FPPC itself conduct probable cause hearings. “When the commission determines there is
probable cause for believing this title has been violated, it may hold a
hearing to determine if a violation has occurred.” (Gov. Code, § 83116.)
Government Code, § 83108 gives the FPPC the authority to delegate
authority to the executive directory, and the FPPC has explicitly delegated the
authority to conduct probable cause hearings to the Executive Director. “The Executive Director may then find there
is probable cause to believe a violation has occurred . . . .” (Cal.Code Regs., tit. 2, § 18361, subd. (d)(4).) “If the Executive Director makes a finding
of probable cause, he or she shall cause an Accusation to be prepared . . .
.” (Cal.Code Regs., tit. 2, § 18361, subd. (d)(4).)