Source: https://caselaw.findlaw.com/ca-court-of-appeal/1772253.html
Timestamp: 2020-06-06 02:44:56
Document Index: 252774525

Matched Legal Cases: ['§\u200211126', '§\u200211121', '§\u20027735', '§\u20027736', '§\u20027615', '§\u20027640', '§\u200211121', '§\u200211126', '§\u200211130', '§\u200211126', '§\u200211120', '§\u200254950', '§\u200211126', '§\u200211126', '§\u200211126', '§\u2002230', '§\u200211126', '§\u200211526', '§\u200254952']

FUNERAL SECURITY PLANS INC v. STATE BOARD OF FUNERAL DIRECTORS | FindLaw
FUNERAL SECURITY PLANS INC v. STATE BOARD OF FUNERAL DIRECTORS
FUNERAL SECURITY PLANS, INC., Plaintiff, Appellant and Cross–Respondent, v. STATE BOARD OF FUNERAL DIRECTORS et al., Defendant, Respondent and Cross–Appellant.
No. C011460.
Decided: October 07, 1994
Wasberg & Gallagher, Michael J. Gallagher, Kansas City, MO, and Montague & Cochrane, J. Michael Cochrane, Sacramento, for plaintiff, appellant and cross-respondent. Daniel J. Lungren, Atty. Gen., John M. Huntington, Sr. Asst. Atty. Gen., Joel S. Primes, Supervising Deputy Atty. Gen., Denise Eaton May, Deputy Atty. Gen., for defendant and appellant.
In the underlying declaratory relief action, Funeral Security Plans, Inc. (FSP) challenged the State Board of Funeral Directors and Embalmers' (Funeral Board) application of the “pending litigation exception” to the Bagley Keene Open Meeting Act (the Act). FSP contends the narrowly drawn exception to the ban on conducting public business in secret meetings was erroneously expanded by the trial court to allow the Board not merely to confer with and to receive advice from its legal counsel, but to hear evidence, deliberate, and take actions in closed sessions. FSP also objects to: (1) the Board's lax compliance with the Act's requirement that legal counsel for the Board prepare a memorandum to justify invocation of the pending litigation exception (Gov.Code, § 11126, subd. (q)) 1 ; (2) the disposition of settlements, reinstatement of licenses, and adoption of administrative findings in closed sessions; and (3) the delegation of Board business to two-member committees who meet privately and without notice to the public.
In the context of this declaratory relief action, we define the parameters of the pending litigation exception to the Open Meeting Act. We conclude the Legislature, by including the statutory language permitting a state body to “confer with, and to receive advice from, its legal counsel,” authorized state bodies to listen to facts presented by legal counsel, to deliberate on the propriety of the advice received, and to take action based on the legal advice offered. Nevertheless, since the Legislature expressly abrogated the attorney-client privilege that would otherwise apply and continues to espouse a public policy disfavoring secrecy, the pending litigation exception is narrowly circumscribed. We are not satisfied the Board's legal counsel substantially complied with the Act's provisions requiring preparation of a legal memorandum justifying closed sessions. Further, we conclude the pending litigation exception applies to the disposition of settlements and the reinstatement of licenses provided the state body sustains its substantial burden of demonstrating the prejudice to be suffered from conducting an open meeting. Routine disposition of these matters in secret contravenes the fundamental policy encouraging participation and oversight by the public. Finally, we hold the multiple two-member committees are state bodies subject to the open meeting requirements of the Act. (§ 11121.7.)
FSP sells preneed funeral contracts in California. Purchasers of preneed funeral contracts prearrange and prepay for their funerals, guaranteeing the preplanned funeral at today's prices. FSP sells its preneed contracts through licensed funeral homes and deposits prepayments in a preneed trust. Prior to 1977 FSP collected its sales charges through a percentage of the income earned annually by the trust. In 1977 sellers of preneed contracts were limited to 2.5% of annual trust income as expenses. At death, principal and income earned under the contract are released for payment to the funeral home and FSP.
The funeral industry is heavily regulated. The Funeral Board regulates preneed contracts (Bus. & Prof.Code, § 7735 et seq.), preneed trusts (Bus. & Prof.Code, §§ 7736, 7737, 7737.5), funeral directors (Bus. & Prof.Code, § 7615 et seq.), and embalmers (Bus. & Prof.Code, § 7640 et seq.) and is a “state body” as defined under the Act. (Gov.Code, § 11121 et seq.) A state body is authorized under the Act to confer and receive advice from legal counsel regarding pending or threatened litigation in closed sessions provided counsel has prepared a memorandum (referred to as a “Q memorandum”) stating the specific reasons and legal authority for the closed session. (Gov.Code, § 11126, subd. (q).)
The Funeral Board met in a closed session on May 18, 1988. Two Q memoranda were prepared explaining the closed session was necessary to discuss settlement on two pending cases. During the Board's deliberations, James Allen, the executive director, responding to an inquiry, informed the Board FSP continued to violate the 2 1/212 percent rule. The Board attorney, Robert Miller, and auditor, Skip Jones, were also present. Following discussion, the Board instructed Allen to request the Attorney General to provide further advice and to prepare for filing litigation.
In a closed session on September 22, 1988, the Funeral Board authorized deputy attorney general Antonio Merino to initiate civil litigation against FSP. In three subsequent closed sessions, however, the Board, pursuant to Merino's advice, decided not to pursue the action. A Q memorandum was not received by the Board within one week of one of these closed sessions. Allen and Jones were present at the first two sessions; Allen was present at the last session. Occasionally, Board members were mailed written memoranda about FSP prior to the closed sessions.
In November 1989 Randy Stricklin, a member of the Board, told David Newcomer, president of FSP, the Board was conducting closed sessions to discuss serious problems involving FSP. Newcomer testified, “[Stricklin] says, well, the Funeral Board's meeting in closed session now and they've asked me not to be in there, because at one time, you had sold funeral plans for us and that they're discussing—they say there's a lot of problems with Funeral Security Plans and they've, you know, invited me out of their meeting but they've met several times before like this. He says, you're in a lot of trouble.” On January 17, 1990, Allen sent letters to FSP associate funeral homes which, according to Newcomer, implied there was something gravely wrong with FSP's handling and administration of preneed contracts.
Newcomer requested records of the closed meetings, but the Board refused. Moreover, the Board refused to disclose the substance of its deliberations at the next public hearing on January 25, 1990. On February 9, 1990, FSP filed this action for declaratory relief.
In a closed session on March 22, 1990, the Board authorized Merino to initiate civil litigation seeking injunctive and restitutionary relief against FSP and also authorized an audit of FSP's preneed trusts. Allen was present. On May 24, 1990, the Attorney General filed a complaint against FSP, et al., requesting a temporary restraining order, preliminary and permanent injunction, reimbursement, restitution, and civil penalties on behalf of the People of the State of California and the Funeral Board. There were additional closed sessions during the prosecution of this action. During many, if not all, of the closed sessions involving FSP, legal counsel introduced facts, sometimes for the first time, intertwined with the legal advice he gave.
FSP was not the only matter discussed in closed sessions. During the same time frame, from April 1988 through November 1990, the Board routinely discussed, approved, and adopted proposed settlements of accusations against various mortuaries. Stipulated settlements were presented by a deputy attorney general, who interjected facts as well as advice, and were adopted following deliberation. In some instances, Board members approved the stipulated settlements by mail.
In two closed sessions, the Board decided to terminate a probation previously imposed and to reinstate the suspended licenses. Prior to these sessions, Allen had provided Board members with written documents setting forth facts concerning the disciplinary proceedings. In another closed session, it adopted a proposed disciplinary decision prepared by an administrative law judge, but a Q memorandum was never received by the Board.
Many of the memoranda did not reference the subparagraph of subdivision (q) authorizing the closed session nor did they contain a statement of reasons why public disclosure would prejudice the Board. Q memoranda were not prepared for three closed sessions.
The Funeral Board has created several committees comprised of two members of the Board. Board members receive per diem compensation for attending committee meetings and receive memoranda in the mail in advance of the meetings. James Allen attends these meetings but does not vote. Public notice of committee meetings is not provided.
The record reflects a history of animosity between FSP and members of the Board. David Newcomer testified: “I think we have ruffled a lot of feathers with the staff. The staff is—has a bias towards the type of prearrangement that's passive, that merely where people come into a funeral home, we're going to use that funeral home anyway to make arrangements․ [¶] And we'd have a very hard time staying in business when the Board has this ability to have all these competitors on the Board making the rules and regulations and proposing the rules and regulations. [¶] And when they can do this is secret and use Gestapo-type practices, it makes it very difficult to stay in business in this state and give the public the opportunity to take advantage of prearrangement.”
“Any interested person may commence an action by ․ declaratory relief for the purpose of stopping or preventing violations or threatened violations of [the Act] or to determine the applicability of [the Act] to actions or threatened future action by members of the state body.” (Gov.Code, § 11130.) We are not asked to provide FSP relief for the Board's past transgressions. Rather, in this appeal, FSP's request for declaratory relief challenges the Funeral Board's ongoing application of the pending litigation exception to evade the open meeting requirement. That exception reads in pertinent part: “Nothing in this article shall be construed to prevent a state body, based on the advice of its legal counsel, from holding a closed session to confer with, or receive advice from, its legal counsel regarding pending litigation when discussion in open session concerning those matters would prejudice the position of the state body in the litigation.” (Gov.Code, § 11126, subd. (q).)
The issue thus presented is whether the Funeral Board's practice of invoking closed sessions and the scope of the actions taken within these sessions constitute a violation of the Act. “[W]hen reviewing the interpretation and proper application of a statute where, as here, the underlying facts are not in dispute, the reviewing court must exercise its independent judgment in making that determination.” (San Diego Union v. City Council (1983) 146 Cal.App.3d 947, 952, 196 Cal.Rptr. 45.)
SCOPE OF THE PENDING LITIGATION EXCEPTION
We begin with the fundamental premise that the Act articulates a vital public policy favoring public discussion of public business by those regulators charged with serving the public. The Legislature has not left this policy to conjecture or surmise, emphatically stating: “[I]t is the intent of the law that actions of state agencies be taken openly and that their deliberation be conducted openly. [¶] The people of this state do not yield their sovereignty to the agencies which serve them. The people, in delegating authority, do not give their public servants the right to decide what is good for the people to know and what is not good for them to know. The people insist on remaining informed so that they may retain control over the instruments they have created.” (Gov.Code, § 11120; see also Stockton Newspapers, Inc. v. Redevelopment Agency (1985) 171 Cal.App.3d 95, 100–101, 214 Cal.Rptr. 561, construing similar language under the Brown Act § 54950.)
Yet as already observed, the Legislature carved narrow exceptions to the basic rule mandating open meetings. FSP does not dispute the Board's right to hold a closed session “to confer, and receive advice, from legal counsel” concerning pending litigation. FSP vehemently disagrees, however, with the Funeral Board's application of the exception. We turn first to the pertinent language of the statute.
“For purposes of this article, all expressions of the lawyer-client privilege other than those provided in this subdivision are hereby abrogated. This subdivision is the exclusive expression of the lawyer-client privilege for purposes of conducting closed-session meetings pursuant to this article. For purposes of this subdivision, litigation shall be considered pending when ․ (1) An adjudicatory proceeding before a court, an administrative body exercising its adjudicatory authority, a hearing officer, or an arbitrator, to which the state body is a party, has been initiated formally․ (3) Based on existing facts and circumstances, the state body has decided to initiate or is deciding whether to initiate litigation.” (Gov.Code, § 11126, subd. (q).)
FSP correctly points out this section was added in 1987 to clarify and restrict the scope of the exception. Prior to the amendment, there had emerged a blanket attorney-client exception to the Brown and Open Meeting Acts. Sacramento Newspaper Guild v. Sacramento County Bd. of Suprs. (1968) 263 Cal.App.2d 41, 69 Cal.Rptr. 480.) In Sacramento Newspaper Guild, the court wrote: “Government should have no advantage in legal strife; neither should it be a second-class citizen․ ‘Public agencies face the same hard realities as other civil litigants. An attorney who cannot confer with his client outside his opponent's presence may be under insurmountable handicaps. A panoply of constitutional, statutory, administrative and fiscal arrangements covering state and local government expresses a policy that litigating public agencies strive with their legal adversaries on fairly even terms. We need not pause for citations to demonstrate the obvious. There is a public entitlement to the effective aid of legal counsel in civil litigation. Effective aid is impossible if opportunity for confidential legal advice is banned.’ [¶] Settlement and avoidance of litigation are particularly sensitive activities, whose conduct would be grossly confounded, often made impossible, by undiscriminating insistence on open lawyer-client conferences․ Neither the Brown Act nor its history supplies undebatable evidence of a legislative intent to supersede the assurance of private legal consultation stemming from the statutory lawyer-client privilege.” (Id. at pp. 55–57, 69 Cal.Rptr. 480, citations omitted.)
In the 1987 amendment the Legislature clearly expressed its intent to supersede the statutory lawyer-client privilege with the explicit language “all expressions of the lawyer-client privilege other than those provided in this subdivision are hereby abrogated.” The amended pending litigation exception was enacted to correct a perceived abuse of the privilege in derogation of the strong public policy fostering open meetings. (See Van de Kamp ltr., 1 Sen.J. (1987 Reg.Sess.) p. 1775.)
It is clear the 1987 amendment was designed to limit when the attorney-client privilege could be invoked by a public agency to conduct a closed session. (Roberti ltr., 1 Sen.J. (1987 Reg.Sess.) p. 1776.) What is not as clear is the scope of the exception and the scope of the attorney-client privilege once the exception is properly invoked.
Urging a strict construction of the statutory language, FSP insists the Board can meet in closed session only “to confer, and receive advice from, legal counsel.” FSP objects to the Board's routine discussion of facts presented for the first time in closed sessions by either staff or legal counsel. Similarly, FSP contends the Board must conduct a public hearing to deliberate and take action because neither deliberation nor decision making involve conferring or receiving advice from counsel. The Funeral Board, on the other hand, argues that the traditional scope of the attorney-client privilege applies to all closed sessions involving pending or threatened litigation. FSP's position offends common sense and the Board's position violates the language, as well as the spirit, of the statutory scheme.
We need not explore the potential breadth of the attorney-client privilege to interpret the statutory language “to confer with, or receive advice from, its legal counsel.” FSP suggests the statutory language compels a two-step process. First, legal counsel can deliver advice to the Board in a closed session, as long as no new facts are disclosed, and second, the Board must deliberate on the advice and decide whether to initiate litigation in an open meeting. It is difficult to conceive of meaningful deliberation without disclosure of the legal advice received. We conclude deliberation and decision making are necessary components of “confer[ring] with,” and “receive [ing] advice from,” legal counsel. Consequently, we are unwilling to ascribe such a tortured construction to the statutory language and compel a bifurcated decision making process whereby the analysis of the advice is divorced from the closed conference with counsel.
The facts of this case are illustrative. Here, the Board, assisted by the Attorney General, was conducting an inquiry into whether FSP violated the preneed arrangements law. The inquiry provided the factual, as well as legal, basis for commencing civil litigation to enjoin those violations. The facts were inextricably intertwined with the legal advice offered by the Attorney General. The Board was not required to notify FSP it was the target of inquiry as it received and reviewed the evidence, grappled with the legal advice it was given, and deliberated the question of whether and when it should pursue injunctive and restitutionary relief. FSP's right to notice did not accrue until the action was filed. Moreover, the open meeting law was not designed to impede a state body's pre-litigation investigation and consultation with legal counsel.
This is not to accept the Board's wholesale proposition that the attorney-client privilege is as broad in closed sessions as in all other arenas in which the privilege is invoked. We leave that issue to be resolved in a proper case in which the strong public policy ensuring open discussion and deliberation is weighed against the asserted need for the attorney-client privilege. Without defining the outer edges of the privilege, we find the presentation of facts by legal counsel and Board staff and the Funeral Board's deliberations and decision making are encompassed by the “confer and advice” language of the pending litigation exception.
THE SUFFICIENCY OF THE Q MEMORANDA
To justify a closed session to discuss pending litigation, legal counsel must prepare a legal memorandum as described in section 11126, subdivision (q). “The legal counsel of the state body shall prepare and submit to it a memorandum stating the specific reasons and legal authority for the closed session. If the closed session is pursuant to paragraph (1), the memorandum shall include the title of the litigation. If the closed session is pursuant to paragraph (2) or (3), the memorandum shall include the existing facts and circumstances on which it is based. The legal counsel shall submit the memorandum to the state body prior to the closed session, if feasible, and in any case no later than one week after the closed session. The memorandum shall be exempt from disclosure pursuant to Section 6254.25.” (Gov.Code, § 11126, subd. (q).)
FSP complains that on three occasions no Q memoranda were prepared, on one occasion the memorandum was tardy, and routinely neither the statutory authority, nor the existing facts and circumstances justifying a closed session, are described. The Funeral Board relies on an asserted defense of substantial compliance. In this declaratory relief appeal our interpretation of the statute is prospective. However, we are not satisfied the Board's action complied with the statutory criteria for Q memoranda.
The Legislature did not exempt every discussion involving litigation from public scrutiny. Rather, a state body is allowed to conduct a closed session “when discussion in open session concerning those matters would prejudice the position of the state body in the litigation.” (Gov.Code, § 11126(q).) Moreover, the law is clear that the presence of the lawyer or the lawsuit cannot be used as a ruse or pretext for an otherwise unlawfully convened closed session. (Register Div. of Freedom Newspapers, Inc. v. County of Orange (1984) 158 Cal.App.3d 893, 907, 205 Cal.Rptr. 92; Sacramento Newspaper Guild v. Sacramento County Bd. of Suprs., supra, 263 Cal.App.2d 41, 58, 69 Cal.Rptr. 480.) The Q memorandum is the vehicle the Legislature has created to assure devotion to openness. The memorandum must justify deviation from the presumption all discussions of public business should be held in public.
Consequently, we are not satisfied with the Board's notion of substantial compliance. The state body is put to the burden of proving a compelling necessity for a closed session. It is not sufficient, as the Board suggests, to rely on a previous memorandum to justify subsequent closed sessions. Nor is a vague reference to potential litigation enough. Although we reject FSP's technical insistence that the subparagraph number be identified, we conclude the statute compels legal counsel to describe the existing facts and circumstances which would prejudice the position of the state body in the litigation if the discussion occurred in open session.
SETTLEMENTS, REINSTATEMENTS, AND DISCIPLINARY PROCEEDINGS
FSP objects, not only to the closed sessions during which its practices were discussed, but also to a smorgasbord of other issues considered privately by the Board. Those include the adoption of an administrative law judge's findings in disciplinary proceedings, the termination of probation, reinstatement of licenses, reduction in penalties, and the acceptance of stipulated settlements. FSP argues these issues are of acute public interest. The issue presented is whether the Open Meetings Act exempts these determinations by the Board from public scrutiny.
The pending litigation exception contained in section 11126, subdivision (q) is one of several limited exceptions set forth in the various subdivisions of section 11126. In justifying closed sessions to adopt findings, revise penalties, or accept settlements, the Board relies on subdivision (d) which, at the time of the declaratory relief action, provided: “Nothing in this article shall be construed to prohibit a state body from holding a closed session to deliberate on a decision to be reached based upon evidence introduced in a proceeding required to be conducted pursuant to [the Administrative Procedure Act (APA) ].” Subdivision (d) subsequently was amended. (Stats.1994 ch. 26, § 230, p. 98.) 2
The Board contends the purpose of the subdivision (d) exception is to shield the decision-making process of an agency functioning in a quasi-judicial capacity. To accomplish this purpose, the Board argues that all deliberations in APA proceedings can be conducted in closed session. The Board's expansive interpretation of the Act does not find support in the language of the subdivision.
Subdivision (d) consists of four elements: 1) deliberation, 2) decision, 3) evidence, and 4) APA proceedings. An agency is authorized to deliberate in a closed session if there was evidence received in an APA mandated proceeding and the agency is attempting to arrive at a decision based on that evidence.
The language of the exception carved in subdivision (d) is exceedingly narrow. We have enumerated the four elements necessary to invoke the subdivision (d) exception. Yet it is only the first of the four, “deliberation” which is shielded from public scrutiny. There is nothing in subdivision (d) warranting secrecy in the introduction of evidence or rendering of a decision in APA proceedings. Rather subdivision (d) exempts only the deliberative process.
Exempting the deliberative process in administrative proceedings preserves the fundamental policy of the Open Meetings Act. The nature of the exemption for deliberations was aptly explained in California State Employees' Assn. v. State Personnel Bd., 31 Cal.App.3d 1009, 1013, 108 Cal.Rptr. 57 wherein sections 11126 and 18653 were reconciled with section 11120: “When the hearing has reached the decisional stage, it may recess the hearing and hold an executive session for the sole purpose of deliberating on the decision to be reached on the subject matter of such hearing. At the conclusion of such executive session, the Board must reconvene the public hearing and make public announcement of its decision.
“Such a construction imparts meaning to and harmonizes the respective provisions of sections 11120, 18653 and 11126. It preserves inviolate the right of the public to participate fully and completely in open discussions of all matters involving Board action and openly to air its views as to the vices and virtues of such action. It is an assurance that no public business will be conducted at closed or unannounced hearings. At the same time, the Board is given an opportunity to review the evidence before it, to exchange views and to deliberate thereon under conditions conducive to calm, orderly and frank discussion. In a broad sense, such a procedure is similar to a trial by jury—the evidence and verdict are presented in public, but the deliberations are conducted at a closed session.”
Adoption of an administrative law judge's findings easily satisfies the subdivision (d) criteria. Evidence is received in the underlying administrative hearing to be considered by the Board in deciding whether to adopt the proffered findings. Since each of the elements of subdivision (d) is satisfied, the Board is entitled to deliberate the propriety of the findings in a closed session. Hence, subdivision (d) enables the Board, contrary to FSP's position, to adopt the administrative findings as part of its deliberative process.
The Board argues decisions to terminate probation, reinstate a license or otherwise reduce the penalty are a mere extension of the initial administrative proceeding and therefore can be made in closed sessions. Having received evidence at the initial proceeding, the Board asserts it can thereafter “evaluate the licensee's present rehabilitation using the original decision as a guide.” The Board does not explain how such an evaluation can proceed without new evidence on the licensee's “present rehabilitation.” If an APA hearing is held and evidence received whether probation should be terminated and/or a license reinstated, then subdivision (d) clearly applies to permit closed deliberations on such evidence. However, subdivision (d) does not empower the Board to conduct closed deliberations at which new evidence is presented to support modification of penalties previously imposed. We reject the Board's suggestions to the contrary.3
Stipulated settlements present the thorniest issue. The Board defends its practice of approving stipulations to settle disciplinary matters in closed session reasoning that such settlements are always supported by an agreed statement of facts which, though not introduced at a contested evidentiary hearing, are tantamount to evidence “introduced in a proceeding.” The Board complains that if voting and discussion underlying a board decision cannot be conducted in closed session then the Board's “judicial thought process” will be revealed. Further, public disclosure of pending settlements would prevent the Board from “candidly receiving and evaluating the strengths or weaknesses of the case.”
Subdivision (d) protects the Board's “judicial thought process” from public disclosure where the evidence controlling its deliberations is presented at a public hearing. It does not permit deliberations to provide cover for receiving and considering evidence in closed session. It is only deliberation, and not the introduction of evidence, which can be conducted in closed sessions pursuant to the subdivision (d) exception.
The Board insists the stipulated facts provide the requisite evidentiary link justifying closed deliberations and decision making. If we accept the Board's position, however, we will create a gaping hole in the Open Meetings Act. The simple expedient of linking closed deliberations to an agreed statement of facts would permit parties to control public access to administrative proceedings.
The Board can “discern no purpose in the statute to treat disciplinary matters in which the facts are established through stipulation differently from those in which the facts are found after the presentation of evidence.” The Board ignores the obvious. Evidence introduced in an administrative proceeding is introduced in a public forum. The statutory scheme insures public access to the nature of the charges, the evidentiary basis, and the ultimate decision. Only the deliberative process evades public scrutiny. If, however, stipulated facts are accepted, deliberations regarding those facts, and the ultimate decision is rendered in closed session, a process which begins in the public eye is resolved in secret. There may be sound policy reasons for permitting such a departure from the statutory scheme in disciplinary proceedings. However, subdivision (d) simply does not go that far.
We understand that adherence to open meeting requirements may impose obligations on public agency counsel not encountered by their private counterparts. However, to suggest, as does the Board, that government is thereby “hamstrung” is beyond the pale. The Board's appeal to “governmental economy and efficiency” are best addressed to the Legislature which is empowered to grant the exemption sought. We are not.
We conclude subdivision (d) enables the Board to deliberate in closed session only if evidence introduced in an APA proceeding is being considered by the Board in rendering its decision. Subdivision (d), therefore, allows the Board to deliberate an administrative law judge's findings based on the evidence presented in a public hearing. It does not, however, apply to exempt deliberations on the termination of probation, reinstatement of a license, or reduction of a penalty not based on evidence introduced at an administrative proceeding. The original hearing leading to imposition of probation or suspension of a license does not exempt all subsequent proceedings from the Open Meetings Act.
To the extent that evaluation of a proposed stipulation is part of the Board's litigation strategy, such evaluation may proceed with counsel in closed session, not under the authority of subdivision (d) but under subdivision (q). Although subdivision (d) does not per se exempt disciplinary negotiations and settlements from the Open Meetings Act, subdivision (q) allows the Board to consult with counsel in closed sessions. “ ‘[L]itigation’ includes any adjudicatory proceeding ․ before a court, administrative body exercising its adjudicatory authority, hearing officer, or arbitrator.” (Govt.Code, § 11126, sub. (q).) By invoking the subdivision (q) exception, therefore, the Board can review the strengths and weaknesses of its case and the propriety of entering into a proposed stipulated agreement. As discussed above, however, legal counsel must justify a closed session by specifically describing the facts and circumstances which would prejudice the Board by an open hearing on the disposition.
Finally, we reject FSP's objection to the Board's receipt of various written and telephonic communication outside a public hearing. The Board is authorized by statute to deliberate the administrative law judge's findings in closed session or vote by mail. (Govt.Code, § 11526.) As long as a closed session is justified pursuant to subdivision (d) or (q), it is irrelevant whether Board members receive information in advance by mail or at a closed session.
The Board's two-member standing committees meet in closed sessions, with Executive Officer James Allen generally in attendance. The Board argues the Act does not apply to its committee meetings because the two-member committees do not constitute a state body under section 11121.8. Section 11121.8 provides: “As used in this article, ‘state body’ also means any advisory board, advisory commission, advisory committee, advisory subcommittee, or similar multi-member advisory body of a state body, if created by formal action of the state body or of any member of the state body, and if the advisory body so created consists of three or more persons.”
FSP, counting the attendance of Executive Officer James Allen at committee meetings, argues the three member advisory bodies constitute “state bodies” pursuant to section 11121.8. The evidence reveals, however, that while Allen attends most committee meetings, he is not a committee member. He has no authority to vote, and does not participate in the deliberations of the committee. He attends to answer questions or assist the committee.
We conclude the attendance of Executive Officer Allen to answer questions of the advisory committees and to assist in the handling of whatever matters are before the committee does not convert the committee into a state body. A committee is allowed under the Act to contact the staff to obtain and exchange information, the purpose for which the staff is hired. (See 64 Ops.Cal.Atty.Gen. 856 (1981).)
FSP contends, however, the committee members, all members of the Board, a state body, receive per diem compensation from the Board for attendance at committee meetings, and therefore, the committees qualify as state bodies under section 11121.7. We agree. Section 11121.7 states: “ ‘[S]tate body’ also means any board, commission, committee, or similar multimember body on which a member of a body which is a state body pursuant to Section 11121, 11121.2, or 11121.5 serves in his or her official capacity as a representative of such state body and which is supported, in whole or in part, by funds provided by the state body, whether such body is organized and operated by the state body or by a private corporation.”
The Attorney General adopted the same rationale in determining that meetings of the State Board of the California Community College Student Government Association (CCCSGA) are subject to the requirements of the Act. (65 Ops.Cal.Atty.Gen. 638 (1982).) The Attorney General wrote: “Accordingly, despite the fact that not all members of the governing board of the CCCSGA must be members of local student associations, and despite the fact that such members are selected by an intermediary ‘semi-autonomous' student association, we conclude that the governing board meets the requirements of section 11121.7 to make it a ‘state body’ within the meaning of that section. As such, it is subject to the open meeting requirements of section 11123, supra, of the Bagley–Keene Open Meeting Act. We believe this conclusion is in accord with the clear legislative intent, which is apparent on the face of section 11121.5 itself, that when a second body is financed by a ‘state body,’ and a member thereof qua member serves on that second body, the open meeting requirements attach to and follow that member to the second body. This conclusion is also in accordance with the rule that remedial legislation is to be liberally construed to effectuate its purpose. (Alford v. Pierno (1972) 27 Cal.App.3d 682, 699 [104 Cal.Rptr. 110.] )” (Id at p. 644.)
We agree with the Attorney General's analytical approach. Because the Board finances the meetings of its committees, “the open meeting requirements attach to and follow” those members to the second body, the committee. The committees are also state bodies pursuant to section 11121.7.
While recognizing the relevance of 11121.7, the Board, quoting copiously from Freedom Newspapers, Inc. v. Orange County Employees Retirement System, 6 Cal.4th 821, 25 Cal.Rptr.2d 148, 863 P.2d 218 (1993), which it considers dispositive, argues that section 11121.8 is a more specific provision which prevails over the general definition in section 11121.7. According to the Board, “the only real distinction” between our case and Freedom Newspapers is that Freedom Newspapers involved the Brown Act and this case involves the Bagley–Keene Act. Alas, the Board correctly discerns why Freedom Newspapers is not controlling; the Bagley–Keene Act is fundamentally different from the Brown Act in its treatment of advisory committees.
In Freedom Newspapers, the nine-member Board of the Orange County Employees Retirement System appointed five 4–member standing advisory committees. These committees met secretly. When the travel policy of the Operations Committee became a matter of public interest, the Orange County Register (The Register) attempted to attend a meeting of the committee, but was excluded. In the ensuing litigation, the Board contended its committees were exempt from the open meetings provisions of the Brown Act.
Like state bodies in the Bagley–Keene Act, local legislative bodies subject to the open meeting provisions of the Brown Act are also defined in four separate sections. (Gov.Code, §§ 54952, 54952.2, 54952.3 and 54952.5.) Section 54952 broadly defines legislative bodies to include any committee or body on which officers of a local agency serve in their official capacity and which is supported by funds provided by such an agency. Section 11121.7 of the Open Meetings Act parallels section 54952 of the Brown Act.
Section 54952.3, similar to section 11121.8, pertains specifically to advisory bodies, including committees. Under section 54952.3 “legislative body” includes “[a]ny advisory commission, advisory committee, or advisory body at a local agency, created by charter, ordinance, resolution, or by any similar formal action of a legislative body or member of legislative body of a local agency.” The Legislature, however, in drafting section 54952.3 expressly exempted certain committees as follows: “ ‘Legislative body’ as defined in this section does not include a committee composed solely of members of the governing body of a local agency which are less than a quorum of such governing body.”
In Freedom Newspapers, the Register insisted section 54952.3 provided only a limited exemption from procedural requirements set forth in section 54952.3, but did not exempt the Board's committees entirely from the open meeting requirements. (Freedom Newspapers, supra, 6 Cal.4th at p. 826, 25 Cal.Rptr.2d 148, 863 P.2d 218.) The Register emphasized the importance of the legislative inclusion of the section 54952.3 language limiting its exemption to “this section.” (Ibid.) Acknowledging the ambiguity raised by the reference to “this section,” the Supreme Court attempted to decipher the legislative intent by employing rules of statutory construction and examining the history of the Brown Act, including the wider historical circumstances surrounding its enactment. (Id. at p. 828, 25 Cal.Rptr.2d 148, 863 P.2d 218.)
The court reported that committees comprised of less than a quorum of the legislative body historically enjoyed an exemption from the Brown Act's open meeting requirements. (Id. at pp. 828–829, 25 Cal.Rptr.2d 148, 863 P.2d 218.) The court applied the basic rule of statutory construction that, “to the extent a specific statute is inconsistent with a general statute potentially covering the same subject matter, the specific statute must be read as an exception to the more general statute.” (Id. at p. 827, 25 Cal.Rptr.2d 148, 863 P.2d 218.) Although an advisory committee meets the definitional standards of “legislative body” contained in section 54952, the court read section 54952.3 as an exception to the general statute. Advisory committees whose members do not constitute a quorum of the governing body are not subject to the open meeting provisions because of the special exemption provided by 54952.3. The court concluded that by enacting section 54952.3 the Legislature provided an explicit less-than-a-quorum exception excluding advisory committees, whether ad hoc or standing, from open meeting restrictions.4 (Id. at p. 833, 25 Cal.Rptr.2d 148, 863 P.2d 218.)
We accept the Board's observation that the Brown Act and the Bagley–Keene Act may be regarded as in pari materia; although directed at different levels of government, they both seek to ensure that public agencies conduct their actions and deliberations openly. Most of the generic observations about legislative intent apply with equal force to both acts. We also acknowledge that some of the Supreme Court's reasoning in Freedom Newspapers might apply in the present case. Thus, the Court thought it significant that a less-than-a-quorum exception had evolved under the Brown Act based largely on Attorney General Opinions. The Attorney General has offered the same opinion on state body meetings of less than a quorum. (Open Meeting Laws (Cal.Atty.Gen., 1989, pp. 13–14, 20–21); 68 Ops.Cal.Atty.Gen. 34 (1985).) Nevertheless, though we travel along similar paths, the Bagley–Keene Act leads us to a different destination than that reached by the Supreme Court in Freedom Newspapers.
As in Freedom Newspapers, we begin with the Legislature's declared intent in enacting the Bagley–Keene Open Meeting Act. Section 11120 provides in relevant part: “It is the public policy of this state that public agencies exist to aid in the conduct of the people's business and the proceedings of public agencies be conducted openly so that the public may remain informed.
“In enacting this article the Legislature finds and declares that it is the intent of the law that actions of state agencies be taken openly and that their deliberations be conducted openly.
Next we look to the comprehensive definitions of state bodies, provided in the Act. State bodies are defined in four different sections. Section 11121 broadly defines a state body as every state board, commission, or similar multimember body required by law to conduct official business. Section 11121.2 state bodies are those boards, committees, etc., which exercise any authority delegated to them by a state body. Section 11121.7 encompasses all boards, committees, etc., on which a member of a state board serves in an official capacity as a representative and which is supported in whole or in part by state body funds. Finally, pursuant to section 11121.8, advisory boards of state bodies are also defined as state bodies.
Cumulatively, the legislative design is expansive. The open meeting requirements follow state body delegation, funding, and advisory groups. Moreover, the comprehensiveness of the definitions of state bodies effectuates the expressed legislative preference for openness.
It is the last phrase of section 11121.8 which presents the dilemma. An advisory body is a state body if created by formal action “and if the advisory body so created consists of three or more persons.” The question is whether the Legislature thereby intended to provide an exemption for state supported two-member committees that would otherwise be covered by section 11121.7 in the same manner that section 54952.3 creates an exemption for less-than-a-quorum advisory committees under the Brown Act. The language of section 11121.8 compels a negative reply.
Whereas the express language of section 54952.3 excludes less than a quorum advisory committees from the open meeting requirements of the Brown Act, section 11121.8 contains no comparable language. To the contrary, while advisory committees to legislative bodies are not subject to the Brown Act as long as a quorum is not reached, any advisory committee numbering more than two triggers the open meeting requirements under the Bagley–Keene Act. Rather than limiting the definition of a state body, as 54952.3 limits the definition of a legislative body, section 11121.8 provides a more inclusive definition. Section 11121.8 does not exclude but rather includes less than three-member committees which do not fit any of the other definitions, including section 11121.7. Thus, for example, section 11121.8 would apply to an advisory committee that is not supported, in whole or in part, by funds provided by the state body. It would also apply where the advisory committee is comprised of members who are not members of the creating state bodies. The two statutes are readily harmonized; section 11121.8 provides for a definition of states bodies in addition to that provided by section 11121.7.
We also consider it significant that Freedom Newspapers relied for its conclusion on abundant legislative history indicating that advisory committees comprised solely of less than a quorum of the governing body are exempt from the open meeting requirements of the Brown Act. (Id. at pp. 831–833, 25 Cal.Rptr.2d 148, 863 P.2d 218.) The Board presents no comparable legislative history under the Bagley–Keene Act and we have found none. While the legislature may have intended advisory committees to be treated the same under both acts, the language chosen to express its intent suggests otherwise. We have not been provided with a reason to look beyond the language of the statute. (Cf. Lungren v. Deukmejian (1988) 45 Cal.3d 727, 248 Cal.Rptr. 115, 755 P.2d 299). In Freedom Newspapers, the Supreme Court concluded the newspaper's interpretation of 54952.3 would result in an absurdity. The court noted it would be absurd to require ad hoc advisory committees to hold “regular” meetings as required by section 54954. (Freedom Newspapers, supra, 6 Cal.4th at p. 827, 25 Cal.Rptr.2d 148, 863 P.2d 218.) Here, the Bagley–Keene Act does not require a state body to hold regular meetings and there is no other ground of statutory absurdity asserted.
We conclude the Board's standing two-member committees are “state bodies” subject to the open meeting requirements of the Act pursuant to section 11121.7. Neither the express language of sections 11121.7 or 11121.8, the legislative history, nor the fundamental policies embodied in the Act exclude subsidized advisory committees from the broad definition of state bodies set forth in section 11121.7. Without a clear legislative exemption akin to that provided less-than-a-quorum advisory committees by section 54952.3, an advisory body which meets any of the definitions of state bodies under the Bagley–Keene Act remains subject to the open meeting laws. The rationale articulated by the Supreme Court in Freedom Newspapers does not apply to the very different construct provided for state bodies under the Bagley–Keene Act.
Asserting FSP's action was filed for an improper motive and completely devoid of merit, the Board appeals from the trial court's denial of court costs and reasonable attorneys fees. While acknowledging “technical violations,” the Board insists it was unnecessary for FSP to bring this lawsuit; the minor violations were cured prior to filing of the lawsuit, and FSP like other members of the public could have simply requested the Board to place the issue of disciplinary procedures on the public agenda. We are not persuaded.
The Board's actions reflect an underlying aversion to openness, creating, at a minimum, the appearance of impropriety. The Q memoranda are vague and nondescript, if prepared at all. When discussing the subject of the memorandum, the Board, on at least one occasion, lapsed into a discussion of a completely different topic, whether or not to initiate litigation against FSP. Disciplinary proceedings are brought and settled, out of the public eye, and then licenses are reinstated without public notice or input. Moreover, we have sustained FSP's objection to the two-member committees as an obvious, but unlawful, attempt to avoid a quorum and, hence, the open meeting requirements. Cumulatively, the Board's conduct fosters a distrust of government, an understandable disenchantment with a secret process, and invites litigation. Under these circumstances, the trial court did not abuse its discretion by denying sanctions for the prosecution of a frivolous action.
The declaratory judgment is affirmed in part and reversed in part in accordance with this opinion. Each party shall bear its own costs on appeal.
1. Further statutory references to sections of an undesignated code are to this code.
2. Amended section 11126, subdivision (d) states: “Nothing in this article shall be construed to prohibit a state body from holding a closed session to deliberate on a decision to be reached in a proceeding required to be conducted pursuant to Chapter 5 (commencing with Section 11500) of Part I of Division 3 of Title 2 or similar provisions of law.”
3. The Board's argument might be compelling in the rare circumstance where the Board acts to modify a prior action without reference to new information. In such a circumstance the Board's renewed deliberations can truly be regarded as an extension of the earlier conference.
4. By the time the Supreme Court filed its opinion in Freedom Newspapers, the legislature had repealed 54952.3 and had amended 54952. (Id. at p. 834, 25 Cal.Rptr.2d 148, 863 P.2d 218, J. Mosk concurring and dissenting.) Amended section 54952 now provides: “As used in this chapter, ‘legislative body’ means: ․ A commission, committee, board, or other body of a local agency, whether permanent or temporary, decisionmaking or advisory, created by charter, ordinance, resolution, or formal action of a legislative body. However, advisory committees, composed solely of the members of the legislative body which are less than a quorum of the legislative body are not legislative bodies, except that standing committees of a legislative body, irrespective of their composition, which have a continuing subject matter jurisdiction, or a meeting schedule fixed by charter, ․ are legislative bodies for purposes of this chapter.” Ironically, although the Retirement Board prevailed in its contest against the press before the Supreme Court, the closed sessions of the standing committees sanctioned by the court are now proscribed by legislation. The Legislature simply intervened to cure the ambiguity. As a result, Freedom Newspapers is an anachronism; the section it construed has met its demise.