Case Name: THE PEOPLE, Plaintiff and Respondent, v. CATHY DAWN GARCIA, Defendant and Appellant
Court: Supreme Court of California
Jurisdiction: California
Decision Date: 2006-08-28
Citations: 39 Cal. 4th 1070
Docket Number: No. S124090
Parties: THE PEOPLE, Plaintiff and Respondent, v. CATHY DAWN GARCIA, Defendant and Appellant.
Judges: 
Reporter: California Reports
Volume: 39
Pages: 1070–1111

Head Matter:
[No. S124090.
Aug. 28, 2006.]
THE PEOPLE, Plaintiff and Respondent, v. CATHY DAWN GARCIA, Defendant and Appellant.
Counsel
Elizabeth M. Campbell, under appointment by the Supreme Court, and Sally P. Brajevich, under appointment by the Court of Appeal, for Defendant and Appellant.
Legal Services of Northern California, Gary F. Smith; Western Center on Law and Poverty, Richard A. Rothschild, Dora Lopez and Robert D. Newman for Legal Aid Association of California as Amici Curiae on behalf of Defendant and Appellant.
Bill Lockyer, Attorney General, Manuel M. Medeiros, State Solicitor General, Robert R. Anderson, Chief Assistant Attorney General, Mary Jo Graves, Assistant Attorney General, Janet E. Neeley, Stephen G. Herndon, Maggy Krell, David Andrew Eldridge, Paul E. O’Connor, Janis Shank McLean and Donald E. deNicola, Deputy Attorneys General, for Plaintiff and Respondent.
David Labahn; Greg Gibeson, Assistant Deputy District Attorney (Alameda); and Stan Kubochi, Deputy District Attorney (Sacramento) for California District Attorney’s Association as Amici Curiae on behalf of Plaintiff and Respondent.

Opinion:
Opinion
MORENO, J.
Nearly 25 years ago, we held in People v. Sims (1982) 32 Cal.3d 468 [186 Cal.Rptr. 77, 651 P.2d 321], that a welfare recipient who has been exonerated of fraud charges by the Department of Social Services in an administrative hearing cannot be criminally prosecuted for welfare fraud, because the doctrine of collateral estoppel bars the prosecution from relitigating issues that were determined in the administrative hearing. The Attorney General urges us to reconsider our decision in Sims based, in part, on statutory changes enacted more than 20 years ago. For the reasons that follow, we conclude that these statutory and other changes do not warrant reconsideration of this court's decision in Sims.
I. FACTUAL AND PROCEDURAL BACKGROUND
Defendant is the mother of four children. She applied for welfare assistance, representing that her household unit consisted of herself and all of her children. A dispute arose over whether defendant's two oldest children, both boys, actually were residing in defendant's household, or instead were living with their father.
In August 2000, the Butte County Department of Social Welfare (the County) sent defendant several notices of action advising her that she had received $5,839 in welfare benefits between October 1998 and June 2000 to which she was not entitled: $3,669 in cash aid and $2,170 in food stamps. The initial notices explained that "the overpayment was caused by the County," or alternately that the "County Welfare Department made a mistake," and also noted that "the wrong household size was used" to calculate the cash aid and food stamps to which defendant was entitled.
Defendant requested an administrative hearing on the County's proposal to recoup the overpayment from her future benefit grants. At this hearing, the County rescinded the notices of action; the matter was dismissed without prejudice on January 30, 2001. Later, the County issued new notices, alleging that the overpayment of cash aid and overissuance of food stamps were caused by defendant's failure to report that the two boys were living with their father, which constituted a material change in her household.
In May 2001, an administrative law judge held a hearing to determine "[wjhether the boys were members of the assistance unit and household during the periods in question," and "[w]hether the overissuance and overpayment were the result of administrative errors or [defendant's] failure to report the boys' absence from her home." Evidence admitted at the hearing included a county case worker's determination that defendant remained eligible for benefits for her sons after she reported in September 1998 that they lived with their father "half of the time." Evidence, however, also was presented to the contrary: that defendant's sons lived with their father during the week, that he had assumed primary responsibility for the care of the two boys since before 1997, and that their longest stay with defendant was for four weeks in the summer of 1999.
In the written decision that followed the administrative hearing, the administrative law judge noted that there were three potential causes of the alleged overpayment: (1) "inadvertent household error," (2) "administrative error," and (3) "intentional program violations." The administrative law judge concluded that the overpayment in this case was "the result of administrative errors of omission committed by the county welfare department," because the county did not conduct required periodic redetermination reviews and investigations. Therefore the administrative law judge ordered that "[t]he claim is granted in that all the overpayments and overissuances are determined to have been caused by administrative errors. In all other respects, the claim is denied." Defendant was ordered to repay the excess benefits.
In March 2001, while the administrative proceedings were pending, defendant was charged by felony complaint with fraudulently receiving welfare benefits of over $400 in violation of Welfare and Institutions Code section 10980, subdivision (c)(2) and committing perjury by false application for aid (Pen. Code, § 118) when she "affirmatively omitted that [her sons] had moved out of the defendant's home."
After the administrative decision was issued, defendant moved to dismiss the criminal action, arguing that collateral estoppel barred the district attorney from proceeding on criminal charges because the administrative law decision had determined that she had received the excess welfare benefits because of administrative errors by the County. The trial court denied her motion and, following a bench trial, defendant was convicted on both counts.
Defendant appealed. The Court of Appeal reversed the judgment in a published decision, holding that the trial court erred in failing to follow Sims, in which this court held that collateral estoppel bars the state from prosecuting for welfare fraud a person who was exonerated of that charge in administrative proceedings. (People v. Sims, supra, 32 Cal.3d at p. 489.) We granted the People's petition for review.
II. DISCUSSION
The People argue that this court should reconsider our decision in People v. Sims, supra, 32 Cal.3d 468 (Sims), in light of intervening changes in the law. In 1982, we addressed in Sims circumstances similar to those in the present case and held that the doctrine of collateral estoppel precluded the People from prosecuting for welfare fraud a welfare recipient who had been exonerated at an administrative hearing conducted by the county. (Id. at p. 489.)
In Sims, the Social Services Department of Sonoma County sought to recoup from June Sims alleged overpayments of aid and food stamps. Sims requested an administrative hearing to challenge the decision. Meanwhile, the district attorney charged Sims with felony welfare fraud under section 11483. The county refused to participate in the administrative hearing, asserting that the pending criminal charges divested the county of jurisdiction. After Sims presented evidence in her behalf, the hearing officer determined that the county had not met its burden of proof and ordered the county to rescind its notice of action against Sims and refund any restitution payments she had made. The county did not seek a rehearing or judicial review. Sims then moved to dismiss the criminal information, contending that the decision at the administrative hearing collaterally estopped the criminal prosecution. The trial court granted Sims's motion, and the People appealed. (Sims, supra, 32 Cal.3d at pp. 473-474.)
We began our discussion in Sims by noting that the United States Supreme Court had concluded that "[c]ollateral estoppel may be applied to decisions made by administrative agencies '[when] an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate .'" (Sims, supra, 32 Cal.3d at p. 479, quoting United States v. Utah Constr. Co. (1966) 384 U.S. 394, 422 [16 L.Ed.2d 642, 86 S.Ct. 1545, 176 Ct.Cl. 1391], italics omitted; see also Pacific Lumber Co. v. State Water Resources Control Bd. (2006) 37 Cal.4th 921, 944 [38 Cal.Rptr.3d 220, 126 P.3d 1040] (Pacific Lumber).) We noted that the standard formulated in Utah Construction supports the primary public policy goal underlying the doctrine of collateral estoppel: " 'limiting litigation by preventing a party who has had one fair trial on an issue from again drawing it into controversy.' " (Sims, supra, at p. 479, quoting Bernhard v. Bank of America (1942) 19 Cal.2d 807, 811 [122 P.2d 892].)
We concluded in Sims that an administrative hearing conducted by the California Department of Social Services (DSS) was "a judicial-like adversary proceeding," emphasizing that: 1) The hearing was impartial; 2) all testimony was submitted under oath; 3) both parties could call and cross-examine witnesses and introduce documentary evidence; 4) the parties could request that witnesses be subpoenaed; 5) regulations required that a verbatim record of the hearing be made; and 6) a written decision would issue after the hearing. (Sims, supra, 32 Cal.3d at pp. 479-480.) Sims also stressed that the administrative decision was adjudicatory in nature, as it involved applying " 'a rule . to a specific set of existing facts,' rather than 'the formulation of a rule to be applied to all future cases.' " (Id. at p. 480, quoting Strumsky v. San Diego County Employees Retirement Assn. (1974) 11 Cal.3d 28, 34-35, fn. 2 [112 Cal.Rptr. 805, 520 P.2d 29].) Finally, we noted that the availability of a rehearing before the agency and the right to petition for review in superior court supported our conclusion that the administrative hearing was judicial in nature. (Sims, supra, 32 Cal.3d at p. 480.)
We then considered whether the traditional requirements of collateral estoppel had been satisfied. There are five threshold requirements: 1) the issue to be precluded must be identical to that decided in the prior proceeding; 2) the issue must have been actually litigated at that time; 3) the issue must have been necessarily decided; 4) the decision in the prior proceeding must be final and on the merits; and 5) the party against whom preclusion is sought must be in privity with the party to the former proceeding. (Sims, supra, 32 Cal.3d at p. 484; accord, Pacific Lumber, supra, 37 Cal.4th at p. 943; see also Lucido v. Superior Court (1990) 51 Cal.3d 335, 341 [272 Cal.Rptr. 767, 795 P.2d 1223] (Lucido); Rest.2d Judgments, § 27.)
In examining whether the welfare fraud issue was actually litigated at the administrative hearing, we noted in Sims that the respondent's request for an administrative hearing had "properly raised" the welfare fraud issue, that the controversy was submitted for a determination on the merits, and that there was a finding that made "clear that respondent's guilt or innocence of welfare fraud was actually litigated at the . . . fair hearing." (Sims, supra, 32 Cal.3d at p. 484.)
We also held in Sims that the welfare fraud issue actually litigated in the administrative hearing was "identical to that involved in the criminal proceedings." (Sims, supra, 32 Cal.3d at p. 485.) After noting that the same amount of overpayments, the same relevant time periods, and the same allegation that Sims had failed to report a change in her household size were at issue in the administrative hearing as in the criminal prosecution, we addressed the fact that different burdens of proof apply at administrative hearings and in criminal prosecutions. Because an administrative hearing is civil in nature, and the county must prove its case by a preponderance of evidence, the burden at the hearing is not as great as the state's burden at a criminal proceeding of proving a defendant's guilt beyond a reasonable doubt, we concluded that "if the County fails to prove its allegations by a preponderance of the evidence at the fair hearing, it follows a fortiori that it has not satisfied the beyond a reasonable doubt standard." (Ibid.)
We then held that the administrative law judge's decision is "final for purposes of applying collateral estoppel" when the deadline for the welfare department to seek rehearing passes, or upon the finality of any appeals of the administrative hearing decision. (Sims, supra, 32 Cal.3d at pp. 485-486.)
Finally, we concluded in Sims that the county and the district attorney were in privity, as is required for collateral estoppel to apply. Although there is " 'no universally applicable definition of privity' " (Sims, supra, 32 Cal.3d at p. 486, quoting Lynch v. Glass (1975) 44 Cal.App.3d 943, 947 [119 Cal.Rptr. 139]), we explained that whether privity exists depends upon whether the " 'relationship between the party to be estopped and the unsuccessful party in the prior litigation . is "sufficiently close" so as to justify application of the doctrine of collateral estoppel.' " (32 Cal.3d at pp. 486-487, quoting Clemmer v. Hartford Insurance Co. (1978) 22 Cal.3d 865, 875 [151 Cal.Rptr. 285, 587 P.2d 1098].)
In discussing whether privity existed, we examined the relationship between "the district attorney's office, which represents the party to be es-topped, and the County, the unsuccessful party in the prior litigation . . . ." (Sims, supra, 32 Cal.3d at p. 487.) Both entities, we noted, are county agencies that are designated by statute to represent the interests of the State of California; just as the district attorney's office represents the state in criminal matters (Pen. Code, § 684), the county welfare department acts for the state in administrative proceedings related to welfare benefits. (Welf. & Inst. Code, § 10800.) Entities that are " 'agents of the same government' " are generally found to be in privity, because they are both acting to vindicate the rights of the same governmental entity. (Sims, supra, 32 Cal.3d at p. 487.)
The Sims decision additionally recognized the "close association between the County and the district attorney's office" in cases involving alleged benefit overpayments and welfare fraud. (Sims, supra, 32 Cal.3d at p. 487.) We explained that the district attorney and the county "operate jointly in investigating and controlling welfare fraud," and that a special unit had been created "to investigate suspected welfare fraud and to function as a liaison between the County and law enforcement agencies." (Ibid.) We also noted that the county must provide documentary evidence to the district attorney upon request, and that county officials must be available to appear at criminal hearings and trials. The Sims decision also mentioned that "[i]n addition, an attempt by the County to obtain restitution of overpayments made to a welfare recipient suspected of fraud is sufficient to satisfy the mandate of section 11483 that the district attorney seek restitution before commencing criminal proceedings." (Id. at p. 488.) In view of the integrated relationship between the county and the district attorney in controlling welfare fraud, this court found in Sims that the county and the district attorney were in privity for purposes of applying collateral estoppel.
Having concluded that the traditional requirements of collateral estoppel were satisfied, we then examined whether precluding the district attorney from prosecuting the welfare recipient would further the traditional public policies served by the collateral estoppel doctrine. We noted in Sims that the application of collateral estoppel to bar criminal prosecutions of welfare fraud would further several public policy goals. First, we observed that "[g]iving conclusive effect to the [administrative] decision exonerating respondent of welfare fraud would promote judicial economy by minimizing repetitive litigation." (Sims, supra, 32 Cal.3d at p. 488; see also Gikas v. Zolin (1993) 6 Cal.4th 841, 849 [25 Cal.Rptr.2d 500, 863 P.2d 745].) Additionally, we expressed concern that, unless the later prosecutions were estopped, the possibility of inconsistent judgments could undermine the integrity of the judicial system as well as the integrity of the administrative hearing process; if a welfare recipient is found in an administrative hearing to have lawfully received welfare benefits, and then is successfully prosecuted in criminal court for welfare fraud, both decisions become suspect. (Sims, supra, 32 Cal.3d at p. 488.)
The possibility of having to defend the receipt of welfare benefits in two forums also works a hardship on the welfare recipient; if collateral estoppel does not apply, the welfare recipient cannot rely upon success at the administrative hearing because "he or she may still be required to return the benefits" after a criminal prosecution. (Sims, supra, 32 Cal.3d at p. 489.) Finally, we explained that precluding the district attorney from relitigating the issue of welfare fraud would protect welfare recipients from being harassed by repeated litigation. After receiving a judgment at the administrative hearing that the county did not satisfactorily prove that the welfare recipient wrongly received welfare benefits, we commented that it would be "manifestly unfair" to subject her to a second proceeding in criminal court "in which she must defend herself against the very same charges of misconduct." (Ibid.)
As additional support for the conclusion that the application of collateral estoppel would further the public policy considerations served by the doctrine as a whole, we observed that "[i]n addition to the public policy considerations . the uniqueness of the statutory scheme governing prosecutions for [welfare] fraud and the circumstances of the individuals receiving welfare benefits make application of collateral estoppel particularly appropriate . . . ." (Sims, supra, 32 Cal.3d at p. 489.)
Principles of stare decisis present a formidable obstacle to the People's request that we reconsider our decision in Sims, which has been the law for nearly 25 years: "It is, of course, a fundamental jurisprudential policy that prior applicable precedent usually must be followed even though the case, if considered anew, might be decided differently by the current justices. This policy, known as the doctrine of stare decisis, 'is based on the assumption that certainty, predictability and stability in the law are the major objectives of the legal system; i.e., that parties should be able to regulate their conduct and enter into relationships with reasonable assurance of the governing rules of law.' " (Moradi-Shalal v. Fireman's Fund Ins. Companies (1988) 46 Cal.3d 287, 296 [250 Cal.Rptr. 116, 758 P.2d 58], quoting 9 Witkin, Cal. Procedure (3d ed. 1985) Appeal, § 758, p. 726.) Although we recognize that "reexamination of precedent may become necessary when subsequent developments indicate an earlier decision was unsound, or has become ripe for reconsideration" (Moradi-Shalal, supra, 46 Cal.3d at p. 297), the arguments posed by the People do not convince us that a reexamination of our decision in Sims is warranted.
The People first argue that our decisions subsequent to Sims place in doubt our characterization of the district attorney as essentially a "county agency," and therefore have undercut our holding in Sims that the district attorney and the county are in privity. This argument is based upon a false premise. Our decision in Sims did not characterize the district attorney as a county agency but, to the contrary, emphasized that the district attorney acts as an agent of the state in prosecuting welfare fraud: "The district attorney's office represents the State of California in the name of the 'People' at criminal prosecutions." (Sims, supra, 32 Cal.3d at 487.) It was precisely the district attorney's action as a surrogate for the state, combined with the county's work as an " 'agent' of the state" (ibid..), that weighed in support of our conclusion that the district attorney and the county were in privity. We have not, as the People contend, "re-examined" the role of the district attorney's office; this court relied in Sims upon the district attorney's role as a representative of the state, and continues to recognize that criminal prosecutions are brought on behalf of the People of the State of California, whether by a county district attorney or by the Attorney General. (See Pitts v. County of Kern (1998) 17 Cal.4th 340, 345 [70 Cal.Rptr.2d 823, 949 P.2d 920] [holding that "the district attorney represents the state, not the county, . . . when prosecuting crimes"]; People v. Eubanks (1997) 14 Cal.4th 580, 588-589 [59 Cal.Rptr.2d 200, 927 P.2d 310].)
The People further argue that amendments to section 11483 made over 20 years ago place in doubt our conclusion in Sims that welfare fraud is governed by a "unique statutory scheme which established a preference for the noncriminal resolution of cases" and have "made more evident the Legislature's intent that the district attorney prosecute welfare fraud as a criminal violation." We disagree. As explained below, our observation in Sims that the statutes governing welfare fraud evidenced a unique preference for noncriminal resolution was not a linchpin of that decision; the statutory scheme merely offered additional, but nonessential, support for our holding. Further, even if we assume that the now decades-old changes to section 11483, upon which the People rely, removed the legislative preference for restitution, such changes do not establish a preference for criminal prosecution, but rather leave the government free either to seek restitution first or prosecute first.
Section 11483 prescribes criminal penalties for persons who have fraudulently obtained welfare benefits in amounts greater than $2,000. At the time of Sims, the statute incorporated by reference to sections 12250 and 12850 the requirement that "restitution shall be sought . . . prior to the bringing of a criminal action." The purpose of this requirement was, in the words of the Court of Appeal, " 'that the person accused of fraud should be given an opportunity to make restitution, and if restitution is made, then the prosecutor should be required to reconsider the case in light of the fact that restitution has been made to determine whether prosecution is in fact warranted.' " (People v. Preston (1996) 43 Cal.App.4th 450, 454 [50 Cal.Rptr.2d 778], quoting People v. Jordan (1978) 86 Cal.App.3d 529, 535 [150 Cal.Rptr. 334].) In People v. McGee (1977) 19 Cal.3d 948 [140 Cal.Rptr. 657, 568 P.2d 382], this court held that the state's failure to comply with the statutory restitution requirement was grounds for dismissal of the criminal prosecution. (Id. at p. 966.)
In 1984, as part of a reform of the statutes punishing welfare fraud, the Legislature amended section 11483 by replacing the reference to sections 12250 and 12850 with a reference to section 10980. Section 10980, which prescribes the penalties for various welfare-fraud-related offenses, does not require prosecutors to demand restitution of overpayments of more than $2,000 before criminal proceedings for welfare fraud may commence. (See People v. Preston, supra, 43 Cal.App.4th at p. 456; 2 Witkin & Epstein, Cal. Criminal Law (3d ed. 2000) Crimes Against Government Authority, § 152, p. 1243.) The Court of Appeal, in People v. Preston, held that the 1984 amendments "remove[d] any current statutory underpinning to the argument that the statute requires a prior demand for restitution." (Preston, supra, 43 Cal.App.4th at p. 460.) In doing so, the Preston court disagreed with an earlier Court of Appeal opinion, People v. Camillo (1988) 198 Cal.App.3d 981, 994 [244 Cal.Rptr. 286], that assumed that the 1984 amendments had not abrogated the requirement that the state seek restitution before pursuing criminal penalties. (Preston, supra, 43 Cal.App.4th at p. 459.)
The People argue that the Legislature's enactment of the 1984 changes to the Welfare and Institutions Code undermined our decision in Sims. Prior to those statutory changes, the state could punish "welfare fraud" under at least seven different statutes that spanned the Welfare and Institutions Code and the Penal Code. (People v. Preston, supra, 43 Cal.App.4th at p. 456.) Consequently, "the same fraudulent act frequently violated several statutes, and was chargeable under more than one of these statutes." (Ibid.) The statutory changes were enacted to resolve the confusion and unnecessary filing of complaints that had resulted from the prior statutory framework. (Sen. Com. on Health & Human Services, Analysis of Sen. Bill No. 2171 (1983-1984 Reg. Sess.) as introduced Feb. 17, 1984.) "The purpose of section 10980 was to create administrative efficiencies in investigating and prosecuting fraud cases by creating a specific welfare fraud statute under which a single fraudulent act involving more than one welfare program could be prosecuted. . . . fi[] . . . [1] The remaining, and current, text of section 11483 does not contain any criminal proscriptions, but merely requires that restitution be sought in cases of failure to report not more than $2,000 in income or resources . . . ." (Preston, supra, 43 Cal.App.4th at p. 456.)
As noted above, the People contend that these statutory changes indicate that the Legislature no longer prefers that cases involving possible welfare fraud be resolved without resort to criminal prosecution, and that such a shift in legislative purpose implicitly overrules this court's decision in Sims. We reject this contention for two reasons. Even if the restitution-first requirement indicates a preference for noncriminal resolutions, it does not necessarily follow that the repeal of the requirement evinces a preference for criminal resolutions. Rather, the current statutory scheme instead places the criminal and noncriminal options in equipoise, leaving the County free to obtain restitution before, during, or after instituting criminal proceedings.
Additionally, though the existence of a restitution-first requirement was considered by this court in Sims, it was only one factor in a multifactor analysis, and was alluded to only in addition to numerous other public policy reasons supporting our conclusion that privity existed between the district attorney and the county. Rather, as we have noted, the court in Sims primarily relied upon the sharing of information between the county and law enforcement agencies and "the fact that both entities are county agencies representing the state" in holding that collateral estoppel principles should apply. (Sims, supra, 32 Cal.3d at p. 488.) The People do not contend that the 1984 changes to the Welfare and Institutions Code altered the sharing of information between the County and the district attorney, nor do they point to any authority that would cause us to reconsider our characterization of the close relationship between the County and the district attorney.
The People argue our subsequent decision in Lucido, supra, 51 Cal.3d 335, demonstrates that the restitution-first requirement was essential to the outcome in Sims. But a careful reading of Lucido leads to the opposite conclusion. The restitution-first requirement was one basis for our decision in Sims, but far from the only grounds for our decision.
In Lucido, we held that the doctrine of collateral estoppel does not bar the People from relitigating in a criminal proceeding an issue on which the defendant had prevailed in a prior probation revocation hearing. (Lucido, supra, 51 Cal.3d at p. 339.) The defendant in Lucido, after being convicted of indecent exposure, was sentenced to probation. While on probation, he was charged with a new count of indecent exposure. The People sought to have Lucido's probation revoked based upon the indecent exposure, as well as upon the independent ground that Lucido had tested positive for marijuana use. Following a hearing, the court revoked Lucido's probation based only upon the marijuana use, and not upon the indecent exposure charge, stating that the prosecution had not produced clear and convincing evidence of the indecent exposure. (Id. at pp. 339-341.)
We held that the state was not collaterally estopped from prosecuting Lucido for indecent exposure, even though the state had failed to prove a violation of probation based on the same conduct. (Lucido, supra, 51 Cal.3d 335, 351.) In so holding, we followed the estoppel framework set forth and applied in Sims, including an analysis of whether the threshold requirements and traditional policy reasons for applying collateral estoppel were satisfied. (Id. at pp. 341-343.)
Our decision in Lucido discussed Sims on two occasions. First, we determined that Sims had not nullified an earlier decision, Chamblin v. Municipal Court (1982) 130 Cal.App.3d 115 [181 Cal.Rptr. 636], in which the Court of Appeal held that findings from a probation revocation hearing did not bar prosecution for Vehicle Code violations, stating: "In Sims we noted that the 'particular and special circumstances' presented by the 'unique statutory scheme' for resolution of welfare fraud strongly supported a holding that collateral estoppel should apply." (Lucido, supra, 51 Cal.3d at p. 345, quoting Sims, supra, 32 Cal.3d at pp. 489-490.) As noted above, the hearing in Sims was statutorily required to be held prior to any criminal action on the fraud. (Sims, supra, at p. 475, citing § 11483.) This requirement suggested that the Legislature intended to afford some protection from criminal prosecution for welfare recipients, and "supported our conclusion that collateral estoppel preempted a criminal trial if fraud was not proved at the hearing." (Lucido, supra, 51 Cal.3d at p. 345.)
We noted that Chamblin had reached the same conclusion, but the lower court in Lucido had declined to follow the decision in Chamblin, concluding that it had "been 'nullified sub silentio' by Sims." (Lucido, supra, 51 Cal.3d at p. 344.) We explained that Chamblin had not been nullified, because the decisions in Chamblin and Sims "do not necessarily conflict," noting that "the 'unique statutory scheme' for resolution of welfare fraud strongly supported a holding that collateral estoppel should apply." (Id. at p. 345.) The statutory requirement present in Sims that the administrative hearing be held prior to any criminal prosecution "suggested that the Legislature intended to afford some protection from criminal prosecution for welfare recipients, by virtue of their 'minimal standard of living.' " (Ibid.) We observed that "[t]his interest was not present in Chamblin, and is not present here." (Ibid., fn. omitted.)
Having distinguished the decisions in Chamblin and Sims and explained why our decision in Sims had not weakened the Court of Appeal's earlier decision in Chamblin, we held in Lucido that our earlier holding in Sims did not require us to apply collateral estoppel in the context of probation revocation hearings because we have applied collateral estoppel to preclude criminal trials "only when compelling public policy considerations outweighed the need for determinations of guilt and innocence to be made in the usual criminal trial setting." (Lucido, supra, 51 Cal.3d at p. 349.) Deciding that Sims did not compel this court to apply collateral estoppel to the probation revocation setting, we observed that "[i]n Sims . we applied collateral estoppel partly on the ground that the 'unique statutory scheme' at issue was intended to essentially resolve issues of criminal guilt and innocence in regard to welfare fraud." (Ibid., italics omitted.)
Missing from each discussion of Sims was any statement or implication that we would have decided Sims differently had the former statutory scheme for resolution of welfare fraud been different. We simply relied upon the unique statutory scheme considered in Sims as a ready means of distinguishing the decision in Chamblin, and observed that the restitution-first requirement and the goal it furthered "supported" our holding in Sims. (Lucido, supra, 51 Cal.3d at p. 345.) Indeed, the discussion in Lucido noted that the Sims court "applied collateral estoppel partly on the ground' that the restitution-first requirement evinced a legislative intent "to essentially resolve issues of criminal guilt" in an administrative setting. (Id. at p. 349, italics added.) The other multiple bases for our decision in Sims remain untouched by our decision in Lucido.
The change in the statutory scheme governing welfare fraud to permit, rather than require, administrative proceedings seeking restitution of welfare benefits prior to criminal prosecution does not alter our conclusion that our decision in Lucido is consistent with our decision in Sims. For example, the circumstances in Lucido did not raise the concern expressed in Sims that forcing welfare recipients to respond to criminal charges after an administrative law judge found that no overpayment was made or that no fraud occurred would impose a hardship on them and leave them exposed to being "harassed by repeated litigation." (Sims, supra, 32 Cal.3d at p. 489.) Rather, as we explained in Lucido, "[t]he essence of vexatiousness, however, is not mere repetition. Rather, it is harassment through baseless or unjustified litigation. [Citation.] Petitioner does not assert that the criminal proceedings in this case are intended to harass. The public has a legitimate expectation that a person once found guilty of a crime may both be held to the terms of his probation and (if deemed appropriate by the prosecution) tried anew for any offenses alleged to have been committed during the probationary period. For this reason, it is neither vexatious nor unfair for a probationer to be subjected to both a revocation hearing and a criminal trial." (Lucido, supra, 51 Cal.3d at p. 351.)
Further, we noted in Lucido that the existence of evidentiary rules rendering the probationer's testimony at the revocation hearing inadmissible at a subsequent criminal trial "significantly protects] probationers from prejudice caused by the juxtaposition of revocation hearings and criminal trials," and therefore weighed against the application of collateral estoppel. (Lucido, supra, 51 Cal.3d at p. 351.) This was not so in Sims. As the People conceded at argument, no similar evidentiary rules prohibit a welfare recipient's testimony at an administrative hearing from being introduced at a later criminal trial for welfare fraud.
Finally, different public policy concerns affected the decisions in Sims and Lucido. In Lucido, we noted that the probation revocation hearing "arises as a continuing consequence of the probationer's original conviction" (Lucido, supra, 51 Cal.3d at p. 348), that any sanction imposed at the hearing stems from the fact that the probationer has been judged guilty of a prior crime, and that the subject of the revocation hearing is whether the defendant can safely remain at liberty. (Id. at pp. 347-348.) Sims did not arise from an earlier determination of culpability, and involved a welfare recipient—not a convicted criminal.
We noted in Lucido that "[probation revocation hearings and criminal trials serve different public interests." (Lucido, supra, 51 Cal.3d at p. 347.) "Probation is a form of leniency which is predicated on the notion that a defendant, by proving his ability to comply with the requirements of the law and certain special conditions imposed upon him, may avoid the more severe sanctions justified by his criminal behavior. Once given the opportunity for lenient treatment the choice is his as to whether he merits being continued on probation." (People v. Zuniga (1980) 108 Cal.App.3d 739, 743 [166 Cal.Rptr. 549].) We stated in Lucido: "A probation revocation hearing assesses whether conditions relating to punishment for a prior crime have been violated so that probation should be modified or revoked . . . ." (Lucido, supra, 51 Cal.3d at pp. 347-348.) In essence, the issue at a probation revocation hearing is whether the defendant's conduct demonstrates that the leniency extended by the grant of probation remains justified. By contrast, we noted in Lucido, "a criminal prosecution seeks conviction for wholly new offenses." (Id. at p. 348.)
Sims differs from Lucido in this respect, because the purposes of administrative proceedings seeking restitution of welfare benefits do not differ greatly from the purposes of criminal prosecution for welfare fraud in obtaining those same benefits. As we noted in Sims, "[t]he County had an adequate opportunity at the fair hearing to prove that respondent had fraudulently obtained welfare benefits. However, [Sims] successfully demonstrated her innocence." (Sims, supra, 32 Cal.3d at p. 489.)
Our conclusion that Sims remains vital after the 1984 changes to the welfare fraud scheme is supported by the legislative history of those changes, which reveals that the Legislature did not contemplate abrogating Sims, either as a direct or indirect effect of the 1984 statutory changes that resulted in, among other things, removing the restitution-first requirement. "[W]hen, as here, the Legislature undertakes to amend a statute which has been the subject of judicial construction" "it is presumed that the Legislature was fully cognizant of such construction . . . ." (Palos Verdes Faculty Assn. v. Palos Verdes Peninsula Unified Sch. Dist. (1978) 21 Cal.3d 650, 659 [147 Cal.Rptr. 359, 580 P.2d 1155]; see also White v. Ultramar, Inc. (1999) 21 Cal.4th 563, 572 [88 Cal.Rptr.2d 19, 981 P.2d 944]; People v. Davenport (1985) 41 Cal.3d 247, 263, fn. 6 [221 Cal.Rptr. 794, 710 P.2d 861].) Because the Legislature amended the welfare fraud statutes after this court's decision in Sims became final, we assume that the Legislature was aware of this court's construction of the welfare fraud statutes in that case. Had the Legislature wanted to invalidate Sims, it could have provided that no administrative decision would prevent a prosecution for welfare fraud.
The Legislature has demonstrated the ability, when it so intends, to specify that administrative proceedings will not bar judicial proceedings. For example, the Legislature specifically provided that administrative proceedings before the Department of Motor Vehicles could not have "a preclusive effect on related criminal proceedings." (Gikas v. Zolin, supra, 6 Cal.4th at p. 851.) The Legislature did not incorporate such a provision denying preclusive effect to administrative hearings in cases of suspected welfare fraud; indeed, the Legislature rejected a bill that contained such language, in favor of legislation that did not directly implicate Sims.
Finally, the People raise for the first time in their opening brief in this court, the argument that the enactment of Proposition 115 in 1990 compels this court to reconsider our decision in Sims. Among other things, Proposition 115 added to the California Constitution a provision that provides the People of California with the right to "a speedy and public trial." (Cal. Const., art. I, § 29.) The People argue that "the creation of an express constitutional right in the People to a public trial compels rejection of the pre-1990 rule that the county's failure in an administrative hearing operates to deprive the People of the right to try the issue of fraud and perjury in a criminal proceeding." In support of the argument that administrative hearings do not satisfy the People's right to a public trial, the People note that administrative regulations state that "[attendance at the hearing is ordinarily limited to the claimant, authorized representative . . . county representative, legal counsel, authorized interpreter, and witnesses relevant to the issue." (DSS Manual of Policies & Procedures (May 12, 1995) ch. 22-000, § 22-049.1.)
The People thus assert that attendance at administrative hearings related to welfare benefit overpayment ordinarily is limited, but because they raise the issue for the first time before this court, they provide no showing that attendance at the hearing in this particular case was so limited as to render the hearing nonpublic, or that the procedures employed at the hearing in this case render it nonjudicial. Nor do the People cite any persuasive authority supporting their contention that Proposition 115's general provision regarding the People's right to a speedy and public trial was intended to overrule Sims or to more generally prevent the application of collateral estoppel principles. Indeed, the Sims regime does not foreclose the People from seeking a criminal trial prior to the administrative hearing; the hearing can only estop the issue of welfare fraud if the People do not pursue the criminal option as speedily as the County pursues the matter administratively.
The People also contend that, even if Sims remains vital after the statutory changes described above, collateral estoppel should not act to bar the prosecution of defendant in this particular case, because the Court of Appeal erred in finding that the issues actually litigated in the administrative hearing were identical to the issues in the criminal prosecution.
As noted above, the first of the traditional requirements of collateral estoppel is that the issue to be precluded must be identical to that decided in the prior proceeding. (Sims, supra, 32 Cal.3d at p. 484.) The Court of Appeal in the present case determined what issues had been litigated in the administrative hearing by considering what issues had been " 'properly raised, by the pleadings or otherwise,' " and whether those issues had been " 'submitted for determination, and . . . determined.' " (Ibid.) The Court of Appeal relied upon the fact that "[t]he administrative decision identified the issues subject to determination as (1) whether defendant's two sons were members of her household when she received aid on their behalf, and (2) whether she received relief to which she was not entitled because she 'fail[ed] to report the boys' absence from her home.' "
At issue in a prosecution for welfare fraud is whether a person has obtained aid for a child not entitled to assistance "by means of false statement or representation or by impersonation or other fraudulent device." (§ 11483, italics added.) However, the Court of Appeal did not adequately consider whether the administrative law decision actually determined whether defendant made any such misrepresentations or omissions and whether those misrepresentations or omissions caused, at least in part, the overpayments.
The administrative decision concluded that "all the overpayments and overissuances are determined to have been caused by administrative errors." But this does not foreclose the possibility that defendant misrepresented whether her two sons were members of her household when she received aid on their behalf and failed to report the boys' absence from her home. The administrative decision that the overpayments were caused by administrative errors leaves open the possibility that defendant made misstatements that were a contributing cause to the overpayments. It is possible that the administrative decision did not determine whether defendant made any misrepresentations, or whether such misrepresentations were a cause, but not the sole cause, of the overpayments. Only if the administrative law judge did indeed find that defendant had made no misrepresentations or omissions in her applications for aid would the state be barred from prosecuting her for welfare fraud; if defendant made no false representations, an element of that crime has not been satisfied. (People v. Carlson (1977) 76 Cal.App.3d 112, 116 [142 Cal.Rptr. 638].)
We decline to determine whether in the present case the People are collaterally estopped from prosecuting defendant for welfare fraud and, instead, remand the case to permit the Court of Appeal to resolve that issue in the first instance. In so doing, the Court of Appeal should consider the circumstance that the record on appeal does not include the notices of action issued by the County on January 16, 2001, in the administrative proceedings. Although we can deduce from the administrative decision that the notices alleged that defendant, rather than the County, was at fault for the overpayments, the absence of these notices from the record makes it difficult to determine what issues were raised " 'by the pleadings or otherwise' " (Sims, supra, 32 Cal.3d at p. 484) in the administrative hearing. On remand, the Court of Appeal should consider the effect, if any, of the absence of these documents from the record on appeal.
It is also unclear whether the People are collaterally estopped from prosecuting defendant for perjury. The Court of Appeal decision does not discuss the perjury charge. The elements of perjury are: "a 'willful statement, under oath, of any material matter which the witness knows to be false.' " (Cabe v. Superior Court (1998) 63 Cal.App.4th 732, 735 [74 Cal.Rptr.2d 331]; see also Chein v. Shumsky (2004) 373 F.3d 978, 983.) Again, if the administrative decision actually decided that defendant had made no misstatements, collateral estoppel would bar prosecution of defendant for perjury. However, if defendant willfully made misstatements, but the administrative law judge determined that such misstatements were not the dominant cause of the overpayments, collateral estoppel would not necessarily dispose of the perjury charge, as it is possible that defendant's false representation could have been material to the administrative proceeding. (See People v. Kobrin (1995) 11 Cal.4th 416, 426-427 [45 Cal.Rptr.2d 895, 903 P.2d 1027].)
Accordingly, we remand this matter to the Court of Appeal for further proceedings consistent with this opinion, including a determination of whether the issues litigated at the administrative hearing and the criminal prosecution for welfare fraud and perjury were identical.
HI. DISPOSITION
For the foregoing reasons, the judgment of the Court of Appeal is reversed; and the matter is remanded to the Court of Appeal for further proceedings consistent with this opinion, including reconsideration of whether the issues litigated at the administrative hearing and the criminal prosecution for welfare fraud and perjury were identical.
George, C. J., Kennard, J., Baxter, J., and Werdegar, J., concurred.
All further undesignated statutory references are to the Welfare and Institutions Code.
Section 11483 provides in pertinent part: "[W]henever any person has, by means of false statement or representation or by impersonation or other fraudulent device, obtained aid for a child not in fact entitled thereto, the person obtaining such aid shall be subject to prosecution . . . ." In cases involving an amount less than $2,000, section 11483 requires that "all actions necessary to secure restitution shall be brought."
Prior to Sims, the Legislature repealed sections 12250 and 12850, but section 11483 still referred to those repealed sections. This court held in McGee that the reference in section 11483 to those statutes therefore remained effective, and continued to direct that the state must pursue administrative remedies before criminal prosecution. (People v. McGee, supra, 19 Cal.3d at p. 958, fn. 3.)
Both the People and defendant presuppose that the Preston court correctly concluded that the Legislature abrogated the requirement that the state first seek restitution, and neither party argues that the state is required to seek restitution prior to commencing criminal proceedings. Accordingly, we assume for purposes of argument, but do not decide, that the 1984 changes to section 11483 eliminated the requirement that the state must pursue restitution before criminal prosecution.
We express no opinion on whether the DSS's current regulatory scheme indicates a preference for criminal resolution of welfare fraud cases. The parties have not raised or briefed the court on this issue, nor have they addressed whether the pertinent regulations were in place at the time Sims was decided by this court.
The concurring and dissenting opinion relies heavily upon the decision in Vandenberg v. Superior Court (1999) 21 Cal.4th 815 [88 Cal.Rptr.2d 366, 982 P.2d 229], in which this court held that "a private arbitration award, even if judicially confirmed, may not have nonmutual collateral estoppel effect under California law unless there was an agreement to that effect in the particular case." (Id. at p. 824.) In failing to even cite Vandenberg, the People evidently do not view that decision as providing a tenable basis for reconsidering Sims. Nor do we.
Among other things, Vandenberg involved an insurance coverage dispute between two insurance companies that was presided over by a private arbitrator who was "not strictly bound by evidence, law, or judicial oversight." (Vandenberg v. Superior Court, supra, 21 Cal.4th at p. 833.) Unlike a private arbitration, in which parties effectively "bypass the judicial system" in favor of private dispute resolution (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 10 [10 Cal.Rptr.2d 183, 832 P.2d 899]), the public administrative hearing at issue here and in Sims is "a judicial-like adversary proceeding" (Sims, supra, 32 Cal.3d at pp. 479-480) that is conducted by a state entity, the DSS, whose administrative law judges must follow California law and render decisions subject to judicial review. (See § 10962.) And in contrast to typical private arbitrations, DSS administrative hearings involve the government as a party and seek to resolve a matter of public concern, i.e., the alleged overissuance of public funds. We are not persuaded that the decision in Vandenberg warrants reconsideration of our decision in Sims.
Senate Bill No. 962 (1983-1984 Reg. Sess.), which was introduced at roughly the same time as Senate Bill No. 2171 (1983-1984 Reg. Sess.), proposed to introduce the following language into the Welfare and Institutions Code: "Nothing in this chapter, including any administrative decision, shall be construed so as to prevent the prosecution of an applicant or recipient for a criminal violation of Section 396 of the Penal Code, or the crime of perjury, as defined in Section 188 of the Penal Code." (Sen. Bill No. 962 (1983-1984 Reg. Sess.) Mar. 3, 1983.)
This provision of Senate Bill No. 962 was intended to "repeal the Sims decision by providing that no administrative decision would prevent the prosecution of an applicant or recipient for criminal violation of the welfare fraud provision." (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 962 (1983-1984 Reg. Sess.) as amended Apr. 21, 1984, p. 12.) The Legislature, however, did not enact Senate Bill No. 962. Rather, the Legislature modified the welfare fraud statutes by enacting into law Senate Bill No. 2171, which did not contain a provision preventing the application of collateral estoppel principles to an administrative decision. However, as this court has previously noted, unpassed bills "have little value" in ascertaining legislative intent. (People v. Mendoza (2000) 23 Cal.4th 896, 921 [98 Cal.Rptr.2d 431, 4 P.3d 265].)
The concurring and dissenting opinion complains that our holding that our decision in Sims survives statutory changes and intervening judicial decisions is dictum. We disagree. We granted review in this case to examine the People's contention that Sims is no longer good law in light of the 1984 statutory changes and our 1990 decision in Lucido. The concurring and dissenting opinion contends that the court should dispose of this case by finding that the threshold requirements for collateral estoppel have not been met here. (Cone. & dis. opn. of Chin, J., post, at p. 1095.) However, the concurring and dissenting opinion fails to recognize that we must first decide whether Sims remains effective after the statutory and other changes before turning to whether the requirements outlined in Sims apply to the facts of this particular case.