Court Opinion

ID: 9544993
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:04:22.722826+00
Date Added: 2024-06-11T15:13:51.260125
License: Public Domain

KAUS, J.
I respectfully dissent.
Although in many instances administrative rulings may properly be accorded binding effect in subsequent proceedings under collateral estoppel principles (see Rest.2d Judgments, § 83), I believe that the majority’s application of the collateral estoppel doctrine in this case is seriously flawed in two respects, one relating to the facts of this particular case and the other pertaining more generally to the relationship between administrative fair hearing proceedings and criminal prosecutions. In my view, each error independently invalidates the majority’s conclusion that the collateral estoppel doctrine bars the criminal prosecution here.
I
I turn first to the narrower issue. The majority’s invocation of the collateral estoppel doctrine on the facts of this case ignores the black-letter precept that collateral estoppel, as contrasted with the bar or merger aspects of res judicata, is confined to issues actually litigated in the initial proceeding. As we stated in Clark v. Lesher (1956) 46 Cal.2d 874, 880 [299 P.2d 865]: “In its secondary aspect res judicata has a limited application to a second suit between the same parties, though based on a different cause of action. The prior judgment is not a complete bar, but it ‘operates as an estoppel or conclusive adjudication as to such issues in the second action as were actually litigated and determined in the first action.’ [Citation.] This aspect of the doctrine of res judicata, now commonly referred to as the doctrine of collateral estoppel, is confined to issues actually litigated.” (Italics added.) (See *491generally 4 Witkin, Cal. Procedure (2d ed. 1971) Judgment, §§ 197, 201, pp. 3335, 3339-3341.)1
The majority’s statement of facts makes it clear, of course, that in this case the county did not “actually litigate” the question of defendant’s fraud at the administrative fair hearing. As the majority acknowledges, at that hearing the county declined to present any evidence at all, taking the position that the agency lacked jurisdiction in light of the pending criminal proceedings. At the conclusion of the hearing, the hearing officer simply found—predictably, in light of the county’s inaction—that the county had failed to meet its burden of proving that defendant had fraudulently obtained welfare benefits.2
Since the county did not appeal the administrative decision, it is, of course, bound by the terms of that ruling. Thus, the county is obligated to refund any restitution payments defendant made pursuant to the agency’s directions and to rescind its administrative “Notice of Action.” At the same time, however, because the county did not “actually litigate” the fraud question in the administrative proceeding, the majority has simply disregarded the well-established contours of the collateral estoppel doctrine in holding that the People are precluded from proving defendant’s guilt in this separate “cause of action”—the criminal pros*492ecution. On this basis alone, the majority’s application of collateral estoppel is unquestionably erroneous.3
II
In addition, although it is not necessary to reach the question in this case, I think the majority’s application of collateral estoppel would be improper even if the question of defendant’s fraud had been actually litigated at the administrative fair hearing.
The majority concedes that it can cite no case in which an administrative determination has been held to bar a subsequent criminal prosecution.4 In People v. Demery (1980) 104 Cal.App.3d 548 [163 Cal.Rptr. 814], perhaps the closest California case in point, the court held directly to the contrary, finding that an administrative determination by the State Board of Medical Quality Assurance which absolved the defendant doctor of a charge of improper furnishing of drugs (Health & Saf. Code, § 11154) did not operate as collateral estoppel in a subsequent criminal prosecution against the doctor on the same charges. In reaching this conclusion, the Demery court explained, inter alia, that “[t]he objective of [the administrative] proceeding was policing licensing requirements rather than making a determination of *493criminal guilt or innocence. While administrative hearings employ fact-finding methods that are similar to those employed in criminal trials, the standards of admissibility differ and the objectives sought are not identical.” (104 Cal.App.3d at p. 561.)
Contrary to the majority’s suggestion, this reasoning is fully applicable to this case. Indeed, on brief reflection, it becomes evident that there are many administrative bodies which in the course of their ordinary duties frequently pass on factual disputes concerning conduct that may also be the subject of a criminal prosecution. Professional licensing boards, prison disciplinary panels, local school boards, the State Personnel Board, labor relations boards and the like may all have occasion to determine—for their own specialized purposes—whether or not an individual committed alleged misconduct. In granting an administrative body the authority to make this factual determination within a particular administrative context, the Legislature surely did not contemplate that the administrative decision would be routinely conclusive on the ultimate issue of an individual’s guilt or innocence of criminal charges relating to the same factual incident. In this setting, as Demery recognizes, the significant differences in both the jurisdiction and the purposes of the administrative and criminal proceedings compel the conclusion that the administrative decision is not binding in a subsequent criminal prosecution. (Cf. Rest.2d Judgments, § 28(3).)5
Indeed, from a practical perspective, the majority’s conclusion appears particularly unsound and short-sighted in the welfare fair hearing context. (See Welf. & Inst. Code, §§ 10950-10965.) The statutory *494scheme reveals that the fair hearing mechanism is intended to provide an aggrieved welfare recipient with a speedy (see id., § 10952) and informal (see id., § 10955) means to challenge an administrative action which may reduce or terminate vitally needed social service benefits. Judicial authorities have frequently observed that, as applied to this kind of administrative proceeding, “[collateral estoppel is by no means an unmixed blessing” (Kelly v. Trans. Globe Travel Bureau, Inc. (1976) 60 Cal.App.3d 195, 202 [131 Cal.Rptr. 488]); if the decision at the fair hearing is given important—indeed, potentially determinative —consequences for an upcoming criminal prosecution, the entire atmosphere and manner of conduct of the fair hearing will be significantly changed, and the administrative hearing will be transformed, in effect, into the first stage of the criminal prosecution itself. To insure that the People’s opportunity to prove the criminal charges is not lost, the county will be required to marshall all of the prosecution’s potential witnesses and evidence at the administrative level; prehearing delays and lengthy hearings will be the predictable result. Furthermore, the majority’s conclusion will have the unfortunate effect of requiring district attorney offices to allocate a greater proportion of their ever-decreasing resources to administrative matters, rather than reserving these scarce resources for the actual prosecution of serious criminal cases in court.
In contrast to the present majority opinion which takes no note of these practical considerations, our court in In re Dennis B. (1976) 18 Cal.3d 687 [135 Cal.Rptr. 82, 557 P.2d 514] gave full recognition to similar practical concerns in holding that the filing and adjudication of a routine traffic infraction should not operate, under Penal Code section 654, as a bar to the subsequent filing of misdemeanor or felony charges arising out of the same course of conduct. In Dennis B., Justice Mosk, writing for a unanimous court, explained that “[t]he state’s substantial interest in maintaining the summary nature of minor motor vehicle proceedings would be impaired by requiring the prosecution to ascertain for each infraction the possibility of further criminal proceedings . ... ” (18 Cal.3d at p. 695.) Justice Mosk noted the various procedural innovations that had been implemented to further the interest in expedited proceedings, pointing in particular to “the use of highway patrol officers ... to perform certain tasks for which deputy district or city attorneys are usually required,” and concluded that “[t]his type of flexibility benefits all parties: defendants gain a swift and inexpensive disposition of their cases without risk of major penalties; and the prosecution, the court system and ultimately the public benefit because judicial and law *495enforcement resources are freed to concentrate on serious criminal behavior.” (Ibid.)
The similarities between Dennis B. and this case are evident: if the results of an administrative fair hearing are limited to the administrative context, the hearing can proceed in a speedy, informal manner with a social worker or comparable agency employee presenting, the agency’s case to the hearing officer. If, however, the “stakes” at the fair hearing are raised so that the administrative decision may be determinative of the pending criminal prosecution—as the majority proposes—then the fair hearing will inevitably become a full dress rehearsal for the criminal trial, and resources which should be allocated to the trial of serious criminal cases will be diverted into the administrative process.
Ill
In sum, I submit that the collateral estoppel doctrine is inapplicable in this case for two reasons: (1) the issue of defendant’s guilt or innocence of welfare fraud was not “actually litigated” at the administrative fair hearing, and (2) even if it had been actually litigated, such an administrative determination should not be binding in a subsequent criminal prosecution.
I would reverse the judgment.

 This element of the collateral estoppel—or “issue preclusion”—doctrine remains fully viable today. Section 27 of the Restatement Second of Judgments, published in early 1982, states: “When an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim.” (Italics added.) Comment (e) to section 27 explains the basic rationale of the “actually litigated” limitation: “Issues not actually litigated. A judgment is not conclusive in a subsequent action as to issues which might have been but were not litigated and determined in the prior action. There are many reasons why a party may choose not to raise an issue, or to contest an assertion, in a particular action. The action may involve so small an amount that litigation of the issue may cost more than the value of the lawsuit. Or the forum may be an inconvenient one in which to produce the necessary evidence or in which to litigate at all. The interests of conserving judicial resources, of maintaining consistency, and of avoiding oppression or harassment of the adverse party are less compelling when the issue on which preclusion is sought has not actually been litigated before. And if preclusive effect were given to issues not litigated, the result might serve to discourage compromise, to decrease the likelihood that the issues in an action would be narrowed by stipulation, and thus to intensify litigation....” (P. 256.)

 The hearing officer’s decision states in this regard: “Since the county has not established its case, or even attempted to present a case, it must be found that the county lacks authority or the right to adjust for alleged overpayment or demand repayment of the alleged overissuance of food stamps.”

 Neither Teitelbaum Furs, Inc. v. Dominion Ins. Co., Ltd. (1962) 58 Cal.2d 601 [25 Cal.Rptr. 559, 375 P.2d 439], nor United States v. Utah Constr. Co. (1966) 384 U.S. 394 [16 L.Ed.2d 642, 86 S.Ct. 1545] supports the majority’s position. In Teitelbaum Furs, plaintiff’s president had fully litigated the question of his guilt in the prior criminal proceeding, and our court simply held that under those circumstances the plaintiff corporation could not avoid the collateral estoppel effect of the earlier judgment by asserting that its president had not presented all of the relevant existing evidence at the first trial. Similarly, in Utah Construction Co., the issue in dispute had been actually litigated in the earlier administrative proceeding, and the United States Supreme Court gave no indication whatsoever that collateral estoppel principles should be more expansively applied to administrative determinations than to court decisions.
Insofar as the case of Fitzgerald v. Herzer (1947) 78 Cal.App.2d 127, 132 [177 P.2d 364] purports to hold that a default judgment invokes the “collateral estoppel”—as opposed to the “merger” or “bar”—aspect of res judicata, the decision is clearly contrary to this court’s subsequent decision in Clark v. Lesher, supra, and the host of collateral estoppel decisions following Clark. As the commentary to section 27 of the Restatement Second of Judgments explains: “In the case of judgment entered by confession, consent, or default, none of the issues is actually litigated. Therefore, the rule of this Section [collateral estoppel or issue preclusion] does not apply with respect to any issue in a subsequent action.” (Rest.2d Judgments, § 27, com. (e), p. 257.)

 Indeed, the majority has not even cited a single case in which a civil judgment against the government or a government agency has been found to preclude a subsequent criminal prosecution.

 The introduction of the Restatement Second of Judgments makes it clear that its provisions are not intended to apply directly to “res judicata in criminal proceedings, that is, [to] the effects of a prior criminal or civil judgment in a subsequent criminal prosecution.” (P. 2.) The introduction nevertheless suggests that “the analysis of various problems considered herein may have application to cognate problems arising in criminal litigation.” (Id.) In this light, the exception to the general collateral estoppel doctrine embodied in section 28(3) may shed some light on the issue before us. That section provides: “Although an issue is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, relitigation of the issue in a subsequent action between the parties is not precluded in the following circumstances: ... (3) A new determination of the issue is warranted by differences in the quality or extensiveness of the procedures followed in the two courts or by factors relating to the allocation of jurisdiction between them .... ” (See also Rest.2d Judgments, § 83(4) (“An adjudicative determination of an issue by an administrative tribunal does not preclude relitigation of that issue in another tribunal if according preclusive effect to determination of the issue would be incompatible with a legislative policy that: ... (b) The tribunal in which the issue subsequently arises be free to make an independent determination of the issue in question.”).)