Court Opinion

ID: 4127841
Source: CourtListenerOpinion
Date Created: 2017-02-18 00:33:42.601749+00
Date Added: 2024-06-11T14:10:49.929479
License: Public Domain

TO BE PUBLISHED IN THE OFFICIAL REPORTS

                              OFFICE OF THE ATTORNEY GENERAL

                                        State of California

                                       DANIEL E. LUNGREN

                                         Attorney General

                           ______________________________________

                    OPINION             :
                                        :          No. 95-324
                   of                   :
                                        :          November 17, 1995
          DANIEL E. LUNGREN             :

            Attorney General            :

                                        :

          CLAYTON P. ROCHE              :

         Deputy Attorney General        :

                                        :

______________________________________________________________________________

                 THE STATE BOARD OF EQUALIZATION has requested an opinion on the
following questions with respect to when a majority of the members of the State Board of Equalization
are prohibited from participating in the making of a governmental decision:

              1.      May a sufficient number of disqualified members be brought back to establish a
quorum through a process of selection by lot?

               2.      If so, what form should the process of selection by lot take?

                3.      In addition to selection by lot, what other means of random selection or other
impartial and equitable means of selection may be used?

                4.      Must all disqualified members participate in the selection process whether by
lot, other means of random selection, or by other impartial and equitable means of selection?

                                                  1.                                          95-324

                5.      When is a disqualified member's participation in the making of a decision
legally required regarding the Board's statutory and constitutional duties?

               6.      What options, such as postponement, are available besides selecting a
disqualified member to participate in the decision?

                                                             CONCLUSIONS

                 When a majority of the members of the State Board of Equalization are prohibited from
participating in the making of a governmental decision:

              1.      A sufficient number of disqualified members may be brought back to establish
a quorum through a process of selection by lot.

                  2.     The process of selection by lot may take any form that results in a random
selection of an object representing a disqualified member, where each such member is represented by a
different object.

                  3.     In addition to selection by lot, other means of random selection include such
activities as flipping coins, drawing cards, and throwing dice or having the members take turns based
upon a predetermined order, and other impartial and equitable means of selection include making a
qualitative evaluation of the particular interests involved.

                4.      All disqualified members must participate in the selection process whether by
lot, other means of random selection, or other impartial or equitable means of selection.

                 5.      A disqualified member's participation is legally required when his presence is
necessary to establish a quorum with respect to the matter regardless of whether the Board's duties in
question are statutory or constitutional.

                 6.     The members may postpone the decision regarding the matter depending upon
the individual circumstances involved.

                                                                 ANALYSIS

                 Government Code section 156761 provides:

                 ". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

                "(b) Prior to rendering any decision in any adjudicatory proceeding pending
        before the State Board of Equalization, each member who knows or has reason to know

   1
    All references hereafter to the Government Code are by section number only.

                                                                         2.                                         95-324

         that he or she received a contribution or contributions within the preceding 12 months
         in an aggregate amount of two hundred fifty dollars ($250) or more from a party or his
         or her agent, or from any participant or his or her agent, shall disclose that fact on the
         record of the proceeding.

                  "(c) No member shall make, participate in making, or in any way attempt to use
         his or her official position to influence, the decision in any adjudicatory proceeding
         pending before the board if the member knows or has reason to know that he or she
         received a contribution or contributions in an aggregate amount of two hundred fifty
         dollars ($250) or more within the preceding 12 months from a party or his or her agent,
         or from any participant or his or her agent, and if the member knows or has reason to
         know that the participant has a financial interest in the decision, as that term is used in
         Article I (commencing with Section 87100) of Chapter 7 of Title 9.

                  "(d) Notwithstanding subdivision (c), if a member receives a contribution
         which would otherwise require disqualification under subdivision (c), and he or she
         returns the contribution within 30 days from the time he or she knows, or has reason to
         know, about the contribution and the adjudicatory proceeding pending before the board,
         his or her participation in the proceeding shall be deemed lawful.

                   ". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

                 "(i)(1) Any person who knowingly or willfully violates any provision of this
         section is guilty of a misdemeanor.

                   ". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

                 (5) This section shall not prevent any member of the board from making, or
         participating in making, a governmental decision to the extent that the member's
         participation is legally required for the action or decision to be made. However, the
         fact that a member's vote is needed to break a tie does not make the member's
         participation legally required."2

The State Board of Equalization ("Board") has implemented section 15626 by adopting specific
administrative regulations. (Cal. Code Regs., tit. 18, '' 7001-7011.)3 Subdivisions (c) and (d) of
Regulation 7008 provide:

    2
    "Article 1 (commencing with Section 87100) of Chapter 7 of Title 9" refers to the Political Reform Act of 1974 (''
81000-91015).

    3
     All references hereafter to title 18 of the California Code of Regulations are by regulation number only.

                                                                           3.                                         95-324

              "(c) Nothing in this section shall prevent any member of the board from
       making, or participating in making, a governmental decision to the extent that the
       member's participation is legally required for the action or decision to be made.
       However, the fact that a member's vote is needed to break a tie does not make the
       member's participation legally required.

               "(d) In the event a board member's participation is legally required for the
       action or decision to be made, the board may bring back as many disqualified members
       as is necessary to establish a quorum. The preferred means of selecting which
       disqualified member should participate is by lot. Other means of random selection or
       other impartial and equitable means of selection may also be used."

The six questions presented for resolution concern the application of section 15626 and Regulation
7008 when a majority of Board members are prohibited from participating in the making of a
governmental decision.

                Before analyzing each question individually, we note that section 15626 and Regulation
7008 set forth a variation of the common law rule known as the "doctrine of necessity." This rule was
explained in Eldridge v. Sierra View Local Hospital Dist. (1990) 224 Cal. App. 3d 311, 321-323, as
follows:

                "The rule of necessity provides that a governmental agency may acquire
       essential goods or services despite a conflict of interest, and in nonprocurement
       situations it permits a public officer to carry out the essential duties of his/her office
       despite a conflict of interest where he/she is the only one who may legally act. The
       rule ensures that essential government functions are performed even where a conflict of
       interest exists. (Olson v. Cory (1980) 27 Cal. 3d 532, 537 [`[A] judge is not
       disqualified from adjudicating a cause because of personal financial interest if there is
       no other judge or court available to hear and resolve the cause.']; Caminetti v. Pac.
       Mutual L. Ins. Co. (1943) 22 Cal. 2d 344, 366-367; Gonsalves v. City of Dairy Valley
       (1968) 265 Cal. App. 2d 400, 404 [`The rule is well settled that where an administrative
       body has a duty to act upon a matter which is before it and is the only entity capable to
       act in the matter, the fact that the members may have a personal interest in the result of
       the action taken does not disqualify them to perform their duty. It is a rule of necessity
       which has been followed consistently.']; 70 Ops.Cal.Atty.Gen. 45, 48 (1987).)

               "The rule of necessity has been codified in section 87101 of the Political
       Reform Act of 1974 and implemented by California Code of Regulations, title 2,
       section 18701.

               "Construing these provisions, the Fair Political Practices Commission, the
       administrative body established by the act to interpret and enforce its provisions, has
       held that if a board cannot, as a result of board member disqualification, obtain a
       quorum in order to make a decision it is legally required to make, the board may bring
       back as many disqualified members as is necessary to establish a quorum. The

                                                  4.                                                95-324

         preferred means of selecting which disqualified member or members should participate
         is by lot or other means of random selection. However, nothing in the act prevents the
         use of other impartial and equitable means of selection. (Matter of Hudson (1978) 4
         FPPC Ops. 13)." (Fn. omitted.)

We have applied the doctrine of necessity in a variety of contexts. (See, e.g., 73 Ops.Cal.Atty.Gen.
191 (1990); 69 Ops.Cal.Atty.Gen. 102 (1986); 67 Ops.Cal.Atty.Gen. 369 (1984); 65 Ops.Cal.Atty.Gen.
305 (1982); 61 Ops.Cal.Atty.Gen. 243 (1978).)

                  1.        Establishing A Quorum By Lot

                 The first question concerns whether a sufficient number of disqualified members of the
Board may be brought back to establish a quorum through a process of selection by lot when a majority
of the members are prohibited from participating in the decision. We conclude that such a process of
selection is permissible.

               Subdivision (d) of Regulation 7008 allows for a process of selection by lot to establish a
quorum in the precise circumstances under consideration. In light of subdivision (i)(5) of section
15626, we find nothing in Regulation 7008 that would be inconsistent with the statutory controls placed
upon the Board by the Legislature. (See People v. Wright (1982) 30 Cal. 3d 705, 712-713; Woods v.
Superior Court (1981) 28 Cal. 3d 668, 679; Mission Community Hospital v. Kizer (1993) 13
Cal. App. 4th 1683, 1691.)4

                 Furthermore, the common law rule would permit all disqualified members to remain
and participate in the Board's decision. (See Gonsalves v. City of Dairy Valley, (1968) 265 Cal. App. 2d
400, 404.) Accordingly, the Board's regulation, which is more restrictive than the common law rule,
would also be proper. (Cf. Eldridge v. Sierra View Local Hospital Dist., supra, 224 Cal.App.3d at
321-323; 61 Ops.Cal.Atty.Gen., supra, 252-254.)

                We conclude in answer to the first question that when a majority of the members of the
Board are prohibited from participating in the making of a governmental decision, a sufficient number
of disqualified members may be brought back to establish a quorum through a process of selection by
lot.

                  2.        The Process of Selection By Lot

                The second question concerns the methods that may be adopted for choosing
disqualified members by lot. We conclude that any form may be adopted that results in a random
selection made from objects representing the disqualified members.

                 In interpreting the "by lot" language of Regulation 7008, we note that the same rules of
interpretation apply to administrative regulations as apply to statutes. (Cal. Drive-in Restaurant Assoc.

    4
     The Language of subdivision (i)(5) of section 15626 is more fully analyzed below in answer to the fifth question.

                                                             5.                                                     95-324

v. Clark (1943) 22 Cal. 2d 287, 292; Duke Molner Wholesale etc. Liquor Co. v. Martin (1960) 180
Cal. App. 2d 873, 884.) Accordingly, "[t]he aim of such construction is to determine the legislative
intent so that the purpose of the statute or the regulation promulgated pursuant to the statute may be
given effect. [Citations.]" (Industrial Indemnity Co. v. City and County of San Francisco (1990) 218
Cal. App. 3d 999, 1008.) "In determining intent, we look first to the language of the statute, giving
effect to its `plain meaning.'" (Kimmel v. Goland (1990) 51 Cal. 3d 202, 208-209.)

                The term "lot" in this context commonly means "an object (as a piece of wood, pebble,
die, straw) used as one of the counters in determining a question by the chance fall or choice of one or
more of them . . . ." (Webster's Third New Internat. Dict. (1971) p. 1338.) The key element of a
selection by lot is that the determination is randomly produced "by the chance fall or choice of one."
We construe Regulation 7008 in light of this definitional language expressing the plain meaning of its
terms.

                 Hence, we believe that each disqualified Board member must be assigned some object
or "lot," and a drawing held with predetermined rules as to how such members are to be chosen for
participation or how they are to be eliminated from participation. It may be accomplished in a single
drawing or in a number of drawings.

                We conclude that when a majority of Board members are prohibited from participating
in the making of a governmental decision, the process of selection by lot may take any form that results
in a random selection made from objects representing each disqualified member.

       3.	     Other Means of Random Selection and Other Impartial and Equitable Means of
               Selection

                The third question to be resolved concerns the means for selecting disqualified
members other than by lot when it is necessary for the Board to act and a majority of members have
been disqualified. We conclude that various activities may be undertaken for selecting disqualified
members other than by lot.

                Subdivision (d) of Regulation 7008 indicates that while the "preferred" method of
selecting disqualified members is by lot, "[o]thers means of random selection or other impartial and
equitable means of selection may also be used." Under this broadly worded grant of authority, the
Board may exercise its discretion in a number of ways.

                Commonly accepted means of random selection other than by lot include flipping
coins, drawing cards, and rolling dice. Any number of similar activities would be appropriate as long
as the rules were determined in advance to produce a random selection. The members may, for
example, take turns in a predetermined order.

                As for "other impartial and equitable means," we believe that disqualified Board
members may be selected based upon a qualitative analysis of the conflicting interests involved. As an
example: three members are disqualified, and one must participate to allow the Board to act; one of
the three was given a $250 contribution 11 months ago, while the other two were each given a $20,000

                                                   6.	                                          95-324

contribution last month. The first may be allowed to participate based upon an "impartial and
equitable" evaluation of the conflicting interests involved.

                We conclude that when a majority of Board members are prohibited from participating
in the making of a governmental decision, means of random selection of disqualified members other
than by lot include such activities as flipping coins, drawing cards, and throwing dice, or having the
members take turns in a predetermined order, and other impartial and equitable means of selection
include making a qualitative evaluation of the particular interests involved.

               4.      Participating in the Selection Process

               When a majority of Board members are disqualified from participating in a decision,
must each of the disqualified members participate in the selection process? We conclude that each
disqualified member must participate in the selection process.

                 Subdivision (d) of Regulation 7008 states that "the board may bring back as many
disqualified members as is necessary to establish a quorum." Following the rules of construction
previously cited for the interpretation of administrative regulations, we believe that subdivision (d)
requires all disqualified members to be subject to the selection process. Nothing in the regulation's
language suggests that a disqualified member may choose not to participate or be excluded by some
other means prior to initiating the selection process. The use of lots, other means of random selection,
or other impartial and equitable means of selection must apply equally to each disqualified member to
ensure a lack of bias in the selection process. Removing members before the selection begins would
change and reduce the "randomness" and "impartiality" of the selection process. We interpret
Regulation 7008 in a reasonable manner consistent with its purpose. (See Lusardi Construction Co. v.
Aubry (1992) 1 Cal. 4th 976, 987; Boam v. Trident Financial Corp. (1992) 6 Cal. App. 4th 738, 743.)

                In answer to the fourth question, we conclude that when a majority of Board members
are prohibited from participating in the making of a governmental decision, each disqualified member
must participate in the selection process, whether by lot, other means of random selection, or by other
impartial and equitable means of selection.

               5.      Participation That Is Legally Required

                 All of the prior questions and conclusions have been predicated upon choosing a
disqualified Board member to participate in a governmental decision because "the member's
participation is legally required for the action or decision to be made." (' 15676, subd. (i)(5).) If
participation is not legally required, then the general prohibition of section 15676 precludes any
participation by a disqualified member. What are the circumstances under which a disqualified
member's participation is "legally required"?

               Nothing in Regulation 7008 or in any other of the Board's regulations describes when a
disqualified Board member's participation would be legally required. However, section 15676 is

                                                  7.                                            95-324

plainly patterned after section 871015 contained in the Political Reform Act of 1974, to which section
15676 refers (' 15676, subd. (c)), and section 87101 has been interpreted by the Fair Political Practices
Commission in administering the act. We believe that the commission's interpretation may be equally
applied to section 15676. (See In re Phyle (1947) 30 Cal. 2d 838, 845; Dieckmann v. Superior Court
(1985) 175 Cal. App. 3d 345, 356; In re Marriage of Pinto (1972) 28 Cal. App. 3d 86, 89.) Accordingly,
section 18701 of title 2 of the California Code of Regulations states as follows:

                 "(a) A public official is not legally required to make or to participate in the
         making of a governmental decision within the meaning of Government Code Section
         87101 unless there exists no alternative source of decision consistent with the purposes
         and terms of the statute authorizing the decision.

                   ". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

                   "(c) This regulation shall be construed narrowly, and shall:

               "(1) Not be construed to permit an official who is otherwise disqualified under
         Government Code section 87100, to vote to break a tie.

                 "(2) Not be construed to allow a member of any public agency, who is
         otherwise disqualified under Government Code section 87100, to vote if a quorum can
         be convened of other members of the agency who are not disqualified under
         Government Code section 87100, whether or not such other members are actually
         present at the time of the disqualification."

                 In the situation presented for analysis, a majority of Board members are disqualified to
vote on a matter. Thus a quorum cannot be convened of members who are not disqualified whether
present at the meeting or not. Assuming all Board members to be present,6 when is the participation
of a disqualified member or members legally required?

    5
     Section 87101 provides:

                   "Section 87100 does not prevent any public official from making or participating in the making
         of a governmental decision to the extent his participation is legally required for the action or decision to be
         made. The fact that an official's vote is needed to break a tie does not make his participation legally
         required for purposes of this section."

Section 87100 states in turn:

                  "No public official at any level of state or local government shall make, participate in making or
         in any way attempt to use his official position to influence a governmental decision in which he knows or
         has reason to know he has a financial interest."

    6
      The Board "consists of 5 voting members: The Controller and 4 members elected for 4-year terms . . . ." (Cal. Const.,
art. XIII, ' 17.)

                                                                           8.                                              95-324

                  In 75 Ops.Cal.Atty.Gen. 47, 49, footnote 2 (1992), we observed:

                 "A `quorum' is the minimum number of members of a body who must be
         present to transact business legally. Almost always, a quorum consists of a majority
         (more than half) of the body's existing membership. [Citation.] For example, a city
         council with seven members would have a quorum to transact business at its meeting
         when four members are present and entitled to vote."

In 62 Ops.Cal.Atty.Gen. 698, 699-700 (1979), we stated:

                 "Without the presence of a `quorum,' a deliberative body cannot transact
         business other than to (1) fix the time to which to adjourn, (2) adjourn, (3) recess, or (4)
         take measures to obtain a quorum. [Citations.]

                 "A quorum is the minimum number of members who must be present at a
         meeting for business to be legally transacted. [Citations.] A quorum refers to the
         number of members present, not to the number of members actually voting on a
         particular question; however, the quorum members must be entitled to vote.
         [Citations.]

                 "A quorum consists of a majority (more than half) of the existing membership
         of the body. [Citations.] . . . ." (Fn. omitted.)

In our 1979 opinion, we specifically pointed out:

                 "A member who is not entitled to vote because of a conflict of interest, for
         example, is not counted for purposes of establishing a quorum on a particular question.
         [Citations.] Special rules are applicable where a quorum cannot be formed due to
         conflicts of interest. [Citations.] . . . ." (Id., at p. 700, fn. 2.)

In 61 Ops.Cal.Atty.Gen. 243, 252 (1978), we noted that "[i]n the absence of a contrary statutory
provision, the number of votes required to sustain the action by a collective body is a majority of a
quorum." (See People v. Harington (1883) 63 Cal. 257, 260; Ursino v. Superior Court (1974) 39
Cal. App. 3d 611, 620; Martin v. Ballinger (1938) 25 Cal. App. 2d 435, 436-437.)

                Here, we have a majority of Board members who are disqualified from voting on a
particular matter. Sufficient number of disqualified members must be chosen to allow the presence of
a quorum so that the Board may act; no other agency may act on behalf of the Board. The disqualified
member or members chosen to convene the quorum are authorized to "participat[e] in making, a
governmental decision" (' 15676, subd. (i)(5)), i.e., to vote on the matter.7

    7
     In 61 Ops.Cal.Atty.Gen., supra, at 254, we concluded that under the terms of section 87101, the disqualified official
chosen could not vote. We now find that conclusion to be inconsistent with the language of section 87101 and the
subsequent administrative construction of section 87101 by the Fair Political Practices Commission, and it is hereby

                                                           9.                                                    95-324

                 Of course, if a quorum of those entitled to vote, i.e., disinterested members, is present,
no disqualified member may be brought back to participate in the decision. Thus, if the disinterested
members cast votes resulting in a tie, a disqualified member may not vote to break the tie. (' 15626,
subd. (i)(5); Reg. 7008, subd. (c); see ' 87101; Cal. Code Regs., tit. 2, ' 18701, subd. (c)(1).)

                 Finally, the application of the rule of necessity as expressed in section 15626 and
Regulation 7008 is identical for the Board's constitutionally mandated duties and statutorily mandated
duties. The purpose of the rule is to permit an official "to carry out the essential duties of his/her office
despite a conflict of interest where he/she is the only one who may legally act." (Eldridge v. Sierra
View Local Hospital Dist., supra, 224 Cal.App.3d at 321.) The legal source of the "essential duty,"
constitutional or statutory, is immaterial.

                We conclude that when a quorum of Board members entitled to vote cannot be
convened on a particular matter, a disqualified Board member's participation is legally required to
establish a quorum so that the Board may perform its statutory or constitutional duties.

                   6.       Postponing the Decision

                The final question concerns other options that may be available for making a
governmental decision when a majority of Board members are disqualified from voting on a matter.
For example, may the Board postpone the decision until the disqualifying interest has terminated under
the provisions of section 15626?

                First, we believe that nothing would require the Board to postpone the performance of
its duties. The purpose of the rule of necessity is to permit an official or board to act despite conflicts
of interest. As stated in subdivision (i)(5) of section 15626:

                 "This section shall not prevent any member of the board from making, or
         participating in making, a governmental decision to the extent that the member's
         participation is legally required . . . ."

No time frame is included in the statutory language. The proviso would permit the Board to conduct
its business "in due course" without postponement.

                 It would accordingly follow that duties which must be performed within specified time
limits (and before the expiration of the 12-month disqualification period of section 15626) may not be
postponed. As to the postponement of other matters, such a determination would fall within the
discretion of the Board. However, postponement in some cases may constitute an abuse of discretion.
The possible detriment to the general public of having otherwise disqualified Board members

disapproved. Although the court in Hamilton v. Town of Los Gatos (1989) 213 Cal. App. 3d 1050, 1057-1058, discussed our
1978 opinion and found it "persuasive," it was not considering whether a disqualified official could vote, and it also found
"persuasive" an opinion of the Fair Political Practices Commission which allowed the disqualified official to vote.

                                                            10.                                                    95-324
participating in governmental decisions must be weighed against the right of an individual to have the
Board timely perform its duties with respect to a particular matter.

                 We conclude in answer to the sixth question that depending upon the individual
circumstances, the Board may postpone a decision when a majority of members are prohibited from
participating in the decision.

                                              *****

                                                 11.                                          95-324