People v. Garcia
People v. Garcia
Opinion of the Court
Opinion
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.
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)
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)
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 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.)
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
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
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.
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.
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
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.
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
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
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.
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,
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
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
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
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.
Concurring in Part
I agree with the majority that the Court of Appeal’s judgment must be reversed because the record fails to demonstrate that in resolving the administrative proceedings before the California Department of Social Services, the administrative law judge (ALJ) necessarily determined that defendant Cathy Dawn Garcia did not make misrepresentations or omissions that contributed to her receipt of overpayments. (Maj. opn., ante, at pp. 1089-1090.) However, as explained below, I disagree with the majority’s decision to remand the case to the Court of Appeal for further consideration of this question. (Maj. opn., ante, at p. 1091.) Because defendant bears the burden of proving her collateral estoppel claim and the record she has provided is insufficient to meet that burden, I would hold that her collateral estoppel claim fails; she simply has not established what the majority correctly identifies as the “threshold requirements” of collateral estoppel. (Maj. opn., ante, at p. 1077.)
I also do not join the majority’s discussion of whether applying collateral estoppel under the circumstances here would be consistent with public policy.
I. Defendant Has Failed to Establish the Threshold Requirements of Collateral Estoppel.
As we recently explained, collateral estoppel “applies ‘only if several threshold requirements are fulfilled. First, the issue sought to be precluded from relitigation must be identical to that decided in a former proceeding. Second, this issue must have been actually litigated in the former proceeding. Third, it must have been necessarily decided in the former proceeding. Fourth, the decision in the former proceeding must be final and on the merits. Finally, the party against whom preclusion is sought must be the same as, or in privity with, the party to the former proceeding. [Citations.]’ ” (Pacific Lumber Co. v. State Water Resources Control Bd. (2006) 37 Cal.4th 921, 943 [38 Cal.Rptr.3d 220, 126 P.3d 1040].)
“The party asserting collateral estoppel bears the burden of establishing these [threshold] requirements. [Citation.]” (Lucido, supra, 51 Cal.3d at p. 341.) Because “the law does not favor estoppels” (People v. Frank (1865) 28 Cal. 507, 517 (Frank)), this burden is a heavy one. As we have explained, “[c]ertainty is an essential element of every estoppel . . . .” (Oakland v. Oakland Water Front Co. (1897) 118 Cal. 160, 221 [50 P. 277].) Thus, where a party asserts “a certain question in issue has been litigated and determined between the same parties in a previous action, it is not enough that the proposed evidence tends to show that the precise question may have been involved in such litigation.” (Emerson v. Yosemite Gold Min. etc. Co. (1906) 149 Cal. 50, 57 [85 P. 122].) In other words, “ ‘[e]very estoppel must be certain to every intent, and not to be taken by argument or inference.’ [Citation.] ‘If upon the face of a record anything is left to conjecture as to what was necessarily involved and decided, there is no estoppel in it when pleaded, and nothing conclusive in it when offered in evidence.’ [Citation.]” (Beronio v. Ventura County Lumber Co. (1900) 129 Cal. 232, 236 [61 P. 958].)
Under these principles, defendant’s collateral estoppel claim fails. As the majority correctly explains, the ALJ’s determination here that the overpayments “were caused by administrative errors leaves open the possibility that defendant made misstatements that were a contributing cause to the overpayments.” (Maj. opn., ante, at p. 1090.) Indeed, this is precisely what the trial court concluded in rejecting defendant’s collateral estoppel claim. Based on the ALJ’s decision, the trial court concluded that the ALJ’s “causation finding” simply represents a “qualitative comparison between the things the county did and the things the defendant did” and “does not carry with it an implicit finding that there was no error in reporting.” Supporting this conclusion are the ALJ’s findings that “[t]he county welfare department was not fully apprised of the actual circumstances surrounding which parent had primary responsibility for the care and control of’ defendant’s children and that “the likelihood of overpayments” would merely have been “diminished”—not eliminated—had the county welfare department properly “reviewed the [children’s] living arrangement in September 1998.” In light of these findings, the trial court correctly concluded the ALJ made no finding that misstatements by defendant did not contribute to the overpayments.
The majority also correctly explains that the absence in the record of the notices of action “makes it difficult to determine” precisely what issues were before and decided by the ALJ. (Maj. opn., ante, at p. 1090.) Notably, at oral argument, defendant’s counsel conceded that “it’s a difficult record to read” because “all” of the information and documents “weren’t entered into evidence at the criminal trial.” Indeed, in her brief, defendant explains that the only evidence she produced below in support of her collateral estoppel claim was a copy of the ALJ’s decision. Under the governing law as set forth above, because defendant bears the burden of proving the elements of collateral estoppel, the absence from the record of the notices is her responsibility and the failure of the incomplete record to clarify the scope of the ALJ’s decision requires rejection of her collateral estoppel claim. (Cf. Vella v. Hudgins (1977) 20 Cal.3d 251, 258 [142 Cal.Rptr. 414, 572 P.2d 28]
I disagree with the majority’s view that we should remand the case to the Court of Appeal to “consider the effect, if any, of the absences of [the notices of action] from the record . . . .” (Maj. opn., ante, at p. 1090.) As demonstrated above, by placing the burden on the party alleging collateral estoppel to prove with certainty that a particular issue was decided in the prior proceeding, and by rejecting the doctrine’s application where the record fails to demonstrate which of several potentially dispositive issues the prior decision was based on, our decisions clearly specify “the effect” of the record’s incompleteness (ibid.): defendant’s collateral estoppel claim should be rejected. Because the majority correctly concludes that, on the record before us, the ALJ’s determination leaves open the possibility that “defendant made misstatements that were a contributing cause to the overpayments” (ibid.), under the governing cases, there is nothing left for the Court of Appeal to consider. Notably, although the majority directs the Court of Appeal on remand to “consider the effect, if any, of the absences of [the notices of action] from the record” (ibid.), the majority gives the Court of Appeal no guidance as to what it is supposed to do with this information. Rather than remand for further consideration of this issue, we should simply affirm the trial court’s rejection of defendant’s collateral estoppel claim and its denial of her dismissal motion.
II. Public Policy Considerations Do Not Support Applying Collateral Estoppel in This Case.
As explained above, collateral estoppel does not apply if the party asserting it fails to establish several “threshold” requirements. (Lucido, supra, 51 Cal.3d at p. 341.) We also refer to these threshold requirements as “prerequisites.” (Sims, supra, 32 Cal.3d at p. 488.)
However, “even where the minimal prerequisites” are established, “ ‘ “policy considerations may limit [collateral estoppel’s] use where the . . . underpinnings of the doctrine are outweighed by other factors.” ’ [Citations.]” (Vandenberg, supra, 21 Cal.4th at p. 829.) In other words, California’s collateral estoppel doctrine “has a public policy exception” (People v. Santamaría (1994) 8 Cal.4th 903, 917, fn. 6 [35 Cal.Rptr.2d 624, 884 P.2d 81]) that precludes the doctrine’s application, even where the threshold
For several reasons, I do not join the majority’s discussion of the public policy exception’s application in this case. Initially, the discussion is both premature and unnecessary. As I have explained, defendant has failed to establish the threshold requirements of her collateral estoppel claim. In reversing the Court of Appeal’s judgment, the majority agrees that the threshold requirements of the doctrine may not be met in this case. (Maj. opn., ante, at pp. 1089-1091.) Unless and until it is determined that defendant has established the threshold requirements, it is unnecessary to discuss whether the public policy exception to the collateral estoppel doctrine applies on the facts of this case. The majority improperly inverts the analysis, by first discussing whether the public policy exception applies, and then, as if by afterthought, discussing whether the threshold requirements have even been established. This analytical inversion cannot hide the fact that the majority’s conclusion regarding the threshold question—that defendant may have failed to establish the prerequisites of her collateral estoppel claim—and its reversal of the Court of Appeal’s judgment on this basis make it unnecessary to address the applicability of the public policy exception. Thus, the majority’s discussion is dictum.
More fundamentally, I disagree with the majority’s analysis of the issue. At the outset, it is important to note that the majority does not make an independent analysis of whether the relevant public policy considerations support application of collateral estoppel on the facts of this case. Nor does
Like the majority, I begin with Sims. There, we held that “collateral estoppel bar[red] the state from [criminally] prosecuting" a welfare recipient “for welfare fraud since she was exonerated in [an administrative fair] hearing of that charge.” (Sims, supra, 32 Cal.3d at p. 489.) In analyzing that question, we first considered whether “the technical prerequisites for applying collateral estoppel . . . were satisfied.” (Id. at p. 488.) After concluding that they were, we then considered whether “public policy considerations” supported the doctrine’s application (id. at p. 489) on “the facts of [that] case.” (Id. at p. 477.) We stated that applying the doctrine “would promote judicial economy by minimizing repetitive litigation” and would prevent “the possibility of inconsistent judgments which may undermine the integrity of the judicial system” and of “the [administrative] fair hearing process.” (Id. at p. 488.) We next explained that not applying the doctrine would work “a hardship” on a welfare recipient “who presents a successful case at the fair hearing,” by requiring the recipient, “[i]n planning a budget for limited resources,... to take into consideration that he or she may still be required to return the benefits” that were “found” in the administrative hearing to have been “legally obtained.” (Id. at pp. 488-489.) Next, we stated that applying the doctrine “would protect [the defendant] from being harassed by repeated litigation." (Id. at p. 489.) It “would be manifestly unfair,” we declared, “[t]o subject [the defendant] to a second proceeding in which she must defend herself against the very same charges of misconduct.” (Ibid.) Finally, we stressed that “the uniqueness of the statutory scheme governing prosecutions for [welfare] fraud . . . ma[d]e application of collateral estoppel particularly appropriate in [that] case.” (Ibid.) Specifically, we cited the fact that the statutes required the state to “seek restitution by request or civil action before initiating criminal proceedings in cases involving certain categories of [welfare] fraud.” (Ibid.) By enacting this “restitution-first requirement” (maj. opn., ante, at p. 1083), we explained, “the Legislature established] a policy in favor of resolving [welfare] fraud cases outside the criminal justice system.” (Sims, supra, 32 Cal.3d at p. 489.) Only by “ignor[ing]” this legislatively established policy, we reasoned, could we hold that collateral estoppel did not apply. (Ibid.) Based on this analysis, we concluded that collateral estoppel applied “[i]n the particular and special circumstances of [that] case.” (Ibid.)
As the majority notes (maj. opn., ante, at p. 1084), in Lucido, we expressly explained why Sims did not require a different result. We cited Sims as a case in which “compelling public policy considerations outweighed the need for
In Vandenberg, this court held that a private arbitration award, even when judicially confirmed, “may not have nonmutual collateral estoppel effect under California law unless there was an agreement to that effect in the particular case.” (Vandenberg, supra, 21 Cal.4th at p. 824, fn. omitted.) Regarding the relevant public policy considerations, the court reasoned that applying collateral estoppel in this context was not necessary either to preserve the integrity of the judicial system or to promote judicial economy. (Id. at p. 833.) As to the former, the court explained that “because a private arbitrator’s award is outside the judicial system, denying the award collateral estoppel effect has no adverse impact on judicial integrity.” (Ibid.) As to the latter, the court reasoned that “because private arbitration does not involve the use of a judge and a courtroom, later relitigation does not undermine judicial economy by requiring duplication of judicial resources to decide the same issue.” (Ibid.)
Applying Sims, Lucido, and Vandenberg in light of the current statutory and administrative scheme, I conclude that public policy considerations do not support applying collateral estoppel on the facts of this case. Under Vandenberg, “because [an ALJ’s decision at a fair hearing] is outside the judicial system, denying the award collateral estoppel effect has no adverse impact on judicial integrity.” (Vandenberg, supra, 21 Cal.4th at p. 833.) Moreover, according to Lucido, the paramount policy concern in terms of the judicial system’s integrity is “preserving the criminal trial process as the proper forum for determinations of criminal guilt or innocence.” (Lucido, supra, 51 Cal.3d at p. 350, fn. 11.) Lucido establishes that this concern controls unless “outweighed” by “compelling public policy considerations.” (Id. at p. 349.)
Indeed, the statutory and administrative scheme that now governs indicates a preference for resolution of welfare fraud cases through the criminal trial process. The Welfare and Institutions Code provides that “whenever” a person fraudulently obtains aid, that person “shall be subject to prosecution.” (Welf. & Inst. Code, § 11483.)
The majority makes several errors in concluding that there is no existing “preference for criminal resolutions” of welfare fraud cases. (Maj. opn., ante, at p. 1083.) Initially, the majority fails to consider the language of section 11483 that I have discussed above, which the People rely on in their brief. Moreover, the majority expressly declines to consider whether the “current regulatory scheme” speaks to this question, because the parties have not briefed the issue. (Maj. opn., ante, at p. 1083, fn. 5.) However, because Sims relied on the regulatory scheme in reaching its conclusion (Sims, supra, 32 Cal.3d at pp. 480-481, 487-488), the majority, in relying exclusively on Sims, necessarily is also relying on that scheme. In my view, we should not, as the majority implicitly does, rely only on part of the regulatory scheme; we should consider all of it. If the majority believes it cannot do so on the existing record, then it should either request further briefing or decline to decide whether the public policy exception applies; it should not purport to decide that issue based on an incomplete analysis that ignores an important consideration. Indeed, in addition to its conclusion that the threshold requirements of the collateral estoppel may not be met here, the majority’s view that the record is insufficient to determine the impact of the regulatory scheme further demonstrates that it is premature to decide whether the public policy exception applies.
The majority incorrectly disregards Lucido in another important respect. According to the majority, the People may avoid the collateral estoppel problem that exists under the majority’s conclusion simply by pursuing a criminal case “as speedily as the County pursues the matter administratively.” (Maj. opn., ante, at p. 1089.) In Lucido, we expressly rejected a similar analysis. There, after noting that “the People could avoid being collaterally estopped” by the decision in a probation revocation hearing “by prosecuting first” and “seeking revocation afterward,” we stated: “As in our previous cases,... we refuse to mandate such a chronology. [Citation.]” (Lucido, supra, 51 Cal.3d at p. 348, fn. 10.) Thus, in essentially mandating that a criminal prosecution be finished before completion of an administrative fair hearing, the majority again disregards Lucido.
In any event, the majority’s discussion of this consideration rests on a false premise: that a county is in control of the speed with which administrative proceedings progress. It is the welfare recipient, not the county, who initiates the fair hearing process by filing a request. (§§ 10950, 10951.) Moreover, the governing regulations require that the hearing be decided within 90 days of the date the request is filed (60 days if the claim involves only food stamps),
The majority disregards Lucido in at least one other important respect. The majority asserts that Sims merely made “observation^]” about the restitution-first requirement that provided “nonessential[] support for our holding.” (Maj. opn., ante, at p. 1081.) As I have explained, in Lucido, we took a decidedly different view of Sims’s discussion. (Ante, at p. 1097.) Supporting our analysis in Lucido is our statement in Sims that refusing to apply collateral estoppel there would have required us “to ignore” the legislatively established “safeguardf]” established by the restitution-first requirement. (Sims, supra, 32 Cal.3d at p. 489.) Indeed, despite its assertion, the majority elsewhere concedes that the restitution-first requirement was “one basis for our decision in Sims” and was “one factor” we considered there in applying the “multifactor analysis” that governs application of the collateral estoppel doctrine. (Maj. opn., ante, at p. 1083.) Thus, contrary to the majority’s view, the issue here is not whether the restitution-first requirement was “the only ground[]” for our decision in Sims. (Ibid.) Rather, the issue is how to apply the governing multifactor test absent the restitution-first factor that was “one basis for our decision in Sims” (ibid.) and in light of our discussion and application of that test in Lucido and Vandenberg. Contrary to the majority’s assertion, given Lucido, Vandenberg, and the relevant statutory changes, stare decisis poses no obstacle to reaching a conclusion here different from the one we reached in Sims. As the majority expressly recognizes, “ ‘reexamination of precedent may become necessary when subsequent developments indicate an earlier decision . . . has become ripe for reconsideration ....’” (Maj. opn., ante, at p. 1080, quoting Moradi-Shalal v. Fireman’s Fund Ins. Companies (1988) 46 Cal.3d 287, 297 [250 Cal.Rptr. 116, 758 P.2d 58].)
The majority’s attempts to distinguish Lucido are unsuccessful. According to the majority, the facts in Lucido “did not raise the concern expressed in Sims” that allowing criminal proceedings after an ALJ’s findings of no fraud and no overpayment would “leave” welfare recipients “exposed to being ‘harassed by repeated litigation.’ [Citation.]” (Maj. opn., ante, at p. 1086.) However, although Lucido did not involve a welfare recipient, we did consider in that case the fact that applying collateral estoppel to a decision in
Also unpersuasive is the majority’s view that the facts in Lucido “did not raise the concern expressed in Sims” that allowing criminal proceedings after an ALJ’s findings of no fraud and no overpayment would “impose a hardship on” welfare recipients. (Maj. opn., ante, at pp. 1085-1086.) As noted above, the “hardship” we identified in Sims was that involved in requiring a welfare recipient, after establishing at a fair hearing that benefits were “legally obtained,” to “plan[] a budget for limited resources” based on the possibility “he or she may still be required to return the benefits . . . .” (Sims, supra, 32 Cal.3d at pp. 488—489.) In my view, forcing convicted criminals who have successfully avoided probation revocation by establishing that they did not commit a new offense to plan their lives based on the possibility they might still be convicted of and incarcerated for that offense presents an equal or greater hardship; nonetheless, that is what Lucido requires.
In any event, the facts of this case do not present the hardship at issue in Sims. Whereas the hearing officer in Sims found that the defendant had not received overpayments and was entitled to keep the money in question (Sims, supra, 32 Cal.3d at p. 474), the ALJ here ruled that defendant did receive overpayments and had to return the extra money. Thus, in declining to apply
The majority also errs in asserting that this case “differs from Lucido” in that “ ‘Probation revocation hearings and criminal trials serve different public interests’ ” whereas “the purposes” of administrative fair hearings and welfare fraud prosecutions “do not differ greatly.” (Maj. opn., ante, at p. 1087.) The majority incorrectly indicates that the puipose of the administrative fair hearing here was “ ‘to prove that [defendant] had fraudulently obtained welfare benefits.’ ” (Ibid., italics added.) As the majority elsewhere explains, the issue at the fair hearing here was not whether defendant obtained the overpayments fraudulently, but whether they “ ‘were the result of administrative errors or [defendant’s] failure to report [her children’s] absence from her home.’ ” (Id. at p. 1075.) In answering this question, it was unnecessary for the ALJ also to determine whether defendant had a fraudulent intent. (See People v. Camillo (1988) 198 Cal.App.3d 981, 989, fn. 3 [244 Cal.Rptr. 286]; People v. Faubus (1975) 48 Cal.App.3d 1, 5-6 [121 Cal.Rptr. 167].) The governing statutes confirm that the DSS was not required to prove defendant acted with fraudulent intent in order to obtain reimbursement. (§ 11004.)
Indeed, under DSS regulations, the ALJ apparently lacked jurisdiction to determine whether defendant acted with fraudulent intent. The regulations provide that “intentionally” making “a false or misleading statement, or misrepresenting], concealing], or withh[o]ld[ing] facts” constitutes an “Intentional Program Violation[]” (IPV). (MPP, §§20-300.1.11, 20-351i(l)(a).) IPV’s may be dealt with administratively only at an “administrative disqualification hearing” (id., §§ 63-801.1.11, 63-801.231), which may be initiated only by the DSS or a county through service of notice on the welfare recipient. (Id., §§ 22-201.412, 22-202.51, 22-315.5.) The fair hearing at issue here, which was initiated by defendant’s request in response to the notices of action (maj. opn., ante, at p. 1075), was not an administrative disqualification hearing. (See MPP, §§ 22-200.2 [“Administrative disqualification hearings are distinct from” fair hearings], 22-301.2 [same].) Indeed, because a criminal action was filed in this case, an administrative disqualification hearing to determine whether defendant committed an IPV could not have been held. (Id., §§ 20-300.24, 20-352.3.) And, because an IPV had not been established
In this regard, this case materially differs from Sims. There, the DSS alleged that the defendant had “fraudulently obtained” benefits by failing to report material information. (Sims, supra, 32 Cal.3d at p. 473.) Under the statutory scheme that governed the defendant’s fair hearing in Sims, whether the overpayments resulted from a “willful failure to report facts” or “any willfully fraudulent device,” and whether the defendant had “willfully withheld information” were expressly relevant to the DSS’s ability to recoup overpayments. (Former § 11004, subds. (d) & (e), added by Stats. 1979, ch. 804, § 2, pp. 2767, 2768, and repealed by Stats. 1982, 1st Ex. Sess., ch. 3, § 2, p. 6890.) The defendant denied that she had failed to disclose material information and she denied that she had received benefits to which she was not entitled. Thus, the ALJ in Sims had to determine whether the defendant had acted fraudulently, and it expressly found that the DSS failed to prove she “fraudulently obtained welfare benefits.” (Sims, supra, 32 Cal.3d at p. 474.) It therefore ruled that the defendant was entitled to keep all benefits she had received and ordered the DSS to “refund any restitution payments [she] had made.” (Ibid.) Here, as already explained, the function of the fair hearing was to determine whose conduct caused the overpayments defendant received, and under the governing statute, whether defendant acted fraudulently was irrelevant to determining that question.
The purposes of administrative fair hearings and criminal prosecutions for welfare fraud appear to differ in another important respect; the nature of the causation inquiry. In the trial court, defendant’s counsel asserted that the ALJ here had only “two choices” regarding causation: “either county error or client” conduct. These two choices excluded the possibility of finding that both county error and defendant’s conduct were contributing factors. Counsel’s argument is fully consistent with the ALJ’s statement of the issue before him: “Whether the overissuance and overpayment were the result of administrative errors or [defendant’s] failure to report [her children’s] absence from her home.” It is also consistent with the governing administrative regulations, which required the ALJ at the fair hearing to find that the overpayments were caused either by administrative error or by inadvertent household error. (MPP, §§ 63-801.211, 63-801.221.) Thus, the purpose of the fair hearing was to
In other respects, administrative fair hearings and criminal welfare fraud prosecutions “serve different public interests” in the same sense that, as we found in Lucido, “[probation revocation hearings and criminal trials serve different public interests . . . .” (Lucido, supra, 51 Cal.3d at p. 347.) A criminal prosecution is initiated by the People to vindicate the public’s “vital interest in enforcement of [its] criminal laws.” (United States v. Jorn (1971) 400 U.S. 470, 479 [27 L.Ed.2d 543, 91 S.Ct. 547].) That interest includes “deter[ring] the individual from committing acts that injure society” and “expressing] society’s condemnation of such acts by punishing them.” (People v. Roberts (1992) 2 Cal.4th 271, 316 [6 Cal.Rptr.2d 276, 826 P.2d 274], italics added; see also Best v. State Bar (1962) 57 Cal.2d 633, 637 [21 Cal.Rptr. 589, 371 P.2d 325] [“purpose” of a “criminal proceeding” is “punishment” if “accused ... is found guilty”].) As previously noted, an administrative fair hearing is initiated by a welfare recipient to vindicate the recipient’s own private interest in challenging an “action of the county [welfare] department relating to his or her application for or receipt of public social services . . . .” (§ 10950.) It provides a “ ‘welfare recipient with a speedy [citation] and informal [citation] means to challenge an administrative action [that] may reduce or terminate’ ” benefits. (Lentz v. McMahon (1989) 49 Cal.3d 393, 402 [261 Cal.Rptr. 310, 111 P.2d 83].) No punishment results from an administrative fair hearing. Thus, like the probation revocation hearing at issue in Lucido, an administrative fair hearing, “despite its obvious importance to” a welfare recipient, “neither threatens” the recipient “with the stigma of a new conviction nor with punishment . . . .” (Lucido, supra, 51 Cal.3d at p. 348.) Moreover, like “the hearing judge in a revocation proceeding,” an ALJ’s “fundamental role and responsibility” at an administrative fair hearing “is not to determine whether” the subject of the hearing “is guilty or innocent of a crime” (ibid.), the ALJ’s responsibility is to determine whether the DSS has properly found that the welfare recipient must reimburse the agency for benefits that should not have been paid. To paraphrase Lucido, “[b]ecause the limited nature of this inquiry may not involve or invoke
The majority also errs in asserting that Lucido can meaningfully be distinguished by the absence in this case of “evidentiary rules [that] prohibit a welfare recipient’s testimony at an administrative hearing from being introduced at a later criminal trial for welfare fraud.” (Maj. opn., ante, at p. 1086.) In Lucido, we explained that such rules “guaranteeQ the probationer the ability to present a full case at the [revocation] hearing without running the risk of prejudicing his defense at a subsequent [criminal] trial.” (Lucido, supra, 51 Cal.3d at p. 351.) In the context of administrative welfare fraud hearings, such evidentiary rules are not critical to a welfare recipient’s ability fully to present his or her case. By statute, administrative fair hearings are “informal,” must be conducted “in order to encourage free and open discussion by the participants,” and are not constrained by the “rules of procedure or evidence applicable in judicial proceedings.” (§ 10955.) DSS regulations provide that “evidence shall be admitted [at an administrative fair hearing] if it is the sort of evidence on which responsible persons are accustomed to rely in the conduct of serious affairs.” (MPP, § 22-050.2.) Thus, welfare recipients can fully present their cases at administrative fair hearings through means other than their own sworn testimony. Moreover, a welfare recipient who wants to testify but who is concerned that his or her testimony may be used at a subsequent criminal trial can readily solve this potential dilemma by requesting that the fair hearing be continued until completion of the criminal prosecution. (See id., §§ 22-053 [postponements and continuances], 22-060.1 [allowing claimant to waive requirement that fair hearing be decided within 60 or 90 days of date hearing request is filed].)
Indeed, contrary to the majority’s analysis, under Vandenberg, the most meaningful distinction between this case and Lucido establishes that it would be even more appropriate—not less—to apply collateral estoppel’s public policy exception in this case than it was in Lucido. The probation revocation hearing in Lucido was a judicial proceeding decided by a judge of a “justice court.” (Lucido, supra, 51 Cal.3d at p. 339.) The fair hearing in this case was an administrative proceeding decided by a nonjudicial officer. As previously explained, under Vandenberg, that administrative fair hearings are “outside the judicial system” and do “not involve the use of a judge and a courtroom” supports the conclusion that, as a matter of public policy, we should not apply collateral estoppel in this case. (Vandenberg, supra, 21 Cal.4th at p. 833.)
The majority’s stated reason for disregarding Vandenberg is inadequate. According to the majority, Vandenberg involved “a private arbitration” that “effectively ‘bypass[ed] the judicial system,’ ” whereas this case involves “a matter of public concern” dealt with in “ ‘a judicial-like adversary proceeding’ [citation] that [was] conducted by a state entity, the DSS, whose administrative law judges must follow California law and render decisions subject to judicial review. [Citation.]” (Maj. opn., ante, at p. 1086, fn. 6.) In
Finally, for several reasons, the majority’s assertion that the Legislature, in amending the welfare fraud statutes in 1984, “did not contemplate abrogating Sims'' (maj. opn., ante, at p. 1087) is unpersuasive. First, it is largely beside the point. As we have explained, the result in Sims was a judicial policy decision that was “informed by the ‘unique statutory scheme’ at issue there. [Citations.]” (Gikas v. Zolin (1993) 6 Cal.4th 841, 851 [25 Cal.Rptr.2d 500, 863 P.2d 745].) Thus, the primary question here is not whether the Legislature intended to abrogate Sims, but whether we should make a different policy decision in this case because, among other things, the “ ‘unique statutory scheme’ ” that “informed” our policy decision in Sims (ibid.) has been materially changed.
Second, the majority’s analysis is inconsistent with our prior decisions. The majority asserts that we must presume the Legislature was aware of Sims and would have specified that administrative decisions do not preclude criminal prosecutions for welfare fraud had it wanted to invalidate Sims. (Maj. opn., ante, at p. 1088.) We rejected a very similar argument in Estate of Kachigian (1942) 20 Cal.2d 787 [128 P.2d 865]. At issue there was our construction of
As the preceding analysis demonstrates, ultimately, in concluding that Sims does not “warrant reconsideration” (maj. opn., ante, at p. 1074), the majority is focusing on the wrong question. As noted above, in Sims, we considered whether “policy” considerations supported collateral estoppel’s application on “the facts of [that] case” (Sims, supra, 32 Cal.3d at p. 477), and we expressly limited our holding to “the particular and special circumstances of [that] case.” (Id. at p. 489.) As also explained above, the facts and circumstances of the case now before us are different: the restitution-first requirement that was a “basis for our decision in Sims” (maj. opn., ante, at p. 1083) no longer exists, the ALJ ruled that defendant must repay the overpayments she received, and the question of whether defendant intentionally made misrepresentations or omissions was not at issue in the administrative proceeding. Thus, the question we must answer here is not, as the majority posits, whether to reconsider Sims, but is whether to extend that decision to the
Corrigan, J., concurred.
I would, however, remand to the Court of Appeal for consideration of other issues that defendant raised and the Court of Appeal did not address in light of its conclusion that collateral estoppel applies.
Contrary to the majority’s suggestion, Sims did not first “outline^” collateral estoppel’s threshold requirements. (Maj. opn., ante, at p. 1089, fn. 8.) Those requirements were already well established when we decided Sims, as clearly evidenced by the fact that Sims merely quoted one of our earlier decisions in setting forth the requirements. (Sims, supra, 32 Cal.3d at p. 484, quoting People v. Taylor (1974) 12 Cal.3d 686, 691 [117 Cal.Rptr. 70, 527 P.2d 622].) The majority is simply incorrect in asserting that we “must” determine whether Sims’s discussion of collateral estoppel’s policy exception “remains effective” before we determine whether collateral estoppel’s threshold requirements have even been met. (Maj. opn., ante, at p. 1089, fn. 8.)
All further unlabeled statutory references are to Welfare and Institutions Code.
I also disagree with the majority’s view that we cannot determine the relevance of the regulatory scheme without briefing on “whether the pertinent regulations were in place at the time Sims was decided by this court.” (Maj. opn., ante, at p. 1083, fn. 5.) An administrative agency has no discretion to promulgate regulations that are inconsistent with governing statutes, and any such regulation is invalid. (Colmenares v. Braemar Country Club, Inc. (2003) 29 Cal.4th 1019, 1029 [130 Cal.Rptr.2d 662, 63 P.3d 220]; Esberg v. Union Oil Co. (2002) 28 Cal.4th 262, 269 [121 Cal.Rptr.2d 203, 47 P.3d 1069].) Because the preference for noncriminal resolution of welfare cases we relied on in Sims was established by statute, it would have overridden any contrary preference expressed in the administrative regulations at that time (which no doubt explains why Sims did not consider this question). Thus, contrary to the majority’s view, it is irrelevant whether “the pertinent regulations were in place at the time Sims was decided . . . .” (Maj. opn., ante, at p. 1083, fn. 5.)
In view of this analysis, I disagree with the majority’s view that our discussion in Lucido contains no “implication that we would have decided Sims differently had the former statutory scheme for resolution of welfare fraud been different.” (Maj. opn., ante, at p. 1085.) The majority’s observation that Lucido contains no express “statement” to this effect (ibid.) is both curious and unremarkable. It would have been entirely inappropriate to make such a statement, as that question was not before us in Lucido.
Because defendant did not testify at her administrative fair hearing, any concern about unfairness in actually using a welfare recipient’s fair hearing testimony at a subsequent criminal trial is irrelevant to determining whether policy considerations support applying collateral estoppel “[i]n the particular and special circumstances of this case.” (Sims, supra, 32 Cal.3d at p. 489.)
Of course, the analysis might be different had defendant petitioned under section 10962 for judicial review of the ALJ’s decision and were we dealing with a superior court judgment rendered after that review.
The majority correctly observes at the end of a long footnote that “unpassed bills ‘have little value’ in ascertaining legislative intent. [Citation.]” (Maj. opn., ante, at p. 1088, fn. 7.) Indeed, as we have explained, “because the Legislature’s failure to enact a proposed statutory amendment may indicate many things other than approval of a statute’s judicial construction, including the pressure of other business, political considerations, or a tendency to trust the courts to correct its own errors,” “ ‘[w]e can rarely determine from the failure of the Legislature to pass a particular bill what the intent of the Legislature is with respect to existing law,’ [Citation, fns. omitted.]” (People v. Mendoza (2000) 23 Cal.4th 896, 921 [98 Cal.Rptr.2d 431, 4 P.3d 265].) In light of these well-established principles, it is unclear why the majority, in its textual discussion, appears to emphasize the Legislature’s failure to pass a bill that would have expressly abrogated Sims. (Maj. opn., ante, at p. 1088.)
Reference
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