Thursday, September 10, 2009
C.A. Clarifies Deadline for Ordering Hearing Transcripts
Delay Will Cost CalPERS $6 Million if Ruling Stands
By a MetNews Staff Writer
An administrative law judge’s proposed decision becomes final under the Administrative Procedures Act 100 days after it is received by the agency, unless the agency rejects the decision or orders a hearing transcript within that time, the Third District Court of Appeal has ruled.
The justices Tuesday affirmed a Sacramento Superior Court judge’s ruling awarding the beneficiaries of Frances Alexander more than $6 million in California Public Employees’ Retirement System benefits and interest.
The court agreed with Judge Jack V. Sapunor that the agency had misinterpreted the statute in contending that it could extend the time in which to decide the case by delaying its request for a transcript of the administrative hearing.
Alexander, who died in 2005, was the widow of Clarence Alexander, secretary of the California Senate at the time of his retirement in 1969.
Clarence Alexander became a state employee in 1947 and had over 22 years of CalPERS credit. He died in 1998, and his widow received a survivor’s benefit until her death.
In 2003, Frances Alexander filed a claim with CalPERS, contending that her husband’s benefits were miscalculated. The CalPERS board denied her claim, and she took an administrative appeal, which was pursued by the beneficiaries after she died.
An ALJ agreed that the benefits were miscalculated, and proposed that the agency pay the beneficiaries more than $3.5 million in benefits, plus 6 percent interest, bringing the total to more than $6 million.
CalPERS received the proposed decision on May 4, 2006. On June 21, the board voted to reject the decision and decide the matter on the administrative record pursuant to Government Code Sec. 11517(c)(2).
That paragraph provides in part that an agency must issue a final decision “not later than 100 days after rejection of the proposed decision” or, if the agency “has ordered a transcript of the proceedings,” within 100 days of receipt of the transcript.
In the Alexander case, CalPERS did not order a transcript until Nov. 6; it was received on Nov. 13. On Dec. 20, 2006, the board, believing that it had 100 days from Nov. 13 to decide the case, voted to grant itself the maximum 30-day extension, which would have given it until March 2007 to take final action.
The beneficiaries, however, filed a petition for writ of mandate before that, contending that the ALJ’s decision had become final.
Sapunor, in granting the writ, said “the Legislature intended agencies to order a transcript no later than 100 days after the rejection of the proposed decision.” He reasoned that if the agency does not order a transcript within 100 days of rejecting the ALJ’s decision, it does not trigger Sec. 11517(c)(2)(E)(iv)’s exception to the general rule requiring it to decide the case within 100 days of that rejection.
He also relied on Court of Appeal precedent in concluding that the 100-day period for ordering a transcript, like the period for rendering the final decision, is mandatory.
Justice Harry Hull, writing for the Court of Appeal, said the trial judge was correct.
The statutory timeframe, he explained, gives the agency 100 days “to adopt, mitigate, modify, or reject the proposed decision.” If the agency rejects the proposed decision, it must decide the matter itself, or order a transcript, within 100 days; only if it orders a transcript within that time does it have 100 days from receipt of the transcript to decide, Hull declared.
“This timeframe reflects the desire for a timely hearing and resolution of administrative proceedings,” the justice wrote. “Under CalPERS’ theory (namely, that there is no time limit for ordering a transcript of proceedings), an agency could reject a proposed decision within 100 days of its receipt but then do nothing else. It could sit on a case for an indeterminate period of time before ordering a transcript and starting the 100-day period for issuing a decision.”
He added that “this statutory scheme, when read as a whole, is mandatory: if the agency fails to act as outlined in subparagraph (E) inclusive, the proposed decision is adopted by the agency.”
The case is Matus v. Board of Administration of California Public Employees’ Retirement System, 09 S.O.S. 5556.
Copyright 2009, Metropolitan News Company