Stanford Law School - Robert Crown Law Library

Filed 8/1/11



IN THE SUPREME COURT OF CALIFORNIA



ROBERT E. STARK,

Petitioner,

S145337

v.

Ct.App. 3 C051073, C051074

THE SUPERIOR COURT OF SUTTER

COUNTY,

Sutter County Super. Ct. Nos.

Respondent;

CRMS051001,

CRMS051031

THE PEOPLE,

Real Party in Interest.



This case involves serious allegations against Robert E. Stark, the auditor-

controller of Sutter County. In that position, Stark made decisions about

allocations and expenditures of public money. Stark had significant disagreements

with the Sutter County Board of Supervisors (Board) and the County

Administrative Office (CAO) regarding questions of public finance. The Sutter

County District Attorney‘s Office claims that Stark violated statutes, county rules

and Board resolutions detailing the requirements of his office. Stark asserts the

matters at issue were complex transactions in which he exercised his professional

judgment as auditor-controller and handled the matters as the law and

governmental accounting rules required. A grand jury ultimately indicted Stark on

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13 counts of violating Penal Code section 4241 for acts and omissions involving

public funds between 2003 and 2005. The grand jury additionally returned a 15-

count accusation under Government Code section 3060 for willful or corrupt

misconduct that could lead to Stark‘s removal from office. We granted review to

resolve the following questions:

1. Does a violation of section 424 require intentional violation of a known

legal duty or is it a general intent crime?

2. May a defendant move to set aside an indictment under section 995,

subdivision (a)(1)(B), on the ground that grand jurors were misinstructed on the

scienter required to establish an element of the charged offense?

3. May a public official be removed from office pursuant to Government

Code section 3060 in the absence of proof of a purposeful refusal to follow the law

in carrying out the duties of his or her office?

4. When a defendant moves to set aside an indictment or accusation on the

ground that the district attorney‘s participation in the grand jury proceedings

created a potential for bias or the appearance of a conflict of interest, must the

defendant satisfy the requirements for disqualification set forth in section 1424?

We resolve these questions as follows:

1. At issue here are four provisions of section 424, all of which proscribe

general intent offenses. Three of those provisions criminalize acting without

authority or failing to act as required by law or legal duty. We conclude those

offenses additionally require that the defendant knew, or was criminally negligent

in failing to know, the legal requirements that governed the act or omission.

2. A claim of misinstruction on the mens rea of a crime may be challenged

under section 995, subdivision (a)(1)(B). It raises the possibility that, as


1

Further statutory references are to the Penal Code unless otherwise

indicated.

2

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instructed, the grand jury may have indicted on less than reasonable or probable

cause.

3. Based on the record in this case, we need not and do not decide the

question of whether willful misconduct under Government Code section 3060

requires a knowing and purposeful refusal to follow the law. Stark does not

disagree with the instruction on mental state given by the district attorney to this

grand jury. Rather, he claims that later closing argument by the district attorney

and accompanying PowerPoint slides invalidated the instruction on mental state,

requiring that the accusation be set aside. We address this claim as to the district

attorney‘s argument and PowerPoint slides and conclude that it is without merit.

4. In a motion to set aside an indictment or accusation, a defendant

claiming that the district attorney suffered from a conflict of interest during the

grand jury proceeding must establish that his right to due process was violated.

I. FACTUAL AND PROCEDURAL BACKGROUND




We begin with a general overview. The specific counts of the indictment

and accusation that remain in this appeal will be described more thoroughly in the

discussion section.

The Board consists of five elected members. Stark has served as the

elected auditor-controller of Sutter County since 1985. His primary duty is to

serve as the chief accounting officer for the county. Larry Combs was the county

administrative officer during the period at issue here, with responsibility to

manage the county for the Board. His duties included recommending and

enforcing policy decisions, as well as recommending and managing the county

budget.

On September 7, 2004, Combs presented a report to the Board entitled

―Analysis of Performance of Auditor-Controller & Recommendation for Action.‖

The report criticized Stark for actions dating back to 1988, and discussed recent

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―serious problems‖ regarding his performance, which are the basis for some of the

allegations in the indictment and accusation. Specifically, the report mentioned

the following: Stark filed the final budget for fiscal year 2003-2004 six and one-

half months late; Stark acted unilaterally in amending the county budget even

though state law reserves that authority to the Board; Stark claimed he had the

authority to approve the rates some county departments were charging other

county departments for services provided; Stark withheld overtime pay from the

county‘s firefighters in January 2003 based on his interpretation of the county‘s

memorandum of understanding (MOU); and, in the final budget for 2003-2004,

which Stark belatedly filed in June 2004, Stark unilaterally transferred money

from the county‘s general fund reserve to Sutter County Waterworks District

No. 1 (Waterworks District).

In fall 2004, the Sutter County Grand Jury, in its oversight function, began

an informal investigation of the auditor-controller‘s office. The Sutter County

District Attorney‘s Office was not involved in these proceedings. On February 9,

2005, the last day of the informal investigation, Stark appeared at the request of

the grand jury and answered questions.

A formal grand jury proceeding began on March 3, 2005, conducted with

the assistance of Sutter County District Attorney Carl Adams. Multiple days of

testimony concluded on May 3, 2005. Additionally, the grand jury received

exculpatory material from Stark.

On May 4, 2005, District Attorney Adams instructed the grand jury on 13

counts alleging violations of various provisions of Penal Code section 424 and 15

counts alleging willful and corrupt misconduct under Government Code section

3060. The grand jury returned the indictment and accusation on all counts.2 The


2

―An indictment is an accusation in writing, presented by the grand jury to a

competent court, charging a person with a public offense.‖ (§ 889.) Government
Code section 3060 et seq. provides for the removal from office of ―any officer of a


(footnote continued on next page)

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indictment and accusation, for the most part, were based on the same acts and

omissions.

Stark moved to set aside the indictment and objected to the accusation. The

superior court set aside one count of the indictment and two counts of the

accusation.

In the Court of Appeal, Stark sought a writ of mandate or prohibition to

review the trial court‘s order. When the Court of Appeal summarily denied the

petition, Stark filed for review here. We granted the petition and transferred the

matter back to the Court of Appeal with directions to issue an order to show cause

why the requested relief should not be granted. On remand, the Court of Appeal

issued the order to show cause. The Court of Appeal concluded that six counts of

the indictment should have been set aside, and issued a peremptory writ of

mandate to correct those errors. It concluded the trial court did not err in denying

Stark‘s motion to set aside the remaining counts of the accusation.

As to the issues for which we granted review, the Court of Appeal ruled

that, as to certain provisions of section 424, a defendant must know that his actions

or omissions regarding public funds are without legal authority. As to the

remaining counts for which that mental state is required, the Court of Appeal

concluded that grand jurors ―could reasonably entertain a strong suspicion‖ that

Stark had such knowledge.

Regarding Stark‘s claims of instructional error as to section 424, the Court

of Appeal concluded that section 995 does not provide a basis to set aside the

indictment on the ground of instructional error. The court held that Stark‘s claim


(footnote continued from previous page)

district, county, or city . . . for willful or corrupt misconduct in office . . . .‖ (Gov.
Code, § 3060.) Such a proceeding is initiated by the grand jury‘s presentation of
an accusation against the official charged with misconduct. (Ibid.)


The grand jury also returned an accusation against assistant auditor Ronda

Putnam. The Court of Appeal set aside the accusation against her.

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was cognizable only as a potential violation of his right to due process, and that

Stark failed to make such a showing.

As to the mental state required to support an accusation under Government

Code section 3060, the Court of Appeal concluded that ―[t]here must be willful

behavior, and that behavior must amount to misconduct . . . .‖ Because Stark

identified no authority permitting a challenge to the accusation for instructional

error, the Court of Appeal rejected his attack on the prosecutor‘s instructions and

comments to the grand jury. Even assuming Stark could argue that the

instructions violated his due process rights, he made no such showing.

Finally, the Court of Appeal rejected Stark‘s argument that the mere

appearance of a conflict of interest by the Sutter County District Attorney‘s Office

during the grand jury proceeding could support a section 995 motion to set aside

the indictment. The Court of Appeal concluded that such a claim was not

cognizable under that statute, but must be brought as a challenge to the indictment

on due process grounds. The Court of Appeal concluded that Stark‘s claim

regarding the district attorney‘s office did not suffice to make such a showing.

II. DISCUSSION

A. Penal Code Section 424 — Mental State



Section 424 was enacted in 1872 as part of the original Penal Code. More

than 80 years ago, this court explained in People v. Dillon (1926) 199 Cal. 1

(Dillon) that section 424 ―has to do solely with the protection and safekeeping of

public moneys as defined by section 426 of the Penal Code, and with the duties of

the public officer charged with its custody or control . . . .‖ (Dillon, at p. 5.)3


3

Section 426 defines public moneys as follows: ―The phrase ‗public

moneys,‘ as used in Sections 424 and 425, includes all bonds and evidence of
indebtedness, and all moneys belonging to the state, or any city, county, town,
district, or public agency therein, and all moneys, bonds, and evidences of
indebtedness received or held by state, county, district, city, town, or public
agency officers in their official capacity.‖

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The current statute contains seven subparts, all of which were part of the

statute as originally enacted, although renumbered by amendment in 1905. (Stats.

1905, ch. 59, § 1, pp. 53-54.) The remaining counts of the indictment allege

violations of four of those provisions:4

―(a) Each officer of this state, or of any county, city, town, or district of this

state, and every other person charged with the receipt, safekeeping, transfer, or

disbursement of public moneys, who either:

―1. Without authority of law, appropriates the same, or any portion thereof,

to his or her own use, or to the use of another; or, [¶] . . . [¶]

―3. Knowingly keeps any false account, or makes any false entry or erasure

in any account of or relating to the same; or, [¶] . . . [¶]

―6. Willfully omits to transfer the same, when transfer is required by law;

or,

―7. Willfully omits or refuses to pay over to any officer or person

authorized by law to receive the same, any money received by him or her under

any duty imposed by law so to pay over the same; —

―Is punishable by imprisonment in the state prison for two, three, or four

years, and is disqualified from holding any office in this state.‖ (§ 424(a).)



1. The Indictment

We begin with a review of the evidence presented to the grand jury as to the

counts of the indictment remaining on appeal.



a. Third Count (Section 424(a) 1)



The People claim that Stark misappropriated public money in violation of

section 424(a) 1 when, without authorization by the Board, he transferred money


4

Hereafter, we will refer to the various provisions of section 424 in the

following form: section 424(a) 1, section 424(a) 3, etc.

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in the 2003-20045 final budget from the county‘s general fund to the Waterworks

District.

The county‘s annual budget is essentially an authorized spending plan for

the year. The budget includes all of the operating departments of the county, as

well as special districts over which the Board serves as the governing body. The

budget is divided up into funds. Some funds consist of a single department.

Others funds represent multiple departments. Assistant county administrator

Curtis Coad testified, ―We have to balance the budget. That means that in every

fund in the budget the revenues have to equal the appropriations.‖

By June 30 of each year, the county administrative officer must submit a

proposed budget to the Board. The Board then approves the proposed budget and

holds budget hearings to be completed by August 30. By means of a final budget

resolution, the Board must adopt the final budget by October 2. The auditor-

controller then has until December 2 to publish the final budget and file it with the

clerk of the Board.

County Administrator Combs testified that the final budget resolution

authorizes the auditor-controller ―to prepare the final budget with such

adjustments as are necessary within restrictions that are contained in this

resolution.‖ Combs explained that the budget resolution authorizes two types of

adjustments. First, the auditor-controller can ―adjust interfund and intrafund

accounts to reflect the effect of amendments and modifications adopted by the

Board, and [can] adjust estimates of State and Federal revenue which are affected

by the amendments and modifications, subject to review and approval by the

County Administrative Officer.‖ Second, the budget resolution allows the auditor-

controller ―to adjust the appropriation for contingencies in each fund, as necessary

to balance the fund and the budget, and, if necessary, to balance any fund and


5

The Sutter County fiscal year runs from July 1 to June 30.

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reduce such fund‘s general reserve, subject to the review and approval of the

County Administrative Officer.‖ 6

Various county funds maintain reserves. Within the county general fund

there are several different reserves, such as those for capital expenditures and

vehicle replacement. At issue in this count of the indictment is the general fund‘s

general reserve (hereafter general reserve). The general reserve is subject to

unique restrictions. The Board is legally authorized to reduce or increase the

amount of the general reserve during the budget process. Once the final budget is

adopted, however, that reserve can be accessed only in an emergency declared by

a four-fifths vote of the Board.

One of the special districts governed by the Board is the Waterworks

District, an enterprise fund that provides sewer and water services to the

community of Robbins. Under an enterprise fund operation, people in the area

pay for the cost of services. No money from the county general fund is required to

operate the Waterworks District. The Waterworks District‘s sewer system was

installed and purchased by a grant obtained by the county on behalf of the

residents of Robbins. The Board had decided not to fund the depreciation of the

sewer system because those expenses would have had to be financed by user fees,

which the Board considered too burdensome for the area residents.

In fiscal year 2003-2004, Stark and the CAO had significant disagreements

over accounting principles applicable to the Waterworks District. Stark‘s position

was that the Waterworks District fund must be included in the county budget.

Stark considered the depreciation of the water system an expense that had not been

funded, resulting in an imbalance in the fund of $336,000. Because the


6

The phrase ―subject to review and approval by the County Administrative

Officer‖ was specifically added to the 2004-2005 final budget resolution because,
as explained by County Administrator Combs, Stark had made unauthorized
changes to the 2003-2004 budget.

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Waterworks District fund was out of balance, the county budget was out of

balance as well.

The CAO disagreed. Assistant county administrator Coad told the grand

jury that enterprise funds do not need to be included in the county budget, but the

Waterworks District fund was included ―more for public information and so we

can include them in our hearing.‖ Thus, if the Waterworks District fund was out

of balance, it had no effect on the overall county budget.

When the final budget for the fiscal year 2003-2004 was released on June

14, 2004, the CAO discovered that the Waterworks District budget included a

contribution from the county general fund of $336,485. Assistant county

administrator Coad explained that Stark, through a series of transactions, took

general reserve money, placed it into the general fund, and then transferred that

money to the Waterworks District fund. As Coad explained, ―Bottom line, he

used general fund reserve money to balance the [Waterworks District] fund. And,

no, we did not sign off on that.‖

Coad told the grand jury that nothing in the final budget resolution

authorized Stark to transfer money from the general reserve, ―which belonged to

all the People of Sutter County,‖ and give it to the Waterworks District serving the

community of Robbins alone. Such a transfer from the general reserve required a

vote of four-fifths of the Board and ―special findings of general public benefit.‖

The Board ordered Stark to return the money to the county‘s general fund. Stark

complied.

On February 9, 2005, the grand jury interviewed Stark during its informal

investigation before the criminal grand jury proceedings began. A copy of this

transcript was entered into evidence during the criminal grand jury proceedings.

During the interview Stark acknowledged that transfers from the general fund

must be authorized by the Board, but stated he had been given this authorization.

Stark elaborated on his answer. He told the grand jury that the Waterworks

District was out of balance due to unfunded depreciation costs and advised the

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CAO that ―the debits don‘t equal the credits.‖ Stark claimed that the proposed

budget adopted by the Board specifically recommended a ―transfer in‖ to the

Waterworks District to balance the budget. Stark testified that after reviewing all

the funds, he could not find ―the recognition of the transfer-out that was the source

of funds for the transfer-in for the [Waterworks District].‖ ―And since I have to

balance the budget . . . I set up the . . . transfer-out for the general fund, which

was the only place the money could actually come from to balance [the

Waterworks District]. [¶] And under the direction that the Board gives me to

balance the budget, I can very well read that as saying that I was authorized to set

that up and the Board did in fact approve that transfer.‖ Stark told the grand jurors

that under the final budget resolution, he is authorized by the Board to balance the

budget and transfer money from the reserves.

b. Ninth Count (Section 424(a) 6)

The ninth count of the indictment alleges that between March and May

2005 Stark violated section 424(a) 6 by ―wilfully omit[ting] to transfer [public

moneys], when transfer was required by law, to wit: post[ing] journal entries

reflecting payment due and income earned by the Sutter County Department of

Information Technology Services.‖

The Department of Information Technology (IT department) provides

computer services for the entire county. The IT department collects payments for

services provided to other county departments through ―inter-fund charges.‖ As

we explain more fully below, rates for IT department services are set at least

annually. When a county department is notified of an IT department billing,

journal entries must be made by the auditor-controller to transfer money from the

user department‘s budget to the IT department.

As of 2005, the IT department had been operating for five years. For the

first four years, calculation of appropriate billing rates was accomplished through

an informal process in which the IT department, Stark, and the CAO would agree

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on a methodology. Stark would set the rates. However, on September 7, 2004, the

Board delegated the authority to set rates to the county administrator.

At the beginning of 2004-2005 fiscal year, the IT department had

approximately $400,000 to $500,000 carried over from the previous year because

the department‘s revenue exceeded its expenses. The IT department operated on

that money until the beginning of November 2004. Bernadette Kucharczuk,

director of the IT department, explained that the department‘s revenue is never

enough to maintain a positive cash flow to year end when all claims are eventually

paid. In each preceding year, the IT department operated in the red. Final budgets

for the IT department anticipate that it will operate in the red. Nevertheless, Stark

had never refused to post entries in earlier years.

In the 2004-2005 fiscal year, the process for setting the IT department‘s

billing rate began in December 2004. On January 18, 2005, County Administrator

Combs forwarded the billing rates to Stark. The IT department then submitted

journal entries to the auditor‘s office for payment of services it had rendered in the

previous six months.

Stark refused to process the journal entries. Stark maintained that he

needed adequate documentation to assess whether the rate changes were cost

based and calculated in accordance with generally accepted accounting principles.

On January 27, 2005, Stark requested that the IT department provide him

additional information, including an accounting for certain costs, in order to

―complete a thorough analysis of the rates submitted by the IT Department.‖

Although the IT department responded, Stark notified Kucharczuk that the

response was inadequate and requested more information. Kucharczuk responded

to this request, and later provided additional information requested by Stark.

Kucharczuk testified that although the rates changed ―somewhat‖ in fiscal year

2004-2005, the methodology for setting the rates was the same as had been used

for the previous four years. In those previous years, when Stark‘s office was

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involved in the rate-setting process, journal entries were processed and claims

paid.

County Administrator Combs notified Stark by letter on February 15, 2005,

that Combs, in accordance with the authority delegated to him by the Board in

September 2004, was approving the billing rates for the IT department that had

been sent to Stark in January. Combs wrote that the rates were reasonable and

followed the ―rate methodology prescribed by your office.‖ Combs stated that it

was ―imperative‖ that Stark process the journal entries immediately and pay any

pending claims that were being held due to the department‘s deficit. Stark

continued to refuse to post journal entries. As of March 3, 2005, when

Kucharczuk first testified before the grand jury, the IT department was $600,000

in the red.

Additionally, at the beginning of February, Stark stopped paying the claims

submitted by the IT department for services provided to the department by outside

vendors. Kucharczuk was told by the auditor-controller‘s office that payment

could not be made because the IT department had a deficit balance, a position

Stark had not asserted in prior years. At the beginning of March, at least $185,000

in bills from outside vendors remained unpaid. At the same time, Stark was

refusing to process journal entries for the IT department totaling more than $1

million.

On March 1, 2005, the Board directed Stark to make the journal entries for

the first and second quarter of the fiscal year and to pay the outstanding claims

against the IT department. Stark told the Board that he did not approve of the

billing rates for processing the journal entries and was having difficulty obtaining

documentation from the IT department in support of those rates. Kucharczuk told

the Board that she had worked with Stark to provide him documentation. The next

day, Stark told the county treasurer, Jim Stevens, that he would not process the

journal entries because he disagreed with the billing rates. At the Board meeting

on March 8, 2005, Stark informed the Board that he would not post the journal

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entries for the IT department because he had not yet received the requested

documentation. The Board minutes indicate that a ―[d]iscussion ensued regarding

various emails and meetings on trying to obtain clarification on what the auditor-

controller needs in order process the journal entries.‖

As of March 23, 2005, the date of Kucharczuk‘s final appearance before the

grand jury, Stark had paid the IT department‘s outstanding bills but had still not

posted the journal entries.7



c. Tenth Count (Section 424(a) 7)

The tenth count of the indictment alleges that Stark violated sections 664

and 424(a) 7 by ―wilfully and unlawfully attempt[ing] to withhold payment of

wages to employees of the Sutter County Department of Information Technology

Services.‖

During the same timeframe covered in count nine, the IT department was

also faced with payroll obligations. Stark took the position that the IT

department‘s payroll expenses could not be met because of its negative cash

deficit. He relied on the county‘s deficit fund cash policy, which provides that if a


7

On April 11, 2005, the Board filed a petition for writ of mandate

compelling Stark to post the IT department journal entries. The writ noted that
―despite a direct order of the Board of Supervisors, the Auditor has failed and
refused to make the required journal entries to transfer monies into the ISF
[internal service fund].‖


On June 13, 2005, after Stark had been indicted by the grand jury, the

superior court granted the writ and ordered Stark to post the journal entries. Stark
complied, but advised the Board on June 20, 2005: ―The [Auditor-Controller‘s
Office] takes no responsibility for the completeness or accuracy of the underlying
documents supporting the transactions; they were not audited nor were they
auditable as presented. In our opinion, based on testimony and other information
provided by the Information Technology department, these entries do not conform
to generally accepted accounting principles. We believe these transactions put the
County at variance with applicable state and federal law, OMB Circulars A-87 and
A-133.‖

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fund‘s deficit cannot be corrected within 30 days, the auditor-controller should

notify the Board of the need for a general fund loan to the deficient fund. Stark

told county treasurer Jim Stevens that on March 1, 2005, the Board had denied his

request for a general fund loan. Stevens testified that stopping payroll accounts

when a department is running a deficit is not part of the deficit fund cash policy.

Stevens explained that certain departments, including IT, typically have a negative

cash balance at certain times of the year for various reasons. Stevens noted that

for the preceding three fiscal years, the IT department had run negative balances,

but its bills, including payrolls expenses, had always been paid by the auditor-

controller‘s office. Stevens also said that if pending journal entries were

processed, the IT department would have a positive cash balance of $380,000.

On March 8, 2005, Stark told Sylvia Oakley, an accountant in his office,

that ―upon advice of counsel, I have no choice but to ask you to stop direct deposit

payment for the IT department.‖8 Oakley then temporarily stopped direct deposit

of wages for these employees. On that same day, Stark sent a memo to treasurer

Stevens advising that Stark anticipated needing registered warrants to cover the IT

department payroll since the Board had not yet acted to resolve the IT

department‘s cash deficit. Stevens testified that a registered warrant is not

immediately payable; it is an interest-bearing promissory note in the nature of an

IOU. Later that day, Stark asked Stevens to issue registered warrants for the IT

department payroll. Stevens responded that he would not do so until advised by

county counsel.

During the afternoon of March 8, Sutter County District Attorney Carl

Adams and a senior criminal investigator from the district attorney‘s office went to


8

At the Board meeting on March 8, 2005, Stark informed the Board that

counsel had advised him to issue registered warrants. At the same meeting,
assistant county administrator Coad ―clarified that Mr. Stark‘s counsel is
independent, not from County Counsel.‖

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Stark‘s office and gave him copies of certain provisions of the Penal and Labor

Codes. Adams told Stark that he wanted to make certain Stark was familiar with

the law regarding payment to employees. Stark replied, ―It doesn‘t matter.

They‘re going to get paid anyway.‖

On the evening of March 8, Stark sent an e-mail to all IT department

employees confirming that he had cancelled direct payroll deposits and planned to

issue payroll warrants. He advised that unless the Board made funds available as

he had requested, he would be required to issue registered warrants. Stark also

sent a memo to the treasurer, Stevens, that evening stating, ―Your refusal today to

comply with our lawful request has prevented these [payroll] payments to

employees. If you continue your refusal of doing your duty to register the

warrants, you are preventing the lawful payments of claims against the county.‖

At its regularly scheduled meeting that night, the Board voted to refer the

matter to the state labor commissioner if Stark refused to pay the IT department

employees on March 11. Stark issued paychecks and the IT department

employees were paid on March 11, 2005.



d. Eleventh Count (Section 424(a) 3)

The eleventh count of the indictment alleges that Stark violated section

424(a) 3 by knowingly keeping a false account or making a false entry in the

―financial books and records for the County of Sutter for fiscal year 2003-2004.‖

Marilee Smith conducted an outside audit of the county‘s books for fiscal

years 2002-2003 and 2003-2004. She explained that her certified public

accounting firm begins its review of the county‘s financial records at the end of

each fiscal year. Smith testified that eventually ―we put all the financial

statements together and any adjustments that we think should be posted. We come

up with what we call proposed audit adjusting entries. We submit those to the

county along with draft financial statements. We let the county, both the county

administrator and the county auditor-controller review the proposed audit entries,

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and look at the draft financial statements, make any comments they might have,

and then we would issue our report on those financial statements.‖

Smith explained that if her firm finds an error or a misclassification in an

account, the firm writes an adjusting journal entry to correct the account‘s balance.

She explained that her firm issues its opinion on the county‘s financial statements,

which includes the journal entry adjustments.

As a result of the 2002-2003 audit, Smith gave Stark a list of adjusting

journal entries. Stark did not express any disagreement with the recommended

adjusting journal entries.

In fiscal year 2003-2004, Smith again audited the county‘s books. She

began her audit with the ending fund balance from the prior 2002-2003 audited

financial statement. However, Smith discovered that Stark had posted some, but

not all of the adjusting journal entries from the previous year‘s audit. Thus, the

ending fund balance on the county‘s books differed from the balance in the prior

year audit report.



e. Twelfth Count (Section 424(a) 7)

The twelfth count of the indictment alleges that Stark violated section

424(a) 7 by ―wilfully and unlawfully withhold[ing] wages earned by employees of

the Sutter County Fire Safety Unit.‖

The county and the union representing the county‘s firefighters entered into

an MOU in 1985, providing for eligible employees to earn overtime for all

authorized work in excess of 212 hours in a 28-day work period. A later MOU,

entered into in 1990, provided for the establishment of an overtime account, to be

used at the discretion of the fire chief to pay firefighters for any voluntary

overtime worked. No changes were made to these provisions in the subsequent

MOU‘s that were in effect through 2005. A change in the terms of the MOU

regarding benefits must be negotiated between the county and the collective

bargaining group.

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Because the firefighters regularly worked 240 hours in a 28-day work

period, they automatically put in overtime hours during each work period. During

the negotiation of the 1985 MOU, it was agreed that if a firefighter took sick leave

or vacation in a given work period, that leave would be deducted from the

appropriate leave balance, and the employee would still be paid overtime.

In December 2002, Richard Martin, a shift lieutenant with the county‘s fire

department, noticed there was no overtime on his paycheck for the work period in

which he had taken leave, and his leave balance had not been reduced. After an

unsuccessful attempt to resolve the matter with Stark‘s office, Martin called the

county‘s personnel director and received his overtime pay later that day.

The following month, January 2003, another issue arose when Martin

learned that Stark intended to stop paying the firefighters for overtime in cash and

intended to give them compensatory time off instead. According to Martin, the

firefighters had been paid cash for overtime since the overtime account was

established in 1990.

During the two pay periods in January 2003, the firefighters were not paid

for their overtime, but received compensatory time off. After several meetings

with various county personnel to discuss how firefighters should be compensated

for overtime, Stark maintained his interpretation of the MOU as requiring paid

leave rather than cash was correct.

On January 28, 2003, Stark sent a memo to members of the fire safety unit

advising them the ―incorrectly prepared payroll documents had been adjusted so

that we can pay you in accordance with the MOU,‖ meaning that firefighters

would receive compensatory time off rather than cash. Referring to his

interpretation of the MOU, Stark stated: ―[T]he effect of following the terms of

the MOU‘s is that when overtime is involved, your cash pay is less than it was

before the erroneous interpretation and unauthorized cash payments.‖

Additional meetings were held on January 29 and 31, 2003. Richard Hall,

the county‘s community services director, attended the January 31 meeting. Hall

18

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testified that he, County Administrator Combs and county counsel explained ―very

clearly to Mr. Stark that [cash for overtime] is the way to read the MOU, and there

was no other valid interpretation.‖ That night, Stark issued and delivered checks

for overtime payments.

Stark sent a memo to County Administrator Combs on February 12, 2003,

stating that ―[t]he determinative factor upon which the Auditor-Controller based

his decision was Counsel‘s advice that since the payments had been made for 13

years it had become past practice and the county had no defendable legal position

to do otherwise.‖ Stark noted in the memo that while county counsel maintained

that the applicable rules were ―unambiguous‖ with regard to the cash payment of

overtime, Stark ―absolutely disagrees with this premise.‖ Stark detailed his

interpretation of the MOU. This memo was in evidence before the grand jury.



f. Thirteenth Count (Section 424(a) 7)

The thirteenth count of the indictment alleges that Stark violated section

424(a) 7 by ―wilfully and unlawfully withhold[ing] wages in the cumulative

amount of $1,969.51 earned by retiring employees of the County of Sutter.‖

Sutter County personnel director Joann Dobelbower testified that a county

rule provides that when a county employee retires on a day preceding a holiday,

the employee will be paid for the holiday. She stated this rule has been in effect

for more than 20 years. Ten county employees retired on December 30, 2004.

Pursuant to the rule, the employees were entitled to be paid for the following day,

which was the New Year‘s Day holiday for the county. This pay was not included

in their checks. Relying on personnel records, Dobelbower compiled a chart

showing a total of $1,969.51 owed to the 10 employees.

Dobelbower, after reviewing the MOU and county rules, contacted Stark,

and advised him that these employees should be paid for the holiday. Stark

disagreed. As of the date of Dobelbower‘s grand jury testimony on May 3, 2005,

the 10 employees had still not been paid.

19

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2. Analysis

As to the counts at issue, we first consider the mental state required for

those crimes defined in the provisions of section 424 that refer to authorization of

law or legal requirements. Section 424(a) 1 applies to a defendant who

appropriates public money to his own use or the use of another without authority

of law. Section 424(a) 6 applies when a defendant willfully fails to transfer public

money, if that transfer is required by law. Section 424(a) 7 applies when a

defendant fails or refuses to disburse money, as required by a legal duty. We

separately discuss section 424(a) 3, which applies when a defendant knowingly

keeps a false account or makes a false entry in an account. Section 424(a) 3 does

not refer to any legal authorization or duty in defining the conduct that it makes

criminal.

The People claimed in the trial court and the Court of Appeal that section

424 requires only a general intent to do the act or make the omission, without a

further mental state. The Court of Appeal rejected this argument. It held that a

defendant must have appropriated public money, knowing that his action was

unauthorized (§ 424(a) 1); willfully failed to make a transfer of money knowing

the transfer is required by law (§ 424(a) 6); and willfully failed or refused to

disburse money, knowing he was under a legal duty to do so. (§ 424(a) 7.) Here,

the People now agree that a defendant must act or fail to act with knowledge of the

unlawfulness of his actions, but urge that the mental state can be satisfied by either

actual knowledge or criminal negligence.



Applying long-standing principles of criminal intent, we reaffirm that the

violations of section 424 at issue are general intent crimes. Further, settled

authority teaches that even general intent crimes often require some kind of

knowledge. We first resolve whether the applicable provisions of section 424

require any additional mental state beyond a general intent to do the act.

20

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a. What Is the Required Mental State?



More than 80 years ago in Dillon, supra, 199 Cal. 1, this court first

examined the mental state required for a violation of section 424. Dillon

concerned unlawful purchases made by Fresno‘s commissioner of finance, who

was also the city‘s purchasing agent. Purchases made for the city‘s benefit were

granted substantial discounts. Dillon made a number of purchases for private

parties using city money and receiving the discounted price. The private

beneficiaries then reimbursed the city for those expenditures. Dillon was

convicted of violations of section 424(a) 1 and 2. (Dillon, supra, 199 Cal. at pp.

3-4.)

Dillon argued the Legislature did not intend that section 424 should apply

to the facts of his case. He asserted that he should have been prosecuted for

embezzlement under section 504, which requires a specific intent to defraud.

(Dillon, supra, 199 Cal. at pp. 5-6.) The Dillon court rejected this claim,

observing that while embezzlement requires ―the specific intent to appropriate

[another‘s property] to one‘s self with a fraudulent intent‖ (id. at p. 11), the

framers of section 424 did not intend ―to incorporate or adopt, by implication or

otherwise, the elements essential to constitute embezzlement as defined by section

504.‖ (Dillon, at p. 9.) Rather, ―the subject matter and the language of section

424 clearly indicate that the legislative mind was intently concerned with the

single, specific subject of the safekeeping and protection of public moneys and the

duties of public officers in charge of the same.‖ (Dillon, at p. 6.) To this end, a

violation of section 424 ―is committed by a public officer when he uses public

funds in a manner forbidden by law even though he may have no fraudulent intent

when he does so. . . . It is sufficient that he intentionally committed the forbidden

act.‖ (Dillon, at p. 7.)

There was no question that Dillon knew he acted without lawful authority.

He did not claim otherwise. Instead, he argued that even though he knew the act

was unauthorized, he had no specific intent to defraud, and that the city was

21

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reimbursed. The Dillon decision was limited to clarifying that violations of

section 424(a) 1 and 2 are general intent crimes. ―When the definition of a crime

consists of only the description of a particular act, without reference to intent to do

a further act or achieve a future consequence, we ask whether the defendant

intended to do the proscribed act. This intention is deemed to be a general

criminal intent. When the definition refers to defendant's intent to do some further

act or achieve some additional consequence, the crime is deemed to be one of

specific intent.‖ (People v. Hood (1969) 1 Cal.3d 444, 456-457.)

In reaching its general intent conclusion, the Dillon court relied on section

20, which provides: ―In every crime or public offense there must exist a union, or

joint operation of act and intent, or criminal negligence.‖ The Dillon court stated:

―The only construction that may be placed upon [section 20] is that there must be

an intent to do the forbidden thing or commit the interdicted act. It furnishes no

basis for the claim that there must exist in the mind of the transgressor a specific

purpose or intent to violate law.‖ (Dillon, supra, 199 Cal. at p. 7.)

The Dillon court had no occasion to consider what knowledge, if any, is

required for a violation of the statute because the issue was not before it. In the

years since Dillon, this court has not further addressed the mental state required

for a violation of section 424. We do so now, in light of more recent

jurisprudence.

Thirty years after Dillon, this court clarified that the ―intent‖ referred to in

section 20 means wrongful intent. (People v. Vogel (1956) 46 Cal.2d 798, 801,

fn. 2 (Vogel).) Vogel was charged with bigamy, and the case turned on the

question of knowledge. The evidence showed Vogel married a second time

without having divorced his first wife. By way of affirmative defense, Vogel

wanted to introduce evidence that he had a reasonable, good faith belief that his

first wife had divorced him. The trial court rejected his proffers, ruling that his

good faith belief that he had been divorced was immaterial. (Id. at pp. 800-801.)

22

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Vogel held the ruling was error. It emphasized that the ―intent‖ provided in

section 20 is wrongful intent, and thus for bigamy, as in other crimes, there must

be a union of act and wrongful intent. (Vogel, supra, 46 Cal.2d at p. 801, fn. 2;

§ 20.) Under section 26, those incapable of committing a crime include persons

who commit the act ― ‗under an ignorance or mistake of fact, which disproves any

criminal intent.‘ ‖ (Vogel, at p. 801, fn. 1, quoting § 26, former subd. Four (now

subd. Three).)

In disapproving contrary authority, the Vogel court relied in part on the

reasoning of the English case of Regina v. Tolson (1889) Law Rep. 23 Q.B.Div.

168, 181, cited in Matter of Application of Ahart (1916) 172 Cal. 762, 764-765, in

which the English court stated: ―At common law an honest and reasonable belief

in the existence of circumstances, which, if true, would make the act for which a

prisoner is indicted an innocent act has always been held to be a good defence.‖

The rationale for this long-standing rule is that an act is unlawful only if

done with wrongful intent. In Vogel, supra, 46 Cal.2d 798, to act with wrongful

intent required more than intentionally marrying a second time. The commission

of bigamy requires that a defendant intentionally marry, knowing he is already

married to another. It is his knowledge of that material fact that makes the

intentional act of marrying wrongful. If he lacks that knowledge, his ignorance or

mistake of fact ―disproves [his] criminal intent.‖ (§ 26, subd. Three.)

Thus, the Vogel court recognized that wrongful intent requires that a

defendant know the material facts. This clarification of section 20 was significant

in view of the expanded creation of strict liability statutes. The traditional rule is

that some form of mens rea is required in ―all but strict liability offenses.‖ (People

v. Hood, supra, 1 Cal.3d at p. 456.) Strict liability statutes often involve public

health and safety concerns and ―criminal sanctions are relied upon even if there is

no wrongful intent. These offenses usually involve light penalties and no moral

obloquy or damage to reputation. . . . The offenses are not crimes in the orthodox

23

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sense, and wrongful intent is not required in the interest of enforcement.‖ (Vogel,

supra, 46 Cal.2d at p. 801, fn. 2.)

In Staples v. United States (1994) 511 U.S. 600, the United States Supreme

Court made this observation regarding strict liability offenses: ―[W]e have

interpreted statutes defining public welfare offenses to eliminate the requirement

of mens rea; that is, the requirement of a ‗guilty mind‘ with respect to an element

of a crime. Under such statutes we have not required that the defendant know the

facts that make his conduct fit the definition of the offense. Generally speaking,

such knowledge is necessary to establish mens rea, as is reflected in the maxim

ignorantia facti excusat [ignorance of facts excuses].‖ (Id. at p. 607, fn. 3.)

In recent jurisprudence, we have construed criminal statutes to include a

guilty knowledge requirement even though the statutes did not expressly articulate

such a requirement. (See People v. Salas (2006) 37 Cal.4th 967, 979.) As we

shall explain, in some cases we have required actual knowledge of the material

facts that demonstrate wrongful intent. In other cases, we have concluded that

actual knowledge or some form of negligence in failing to know the material facts

is required.

People v. Simon (1995) 9 Cal.4th 493 (Simon) involved the mental state

required for a criminal violation of Corporations Code section 25401, which

prohibits the offer or sale of securities by means of materially false statements or

omissions. Any person who ―willfully‖ violates that section is guilty of a felony.

(Corp. Code, § 25540.) The trial court had instructed the jury that only a general

intent to commit the proscribed act was required, and that the actor‘s intent or

knowledge of a material falsehood was irrelevant. (Simon, at pp. 498-499.)

The Simon court considered a number of factors, including the nature of the

conduct criminalized by Corporations Code section 25401 and the harsh penalties

for its violation, to conclude the offense was not a strict liability crime. (Simon,

supra,9 Cal.4th at p. 521.) Generally, ― ‗[t]he existence of a mens rea is the rule

of, rather than the exception to, the principles of Anglo-American criminal

24

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jurisprudence.‘ ‖ (Id. at p. 519.) We noted the prevailing trend away from

imposition of strict liability in the absence of such an express or implied intent in

the statute. (Id. at p. 521.) Thus, although Corporations Code section 25540 does

not explicitly contain a knowledge requirement, we concluded that ―knowledge of

the falsity or misleading nature of a statement or of the materiality of an omission,

or criminal negligence in failing to investigate and discover them, are elements of

the criminal offense described in section 25401.‖ (Simon, supra, 9 Cal.4th at p.

522.)

In People v. Coria (1999) 21 Cal.4th 868, we held that manufacturing

methamphetamine in violation of Health and Safety Code section 11379.6

requires proof that a defendant knows the character of the substance being

produced. (Coria, at p. 872.) We observed that ―[n]ot all acts of chemical

synthesis are illegal; only the manufacture of specific controlled substances is

prohibited.‖ (Coria, supra, 21 Cal.4th at p. 880.) Without a knowledge

requirement, the statute would criminalize ― ‗traditionally lawful conduct.‘ ‖

(Ibid.) ―[S]ilence with respect to a knowledge element does not mean the

Legislature intended to dispense with the requirement that the accused know the

character of the substance being manufactured. For crimes which impose severe

punishment, ‗. . . the usual presumption that a defendant must know the facts that

make his conduct illegal should apply.‘ ‖ (Coria, at p. 878, quoting Staples v.

United States, supra, 511 U.S. at p. 619.)

In In re Jorge M. (2000) 23 Cal.4th 866, we construed the statute outlawing

possession of assault weapons (§ 12280, subd. (b)) ―as requiring knowledge of, or

negligence in regard to, the facts making possession criminal.‖ (Jorge M., at

p. 887.) We held that ―the People bear the burden of proving the defendant knew

or reasonably should have known the firearm possessed the characteristics

bringing it within the AWCA [Assault Weapons Control Act].‖ (Ibid., italics

omitted.) This interpretation was appropriate because, among other factors, a

defendant convicted of the offense is subject to the severity of felony punishment.

25

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Without a knowledge requirement, there would be a significant possibility that

innocent possessors would fall within the statute. (Ibid.)

In People v. Rubalcava (2000) 23 Cal.4th 322, we determined that section

12020, which prohibits the carrying of a concealed dirk or dagger, does not require

the specific intent to use the concealed instrument as a stabbing device.

Nevertheless, ―the absence of a specific intent requirement does not make the

carrying of a concealed dirk or dagger a strict liability offense.‖ (Rubalcava, at

p. 331.) ―Because the dirk or dagger portion of section 12020 criminalizes

‗ ―traditionally lawful conduct,‖ ‘ we construe the statute to contain a ‗knowledge‘

element. [Citation.] Thus, to commit the offense, a defendant must still have the

requisite guilty mind: that is, the defendant must knowingly and intentionally carry

concealed upon his or her person an instrument ‗that is capable of ready use as a

stabbing weapon.‘ [Citation.] A defendant who does not know that he is carrying

the weapon or that the concealed instrument may be used as a stabbing weapon is

therefore not guilty of violating section 12020.‖ (Id. at pp. 331-332.)

In People v. Garcia (2001) 25 Cal.4th 744 (Garcia), we held that because

the offense of willful failure to register as a sex offender under section 290

involves an omission rather than an affirmative act, proof of a defendant‘s actual

knowledge of the duty to register is required. (Garcia, at p. 752.) Although a jury

may infer knowledge from notice, the notice alone does not necessarily satisfy the

element of willfulness. (Ibid.)



In People v. King (2006) 38 Cal.4th 617, we held that to secure a

conviction for possession of a short-barreled firearm (§ 12020, subd. (a)(1)), the

People ―must prove the possessor‘s knowledge of the weapon‘s illegal

characteristics.‖ (King, at p. 620.) Although the statute contains no such

knowledge requirement, ―[i]t is highly unlikely that the Legislature intended that a

person possessing an item listed in section 12020(a)(1) for its lawful, utilitarian

purpose, but unaware of the characteristic that makes possession of the item

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illegal, would nevertheless be guilty of violating section 12020(a)(1).‖ (King, at p.

626.)

In light of the evolution of our mens rea jurisprudence, we consider the

applicable provisions of section 424. We agree that this venerable statute requires

a broader mental state beyond a mere intent to do the act. Section 424(a) 1 makes

criminal the appropriation of public funds to oneself or another without authority

of law. Section 424(a) 6 proscribes willfully omitting to transfer public funds

when the transfer is required by law. Section 424(a) 7 proscribes willfully

omitting or refusing to pay over money, under any duty imposed by law, to

persons authorized to receive such money.

As the statutory language provides, it is not simply appropriation of public

money, or the failure to transfer or disburse public funds, that is criminalized.

Criminal liability attaches when those particular actions or omissions are contrary

to laws governing the handling of public money. Unlike many statutory

provisions, these provisions make the presence or absence of legal authority part

of the definition of the offense. The People must prove that legal authority was

present or absent.

Without a mental state as to legal authorization, a defendant could be

convicted of violating the section 424 provisions by simply acting or failing to act,

even if he was unaware of the facts, as defined by statute, that made his intent

wrongful. Such an interpretation is inconsistent with Vogel, supra, 46 Cal.2d 798,

and the common law upon which Vogel relied. Section 424 has never been

construed as a strict liability offense. The purpose of section 424 is punishment,

rather than regulation. The penalties for its violation are severe, including a prison

sentence and the disqualification from public office.

The plain language of the statute and our own recent jurisprudence compel

the conclusion that section 424(a) 1, 6, and 7 must be construed to include a

mental element as to the presence or absence of legal authorization or obligation.

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Our holding is not inconsistent with Dillon, supra, 199 Cal. 1. In Dillon,

there was no question that the defendant knew the nature of the act he was doing.

He knew he was making purchases at a discounted price for persons who did not

work for the City of Fresno, and so knew ―the facts that [made] his conduct fit the

definition of the offense.‖ (Staples v. United States, supra, 511 U.S. at p. 607,

fn. 3.) Because Dillon acted with general intent to do the proscribed act while

aware of the material facts, he acted with wrongful intent. Dillon does not stand

for the proposition that section 424 requires no knowledge of the facts or that

section 424 is a strict liability crime.



As we have noted, Stark and the People disagree as to the nature of the

required mental state. Before we address that issue, we clarify what must be

―known.‖ We use the term ―knowledge‖ here for ease of discussion, mindful of

the People‘s position that criminal negligence is sufficient to satisfy the mental

state.

b. What Must Be Known?

In considering what must be known by a defendant in order to prove

wrongful intent, the law has long distinguished between ignorance of fact and

ignorance of law. The ancient maxim, stated partially in Staples v. United States,

supra, 511 U.S. at page 607, footnote 3, is ―ignorantia facti excusat, ignorantia

juris non excusat.‖ Ignorance of facts excuses, ignorance of the law does not

excuse. ― ‗It is an emphatic postulate of both civil and penal law that ignorance of

a law is no excuse for a violation thereof.‘ ‖ (People v. Snyder (1982) 32 Cal.3d

590, 592-593.) This principle is reflected in our Penal Code: ―The word

‗knowingly‘ imports only a knowledge that the facts exist which bring the act or

omission within the provisions of this code. It does not require any knowledge of

the unlawfulness of such act or omission.‖ (§ 7, subd. 5.)

A defendant must know the facts that affect the material nature of his

conduct, that is, the facts that must be proven to show his act is the kind of

conduct proscribed by the statute. He need not know that his behavior in light of

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those facts is regulated by a statute. In a prosecution for bigamy, for example, the

defendant must know that he is marrying and that he is already married to another.

Both those material facts taken together make his action bigamy. They change the

nature of his act of marrying from legitimate behavior to illegal conduct. The

defendant need not know his conduct is illegal, but he must know the fact (i.e., he

is already married) that affects the material nature of his conduct.

A defendant does not have to know that his conduct is a crime. ―If the act

itself is punishable when knowingly done, it is immaterial that the defendant

thought it was lawful.‖ (1 Witkin & Epstein, Cal. Criminal Law (3d ed. 2000)

Defenses, § 36, p. 367.) A defendant may not escape criminal liability by

asserting that he did not know the criminal law.

Section 424, however, is an unusual statute, in which the definition of some

of the offenses incorporates a legal element derived from other noncriminal legal

provisions. Each of the three provisions at issue refers to ―law‖ or ―legal duty.‖

These references are ―shorthand,‖ used to encompass the wide variety of

requirements relating to the official‘s duties.

The ―law‖ applicable to the acts and omissions in these provisions of

section 424 is the authorizing law, which is extraneous to the penal statute.

Liability under section 424 arises when the officer or custodian, bound by these

authorizing laws, acts without authority (§ 424(a) 1)9 or fails to act as required.

(§ 424(a) 6, 7.) For the sake of clarity, we will refer to these authorizing laws as

―nonpenal laws,‖ to distinguish them from the crimes defined in section 424. In


9

As section 424(a) 1 is worded, ―[r]ather than prohibiting specifically

enumerated behavior, it prohibits any behavior which has not been previously
approved by statute or ordinance.‖ (People v. Battin (1978) 77 Cal.App.3d 635,
654.) Depending on the circumstances, it may be that no lawful authority
sanctioned the defendant‘s actions, or that the defendant‘s action was expressly
prohibited by particular lawful authority.

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Stark‘s circumstances, for example, the nonpenal law relied on by the People

includes the Government Code and the Board resolutions.

As we have explained, presence or absence of legal authorization is an

essential element of each of the offenses at issue. It also a ―fact‖ about which the

defendant must have knowledge in order to act with wrongful intent. Thus, the

People must prove, as a matter of fact, both that legal authority was present or

absent, and that the defendant knew of its presence or absence.

The People do not have to prove that defendant knew chapter and verse of

the nonpenal law. It is sufficient that the defendant knew generally that a

nonpenal law required or prohibited his conduct. As with any mental state, the

People may prove this knowledge by reference to the facts and circumstances of

the case.

c. What Is the Required Scienter?



We stated in People v. Salas, supra, 37 Cal.4th 967, 975, ―Depending upon

the crime, a requirement of guilty knowledge may mean that defendants are

10

innocent unless they know the facts making their conduct criminal.‖ In other

cases, however, ―it is sufficient that the defendants either know those facts or were

criminally negligent in failing to know them.‖ (Salas, at p. 975.)11

Stark maintains that the prosecution must prove a defendant‘s actual

knowledge of the legal requirements underlying the section 424(a) 1, 6, and 7

charges. The People argue that it is sufficient for the prosecution to prove that a


10

We repeat that a defendant does not have to know that his conduct is a

crime. He must know the facts that affect the material nature of his conduct.

11

Additionally, as noted, we held in In re Jorge M., supra, 23 Cal.4th 866,

867 that commission of the offense requires proof that a defendant knew or
reasonably should have known of the firearm‘s characteristics as an assault
weapon. We acknowledged that a ―reasonably should have known‖ formulation
―departs somewhat from the usual description of criminal negligence.‖ (Id. at p.
887 & fn. 11.)

30

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defendant knew, or was criminally negligent in failing to know, those legal

requirements.

As the People note, we determined in Simon, supra, 9 Cal.4th 493, that

actual knowledge of the facts or criminal negligence in failing to discover the facts

was the appropriate scienter. As we have previously explained, Simon concerned

Corporations Code section 25401, which prohibits the sale or purchase of

securities by means of misleading statements or omission of material facts. A

criminal penalty is imposed for ―willfully‖ violating Corporations Code section

25401. (Corp. Code, § 25540.) After concluding that section 25401 is not a strict

liability crime, we construed the statute to require a mental element. We held that

a criminal violation of Corporations Code 25401 requires ―either (1) knowledge of

the false or misleading nature of a representation or of the materiality of an

omission, or (2) criminal negligence in failing to acquire such knowledge.‖

(Simon, at p. 497, italics added.) Simon derived the particular mental state of

actual knowledge or criminal negligence from the corresponding civil remedy for

a violation of Corporations Code section 25401, which states that there is no

liability if the defendant ― ‗exercised reasonable care and did not know (or if he

had exercised reasonable care would not have known)‘ of the false or misleading

nature of a statement or omission . . . .‖ (Simon, at p. 517.)

Simon relied on related statutory authority to formulate the mental state

required for a criminal violation of Corporations Code section 25401. While

similar related statutes do not apply to section 424, Simon remains instructive. It

recognizes that, in particular circumstances, actual knowledge or criminal

negligence in failing to know material facts is the appropriate scienter.

We agree with the People that those circumstances are present here. Strong

public policy supports a rule requiring either actual knowledge or criminal

negligence in failing to know the legal requirements underlying the section 424

charges. ―Criminal negligence refers to ‗ ―a higher degree of negligence than is

required to establish negligent default on a mere civil issue. The negligence must

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be aggravated, culpable, gross, or reckless.‖ ‘ (People v. Penny (1955) 44 Cal.2d

861, 879; see People v. Valdez (2002) 27 Cal.4th 778, 783; People v. Peabody

(1975) 46 Cal.App.3d 43, 47; CALJIC No. 3.36.)‖ (People v. Salas, supra, 37

Cal.4th at p. 971, fn. 2.)

The Dillon court stated: ―The safekeeping of public moneys has, from the

first, been safeguarded and hedged in by legislation most strict and severe in its

exactitudes. It has continuously been the policy of the law that the custodians of

public moneys or funds should hold and keep them inviolate and use or disburse

them only in strict compliance with the law.‖ (Dillon, supra, 199 Cal. at p. 12.)

―The wisdom of the legislature in requiring custodians of public moneys to hold

them inviolate is both a protection to the public and to the officer as it tends to

remove from him the temptations that beset those who have large sums of money

in their possession free from immediate demands.‖ (Id. at p. 15.)

Citing authority that included Penal Code section 424 and Dillon, supra,

199 Cal. 1, we observed in Stanson v. Mott (1976) 17 Cal.3d 206, 225, that those

public officers ―who either retain custody of public funds or are authorized to

direct the expenditure of such funds bear a peculiar and very grave public

responsibility, and . . . courts and legislatures, mindful of the need to protect the

public treasury, have traditionally imposed stringent standards upon such

officials.‖

A mental state limited solely to actual knowledge is too rigid a formulation

in light of the purpose of section 424. The statute applies to public officers and

others charged with ―the receipt, safekeeping, transfer, or disbursement‖ of public

funds. (§ 424(a).) Because the Legislature intended that such persons fulfill their

obligations ―in strict compliance with the law‖ (Dillon, supra, 199 Cal. at p. 12),

we expect them to be aware of and indeed embrace the duties the law imposes

upon them. It would be antithetical to the intent of the Legislature that those

entrusted with control of public funds could evade an actual knowledge

requirement by failing to conduct the research that would inform them of their

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duties, or by failing to seek the advice of persons who could provide that

information. Limiting the requirement to actual knowledge would operate to

shield those whose efforts at determining their duties does not comport with the

significant public responsibility these individuals bear.

Given that ―[t]he safekeeping of public moneys has, from the first, been

safeguarded and hedged in by legislation most strict and severe in its exactitudes‖

(Dillon, supra, 199 Cal. at p. 12), a strict actual knowledge standard would impair

effective enforcement. It would defy the exacting nature of the statute if one could

escape criminal liability by claiming lack of subjective knowledge in

circumstances that are objectively unreasonable. Consequently, we agree with the

People that we should construe the applicable subdivisions of section 424 to

require actual knowledge or criminal negligence.

A criminal negligence standard protects both the public and the accused. If

public officials and others entrusted with control of public funds subjectively

believe their actions or omissions are authorized by law, they are protected from

criminal liability unless that belief is objectively unreasonable, i.e., is the product

of criminal negligence in ascertaining legal obligations. Public officials and others

should not be criminally liable for a reasonable, good faith mistake regarding their

legal responsibilities. Nor is section 424 intended to criminalize ordinary

negligence or good faith errors in judgment.

Section 424 is not limited to public officers. ―Because of the essential

public interest served by [section 424] it has been construed very broadly.‖

(People v. Groat (1993) 19 Cal.App.4th 1228, 1232.) It applies to ―every other

person‖ with some control over public funds. (See People v. Groat, at p. 1234

[manager in city‘s public safety department who had authority to certify her own

time record was a person charged with disbursement of public funds]; People v.

Evans (1980) 112 Cal.App.3d 607 [county aid worker with authority to complete

emergency check requisitions for clients was a person charged with disbursement

of public money].) Thus, while the criminal negligence standard remains the

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same, its application will necessarily be measured by what is objectively

reasonable for the particular person in the defendant‘s position.

Stark insists that actual knowledge is required. At oral argument, his

counsel asserted that a defendant charged under the statute ―cannot willfully act

without authority of law if he does not have knowledge of what the law requires

him to do.‖12 However, the authority relied on by Stark is distinguishable.

In People v. Hagen (1998) 19 Cal.4th 652 (Hagen), we construed the term

―willfully‖ in Revenue and Taxation Code former section 19405, subdivision

(a)(1), which made it a felony to ―[w]illfully make[] and subscribe[] any [tax]

return . . . that he or she does not believe to be true and correct as to every

material matter.‖ (Rev. & Tax. Code, former § 19405, as amended by Stats. 1993,

ch. 826, § 6, pp. 4462–4463, repealed by Stats.1994, ch. 1243, § 58; see now Rev.

& Tax. Code § 19705.) We observed that the term ―willfully‖ has been interpreted

in a number of statutory contexts as requiring more than mere volition in

committing the prohibited act. (Hagen, at p. 663.) We concluded the term

―willfulness,‖ as an element of this particular tax statute, ―requires the prosecution

to prove the defendant made the perjurious statement in voluntary, intentional

violation of a known legal duty.‖ (Id. at p. 666.) This construction is consistent

with the United States Supreme Court‘s definition of willfulness in federal

criminal tax statutes, including one ―substantially identical‖ to the statute at issue

in Hagen. (Hagen, supra, at pp. 658-661, 664.)

Additionally, as observed in Hagen: ―[T]he filing of a California personal

income tax return is an act demanded by law of most California residents. By

virtue of this and other reporting requirements, millions of Californians are subject

to, and must attempt to conform to, a myriad of state laws and regulations (in

addition to the many federal laws incorporated into state law). Most taxpayers


12 The term ―willfully‖ is used in section 424(a) 6 and 7, not in section 424(a) 1.

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cannot be expected to have special expertise in the area of tax law, and that many

taxpayers, without intending to disobey the law, will occasionally err out of

ignorance or a good faith misunderstanding of the law‘s requirements is inevitable.

California law, like its federal model, provides a graduated scheme of civil

penalties and misdemeanor and felony punishment to deter both honest mistakes

and willful fraud. . . . [W]e think it likely the Legislature . . . intended to use these

graduated penalties to ‗separate the purposeful tax violator from the well-meaning,

but easily confused, mass of taxpayers.‘ ‖ (Hagen, supra, 19 Cal.4th at p. 662,

italics added.)

Because our decision in Hagen, supra, 19 Cal.4th 652, concerned the

interpretation of ―willfulness‖ in a criminal tax offense, it does not assist us here.

In Cheek v. United States (1991) 498 U.S. 192, 200 the United States Supreme

Court stated, ―special treatment of criminal tax offenses is largely due to the

complexity of the tax laws.‖ The high court observed that ―the proliferation of

statutes and regulations has sometimes made it difficult for the average citizen to

know and comprehend the extent of the duties and obligations imposed by the tax

laws.‖ (Id. at pp. 199-200.) Thus, a defendant‘s good faith belief that he is not

violating the tax law negates the statutory ―willfulness‖ requirement, whether or

not the defendant‘s good faith belief is objectively reasonable. (Id. at p. 202.)

However, public policy concerns for the average taxpayer, who is not

expected to have a ―special expertise‖ in tax law (Hagen, supra, 19 Cal.4th at

p. 662), do not apply with equal force to those public officers and others entrusted

with the safekeeping of public money. The filing of tax returns is an obligation

imposed by the government. Because that obligation entails the application of

myriad and complex statutes, an actual knowledge requirement serves to protect

the innocent, misinformed taxpayer.

By contrast, those charged with control of public funds freely elect to hold

their positions of public trust. In this sense, those persons who fall within the

purview of section 424 are more comparable to the sellers of securities in Simon,

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supra, 9 Cal.4th 493, than to taxpayers who do not voluntarily assume that

obligation. Although some violations of section 424 may arise under complex

public finance laws, as Stark asserts, certainly not all do. But even in complex

situations, public officials and others are nevertheless obligated to act ―in strict

compliance with the law.‖ (Dillon, supra, 199 Cal. at p. 12.) They are expected to

take reasonable necessary steps to determine the appropriateness of their conduct.

Garcia, supra, 25 Cal.4th 744, likewise does not mandate an element of

actual knowledge. We noted in Garcia that the willful failure to register as a sex

offender under section 290 involves ―a failure to act.‖ (Garcia, at p. 752.) ―The

word ‗willfully‘ implies a ‗purpose or willingness‘ to make the omission. (§ 7.)

Logically one cannot purposefully fail to perform an act without knowing what act

is required to be performed. As stated in People v. Honig (1996) 48 Cal.App.4th

289, 334, ‗the term ―willfully‖ . . . imports a requirement that ―the person knows

what he is doing.‖ [Citation.] Consistent with that requirement, and in

appropriate cases, knowledge has been held to be a concomitant of willfulness.

[Fn. omitted.]‘ Accordingly, a violation of section 290 requires actual knowledge

of the duty to register. A jury many infer knowledge from notice, but notice alone

does not necessarily satisfy the willfulness requirement.‖ (Garcia, supra, at p.

752.)

Registration is an obligation imposed on a sex offender due to his criminal

conduct. Like the paying of taxes, it is not an obligation he seeks out. However, a

public officer or any other person charged with the transfer or disbursement of

public money is not in the same position as the sex offender required to register

under section 290. While section 424(a) 6 and 7 criminalizes ―willful‖ failures to

act, public officers and others entrusted with safekeeping of public funds have

voluntarily assumed the duties that require their action. They seek out and accept

these obligations. They must be aware that the government positions they accept

come with legal obligations. Because those who transfer and disburse public

money bear significant public responsibility, they may be held to a standard of

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criminal negligence. Stated another way, those who willfully accept the

responsibility to manage or handle public money cannot remain recklessly

ignorant of the nonpenal law regulating their actions. Rather, ―duty requires the

person to acquaint himself with the facts.‖ (Perkins & Boyce, Criminal Law (3d

ed. 1982) p. 668.)

Finally, Stark opposes a criminal negligence standard because he urges

there is a civil remedy against those public officials who make unauthorized

expenditures by acting without due care. He relies on Stanson v. Mott, supra, 17

Cal.3d 206, in which we held that a public official who, in good faith, authorizes

the improper expenditure of public funds may be personally liable to repay such

funds. We stated that ―public officials must use ‗due care,‘ i.e., reasonable

diligence, in authorizing the expenditure of public funds, and may be subject to

personal liability . . . in the absence of such due care.‖ (Id. at pp. 226-227.) But

the availability of a civil remedy against public officials for unauthorized

expenditures does not deprive the Legislature of authority to impose criminal

sanctions as well.

Stark argues that the conduct underlying the charges here is better resolved

in a civil forum. It is not for this court to question the wisdom of the Sutter

County District Attorney‘s Office in employing section 424 to address Stark‘s

conduct as county auditor-controller. The Legislature enacted a statute that

imposes criminal liability for the acts and omissions it describes. It is for the

prosecution to decide whether to bring charges and for a jury to decide if those

charges can be proven.







3. Section 424(a) 3

We address separately the mental state required for a violation of section

424(a) 3, which applies to a defendant who ―[k]nowingly keeps any false

account . . . .‖ Unlike the provisions of section 424 discussed above, section

424(a) 3 does not mention any ―authority of law.‖ The offense expressly requires

that a defendant act ―knowingly.‖ The word ―knowingly‖ is defined in section 7

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as follows: ―5. The word ‗knowingly‘ imports only a knowledge that the facts

exist which bring the act or omission within the provisions of this code. It does

not require any knowledge of the unlawfulness of such act or omission.‖ (§ 7,

subd. 5.) Thus, under this definition, a person violates section 424(a) 3 if he or she

keeps an account with knowledge that the account is false.



B. Section 424 — Instructional Error on Mental State

With regard to the alleged violations of Penal Code section 424, the grand

jury was instructed as follows: ―In the crimes charged in the indictment . . . , there

must exist a union or a joint operation of act or conduct and general criminal

intent. [¶] General criminal intent does not require an intent to violate the law.

When a person intentionally does that which the law declares to be a crime, he or

she is acting with general criminal intent, even though he or she may not know

that his or her act is unlawful.‖

The prosecutor then defined the terms ―knowingly‖ and ―willfully‖ and

read section 424 verbatim.

Later, the prosecutor told the grand jury: ―What we have here are general

intent crimes. You don‘t have to intend to break the law. You don't have to intend

to do anything that‘s illegal. All you have to do is the act that the law says is a

crime. You‘ve heard the phrase ignorance of the law is no excuse. That‘s what

you‘re dealing with with a general intent crime, especially misappropriation of

public money.‖

However, as we have discussed, the section 424 provisions at issue require

that the defendant knew or was criminally negligent in failing to know that his

actions and omissions were without lawful authority or contrary to legal

requirements. The grand jury was not given such an instruction.

The People and Stark disagree as to how Stark may challenge the

indictment on the ground of instructional error. Stark, relying on Cummiskey v.

Superior Court (1992) 3 Cal.4th 1018 (Cummiskey), claims that he may assert his

claim of instructional error under section 995, subdivision (a)(1)(B), which

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provides for dismissal of the indictment when ―the defendant has been indicted

without reasonable or probable cause.‖ The People argue that Stark must

demonstrate that the instructional error resulted in a denial of due process in the

grand jury proceedings (see People v. Backus (1979) 23 Cal.3d 360, 392-393

(Backus)), and that such a claim must be brought as a nonstatutory motion. For

the reasons explained below, we hold that instructional error on the mental state

required for an offense can be challenged under a section 995, subdivision

(a)(1)(B) motion. An improper instruction on the required mental state raises the

possibility that the defendant may have been indicted on less than probable cause.

In Cummiskey, supra, 3 Cal.4th 1018, the petitioner‘s principal claim was

that the grand jury had been misled on the standard of proof for returning an

indictment. The superior court denied the motion to set aside the grand jury

indictment under section 995, and this court granted review after a summary

denial of Cummiskey‘s petition for writ of mandate.

The grand jury in Cummiskey was instructed that an indictment could be

returned if all the evidence, taken together, provided sufficient cause to believe

that an offense had been committed and that the accused was guilty of it.

(Cummiskey, supra, 3 Cal.4th at p. 1025.) Cummiskey argued that the ―sufficient

cause‖ test, while applicable to a magistrate conducting a preliminary hearing, is

inadequate for a grand jury proceeding. Instead, Cummiskey claimed the grand

jury should have been instructed with the exact language of section 939.8, which

she asserted required a higher standard of proof.13 Cummiskey argued that the

failure to instruct the grand jury with the precise language of section 939.8 was

grounds for dismissal of the indictment under section 995. (Cummiskey, at pp.

1025-1026.)


13

Section 939.8 provides: ―The grand jury shall find an indictment when all

the evidence before it, taken together, if unexplained or uncontradicted, would, in
its judgment, warrant a conviction by a trial jury.‖

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We rejected Cummiskey‘s claim, holding that the standard of proof for

returning an indictment under section 939.8 is ― ‗probable cause. ‘ ‖ (Cummiskey,

supra, 3 Cal.4th at p. 1029.) Thus, the grand jury was adequately instructed when

told that it must find the equivalent of ― ‗probable cause to indict.‘ ‖ (Ibid.)14

Justice Kennard, in a concurring and dissenting opinion joined by Justice

Mosk, described Cummiskey‘s claims as challenges to the propriety of legal

advice and instructions given to the grand jury and, as such, were not cognizable

under section 995 as a basis for setting aside the indictment. (Cummiskey, supra,

3 Cal.4th at pp. 1039-1040 & conc. & dis. opn. of Kennard, J.) Justice Kennard

stated that the only recognized exception to these statutory grounds permits a court

to ―set aside an indictment on the ground that the proceedings have failed to

comport with the demands of the due process clause of the federal or state

Constitution.‖ (Id. at p. 1039.)

In a footnote, the Cummiskey majority responded: ―Petitioner‘s chief

assertion—that the grand jury was misinstructed on the minimum standard of

proof required to indict—is manifestly tantamount to a claim that, as instructed,

the jury may have indicted her on less than reasonable or probable cause. As such,

the indictment was plainly subject to a motion to set it aside on that ground under

section 995, subdivision (a)(1)(B).‖ (Cummiskey, supra, 3 Cal.4th at p. 1022,

fn. 1.)

Stark argues that the prosecutor‘s failure to instruct the grand jury on the

required mental element of section 424 is likewise ―tantamount to a claim that, as


14

Additionally, Cummiskey claimed the prosecutor, by instructing the grand

jury that it ― ‗should only consider the evidence presented,‘ ‖ and by refusing to
answer certain evidentiary questions, misled it regarding the exercise of its
independent investigative authority under section 939.7. (Cummiskey, supra, 3
Cal.4th at p. 1030.) Cummiskey also argued that the prosecutor failed to instruct
the grand jury on lesser included offenses. (Id. at p. 1034.) We rejected both these
claims as well. (Id. at pp. 1034, 1036.)

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instructed, the jury may have indicted [him] on less than reasonable or probable

cause.‖ (Cummiskey, supra, 3 Cal.4th at p. 1022, fn. 1.) The People, on the other

hand, argue that the Cummiskey majority held only that a misinstruction on the

standard of proof required to indict was cognizable under section 995. The People

rely on People v. Gordon (1975) 47 Cal.App.3d 465, in which the Court of Appeal

concluded that an indictment cannot be challenged under section 995 ―on the

grounds that the grand jury was given insufficient or even inaccurate legal advice

before returning an indictment. [¶] The legal sufficiency of the evidence which

underpins an indictment is reviewed by a judge of the superior court at the time of

the hearing on a motion under section 995 of the Penal Code. It is this check on

the grand jury‘s power to indict that serves to protect a defendant against

unmeritorious or legally incorrect indictments.‖ (Gordon, at p. 476.)

The People read our footnote in Cummiskey too narrowly. The role of the

grand jury in an indictment proceeding is to ―determine whether probable cause

exists to accuse a defendant of a particular crime.‖ (Cummiskey, at p. 1026.)

Probable cause ― ‗ ―means such a state of facts as would lead a man of ordinary

caution or prudence to believe, and conscientiously entertain a strong suspicion of

the guilt of the accused.‖ ‘ ‖ (Cummiskey, supra, 3 Cal.4th at p. 1029, italics

omitted, quoting Lorenson v. Superior Court (1950) 35 Cal.2d 49, 56.) The grand

jury serves as the functional equivalent of a magistrate who presides over a

preliminary examination on a felony complaint. ―Like the magistrate, the grand

jury must determine whether sufficient evidence has been presented to support

holding a defendant to answer on a criminal complaint.‖ (Cummiskey, at p. 1027.)

We have explained the limited role of the reviewing court with regard to a

grand jury indictment: ―The duty of determining whether or not an indictment

should be found is lodged exclusively in the grand jury and not in the courts.‖

(Lorenson v. Superior Court, supra, 35 Cal.2d at p. 55.) The reviewing court

does not substitute its judgment as to the weight of the evidence for that of the

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grand jury, and must draw all reasonable inferences in favor of the indictment.

(Williams v. Superior Court (1969) 71 Cal.2d 1144, 1148.)

While the evidence presented to the grand jury need not be sufficient to

support a conviction beyond a reasonable doubt, there must be some factual

showing as to each element of the crime. Such a showing may be made by

circumstantial evidence supportive of reasonable inferences. (See Williams v.

Superior Court, supra, 71 Cal.2d at p. 1148.) Among the elements, of course, is

the mental state required to commit the offense.

A grand jury need not be instructed with the same degree of precision that

is required for instructing the trial jury. (See Cummiskey, supra, 3 Cal.4th at

p. 1034.) But when a grand jury is not asked to consider the mental state required

for the commission of the offense, absence of any instruction on that topic raises

the possibilty that the defendant may have been indicted on less than reasonable or

probable cause. The indictment is subject to a motion to set it aside on that ground

under section 995, subdivision (a)(1)(B).15

Stark asserts that the prosecutor‘s failure to instruct on the knowledge

requirement for section 424 ―is a misinstruction on the standard of proof . . . .

which effectively removed the element of mens rea from any independent

assessment by grand jurors . . . .‖ His argument fails because of the particular

state of this record. As we shall explain, based on parallel counts of the accusation

under Government Code section 3060, the record demonstrates that the grand jury

did indeed consider whether Stark acted or failed to act with actual knowledge.

Thus, the failure to instruct with the guilty knowledge requirement set out in this

opinion was harmless.


15

Accordingly, we disapprove of People v. Gordon, supra, 47 Cal.App.3d

465, to the extent it is inconsistent with our holding here.

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The identical conduct that was the basis for the counts of the criminal

indictment is also the basis of parallel counts in the accusation. In particular:

1) Count three of the accusation is based on the same conduct as the third

count of the indictment: Stark‘s unauthorized transfer of money from the county‘s

general fund to the Waterworks District. Both counts allege that Stark‘s conduct

violated section 424(a) 1;

2) Count six of the accusation is based on the same conduct as the ninth

count of the indictment: Stark‘s refusal to post the journal entries for the IT

department. Both counts allege that Stark‘s conduct violated section 424(a) 6;

3) Counts seven and eight of the accusation are based on the same conduct

as the tenth count of the indictment: Stark‘s attempt to withhold wages from

employees of the IT department. Count eight of the accusation and count ten of

the indictment allege that Stark‘s conduct was an attempted violation of section

424(a) 7;

4) Counts eleven and twelve of the accusation are based on the same

conduct as the twelfth count of the indictment: Stark‘s refusal to pay overtime to

the fire department employees in January 2005. Both count twelve of the

accusation and count twelve of the indictment allege that Stark‘s conduct violated

section 424 (a) 7; and

5) Counts fourteen and fifteen of the accusation are based on the same

conduct as the thirteenth count of the indictment: Stark‘s withholding of wages

for the New Year‘s holiday from retiring employees. Both count fifteen of the

accusation and count thirteen of the indictment allege that Stark‘s conduct violated

section 424(a) 7.

Turning first to the counts of the accusation listed above, violations of the

Government Code and other laws are alleged, as are the parallel violations of

section 424. As before, we will refer to these other laws as ―nonpenal laws‖ to

distinguish them from section 424. The district attorney told the grand jury, ―All

the Government Code statutes that give the auditor the duty to do certain things or

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the Board to do certain things are contained in the accusation, and then we also

included the parallel violations of [penal] law.‖ Specifically, count three of the

accusation alleges that Stark‘s transfer of county funds to the Waterworks District

violated Government Code sections concerning the authority of the Board to make

changes to the adopted budget and to approve approriations from reserve

accounts,16 and section 424(a) 1, which criminalizes the appropriation of money

without lawful authority.

Count six of the accusation alleges that Stark‘s failure to post entries for the

IT department violated a Government Code section requiring the auditor-

controller to issue warrants on claims the Board has ordered paid,17 and section

424(a) 6, which criminalizes the willful failure to transfer money as legally

required.

Count seven of the accusation alleges that Stark‘s attempt to withhold

wages from IT department employees was an attempted violation of Labor Code

section 222, and count eight of the accusation alleges that the identical conduct

was an attempted violation of section 424(a) 7, which criminalizes the willful

failure to pay over money when under a legal duty to do so.

Count eleven of the accusation alleges that Stark‘s failure to pay wages to

fire department employees violated the Fair Labor Standards Act and Labor Code

section 222, and count twelve of the accusation alleges that the identical conduct

violated section 424(a) 7.

Count fourteen of the accusation alleges that Stark‘s withholding of wages

to retiring employees for the New Year‘s holiday violated Sutter County rule

13.10, concerning holiday pay for terminating employees, and Labor Code section

222, and count fifteen of the accusation alleges that the identical conduct violated

section 424(a) 7.

16

Government Code sections 29088 and 29130.

17

Government Code section 28903.

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As will be discussed regarding Government Code section 3060, the grand

jury was instructed that Stark had to know ―the act he . . . was performing or

failing to perform was required or prohibited by law,‖ and ―the law may be set

forth in a statute, ordinance or other provision of law.‖ (Italics added.) In

returning the counts of the accusation, the grand jury necessarily found sufficient

evidence that Stark knew the act he performed or failed to perform was required or

prohibited by the nonpenal law specified in those counts. This finding of

knowledge extends to the parallel violations of section 424 in the accusation,

which rest on the same nonpenal law.18

In turn, as listed above, the same violations of section 424 alleged in the

accusation are alleged in parallel counts of the indictment. The prosecutor argued

to the grand jury that ―[t]he evidence will be viewed the same as it supports

returning the indictment and the accusation against Robert Stark.‖ Thus, as to the

parallel violations of section 424 in the indictment, the failure to instruct with the

guilty knowledge requirement was harmless.

Finally, there was no instructional error as count eleven of the indictment,

which alleges a violation of section 424(a) 3. As we have explained, section

424(a) 3 requires only that the act be done knowingly. The grand jury here was

properly advised: ―The word ‗knowingly‘ means with knowledge of the existence

of the facts in question. [¶] Knowledge of the unlawfulness of an act or omission

is not required.‖



C. Government Code Section 3060 — Mental State

In his petition, Stark sought review of the mental state required for willful

misconduct under Government Code section 3060. We need not decide that issue

to resolve the gravamen of Stark‘s challenge to the accusation. Stark‘s ultimate


18

In view of our conclusion that the required mental state for these section

424 provisions is actual knowledge or criminal negligence, the grand jury
instruction was more generous to Stark than required.

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argument is quite different from that point in his petition for review. Unlike his

claim regarding section 424, Stark does not argue that the grand jury was

improperly instructed on the Government Code section 3060 mental state.

Instead, he asserts that some of the district attorney‘s argument and accompanying

PowerPoint slides may have confused the grand jury and ―vitiated‖ the correct

instruction. Thus, he urges the accusation must be set aside. As we shall explain,

this argument fails.19

1. Background

Government Code section 3060 et seq. provides for a special statutory

proceeding authorizing the removal from office of ―any officer of a district,

county, or city‖ for ―willful or corrupt misconduct in office.‖ (Gov. Code, § 3060;

see 2 Witkin & Epstein, Cal. Criminal Law, supra, Crimes Against Governmental

Authority, § 109, p. 1201.)

A proceeding under Government Code section 3060 begins with a grand

jury‘s presentation of an accusation against the official charged with misconduct.

(Gov. Code, § 3060.)20 The official may object to the legal sufficiency of the

accusation, and if the objection is rejected, the official ―shall answer thereto.‖

(Gov. Code, § 3068; see id., § 3066.) If the official denies the charges, the

accusation shall be tried by a jury ―and conducted in all respects in the same

19

The People argue that Government Code section 3066 does not provide a

basis for challenging an accusation based on an allegedly erroneous grand jury
instruction. The statute allows an official who is the subject of the accusation to
object to its ―legal sufficiency.‖


We need not resolve that question here because, even assuming the statute

permits a challenge for instructional error, Stark‘s argument is without merit.
20

Government Code section 3060 provides in relevant part: ―An accusation

in writing against any officer of a . . . county, . . . for willful or corrupt misconduct
in office, may be presented by the grand jury of the county for or in which the
officer accused is elected or appointed. An accusation may not be presented
without the concurrence of at least 12 grand jurors, or at least eight grand jurors in
a county in which the required number of members of the grand jury is 11.‖

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manner as the trial of an indictment.‖ (Gov. Code, § 3070; see id., § 3069.) Upon

conviction, the court ―shall pronounce judgment that the defendant be removed

from office.‖ (Gov. Code, § 3072.)

―This special statutory proceeding is not a criminal prosecution; i.e., its

object is not to convict the defendant of a crime but merely to remove him or her

from office, no other punishment being authorized.‖ (2 Witkin & Epstein, Cal.

Criminal Law, supra, Crimes Against Governmental Authority, § 109, p. 1201.)

A crime committed in a defendant‘s official capacity necessarily suffices to

establish ―willful or corrupt misconduct in office‖ under Government Code section

3060. (See People v. Hale (1965) 232 Cal.App.2d 112, 122; People v. Harby

(1942) 51 Cal.App.2d 759, 767.) However, acts which can be punished under

Government Code section 3060 are broader than behavior subject to criminal

charges. In Coffey v. Superior Court (1905) 147 Cal. 525 (Coffey), we stated that

― ‗misconduct in office‘ is broad enough to include any willful malfeasance,

misfeasance, or nonfeasance in office,‖ even without any ― ‗criminal intention.‘ ‖

(Id. at p. 529.)

A 13-count accusation remains against Stark. Nine counts are based on the

same conduct alleged in the criminal indictment. Four additional counts of the

accusation allege the following conduct: in count one, that Stark failed to file the

budget on time as required by the Government Code provision and Board

resolution; in counts four and five, that Stark ―unilaterally amend[ed]‖ the 2004-

2005 county budget, and ―creat[ed] unauthorized reserve accounts‖ in that budget

in violation of Government Code provisions and a Board resolution;21 and in


21

Counts four and five of the accusation were parallel to particular counts in

the indictment. However, those counts of the indictment were dismissed by the
Court of Appeal because the alleged acts by Stark did not constitute ―use‖ within
the meaning of section 424(a) 2, which applies to one who ―[l]oans [public
money] or any portion thereof; makes any profit out of, or uses the same for any
purpose not authorized by law[.]‖

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count nine, that Stark removed IT department employees ―from receipt of wages

by direct deposit.‖



2. Instruction and Argument

The prosecutor instructed the grand jury as follows:

―Misconduct in office includes any knowing and willful malfeasance,

misfeasance or nonfeasance.

―Malfeasance is the knowing and willful doing of an act that is unlawful.

―Misfeasance is the knowing and willful failure to perform a duty in the

manner that the law requires.

―Nonfeasance is the knowing and willful failure to act when the law

requires an act. ¶

―Mere negligence or mistake in judgment in the performance of a public

officer’s duty does not constitute willful misconduct in office.

―It must be proved that the public officer knew the act that he or she was

performing or failing to perform was required or prohibited by law, and, having

said knowledge, willfully failed to act, in whole or in part, in conformity with such

law.

―The law may be set forth in a statute, ordinance or other provision of law.

―The Auditor-Controller is a public officer or public official.‖ (Italics

added.)

The grand jury was instructed in great detail on the manner of its

deliberations, and the particular Government Code sections and rules applicable to

the accusation and indictment. The grand jury was advised that a written set of the

instructions would be provided for its deliberations.

There was a distinct break between the legal instructions and the

prosecutors‘ argument. At the conclusion of the instructions, District Attorney

Adams said that he would next argue the significance of the evidence: ―You have

now heard all of the law and received all the evidence that your decision will be

based on. [¶] We are going to take a very brief break and then we are going to

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present our opinion of the case, and it is simply a lawyer‘s opinion. [¶] I even

want to go so far as to caution you at this point that we‘re not really speaking as

the Grand Jury‘s advisors. We are here to present to you what we believe, as

attorneys, is the outline of the case and the significance of the evidence to suggest

to you what you should do with it. [¶] We are advocates, and we are advocates

for one side of the case, where the other side will not be heard.‖ Following

argument presented by the deputy district attorney, Adams told the grand jury:

―What you do depends on the facts that you have determined through all the

testimony and all of the exhibits and on the law that was read to you earlier.‖

(Italics added.)

The instruction at issue here regarding knowledge of law concerns the

nonpenal law that requires or prohibits the act or omission. As we have previously

explained, the mental state for a violation of section 424 may be satisfied by actual

knowledge or criminal negligence in failing to know the legal requirements

governing the charged acts or omissions. In this case, we need not decide the

precise contours of the mental state required by Government Code section 3060.

Our analysis here is based on the narrow confines of this record. This grand jury

was instructed that a public officer must have actual knowledge of the legal

requirement or prohibition pertaining to his act. As noted in the analysis of the

criminal charges, the grand jury could not have returned the accusation against

Stark without determining that he had actual knowledge of the law.

We now turn to Stark‘s allegation of juror confusion. Rather than attack

the instructions themselves, Stark claims that some of the prosecutor‘s comments

during argument and accompanying PowerPoint slides ―vitiated‖ that instruction

on actual knowledge.

Stark objects first to the italicized sentence in this portion of the

prosecutor‘s argument: ―Misconduct in office involves any willful malfeasance,

misfeasance or nonfeasance in office, and ‗willfully‘ means done purposefully. It

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doesn’t mean that you have intended to break the law. You just have to commit

the act that the law says is either a violation of a statute or criminal act also.‖

Stark does not explain his objection to the italicized phrase, nor do we

discern one. The prosecutor merely repeated the standard from Coffey, supra, 147

Cal. at p. 529, and properly pointed out that the act or omission must be done

willfully. The correct statement that an intent to break the law is not required in

no way undermines the instruction that an official ―know‖ the act in question was

required or prohibited by law.22

Stark next objects to the explanation of malfeasance. The PowerPoint slide

defined ―malfeasance‖ as follows: ―The commission of an illegal act — an act

that ought not be done at all. [¶] Includes such acts as amount to a breach of

good faith and right action that are impliedly required of all public officers. [¶]

Example: performing an act in violation of a statute. [¶] Does not have to be a

violation of a criminal law.‖ (Italics added.)

Again, Stark does not explain his objection. And again, the italicized

sentence does not concern ―knowledge‖ of the law. The sentence describes the

nature of the act required. Assuming Stark‘s objection is that the sentence is too

broad, its scope was narrowed by the example given: violation of a statute.

Stark next objects to the PowerPoint slide entitled ―Nonfeasance.‖ The

slide described nonfeasance as follows: ―Knowing and willful failure to act when

the law requires an act. [¶] Neglect of the duties of office. [¶] Failure to act

where the duty to act is premised on something the official should have known.

[¶] Something more than oversight or neglect is required to constitute willful

misconduct.‖

The first two sentences are a correct explanation of nonfeasance: failure to

do what the law requires and a failure to perform the duties of office. The third

22

As pointed out, we need not and do not decide here what mental state is

required to establish willful misconduct under Government Code section 3060.

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sentence, referring to something the official ―should have known‖ may imply a

standard less than actual knowledge. However, the very next sentence points out

that mere oversight or neglect is insufficient. Starks concedes this latter statement

is correct. Considering the entire statement set out in the slide in light of the clear

statement in the instructions that actual knowledge is required, this single sentence

used in argument does not raise a legitimate concern that the grand jury was

misled as to the mental state required in order to return an accusation, or that it

returned the accusation on legally insufficent evidence.

D. Conflict of Interest as a Basis to Set Aside the Indictment and





Accusation

1.

Background



After the grand jury investigation had begun, Stark‘s attorney asked District

Attorney Adams to declare a conflict of interest. Adams declined. While grand

jury proceedings were ongoing, Stark tried to file a motion to disqualify the Sutter

County District Attorney‘s Office. The filing was disallowed, however, because

no action was pending. The grand jury returned its indictment and accusation on

May 4, 2005.

In June 2005, Stark moved to disqualify the district attorney‘s office from

prosecuting the indictment and accusation against him. Relying on section 1424

and due process grounds, Stark argued that as auditor-controller he would continue

to make decisions affecting the daily operation of the district attorney‘s office; the

district attorney‘s office is financially impacted by Stark‘s alleged misconduct;

and District Attorney Adams was personally involved in events that related to the

grand jury investigation.

While the motion to disqualify was pending, Stark filed his motion to set

aside the indictment and accusation, arguing that the district attorney‘s office

suffered from an apparent conflict of interest during the grand jury proceedings.

Stark incorporated the facts and argument from his disqualification motion, but

claimed the standard of People v. Superior Court (Greer) (1977) 19 Cal.3d 255

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(Greer), governs the determination of whether a conflict of interest requires the

setting aside of the indictment and accusation.

Starks‘s motion to disqualify the district attorney‘s office was heard first

and denied. Two months later, the trial court denied Stark‘s motion to set aside

the indictment and accusation. The trial court, applying the standard in Greer,

supra, 19 Cal.2d 255, concluded that ―the district attorney‘s involvement did not

create a potential for bias or the appearance of a conflict of interest.‖ Stark argues

the trial court erred in that determination, and claims the ruling must be reviewed

under Greer standard.



2. Analysis

Stark relies on Greer, supra, 19 Cal.3d 255, to assert that he may challenge

the indictment under section 995 by showing that the district attorney suffered

from a conflict of interest ―which might prejudice him against the accused and

thereby affect, or appear to affect, his ability to impartially perform the

discretionary functions of his office.‖ (Greer, at p. 269, italics added.) He argues

that the subsequent enactment of section 1424 had no effect on Greer‘s

applicability to motions to set aside an indictment.

Greer involved a motion to disqualify the prosecutor before trial. The

Greer court concluded the trial court had the inherent power to disqualify the

district attorney in order to ensure that a fair trial would be achieved. In dictum,

the Greer court stated: ―We do not mean to deny that the same conflict of interest

which disqualifies a prosecutor from participating in the trial of a criminal case

may not also taint the procedure by which the defendant was charged, if the same

district attorney participated therein. [Citations.] Thus, if the trial court

determines that a district attorney‘s participation in the filing of a criminal

complaint or the preliminary hearing on that complaint created a potential for bias

or the appearance of a conflict of interest, it may conclude that the defendant was

not ‗legally committed‘ within the meaning of Penal Code section 995, and the

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information should be set aside.‖ (Greer, supra, 19 Cal.3d at p. 263, fn. 5,

hereafter Greer footnote.)

Three years after the Greer decision, the Legislature enacted section 1424,

―[r]esponding to an increase in the number of recusals, which the Attorney

General attributed in part to Greer‘s ‗appearance‘ standard . . . .‖ (People v.

Vasquez (2006) 39 Cal.4th 47, 59 (Vasquez); see People v. Eubanks (1996) 14

Cal.4th 580, 591, fn. 3.) Section 1424 provides that motions to disqualify the

district attorney may not be granted ―unless the evidence shows that a conflict of

interest exists that would render it unlikely that the defendant would receive a fair

trial.‖ ―[W]hether the prosecutor‘s conflict is characterized as actual or only

apparent, the potential for prejudice to the defendant — the likelihood that the

defendant will not receive a fair trial — must be real, not merely apparent, and

must rise to the level of a likelihood of unfairness. Thus section 1424, unlike the

Greer standard, does not allow disqualification merely because the district

attorney‘s further participation in the prosecution would be unseemly, would

appear improper, or would tend to reduce public confidence in the impartiality

and integrity of the criminal justice system.‖ (People v. Eubanks, supra, 14

Cal.4th at p. 592.)

Nevertheless, in People v. Eubanks, supra, 14 Cal.4th 580, we referred to

the Greer footnote: ―One should note, in this connection, the distinction between

a motion to recuse the district attorney, under section 1424, and a motion to set

aside the information or indictment, under section 995. In Greer we suggested

that ‗if the trial court determines that a district attorney's participation in the filing

of a criminal complaint or the preliminary hearing on that complaint created a

potential for bias or the appearance of a conflict of interest, it may conclude that

the defendant was not ―legally committed‖ within the meaning of Penal Code

section 995, and the information should be set aside.‘ (Greer, supra, 19 Cal.3d at

p. 263, fn. 5.) We expressly reserve the question whether availability of a remedy

under section 995 was affected by the addition of section 1424 and thus express no

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opinion here regarding what standard would govern motions brought under section

995.‖ (People v. Eubanks, supra, 14 Cal.4th at p. 592, fn. 4.)

Greer concerned the disqualification of a prosecutor from participating in

an upcoming trial. As we have noted, its observations regarding the possible

setting aside of an information were dictum. Eubanks concerned disqualifications

under section 1424, and its footnote served simply to note the distinction between

those motions and motions to set aside accusatory pleadings, without expressing

any opinion on the viability of Greer in the latter context. Nevertheless, Stark

argues the Greer standard remains applicable to setting aside an indictment. Stark

is wrong.

An examination of the Greer footnote does not indicate that it was intended

to apply to a motion to set aside an indictment. The Greer footnote addressed

only the district attorney‘s participation in the filing of a criminal complaint or in a

preliminary hearing. The Greer court suggested that an appearance of a conflict of

interest at those portions of the proceedings may demonstrate that a defendant was

not ―legally committed‖ within the meaning of section 995, subdivision (a)(2)(A),

requiring the information be set aside. (Greer, supra, 19 Cal.3d at p. 263, fn. 5,

italics added.)23 Indictments, on the other hand, are governed by section 995,

subdivision (a)(1), which omits the ―legally committed‖ language.24


23

The phrase ―legally committed‖ is contained in section 995, subdivision

(a)(2)(A), which requires that an information be set aside if the defendant was not
―legally committed.‖ ― ‗ ―The phrase ‗legally committed,‘ . . . refers to the
examination of the case and the holding of the defendant to answer . . . .‖ ‘ ‖
(Jennings v. Superior Court (1967) 66 Cal.2d 867, 874.)
24

Section 995, subdivision (a)(1)(A) provides the indictment shall be set

aside if it ―is not found, endorsed, and presented as prescribed in this code,‖ i.e.,
―part 2, title 5, chapter 1, of the Penal Code beginning with section 940.‖ (People
v. Jefferson (1956) 47 Cal.2d 438, 442.) Section 995, subdivision (a)(1)(B)
provides the indictment shall be set aside when the accused has been indicted
―without reasonable or probable cause.‖


(footnote continued on next page)

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Stark complains that it would be ―anomalous‖ to require a defendant

charged by indictment to meet a different legal standard than a defendant charged

by information. Even as to a motion to set aside an information, however, the

Greer dictum is not viable. When the Legislature superseded the Greer standard

by enacting section 1424, it necessarily rejected that standard for all purposes. To

maintain the Greer dictum could lead to the absurd result of dismissing the

prosecutor‘s information in the absence of grounds to disqualify the prosecutor, a

circumstance the Legislature could not have intended in enacting section 1424.

The question here is not whether the defunct Greer standard applies. The

question is whether Stark was denied due process. This court has recognized that

the manner in which the grand jury proceedings are conducted may result in a

denial of a defendant‘s due process rights, requiring dismissal of the indictment.

(Backus, supra, 23 Cal.3d at pp. 392-393.)25 That showing requires a

demonstration that the prosecutor suffered from a conflict of interest that

substantially impaired the independence and impartiality of the grand jury. (Ibid.)

Stark has failed to make such a showing. Both as to the indictment and


(footnote continued from previous page)

Stark observes that the Greer footnote, in making a general observation that

a conflict of interest may taint the charging procedure, cites Corbin v. Broadman
(1967) 6 Ariz.App.436, which involved a grand jury indictment. The Arizona case
is distinguishable. There, the court concluded that Arizona Rules of Criminal
Procedure permitted the quashing of an indictment on the ground that the
prosecutor, who had a conflict of interest, was an unauthorized person present
during grand jury proceedings. (Id. at pp. 440-441.)
25

The parties disagree on the means by which a defendant may challenge an

indictment under Penal Code section 995 and an accusation under Government
Code section 3060 on the basis of a district attorney‘s conflict of interest. Stark
argues that his claims are properly raised under those statutes, although he does
not clearly explain how. The People argue that Stark is limited to making a
nonstatutory due process motion. We need not resolve these questions here. Stark
has failed to establish his entitlement to relief on any basis.


55

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accusation, Stark has confined his arguments to the untenable position that a

conflict sufficient to satisfy the Greer standard was enough to garner the relief he

sought. Moreover, having failed to make a showing sufficient to disqualify the

district attorney under section 1424 on identical facts,26 it is plain that Stark could

not make the more stringent showing required to establish a violation of due

process. (See Vasquez, supra, 39 Cal.4th at pp. 58-59.)


26

As we have noted, Stark‘s disqualification motion was denied by the trial

court, and the record does not indicate he sought relief from that ruling by pretrial
petition. (See Vasquez, supra, 39 Cal.4th at p. 68.)

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III. DISPOSITION

The judgment of the Court of Appeal is affirmed.




CORRIGAN, J.

WE CONCUR:

KENNARD, ACTING C. J.
BAXTER, J.
WERDEGAR, J.
CHIN, J.
DUFFY, J. *
DONDERO, J. **















___________________________
* Associate Justice, Court of Appeal, Sixth Appellate District, assigned by the
Acting Chief Justice pursuant to article VI, section 6 of the California
Constitution.

** Associate Justice, Court of Appeal, First Appellate District, Division One,
assigned by the Acting Chief Justice pursuant to article VI, section 6 of the
California Constitution.


57

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CONCURRING OPINION BY KENNARD, J.




Here, the court holds, among other things, that an indictment may be set

aside under Penal Code section 995 on the ground that the grand jury was wrongly

instructed on the mental state required for an offense. (Maj. opn., ante, at pp. 2,

39.) This holding is logically compelled by Cummiskey v. Superior Court (1992)

3 Cal.4th 1018 (Cummiskey), which held that a claim of instructional error

regarding the standard of proof is cognizable under Penal Code section 995.

(Cummiskey, supra, at p. 1022, fn. 1.) I dissented on that point in Cummiskey,

arguing that Penal Code section 995 does not authorize a court to set aside an

indictment on the ground of instructional error. (Cummiskey, at pp. 1038-1040

(conc. & dis. opn. of Kennard, J.).) But Cummiskey now has the force of

precedent, and, as I have stated before, ―reiteration of dissenting views is rarely

justified.‖ (International Society for Krishna Consciousness of California, Inc. v.

City of Los Angeles (2010) 48 Cal.4th 446, 461 (conc. opn. of Kennard, J.); see

also Porter v. Superior Court (2009) 47 Cal.4th 125, 142.) Therefore, I join in the

majority‘s holding on this issue.

KENNARD, J.

1

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See next page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion Stark v. Superior Court
__________________________________________________________________________________

Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 140 Cal.App.4th 567
Rehearing Granted

__________________________________________________________________________________

Opinion No. S145337
Date Filed: August 1, 2011
__________________________________________________________________________________

Court: Superior
County: Sutter
Judge: H. Ted Hansen

__________________________________________________________________________________

Counsel:

Rothschild, Wishek, Chastaine & Sands, Rothschild, Wishek & Sands, M. Bradley Wishek, Quin A.
Denvir; and Marilyn Fisher for Petitioner.

No appearance for Respondent.

Bill Lockyer, Edmund G. Brown, Jr., and Kamala D. Harris, Attorneys General, Robert R. Anderson and
Dane R. Gillette, Chief Assistant Attorneys General, Manuel M. Medeiros, State Solicitor General, Donald
E. de Nicola, Deputy State Solicitor General, Mary Jo Graves and Michael P. Farrell, Assistant Attorneys
General, Michal A. Canzoneri, Janet Neeley and Clifford E. Zall, Deputy Attorneys General, for Real Party
in Interest.

---

Counsel who argued in Supreme Court (not intended for publication with opinion):

M. Bradley Wishek
Rothschild, Wishek & Sands
901 F Street, Suite 200
Sacramento, CA 95814
(916) 444-9845

Clifford E. Zall
Deputy Attorney General
1300 I Street, Suite 125
Sacramento, CA 94244-2550
(916) 324-5281

---

Petition for review after the Court of Appeal granted in part and denied in part petitions for peremptory writ of mandate. This case presents the following issues: (1) Does the offense of falsification of accounts or misappropriation of public funds by a public officer or employee in violation of Penal Code section 424 require intentional violation of a known legal duty or is it a general intent crime? (2) Does Government Code section 3060, authorizing an accusation for willful or corrupt misconduct in office, require a knowing and purposeful refusal to follow the law or does general intent suffice? (3) Can a defendant move to set aside an indictment under Penal Code section 995, subdivision (a)(1)(B), or object to the sufficiency of an accusation pursuant to Government Code section 3066 on the ground the grand jury was misinstructed on the required mental state? (4) What is the standard for assessing a district attorney's alleged conflict of interest when the issue is raised on a motion under Penal Code section 995?

Opinion Information

Date:	Citation:	Docket Number:	Category:	Status:	Cross Referenced Cases:
Mon, 08/01/2011	52 Cal. 4th 368, 257 P.3d 41, 128 Cal. Rptr. 3d 611	S145337	Review - Criminal Original (non-H.C.)	submitted/opinion due	PEOPLE v. BRADLEY (S146985) MALKENHORST v. S.C. (PEOPLE) (S156100) PEOPLE v. ALDANA (S174836)

Opinion Authors
Opinion	Justice Carol A. Corrigan

Dockets
Jul 25 2006	Petition for review filed   Robert E. Stark, petitioner [in all three cases C051073/C051074/C051075 ] by M. Bradley Wishek and Quin A. Denvir of Rothschild Wishek & Sands LLP, retained counsel. (Filed in Sacramento)
Jul 25 2006	Received Court of Appeal record   C051073 -- one doghouse
Jul 27 2006	Record requested   for balance of all the records.
Jul 28 2006	Received additional record   5 doghouse's (vol 2 thru 6) two file jackets C051074/ C051075
Aug 29 2006	Note:   Spoke to Superior Court clerk, Criminal Div. Trial setting is to be heard on September 15, 2006, at 1:30 p.m.
Sep 13 2006	Petition for review granted (criminal case)   Votes: George, C.J., Kennard, Werdegar, Moreno, and Corrigan, JJ.
Sep 28 2006	Request for extension of time filed   by Atty M. Bradley Wishek counsel for petitioner Robert E. Stark. Counsel requesting to November 13 to file opening brief on the merits (to court for decision)
Oct 10 2006	Extension of time granted   On application of petitioner and good cause appearing, it is ordered that the time to serve and file the opening brief on the merits is extended to and including November 13, 2006.
Oct 11 2006	Additional issues ordered   In addition to the issues set forth in the petition for review, the parties are directed to brief the following issue: Does violation of Penal Code section 424 (falsification of accounts or misappropriation of public funds by a public officer or employee) require intentional violation of a known legal duty or is it a general intent crime?
Nov 13 2006	Opening brief on the merits filed   Robert E. Stark, petitioner M. Bradley Wishek, counsel
Dec 8 2006	Request for extension of time filed   by Atty Cliff Zall, Deputy Attorney General, counsel for The People requesting to January 12 to file answer brief on the merits (to court for permission)
Dec 13 2006	Extension of time granted   On application of real party in interest and good cause appearing, it is ordered that the time to serve and file the answer brief on the merits is extended to and including January 12, 2007.
Jan 4 2007	Request for extension of time filed   Atty Clifford Zall, Deputy Attorney General, for real party in interest The People requesting to 2/11/07 to file answer brief on the merits
Jan 16 2007	Extension of time granted   On application of real party in interest and good cause appearing, it is ordered that the time to serve and file the answer brief on the merits is extended to and including February 11, 2007.
Feb 9 2007	Answer brief on the merits filed   The People, Real Party in Interest Clifford E. Zali, Deputy Attorney General
Feb 26 2007	Request for extension of time filed   by petitioner requesting 11-day extension to file petitioner's reply brief on the merits.
Mar 1 2007	Extension of time granted   On application of petitioner and good cause appearing, it is ordered that the time to serve and file petitioner's reply brief on the merits is hereby extended to and including March 12, 2007.
Mar 12 2007	Application filed to:   file reply brief in excess of 4200 words from Atty Wishek counsel for petitioner Robert Stark (to court for permission)
Mar 12 2007	Request for judicial notice filed (granted case)   Robert E. Stark, petitioner M. Bradley Wishek, counsel
Mar 16 2007	Reply brief filed (case fully briefed)   Robert E. Stark, petitioner (filed w/permission) M. Bradley Wishek, counsel
Mar 2 2011	Order filed   Review in Robert E. Stark v. Sutter County Superior Court, C051073 and C051074, is severed from review in Ronda G. Putam v. Sutter County Superior Court, C051075. Review in Ronda G. Putnam v. Sutter County Superior Court, C051075 is dismissed. (Cal. Rules of Court, rule 8.528(b)(1).) Cantil-Sakauye, C.J., was recused and did not participate.
Apr 3 2011	Justice pro tempore assigned   Hon. Wendy Clark Duffy Sixth Appellate District (Cantil-Sakauye, C.J., recused) Hon. Robert L. Dondero First Appellate District, Division One (Moreno, J., retired)
Apr 6 2011	Case ordered on calendar   to be argued Tuesday, May 3, 2011, at 9:00 a.m., in San Francisco
Apr 20 2011	Request for judicial notice granted   The request for judicial notice filed on March 12, 2007 is granted. Cantil-Sakauye, C.J. was recused and did not participate.
May 3 2011	Cause argued and submitted
Jul 29 2011	Notice of forthcoming opinion posted   To be filed Monday, August 1, 2011 at 10 a.m.

Briefs
Nov 13 2006	Opening brief on the merits filed
Feb 9 2007	Answer brief on the merits filed
Mar 16 2007	Reply brief filed (case fully briefed)

Brief Downloads
s145337-1-petitioners-petition-for-review.pdf (1024510 bytes) - Petitioner's Petition for Review
s145337-2-petitioners-opening-brief-on-the-merits.pdf (494137 bytes) - Petitioner's Opening Brief on the Merits
s145337-3-real-partys-interest-answer-brief-merits.pdf (256606 bytes) - Real Party's in Interest Answer Brief on the Merits
s145337-4-petitioners-reply-brief-on-the-merits.pdf (234625 bytes) - Petitioner's Reply Brief on the Merits
s180567-1-appellants-petition-for-review.pdf (425829 bytes) - Appellant's Petition for Review
s180567-2-appellants-opening-brief-on-the-merits.pdf (709721 bytes) - Appellant's Opening Brief on the Merits
s180567-3-appellants-request-for-judicial-notice.pdf (9532619 bytes) - Appellant's Request for Judicial Notice
s180567-4-respondents-answer-brief-on-the-merits.pdf (723522 bytes) - Respondent's Answer Brief on the Merits
s180567-5-appellants-reply-brief-on-the-merits.pdf (109503 bytes) - Appellant's Reply Brief on the Merits

If you'd like to submit a brief document to be included for this opinion, please submit an e-mail to the SCOCAL website

Jun 6, 2012 Annotated by Elizabeth Kolbe

Facts Defendant, Robert E. Stark, was charged with violating multiple statutes, county rules, and the Sutter County Board of Supervisors (Board) decisions in his role as the auditor-controller of Sutter County. Stark was auditor-controller since 1985 and in that role, acted as the chief accounting officer for the county. Larry Combs, the county administrative officer, gave a report to the Board on September 7, 2004, criticizing Stark for his performance since 1988. This case follows many of the allegations of the report including filing the final budget for fiscal year 2003-2004 six and a half months late, claiming authority to approve rates of services to various county departments, independently amending the county budget without the Board’s required approval, withholding overtime pay to the county firefighters, and unilaterally transferring money from the county’s general fund to another district without approval. Procedural History In the fall of 2004, the Sutter County Grand Jury started an informal investigation into the office of the auditor-controller. On March 3, 2005, a formal grand jury proceeding began with the involvement of the district attorney. On May 4, 2005, a grand jury indicted Stark with regard to Penal Code section 424 on 13 counts for acts or omissions regarding public funds between 2003 and 2005. Additionally, the grand jury found 15 counts alleging willful or corrupt misconduct under Government Code section 3060. After Stark moved to set aside the indictment and disagreed with the allegations, the superior court set aside one count of the indictment and two counts of the accusation. The Court of Appeal denied Stark’s petition for a writ of mandate or prohibition to review the trial court order and Stark appealed for review here. The Court transferred the issue back to the Court of Appeal, directing them to show cause why the requested relief should not be granted. This time, the Court of Appeal set aside six counts of the indictment, and wrote a peremptory writ of mandate. Issues 1. Is Penal Code section 424 a general intent crime or does it require intentional violation of a known legal duty? 2. If the grand jury received incorrect instructions on the intent requirement, may the defendant move to set aside the indictment under section 995(a)(1)(B)? 3. Does Government Code section 3060 allow for the removal of a public official without proof of a purposeful refusal to comply with the law with regard to the duties of office? 4. Must the defendant satisfy Penal Code section 1424 in order to set aside an indictment on the ground that the district attorney’s involvement resulted in a potential for bias or the appearance of a conflict of interest? Holding 1. The four provisions at issue in section 424 are general intent crimes, however, they do require that the defendant knew, or was criminally negligent in failing to know, the legal requirements that concerned the act or omission. 2. Section 995(a)(1)(B) may be used to challenge a misinstruction of a scienter requirement. 3. This issue was not ultimately decided since the defendant did not disagree with the instruction to the grand jury, but instead with the closing argument by the district attorney. The claim against the district attorney is meritless. 4. The defendant must show that their right to due process was violated in the claim that the district attorney’s participation was a conflict of interest in order to set aside an indictment or accusation. Analysis 1. With regard to the first issue, the mental state is analyzed regarding three provisions of section 424 which refer to legal requirements or authorization. The Court looked first to past cases to find that the relevant code section was in fact a general intent crime, but that some additional knowledge was still required. With recent jurisprudence in mind, the Court stated that more than “mere intent to do the act” is required because of the inclusion of the statutory language that prohibits conduct not authorized by law or conduct that is required by law. The act of transferring public money or appropriating money only becomes a crime when the act is “contrary to laws governing the handling of public moneys.” Thus, there must be proof that the defendant had a mental state as to a lack of legal authority. The expansion to include criminally negligent conduct, and not just conduct done knowingly, was found to be appropriate because of the important public policy issues surrounding handling of public money. The fourth provision of section 424 at issue does not include the authority of law language, but instead requires the act be done “knowingly,” which is defined as “keep[ing] an account with knowledge that the account is false.” 2. The Court found that the jury instruction for section 424 may be challenged under section 995(a)(1)(B), which allows for a dismissal of the indictment when “the defendant has been indicted without reasonable or probable cause.” Such an indictment without probable cause may be at issue when an improper jury instruction is given regarding the mental state requirement. The Court concluded that this is necessary because of the limited review of evidence in indictments from grand juries. However, in this case, the lack of a proper jury instruction was harmless. 3. The defendant did not disagree with the jury instruction for section 3060, but argued that the district attorney’s closing argument and presentation “vitiated” the proper instruction. But the Court found that the objections to the district attorney were unfounded because of the correct instruction and the lack of any “legitimate concern that the grand jury was misled.” 4. Because Stark was continuing to make decisions regarding the attorney general’s office during the proceeding, the defendant relied on Greer and argued that the district attorney should have been disqualified based on a conflict of interest. People v. Superior Court (Greer) (1977) 19 Cal.3d 255. However, Greer was followed by the enactment of section 1424 which sought to reduce the number of disqualifications. Section 1424 states that there is not a conflict unless it is likely that the involvement of the district attorney “would render it unlikely that the defendant would a receive a fair trial.” While the Court does not decide whether Greer applies, but states that the standard is whether the defendant was denied due process. The Court found that Stark did not show such a denial. Tags Stark, public funds, public moneys, legal authority, intent, knowingly, jury instruction, district attorney, conflict of interest By Elizabeth Kolbe

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