Stanford Law School - Robert Crown Law Library

Filed 11/13/06

IN THE SUPREME COURT OF CALIFORNIA

DEPARTMENT OF ALCOHOLIC
BEVERAGE CONTROL,
Petitioner,
v.
S133331
ALCOHOLIC BEVERAGE CONTROL
Ct.App. 2/7 B177986
APPEALS BOARD,
)
Respondent;
DANIEL BECERRIL QUINTANAR,
Real Party in Interest.

)
DEPARTMENT OF ALCOHOLIC
BEVERAGE CONTROL,
Petitioner,
v.
ALCOHOLIC BEVERAGE CONTROL
APPEALS BOARD,
)
Respondent;
KV MART CO.,
Real Party in Interest.

---

DEPARTMENT OF ALCOHOLIC
BEVERAGE CONTROL,
Petitioner,
v.
ALCOHOLIC BEVERAGE CONTROL
APPEALS BOARD,
)
Respondent;
RICHARD LEUN KIM,
Real Party in Interest.

The Department of Alcoholic Beverage Control (Department) has exclusive
licensing authority over entities that sell alcoholic beverages. Its procedures for
adjudicating whether licensees have violated the terms of their licenses include an
evidentiary hearing at which a Department prosecutor makes the Department’s
case to an administrative law judge (ALJ), and a second level of decisionmaking
in which the Department’s director or a delegee decides whether to adopt the
ALJ’s proposed decision. In the three consolidated cases here, consistent with
standard Department procedure, the prosecutor prepared a summary of the
evidentiary hearing and recommended resolution, which he then provided ex parte
to the ultimate decision maker or decision maker’s advisor.
While the state’s administrative agencies have considerable leeway in how
they structure their adjudicatory functions, they may not disregard certain basic
precepts. One fairness principle directs that in adjudicative matters, one adversary
should not be permitted to bend the ear of the ultimate decision maker or the
decision maker’s advisors in private. Another directs that the functions of
prosecution and adjudication be kept separate, carried out by distinct individuals.
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California’s Administrative Procedure Act (APA) (Gov. Code, § 11340 et seq.),1
as overhauled in 1995, adopts these precepts by regulating and strictly limiting
contacts between an agency’s prosecutor and the officers the agency selects to
preside over hearings and ultimately decide adjudicative matters. We conclude the
Department’s procedure violates the APA’s bar against ex parte communications.
FACTUAL AND PROCEDURAL BACKGROUND
The Department is a unitary agency with the exclusive authority to license
the sale of alcoholic beverages in California and to suspend or revoke licenses.
(Cal. Const., art. XX, § 22.) As a unitary agency, it carries out multiple functions:
“It is in the nature of administrative regulatory agencies that they function both as
accuser and adjudicator on matters within their particular jurisdiction.
Administrative agencies are created to interpret and enforce the legislative
enactments applicable to the field in which they operate. That role necessarily
involves the administrative agency in both determining whether a licensee is in
violation of the law, and taking action to correct such violations.” (Department of
Alcoholic Beverage Control v. Alcoholic Beverage Control Appeals Board (ALQ
Corp.) (1981) 118 Cal.App.3d 720, 726-727.)
Like many state administrative agencies,2 the Department exercises its
adjudicatory power through a two-stage process. In the first (trial) stage, a
Department staff attorney, acting as prosecutor, and the licensee present their
respective cases to an ALJ at an evidentiary hearing. The ALJ then makes factual

1
All further statutory references are to the Government Code unless
otherwise indicated.
2
See Asimow, The Fiftieth Anniversary of the Administrative Procedure Act:
Past and Prologue: The Influence of the Federal Administrative Procedure Act on
California’s New Administrative Procedure Act (1996) 32 Tulsa L.J. 297, 300-301
(hereafter California’s New APA).
3

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findings, prepares a proposed decision, and submits it to the Department. (See
§ 11517, subd. (c)(1).) In the second (decision) stage, the Department’s director
or a delegee considers the proposed decision and elects to adopt it, modify it,
reject it and remand for a new hearing, or reject it and decide the case on the
record. (Id., subd. (c)(2).)
The Department followed this procedure in each case here. Between May
and August 2002, the Department filed accusations against real parties in interest
Daniel Becerril Quintanar, KV Mart Co., and Richard Leun Kim (hereafter
collectively the licensees). The Department alleged Quintanar’s bartender sold
beer to an obviously intoxicated customer and alleged clerks who worked for KV
Mart Co. and Kim both sold alcoholic beverages to a 19-year-old decoy. In each
case, at the trial stage, the ALJ considered the Department’s and licensee’s
evidence and argument and issued a proposed decision dismissing the accusation,
which was then referred to the Department for final action.
After the close of each administrative hearing but before the Department
rendered its decision, the Department prosecutor prepared a report of hearing, a
form document, and apparently sent it to the Department’s chief counsel, but not
to any of the licensees. As we will discuss, the reports of hearing prepared in
these three cases are not part of the records, but copies of the generic form are.
The generic form provides space for the prosecutor to summarize the issues and
the evidence presented at the hearing and to recommend, with supporting reasons,
a particular disposition of the case.
In each case, the Department rejected the ALJ’s proposed decision to
dismiss the accusation and substituted its own decision, suspending the licenses of
Kim, Quintanar, and KV Mart Co. for periods of 15, 20, and 25 days, respectively.
The licensees appealed these adverse decisions to the Alcoholic Beverage
Control Appeals Board (Board), a separate entity with limited appellate
4

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jurisdiction over the Department’s decisions. (See Cal. Const., art. XX, § 22; Bus.
& Prof. Code, § 23084.) They contended the Department had violated their due
process rights because the decision maker, the Department’s chief counsel, was
the prosecutor’s supervisor and a biased advocate rather than a neutral decision
maker.
In connection with their appeals, the licensees each filed a motion to
augment the record, seeking all documents available to the chief counsel at the
time the Department rendered its decision, including the reports of hearing. In
opposition, the Department argued the documents sought were protected by the
attorney-client privilege and work product doctrine and, in any event, the Board
lacked authority to augment the record. The Board granted the motion in each
case and ordered the Department to file its reports of hearing under seal within 21
days. The Department refused. Instead, after the time for production had expired,
the Department reasserted its privilege claim and told the Board it would not
acquiesce in the Board’s order without further proof of legal authority supporting
it. Thus, the reports of hearing do not appear in the record.
The Board heard argument in these three matters and reversed the
Department’s decisions. The Board concluded the Department’s failure to screen
its decision maker and the decision maker’s advisors from communications with
its prosecutors deprived the licensees of the right to a fair trial by a fair tribunal
and constituted a due process violation. The Board also found the report of
hearing was an ex parte communication between an agency’s decision maker or
decision maker’s advisor (the Department’s chief counsel) and a party (the
Department’s prosecutor) prohibited under the APA, and the Department had
violated the APA by failing to make the report part of the administrative record,
notify the parties of its inclusion, and allow the licensees an opportunity to
respond.
5

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The Department sought writ relief (see Bus. & Prof. Code, § 23090), but
the Court of Appeal affirmed. It concluded the manner in which the Department
had conducted its administrative hearings created an unacceptable risk of bias and
unfairness. The Court of Appeal held the Department’s practice of having the
agency prosecutor prepare a report of hearing, including a recommended outcome,
and forward it to the Department’s chief counsel while a final Department decision
was still pending, violated the licensees’ due process rights. It ordered the
Department to institute screening procedures preventing the agency prosecutor
from communicating with the ultimate decision maker and any advisors while a
proceeding was still pending and to henceforth exclude the report of hearing from
the materials reviewed by the Department’s decision maker.
We granted review to address how the APA and due process clause apply
to a unitary administrative agency that combines prosecutorial and adjudicative
functions in resolving administrative matters. Like the Court of Appeal, we
confine our review to the question whether the Department “has proceeded in the
manner required by law.” (Cal. Const., art. XX, § 22; Bus. & Prof. Code,
§ 23090.2, subd. (b); see Walsh v. Kirby (1974) 13 Cal.3d 95, 103.)
DISCUSSION
I. The California Administrative Procedure Act
Does the APA permit ex parte contacts between an agency’s prosecutor and
its ultimate decision maker or his or her advisors about the substance of the case,
prior to the ultimate decision maker rendering a final decision? We conclude it
does not.
A. The APA: Historical Background
California’s original APA (Stats. 1945, ch. 867, § 1, p. 1626) was
pioneering but limited. (California’s New APA, supra, 32 Tulsa L.J. at pp. 298,
307; see generally Hohreiter v. Garrison (1947) 81 Cal.App.2d 384, 393-394.) It
6

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applied principally to licensing cases and covered only certain aspects of
administrative practice. In particular, it said nothing about either ex parte
communications or agency separation of functions.3 (Recommendation:
Administrative Adjudication by State Agencies (Jan. 1995) 25 Cal. Law Revision
Com. Rep. (1995) pp. 55, 104-105 (hereafter Recommendation); California’s New
APA, supra, 32 Tulsa L.J. at p. 312.) A 1986 amendment added restrictions on ex
parte contacts with ALJ’s during the trial stage for some agencies, but continued to
leave unregulated such contacts with agency heads during the decision stage. (See
former § 11513.5, added by Stats. 1986, ch. 899, § 2, p. 3116; Recommendation,
25 Cal. Law Revision Com. Rep., supra, at pp. 104-105; California’s New APA,
supra, 32 Tulsa L.J. at p. 312.) In the absence of regulation, agency heads were
free to discuss adjudicatory matters with whomever they pleased, both inside and
outside the agency, subject only to whatever indefinite limits due process might
impose.4

3
“Separation of functions in administrative law refers to structural
arrangements that lodge responsibility for prosecution and advocacy in one group
of agency personnel (the ‘adversaries’) and responsibility for adjudicatory
decision-making in a different group of agency personnel (‘the adjudicators’).
There are two fundamentally different approaches to separation of functions. An
external separation removes the adversaries entirely from agencies that have
adjudicating responsibilities. Internal separation leaves these functions within the
same agency but prevents the same people from discharging both adversary and
adjudicatory functions.” (Asimow, Toward a New California Administrative
Procedure Act (1995) 39 UCLA L.Rev. 1067, 1152 (hereafter Toward a New
California APA), reprinted at 25 Cal. Law Revision Com. Rep., supra, at pp. 321,
406; see also California’s New APA, supra, 32 Tulsa L.J. at pp. 312, fn. 88, 314.)
4
There is some indication agency heads may have done so and that the
culture within various administrative agencies may have supported unfettered
contacts. (Recommendation, 25 Cal. Law Revision Com. Rep., supra, at pp. 104-
105; Toward a New California APA, supra, 39 UCLA L.Rev. at p. 1130, reprinted

(footnote continued on next page)
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In 1987, the Legislature directed the California Law Revision Commission
(Commission) to study administrative adjudication and propose reforms to the
APA. (Sen. Conc. Res. No. 12, Stats. 1987 (1987-1988 Reg. Sess.) res. ch. 47,
par. 24, p. 5899; see Recommendation, 25 Cal. Law Revision Com. Rep., supra, at
p. 75; California’s New APA, supra, 32 Tulsa L.J. at p. 299, fn. 11.)5 After seven
years, the Commission came back with extensive recommendations. It declared:
“Fundamental fairness in decisionmaking demands both that factual inputs and
arguments to the decisionmaker on law and policy be made openly and be subject
to argument by all parties.” (Recommendation, 25 Cal. Law Revision Com. Rep.,
supra, at p. 105.) Consistent with this view, the Commission proposed an
“administrative adjudication bill of rights,” which inter alia would require state
agencies to limit reliance on ex parte contacts in their decisionmaking and adopt
some internal separation of functions. Senate Bill No. 523 (1995-1996 Reg. Sess.)
adopted the Commission’s proposed administrative adjudication bill of rights
virtually unchanged, including its limits on ex parte contacts (article 7) and its
internal separation of function provisions (articles 6 and 7).

(footnote continued from previous page)
at 25 Cal. Law Revision Com. Rep., supra, at p. 384; California’s New APA,
supra, 32 Tulsa L.J. at pp. 312, 313, fn. 92, 314.)
5
Professor Asimow, the author of California’s New APA and Toward a New
California APA, cited herein, was retained by the Commission as its principal
advisor in reviewing the APA and proposing reforms. (Recommendation, 25 Cal.
Law Revision Com. Rep., supra, at pp. 60-61, 75.) We previously have found
Professor Asimow’s work on administrative law for the Commission highly
persuasive. (See Yamaha Corp. of America v. State Bd. of Equalization (1998) 19
Cal.4th 1, 12-14.)
8

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B. The APA’s Ex Parte and Separation of Function Provisions
Article 7, modeled on provisions of the federal Administrative Procedure
Act and the 1981 Model State Administrative Procedure Act (see California’s
New APA, supra, 32 Tulsa L.J. at p. 315), broadly prohibits ex parte contacts
between parties, including agency parties, and decision makers during
administrative adjudicative proceedings. “While the proceeding is pending there
shall be no communication, direct or indirect, regarding any issue in the
proceeding, to the presiding officer from an employee or representative of an
agency that is a party . . . without notice and opportunity for all parties to
participate in the communication.” (§ 11430.10, subd. (a), italics added.) A
“presiding officer” is defined as an officer who presides over an evidentiary
hearing (§ 11405.80), but other provisions of article 7 expressly extend this
prohibition to all decision makers, including agency heads and their delegees,
whether or not they preside over an evidentiary hearing: “Subject to subdivision
(b) [governing ratemaking proceedings], the provisions of this article governing ex
parte communications to the presiding officer also govern ex parte
communications in an adjudicative proceeding to the agency head or other person
or body to which the power to hear or decide in the proceeding is delegated.”
(§ 11430.70, subd. (a).)6 The Commission comments to section 11430.10 reiterate

6
The APA’s linguistic distinction between “presiding officers” and “agency
heads” adopts a suggestion from Professor Asimow, who proposed “that a
California statute use the term ‘presiding officer’ to refer only to the person who
conducts the initial hearing, which is a more natural meaning for the phrase. The
statute should then be drawn so that the prohibition on ex parte contact covers
presiding officers, agency heads, and any other person engaged in making
adjudicatory decisions.” (Toward a New California APA, supra, 39 UCLA L.Rev.
at p. 1135, fn. 220, reprinted at 25 Cal. Law Revision Com. Rep., supra, at
p. 389.)
9

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that section 11430.70 expands section 11430.10’s scope: “This provision [section
11430.10] also applies to the agency head, or other person or body to which the
power to hear or decide is delegated. See Section 11430.70 (application of
provisions to agency head or other person).” (Cal. Law Revision Com. com., 32D
West’s Ann. Gov. Code (2005) foll. § 11430.10, p. 309.)
Other provisions slightly narrow section 11430.10’s blanket prohibition.
Two are pertinent here. First, communications are permitted regarding
uncontroversial procedural matters. (§ 11430.20, subd. (b).) Second, an agency
decision maker may receive advice from nonadversarial agency personnel: an
otherwise prohibited ex parte communication will be allowed if it “is for the
purpose of assistance and advice to the presiding officer from a person who has
not served as investigator, prosecutor, or advocate in the proceeding or its
preadjudicative stage. An assistant or advisor may evaluate the evidence in the
record but shall not furnish, augment, diminish, or modify the evidence in the
record.” (§ 11430.30, subd. (a).)7 None of the exceptions permit prosecutors and
other adversarial agency employees to have off-the-record contact about
substantive issues with the agency head, or anyone to whom the agency head
delegates decisionmaking authority, during the pendency of an adjudicative
proceeding. Thus, the APA sets out a clear rule: an agency prosecutor cannot
secretly communicate with the agency decision maker or the decision maker’s
advisor about the substance of the case prior to issuance of a final decision.8

7
Again, section 11430.70 by its express terms expands the scope of this rule
to encompass all decision makers, not just presiding officers. (§ 11430.70, subd.
(a); Cal. Law Revision Com. com., 32D West’s Ann. Gov. Code, supra, foll.
§ 11430.30, p. 313.)
8
The Court of Appeal drew no distinction between communications between
a prosecutor and a final agency decision maker on the one hand, and those

(footnote continued on next page)
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This rule enforces two important procedural precepts. First, it promotes
neutral decisionmaking by requiring a limited internal separation of functions.
Procedural fairness does not mandate the dissolution of unitary agencies, but it
does require some internal separation between advocates and decision makers to
preserve neutrality. (See Howitt v. Superior Court (1992) 3 Cal.App.4th 1575,
1585 [“A different issue is presented, however, where advocacy and
decisionmaking roles are combined. By definition, an advocate is a partisan for a
particular client or point of view. The role is inconsistent with true objectivity, a
constitutionally necessary characteristic of an adjudicator”]; see also Nightlife
Partners, Ltd. v. City of Beverly Hills (2003) 108 Cal.App.4th 81, 94, 97-98;
Toward a New California APA, supra, 39 UCLA L.Rev. at pp. 1166-1172,
reprinted at 25 Cal. Law Revision Com. Rep., supra, at pp. 420-425.) Second, the
rule preserves record exclusivity. “The decision of the agency head should be
based on the record and not on off-the-record discussions from which the parties
are excluded.” (Cal. Law Revision Com. com., 32D West’s Ann. Gov. Code,
supra, foll. § 11430.80, p. 322; see also English v. City of Long Beach (1950) 35
Cal.2d 155, 158-159 [“[T]he right of a hearing before an administrative tribunal
would be meaningless if the tribunal were permitted to base its determination upon
information received without the knowledge of the parties”].)

(footnote continued from previous page)
between a prosecutor and the decision maker’s advisor, on the other. Nor do we.
Each form of contact equally compromises the protections the APA’s adjudicative
bill of rights sought to adopt; nothing in the APA contemplates permitting an
agency to accomplish through secondhand communications what is forbidden
through firsthand communications. The Department does not contend that if the
APA bars communications between a prosecutor and final decision makers, it
should be construed to still permit communications between the prosecutor and
that decision maker’s advisors.
11

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The Department takes issue with this rule. It argues that even under the
revised APA, limits on ex parte communications extend only to communications
during the trial stage, not to those during the decision stage. The Department
reasons that section 11430.70 limits contacts with agency heads and other decision
makers only during “adjudicative proceeding[s]” (§ 11430.70, subd. (a)), an
“adjudicative proceeding” is defined as “an evidentiary hearing for determination
of facts pursuant to which an agency formulates and issues a decision”
(§ 11405.20), and thus agency heads and their delegees are limited in their
contacts only when they preside over evidentiary hearings. After the close of the
evidentiary hearing, according to the Department, the agency’s prosecutor may
secretly advise the agency head without violating any APA proscription.
We are not persuaded. We do not construe statutory language in isolation,
but rather as a thread in the fabric of the entire statutory scheme of which it is a
part. (Carrisales v. Department of Corrections (1999) 21 Cal.4th 1132, 1135.)
Section 11405.10 expressly qualifies the applicability of the APA’s definitions:
“Unless the provision or context requires otherwise, the definitions in this article
govern the construction of this chapter.” (Italics added.) Here, as we shall
explain, the context of the rest of article 7 and the legislative history behind it
make clear section 11430.70, subdivision (a) was not intended to incorporate the
narrow section 11405.20 definition of “adjudicative proceeding,” but was intended
to apply more broadly to limit ex parte contacts in all nonratemaking proceedings
that employ an evidentiary hearing in the course of adjudicating the rights of a
single party.
As originally introduced, section 11430.70 provided in total: “The
provisions of this article governing ex parte communications to the presiding
officer also govern ex parte communications to the agency head or other person or
body to which the power to decide in the proceeding is delegated.” (Sen. Bill No.
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523 (1995-1996 Reg. Sess.) § 16, as introduced Feb. 21, 1995.) This version
clearly extended the limit on ex parte communications from the administrative
hearing (trial) stage to the final decision stage.
As drafted, however, the provision would have prohibited ex parte contacts
in individual ratemaking proceedings. (See Cal. Law Revision Com. com., 32D
West’s Ann. Gov. Code, supra, foll. § 11405.50, p. 265 [“[R]ate making and
licensing determinations of specific application, addressed to named or particular
parties such as a certain power company or a certain licensee, are decisions subject
to this chapter”].) The section was subsequently amended, not to confine its
application to the trial stage, but to clarify that it did not extend to individual
ratemaking proceedings. The original version of section 11430.70 was
redesignated as subdivision (a), language limiting it to an “adjudicative
proceeding” was inserted, and a new subdivision (b) was added, providing: “An
ex parte communication to the agency head or other person or body to which the
power to decide is delegated is permissible in an individualized ratemaking
proceeding if the content of the communication is disclosed on the record and all
parties are given an opportunity to address it in the manner provided in section
11430.50.” (Sen. Bill No. 523 (1995-1996 Reg. Sess.) § 21, as amended Aug. 30,
1995, italics added.) The author, Senator Kopp, explained: “This technical
amendment responds to So[uthern] Cal[ifornia] Edison concern that the ex parte
communication prohibition should not apply in rulemaking [sic: ratemaking]
proceeding[s]. . . . [¶] Gov’t Code § 11430.70 amended to allow ex parte
communication in individualized ratemaking proceeding if disclosed on the record
and parties have an opportunity to comment. This is the approach used by PUC.”
(Sen. Kopp, Sen. Appropriations Com., amendments to Sen. Bill No. 523 (1995-
1996 Reg. Sess.) Aug. 23, 1995; see also Recommendation, 25 Cal. Law Revision
Com. Rep., supra, at p. 86; California’s New APA, supra, 32 Tulsa L.J. at pp. 305-
13

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306 & fn. 45.) Thus, the “adjudicative proceeding” limit in section 11430.70,
subdivision (a) was added as a way to distinguish individual ratemaking
proceedings (not covered) from individual nonratemaking proceedings (covered),
apparently without heed to the cross-definition of “adjudicative proceeding” in
section 11405.20.
The Commission’s comments to section 11430.30, which further defines
the extent of permissible contacts, likewise reflect the understanding that the limits
on contacts with agency heads and other decision makers apply at both the trial
stage and the decision stage.9 The comments note: “This provision is not limited
to agency personnel, but includes participants in the proceeding not employed by
the agency. A deputy attorney general who prosecuted the case at the
administrative trial level, for example, would be precluded from advising the
agency head or other decision maker delegated the power to hear or decide at the
final decision level, except with regard to settlement matters.” (Cal. Law Revision
Com. com., 32D West’s Ann. Gov. Code, supra, foll. § 11430.30, p. 313, italics
added.)
The more general legislative history behind Senate Bill No. 523 (1995-
1996 Reg. Sess.) also demonstrates that the concerns of the Commission and
Legislature extended beyond ex parte contacts with ALJ’s issuing proposed
decisions to ex parte contacts with the true, ultimate decision makers, the agency
heads and their delegees. The Commission proposed proscribing ex parte

9
“Because the official comments of the California Law Revision
Commission ‘are declarative of the intent not only of the draftsman of the code but
also of the legislators who subsequently enacted it’ [citation], the comments are
persuasive, albeit not conclusive, evidence of that intent.” (Bonanno v. Central
Contra Costa Transit Authority (2003) 30 Cal.4th 139, 148.)
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communications with all agency decision makers, not just hearing officers.
(Recommendation, 25 Cal. Law Revision Com. Rep., supra, at pp. 104-106.)
More specifically, as Professor Asimow explained in the study that was submitted
to the Legislature with the Commission’s proposed reforms, an advocacy role
could distort the advice one gave and thus it was critical to limit advice given by
adversaries to the ultimate decision maker while a final decision was being made.
(Toward a New California APA, supra, 39 UCLA L.Rev. at pp. 1166, 1177,
reprinted at 25 Cal. Law Revision Com. Rep., supra, at pp. 420-421, 431.)
Principles of fairness dictated that these final decisions should flow exclusively
from the record, not from off-the-record submissions by either side. (Toward a
New California APA, supra, 39 UCLA L.Rev. at p. 1167, reprinted at 25 Cal. Law
Revision Com. Rep., supra, at p. 421.)
The Legislature adopted article 7 without significant change, and the
committee reports describing the understanding of that article reflect equal
concern with ex parte contacts at the trial and decision stages. Senate Bill No. 523
was intended to prohibit contacts with agency decision makers at all stages.
(Assem. Appropriations Com., Rep. on Sen. Bill No. 523 (1995-1996 Reg. Sess.)
as amended July 28, 1995, p. 2 [bill “[p]rohibits ex-parte communications with the
decision maker in all state agency proceedings”]; Dept. of Finance, Analysis of
Sen. Bill No. 523 (1995-1996 Reg. Sess.) as amended July 28, 1995, p. 4 [“The
proposed law would prohibit ex parte communications with the decision maker in
all state agency proceedings. Current law prohibits ex parte contact with an ALJ
employed by the Office of Administrative Hearings, but is silent as to ex parte
communications to agency heads”].)
The Department’s construction would render superfluous section 11430.70,
subdivision (a)’s extension of the limits on ex parte contacts to contacts with
agency heads. Presiding officers, including agency heads who serve as presiding
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officers, are already constrained from engaging in ex parte communications
elsewhere in article 7. (§ 11430.10, subd. (a) [no ex parte contacts with presiding
officer]; § 11405.80 [“Presiding officer” includes agency head who presides over
an adjudicative proceeding].) If an agency head is constrained only when he or
she serves as a presiding officer, section 11430.70, subdivision (a) has no function.
As is well settled, we will avoid constructions such as this that render statutory
language surplusage. (Elsner v. Uveges (2004) 34 Cal.4th 915, 931.)
The Department points to section 11517 and the Commission’s related
comments, which it asserts give it wide latitude to structure its adjudicative
proceedings as it sees fit, in support of its argument that its prosecutors may advise
its decision makers.10 Section 11517 is beside the point. The Department may
structure its decisionmaking however it sees fit, so long as it complies with the
APA and related statutory and constitutional minimums. Nothing in either the

10
The Commission comments the Department cites as authority refer to a
superseded version of the statute. Former section 11517, subdivision (b) provided
in relevant part: “Thirty days after receipt of [a proposed ALJ decision], a copy of
the proposed decision shall be filed by the agency as a public record and a copy
shall be served by the agency on each party and his or her attorney. The filing and
service is not an adoption of a proposed decision by the agency. The agency itself
may do any of the following: [¶] (1) Adopt the proposed decision in its entirety.
[¶] (2) Reduce or otherwise mitigate the proposed penalty and adopt the balance of
the proposed decision. [¶] (3) Make technical or other minor changes in the
proposed decision and adopt it as the decision. Action by the agency under this
paragraph is limited to a clarifying change or a change of a similar nature that does
not affect the factual or legal basis of the proposed decision.” (Former § 11517,
subd. (b), as amended by Stats. 1995, ch. 938, § 42, pp. 7163-7165, repealed and
added by Stats. 1999, ch. 339, § 1.) The accompanying Commission comment
explained in part: “Nothing in subdivision (b) is intended to limit the authority of
the agency to use its own internal procedures, including internal review processes,
in the development of a decision.” (Com., 1995 Ann. Rep., 25 Cal. Law Revision
Com. Rep., supra, at pp. 615, 732.)
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superseded or current version of section 11517 purports to authorize procedures
that run afoul of proscriptions spelled out elsewhere in the Government Code.
Finally, the Department relies on Department of Alcoholic Beverage
Control v. Alcoholic Beverage Control Appeals Board (ALQ Corp.), supra, 118
Cal.App.3d 720, as approving its use of a confidential report of hearing procedure.
In ALQ Corp., a licensee sought discovery of any reports of hearing or other
communications between hearing staff and the Department’s decision makers.
The Board held due process required disclosure of these communications, but the
Court of Appeal reversed. It concluded due process did not authorize an inquiry
by the Board into the agency decision makers’ reasoning, the material the licensee
sought was irrelevant to the proceedings, and the Board lacked jurisdiction to
require the Department to disclose any communications. (Id. at p. 728.)
ALQ Corp. was decided 14 years before the overhaul of the APA. Where
previously the APA was silent on the subject of off-the-record communications
with agency decision makers, now it regulates them. The Board is authorized to
determine “whether the [D]epartment has proceeded in the manner required by
law” (Cal. Const., art. XX, § 22; Bus. & Prof. Code, § 23084, subd. (b)); as such,
it has jurisdiction to determine whether the Department has complied with statutes
such as the APA. ALQ Corp. was decided on due process grounds, but insofar as
it may be read more broadly to authorize contacts between an agency’s prosecutor
and its ultimate decision maker, or preclude Board or court inquiry into the
occurrence of such contacts, it has been superseded by statute.
C. Application of the APA to Reports of Hearing
The administrative adjudication bill of rights provisions of the APA apply
to Department license suspension hearings. (See Gov. Code, § 11410.10
[provisions apply whenever evidentiary hearing is required by statute or
constitutional right]; Bus. & Prof. Code, § 24300 [providing for license suspension
17

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hearing]; Irvine v. State Bd. of Equalization (1940) 40 Cal.App.2d 280, 284-286
[liquor license cannot be suspended or revoked without hearing].)
Did the Department’s prosecutor and the Department’s final decision maker
or advisor have an impermissible ex parte contact? The Board and the Court of
Appeal inferred as much. The Department’s refusal to comply with the Board’s
order and produce its reports of hearing from these three cases leaves us somewhat
in the dark.11 However, the Department concedes a report of hearing was
prepared in each case. At oral argument, it further conceded that the final decision
in each case was made by either the Department’s director or its chief counsel, and
that both had access to the reports of hearing. In light of these concessions, we
consider it established that the reports of hearing were provided to the agency’s
decision maker.

11
Notwithstanding the Department’s objections, the Board had the authority
to order disclosure. It was constitutionally empowered to determine whether the
Department had issued its decision in compliance with all laws, including the
APA. (Cal. Const., art. XX, § 22.) While it is true, as the Department notes, that
the Constitution also limits the Board to consideration of the record before the
Department (ibid.), we must harmonize these two provisions to the extent possible
so that the limit imposed by one clause does not destroy the power granted by the
other. (People v. Garcia (1999) 21 Cal.4th 1, 6.) We interpret the record limit as
applying to prevent parties from relitigating substantive matters by submitting new
evidence, but not to prevent the Board from carrying out its obligation to
determine whether the Department has complied with the law. The Department
argues that ex parte contacts are not in the record (a virtual tautology) and thus the
Board cannot consider them or direct that they be added to the record, whether or
not the Department has considered them; if this is so, then the Department may
violate the APA without sanction. To read this clause as the Department does, as
further precluding inquiry into ex parte communications, would render the APA as
it applies to the Department, and the Board’s constitutional authority to ensure
compliance, a dead letter. We reject such a seemingly absurd result.
18

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The Department argues the record contains no proof the reports of hearing
were actually considered by the ultimate decision maker or his advisors, but
neither does it deny this occurred. Whether the decision maker considered the
reports of hearing is in any event beside the point. On the one hand, proof as to
how a particular ex parte contact weighed in an agency decision maker’s calculus
would be impossible to come by without inquiry into matters beyond the ken of
any court. On the other hand, the APA does not require such proof; perhaps
because such proof is unattainable, the APA prophylactically outlaws any
substantive communications or advice from an agency prosecutor to an agency
decision maker. The party faced with such a communication need not prove that it
was considered; conversely, the agency engaging in ex parte discussions cannot
raise as a shield that the advice was not considered. Under the APA, the mere
submission of ex parte substantive comments, without more, is illegal.
(§ 11430.10, subd. (a).) If reports of hearing were submitted by the Department’s
prosecutors to its final decision maker or decision maker’s advisors, as the
Department concedes, this violated the APA.
The Department and Attorney General express concern that a rule
precluding prosecutor-decision maker contact will have dramatic consequences for
this and other agencies, requiring agencies to split and depriving agency heads of
the advice of their subordinates. Nothing about our interpretation of the APA
requires splitting this agency or any other. The Department may still function as a
unitary agency. In doing so, however, it must afford licensees fundamentally fair
hearings by observing a limited internal separation of functions. The agency head
is free to speak with anyone in the agency and to solicit and receive advice from
whomever he or she pleases—anyone except the personnel who served as
19

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adversaries in a specific case.12 (§ 11430.30, subd. (a); see California’s New APA,
supra, 32 Tulsa L.J. at pp. 315-316.) Indeed, the agency head can even contact the
prosecutor to discuss settlement or direct dismissal. (See § 11430.10, subd. (a);
Cal. Law Revision Com. com., 32D West’s Ann. Gov. Code, supra, foll.
§ 11430.10, p. 309; California’s New APA, supra, 32 Tulsa L.J. at p. 316, fn. 118.)
Virtually the only contact that is forbidden is communication in the other
direction: a prosecutor cannot communicate off the record with the agency
decision maker or the decision maker’s advisors about the substance of the case.
But the one contact that is forbidden is the one contact that occurred here.13
II. Remedy
We turn to the question of the appropriate remedy. Upon determining that
the Department had violated the APA and due process, the Board reversed the
Department’s order in each case.
The Department implies no remedy is necessary because any submission
was harmless; according to the Department, the decision maker could have
inferred the contents of the reports of hearing (to wit, a summary of the hearing

12
As Professor Asimow notes and the text of the APA plainly allows, the
separation of functions can be accomplished on a case-by-case basis. (Toward a
New California APA, supra, 39 UCLA L.Rev. at p. 1171, reprinted at 25 Cal. Law
Revision Com. Rep., supra, at pp. 424-425.) Thus, an agency decision maker may
receive private advice from members of his or her prosecutorial staff other than
the particular prosecutor who handled a given matter.
13
Because limited internal separation of functions is required as a statutory
matter, we need not consider whether it is also required by due process. As a
prudential matter, we routinely decline to address constitutional questions when it
is unnecessary to reach them. (Morning Star v. State Board of Equalization
(2006) 38 Cal.4th 324, 328; Santa Clara County Local Transportation Authority v.
Guardino (1995) 11 Cal.4th 220, 230; see People v. McKay (2002) 27 Cal.4th 601,
626-627 (conc. opn. of Werdegar, J.).) Consequently, we express no opinion
concerning how the requirements of due process might apply here.
20

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and requested penalty) from the record. We are not persuaded. First, because the
Department has refused to make copies of the reports of hearing part of the record,
despite a Board order that it do so, whether their contents are as innocuous as the
Department portrays them to be is impossible to determine. Second, although both
sides no doubt would have liked to submit a secret unrebutted review of the
hearing to the ultimate decision maker or decision maker’s advisors, only one side
had that chance. The APA’s administrative adjudication bill of rights was
designed to eliminate such one-sided occurrences. We will not countenance them
here. Thus, reversal of the Department’s orders is required.
We note, however, that the further remedy ordered by the Court of
Appeal—mandatory screening procedures barring prosecutor-decision maker
contacts and precluding use of reports of hearing in future cases—is overbroad.
The APA bars only advocate-decision maker ex parte contacts, not all contacts.
Thus, for example, nothing in the APA precludes the ultimate decision maker from
considering posthearing briefs submitted by, and served on, each side. The
Department if it so chooses may continue to use the report of hearing procedure,
so long as it provides licensees a copy of the report and the opportunity to respond.
(Cf. § 11430.50 [contacts with presiding officer or decision maker must be public,
and all parties must be afforded opportunity to respond].)
21

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DISPOSITION
For the foregoing reasons, we affirm the judgment of the Court of Appeal.

WERDEGAR, J.
WE CONCUR:
GEORGE, C. J.
KENNARD, J.
BAXTER, J.
CHIN, J.
MORENO, J.
CORRIGAN, J.

22

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See next page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion Dept. of Alcoholic Beverage Control v. Alcoholic Beverage Control Appeals Board
__________________________________________________________________________________

Unpublished Opinion

Original Appeal
Original Proceeding
Review Granted XXX 127 Cal.App.4th 615
Rehearing Granted

__________________________________________________________________________________

Opinion No.

S133331
Date Filed: November 13, 2006
__________________________________________________________________________________

Court:

n/a
County: n/a
Judge: n/a

__________________________________________________________________________________

Attorneys for Appellant:

John R. Pierce, Nicholas R. Loehr, Matthew G. Ainley, Thomas M. Allen and Kerry K. Winters for
Petitioner.

Bill Lockyer, Attorney General, Manuel M. Medeiros, State Solicitor General, Tom Greene and James
Humes, Chief Assistant Attorneys General, Jacob A. Appelsmith and J. Matthew Rodriguez, Assistant
Attorneys General, Silvia M. Diaz, Graeme E. Sharpe, Richard M. Frank and Joseph Barbieri, Deputy
Attorneys General, as Amici Curiae on behalf of Petitioner.

__________________________________________________________________________________

Attorneys for Respondent:

No appearance for Respondent.

Solomon, Saltsman & Jamieson, Ralph Barat Saltsman, Stephen Warren Solomon, Ryan M. Kroll and
Claire C. Weglarz for Real Parties in Interest.

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Counsel who argued in Supreme Court (not intended for publication with opinion):

John R. Pierce
Department of Alcoholic Beverage Control
3927 Lennane Drive, Suite 100
Sacramento, CA 95834
(916) 419-2517

Kerry K. Winters
Department of Alcoholic Beverage Control
3927 Lennane Drive, Suite 100
Sacramento, CA 95834
(916) 419-2517

Ralph Barat Saltsman
Solomon, Saltsman & Jamieson
426 Culver Boulevard
Playa del Rey, CA 90293
(310) 822-9848

2

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Opinion Information

Date:	Docket Number:
Mon, 11/13/2006	S133331

Disposition
Nov 13 2006	Opinion: Affirmed

Dockets
Apr 25 2005	Petition for review filed   petitioner Department of Alcoholic Beverage Control
Apr 27 2005	Received Court of Appeal record
May 16 2005	Request for depublication (petition for review pending)   petitioner Department of Alcoholic Beverage Control
Jun 16 2005	Time extended to grant or deny review   to and including July 22, 2005, or the date upon which review is either granted or denied.
Jul 13 2005	Petition for review granted (civil case)   George, C.J., was absent and did not participate. Votes: Werdegar, ACJ, Kennard, Baxter, Chin, and Moreno, JJ.
Jul 14 2005	Note:   Records sent to Cal-Coord. Office: 5, 7, Req. for Jud. Ntc., Depub. Req., Pet. for Writ of Mandate (3), Inf. Response to Pet. for Writ of Mandate, w/Records (3), misc. docs. and records.
Jul 29 2005	Certification of interested entities or persons filed   petitioner Department of Alcoholic Beverage Control
Aug 4 2005	Request for extension of time filed   opening brief/merits to 9-12-05>>petitioner Department of Alcoholic Beverage Control
Aug 9 2005	Extension of time granted   Petitioner's time to serve and file the opening brief on the merits is extended to and including September 12, 2005.
Sep 7 2005	Request for extension of time filed   opening brief/merits to 10-12-05>>petitioner Department of Alcoholic Beverage Control
Sep 13 2005	Extension of time granted   Petitioner's time to serve and file the opening brief on the merits is extended to and including October 12, 2005.
Oct 6 2005	Received:   letter from real parties Danial B. Quintanar, etal
Oct 11 2005	Opening brief on the merits filed   by counsel for petitioner (Dept. of Alcoholic Beverage Ctrl.)
Nov 2 2005	Request for extension of time filed   to file answer/brief merits to 1-9-06>> real parties Daniel Bercerril Quintanar, etal
Nov 7 2005	Extension of time granted   Real Party in Interest time to serve and file the answer brief on the merits is extended to and including January 9, 2005. NO FURTHER EXTENSIONS WILL BE GRANTED.
Jan 5 2006	Answer brief on the merits filed   Real Parties Daniel Becerril Quintanar, etal Attorney Ralph Barat Saltsman, Retained
Jan 5 2006	Request for judicial notice filed (granted case)   Real Parties Daniel Becerril Quintanar, etal
Jan 19 2006	Request for extension of time filed   reply brief/merits to 2-27-06 Petitioner Department of Alcoholic Beverage Control Kerry K. Winters, Department of Alcoholic Beverage Control
Jan 24 2006	Extension of time granted   Petitioner's time to serve and file the reply brief on the merits is extended to and including February 27, 2006. No further extensions of time are contemplated.
Mar 1 2006	Reply brief filed (case fully briefed)   counsel for Dept. of Alcholic Beverage Ctrl. (40.1(b))
Mar 30 2006	Amicus curiae brief filed   Calif. Attorney General in support of Department of Alcoholic Beverage Control.
Apr 19 2006	Response to amicus curiae brief filed   Daniel Becerri Quintanar, real party in interest to amicus briefs of California Attorney General
Aug 3 2006	Case ordered on calendar   September 6, 2006, at 9:00 a.m., in San Francisco
Aug 15 2006	Application filed to:   divide oral argument. Chief Counsel of the Department of Alcoholic Beverage Control asking to share time with staff counsel Kerry Winters.
Aug 15 2006	Order filed   The request of counsel for petitioner in the above-referenced cause to allow two counsel to argue on behalf of petitioner at oral argument is hereby granted. The request of petitioner to allocate to cocounsel Kerry Keach Winters ten minutes of petitioner's 30-minute allotted time for oral argument is granted.
Aug 28 2006	Request for judicial notice granted   The request for judicial notice filed on January 5, 2006, is granted.
Sep 6 2006	Cause argued and submitted
Nov 13 2006	Opinion filed: Judgment affirmed in full   OPINION BY: Werdegar, J ----- joined by: George, C.J., Kennard, Baxter, Chin, Moreno, Corrigan, JJ.
Dec 14 2006	Remittitur issued (civil case)
Dec 28 2006	Received:   receipt for remittitur from CA 2/7

Briefs
Oct 11 2005	Opening brief on the merits filed
Jan 5 2006	Answer brief on the merits filed
Mar 1 2006	Reply brief filed (case fully briefed)
Mar 30 2006	Amicus curiae brief filed
Apr 19 2006	Response to amicus curiae brief filed

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