Bills to watch: court decisions leads to overreaching legislation.

• Author: Fox, Jason
• Position: Capitol Beat

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Last year the Legislature held an informational hearing regarding the North Carolina Board of Denial Examiners v. Federal Trade Commission decision and its potential impact on licensing boards under the Department of Consumer Affairs (DCA), including the California Board of Accountancy.

In this case, the U.S. Supreme Court ruled that the NC Dental Board (the Board) could be held liable for anticompetitive conduct for taking actions against non-licensees. The Court focused on the fact that a controlling number of the Board's decision-makers are active participants in the profession regulated by the Board, and questioned whether there was sufficient active supervision by the state to review for anticompetitive actions.

The decision set a precedent for the oversight of licensed professions by the profession itself. This caused a number of licensing boards for all professions in a number of states, including California, to review state actions to ensure that boards would be insulated from lawsuits alleging anticompetitive actions.

Subsequently, in California SB 1195 (Hill) was amended to propose a number of significant changes to increase the level of authority the DCA has over the actions of licensing boards. The bill would allow the DCA director on his/her own (or upon the request of a consumer or licensee) to review and disapprove of a board action that is perceived to be anticompetitive.

As amended April 6, SB 1195 is an overreaching bill that provides the DCA director a degree of power beyond what is necessary to remedy the concerns created by the North Carolina case. The proposed changes would significantly limit the CBA's ability to independently operate as the regulator of the CPA profession. Too much authority to intervene without the appropriate due process structure could hinder the CBA's ability to take appropriate and timely actions to ensure consumer protection.

The Office of Administrative Law, which reviews CBA actions, is a more appropriate entity to review anticompetitive implications of CBA actions. The structured administrative processes of the OAL would allow for a measured and deliberative review of anticompetitive effects with greater transparency and less opportunity to politicize the review process.

CalCPA has an oppose-unless-amended position on SB 1195 and continues to work with the author and stakeholders.

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