Kalb's Q&A for Contractors

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Week of 11/23/09

By David Kalb, President of Capitol Services, Inc.
 

Keeping an eye on CSLB policy and practice is part of my work. Sharing those developments with you, and commenting on important changes for contractors are other parts of my job. My work also takes me to meetings where discussion and decisions are made that may impact all contractors, like this one…
 
The CSLB held it’s quarterly meeting in Berkeley on November 12th.  Due to a lack of gubernatorial appointments, a quorum was barely present.  Issues discussed during the 4+ hour meeting included legislative proposals for 2010; proactive enforcement by the Statewide Investigative Fraud Team (SWIFT); a report of upcoming enforcement ‘stings’ throughout CA; an update on the Board’s “Check-The-License-First “ media campaign; and last, but far from least, a policy review regarding classification Determinations on matters with Pending Litigation.
 
Regarding this last item, the CSLB’s Chief of Licensing sought a legal ruling from the Department of Consumer Affairs (DCA) regarding the issuance of staff opinions on matters that are currently the subject of litigation.  Say for instance, a contractor had a case in Superior Court where the primary question was whether the contractor held the proper classification.  My understanding is that in years past the Board issued class determination opinions regardless of whether the issue was in court. It may prove unfortunate this policy will not be maintained.
 
DCA Legal Affairs Division recently advised (and the Board adopted) a policy that it “should refrain from issuing interpretive “opinion”, “guidance”, “advise” or any other type of directive to the public or licensed community on those matters which are subject of litigation”.  According to legal council, a number of factors contributed to this opinion including: limited Board resources; potential bias towards the litigant who is asking the question; and the potential that a Board opinion may lead to an unintended “underground regulation”.
 
My primary concern is that in an effort to refrain from issuing SOME opinions, the Contractors Board will end up adopting a more restrictive future policy where they issue ONLY LIMITED guidance. Take for instance the above example.  If the Board related the question to potential litigation, a bid protest or any other type of outside administrative act, would they decide a “NO OPINION” letter might be in order? I broached this subject with Board personnel and was assured the Board will continue to provide general guidance and opinions on matters related to classification and licensing requirements. 
 
This was good to hear since my concern stems from discussions I have had with applicants, contractors and other interested parties (i.e. attorneys) who believe (as do I) that this ruling could have adverse consequences if expanded to cover issues related to public bids and non-litigated disputes.
 
The Board decided that if the issue were a subject of litigation it would be inappropriate to weigh in on the matter outside of the legal hearing.  According to CSLB staff, they are often asked for an opinion without benefit of all pertinent information and only receive the facts from one side -- which tend to favor that litigant’s position.   Legal counsel felt that since both parties have the ability to subpoena expert testimony as deemed necessary – and at their expense rather than the Board’s --this is the more appropriate manner in which to handle these matters.
 
I can understand that with limited resources, it is difficult to weigh in on all issues; yet, my experience is that CSLB “opinions” most always indicated it is based solely on the information presented and if other information were available, might change their guidance.
 
It remains to be seen if this policy benefits contractors or the general public. For a copy of the entire October 13th Memorandum, please call or email my office.
 
Knowledge is power. Knowing where to go for the answers is half the battle.  Get expert assistance immediately when you call 916-443-0657, email info@cutredtape.com, fax (916) 443-1908, or write me at Capitol Services, Inc., 1225 8th St. Ste. 580, Sacramento, CA 95814.

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