A court of appeal decision last year makes it clear that a contractor is obligated to complete the CSLB’s disciplinary procedure through to a final, effective decision before they can seek relief from the courts.

According to attorney Aaron J. Flores, of Hunt, Ortmann, Palffy, Nieves, Darling & Mah, in Contractors State License (CSLB) v. Superior Court (Black Diamond Electric, Inc. ), the court of appeal held that even when a contractor seeks the court’s independent interpretation of statutes at issue in a disciplinary action (an action ultimately for the court, not administrative procedures), it cannot leapfrog the CSLB’s disciplinary procedures.

The contractor must complete the disciplinary procedures, then seek judicial review to interpret the statutes through a writ of administrative mandamus—a request that a Superior Court review and reverse the final decision or order of an administrative agency. It is brought under California Code of Civil Procedure (CCP) §1094.5.

In this case, Black Diamond Electric, Inc. (“BDE”) was the subject of a CSLB disciplinary action, in the form of an “accusation” pursuant to the Administrative Procedure Act, due to its alleged violation of Labor Code § 108.2(a) and related statues which require individuals who perform certain electrical work to be certified (“Accusation Action”). Uncertified persons seeking on-the-job experience necessary for certification may perform limited types of electrical work if they are “under the direct supervision” of a certified electrician. Willful violations of the statutes may result in the suspension or revocation of a C-10 electrical contractor license.

Here’s the case in a nutshell: BDE is a licensed C-10 electrical contractor. Labor Code section 108.2(a) requires individuals who perform work as electricians to be certified. Uncertified persons seeking the on-the-job experience necessary for certification may perform electrical work under the direct supervision of a certified electrician. Willful violations may result in the suspension or revocation of a C-10 license. The CSLB alleged that uncertified BDE employees performed work that required certification and that BDE trainees performed work without the required supervision. BDE argued that the CSLB’s interpretation of the code was erroneous. An Administrative Law Judge (ALI) rejected BDE’s contention that “certified electricians are required only when a device is attached to the wires at the end of the electrical project,” and recommended revocation of BDE’s license.

The superior court overruled the CSLB’s decision. The court of appeal disagreed saying, since the statutes provide BDE with an administrative remedy, it must exhaust that remedy before seeking redress in court. While statutory interpretation is ultimately a judicial function, BDE can seek a judicial interpretation in an action under Code of Civil Procedure section 1094.5. BDE failed to demonstrate either that exhaustion of its administrative remedy would be futile or that the CSLB cannot provide an adequate remedy. 

The Accusation Action against BDE was filed by the CSLB in March 2017. After a hearing on the accusation, the ALJ’s tentative decision was that BDE violated the Labor Code and should therefore have its license revoked. The CSLB Registrar later adopted this tentative decision as its final decision, but, at BDE’s request, stayed the effective date so BDE could seek reconsideration of the decision.

Jumping the Gun on Lawsuit 

While the Accusation Action was pending, and before the hearing on the CSLB’s accusation, BDE filed its own complaint against the CSLB in superior court seeking an independent declaration interpreting the statutes and prohibiting what BDE claimed was an illegal application of the Labor Code. The court of appeal found that the Administrative Procedure Act provides BDE with an administrative remedy that must be completed – through a final, effective decision – before it could request the court’s independent interpretation of the statutes and seek to enjoin the CSLB’s alleged illegal application. This was true even though BDE’s action sought a legal interpretation of a statute – something generally not available through the CSLB disciplinary procedures and ultimately a court function.

CSLB action on Black Diamond Electric ‘s license (#724171) is still hanging fire while another court case is in the works. 

The Black Diamond Electric, Inc. decision highlights the importance of understanding and completing the CSLB disciplinary procedures before seeking relief through the courts. While this may be bad news for contractors who believe the CSLB is incorrectly interpreting and applying the law, contractors will get their day in court if they still needed it after completing all the CSLB steps. 

For more information about this case, go to//huntortmann.com/buckle-up-contractors-cslb-disciplinary-procedures-must-be-completed-before-seeking-the-courts-assistance/ or contact Aaron J. Flores at [email protected] 

By Rich Lambros, ECA Interim Executive Director Email: [email protected]