Download New Ex Parte Regulat..

New Ex Parte Regulations and
Lobbying Requirements at the
CPUC
Mike Day and Brian Cragg
Goodin, MacBride, Squeri & Day, LLP
September 20, 2016
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New Legislation on Communications
with Commissioners
 Senate Bill 215
 Codifies requirements governing communications with
CPUC Commissioners and key staff
 Existing requirements are in the CPUC’s procedural rules
and have the status of administrative regulations
 States the Legislature’s “intent” that the Commission
and those seeking to influence the Commission’s actions
will be subject to “all applicable ethical standards,
including ethical obligations applying to lobbyists under
the Political Reform Act”
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California Rules of Professional Conduct
Related to Ex Parte Communications
 Rule 3-210: “A member shall not advise the violation of any
law, rule, or ruling of a tribunal unless the member believes
in good faith that such law, rule, or ruling is invalid. . . .”
 Rule 5-300(B): “A member shall not directly or indirectly
communicate with or argue to a judge or judicial officer
upon the merits of a contested matter pending before such
judge or judicial officer, except:
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In open court; or
With the consent of all other counsel in such matter; or
In the presence of all other counsel in such matter; or
In writing with a copy thereof furnished to such other counsel;
or
 In ex parte matters.”
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Definition of “Ex Parte
Communication”
CPUC Rules
SB 215
 “a written communication . . . or
oral communication . . . that: (1)
concerns any substantive issue in
a formal proceeding, (2) takes
place between an interested
person and a decisionmaker, and
(3) does not occur in a public
hearing, workshop, or other
public forum noticed by ruling or
order in the proceeding, or on
the record of the proceeding.”
 “any oral or written
communication between a
decisionmaker and an interested
person concerning any matter
before the commission that the
commission has not specified in
its Rules of Practice and
Procedure as being a procedural
matter and that does not occur
in a public hearing, workshop, or
other public proceeding, or on
the official record of the
proceeding on the matter.”
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“Oral or Written Communication”
CPUC Rules
SB 215
 “Written communication”
includes letters, e-mails or
other electronic medium
 “Oral communication”
includes telephone and inperson communications
 NOTE: Written ex parte
communications must be
served on all parties the same
day the communication is sent
to the decisionmaker
 No definitions of type of
communications
 Written comments received
from members of the public are
part of the record but are not
treated as evidence
 Parties will have opportunity to
respond to written comments
included in the record
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“Decisionmaker”
CPUC Rules
SB 215
 “any Commissioner, the Chief
Administrative Law Judge, any
Assistant Chief Administrative
Law Judge, the assigned
Administrative Law Judge, or
the Law and Motion
Administrative Law Judge”
 Advisors to Commissioners are
not defined as “decisionmakers”
but communications with them
are subject to similar restrictions
and reporting requirements
 The CPUC shall adopt a
definition that must include,
but not be limited to, “each
commissioner; the personal
staff of a commissioner if the
staff is acting in a policy or legal
advisory capacity; the chief
administrative law judge of the
commission; and the
administrative law judge
assigned to the proceeding.”
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“Interested Person”
SB 215
CPUC Rules
 (1) any party to the proceeding or
the party’s agents, employees, or
compensated representatives;
 (2) any person with a financial
interest in a matter at issue before
the Commission, or such person's
agents, employees, or compensated
representatives, or
 (3) a representative acting on behalf
of any formally organized civic,
environmental, neighborhood,
business, labor, trade, or similar
association who intends to influence
the decision of a Commission
member on a matter before the
Commission, even if that association
is not a party to the proceeding.
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(i) Any applicant, an agent, employee, or
compensated representative of the applicant,
or a participant in the proceeding on any
matter before the commission.
(ii) Any person with a financial interest, in a
matter before the commission, and such
person’s agent, employee, or compensated
representative. A person involved in issuing
credit ratings or advising entities or persons
who invest in the shares or operations of any
party to a proceeding is a person with a
financial interest.
(iii) A representative acting on behalf of any
civic, environmental, neighborhood, business,
labor, trade, or similar organization who
intends to influence the decision of a
commission member on a matter before the
commission.
(iv) Other categories of individuals the
commission, by rule, defines as an interested
person.
“Substantive Issue” or “Not
Procedural Matter”
CPUC Rules
SB 215
 Ex parte communications
include communications that
concern “any substantive issue
in a formal proceeding.”
 “Communications regarding
the schedule, location, or
format for hearings, filing
dates, identity of parties, and
other such nonsubstantive
information are procedural
inquiries, not ex parte
communications.”
 Ex parte communications
include “ any matter before the
commission that the
commission has not specified in
its Rules of Practice and
Procedure as being a
procedural matter.”
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Not Occurring in Public or on the
Record
CPUC Rules
SB 215
 Communications that occur “in
a public hearing, workshop, or
other public forum noticed by
ruling or order in the
proceeding, or on the record
of the proceeding,” are not ex
parte communications
 Communications that occur
“in a public hearing,
workshop, or other public
proceeding, or on the official
record of the proceeding on
the matter,” are not ex parte
communications.
 But special rules for
communications occurring
during conferences
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SB 215: Special Rules for Conferences
 Communications that occur at conferences, including
communications in a private setting or during meals,
entertainment events, and tours, and informal
discussions among conference attendees, are subject
to ex parte restrictions and reporting requirements
 Ex parte communications in adjudication proceeding must
be reported
 Ex parte communications in ratesetting proceeding must
be reported
 Ex parte communications in quasi-legislative matters are
subject to disclosure requirements developed by the
CPUC
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Banned Communications
CPUC Rules
SB 215
 Adjudicatory proceedings
 Periods related to Ratesetting
Deliberative Meetings
 Assignment or reassignment of
a proceeding to a particular ALJ
 Adjudication cases: exception for
procedural discussions with assigned
ALJ only
 One-way ex parte communications
from a decisionmaker to an interested
person
 Any communication between an
interested person and a decisionmaker
regarding which commissioner or ALJ
may be assigned to a matter before the
commission.
 Periods related to Ratesetting
Deliberative Meetings
 In ratesetting matters, no individual ex
parte meetings are allowed during 3
business days before the scheduled
vote
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Permitted Communications
CPUC Rules
SB 215
 In quasi-legislation proceedings
 On procedural matters
 In ratesetting proceedings, allparty meetings
 In ratesetting proceedings, if all
parties given 3 days’ notice of
meeting with decisionmaker
 In quasi-legislative proceedings
 CPUC to adopt rules on disclosure of
communications on Q-L proceedings
occurring at conferences
 In ratesetting proceedings
 If all parties given 3 days’ notice and
opportunity for equal time meeting
(but no equal time requirement for
meetings with advisors)
 Notice not required if all parties are
invited and given 3 days’ notice of
meeting
 Meetings with commissioners’
advisors
 Equal time meetings (advisors are
not decisionmakers)
 In ratesetting proceedings,
written communications served
on all parties the same day
 If no answer, response, or
protest or if scoping memo
determines no hearing is needed
 Before proceeding is filed
 In ratesetting proceedings, written
communications served on all parties
the same day
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Reporting Ex Parte Communications
by Interested Persons
SB 215
CPUC Rules
 File within 3 working days and
include:
 File within 3 working days and
include:
 The date, time, and location of the
communication, whether it was oral or
written, or a combination, and the
communication medium used
 The identities of the decisionmaker,
the person initiating the
communication, and any other persons
present
 The topic of the communication,
including applicable proceeding
numbers
 A substantive description of the
interested person’s communication
and its content
 A copy of any written material or text
used during the communication
 The date, time, and location of the
communication, and whether it
was oral, written, or a combination
 The identities of each
decisionmaker (or Commissioner's
personal advisor) involved, the
person initiating the
communication, and any persons
present
 A description of the interested
person's, but not the
decisionmaker's, communication
and its content and a copy of any
written or other material used for
or during the communication
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Logging the Ex Parte Communication
by the Decisionmaker
CPUC Rules
SB 215
 Any decisionmaker participating in
the communication must “promptly”
file a notice including:
 No requirement (but CPUC
started to log Oct. 2014)
 The date, time, and location of the
communication, whether the
communication was oral or written, or
a combination, and the
communication medium used
 The identity of the interested person,
the identity of the person initiating the
communication, and the identities of
any other persons present
 The topic of the communication,
including any applicable proceeding
numbers
 A brief description of the
communication
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Violations: Sanctions and Remedies
CPUC Rules
SB 215
 Rule 8.3(j): “When the Commission
determines that there has been a
violation of this rule or of Rule 8.4
[reporting requirements], the
Commission may impose penalties
and sanctions, or make any other
order, as it deems appropriate to
ensure the integrity of the record
and to protect the public interest.”
 Rule 1.1—General ethical obligation
to comply with California laws,
respect the Commission and its
members and ALJs, and never to
mislead the Commission
 Ex parte communication in
adjudication:
 File notice
 No CPUC vote until notice filed and all
parties have opportunity to respond
 If communication not noticed until
after vote, party may file petition to
rescind or modify
 Failure to file timely notice:
 Decisionmaker shall refer matter to
the General Counsel
 Assigned Commissioner shall order
submission of notice
 Failure to file when ordered is a
separate violation for each day of
delay
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Violations: Public Utilities Code
Existing Statutes
SB 215
 Section 1701.6: Violations of the
ex parte statutes are subject to
civil sanctions, including civil
penalties or up to $50,000,
adverse consequences in CPUC
proceedings, or other
appropriate orders
 Section 312: “The commission and each
commissioner may issue . . . all
necessary process in proceedings for
contempt, in like manner and to the
same extent as courts of record.”
 Section 2110: Knowing violation of the
Commission’s rules by a utility
employee is a misdemeanor subject to
a fine of up to $5,000 and up to a year
in county jail
 Section 2111: Knowing violation of the
Commission’s rules by other persons is
subject to fine of between $500 and
$50,000
 Section 2112: Knowing violation by
other persons is a misdemeanor,
subject to a fine of up to $1,000 fine or
up to a year in county jail
 Each day violation not disclosed is
a separate violation
 Section 1701.7: The Attorney
General can bring an
enforcement action against a
Commissioner or CPUC employee
for ex parte violations; court may
grant civil penalties and
disqualification from proceedings
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The Ex Parte Rules Will Continue
to Evolve
 SB 215 requires the CPUC to revise some of its rules
 CPUC will presumably conform its rules to the statute
 But until rules are conformed and consistent, comply
with the requirements of both the CPUC existing
rules and the statutory requirements (if SB 215 is
signed)
 When in doubt, report
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SB 215 does not change existing law
re lobbying the CPUC
 However, the statement of Legislative intent in Sec.
1701.1(h) ensures that there will be greater emphasis on
enforcing the existing law related to lobbying of the CPUC.
 Frankly, we have observed that many practitioners are likely
skirting violation of the current rules by not registering as
lobbyists.
 CPUC and FPPC Staff will likely be exceedingly vigilant on
registration, and can check who is visiting Commissioners
and advisors by checking the on-line logs of ex parte visits.
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Important Disclaimer
 Please note that the Fair Political Practices Act and the
FPPC Regulations are extremely complex and this
presentation is only a summary designed to give you an
idea if your firm’s activity may require registration.
 You are strongly encouraged to review the FPPC website
for additional information and if you believe you may need
to register as a Lobbyist or Lobbying Firm, you should
consult a law firm that specializes in political law and
lobbying registration and reporting.
 See the links on the final page of this presentation.
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What Activity Qualifies as Lobbying?
 Direct communication with a qualifying government
official (Legislator, CPUC commissioner, ALJ, or advisor)
for
 the purpose of influencing Administrative Action or
Legislative Action, and
 the individual receives compensation for the direct
communication to influence government action (above a
specified amount).
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An Important Exemption to the
Lobbying Definition
 A conversation by an individual (an employee of your
company) with a qualifying official that takes place in the
company of a registered lobbyist retained by your firm is
not a direct communication that makes the individual a
“lobbyist”.
 The exemption also applies to a conversation involving a
lobbyist of a trade association of which you (or your firm)
are a member (such as IEP).
 However, your lobbyist’s activity and payments are
reportable.
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What are the threshold levels of
compensation for Registration?
 For Lobbyists:
 In-house lobbyists: Registration required if one third or more of their
compensated time is spent in direct communication with California qualifying
officials.
 Contract Lobbyists: Registration required if they receive $2000 or more in a
calendar month for direct communications with qualifying officials (Note: this is
not $2000 per client, but $2000 for all direct communication activity).
 Lobbying Firms:
 A business entity that receives compensation for lobbying and at least one
employee or partner, owner or officer is a lobbyist, or
 A business entity that receives at least $5000 in a calendar quarter for lobbying
even if no employee, partner, owner or officer is registered as a lobbyist.
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Lobbyist Employers and Lobbying
Coalitions
 Lobbyist Employers:
 An individual, association, local government agency, or business entity
that either:
 directly employs an in house lobbyist to influence legislative or
administrative action, or
 retains a lobbying firm to engage in direct communication to
influence legislative or administrative action.
 Lobbying Coalitions:
 Defined as a group of ten or more persons or entities formed primarily
to influence legislative or administrative action whose members
contribute to share the expenses of lobbying.
 A person who only makes payments to a lobbying coalition is not a
Lobbyist Employer.
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But Don’t Forget $5000 Filers!
 Note: A person must still register as a “$5000 Filer” if
they directly or indirectly make payments of $5000 or
more in any calendar quarter to influence legislative
or administrative action.
 There are special rules regarding what type of
payments have to be included in the calculation of the
$5000. However, payments to a Lobbying Coalition
do count toward the limit.
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What are the paperwork
requirements for Lobbying?
 To Start Lobbying, the Lobbyist, Lobbying Firm, and
Lobbyist Employer must register with the Secretary of
State (SOS) within 10 days after qualifying as a lobbyist,
etc.
 All three types of entities must file Quarterly Reports with
the SOS by the end of the month following each calendar
quarter.
 If the payments or related expenses are over $2500, all
filing must be done electronically.
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What are the paperwork
requirements for Lobbying?
 The key forms are:
 Form 601 Lobbying Registration Statement
 Form 602 Lobbying Firm Activity Authorization
 Form 603 Lobbyist Employer or Lobbying Coalition Registration
Statement
 Form 604 Lobbyist Certification Statement
 Form 605 Amendment to Registration
 Form 606 Notice of Termination (when the Lobbyist, Firm or
Employer ceases all lobbying activity during a legislative session).
 Form 615 Lobbyist Report
 Form 625 Report of Lobbying Firm
 Form 635 Report of Lobbyist Employer and Report of Lobbying
Coalition
 Form 645 Report of $5000 Filer
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Reporting Payments for PUC
Administrative Testimony
 Lobbyist Employers and Coalitions must report quarterly Payments in
Connection with Administrative Testimony at the CPUC.
 These payments are limited to ratemaking and quasi-legislative
proceedings.
 The amounts reported must include legal fees to attorneys (other
than lobbyists) for time spent appearing as counsel and preparing
testimony. It must also include compensation to all witnesses for
preparing to testify and for time spent testifying.
 Payments for “grass-roots” lobbying to influence the PUC are also
reportable.
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Other Requirements
 Every Lobbyist must take a lobbyist ethics course (conducted by the
Assembly and Senate Ethics Committees) within 12 months of
registration for the first time, and must take the course again if they
have not taken the course within 12 months of renewing the
certification.
 Campaign Contributions must be reported (if they total over $100
per year).
 Home Hospitality: A lobbyist may not entertain a reportable official
in their home. There is an exception when there is a relationship or
association unrelated to the official’s position and the hospitality is
related to that relationship. This was frequently abused in the past
and the rules have been tightened recently.
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Gift Restrictions
 Lobbyists and lobbying firms may not make or act as an
agent to give a gift, or “arrange” to give a gift in excess of
$10 in a calendar month, nor make gifts aggregating more
than $460 per calendar year.
 There are many detailed rules regarding what constitutes a
gift or arranging for a gift, including items such as tickets to
events, meals, or attendance at functions.
 Educational tours and informational material are not
considered gifts.
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Resources for Complying with the
Fair Political Practices Act
 The website of the Fair Political Practices Commission is a key resource for entities
that are considering lobbying or registering to do so. You can find it at:
http://www.fppc.ca.gov/
 On the site under the tab “The Law” you can find links to the current version of the
Fair Political Practices Act. See http://www.fppc.ca.gov/content/dam/fppc/NSDocuments/LegalDiv/The%20Political%20Reform%20Act/2016-act-final-highlighted.pdf
 You can also obtain the FPPC’s Regulations and decisions implementing the Act.
See http://www.fppc.ca.gov/the-law/fppc-regulations/regulations-index.html
 Under the tab “Learn” you can find a useful Lobbying Disclosure Manual, which
contains the rules regarding lobbying, plus links to all the key forms necessary to
commence lobbying and to file the necessary reports.
See http://www.fppc.ca.gov/learn/lobbyist-rules/lobbying-manual-and-forms.html
 The FPPC will also accept written or electronic requests for advice or explanations
about the statutes and regulations affecting lobbying. See
http://www.fppc.ca.gov/advice.html
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