Taxpayer’s Due Process Rights Were Not Violated When Attorneys From The County Counsel's Office Represented The Assessor And Advised The Board Of Equalization

The United States Court of Appeals for the Ninth Circuit recently held that dual representation pursuant to a California statute that allows individual representatives from the county counsel’s office to represent the assessor and the county board of equalization, as long as the same individual is not representing both the assessor and the board, did not violate a taxpayer’s due process rights.  (William Jefferson & Co., Inc., v. Board of Assessment and Appeals No. 3 for Orange County (--- F.3d ----, C.A.9 (Cal.), August 29, 2012).

Facts

William Jefferson & Co., Inc. (“William Jefferson”) owns real property in Orange County, California.  William Jefferson challenged the valuation of property by the Orange County Tax Assessor (“Assessor”) and the assessment of state property taxes.  William Jefferson appealed the valuation and assessment to the Assessment Appeals Board for Orange County (“Board”).   The Board denied the administrative appeal on statute of limitations grounds. 

At the administrative hearing, James C. Harmon represented the Assessor.  Paula Whaley advised the Board.  Harmon and Whaley are both attorneys who work for the County Counsel for Orange County (“County Counsel”), which is Orange County’s public law office.  William Jefferson claimed that because the Assessor was represented by one member of the County Counsel’s office and the Board was advised by another member of that office, the administrative hearing did not comply with the requirements of due process.  However, the “dual representation” of the Assessor and the Board is expressly authorized pursuant to Government Code § 31000.7.

William Jefferson brought a lawsuit in federal district court in which he asserted that the Board’s hearing procedures violated William Jefferson's procedural due process rights under the Fourteenth Amendment to the United States Constitution.  William Jefferson sought relief under 42 U.S.C. § 1983. 

The district court entered judgment against William Jefferson.  The district court found Whaley and Harmon worked for two different sections of the County Counsel’s office.  Whaley works for the advisory section and Harmon works for the litigation section.  The County Counsel’s office takes diligent measures to separate members of these two sections.  Members of the advisory section have a separate “doored-off” work space and documents relating to advising the Board are kept in a locked file cabinet.  Both attorneys have received training regarding the procedures for maintaining an “ethical wall” between the two sections.  Due to these procedures and Whaley’s diligence in observing the ethical rules of the office, Whaley had no contact with Harmon while William Jefferson’s appeal was pending.

The district court further found that Whaley had never represented the Assessor and Harmon had no role in Whaley’s professional reviews or her advancement within the office.  It also found that although Harmon and Whaley had mutual professional respect for each other, they rarely interacted.  There was no evidence that their mutual respect would have influenced Whaley’s advice to the Board in this matter.  The district court concluded that Government Code § 31000.7 expressly permits a member of the County Counsel’s office to advise the Board at a hearing in which another member of the office represents the Assessor.  The court found that this provision of § 31000.7 is not unconstitutional on its face and does not violate William Jefferson's due process as applied in this case because there was no evidence Whaley’s advice to the Board was influenced by her respect for Harmon.  Even if Whaley had personally been influenced, The Board was the decision-maker and there was no evidence it was biased.

Decision

William Jefferson did not challenge the district court’s factual findings and therefore, the issue before the court of appeals was an issue of law.  William Jefferson challenged Government Code § 31000.7 on its face and as applied to his particular circumstances.  If William Jefferson’s as-applied challenge fails then his facial challenge also fails “because there is at least one set of circumstances where application of § 31000.7 does not violate a taxpayer’s procedural due process rights.”  The court of appeals concluded Williams Jefferson’s due process rights were not violated and affirmed the decision of the district court. 

William Jefferson asserted that the dual representation scheme provided for under Government Code § 31000.7 acts to deny “taxpayers an unbiased adjudicator and undermines the appearance of fairness in the Board’s proceedings.”  Section 31000.7 provides, “The same law firm shall not be employed to advise or represent both the assessor and the county board of equalization on any matters relating to hearings before the county board of equalization.”  However, § 31000.7 further provides that the “prohibition shall not apply to the county counsel’s office” and that “[i]ndividual representatives of that office may represent the assessor and the county board of equalization, as long as the same individual does not represent both parties.”

William Jefferson asserts that Whaley advising the Board in the same proceeding where Harmon was representing the Assessor undermined the Board’s impartiality, or at least the appearance of the Board’s impartiality.  William Jefferson, however, does not allege any of the members of the Board had a direct pecuniary or personal interest in the outcome of the appeal.  The United States Supreme Court has held “that the mere fact that investigative and adjudicative powers are combined in a state administrative agency, without more, [does] not violate due process.  Here, the Board did not even act in an investigative capacity and instead only performed a prosecutorial function.  William Jefferson did not allege that the Board was involved in valuing its property or in defending the Assessor’s valuation.

Furthermore, although Harmon and Whaley worked in the same public law office, they performed different functions and the law office kept them screened from each other.  The district court’s finding that the County Counsel’s office meticulously followed screening procedures to keep Harmon and Whaley from sharing information was not challenged by William Jefferson.  Also, “the Board members are presumed to discharge their adjudicative responsibilities with honesty and integrity.”  The dual representation alone does not overcome this presumption.  The court concluded the screening procedures used by the County Counsel’s office were sufficient to ensure that William Jefferson’s appeal was heard by an impartial adjudicator. 

The court rejected William Jefferson’s contention that the County Counsel’s office has a financial incentive to tell the Board to rule against a taxpayer because a portion of the fees that the Board collects are paid to the County Counsel’s office.  The fees to which William Jefferson referred are paid to the County Counsel’s office regardless of which party prevails.

The court held that § 31000.7, does not violate due process as applied in William Jefferson’s case.  “As long as the county counsel’s office maintains an ethical wall that prevents attorneys representing the Assessor from supervising attorneys who advise the Board or sharing case information with them, the county counsel’s dual representation does not undermine the Board’s impartiality.”  The court of appeals affirmed the decision of the trial court. 

Questions

If you have any questions concerning the content of this Legal Alert, please contact the following from our office, or the attorney with whom you normally consult.

Brett L. Price | 661.864.3800

Jon E. Goetz | 805.786.4302

Jeffrey L. Massey | 916.321.4500