The Commission Awarded Costs To The Bureau Of Gambling Control After Concluding ALJ’s Denial Of Costs Was Based On Misinterpretation Of The Law Governing Costs Awards, But Should Have Remanded The Issue To The ALJ, And Nothing In Bus. & Prof. Code § 19930(d)(1) Prevented Trial Court From Vacating The Award And Remanding To The Commission With Leave For It To Remand The Issue To The ALJ.
Gambling Room, Looking East – Town of Locke, Dai Loy Gambling Museum, 13951 Main Street, Locke, Sacramento County, CA. Jet Lowe, Creator. 1984. Library of Congress.
The Department of Justice, through its Bureau of Gambling Control, investigates gambling license applicants, monitors the conduct of licensees, and initiates and prosecutes disciplinary actions against licensees accused of committing violations of the Gambling Control Act (Bus. & Prof. Code, div. 8, ch. 5; § 19800). One such licensee saw his gambling license revoked/not renewed by the California Gambling Control Commission following a hearing before an administrative law judge (ALJ) where licensee was found to have committed 21.5 violations (and for those who are curious – no, there is no explanation for how a half-violation could be committed). Additionally, the Commission hit licensee with a monetary penalty of $13,672,000 and costs of $127,880.
Licensee challenged the Commission’s decision through a petition for a writ of mandate before the trial court – achieving partial success with the trial court’s determination that the Commission may have relied on unproven misconduct in reaching its decision, and by having the penalty and costs vacated for exceeding the amount supported by law and remanded for redetermination based on the trial court’s conclusion that the monetary penalty exceeded the amount supported by law and that the costs could only be assessed by the ALJ on remand from the Commission. This led to an appeal by both the licensee and the Commission in Swallow v. Cal. Gambling Control Com., Case No. C089329 (Third Dist., April 4, 2022) (unpublished).
The Third District affirmed the trial court’s judgment with exception to the monetary penalty – although finding that the penalty was not supported by law, analyzing the issue differently than the trial court and ordering the Commission to reconsider the penalty in line with the appellate panel’s opinion. However, we focus on the costs issue, which the licensee unsuccessfully argued on appeal had been improperly remanded for further proceedings.
The Bureau of Gambling Control’s request for an award of costs under § 19930(d) was denied by the ALJ because the Bureau submitted its proof of costs after the conclusion of, rather than during, the hearing on the charges against licensee. Based on its determination that the ALJ made an error of law, the Commission awarded costs to the Bureau – which the trial court reversed and remanded to the Commission with leave for it to remand the case back to the ALJ. On appeal, licensee did not address ALJ’s mistake, but argued that the trial court’s remand violated § 19930(d)(1). The Third District – finding licensee’s argument to be without merit – agreed with the trial court that § 19930(d)(1) does not prohibit such remand to the ALJ for reconsideration of the Bureau’s costs request under a proper interpretation of § 19930(d), and affirmed.
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