People v. Superior Court (Sahlolbei) CA4/2

Filed 1/20/16 P. v. Superior Court (Sahlolbei) CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

THE PEOPLE,

Petitioner, E062380

v. (Super.Ct.No. INF1302523)

THE SUPERIOR COURT OF OPINION
RIVERSIDE COUNTY,

Respondent;

HOSSAIN SAHLOLBEI,

Real Party in Interest.

ORIGINAL PROCEEDINGS; petition for writ of prohibition/mandate. Michael J.

Naughton, Judge. (Retired Judge of the Orange Super. Ct. assigned by the Chief Justice

pursuant to art. VI, § 6 of the Cal. Const.) Petition is denied

Paul E. Zellerbach, Michael A. Hestrin, District Attorneys, and Emily R. Hanks,

Deputy District Attorney, for Petitioner.

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 No appearance for Respondent.

Brown White & Newhouse, Brown White & Osborn and Kenneth P. White, for

Real Party in Interest.

As relevant to this petition, defendant and real party in interest Hossain Sahlolbei

(Dr. Sahlolbei) was charged with violating Government Code section 1090,1 which

generally prohibits acts constituting a conflict of interest on the part of “[m]embers of the

Legislature, state, county, district, judicial district, and city officers or employees . . . .”2

The trial court followed binding appellate precedent and dismissed the charge. The

People seek review, and we affirm the trial court finding, that defendant is not subject to

that statute.

I. STATEMENT OF FACTS

The operative facts relating to the alleged offense are not in dispute for the

purposes of this petition. Palo Verde Hospital (PVH) is a “district hospital” which

qualifies as a public entity. At all relevant times, Dr. Sahlolbei served as codirector of

surgical services with PVH pursuant to a contract which specifically described him as an

1 All further statutory references are to the Government Code unless otherwise
indicated.

2 Subdivision (a) of section 1090 reads, in full: “Members of the Legislature,
state, county, district, judicial district, and city officers or employees shall not be
financially interested in any contract made by them in their official capacity, or by any
body or board of which they are members. Nor shall state, county, district, judicial
district, and city officers or employees be purchasers at any sale or vendors at any
purchase made by them in their official capacity.” The criminal penalty is set out in
section 1097.

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independent contractor. He also served on the Medical Executive Committee (MEC)

either as chief of staff or vice chief of staff and had considerable influence over the

hospital board and its decisions with respect to hiring and issuing credentials to

physicians.

On two occasions Dr. Sahlolbei solicited an outside physician to provide contract

services to PVH.3 On each occasion Dr. Sahlolbei agreed that the physician would be

paid X dollars per month for his services, and then negotiated an agreement with PVH’s

board of directors to pay the physician X plus several thousand dollars per month.

Dr. Sahlolbei retained the difference. These general allegations form the basis for the

charge under section 1090.

The dispute is whether Dr. Sahlolbei can be held criminally liable under

Government Code section 1090, which expressly governs the actions of “officers or

employees” of the district. The trial court granted Dr. Sahlolbei’s motion to dismiss the

charge pursuant to Penal Code section 995, and the People sought review by way of a

petition for writ of prohibition/mandate. We issued an order to show cause and now deny

the petition.

3 With respect to one of these physicians, Dr. Ahmad, the trial court granted Dr.
Sahlolbei’s motion to dismiss based on the statute of limitations. Thus, count 4, although
based on the same legal theory as count 1, is not involved in this petition. Rather than
detail the facts presented with respect to the two transactions, we provide merely a
general description.

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 II. DISCUSSION

A. Standard of Review

“‘In determining if charges in an information can withstand a motion under [Penal

Code] section 995, neither the superior court nor the appellate court may reweigh the

evidence or determine the credibility of the witnesses. [Citations.] Ordinarily, if there is

some evidence in support of the information, the reviewing court will not inquire into its

sufficiency. [Citations.] Thus, an indictment or information should be set aside only

when there is a total absence of evidence to support a necessary element of the offense

charged. [Citations.] [¶] “[A]lthough there must be some showing as to the existence of

each element of the charged crime [citation] such a showing may be made by means of

circumstantial evidence supportive of reasonable inferences on the part of the

magistrate.” [Citation.] “Every legitimate inference that may be drawn from the

evidence must be drawn in favor of the information.” [Citations.] Thus, the ultimate test

is that “‘“[a]n information will not be set aside or prosecution thereon prohibited if there

is some rational ground for assuming the possibility that an offense has been committed

and the accused is guilty of it.”’” [Citation.] [¶] We review the evidence in support of

the information to determine whether as a matter of law it is sufficient, not whether the

trial court’s ruling was reasonable. [Citations.]’ [Citation.]” (Salazar v. Superior Court

(2000) 83 Cal.App.4th 840, 842.)

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B. Analysis

To resolve the present matter we need look no farther than the plain language of

section 1090, the case of People v. Christiansen (2013) 216 Cal.App.4th 1181, and the

common law indicia of employment.

In its relevant portion, section 1090 provides: “Members of the Legislature, state,

county, district, judicial district, and city officers or employees shall not be financially

interested in any contract made by them in their official capacity, or by any body or board

of which they are members.” By its terms, the statute deals with officers or employees,

not independent contractors. “‘[O]ur first task in construing a statute is to ascertain the

intent of the Legislature so as to effectuate the purpose of the law. In determining such

intent, a court must look first to the words of the statute themselves, giving to the

language its usual, ordinary import and according significance, if possible, to every word,

phrase and sentence in pursuance of the legislative purpose. . . .’ [¶] . . . ‘In the

construction of a statute . . . , the office of the Judge is simply to ascertain and declare

what is in terms or in substance contained therein, not to insert what has been omitted, or

to omit what has been inserted . . . .’ [Citations.] [¶] . . . ‘“‘[A] court is not authorized to

insert qualifying provisions not included and may not rewrite the statute to conform to an

assumed intention which does not appear from its language.’”’ [Citation.] ‘[C]ourts are

not at liberty to impute a particular intention to the Legislature when nothing in the

language of the statute implies such an intention. . . .’ [Citation.]” (Vikco Ins. Services,

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Inc. v. Ohio Indemnity Co. (1999) 70 Cal.App.4th 55, 61-62.) By its terms, the statute

applies to “employees”; it does not apply to conduct of independent contractors.

Further, and within the context of due process, a statute imposing criminal liability

must be sufficiently definite and describe with reasonable certainty those to whom the

statute applies and the conduct that it proscribes. (People v. Honig (1996) 48

Cal.App.4th 289, 339; People v. Vincelli (2005) 132 Cal.App.4th 646, 650.) By its

express provisions, there is no indication that section 1090 applies to independent

contractors.

In People v. Christiansen, supra, 216 Cal.App.4th 1181, the appellate court

reversed the defendant’s convictions of four counts of violating section 1090 on the basis

that, as an independent contractor, she was not subject to the proscriptions of the statute.

The court found that the term “employee” did not include an individual working as an

independent contractor. (People v. Christiansen, supra, at p. 1183.)

There, between 2004 and June of 2006, the defendant had been employed by a

school district as its “Director of Planning and Facilities.” In 2006, she ceased being

employed by the school district and became a consultant. It was during her tenure as a

consultant that she financially benefited from contracts entered into between the district

and companies in which she was involved. The court, in reaching its conclusion that

Christiansen was not an employee for purposes of section 1090, compared indicia of her

relationship with the school district as it existed between 2004 and 2006 against the

period of time she served as a consultant. In so doing, it pointed out that section 1090

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does not contain a definition of “employee” and that in Reynolds v. Bement (2005) 36

Cal.4th 1075, 1086-1087 the Supreme Court stated that unless the language of a statute

clearly indicates otherwise, it should be construed in light of the common law.

Specifically, the court in Reynolds commented that in the case of “‘a statute referring to

employees without defining the term—courts have generally applied the common law

test of employment.’”4 (Id. at p. 1087, cited in People v. Christiansen, supra, 216

Cal.App.4th at pp. 1188-1189.) The Christiansen court then concluded that, “[b]ecause it

is undisputed that at all relevant times Christiansen was an independent contractor, she

was not an employee within the meaning of section 1090 . . . .” (People v. Christiansen,

supra, at p. 1189.) The court acknowledged that while the defendant’s job duties, in

essence, remained the same, the consulting contract entered into with the district

identified her as an independent contractor, not an employee. Further, as an employee,

she had received employee benefits, such as medical and dental coverage along with

vacation and sick leave; as an independent contractor, she was required to provide

worker’s compensation insurance as well as general liability insurance. Lastly, the court

noted that neither as an employee nor a consultant was she allowed to enter into contracts

on behalf of the school district.

4 In Reynolds, employees alleging wage and hour violations under the Labor Code
sought to hold officers of their corporate employer directly liable. It was in this context
that the court, applying the common law definition of “employee,” rejected the plaintiff’s
claims. (Reynolds v. Bement, supra, 36 Cal.4th at pp. 1087-1088.)

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 While not specifically discussed in Christiansen, further common law indicia of

employment can be found in Ayala v. Antelope Valley Newspapers, Inc. (2014) 59

Cal.4th 522. “While the extent of the hirer’s right to control the work is the foremost

consideration in assessing whether a common law employer-employee relationship exists,

our precedents also recognize a range of secondary indicia drawn from the Second and

Third Restatements of Agency that may in a given case evince an employment

relationship. Courts may consider ‘(a) whether the one performing services is engaged in

a distinct occupation or business; (b) the kind of occupation, with reference to whether, in

the locality, the work is usually done under the direction of the principal or by a specialist

without supervision; (c) the skill required in the particular occupation; (d) whether the

principal or the worker supplies the instrumentalities, tools, and the place of work for the

person doing the work; (e) the length of time for which the services are to be performed;

(f) the method of payment, whether by the time or by the job; (g) whether or not the work

is a part of the regular business of the principal; and (h) whether or not the parties believe

they are creating the relationship of employer-employee.’ [Citations.]” (Id. at p. 532.)

With all of these criteria in mind, we now look to the facts placed before the court

at the preliminary hearing upon which the Penal Code section 995 motion was granted.

Evidence of the relationship between Dr. Sahlolbei and the hospital district was provided

through the testimony of individuals directly associated with the hospital district and its

board, and by various written agreements entered into between Dr. Sahlolbei and the

district.

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 Dr. Sahlolbei was a medical doctor independent of the hospital. He was

associated with the district in three ways: (1) as a member of the MEC in which at times

he was chief of staff; (2) by having an on-call agreement with the hospital; and, (3) as

codirector of the surgery department.

As testified to, the medical staff of the hospital was a self-governing body. The

MEC was the governing board of the medical staff. Members of the MEC were selected

by a vote of the doctors. The chief of staff was elected by the doctors. A chief of staff’s

primary duties were to make sure the by-laws were followed and to act as a go-between

with the medical staff and the board. At times, Dr. Sahlolbei was chief of staff.

The MEC made recommendations to the board of the hospital district regarding

the hiring of doctors and on issues of quality assurance. The board relied heavily on the

MEC to assess and review a prospective physician’s application. As chief of staff, Dr.

Sahlolbei would appear before the board to present the recommendations of the MEC as

to the hiring of doctors. The board had the final say as to which doctors were hired.

Dr. Sahlolbei did not have the authority to provide anesthesia services for the

hospital nor did he have the authority to contract with others or hire an anesthesiologist

without board approval.

Over 99 percent of the doctors under contract with the hospital were independent

contractors. Dr. Sahlolbei was an independent contractor. As codirector of the surgery

department, he acted as a consultant to the board. As codirector of the surgery

department, he had a contract which provided that he was acting as an independent

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contractor. He was paid a stipend as director of the surgery department. The hospital and

Dr. Sahlolbei also had an on-call agreement that required physicians to be available or

have another physician available 24 hours a day seven days a week. Under the on-call

service agreement, Dr. Sahlolbei was an independent contractor.5

Of particular note is the “Surgical Services Co-Director Agreement.” In its

relevant portions, the contract provided:

“2. Co-Director Surgical Services. Co-Director’s duties as Co-Director shall

include:

“1. Directs the formation and content of monthly meetings of the Surgical

Services Committee,

“2. Assist Hospital in maintaining compliance with CMS Conditions of

Participation, Title 22, JCAHO standards, and other customary regulations.

“3. Devote necessary time to provide consultation to other practitioners of the

medical staff.

“4. Provides professional guidance and support to the Surgical Services staff.

“5. Supervises the development and implementation of the Departmental policy

and procedures.

“6. Assesses compliance with established Surgical Services policies and

procedures, including standards of practice, and current evidence based research studies

and/or strong theoretical rationales.”

5 Our record does not contain a copy of the on-call agreement.

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 “As the Co-Director of the Facility, Hospital shall pay Co-Director $3000.00 per

month as a CoDirectorship fee as consideration for this agreement and for the

performance and documentation of the services listed in Section 2 above. Co-Director

shall devote a minimum of 15 hours per month to providing said services and shall

document the time, nature and date of the services on a form to be provided by Hospital

and provide the same to the CEO no later than the 5th day of the month following the

month when the services were provided.”

The contract provided that defendant was to supervise the work of hospital

employees and assist in the training of employees. The agreement further allowed for

either party to terminate the agreement without cause upon 60 days’ written notice.

Pursuant to its terms, Dr. Sahlolbei, at his sole expense, was to maintain professional

liability insurance of $1 million/$3 million.

As to Dr. Sahlolbei’s status, the following was provided: “Co-Director shall act at

all times under this Agreement as an independent contractor. The parties agree that

Hospital shall not have and shall not exercise any control or direction over the manner or

method by which Co-Director provides the services hereunder. Hospital shall not

withhold from amounts paid to Physician, state or federal income tax withholding, FICA,

FUTA, workers compensation, state unemployment or other amounts. Physician agrees

to indemnify, hold harmless and defend Hospital from and against any amount that it

pays as a result of not withholding said amounts in the event that demand is made on

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Hospital to pay the same or in the event that Hospital determines that it is legally

obligated to pay said amounts.”

Further, the contract had an indemnification clause in which Dr. Sahlolbei agreed

to indemnify the hospital for liability on account of his negligence. Lastly, the contract

provided: “In no event shall this Agreement be construed in any way to prohibit, limit or

restrain Hospital from entering into a contract or agreement, at any time, with any other

Physician for the provision of medical services at Facility.”

As evident from the above facts, there was clearly no evidence that Dr. Sahlolbei

was an employee of the hospital district from the standpoint of being paid a salary or an

hourly wage. Further, there was no evidence that the district paid for any benefits or

provided Dr. Sahlolbei with vacation or sick leave. There was no evidence that the

hospital district controlled the activities of Dr. Sahlolbei; in fact, from the provisions of

the contract entered into between the district and Dr. Sahlolbei, the district disclaimed

any right to control. While certainly there were things Dr. Sahlolbei needed to do as

codirector of surgery, the duties outlined in the agreement were relatively nondescript

and did not include the right to hire hospital staff. Clearly, he was a specialist, and by the

nature of his profession he worked without supervision. The contract was of limited

duration, one year, and the district did not directly control how Dr. Sahlolbei allotted the

15 hours expended as the codirector of surgery. Further, both the testimony and the

written agreement support the notion that Dr. Sahlolbei was an independent contractor,

not an employee. While Dr. Sahlolbei, as chief of staff and as a member of MEC, did

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appear before the board and consult as to the hiring of doctors and presumably on issues

of quality control, there was no evidence that he did so as anything other than as a

representative of the doctors practicing at the hospital.6

As such, we believe there to be a total absence of evidence that Dr. Sahlolbei,

during the time at issue, was acting as an “employee” of the district. As such, the trial

court properly granted his Penal Code section 995 motion as to count 1 of the

information.

To support its argument that section 1090 is applicable to “independent

contractors,” the People rely primarily on the civil cases of Hub City Solid Waste

Services, Inc. v. City of Compton (2010) 186 Cal.App.4th 1114 (Hub City) and California

Housing Finance Agency v. Hanover/California Management & Accounting Center, Inc.

(2007) 148 Cal.App.4th 682. Initially, as stated in Christiansen: “We express no opinion

on the soundness of those opinions in the civil context, but we hold that their expansion

of the statutory term ‘employees’ to apply to independent contractors does not apply to

criminal prosecutions for violation of section 1090. At least for purposes of criminal

liability under section1090, an independent contractor is not an employee.” (People v.

Christiansen, supra, 216 Cal.App.4th at p. 1189; accord, People v. Lofchie (2014) 229

Cal.App.4th 240, 252; see also Davis v. Fresno Unified School Dist. (2015) 237

6 The record demonstrates that as to Dr. Barth, Dr. Sahlolbei appeared before the
board as a representative of Dr. Barth.

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Cal.App.4th 261, 300 [“The stricter definition of the statutory terms adopted by the court

in [Christiansen] is appropriate in the context of criminal prosecution . . . .].)7

Christiansen’s holding aside, and even assuming that section 1090 covers conduct

by independent contractors, there is still a total absence of evidence that Dr. Sahlolbei

was acting in an official capacity or performing an authorized public function, as were

defendants in Hubb City and California Housing Finance Agency.

In Hub City, the City of Compton was awarded $22 million against defendant

Aloyan. Aloyan had been an independent contractor with the city, in charge of its waste

management. During his relationship with the city he negotiated a contract with the city

to privately provide waste management services. Shortly after city council approval he

made campaign contributions to the city council members that voted to approve the

contract. He additionally hired relatives of one of the council members. Of import to the

court’s decision that section 1090 applied to Aloyan’s conduct was the fact that at the

time of the conduct he was performing a public function authorized by the city. As

stated: “In May 2000, Compton entered into a management agreement with Aloyan’s

company, AUS. Under the management agreement AUS was an independent contractor

but assumed many of the city’s waste management needs; [the city manager] described

AUS as ‘providing the private management’ of the city’s in-house waste operation. . . .

Under the agreement Aloyan acted as the director of the in-house waste division, working

7 The People also rely on People v. Gnass (2002) 101 Cal.App.4th 1271, which
will be discussed, post.

14
alongside city employees, overseeing day-to-day operations of Compton’s waste

management division, and taking responsibility for public education and compliance with

state-mandated recycling and waste reduction efforts.” (Hub City, supra, 186

Cal.App.4th at pp. 1119-1120, fn. omitted.)

“The evidence presented at trial was sufficient to establish that Aloyan fell within

the ambit of section 1090. Pursuant to the management agreement between AUS and

Compton, Aloyan supervised city staff, negotiated contracts, and purchased equipment

and real estate on behalf of the city. His activities served a public function and he was

intricately involved in the city’s waste management decisions.” (Hub City, supra, 186

Cal.App.4th at p. 1125.)

In finding section 1090 applicable, the Hub City court focused on facts

demonstrating that at all times Aloyan was performing a public function (in charge of the

city’s in-house waste management) with the City of Compton; as such, he was acting

within an official capacity with the city. Such is not the case here. Here, there was no

evidence that at any time was it part of Dr. Sahlolbei’s duties, either as a member of the

MEC or as codirector of surgery, to find doctors to serve on the hospital’s staff or

negotiate their salaries on behalf of the board. There is nothing in our record to indicate

that Dr. Sahlolbei had a relationship with the district in which he performed public

functions on behalf of the district such that he could be deemed to be acting within his

official capacity.

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 The same is true with California Housing Finance Agency. There, Attorney

McWhirk was general counsel for California Housing Finance Agency (CHFA) from

1984 to 1990. CHFA was a direct lender, loan purchaser, and mortgage insurer. In 1991,

McWhirk became outside counsel pursuant to a written agreement. While serving as

outside counsel he formed a company with a straw person acting as president. He

thereafter influenced CHFA as its attorney to enter into a contract with his company for

his company to administer loan payments being made to CHFA. During the life of the

contract, administration fees grew. Eventually an audit showed that McWhirk’s company

had overcharged CHFA for those fees. McWhirk was sued on a number of theories,

including one based on section 1090. The court affirmed the applicability of section

1090 to its facts. Its facts, however, are different than ours. There, McWhirk was the

attorney for the governmental agency, who looked to him for advice. He was under

contract to advise the board of CHFA. Whether hired as a staff attorney or as

independent counsel, he had an ongoing relationship with CHFA in which he was

performing a public function in an official capacity. Here, Dr. Sahlolbei was not hired or

paid by the district to advise them on who they should hire or how much the district

should pay. While as chief of staff, the board may have listened to and accepted his

recommendations, he was nonetheless acting independent of the board. In appearing

before the board as it relates to Dr. Barth’s salary, the record is clear that he was

appearing on behalf of Dr. Barth, not as a representative of the district performing a

public function. There is simply nothing in our record to indicate that the district viewed

16
Dr. Sahlolbei as performing a public function, or at any time treated Dr. Sahlolbei as

acting in an official capacity.

Equally distinguishable is Gnass. There, as in California Housing Finance

Agency, the defendant was an attorney who was an independent contractor hired by the

City of Waterford to advise on various bond issues; he also served as the attorney for the

authority issuing the bonds; as such, he had a conflict of interest. The court found that as

the attorney for the city, he was performing a public function although he was technically

an independent contractor. As such, he was acting in an official capacity.

The facts of the cases relied upon by the People simply do not exist here. There is

nothing to suggest that Dr. Sahlolbei was ever in a role or had an ongoing relationship

with the district such that he performed public functions on behalf of the district. While

Dr. Barth may have thought Dr. Sahlolbei had the authority to negotiate a contract, such

perception was based solely on Dr. Sahlolbei’s representations. There is nothing in the

record to suggest that he was exercising any ostensible authority granted to him by the

hospital district.

While certainly we do not say there is no criminal conduct, we do say that it does

not fall within the parameters of section 1090.

III. DISPOSITION

The petition is denied.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

KING

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 J.

I concur:

MILLER
J.

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[People v. Superior Court (Sahlolbei)—E062380

HOLLENHORST, J., Dissenting.

I agree with the majority that defendant Hossain Sahlolbei’s behavior, as alleged,

constitutes criminal conduct. I further agree that some existing case law, particularly

People v. Christiansen (2013) 216 Cal.App.4th 1181 (Christiansen), supports the

conclusion that the alleged conduct does not fall within the parameters of Government

Code1 section 1090, at least for purposes of criminal liability.

In my view, however, Christiansen is incorrect to establish an absolute rule that an

independent contractor for a public entity—as distinguished from an employee, as the

two terms are defined under the common law of torts—may never be subject to criminal

liability for violating section 1090. I would therefore decline to follow Christiansen, and

would find defendant’s motion to dismiss the section 1090 charge should not have been

granted.

The question of whether defendant’s behavior falls within the scope of section

1090 is “ultimately one of legislative intent, as ‘[o]ur fundamental task in construing a

statute is to ascertain the intent of the lawmakers so as to effectuate the purpose of the

statute.’” (Martinez v. Combs (2010) 49 Cal.4th 35, 50 (Martinez).) We start our

analysis with the statutory language, but where statutory language “‘allows more than

one reasonable construction, we may look to such aids as the legislative history of the

measure and maxims of statutory construction. In cases of uncertain meaning, we may

1 Further undesignated statutory references are to the Government Code.

1
also consider the consequences of a particular interpretation, including its impact on

public policy.’” (Id. at p. 51.)

The statutory language of section 1090 allows for more than one reasonable

construction. A number of courts have construed the term “employee,” as used in section

1090, to encompass at least some individuals providing services as independent

contractors. (E.g., California Housing Finance Agency v. Hanover/California

Management & Accounting Center, Inc. (2007) 148 Cal.App.4th 682, 693 (California

Housing) [“an attorney whose official capacity carries the potential to exert

‘considerable’ influence over the contracting decisions of a public agency is an

‘employee’ under section 1090, regardless of whether he or she would be considered an

independent contractor under common law tort principles”]; Hub City Solid Waste

Service, Inc. v. City of Compton (2010) 186 Cal.App.4th 1114, 1125 (Hub City) [“An

individual’s status as an official under [section 1090] turns on the extent to which the

person influences an agency’s contracting decisions or otherwise acts in a capacity that

demands the public trust.”].) In contrast, the Christiansen court construed the same

statutory language to encompass only those individuals who would be classified as an

employee under the common law test of employment, at least for the purpose of

determining criminal liability for willful violation of section 1090. (Christiansen, supra,

216 Cal.App.4th at pp. 1189-1190.) The People have conceded that defendant “qualifies

as an independent contractor under common law tort.” The plain language of section

1090 alone, therefore, does not answer the question presented by the case at bar.

2
 The fundamental purpose of section 1090 is to act prophylactically against the

temptation of self-dealing, which might compromise the judgment of a public official or

employee or cast doubt on his or her loyalty and allegiance, and to avoid the appearance

of impropriety. (Carson Redevelopment Agency v. Padilla (2006) 140 Cal.App.4th 1323,

1330 (Carson).) Christiansen holds that someone who provides services as an

independent contractor, under the definition of the term developed in the common law of

torts, may not be held criminally liable for violating section 1090. (Christiansen, supra,

216 Cal.App.4th at pp. 1189-1190.) This holding effectively carves out a safe harbor for

independent contractors to engage in self-dealing, which is inconsistent with

accomplishing section 1090’s prophylactic purposes. (See Carson, supra, at p. 1335 [a

“prophylactic statute such as section 1090 should be construed broadly to close

loopholes; it should not be constricted and enfeebled.”].)

Perhaps many, or even most, independent contractors are not in a position to

benefit from improper self-dealings. Nevertheless, the realities of modern-day

government economics make outsourcing of even core government functions

commonplace, as public entities attempt to trim costs. (See, e.g., Service Employees

Internat. Union, Local 1021, AFL-CIO v. County of Sonoma (2014) 227 Cal.App.4th

1168, 1171; Costa Mesa City Employees Assn. v. City of Costa Mesa (2012) 209

Cal.App.4th 298, 302.) The facts of Christiansen are a prime example. The defendant in

that case was a former employee of a school district, who continued to provide the same

services to the district under a new contract, but now as an independently contracted

“consultant.” (Christiansen, supra, 216 Cal.App.4th at p. 1184.) These duties included

3
“identifying companies to perform work for the District.” (Id. at p. 1186.) The

prosecution alleged that the defendant was financially interested in four contracts entered

into by the district on the defendant’s recommendation. (Id. at pp. 1186-1187.) Three of

the contracts were between the district and a company that had also hired defendant’s

company—an LLC, of which she was the sole member and owner—as a consultant,

while the fourth was based on an amendment to a contract between the district and the

defendant’s company. (Ibid.)

The temptation for self-dealing for the defendant in Christiansen was no different

than when the defendant had been an employee performing the same services for the

district, and the policy reasons behind the section 1090 prohibition on self dealing were

equally relevant. The Christensen court nevertheless concluded that the defendant’s

change from an employee to independent contractor insulated her from any criminal

liability for violation of section 1090. (Christiansen, supra, 216 Cal.App.4th at p. 1190.)

I find it unlikely that such a holding is consistent with the intent of the lawmakers, and it

certainly does not tend to effectuate the prophylactic purpose of section 1090. (See

Martinez, supra, 49 Cal.4th at p. 50.)

Moreover, I find the Christiansen court’s reasoning in support of its conclusion

unpersuasive. The Christiansen court relies on Reynolds v. Bement (2005) 36 Cal.4th

1075, 1086-1087 (Reynolds), for the proposition that a statute should be construed using

common law definitions of terms, unless the statute explicitly indicates otherwise.

(Christiansen, supra, 216 Cal.App.4th at p. 1188.) The Reynolds decision involved

interpretation of a Labor Code provision, and had adopted the common law tort definition

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of the term “employee” in doing so. (Reynolds, supra, at p. 1087.) The Christiansen

court ignored, however, that Reynolds had been abrogated on precisely that point.

(Martinez, supra, 49 Cal.4th at pp. 62-63.)

Additionally, the definition of “employee” used in Reynolds had developed in the

specific context of determining when an employer should be held liable in tort for injuries

to third parties. (S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989)

48 Cal.3d 341, 352.) Christiansen makes no attempt to grapple with the circumstance

that section 1090 arose not from tort law, but rather the common law of conflicts of

interest, which has very different history and fundamental purpose. (Lexin v. Superior

Court (2010) 47 Cal.4th 1050, 1072-1073 (Lexin).) The issue in the section 1090 context

is not the degree of control the putative employer has over its agent (as when courts

consider whether to impute tort liability for injuries to third parties), but quite the

opposite, the degree of influence the public servant has over the public entity’s

contracting decisions. (California Housing, supra, 148 Cal.App.4th at p. 690.) “Thus,

the common law employee/independent contractor analysis is not helpful in construing

the term ‘employee’ in section 1090.” (Ibid.)

Finally, I am not persuaded that section 1090 may be interpreted differently

depending on whether the case at bar is a criminal or a civil action. On its face, section

1090 articulates a rule; section 1097 makes any willful violation of that rule, or aiding or

abetting of a violation, a criminal offense. (§§ 1090, 1097.) Christiansen’s distinction

between the civil and criminal context not only lacks any basis in the statutory language

or the legislative history. It also has no basis in prior case law. Before Christiansen,

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courts routinely—and in my view properly—relied on both civil and criminal cases in

interpreting the statutory language of section 1090, regardless of the nature of the case at

bar. (E.g., People v. Gnass (2002) 101 Cal.App.4th 1271, 1290-1291 (Gnass) [relying on

civil cases to determine defendant had acted in official capacity for section 1090

purposes]; California Housing, supra, 148 Cal.App.4th at pp. 690-691 [citing People v.

Honig (1996) 48 Cal.App.4th 289, 314 (Honig).) Indeed, Christiansen’s holding is

inconsistent with the California Supreme Court’s recent articulation of the elements

necessary to establish criminal liability for violating section 1090, which describes the

intent element as the only difference between the civil and criminal analysis. (Lexin,

supra, 47 Cal.4th at p. 1074 [reciting elements of section 1090 violation, noting that

“[p]roof of a violation of section 1097, the provision criminalizing violations of section

1090, requires a further showing that the section 1090 violation was knowing and

willful.”].)

Unlike the majority, I would reject Christiansen’s “narrow and technical”—and, in

my view, simply incorrect—interpretation of section 1090, which limits the statute’s

scope and tends to defeat its legislative purpose. (Honig, supra, 48 Cal.App.4th at p.

314.) Instead, I would apply the reasoning of California Housing and Hub City, and hold

that an independent contractor (as that term is used in the context of the common law of

torts) may be an “employee” for the purpose of applying section 1090, at least where that

person contracts with a public entity to perform services that carry “the potential to exert

‘considerable’ influence over the contracting decisions of a public agency . . . .”

(California Housing, supra, 148 Cal.App.4th at p. 693.)

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 My review of the record also compels me to part ways with the majority’s

conclusion that there is a “total absence” of evidence that defendant was acting in an

official capacity when he appeared before the hospital’s board and recommended that the

hospital enter into a contract with Dr. Barth. (Maj. opn., ante, at p. 14.) The majority,

focusing on the terms of defendant’s written contract with the hospital, asserts that

defendant “was not hired or paid by the district to advise them on who they should hire or

how much the district should pay.” (Maj. opn, ante, at p. 16.) This analysis, however,

ignores that “in construing section 1090 in any particular situation, ‘“[w]e must disregard

the technical relationship of the parties and look behind the veil which enshrouds their

activities in order to discern the vital facts.”’” (California Housing, supra, 148

Cal.App.4th at p. 691, quoting Honig, supra, 48 Cal.App.4th at p. 315.) Also, given the

current procedural posture, we are bound to draw all reasonable inferences in favor of the

information. (Lexin, supra, 47 Cal.4th at p. 1072.) I am not persuaded that the majority’s

discussion does so.

Viewed in the required light, the evidence establishes that defendant’s official

capacity as co-director of surgical services included the responsibility of acting as a

consultant to the board of directors. The board, constituted primarily of individuals who

are not themselves doctors, relies heavily on input from the hospital’s medical staff—of

which defendant was a part, by virtue of his position as co-director of surgical services—

with respect to hiring doctors, in particular. Generally, this input is filtered through the

Medical Executive Committee (MEC), the formal representative body of the medical

staff. Defendant had served as an officer of the MEC at various times, but was a “power

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broker” on the medical staff, regardless of whether he formally held an office on the

MEC at any particular point in time.

Furthermore, with respect to the contract at issue in this petition, defendant went

beyond merely recommending that the hospital hire Dr. Barth. He attempted

(successfully) to leverage the power he had in his position as co-director of surgery to

force the board to make the hire on the terms defendant preferred. He threatened to

“remove admissions”—essentially, a form of work slowdown, whereby a doctor or group

of doctors direct elective patients to other facilities for treatment, reducing the hospital’s

revenue—if the board did not sign the contract. It is no stretch to conclude that

defendant’s influence on the hospital’s contracting decisions, both while acting in his

capacity as co-director of surgical services, and in the other roles he had within the

hospital that ultimately derive from that position, equals or exceeds the influence of the

defendants in the several cases that the majority discusses, and who were determined to

fall within the scope of section 1090. (See Hub City, supra, 186 Cal.App.4th at pp. 1119-

1120 [independent contractor who had “assumed many of the city’s waste management

needs”]; California Housing, supra, 148 Cal.App.4th at p. 686 [outside counsel for

government agency who “influenced” contracting decision]; Gnass, supra, 101

Cal.App.4th at pp. 1279-1280 [outside council for city, hired to advise on various bond

issues].) While the majority attempts to distinguish these cases from the one at bar on

their facts, I am not persuaded that any of the differences observed should make a

difference. In my view, the reasoning of these cases, and particularly their articulation of

the scope of section 1090, is equally applicable here.

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 It may well be that defendant purported to appear before the board solely as a

representative of Dr. Barth, not in his role as co-director of surgical services. But the

majority goes too far, in my view, when it states “the record is clear that [defendant] was

appearing on behalf of Dr. Barth, not as a representative of the district . . . .” (Maj. opn.,

ante, at p. 17.) A fundamental principle of conflict of interest law is that a person who

wears several hats cannot just set one of them aside and declare the absence of a conflict.

(See Lexin, supra, 47 Cal.4th at p. 1073 [the judgment of a person with conflict of

interest “‘cannot and should not be trusted, even if he attempts impartiality.’”].) By

negotiating on behalf of Dr. Barth with the board, defendant also necessarily, even if

implicitly, advocated for the contract in his role as co-director of surgical services. If, as

alleged, and as at least some evidence suggests, defendant did so while having a personal,

financial interest in Dr. Barth’s hiring, defendant had precisely the sort of conflict of

interest that section 1090 is designed to prevent, and that section 1097 makes a criminal

offense where the violation is willful.

For the above reasons, I respectfully dissent from the majority’s ruling affirming

the dismissal of the charge at issue.

HOLLENHORST
Acting P. J.

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