Wednesday, December 30, 2020

People v. Martinez (Cal. Ct. App. - Dec. 30, 2020)

I wonder if the Attorney General's office took this appeal seriously enough.

The defendant, Monica Martinez, is a bail agent who was convicted of violating Section 1814 of the Insurance Code.  That statute -- pursuant to various regulations -- prevents bail licensees from, inter alia, entering into arrangements with people currently incarcerated to refer other individuals (i.e., other people in the jail) to a particular bail agent.

You can see why those rules exist.  You don't want particular bail agents paying off people in jail to refer people to that particular agent.  You'd rather have the marketplace decide; on price, on quality of service, etc.  This might be an especially important concern since people in jail might have limited access to high-quality information about particular bail agents, so you don't want them making their decision simply based upon which bail agents can afford to pay off enough fellow inmates to refer 'em.

Understandably, the defendant insists that these regulations violate her free speech rights (and the free speech rights of other inmates).  To be clear:  Inmates are still allowed to sua sponte tell other inmates that their bail agent was awesome or terrible or whatever.  Bail agents just can't pay 'em to do so; i.e., can't "make arrangements" with them for such referrals.

Does that limit free speech?  Sure.  To a degree.  Is there a sufficiently legitimate state interest for the thing?

The Court of Appeal says:  No.  Holding that the limitation is unconstitutional and violates the First Amendment.

There's a dissent that argues otherwise.  But the majority goes the other way.  It admits that there's a state interest in regulating in-custody bail arrangements.  Which is not surprising, since there's fairly extensive precedent on this point.  As the legislative history surrounding one of the relevant statutory enactments -- and cited by the majority -- accurately reflects:  "Unfortunately, the industry reports that the State Department of Insurance has a difficult time enforcing laws and regulations designed to prevent the unfair and anti-competitive practice of providing compensation to inmates for soliciting the business of detained individuals. The practice of providing compensation to inmates for such activities has, in effect, permitted inmates unlicensed by the department to solicit bail services. Inmates do not know, nor should they be expected to know the laws pertaining to bail bonds services[,] and [they] can intimidate detained individuals into calling a particular agent because of the monetary benefit which creates an unfair and anti-competitive business atmosphere. [¶] The anticompetitive situation [arises] when one bail company compensates inmates to solicit business and detained individuals are not free to call other bail companies. Essentially, bail companies abiding by the department’s regulations lose business while those ignoring existing regulations obtain all the business. In fact, the bail industry reports that situations arise where one bail company has written nearly every bond at a jail.”

Okay, then why is the prohibition at issue unconstitutional?  Because, according to the majority, the Attorney General "failed to demonstrate that section 2076 provides more than 'only ineffective or remote support for the government’s purpose'” under the relevant Central Hudson test.  The Court of Appeal says:  "[I]n this case, the People have made no attempt to show that section 2076 directly and materially advances the state’s substantial interests. . . . Although they articulate substantial state interests, the People merely make the conclusory statements that section 2076 advances those interests and is 'narrowly tailored.' But they utterly fail to tie section 2076 to the direct and material advancement of those interests."

The Court of Appeal thus concludes:  "Since the state has failed to carry its burden, we conclude that section 2076 is invalid as a facially overbroad regulation of speech that does not survive even the intermediate level of review that applies to commercial speech."

One might perceive two alternative (or potentially reinforcing) problems here.  First, maybe the Attorney General's office didn't take the appeal seriously enough to marshall sufficient evidence or argument to justify the statute.  After all, it's just a penny-ante criminal conviction; maybe the AG thought there was no way the Court of Appeal was going to through out such a common-sense statute.  If so, well, that was definitely the wrong call.

Or maybe the majority demanded too much "proof" of what seems a straightforward principle.  In a footnote, the majority opinion faults the dissent for not providing actual "evidence" of the need for the statute, saying:  "The dissent does not point to any empirical data, history, or evidence, even anecdotal, to establish the efficacy of the regulation. Its unsupported reasoning sounds more like less-demanding 'rational basis' review than the heightened scrutiny applicable to commercial speech."  Perhaps.  But I definitely see the contrary viewpoint as well.  Letting bail agents make "arrangements" with inmates to refer clients to 'em clearly, in my view, distorts the marketplace, and punishing such conduct will lead to a marketplace more closely (albeit admittedly still imperfectly) competes on relevant criteria -- price, quality, service, etc.  So maybe the majority's asking for too much.

Or maybe the Attorney General should have provided more than he did.