California CPA prevails over fingerprint requirements

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A California CPA has won a key ruling in a suit against the California Board of Accountancy claiming it is improperly enforcing a fingerprinting requirement.

Ned Leiba of the Stockton-based firm of Leiba & Bowers CPAs objected to a recent requirement from California regulators mandating “live scan” fingerprints from many members of boards, commissions, licensees and the general public. A “live scan” creates an electronic record of someone’s fingerprints.

Leiba was originally licensed by the California Board of Accountancy in 1976 and at the time submitted a copy of his “rolled” fingerprints, according to a March ruling by Judge Shelleyanne Chang of California Superior Court in Sacramento. His license has been continuously renewed and he had no history of license discipline with the board. In the 1970s, the California Board of Accountancy didn’t submit licensee fingerprint cards for criminal background screening with the Department of Justice. At some point during the 1980s, the CBA decided to destroy all of its copies of licensee fingerprints, worrying there might be a security risk.

However, in 2012, the CBA issued a regulation with stiffer fingerprinting requirements. When Leiba applied to renew his license in 2014, he was told he needed to submit a “live scan” so his fingerprints could be collected and sent to the DOJ. Leiba maintained that he had already submitted his fingerprints back in 1976 to the CBA and didn’t need to submit them again. In 2015, the CBA issued him a citation for $500 for violating the regulation, and he contested it. Last year, an administrative law judge issued a proposed decision dismissing the citation, noting the CBA itself had destroyed the old fingerprints.

However, the CBA rejected the proposed decision and issued an order remanding the judge to hold a new hearing and take additional evidence on the issue of whether or not the DOJ had a copy of his fingerprints. Another judge upheld the CBA’s citation in the next hearing on the case in May 2016. Leiba petitioned for reconsideration, but there was a disagreement over whether the CBA received his petition in time or responded to it. Last September, Leiba sent the CBA a card with his fingerprints, but the CBA responded that it would not process his renewal application because he was required to submit his fingerprints on two cards, not just one, and had not paid the $49 processing fee. Leiba objected, and Judge Chang sided with him.

“The evidence presented by the Board … indicates at best, that a record of Petitioner's fingerprints may not exist at the DOJ,” she wrote. “This uncertainty is not sufficient to show that Petitioner is a person ‘for whom an electronic record of the licensee's fingerprints does not exist in the Department of Justice's criminal offender record identification database.’”

During one of the hearings, the judge chided an attorney for the CBA. “Now you're saying he has no fingerprint cards with the Board and which are able to be transmitted to the Department of Justice because we destroyed it,” she said. “But we're going to hold Mr. Leiba responsible because we destroyed those records, and they now can't be transmitted to the Department of Justice. I mean, just on a practical-fairness level, does that make any sense at all?”

Leiba believes the legal requirement for the “costly and in many cases duplicative live scan fingerprints is not valid.” He contends that thousands of Californians, including CPAs, may have been forced to pay the cost of live scan fingerprinting without a valid basis.

“The recent ruling in my case, Leiba v. the California Board of Accountancy, calls into question not only the specific legality of the requirement of licensing agencies that require duplicative live scan fingerprints, but suggests that the recordkeeping system of the Department of Justice is insufficient to satisfy the legal standards of many licensing requirements,” he said in an email.

A CBA spokesperson declined to comment on the case, due to litigation.

Judge Chang granted Leiba's petition for a writ of mandate on March 10. "And yes, the CBA did renew my license after the decision," said Leiba.

"Accordingly, the Board abused its discretion in sustaining the administrative citation against Petitioner," the judge wrote in her ruling. "To the extent that Petitioner seeks other mandate relief, these claims are denied."

A writ of mandate is an order from the court to a subordinate agency, in this case the CBA, to revise its citation and order, but in this case, according to Leiba, the board must dismiss them. He is awaiting an appearance before the CBA because he wants the opportunity to address the board about his case, although he said it's possible the staff may arrange for the citation to be dismissed without him making an appearance.

The judge's ruling means Leiba does not need to resubmit his fingerprints because he satisfied the requirement over 40 years ago. He also does not need to pay the $500 fine, nor the $49 processing fee.

Leiba thinks many CPAs in California may be entitled to refunds from the CBA and he plans to raise the issue with the president of the California Society of CPAs during a meeting next week.

“The narrow picture with the CBA is that the regulation clearly says folks like me don't need to undertake additional live scan fingerprints,” he said. “Despite that, the staff has gone out and vigorously enforced a duplicative fingerprint requirement. So not only have thousands of CPAs incurred the cost, perhaps $60-$70, of legally unnecessary duplicative fingerprints, but the CBA has fined and cited a great number of CPAs, if you believe the statistics published by the CBA. I worry that the staff of the CBA has not informed the members of the board of this issue. I worry that members of the board do not read the regulations they approve and understand them.”

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