Chapter 16.34

UNIFORM REGULATORY ACTION AND HEARING PROCEDURES

Parts:

• 1 Regulatory Action Procedures

• A. The procedures set out in this chapter shall apply to all regulatory actions that the administrator is authorized to take against cardroom permittees and licensees.

• B. For purposes of this chapter, the person who is the subject of the regulation action means the cardroom permittee or any licensee that is charged with wrongdoing.

• (Ord. 28517.)

Any cardroom permit issued under the provisions of this title shall be subject to regulatory action on any of the following grounds:

• A. The cardroom permittee or any stock ownership licensee has violated any provision of this title or any provision of Chapter 4.77 of Title 4 of this Code.

• B. The cardroom permittee or stock ownership licensee failed to timely pay any fees due under this title.

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§ 16.34.030

• C. The cardroom permittee or any stock ownership licensee has violated any term or condition of either the cardroom permit or the stock ownership license.

• D. The cardroom permittee or any stock ownership licensee has committed acts constituting a violation of:

  - J. The operation of the cardroom substantially aggravates the crime problems in the area, makes law enforcement unduly difficult, or is otherwise detrimental to crime prevention or is detrimental to the public peace, health or safety in the area. 
  
  - (Ord. 28517.) 
  

  1. State gambling law; or

  2. Any federal law substantially related to the qualifications, functions, or duties of the cardroom business or gambling business; or

  3. Any law of any other state or territory of the United States relating to the qualifications, functions, or duties of the cardroom business or gambling business.

• E. The failure or refusal of any cardroom permittee or any stock ownership licensee to make and file any statements as required by this title within the time required or to timely pay any sums due under the tax provisions of Chapter 4.77 of Title 4 of this Code.

• F. The cardroom permittee or any stock ownership licensee supplies information to the administrator that is untrue or misleading.

• G. The cardroom permittee or any stock ownership licensee has knowingly made false statements on any filing, registration or statement required under this title.

• H. The cardroom permittee or any stock ownership licensee has committed any acts involving dishonesty, fraud, or deceit with the intent to substantially benefit the cardroom permittee or any stock ownership licensee or another, or to substantially injure another.

• I. The operation of the cardroom violates the city's Zoning, Fire, or Building Codes or other ordinances or regulations, or applicable state laws or regulations relating to the operation of the premises.

All licenses issued under the provisions of this title shall be subject to appropriate regulatory action on any of the following grounds:

• A. The licensee has violated any provision of this title or any provision of Chapter 4.77 of Title 4 of this Code.

• B. The licensee has failed to timely pay any fees due under this title.

• C. The licensee has violated any term or condition upon which the license was issued.

• D. The licensee has committed acts constituting violation of:

  1. State gambling law; or

  2. Any federal law substantially related to the qualifications, functions, or duties of the cardroom business or gambling business; or

  3. Any law of any other state or territory of the United States relating to the qualifications, functions, or duties of the cardroom business or gambling business.

• E. Failure of the licensee to establish his or her continued eligibility and qualifications for licensing under the affirmative criteria for licensing set forth in Chapter 16.32.

• F. Failure to provide information, documentation, and assurances required by the administrator to demonstrate the licensee's continued qualification for licensing.

• G. Failure to reveal any material fact relating to the licensee's continued qualification for licensing.

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• H. The supplying of information which is untrue or misleading.

• I. A felony conviction, including by a plea of nolo contendere, or a conviction by any federal court or a court in another state for a crime that would constitute a felony in California.

• J. A misdemeanor conviction, including by a plea of nolo contendere, or a conviction by any federal court or a court in another state for a crime that would constitute a misdemeanor in California, involving dishonesty, moral turpitude, prostitution, sale or possession for sale of a controlled substance, gambling, or any other crime substantially related to the qualifications, functions, or duties of the cardroom business or gambling business, within a ten-year period immediately preceding the submission of the initial licensing application or renewal application.

• K. Association of the licensee with criminal profiteering activity or organized crime as defined in the California Penal Code Section 186.2 of the California Control of Profits of Organized Crime Act, Penal Code Sections 186 et seq.

• L. Contumacious defiance by the licensee relating to any legislative investigative body or any other investigative body in any state of the United States.

• M. The licensee is a partner, officer, director or shareholder or has any financial interest in any business organization that engaged in any form of prohibited gambling pursuant to the California Penal Code whether within or outside of the State.

• N. Denial, revocation, or suspension of a state gambling license, key employee license, work permit, registration, or finding of suitability pursuant to state gambling law or the denial, revocation, or suspension of a regulatory license for lawful gambling in any other state.

• O. The commission of acts involving dishonesty, fraud or deceit with the intent to substantially benefit him or herself or another, or substantially injure another.

  • P. The licensee is less than twenty-one years of age.

• (Ord. 28517.)

• A. The Administrator shall make appropriate investigations to determine whether grounds may exist for regulatory action. If an investigation cannot be concluded and a notice of Regulatory Action served in accordance with Section 16.34.060 of this Chapter within one hundred and eighty (180) Business Days after the date of discovery by the Administrator of the incident and/or circumstances that precipitated the investigation, the Administrator shall inform the Chief of Police in writing of the focus of the investigation and an estimated date for completion of the investigation. Thereafter, the Administrator shall provide the Chief of Police with a written status update on a monthly basis until the investigation concludes.

• B. Prior to serving a notice of regulatory action, the Administrator shall provide the Cardroom Permittee or Licensee who is the subject of the investigation with the opportunity to meet with the Administrator in order for the Administrator to inform the Cardroom Permittee or Licensee generally of the basis for the proposed action.

• C. If, after investigation, the Administrator is satisfied that grounds exist for a regulatory action hearing, the Administrator shall file a notice of regulatory action in accordance with Section 16.34.060.

• (Ords. 28517, 30616.)

• A. In determining the appropriate regulatory action to take against a person who is the subject

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of the regulatory action, the administrator may consider, but is not limited to, the following mitigating and aggravating factors:

1. The seriousness of any crimes constituting grounds for regulatory action for which the person who is the subject of the regulatory action has been convicted including, but not limited to:

   • a. The fines, jail or prison sentence, other punishment, restitution, and fees imposed by the court;

   • b. How much of the sentence was completed;

   • c. Whether the person paid his or her fines and provided full restitution to the crime victims;

   • d. Whether the person paid any other costs imposed by the sentencing court.

2. The nature of the conduct constituting the grounds for regulatory action.

3. The duration of the conduct constituting the grounds for regulatory action.

4. The numbers of instances of conduct constituting the grounds for regulatory action and whether or not the conduct is part of a pattern of misconduct.

5. Whether the conduct constituting the grounds for the regulatory action was deliberate or inadvertent.

6. The degree of injury to any victim, including the city, either financial or physical, caused by the conduct giving rise to the grounds for regulatory action.

7. The motivation of the person who is the subject of the regulatory action.

8. Restitution provided to the victim.

9. Whether the violations are continuing in nature.

10. Prior regulatory violations of this title, of Chapter 4.77 of Title 4 of this Code, or of state gambling law, and any regulatory action ordered pursuant to this title or

any regulatory or other enforcement action taken by the state pursuant to the state gambling law.

11. Voluntary corrective action taken to correct the grounds for regulatory action prior to the regulatory action hearing.

12. Any other mitigating or aggravating circumstances the administrator may consider applicable.

• B. In addition to the considerations set forth in Subsection A., the administrator may also consider the following additional mitigating and aggravating factors with regard to cardroom permittees that are subject to regulatory action:

  1. Any criminal convictions of the cardroom permittee, or any stock ownership or key employee licensee, involving any crimes that would constitute grounds under this title for the denial, suspension, or revocation of a stock ownership or key employee license.

  2. The commission of any act by the cardroom permittee or any stock ownership or key employee licensee, involving dishonesty, fraud or deceit with the intent to substantially benefit himself or herself or another, or substantially injure another.

  3. Whether the cardroom permittee or any stock ownership or key employee licensee, has previously operated in this or another state under a gambling, gaming or similar license or permit that has been revoked or suspended, the reasons therefor, and the actions of such person thereafter.

4. Whether the cardroom permittee or any stock ownership or key employee in this or another state has been denied a gambling, gaming or similar license or permit, the reasons therefor, and the actions of the person thereafter.

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§ 16.34.050

5. The business and credit history of the cardroom permittee and stock ownership licensees.

• (Ord. 28517.)

• A. If a regulatory action is imposed, the Administrator shall serve on the Cardroom Permittee or Licensee a notice of regulatory action. The notice shall state:

  1. All the grounds for regulatory action;

  2. The regulatory action and a statement of the reasons for the regulatory action, including all the aggravating and mitigating factors that the Administrator considered relevant to his or her decision; and

  3. The name of each person who committed the alleged violation, if known.

  • B. The notice of regulatory action shall become a final decision effective twentyone (21) calendar days after service of the notice of regulatory action upon the person who is the subject of the regulatory action unless the person who is the subject of the regulatory action files a written request for a regulatory action hearing with the Administrator before the close of business on the twentieth day.

• (Ords. 28517, 30616.)

Part 2

HEARING PROCEDURES

Sections:

• 16.34.220 Time of hearing.

• 16.34.230 Notice of regulatory action hearing.

• 16.34.240 Conduct of regulatory action hearing.

The person who is the subject of the regulatory action must file a request for regulatory action hearing within the time provided in Section 16.34.060. The request for regulatory action hearing must set forth all of the specific grounds for the request for a regulatory action hearing and deny or admit each of the factual allegations in the notice of regulatory action. Any allegation of fact in the notice of regulatory action that is not specifically denied is deemed admitted. (Ord. 28517.)

• A. Regulatory action hearings against licensees, except stock ownership licensees, shall be conducted by a hearing officer appointed by the Chief of Police having a rank of a Deputy Chief of Police or a civilian City Employee with an equivalent civilian position.

• B. Regulatory action hearings against Cardroom Permittees and stock ownership licensees shall be conducted by a retired judge of the State of California selected in accordance with the procedure set forth in Subsection C.

• C. The City Attorney shall nominate not less than three (3) retired judges of the State of California. The Cardroom Permittee or Stock Ownership Licensee shall thereafter select one (1) of those nominees by filing a written notice with the City Attorney no more than five (5) Business Days after being notified by the City Attorney of the nominations.

(Ords. 28517, 30616.)

Where a request for regulatory action hearing has been filed, a hearing shall be conducted as soon as reasonably possible.

• (Ord. 28517.)

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• A. The hearing officer shall provide the licensee or Cardroom Permittee with written notice of the day, time, and place of the regulatory action hearing not less than twenty Business Days prior to the date of the hearing.

• B. The hearing officer may grant deferrals of the opening of the regulatory action hearing and such continuances of the hearing, once begun, for good cause. Deferrals and continuances shall also be granted upon agreement of the city attorney and the licensee or permittee.

• (Ords. 28517, 30616.)

The regulatory action hearing shall be conducted in accordance with the provisions of Chapter 16.36. (Ord. 28517.)

• A. After considering the Administrator's notice of regulatory action, the testimony and evidence presented at the regulatory action hearing, and any argument the City or the person who is subject to the regulatory action may provide orally or submit in writing, the hearing officer shall issue a written statement of decision.

• B. The City must prove at least one (1) of the reasons for regulatory action by a preponderance of the evidence presented at the regulatory action hearing in order for the hearing officer to confirm or modify the regulatory action.

• C. The hearing officer may modify the regulatory action by reducing or increasing the severity of the regulatory action if he or she finds that the Administrator's determination of the mitigating or aggravating factors, as applicable, was not supported by a preponderance of the evidence presented at the regulatory action hearing.

• D. The hearing officer shall serve or cause to be served a written statement of decision upon

the person who is the subject of the regulatory action and the City within forty-five (45) Business Days of the close of the hearing.

• E. The statement of decision shall contain a notice setting out the provisions contained in Section 1.16.010 of this Code.

• (Ords. 28517, 30616.)

• A. The decision of the hearing officer shall be final.

• B. A writ of mandate to challenge a hearing officer's decision may be sought by either the city or person who is subject to the regulatory action, and may include a challenge to the award of costs.

• (Ord. 28517.)

• A. If the grounds for the regulatory action is sustained or the cease and desist order is upheld, the hearing officer may order the person who is the subject to the regulatory action to pay the city's reasonable costs of investigation and prosecution of the case, including the attorneys' fees incurred by the city up to the date of the hearing.

• B. The city will file a bill itemizing the costs, including the attorneys' fees, within thirty calendar days after the hearing officer issues the statement of decision.

• C. Within fourteen days after the service of the city's costs bill, the person who is the subject of the hearing, may apply to the hearing officer for a reduction of the costs. In determining the costs, the hearing officer may take into consideration the person who is the subject of the hearing's good faith belief in his or her position; their ability to pay; and whether the city's investigation is proportionate to the misconduct charged. If there is no request for a reduction, the costs will be due and payable within fourteen calendar days after the service of the bill.

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• D. The costs shall be a civil debt of the cardroom permittee and the person who is the subject of the hearing where the cardroom permittee and/or its related licensees are the subject of the hearing. The costs shall be a civil debt of the funding source and the person who is the subject of the hearing in the case of a hearing where the funding source licensee and/or its related licensees are the subject of the hearing.

• E. There shall be joint and several liability for payment of the debt:

  1. Between the cardroom permittee and the related licensee who is the subject of the hearing, or

  2. The funding source licensee and the related licensee who is the subject of the hearing.

• (Ord. 28517.)

Part 3

CEASE AND DESIST ORDERS

Sections:

• A. The Administrator may issue any cease and desist orders against a Cardroom Permittee or any Licensee that the Administrator deems reasonably necessary:

  1. For the immediate preservation of the public peace, health, safety, or general welfare; or

  2. To prevent a violation of the provisions of this Title; or

  3. To preserve the public policies of this Title.

• B. The cease and desist order shall set forth the grounds upon which it is based, including a statement of the facts constituting the imminent danger to the public peace, health, safety, or general welfare necessitating the order.

• C. The cease and desist order is effective immediately upon service on the Cardroom Permittee or the Licensee. The cease and desist order may suspend, limit, condition or take other action in relation to the Cardroom Permit or License. The cease and desist order shall remain in effect until further order of the Administrator or final disposition of any proceeding conducted pursuant to this Section.

• D. Within two (2) Business Days after service of a cease and desist order, the Administrator shall serve the Cardroom Permittee or the Licensee with a notice giving the name of the hearing officer.

• E. The notice served upon the Cardroom Permittee or licensee shall also notify the Cardroom Permittee or the licensee of his or her right to request a hearing before a hearing officer.

• F. The Cardroom Permittee or the Licensee is entitled to request that the hearing commence within ten (10) Business Days of the date of the request for hearing if the Gambling Operation at the Cardroom is closed by the order, and in all other cases, within thirty (30) calendar days of the date of the request. Upon application of the Administrator, the Cardroom Permittee, or the Licensee for good cause shown, the hearing officer may extend the time within which a hearing is required to be commenced, upon those terms and conditions that the hearing officer deems equitable.

• G. Except as otherwise specified in this Section, the procedures set out in Chapter 16.36 for administrative hearings shall apply to cease and desist order proceedings.

• (Ords. 28517, 30616.)

Cease and desist order hearings shall be conducted by a retired judge of the State of California selected by the city attorney. (Ord. 28517.)

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§ 16.36.020