People v. Superior Court of Riverside Cnty., 219 Cal. Rptr. 3d 436

Background

Dr. Hossain Sahlolbei, an independent contractor surgeon, served as co‑director of surgery and held leadership roles on the hospital medical staff and medical executive committee at Palo Verde Hospital, a public hospital.
In 2009 Sahlolbei recruited anesthesiologist Brad Barth, negotiated a deal that paid Barth $36,000/month, then pressured the hospital Board to approve a larger contract and directed Barth’s paychecks to be deposited into Sahlolbei’s account; Sahlolbei retained the difference.
The Riverside County District Attorney charged Sahlolbei with grand theft and a knowing, willful violation of Gov. Code § 1090 (conflicts of interest in public contracting).
The trial court dismissed the § 1090 count; the Court of Appeal affirmed based on People v. Christiansen, which held independent contractors cannot be criminally liable under § 1090.
The California Supreme Court granted review to decide whether § 1090 can apply to independent contractors and whether the evidence supported a § 1090 theory that Sahlolbei was acting in an official capacity when influencing Barth’s contract.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether § 1090 can apply to independent contractors	§1090 covers independent contractors who advise or engage in public contracting; legislative history supports broad scope.	Christiansen: independent contractors are categorically excluded; Reynolds requires common‑law employee test.	Independent contractors are not categorically excluded; §1090 applies to contractors entrusted to engage in or advise on public contracting.
Proper interpretive test for who is covered by § 1090	Use statute history, purpose, and precedent expanding coverage to outside advisors; look to duties and functions, not label.	Apply common‑law employee/officer test (Reynolds/Christiansen) to limit reach.	Reject categorical common‑law exclusion; apply a functional test focused on whether contractor acted on behalf of the government in contracting duties.
Whether criminal liability under § 1097 differs from civil § 1090 application	§1097 criminalizes knowing and willful violations; past civil precedents inform criminal prosecutions.	Criminal context demands stricter, narrower interpretation and lenity.	No basis to interpret §1090 differently for criminal prosecutions; lenity does not control because statutory intent is discernible.
Whether evidence supports that Sahlolbei acted in an official capacity in making Barth’s contract	Evidence shows Hospital leadership asked Sahlolbei to recruit physicians; he used official influence (committee roles, threats to stop admissions) to obtain the contract and profited.	Board viewed Sahlolbei as Barth’s private representative during negotiations; his written duties didn’t explicitly include recruiting.	On the § 995 motion standard, a reasonable person could strongly suspect Sahlolbei acted in an official capacity; remand for further proceedings to resolve timing/affiliation issues.

Key Cases Cited

Reynolds v. Bement, 36 Cal.4th 1075 (discusses when to apply common‑law employee test and presumption against abrogating common law)
Lexin v. Superior Court, 47 Cal.4th 1050 (framework for §1090/§1097 criminal enforcement and reading conflicts statutes together)
Stigall v. City of Taft, 58 Cal.2d 565 (defines "making" a contract to include pre‑contract activities and broad prophylactic aims of §1090)
Schaefer v. Berinstein, 140 Cal.App.2d 278 (earlier Court of Appeal holding outside advisors can be covered by §1090)
Christiansen v. People, 216 Cal.App.4th 1181 (Court of Appeal decision holding independent contractors categorically excluded from §1090; disapproved here)
United States v. Mississippi Valley Co., 364 U.S. 520 (federal precedent on conflicts statutes emphasizing prevention of temptation to dishonor)
Thomson v. Call, 38 Cal.3d 633 (broad interpretation of "financial interest" under conflicts rules)
Campagna v. City of Sanger, 42 Cal.App.4th 533 (treating outside attorney as within §1090 scope)