There are many ways to define a term. Many definitions are “intensional definitions”. An intensional definition lays down all of the properties required to meet that definition. For example, Corporations Code Section 185 provides that “Shareholder” means “one who is a holder of record of shares.” That is, the necessary and sufficient condition for belonging to the set of “shareholders” is that one be a holder of record of shares. Other definitions are “extensional”. These definitions operate by listing everything within the term being defined. For example, Corporations Code Section 25013 provides that ”person” means “an individual, a corporation, a partnership, a limited liability company, a joint venture, an association, a joint stock company, a trust, an unincorporated organization, a government, or a political subdivision of a government.”
Unfortunately, legislators and rulemakers are wont to use less precise techniques to define terms. Sometimes, they use apophasis – defining something by what it is not. Thus, for example, Corporations Code Section 176 doesn’t tell you what “preferred shares” are nor does it provide a listing of things that are preferred shares. Rather, the statute tells you only that preferred shares are “shares other than common shares”. Even more common are definitions that provide non-exclusive lists of things within the term being defined. Corporations Code Section 154, for example, states that “‘Articles’ includes the articles of incorporation, amendments thereto, amended articles, restated articles, certificate of incorporation and certificates of determination.” The problem with this definition is that rather than providing an exclusive list, it uses the verb “includes”. This introduces indeterminancy to the definition because ”includes” is usually interpreted in statutes and rules as a term of enlargement, not limitation. Hassan v. Mercy American River Hospital, 31 Cal. 4th 709, 717 (2003). The problem with both apophatic and indeterminate definitions is that they engender uncertainty. Whenever there is uncertainty, there are costs.
One reason, but not justification, for indeterminate definitions is that the person writing the statute or rule may be concerned about leaving something out or defining a term too narrowly. At the legislative level, a degree of indeterminacy may be justified because the legislature can look to rule making agencies to fill in the gaps. There are at least two benefits to legislative delegation. First, the agencies through accumulated experience may have developed greater expertise than a general legislative body. Second, the notice and comment procedures that are required in most cases for the adoption of a rule provides greater opportunities for public participation and enhanced transparency.
At the agency level, these justifications simply do not apply. More importantly, when definitional gaps are created, litigation is likely to follow. This means that in many cases gaps will be filled by judges. This has important implications for the separation of powers and accountability. Cal. Const. Art. III, Sec. 3 (“The powers of State government are legislative, executive and judicial. Persons charged with the exercise of one power may not exercise either of the others except as permitted by this Constitution.”). The legislature and agencies are part of the legislative and executive branches. Cal. Const. Art. IV, Sec. 1 and Art. V. Consequently, both are politically accountable for their decisions.
Vague rules result in the less politically accountable judicial branch making policy decisions.[1] In effect, an agency cedes its policy-making functions to the courts which are very likely to have far less experience and expertise in the issues at hand. Thus, the decision to use the word “includes” rather than “means” in a definition threatens to upset the separation of powers. Agencies should not abandon one of their principal raisons d’etre through the careless use of “includes” or “including” in definitional rules.
[1] Unlike federal court judges, California judges are subject to a limited degree of political accountability. Justices (Supreme Court and Court of Appeal) serve 12 year terms and are subject to retention elections. Superior Court judges serve six year terms. Cal. Const. Art. VI, Sec. 16. The Governor appoints appellate justices, subject to confirmation by the Commission on Judicial Appointments. The Governor fills most vacancies on the Superior Court bench by appointment but judges can be challenged in nonpartisan elections.
