White Collar Defendants in California Should Avail Themselves of Mental Health Diversion (Penal Code section 1001.36) If Applicable

01 Feb White Collar Defendants in California Should Avail Themselves of Mental Health Diversion (Penal Code section 1001.36) If Applicable

Posted at 20:36h in Criminal Defense by

California’s mental health diversion statute, Penal Code section 1001.36, has been on the books since 2018.  But there is no published case nor any secondary source addressing its applicability to a white-collar defendant.  While a number of firms have blog posts about mental health diversion, I have not seen any with a specific focus on white collar crime, even though the statute applies to this crime.

This tells me one thing: many white collar defendants are missing out on a diversion program that could end their case without a conviction and seal their arrest from public view, while obtaining for them the necessary mental health treatment necessary to prevent recidivism.

How Mental Health Diversion Works

Mental health diversion is a form of pretrial diversion.  A defendant must request it before going to trial.  For diversion to be granted, a defendant must make a preliminary showing regarding the factors that are discussed in the next section, and a mental health expert must examine a defendant and write a report to aid the court in evaluating these factors. 

If a court grants diversion, the defendant will undergo mental health treatment.  Sometimes this is outpatient treatment; sometimes it’s inpatient; and sometimes it’s a combination.  The treatment provider submits periodic progress reports to the court and the parties while the defendant is receiving treatment. 

Upon successful completion of treatment, the charges are dismissed and the arrest is sealed.  If one does not successfully complete treatment, they are back where they were pre-diversion: they must either proceed to trial on their charges or plead guilty.

Mental Health Diversion Requirements

There are six eligibility requirements for California’s mental health diversion program.

First, the defendant must have been diagnosed with a properly recognized mental health disorder. There are numerous common disorders that qualify, like depression, anxiety, substance abuse, and adjustment disorders. About 1 in 4 Americans suffers from a diagnosable mental health disorder in a given year. The disorder need not have been diagnosed before seeking diversion.

Second, there must be a sufficient connection between the defendant’s mental health disorder and the commission of the charged offense.

Third, a mental health expert must opine that the defendant’s symptoms of the mental health disorder contributing to or motivating the criminal behavior would respond to mental health treatment.

Fourth, the defendant must consent to diversion and waive their right to a speedy trial. 

Fifth, the defendant must agree to comply with treatment as a condition of diversion.

Sixth, the defendant must not pose an unreasonable risk of danger to public safety.

White Collar Defendants Have Advantages with the Factors

Two factors are of special note here for white collar defendants.

First, “There was a sufficient connection between the defendant’s mental health disorder and the commission of the charged offense.” The Legislature has recently changed this factor in ways that particularly benefit white collar defendants. Before 2023, to meet this element, a defendant had to show that the mental health disorder was a “significant factor” in committing the offense.  As a former Deputy District Attorney, this is where I saw most mental health diversion requests fail.

But beginning in 2023, this test got a lot easier.  While the significant-factor language is still in the statute, it now means something much less difficult to prove.  Now, all a defendant must show is that they have been diagnosed with a mental health disorder, and then the burden shifts to the People to prove by clear and convincing evidence that the disorder did not even contribute to the commission of the offense.  If the People fail to meet this high burden, a court must find that the mental health disorder was a significant factor in committing the offense.

For white collar defendants, this change has a dramatic effect to increase the likelihood of satisfying the elements of section 1001.36.

Usually, the motivation of a white collar crime is money.  Because desiring money is highly rational, it was more challenging for these defendants to demonstrate that a mental illness was a significant factor in committing the offense.  Further, white collar crimes tend to occur over a longer period of time and use sophisticated means, which may suggest a mastery over one’s faculties that has some tension with assigning significant blame to a mental health disorder.  So with this change in the law, the biggest hurdle for a white collar defendant gaining diversion has been significantly lowered, and the Legislature has added a new higher burden for the People.

Second, “The defendant does not pose an unreasonable risk of danger to public safety.” Danger to public safety has a particular meaning. It means that the defendant is not a risk of committing one of a few enumerated violent felonies, like murder, assault with a machine gun, and certain child molestation crimes.

Often, white collar defendants have no prior convictions, or at least no violent convictions.  And white collar crime is obviously not a violent affair.  As such, a white collar defendant should rarely have an issue demonstrating this element.

White Collar Defendants Have Advantages with Resources

White collar defendants typically have more resources than the average, indigent defendant.  And while it’s admittedly unfair, greater resources have numerous advantages in our criminal justice system.  Obviously, the ability to hire your own chosen defense counsel is a major advantage—ideally one experienced with mental health diversion if it is of interest.

But with mental health diversion, there is another key advantage.  While indigent defendants may ask the court to appoint a healthcare professional to evaluate them for purposes of diversion from a court-approved list, they are essentially stuck with whomever the court picks.  By contrast, defendants with resources can choose the expert who will evaluate them for mental health diversion.  They can pick someone who is respected in the community, someone whose opinion the court will take seriously, someone who will persuasively and capably write a report for the court to consider in making its decision on diversion.

This is huge.  A bad report can tank the chances of diversion for the most deserving defendant.  And a sophisticated, well written report can make the difference in a marginal case.  Obviously, having the right attorney who can point a defendant in the direction of a great expert is key.

White Collar Defendants Often Fit Well with the Purpose of Mental Health Diversion.

As one court has explained, the purpose of mental health diversion lies in the recognition that “successful treatment also improves our society in a myriad of other ways by helping those with mental disorders become more productive citizens, to the benefit of their families, their employers, and the community at large.”

Courts always have the purpose of a statute in mind when applying it.  For white collar defendants, it can be easier to see how the defendant will fit within the purpose of mental health diversion.  Often, these individuals have a history of being productive members of society, with little or no prior interactions with the criminal justice system.  For many, it is just simpler to envision someone being a good, contributing citizen, when that is what they have been for most of their lives. 

Greg Nolan

Greg Nolan

Greg Nolan is Senior Counsel with Brown White & Osborn. He is a former federal and state prosecutor, whose practice focuses on white collar criminal defense, investigations of all types, and business litigation. He has been interviewed by national media on criminal cases and investigations.
Greg Nolan

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