Magnetic Arts Corp. v. Department of Industrial Relation

Opinion

BROWN (Gerald), P. J. Magnetic ArtsCorporation operating in violation of state law requiring workers’ compensation insurance,1 was served with a stop order prohibiting the use of employee labor and charged a statutory penalty by the Department of Industrial Relations (Department), under Labor Code section 3710.1.2 When MAC refused to comply with the Department’s order, misdemeanor charges were brought by the district attorney’s office against the company’s president, Arthur Devine, under Labor Code section 3710.2.3 Pursuant to a plea bargain, MAC was joined as a defendant in the criminal proceedings and all counts against Devine (including the § 3710.2 violation [420]which was inadvertently denominated 3710.1 in the caption of the complaint) were dismissed “in the interest of justice.” MAC pleaded nolo contendere to failing to post a statutorily required notice of compensation insurance coverage (Lab. Code, § 3713) and was ordered to pay a nominal fine.

It is based upon these criminal proceedings that MAC now refuses to pay the original penalty assessment levied against it by the Department. When a penalty lien was filed against MAC to secure payment, it petitioned the superior court for writ of mandate to compel rescission of the lien, claiming the imposition of the civil penalty violates double jeopardy proscriptions. The court below granted the petition and the lien was removed.

Mandamus is the proper procedure to compel the Department to rescind action which is beyond its authority (Aylward v. State Board etc. Examiners (1948) 31 Cal.2d 833, 839 [192 P.2d 929]). MAC suggests the imposition of the penalty in this case is beyond the Department’s authority because it violates principles of fairness.

Dismissal of the earlier pending misdemeanor charges is a bar to any further prosecution for the same offense (Pen. Code, §§ 6, 1387, 687). Despite strict application of double jeopardy protections to criminal proceedings in the past (see People v. Silverstein (1953) 121 Cal.App.2d 140, 143 [262 P.2d 656]), MAC contends the concept of “prosecution” should be extended to include civil penalties because of their quasi-criminal nature (see Harbor Comm’rs v. Redwood Co. (1891) 88 Cal. 491, 493 [26 P. 375]). However, this argument has been rejected in California. Where the same act constitutes a crime and also gives rise to a civil penalty, the acquittal or dismissal of the criminal offense is not a bar to the civil action (People v. One 1952 Chevrolet (1954) 128 Cal.App.2d 414, 418 [275 P.2d 509]).