Due diligence checklist for acquisition

Defendant, the Califo ia Department of Real Estate, revoked plaintiff licensee's real estate license under Cal. Code Regs., tit. 10, § 2910, subd. (a)(5), based on a conviction for unlawful intercourse with a minor. The superior court (Califo ia) denied the licensee's petition for administrative mandamus, and the licensee appealed.

The Real Estate Commissioner concluded that the 16-year-old victim's age rendered her categorically incapable of giving legal consent to the sexual conduct. The court held that the conclusive presumption that a minor did not and could not consent to sexual relations appeared to have been inferred from a statutory treatment abandoned by the legislature. The fact that consent was not a defense to Pen. Code, § 261.5, meant only that for reasons of policy, the legislature had chosen to treat sexual intercourse with a minor as a criminal act, notwithstanding that the minor consented. Assuming it existed as per due diligence checklist for acquisition, the long-standing application of Cal. Code Regs., tit. 10, § 2910, subd. (a)(5), to view all minor victims of sex crimes as nonconsenting participants was either applied to all such cases, or it was applied to some cases but not others. If it was universally applied, it was a regulation, rendering it void for failure to comply with the Administrative Procedures Act. In that case it could provide no foundation for the revocation of the license. If the rule was applied only to some cases, its application in the licensee's case was without rational basis and thus arbitrary and capricious.

The court reversed the judgment with directions to set aside the order denying the licensee's petition for administrative mandamus and to make a new order granting the petition and issue a peremptory writ directing the Department to set aside its order revoking the license and to reconsider the matter.

In a putative class action regarding whether petitioner employer violated the Califo ia Labor Code, respondent, the San Diego County Superior Court, Califo ia, denied the employer's motion to strike all reference to a time period more than one year prior to the filing of real party in interest employees' complaint. The employer then filed a petition for a writ of mandate, seeking writ review of the trial court's order.

The employees alleged that the employer had for four years required them to work in excess of five hours per day without receiving a meal break of at least 30 minutes and had not provided them with a 10-minute rest period every four hours. They sought compensation of one hour's pay for each day of violation of the meal or rest period law, pursuant to Lab. Code, § 226.7, subd. (b). The employer argued that the one additional hour of pay required by § 226.7, subd. (b), was a penalty subjecting the employees to a one-year statute of limitations. The court held that a payment under § 226.7 was an obligation created by statute, other than a penalty, and therefore was subject to a three-year statute of limitations period under Code Civ. Proc., § 338, subd. (a). The § 226.7 payment was both a penalty against the employer and a wage to the employee. Because labor law statutes were to be construed in favor of employees, the court concluded that the § 226.7 payment was subject to the longer statute of limitations period. The court also held that the § 226.7 payment was restitutionary and recoverable under Califo ia's Unfair Competition Law.

The employer's petition for writ of mandate was denied.