Case Name: Restivo Enterprises, Inc. v. Su
Case No.: 1-14-CV-260919

In its verified petition for writ of administrative mandamus (the “Petition”), petitioner Restivo Enterprises, Inc., dba Le Grande Affaire Limousine Services (“Restivo”) seeks an order that respondent Julie Su, the State of California Department of Industrial Relations, Division of Labor Standards Enforcement (“DLSE”) not hear administrative claims by Restivo’s former employees, real parties in interest Duc (Bruce) Doan, Jonathon Covey, Jose Retana, James Parker, Maria Valencia, and Arturo Carrillo (collectively, “Real Parties in Interest”). The Petition alleges that Restivo filed a complaint for trade secret misappropriation, breach of contract, intentional interference with prospective economic relations, civil conspiracy, conversion, unfair business practices, and breach of fiduciary duty against Real Parties in Interest also arising out of their employment with Restivo (Restivo Enterprises, Inc. v. Duc, et al. (Super. Ct. Santa Clara County, No. 1-13-CV-255867)), and the DLSE claims “would be subject to a mandatory cross-complaint” in Restivo’s civil action for damages. (See Petition, p.2, ll. 12-16; p. 3, l. 14.) The Petition alleges that there is a substantial probability of Restivo being subject to multiple actions and inconsistent verdicts if the DLSE claims proceed, and the Labor Commissioner has a conflict of interest to hear those claims since she may represent Real Parties in Interest if they obtain awards at the DLSE that are appealed. (See Petition, p. 3: ll.16-20.)

Currently before the Court are a demurrer by the DLSE on the ground that the Petition fails to state a cause of action and a motion to intervene by Real Parties in Interest.

The DLSE’s demurrer is SUSTAINED without leave to amend. In its demurrer, the DLSE contends that the Petition fails to allege (1) the absence of a plain, speedy, and adequate remedy at law, (2) that Restivo has a beneficial interest in the outcome of the DLSE proceeding, (3) that Restivo has exhausted its administrative remedy, and (4) that the DLSE has a clear, present, and ministerial duty to perform the desired act and Restivo has a clear, present, and beneficial right to the performance it seeks. Although it is noted that the DLSE cites to statutes governing traditional mandamus actions and writs of prohibition in support of its argument (see Code Civ. Proc., §§ 1085, 1102, 1103) while the Petition is instead one for administrative mandamus (see Code Civ. Proc., § 1094.5), the DLSE’s point is nonetheless well-taken. It is clear from the face of the Petition, which seeks to stay ongoing DLSE proceedings, that Restivo has failed to exhaust its administrative remedies, and this bars an action for administrative as well as traditional mandamus. (See Eight Unnamed Physicians v. Medical Executive Committee of Medical Staff of Washington Tp. Hosp. (2007) 150 Cal.App.4th 503, 511 [“The exhaustion requirement applies whether relief is sought by traditional (Code Civ. Proc., § 1085) or administrative (Code Civ. Proc., § 1094.5) mandamus.”].)

While Restivo contends that the DLSE process is wasteful in light of its pending action for damages and the appeal process provided by Labor Code section 98.2, subdivision (a) is disadvantageous to Restivo, it does not address the propriety of raising such arguments in the context of an administrative mandamus proceeding. As alleged by the Petition, administrative mandamus is available only for the purpose of reviewing the validity of a final administrative determination made as the result of a proceeding in which a hearing is required to be given, evidence is required to be taken, and discretion in the determination of facts is vested in the administrative agency. (Code Civ. Proc., § 1094.5, subd. (a); see Petition, p. 4, ll. 7-10.) Here, no hearing is required (see Corrales v. Bradstreet (2007) 153 Cal.App.4th 33, 52 [“The Labor Code does not require an evidentiary hearing before the Commissioner makes a “decision” under section 98. … Rather, section 98, subdivision (a), states the Commissioner “may provide for a hearing” … of employee claims.”], italics original), and, as urged by the DLSE, no final determination has been made. “Section 98 administrative hearings are not subject to review under Code of Civil Procedure section 1094.5” at any stage of the DLSE process (Corrales v. Bradstreet, supra, 153 Cal.App.4th at p. 55), instead being subject to trial de novo pursuant to Labor Code section 98.2, subdivision (a), and Restivo cites no authority for the proposition that an administrative mandamus proceeding may be used to seek a stay of an administrative proceeding in light of a related civil action.

The DLSE’s demurrer is consequently sustained without leave to amend. (See Camsi IV v. Hunter Technology Corp. (1991) 230 Cal.App.3d 1525, 1542 [“absent an effective request for leave to amend in specified ways,” it is an abuse of discretion to deny leave to amend “only if a potentially effective amendment were both apparent and consistent with the plaintiff’s theory of the case”]; Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1387 [“An order sustaining a demurrer without leave to amend will constitute an abuse of discretion if there is any reasonable possibility that the defect can be cured by an amendment.”], italics original, internal quotations and citations omitted; Goodman v. Kennedy (1976) 18 Cal. 3d 335, 349 [“Plaintiff must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading”], quoting Cooper v. Leslie Salt Co. (1969) 70 Cal. 2d 627, 636; Hendy v. Losse (1991) 54 Cal. 3d 723, 742 [“the burden is on the plaintiff… to demonstrate the manner in which the complaint might be amended”].)

In light of the above ruling, the motion by Real Parties in Interest to intervene is DENIED as moot.

The Court will prepare the order.