DLSE

Appellant Starving Students, Inc. (Employer), appeals from a judgment denying its petition for writ of mandate pursuant to Code of Civil Procedure section 1094.5. Employer sought an order directing respondent Division of Labor Standards Enforcement (DLSE) to withdraw or reduce a $100,000 penalty assessment for Employer’s failure to obtain workers’ compensation insurance from an authorized insurer. Employer contends: (1) the DLSE has discretion under Labor Code section 3727.1 to withdraw or reduce the penalty and the DLSE refused to exercise that discretion; (2) a mandatory penalty would be unconstitutional; and (3) the $100,000 penalty assessment is unconstitutional as applied in this case. We hold that when an employer obtains workers’ compensation insurance from an insurer who is not authorized to write compensation insurance in California and a penalty is assessed against the employer pursuant to Labor Code section 3722, subdivision (a), for failure to obtain insurance from an authorized insurer, the DLSE does not have discretion under Labor Code section 3727.1 to withdraw the penalty assessment. Moreover, the penalty assessment in this case is not unconstitutional. We…