People ex rel. Harris v. Sunset Car Wash, LLC

I respectfully dissent.

The following facts are undisputed: Auto Spa Express, Inc. (Auto Spa), owned and operated a carwash business at 2028 Sunset Boulevard, a parcel of real property which it owned subject to a deed of trust securing a loan; Auto Spa owed wages and Labor Code penalties to its employees; Auto Spa defaulted on its secured loan; the noteholder conducted a nonjudicial foreclosure sale at which it purchased the property at 2028 Sunset Boulevard; Auto Spa was evicted from the property and ceased doing business; 1 the new owner of 2028 Sunset Boulevard leased the premises to Sunset Car Wash, LLC (Sunset), an entity unaffiliated with, and in fact a stranger to, Auto Spa; Sunset opened a new carwash business under its corporate name at 2028 Sunset Boulevard. Relying on the dictionary definition of a “successor” as “one that follows” (Merriam-Webster Online Diet. [as of May 16, 2012]) the Attorney General contends that pursuant to Labor Code section 2066, Sunset incurred successor liability for Auto Spa’s Labor Code violations because it operated its new carwash on the same business premises previously used by Auto Spa. This simple…

Labor Code section 2050 1 et seq. established a regulatory scheme for carwash operators, motivated by a legislative concern that car-wash employees were not being paid in accordance with law. One component of the statutory scheme—section 2066—imposes liability upon a “successor” to a carwash employer for unpaid wages and penalties owed by a predecessor employer in four circumstances, including where the successor uses the same facilities to perform substantially the same services as the predecessor. We hold that the four circumstances of liability set forth in section 2066 determine the meaning of “successor,” and there is no need to look to other statutes and case law to further define the term. We further hold that imposition of liability against a successor who operates at the same location as a predecessor carwash employer does not constitute a violation of due process.

BACKGROUND

Plaintiff and respondent The People of the State of California ex rel. Kamala D. Harris, as Attorney General, filed an action against defendant and appellant Sunset Car Wash, LLC, seeking to recover unpaid wages and penalties owed by defendant Auto Spa Express, Inc. (Auto Spa), 2 which had…