People v. Municipal Court (Kong)

• Citation: 122 Cal.App.3d 176,175 Cal.Rptr. 861
• Court: California Court of Appeals Court of Appeals
• Decision Date: 29 July 1981
• Parties: PEOPLE of the State of California, Petitioner, v. MUNICIPAL COURT OF the CITY AND COUNTY OF SAN FRANCISCO, Respondent. YEE NOR KONG, Real Party in Interest. Civ. 51473.

Page 861

175 Cal.Rptr. 861

122 Cal.App.3d 176

PEOPLE of the State of California, Petitioner, v. MUNICIPAL COURT OF the CITY AND COUNTY OF SAN FRANCISCO, Respondent YEE NOR KONG, Real Party in Interest.

Civ. 51473.

Court of Appeal, First District, Division 3, California.

July 29, 1981.

Rehearing Denied August 28, 1981.

Hearing Denied October 22, 1981.

Arlo Smith, Dist. Atty., George Butterworth, Asst. Dist. Atty., San Francisco, for petitioner

[122 Cal.App.3d 178] Joseph C. Morehead, San Francisco, for real party in interest.

FEINBERG, Associate Justice.

This petition by the People for a writ of prohibition and/or mandamus challenges a magistrate's determination, after a postindictment preliminary hearing, that six crimes charged as felonies should be considered misdemeanors. (Pen.Code, § 17, subd. (b)(5).) ¹

On August 6, 1980, real party Yee Nor Kong, an operator of several garment shops, was indicted by the San Francisco Criminal Grand Jury on 6 felony and 21 misdemeanor charges. The felony charges involved failure to collect and to account truthfully for employee wage taxes (Rev. & Tax.Code, § 19408) (3 counts) and falsification of corporate accounts (Corp.Code, § 2255, subd. (b)) (3 counts). Violation of these two sections is punishable as either a felony or a misdemeanor.

At arraignment, real party requested a postindictment preliminary examination, which took place on October 8 and 9, 1980. Testimony was presented and the grand jury transcript, as well as exhibits from the grand jury proceeding, were received into evidence by stipulation. The parties stipulated that a factual basis for each felony charge had been presented.

Thereafter, real party moved the magistrate to reduce all 6 felony charges to misdemeanors under section 17, subdivision (b)(5). ² Petitioner objected based upon the assertion that the magistrate lacked jurisdiction to act pursuant to that section when the preliminary examination follows an indictment rather than a complaint.

The People presented this petition for the writ to the superior court, seeking an order directing the magistrate to set aside his determination that the charged felonies ³ were misdemeanors. The petition was denied and thereupon the People brought this application to this court. We issued an alternative writ.

THE FACTS ⁴

Real party in interest, Mrs. Yee Nor Kong, is a Chinese-born woman who has been engaged in the operation of several small shops which produce finished clothing for various local garment dealers. Mrs. Kong was educated in Hong Kong and has only an elementary knowledge of the English language and no formal business education. She had never been arrested prior to this incident and had never been given any warnings or admonitions by the Department of Employment Development.

Evidence introduced at the preliminary examination established probable cause to believe that Mrs. Kong had conspired with as many as 105 employees to assist them in obtaining partial unemployment insurance compensation to which they were not entitled. To conceal such fraud, Mrs. Kong falsified the permanent corporate payroll records and engaged in an "under-the-table" payment plan. As a result of these falsifications, real party under-reported to the State of California earnings for her employees on at least three "D.E.3" Quarterly Reports, which understatement resulted in underpayment to the state of $25,000 for the last three quarters of employee personnel tax withholding, unemployment contributions, and disability contributions for one of the four worksites alone. Of the 26 employees whose records were presented in full for demonstrative purposes (105 had made claims), the loss to the state for partial unemployment insurance compensation with supporting documentation and/or surveillance is $42,461.

In addition, there is a possible loss to the state for fraudulent partial unemployment insurance compensation claims by real party's employees of $2,000 per month for the three remaining worksites. The total loss to the state in this case due to fraud by real party and her employees for the years 1977-1979 is estimated to be in excess of $200,000. All of the employees charged with fraud in these cases have been charged with misdemeanors, even though many are alleged to have obtained wrongfully over $2,500 in Unemployment Insurance Benefits.

Petitioner makes the following contentions:

1. Mandamus is available to the People to review the magistrate's determination 2. The magistrate had no jurisdiction to reduce the charged felonies to misdemeanors under section 17, subdivision (b)(5) because the section does not apply to a postindictment preliminary examination proceeding.

under section 17, subdivision (b)(5) that the felony offenses charged were misdemeanors.

3. If the magistrate did have jurisdiction to reduce the charged felonies, he abused his discretion in so doing and his determination must be reversed.

We agree that mandate is available but the review afforded by mandate is not as expansive as petitioner suggests.

We hold that a magistrate, in the context of a postindictment preliminary examination, has jurisdiction under section 17, subdivision (b)(5) to determine a felony to be a misdemeanor.

We hold that mandate is not available to review a judicial abuse of discretion in a criminal case. Therefore, we shall not reach the question as to whether there was an abuse of discretion in the case at hand.

We explain:

1. Is Mandate Available to the People in a Criminal Proceeding Where Concededly Appeal Will Not Lie?

The seminal case is People v. Superior Court (Howard) (1968) 69 Cal.2d 491, 72 Cal.Rptr. 330, 446 P.2d 138. In Howard, the trial court, on its own motion pursuant to section 1385, dismissed an information in furtherance of justice after a jury had found the defendant guilty. Such an order is not appealable.

The People petitioned for a writ of mandate to vacate the order dismissing the information. The court issued an alternative writ and then denied the peremptory writ, stating, "mandate is not available for this purpose." (Id., at p. 493, 72 Cal.Rptr. 330, 446 P.2d 138.) Again, the court, in forthright fashion, wrote, "Is mandate permissible to review the determination made under this section (§ 1385)? We think not." (Id., at p. 497, 72 Cal.Rptr. 330, 446 P.2d 138.)

The predicate upon which the Howard court came to its conclusion is that "(t) he restriction on the People's right to appeal is not merely a procedural limitation allocating appellate review between direct appeals and extraordinary writs but is a substantive limitation on review of trial court determinations in criminal trials." (Id., at p. 498, 72 Cal.Rptr. 330, 446 P.2d 138, emphasis added.)

Thus, "(t)o permit the People to resort to an extraordinary writ to review where there is no right to appeal would be to give the People the very appeal which the Legislature has denied to them." (Id., at p. 499, 72 Cal.Rptr. 330, 446 P.2d 138.)

Does this mean that mandate is never available to the People to review a nonappealable order? Not so. It is an appropriate vehicle for review where the trial court has acted in excess of its jurisdiction in the traditional sense only, that is to say, "where the trial court has acted without jurisdiction of the subject matter or of the person." (Id., at p. 500, 72 Cal.Rptr. 330, 446 P.2d 138.) It appears clear to us that the Howard court disapproved of a broader reading of the phrase "in excess of jurisdiction" as it might apply in the circumstance of a civil case. (Id., at pp. 500-501, 72 Cal.Rptr. 330, 446 P.2d 138.)

Unfortunately, the Howard court, having clearly illuminated the field of extraordinary writ review of nonappealable orders sought by the People in criminal cases, then proceeded to cast a shadow by way of dicta.

Said the court "(a)ssuming that in some cases the matter may be of such importance that mandate may be available to the People to review determinations where appeal does not lie, we are satisfied that the proper balancing of these considerations (preventing harassment of the accused as against correction of possible errors) prohibits review by mandate at the request of the People where there is a danger of further trial or retrial." (Id., at p. 501, 72 Cal.Rptr. 330, 446 P.2d 138, emphasis added.) The court concluded its opinion, "Assuming Thus, in a number of criminal cases, appellate courts have followed the expansive concept of "in excess of jurisdiction" derived from civil cases, combined it with the Howard balancing test of correcting judicial error as against harassment of the defendant, and finding no danger of further trial or retrial, have held that mandate will lie at the request of the People in the absence of a right to appeal even though the trial court had jurisdiction of the person and subject matter. ⁵

we may review the merits in the instant case, we are satisfied that the record does not show an abuse of discretion...." (Id., at p. 505, 72 Cal.Rptr. 330, 446 P.2d 138, emphasis added.)

Most reluctantly we disagree with these cases. We believe Howard, and the Supreme Court cases that have followed it, direct otherwise.

In People v. Superior Court (Edmonds) (1971) 4 Cal.3d 605, 94 Cal.Rptr. 250, 483 P.2d 1202, a motion to suppress evidence was made by defendant pursuant to section 1538.5 in superior court prior to trial. It was denied. The case went to court trial and the evidence came in. At the conclusion of the trial, defendant renewed his motion to suppress. It was granted. Before entry of judgment, the People sought mandate to compel the trial court to set aside its order granting the motion to suppress.

The court held that though no specific statutory authority existed for mandate to issue on behalf of the People to set aside a suppression order made during trial, nevertheless, under general principles of law, if the trial court had no jurisdiction to entertain the renewed suppression motion...