Due diligence acquisition checklist

Appellant optical firm sought review of a judgment of the Superior Court of Los Angeles County (California), which found appellant to be in contempt and permanently enjoined it from advertising, in an action filed by respondents, the Board of Medical Examiners, Board of Optometry (boards), and an optical association, pursuant to Cal. Bus. & Prof. Code §§ 2556, 3129 and 651.3.

In an action brought by respondents, the Board of Medical Examiners, Board of Optometry (boards), and an optical association, appellant optical firm was found in contempt and permanently enjoined from advertising the price of eyeglasses or the cost of optical commodities or services pursuant to Cal. Bus. & Prof. Code §§ 2556, 3129 and 651.3. While this due diligence acquisition checklist was pending, the United States Supreme Court in an unrelated case declared a similar statutory restriction on commercial speech to be unconstitutional. On this basis, the trial court dissolved the permanent injunction against appellant, but appellant sought review of other aspects of the trial court's judgment. On appeal, the court reversed and remanded, holding that the permanent injunction was properly dissolved and the statutory prohibition on optical price advertising was unconstitutional. The court noted that appellant should be exonerated from the contempt order. The court held that appellant had no action against respondent association for damages resulting from the wrongful issuance of the injunction, and that respondent boards were protected by governmental immunity.

The court reversed and remanded the trial court's judgment against appellant optical firm, holding that the permanent injunction was properly dissolved and the statutory prohibition on optical price advertising was unconstitutional. The court noted that appellant should be exonerated from the contempt order, but had no action to recover damages for the wrongful issuance of the injunction.

Defendant sought a writ of prohibition to compel the respondent trial court to dismiss a felony complaint on the ground that defendant had entered a plea of nolo contendere and been sentenced upon a misdemeanor that arose out of the identical underlying conduct. The trial court held that defendant's silence constituted fraud that removed the protection of Cal. Penal Code § 654 and the state and federal constitutions.

Defendant was charged with misdemeanor extortion over the return of a stolen pocketbook. The prosecution then brought a felony charge based on the identical act, intending to drop the misdemeanor. The defendant appeared and pled guilty to the misdemeanor with counsel, who did not know of the felony. Defendant then filed a motion to dismiss the felony charge based on double jeopardy. The trial court denied defendant's motion and defendant filed a petition for a writ of prohibition. The court issued a writ of prohibition barring the felony proceeding because the defendant's mere silence did not constitute fraud, in the absence of an affirmative duty to disclose. The court found that while fraud could remove the protection of Cal. Penal Code § 654, an analogous law that barred multiple prosecutions for the same act, fraud did not arise without an affirmative act or an affirmative duty. It was unfair to charge defendant with the duty to safeguard against prosecutorial omissions when he in no manner manipulated the proceedings and merely entered a plea in due course.

The court issued a writ of prohibition compelling respondent trial court to dismiss the felony charges of extortion and receiving stolen property based on double jeopardy grounds. The court held that the felony prosecution was barred because it was based on the same act that was the basis for defendant's misdemeanor conviction and defendant's mere silence, in the absence of an affirmative duty, did not constitute a fraud upon the court.

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