A group of parents, Plaintiffs, filed a class action lawsuit against Pacific Oaks Children’s School, alleging that Pacific Oaks failed to comply with the Department of Social Services[1] (DSS) childcare licensing requirements. Specifically, that Pacific Oaks enrolled more children than permitted by their license, which set a capacity of 77 children. The parents asserted claims based under the false advertising laws, the unfair competition law, and for common law fraud.
The Plaintiffs relied on Health and Safety Code section 101161, subdivision (a) in making their claims, it states, “a licensee shall not operate a child care center beyond the conditions and limitations specified on the license, including the capacity limitation.” Plaintiffs argued that the term “capacity limitation,” refers to enrolled children, not how many are present at any given time. It was not in dispute that Pacific Oaks enrolled more than 77 children.
The Court interpreted the statute by examining its plain, common sense meaning and by looking at the purpose of the section because there is no California decision or administrative interpretation that exists for this section. By taking this approach, the Court analyzed the definitions contained in the Act itself, which define capacity to mean, “the maximum number of children authorized to be provided care and supervision at any one time in any licensed child care center.” Further, the legislative intent provides that the section’s purpose is to ensure a quality childcare environment.
In its interpretation of the definition and legislative intent, the Court provided an example of a facility that has a capacity limitation of 20 and provides care to 15 children in the morning and a different 15 children in the afternoon. Under the Plaintiff’s argument, this hypothetical facility would be in violation of its license. However, it shows that capacity and enrollment numbers can be different while still ensuring that children are receiving proper supervision.
Accordingly, the Court ruled in favor of Pacific Oaks and held that the capacity set on a childcare facility license means the number of children being cared for at the facility at a given time, not the aggregate number of students enrolled.
Since it is a common practice for preschool and daycare facilities to operate a number of different programs throughout the day, this case is significant to show that facilities can comply with their capacity limitations as long as they are not caring for children in excess of the capacity at any given time.
Baker v. Pacific Oaks Education Corp. (2024) 99 Cal.App.5th 77.
[1] The Department of Social Services regulates preschools in California by carrying out the California Child Day Care Facilities Act. It is also responsible for issuing licenses, monitoring compliance, and administering corrective action as needed.