American Drug Stores, Inc. v. Stroh

• Decision Date: 13 November 1992
• Docket Number: No. D015010,D015010
• Court: California Court of Appeals Court of Appeals
• Parties: AMERICAN DRUG STORES, INC., Plaintiff and Appellant, v. Jay STROH, as Director, etc., Defendant and Respondent.

Page 432

13 Cal.Rptr.2d 432

10 Cal.App.4th 1446

AMERICAN DRUG STORES, INC., Plaintiff and Appellant, v. Jay STROH, as Director, etc., Defendant and Respondent.

No. D015010.

Court of Appeal, Fourth District, Division 1, California.

Nov. 13, 1992.

Donahue, Gallagher, Thomas & Woods, John F. Kraetzer and Renee D. Wasserman, Oakland, Hinman & Carmichael, John A. Hinman, II, San Francisco, for plaintiff and appellant.

Daniel E. Lungren, Atty. Gen., and Melvin R. Segal, Deputy Atty. Gen., for defendant and respondent.

FROEHLICH, Associate Justice.

BUSINESS AND PROFESSIONS CODE SECTION 23090¹ et seq. provides that the Supreme Court and the Courts of Appeal have exclusive jurisdiction to review orders or decisions of the Department of Alcoholic Beverage Control (the ABC) which impose penalties on liquor licensees. This appeal presents a single question: May a liquor licensee, threatened with suspension or revocation of its license, avoid the statutory limitations on judicial review of disciplinary actions if the licensee files a declaratory relief action in Superior Court before the ABC has acted on the disciplinary action? The trial court concluded, and we agree, that the statutory limitations on judicial review cannot be circumvented by a "race to the court house." We will affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. FACTS

Because this appeal is from a judgment sustaining a demurrer without leave to amend, we accept as true the facts as alleged in the complaint. Appellant, American Drug Stores, Inc., is the holder of a liquor license from the ABC and operates SAVON Drugs, a retail store in El Cajon at which alcoholic beverages are sold. The ABC has accused appellant of selling alcoholic beverages to minors in violation of Article XX, section 22 of the California Constitution, which prohibits the sale of such beverages to anyone under the age of 21. The alleged sales occurred on October 30, 1990 and December 17, 1990. The ABC, in conjunction with local police departments, operates "sting" operations in which it uses minors as decoys to purchase alcoholic beverages from licensees. The alleged sales were made during a sting operation in which minors acted as undercover agents in cooperation with the El Cajon police. As a result of the unlawful sales, appellant is in jeopardy of suspension or revocation of its license.

B. THE COMPLAINT AND DEMURRER

Appellant filed a complaint for declaratory and injunctive relief, along with a motion for a preliminary injunction, seeking to prevent the ABC from imposing any penalties based on the results of the sting operation. Appellant contended the sting operation itself violated the constitutional prohibition against selling alcoholic beverages to a minor or purchasing of same by a minor. Because the ABC's activity itself violated constitutional principles, appellant argued that the sting operation should not be permitted to serve as the basis for ABC's disciplinary action, and further that the ABC should be enjoined from taking disciplinary action based upon sting operations.

The ABC demurred to the complaint on the ground that the superior court lacked jurisdiction to entertain the complaint or grant the requested relief. The ABC relied upon section 23090.5, which provides that only the Supreme Court and the Courts of Appeal have jurisdiction to interfere with the ABC in the performance of its duties. Appellant opposed the demurrer, claiming the exclusivity provisions of section 23090.5 apply only to actions attacking the validity of an "order, rule, or decision" of the ABC. Appellant argued that because no order had yet been issued, and because its action sought only a declaration rendering the sting operation invalid, the superior court had jurisdiction.

C. THE TRIAL COURT'S RULING

The trial court sustained the ABC's demurrer without leave to amend. In its statement of decision the court noted that section 23090.5 on its face divested the superior courts of jurisdiction to "review, affirm, reverse, correct, or annul any order ... [of the ABC] or to suspend, stay, or delay the operation or execution thereof, or to restrain, enjoin, or interfere with [the ABC] in the performance of its duties." (Emphasis added by trial court.) The court concluded that although there had not yet been any "order" (i.e., disciplinary action), section 23090.5 applied because the instant action merely sought preemptively to attack the validity of a future order, triggering the application of section 23090.5.

II. THE EXCLUSIVE JURISDICTION OF THE SUPREME COURT OR APPELLATE COURTS TO REVIEW DISCIPLINARY ORDERS BY THE ABC AGAINST LICENSEES CANNOT BE CIRCUMVENTED BY THE FILING OF A SUPERIOR COURT CHALLENGE TO THE PROSPECTIVE DISCIPLINARY ACTION STYLED AS A CLAIM FOR DECLARATORY RELIEF

By its complaint, appellant sought a superior court judgment precluding the ABC from taking any disciplinary action based on the evidence garnered in the sting operation. The statutory scheme, however, comprehensively vests exclusive jurisdiction for judicial review of such disciplinary action in the Supreme Court and appellate courts by way of writ review.

Chapter 1.5 of division 9 of the Business and Professions Code is the statutory framework for administering and enforcing the liquor laws of California. Article 3 sets up the Alcoholic Beverages Appeals Board. Article 4 describes the manner and procedures by which such Appeals Board shall hear and decide appeals from determinations of the ABC which impose a penalty or affect a license. ( §§ 23075-23089.)

Article 5 then provides the framework for judicial review of the Appeals Board's decisions. Section 23090 requires a person affected by the order to make timely application "... to the Supreme Court or to the court of appeal ... for a writ of review...." Sections 23090.1 through 23090.4 specify the procedures for and limitations on appellate review of Board decisions. The review jurisdiction granted to the Supreme Court and appellate courts is exclusive:

"No court of this state, except the Supreme Court and the courts of appeal to the extent specified in this article, shall have jurisdiction to review, affirm, reverse, correct, or annul any order, rule, or decision of the department or to suspend, stay, or delay the operation or execution thereof, or to restrain, enjoin, or interfere with the department in the performance of its duties, but a writ of mandate shall lie from the Supreme Court or the courts of appeal in any proper case." ( § 23090.5.)

The courts have repeatedly held that the foregoing language divests the superior courts of any jurisdiction to review actions by the ABC. In Samson Market Co. v. Kirby (1968) 261 Cal.App.2d 577, 68 Cal.Rptr. 130, the court held that jurisdiction over any judicial review of the ABC's administrative actions was limited by section 23090.5 to the appellate courts or the Supreme Court, and that the superior court had no authority to grant relief to the petitioner. (Samson Market Co. v. Kirby, supra, at pp. 581-584, 68 Cal.Rptr. 130.) Subsequently, in Dept. of Alcoholic Bev. Control v. Superior Court (1968) 268 Cal.App.2d 67, 73 Cal.Rptr. 780, which involved a "quasi-judicial" action by the ABC, the court struck down a superior court order staying enforcement of a license suspension, holding that the 1967 statutes enacting sections 23090 et seq. "... clearly divested superior courts of jurisdiction to review or stay the operation of a decision of the Department...." (268 Cal.App.2d at p. 71, 73 Cal.Rptr. 780.) Also, the court in Schenley Affiliated Brands Corp. v. Kirby (1971) 21 Cal.App.3d 177, 98 Cal.Rptr. 609, after evaluating a licensee's challenge to a regulation on discount pricing (i.e., a "quasi-legislative" action), concluded the statutory scheme channeled judicial review of actions by the ABC into the appellate courts and divested the superior courts of the power to hear such challenges. (Id. at pp. 195-196, 98 Cal.Rptr. 609.)

Appellant seeks to avoid the exclusivity provisions by claiming such provisions apply only when the challenge is to an "order, rule, or decision" of the ABC. Since this case was filed before any disciplinary order was entered, and seeks only declaratory relief, appellant argues the exclusivity provisions are inapplicable.

We reject the notion that jurisdictional limitations can be circumvented by a preemptive lawsuit. The gravamen of appellant's action seeks an advance declaration rendering disciplinary action against it void, based on the alleged unconstitutionality of the method by which the evidence was gathered. Neither party cites, nor are we aware of, any case which directly addresses the propriety of a superior court action seeking such an advance declaration in a case involving the ABC's administrative actions. ² However, in that the thrust of appellant's action is to disable the ABC from taking disciplinary action, such a judgment on its face would violate the proscriptions of section 23090.5 because it would "annul an order ... or decision" in advance, or at minimum would "restrain, enjoin, or interfere with the department in the performance of its duties."

While there is a dearth of authority in the ABC context, our review of other cases arising under the analogous Public Utilities Commission statutes supports our conclusion that the jurisdictional limitations cannot be circumvented by preemptive lawsuits. ³ In the Public Utilities Commission context, the courts have consistently held that attacks on agency decisions were exclusively reviewable by petition to the Supreme Court for writ of review. (Consumers Lobby Against Monopolies v. Public Utilities Com. (1979) 25 Cal.3d 891, 901, 160 Cal.Rptr. 124, 603 P.2d 41; Southern Pac. Transportation Co. v. Public Utilities Com. (1976) 18 Cal.3d 308, 311, fn. 2, 134 Cal.Rptr. 189, 556 P.2d 289.) Efforts to avoid such exclusive jurisdiction by "preemptive strikes"--whether in the form of a complaint seeking...