Kirby v. Alcoholic Beverage Control Appeals Bd.

Citation459 P.2d 657,71 Cal.2d 1200,81 Cal.Rptr. 241
Decision Date21 October 1969
Docket NumberS.F. 22622
Parties, 459 P.2d 657 Edward J. KIRBY, as Director, etc., Petitioner, v. ALCOHOLIC BEVERAGE CONTROL APPEALS BOARD, Respondent; Richard CORSETTI, Real Party in Interest.
CourtUnited States State Supreme Court (California)

Thomas C. Lynch, Atty. Gen., and L. Stephen Porter, Deputy Atty. Gen., for petitioner.

Leo K. Gallant, Loomis, for respondent.

J. Bruce Fratis, San Francisco, for real party in interest.

MOSK, Justice.

This is a review of the decision of the Alcoholic Beverage Control Appeals Board which reversed a decision of the Department of Alcoholic Beverage Control ordering revocation of a retail off-sale general liquor license. (Bus. & Prof.Code, § 23090 et seq.).

On November 23, 1966, an accusation was filed by the Department of Alcoholic Beverage Control (hereinafter department) against the retail off-sale general license of Richard Corsetti (hereinafter the licensee), doing business as 'Dick's Fine Foods.' The accusation alleged that the licensee made retail sales of distilled spirits on September 27, 1966, at prices less than those listed in the minimum retail price schedule duly filed with the department, in violation of Business and Professions Code section 24755 and California Administrative Code, title 4, rule 99(a).

Following a proceeding before a hearing officer of the Office of Administrative Procedure, a decision was proposed finding the allegations of the accusation to be true and recommending suspension of licensee's alcoholic beverage license for 15 days. The department rejected the proposed decision of the hearing officer and independently determined the case pursuant to Government Code section 11517, subdivision (c). The decision of the department, which issued on April 19, 1967, incorporated by reference the findings of fact and determination of the issues appearing in the proposed decision and ordered revocation of the license.

An appeal to the respondent Alcoholic Beverage Control Appeals Board (hereinafter appeals board) was filed by the licensee, and on July 12, 1967, the appeals board reversed the decision of the department. The appeals board found that the evidence in the record failed to establish publication of the minimum price schedule in compliance with the requirements of Business and Professions Code section 24755. 1

We meet three questions on this review: (1) whether the publication of the minimum retail price schedule in a trade journal of general circulation in the licensee's trade area, pursuant to the former provisions of California Administrative Code, title 4, rule 99(k), satisfies the publication requirements of section 24755; (2) whether rule 99 and section 24755 are constitutionally valid; and (3) whether section 24755.1, precluding revocation of the licensee's alcoholic beverage license for violation of section 24755, is constitutionally valid.

The first two queries were recently answered in Reimel v. Alcoholic Beverage etc. Appeals Board (1967) 256 Cal.App.2d 158, 167--174, 64 Cal.Rptr. 26, 65 Cal.Rptr. 251, hearing denied, in which it was held that the subject mode of publication is proper and that rule 99 and section 24755 are constitutionally valid. (See also our discussion in Samson Market Co., Inc. v. Alcoholic Beverage Control Appeals Board, 81 Cal.Rptr. 251, ---P.2d ---.) The appeals board determined that the evidence in the present record failed to establish that there had been a proper publication of the minimum prices involved here. This determination, however, was based on prior decisions of the appeals board holding that as a matter of law the publication of the minimum retail prices for distilled spirits in a trade journal in general circulation in the trading area affected does not meet the statutory requirements. The court decided to the contrary on identical issues in Reimel, supra. Accordingly, we need not concern ourselves with the factual substantiality of the evidence, but hold that the publication is sufficient as a matter of law pursuant to Reimel, supra.

The remaining question is the constitutionality of section 24755.1. That section, effective September 17, 1965, provides that violations of section 24755, which prohibits the retail sale of alcoholic beverages at less than the price contained in minimum retail price schedules filed with the department, shall be punished solely by monetary penalties, specifically providing that no criminal penalties shall be imposed and that no license shall be suspended or revoked for a violation of such section. 2

It is contended that section 24755.1 infringes upon the powers granted to the department by article XX, section 22, of the California Constitution. Paragraph five of that section provides: 'The Department of Alcoholic Beverage Control shall have the exclusive power, except as herein provided and In accordance with laws enacted by the Legislature, to license the manufacture, importation and sale of alcoholic beverages in this State, and to collect license fees or occupation taxes on account thereof. The department shall have the power, in its discretion, to deny, suspend or revoke any specific alcoholic beverage license if it shall determine for good cause that the granting or continuance of such license would be contrary to public welfare or morals, or that a person seeking or holding a license has violated any law prohibiting conduct involving moral turpitude. * * *' (Italics added.)

Two possible interpretations of this paragraph have been suggested: either the two sentences quoted above are independent, and the department's power over 'licensing' is qualified but its power over denial, suspension or revocation for defined cause is limitless and absolute; or the two sentences are interrelated and must be read together, so that the department's power over denial, suspension or revocation, like its power over 'licensing' in general, is subject to reasonable legislative enactment. We conclude that the latter construction is correct.

The context of section 22 itself indicates the proper interpretation of paragraph five. The qualified power to 'license' granted in the first sentence does not apply merely to the authority to issue licenses in the sense that a bureaucratic functionary delivers licenses over the counter. It necessarily encompasses the overall power to control licensing procedures. Thus the initial sentence of section 22, which sets out the general basis for the allocation of powers that follows, provides: 'The State of California * * * shall have the exclusive right and power to License and regulate' manufacture, sale, etc., of alcoholic beverages. (Italics added.) This is obviously a declaration by the state that it shall have plenary power in the entire field of 'licensing,' subject only to superseding federal authority. The same power to 'license' is then allocated or delegated to the department in the first sentence of paragraph five, all subject to qualification by legislative enactment. In addition, in paragraph five and elsewhere in section 22, where specific aspects of 'licensing' are intended, specific terms are employed (e.g., '* * * if it shall determine for good cause that the Granting or continuance of such license * * *'; 'When any person aggrieved * * * appeals from a decision of the department ordering any penalty assessment, Issuing, denying, transferring, suspending or revoking any license * * *.').

'Licensing,' then, is the generic term--the whole--which includes within it nu merous parts: 'issuing, denying, transferring, suspending or revoking' of licenses. It is axiomatic that 'The greater contains the less.' (Civ.Code, § 3536.) When sentence one of paragraph five delegates to the Legislature control of the department's power over 'licensing,' that control extends to the entire field of licensing, including the aspects of denial, suspension and revocation specified in sentence two. The latter sentence simply states the terms and conditions under which the department, still subject to legislative enactment, shall exercise the negative aspects of that licensing power. 3

Even apart from the clear language of the section, however, logic also compels the foregoing conclusion. It would seem incongruous for the state to give to the Legislature control over the power to 'license'--i.e., the power to grant, deny, suspend or revoke--and then immediately deny or drastically limit its control over the latter three functions. Certainly a power to determine under what circumstances licenses shall be Granted necessarily implies a determination under what circumstances licenses shall be Denied. The department's contrary interpretation of paragraph five is tantamount to giving to one baseball umpire the power to call balls, and to another the power to call strikes. There would necessarily arise situations, such as that involved in the instant case, in which the Legislature determined circumstances in which to grant (or continue) a license, and the department determined to deny (or revoke) a license under identical conditions. If the department were to prevail, it would in effect be exercising a veto, an ultimate control, over the Legislature's power to regulate the issuance of licenses; yet section 22 clearly grants to the Legislature the superior power over licensing. It is far more consistent with state constitutional purposes to hold that in the case of a conflict the ultimate power rests with the Legislature by virtue of the broad language of sentence one. 4 (cf. Harris v. Alcoholic Bev. etc Appeals Bd. (1964) 228 Cal.App.2d 1, 7, 39 Cal.Rptr. 192.)

We do not suggest that the Legislature may eliminate or tamper at will with the power of the department to deny, suspend or revoke licenses or to exercise its constitutionally granted discretion in that regard. The department itself, in its earlier administrative construction (see fn. 4, Ante), properly assessed the...

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  • La Rue v. State of California
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
    • 7 Abril 1971
    ...the Department's power over such matters is subject to reasonable legislative enactment. Kirby v. Alcoholic Beverage Control Appeals Board, 71 Cal.2d 1200, 81 Cal.Rptr. 241, 459 P.2d 657 (1969); Samson Market Co. v. Alcoholic Beverage Control Appeals Board, 71 Cal.2d 1215, 81 Cal.Rptr. 251,......
  • Kirby v. Alcoholic Bev. etc. Appeals Bd.
    • United States
    • California Court of Appeals
    • 23 Junio 1970
    ...in the record of the hearing on the second accusation. Record Supporting the Department In Kirby v. Alcoholic Beverage Control Appeals Board (1969) 71 A.C. 1245, 81 Cal.Rptr. 241, 459 P.2d 657, the court approved the decision of this court in Reimel v. Alcoholic Beverage etc. Appeals Bd. (1......
  • Stroh v. Midway Restaurant Systems, Inc.
    • United States
    • California Court of Appeals
    • 13 Mayo 1986
    ...22 of article XX of the California Constitution to enact laws concerning that subject. (Kirby v. Alcoholic Bev., etc. Appeals Bd. (1969) 71 Cal.2d 1200, 1204-1206, 81 Cal.Rptr. 241, 459 P.2d 657.) Section 22 of article XX as originally enacted and as now amended does not include provisions ......
  • Samson Market Co. v. Alcoholic Beverage Control AppealsBd.
    • United States
    • United States State Supreme Court (California)
    • 21 Octubre 1969
    ...Sacramento and that they were those of licensees in the southern California trading area. We held in Kirby v. Alcoholic Beverage Control Appeals Board, Cal., 81 Cal.Rptr. 241, 459 P.2d 657, that the court in Reimel v. Alcoholic Bev. etc. Appeals Bd. (1967) supra, 256 Cal.App.2d 158, 64 Cal.......
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