Leslie's Pool Mart, Inc. v. Department of Food & Agriculture

• Decision Date: 24 September 1990
• Docket Number: No. B,B
• Citation: 273 Cal.Rptr. 373,223 Cal.App.3d 1524
• Court: California Court of Appeals Court of Appeals
• Parties: LESLIE'S POOL MART, INC., a California corporation, Plaintiff and Respondent, v. DEPARTMENT OF FOOD AND AGRICULTURE, et al., Defendants and Appellants. Clare BERRYHILL, as Director of the Department of Food and Agriculture, State of California; People of the State of California, Cross-Complainants and Appellants, v. LESLIE'S POOL MART, INC., a California corporation, Cross-Defendant and Respondent. 027715.

Page 373

273 Cal.Rptr. 373

223 Cal.App.3d 1524

LESLIE'S POOL MART, INC., a California corporation, Plaintiff and Respondent, v. DEPARTMENT OF FOOD AND AGRICULTURE, et al., Defendants and Appellants.

Clare BERRYHILL, as Director of the Department of Food and Agriculture, State of California; People of the State of California, Cross-Complainants and Appellants, v. LESLIE'S POOL MART, INC., a California corporation, Cross-Defendant and Respondent.

No. B 027715.

Court of Appeal, Second District, Division 7, California.

Sept. 24, 1990.

As Modified on Denial of Rehearing

Oct. 24, 1990.

Review Denied Jan. 16, 1991.

John K. Van de Kamp, Atty. Gen., R.H. Connett, Asst. Atty. Gen., and Richard

J. Magasin, Deputy Atty. Gen., for defendant and appellant, cross-complainants and appellants.

Lewis, D'Amato, Brisbois & Bisgaard, David E. Reynolds and Jana I. Lubert, Los Angeles, for plaintiff and respondent, cross-defendant and respondent.

FACTS AND PROCEEDINGS BELOW

JOHNSON, Associate Justice.

Leslie's Pool Mart, Inc. (Leslie's) is a wholesaler and retailer of swimming pool equipment and supplies. Some of the supplies it sells are registered with the California Department of Food and Agriculture as pesticides or "economic poisons," under the Economic Poisons Act. (Food & Agr. Code, § 12501, et seq.) ¹ Products so registered must comply with the statutes and regulations governing sale of pesticides and are subject to a special tax assessment under sections 12841 et seq.

The Department of Food and Agriculture and its director are charged with enforcement of the Economic Poisons Act including registering and regulating products which fall within the purview of the Act and assessing and collecting the special tax assessment authorized by the Act.

In December 1981 employees of the Department of Food and Agriculture entered two of Leslie's retail stores and seized and quarantined a product known as Leslie's oxidizer. The director based this seizure on his belief Leslie's oxidizer was an unregistered pesticide whose possession and sale was unlawful under the act. The director did not afford Leslie's an opportunity for a hearing on the merits of the seizure before or after the seizure took place. Leslie's oxidizer was subsequently registered as a pesticide and the quarantine was lifted on the products seized.

In consolidated actions, Leslie's brought suit against the director and the department for declaratory and injunctive relief, a refund of the special tax assessment levied on its oxidizer and other products and for attorney's fees under Government Code section 800. Specifically, Leslie's sought a declaration that its products sold for the mitigation and control of bacteria and algae in swimming pools, including but not limited to the oxidizer, are not pesticides and, therefore, not subject to regulation or taxation under the Economic Poisons Act. Alternatively, Leslie's sought a declaration the tax assessment had been improperly calculated as to its products and that it was entitled to a refund of excess taxes paid. In addition Leslie's sought a declaration the director had violated Leslie's due process rights by seizing and quarantining its product without affording Leslie's the opportunity for a pre- or post-seizure hearing. Leslie's claimed entitlement to attorney's fees under Government Code section 800 on the ground the director's registration and taxation determinations and his decision to seize Leslie's oxidizer without a hearing were arbitrary or capricious.

The director filed a cross-complaint against Leslie's for civil penalties based on its sale of an unregistered pesticide, Leslie's oxidizer. ²

After a court trial, the court awarded judgment to Leslie's on all its causes of action (except for injunctive relief which was moot by then). The court ordered a tax refund of $354,796 and awarded attorneys' fees under Government Code section 800. The court also awarded judgment to Leslie's on the director's cross-complaint.

ISSUES ON APPEAL

In this case we are called upon to resolve several issues pertaining to California's regulation and taxation of pesticides. The issues we must decide are:

(1) may the state seize and quarantine a substance it believes is being sold or possessed in violation of the Economic (2) are chemicals sold for the purpose of preventing, destroying, repelling or mitigating bacteria and algae in swimming pools subject to regulation and taxation under the Economic Poisons Act?

Poisons Act without affording the person selling or possessing the substance a hearing on the merits of the seizure before or after the seizure takes place?

(3) is the special tax assessment on pesticides constitutional as applied to products sold for the purpose of preventing, destroying, repelling or mitigating bacteria and algae in swimming pools; and, if so, was the tax constitutionally applied to Leslie's?

DISCUSSION

I. THE DIRECTOR VIOLATED LESLIE'S RIGHT TO DUE PROCESS OF LAW BY SEIZING AND QUARANTINING ITS PRODUCTS WITHOUT AFFORDING LESLIE'S AN OPPORTUNITY TO BE HEARD BEFORE OR AFTER THE SEIZURE.

Acting under the authority of section 12961, ³ the director seized and quarantined 1240 pounds of Leslie's oxidizer without prior notice and without affording Leslie's the opportunity for a hearing on the merits of the seizure before or after seizing the product. We agree with the trial court's conclusion this seizure was a violation of Leslie's due process rights under the federal and state constitutions. ⁴

We advise at the outset our holding on the due process issue is a narrow one: that the director violated Leslie's right to due process under the facts of this case. We do not hold the law under which he acted, section 12961, unconstitutional on its face. The trial court did not hold section 12961 unconstitutional. It only held the director's seizure and quarantine in this case violated Leslie's rights under the due process clauses of the United States and California Constitutions. There might be extraordinary circumstances where an immediate danger to the public health or safety would justify seizing and quarantining pesticides without prior notice and hearing. (See discussion, infra, pp. 378-379.) Rather than sow doubt and confusion over the director's statutory authority to protect the public and the environment from imminent danger we limit our holding to the facts of the case before us where no extraordinary circumstances appear. ⁵

Furthermore, we limit our discussion to the due process issue. Neither Leslie's nor the trial court addressed the question whether Fourth Amendment requirements are applicable to the seizure of pesticides under section 12961 thus we do not address that question here. (But see New York v. Burger (1987) 482 U.S. 691, 107 S.Ct. 2636, 96 L.Ed.2d 601; People v. Roehler (1985) 167 Cal.App.3d 353, 213 Cal.Rptr. 353; Kress & Iannelli, Administrative Search and Seizure Wither The Warrant (1986) 23 Vill.L.Rev. 705.)

It is undisputed Leslie's had a significant property interest in its swimming pool chemicals and their seizure constituted a taking of property within the purview of the due process clauses of the United States and California Constitutions. (U.S. Const., Fourth Amend.; Cal. Const., art. I, § 7.) The question is not whether Leslie's We begin with "the basic proposition that in every case involving a deprivation of property within the purview of the due process clause, the constitution requires some form of notice and a hearing.... Absent extraordinary circumstances justifying resort to summary procedures, this hearing must take place before an individual is deprived of a significant property interest." (Beaudreau v. Superior Court (1975) 14 Cal.3d 448, 458, 121 Cal.Rptr. 585, 535 P.2d 713 [citations omitted; emphasis in original].)

was entitled to due process but, as it is often put: what process was due? (Morrissey v. Brewer (1972) 408 U.S. 471, 481, 92 S.Ct. 2593, 2600, 33 L.Ed.2d 484; Goldin v. Public Utilities Commission, supra, 23 Cal.3d at p. 662, 153 Cal.Rptr. 802, 592 P.2d 289.)

Among the "extraordinary circumstances" that have justified the government's seizure of property without prior notice and hearing is "the right and duty of the State to protect and guard, as far as possible, the lives and health of its inhabitants...." (North American Storage Co. v. Chicago (1908) 211 U.S. 306, 315, 29 S.Ct. 101, 104, 53 L.Ed. 195.) In North American Storage, the court upheld the power of city food inspectors to act without prior notice and hearing "to forthwith seize, condemn and destroy any ... putrid, decayed, poisoned and infected food which any such inspector may find...." (Id. at p. 309, 29 S.Ct. at p. 102; emphasis in original.) In Ewing v. Mytinger & Casselberry, Inc. (1950) 339 U.S. 594, 70 S.Ct. 870, 94 L.Ed. 1088, the court upheld the power of the Food and Drug Administration to seize, without prior notice and hearing, any misbranded article the agency had probable cause to believe was dangerous to health, fraudulently labeled, "or would be in a material respect misleading to the injury or damage of the purchaser or consumer." (Id. at pp. 595-596, 70 S.Ct. at p. 871.) The court noted the protection of public health is "[o]ne of the oldest examples [of] the summary destruction of property without prior notice or hearing...." (Id. at p. 599, 70 S.Ct. at p. 873.) California, too, has long recognized the public welfare may justify seizing property without prior notice and hearing. See, e.g. State Savings Etc. Bank v. Anderson (1913) 165 Cal. 437, 446, 132 P. 755: "Summary seizure and liquidation of unsafe banks can fairly and reasonably be justified on the ground of immediate danger to the public welfare in further permitting their business continuance."

Federal and California law on pre-hearing seizures was summarized by the court in Phillips v. San Luis Obispo County Dept. Etc. Regulation (1986) 183 Cal.App.3d 372, 378, 228 Cal.Rptr. 101: "Whether...