Matossian v. Fahmie

• Decision Date: 17 January 1980
• Citation: 161 Cal.Rptr. 532,101 Cal.App.3d 128
• Court: California Court of Appeals Court of Appeals
• Parties: Joseph MATOSSIAN et al., Plaintiffs and Appellants, v. Joseph FAHMIE et al., Defendants and Respondents. Civ. 44033.

Page 532

161 Cal.Rptr. 532

101 Cal.App.3d 128

Joseph MATOSSIAN et al., Plaintiffs and Appellants, v. Joseph FAHMIE et al., Defendants and Respondents.

Civ. 44033.

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

Jan. 17, 1980.

Hoffman & Associates, H. Tim Hoffman, Gregory Wilcox, Arthur W. Lazear, Oakland, for plaintiffs and appellants.

Bronson, Bronson & McKinnon, Paul H. Cyril, Joseph B. Phair, San Francisco Moore, Clifford, Wolfe, Larson & Trutner, J. Jay Schnack, Oakland, Barfield, Barfield, Dryden & Ruane, Mattathias N. Smith, San Francisco, Ericksen, Mackenroth, Arbuthnot, Inc., R. Opre Wilson, Jr., Oakland, Robert G. Levy, San Francisco, for defendants and respondents.

ELKINGTON, Associate Justice.

The question of this appeal is whether holders of licenses to purvey alcoholic beverages have a right, in combination, to protest the granting, or transfer, of a similar license For the sole purpose of preventing or limiting competition. We conclude they have such a right of protest and affirm the judgment of the superior court. Our reasons follow.

California's Constitution, article XX, section 22, provides that such purveyors of alcoholic beverages shall be licensed by the Department of Alcoholic Beverage Control (Department). Such a license will be allowed only when not contrary to the "Public welfare or morals, . . ." (Emphasis added.) Any person aggrieved by action of the Department is given a right of appeal to the Alcoholic Beverage Control Appeals Board (Appeals Board). And the state's Legislature is authorized to implement the constitutional provisions to the end that the public welfare and morals be served.

Pursuant to its constitutional authority the Legislature has provided that an application for, or transfer of, a license shall be granted by the Department only if, After "a thorough investigation" (emphasis added), it is found to be consistent with the public welfare and morals. And it has ordained that the constitutional criteria are not ordinarily served if the license's issuance "would tend to create a law enforcement problem, or if issuance would result in or add to an Undue concentration of licenses and the applicant fails to show that public convenience or necessity would be served by such issuance." (Bus. & Prof.Code, § 23958; emphasis added.)

In the course of its legislatively-directed thorough investigation the Department requires "public notice" of the application to interested persons whose views whether it comports with the public welfare and morals, are invited by way of timely written "protests." (Bus. & Prof.Code, §§ 23985, 23986.) Any interested person has a Right to express his views by filing such a protest (Bus. & Prof.Code, § 24013), and a Right to a hearing thereon (Bus. & Prof.Code, §§ 24015, 24300).

Further implementation of the constitutional and statutory directions appear in printed "Instructions for preparing and filing protests" which are widely disseminated by the Department. They provide that protests shall set forth specific objections such as: "Issuance of the license to the premises would result in or add to undue concentration of licenses" (emphasis added; and see Bus. & Prof.Code, § 23958), or "would interfere with the quiet enjoyment of their property by the residents of the area," or with the "respective functions" of a nearby "school, church, hospital or children's public playground . . .."

The plaintiffs Matossian were proprietors of a delicatessen in the City of Berkeley located just beyond the area within "one mile" from the grounds "belonging to the University of California," in which the sale of alcoholic beverages was forbidden by Penal Code section 172. They, the several defendants, and many others in the neighborhood, held licenses permitting sale and consumption of beer and wine on their business premises. Having moved to larger adjacent premises where they "Planned to serve light foods and beer and wine," plaintiffs applied to the Department for a transfer of their license. Upon posting of the required notice 15 interested persons responded with protests.

The several nonparty protestants gave varying reasons. ^*

For some reason, or perhaps no reason, we are not furnished by plaintiffs with a record of defendants' protests; but the briefs make clear that they at least included complaints that granting the license transfer "would result in or add to undue concentration of licenses." We accordingly treat plaintiffs' appeal as though defendants' protests were grounded on that reason alone.

The Department held a hearing, considered the protests, and then granted plaintiffs' application. Upon denial of a request for reconsideration the defendants appealed to the Appeals Board. The other protestants did not so appeal. The Appeals Board affirmed the ruling of the Department.

Thereafter plaintiffs filed the instant action for damages against defendants by which they sought $600,000 and costs. The complaint was in three counts, sounding in (1) "malicious prosecution" and "tortious interference with a business," (2) "abuse of process," and (3) "conspiracy to prevent competition." As to each of them, disregarding conclusionary allegations (see 3 Witkin, Cal. Procedure (2d ed.1971) Pleading, § 272, pp. 1944-1946), the gist of the complaint was that defendants conspired to, and did, file "meritless protests" for the single purpose to "destroy . . . competition and thereby to gain a business advantage for themselves," thus causing plaintiffs "to be without a license to carry on their (alcoholic beverage) business for ten (10) months."

For the purpose of clarifying the issues the several defendants in the superior court, and now here, concede, arguendo, "the existence of a conspiratorial motive to prohibit excessive competition."

Defendants' general demurrers to the malicious prosecution and tortious interference with a business, and abuse of process, counts of the complaint were sustained without leave to amend. And thereafter, on defendants' motion, an order granting summary judgment on the remaining conspiracy to prevent competition count was entered. It is from the ensuing judgment of dismissal of their action that plaintiffs have appealed.

We find the following principles generally apposite to the appeal.

In determining constitutional issues such as impairment of the First Amendment right of petition, and where as here the facts are without substantial controversy, the question "is one of law (for the reviewing court) and not of fact, . . ." (L. A. Teachers Union v. L. A. City Bd. of Ed. (1969) 71 Cal.2d 551, 556, 78 Cal.Rptr. 723, 726, 455 P.2d 827, 830.)

The right of petition to governmental agencies, like freedom of speech, of the press, and of religion, has "a paramount and preferred place in our democratic system." (American Civil Liberties Union v. Board of Education (1961) 55 Cal.2d 167, 178, 10 Cal.Rptr. 647, 653, 359 P.2d 45, 51 cert. den., 368 U.S. 819, 82 S.Ct. 34, 7 L.Ed.2d 25.) "All these, though not identical, are inseparable." (Thomas v. Collins (1945) 323 U.S. 516, 530, 65 S.Ct. 315, 89 L.Ed. 430.) "Congress shall make no law . . . abridging . . . the right of the people . . . to petition the Government for a redress of grievances." (U.S.Const., 1st Amend.) "The people have the right to . . . petition government for redress of grievances, . . ." (Cal.Const., art. I, § 3.)

" 'The very idea of a government . . . implies a right on the part of its citizens . . . to petition for a redress of grievances.' " (De Jonge v. Oregon (1937) 299 U.S. 353, 364, 57 S.Ct. 255, 260, 81 L.Ed. 278.) "(A)ny attempt to restrict those liberties must be justified by clear public interest, threatened not doubtfully or remotely, but by clear and present danger. The rational connection between the remedy provided and the evil to be curbed, which in other contexts might support legislation against attack on due process grounds, will not suffice. These rights rest on firmer foundation. . . . Only the gravest abuses, endangering paramount interests, give occasion for permissible limitation. . . . It was not by accident or coincidence that the rights to freedom in speech and press were coupled in a single guaranty with the rights of the people peaceably to assemble And to petition for redress of grievances." (Thomas v. Collins, supra, 323 U.S. 516, 530, 65 S.Ct. 315, 322-23, 89 L.Ed. 430; emphasis added, fn. omitted; American Civil Liberties Union v. Board of Education, supra, 55 Cal.2d 167, 179, 10 Cal.Rptr. 647, 359 P.2d 45.) And as said in In re Allen (1969) 71 Cal.2d 388, 391, 78 Cal.Rptr. 207, 208, 455 P.2d 143, 144: "The government is without constitutional authority to impose a predetermined condition on the exercise of a constitutional right or penalize in some manner its use."

The right to petition for redress of grievances is not confined to "religious or political" matters. (Thomas v. Collins, supra 323 U.S. 516, 531, 65 S.Ct. 315, 89 L.Ed. 430.) "(C)ommercial speech, like other varieties, is protected" by the First Amendment. (Va. Pharmacy Bd. v. Va. Consumer Council (1976) 425 U.S. 748, 770, 96 S.Ct. 1817, 1830, 48 L.Ed.2d 346.) "(I)t would be destructive of rights of association and of petition to hold that groups with common interests may not . . . use the channels and procedures of state and federal agencies and courts to advocate their causes and points of view respecting Resolution of their business and economic interests vis-a-vis their competitors." (California Transport v. Trucking Unlimited (1972) 404 U.S. 508, 510-511, 92 S.Ct. 609, 612, 30 L.Ed.2d 642; emphasis added.)

Where administrative agencies such as the Department must make factual determinations " 'the widest possible dissemination of information from Diverse and antagonistic sources is essential to the welfare of the public, . . .' " (Weaver v. Jordan (1966) 64 Cal.2d 235, 245, 49 Cal.Rptr. 537, 544, 411 P.2d 289, 296 cert. den., 385 U.S. 844, 87...