People ex rel. Becerra v. Huber
| Decision Date | 25 February 2019 |
| Docket Number | A144214 |
| Court | California Court of Appeals Court of Appeals |
| Parties | The PEOPLE EX REL. Xavier BECERRA, as Attorney General, etc., Plaintiff and Respondent, v. Ardith HUBER, Defendant and Appellant. |
Law Office of Dario Navarro, Dario F. Navarro ; Fredericks Peebles & Morgan, Michael A. Robinson, Sacramento, for defendant and appellant.
Xavier Becerra, Attorney General, Karen Leaf, Senior Assistant Attorney General, Nicholas M. Wellington, Supervising Deputy Attorney General for plaintiff and respondent.
This appeal is from a summary adjudication order and permanent injunction entered in an enforcement action by the Attorney General on behalf of the People of the State of California against Ardith Huber, a member of the Wiyot Band of Indians. Huber owns and operates a tobacco smokeshop on the Table Bluff Rancheria, an area where the Wiyots live just outside of Crescent City, in Humboldt County.
The Attorney General’s complaint alleges a claim for violation of the Unfair Competition Law, Business and Professions Code section 17200 et seq. (the UCL) and cites as predicate "unlawful acts" violations of three statutes applicable to cigarette sales and marketing, the Tax Stamp Act ( Rev. & Tax. Code, § 30161 ), the Directory Act ( Rev. & Tax. Code, § 30165.1, subd. (e)(2) ), and the Fire Safety Act ( Health & Saf. Code, § 14951, subd. (a) ). He also pleads, as separate claims, violations of the Directory Act and the Fire Safety Act. The trial court granted summary adjudication to the People, denied it to Huber, and entered a permanent injunction on all three claims.
Although Huber’s position has evolved in the course of this appeal, her primary argument is an attack on subject matter jurisdiction. She contends that, under a federal statute granting California courts plenary criminal jurisdiction but limited civil jurisdiction over cases arising on Indian reservations, the trial court lacked power to proceed on any of the three claims in this case. She also argues that, under the doctrine of Indian preemption, which limits the reach of state law to conduct by Indians on Indian reservations, all the statutes the Attorney General seeks to enforce here are preempted by paramount federal authority.
We affirm.
Huber runs a sole proprietorship out of her home called Huber Enterprises, selling cigarettes at retail and wholesale. Although Huber once sold other brands of cigarettes, after 2007 she has sold exclusively Native American brands, which she describes as "cigarettes manufactured by Indians on Indian lands, ... shipped and sold through Indian and tribally-owned distributors to Indian and tribally-owned retail smokeshops located on Indian lands."
The retail component of Huber’s enterprise is onsite business. Customers include tribe members and nonmembers who come to the Table Bluff Rancheria to make purchases there. The wholesale component of the enterprise is with "over two dozen Indian smokeshops owned either by Indian tribes or [i]ndividual tribal members and operated within [other] ... recognized Indian reservation[s]." Deliveries are made to these "inter-tribal" customers by truck, using California highways.
Huber Enterprises is licensed to do business pursuant to the Wiyot Tribal Business Code and the Wiyot Tribal Tobacco Licensing Ordinance (Ordinance No. 01-10). Ordinance No. 01-10 was promulgated June 14, 2010, for purposes of, inter alia, "promot[ing] tribal economic development," "regulat[ing] and licens[ing] the manufacture, distribution, wholesaling, and retailing of tobacco products," "complement[ing] and enforc[ing] federal standards relating to or prohibiting the sale, distribution, possession, exposure to, access to, advertising and promotion of, and use of tobacco products," and "encourag[ing] and foster[ing] traditions and culture of the Tribe."
Ordinance No. 01-10 requires licensees to pay—and Huber Enterprises does pay—a quarterly excise tax administered through a tribal tax stamp system. Taxes collected in this manner are deposited into a dedicated Tribal Tobacco Fund, earmarked solely for the expenses of "[t]obacco-related school and community health education programs," "[s]moking and tobacco-use prevention measures," and "[a]ssistance to tribal and community members for cessation of smoking and tobacco use."
There is no dispute in this case that today the Wiyot Band of Indians is a federally recognized tribe and that the Table Bluff Rancheria falls within the broad definition of "Indian country" under federal law, as do individual allotments of land to enrolled tribe members such as Huber. ( 18 U.S.C. § 1151 ; see Oklahoma Tax Com. v. Sac & Fox Nation (1993) 508 U.S. 114, 123, 113 S.Ct. 1985, 124 L.Ed.2d 30 [].)1
B. The Directory Act, the Fire Safety Act, and the Tax Stamp Act
At the center of the appeal are three sets of statutes governing different aspects of the sale and distribution of cigarettes in California. In order to provide some general legal context and set the stage for the specific issues framed by the appeal, we begin by summarizing these statutes.
First, California, along with many other states, has enacted legislation designed to implement the provisions of the 1998 Tobacco Master Settlement Agreement (the MSA).2 Under the pertinent California statutes, cigarettes sold in this state must be produced by manufacturers who either (a) have signed the MSA and agreed to pay substantial sums to the state to cover, among other things, health care costs generated by tobacco use among Californians, or (b) in lieu of signing the MSA, have agreed to pay sufficient funds into a reserve fund in escrow to guarantee a source of compensation should liability arise. ( Health & Saf. Code, §§ 104555 – 104557.) Under the Directory Act, the Attorney General maintains a published list of all cigarette manufacturers who have annually certified their compliance with the requirements of the MSA or the alternative escrow funding requirements. ( Rev. & Tax. Code, § 30165.1, subds. (c) & (d).) It is categorically illegal for any "person" to "sell, offer, or possess for sale in this state, ship or otherwise distribute into or within this state" cigarettes that are not in compliance with the Directory Act. ( Id., § 30165.1, subd. (e)(2) ; see Health & Saf. Code, § 104555.)
Second, under the Fire Safety Act, any manufacturer of cigarettes sold in California must meet specified testing, performance, and packaging standards established for the purpose of minimizing the fire hazards caused by cigarettes. ( Health & Saf. Code, §§ 14951, subd. (a)(1)–(3), 14952 – 14954.) This statute provides that all cigarettes sold in this state must, among other things, be packaged in a specified manner and certified with the State Fire Marshal as compliant with these safety standards. ( Id. , § 14951, subd. (a).) It is categorically illegal for any "person" to "sell, offer, or possess for sale in this state cigarettes" that do not comply with the Fire Safety Act. (Ibid. )
Third, to reduce smoking and fund healthcare research related to diseases caused by smoking (Rev. & Tax. Code, §§ 30131 & 30121 et seq.), California imposes excise taxes that "shall be paid by the user or consumer" (id., § 30107) but that must be collected by distributors at the time of sale and remitted by them to the state (id., § 30108). Compliance with this remittance obligation is administered under the Tax Stamp Act, which requires all cigarette packages sold in California to have tax stamps affixed to them. (Rev. & Tax. Code, § 30161.) Subject to exceptions, it is illegal for any "person" to "knowingly possess[ ], or keep[ ], store[ ], or retain[ ] for the purpose of sale, or sell[ ] or offer[ ] to sell, any package of cigarettes to which there is not affixed" a tax stamp required by the Tax Stamp Act. (Rev. & Tax. Code, § 30474, subd. (a).)
C. Procedural History
After sending two cease-and-desist letters charging Huber with violating various provisions of state law governing distribution and sales of cigarettes, the Attorney General filed this action in Humboldt County in March 2011. The complaint pleaded three causes of action. The first alleged violation of the Directory Act. The second alleged violation of the Fire Safety Act. And the third alleged violation of the UCL, specifying violations of the Tax Stamp Act, the Directory Act, and the Fire Safety Act as predicate "unlawful acts" warranting entry of a permanent injunction and an award of civil penalties.
Specifically, it was alleged that Huber Enterprises sold cigarettes in packages without an affixed tax stamp and failed to collect and remit excise taxes, all in violation of the Tax Stamp Act ( Rev. & Tax. Code, § 30161 ); sold cigarettes purchased from manufacturers not listed by the Attorney General on the statewide tobacco directory, in violation of the Directory Act (id , § 30165.1, subd. (e)(2)); and sold cigarettes in packaging that does not meet required safety standards, in violation of the Fire Safety Act ( Health & Saf. Code, § 14951, subd. (a) ).3
On cross motions for summary adjudication, the trial court denied Huber’s motion; granted the Attorney General’s motion in part, leaving open triable issues concerning civil penalties; and entered a permanent injunction. By its terms, the injunction applies only to sales to nonmembers of the Wiyot Tribe and permits Huber to continue operating so long as she complies with the Directory Act, the Fire Safety Act, and the Tax Stamp Act. This appeal followed.
Only the grant of the permanent injunction is on appeal. " ...
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Hughes v. Cnty. of Humboldt
...on the disparate treatment theory. The standard of review of a grant of summary adjudication is de novo. (People ex rel. Becerra v. Huber (2019) 32 Cal.App.5th 524, 532.) He argues he presented enough evidence of disparate treatment by establishing that 17 middle management positions had be......
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Hughes v. Cnty. of Humboldt
...on the disparate treatment theory. The standard of review of a grant of summary adjudication is de novo. (People ex rel. Becerra v. Huber (2019) 32 Cal.App.5th 524, 532.) He argues he presented enough evidence of disparate treatment by establishing that 17 middle management positions had be......
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