State Bd. of Dry Cleaners v. Thrift-D-Lux Cleaners

• Decision Date: 10 March 1953
• Docket Number: THRIFT-D-LUX
• Citation: 40 Cal.2d 436,254 P.2d 29
• Parties: STATE BOARD OF DRY CLEANERS v.CLEANERS, Inc., et al. L. A. 21666.
• Court: California Supreme Court

Page 29

254 P.2d 29

40 Cal.2d 436

STATE BOARD OF DRY CLEANERS v. THRIFT-D-LUX CLEANERS, Inc., et al.

L. A. 21666.

Supreme Court of California, in Bank.

March 10, 1953.

Rehearing Denied April 2, 1953.

Edmund G. Brown, Atty. Gen., Alberta Gattone and J. Albert Hutchinson, Deputy Attys. Gen., for appellant.

Robert Kingsley, Los Angeles, amicus curiae on behalf of appellant.

Adele I. Springer, Beverly Hills, for respondents.

SHENK, Justice.

Plaintiff appeals from a judgment of dismissal after the defendants' general demurrer to the amended complaint was sustained without leave to amend. The demurrer is based on the ground that the minimum price provisions of the Dry Cleaner's Act of 1945, Sections 9560 through 9567, Article 5, Chapter 18 of the Business and Professions Code, under which the plaintiff sought injunctive relief against the defendant's alleged violations of that Act, are in violation of the due process clauses of the state and federal constitutions. The ruling on the demurrer presents the sole question on appeal.

The Act provides for the creation of a State Board of Dry Cleaners consisting of seven members: one from the general public; two owners of retail plants; two owners of wholesale plants; and two owners of shops. Article 5, in Sections 9560 through 9567, provides for 'Minimum Price Shedules'. Section 9560 empowers the Board to act; Section 9561 permits the members of the Board to have access to cleaning establishments; Section 9562 provides for rules of procedure, notice and hearing. Section 9563 provides:

'The board may establish minimum price schedules for the various items of cleaning, dyeing and pressing services for any city or county or other area as may be determined by the board upon the filing of a petition with it, requesting a minimum price schedule for that * * * area signed by seventy-five per cent (75%) or more of the persons in that * * * area who are licensed under this chapter.' Section 9564 provides:

'Upon receipt of a petition under this article the board shall investigate and ascertain those minimum prices which will enable cleaners, dyers, or pressers in that city or county or other area to furnish modern, proper, healthful and sanitary services, using such appliances and equipment as will minimize the danger to public health and safety incident to such services.

'In establishing minimum price schedules, the board shall consider all conditions affecting the business of cleaning, dyeing and pressing in that city, county or other area and the relation of those conditions to the public health, welfare and safety.'

Section 9565 provides that the Board shall conduct a cost survey and states that 'the board shall not fix a price for any service at a sum less than that which is shown to be the cost price of such service * * *.'

Section 9566 provides for the readjustment of minimum price levels either on the initiative of the Board or on complaint of fifty-one per cent or more of the persons licensed in the area, if the Board determines that 'the minimum price so established or any of them are insufficient properly to provide healthful and proper services to the public and to maintain a clean, healthful, safe and sanitary cleaning, dyeing or pressing establishment, or that any minimum price set creates an undue hardship on any licensee under this act * * *.'

Section 9567 provides for injunctive relief upon complaint by the Board against violators of the minimum price schedules established by the Board.

In July 1947 seventy-five percent of those licensed by the Board in numerous cities in Los Angeles County petitioned the Board to establish minimum prices in both wholesale and retail fields. Basing its action upon its own cost surveys, the Board established and published its minimum Price Schedules. In September 1949 the Board filed a complaint charging the defendants with violations of the price schedule and with threats to continue to do so. The Board had established a minimum price to be paid for cleaning and pressing a man's suit at $1. The defendant Thrift-D-Lux Cleaner was charging 69 cents for the same service.

If the statute can be sustained as constitutional it is because it is a reasonable exercise of the police power of the state. Under the law generally that power extends to legislation enacted to promote the public health, safety, morals and general welfare. It has rightly been said that 'Such (police) regulations may validly be imposed if they constitute a reasonable exertion of governmental authority for the public good. If there is a proper legislative purpose, a law enacted to carry out that purpose, if not arbitrary nor discriminatory, must be upheld by the courts.' In re Fuller, 1940, 15 Cal.2d 425, 428, 102 P.2d 321, 324. However, in the exercise of the police power the law places limits on the discretion of the legislature. Whether there has been a reasonable exercise of this power is a court question.

It is first contended by the plaintiff that the price fixing features of the statute were designed to protect the public health and safety. The statutory law in California meets this contention head on for it has made detailed and adequate provisions elsewhere for the protection of the public's health and safety through the regulation of the dry cleaning industry. Chapter 2, Fire Protection Clothes Cleaning Establishments, and Chapter 3, Fire Protection Spotting, Sponging, and Pressing Establishments, of Part 2, Division 12 of the Health and Safety Code; Subchapter 4, Dry Cleaning Equipment Employing Volatile and Inflammable Solvents, and Subchapter 5, Spotting, Sponging and Pressing Establishments, of Chapter 1, State Fire Marshal, Title 19, Public Safety, of the California Administrative Doce; Article 6, Laundry, Dry Cleaning, and Dyeing Industry, Chapter 5, Division of Industrial Welfare, Title 8, Industrial Relations, of the Administrative Code; Chapter 2, Safety Devices and Safeguards, Part 1, Workmen's Safety, Division 5, Safety in Employment, of the Labor Code. It is not contended that the present statute is invalid merely because the legislature could reach the purported objective through the enforcement of the provisions of the above cited statutes. The previous enactment of these statutes furnish support for the conclusion that they were designed to and do fully protect the public health and safety and that the price fixing features of the present statute have no function to that end. On the contrary they constitute an unnecessary and unreasonable restriction on the pursuit of private and useful business activities. The asserted objective of those portions of the statute are not in fact their real objective. There is therefore nothing relating to the price charged for such services that has any real or substantial relationship to the public health or safety.

The proponents of the validity of the statute would justify it in the light of troubled conditions which they claim existed prior to World War II, although they are adverse to applying legal concepts generally accepted during that same period. The statute does not purport to be nor can it be justified as a war or emergency measure. During periods of emergency such as a state of war or of general economic distress the courts have recognized a broad legislative discretion dealing with such situations in the interest of the public welfare. It does not appear that at the time this legislation was enacted there was any such general emergency affecting all private businesses alike. There is nothing in the dry cleaning business which distinguishes it from the multitude of other businesses offering services to the general public. The disturbances and violence which are said to have existed in the dry cleaning business during the period of economic stress prior to the last World War were common to other businesses. It is important to note that the statute itself in no way purports to prevent destructive and unfair competition or to suppress violence.

It is claimed that the price fixing portions of the statute were enacted to provide for the general welfare. But a legislative body may not, under the guise of providing for this component of the police power, impose unnecessary and unreasonable restrictions upon the pursuit of these useful activities. If a statute has no real or substantial relation to any legitimate police power objective, it is the duty of the court to so declare. McKay Jewelers, Inc., v. Bowron, 19 Cal.2d 595, 600, 122 P.2d 543, 139 A.L.R. 1188. In this connection it is recognized that every intendment will be indulged in favor of the constitutionality of a legislative enactment. Hart v. City of Beverly Hills, 11 Cal.2d 343, 79 P.2d 1080, but the presumption of constitutionality is not conclusive.

The question of the validity of a price fixing law as related to the general welfare was involved in the case of In re Herrick, 1938, 25 Cal.App.2d 751, 77 P.2d 262. There the court declared unconstitutional an ordinance which fixed a minimum price for the cleaning of a man's suit of clothes. The declared purpose of the ordinance was 'the restoration and maintenance of the highest practical degree of public welfare.' The court in that case relied on the decision in In re Kazas, 1937, 22 Cal.App.2d 161, 70 P.2d 962, which had declared unconstitutional an ordinance for fixing minimum prices for a hair cut and shave. In considering whether legislation aims to promote the public welfare as a component part of the police power, the court properly recognized that the concept of public welfare had undergone a process of development through the years. Traditionally the power to legislate for the public welfare was not much more comprehensive than the power to legislate for the public health, safety and morals. In Munn v. Illinois, 1876, 94 U.S. 113, 24 L.Ed. 77, it was considered that only where a person had entered the field of public service in the use of his property did he...