Tip Top Foods, Inc. v. Lyng

• Decision Date: 06 November 1972
• Parties: TIP TOP FOODS, INC., a corporation, Plaintiff, Respondent, and Cross-Appellant, v. Richard LYNG, as Director of Agriculture, et al., Defendants, Appellants, and Cross-Respondents. Civ. 30639.
• Court: California Court of Appeals Court of Appeals

Page 718

104 Cal.Rptr. 718

28 Cal.App.3d 533

TIP TOP FOODS, INC., a corporation, Plaintiff, Respondent, and Cross-Appellant, v. Richard LYNG, as Director of Agriculture, et al., Defendants, Appellants, and Cross-Respondents.

Civ. 30639.

Court of Appeal, First District, Division 3, California.

Nov. 6, 1972.

As Amended Nov. 24, 1972.

Hearing Denied Jan. 3, 1973.

Watson, Hoffe & Fannin, Richmond, for plaintiff, respondent and cross-appellant.

Evelle J. Younger, Atty. Gen., State of California, Sanford N. Gruskin, Asst. Atty. Gen., Roderick Walston, Deputy Atty. Gen., San Francisco, for defendants, appellants and cross-respondents.

CALDECOTT, Associate Justice.

On February 5, 1969, plaintiff and cross-appellant ¹ Tip Top Foods, Inc., commenced this action for injunctive and declaratory relief, seeking to restrain defendants from enforcing a cease-and-desist order, and seeking to have a number of sections of the California Agriculture Code declared unconstitutional. Named as defendants were Richard Lyng, as Director of Agriculture of the State of California; R. L. Van Buren, as Chief of the Bureau of Dairy Service of the Department of Agriculture of the State of California; and P.J. Benedetti, as Regional Administrator of the Bureau of Dairy Service of the Department of Agriculture of the State of California. (Hereinafter referred to as the State.)

This action challenges the constitutionality of several sections of the Agricultural Code of the State of California, relating to regulation of 'products resembling milk products.' ² The trial court found certain of these challenged sections to be unconstitutional but found the remainder of the Act constitutionally valid. Both sides have appealed.

The facts are not in dispute. The plaintiff is Tip Top Foods, Inc., a manufacturer of three food products: 'Sour C,' 'Hi-Lo' and 'Pantry Pride.' As plaintiff notes, "Sour C,' and 'Hi-Lo' are similar products. Both are all-purpose dressings for use in such foods as fruits, salads and baked potatoes, for use in the preparation of other dressings and for use in cooking. Each of these products is a pasteurized, cultured blend of water, nonfat dry milk solids, vegetable fats and small amounts of food chemicals. The main difference between the two products is that 'Hi-Lo' has a lower vegetable fat content then does 'Sour C.' Both products use a partially hydrogenated soybean oil as a fat source. Each of the two products is sold to commercial establishments or institutions in the food industry. In addition, 'Sour C' is sold in retail stores. 'Sour C' is a registered trade mark which is held by plaintiff.

"Pantry Pride' is sold only in the commercial institutional trade for cooking and baking and the manufacture of other food products. This product is a pasteurized blend of water, nonfat dry milk solids, vegetable facts and small amounts of food chemicals. 'Pantry Pride' does not reach and is not consumed by the public in its original form.' 'Pantry Pride' is in beverage form and uses a fully hydrogenated coconut oil as a fat source. Is section 38904 constitutional?

The trial court found section 38904 to be unconstitutional. That section provides: 'Except as provided in this section, no products resembling milk products ³ shall be used in any of the charitable or penal institutions that receive assistance from the state. If the state is informed in writing that government holdings of milk or milk products cannot be purchased or acquired by the state, the Department of General Services may purchase for use in state institutions such products if requested to do so by the director of the department which has control of any state institutions for which such product is intended.'

In matters not involving First Amendment rights, the test of the validity of an exercise of the police power ⁴ is its reasonableness in relation to the objective of the legislation. (Adams v. Shannon, 7 Cal.App.3d 427, 86 Cal.Rptr. 641, and cases cited therein.) But the court will not substitute its judgment for that of the Legislature, and if reasonable minds might differ as to the reasonableness of the regulation, the law will be upheld. (Daniel v. Board of Police Commissioners, 190 Cal.App.2d 566, 571, 12 Cal.Rptr. 226; Burk v. Municipal Court, 229 Cal.App.2d 696, 700, 40 Cal.Rptr. 425.) Nevertheless, "Reasonable regulation' implies that the regulatory objective is the welfare of the general public as contrasted with that of a special class or segment. (Citation.) The law must not be arbitrary; it must rest upon 'adequate reason.' (Citation.) If the general objective of the law is within the state's regulatory power, its individual provisions must have a 'real and substantial relation' to that objective (Citations.)' (Doyle v. Board of Barber Examiners, 219 Cal.App.2d 504, 510, 33 Cal.Rptr. 349, 353.) In short, in order to determine the constitutionality of a police power statute, the court must first look at the purposes of the regulation, and secondly, must ascertain whether the statute in question is related in a reasonable fashion to those purposes.

The purposes of the Act have been set out clearly by the Legislature in section 38902, which provides as follows: 'The Legislature further finds and declares all of the following: (a) There is an increasing advent into the marketplace of food products which in appearance, taste and other physical characteristics resemble milk products, which are frequently mistaken by consumers for milk and milk products, which are used for the same or similar purposes as milk and milk products, which are frequently manufactured, transported and sold in the same places as milk and milk products, which are frequently packaged in the same types, sizes and shapes of containers as milk and milk products, which are suitable media for the growth and multiplication of micro-organisms; but which food products contain fats and oils other than milk fat in combination with milk products or contain no milk products. (b) It is necessary in order to prevent and avoid false, misleading and deceptive marketing of such products resembling milk products, and in order to prevent deception and confusion among consumers, and in order to protect public health, that this chapter be enacted, and that the director from time to time promulgate regulations governing the labeling, identification and sanitary production of all such products.'

Tip Top Foods argues that section 38904 seeks to impose no regulations at all dealing with the information, health or safety of prospective consumers, and is therefore void according to the above principles. We agree with this contention. Prohibiting the use of products resembling milk products in the charitable or penal institutions which receive assistance from the state cannot possibly be said to have any reasonable relation to the prevention of deceptive marketing or the prevention of confusion among consumers. (In accord; Coffee-Rich, Inc. v. Fielder, 27 Cal.App.3d 792, 104 Cal.Rptr. 252.) These goals might be accomplished through regulation of marketing and labeling practices, but to prohibit the use of products resembling milk products by certain classes without any apparent or imaginable reason is wholly arbitrary and capricious.

The state argues that it 'should be permitted to select food products that it considers nutritionally superior to other such products, even though the latter are sufficiently nutritious to be sold on the open market.' However, it is quite apparent that the statute has no relation whatever to this goal, since even without the statute the state could still exercise its discretion to select those products which it considers nutritionally superior.

Nor does section 38904 have any relation to public health. The state concedes that the products 'are sufficiently nutritious to be sold on the open market,' and the statute provides that products resembling milk products may be used when 'government holdings of milk or milk products cannot be purchased or acquired by the state.' There is no indication whatsoever that plaintiff's products are unhealthful; and even if they were, this statute does not serve to correct that condition.

While Tip Top Foods states that '(i)t is obvious that the prohibition is designed only to make a market for dairy products and for no other purpose whatever,' we need not reach this contention, since the above reasons are sufficient to sustain the trial court's finding of unconstitutionality.

Is section 35191 constitutional?

The trial court found section 35191 to be unconstitutional. That section provides: 'Every person that manufactures or imports any oleomargarine or margarine, or any substance designed as a substitute for butter, or that resembles butter, which is not made wholly from pure milk or cream, or any product resembling a milk product, shall keep a record, which gives the quantity that is sold or purchased, the name and location of the seller and purchaser, the date, and the place to which it was shipped or delivered.' We are unable to find any constitutional infirmity in such a requirement. One of the purposes of the Act is to protect the public health. (§ 38902.) The state points out that the purpose of the record-keeping requirement is to enable the distribution of a particular product to be traced and recalled, should it occur that a particular batch of a product is defectively manufactured. Thus viewed, the record-keeping requirement is reasonably consistent with the state's purpose in protecting public health.

Tip Top Foods contends in its brief that the statute is unreasonable because it would require the housewife checking out groceries from a store to stop and give her name and address when purchasing 'Sour C.' Tip Top Foods, however, has misread the statute. The record-keeping requirement is imposed on 'Every person who manufactures or imports . . . any product resembling a milk product.' Thus the manufacturer, or...