Top Hat Liquors v. Department of Alcoholic Beverage Control, S.F. 22981

• Citation: 118 Cal.Rptr. 10,13 Cal.3d 107,529 P.2d 42
• Decision Date: 11 December 1974
• Docket Number: S.F. 22981
• Court: United States State Supreme Court (California)
• Parties: , 529 P.2d 42 TOP HAT LIQUORS, INC., Petitioner, v. DEPARTMENT OF ALCOHOLIC BEVERAGE CONTROL, Respondent. In Bank

Page 10

118 Cal.Rptr. 10

13 Cal.3d 107, 529 P.2d 42

TOP HAT LIQUORS, INC., Petitioner, v. DEPARTMENT OF ALCOHOLIC BEVERAGE CONTROL, Respondent.

S.F. 22981.

Supreme Court of California,

In Bank.

Dec. 11, 1974.

C. Wadsworth White and Alfred P. Knoll, Oakland, for petitioner.

Evelle J. Younger, Atty. Gen., and L. Stephen Porter, Deputy Atty. Gen., for respondent.

WRIGHT, Chief Justice.

Petitioner, a corporate off-sale liquor licensee, seeks a writ of mandate to compel the respondent Department of Alcoholic Beverage Control (the department) to reduce monetary penalties assessed against it under Business and Professions Code section 24755.1, a part of the Alcoholic Beverage Control Act. That section imposes such penalties on licensees who sell distilled spirits at less than minimum retail prices established by fair trade contracts in accordance with section 24755. ¹

Petitioner challenges the validity of the procedure by which the department accumulates evidence of successive sales each below minimum retail prices and then, in a single prosecution, imposes cumulative penalties each based on a single sale but measured in severity by the prior number of illegal sales in the series. Specifically, petitioner claims that the imposition of such cumulative penalties by the department is not permissible under section 24755.1 and, even if permissible, constitutes arbitrary and capricious action in violation of the due process clauses of the federal and state Constitutions. We do not reach the foregoing contentions, however, as petitioner failed to exhaust its administrative remedies and its application for the instant relief is thus premature. In pursuing its administrative remedies petitioner is nevertheless entitled to the benefit of our decision this date in Walsh v. Kirby, Ante page 33, wherein we hold that the imposition of cumulative penalties based on similar investigative practices was, in that case, arbitrary and capricious and constituted a denial of due process.

The sole shareholder and president of petitioner, Raymond A. Douglass, Jr., was at all times herein regularly employed as an assistant manager of a large supermarket totally independent of petitioner. Douglass invested his savings and other funds borrowed from relatives in petitioner corporation. After the commencement of business he delegated the day-to-day management to his father and another individual, both of whom were officers of the corporation.

Evidence presented at an administrative hearing conducted by the department following its accusation of petitioner discloses that Douglass' father and other employees of petitioner devised a scheme by which certain customers were issued 'courtesy cards' which enabled them to buy distilled spirits at prices below the minimum retail prices set forth in schedules filed with the department. An employee of the department obtained such a card from one of petitioner's competitors. Investigators then used the card to make purchases of distilled spirits at less than minimum retail prices on 11 separate occasions over a 26-day period. Douglass was unaware of the scheme or of the sales that were being made pursuant to it and had no actual notice of any illegal sale made to the department's investigators until the filing of an accusation charging the 11 violations.

Following the hearing the department made findings that petitioner committed 11 violations of section 24755 and, purporting to act in accordance with section 24755.1, assessed penalties of $250 for the first violation and $1,000 for each of the following successive violations for a total of $10,250. Petitioner seeks to compel a reduction of the penalty to $250 claiming that it could be assessed for only a single violation.

The department contends that we lack jurisdiction herein since petitioner has failed to exhaust its administrative remedy of appeal to the Alcoholic Beverage Control Appeals Board (the board). ² Petitioner filed an appeal with the board after the commencement of these proceedings but the board has not yet acted and it must be deemed that such remedy has not yet been exhausted. ³

A court is generally without jurisdiction to review administrative action until after the administrative remedy provided for by statute has been exhausted. (See Abelleire v. District Court of Appeal (1941) 17 Cal.2d 280, 291--293, 109 P.2d 942.) The rule is equally applicable in the case of a liquor licensee adversely affected by a decision of the department. In 1967 the Legislature made specific provision as to the availability and the scope of judicial review of departmental decisions in sections 23090 through 23090.7. (Stats.1967, ch. 1525, pp. 3635--3636, § 4.) The exclusiveness of the judicial review thus provided is made clear by section 23090.5, which expressly withholds from the courts jurisdiction to review or otherwise to interfere with the department or its decisions, 'except . . . to the extent specified in (sections 23090 through 23090.7).' ⁴ Section 23090, in specifying the conditions under which applications may be made for a writ of review, limits such applications to those persons affected by a 'final order of the board.' It is thus manifest that the limited review will lie only after the board has made a final order; that is, after the administrative remedy has been exhausted.

In concluding, as we have, that sections 23090 through 23090.7 provide the exclusive avenue to judicial review following a final order of the board, we have not overlooked that provision of section 23090.5 which states that notwithstanding the express limitations on judicial review, 'a writ of mandate shall lie from the Supreme Court or the courts of appeal in any proper case.' (See fn. 4, supra.) It is clear for reasons which follow that the quoted provision does not authorize an alternative avenue of judicial review of the adjudicatory decisions of the department apart from the writ of review provided for in sections 23090 through 23090.7.

Prior to the 1967 legislation the scope of judicial review of all departmental decisions was defined by general mandamus limitations. (Code Civ.Proc., § 1094.5.) We hold today in Walsh v. Kirby, supra, Ante pages 39, 40, that in 1967 the Legislature limited such scope to those areas specifically enumerated in section 23090.2. We recognize, however, that in imposing such limitations the Legislature intended to deal only with the adjudicatory function of the department as distinguished from its administrative function. ⁵ The writ of mandate remains...