Walker v. Munro

• Decision Date: 17 February 1960
• Docket Number: No. 18479,18479
• Citation: 178 Cal.App.2d 67,2 Cal.Rptr. 737
• Parties: John F. WALKER et al., Plaintiffs and Appellants, v. Russell S. MUNRO, etc., et al., Defendants and Respondents.
• Court: California Court of Appeals Court of Appeals

Page 737

2 Cal.Rptr. 737

178 Cal.App.2d 67

John F. WALKER et al., Plaintiffs and Appellants, v. Russell S. MUNRO, etc., et al., Defendants and Respondents.

No. 18479.

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

Feb. 17, 1960.

As Corrected March 7, 1960.

M. Mitchell Bourquin, George Olshausen, San Francisco, for appellants.

Stanley Mosk, Atty. Gen., of California Charles A. Barrett, Deputy Atty. Gen., Pillsbury, Madison & Sutro, Brobeck, Phleger & Harrison, Heller, Ehrman, White & McAuliffe, Athearn, Chandler & Hoffman, Bronson, Bronson & McKinnon, Rogers & Clark, San Francisco, for respondents.

BRAY, Presiding Justice.

Plaintiffs appeal from summary judgements in favor of defendants in an action for declaratory relief and injunction.

Questions Presented.

1. Can summary judgment be granted in a declaratory relief action?

2. Does the rule of exhaustion of administrative remedies apply in an action for declaratory relief?

3. Did the trial court abuse the discretion granted by section 1061, Code of Civil Procedure?

Record.

Plaintiffs are retail liquor dealers. Defendants are Department of Alcoholic Beverage Control officials and a number of corporations engaged in the sale of distilled spirits to wholesalers in California. Plaintiffs were charged with violating the fair trade provisions of the Alcoholic Beverage Control Act. (Bus. & Prof.Code, § 24750 et seq.) During the pendency of the latter proceedings, plaintiffs filed this action to obtain a declaration that the fair trade provisions (Bus. & Prof.Code, §§ 24750-24757) and rules 99 and 100, Department of Alcoholic Beverage Control, are unconstitutional and enjoining defendant officials from enforcement thereof against plaintiffs.

Defendant officials demurred to the complaint and moved for summary judgment. Plaintiffs filed an amended complaint and said defendants demurred thereto and again moved for summary judgment. The court granted the summary judgment.

The corporate defendants appeared and pleaded to the amended complaint, and variously filed motions for judgment on the pleadings and for summary judgment. These judgments were granted. In all instances the judgments against plaintiffs were based upon the court's determination that (1) each of the plaintiffs is engaged in administrative actions before the Department of Alcoholic Beverage Control in which the constitutionality of sections 24750 to 24757, Business and Professions Code, and of department rules 99 and 100 was raised; and (2) that it is more expeditious and proper that the department rule on this question before the court is required to rule on it.

1. Summary Judgment.

Plaintiffs contend that as the object of declaratory relief is to make a declaration of rights and duties, even if the plaintiff in a particular case is contending for an erroneous proposition (Maguire v. Hibernia Savings & Loan Soc., 1944, 23 Cal.2d 719, 729-730, 146 P.2d 673, 151 A.L.R. 1062), a dismissal is not within the contemplation of the declaratory relief statutes whether there are factual issues or not. Section 437c, Code of Civil Procedure (dealing with summary judgments) provides in part that where it is claimed that 'the action has no merit * * * the complaint may be dismissed * * *' In 1953 the following was added: 'The word 'action' as used in this section shall be construed to include all types of proceedings.' Viewed in the light of the gradual expansion of actions to which summary proceedings were made applicable (Stats.1933, pp. 1848-1849; Stats.1953, p. 2264; Stats.1957, pp. 2780-2781), it is apparent that section 437c was intended to include declaratory relief actions in a proper case. If there is a jurisdictional defect not apparent on the face of the complaint, or if the relief sought is dependent upon facts which are shown by uncontradicted affidavits not to exist, or if it appears that in the particular case the court desires to exercise the discretion invested in it by section 1061, Code of Civil Procedure, there is no reason why the case should be prolonged and a summary judgment not granted. This brings us to the validity of the court's determination that it had no jurisdiction to proceed because plaintiffs had not exhausted their administrative remedies, and also in the exercise of its discretion the court determined that it would be more expeditious to have the department rule on the constitutional issues raised before the court intervened.

2. Exhaustion of Administrative Remedies.

One of the grounds for the summary judgment was that, in view of the pending administrative proceedings in which the constitutionality of the relevant fair trade liquor laws and regulations had been raised, plaintiffs had failed to exhaust their administrative remedies.

As to the corporate defendants, it is true that no administrative proceedings are pending against them, and were this the only ground of the decision for them, the summary judgment probably would not lie (although in Myers v. Bethlehem Shipbuilding Corp., 1938, 303 U.S. 41, 58 S.Ct. 459, 82 L.Ed. 638, and Home Loan Bank Board v. Mallonee, 9 Cir., 1952, 196 F.2d 336, the exhaustion doctrine was held applicable where persons not parties to the administrative proceedings were joined with others who were in an attempt to enjoin the proceedings). The corporate defendants contend that even though they are not parties to the administrative proceedings the issues in the two proceedings are the same, and therefore the trial court properly exercised its discretion under section 1061.

It is firmly established in this state that a litigant must exhaust an administrative remedy provided by statute before he may resort to the courts and that jurisdiction to entertain an action for judicial relief is conditioned upon a completion of the administrative procedure. United States v. Superior Court, 1941, 19 Cal.2d 189, 120 P.2d 26; Abelleira v. District Court of Appeal, 1941, 17 Cal.2d 280, 109 P.2d 942, 132 A.L.R. 715.

The doctrine of exhaustion of remedies has been applied to actions for declaratory relief involving statutes administered by governmental agencies. Imperial Mutual Life Ins. Co. v. Caminetti, 1943, 59 Cal.App.2d 501, 505, 139 [178 Cal.App.2d 72] P.2d 691; Chapman v. Division of Real Estate, 1957, 153 Cal.App.2d 421, 430-432, 314 P.2d 773; Carrier v. Robbins, 1952, 112 Cal.App.2d 32, 36, 245 P.2d 676; Louis Eckert Brewing Co. v. Unemployment Reserves Comm., 1941, 47 Cal.App.2d 844, 847-848, 119 P.2d 227. Plaintiffs cite no cases which hold the exhaustion doctrine inapplicable where the party seeking relief in the courts did not initiate the administrative proceedings. On the other hand, the exhaustion doctrine has been held applicable to parties who were in the position of defendants in the administrative proceedings. Alexander v. State Personnel Board, 1943, 22 Cal.2d 198, 137 P.2d 433; United Insurance Co. of Chicago, Ill. v. Maloney, 1954, 127 Cal.App.2d 155, 273 P.2d 579. Plaintiffs assert these cases did not involve actions for declaratory relief which are 'expressly made cumulative' under section 1062, Code of Civil Procedure. But that section clearly means that the declaratory relief remedy is in addition to and not in lieu of other remedies provided by law. The declaratory relief provisions do not independently empower the courts to stop or interfere with administrative proceedings by declaratory decree. Carrier v. Robbins, supra, 112 Cal.App.2d 32, 36, 245 P.2d 676.

Regardless of whether they are 'plaintiffs' or 'defendants' in the administrative proceedings, plaintiffs may avail themselves of the complete administrative procedure. Until that procedure has been completed, plaintiffs 'have no standing to ask for judicial relief because they have not yet exhausted the remedies given them by the statute.' Abelleira v. District Court of Appeal, supra, 17 Cal.2d at page 291, 109 P.2d at page 949.

Birch v. McColgan, D.C.1941, 39 F.Supp. 358, cited by plaintiffs, is not in point. In that case, the administrative remedy was not adequate where the party who might have invoked it was threatened with a criminal prosecution if he did.

Plaintiffs argue that their administrative remedy, if any, is inadequate because it appears that the administrative proceedings may be terminated in their favor without reaching the constitutional questions. Plaintiffs point out that a decision was reached against one of the plaintiffs, which was reversed and remanded by the Appeals Board upon grounds of insufficient evidence. Plaintiffs argue that they may be thus subjected to long proceedings without obtaining a decision on the constitutional questions. However, underlying the exhaustion doctrine is the jurisdictional requirement that the prescribed administrative procedure be exhausted before resort can be had to the courts. Plaintiffs merely contend that such procedure is not speedy. There is no allegation that the lack of 'speediness' is the result of illegal administrative action or will cause such irreparable damage to plaintiffs as would warrant the recognition of an exception to the exhaustion doctrine as discussed in United Insurance Co. of Chicago, Ill. v. Maloney, supra, 127 Cal.App.2d at page 158, 273 P.2d at page 580. And until the administrative procedure has been completed, plaintiffs' contention that they may not be able to obtain a ruling on the constitutional questions appears premature.

Plaintiffs also argue that the exhaustion doctrine is inapplicable because the Department of Alcoholic Beverage Control does not have the power, or at least not a preferred power, to decide constitutional questions. However, in United States v. Superior Court, supra, 19 Cal.2d at page 195, 120 P.2d at page 29, the court stated by way of dictum: 'And even where the statute sought to be applied and enforced by the administrative agency is challenged upon constitutional grounds, completion of the administrative remedy has been...