Reimel v. House

259 Cal. App. 2d 511, 66 Cal. Rptr. 434, 1968 Cal. App. LEXIS 1994
California Court of Appeal·Decided February 27, 1968·No. Civ. 30427·Published·Cited by 2 cases

Opinion

FOURT, J.

This is an appeal by the Department of Alcoholic Beverage Control of the State of California (hereinafter sometimes referred to as the Department) through its director, James 0. Reimel, from a judgment of the trial court denying a petition for a writ of mandate (and discharging an alternative writ of mandate), which would have required the Alcoholic Beverage Control Appeals Board (hereinafter sometimes referred to as the Board), to affirm the decision made by the Department.

Westside Liquor Company (hereinafter sometimes referred to as Westside), doing business as Kazan’s Wines and Spirits, holds an off-sale general liquor license issued by the Department. On December 13, 1963, the Department filed an accusation against Westside in which it was alleged in separate counts that on each of three occasions (November 15, 18, and 22, 1963, respectively) Westside violated the Fair Trade Laws (Bus. & Prof. Code, § 24755) by making retail sales of alcoholic beverages at prices below the effective minimum retail prices. A hearing on these charges was conducted before a hearing officer from the Office of Administrative Procedure, who issued a proposed decision finding the accusations true. He recommended license revocation upon conditions permitting Westside to transfer the license to a third party, subject to 60 days suspension. The Department adopted the findings of the hearing officer, but modified the penalty and issued its *514 decision revoking Westside’s license on each count severally and separately.

Westside appealed to the Board, which rejected the grounds proposed by Westside for reversal of the Department’s decision, but on its own motion undertook to consider the issue, not theretofore raised of whether the minimum retail prices which the Department sought to enforce liad been published in accordance with the publication provisions of Business and Professions Code, section 24755 subdivision (b). On this issue, the Board determined the case adversely to the Department, holding that the record did not contain substantial evidence of the publication of these specific minimum prices in compliance with the controlling statute. The Board founded its decision on a determination that the Department’s rule (99 (k), Cal.Admin. Code, tit. 4), conflicted with the provisions of the statute insofar as it permitted publication of minimum prices in a trade journal in general circulation among liquor licensees in the trading area affected to satisfy the publication requirement, and was therefore invalid.

Following the Board’s decision, the Department filed the instant petition for writ of mandate in the superior court; the Board answered and Westside intervened. The court affirmed the Board’s action, and the Department appeals the court’s denial of the requested writ.

A résumé of some of the facts, as disclosed by the record, shows that sales in violation of the statute were made by a long-time employee of Westside, Claire Feldman. She was familiar with Patterson’s (a trade journal) and she made written comparison for the Department investigators, who posed as “special customers” from whom volume purchases might be anticipated, of the published minimum retail prices and the discount prices at which Westside would voluntarily sell the same brand name merchandise. The first Department investigator to visit the Westside store was Daniel H. Latendresse who, on November 14, 1963, represented to Claire that he was employed by a public relations firm, identified as Ben A. Cossart and Associates. She quoted him on his first visit a discount price for Jack Daniels liquor, but he made no purchase. The next day he returned to the store, reminded Claire of their previous conversation, and purchased several bottles of Jack Daniels at a price per bottle below the scheduled minimum retail price for that brand. On November 18, 1963, Department investigator George H. Weiner, representing that he was employed by the same public relations firm, completed a second purchase of brand name liquor from Claire at a price *515 per bottle in each instance lower than the scheduled minimum retail price. Finally, on November 22, 1963, a third Department investigator, Robert LaTouehe, visited the Westside store in the company of Latendresse. Claire then offered to place their names on cards in the store’s “special customer” file which would reflect the prices she quoted to them, so that in her absence other clerks would aelmowledge the deal she had made with these customers. Thereafter, upon request, she went through the whole store with the investigators, quoting various prices for which she would sell them brand name merchandise below minimum retail prices. Finally, she prepared a written list for them which indicated in the left hand column the prices published by Patterson’s and in the right hand column the lower prices at which she would sell them the same brands of liquor. On that date LaTouehe made the third purchase of brand labelled merchandise below the filed minimum retail price, as alleged in the accusation.

Appellant asserts that the Board exceeded its jurisdiction in deciding the case upon an issue not raised at the hearing before the Department; that rule 99 (k) of the Department is a valid regulation and not in conflict with the controlling statute which it purports to implement; and that substantial evidence supports the Department’s decision. These are meritorious contentions.

Neither at the hearing before the Office of Administrative Procedure hearing officer, nor in its appeal to the Board did Westside raise the issue of the validity of rule 99 (k), and at no time did it assert that this regulation exceeded the Department’s authority or conflicted with the controlling statute (Bus. & Prof. Code, § 24755, subd. (b)). In fact, both the Department and the licensee assumed that the publication requirements of the statute had been complied with to establish effective minimum retail prices for the alcoholic beverage brands in question, and to afford legitimate price protection for the owners of such brand names. Since the issue of whether the publication was proper was not raised at the hearing before the Department, this issue was not properly before the Board. (Harris v. Alcoholic Beverage etc. Appeals Board, 197 Cal.App.2d 182 [17 Cal.Rptr. 167]; Wilke (& Holzheiser, Inc. v. Department of Alcoholic Beverage Control Appeals Board, 65 Cal.2d 349, 376 [55 Cal.Rptr. 23, 420 P.2d 735].)

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Reimel v. House, 259 Cal. App. 2d 511, 66 Cal. Rptr. 434, 1968 Cal. App. LEXIS 1994 (Cal. Ct. App. 1968).

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