California Grocers Ass'n v. Department of Alcoholic Beverage Control

Filed 9/19/

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

THIRD APPELLATE DISTRICT

CALIFORNIA GROCERS ASSOCIATION, C070007

Petitioner, C070375

v.

DEPARTMENT OF ALCOHOLIC BEVERAGE

CONTROL et al.,

Respondents.

ORIGINAL PROCEEDINGS in mandate. Petitions granted and denied.

Pillsbury Winthrop Shaw Pittman, James M. Seff, Christopher R. Rodriguez and Carrie L. Bonnington for Petitioner.

Kamala D. Harris, Attorney General, Alicia M. B. Fowler, Senior Assistant Attorney General, Fiel D. Tingo, Supervising Deputy Attorney General and Michael D. Gowe, Deputy Attorney General, for Respondents.

This case involves the meaning of section 23394.7 of the Business and Professions Code, that regulates the sale of alcoholic beverages at any customer-operated checkout

1 stands.1 It provides: “No privileges under an off-sale license shall be exercised by the licensee at any customer-operated checkout stand located on the licensee‟s physical premises.” (§ 23394.7, as added by Stats. 2011, ch. 726, § 2.) The principal question tendered is whether “customer-operated checkout stand”…

This case involves the meaning of section 23394-7 of the Business and Professions Code, which regulates the sale of alcoholic beverages at any customer-operated checkout stands. 1 It provides: “No privileges under an off-sale license shall be exercised by the licensee at any customer-operated checkout stand located on the licensee’s physical premises.” (§ 23394.7, as added by Stats. 2011, ch. 726, § 2.) The principal question tendered is whether “customer-operated checkout stand” refers to the stand itself or to the function performed at the stand, and, accordingly, whether the members of petitioner California Grocers Association (Grocers) may sell alcoholic beverages at such a stand.

*1068 Grocers invokes our original jurisdiction in two writs of mandate to review the validity of an advisory issued by respondent Department of Alcoholic Beverage Control (Department). (§ 23090.5.) The advisory interprets section 23394.7 as providing that “no alcoholic beverages may be sold through any checkout stand that is enabled to allow operation by the customer at the time the customer’s check-out transaction commences or at any point during the check-out process.”

The writ in case…

I concur in the lead opinion, but write separately to explain my analysis.

I

The First Writ

The first writ petition before us (No. C070007) raises the question of whether the advisory was subject to the APA (Administrative Procedure Act; *1077 Gov. Code, § 11340 et seq.). A regulation subject to the APA has two principal identifying characteristics. “First, the agency must intend its rule to apply generally, rather than in a specific case. The rule need not, however, apply universally; a rule applies generally so long as it declares how a certain class of cases will be decided. [Citation.] Second, the rule must ‘implement, interpret, or make specific the law enforced or administered by [the agency], or . . . govern [the agency’s] procedure.’ ” (Tidewater Marine Western, Inc. v. Bradshaw (1996) 14 Cal.4th 557, 571 [ 59 Cal.Rptr.2d 186 , 927 P.2d 296 ].)

An exception to the second identifying characteristic exists where the agency interprets a law in such a manner that the agency’s interpretation constitutes “the only legally tenable interpretation of a provision of law.” (Gov. Code, § 11340.9, subd. (f).) “[T]he exception for the lone ‘legally tenable’ reading of the law…

I concur in the court’s holding that the industry advisory issued by the Department of Alcoholic Beverage Control (the Department) on December 23, 2011, in anticipation of the January 1, 2012 effective date of the 2011 amendment to Business and Professions Code section 23394.7 (hereafter the Advisory), is subject to the rulemaking provisions of the Administrative Procedure Act (the APA) (Gov. Code, § 11340 et seq.) and that we must declare the Advisory invalid due to the failure of the Department to comply with the provisions of that act. (Unspecified section references that follow are to the Bus. & Prof. Code.)

As to that portion of the lead opinion that finds that this court nonetheless may uphold the Advisory because we need not defer to the Department’s interpretation of the statute and because “the interpretation of section 23394.7 is well within the court’s competence” (lead opn., ante, at p. 1068), I dissent.

In 2011, the Legislature enacted section 23394.7 which provides: “No privileges under an off-sale license shall be exercised by the licensee at any customer-operated checkout stand located on the licensee’s physical premises.” (Stats. 2011, ch. 726, § 2.)

Section…