Court Opinion

ID: 9947864
Source: CourtListenerOpinion
Date Created: 2024-03-05 20:03:06.173352+00
Date Added: 2024-06-11T14:28:38.684531
License: Public Domain

Filed 3/5/24 Restaurant Fees Cases CA2/8
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                      DIVISION EIGHT

RESTAURANT FEES CASES                                           B321206
_______________________________
33 TAPS, LLC, et al.,
                                                                JCCP No. 5180
    Plaintiffs and Appellants,

         v.                                                     Los Angeles County
                                                                Super. Ct. No. 20STCV47771
DEPARTMENT OF
ALCOHOLIC BEVERAGE
CONTROL,

    Defendant and Respondent.

      APPEAL from a judgment of the Superior Court of Los
Angeles County. Daniel J. Buckley, Judge. Affirmed.
      Kabateck, Brian S. Kabateck, Marina R. Pacheco, Matt A.
Sahak; Blood Hurst & O’Reardon, Timothy G. Blood, Leslie E.
Hurst and Jennifer L. MacPherson for Plaintiffs and Appellants.
      Rob Bonta, Attorney General, Chris A. Knudsen, Assistant
Attorney General, and Kenneth C. Jones, Deputy Attorney
General, for Defendant and Respondent.
                 ______________________________
                            SUMMARY
      Plaintiff 33 Taps, LLC filed a class action complaint
against defendant Department of Alcoholic Beverage Control
(ABC or the Department) and others. Sixteen other similar class
action complaints were filed by restaurants throughout the state,
and the actions were coordinated in Los Angeles Superior Court.
As against ABC, each complaint sought damages and other relief
for ABC’s failure to refund annual license renewal fees paid by 33
Taps and the class (plaintiffs) during the COVID-19 pandemic,
when their businesses “were prevented and/or limited from
using” their licenses.
      ABC demurred on the ground the trial court had no
jurisdiction in the matter under Business and Professions Code
section 23090.5. Section 23090.5 expressly divests trial courts of
jurisdiction to review decisions of ABC or to restrain or interfere
with ABC in the performance of its duties, and instead provides
that a writ of mandate from the Supreme Court or a Court of
Appeal will lie in a proper case. (Id., subd. (a).)
      The coordination court sustained ABC’s demurrer without
leave to amend. Plaintiffs filed notices of appeal, and then filed a
motion asking us to deem the coordinated class actions against
ABC transferred to this court and to appoint a special master.
This request was based on Code of Civil Procedure section 396,
which provides that if the superior court lacks jurisdiction “of an
appeal or petition,” and the Supreme Court or a Court of Appeal
would have jurisdiction, “the appeal or petition shall be
transferred to the court having jurisdiction . . . .” (Id., subd. (b).)
      We denied plaintiffs’ motion, and we now affirm the trial
court’s judgment. Under Code of Civil Procedure section 396, we
have jurisdiction over appeals or petitions for writ of mandate—

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not over class action complaints. We also reject plaintiffs’
alternative claim that Business and Professions Code
section 23090.5 does not divest the superior court of jurisdiction
over the complaints. Accordingly, we affirm the judgment of
dismissal.
                               FACTS
       In their class action complaints, plaintiffs sued city and
county entities, as well as ABC, to recoup local fees those entities
collected, while at the same time ordering restaurants to cease
operations in whole or in part. Those claims are ongoing in the
coordinated proceedings in superior court and are not at issue
here.
       The complaints allege that despite the orders requiring the
closure of plaintiffs’ businesses or severe limitations on their
operations, ABC continued to charge, collect and fail to partially
or completely refund alcoholic beverage control fees. The
complaints allege ABC had a mandatory duty under Business
and Professions Code section 23320 to refund annual fees. That
section provides the annual fee paid at the time of application for
a new permanent license “shall be refundable only in the event
that the license application is withdrawn or denied.” (Id.,
subd. (c)(1).) Section 23320 contains no other refund provisions,
so the allegation that ABC had a mandatory duty to refund
annual fees to entities that already have licenses appears not to
be reflected by the language plaintiffs quote in their complaints.
Plaintiffs sought damages and equitable remedies.
       ABC demurred on the ground the superior court had no
jurisdiction over the actions. The division of the Business and
Professions Code governing alcoholic beverages includes this
provision on jurisdiction: “[A] court of this state, except the
Supreme Court and the courts of appeal to the extent specified in

                                 3
this article, shall not have jurisdiction to review, affirm, reverse,
correct, or annul any order, rule, or decision of the department
[ABC] or to suspend, stay, or delay the operation or execution
thereof, or to restrain, enjoin, or interfere with the department in
the performance of its duties, but a writ of mandate shall lie from
the Supreme Court or the courts of appeal in any proper case.”
(§ 23090.5, subd. (a).)
      Plaintiffs opposed ABC’s demurrer, arguing Business and
Professions Code section 23090.5 does not apply and the superior
court has jurisdiction over cases involving ABC “when the
superior court is hearing a matter in the first instance, as it is
here, as opposed to reviewing a determination that has gone
through the review process of the ABC.” The trial court rejected
plaintiffs’ argument based on the express language of the statute
and relevant case law.
      The court entered judgment dismissing the coordinated
complaints in their entirety as to ABC, and plaintiffs filed a
timely notice of appeal.
      Several months later, plaintiffs filed the motion we have
described, contending Code of Civil Procedure section 396
required the trial court to transfer the class actions to this court;
asking us to deem the actions transferred to us; and asking us to
appoint a special master to take evidence and make factual
findings. We denied the motion.
                           DISCUSSION
      A demurrer tests the legal sufficiency of the complaint. We
review the complaint de novo, accepting as true all material facts
alleged in the complaint, but not contentions, deductions or
conclusions of fact or law. (Blank v. Kirwan (1985) 39 Cal.3d 311,
318.) When a demurrer is sustained without leave to amend, “we
decide whether there is a reasonable possibility that the defect

                                  4
can be cured by amendment: if it can be, the trial court has
abused its discretion and we reverse; if not, there has been no
abuse of discretion and we affirm.” (Ibid.)
1.     Code of Civil Procedure Section 396 (Section 396)
       Plaintiffs contend that, in contravention of section 396, the
trial court dismissed ABC from the coordinated class action
complaints instead of transferring those complaints to this court
for decision. They say the “plain meaning” of section 396
required the court to do so. We disagree.
       Section 396 states, in its entirety:
       “(a) No appeal or petition filed in the superior court shall be
dismissed solely because the appeal or petition was not filed in
the proper state court.
       “(b) If the superior court lacks jurisdiction of an appeal or
petition, and a court of appeal or the Supreme Court would have
jurisdiction, the appeal or petition shall be transferred to the
court having jurisdiction upon terms as to costs or otherwise as
may be just, and proceeded with as if regularly filed in the court
having jurisdiction.”
       It is apparent that section 396 requires the superior court
to transfer “an appeal or petition” over which it has no
jurisdiction. But the coordinated complaints here are not
appeals, and plaintiffs cite no authority for construing a putative
class action complaint as a petition for writ of mandate, or any
other kind of petition.
       Plaintiffs cite two cases where courts have found that a
complaint could be regarded as a petition for writ of mandamus.
Neither case involved putative class action complaints. They
involved civil complaints that stated a cause of action for
mandamus, that is, they sought relief for which a writ of

                                  5
mandamus was appropriate for review of an administrative
decision after hearing.
       Plaintiffs first assert that Boren v. State Personnel Board
(1951) 37 Cal.2d 634 (Boren) is “on point.” It is not. In Boren, the
plaintiff sought to annul an order of the defendant board
dismissing him from his civil service position, and also sought a
judgment awarding accrued salary from the date of his
suspension. (Id. at p. 637.) He filed “in form . . . a complaint in a
civil action.” (Ibid.) The court held that for the relief the plaintiff
sought, “an ordinary civil action is inappropriate.” (Ibid.)
Instead, “the writ of mandamus is appropriate ‘for the purpose of
inquiring into the validity of any final administrative order or
decision made as the result of a proceeding in which by law a
hearing is required to be given, evidence is required to be taken
and discretion in the determination of facts is vested in the
inferior tribunal, corporation, board or officer . . . .’ ” (Ibid.) The
board’s proceedings in connection with the plaintiff’s dismissal
“were clearly of the type envisioned by section 1094.5 [citation],
and the writ of mandamus will therefore lie to review the board’s
decision.” (Ibid.)
       Plaintiffs then tell us that Lee v. Blue Shield of California
(2007) 154 Cal.App.4th 1369 “is also instructive.” That case
involved the peer review hearing process for medical providers,
and is equally inapt. The appellate court found the trial court
correctly sustained the defendant’s demurrer to the plaintiff’s
contract and tort claims for failure to exhaust his administrative
remedies, but should have overruled the demurrer to his cause of
action for declaratory relief and treated it as a petition for writ of
mandate. (Id. at pp. 1373, 1379.) Assuming the truth of the
plaintiff’s allegations, the defendant terminated the plaintiff’s

                                  6
provider contract because he was not cooperating with the
defendant’s discovery requests related to the administrative
hearing, and this “was a violation of [the plaintiff’s] rights under
the statutes governing the hearing process.” (Id. at p. 1376.) If
the plaintiff proved his allegations, he “would be entitled to a writ
of mandate directing [the defendant] to set aside its termination
of [the plaintiff’s] provider contract (but not [his] suspension),
reconvene a hearing pursuant to the provisions of [the statute],
and comply with the provisions of the peer review hearing
process.” (Id. at p. 1379.)1
       In short, plaintiffs cite no legal authority that supports
construing their class action complaints as petitions for a writ of
mandate. Moreover, the only legal authority that mentions
section 396’s requirement that a superior court transfer an
“appeal or petition” to the Court of Appeal or Supreme Court if it
lacks jurisdiction to consider the matter itself is PegaStaff v.
Public Utilities Com. (2015) 236 Cal.App.4th 374. In PegaStaff,
as plaintiffs point out, the court stated that such a transfer does
not require a motion. (Id. at p. 392.) But PegaStaff concluded a
transfer would have been futile in the case before it (because of
the plaintiff’s failure to exhaust administrative remedies), “even
if we ignore the fact that [the plaintiff’s] complaint does not

1      Plaintiffs also cite Barrington v. A.H. Robins Co. (1985)
39 Cal.3d 146, 157, where the court stated that “[a]ny rule that
penalizes a plaintiff for the mere form in which the pleadings are
cast is inherently unfair and deserves to be discarded.”
Barrington does not involve construing a complaint as a petition
for writ of mandate; the issue was the time limit for service of an
amended complaint charging a Doe defendant with a new cause
of action arising from different facts. (Id. at p. 149.)

                                 7
appear to be an ‘appeal or petition.’ ” (Ibid.) Plaintiffs here do
not mention this aspect of the court’s statement.
       In the absence of any authority for considering these
putative class action complaints as mandamus petitions, we
necessarily conclude the trial court had no duty to transfer them
to this court.
2.     Business and Professions Code Section 23090.5
       (Section 23090.5)
       Plaintiffs argue alternatively that section 23090.5, despite
its plain language, does not deprive the superior court of
jurisdiction. Again they are mistaken.
       We have already quoted the pertinent part of
section 23090.5. (See the Facts, ante, at pp. 3–4.) To recap,
section 23090.5 provides that no state court (except the Supreme
Court and courts of appeal) has jurisdiction to review or annul or
suspend or delay the operation of “any order, rule, or decision” of
ABC, or to enjoin or interfere with ABC “in the performance of its
duties.” (Id., subd. (a).) It also states that “a writ of mandate”
from the Supreme Court or a court of appeal lies “in any proper
case.” (Ibid.)
       Plaintiffs contend section 23090.5 does not apply here
because there “is no order or prospective order to be annulled,”
they “do not seek review of any prior order made by the ABC,”
and “the ABC has not issued any orders for a court of appeal to
review.” Plaintiffs cite three cases, none of which supports the
notion that section 23090.5 does not apply in cases where ABC
has not issued an order.
       In American Drug Stores, Inc. v. Stroh (1992)
10 Cal.App.4th 1446, the Court of Appeal held that “where a
matter is within the purview of the ABC, an action seeking a

                                 8
judgment which will interfere with the agency’s prospective
disciplinary orders is beyond the jurisdiction of the superior
court,” even though the licensee styles the action as one for
injunction or declaratory relief. (Id. at p. 1452; see also id. at
p. 1451 [a judgment disabling ABC from taking disciplinary
action “on its face would violate the proscriptions of section
23090.5 because it . . . at minimum would ‘restrain, enjoin, or
interfere with the department in the performance of its
duties.’ ”].) We fail to see how American Drug Stores assists
plaintiffs. All plaintiffs say is that, unlike American Drug Stores,
their lawsuits do not attempt to preemptively annul any ABC
order and are not related to any disciplinary proceedings. But
their lawsuits do seek to restrain, enjoin or interfere with ABC’s
performance of its duties, so plaintiffs’ distinction is without a
difference.
       Next, plaintiffs cite Samson Market Co. v. Kirby (1968)
261 Cal.App.2d 577. In that case, the Court of Appeal held that
it had jurisdiction to grant the relief the plaintiff sought—a writ
requiring ABC to extend a time period for cancelation of the
plaintiff’s liquor license until after pending accusations were
resolved—and the superior court had no jurisdiction to grant
such relief. (Id. at pp. 578, 584.) Samson does not apply to these
class action complaints.
       Plaintiffs also cite Wiseman Park, LLC v. Southern Glazer’s
Wine & Spirits, LLC (2017) 16 Cal.App.5th 110. Wiseman
involved a lawsuit between two licensees, a restaurant and a
wholesale distributor, over carrying charges the restaurant
contended were not permitted by the Alcoholic Beverage Control
Act. (Wiseman, at pp. 113–114.) The trial court found the
Department had exclusive jurisdiction, but the Court of Appeal

                                 9
held otherwise, finding section 23090.5 did not “confer[]
jurisdiction on the Department in the first instance to hear
contract disputes between its licensees; instead, it relates only to
appeals from Department actions.” (Wiseman, at p. 125.)
Wiseman does not help plaintiffs; their claims do not concern a
dispute between third parties, but rather seek judicial review of
the Department’s actions.
       Finally, plaintiffs contend their lawsuits do not seek to
interfere with ABC in the performance of its duties. In an
argument devoid of apt legal authority, plaintiffs say that “ABC’s
act of collecting fees during COVID-19 shutdowns enlarged their
authority and was outside the scope of their duties,” because
plaintiffs “no longer had the ability to sell alcohol.” We do not see
how the “act of collecting fees” during the pandemic may be seen
as something other than the performance of its administrative
duties.
       Plaintiffs specifically sought to enjoin ABC from levying
fees, taxes, and other charges. Now that shutdown orders are no
longer in effect, they contend all of their claims are for past
harms “and cannot interfere with ABC in the performance of its
duties.” As support for this assertion, plaintiffs quote, with no
explanation of the context, a court’s observation that “prospective
relief, such as an injunction, may sometimes interfere with
the PUC’s [Public Utility Commission’s] regulatory authority in
ways that damages claims based on past harms would not.”
(PegaStaff v. Pacific Gas & Electric Co. (2015) 239 Cal.App.4th
1303, 1318 (PegaStaff II).) The court’s point was that the nature
of the relief sought (prospective relief versus damages for past
harms) was relevant to the analysis of the third prong of a legal
test that has no application whatsoever to this case. (Ibid.)

                                 10
Indeed, the PUC was not a party in PegaStaff II, which involved
third party lawsuits against a PUC-regulated utility. We reject
the unsupported notion that claims for past harms do not
constitute interference with ABC in the performance of its duties.
       As a final observation, we mention plaintiffs’ introductory
statement that this “is a controversy that needs a court,” and that
applying section 23090.5 in these circumstances means their
“only available tribunal . . . is the Supreme Court, the courts of
appeal, or nowhere at all.” We recognize that with this decision
there is no court with jurisdiction over these class action
complaints against ABC. But the Legislature has provided some
relief to licensees affected by the pandemic.
       As ABC points out (as part of its argument that dismissal
and failure to transfer was not prejudicial), the Legislature
provided an administrative procedure for waiver of renewal fees
for licenses expiring between March 1, 2021, and February 28,
2023, “[f]or the purpose of providing economic relief to licensees
most severely impacted by the COVID-19 pandemic.” (Bus. &
Prof. Code, former § 23320.3, subd. (a)(1), added by Stats. 2021,
ch. 9, § 2, eff. Feb. 23, 2021, renumbered as § 23320.4, by
Stats. 2021, ch. 11, § 1, eff. Mar. 17, 2021.) The legislation also
provided that if the licensee does not request the fee waiver in
the manner prescribed, the licensee “shall not be eligible for a fee
waiver and shall thereafter pay the license renewal fees, together
with any penalties that may be applicable . . . .” (Id., subd.
(b)(3).) And, “[t]he department shall not refund any license
renewal fees paid before the enactment of this section or the
submission of a waiver request by a licensee.” (Id., subd. (b)(4).)
We point this out only to show that the Legislature has expressly

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addressed the extent of economic relief to be provided to licensees
impacted by the pandemic.
                         DISPOSITION
       The judgment is affirmed. The Department shall recover
its costs on appeal.

                              GRIMES, J.

      WE CONCUR:

                        STRATTON, P. J.

                        VIRAMONTES, J.

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