State of Cal. ex rel. Dep't of PESTICIDE REGULATION v. PET FOOD EXPRESS LTD.

165 Cal.App.4th 841

81 Cal.Rptr.3d 486

STATE of California ex rel. DEPARTMENT OF PESTICIDE REGULATION, Plaintiff and Respondent,

v.PET FOOD EXPRESS LIMITED, Defendant and Appellant.

No. C057156.

Court of Appeal, Third District, California.

July 31, 2008.

COPYRIGHT MATERIAL OMITTED.

Henn, Etzel & Moore and John Douglas Moore, Oakland, for Defendant and Appellant.

Edmund G. Brown Jr., Attorney General, Mary E. Hackenbracht, Assistant Attorney General and Charles W. Getz, Deputy Attorney General for Plaintiff and Respondent.

SIMS, J.

Pet Food Express Limited (PFE) appeals from a trial court's order compelling it to comply with an investigatory administrative subpoena issued by the State of California Department of Pesticide Regulation (the Department), seeking records pursuant to Government Code section 11180 et seq. (Undesignated statutory references are to the Government Code.) We shall deny the Department's motion to dismiss the appeal, grounded on asserted nonappealability of the order. We shall reject PFE's contention that the order impermissibly burdens PFE with a duplicative demand on a claim barred by the statute of limitations. Accordingly, we shall affirm the order.

FACTUAL AND PROCEDURAL BACKGROUND

PFE is a chain of pet food/supply stores. PFE bought some flea prevention products made by European drug companies and imported through a British distributor, Abbeyvet, until the Department advised PFE in August 2003 that the foreign-made products were not properly registered under California law (the Food and Agricultural Code).

In 2004, in response to a written request by the Department, PFE provided copies of its invoices of purchases of foreign products from Abbeyvet.

In February 2005, the Department issued a notice of proposed action (NOPA) under Food and Agricultural Code section 12999.4, ¹ proposing to levy penalties against PFE in the amount of $700,000, as follows:

“As early as September 20, 2000, [PFE] began purchasing foreign Advantage and Frontline flea control pesticides from [Abbeyvet and continued to purchase them until August 4, 2003]. The Department has information and belief that [PFE] sold a minimum of one (1) foreign Advantage and/or Frontline flea control pesticide product a week for the time period beginning at least as early as October 1, 2001, and ending at least as late as August 13, 2003. The sales ... were in violation of FAC [Food and Agricultural Code] sections 12992 ² and 12993, ³ as the flea control pesticide product's labels did not conform to the [Department]-registered labels and were not registered by the Department. Each violation constitutes a separate offense ( [Food and Agricultural Code] section 12996 ⁴ ). The proposed fine [is] based upon a proposed fine of $5,000 per sale per week for 140 weeks, the number of weeks from October 1, 2001, through August 13, 2003.”

The NOPA advised PFE of its right to request an administrative hearing (Food & Agr.Code, § 12999.4, fn. 1, ante.) PFE says it objected to the NOPA but the Department has not set a hearing. PFE fails to substantiate this assertion with a cite to the record but, in any event, for our purposes it does not matter whether PFE requested an administrative hearing.

In June 2006, the Department issued an administrative subpoena duces tecum (§ 11184 ⁵ ), requesting information about PFE's sales (as opposed to PFE's purchases). PFE did not respond to the subpoena.

On January 30, 2007, the Department issued another, identical administrative subpoena duces tecum to PFE, captioned, “In the Matter of the Investigation of Sales of Unregistered Pesticide Products, and Sales of Misbranded Pesticide Products,” stating in part:

“The [Department], having reasonable belief that Food and Agricultural Code sections 12992 and 12993 have been violated with respect to sales of Bayer Advantage flea control products and Merial Frontline and Frontline Plus flea control products into and within California, and pursuant to the power conferred by sections 11180 and 11181 and Food and Agricultural Code section 11453, has authority to conduct the above entitled investigation.

“[PFE] has produced documentation to the Department showing purchases in excess of $1.2 million of unlawful foreign Bayer Advantage flea control pesticide products and Merial Frontline and Frontline Plus flea control pesticide products.

“You are hereby commanded to produce [copies of the following records]....

“... All records or documents from January 1, 2002, until the present day that refer[ ] or relate[ ] to sales of [specified] foreign Bayer Advantage ... and Merial Frontline and Frontline Plus ... flea control products....

“Specifically, with respect to foreign Bayer Advantage and Merial Frontline and Frontline Plus flea control products listed in Attachment A, provide such documents that show the following date for each sale:

“1. For all sales, such documents as show:

“a) Dollar amount and unit volume of sales from January 1, 2002, to February 15, 2005.

“b) Date of sale.

“c) Exact identification of product sold.

“d) Quantity sold.

“e) Unit price at which each item sold.

“2. In the absence of transaction records, provide such documents that show volume of product sold and the price at which each product was sold.

“3. This request shall include all documents to the extent that they show any or all of the above-listed information.”

PFE did not respond to the subpoena.

The Attorney General's Office sent letters in February and March 2007, seeking compliance with the subpoena. PFE responded with a letter on May 2, 2007, questioning the Department's need for the information sought in the subpoena.

On May 11, 2007, the Department, pursuant to statutory authorization, initiated a petition in the superior court for an order directing PFE to comply with the administrative subpoena. (§§ 11187, ⁶ 11188. ⁷ ) The Department filed an ex parte application for an order to show cause (OSC) regarding compliance with the investigatory subpoena, and a petition for an OSC.

PFE did not contest the ex parte application. The trial court issued an OSC and set a hearing date. The hearing was rescheduled after PFE claimed it was not served with the OSC.

PFE filed a response to the OSC, challenging the subpoena on the ground of administrative burden and questioning whether there was a need for PFE's “sales” data, since PFE had already provided its purchase data upon a representation the Department was not “likely” to seek an administrative fine against PFE. A declaration of a PFE vice president attested, “I do not know if we have the retail sales data that [the Department] now seeks (we have no records at all on the subject products after August, 2003 since there were no sales ⁸ ) and even if [ sic ] we do it will take a lot of person-hours to mine and copy it.” PFE argued the subpoena was an arbitrary exercise of police power in violation of the due process clause and violation of the Fourth Amendment. In the course of making these arguments in the trial court, PFE stated the records sought by the Department dating back to 2002 would be difficult to “mine,” but PFE did not raise the statute of limitations issue it now seeks to raise on appeal.

The trial court in August 2007 issued an order compelling PFE to comply with the administrative subpoena by September 26, 2007, and retaining jurisdiction to insure compliance.

PFE filed a notice of appeal.

DISCUSSION

I. Appealability

We first dispose of the Department's motion to dismiss the appeal due to nonappealability of the order.

“ ‘ “It is settled that the right of appeal is statutory and that a judgment or order is not appealable unless expressly made so by statute.” ’ ( People v. Mazurette (2001) 24 Cal.4th 789, 792 [102 Cal.Rptr.2d 555, 14 P.3d 227].” ( People v. Totari (2002) 28 Cal.4th 876, 881, 123 Cal.Rptr.2d 76, 50 P.3d 781.)

We shall conclude the order is made appealable by Code of Civil Procedure section 904.1, subdivision (a)(1). ⁹

Confusion exists regarding appealability of orders enforcing administrative subpoenas, as stated in Pacific-Union Club v. Superior Court (1991) 232 Cal.App.3d 60 at pages 68 through 69, footnote 3, 283 Cal.Rptr. 287: “Some cases assume appealability without discussion. [Citations.] Other cases conclude that a Government Code section 11188 order is directly appealable as a final judgment in a special proceeding. [Citations.] Still others have concluded that such orders are reviewable only by writ. [Citations.] ... [¶] In Craib v. Bulmash (1989) 49 Cal.3d 475, 261 Cal.Rptr. 686, 777 P.2d 1120, the Supreme Court declined to resolve the confusion. The Court of Appeal had discussed the appealability problem with citations to both sides of the debate. The Supreme Court opinion does not discuss the question of appealability.” Pacific-Union Club concluded that, even if the order were not directly appealable, the court would treat it as a writ in the interests of judicial economy and expediency. ( Id. at pp. 68-69, fn. 3, 283 Cal.Rptr. 287.)

The California Supreme Court has still not resolved the issue. Thus, in reviewing a Court of Appeal decision concerning an administrative subpoena, the California Supreme Court said in Arnett v. Dal Cielo (1996) 14 Cal.4th 4, 56 Cal.Rptr.2d 706, 923 P.2d 1, that the Court of Appeal “held that the ‘better view’ is that an order compelling compliance with an administrative subpoena is appealable as a final order in a special proceeding, following Millan v. Restaurant Enterprises Group, Inc. (1993) 14 Cal.App.4th 477 at pages 484 through 485, 18 Cal.Rptr.2d 198, and cases cited. The parties do not question that holding here, and it is therefore not before us for review.” ( Arnett v. Dal Cielo, supra, 14 Cal.4th at p. 18, 56 Cal.Rptr.2d 706, 923 P.2d 1.)

The California Supreme Court's deflection of the issue is perplexing, because appealability is a jurisdictional question that must be addressed by the reviewing court, even if the parties do not question...