Opposition Brief — Francisco Enterprises, Inc. v. Kirby

—

f

In the Supreme Court“ of the

United States

Octoser Term, 1973

No. 73-798

Francisco Enterprises, [xc., a corporation,

Petitioner,

vs.

Epwarp J. Kirsy, Peter T. Sexton,

Ronawp Lockyer and Jay D. Catpiss,

Respondents.

Brief in Opposition to Petition

for Writ of Certiorari

Eves J. YOuNGER

Attorney General of the State of

California

L. SrerHen Porter

i| Deputy Attorney General of the

State of California

6000 State Building

San Francisco, California 94102

Telephone: (415)) 557-2146,

Attorneys for Respondents

SORG PRINTING COMPANY OF CALIFORNIA, 346 FIRST STREET. SAN FRANCISCO 84105

———————

SUBJECT INDEX

Opinion Below .......

Page

Jurisdiction

Questions Presented

Statutes Involved

Statement of the Case

Argument .......

Conclusion

13

TABLE OF AUTHORITIES CITED

Cases

Pages

Covert v. State Board of Equalization, 29 Cal.2d 125,

131, 173 P.2d 545 (1946) 6,9

Dept. of Alcoholic Beverage Control v. Superior

Court, 268 Cal.App.2d 67, 70 (1968) 9

England v. Louisiana Board of Medical Examiners

(375 U.S. 411) ee 11

Francisco Enterprises, Inc. v. Kirby et al, 482 F.2d

481, 484-485 11,12

Kirby v. Superior Court, 275 Cal.App.2d 975 (1969)... 9

Martin v. Alcoholic Beverage Control Appeals Board,

52 Cal.2d 238, 340 P.2d 1 (1959) 6,9

STATUTES

California Alcoholic Beverage Control Act:

Section 23090 2,9

Section 23090.2 2.3

Section 23090.3 3

Section 23090.5 —......... 3,9

Section 23090.7 2

Section 24200(a) -............... 6

Section 24200(b) 6

Section 25601 .- 6

TaBLe oF AUTHORITIES CITED iil

Pages

California Business and Professions Code, Division 9,

$$ 23090 through 23090.7 2

California Code of Civil Procedure, Sections 1067

through 1077 2

28 U.S.C. § 1254(1) 1

28 U.S.C. § 1257 2, 12

28 U.S.C. § 2283 . 2

42 U.S.C. § 1983 2

CoNSTITUTIONS

California Constitution :

Article XX, Section 22 2, 3, 6, 7, 8,9

In the Supreme Court of the

United States

Octoser Term, 1973

No. 73-798

Francisco ENterpRIsEs, [nc., a corporation,

Petitioner,

a. en

vs.

zs

Epwarp J. Kirsy, Peter T. Sexton,

Ronatp Lockyer and Jay D. Ca.piss,

Respondents.

Brief in Opposition to Petition

for Writ of Certiorari

OPINION BELOW

The opinion of the United States Court of Appeals, Ninth

Cireuit, No. 71-1813, on appeal from the United States

District Court for the Northern District of California is

reported at 482 F.2d 481 and may be found in Appendix 1

of the Petition for Writ of Certiorari. Petitioner’s petition

for rehearing was denied by the United States Court of

Appeals on August 20, 1973.

JURISDICTION

The jurisdiction of this Court was invoked under the

provisions of section 1254(1) of Title 28, United States

Code.

QUESTIONS PRESENTED

While the instant petition for a writ of certiorari frames

the “question presented” as being whether a prior adjudica-

tion by a state court should bea res judicata bar to a 42

U.S.C. § 1983 action in a federal district court, respondents

submit that viewed in the facts and context of this case

the actual question presented also inevitably involves

whether a United States District Court may exercise appel-

late review over, and enjoin, a final state court judgment.

STATUTES INVOLVED

The constitution and statutes involved are Article XX,

Section 22 of the California Constitution dealing with the

state constitution’s establishment of the California Depart-

ment of Alcoholic Beverage Control as a judicial tribunal;

sections 23090 through 23090.7 of the California Alcoholic

Beverage Control Act! dealing with the review of California

Department of ‘Alcoholic Beverage Control adjudicatory

decisions by way of a writ of review (certiorari) in the

California Supreme Court or the California Court of Ap-

peal; and sections 1067 through 1077 of the California

Code of Civil Procedure dealing with state appellate review

by way of writs of review (certiorari) to inferior judicial

tribunals. Also pertinent are 28 U.S.C. § 1257 which vests

only in this Honorable Court the jurisdiction to review final

judgments of state courts, and 28 U.S.C. § 2283 which pro-

hibits federal district courts from enjoining state court

judgments.

California Constitution, Article XX, Section 22

“The Department of Alcoholic Beverage Control

shall have the exclusive power, except as herein pro-

1. California Business and Professions Code, Division 9, §§ 23090

through 23090.7.

3

vided and in accordance with the laws enacted by the

Legislature, to license the manufacture, importation

and sale of alcoholic beverages in this State, and to

collect license fees or occupation taxes on account

thereof. The Department shall have the power, in its

discretion, to deny, suspend or revoke any specific

alcoholic beverages license if it shall determine for

good cause that the granting or continuaunce of such

license would be contrary to public welfare or morals,

or that a person seeking or holding a license has vio-

lated any law prohibiting conduct involving moral

turpitude.” (Emphasis added)

California Alcoholic Beverage Control Act,

Sections 23090, 23090.2, 23090.3 and 23090.5

Under California statutory and constitutional law, re-

view of Department of Alcoholic Beverage Control adjudi-

eatory decisions is by way of appeal to the constitutionally

created? California Alcoholic Beverage Control Appeals

Board and thence by petition for a writ of review (certio-

rari) in the California Supreme Court or the California

Court of Appeal:

“93090. Any person affected by a final order of the

board, including the department, may, within the time

limit specified in this section, apply to the Supreme

Court or to the court of appeal for the appellate dis-

trict in which the proceeding arose, for a writ of review

of such final order. The application for writ of review

shall be made within 30 days after filing of the final

order of the board.”

2. Article XX, section 22 of the California Constitution estab-

lishes the Aleoholic Beverage Control Appeals Board as an appel-

late tribunal to review adjudicatory decisions of the Department

of Aleoholic Beverage Control. If the Appeals Board affirms the

Department’s decision, the licensee may then petition the California

Supreme Court or the California Court of Appeal for a writ of

review (certiorari).

4

“23090.1 The writ of review shall be made return-

able at a time and place then or thereafter specified by

court order and shall direct the board to certify the

whole record of the department in the case to the court

within the time specified. No new or additional evi-

dence shall be introduced in such court, but the cause

shall be heard on the whole record of the department

as certified to by the board.”

“23090.2 The review by the court shall not extend

further than to determine, based on the whole record

of the department as certified by the board, whether:

(a) The department has proceeded without or in

excess of its jurisdiction.

(b) The department has proceeded in the manner

required by law.

(c) The decision of the department is supported

by the findings.

(d) The findings in the department’s decision are

supported by substantial evidence in the light of the

whole record.

(e) There is relevant evidence which, in the exer-

cise of reasonable diligence, could not have been

produced or which was improperly excluded at the

hearing before the department.

Nothing in this article shall permit the court to hold

a trial de novo, to take evidence, or to exercise its inde-

pendent judgment on the evidence.”

“23090.3 The findings and conclusions of the depart-

ment on questions of fact are conclusive and final and

are not subject to review. Such questions of fact shall

include ultimate facts and the findings and conclusions

of the department. The board, the department, and

each party to the action or proceeding before the board

shall have the right to appear in the review proceed-

ing. Following the hearing, the court shall enter judg-

ment either affirming or reversing the decision of the

department, or the court may remand the case for

5

further proceedings before or reconsideration by the

department.”

“23090.4 The provisions of the Code of Civil Pro-

cedure relating to writs of review shall, insofar as

applicable, apply to proceedings in the courts as pro-

vided by this article. A copy of every pleading filed

pursuant to this article shall be served on the board,

the department, and on each party who entered an

appearance before the board.”

“23090.5 No court of this state, except the Supreme

Court and the courts of appeal to the extent specified

in this article, shall have jurisdiction to review, affirm,

reverse, correct, or annul any order, rule, or decision

of the department 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.”

“23090.6 The filing of a petition for, or the pendency

of, a writ of review shall not of itself stay or suspend

the operation of any order, rule, or decision of the

department, but the court before which the petition is

filed may stay or suspend, in whole or in part, the oper-

ation of the order, rule, or decision of the department

subject to review, upon the terms and conditions which

it by order directs.”

“23090.7 No decision of the department which has

been appealed to the board and no final order of the

board shall become effective during the period in which

application may be made for a writ of review, as pro-

vided by section 23090.”

STATEMENT OF THE CASE

Petitioner was* a corporate on-sale general public prem-

ises licensee of the California Department of Alcoholic

3. The revocation of petitioner's alcoholic beverages license was

placed into effect on October 1, 1970, after the California Supreme

Court had denied a hearing and stay order.

6

Beverage Control and as such exercised the privileges of

selling alcoholic beverages at retail for consumption on its

licensed premises.

On June 8, 1967, an accusation was filed with the Cali-

fornia Department of Alcoholic Beverage Control (herein-

after referred to as the Department) against petitioner’s

alcoholic beverages license. The accusation was pled in two

(2) counts and alleged in substance that continuance of

petitioner’s alcoholic beverages license would be contrary

to public welfare and morals within the meaning of Article

XX, Section 22 of the California Constitution and sections

24200(a), 24200(b) and 25601 of the California Alcoholic

Beverage Control Act, in that petitioner had permitted and

allowed the licensed aleoholic beverages premises to be used

as a disorderly house and a place to which people resorted

for purposes injurious to the public morals, health and

safety.

Count I of the accusation alleged in numerous subeounts

that on various dates the petitioner-licensee had permitted

on the licensed premises overt sexual acts and conduct

between male patrons and between a male patron and an

emplovee of the petitioner-licensee. Count IT alleged that

petitioner-licensee’s president had in his possession for sale

or distribution two (2) simulated rubber penises.

Petitioner filed a Notice of Defense and requested a hear-

ing on the charges.

On September 18 and 19, 1967, and on May 27, 1968,

adjudicatory hearings were held on the accusation before

the Department ;* petitioner was represented by counsel,

evidence was adduced, and the proceedings were reported.

4+. The California Department of Aleoholie Beverage Control

is a California state court of limited jurisdiction. Calif. Constitu-

tion, Art. XX, See. 22; Martin v. Aleoholie Beverage Control

Appeals Board, 52 Cal.2d 238 (1959); Covert v. State Board of

Equalization, 29 Cal.2d 125, 131, 173 P.2d 545 (1946).

kek sdrtewian

7

On July 18, 1968, the Department filed its decision which

found the allegations of the accusations to be true and

ordered the revocation of petitioner’s aleoholic beverages

license on Count I and a 30 day suspension of the license

on Count IT.

Petitioner then filed an appeal with the California Alco-

holic Beverage Control Appeals Board (hereinafter re-

ferred to as the Appeals Board), the appellate tribunal

established by the California Constitution® to review adjudi-

eatory decisions of the Department.

On June 18, 1970, after receiving written and oral argu-

ment, the Appeals Board filed its opinion wherein it affirmed

the Department’s decision as to Count I and, concluding

that the possession of the simulated rubber penises by

petitioner’s president was not grounds for disciplining the

license, reversed the Department’s decision as to Count IT.

On July 17, 1970, petitioner filed a petition for a writ

of review (certiorari) in the California Court of Appeal,

First Appellate District. The California Court of Appeal

denied petitioner’s petition for a writ of review.

On July 29, 1970, petitioner petitioned the California

Supreme Court for a hearing.

On September 10, 1970, the California Supreme Court

denied petitioner’s petition for a hearing.

On October 1, 1970, the revocation of petitioner’s alco-

holie beverages license was placed into effect.

On November 1, 1970, petitioner filed its complaint for

injunctive relief in the United States District Court for

the Northern District of California seeking to have the

respondents restrained and enjoined from enforcing the De-

partment’s decision revoking petitioner’s alcoholic heverages

license.

5. California Constitution, Article XX, Section 22.

8

On November 17, 1970, respondents filed in the District

Court their opposition to a preliminary injunction; and on

November 23, 1970, respondents filed their notice of motion

and motion to dismiss the action on the grounds: that the

United States District Court was without jurisdiction to

exercise appellate review of a state court judgment, that

the District Court could not entertain a collateral attack

against a state court judgment by way of an injunctive

relief action, that the final state court judgment was a res

judicata bar to the federal action, and that petitioner’s

remedy was by way of review in the United States Supreme

Court.

On March 29, 1971, the United States District Court dis-

missed the action.

On April 15, 1971, petitioner filed its Notice of Appeal

to the United States Court of Appeals, Ninth Circuit.

On July 19, 1973, the United States Court of Appeals

filed its decision affirming the judgment of the United States

District Court.

ARGUMENT

1. The California Department of Alcoholic Beverage Control

Is a California State Court of Limited Jurisdiction.

Petitioner contends that the California Department of

Aleoholic Beverage Control is merely an administrative

agency and that its adjudicatory decisions are not those of

a state court nor res judicata as to federal court actions.

Such is simply not so.

The California Department of Alcoholic Beverage Con-

trol is not a legislatively created administrative agency,

but is a California state tribunal created and established

directly by the California Constitution and vested with

judicial powers by the California Constitution. California

9

Constitution, Article XX, Section 22. The California courts

have recognized that the Department of Alcoholic Beverage

Control is a state constitutional tribunal exercising adjudi-

catory powers. Covert v. State Board of Equalization, 29

Cal.2d 125, 131-132, 173 P.2d 545 (1946); Martin v. ABC

Appeals Board & Richards, 53 Cal.2d 238, 241-242, 340 P.2d

1 (1959) ; Dept. of Alcoholic Beverage Control v. Superior

Court, 268 Cal.App.2d 67, 70 (1968): Kirby v. Superior

Court, 275 Cal.App.2d 975 (1969).

The position of the California Department of Alcoholic

Beverage Control as a court of limited jurisdiction is fur-

ther recognized hy the review procedures of Department

adjudicatory decisions. The California Superior Court (gen-

eral trial court) is prohibited from reviewing, restraining,

enjoining, or interfering in any way with adjudicatory deci-

sions of the Department. Section 23090.5, California Alco-

holic Beverage Control Act. Review of Department adju-

dicatory decisions is by way of a writ of review (certiorari)

in the California Supreme Court and in the California Court

of Appeal. Section 23090 et seq., California Alcoholic Bev-

erage Control Act.

As succinctly set forth by the United States District

Court below:

*. eee

The foregoing legislative and case history indicates

that the present Department of Alcoholic Beverage

Control has succeeded to the status formerly held by

the State Board of Equalization in matters of liquor

control. Although there are no California cases

directly in point, it is clear to this Court that the Cali-

fornia courts do consider the Department of Alcoholic

Beverage Control to be a state court of limited juris-

diction, Martin v. Alcoholic Beverage Control Appeals

Board, 52 Cal.2d 238 (1959), and similar in nature to

10 :

other constitutionally created California state courts

of limited jurisdiction such as the California Public

Utilities Commission and the Workmen’s Compensa- |

tion Appeals Board. Department of Alcoholic Bever-

age Control v. Superior Court, 268 C.A.2d 67, 73 Cal.

Rptr. 780 (1968).

Since the Department of Aleoholie Beverage Control

is a state court of limited jurisdiction, this District

Court cannot exercise appellate review over its judg-

ment, not entertain a collateral attack by way of an

action for injunctive relief. Flynn v. State Board of

Chiropractic Examiners, supra (418 F.2d 668), Wilke

& Holzheiser, Inc. v. Reimel, supra (266 F.Supp. 168

N.D. Calif. 1967), Rooker v. Fidelity Trust Company,

supra (263 U.S. 413). Plaintiff’s remedy after the De-

partment of Alcoholic Beverage Control’s decision

beeame final by the denial of plaintiff's petition for a

writ of review in the California Court of Appeal and

in the California Supreme Court was that of appeal

or petition for certiorari in the United States Supreme

Court. Wilke & Holzheiser, Inc. v. Reimel, supra.”

(Francisco Enterprises, Inc. v. Kirby et al, U.S.D.C.

Northern Dist. of Calif., No. C-70-2372; see Ap-

pendix 2 to Petition for Writ of Certiorari)

This status of the California Department of Alcoholic

Beverage Control was examined and affirmed by the United

States Court of Appeals, Ninth Circuit, below:

“The district court’s dismissal on the above grounds

was predicated upon a determination that ‘the Cali-

fornia Department of Alcoholic Beverage Control is a

state court of limited jurisdiction.’ The distriet court

made such a determination after examination of rele-

vant California law. Martin v. Alcoholic Beverage

Control Appeals Board, 340 P.2d 1 (1959); Covert v.

State Board of Equalization, 173 P.2d 545 (1946).

11

We agree with the district court’s conclusion that

California law considers the Department of Alcoholic

Beverage Control to be a state court of limited juris-

diction. See Martin and Covert, supra, and that res

judicata principles precluded its entertaining the

federal complaint.”

(Francisco Enterprises, Inc. v. Kirby et al, 482 F.2d

481, 484-485)

And just recently in a similiar case to this one, the

United States Court of Appeals, Ninth Circuit, reaffirmed

the foregoing status of the California Department of Alco-

holic Beverage Control as a California state court of

limited jurisdiction whose adjudicatory decisions are not

subject to attack or review in the federal district courts.

Kuzinich dba The Pink Poodle v. Kirby, et al, Nos. 72-

1131 and 72-1132, December 11, 1973:

“On Appeal from the United States District Court

for the Northern District of California

Before CHamBers, Duniway and KiLkENny,

Cireuit Judges.

Per Curiam:

The judgment of dismissal is affirmed. See Fran-

cisco Enterprises, Inc. v. Kirby, et al, 482 F.2d 481

(9th Cir. 1973).”

2. A Final State Court Judgment May Be Reviewed Only by the

United States Supreme Court. Res Judicata Bars a Party from

Relitigating His Claims in a Federal District Court.

This is not an England v, Louisiana Board of Medical

Examiners (375 U.S. 411) case. Petitioner did not initially

enter the federal district court seeking relief from threat-

ened or actual state action only to have the federal court

abstain and send the petitioner to the state courts first.

12

On the contrary, state proceedings were initiated against

petitioner’s alcoholic beverages license and, in proceedings

extending over three (3) years,® the facts and issues—in-

cluding petitioner’s federal constitutional claims—were

heard and litigated in the California state courts. Then,

after the Department of Alcoholic Beverage Control’s ad-

judicatory decision had become final when the California

Court of Appeal and the California Supreme Court denied

petitioner’s petition for a writ of review, petitioner, instead

of seeking review and relief in this Honorable Court, filed

an injunctive relief action in the federal district court seek-

ing to have the Department’s decision enjoined.

As aptly put by the Court of Appeals below:

“Res judicata principles have been consistently applied

to preclude parties from relitigating federal constitu-

tional claims in a federal district court subsequent to

an adverse determination on the merits of such claims

by a state court of competent jurisdiction. The sole

recourse for the losing litigant is by appeal or writ

of certiorari to the United States Supreme Court.”

(Francisco Enterprises, Inc. v. Kirby, et al, 482 F.2d

481, 485)

28 U.S.C. § 1257 vests only in this Honorable Court the

jurisdiction to review final state court judgments. Peti-

tioner’s recourse from the final adverse state judgment

against it was by appeal or petition for certiorari to this

Honorable Court. Petitioner may not relitigate its claims

in the federal district court and have the federal district

court review and enjoin the state court judgment.

6. The accusation against petitioner's alcoholic beverages license

was filed on June 8, 1967. The California Supreme Court filed its

order denying petitioner's petition for a hearing on September 10,

1970.

13

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted,

EVELLE J. YOUNGER

Attorney General of the State of

California

L. STEPHEN PorTER

Deputy Attorney General of the

State of California

Attorneys for Respondents