Opinion
10-3-1951
. WEST LOS ANGELES MILLING CO. et al. v. BROCK. Civ. 15052. District Court of Appeal, First District, Division 1, California
Edmund G. Brown, Atty. Gen. of California, W. R. Augustine, Deputy, for petitioner & appellant. Doyle & Clecak, and Tom F. Chapman, all of San Francisco, for respondents.
BROCK
v.
SUPERIOR COURT IN AND FOR CITY AND COUNTY OF SAN FRANCISCO et al.
WEST LOS ANGELES MILLING CO. et al.
v.
BROCK.
Oct. 3, 1951.
Rehearing Granted Nov. 2, 1951. *
Edmund G. Brown, Atty. Gen. of California, W. R. Augustine, Deputy, for petitioner & appellant.
Doyle & Clecak, and Tom F. Chapman, all of San Francisco, for respondents.
BRAY, Justice.
This petition for a writ of prohibition and a writ of supersedeas raises the questions (1) whether section 1094.5 of the Code of Civil Procedure provides for a review by the courts of quasi legislative acts of administrative agencies, and (2) the extent of that review.
Record.
On the 14th day of September, 1950, petitioner, the Director of Agriculture, acting pursuant to the California Marketing Act of 1937, Chapter 10, Division 6 of the Agriculture Code, comprising sections 1300.10 to 1300.29, upon the written request of a committee of lima bean producers, processors and handlers, called a public hearing to consider a proposed marketing order for standard lima beans. It is conceded that said hearing was called, held and conducted in all respects as required by law. Thereafter, and on or about the 3rd day of October, 1950, petitioner executed and issued a marketing order for standard lima beans to be submitted to producers and handlers for written assent as required by section 1300.16 of the Agricultural Code. Thereafter and on the 2nd day of March, 1951, a finding was made that said marketing order for standard lima beans had been assented to in writing by the requisite number of producers and handlers of lima beans, and petitioner issued an order making said marketing order for standard lima beans effective as of March 10, 1951. Pursuant to said California Marketing 10, 1951. Pursuant to said marketing order for standard lima beans, and after nominations were received from the industry, the Director of Agriculture, on or about March 19, 1951, appointed the members and alternate members of the advisory board provided by the act. All of the members so appointed have qualified and accepted such appointments and are now members of said advisory board.
Thereafter a mandate proceeding was filed in the San Francisco Superior Court for a review of the marketing order on the ground that the findings of the Director of Agriculture are not supported by the weight of, or substantial, evidence. Petitioners therein (referred to here as respondents) include dealers in and growers of lima beans. Several are members of the advisory board. A restraining order was issued restraining the enforcement of the marketing order pendente lite. At the hearing respondents offered, in addition to the record of the proceedings upon which the marketing order was based, certain new evidence. The court refused to admit such evidence but issued a peremptory writ of mandate, commanding the director to call a hearing pursuant to the provisions of Division 6, Chapter 10 of the Agricultural Code and at such hearing to permit the introduction of said evidence, to reconsider his decision issuing the marketing order in the light of such evidence, and to make due return of his actions to the court. The restraining order was continued in force. The director appealed and the appeal is now pending. Thereafter the director filed this petition to prohibit the superior court from further proceedings other than to annul its previous actions. He also seeks a writ of supersedeas staying the enforcement of the superior court orders. A stay pending determination of the issues has been granted.
1. Does Section 1094.5 of the Code of Civil Procedure Apply?
Although respondents contend that the action of the director in issuing a marketing order under the procedure provided in the Agricultural Code is quasi judicial and not quasi legislative, it is obvious that it is in the latter category. See Ray v. Parker, 15 Cal.2d 275, 101 P.2d 665. Pertinent sections of the Agricultural Code are known as 'The California Marketing Act of 1937.' The purposes of the act are declared to be: to enable agricultural producers, with the aid of the state, to correlate more effectively their commodities with marketing demands therefor; to establish their orderly marketing, uniform grading, and proper preparation; to provide means for maintenance of present, and development of new or larger, markets, and to prevent, modify or eliminate trade barriers in agricultural commodities; to eliminate or reduce economic waste in the marketing thereof, and to restore and maintain adequate purchasing power for California agricultural producers. It is not a price fixing statute. It provides for the promulgation of marketing orders after a public hearing. It sets forth the facts to be considered by the director at the hearing, the circumstances authorizing the issuance of a marketing order, the findings required to be made by him, and the provisions that may be contained in such order. It provides for the appointment of an advisory board of members of the industry to be appointed by the director. This board is to assist in the administration of the order. The order must be assented to in writing by 65 per cent of persons affected thereby. The act provides for administration, finances, enforcement, etc., in connection with the order.
A reading of section 1094.5 of the Code of Civil Procedure demonstrates that its language is broad enough to include the acts of the director in making the findings and marketing order. It reads: 'Where the writ is issued 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, the case shall be heard by the court sitting without a jury. * * *' Undoubtedly the marketing order was a final order or decision. It was the result of a hearing required by law where evidence was required to be, and was, taken, and where discretion in the determination of the facts was vested in the director. If it is to be held that the section does not apply, such holding must be based upon something other than the language of the section itself. We have been unable to find any authority justifying an interpretation contrary to the plain language of the section itself. Petitioner states that the section is merely the procedural section which sets up the method of reviewing proceedings conducted pursuant to the Administrative Procedure Act, Government Code, § 11500 et seq., and hence does not apply to the kind of hearing held by the director in promulgating a marketing order. However, there appears to be no authority for this statement.
Petitioner contends that because of the involved and expensive public hearing requirements of the Marketing Act and because of the contention that the director does not determine whether the particular industry should or should not have a marketing order but merely refers the matter to the industry for written assents, section 1094.5 can have no application to the director's orders resulting from such hearing. While these arguments are persuasive they do not meet the plain language of the section.
Petitioner refers to the cases which have arisen under the Administrative Procedure Act and section 1094.5, citing many of them, and points out that all involved quasi judicial hearings only. While this is true, they cannot be authority for the proposition that the section does not apply to quasi legislative hearings. There are no cases holding that it does not so apply.
Again, the fact that an action in declaratory relief lies, Gov.Code, § 11440, and there is some indication that in a proper case injunction will lie, see Brock v. Superior Court, 11 Cal.2d 682, 81 P.2d 931; Challenge Cream & Butter Ass'n v. Parker, 23 Cal.2d 137, 142 P.2d 737, 149 A.L.R. 1203; Agricultural Prorate Comm. v. Superior Court, 5 Cal.2d 550, 55 P.2d 495, is not authority for the proposition that they are the exclusive remedies.
Section 1094.5 and the Administrative Procedure Act were drafted by the Judicial Council, submitted to the Legislature and adopted by it as submitted. In its Tenth Biennial Report the Judicial Council states: 'Until recent years the writ of mandate was not widely used in this State as a means of challenging administrative action. * * * Where discretion, either quasi-legislative or quasi-judicial in nature, had been vested in the administrative officer, the writ could not be used as a means of controlling the exercise of that discretion.' P. 139; emphasis added. It then points out that 'the use of the writ of mandate for the purpose of reviewing administrative action was greatly expanded in California', p. 139 and that 'The nature and precise limits of this expanded use of the writ are not clear.' P. 139. It does state: 'The courts have given no indication that the new mandate procedure is available where quasi-legislative administrative action is involved', p. 140; emphasis added. In support of this latter statement the report refers to Rible v. Hughes, 24 Cal.2d 437, 150 P.2d 455, 154 A.L.R. 137 and Allen v. Bowron, 64 Cal.App.2d 311, 148 P.2d 673, neither of which cases discusses that particular subject.
2. Extent of the Review.
At the hearing in the trial court respondents stated that they wished to introduce the evidence hereafter mentioned. A discussion ensued in which the court stated that, as the proposed evidence was not in existence at the time of the director's hearing and the promulgation of the marketing order, and hence had not been before the director, it would not hear such evidence. The court then ordered that the case be sent back to the director to consider that evidence. The court did not review the proceedings which were had before the director, nor did it make any finding of any of the matters set forth in section 1094.5. Neither did it exercise its independent judgment on the facts. This, then, raises the question as to whether, in proceedings under section 1094.5, the court, without any review of the proceeding before the director and without any finding of any of the bases for review set forth in section 1094.5, may, merely upon the representation that matters which might affect that order have occurred subsequently to the director's order, issue a writ of mandate directing the director to reconsider his order, hold another hearing and consider those subsequent matters.
Section 1094.5 provides, in part:
'(b) The inquiry in such a case shall extend to the questions whether the respondent has proceeded without, or in excess of jurisdiction; whether there was a fair trial; and whether there was any prejudicial abuse of discretion. Abuse of discretion is established if the respondent has not proceeded in the manner required by law, the order or decision is not supported by the findings, or the findings are not supported by the evidence.
'(c) Where it is claimed that the findings are not supported by the evidence, in cases in which the court is authorized by law to exercise its independant judgment on the evidence, abuse of discretion is established if the court determines that the findings are not supported by the weight of the evidence; and in all other cases abuse of discretion is established if the court determines that the findings are not supported by substantial evidence in the light of the whole record.'
Not only was there no finding that any of the above conditions existed, but the court did not examine the proceedings to determine whether they did. While the petition for writ of mandate alleged that the findings were not supported by the evidence, no effort was made to point out to the trial court any such insufficiency. Respondents contend that they brought themselves within the provisions of subdivision (d): 'Where the court finds that there is relevant evidence which, in the exercise of reasonable diligence, could not have been produced or which was improperly excluded at the hearing before respondent, it may enter judgment as provided in subdivision (e) of this section remanding the case to be reconsidered in the light of such evidence; or, in cases in which the court is authorized by law to exercise its independent judgment on the evidence, the court may admit such evidence at the hearing on the writ without remanding the case.'
The evidence sought to be introduced and which the court ordered the director to hear was the following, none of which, excepting No. 5, was in existence or had been ascertained prior to the promulgation of the marketing order. 1. The fixing by the United States government of the 1951 support price for large lima beans and the fact that such price assures the grower a fair profit. 2. The limited warehouse and cleaning facilities in the industry assure orderly marketing and prevent the dumping of the crop in a short period of time. 3. No carryover from the 1950 crop plus a prospective 1951 short crop. 4. The initiation by the National Dried Bean Council of an extensive sales and marketing program. 5. The change in the voting procedure in the course of the adoption of the marketing order was illegal and prejudicial to the petitioners.
No. 5, of course, was in existence prior to the marketing order, but no effort was made to point out on what facts such contention was based nor why the evidence in relation thereto could not, in the exercise of reasonable diligence, have been produced. An examination of the proceedings at the hearing in the trial court shows that no particular reliance was placed on No. 5. The stress was placed on the first ground. When asked by the court as to whether the proposed evidence (all five) was improperly excluded or even was offered, respondents stated that it was not. It was evidence which could not have been produced before the director 'because it wasn't in existence.' The support price was not fixed by the government until April 23, 1951, approximately one and a half months after the promulgation of the marketing order and more than 40 days after its effective date. As said by respondents, the fixing of the support price by the government 'is the crux of the entire matter.'
Section 1094.5 never contemplated that solely because of evidence coming into existence subsequently to the proceedings before the administrative officer, his order or decision should be set aside and a new hearing ordered. Nor does the language 'Where the court finds that there is relevant evidence which, in the exercise of reasonable diligence, could not have been produced or which was improperly excluded at the hearing before respondent' contemplate evidence of matters which occurred subsequently to the action of the officer. The purpose of section 1094.5 is to provide a review by the courts of the action of an administrative officer to determine if there has been any prejudicial abuse of discretion, by action not based upon the weight of the evidence produced before such officer. This necessarily requires a limitation of the evidence to matters existing at or prior to the time the decision is made. While evidence which was not before the officer may be considered, it necessarily must be of matters in existence at the time of the decision and which with exercise of reasonable diligence could not have been produced. Otherwise, the proceeding is not a review of the director's action, but a complete setting aside of it, based upon facts which were not and could not have been before him. In Dare v. Board of Medical Examiners, 21 Cal.2d 790, at page 799, 136 P.2d 304, at page 309, the court discussed at length the scope of the proceedings to review the actions of an administrative order, as to the evidence additional to the record of the proceedings before the officer, and it said: 'If it should appear from that record that incompetent evidence had been received by the board, the complaining party should not be foreclosed from objecting on the trial to its admissibility. Also if the board had improperly refused to entertain admissible evidence the litigant should not be foreclosed from offering it at the trial. If additional evidence not included in either category be sought to be introduced by a party, the court has the right to receive it upon a showing that, in the exercise of reasonable diligence, it could not have been introduced before the board.' (Emphasis added.) While subsequent conditions may require a change in the order, they in no wise make the hearing or order unfair nor cause any abuse of discretion in the officer at the time the order was made. To hold otherwise would cause section 1094.5 to be completely unworkable. Every time an order might be made, a petition could be made to the superior court to hold up the application of the order because of subsequent changes in conditions, and no order could ever go into effect. At least, an application should be made to the tribunal or officer to consider the order in the light of subsequent circumstances and an opportunity be given to determine whether such circumstances require a change in the order.
So far as consideration of additional evidence under subdivision (d) of section 1094.5 is concerned, the situation is somewhat analogous to that on motions for new trial. In the latter case evidence such as is offered here could not be considered. The general rule is set forth in 66 C.J.S., New Trial, § 101, page 294; 'In any but an extraordinary case in which an utter failure of justice will unequivocally result, evidence of facts not in existence at the time of trial, such as evidence which was not available at the time of the trial but rather was the result of changed conditions since the trial, is not generally regarded as constituting a ground for new trial because of newly discovered evidence * * *.' There are exceptions to this rule but they apply only where the acts or events occurring subsequently to the trial are proof of a condition which existed prior to the trial and where the probative effect of the evidence is to explain such condition. 39 Am.Jur. p. 180, § 175; 20 R.C.L. p. 299, § 80. In State, by Youngquist v. Watrous, 177 Minn. 25, 224 N.W. 257, a motion for new trial in a condemnation action was denied. At the trial the State had contended that the construction of the proposed highway for which the land was being condemned would give valuable drainage to defendant's land. This was denied by defendant. The motion for new trial was based upon the State's offer to produce evidence that the construction which by then had taken place, fully demonstrated that the drainage had actually benefitted the land. The court stated that 'In any but a very extraordinary case the evidence at the trial must end the controversy', 224 N.W. at page 258, and then followed the general rule. In Wagner v. Loup River Public Power Dist., 150 Neb. 7, 33 N.W.2d 300, it was held that evidence that more than one year after the trial the improvement which defendants' experts had testified at the trial would result to plaintiff's land from the diversion of a river had not come about, did not constitute newly discovered evidence authorizing a new trial.
In Nebelung v. Norman, 14 Cal.2d 647, at page 655, 96 P.2d 327, at page 331, in denying a motion for a new trial on the ground of newly discovered evidence, the court said: "When a new trial is asked upon the ground of newly discovered evidence, 'the moving party must make a strong case' (Smith v. Schwartz, 14 Cal.App.2d 160, 166, 57 P.2d 1386), and this is particularly true when the alleged newly discovered evidence relates to facts occurring after the conclusion of the tria."
Applying the analogy of the rule on motions for new trial to our case, the evidence offered was of conditions coming into existence after the director's order was issued and was neither proof of a condition existing prior to the hearing nor to explain the evidence there given.
In the Tenth Biennial Report of the Judicial Council appears the statement (p. 140): 'The scope of review where administrative action is challenged by the writ of mandate may be stated generally to consist of the correction of abuse of discretion.' How can an abuse of discretion be determined by events not in existence at the time of the determination? The very wording of section 1094.5, 'evidence which, in the exercise of reasonable diligence, could not have been produced or which was improperly excluded at the hearing', demonstrates that the new evidence which can be introduced at the court hearing must be facts in existence at the time of the hearing which, if then known, would or should have affected the director's finding.
Section 1300.16, subdivision (d), of the Marketing Act provides: 'The director may amend any marketing order if such amendment or amendments have been considered at a public hearing * * *' and if such amendments are assented to in writing in accordance with the provisions of the section. Before invoking the action of the courts respondents are required to exhaust this administrative remedy by applying to the director to proceed to amend. '* * * the rule is that where an administrative remedy is provided by statute, relief must be sought from the administrative body and this remedy exhausted before the courts will act.' Abelleira v. District Court of Appeal, 17 Cal.2d 280, 292, 109 P.2d 942, 949, 132 A.L.R. 715. Had respondents in the trial court pursued their charges in the petition that the evidence did not support the director's findings, it would not have been necessary for them to seek an amendment of the order for the reason that they would be attacking the very validity of the order itself. But they did not do so. They elected to stand on the proposition that events occurring subsequently to the effective date of the order require a change or an elimination of the order. There is a provision, § 1300.16(c), for suspension or termination (by the director) of the marketing order. However, it could not become effective until the end of the current marketing season and hence would be an inadequate remedy. But the amendment process has no such limitation and would give respondents adequate relief.
The marketing order itself provides: 'Section E. [Article VIII] Appeals. Any person subject to the provisions of this Marketing Order may petition the Director to review any order or decision of the Advisory Board. * * * The Director shall, if the facts stated show reasonable grounds, grant any such petition and may review or revise in any manner whatsoever any order or decision upon which an appeal is taken.' Respondents did not avail themselves of this remedy. A somewhat similar situation is found in United States v. Superior Court, 19 Cal.2d 189, 120 P.2d 26. There a marketing order as to oranges was issued by the United States Secretary of Agriculture under the provisions of the Federal Agricultural Adjustment Act of 1933, as amended, 7 U.S.C.A. § 601 et seq. Certain shippers sought in the superior court to enjoin the enforcement of the order. Thereupon the United States of America brought in the Supreme Court a proceeding in prohibition to prevent the superior court from hearing the case on the ground that the shippers had not exhausted the administrative remedies provided by the act. The Supreme Court upheld this contention. While the federal act provides for different remedies than are provided in our statute, the principle is the same. Respondents here contend that the requirement of exhaustion of administrative remedies does not apply where the validity of the order is being attacked. In the United States case the court said, 19 Cal.2d at page 194, 120 P.2d at page 29: 'The respondents apparently contend that the requirement of exhaustion of administrative remedies applies only to erroneous orders and does not preclude judicial interference where, as here, an order is assailed as a nullity because illegally adopted and where the agents for enforcement appointed thereunder are charged with being mere pretenders claiming powers which they do not lawfully possess. But there is no substantial difference, in so far as the necessity for resort to administrative review is concerned, between an erroneous order and one which, it is claimed, is being executed in violation of statutory authority.'
Let a peremptory writ of prohibition and a writ of supersedeas issue.
PETERS, P. J., and FRED B. WOOD, J., concur. --------------- * Subsequent opinion 241 P.2d 283.