Ferrante v. Fish & Game Commission , 29 Cal. 2d 365 ( 1946 )

DOOLING, J. pro tem.

The six petitions herein considered present common questions. The several petitioners are seeking by writ of mandate to compel the respondent, Fish and Game Commission of the State of California, to grant to each of them a permit to take and use pilchard sardines during the 1946-1947 season for the purpose of reducing them into meal in plants severally owned and to be operated by the petitioners.

The petitions all contain similar, and in many respects identical, allegations. It appears therefrom that on October 27, 1945, the respondent adopted the following rules affecting applications for such permits:

“(b) For the 1946-47 sardine season only, no reduction permit shall be granted or issued to any applicant who did not hold a permit and operate in the previous season unless such an applicant produces proof satisfactory to the Fish and Game Commission that he has his plant, including all buildings and equipment therein, as described in rule H, fully constructed and fully equipped to receive and process fish at the time of filing his application. (14 C.A.C. 155(b).)

“(g) A permit may be issued to a plant only after it has been inspected by an accredited representative of the Fish and Game Commission and upon certification by said representative that the plant is fully equipped and ready to operate. The penalty for not being ready to operate on the first day of the season shall be a revocation of tonnage on the basis of the number of days such plant fails to operate. The amount revoked for each day shall be equal to the total tonnage granted to the permittee, divided by total number of days in the season in the district in which the plant is located. ’ ’ (14 C.A.C. 155(g).)

It further appears that the commission, in accordance with law, made a finding that 395,000 tons of pilchard sardines for the season 1946-1947 could be taken from the territorial water of California without adversely affecting the interest of the people of the state; and fixed May 15, 1946, as the last day for receiving applications for permits to take and utilize pilchard sardines for reduction to edible meal; that 109 applicants filed applications for such permits prior to the date fixed and that 99 of such applications were granted, 88 of them to applicants who had held permits for the previous season; and that the applications of the several petitioners were denied upon the ground that there was a substantial failure to comply with rule B of the respondent commission, above quoted.

It is alleged in each of the petitions, except that of Western Sardine Company, Inc., that the several petitioners had contracted for the construction of fish reduction plants to be completed before May 15, 1946, but that due to delays caused by strikes over which the petitioners had no control the several plants were not entirely completed on May 15, 1946. The petition of Western Sardine Company, Inc., contains an allegation that its plant on May 15, 1946, was completed and ready for operation. This allegation has been denied and this petitioner has expressly withdrawn that issue from the court. Thus its case stands with the others as one in which its plant was not completed on May 15 of this year.

A factual difference in the allegation of the petition in S. F. No. 17356 should be noted. The petitioners in that case allege that all machinery and equipment were installed and their plant completed for operation on May 15, but that by reason of strikes and conditions beyond petitioners’ control certain materials could not be obtained for the covering of a building housing said machinery and equipment and “that said materials were and are not necessary to the operation of said plant and are not required under the rules and regulations promulgated by said respondent.”

The allegation (if that is its intent) that the rules did not require a completed building is contradicted by the language of rule B above quoted, “including all buildings.” The allegation that the plant could be operated in an uncompleted building we pass with the observation that it is certainly a proper requirement that all fish reduction plants be housed in buildings, and if the rule requiring the plant to be fully equipped to receive and process fish at the time the application is filed is valid, the requirement that the building in which-, the plant is housed be completed at that time is equally so:.

This brings us to the main contentions upon which thee petitioners rely. It is alleged in the several petitions that in> the case of the 88 applicants who held permits in the previous season their applications were granted “without any in-, quiry as to whether or not they had plants capable of operating, or even sites on which to erect a plant, and without any inspection of any kind or character whatsoever, and. solely-upon the basis of the provisions of Rule G..”'

This alleged difference in treatment and the rules permitting it are attacked as unreasonably discriminatory.

Amici curiae ask us to sustain the difference in treatment accorded the veterans of the industry and those seeking permits for the first time on the ground that under section 1068, Fish and Game Code, the respondent commission has the power, if it determines that it would result in economic waste to issue permits to newcomers to the industry, to deny permits to them altogether and to limit its permits to those who have operated reduction plants in the previous year. This question is not necessarily involved in this proceeding since the respondent has not taken that position, but has actually issued permits to those newcomers to the industry who complied with Rule B. We accordingly expressly refrain from the decision of that question.

Assuming, as we must, that the respondent has determined that it is proper to issue permits to all applicants who have complied with its rules it may be taken as settled that in the allocation of pilchard sardines for reduction purposes the respondent may not arbitrarily discriminate among the applicants for such permits who meet the requirements fixed by respondent (People v. Globe Grain & Milling Co., 211 Cal. 121,126-128 [294 P. 3]), but that does not mean that the commission is without the power to make the classification that is here under attack. Certain obvious differences exist between the applicant who has successfully operated under a permit allowing him to engage in the reduction of sardines in the previous season and the applicant who seeks to engage in that business for the first time. The former had a plant fully equipped and operating in the previous season. He may be supposed to have established business connections, customers, a. Staff of employees and operatives for- his. plant and" possibly contract commitments, for- the qoming year- He. qlear-ly stands- in a different- ppsition, from the newcomer, to, the field.. The placing, of" the. newcomer, in, a separate, class, and requiring him to, have- hjs; plant ready for operation by-May 15 can only bp nullified by this, court ii] "we can plainly-see that there is, no ‘-‘-natural", intrinsic, or constitutional- distinction which reasonably justifies difference in treatment.’’(Lelande v. Lowery, 26 Cal.2d 224, 232 [157 P.2d 639] ; In re Herrera, 23 Cal.2d 206, 212 [143 P.2d 345]; People v. W. Western Fruit Growers, 22 Cal.2d 494, 506-7 [140 P.2d 13] ; Sacramento M. U. Dist. v. Pacific G. & E. Co., 20 Cal.2d 684, 691 [128 P.2d 529]; In Re Fuller, 15 Cal.2d 425, 437 [102 P.2d 321] ; In re Weisberg, 215 Cal. 624, 629 [12 P.2d 446].)

In Bayside Fish Flour Co. v. Gentry, 297 U. S. 422, 429 [56 S.Ct. 518, 80 L.Ed. 772], the Supreme Court of the United States said of a claim of unreasonable discrimination in an earlier statute of this state governing the processing of fish:

“It has never been found possible to lay down any infallible or all-inclusive test by the application of which it may be determined whether a given difference between the subjects of legislation is enough to justify the subjection of one and not the other to a particular form of disadvantage. A very large number of decisions have dealt with the matter; and the nearest approach to a definite rule which can be extracted from them is that, while the difference need not be great, the classification must not be arbitrary or capricious, but must bear some reasonable relation to the object of the legislation. ’ ’

It is alleged in the answers that the classification attacked is predicated upon the following facts and was made for the following reasons:

The nature of the fish reduction industry demands that operators of reduction plants know well in advance of the season the number of permits to be granted and the quantity of sardines which will be allocated to each permit, because these factors enter into their seasonal contracts for supplies, labor, fish, and the sale of their products of reduction. Experience gained by respondent over a period of years has conclusively shown it that the applications of newcomers often have been attempts to secure permits with plants more imaginary than real and that assurances on the part of bona fide new applicants that they will be able to complete their plants by the opening of the sardine season or shortly thereafter largely result in failures. Such conditions do ppt prevail in the case of plants which were operated in the previous season. To grant applications of new applicants, who have not completed plants is not conducive of a just, efficient and orderly administration of the law in that the uncertainty of-the number of permits which ultimately will be issued leaves the successful applicants and the industry as a whole in confusion and doubt.

That respondent deems it inimical to public interest to permit trafficking in such permits by permittees who cannot themselves make use of them and to that end has limited its permits to those who in fact have fully constructed and equipped reduction plants; and it has been for several years past and now is the policy of respondent to regard the permits as running with the plants and not the individual owners or operators, and this policy has been well publicized and is known to those engaged in the industry and to petitioners. Through experience respondent is reasonably certain that plants which were operated in the previous season will make use of the permits which are granted and issued for the following season.

That experience has also shown respondent that the plants which operated in the previous season are required to be dismantled from time to time for the purpose of making repairs, replacements, alterations and for overhauling during the period between fishing seasons, and that time and circumstances do not in every case allow such plants to be reassembled until after the final date set for the filing of applications for permits for the coming season. This condition does not exist in the case of new plants being constructed for the first time.

It further appears that the applications are granted or denied and the allocation of sardines is made well in advance of the season, but permits are not actually issued until shortly before the season starts, at which time, under rule G, all permittees alike,, newcomers whose plants were completed on May 15 and the veterans of the industry, are penalized if for any reason they are not ready to operate on the first day of the season, by a proportionate reduction in the quantity of fish which they are allowed to process.

The limitations upon the power of courts to strike down classifications made for the purpose of regulation are well settled. In Lindsley v. Natural Carbonic Gas Co., 220 U. S. 61, 78-79 [31 S.Ct. 337, 55 L.Ed. 369], the highest court stated them as follows:

“The rules by which this contention must be tested, as is shown by repeated decisions of this court, are these: 1. The equal protection clause of the Fourteenth Amendment does not take from the State the power to classify in the adoption of police laws, but admits of the exercise of a wide scope of discretion in that regard, and avoids what is done only when it is without any reasonable basis and therefore is purely arbitrary. 2. A classification having some reasonable basis does not offend against that clause merely because it is not made with mathematical nicety or because in practice it results in some inequality. 3. When the classification in such a law is called in question, if any state of facts reasonably can be conceived that would sustain it, the, existence of that state of facts at the time the law was enacted must be assumed. 4. One who assails the classification in such a law must carry the burden of showing that it does not rest upon any reasonable basis, but is essentially arbitrary. Bachtel v. Wilson, 204 U.S. 36, 41 [27 S.Ct. 243, 51 L.Ed. 357]; Louisville & Nashville R. R. Co. v. Melton, 218 U.S. 36 [30 S.Ct. 676, 54 L.Ed. 921]; Ozan Lumber Co. v. Union County Bank, 207 U.S. 251, 256 [28 S.Ct. 89, 52 L.Ed. 195]; Munn v. Illinois, 94 U.S. 113, 132 [24 L.Ed. 77] ; Henderson Bridge Co. v. Henderson City, 173 U.S. 592, 615 [19 S.Ct. 553, 43 L.Ed. 823].”

This court recently in People v. Western Fruit Growers, supra, 22 Cal.2d at page 507 said:

‘‘When a legislative classification is questioned, if any state of facts reasonably can be conceived that would sustain it, there is a presumption of existence of that state of facts, and the burden of showing arbitrary action rests upon the one who assails the classification. (In re Fuller, 15 Cal.2d 425, 437 [102 P.2d 321] ; McCreery v. McColgan, 17 Cal.2d 555, 562 [110 P.2d 1051, 133 A.L.R. 800]; In re Livingston, supra [10 Cal.2d 730 (76 P.2d 1192)]; Sequoia Nat. Park Stages Co. v. Sequoia & General Grant Nat. Parks Co., 210 Cal. 156 [291 P. 208] ; Martin v. Superior Court, supra [194 Cal. 93 (227 P. 762)]; In re Cardinal, supra [170 Cal. 519 (150 P. 348, L.R.A. 1915F 850)]; County of Los Angeles v. Hurlbut, 44 Cal.App.2d 88 [111 P.2d 963]; Pacific Gas & Elec. Co. v. Moore, 37 Cal.App.2d 91 [98 P.2d 819].)”

The experience of the respondent commission as set out in its answers must be looked to and considered in determining whether the classification adopted has any reasonable basis in fact and we cannot say that the rules as interpreted and administered by the commission discriminate arbitrarily against the petitioners unless it is demonstrated to us that they find no supporting basis which might appeal to persons of reasonable mind.

The necessity of the permittees knowing long enough in advance the quantity of fish allocated to each so that they can make their contracts and arrangements for the coming season is obvious. The respondent’s practice of treating the permits as running to the plants and not to the operators guarantees that veterans without plants, because they have disposed of them or razed them or they have been otherwise destroyed, will not be granted permits for the coming season. We cannot say that the tolerance given to the veterans of the industry over the newcomers by rule B is not justified by the respondent’s experience that old plants must be repaired and reconditioned between seasons. The sardine season ends in the north on February 15 and in the south on March 1. Any repairs and reconditioning of old plants cannot start until the season ends, and repairs and reconditioning might be impossible or impracticable between those dates and May 15, while perfectly feasible before the season starts on August 1. Newcomers to the industry on the other hand can commence construction of their plants at any time, and in ample time to be fully completed by the May 15 deadline.

The petitions contain no allegation that any applicant whose application was actually granted did not in fact have a plant ready for operation, but only that as to the 88 former permittees no investigation to ascertain the facts was made.

We cannot assume in the absence of any allegation on the subject that any of the veteran applicants did not in fact have completed plants on May 15. In the absence of an allegation to that effect we must, under the authorities cited, assume a state of facts which will make the regulation in its actual operation constitutional. “A statute may be invalid as applied to one state of facts, and yet valid as applied to an-, other.” (Daknke-Walker Milling Co. v. Bondurant, 257 U.S. 282, 289 [42 S.Ct. 106, 66 L.Ed. 239].) Or as this court stated in Max Factor & Co. v. Kunsman, 5 Cal.2d 446, 468 [55 P.2d 177] :

“Respondent presents several hypothetical situations under which enforcement of the act would be inequitable or difficult, or, perhaps, even unconstitutional. It is elementary, of course, that a statute may be invalid as applied to one set of facts, yet valid as applied to another. (Citing Daknke-Walker Milling Co. v. Bondurant, supra.) The situations conjured up by respondent are not here involved, and respondent is limited in his attack to the application of the statute to the factual situation now before the court.” (Cf. Wholesale T. Dealers Bureau v. National etc. Co., 11 Cal.2d 634, 661 [82 P.2d 3, 118 A.L.R. 486].)

The answer to petitioner’s claim that under rule B the respondent might grant the application of a veteran who had no existing plant on Hay 15 is found in these authorities. So far as the pleadings show the supposition is purely hypothetical and under the facts pleaded that situation is not presented to us for determination.

So long as the allocation of fish is fairly made among the applicants who satisfy the rules, newcomers (of which apparently eleven this year qualified) and veterans of the industry being treated with equality in that respect, we can find no basis for holding the regulations capricious, unreasonable or arbitrary.

The Legislature has entrusted the supervision and protection of this valuable resource of the state to the respondent commission, not to the courts. The commission must be presumed to have a knowledge of the conditions which underlie and motivate its regulatory actions and unless it is demonstrated that those actions are not grounded upon any reasonable factual basis the courts should not interfere with the exercise of the discretion vested in it by the Legislature, nor lightly substitute their judgment for that of the commission.

Petitioners argue further that they have substantially complied with rule B, “being prevented from full compliance by causes beyond their control, viz: Labor disputes, and as a consequence it is an exceedingly harsh discrimination to deny them consideration altogether because of their failure to have a 100 per cent compliance with the rule.” Similar apparent hardships are inherent in every classification made for the purpose of regulation. Some clojse cases must always fall just inside and others just outside of the line delimiting the class, wherever drawn, and the regulation will appear to operate with especial harshness upon those which happen to fall just inside. But the line must be drawn somewhere or there can be no classification and the courts have recognized that if the classification is reasonable in its over-all operation it is not to be stricken down because of its application to a particular case that may lie just inside its borders. Chief Justice Hughes said tersely in Continental Baking Co. v. Woodring, 286 U.S. 352, 370-371 [52 S.Ct. 595, 76 L.Ed. 1155] :

“It is obvious that the legislature in setting up such a zone would have to draw the line somewhere and unquestionably it had a broad discretion as to where the line should be drawn. ’ ’

Justice Holmes in Dominion Hotel v. Arizona, 249 U.S. 265, 269 [39 S.Ct. 273, 63 L.Ed. 597], elaborated the same idea:

"If in its theory the distinction is justifiable, as for all that we know it is, the fact that some eases, including the plaintiff’s, are very near to the line makes it none the worse. That is the inevitable result of drawing a line where the distinctions are distinctions of degree; and the constant business of the law is to draw such lines. ‘Upholding the act as embodying a principle generally fair and doing as nearly equal justice as can be expected seems to import that if a particular case of hardship arises under it in its natural and ordinary application, that hardship must be borne as one of the imperfections of human things. ’ Louisville & Nashville R. R. Co. v. Barber Asphalt Co., 197 U.S. 430, 434 [25 S.Ct. 466, 49 L.Ed. 819].”

Cf. Zahn v. Board of Public Works, 195 Cal. 497, 512 [234 P. 388], quoting Brown v. City of Los Angeles, 183 Cal. 783 [192 P. 716] ; Martin v. Superior Court, 194 Cal. 93, 105 [227 P. 762]; Matter of Application of Miller, 162 Cal. 687, 699-700 [124 P. 427] ; Matter of Petition of Burke, 160 Cal. 300, 303-304 [116 P. 755],

The alternative writs of mandate heretofore issued are discharged and the petitions for peremptory writs denied.

Shenlc, J., Edmonds, J., Traynor, J., and Spence, J., concurred.