The primary focus of enforcement is to ensure that all new vehicles sold, offered for sale, or used in the state are certified for sale in California. Under California's regulations, a new vehicle (defined as a vehicle that has fewer than 7,500 odometer miles) which is not certified to California's standards may not be sold within or imported into the state. If such a vehicle enters California, a Notice of Violation (NOV) is issued. The NOV requires that the vehicle(s) be removed from California and that a civil penalty of up to $5,000 per vehicle as authorized under Health and Safety Code Section 43151 be assessed. See Wilmshurst vs. ARB for case law regarding this program.Wilmshurst vs ARB follows.
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THE PEOPLE ex rel. STATE AIR RESOURCES
BOARD, Plaintiff and Respondent,
v.
RICHARD E. WILMSHURST et al., Defendants and
Appellants.
No. C022579.
Court of Appeal, Third District, California.
Jan. 5, 1999.
[Opinion certified for partial publication. [FN*] ]
FN* Pursuant to California Rules of Court,
rules 976(b) and 976.1, this opinion is
certified for publication with the exception
of parts I.B, I.C, II, III.E, IV, VI, VII, and
VIII of the Discussion.
SUMMARY
The Attorney General filed an action in the name of
the People on behalf of the State Air Resources
Board to recover civil penalties against a corporate
car dealership and its president for violations of art.
1.5 of the Health & Saf. Code (§ § 43150-43156),
based on sales of new cars not certified to comply
with California air emissions standards. The trial
court found that defendants were liable and imposed
total penalties of $45,000 on each defendant.
(Superior Court of Calaveras County, No. 18490,
Richard E. Tuttle, Judge. [FN†] ] )
FN† Retired judge of the Sacramento
Superior Court, assigned by the Chief
Justice pursuant to article VI, section 6 of
the California Constitution.
The Court of Appeal affirmed. The court held that
the action was not barred by the statute of limitations.
Although Code Civ. Proc., § 340, subd. (2), provides
a one-year limitations period for actions "upon a
statute for a forfeiture or penalty to the people of this
state," Code Civ. Proc., § 338, subd. (k), provides a
three-year limitations period for an "action
commenced under Division 26 [commencing with §
39000 of the Health & Saf. Code]." The three-year
statute expressly applies to any action under div. 26.
The court also held that California's definition of a
new motor vehicle was not preempted by the federal
Clean Air Act (42 U.S.C. § 7401 et seq.). The court
further held that the presumption in Health & Saf.
Code, § 43156 (California conclusively presumes
that vehicles with fewer than 7,500 odometer miles
are new), did not violate the commerce clause as an
impermissible burden on interstate commerce (U.S.
Const., art. I, § 8, subd. 3). The court held that the
definition of a new car under Health & Saf. Code, §
43156, was not arbitrary in its selection of 7,500
miles as the dividing line between categories of
vehicles. The court also held that the fact that
defendants sold individual cars that may have
satisfied the emissions standards enforced as *1333
part of the Department of Motor Vehicle's smog
check inspection program (ch. 5 of pt. 5 of div. 26
(Health & Saf. Code, § 44000 et seq.)), did not
entitle defendants to sell new vehicles that the State
Air Resources Board had not certified at the factory
for sale in California pursuant to ch. 2 of pt. 5 of div.
26 (Health & Saf. Code, § 43100 et seq.). The court
further held that the absence of evidence in the record
that the emission control equipment in defendants'
uncertified vehicles was different than the equipment
in certified vehicles did not prevent imposition of
penalties against defendants. The court held that the
president could be held individually liable and fined
for the violations along with his dealership, and that
the imposition of a $45,000 penalty on each
defendant ($5,000 per car) did not violate the
excessive fines clause of the federal Constitution
(U.S. Const., 8th Amend.) The court finally held that
it was not necessary to base the amount of the fine on
the degree to which the subject vehicles polluted the
air, rather than on defendants' ability to pay. (Opinion
by Davis, J., with Scotland, P. J., and Sims, J.,
concurring.)
HEADNOTES
Classified to California Digest of Official Reports
(1) Appellate Review § 109--Briefs--Argument and
Authority--Trial Court's Tentative Statement of
Decision.
A trial court's tentative statement of decision has no
relevance on appeal, and the appellate court may
accordingly disregard any argument based thereon.
(2) Automobiles and Highway Traffic § 18--Sales
and Transfers--Statutory Requirements--Air
Emissions Standards--Certification--Action Against
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Dealer to Recover Penalties for Violation--
Limitations:Limitation of Actions § 27-- Statutory
Liability.
An action by the Attorney General to recover civil
penalties against a car dealership for violations of art.
1.5 of the Health & Saf. Code (§ § 43150- 43156),
based on sales of new cars not certified to comply
with California air emissions standards, was not
barred by the statute of limitations. Although Code
Civ. Proc., § 340, subd. (2), provides a one-year
limitations period for actions "upon a statute for a
forfeiture or penalty to the people of this state," Code
Civ. Proc., § 338, subd. (k), provides a three-year
limitations period for an "action commenced under
Division 26 [commencing with § 39000 of the
Health & Saf. Code]." The three-year statute
expressly applies to any action under div. 26; no
reasonable basis existed for giving effect only to that
portion of the statute that creates a delayed accrual
rule for div. 26 *1334 actions. Even if the two
statutes were in conflict, it was proper to give effect
to the more specific statute that expressly applied to
div. 26 actions. It was unnecessary to decide if the
earlier-enacted one-year statute was repealed by
implication, since the Legislature expressly
recognized it was changing existing law in creating a
specific statute of limitations for actions maintained
for the enforcement of provisions on air pollution (4
Stats. 1990, Summary Dig., ch. 669, p. 236).
Moreover, extension of the limitations period did not
run afoul of the prohibition against retrospective
legislation.
[See 3 Witkin, Cal. Procedure (4th ed. 1996)
Actions, § 450.]
(3) Automobiles and Highway Traffic § 18--Sales
and Transfers--Statutory Requirements--Air
Emissions Standards--Certification--Federal
Preemption:Constitutional Law § 34--Preemption.
For purposes of recovering civil penalties for
violations of art. 1.5 of the Health & Saf. Code (§ §
43150-43156), based on sales of new cars not
certified to comply with California air emissions
standards, California's definition of a new motor
vehicle was not preempted by the federal Clean Air
Act (42 U.S.C. § 7401 et seq.). Under the Clean Air
Act, enforcement of emissions standards for new
motor vehicles is the sole and exclusive prerogative
of the federal government, and a vehicle is new until
it is acquired by the first person who does not buy it
for the purpose of resale (42 U.S.C. § 7550(3), (5)).
By contrast, California law conclusively presumes
that vehicles with fewer than 7,500 odometer miles
are new (Health & Saf. Code, § 43156, subd. (a)).
California's efforts to enforce its emissions standards
on new motor vehicles by means of the Health & Saf.
Code, § 43156, presumption would involve
preemption only as to vehicles subject to the Clean
Air Act; that is, vehicles with less than 7,500 miles
never acquired for a use other than resale. However,
the Clean Air Act contains an express provision for
waiving federal preemption of California's emissions
standards (42 U.S.C. § 7543(b)). Since California is
authorized to apply its standards to new motor
vehicles, it does not matter that the state's definition
of new motor vehicles overlaps with the federal
statute.
(4) Automobiles and Highway Traffic § 18--Sales
and Transfers--Statutory Requirements--Air
Emissions Standards--Certification--Commerce
Clause:Commerce § 3--State Regulation of Interstate
Commerce.
For purposes of recovering civil penalties for
violations of art. 1.5 of the Health & Saf. Code (§ §
43150-43156), *1335 based on sales of new cars not
certified to comply with California air emissions
standards, the presumption in Health & Saf. Code, §
43156 (California conclusively presumes for vehicles
with fewer than 7,500 odometer miles that the vehicle
is new), did not violate the commerce clause as an
impermissible burden on interstate commerce (U.S.
Const., art. I, § 8, subd. 3). Any limitation imposed
by the commerce clause on the power of a state to act
may be lifted by an expression of the unambiguous
intent of Congress, and the express provision for
waiving federal preemption of California's emissions
standards (42 U.S.C. § 7543(b)) demonstrated an
intent by Congress to grant California the broadest
possible discretion in adopting and enforcing
standards for the control of emission from new motor
vehicles. The history of the waiver provision
indicated that Congress intended the state to continue
and expand its pioneering efforts at adopting and
enforcing motor vehicle emission standards different
from and in large measure more advanced than the
corresponding federal program. This intent extended
to California's emissions program as a whole.
(5a, 5b) Automobiles and Highway Traffic § 18--
Sales and Transfers-- Statutory Requirements--Air
Emissions Standards--Certification--Classification of
New Vehicles Based on Mileage--Equal
Protection:Constitutional Law § 95-- Equal
Protection.
For purposes of recovering civil penalties for
violations of art. 1.5 of the Health & Saf. Code (§ §
43150-43156), based on sales of new cars not
certified to comply with California air emissions
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standards, the definition of a new car under Health &
Saf. Code, § 43156, was not arbitrary in its selection
of 7,500 miles as the dividing line between categories
of vehicles. California could not effectively enforce
its standards for emissions from new motor vehicles
without a mileage cutoff point that was sufficiently
high to discourage people from purchasing motor
vehicles out of state that were not subject to the
certification process, and driving them back to
California. Moreover, the large number of vehicles
registered in California rendered it impractical for the
Legislature to make allowances for individual cases.
The drawing of such a line is very largely a matter of
legislative discretion, the exercise of which will not
be invalidated by the courts unless abused.
(6) Constitutional Law § 85--Equal Protection--
Classification--Judicial Review--Presumption of
Constitutionality.
The enactments of *1336 the Legislature are imbued
with a presumption of constitutionality. In the
absence of a suspect classification or a restriction on
a fundamental interest, courts will sustain a statute's
classification if it bears a rational relationship to a
legitimate state purpose. A court may sustain a statute
if the court can conceive of any reasonable state of
facts that justifies the classification.
[See 8 Witkin, Summary of Cal. Law (9th ed. 1988)
Constitutional Law, § 601.]
(7) Automobiles and Highway Traffic § 18--Sales
and Transfers--Statutory Requirements--Air
Emissions Standards--Certification--Classification of
New Vehicles Based on Mileage--Due Process--
Estoppel:Constitutional Law § 108--Due Process--
Notice.
In an action by the Attorney General to recover civil
penalties against a car dealership for violations of art.
1.5 of the Health & Saf. Code (§ § 43150- 43156),
based on sales of new cars not certified to comply
with California air emissions standards, placement of
the definition of a new car, which applied to used
motor vehicles with fewer than 7500 odometer miles
(Health & Saf. Code, § 43156), within a chapter
dealing with new motor vehicles did not result in a
denial of defendant's right to due process. The
intentional doing of an act expressly prohibited by
statute constitutes the offense denounced by the law
regardless of good motive or ignorance of the
criminal character of the act. Nor could defendant
premise its ignorance of the law on opinions
purportedly issued by the Legislative Counsel; it does
not offend traditional notions of fair play and
substantial justice to apply the true meaning of a
statute regardless of a defendant's claimed reliance on
mistaken opinions that do not have the weight of a
ruling of a court of law. Nor was the State Air
Resources Board estopped from penalizing
defendant. Estoppel ordinarily will not apply against
a governmental body except in unusual instances
when necessary to avoid grave injustice and when the
result will not defeat a strong public policy. The
state's strong public policy in protecting air quality
precluded application of estoppel in the present case.
More important, by rejecting the defense of a good
faith belief, the trial court's ruling necessarily
precluded any claim of reliance necessary for
estoppel.
(8) Automobiles and Highway Traffic § 18--Sales
and Transfers--Statutory Requirements--Air
Emissions Standards--Certification--Versus Smog
Check Inspection.
In an action by the Attorney General to recover civil
penalties against a car dealership for violations of art.
1.5 of the Health & Saf. Code (§ § 43150- 43156),
based on sales *1337 of new cars not certified to
comply with California air emissions standards, the
fact that individual cars may have satisfied the
emissions standards enforced as part of the
Department of Motor Vehicle's smog check
inspection program (ch. 5 of pt. 5 of div. 26 (Health
& Saf. Code, § 44000 et seq.)), was not a defense, as
it did not entitle defendant to sell new vehicles that
the State Air Resources Board had not certified at the
factory for sale in California pursuant to ch. 2 of pt. 5
of div. 26 (Health & Saf. Code, § 43100 et seq.). The
standards for certification of cars for sale in
California are more exacting and test for a broader
range of pollutants than the standards for the smog
check program. Moreover, Health & Saf. Code, §
44015.5, explicitly precludes "any new motor vehicle
... which is not certified by the [Board]" from
receiving a smog check certificate.
(9) Automobiles and Highway Traffic § 18--Sales
and Transfers--Statutory Requirements--Air
Emissions Standards--Certification--Evidence of
Emissions Violations.
In an action by the Attorney General to recover civil
penalties against a car dealership for violations of art.
1.5 of the Health & Saf. Code (§ § 43150- 43156),
based on sales of new cars not certified to comply
with California air emissions standards, the asserted
absence of evidence in the record that the emission
control equipment of defendant's uncertified vehicles
was different than the equipment in certified vehicles
did not prevent imposition of penalties against
defendant. Even if the claim were true, the vehicles
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were nonetheless uncertified, and transacting in them
was therefore unlawful. There is an express
prohibition against transacting in vehicles not
certified pursuant to Health & Saf. Code, § § 43151-
43153, and the sheer magnitude of vehicles in
California means that courts should defer to the
Legislature's choice not to engage in case-specific
determinations of the adequacy of a particular
vehicle's emissions system. Moreover, Health & Saf.
Code, § § 43151-43153, prohibit transactions
involving vehicles lacking the required certification,
not vehicles that do not meet the standards that
underlie the certification.
(10) Automobiles and Highway Traffic § 18--Sales
and Transfers--Statutory Requirements--Air
Emissions Standards--Certification--Liability of Both
Corporate Dealership and President:Corporations §
39--Directors, Officers, and Agents--Liability.
In an action by the Attorney General to recover civil
penalties against a corporate car dealership and its
president for violations of art. 1.5 of the Health &
Saf. Code (§ § 43150-43156), based on sales of new
cars not certified to comply with California air
emissions *1338 standards, the president could be
held individually liable and fined for the violations
along with his dealership. Each of the defendants had
independent legal existence; regardless of the fact
that the president might be the dealership, the trial
court did not find any basis to disregard the corporate
entity. Since both the corporate agent and the
corporation could be liable for the violations, then
each was required to suffer the consequences of the
violations.
(11a, 11b) Automobiles and Highway Traffic § 18--
Sales and Transfers-- Statutory Requirements--Air
Emissions Standards--Certification--Violation--
Amount of Penalties--Eighth Amendment.
In an action by the Attorney General to recover civil
penalties against a corporate car dealership and its
president for violations of art. 1.5 of the Health &
Saf. Code (§ § 43150-43156), based on sales of new
cars not certified to comply with California air
emissions standards, the imposition of a $45,000
penalty on each defendant ($5,000 per car) did not
violate the excessive fines clause of the federal
Constitution (U.S. Const., 8th Amend.) In imposing a
fine, ability to pay becomes a critical factor. Thus, it
was defendants' ability to pay that was the
constitutional lodestar. The trial court found that both
defendants had the financial resources and ability to
pay the penalty of $5,000 per car. As a result, the fine
did not violate the Eighth Amendment.
(12) Forfeitures and Penalties § 1--Penalties--Fines-
-Eighth Amendment.
Application of the Eighth Amendment is not limited
to criminal prosecutions. The question is not whether
a fine is civil or criminal, but rather whether it is
punishment. Even assuming a fine serves some
remedial purpose, it will be considered punishment if
it also serves either retributive or deterrent purposes.
(13a, 13b) Automobiles and Highway Traffic § 18--
Sales and Transfers-- Statutory Requirements--Air
Emissions Standards--Certification--Violation--
Relationship of Penalties to Demonstrated Damages.
In an action by the Attorney General to recover civil
penalties against a corporate car dealership and its
president for violations of art. 1.5 of the Health &
Saf. Code (§ § 43150-43156), based on sales of new
cars not certified to comply with California air
emissions standards, it was not necessary to base the
amount of the fine on the degree to which the subject
vehicles polluted the air, rather than on deterrence as
measured by defendants' ability to pay. The
emissions from the vehicles was not the limit of the
damages defendants caused. They inconvenienced
the purchasers of the vehicles, they caused the
Department of Motor Vehicles to incur costs in
enforcing *1339 the certification requirement for
registration, and they caused the State Air Resources
Board to incur enforcement costs. Moreover, the
amount of penalty was related to the amount of profit
defendants realized in the wrongful transactions.
Having violated the Legislature's strategy for
minimizing the pollution effects of mobile sources in
interstate commerce, it was a sufficient basis for the
penalty that defendants be deterred from ever doing
so again. Thus, the trial court did not err in failing to
consider defendants' mitigating evidence of possibly
permissible emissions from the subject vehicles, and
as a result was entitled to award the maximum
penalty per violation.
(14) Forfeitures and Penalties § 1--Penalties--
Purpose.
In addition to disgorging illicit gains and obtaining
recompense, a civil penalty also has the purpose of
deterring future misconduct. Regulatory statutes
would have little deterrent effect if violators could be
penalized only where a plaintiff demonstrated
quantifiable damages. Further, a penalty statute
presupposes that its violation produces damages
beyond that which is compensable. The burden of
proving that actual damages are less than the
liquidated maximum provided in a penalty statute lies
with a defendant, and in the absence of evidence in
mitigation a court is free to assess the full amount.
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COUNSEL
Richard E. Wilmshurst, in pro. per., for Defendant
and Appellant.
Pahl & Gosselin and Harold C. Wright for
Defendant and Appellant Forty-Niner Sierra
Resources, Inc.
Daniel E. Lungren, Attorney General, Charles W.
Getz, Assistant Attorney General, Richard M.
Thalhammer, Deputy Attorney General; Kathleen C.
Walsh; and Kirk C. Oliver for Plaintiff and
Respondent.
DAVIS, J.
The Attorney General filed this action in September
1992 to recover civil penalties for violations of
division 26, part 5, chapter 2, article 1.5 of the Health
and Safety Code (§ § 43150-43156 [undesignated
section references will be to this code]), based on
transactions in 1990 and 1991 *1340 involving
vehicles not certified to California air emissions
standards. [FN1] The parties stipulated to the
pertinent facts. The superior court bifurcated the trial
into liability and penalty phases, which took place in
February and September 1995. It imposed total
penalties of $45,000 on each defendant. [FN2]
FN1 Pursuant to section 43154, actions to
recover civil penalties for transactions
prohibited by sections 43151-43153 are
brought by the Attorney General in the name
of the People on behalf of the State Air
Resources Board (Board); the Board itself is
not a proper party. (California Air
Resources Bd. v. Hart (1993) 21
Cal.App.4th 289, 300- 301 [26 Cal.Rptr.2d
153].) Although the Attorney General
properly alleged the present action was on
behalf of the Board, the Board was also
listed in the caption as an additional plaintiff
(and its attorney listed as cocounsel). We
have adjusted the caption accordingly by
striking the Board as a party.
FN2 The defendants are Forty-Niner Sierra
Resources, Inc. (49er), and Richard E.
Wilmshurst, its president and sole
stockholder. Defendant Wilmshurst has filed
his own appellate brief in propria persona.
Except where necessary for clarity, we shall
refer only generally to "defendants."
The defendants have raised 29 separately headed
contentions challenging the viability of this action,
several of the superior court's rulings during trial, the
rejection of their defenses, the failure of the superior
court judge to recuse himself between the trial
phases, the amount of the penalties, the award of
costs, the invalidity of a discovery sanction, and their
entitlement to attorney's fees if they prevail. In the
published portions of the discussion, we reject their
arguments regarding the statute of limitations, their
constitutional and other defenses to liability, and their
challenges to the fines assessed against them. We
reject the remainder of their contentions in the
unpublished portion of the opinion. We shall thus
affirm the judgment in all respects.
Facts
Division 26 of the Health and Safety Code (§ 39000
et seq.) is devoted to regulation of air quality. Part 5
of the division (§ 43000 et seq.) generally provides
for regulation of air pollution from vehicles. Chapter
2 of part 5 (§ 43100 et seq.) is devoted to new motor
vehicles. In article 1 of this chapter (§ § 43100-
43108), the Legislature has authorized the Board to
test and certify new motor vehicle models as
complying with emissions standards developed by
the Board. Article 1.5 of the chapter (§ 43150 et
seq.) prohibits all conceivable transactions involving
new motor vehicles which have not received the
Board's certification pursuant to the chapter. For
purposes of this article, it is "conclusively presumed"
a vehicle with fewer than 7,500 odometer miles is
"new." (§ 43156, subd. (a).)
Defendant 49er is a dealer in new motor vehicles
located in Calaveras County. It is a franchisee of
Subaru of America. At a 1990 dealer auction in
*1341 Utah, the defendants bought 50 or so 1990
Subaru Legacy vehicles which had previously been
owned by rental car companies. They transported
them to their place of business for resale to
consumers. Nine of these Legacies had fewer than
7,500 odometer miles at time of purchase or resale.
Although Subaru manufactured a model of the 1990
Legacy which the Board had certified as satisfying
emissions standards, none of these vehicles was a
California-certified model. Eight of the Legacies
were sold to California residents in 1990 and 1991. In
connection with these sales, the defendants
determined at their licensed in-house facility that
each vehicle satisfied the emissions test required as a
condition of registration by the Department of Motor
Vehicles (DMV). The defendants reported each sale
to the DMV as involving a "used" vehicle. The DMV
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refused to issue registrations for the vehicles. Alerted
to these transactions, the Board brought the present
proceeding against the defendants.
Discussion
(1) We note at the outset that at numerous points in
their briefs the defendants premise their arguments on
citations to a tentative statement of decision by the
trial court. This document has no relevance on
appeal. (7 Witkin, Cal. Procedure (4th ed. 1997)
Judgment, § 9, pp. 546-547.) We accordingly
disregard any argument based thereon.
I. Challenges to maintaining this action
A. Statute of limitations
(2) The defendants assert a one-year statute of
limitations applied to their violations. As the last of
the transactions occurred in January 1991, they claim
the September 1992 action was untimely.
To summarize their several arguments, the statute
which expressly provides a three-year limitations
period for "[a]n action commenced under Division 26
[§ 39000 et seq.]" (Code Civ. Proc., § 338, subd.
(k)) [FN3] (1) should be interpreted as only creating a
delayed-accrual rule for these enforcement actions;
(2) is a "general" statute which is superseded by the
more "specific" statute which provides a one-year
limitations period for "[a]n action upon a statute for a
forfeiture or penalty to the people of this state" (Code
Civ. Proc., § 340, subd. (2)); (3) cannot repeal the
earlier-enacted one-year statute "by implication"; (4)
cannot extend the one-year *1342 statute without
offending restrictions against retrospective
legislation; and (5) creates a limitations period which
is "unfair."
FN3 The statute also includes an accrual
provision: "These causes of action shall not
be deemed to have accrued until the
discovery ... of the facts constituting
grounds for commencing the action ...."
(Code Civ. Proc., § 338, subd. (k).)
The first three claims involve errant interpretations
of the relationship between the two limitations
statutes. (1) The literal words of the three-year
limitations statute apply to any action brought under
division 26; no reasonable basis exists for giving
effect only to the portion of the statute which creates
a delayed-accrual rule for division 26 actions. (2) It is
the one-year limitations statute which generally
applies to all actions by the state for penalties or
forfeitures, while it is the three-year statute which
specifically applies to division 26 actions for
penalties or fines. Therefore, even if the two statutes
could possibly be considered in conflict, we would
give effect to the three-year statute. (Estate of
Kramme (1978) 20 Cal.3d 567, 576 [143 Cal.Rptr.
542, 573 P.2d 1369].) (3) The principle disfavoring
repeals by implication (People v. Leong Fook (1928)
206 Cal. 64, 70 [273 P. 779]) is irrelevant in this
context. The Legislature expressly recognized in
1990 that effective January 1, 1991, it was changing
existing law in creating a specific statute of
limitations for "actions maintained for the
enforcement of provisions on air pollution." (5 Stats.
1990, Summary Dig., ch. 669, p. 236.)
The remaining two arguments are equally
unavailing. The Legislature enacted the three-year
statute within one year of all of the defendants'
violations. This extension of the statute of limitations
consequently does not run afoul of any of the
prohibitions against retrospective legislation. (7
Witkin, Summary of Cal. Law (9th ed. 1988)
Constitutional Law, § § 486, 494(a), pp. 675, 684-
685.) As for the claim three years is excessively long,
the defendants do not provide any authority for us to
disregard the measured judgment of our coordinate
branch of government in setting the limitations period
for enforcement of division 26 actions.
B. , C. [FN*]
FN* See footnote, ante, page 1332.
. . . . . . . . . . .
II. Trial rulings [FN*]
FN* See footnote, ante, page 1332.
. . . . . . . . . . .
III. Defenses to liability
A. Federal preemption
(3) Under the preemption provision of the federal
Clean Air Act (42 U.S.C. § 7401 et seq.), "No State
... shall adopt or attempt to enforce any *1343
standard relating to the control of emissions from
new motor vehicles ... subject to this part. No State
shall require certification ... or any other approval
relating to the control of emissions from any new
motor vehicle ... as condition precedent to the initial
retail sale ... of such motor vehicle ...." (Id., §
7543(a).) Consequently, enforcement of emissions
standards for new motor vehicles is the sole and
exclusive prerogative of the federal government.
(Sims v. Fla. Dept. of Hwy. Safety & Motor Vehicles
(11th Cir. 1989) 862 F.2d 1449, 1455.)
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However, the Clean Air Act has no concern with the
regulation of vehicle emissions subsequent to the
initial sale. (Sims v. Fla Dept. of Hwy. Safety &
Motor Vehicles, supra, 862 F.2d at p. 1455, fn. 8.)
Moreover, the Clean Air Act contains an express
provision for waiving federal preemption of
California's emissions standards: "The Administrator
[of the Environmental Protection Agency (EPA)]
shall ... waive application of this section to any State
which has adopted standards ... for the control of
emissions from new motor vehicles ... prior to March
30, 1966, [FN7] if the State determines that the ...
standards will be ... at least as protective of public
health and welfare as applicable Federal standards."
(42 U.S.C. § 7543(b).) It is not disputed that
pursuant to this provision, the EPA has granted
California a waiver to allow it to enforce its own
emissions standards as a condition precedent to the
initial retail sale of new motor vehicles in this state.
FN7 "California is the only state which had
adopted emissions control standards (other
than crankcase emission standards) before
March 30, 1966. It is thus the only state
eligible for a waiver." (Motor and
Equipment Mfrs. Ass'n, Inc. v. E.P.A. (D.C.
Cir. 1979) 627 F.2d 1095, 1100, fn. 1 [201
App.D.C. 109].)
Under the Clean Air Act, a motor vehicle is "new"
until it is acquired by the first person who does not
buy it for the purpose of resale (an "ultimate
purchaser"). (42 U.S.C. § 7550(3), (5).) By contrast,
California law (as previously noted) "conclusively"
presumes for vehicles with fewer than 7,500
odometer miles that the person acquiring the vehicle
does not have the status of ultimate purchaser
(regardless of the actual intent of the purchase). (§
43156, subd. (a).) [FN8]
FN8 Although not in issue and thus outside
the scope of this opinion, there is a similar
presumption for motor vehicles less than
two years old. (§ 43156, subd. (b).)
The defendants argue the California definition of a
new motor vehicle is incompatible with the federal
definition and is therefore preempted. However, they
have not established even a colorable preemption
claim. [FN9]
FN9 Because they are irrelevant to our
conclusions, we disregard the trial exhibits
which contain the opinions of administrative
and legislative officers on the issue of
preemption, and excerpts from the
legislative history of section 43156, all of
which play a part in the parties' arguments
on this issue. We also deny the request for
judicial notice of additional legislative
history materials.
The differing federal and state definitions create four
categories of motor vehicles: 1) a motor vehicle
never acquired by someone for a use other than
*1344 resale, with fewer than 7,500 miles; this would
be "new" for purposes of both federal and state law;
2) a motor vehicle never acquired by someone for a
use other than resale that nonetheless managed to
accumulate 7,500 miles; this would be "new" under
federal but not state law; 3) a motor vehicle which
someone acquired without the intent of resale, with
fewer than 7,500 miles; this would not be new for
federal purposes but is deemed new under state law;
[FN10] 4) a motor vehicle which someone acquired
without the intent of resale, with more than 7,500
odometer miles; this is not new under either federal
or state law.
FN10 As this is the category in which the
defendants' vehicles fall, it is arguably the
only category about which they have
standing to raise the issue of preemption.
It is only with respect to the first category that
California's efforts to enforce its emissions standards
on a "new" motor vehicle by means of the section
43156 presumption would involve preemption,
because those are the only motor vehicles which are
the subject of the Clean Air Act. However, the EPA
has waived federal preemption. The effort by the
defendants to posit a distinction between the
authority of the EPA to waive federal emissions
standards and its supposed lack of authority to waive
the federal definition of an ultimate purchaser is
irrelevant. The definition of a new motor vehicle has
no import outside the enforcement of emissions
standards. If California is authorized to apply its
standards to new motor vehicles, it does not matter
that the state's definition of new motor vehicles
overlaps with coverage of the federal statute.
The second category does not involve preemption
because these motor vehicles are not subject to state
regulation. The defendants seem to argue the
definition in section 43156 impermissibly exempts
these vehicles from coverage under the Clean Air
Act, but we cannot find any basis in law or logic for
this suggestion.
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The final two categories also do not involve
preemption because the Clean Air Act, as noted, does
not itself apply after the initial sale of a vehicle. The
defendants do not provide any authority for inferring
a congressional intent to preempt all state regulation
of vehicle emissions after the initial sale. Therefore,
if California wishes to regulate these vehicles, there
is not any federal interest involved. [FN11] *1345
FN11 Entangled in the preemption argument
are complaints about a "conflict" between
the definition of "new" motor vehicles
created by section 43156 and the definition
of new motor vehicles in the general
provisions for division 26, which is identical
to the federal definition. (§ § 39042,
39055.5.) As the general definition apply
except where "the context requires
otherwise" (§ 39010), there is no conflict.
B. Commerce clause
(4) The defendants argue the presumption in section
43156 violates the commerce clause as an
impermissible burden on interstate commerce. (U.S.
Const., art. I, § 8, cl. 3.) The short answer is that any
limitation imposed by the commerce clause on the
power of a state to act "may be lifted, as it has been
here, by an expression of the 'unambiguous intent' of
Congress." (New York v. United States (1992) 505
U.S. 144, 171 [112 S.Ct. 2408, 2426, 120 L.Ed.2d
120]; accord, Merrion v. Jicarilla Apache Tribe
(1982) 455 U.S. 130, 154 [102 S.Ct. 894, 910, 71
L.Ed.2d 21, 40].) The preemption waiver provisions
of 42 United States Code section 7543(b)
demonstrate an intent by Congress to grant California
the broadest possible discretion in adopting and
enforcing standards for the control of emission from
new motor vehicles. (Motor and Equipment Mfrs.
Ass'n, Inc. v. E.P.A., supra, 627 F.2d at p. 1128.)
"The history ... of the California waiver provision ...
indicates that Congress intended the State to continue
and expand its pioneering efforts at adopting and
enforcing motor vehicle emission standards different
from and in large measure more advanced than the
corresponding federal program ...." (Id. at pp. 1110-
1111, italics added.) This intent extends to
California's emissions program as a whole. (Id. at p.
1110.) In light of this express intent of Congress to
allow California to forge emissions standards at
variance with the rest of the United States, the
defendants do not have a tenable argument based on
the commerce clause.
C. Equal protection
(5a) Citing absolutely no authority, but using
language evocative of challenges based on the
constitutional guarantee of equal protection under the
law (U.S. Const., 14th Amend.), the defendants argue
section 43156 is arbitrary in its selection of 7,500
miles as the dividing line between categories of
vehicles because there is no technological basis for
that cutoff point. They conclude, "clearly the statute
has been applied in a random and capricious
manner."
(6) The enactments of our coordinate branch of
government are imbued with a presumption of
constitutionality. (8 Witkin, Summary of Cal. Law,
supra, Constitutional Law, § 601, p. 54.) In the
absence of a suspect classification or a restriction on
a fundamental interest, we will sustain a statute's
classification if it bears a rational relationship to a
legitimate state purpose. (Id., § 602, p. 56.) We may
sustain a statute if we can conceive of any reasonable
state of facts which justifies the classification.
(McGowan v. *1346 Maryland (1961) 366 U.S. 420,
426 [81 S.Ct. 1101, 1105, 6 L.Ed.2d 393, 399].)
(5b) As the Board correctly maintains, California
could not effectively enforce its standards for
emissions from new motor vehicles without a
mileage cutoff point that is sufficiently high to
discourage people from purchasing motor vehicles
out of state which are not subject to the certification
process and driving them back to California. It is
beside the point that a particular uncertified car might
nonetheless satisfy California standards; the sheer
number of vehicles registered in California renders
ludicrous any suggestion the Legislature must make
allowances for individual cases. As for the
defendants' claim there is nothing to distinguish cars
with 7,499 or 7,501 miles, it has been discredited for
almost half a century: "It is also urged that the statute
is unreasonable and discriminatory because under it
one who discharges an air contaminant only slightly
below the prescribed limit ... is exempt from the
prohibition even though if he continues his operation
long enough he will discharge more contaminant ...
than one who continues for only a short time .... But
the drawing of such a line is very largely a matter of
legislative discretion, the exercise of which will not
be reversed by the courts unless abused.... '[T]he 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.' " (People v. International Steel Corp.
(1951) 102 Cal.App.2d Supp. 935, 939- 940 [226
P.2d 587].)
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D. Due process/estoppel
(7) Under a heading invoking the protections of due
process against fundamental unfairness, the
defendants argue the application of section 43156 to
used motor vehicles with fewer than 7,500 odometer
miles "is obscured by its placement within [a c]hapter
... dealing with new motor vehicles. There is no
reference to § 43156 in any statute, rule or regulation
dealing with used motor vehicles in either the Health
& Safety Code or the Vehicle Code." They therefore
claim the Board should be estopped from penalizing
them.
In essence, this argument amounts to putting the
wolf of ignorance of the law in the sheep's clothing of
notice. "The intentional doing of an act expressly
prohibited by statute constitutes the offense
denounced by the law regardless of good motive or
ignorance of the criminal character of the act."
(People v. Byers (1979) 90 Cal.App.3d 140, 150 [153
Cal.Rptr. 249]; accord, 1 Witkin & Epstein, Cal.
Criminal Law (2d ed. 1988) Defenses, § 218, pp.
*1347 251-252.) That a particular defendant might
not have the research skills to find an applicable
statute has never been and never will be a valid
excuse for failing to comply with it. [FN12] Nor can
they premise their ignorance of the law on opinions
purportedly issued by the Legislative Counsel; it does
not offend traditional notions of fair play and
substantial justice to apply the true meaning of a
statute regardless of a defendant's claimed reliance on
mistaken opinions which do not have the weight of a
ruling of a court of law. (People v. Sobiek (1973) 30
Cal.App.3d 458, 476 [106 Cal.Rptr. 519, 82
A.L.R.3d 804].)
FN12 Although accessibility of the
definition is immaterial, we note the general
definition in division 26 of a "used" motor
vehicle is simply a negative, i.e., "any motor
vehicle which is not a new motor vehicle" (§
39058), so presumably it would be
incumbent upon one curious about the
regulation of emissions from used vehicles
(chapter 3 of part 5, commencing with
section 43600) to be concerned with the
provisions in chapter 2 regulating new motor
vehicles.
As for their claim of estoppel, "We previously have
recognized that this doctrine ordinarily will not apply
against a governmental body except in unusual
instances when necessary to avoid grave injustice and
when the result will not defeat a strong public
policy." (Hughes v. Board of Architectural Examiners
(1998) 17 Cal.4th 763, 793 [72 Cal.Rptr.2d 624, 952
P.2d 641], italics added.) The state's strong public
policy in protecting air quality precludes application
of estoppel here. More importantly, by rejecting the
defense of a good faith belief, the trial court's ruling
necessarily precludes any claim of reliance necessary
for estoppel. (Ibid.) This argument consequently fails.
E. Good faith belief [FN*]
FN* See footnote, ante, page 1332.
. . . . . . . . . . .
F. Certification v. smog check
In chapter 2 of part 5 of division 26, the Board is
authorized to develop emissions standards for new
vehicles and procedures for certifying they meet
these standards. (§ § 43100-43108.) These include
surveillance during the assembly line process at the
factory. (§ § 43202, 43210.) Transactions involving
new motor vehicles which have not been certified
pursuant to this process are prohibited by sections
43150-43156.
In chapter 5 of part 5 of division 26 (§ 44000 et
seq.), the Legislature has provided for the biennial
inspection and maintenance of emission control
devices in all vehicles "powered by internal
combustion engines" (the *1348 "smog-check"
program), requiring all motor vehicles to obtain
certificates that their emissions are in compliance
with standards developed by the Board for this
chapter. (§ § 44011, 44013.) Vehicle Code sections
4000.1 and 4000.2 direct the DMV to enforce this
requirement by making a valid certificate of
compliance a condition of the registration of any
vehicle.
(8) Without any authority whatsoever, the
defendants argue these two programs for regulating
the emissions from motor vehicles should be
considered parallel regulatory schemes, so that motor
vehicles which the Board has not certified at the
factory for sale in California pursuant to chapter 2
can nonetheless be sold if they individually satisfy
the emissions standards enforced as part of the
DMV's inspection program in chapter 5. This premise
resurfaces some 20 pages later in one of their briefs
as part of a 2-sentence claim (again unsupported by
any authority) that sections 43150-43156 are
fundamentally unfair and thus violate due process
because they "conflict" with the smog-check
program.
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As found by the superior court (and based on
substantial evidence at trial), the standards for
certification of cars for sale in California are more
exacting and test for a broader range of pollutants
than the standards for the smog-check program.
Moreover, as this is ultimately a question of
legislative intent, these arguments by the defendants
fatally founder upon section 44015.5, which
explicitly precludes "any new motor vehicle ... which
is not certified by the [Board]" from receiving a
smog-check certificate. The defendants' sole cogent
response to this statute is a claim its effective date is
subsequent to the events at issue and is therefore
irrelevant. The effective date of the statute does not
belie the import of the statute-the Legislature does
not consider the programs to be equivalent. We
therefore reject these claims on the merits. [FN13]
FN13 To the extent there lurks a renewal of
their "good faith" defense in these
arguments, it is foreclosed by the superior
court's conclusion they knew full well the
illegality of their acts.
G. Insufficient evidence of emissions violations
(9) The defendants claim there is no evidence in the
record that the emission control equipment of their
uncertified vehicles is any different than the
equipment in certified vehicles. Even if true (and the
Board points to evidence at trial disputing this claim),
the defendants do not apprehend the irrelevance of
this fortuity. The vehicles are nonetheless uncertified
and thus transacting in them is unlawful. The
defendants do not provide any authority permitting us
to gloss the express prohibition against transacting in
vehicles not "certified pursuant to this chapter" (§ §
43151-43153) by inferring a *1349 proviso "or which
have uncertified equipment which happens to
perform up to California air-emissions standards." As
we have stated earlier, the sheer magnitude of
vehicles in California means we should defer to the
Legislature's choice not to engage in case-specific
determinations of the adequacy of a particular
vehicle's emissions system.
The defendants reformulate this premise in a
different part of their brief, arguing there was no
evidence the subject vehicles emitted pollutants in
excess of California standards, and thus the Board
failed to prove what is in their view an essential
element of its cause of action. They base this claim
on an ipse dixit conception of California law being
standard based, in contrast to equipment-based
requirements of federal law. The argument fails
because sections 43151-43153 prohibit transactions
involving vehicles lacking the required certification,
not vehicles which do not meet the standards which
underlie the certification. We are not free to depart
from the express wording of the statutes. We thus
reject this argument.
IV. Disqualification motion [FN*]
FN* See footnote, ante, page 1332.
. . . . . . . . . . .
V. Challenges to assessed penalty
A. Fining both defendants individually
(10) In its statement of decision, the trial court
concluded defendant Wilmshurst could be held
individually liable for the violations along with
defendant 49er, his corporation. It cited People v.
Toomey (1984) 157 Cal.App.3d 1, 15 [203 Cal.Rptr.
642], as authority that corporate agents have
individual liability for their own actions even when
taken on behalf of the corporation, and that the
responsible managing agent of a corporation can have
individual liability for the violations of strict liability
"public welfare" regulations by others in furtherance
of the corporation's normal course of business.
(Accord, People v. Conway (1974) 42 Cal.App.3d
875, 885- 886 [117 Cal.Rptr. 251]; 1 Witkin &
Epstein, Cal. Criminal Law, supra, Introduction To
Crimes, § § 94, 95, pp. 109, 110.)
The defendants argue here that while Toomey may
be authority for finding both of them liable (accord,
People v. International Steel Corp., supra, 102
Cal.App.2d at pp. Supp. 937, 942 [evidence sufficient
to support liability of both president and corporation];
see United States v. Park (1975) 421 U.S. 658, 670
[95 S.Ct. 1903, 1910-1911, 44 L.Ed.2d 489, 499-500]
[discussing *1350 general principle under federal
purity laws that both agent and corporation can be
liable for criminal act]), it does not address the
separate issue of whether a court can fine both
defendants. They assert the exaction of a fine from
each of them amounts to a "double" punishment
which is "openly unconstitutional." They do not,
however, provide any authority which precludes
fining each of them. We decline to supply it. Each of
the defendants has independent legal existence;
regardless of the fact defendant Wilmshurst may "be"
defendant 49er, the trial court did not find any basis
to disregard the corporate entity. If both may be
liable for the violations, then each must suffer the
consequences of the violations.
B. Eighth Amendment
(11a) The defendants contend the amount of
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penalties violates the excessive-fines clause of the
federal Constitution. (U.S. Const., 8th Amend.)
(12) In Austin v. United States (1993) 509 U.S. 602
[113 S.Ct. 2801, 125 L.Ed.2d 488], the Supreme
Court stated there was nothing in the history of the
Eighth Amendment which indicated its limitation to
criminal prosecutions. (Id. at p. 608 [113 S.Ct. at pp.
2804-2805].) "[T]he question is not ... whether [a
fine] ... is civil or criminal, but rather whether it is
punishment." (Id. at p. 610 [113 S.Ct. at p. 2806].)
Even assuming a fine serves some remedial purpose,
it will be considered punishment if it also serves
either retributive or deterrent purposes. (Id. at p. 621
[113 S.Ct. at p. 2812].)
(11b) Austin declined to articulate a test for
determining whether a fine is excessive. Although a
number of forfeiture cases have articulated a
multifactor analysis of proportionality to be followed
by a trial court (e.g., United States v. Bajakajian
(1998) 524 U.S. 321, ___ [118 S.Ct. 2028, 2036-
2038, 141 L.Ed.2d 314, 329-331]; U.S. v. Alexander
(8th Cir. 1994) 32 F.3d 1231, 1235-1237), the
constitutionality of a fine is determined by a simpler
test. "Proportionality is likely to be the most
important issue in a forfeiture case, since the
claimant-defendant is able to pay by forfeiting the
disputed asset. In imposing a fine, on the other hand,
ability to pay becomes a critical factor. But the
[Sentencing] Guidelines mandate that this factor be
considered ... and if the sentencing court complies
with these provisions, any constitutional ability-topay
limitation will necessarily be met." (U.S. v. Hines
(8th Cir. 1996) 88 F.3d 661, 664.) The defendants'
concern with the relationship between the amount of
the fines and nature of their offenses or the amounts
of fines imposed in other cases is consequently
irrelevant; it is their ability to pay which is the
constitutional lodestar.
Here, the trial court found both defendants had the
financial resources and ability to pay the per-car
penalty of $5,000. As a result, this fine did not violate
the Eighth Amendment. *1351
C. Failure to relate penalties to demonstrated
damages
(13a) In a variation on their earlier theme, the
defendants argue the amount of the fine must be
based on the degree to which the subject vehicles
polluted the air, rather than deterrence (as measured
by their ability to pay). Claiming there was no
evidence any of the vehicles had emissions in excess
of those tolerated under the law, the defendants argue
the Board is not entitled to any penalty assessment.
(14) In addition to disgorging illicit gains and
obtaining recompense, a civil penalty also has the
purpose of deterring future misconduct. (State of
California v. City & County of San Francisco (1979)
94 Cal.App.3d 522, 531 [156 Cal.Rptr. 542]; People
v. Bestline Products, Inc. (1976) 61 Cal.App.3d 879,
924 [132 Cal.Rptr. 767].) Regulatory statutes would
have little deterrent effect if violators could be
penalized only where a plaintiff demonstrated
quantifiable damages. (State of California v. City &
County of San Francisco, supra, 94 Cal.App.3d at p.
531.) Further, "A penalty statute presupposes that its
violation produces damages beyond that which is
compensable." (Ibid., italics added.) The burden of
proving that actual damages are less than the
liquidated maximum provided in a penalty statute lies
with a defendant, and in the absence of evidence in
mitigation a court is free to assess the full amount.
(Id. at pp. 531-532.)
(13b) The defendants appear to believe that simply
because they were prepared to demonstrate that their
uncertified vehicles might not emit pollution in
excess of California standards, this would have been
sufficient evidence that the actual damage from
transacting in uncertified vehicles is negligible. This
is not the limit of the damages they have caused,
however. They inconvenienced the purchasers of the
vehicles; they caused the DMV to incur costs in
enforcing the certification requirement for
registration; and they have caused the Board to incur
no end of enforcement costs. All these are damages
borne by the taxpaying citizens of this state as a
result of the defendants' decision to flout the
proscriptions of the Health and Safety Code. The
defendants also ignore the extent to which the
amount of penalty relates to the amount of profit they
realized in the wrongful transactions.
Their argument that damage must be paramount to
deterrence in penalty setting once again raises the
untenable spectre of forcing the Board in every
individual case to prove the amount of emissions
stemming from a particular vehicle, an enforcement
scheme the Legislature has eschewed. Having
violated the Legislature's carefully crafted strategy
for minimizing the pollution effects of mobile
sources in interstate commerce, it is a sufficient basis
for the penalty that they be deterred from ever doing
so again. Thus, the court *1352 did not err in failing
to consider the defendants' mitigating evidence of
possibly permissible emissions from the subject
vehicles, and as a result was entitled to award the
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maximum penalty per violation.
VI. -VIII. [FN*]
FN* See footnote, ante, page 1332.
. . . . . . . . . . .
Disposition
The judgment is affirmed.
Scotland, P. J., and Sims, J., concurred.
A petition for a rehearing was denied February 1,
1999, and appellants' petition for review by the
Supreme Court was denied April 14, 1999. *1353
Cal.App.3.Dist.,1999.
People ex rel. State Air Resources Bd. v. Wilmshurst
END OF DOCUMENT
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