Hollister Smoke Shop, Inc., dba Hollister Smoke and Vape Shop v. City of Goleta

Case Number

24CV03025

Case Type

Hearing Date / Time

Mon, 07/07/2025 - 11:30

Nature of Proceedings

Trial De Novo

Tentative Ruling

Hollister Smoke Shop, Inc., dba Hollister Smoke and Vape Shop v. City of Goleta 

Case No. 24CV03025

           

Hearing Date: July 7, 2025  11:30 a.m.                                                        

HEARING:              Administrative Citation Trial De Novo

ATTORNEYS:        For Appellant Hollister Smoke Shop, Inc.: Edward D. Pinchiff, Jennifer McGrath, Law Offices of Jennifer McGrath

                                    For Respondent City of Goleta: Issac M. Rosen, Dylan Vaughn Gunzel, Best Best & Krieger LLP

                                   

TENTATIVE RULING:

Based upon the court’s de novo review of all of the evidence and arguments presented by the parties, the administrative citations subject to this appeal are upheld. Appellant Hollister Smoke Shop, Inc., shall pay to respondent City of Goleta administrative fines in the total amount of $19,200.00 (subject to credit for amounts previously paid), and shall pay administrative costs as discussed herein.

Background:

This is a trial de novo as an appeal by appellant Hollister Smoke Shop, Inc. (Hollister) of two City of Goleta (City) administrative citations to the extent previously upheld following a City administrative appeal hearing. The incidents and evidence giving rise to the citations is discussed below in the context of the analysis of the violations. In making this ruling the court has reviewed all of the evidence presented and the arguments of the parties, whether or not expressly discussed below.

(1)       Procedural History

On March 4, 2024, following various communications between the parties, Goleta Code Compliance Officer Albert Torres issued City Administrative Citation G1328 against appellant Hollister. (Final and Complete Agency File [AR], lodged February 14, 2025, p. GOL000034.) (Note: The page numbers of the pdf version of the AR as lodged by the City do not match the Bates numbers of documents in the AR in violation of the California Rules of Court. (See Cal. Rules of Court, rule 2.109 [pages must be consecutively paginated beginning with page 1].) Exhibits identified in the AR and briefs are identified by Bates numbers only in the exhibit index, which is difficult to find relative to a pdf page number (see Cal. Rules of Court, rules 3.1110(c), (f)(1)); the AR also does not contain electronic bookmarks for numbered exhibits (see rule 3.1110(f)(4)). The court cites to the Bates page numbers of documents herein for consistency with the parties’ briefs in the form of “AR [page number].” Bates page numbers cited herein omit “GOL” and all leading zeros.) Citation G1328 asserts four violations: (1) Goleta Municipal Code section 5.07.020(B); (2) section 5.07.020(D); (3) section 5.07.020(N); and section 5.09.030(A). (AR 34.)

On March 13, 2024, following various communications between the parties, Officer Torres issued Administrative Citation G1330 against Hollister. (AR 54.) Citation G1330 asserts three violations: (1) Goleta Municipal Code section 5.07.020(B); (2) section 5.07.020(D); and (3) section 5.07.020(N). (Ibid.)

On March 14, 2024, Hollister submitted a request for an administrative appeal hearing. (AR 163.)

On May 1, 2024, the City held an administrative appeal hearing on the two citations. (AR 1.) On May 16, 2024, the hearing officer issued a statement of decision on the administrative appeal, which concluded:

“The Hearing Officer finds that Administrative Citations G1328 and G1330, as applied to the sale of flavored tobacco and flavored tobacco products, are upheld. The portion of Administrative Citation G1328 that arises out of the alleged sale of cannabis products lacks sufficient evidence.

“Both Citations were clear and unambiguous, with directions for correcting violations. There has been no violation of Appellant’s due process rights. For Administrative Citation G1328, Appellant should be refunded that portion of the penalties assessed for violations of cannabis retail and license laws, totaling $33,214. Those fees should be credited against other fees and costs addressed below, with any balance refunded to Appellant when he verifies compliance.

“Pursuant to GMC 1.02.120 E, based on a finding that a portion of Administrative Citation G1328 and all of G1330 is upheld, Appellant must pay City’s administrative costs, consisting of fees incurred in the retention of the Hearing Officer, City staff time, City legal staff time, and associated costs.

“Because Appellant did not present any evidence that the sale of flavored tobacco products and flavored tobacco on the Premises had been abated, or his relationship with Vapesellers.com had ended, fines for a continuing violation are to be assessed pursuant to GMC 1.02.090. Administrative Citation G1328 was issued on or about March 4, 2024. Administrative Citation G1330 was issued on or about March 13, 2024. The Hearing Officer finds that a continuing violation has occurred from March 13, 2024, and assesses fines of $300 per day through the date of the issuance of this ruling, in the amount of 64 days, for a total of $19,200.

“Appellant must also remove all flavored tobacco products and flavored tobacco from the Premises no later than Friday, May 24, 2024, with City to confirm by inspection that this has occurred. Appellant should not make any sales of flavored tobacco or flavored tobacco products, directly or via Vapesellers.com, during the interim period.” (AR 8-9.)

On May 30, 2024, Hollister filed two appeals in this court—one for each administrative citation—which have been consolidated in this proceeding. Hollister appeals only those violations upheld in the administrative appeal.

(2)       Standards of Review

“The legislative body of a local agency, as the term ‘local agency’ is defined in Section 54951, may by ordinance make any violation of any ordinance enacted by the local agency subject to an administrative fine or penalty. The local agency shall set forth by ordinance the administrative procedures that shall govern the imposition, enforcement, collection, and administrative review by the local agency of those administrative fines or penalties. Where the violation would otherwise be an infraction, the administrative fine or penalty shall not exceed the maximum fine or penalty amounts for infractions set forth in Section 25132 and subdivision (b) of Section 36900.” (Gov. Code, § 53069.4, subd. (a)(1).)

“Notwithstanding Section 1094.5 or 1094.6 of the Code of Civil Procedure, within 20 days after service of the final administrative order or decision of the local agency is made pursuant to an ordinance enacted in accordance with this section regarding the imposition, enforcement, or collection of the administrative fines or penalties, a person contesting that final administrative order or decision may seek review by filing an appeal to be heard by the superior court, where the same shall be heard de novo, except that the contents of the local agency’s file in the case shall be received in evidence. A proceeding under this subdivision is a limited civil case. A copy of the document or instrument of the local agency providing notice of the violation and imposition of the administrative fine or penalty shall be admitted into evidence as prima facie evidence of the facts stated therein. A copy of the notice of appeal shall be served in person or by first-class mail upon the local agency by the contestant.” (Gov. Code, § 53069.4, subd. (b)(1).)

“After considering all of the testimony and evidence submitted at the hearing, the Hearing Officer shall issue a written decision within 15 days after the hearing to uphold or revoke the Administrative Citation based upon the Hearing Officer’s conclusion of whether a violation occurred. The Hearing Officer shall use preponderance of evidence as the standard of evidence in deciding issues. The decision of the Hearing Officer shall be final.” (Goleta Mun. Code, § 1.02.120, subd. (A).)

“Any person aggrieved by an administrative decision of a Hearing Officer on an Administrative Citation may seek judicial review of the administrative decision by filing a further appeal with Santa Barbara Superior Court within 20 calendar days after the appellant receives a copy of the Notice of Decision, in accordance with the provisions of California Government Code Section 53069.4. The appeal filed with the Court must also contain a proof of service showing a copy of the appeal was served upon the City of Goleta City Attorney. The appellant must pay to the Superior Court the appropriate court filing fee when the appeal is filed.” (Goleta Mun. Code, § 1.02.130, subd. (A).)

As a trial de novo, the court hears the trial anew “ ‘the same as if no previous hearing had ever been held.’ ” (Buchwald v. Katz (1972) 8 Cal.3d 493, 501, citation and internal quotation marks omitted.) The parties agreed that the court would conduct the trial de novo upon the lodged administrative record and the filed briefings. (Minute Order, filed Mar. 3, 2025, at p. 1.)

(3)       Statutes and Ordinances Applicable to Citations

“No person shall engage in tobacco retailing in the City without first obtaining and maintaining a valid tobacco retailing license for each location at which any tobacco retailing is to occur.” (Goleta Mun. Code, § 5.07.020, subd. (A).)

“Licenses may be issued only to authorize tobacco retailing at one fixed location at a time.” (Goleta Mun. Code, § 5.07.020, subd. (B).)

“In the course of tobacco retailing or in the operation of a tobacco retailing business or maintenance of the location in the City for which a license issued, it shall be a violation of this chapter for a licensee, or agents or employees thereof, to violate any local or State tobacco control law.” (Goleta Mun. Code, § 5.07.020, subd. (D).)

“Prohibition of the Sale of Flavored Tobacco Products. No tobacco retailer shall sell any flavored tobacco product. There shall be a rebuttable presumption that a tobacco product is a flavored tobacco product if a manufacturer or any of the manufacturer’s agents or employees, in the course of their agency or employment, has made a statement or claim directed to consumers or to the public that the tobacco product has a taste or smell other than tobacco flavor including, but not limited to, text, color, and/or images on the product’s labeling or packaging that are used to explicitly or implicitly communicate that the tobacco product is a flavored tobacco product.” (Goleta Mun. Code, § 5.07.020, subd. (N).)

Goleta Municipal Code section 5.07.010 provides applicable definitions, including the following:

“ ‘Flavored tobacco product’ means any tobacco product that contains a taste or smell, other than the taste or smell of tobacco, that is distinguishable by an ordinary consumer either prior to, or during the consumption of, a tobacco product, including, but not limited to, any taste or smell relating to fruit, menthol, mint, wintergreen, chocolate, cocoa, vanilla, honey, molasses, or any candy, dessert, alcoholic beverage, herb, or spice.”

“ ‘Licensee’ means any proprietor(s) who holds a valid tobacco retailing license issued pursuant to this chapter.”

“ ‘Person’ means any natural person, partnership, cooperative association, corporation, personal representative, receiver, trustee, assignee, or any other legal entity.”

“ ‘Proprietor’ means a person with a minimum of 10% ownership interest in a tobacco retailing business.”

“ ‘Tobacco paraphernalia’ means any item designed for the consumption, use, or preparation of tobacco products.”

“ ‘Tobacco product’ means:

“1.       Any product containing, made, or derived from tobacco or nicotine that is intended for human consumption, whether smoked, heated, chewed, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by any other means, including, but not limited to, cigarettes, cigars, little cigars, chewing tobacco, pipe tobacco, snuff, snus;

“2.       Any electronic smoking device, with or without nicotine; and

“3.       Any component, part, or accessory of a tobacco product, whether or not sold separately, notwithstanding any provision of this definition to the contrary.”

“ ‘Tobacco retailing’ means selling, offering for sale, or offering to exchange for any form of consideration, tobacco, tobacco products, or tobacco paraphernalia. This definition is without regard to the quantity of tobacco, tobacco products, or tobacco paraphernalia sold, offered for sale, exchanged, or offered for exchange.”

“ ‘Tobacco retailing business’ means a physical location at which tobacco retailing occurs.”

“ ‘Tobacco retailing license’ means the license required pursuant to this chapter.”

“Whenever any act or omission is made unlawful by this Code, it shall include causing, permitting, aiding, abetting, suffering, or concealing the fact of such act or omission.” (Goleta Mun. Code, § 1.01.170.)

Analysis:

(1)       Flavored Tobacco Products

Both citations G1328 and G1330 cite violations of Goleta Municipal Code section 5.07.020 based upon the sale of prohibited flavored tobacco products.

At the administrative hearing, Officer Torres provided testimony regarding the incidents supporting the citation. By way of example, Officer Torres testified that he took photographs at Hollister on February 21, 2024. (AR 179-180.) On page 11 of the photographs (AR 46), Officer Torres testified as to the depicted Juicy Jay brand of flavored rolling papers. (AR 197-198.) The photograph shows one example, with packaging stating that it is “Mello Mango” and also shown on a shelf with a price tag. (AR 46.)

In the testimony concerning this product, Officer Torres testified that he did not know if those rolling papers were made from a tobacco product. (AR 198.) Officer Torres also testified that, similar to other products depicted in other pages, that they could be used for smoking tobacco or cannabis. (AR 196-198.)

Norris Halak, the President and Chief Executive Officer of Hollister, testified that the flavored wraps are not made out of tobacco, flavored tobacco, or cannabis. (AR 224-225.) Halak testified that these papers may be used to impart flavor to tobacco but are almost never used for tobacco because the price is too high. (AR 225-226.) Instead, these papers are used to impart flavor to cannabis. (Ibid.)

There is no dispute that Hollister is a licensed “tobacco retailer” under the Goleta Municipal Code.  A tobacco retailer is prohibited from selling “any flavored tobacco product.” (Goleta Mun. Code, § 5.07.020, subd. (N).) The issue raised by Hollister on this point is whether these papers constitute a “flavored tobacco product” when there is no evidence that these papers are made from a tobacco product and the evidence is that the principal use of such papers is for cannabis rather than tobacco.

Under the applicable definition of “tobacco product,” a “tobacco product” includes both products made from tobacco and “[a]ny component, part, or accessory of a tobacco product, whether or not sold separately, notwithstanding any provision of this definition to the contrary.” (Goleta Mun. Code, § 5.07.010.) Because such papers may be used as intended with tobacco, these products fall within the definition as either a “component” or an “accessory.” As a “tobacco product” under this definition, these papers also fall clearly within the definition of “flavored tobacco product” by the packaging and labeling using the words, “Mello Mango,” as a flavor descriptor. (Goleta Mun. Code, §§ 5.07.010, 5.07.020, subd. (N).)

The testimony that the papers are not ordinarily used with tobacco is not persuasive that the papers do not fall within the applicable definition for two reasons. First, as a licensed tobacco retailer, and not a licensed cannabis retailer, there is a strong inference that these products are sold in connection with the tobacco products also offered for sale, whether or not such papers may also be used for cannabis products. Second, the clear intent of section 5.07.020, subdivision (N) is to prohibit the sale of flavored tobacco products by licensed tobacco retailers. It would be contrary to this clear intention if prohibited products sold in a tobacco retail shop would not be prohibited for the sole reason that these products may (whether usually or otherwise) also be used for another purpose.

Hollister argues that such a construction is unconstitutionally vague. “As generally stated, the void-for-vagueness doctrine requires that a penal statute define the criminal offense with sufficient definiteness that ordinary people can understand what conduct is prohibited and in a manner that does not encourage arbitrary and discriminatory enforcement.” (Kolender v. Lawson (1983) 461 U.S. 352, 357 [103 S.Ct. 1855, 75 L.Ed.2d 903].) In support of this argument, Hollister points to definitions in Health and Safety Code section 104559.5.

The definitions and prohibitions in section 104559.5 are not meaningfully different from the Goleta Municipal Code: “A tobacco retailer, or any of the tobacco retailer’s agents or employees, shall not sell, offer for sale, or possess with the intent to sell or offer for sale, a flavored tobacco product or a tobacco product flavor enhancer. (Health & Saf. Code, § 104559.5, subd. (b)(1).)

“There is a rebuttable presumption that a tobacco product is a flavored tobacco product if a manufacturer or any of the manufacturer’s agents or employees, in the course of their agency or employment, has made a statement or claim directed to consumers or to the public that the tobacco product has or produces a characterizing flavor, including, but not limited to, text, color, images, or all, on the product's labeling or packaging that are used to explicitly or implicitly communicate that the tobacco product has a characterizing flavor.” (Health & Saf. Code, § 104559.5, subd. (b)(2).)

In 2024, “tobacco product” was defined in section 104559.5 by reference to the definition in section 104495, subdivision (a)(8)(A) (Stats. 2023, ch. 351, § 2 [former Health & Saf. Code, § 104559.5, subd. (a)(16)]). Section 104495, then and now, defines “tobacco product” as including “[a]ny component, part, or accessory of a tobacco product, whether or not sold separately.” (Health & Saf. Code, § 104495, subd. (a)(8)(A)(iii).) This definition is now included with section 104559.5 without separate reference.

In 2024, the definition of “flavored tobacco product” in section 104559.5 was simply “any tobacco product that contains a constituent that imparts a characterizing flavor.” (Former Health & Saf. Code, § 104559.5, subd. (a)(6) [Stats. 2023, ch. 352, § 2].) In 2024, effective January 1, 2025, this definition was amended to read as: “ ‘Flavored tobacco product’ means any tobacco product that contains a constituent that imparts a characterizing flavor. ‘Flavored tobacco product’ includes any tobacco product, other than looseleaf tobacco, a premium cigar, or a shisha tobacco product, that is not listed on the Unflavored Tobacco List established and maintained by the Attorney General pursuant to Section 104559.1.” (Health & Saf. Code, § 104559.5, subd. (a)(6); Stats. 2024, ch. 849, § 7.) The reason for the amendment is explained in the legislative findings:

“The Legislature finds and declares all of the following:

“(a)      A large and increasing number of flavored tobacco products are available for sale in California, which appeal to minors and nonsmokers, initiate nonusers, and impede cessation.

“(b)      There is evidence that those products are disproportionately used by youth and marketed to certain minorities and marginalized communities.

“(c)      A growing number of cities and counties have restricted or banned the retail sale of flavored tobacco products, and a statewide ban on the retail sale of certain flavored tobacco products has been approved by California voters.

“(d)      Because many tobacco manufacturers do not disclose whether their products are flavored, it is difficult for government agencies, distributors, wholesalers, retailers, and consumers to identify whether tobacco products are flavored without actually using the products.

“(e)      There is a need in California for a reliable and complete public list of unflavored tobacco products, meaning tobacco products that do not have a flavor other than that of tobacco.” (Stats. 2024, ch. 849, § 1.)

Hollister argues that the 2024 amendment recognizes the vagueness and ambiguity in the law. Whether or not there may be ambiguity as to the inclusion of some tobacco products within the statutory or municipal code definition of “flavored tobacco products,” the products that are the basis for the City’s citations of Hollister are not among them. The evidence as to the products that are the basis for the City’s alleged violations, on its face, supports a finding that these are flavored products. The court finds that these products fall within these definitions.

The court finds on the evidence presented that Hollister has violated Municipal Code section 5.07.020, subdivision (N).

Hollister argues that the same conduct that supports the violation of either of subdivision (D) (violation of state or municipal tobacco control law) or of subdivision (N) is duplicative and therefore cannot support multiple alleged violations and fines.

Assuming without deciding that Hollister is correct that the same conduct cannot support citations under multiple subdivisions of section 5.07.020, the court finds that the City has shown multiple products violating the prohibition of subdivision (N) and Health and Safety Code section 104559.5. (E.g., AR 45.) The administrative fines imposed would be supported by a single violation as to one particular product. (See Goleta Mun. Code, § 1.02.040, subd. (B) [“A single citation may charge a violation for one or more days on which a violation exists, and for violation of one or more Code sections.”]; see also People v. Correa (2012) 54 Cal.4th 331, 341 [no bar to multiple punishment for multiple violations of the same provision of law].) The evidence includes at least one unique prohibited item supporting each of these violations. (See also the discussion below regarding fines.)

For the same reasons, the court finds that the notices of violation are sufficient, not vague or ambiguous, and do not violate due process. (See AR 24-70.)

Accordingly, the court independently finds on the evidence presented that the City has shown violations of Goleta Municipal Code section 5.07.020, subdivisions (D) and (N) in each of citations G1328 and G1330. Those portions of the administrative citations are upheld.

(2)       Multiple Locations

Both citations also include a violation of Goleta Municipal Code section 5.07.020, subdivision (B) based upon Hollister allowing an unpermitted online tobacco retailer to store and sell prohibited products in Hollister’s physical location.

The City presents evidence that vapesellers.com, an unlicensed internet business, is operating at the same location as Hollister. Among other evidence, the City presents evidence of a vapesellers.com digital terminal and covered display cases on the location. (AR 51-52.)

In his declaration, Halak states that Hollister is tobacco retailing at only one fixed location and has no other location. (Halak decl., ¶ 3 [AR  337].) The vapesellers.com website is operated by an independent third party, VSR, LLC (VSR), incorporated in, operating in, and physically located in the state of Wyoming. (Halak decl., ¶ 4.) Neither Hollister nor Halak have any ownership in, interest in, or control over VSR, and VSR is not allowed to make sales at the Hollister store in Goleta. (Halak decl., ¶ 6.) Anyone wanting to purchase products from VSR must go on VSR’s vapesellers.com website and make that purchase on their own directly with VSR. (Halak decl., ¶ 7.) Hollister does not sell VSR products nor does it allow VSR to sell products in the Goleta store. (Halak decl., ¶ 8.) Hollister provides a service to VSR in that it allows VSR’s customers to pick up products they order online from VSR and Hollister checks the ID of VSR customers to make sure they are the person who made the purchase from VSR and that they are age 21 or over. (Halak decl., ¶ 9.) This pickup service involves Hollister storing tobacco products belonging to VSR, but those products are not on display and are not advertised as for sale. (Halak decl., ¶ 10.) The person making the online purchase from vapesellers.com does not provide any consideration to Hollister. (Halak decl., ¶ 11 [AR 338].) That person is under no obligation to choose Hollister as a pickup location for their VSR purchase and can choose any of over 60 locations. (Ibid.)

The photo attached to the City’s Administrative Citation G1328 that is labeled a vapesellers.com digital terminal is an android tablet with internet access that was in the Hollister store before any association with vapesellers.com and has been available for anyone in the store to look up product information online. (Halak decl., ¶ 12 [AR 338].) It can also be used to go to the vapesellers.com website. (Ibid.) The QR code in the photo is something anyone can scan with their own phone to go to the vapesellers.com website. (Ibid.)

Halak also testified at the administrative hearing that Hollister operates as a pickup and fulfillment location for VSR for which VSR pays Hollister a fee. (AR 249-250.) The signup process with VSR takes about two weeks, with a lot of back and forth with VSR officers. (AR 250.) These officers explain things and how things work for VSR. (Ibid.) VSR picks and chooses what stores they want to become partners with—“partners” meaning subject to a confidential agreement with VSR. (AR 250-251.) By that agreement, basically, Hollister hosts VSR products that are sold online and then customers pick up those products from the Hollister store, for which Hollister is paid a fee. (AR 251.) In addition, Hollister verifies that the person who made the purchase is the person picking up the purchase. (AR 251-252.) Having a store verify such pickups helps to eliminate fraud and keeps costs down for VSR. (AR 252.)

The City asserts that Hollister’s operation with respect to VSR violates Goleta Municipal Code section 5.07.020, subdivision (B): “Licenses may be issued only to authorize tobacco retailing at one fixed location at a time.” In the citations, the City described this violation as: “Operator allowing an unpermitted online tobacco retailer to store and sell prohibited products in the store.” (AR 34, 54.) Thus, the City contends that Hollister is operating a second business on behalf of VSR at the same location.

Hollister contends that there is no violation of either state or local law to store tobacco products, including flavored tobacco products as long as there is no intent to sell by Hollister. The evidence shows that the products belong to VSR and not to Hollister, and there is no obligation for a person to choose Hollister as a pickup location for their VSR purchases.

The resolution of this issue depends in large part upon the construction of section 5.07.020, subdivision (B).

“We interpret city ordinances and agency rules and regulations the same way we interpret statutes, by starting with the text as the best indication of the measure’s intent and purpose. [Citations.] ‘If the text is unambiguous and consistent with the purpose of the regulation, our analysis ends.’ [Citations.] If not, we may look to a variety of extrinsic aids, including the measure’s legislative history and public policy. [Citations.]” (KB Salt Lake III, LLC v. Fitness Internat., LLC (2023) 95 Cal.App.5th 1032, 1048.)

“ ‘If, however, the language supports more than one reasonable construction, we may consider “a variety of extrinsic aids, including the ostensible objects to be achieved, the evils to be remedied, the legislative history, public policy, contemporaneous administrative construction, and the statutory scheme of which the statute is a part.” [Citation.] Using these extrinsic aids, we “select the construction that comports most closely with the apparent intent of the Legislature, with a view to promoting rather than defeating the general purpose of the statute, and avoid an interpretation that would lead to absurd consequences.” [Citation.]’ [Citation.]” (People v. Lopez (2003) 31 Cal.4th 1051, 1056.) “ ‘In the absence of express language, the intent must be gathered from the terms of the statute construed as a whole, from the nature and character of the act to be done, and from the consequences which would follow the doing or failure to do the particular act at the required time.’ [Citations.]” (People v. Allen (2007) 42 Cal.4th 91, 102.)

There is no strong dispute here as to the actual conduct of Hollister with respect to the VSR products. The evidence shows, generally consistent with Hollister’s assertion of the facts, that the products belong VSR and not to Hollister, that Hollister operates as a pickup and fulfillment facility for customers purchasing those VSR products, that Hollister operates under an express agreement with VSR for which it receives payment, and that part of Hollister’s operation under the agreement is the verification that the person picking up the product is an over-21 person who placed the order with VSR.

Because the products admittedly do not belong to Hollister—but rather Hollister is storing VSR’s products—transfers of such products by Hollister to the VSR customer picking up the product is not a direct sale from Hollister to that VSR customer. Instead, it is a sale from VSR to the VSR customer where Hollister participates in that sale by its provision of services at Hollister’s physical location.

Under Goleta Municipal Code section 5.07.020, subdivision (A), no person may engage in tobacco retailing without obtaining a tobacco retailing license for each location at which any tobacco retailing is to occur. “Tobacco retailing” is defined as the selling, offering for sale, or offering to exchange for any form of consideration, tobacco products. (Goleta Mun. Code, § 5.07.010.) Under section 5.07.020, subdivision (B), a license is limited to tobacco retailing at one fixed location. Construing these provisions together, section 5.07.020 prohibits tobacco retailing by more than one person at a single physical location at a time.

Goleta Municipal Code section 1.01.170 adds additional requirements to these provisions: “Whenever any act or omission is made unlawful by this Code, it shall include causing, permitting, aiding, abetting, suffering, or concealing the fact of such act or omission.”

By its admitted agreement with VSR, Hollister is permitting, aiding, and facilitating tobacco retailing, as defined in section 5.07.010, at Hollister’s location by VSR. Hollister consequently violates section 5.07.020, subdivision (B) by permitting and aiding tobacco retailing by more than one person (i.e., someone other than itself) at a single location.

This construction is consistent with the licensing scheme and the purpose behind the prohibition against the sale of flavored tobacco products. On its face, the licensing scheme is designed so that each location is separately licensed and that only one tobacco business operates from that location. The ostensible purpose of such a scheme is to ensure that those engaging in tobacco retailing are specifically identified and licensed. Allowing unlicensed persons indirectly to engage in tobacco retailing defeats this scheme by placing persons engaged in a highly regulated activity beyond the knowledge (and perhaps reach) of the regulators. Licenses may not be shared so that those actually engaged in the regulated activity, and benefitting financially from that activity, are accountable in following the regulatory requirements.

Here, as discussed above in the context of the violation of subdivision (N), there is a specifically stated regulatory purpose in not permitting the sale of flavored tobacco products by tobacco retailers. (Goleta Mun. Code, § 5.07.020, subd. (N); Health & Saf. Code, § 104559.5, subd. (b)(1).) The evidence shows that Hollister’s operations with VSR effectively permit such sales on Hollister’s premises by the subterfuge of having the ordering and payment for prohibited products occur over the internet with an out-of-state vendor. The evidence shows that Hollister directly and financially benefits from this transaction. The evidence also shows that such sales are facilitated by Hollister by signage and equipment at the physical location permitting (if not encouraging) the placing of such orders at Hollister’s physical location, by the delivery of products ordered at Hollister’s physical location, and by Hollister’s verification services designed to reduce the costs of such transactions. This activity is contrary to the purpose of these prohibitions within the regulatory scheme.

The court further finds that the citations are not vague or ambiguous, and do not violate due process. The court further finds that the notices do not lack a plain non-technical description of the alleged violations.

Accordingly, the court independently finds on the evidence presented that the City has shown violations of Goleta Municipal Code section 5.07.020, subdivisions (B) in citations G1328 and G1330. Those portions of the administrative citations are upheld.

(3)       Fines and Fees

The fines imposed by the Hearing Officer included continuing violations from March 12, 2024, for $300 per day through the date of the issuance of the ruling in the amount of 64 days for a total of $19,200, based upon the lack of evidence that the cited conduct had concluded. (AR 9.) Hollister argues that this is an excessive fine.

“The amount of the fines for Code violations shall be set forth in the Administrative Penalty Schedule established by resolution of the City Council. The schedule may include escalating fine amounts for repeat Code violations occurring within specified periods of time.” (Goleta Mun. Code, § 1.02.080, subd. (A).)

“Where no amount is specified by resolution of the City Council, the following fines shall apply:

“1.       Standard Penalty. A fine not exceeding $100.00 per occurrence for a first violation;

“2.       Second Violation. A fine not exceeding $200.00 per occurrence for a second violation of the same or similar ordinance or permit within one year from the date of the first violation;

“3.       Third Violation. A fine not exceeding $500.00 per occurrence for each additional violation of the same or similar ordinance or permit within one year from the date of the first violation.” (Goleta Mun. Code, § 1.02.080, subd. (B).)

“Each and every day a violation of the Goleta Municipal Code exists constitutes a separate and distinct offense and will be subject to a separate fine. A single citation may charge a violation for one or more days on which a violation exists, and for violation of one or more Code sections. Continuing violations shall automatically accrue fines beginning on the date the citation is issued until the abatement of the offense is properly verified in accordance with Section 1.02.090.” (Goleta Mun. Code, § 1.02.040, subd. (B).)

“If the offense is a continuing violation and the responsible person fails to properly cease and abate such violation, fines shall accrue for each day until the abatement is properly verified. Subsequent Administrative Citations may be issued for the same violation.” (Goleta Mun. Code, § 1.02.090, subd. (B).)

Among other things, Hollister argues that the fines are duplicative. With respect to the fines as to section 5.07.020, subdivisions (D) and (N), as the court discussed above, there are unique incidents supporting these violations in each of the citations. So, daily fines under section 1.02.090, subdivision (B) are appropriate, either for a first offense under citation G1328 or for a second offense under citation G1330, to accrue based upon the failure to abate each of those violations separately. The court notes, however, that the violation of section 5.09.020, subdivision (B) in citation G1328 is based on the same VSR operation as in citation G1330. It would be permissible to impose the daily fine of $100 (for a first offense) for the failure to abate this violation; it would also be permissible, as was done here, to assert a second violation based on the same conduct following the correction due date and to impose the $200 fine for that second offense. It would further be permissible to impose the daily fine of $200 (for a second offense) based upon the failure to abate that second violation. It would not be permissible to impose both a daily fine of $100 for the failure to abate the first offense and also a daily fine of $200 for the failure to abate the second, same offense—that would be duplicative. Here, however, the $300 daily fine imposed by Hearing Officer is a total for all violations and, both on a daily basis and in total, is less than the total permissible daily fine for these continuing violations. There is therefore no impermissible duplication in these fines.

The administrative fines imposed by the Hearing Officer are consistent with the Municipal Code sections in amount per occurrence, for a first and second violation as reflected in the citations, and for continuing violations in the absence of evidence showing that the violations had been abated. The total fine of $19,200 is consistent with law and is not excessive. Reviewing the fines de novo, understanding its discretion to alter the fines as provided by law, and considering the arguments of the parties, the court agrees with the fines imposed by the Hearing Officer, and will assess these fines as previously imposed in the same total amount.

The Hearing Officer also awarded fees and costs as follows: “Pursuant to GMC 1.02.120 E, based on a finding that a portion of Administrative Citation G1328 and all of G1330 is upheld, Appellant must pay City’s administrative costs, consisting of fees incurred in the retention of the Hearing Officer, City staff time, City legal staff time, and associated costs.” (AR 9.)

The City argues that, as the prevailing party, it is entitled to its costs of enforcement actions, including the administrative appeals process.

“Any owner or responsible party in an enforcement action shall be liable to the City for enforcement costs incurred by the City in an enforcement action.” (Goleta Mun. Code, § 2.02.030, subd. (A).) “ ‘Enforcement action’ means any action taken to correct a code violation.” (Goleta Mun. Code, § 2.02.020.)

“In no action, administrative proceeding, or special proceeding shall an award of attorney’s fees to any prevailing party exceed the amount of reasonable attorney’s fees incurred by the City in the action or proceeding. (Goleta Mun. Code, § 2.02.030, subd. (C).)

“The Hearing Officer may assess administrative costs against the violator when the Hearing Officer determines that a violation has occurred and that compliance was not achieved.” (Goleta Mun. Code, § 1.02.120, subd. (E).)

“Administrative costs may include any and all costs incurred by the City (both direct and indirect costs) in investigating and commencing administrative proceedings for the violation as well as any and all costs incurred by the City in connection with the Hearing Officer incurred in preparation for the hearing and for participating in the hearing itself and costs of the City to conduct the hearing.” (Goleta Mun. Code, § 1.02.120, subd. (F).)

Hollister argues (1) that the City should not be entitled to any costs related to the administrative hearing because Hollister prevailed on the alleged cannabis violation in citation G1328, asserting by far the largest fine of $33,214, and (2) that Hollister should be awarded costs and fees in both the administrative proceeding and in this trial de novo.

This trial de novo addresses those matters that are subject to the notice of appeal, that is, those appealed matters that were originally determined by the Hearing Officer. The Hearing Officer determined only that the City was entitled to its administrative costs. The Hearing Officer did not determine the amount of the administrative costs to be awarded. The court agrees with the Hearing Officer that the City is the prevailing party entitled to an award of enforcement costs (i.e., administrative costs).

“A city may, by ordinance, provide for the recovery of attorneys’ fees in any action, administrative proceeding, or special proceeding to abate a nuisance. If the ordinance provides for the recovery of attorneys’ fees, it shall provide for recovery of attorneys’ fees by the prevailing party, rather than limiting recovery of attorneys’ fees to the city if it prevails. The ordinance may limit recovery of attorneys’ fees by the prevailing party to those individual actions or proceedings in which the city elects, at the initiation of that individual action or proceeding, to seek recovery of its own attorneys’ fees. In no action, administrative proceeding, or special proceeding shall an award of attorneys’ fees to a prevailing party exceed the amount of reasonable attorneys’ fees incurred by the city in the action or proceeding.” (Gov. Code, § 38773.5, subd. (b).)

“Prevailing party” is not specifically defined in this context, but under any ordinary construction, the City is the “prevailing party.” As previously discussed, the purpose of the enforcement action is compliance with health and safety ordinances as specifically addressed to tobacco retailing. The City did prevail (and has again prevailed) on the tobacco licensing violations, which constituted a substantial part of its enforcement action, even if not the majority of its potential fines. The fact that the City did not prevail on the alleged cannabis violation is relevant in this analysis, but when the totality of the circumstances is considered, the City, as opposed to Hollister, had the greater and more substantial success. For the same reason, the court will uphold the Hearing Officer’s determination and, following de novo review, order the payment of enforcement costs to the same extent as the Hearing Officer.

Because there is a separate administrative procedure for the determination of the amount of enforcement costs and the amount so determined is not now before the court (see Goleta Mun. Code, § 2.02.040), the court expresses no opinion as to the amount of such enforcement costs.

With respect to an award of attorney fees and costs in this court proceeding, the court will address such fees and costs by an appropriate post-judgment procedure. (See Cal. Rules of Court, rules 3.1700, 3.1702.)