PACIFIC MERCHANT SHIPPING ASSOCIATION v. VOSS

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Court of Appeal, Third District, California.

PACIFIC MERCHANT SHIPPING ASSOCIATION, Plaintiff and Respondent, v. Henry VOSS, As Director etc., et al., Defendants and Appellants.

No. C015630.

Decided: January 04, 1995

Daniel E. Lungren, Atty. Gen., Roderick E. Walston, Chief Asst. Atty. Gen., Walter Wunderlich, Sr. Asst. Atty. Gen., Charles W. Getz, IV, Supervising Deputy Atty. Gen., for defendants and appellants. R. Frederic Fisher, Lawrence N. Minch, Lillick & Charles, San Francisco, for plaintiff and respondent.

Plaintiff Pacific Merchant Shipping Association (Pacific Merchant), an unincorporated association of ocean carriers, filed this class action on behalf of its members to obtain a declaration that inspection fees collected by defendant Department of Food and Agriculture (Department) 1 violate the United States Constitution, to enjoin collection of the fees, and to recover damages resulting from the collection of the fees.   The Department appeals from the judgment entered by the trial court in favor of Pacific Merchant.   Finding the summary adjudication of facts on which the trial court rested its judgment to have been granted in error, we shall reverse the judgment and remand for further proceedings.

BACKGROUND

As an urgency statute, the Legislature enacted the “California Airport and Maritime Plant Quarantine, Inspection, and Plant Protection Act” (the Act) in 1990 (Stats.1990, ch. 1612, § 1, p. ––––), adding sections 5350–5353 to the Food and Agriculture Code (undesignated section references will be to this code).   Under these statutes, the Department “shall establish a program for the inspection of conveyances entering California through airport and maritime facilities to prevent the introduction into, or spread within, this state of pests.”  (§ 5350, subd. (a).)  To this end, the Act required the Department to “maintain plant quarantine inspection stations at point of entry at airports and marine terminals․” and to “establish a program for the dissemination of information at airports and marine terminals in order to provide the users of the facilities information regarding the pest control and quarantine requirements of this state.”  (Id., subds. (b), (c).)

The Act mandated the Department to collect fees (to the extent authorized by federal law) from air and marine carriers for the use of airport or marine terminal facilities “for plant and animal pest inspection, quarantine, and eradication.”  (§§ 5351, subd. (a);  5352.)   The Act also required the Department to establish a list of countries which it had reason to believe were potential sources of exotic plant and animal pests.  (§ 5352.)   The Legislature prescribed a fee schedule of $85 per air carrier and $200 per marine carrier making their initial stop in California on a journey initiating outside the United States.  (§ 5353, subds. (a), (b).)   The fees collected pursuant to the Act were to be deposited in a special fund for the Department for use for the purposes of the Act.  (Id., subd. (e).)  The Legislature ceded discretion to the Department to increase or decrease these fees by regulation “upon determining that the revenue received is inadequate or in excess of the amount needed to conduct an effective inspection program” with a maximum charge limited to three times the statutory fees.  (Id., subd. (f).) 2

Pacific Merchant brought this action shortly after the program began in July 1991.   To outline briefly the procedural course, the Department demurred to Pacific Merchant's First Amended Complaint, challenging Pacific Merchant's standing.   The Court denied the demurrer and subsequently certified the class.   Eventually, Pacific Merchant moved for summary judgment or adjudication of issues.   The trial court issued a tentative ruling granting summary judgment on the ground the inspection fee discriminated against foreign commerce;  after taking the matter under submission, the court accorded the Department the opportunity of presenting additional evidence justifying the discrimination.   The trial court thereafter affirmed its tentative ruling.   Reserving its right to challenge the trial court's ruling on appeal, the Department stipulated to a judgment declaring the inspection fees to be in violation of the Commerce Clause (U.S. Const., art. I, § 8), and to a trial on stipulated facts with respect to remaining damages issues.   The trial court entered judgment in April 1993.

THE SUMMARY ADJUDICATION MOTION

At the outset of its brief in the trial court, Pacific Merchant stated, “This motion is based solely on issues of law.   Plaintiff['s] fundamental position is that the statutory fees on their face violate the Commerce Clause (U.S. Const., Art. I, § 8).   The alternative constitutional grounds also urge facial invalidity of the statutory fees and issues of law.   To the extent that the alternative grounds also address Defendant['s] actual administration of the statute, Plaintiffs rely only on facts that have been stated under oath by Defendant.”  (Original emphasis.)   Laying out its legal theory, Pacific Merchant asserted as its primary ground a violation of the Commerce Clause because the Act “on its face discriminated against foreign commerce by imposing fees on vessel inspection only in foreign commerce while providing free inspections in domestic commerce.”   As alternative grounds, “this motion urges that the statutory fees as a matter of law violate the Tonnage Duty, Commerce, and Export/Import Clauses of the Federal Constitution [Art. I, § 10, cl. 3;  § 8, cl. 3;  and § 10, cl. 2] and the GATT Treaty[3 because the fees imposed do not even purport to reflect any allocation of Defendant's cost burden to both foreign and domestic commerce, convey no benefit on vessels[,] and ․ exceed Defendant['s] actual costs of inspecting vessels.”   Finally, Pacific Merchant claimed the fees “violate the Supremacy Clause of the Federal Constitution because they conflict with a federal statute restricting concurrent State jurisdiction over border quarantine/inspection of transport conveyances like vessels to domestic commerce.  (7 U.S.C. § 161 (First Proviso)).”  (Emphasis original.)

Pacific Merchant adduced the following facts with respect to the Department's inspection programs which are not disputed.   The Department has established a list of pests with origins in the United States and its territories which are the basis for enforcement of intrastate and interstate quarantines;  however, for pests originating outside the United States, the Department relies on federal quarantines.   The introduction of any of these pests would have a significant economic impact on the state's agricultural industry.   According to excerpts of the depositions of Department officials, the Department conducts inspections of various instrumentalities of domestic interstate commerce, imposing a fee only for the destruction of infected goods (collecting no more than $20,000 in a typical year).4  The Department will inspect aircraft (but not their contents, which are subject to inspection by county departments) to check for Japanese beetles.   Rail carriers are inspected if there is reason to believe there is a suspect cargo (although the frequency or nature of these inspections is not specified).   Ships are subject to inspection, and have been inspected (although again the frequency is not specified).   This brings us to trucks, which are also inspected and are the instrumentality on which Pacific Merchant most directly focused.   These inspections are performed at 16 border stations owned, operated, and staffed by the state of California.   In contrast, the Department does not maintain any state inspection facilities at marine and air terminals, or at the Mexican border.   Instead, the federal Department of Agriculture (USDA) is responsible for pest inspections of international arrivals.   Inspections are performed almost entirely by USDA inspectors.

In order to defray the costs of the inspection program created by the Act, inspection fees are payable by all planes and vessels originating outside the United States from a listed quarantine area which are making their first United States port of call in California.   With respect to ships, passengers and crew are inspected on board;  the cargo is generally inspected at warehouses in the privately-owned marine terminals.   Pursuant to a memorandum of understanding between the Department and the USDA, the state subsidizes the costs of additional federal inspectors (and their overhead) at both sea and air facilities.   In the particular year for which Pacific Merchant requested information, the cost of the additional inspectors pursuant to the agreement with the USDA was $2.4 million.   This resulted in the hire of 7 additional marine inspectors and 44 additional air inspectors.

Pacific Merchant also adduced a number of financial facts relating to the inspection programs which are generally undisputed.   In the particular fiscal year for which Pacific Merchant obtained information, the total amount of inspection fees collected from vessels and planes under the Act amounted to $4.3 million.   In addition to the 51 inspectors hired pursuant to the $2.4 million agreement with the USDA, the inspection fees also funded a $1 million public information program, $660,000 in overhead (charged as a percentage by the state of California against all state programs), $164,000 for investigations, and $100,000 for “blitzes” (periods of intense inspection of every incoming vessel).5  In comparison, the total costs for the Department's pest-exclusion division (exclusive of foreign pests) were $10.8 million, with $8.4 million 6 devoted to the inspections of domestic interstate commerce.

In the opposition to the motion, the Department adduced evidence from its officials attesting to purported significant differences between the risks addressed by the domestic border inspections and the air and maritime inspections.   They stated (in contradiction of Pacific Merchant's position) that foreign commerce presented a significantly greater danger than domestic commerce with respect to the risk of infestation, since there were 199 different countries with thousands of pests subject to federal quarantines, while there are only 37 domestic quarantines established by the Department.   While trucks can be inspected at the border stations in 5 to 30 minutes, inspection of a ship and its cargo can take several days.

The Department represented that the Act was passed not as a means of raising revenue but for the purpose of protecting California agriculture from infestation.   As found in an August 1991 blitz of all ships in a two-week period entering Los Angeles, 27 percent carried pests of some type.   There had been a big increase in air and marine commerce, but the number of federal inspectors had not been commensurately increased.   All fees collected support the air and marine inspection program and not the general fund;  in fact, the program has a separate fund and line item in the budget from the rest of the Department.   With the increase in staffing, inspectors were able to increase interceptions, but even with the augmentation they are able to inspect only 62 percent of ships.   It was in part at the behest of the plaintiff that the Department structured the program as it did (making use of additional federal inspectors), since there were objections to a separate layer of state inspections.

Supplementing Pacific Merchant's description of the program in its motion, the Department noted marine carriers could obtain exemptions from inspections based on the nature of their cargo or their foreign ports-of-call.   In the 16 months ending November 1992, 330 ships qualified for exemptions.7  A significant amount of staff time is devoted to processing the requests for these exemptions.   The Department has also established incentives for carriers willing to assist in education programs, with a 10 percent discount on fees in the first year and 20 percent in each following year in which the carrier continues to participate.   While the Department has authority to reduce or increase the statutory inspection fee, there are no current plans to do so.

In connection with the costs of the program, the Department offered testimony that the public information materials were an important part of pest eradication because they reduced the number of passengers and crew bringing pests into the country and thus hopefully would expedite future inspections.   Even though there were not a high percentage of pests found among the passengers and crew of ships, any one pest could pose a significant risk to California agriculture.   The Department was unable to separate the costs of the public information program for air carriers from marine carriers.   The Department noted that while the per-vessel charge was higher than the per-aircraft charge, the vastly larger number of aircraft meant the ships provided only 21 percent of the total fees recovered.

DISCUSSION

I. The Negative Commerce Clause

Remembering it is the summary adjudication of facts under review, we first set out the governing substantive law to be applied to Pacific Merchant's showing and the Department's opposition.   Although our resolution of the matter terminates at an early point of the negative commerce clause analytic paradigm, we include its entirety for the guidance of the trial court on remand.

A. Substantive Legal Principles

While the Commerce Clause of the United States Constitution is a subject of endless fascination to constitutional scholars (as many a weary law student can attest), we do not intend to recapitulate the extensive commentary that has developed on this subject, particularly that which has been penned saluting its purposes.   Rather, we will stick to the pertinent cases.

“The Commerce Clause expressly gives Congress power ‘[t]o regulate Commerce with foreign Nations, and among the several States.’  U.S. Const., Art I, § 8, cl. 3.   It has long been understood, as well, to provide ‘protection from state legislation inimical to the national commerce [even] where [the] Congress has not acted․’ ”  (Barclays Bank v. Franchise Tax Bd. (1994) 512 U.S. 298, ––––, 114 S.Ct. 2268, 2275, 129 L.Ed.2d 244, 257.)   This latter aspect is termed the “dormant” or “negative” Commerce Clause.  (Oregon Waste Sys. v. Dept. of Env. (1994) 511 U.S. 93, ––––, 114 S.Ct. 1345, 1349, 128 L.Ed.2d 13, 20.)   Far from being an incidental emanation of the Commerce Clause, there is evidence the Framers considered the negative aspect to be the more significant.  (West Lynn Creamery v. Healy (1994) 512 U.S. 186, ––––, fn. 9, 114 S.Ct. 2205, 2211, fn. 9, 129 L.Ed.2d 157, 166, fn. 9.)

 “[T]he first step in analyzing any law subject to judicial scrutiny under the negative Commerce Clause is to determine whether it ‘regulates evenhandedly with only incidental effects on interstate commerce, or discriminates against interstate commerce.’  ․ If [the latter], it is virtually per se invalid.   By contrast, nondiscriminatory regulations that have only incidental effect on interstate commerce are valid unless ‘the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.’ ”  (Oregon Waste Sys., supra, 511 U.S. at p. ––––, 114 S.Ct. at p. 1347, 128 L.Ed.2d. at p. 21.)   A court may find discrimination either on the face of legislation or in its effects (Bacchus Imports, Ltd. v. Dias (1984) 468 U.S. 263, 270, 104 S.Ct. 3049, 3054, 82 L.Ed.2d 200);  moreover, even a lack of legislative intent to discriminate does not insulate a statute from challenge because “the evil of protectionism can reside in legislative means as well as legislative ends.”  (Philadelphia v. New Jersey (1978) 437 U.S. 617, 626, 98 S.Ct. 2531, 2536–2537, 57 L.Ed.2d 475.)   It is immaterial as well that a statute discriminates only against a segment of interstate commerce rather than its entire spectrum.  (Fort Gratiot Landfill v. Mich. Dept. (1992) 504 U.S. 353, –––– – –––– & fn. 4, 112 S.Ct. 2019, 2024–2025 & fn. 4, 119 L.Ed.2d 139, 148–149 & fn. 4.)

 The challenger bears the initial burden of demonstrating the existence of discrimination.   Of necessity, this includes the demonstration that the commerce with which the challenger seeks to compare itself is similarly situated.  (Cf. National Meat Assoc. v. Deukmejian (9th Cir.1984) 743 F.2d 656, 660, aff'd. mem. (1985) 469 U.S. 1100, 105 S.Ct. 768, 83 L.Ed.2d 766 [must demonstrate tax discriminates between similarly situated participants in commerce].)   Otherwise, the challenger could simply pick any other type of commerce not subjected to the same regulation and argue discrimination.   Requiring the demonstration of similar situations avoids the proverbial apple-and-orange comparisons which cram facts into procrustean analyses ill-suiting them.

 Once a court finds the existence of discrimination, the burden switches to the state to demonstrate a legitimate local purpose for the distinction in treatment which cannot be served by alternative nondiscriminatory means.  (Oregon Waste Sys., supra, 511 U.S. at pp. –––– – ––––, 114 S.Ct. at pp. 1350–1351, 128 L.Ed.2d at p. 22;  Chemical Waste Management v. Hunt (1992) 504 U.S. 334, –––– – ––––, 112 S.Ct. 2009, 2013–2015, 119 L.Ed.2d 121, 132–133;  Hughes v. Oklahoma (1979) 441 U.S. 322, 336–337, 99 S.Ct. 1727, 1736–1737, 60 L.Ed.2d 250.)   A statute patently discriminating in its treatment of interstate commerce is subjected to the strictest scrutiny, requiring a compelling justification.  (Oregon Waste Sys., supra, 511 U.S. at pp. –––– – ––––, 114 S.Ct. at pp. 1350–1351, 128 L.Ed.2d at p. 22;  Kraft Foods v. Iowa (1992) 505 U.S. 71, –––– – ––––, 112 S.Ct. 2365, 2371–2372, 120 L.Ed.2d 59, 69;  Hughes, supra, 441 U.S. at p. 337, 99 S.Ct. at p. 1737.)

 Discriminatory treatment is not, however, automatically fatal;  it will be allowed if there is some reason other than the point of origin of the articles of commerce which affects either the health and safety of a state's citizenry or the integrity of its natural resources and there is no nondiscriminatory alternative.  (Maine v. Taylor (1986) 477 U.S. 131, 148 n. 19, 151, 106 S.Ct. 2440, 2453 n. 19, 2454, 91 L.Ed.2d 110;  see Oregon Waste Sys. v. Dept. of Env., supra, 511 U.S. at pp. –––– – ––––, 114 S.Ct. at pp. 1351–1352, 128 L.Ed.2d at t p. 23;  Chemical Waste Management, supra, 504 U.S. at pp. –––– – ––––, 112 S.Ct. at pp. 2016–2017, 119 L.Ed.2d at p. 135;  Philadelphia, supra, 437 U.S. at pp. 626–627, 98 S.Ct. at pp. 2536–2537.)   This exception reflects the Supreme Court's long-standing recognition of a state's right to legislate in the interest of local health and safety, even if burdensome regulation is imposed on interstate commerce as a result.   (Maine, supra, 477 U.S. at pp. 148 fn. 19, 151, 106 S.Ct. at pp. 2453 fn. 19, 2454;  H.P. Hood & Sons v. DuMond (1949) 336 U.S. 525, 533, 535, 69 S.Ct. 657, 662, 663, 93 L.Ed. 865.)   In furtherance of this inherent police power, the state can both inspect the articles of interstate commerce and exact an inspection fee, which will be upheld so long as it reasonably relates to the costs of the inspection program.  (Texas Co. v. Brown (1921) 258 U.S. 466, 474–475, 42 S.Ct. 375, 377–378, 66 L.Ed. 721;  Pure Oil Co. v. Minnesota (1918) 248 U.S. 158, 161–162, 39 S.Ct. 35, 36–37, 63 L.Ed. 180;  cf. Great Northern R. Co. v. Washington (1937) 300 U.S. 154, 160 & fns. 7, 9, 57 S.Ct. 397, 400 & fns. 7, 9, 81 L.Ed. 573 [fees to cover costs of regulating interstate public utilities];  see South Carolina State H. Dept. v. Barnwell Bros. (1938) 303 U.S. 177, 188 & fn. 5, 58 S.Ct. 510, 515 & fn. 5, 82 L.Ed. 734;  compare Hale v. Bimco Trading (1939) 306 U.S. 375, 380, 59 S.Ct. 526, 528, 83 L.Ed. 771 [no rational basis for subjecting only out-of-state commodities to inspection and fees;  fees exorbitant as well].)   It is the burden of the challenger to demonstrate a fee is “manifestly disproportionate” to the service rendered.  (Clark v. Paul Gray (1939) 306 U.S. 583, 599–600, 59 S.Ct. 744, 753, 83 L.Ed. 1001.) 8

Because it engages in foreign interstate commerce, Pacific Merchant also attempts to invoke (as part of the pertinent substantive law) the oft-repeated cliché from Japan Line, Ltd. v. County of Los Angeles (1979) 441 U.S. 434, 99 S.Ct. 1813, 60 L.Ed.2d 336, in which the Supreme Court set out the analysis for taxation of foreign commerce:  “[A]n inquiry more elaborate than that mandated by Complete Auto Transit[, Inc. v. Brady (1977) 430 U.S. 274, 97 S.Ct. 1076, 51 L.Ed.2d 326] is necessary when a State seeks to tax the instrumentalities of foreign, rather than interstate, commerce.   In addition to answering the nexus, apportionment, and nondiscrimination questions ․, a court must also inquire, first, whether the tax ․ creates a substantial risk of international multiple taxation, and, second, whether the tax prevents the Federal Government from ‘speaking with one voice when regulating commercial relations with foreign governments.’ ”  (Id. at p. 451, 99 S.Ct. at p. 1823 [emphasis supplied];  accord Barclays Bank, supra, 512 U.S. at pp. –––– – ––––, 114 S.Ct. at pp. 2280–2281, 129 L.Ed.2d at p. 264.)   As refined in Barclays Bank, the “one voice” element must be demonstrated by specific indications of congressional intent to bar the challenged state regulation.  (512 U.S. at p. ––––, 114 S.Ct. at 2282, 129 L.Ed.2d at p. 266.)   Although we question whether this element from a taxation case is even relevant to inspection fee cases, Pacific Merchant has not pointed to any such specific Congressional intent to preclude states from collecting regulatory fees from foreign commerce.   This factor therefore forms no part of our analysis.

B. Analysis

 We begin by casting aside the Department's efforts to establish the bona fides of the Legislature in enacting the challenged inspection scheme (part of which is the irrelevant argument that Californians engaging in foreign interstate commerce are not favored), or to point out that only a portion of foreign interstate commerce is encumbered.   Under the authority cited above, both propositions are irrelevant:  even the best-intentioned encumbrance of only one aspect of foreign interstate commerce is impermissible if unjustified.

We must also reject the analytic paradigm Pacific Merchant has applied to the facts of this case, which led the trial court astray and resulted in relieving Pacific Merchant of its full burden on the summary adjudication motion.   Pacific Merchant purports to lump all inspections performed by the Department into what it views as a single pest-prevention program, a view which allows it to posit facial discrimination in the statute at issue because it imposes fees only on certain inspections.9  Were we to accept this characterization, Pacific Merchant would need to do little other than point to the waste-disposal fee cases cited above (or cases in which taxes are imposed on one type of commerce and not another) and demand that the Department produce evidence demonstrating a compelling reason for charging fees for one and not the other.   This would be a Sisyphean task for the Department, because fees imposed in discriminatory manner by a single program (or discriminatory fees and taxes unrelated to a substantive regulatory program) are inevitably stricken down.

This effort to leap past the requirement of demonstrating ships are similarly situated to unburdened commerce is unavailing, however.   Unlike the waste-disposal cases in which the high court was presented with single regulatory program charging disparate fees (or cases where there are no regulatory programs at all), we here have an inspection program for ships (and planes) administratively and financially segregated from either the general fund or even the remainder of the Department's budget;  in point of fact, the inspections themselves are even performed almost entirely by a different sovereign subsidized by California.   The fact that inspections of air and marine carriers flow from the same general grant of legislative authorization to the Department as any other inspection (§ 5341) is immaterial;  this power can flow into entirely discrete streams.

Since we have discrete regulatory programs under consideration, only one of which assesses the fees at issue, Pacific Merchant must thus initially demonstrate that the inspections of its ships are sufficiently similar to the other inspections taking place under the Department's other programs.   Otherwise, its Commerce Clause challenge is limited (under the inspection-fee cases we have cited above (p. 7, ante )) to demonstrating the extent to which the fees charged exceed the costs of the inspection program (in which case the excess is stricken down as a camouflaged revenue-raising method).10

Contrary to Pacific Merchant's offhand response to the Department's arguments in this regard, requiring it to demonstrate “similar situation” does not simply shift to it the Department's “justification” burden.   It is Pacific Merchant's initial burden to demonstrate discrimination.   Although often unarticulated, it is an apriority to establishing “discrimination” that the categories under analysis are otherwise the same.   Moreover, there are two different foci involved for the two issues:  if Pacific Merchant shows the nature of inspections are essentially the same (and thus that discrimination exists), the Department must justify charging fees only under the ship and airplane program.   Thus, the Department's evidentiary showing has been mischaracterized by Pacific Merchant and the trial court.   It is not an effort to “justify” the discrimination by showing the inspections are unalike;  it is instead a counter-showing that there is no discrimination because the categories are not the same (and therefore need not be treated the same).

 As a result, despite the highfalutin constitutional issues invoked in this appeal, all we need resolve are the mundane mechanics of the burdens in a summary adjudication motion.   Aligning the evidence produced below in the proper substantive viewfinder, it is clear the evidence relating to the substantial-similarity component of discrimination, far from being uncontested, is hotly disputed between the parties.   In Pacific Merchant's view, both programs simply look for the same pests, and an inspection of a ship is nothing more than a cumulation of 4000 trucks.   The Department maintains there are different pests involved, and the magnitude of difference is of such a high order than the inspections are inapposite.11  Faced with this primary dispute (and the subsidiary factual defect identified in the footnote), factual findings are required on the issue of similarity, which is not the office of a trial court on a summary adjudication motion and is certainly not a function for this court.12  It may well be that if the nature of the inspections are substantially similar, charging fees for one and not the other is indefensible.   But that is an issue we need not reach (and one on which we decline to offer an advisory opinion in the absence of facts).   It is sufficient to hold the Department has satisfied its burden of demonstrating the existence of triable issues of fact regarding the presence of discrimination, so the trial court should have denied the motion.

II. Other Grounds Raised Below

In sketchy fashion, Pacific Merchant reasserts the invalidity of the statutory scheme on other grounds raised by it in the trial court (which declined to consider them in light of its ruling on the negative Commerce Clause).   The Department contends these issues are not properly before us.13

“A judgment correct under any applicable legal theory will not be reversed merely because the trial court followed an erroneous path of reasoning, but an appellate court will not employ a theory as grounds for affirmance where that theory rests on determinations of fact, the evidence on the facts was conflicting, and the conflicts are not resolved by the trial court.”  (Cline v. Yamaga (1979) 97 Cal.App.3d 239, 246–247, 158 Cal.Rptr. 598;  accord Zak v. State Farm etc. Ins. Co. (1965) 232 Cal.App.2d 500, 506, 42 Cal.Rptr. 908.)   Thus, if Pacific Merchant's alternative theories involve disputed matters of fact, we cannot resolve them on appeal.

 As we earlier noted, Pacific Merchant expressly agreed in the trial court (and now on appeal) that all of its remaining theories—other than federal preemption-involve resolution of the question whether the fees assessed substantially exceed the actual and necessary costs to the Department of the inspection program.   However, its showing in that regard was limited to calculating the percentage of new inspectors dedicated to marine inspection (13 percent), comparing this with the percentage of revenue generated by marine fees (21 percent), and asserting that the public information and overhead costs should not be borne by marine carriers.   It also pointed to the fact ships are charged the fee whether or not they can actually be inspected.

Pacific Merchant has failed to present any cogent reason why we should limit the costs for which they should be responsible to the percentage of the contractual costs of the additional maritime inspectors.   It is undisputed that all fees are expended and none are retained as revenue.   While Pacific Merchant may claim that public information costs and overhead are not permissible expenses, the Department has produced evidence that public information is a necessary part of the program because it reduces the influx of pests and diminishes the need for future inspections, and every program in the state is asked to bear its share of the state's administrative expenses.   As for the point that not every ship is inspected, the Department has produced evidence this is a function of insufficient inspectors, which would tend to prove the fees are insufficient to cover the actual costs.   Finally, Pacific Merchant, in seeking to strike down the statute, ignores the effect of the express grant of authority to the Department to adjust fees to reflect costs as well as the Department's exemption program.   Thus, the extent to which the expenses are actual and necessary, even if Pacific Merchant has sustained its burden, are disputed questions of fact, meaning we cannot consider any theory based on them in the absence of trial court findings.

(7) This leaves the federal preemption argument,14 which is quickly dispatched.   In Oregon–Washington R. & Nav. Co. v. Washington (1926) 270 U.S. 87, 46 S.Ct. 279, 70 L.Ed. 482, the Supreme Court held that Congress, in enacting the Plant Quarantine Act (7 U.S.C. § 151 et seq.) intended to occupy the field of interstate quarantines of plant diseases and pests, preempting state efforts to establish quarantines.  (Id. at pp. 101–103, 46 S.Ct. at pp. 283–284.)   Pacific Merchant attempts to rely on this decision to establish that the Department is precluded from regulating interstate commerce.

 However, Congress immediately amended 7 U.S.C. section 161 to divest the Plant Quarantine Act of its preemptive effect, “restor[ing] to the states full police power to impose a quarantine on any articles not specifically interdicted by a federal quarantine.”  (Guam Fresh, Inc. v. Ada (9th Cir.1988) 849 F.2d 436, 438.)  “A Congressional intent to allow state regulation to co-exist with federal authority is also implicit in ․ related statutes aimed at controlling and eradicating plant and animal diseases and pests.   For example, 7 U.S.C. § 450 (1982) authorized the Secretary to cooperate with state departments of agriculture ‘[i]n order to avoid duplication of functions, facilities, and personnel․’  [ ] Such provisions are inconsistent with the argument that federal law displaces state regulation in this area;  rather, it is clear the Congress contemplated a statutory scheme in which state regulation supplements federal law, by restricting the entry of pests of peculiarly local concern.”  (Ibid.)

Pacific Merchant has overlooked this decision and the related statute cited in it (7 U.S.C. § 450).15  Nothing about the Act conflicts with a federal quarantine.   Indeed, the Department has specifically stated it is enforcing only federal quarantines in interstate commerce.   The Act otherwise seeks to work in cooperation with the federal quarantines.   Consequently, the preemption argument is without merit.

DISPOSITION

The judgment is reversed and the matter remanded with direction to enter a new order denying Pacific Merchant's summary adjudication motion.   The Department shall recover costs of appeal.

FOOTNOTES

1.   The named defendants are Henry Voss and Islam Siddiqui, sued in their respective official capacities as director and assistant director of the Department.   For ease of reference, we will simply refer to the Department as defendant.

2.   The Department has promulgated a regulation setting the inspection fees equal to those prescribed in section 5353 and providing for exemptions for particular flights or voyages where sufficient evidence is provided of adequate compliance with the Act.  (3 Cal.Code Regs. § 3560.)

3.   “GATT” is the acronym for the General Agreement on Tariffs and Trade.   While the GATT treaty is presently a focus of attention in current events, it plays no part in the resolution of this case.   Hence, there is no need to expand our explanation beyond identifying the acronym.

4.   The Department officials stated the Department participated in inspections of intrastate commerce along with county agricultural departments.   These applied to trucks, railroads, aircraft, and cars (the latter only if a special quarantine were in effect).   While the Department does not impose fees for these inspections, apparently the counties impose fees if they take place outside normal work hours or for destruction of contaminated goods (although the Department was unfamiliar with the manner or amount of fees charged by the various counties).

5.   Although the parties elsewhere dispute the total costs of the air and marine inspection program, this is the result of Pacific Merchant relying on data from one fiscal year while the Department relies on data from a different fiscal year.   However, Pacific Merchant in fact relies on the Department's data as support for these financial facts.

6.   There is also a discrepancy with respect to this figure, with an answer to an interrogatory stating that “inspection activities, other than airport and maritime inspections, are performed ․ at a cost of $9.92 million” and a deposition response stating that “I would say about $8.4 million of the State of California general fund is being used in this effort of ․ domestic pest containment or prevention.”   The parties seem to have adopted the latter figure on appeal, however.

7.   Putting this number in perspective, there were 774 ships paying inspection fees during a three-month period.

8.   We reject as nonexistent the distinction Pacific Merchant attempts to draw in Commerce Clause jurisprudence between “substantive regulatory program” cases and “fee/tax” cases.   First, in attempting to draw this distinction, Pacific Merchant ignores the inspection-fee cases we have cited.   Moreover, the “distinction” relates merely to the factual happenstances of the cases from which Pacific Merchant purports to draw this distinction and not any aspect of the legal reasoning fundamental to the cases.   Pacific Merchant thus loses sight of the principle that the ratio decidendi of a case must be related to the facts before the court.   (In re Randy J. (1994) 22 Cal.App.4th 1497, 1503, 28 Cal.Rptr.2d 152.)

9.   Pacific Merchant does not challenge the inspections themselves as an impermissible burden on foreign interstate commerce, perhaps recognizing it follows directly from Maine v. Taylor, supra, that inspections are the least restrictive alternative furthering the compelling state interest of protecting its agricultural industry from non-native pests.

10.   As Pacific Merchant did not pursue this course, we will not discuss whether the inspection fees were “excessive” other than noting there are triable issues of material fact regarding the relationship of revenues and costs under the program (a subject addressed again at greater length in part II).

11.   Besides these issues of triable material fact in the comparison of the similarity of the truck and ship inspections, for which at least there is some factual material in the record, we note Pacific Merchant has also attempted to invoke the other inspections performed by the Department without fee.   However, as we noted in our earlier summary of these sparse materials filed in support of the motion, the deposition excerpts are a mere recitation of the categories of inspections and the absence of fees without any additional information as to the nature of these inspections, or even their frequency.   This is insufficient to carry the burden of demonstrating inspections of Pacific Merchant's ships are similar to these other inspections of intrastate and domestic interstate commerce.

12.   As the Supreme Court has pointed out, involvement of Commerce Clause issues does not alter the fundamental premise that findings on disputed issues of fact are for the trial court and not the appellate court.  (Maine, supra, 477 U.S. at pp. 144–145, 106 S.Ct. at p. 2450.)

13.   Hedging its bets, the Department invites this court in its reply brief to consider its trial brief in the event we reach the merits of these alternative grounds.   Incorporating trial briefs by reference is an improper mode of appellate advocacy, which courts deem to be an abandonment of argument on an issue.  (Garrick Development Co. v. Hayward Unified School Dist. (1992) 3 Cal.App.4th 320, 334, 4 Cal.Rptr.2d 897;  see Balesteri v. Holler (1978) 87 Cal.App.3d 717, 720–721, 151 Cal.Rptr. 229.)   In light of the importance of this case to the legislative scheme, we will overlook this lapse on the part of the Department and not deem it to have abandoned any opposition.

14.   In a scant paragraph's “argument,” Pacific Merchant requests we take judicial notice of a trial court decision invalidating the Act as applied to air carriers and then affirm the judgment on the ground it would violate equal protection to apply the Act only to marine carriers and not air carriers.   As the trial court judgment has been stayed by the Second District pending appeal (in a decision of which the Department requests we take judicial notice), we reject this argument, whatever its merits, as premature.

15.   Pacific Merchant claims the failure to amend 7 U.S.C. § 160 (which authorizes the USDA to establish quarantines for foreign commerce) as well leaves states powerless to inspect foreign commerce.   It provides no authority for this proposition, which is inconsistent with Guam Fresh, Inc.'s holding that the amendment was to apply to the entire federal act (abrogating the Supreme Court's holding that had applied to the entire federal act).

DAVIS, Associate Justice.

SPARKS, Acting P.J., and NICHOLSON, J., concur.