Verne ORR, Director of the Department of Motor Vehicles, and Department of Motor Vehicles, a Department of the State of California, Petitioners, v. SUPERIOR COURT of the State of California FOR the CITY and COUNTY OF SAN FRANCISCO, Respondent, Peter ALVARADO, John Batista Berberena, and Norman Del Bosque, Real Parties in Interest.
By their petition for a writ of prohibition, the director of the Department of Motor Vehicles and the department seek to restrain the respondent superior court from taking any further action against them in which the real parties in interest, by petition for writ of prohibition and mandate and by complaint in intervention, pray for a judgment declaring sections 16080 and 16100 of the Vehicle Code 1 unconstitutional and void, in an of themselves, and as applies to real parties in interest, and for restoration of their driving privileges and licenses. Petitioners' demurrer to the petition in the lower court was overruled. After petitioners answered each side interposed a motion for summary judgment. The court denied each motion and made the following order: “ * * * the matter will be set on the Court's calendar for hearing. If upon the trial, it appears from the evidence that petitioners and the intervener were without fault as to the accidents which resulted in the suspension orders, a writ of mandate will issue compelling respondent to restore their licenses.” Intervention of this court is sought on the grounds that the lower court is proceeding in excess of its jurisdiction. (Code Civ.Proc. §§ 1102 and 1103; City & County of S.F. v. Superior Court (1959) 53 Cal.2d 236, 243–245, 1 Cal.Rptr. 158, 347 P.2d 294; Harden v. Superior Court (1955) 44 Cal.2d 630, 634–636, 284 P.2d 9; Tide Water Assoc. Oil Co. v. Superior Court (1955) 43 Cal.2d 815, 820–821, 279 P.2d 35; City of San Diego v. Superior Court (1950 36 Cal.2d 483, 485, 224 P.2d 685; City Council of City of Santa Monica v. Superior Court (1962) 204 Cal.App.2d 68, 71–73, 21 Cal.Rptr. 896; and see 3 Witkin, Cal.Proc., Extraordinary Writs, § 36, subd. a, pp. 2512–2513.) The matter has been heard following the issuance of an alternative writ.
In the spring of 1967, the real parties in interest herein were uninsured drivers of vehicles which were involved in accidents on the California highways. Thereafter, the Department of Motor Vehicles sent notices to the parties requesting either that they post security with the department as required by Vehicle Code section 16020,2 or that they risk suspension of their licenses and registration as provided by Vehicle Code sections 16080 and 16100. The parties failed to comply with the request to post security and in each case the department ordered that the party's drivers license and registration be suspended.
Real parties in interest Alvarado and Berberena filed a petition for writ of prohibition and mandate with respondent court requesting that the department be directed to set aside the orders of suspension issued in their respective cases. Real party in interest Del Bosque was allowed to intervene in the action by order of court. In their petitions the parties alleged, inter alia, that they had been involved in automobile accidents, that at the time of the accidents they were driving uninsured vehicles, but that they were not culpable in the respective accidents. The petitions stated that the parties were without sufficient funds to purchase automobile insurance or to post the required security deposits, and that without the use of their automobiles they were incapable of seeking gainful employment.
The answer contended that no determination of blame or liability was required as a prerequisite to a departmental demand for a security deposit, and that unless a party was specifically exempted by statute (§§ 16050–16057), involvement in an accident was the only criterion to be considered by the department before fixing the amount of security.
Petitioners, in support of their motion for summary judgment below contended, and before this court assert that it is the uninsured driver's involvement in an accident, and not his actual culpability, that is the basis for the requirement of posting security under the provisions of California Financial Responsibility Laws (Veh.Code, Div. 7, §§ 16000–16553) which require evidence of, or posting of security after an accident (id., Ch. 1, §§ 16000–16110); and that since fault is not the test of that requirement, it is not material on the issue of suspension for failure to post security, and cannot be the subject of judicial inquiry by the lower court.
Real parties in interest contend that it is established as the law of this state that the department must consider the question of liability in connection with the demand for security, and any ensuing, suspension; that the statute, as administered in the manner contended by petitioners, is unconstitutional in that equal protection of the law has been denied to nonculpable uninsured drivers who are involved in an accident; that the statute as administered is unconstitutional because it has no reasonable relationship to the statutory purpose of compensating the victims of negligent drivers; and that procedural due process requires that uninsured motorists be given notice and a hearing on all issues prior to suspension of their licenses.
It is concluded that the reasons hereinafter set forth that the statute is constitutional; that as interpreted by the law of this state the department must consider the culpability of the uninsured motorist before demanding security; that no hearing is required before the department, but that the licensee is entitled to judicial review to determine, not his culpability, but whether there was evidence before the department from which it could determine that there was a reasonable possibility that a judgment would be recovered against him. Therefore, the trial court may not be restrained from proceeding in the action before it. The petition must be denied, and the alternative writ, heretofore issued, will be discharged.
Constitutionality of the Statute
The provisions of the financial responsibility laws governing the suspension of a driver's license for failure to post security have been upheld against attack that they were unconstitutional on the following grounds: “1. The statute violated the due process provisions of the federal Constitution (Amendment XIV, § 1) and the state Constitution (art. I, § 13) in that no provision was made for hearing before the department, or for recourse to the courts, before suspension of a license.
“2. Judicial power was delegated to an administrative body in violation of the state Constitution (art. III, § 1, art. VI, § 1), in that no sufficient standard was provided to guide the department in determining the amount of security.
“3. The effect of the statute was an arbitrary discrimination in violation of the equal protection clause of the federal Constitution (Amendment XIV, § 1) and the uniform operation of law provision of the state Constitution (art. I, § 11) in that: (a) The posting of security by a driver who might not be culpable was required. (b) Those who were financially able to carry insurance or post security were favored as against those who were not. (c) The provisions permitting any person in whose name more than 25 motor vehicles were registered to qualify as a self-insurer created an arbitrary classification.” (Escobedo v. State Department of Motor Vehicles of California (1950) 35 Cal.2d 870, 874, 222 P.2d 1, 4.) 3
Real parties in interest insist that procedural due process requires that uninsured motorists be given notice and a hearing on all issues prior to suspension of their licenses. In Escobedo the court recognized that there was no express provision in that statute concerning hearing before determination by the department that security must be deposited or the operator's license be suspended. (Stats.1947, ch. 1235, pp. 2738–2743, adding former §§ 419–420.9 to the Vehicle Code. Cf. present §§ 16000–16084.) 4 It pointed out that under the provisions of the Vehicle Code, the licensee was not entitled to a hearing when suspension was mandatory (former § 315; and cf. present §§ 13950–13953 and 14101, subd. a); and that suspension of the operator's license was mandatory “whenever it had been determined that a motor vehicle accident had occurred and damages exceeding $100 ensued which probably might result [emphasis added] in ‘a judgment or judgments for damages * * * recovered against such operator,’ * * * ;; (35 Cal.2d at pp. 874 and 875, 222 P.2d at p. 4.) The court concluded, “Suspension of the license without prior hearing but subject to subsequent judicial review did not violate due process if reasonably justified by a compelling public interest. [Citations.] The compelling public interest here appears from the obvious carelessness [emphasis added] and financial irresponsibility of a substantial number of drivers and from” circumstances which made it “apparent that to require a hearing in ever case before suspension of a license would have substantially burdened and delayed if not defeated the operation of the law.” (Id., at pp. 876–877, 222 P.2d, at pp. 5–6. See also Eye Dog Foundation v. State Board of Guide Dogs for the Blind (1967) 67 Cal.2d 536, 545, 63 Cal.Rptr. 21, 432 P.2d 717; Hough v. McCarthy (1960) 54 Cal.2d 273, 285, 5 Cal.Rptr. 668, 353 P.2d 276; Turner v. Dept. Motor Vehicles (1968) 265 A.C.A. 737, 741, 71 Cal.Rptr. 616; and Cook v. Bright (1962) 208 Cal.App.2d 98, 102–103, 25 Cal.Rptr. 116.)
Real parties in interest suggest that principles enunciated in Sokol v. Public Utilities Commission (1966) 65 Cal.2d 247, 53 Cal.Rptr. 673, 418 P.2d 265, and in Endler v. Schutzbank (1968) 58 A.C. 160, 65 Cal.Rptr. 297, 436 P.2d 297, require reappraisal of Escobedo's approval of summary suspension prior to hearing. Sokol noted the holding of Escobedo and considered it distinguishable (65 Cal.2d at pp. 253–254, 53 Cal.Rptr. 673, 418 P.2d 265). Sokol is relevant to this case, in that it recognized that a telephone, and so here, it is urged, a motor vehicle, is indispensable to legitimate business operations in modern commercial society (id., pp. 254–255, 53 Cal.Rptr. 673, 418 P.2d 265), but it did not give the subscriber a predisconnection hearing. It merely held that the utility cannot be ordered to disconnect on receipt of a conclusionary notice from a law enforcement official, and that “whatever new procedure is hereafter devised must at a minimum require that the police obtain prior authorization to secure the termination of service by satisfying an impartial tribunal that they have probable cause to act, in a manner reasonable comparable to a proceeding before a magistrate to obtain a search warrant. In addition, after service is terminated the subscriber must be promptly afforded the opportunity to challenge the allegations of the police and to secure restoration of the service.” (65 Cal.2d at p. 256, 53 Cal.Rptr. at p. 679, 418 P.2d at p. 221.)
In Endler the court recognized and verbalized a distinction which goes to the core of this case. The opinion states: “Although the state may of course regulate the qualifications of individuals employed by licensed business establishments and may discipline those licenses who jeopardize the public welfare by their hiring practices, [fn. omitted] the state must proceed within the limits of procedural due process in its exercise of such power. We are thus concerned here not with the ends which might justify governmental restrictions upon the right to follow a chosen profession but only with the means which government must employ in enforcing admittedly permissible restraints.” (68 A.C. at p. 168, 65 Cal.Rptr. at p. 302, 436 P.2d at p. 302.) It held “that the state may not make a man an outcast in his own profession without affording him a full opportunity to present his defense” (id., at p. 171, 65 Cal.Rptr., at p. 304, 436 P.2d at p. 304), and that “Since the ‘right to * * * a hearing is one of “the rudiments of fair play” * * * assured * * * [t]here can be no compromise on the footing of convenience or expediency * * * when that minimal requirement has been neglected or ignored.’ (Ohio Bell Tel. Co. v. Public Utilities Com. (1937) 301 U.S. 292, 304–205, 57 S.Ct. 724, 730, 81 L.Ed. 1093.)” (Id., at p. 178, 65 Cal.Rptr. at p. 310, 436 P.2d at p. 310.) The employee only claimed the right to secure a hearing in order to secure reinstatement or a new position after his discharge. The form the hearing was to take was left for future determination. (Id., at pp. 179–180, 65 Cal.Rptr. 297, 436 P.2d 297.) The case does not overrule Escobedo either directly or by implication.
The Escobedo opinion recognizes the right of real parties in interest to bring the proceedings which are now under review. The opinion states: “The requirement of due process was recognized and accepted by section 317 of the Vehicle Code, which declared that ‘Nothing in this code shall be deemed to prevent a review or other action as may be permitted by the Constitution and laws of this State by a court of competent jurisdiction with reference to any order of the department refusing, canceling, suspending or revoking a license.’ [Cf. present § 14400.] Such review can be had by application to the superior court for writ of mandate (Code Civ.Proc., §§ 1085, 1086). Also, an action for declaratory relief has been used in a comparable situation (Ratliff v. Lampton (1948), ,supra, 32 Cal.2d 226, 195 P.2d 792, 10 A.L.R.2d 826).” (s6 Cal.2d at p. 877, 222 P.2d at p. 6.) 5 The fundamental issue in these proceedings is the scope of the review to be afforded the real parties in interest, and it is discussed below.
In their answer to the petition filed in this court, real parties in interest allege that the statutes are unconstitutional because they “constitute an invalid discrimination in practical effect against poor people as a class, who can neither afford to pay costly premiums nor arbitrary security deposits as awards of damages to owners of motor vehicles who are not entitled thereto.” In Escobedo the court answered this contention as follows: “Financial responsibility laws such as this do not unconstitutionally discriminate against the poor. (See Watson v. Division of Motor Vehicles (1931), 212 Cal. 279, 284, 298 P. 481; Rosenblum v. Griffin (1938), 89 N.H. 314, 319, 197 A. 701, 115 A.L.R. 1367.) Those damaged by the negligence of indigent drivers may be indigent also, and as little able as the drivers to bear the cost of such negligence. The fallacy of the argument that the law favored the rich over the poor “lies in the failure to distinguish between equality of opportunity and ability to take advantage of the opportunity which is offered to all. The equality of the Constitution is the equality of right, and not of enjoyment.' (Watson v. Division of Motor Vehicles (1931), supra, p. 284 of 212 Cal., p. 483 of 298 P.) Those who cannot afford to possess automobiles are as little able to enjoy the opportunity of driving on the public highways as those who cannot afford insurance or security.” (35 Cal.2d at p. 878, 222 P.2d at p. 6. See also Taliaferro v. Hoogs (1965) 236 Cal.App.2d 521, 527–529, 46 Cal.Rptr. 147.) 6 The denial of counsel on appeal to an indigent defendant in a criminal proceeding may draw an “unconstitutional line * * * drawn between rich and poor” (see Douglas v. People of State of California (1963) 372 U.S. 353, 357, 83 S.ct. 814, 816, 9 L.Ed.2d 811), because the pecuniary ability to secure counsel is not rationally related to the right or privilege to have the conviction reviewed. There is, however, a rational relationship between the pecuniary ability to respond in damages and the operation of a motor vehicle. The question is not whether the operator is financially able to furnish proof of such ability, but whether the demand that he furnish such proof, either prospectively or retrospectively, is predicated upon a nondiscriminatory classification among all operators or motor vehicles, rich and poor alike.
Real parties in interest further assert that the administration of this portion of the financial responsibility laws demonstrates that it has no reasonable relationship to the purpose of compensating victims of negligent drivers. They cite statistics which allegedly reflect that only 5.4 percent of those requested [93,701] actually post security for damages, and that “93,000 people are demanded to put up over $3,000,000, requiring a large administrative work force and an expense [$1,401,896] of five times the benefits paid [$264, 381], in order that 440 persons may collect security deposits averaging $600 each.”
On the other hand, it was predicted that the provisions of the law which became operative July 1, 1948 (Stats.1947, ch. 1235, § 2, p. 2743) would increase the percentage of motorists covered by liability insurance from 35 percent to 80 percent. (“New Approach to Problem of Motorist Financial Responsibility Misses Mark” (1949) 1 Stan.L.Rev. 263, 268, fn. 40, and accompanying text.) According to the petitioner, in the first year of the statute's operation 78 percent of those involved in accidents were able to establish their financial responsibility by insurance, and currently the percentage is 84 percent. (Cf. Comment, “The Constitutionality Law” (1968) 4 Cal.West.L.Rev. 89, 90, fn. 12, and text which gives a figure of 88 percent.)
In Escobedo (35 Cal.2d at p. 876, 222 P.2d at p. 5) the court quoted with approval from Reitz v. Mealey (1941) 314 U.S. 33, 36, 62 S.Ct. 24, 86 L.Ed. 21, as follows: “ ‘Any appropriate means adopted by the states to insure competence and care on the part of its licensees and to protect others using the highway is consonant with due process.’ ” 7 The Escobedo court then stated: “The state, in the exercise of its police power, could constitutionally have required deposit of security by the owners of all vehicles as a condition to licensing them. (In re Opinion of the Justices (1925) 81 N.H. 566, 129 A. 117, 39 A.L.R. 1023; In re Opinion of the Justices (1925), 251 Mass. 569, 147 N.E. 681; Brest v. Commissioner of Insurance (1930), 270 Mass. 7, 169 N.E. 657; Ex parte Poresky (1933), 290 U.S. 30, 54 S.Ct. 3, 78 L.Ed. 152.) Instead, the state chose to allow financially irresponsible licensed operators to drive until they became involved in an accident [emphasis added] with the consequences described in sections 419 and 420 of the Vehicle Code and their financial irresponsibility was thus brought to the attention of the department, and then to require suspension of their licenses.” (35 Cal.2d at p. 876, 222 P.2d at p. 5.) Requiring all operators to produce evidence of financial responsibility is clearly nondiscriminatory. Whether a test of involvement in an accident without regard to culpability is free of constitutional taint goes to the heart of this case, but involves not the constitutionality of the statute itself, but its interpretation and administration as discussed below.
The reason advanced by the court may be specious in that the power to impose a nondiscriminatory regulation may not justify the imposition of a similar regulation in a discriminatory manner. (See Comment, op cit., 4 Cal.West.L.Rev. at pp. 90–93; Note (1962) 30 George Washington L.Rev. 523, 525–526.) Nevertheless, the statutory scheme, if properly construed and administered is clearly warranted as a regulation designed for “the protection of the public using the highways from financial hardship which may result from the use of automobiles by financially irresponsible persons. It accomplishes the objective by requiring proof of financial responsibility by those involved in an accident, either by a showing of insurance which covers the accident, by requiring a bond or deposit of cash or securities. It may, as incidental purposes and effects, because of the threat of loss of driving rights following an uninsured accident, (1) encourage operators of motor vehicles to obtain liability insurance, [fn. omitted] and (2) encourage drivers to drive more carefully. Because the uninsured motorist can avoid the adverse effects of the statute without obtaining insurance, and without improving his driving practices (i.e. by putting upon security * * * or by obtaining a release from the injured party, or an agreement for payment of damages in installments) we cannot consider either the encouragement to obtain insurance or the improvement of safety conditions on the highway to be primary objectives of this law.” (Schecter v. Killingsworth (1963) 93 Ariz. 273, 280–281, 380 P.2d 136, 140–141.)
Since the statute itself is a constitutional expression of the regulatory power of the state it cannot be declared unconstitutional because there may be more efficient ways to carry out its objectives. That contention was considered and rejected in Escobedo where the opinion states: “Objection is made by petitioner that suspending his license after the accident did not make him more financially responsible, for it deprived him of his means of livelihood for himself, his wife and nine children. This contention constitutes no more than an argument that the Legislature acted unwisely in selecting a financial responsibility law of a lock-the-barn-door-after-the-horse-is-stolen type instead of a compulsory pre-insurance law or some other method of treating the problem (see 1 Stan.L.Rev. 263). Our concern, however, is with the validity of the law under attack and not with whether a better law could be devised. (See Watson v. Division of Motor Vehicles (1931), supra, pp. 285–286 of 212 Cal., pp. 483–484 of 298 P.)” (35 Cal.2d at pp. 878–879, 222 P.2d at pp. 6–7.) 8
Real parties in interest assert that by the foregoing the Escobedo court clearly intended to indicate that there were certain operators who might be involved in an accident from whom security could not be required, and that the department would have to make a determination as to whether a judgment might be recovered against the operator in question or not. From other portions of the opinion which have been emphasized in the quotations set forth above it is clear that the court was concerned with the operator's carelessness as well as his financial responsibility, and that security could not be required unless a judgment probably might result against the operator. Elsewhere the court indicated that the opinion of the department with respect to the amount of security should be predicated on “facts and legal principles governing the recovery of judgments for damages [which] are a matter of public knowledge.” (35 Cal.2d at p. 878, 222 P.2d at p.6.) There is no reason to withhold application of the same principles from the determination of whether the security should be zero in those circumstances where it is not probable that a judgment might result against the operator.
It is concluded that the statute as interpreted in Escobedo requires the department to find that there is a reasonable possibility that there will be a judgment recovered against the operator before it can demand security and suspend his license if he fails to post it. Petitioner's contentions that Escobedo does not mean what it says; that, in any event, it is erroneous to assume that requiring security of the nonculpable is unconstitutional; and that administrative and judicial convenience dictate a contrary result are examined and rejected.
Salient portions of the Escobedo opinion have been emphasized as quoted above. Petitioner relies upon the court's recognition of the statutory language in the passage reading “the state chose to allow financially irresponsible licensed operators to drive until they became involved in an accident* * *.” (Id., at p. 876, 222 P.2d at p. 5; emphasis added. Cf “involved in an accident” as used in §§ 16000, 16020, 16050 and 16100.) The phrase relied on is followed in the opinion by the words “with the consequences described in sections 419 and 420 [cf. present §§ 16000, 16003, 16004 and 16020] of the Vehicle Code * * *.“ The consequences as interpreted by the court were that the operator's license would be suspended “whenever it had been determined that * * * damages * * * ensured which probably might result in ‘a judgment or judgments for damages * * recovered against such operator,’ * * *.” (Id., at p. 875, 222 P.2d at p. 4, emphasis added.)
Petitioner asserts that the statutory scheme, by setting up specific exemptions (§§ 16050–16060), some of which are predicated upon facts which indicate nonculpability (§ 16052, no damage to another, or vehicle legally parked; § 16053, subd. (a), released from liability; and § 16054, evidence of payment to driver), intended to exclude consideration of any other evidence of nonculpability; and that the Escobedo court in adverting to judicial review, and to the absence of arbitrary discrimination against the nonculpable driver under proper administration of the act, had reference only to the resolution by the department of questions which involved the identity of the driver, the amount of security, and the application of the exemptions in the cases reported to it. This limited interpretation of Escobedo disregards the issue expressly raised, considered and disposed of in that case.
It has generally been recognized that Escobedo stands for the proposition that “a deposit of security would be required only of those against whom, in the opinion of the department, a judgment might be recovered.” (Schecter v. Killingsworth, supra, 93 Ariz. 273, 284, 380 P.2d 136, 143. See also Agee v. Kansas Highway Commission (1967) 198 Kan. 173, 178, 422 P.2d 949, 954; Comment (1968) 4 Cal.West.L.Rev. 89, 95; Note (1962) So.Dak.L.Rev. 179, 181; Note (1953) 66 Harv.L.Rev. 1300, 1302, fn. 22.) Turner v. Dept. of Motor Vehicles, supra, 265 A.C.A. 737, 71b Cal.Rptr. 616, does not require a contrary result. In Turner the superior court had granted a petition for writ of mandate and issued an order which directed the department to grant the plaintiff a hearing on the issue of his probable pecuniary culpability, and which stayed the department's order suspending the petitioner's driver's license. The court stated: “On appeal the department contends it is not required to determine ‘fault precedent to a demand for security and, in any event, it is not required to grant a hearing to the licensee on this issue.’ Our conclusion a departmental hearing is not required is decisive of the appeal and we devote our attention exclusively to the reasons for this conclusion.” (Pp. 740–741, 71 Cal.Rptr. p. 618.) The judgment was reversed on the authority of the ruling in Escobedo that the statute did not provide, and constitutional principles did not require, a hearing before the department. That procedure has been adhered to in these proceedings. (Cf. Comment in Note (1951) 39 Cal.L.Rev. 119, 26–127.)
Petitioners advance enticing, but unconvincing reasons to subvert the proposition, whether inherent in Escobedo or not, that requiring the posting of security by a driver without some show of his probable culpability is an arbitrary discrimination in violation of constitutional requirements of due process and equal protection of the laws. They first rely on the decisions of the United States Supreme Court which have upheld the constitutionality of financial responsibility laws. In Kesler v. Dept. of Public Safety (1962) 369 U.S. 153, 82 S.Ct. 807, 7 L.Ed.2d 641 and Reitz v. Mealey, supra, 314 U.S. 33, 62 S.Ct. 24, 86 L.Ed. 21, the court was concerned with statutes which imposed penalties for failure to satisfy a judgment (see fn. 7, supra) and their possible conflict with the federal bankruptcy law. In Kesler, the court in an extensive review of financial liability laws (369 U.S. at pp. 158–159, 82 S.Ct. at p. 811) noted, “Financial-responsibility laws are intended to discourage careless driving or to mitigate its consequences by requiring as a condition of licensing or registration the satisfaction of outstanding accident judgments, the posting of security to cover possible liability for a past accident, or the filing of an insurance policy or other proof of ability to respond in damages in the future.” (Id., pp. 158–159, 82 S.Ct. 807; emphasis added.) In neither case did the court pass upon the conditions under which posting of security could be required before an adjudication of fault. In Ex parte Poresky (1933) 290 U.S. 30, 54 S.ct. 3, 78 L.Ed. 152, the court upheld the right of a state to require compulsory automobile insurance of all drivers without discrimination, which as has been demonstrated, is not the situation in this case, and is a questionable precedent for authorizing a discriminatory requirement. Similarly the state may, without discrimination, require security of all of those whom it licenses as contractors (Bus. & Prof.Code, § 7071.9), bail bondsmen (Ins.Code, §§ 1802.5 and 1802.7), or collection agents (Bus. & Prof.Code, § 6895).
Statements regarding the general purpose of this state's financial security law are of no greater assistance than the federal pronouncements in determining the question at issue. It is generally recognized: “A primary purpose of financial responsibility laws is to protect ‘that ever changing and tragically large group of persons who while lawfully using the highways themselves suffer grave injury through the negligent use of the highways by others.’ (Continental Cas. Co. v. Phoenix Constr. Co. (1956) 46 Cal.2d 423, 434, 296 P.2d 801, 57 A.L.R.2d 914; see Interinsurance Exchange v. Ohio Cas. Ins. Co. (1962) supra, 58 Cal.2d 142, 153, 23 Cal.Rptr. 592, 373 P.2d 640; Wildman v. Government Employees' Ins. Co. (1957) supra, 48 Cal.2d 31, 39, 307 P.2d 359.)” (Atlantic Nat. Ins. Co. v. Armstrong (1966) 65 Cal.2d 100, 106, 52 Cal.Rptr. 569, 573, 416 P.2d 801, 805. See, in addition to the cases cited, Mission Ins. Co. v. Feldt (1964) 62 Cal.2d 97, 101, 41 Cal.Rptr. 293, 396 P.2d 709; Simmons v. Civil Service Empl. Ins. Co. 91962) 57 Cal.2d 381, 385, 19 Cal.Rptr. 662, 369 P.2d 262; Ohio Cas. Ins. Co. v. Armendariz (1964) 224 Cal.App.2d 56, 64, 36 Cal.Rptr. 274; and Wisdom v. Eagle Star Ins. Co. (1963) 211 Cal.App.2d 602, 603, 27 Cal.Rptr. 599.) In Continental Cas. Co. v. Phoenix Constr. Co., supra, the fountainhead of this oft-quoted principle, the court recognized the distinction between imposing sanctions upon an adjudicated negligent driver who had failed to satisfy a judgment and sanctions imposed after an accident and before judgment.9 In Simmons the court observed, “Although our laws do not require as a condition of obtaining an operator's license that any showing be made by an applicant as to his financial responsibility to respond in damages if, through his negligence in the operation of an automobile, he causes injuries to the persons or property of others, nevertheless provisions are contained therein whereunder, after such injuries have been inflicted through his negligence, the licensed operator is required to afford financial responsibility in favor of those who have been injured by his conduct and upon his failure to do so the statutes provide for the suspension of his operator's license and for other sanctions, all intended, through threat of the imposition of such sanctions, to result in the affording of limited financial relief to the injured.” (57 Cal.2d at p. 385, 19 Cal.Rptr. at p. 664, 369 P.2d at p. 264; emphasis added.) It is obvious that the requirement of security from non-negligent drivers does not aid any victim of the first accident, and if some non-negligent drivers are selected to show proof of future responsibility when they are involved in an accident without fault, the question of discrimination remains, and is not answered by the statement of general policy. The policy of the law is satisfied by limiting the requirements of the deposit of security to one involved in an accident under circumstances where there is a reasonable possibility that a judgment will be recovered against him.
In Escobedo the court approved suspension of licenses without a prior administrative hearing because “to require a hearing in every case before suspension of a license would have substantially hindered and delayed if not defeated the operation of the law.” (35 Cal.2d at p. 877, 222 P.2d at p. 6.) This concept is echoed in Turner where the opinion states, “Departmental hearings on the issue of ‘culpability’ would afford every uninsured motorist involved in an accident a discovery procedure tantamount to a preliminary hearing in a negligence action not yet filed; would prevent the summary and speedy determination implicit in the prescribed statutory procedure; and in this manner would defeat the objective and purpose of the statute.” (265 A.C.A. at pp. 741–742, 71 Cal.Rptr. at p. 619.) Respondents contend that to permit judicial review of the department's determination that security was required involves the same hazards to the proper operation of the law. In Endler v. Schutzbank, supra, the court noted and disposed of a similar argument as follows: “The Attorney General finally urges that, whatever result principle and precedent might require, this court should not inconvenience the commissioner by recognizing the plaintiff's right to a hearing. This suggestion is, to say the least, surprising. Since the ‘right to * * * a hearing is one of “the rudiments of fair play” * * * assured * * * by the Fourteenth Amendment * * *. [t]here can be no compromise on the footing of convenience or expediency * * * when that minimal requirement has been neglected or ignored.’ (Ohio Bell Telephone Co. v. Public Utilities Commission (1937) 301 US. 292, 304–205, 57 S.Ct. 724, 730, 81 L.Ed. 1093. * * *)” (68 A.C. at p. 178, 65 Cal.Rptr. at p. 310, 436 P.2d at p. 310.) Escobedo expressly granted the right to judicial, as distinguished from administrative, review. If the department properly administers the law the cases will be few in which a demand for security and an ensuing suspension are set aside for lack of any evidence of a reasonable possibility that a judgment will be obtained against the operator or owner. The judgment between the driver and the department cannot bind any other party to the accident. (See Tavegia v. Bromley (1950) 67 Wayo. 93, 117, 214 P.2d 975, 984.) The fears expressed in Turner may be exaggerated. Even if they were not, due process and equal protection of the laws gives the driver a right to be heard. The chance that the department originally, or a court on review might determine nonculpability, where as a subsequent civil action might establish liability should not defeat the driver's right to a hearing. There may be similar inconsistencies between the results of criminal and civil proceedings involving the same set of facts. Here, however, as the administrative finding is dealing with possibilities and the civil proceedings require a preponderance of the evidence, the scales are tilted in favor of netting more drivers than will ultimately be found to be legal catches. If a few of legal size escape the net, it is a small price to pay for the protection of those who, although they are financially irresponsible, are also free of any responsibility for injury or damage to others.
Petitioners' posture must rest on the proposition that constitutional limitations do not preclude netting in nonculpable, as well as culpable, drivers who are involved in an accident. There is respectable authority in support of that position (see fn. 3, supra). The case for discrimination is nowhere more strongly stated than in Rosenblum v. Griffin (1938) 89 N.H. 314, 197 A.701, 115 A.L.R. 1367, where the opinion recites: “The test of an accident without regard to fault or a charge of fault as the occasion for giving the law operative effect is in some aspects an arbitrary one. It discriminates among innocent persons, between those escaping and those not escaping accident. A car owner or operator fortunate enough not to be struck by a negligent driver need not, while one who in spite of all possible care does not escape must, furnish security. Proper operation is immaterial and innocent misfortune is penalized. To use an appropriate expression, insult is added to injury.” (89 N.H. at p. 316, 197 A. at p. 703. See also Schecter v. Killingsworth, supra, 93 Ariz. 273, 281 and 285, 380 P.3d 136; Tavegia v. Bromley, supra, 67 Wyo. 93, 111–113, 214 P.2d 975, 981–982; Comment, op cit., 4 Cal.West.L.Rev. 89, 92–93; and Note, op. cit., George Washington L.Rev. 523, 528–529). Nevertheless, in Rosenblum the New Hampshire statute (Laws 1937, c. 161), which repealed provisions of earlier laws which required a provisional finding of negligence was upheld. The court recognized, “Unless in a case where the doctrine of res ipsa loquitur might be invoked, an accident of itself is no evidence of liability for it, and a charge of liability has no tendency to prove it.” (89 N.H. at p. 317, 197 A. at p. 704.) The court found that the equality between all nonculpable financially irresponsible drivers was sufficient; and that the hardship caused by an inequality with financially irresponsible drivers who were fortunate enough to escape accident was warranted by the necessity of establishing “conditions which are definite and conclusive in meeting the need for prompt action.” (Id.) Why there is need for prompt action to require security from or to remove from the road nonculpable drivers is not explained.
The case rejects the argument that the requirement of financial responsibility promotes safety on the roads. “Certainly, in the absence of known experience and statistics, it is doubtful whether the insured owner's car, driven either by himself or another, may be considered to be operated more carefully than one whose owner is uninsured.” (Id., p. 318, 197 A. at p. 704.) It does hold without qualification, “It is a reasonable incident of the general welfare that financially irresponsible persons be denied the use of the highway with their cars, regardless of the competency of themselves or others as drivers” and that, “Since legislation requiring insurance or other security as a condition of a right to operate a vehicle on the highways is valid, the compulsion may be limited to depend upon contingencies.” (Id.) Recognizing that there was still objection if the contingencies selected—the occurrence of an accident—led to discrimination, the court added: “So far as classification is here involved, no one is unconstitutionally denied the privilege of the use of the highways with a motor vehicle. The terms and conditions of the privilege are applicable to all who avail themselves of it. They may be unfair and unreasonable, in fact, but they are not invalid. There is equality of treatment. Every licensee takes his license on the condition that if he meets with an accident while operating a car, his further right to operate shall depend upon his having or furnishing security for any liability arising out of the accident or any future accident.” (89 N.H. at p. 319, 197 A. at p. 704.) Many cases have followed the lead of Rosenblum in upholding the right to require security upon involvement in an accident without any showing of culpability on the theories that the right to impose compulsory liability insurance on all includes the right to require financial responsibility from those involved in an accident regardless of fault, and that such a requirement may be imposed indiscriminately as a condition on the privilege to drive.10 (See cases collected Schecter v. Killingsworth, supra, 93 Ariz. 273 at p. 279, 380 P.2d 136, particularly Sharp v. Department of Public Safety (La.App.1959) 114 So.2d 121; Larr v. Dignan (1947) 317 MIch. 121, 26 N.W.2d 872; and Gillaspie v. Department of Public Safety (1953) 152 Tex. 459, 259 S.W.2d 177; and additionally State v. Finley (1967) 198 Kan. 585, 426 P.2d 251; Agee v. Kansas Highway Commission, supra, 198 Kan. 173, 422 P.2d 949; Turmon v. State Department of Public Safety 91967) 222 Ga. 843, 152 S.E.2d 884; Adams v. City of Pocatello (1966) 91 Idaho 99, 416 P.2d 46; Velletri v. Lussier (1959) 88 R.I. 352, 148 A.2d 360; Hughes v. Department of Public Safety (La.App.1955) 79 So.2d 129; Sullivan v. Cheatham (1955) 264 Ala. 71, 84 So.2d 374.) Each theory fails to grapple with the acknowledged discrimination. In Agee v. Kansas Highway Commission, supra, the court states: “Our study, however, has disclosed that in the great majority of jurisdictions where the question has arisen, the courts have held that it is not for the suspending agency to determine fault or to ascertain who caused the accident. The ascertainment of civil liability for damages, resulting from an accident, is a judicial function to be exercised by a court of law in an action brought for such purpose.” (198 Kan. at 177, 422 P.2d at p. 953.) The last statement cannot be questioned, but the fact that the courts must determine civil liability should not, of itself, relieve the administrative agency of the necessity of determining whether lawful grounds exist for the imposition of penalties against a driver involved in an accident.
Even if Escobedo did not foreclose inquiry, it should be concluded that constitutional principles guarantee the nonculpable driver, who had been involved in an accident, equal protection of the law with his more fortunate brother who has not been so involved. The state may not impose an unconstitutional condition upon the “privilege” of driving, or deprive the licensed operator of his “right” to drive on discriminatory terms. Escobedo, although a minority view, imposes a rational and constitutionally required restraint on the otherwise indiscriminate requirement of security.
Respondents rely upon Nebbia v. People of State of New York (1933) 291 U.S. 502, 54 S.Ct. 505, 78 L.Ed. 940, wherein the court said, “ * * * the guaranty of due process, as has often been held, demands only that the law shall not be unreasonable, arbitrary or capricious, and that the means selected shall have a real and substantial relation to the object sought to be obtained.” (291 U.S. at p. 525, 54 S.Ct. at p. 510. See also O'Donnell v. Mullaney (1967) 66 Cal.2d 994, 999, 59 Cal.Rptr. 840, 429 P.2d 160; County of Los Angeles v. Superior Court (1965) 62 Cal.2d 839, 846, 44 Cal.Rptr. 796, 402 P.2d 868; Burks v. Poppy Construction Co. (1962) 57 Cal.2d 463, 475–476, 20 Cal.Rptr. 609, 370 P.2d 313; and Phillips v. Bd. of Police Commissioners (1966) 240 Cal.App. 2d 410, 412, 49 Cal.Rptr. 490.) These cases all recognize that a classification to be restricted or regulated must have a reasonable and substantial relationship to the purpose for which the legislation was designed. A construction of the statute which required security of nonculpable drivers who are involved in an accident may serve administrative convenience, but it does not serve to give monetary protection to the victim of the accident (see Continental Cas. Co. v. Phoenix Constr. Co., supra, 46 Cal.2d 423, 434, 296 P.2d 801, 57 A.L.R.2d 914), or add anything to the competence and care exercised by the driver in question or to the safety of others using the highway. (See Escobedo v. State of California, supar, 35 Cal.2d 870, 874, 222 P.2d 1.) Insofar as the statute seeks to prospectively prevent financial hardship to others in the event the nonculpable driver has a second accident in which he is at fault (see § 16082), the unrestricted construction of the statute again clearly discriminates between financially irresponsible drivers who have an accident and those who do not.
In order to follow Escobedo and preserve the constitutionality of the statute, the department “need not decide on the basis of conflicting evidence whether a motorist was in fact, culpable, but must determine if there is any reasonable possibility that a judgment will be recovered against him and the amount thereof.” (See Schecter v. Killingsworth, supra, 93 Ariz. at p. 284, 380 P.2d at p. 143.) Escobedo guarantees the right of judicial review, but the test adopted raises a question of the scope of that review.
Chapter 1 of the financial responsibility laws (§§ 16000–16110), as pointed out in Escobedo, does not expressly provide for an administrative hearing before the department demands security (§ 16020), or before it suspends the privilege of the driver to drive a motor vehicle (§ 16080), or the registration of a motor vehicle (§ 16100). (Cf. §§ 13950, 13951 which generally provide for notice and an opportunity to be heard in the event of revocation of, suspension of, imposition of terms of probation on, refusal to issue or to renew a driver's license, and §§ 14100–14112 which define when a hearing will be granted and the nature and procedure for informal and formal hearings and the manner in which the director shall render a decision.)
Nevertheless, the chapter does provide for submitting evidence to the department before action is taken. Section 16000 requires each driver involved to report the accident on a form approved by the department. (Although these reports are for the confidential use of the department (§ 16005), the department could not rely on that provision to justify denial of review of an allegedly unwarranted action.)
Section 16020 expressly provides: “The department shall determine the amount of security deposit upon the basis of the reports or other evidence submitted to it * * *.” (emphasis added), and expressly contemplates that any person who may seek the benefit of the security to be deposited must furnish evidence of the extent of his injuries or the damage to his property. The same evidence should furnish the basis for the opinion that “a judgment might be recovered” which is inherent in a determination that any, as distinguished form no security is required, and which, as has been pointed out, is required by Escobedo (35 Cal.2d at p. 878, 222 P.2d 1) and general constitutional principles.
Section 16024 authorizes the department to exercise its judgment to determine if the security is excessive and to reduce the amount ordered. By implication it contemplates further investigation or the receipt of further evidence by the department.
Section 16084 provides: “Whenever the department has taken any action or has failed to take any action under this chapter by reason of having received erroneous information, or by reason of having received no information, it shall take appropriate action to carry out the purposes and effect of this chapter upon receiving correct information. The provisions of this section shall not be deemed to require the department to increase the amount of any deposit after it has been ordered under this chapter.”
With respect to supervision of registrations the department is expressly directed to make a finding on one aspect of culpability. Section 16000 provides: “ * * * the suspension of registration shall not apply upon filing of evidence with the department that the vehicle was not, at the time of the accident, being operated with the permission, express or implied of the owner. * * * ”
From the foregoing it is apparent that the department is authorized and directed to receive evidence, in the form of reports and statements, before making a demand for security, or imposing penalties for a failure to deposit it. The driver alleging nonculpability is at a minimum entitled to a review of the data assembled by the department so that the court can determine whether the evidence before the department supports the implied finding that there is a reasonable possibility that a judgment will be recovered against the petitioning driver and owner. (See Johnson v. Dept. of Motor Vehicles (1960) 177 Cal.App.2d 440, 2 Cal.Rptr. 235; Serenko v. Bright (1968) 263 A.C.A. 789, 799, 70 Cal.Rptr. 1; and Finley v. Orr, supra, 262 A.C.A. 711, 719–721, 69 Cal.Rptr. 137.)
The issue is not, as indicated by the lower court, whether the petitioner and intervenor were without fault in the respective accidents which resulted in the suspension orders, but whether the evidence before the department supports the implied finding that there is a reasonable possibility that a judgment will be rendered against the petitioner driver and owner. Accordingly, it is appropriate to limit the scope of the trial to a review of the department's action, rather than an unlimited new trial on the issue of fault.
It is recognized that application of the rules set forth herein may produce but a Pyrrhic victory for any of the real parties in interest against whom some show of fault can be made. His license may be suspended, and he yet may be ultimately exonerated of liability. The principles do have the merit of absolving those who might otherwise be subjected to penalties without just cause, and they do tailor the law to fit constitutional requirements recognized in Escobedo and reiterated here.
The petition for writ of prohibition is denied. The alternative writ of prohibition is discharged and the trial court is authorized to proceed subject to the principles set forth in this opinion.
1. Section 16080 provides for the suspension of a driver's license, and section 16100 provides for the suspension of the registration of a vehicle for failure to deposit security following an accident, in accordance with the provisions of the Vehicle Code reviewed in this opinion. All references herein are to sections of the Vehicle Code unless otherwise noted.The emphasis in the prayer for relief before the lower court, and in the respective arguments in these proceedings, is on the question of restoration of the driving privileges and the licenses of the real parties in interest. No consideration has been given to any peculiar circumstances which might affect the constitutionality of section 16100. The case is therefore considered as if only section 16080 is involved.
2. Vehicle Code section 16020 provides: “Unless the driver involved in an accident described in Section 16000 complies with one of the conditions for exemption specified in Section 16050, the driver shall deposit security in a sum which shall be sufficient in the judgment of the department to satisfy any final judgment or judgments in any amount for bodily injury or in excess of one hundred dollars ($100) for property damage resulting from such accident as may be recovered against such driver or owner subject to the maximum limits required. The department shall determine the amount of security deposit upon the basis of the reports or other evidence submitted to it but shall not require a deposit of security for the benefit of any person when evidence has not been submitted by such person or on his behalf as to the extent of his injuries or the damage to his property within fifty (50) days following the date of the accident.”
3. For general discussions of the question the constitutionality of statutes which require the deposit of security after an accident see: Schecter v. Killingsworth (1963) 93 Ariz. 273, 278–281, 380 P.3d 136, and cases cited p. 279, 380 P.2d 136, 139–141, and cases cited pp. 139–140; Comment (1968) 4 Cal.West.L.Rev. 89; Note (1962) 7 So.Dak.L.Rev. 179; Note (1962) 30 George Washington L.Rev. 523; Note (1951) 39 Cal.L.Rev. 123; Annotation (1954) 35 A.L.R.2d 1011, 1021–1026; and cf. People v. Nothaus (1961) 147 Colo. 210, 214–216, 363 P.2d 180, 182–183.
4. For general discussions of the historical development of financial responsibility laws, including those requiring the deposit of security after an accident, see: Kesler v. Dept. of Public Safety (1962) 369 U.S. 153, 158–168, 82 S.Ct. 897, 7 L.Ed.2d 641; Note (1963) 66 Harv.L.Rev. 1300; Comment (1949) 1 Stan.L.Rev. 263.
5. It is generally recognized, even in those states which dispense with the necessity of any showing of culpability, that there must be some provision for hearing and review, either administrative or judicial, when a license or registration is to be suspended. (See Agee v. Kansas Highway Commission (1967) 198 Kan. 173, 175 and 179, 422 P.2d 949, 951–952 and 955; Schecter v. Killingsworth (1963) 93 Ariz. 273, 281–283, 380 P.2d 136, 141–143; Berberian v. Lussier (1958) 87 R.I. 226, 232–233, 139 A.2d 869, 873; Heart v. Fletcher (1945) 184 Misc. 659, 663–664, 53 N.Y.S.2d 369, 373–374; Sharp v. Department of Public, Safety (La.App.1959) 114 So.2d 121, 123; Larson v. Warren (Fla.2961) 132 So.2d 177, 181; Doyle v. Kayl (1951) 242 Iowa 153, 156 and 158, 46 N.W.2d 52, 54 and 55; State v. Stehlek (1953) 262 Wis. 642, 653–654, 56 N.W.2d 514, 520–521; and Adams v. City of Pocatello (1966) 91 Idaho 99, 102, 416 P.2d 46, 49.)
6. For further discussion of the issue of discrimination against the poor, see Agee v. Kansas Highway Commission, supra, 198 Kan. 173, 180, 422 P.2d 949, 955; Rosenblum v. Griffin (1938) 89 N.H. 314, 319, 197 A. 701, 704–705, 115 A.L.R. 1367; and cf. Comment, supra, 4 Cal.West L.Rev. 89, 91.
7. Reitz involved a statute which provided for loss of the right to drive upon failure to satisfy a judgment for damages occasioned by the operator's negligent operation of a motor vehicle. (Cf. Veh.Code, Div. 7, Ch. 2, §§ 16250–16381.) Fault having been adjudicated there is a rational relationship in the requirement that the negligent operator compensate his victim (Watson v. Division of Motor Vehicles (1931) 212 Cal. 279, 282–286, 298 P. 481; and Samson v. State of California (1942) 55 Cal.App.2d 194, 196, 130 P.2d 452) and that he furnish prospective proof of ability to respond in damages (§ 16371) before his license is restored.
8. For further discussion of the issue of the appropriateness of such a statute to attain its ostensible ends see Schecter v. Killingsworth, supra, 93 Ariz. 273, 285, 380 P.2d 136, 144; Note, supra, 30 George Washington L.Rev. 523, 528.
9. The full text reads: “ * * * California's general automobile financial responsibility law * * * is found in sections 410 through 423.1 of the Vehicle Code. (See escobedo v. State 91950), 35 Cal.2d 870, 878, 222 P.2d 1.) Sections 410–418.5, which comprise chapter 2, cover the matter of establishing responsibility after an accident and an unpaid judgment, while sections 419–423.1, which comprise chapter 3, provide for such a showing after the accident and before any judgment, all directly intended for the benefit of drivers and owners of motor vehicles as a means of forestalling suspension of the license of the driver and of the registration of the vehicle or vehicles, and, more fundamentally, designed to give monetary protection to that ever changing and tragically large group of persons who while lawfully using the highways themselves suffer grave injury through the negligent use of those highways by others. Such a law is remedial in nature and in the public interest is to be liberaly construed to the end of fostering its objectives.” (Continental Cas. Co. v. Phoenix Constr. Co. (1956) 46 Cal.2d 423, 434, 296 P.2d 801, 808.)
10. It may be noted that the implied consent to a blood test found in section 13353 of the Vehicle Code does not impose an unconstitutional condition on the exercise of the driving privilege, is limited to circumstances—“reasonable cause to believe such person was driving a motor vehicle upon a highway while under the influence of intoxicating liquor”—which do not tend to discriminate against the nonculpable, and give the driver a right to administrative and judicial review before his license is suspended. (See Serenko v. Bright 91968) 263 A.C.A. 789, 70 Cal.Rptr. 1; and Finley v. Orr (1968) 262 A.C.A. 711, 69 Cal.Rptr. 137, passim.)
SIMS, Associate Justice.
MOLINARI, P.J., and ELKINGTON, J., concur.