Cigarette and Tobacco Products – Citations / Appeal Process
The Investigations Division of the Board of Equalization (BOE) is authorized to issue citations for violations of the California Cigarette and Tobacco Products Licensing Act of 2003 (CTPLA). Two types of citations may be issued: civil citations and criminal citations. The civil citation is processed by the BOE. The criminal citation is a Notice to Appear in court. Both types of citations are subject to civil penalties.
When a civil citation is issued, a copy of the citation is sent to the Special Taxes and Fees (STF) office of the BOE for processing and civil penalties assessed, if applicable. The CTPLA licensee cited has the right to appeal the citation with cause.
When a criminal citation is issued, it will first be processed through the criminal court system. Once the court proceeding is complete, the BOE will obtain the court's ruling. Depending on the violation(s) cited, the court may impose fines, jail time or both. In addition to any criminal penalties levied by the court, the BOE may also impose civil penalties. The CTPLA licensee criminally cited has the right to appeal any additional civil penalties imposed by the BOE. For more information about BOE civil penalties, see Publication 161, Criminal Citations Include a Civil Administrative Process.
Civil Appeals Process for Notices, Suspensions, Revocations, and Civil Fines
When STF receives their copy of a citation, STF will enter the violation(s) on the license record. Depending on the type of violation(s), a Warning Notice or a Notice of Violation will be sent to the licensee. A Warning Notice notifies the licensee that the listed violation(s) will be entered on the license record but there will be no civil fine, suspension, or revocation. A Notice of Violation notifies the licensee of the violation(s) that will be entered on the license record and the specific penalty(s) imposed. Both the Warning Notice and the Notice of Violation advise licensees of their appeal rights.
The licensee may appeal the violation(s) and/or penalties outlined in the Warning Notice or Notice of Violation. The procedures for requesting an appeal are outlined in the notices. The appeal must be filed within 10 days from the date of the notice, and must include the licensee's contentions and any supporting documentation. If no appeal is requested, the violation(s) are added to the licensee's permanent license record and applicable penalties are assessed.
If STF receives a timely request for appeal, a Notice of Conference will be sent to the licensee. This notice will provide a conference date, time, and telephone number to call (appeal conferences are conducted by telephone). The Response to Notice of Conference (on the back of the notice) must be completed and filed within 10 days from the date of the notice.
Designated BOE staff presides over the appeal conference. A member of the Investigations Division also attends to represent the department.
Approximately 4-6 weeks after the conference, STF will issue a Notice of First Decision to the licensee. A licensee who disagrees with this decision and wishes to appeal must complete the Request for Appeals Conference (on the back of the notice) and return that notice with any new contentions and any supporting documentation. The Request for Appeals Conference must be filed within 10 days from the date of the Notice of First Decision.
If timely filed, the BOE's Case Management Division will process the request and notify the licensee of the date, time and telephone number to call for the scheduled Appeals Conference. The Appeals Conference is conducted by a BOE Appeals Division attorney and incudes a member of the Investigations Division to represent the department.
After the Appeals Conference, the Appeals Division will notify the licensee of the outcome of the appeal in a Notice of Second Decision. If the violation(s) and penalties are dismissed, the violation(s) will be removed from the license record. If the violation(s) and/or penalties are upheld, and do not include a fine in excess of $2,500, STF will issue a Notice of Suspension or Warning Notice and/or a demand billing to the licensee for civil penalties, as applicable.
If the Appeals Division upholds the violation(s) and the penalties include a fine in excess of $2,500 or a revocation of a license, the licensee has one additional level of appeal available. The licensee may request a hearing before the elected Board Members. The instructions for requesting a hearing before the Board Members is outlined in the Notice of Second Decision.
After a hearing before the Board Members, the Board Proceedings Division will notify STF of the outcome of the appeal. If the violation(s) and/or penalties are upheld, STF will issue a demand billing and a Notice of Suspension or Notice of Revocation in accordance with the Board Members' decision. If the violation(s) and penalties are dismissed, the violation(s) will be removed from the license record.
Civil Fines and Penalties
The BOE will issue fines and penalties pursuant to its authority under Business and Professions Code Section 22974.7. This section provides:
In addition to any other civil or criminal penalties provided by law, upon a finding that a retailer has violated any provision of this division, the board may take the following actions:
- In the case of the first offense, the board may revoke or suspend the license or licenses of the retailer pursuant to the procedures applicable to the revocation of a license set forth in Section 30148 of the Revenue and Taxation Code.
- In the case of a second or any subsequent offense, in addition to the action authorized under subdivision (a), the board may impose a civil penalty in an amount not to exceed the greater of either of the following:
- Five times the retail value of the seized cigarettes or tobacco products.
- Five thousand dollars ($5,000).
The BOE may reduce civil fines by the amount of any criminal fine imposed by the court for the specific violation. The criminal fine is the statutory penalty imposed for the specific violation, and does not include any other court-imposed fees or costs.
Business and Professions Code § 22974.7 applies to retailers. Similar sections apply to distributors, wholesalers, manufacturers and importers (see Business and Professions Code §§ 22978.7 and 22979.7).