Oh the humanity! Yes, start with reporting to animal control. I'm sure that they will recommend that you report the breeder to other places such as Better Business Bureau and whoever your state licensing agency is for dog breeders. For instance, in Los Angeles, the information can be found here:
Breeders Permit | Los Angeles Animal Services "B. No offspring may be sold, adopted, bartered, or otherwise transferred, whether for compensation or otherwise, until it has reached the age of at least eight weeks."
I'm not sure about other parts of California, but there are state laws as well.
Edit: Here is some more information specific to Orange County:
Citizens observing any of the following conditions at an animal related business should report it to OC Animal Care at 714-935-6848.
Cruelty to animals
Sick or injured animals
Lack of healthful food and potable water
Unsanitary facilities