My friend is very adament about adopting pets.
She's repeatedly over and over said one shouldn't get a dog from a breeder let alone a pet store.
I think that many people have overlooked that part of your reaction was being stunned that this person, who had previously made very strong statements, was going against her own principles.
She claims that Petland doesn't support puppy mills and backyard breeders.
It sounds like she went by there, got sucked in by a cute face, and decided to believe whatever the guy there told her. And now, perhaps, is deeply regretting it herself, perhaps even feeling ashamed (anyone who has ever gone against a deepset conviction that one has held knows that you will feel deep, deep shame afterwards, OR throw up defenses like crazy and not allow anyone to bring up your previous position), and she probably really doesn't want to think about it.
I won't even go by those places, I do NOT want to be suckered in by a pretty face. Because if I get pulled in by that face, by some sort of connection, I am dooming that animal's mother to MORE litters, to MORE what-I-deem abuse, to MORE time spent locked up... And if that animal's mother is already gone, then it's just another one, or another, or another.
I get that if it's not me that takes an animal home, it'll be someone else. But it won't be ME causing further pain to the breeding animals back wherever those animals came from.
Now, what do you say to her now? Well, you didn't say how she responded to. Actually, first off, I find "congratuations" to be a WEIRD response to getting an animal to begin with. So I would never even say that to anyone who just got a new animal. But still, you didn't say what she said.
If you think she's ashamed, now finding out that she was sold a line of hooey (please note I don't even know what Petland is...we have Petco (sells animals?) and PetSmart (adopts animals out for local shelters?) around here), but she's in puppy love and probably can't see a palatable way out of it NOW, so while I wouldn't tell you to ignore it, I wouldn't want to, well, rub her nose in how she went against her beliefs. She knows it, she knows you know it.
As for the city and HOA stuff, that's on her head. She knows that she's going against rules...
And with the multiple animal thing...I'm sure she also knows she has too many animals. We had one cat, and we quickly realized that it was too many for us. An otherwise good friend of mine urged me to find another home for her, because she knew that the cat was too much for me.
I was desperately allergic (an asthma attack the second day she was with us nearly sent me to the hospital...I had never had anything but exercise induced asthma before), she was a LOVEY cat with issues who drooled and clawed and had to be ON me most of the day. Then I got pg and couldn't even stand to be near my sweet girl b/c of weird aversions that I tried so hard to get over but just couldn't, so her care and love was all on DH. Then DS arrived and she HATED him, then he started moving around and she hated him even more. We protected her but in protecting her we made her world even smaller...she was 7ish years old, drooled, had abandonment issues, could NOT be in a house with other animals b/c she had been bullied in the three homes before us, AND for 1.5 years she had a persistent leg infection (because she licked and bit and licked and bit herself obsessively, because we couldn't provide perfectly for her needs) that ONLY more alternative, expensive, remedies helped with, while the antibiotics that a normal person would give her only made it worse... We could NOT give her up to just anyone, and could never find anyone who would take her...so we soldiered on, continuing to TRY, until she ran out the door while DH was cleaning up a mess she made while he was dealing with his father being gravely ill in the hospital (he didn't notice b/c his parents were calling repeatedly while he cleaned up the poop she had "put" all over the floor, right next to her CLEAN litterbox), and we never saw her again.
So my friend told me to do things, but she also never gave me any practical advice for helping our cat or finding her a home. I knew the negative feelings were there from my friend, as we tried to do our best with and for our cat, but without HELP, it was useless to talk with my friend about it. She didn't assist, she only made me feel worse, which didn't help me help my cat.
And that situation didn't even have to do with something that went against my convictions...in my case the only shame was that I couldn't fulfill my promise to my first baby, our cat, because the second baby, my son, and all of my hormones and feelings swirling around made it as impossible to deal with her, as it was impossible for me to eat eggs (utterly impossible) during that time (pg and first year postpartum).
And my embarrassment was thinking for a second that I could have an indoor cat, when I hadn't grown up with them, had had allergies to the universe since I was 4, and grew up with a mother with life-threatening asthma. It was ridiculous for me to have said "yes" to her to begin with, but she was a pretty face and that, along with her sweetness and the sadness of her situation when I met her, pulled me in to a situation I shouldn't have been in.
If you want to be friends, be friends. Help her in some way to figure things out, if she needs/wants it, even if you don't want to watch her animals for her anymore. She knows how you feel about her abandoning HER own principles, she probably doesn't need you to bring that up anymore. She might want to talk about it in the future. She might not. If you do NOT want to be friends, just walk away. Maybe there are other issues, maybe there aren't. But if you've had it, you don't have to stick around. She'll survive. Though you might want to give her an honest explanation, so she doesn't have to walk around not understanding it forever...I've lost two friends for mystifying, illogical, and IMO nonsense reasons (the first one I never even GOT reasons for, just "reasons" told to me by other friends after the fact), and it drives me bonkers sometimes, to think about it and know they won't explain...so if you don't want her to still be remembering you with frustration 12 years from now, at least explain.
Good luck!