Title: Moore v. King

State: arkansas

Issuer: Arkansas Supreme Court

Document:

Robert S. MOORE, as Director of the Alcoholic
Beverage Control Division; Dr. Carl Hyman,
James N. Walters, Robert J. Jones, Tony
Ellis, and Michael Butler, as Members of the
Alcoholic Beverage Control Division Board;
and Billy G. Taylor v. Leo KING

97-202                                             ___ S.W.2d ___

                    Supreme Court of Arkansas
                 Opinion delivered May 27, 1997


1.   Appeal & error -- review of court of appeals case. -- When the supreme
     court grants review following a decision by the court of
     appeals, it reviews the case as though the appeal was
     originally filed with the supreme court.

2.   Administrative law & procedure -- agency decision -- limited review. -- On
     appeal, the supreme court's review is directed, not toward the
     circuit court, but rather toward the decision of the agency;
     in review of an agency decision, the circuit court is limited
     to a determination of whether there was substantial evidence
     to support the agency's decision, and, on appeal, the supreme
     court's review is similarly limited; administrative agencies,
     as opposed to courts, are better equipped by specialization,
     insight through experience, and more flexible procedures to
     determine and analyze legal issues affecting their agencies;
     questions concerning the credibility of witnesses and the
     weight to be accorded to the evidence presented lies within
     the prerogative of the agency, rather than the reviewing
     court.

3.   Evidence -- substantial evidence defined -- establishing absence of
     substantial evidence in administrative context. -- Substantial evidence
     is defined as valid, legal, and persuasive evidence or such
     relevant evidence as a reasonable mind might accept as
     adequate to support a conclusion; to establish an absence of
     substantial evidence, it must be demonstrated that the proof
     before the administrative tribunal was so nearly undisputed
     that fair-minded persons could not reach its conclusions.

4.   Administrative law & procedure -- administrative decisions -- when reversed
     -- challenging party's burden. -- Administrative decisions should
     be upheld if they are supported by substantial evidence and
     are not arbitrary, capricious, or characterized by an abuse of
     discretion; the courts determine whether there has been an
     arbitrary or unwarranted abuse of discretion, even though
     considerable judicial restraint should be observed in finding
     such an abuse; an administrative decision should be reversed
     as arbitrary and capricious only when it is not supportable on
     any rational basis, not simply because the reviewing court
     would have acted differently; the party challenging the
     agency's action must prove that such action was willful and
     unreasonable, without consideration and with a disregard of
     the facts or circumstances of the case.

5.   Intoxicating liquors -- liquor permits -- Alcoholic Beverage Control
     Board's power. -- The ABC Board has the power to determine
     whether public convenience and advantage will be promoted by
     granting liquor permits; to carry out the legislative intent
     and the requirements of the Alcoholic Beverage Control Act,
     the ABC Board must look at factors that directly weigh on the
     public convenience and advantage.

6.   Administrative law & procedure -- courts should not consider grounds not
     presented to agency -- substantial evidence supported Board's decison to
     grant private-club permit -- trial court's judgment reversed -- Board's
     decision affirmed. -- Although, on appeal to both the trial court
     and court of appeals, the decision to reverse the Alcoholic
     Beverage Control Board's decision granting a private-club
     permit to a lodge was based on ABC regulations dealing with
     false information at hearings and alcohol-related convictions, 
     these regulations were not argued by appellee at the hearing
     before the ABC Board; courts should not consider grounds not
     presented to an agency because to do so would deny the agency
     the opportunity to consider the matter, make its ruling, and
     express the reasons for its action; it is not the function of
     the courts to make findings of fact with respect to issues
     raised for the first time on appeal; where the trial court
     overturned the ABC Board's decision on grounds not raised in
     the hearing below, it improperly substituted its judgment for
     that of the agency; because the supreme court concluded that
     there was substantial evidence to support the ABC Board's
     decision to grant the private-club permit to the lodge, it
     reversed the judgment of the trial court and affirmed the
     Board's decision.


     Petition for Review from the Arkansas Court of Appeals;
reversed.
     Donald R. Bennett, for appellant Alcoholic Beverage Control
Board.
     Charles R. Singleton, for appellant Billy G. Taylor.
     Lyons & Emerson, by: Jim Lyons, for appellee.

     Donald L. Corbin, Justice.
     Appellant Robert S. Moore, Director of the Alcohol Beverage
Control ("ABC") Division, individually and on behalf of the ABC
Board, appeals the judgment of the Randolph County Circuit Court,
which reversed the ABC Board's decision to grant an application for
a private-club permit to the Pocahontas Moose Lodge.  The Arkansas
Court of Appeals affirmed the trial court's judgment.  Moore v.
King, 56 Ark. App. 21, 937 S.W.2d 677 (1997).  We granted
Appellant's petition for review of that decision pursuant to Ark.
Sup. Ct. R. 1-2(e) (as amended by per curiam July 15, 1996).  When
we grant review following a decision by the court of appeals, we
review the case as though the appeal was originally filed with this
court.  Stucco Plus, Inc. v. Rose, 327 Ark. 314, 938 S.W.2d 556
(1997).  We reverse the judgment of the trial court and affirm the
decision of the ABC Board to grant the permit.  
                 Facts and Procedural History
     Pocahontas Moose Lodge #2405, filed an application for a
private-club permit with the ABC Division on May 20, 1994.  The ABC
Division received written objections to the application from the
Randolph County Sheriff, the Pocahontas Assistant Chief of Police,
and Appellee Leo King, a nearby property owner.  Specifically, the
Sheriff disapproved of the lodge receiving a permit due to the lack
of deputies to enforce the regulations at the lodge.  The
Pocahontas Assistant Chief of Police opposed the permit as
promoting a traffic hazard on the roads near the lodge.  Leo King
and other private citizens alleged that the lodge would lower the
value of nearby property and disturb the peace of the area.  As a
result of the foregoing objections, along with the concerns of
building code requirements, the ABC Division Director initially
denied the application on June 23, 1994, and the Moose Lodge
appealed.  
     A hearing was held before the ABC Board on September 21, 1994,
where supporters and opponents to the permit were heard.  After the
hearing, the lodge's application was granted.  Appellee appealed to
the Randolph County Circuit Court on October 18, 1994.  The circuit
court reversed the decision of the ABC Board, determining that the
issuance of the permit was arbitrary and capricious and
characterized by an abuse of discretion.  Apparently, the circuit
court, on its own initiative, determined that Steve Rice, secretary
of the Moose Lodge, had knowingly given false statements regarding
the issue of whether the lodge had previously sold alcoholic
beverages on its premises.  The circuit court also found that the
previous practices of obtaining alcohol at the lodge violated
specific ABC regulations, which were not argued by Appellee in the
hearing and which would, in any event, only provide for a
revocation of a permit.
     Appellant appealed to the court of appeals, which held that
the circuit court had properly exercised its authority and that its
ruling to reverse the decision of the ABC Division was correct in
light of the fact that ABC regulations prohibited the issuance of
a private-club permit in this instance.  The court of appeals
concluded that Steve Rice gave false testimony regarding the sale
of liquor at the lodge and that Tommy Starr had been convicted of
selling beer on the premises and was an officer of the Moose Lodge. 
At the hearing before the Board, however, there was no testimony
revealing that Tommy Starr was an officer of the lodge, nor was
there any request from Appellee for the Board to make a finding of
fact with regard to ABC regulation 1.32(6), which prohibits the
issuance of a permit if an officer of the corporation has been
convicted of alcohol-related crimes.
                       Standard of Review
     On appeal, our review is directed, not toward the circuit
court, but rather toward the decision of the agency.  Arkansas
State Highway & Transp. Dep't v. Kidder, 326 Ark. 595, 933 S.W.2d 794 (1996).  In review of an agency decision, the circuit court's
review is limited to a determination of whether there was
substantial evidence to support the agency's decision and, on
appeal, the supreme court's review is similarly limited.  Id. 
Administrative agencies, as opposed to courts, are better equipped
by specialization, insight through experience, and more flexible
procedures to determine and analyze legal issues affecting their
agencies.  Id.  Questions concerning the credibility of witnesses
and the weight to be accorded to the evidence presented lies within
the prerogative of the agency, rather than the reviewing court. 
Williams v. Scott, 278 Ark. 453,