NO. 82-194
INTHE SUPREME COURT OF THE STATE OF MONTANA 1983

R. PEYTON HOVEY, petitioner and Appellant,

VS. DEPARTMENT OF REVENUE, LIQUOR DIVISION, of the State of Montana, and LEE WILLIAMS, et al., Respondents.

Appeal from: District Court of the FirstJudicial District, In and for the County of Lewis and Clark Honorable Gordon Bennett, Judge presiding. Counsel of Record:
For Appellant: John W. Mahan argued, Helena, Montana Carter Picotte argued, Helena, Montana
For Respondents: Mike Garrity argued, Dept. of Revenue, Helena, Montana

submitted: January 14, 1983 Decides: 

### February 24, 1983
p-

### .-. - I-

### t

## 82

## 41983 Filed:

Clerk --

# -Mr. JusticeL. C. Gulbrandson delivered theOpinion of the Court.
This 

### case comes to thisCourt from the District Court of the First Judicial District, Lewis and Clark County. The District Court denied appellant's petition for 

### a writ of mandate, requiring the Department of Revenue (DOR) to allow him to apply forone of sixnew liquor licenses 

### to be issued in the Billings

area. From thatdenial thisappeal 

### was taken. InSeptember 1981, sixnew floaterallbeverage liquorlicen

### ses became available inBillingsbased on the statisticscompiled in the 1980 census. On October 5, 1981, appellant, Hovey, applied forone of these licenses 

### to use inhisdowntown Billings restaurant. Appellant's application 

### was rejected by the DOR onOctober 21, 1981. This rejection

### was on the grounds that the appellant's place of business was in violation of section 16-3-306, MCA, which prohibits liquor dispensing premises (hereinafter premises) within 600 feet of churches 

### or schools when on the 

### same street, and the DORIS interpretation of that section, setout insection42.12.129, ARM. On November 2, 1981, Hovey filed a petition for an alternative 

### writ of mandate in the District Court of the First JudicialDistrict, Lewis and ClarkCounty. On thatdateanorder

was secureddirecting the DOR torevoke itsruling thatappellant



### was ineligible 

### to applyforone of the sixnew licenses orinthe alternative to show cause why that ruling had not been revoked. An initial hearing 

### was held on the order 

### to show cause on November 9

## , 1981. A subsequent hearing 

### was ordered to be held February 4, 1982, following a ruling issued by the Honorable Arnold Olsen in the case of Fletcher v. DOR, No. 47319, (decided March 8, 1982, Lewis and ClarkCounty), which presented a similar issue. In the interim between the second hearing and the District CourtIsfinal decision, the appellant

### was allowed 

### to participate in the DOR administrative hearing with other applicants. This



### was onlyto expedite

### matters in

### case of an adverse ruling by theDistrictCourt. The Court's final order came down insupport of the DOR's position and appellantwas denied a license. The appellant is the owner of Cellar 301, a restaurant located inthe old chamber buildingon the cornerof Third Avenue North and North 27th Street indowntownBillings. The restaurant


### was opened in 1977 with its business address being 2615 Third Avenue North. There are no doors on North 27th Street because when the building 

### was renovated, the appellant placed the entranceonThirdAvenue. The church building in question is the First Congregational Church of Christ and is located at310 North 27th Street. The church owns a large tract of land which extends to the intersection where the appellant's restaurant is located. They have granted the Cityof Billings a bus stopatthisintersection, and the City has erected and maintains shelters on the property in connection with the bus stop. The issue to be determined by this Court 

### is whether the DistrictCourt's denial of appellant's application for a 

### writof mandate, on the grounds that the building in which appellant's restaurant is located, violates section 16-3-306, MCA, and section 42.12.129, ARM, the DOR's interpretation of the statute, constitutesreversible error? The actual thrust of this case centers around a question of statutoryinterpretation and whether it

### was proper forthe DOR to deny the appellant the opportunity 

### to apply for one of the new floaterallbeverage liquor licenses 

### to be issued inBillings, on the grounds that he is in violation of the "on the same street" requirement of section 16-3-306, MCA, as interpreted by the DOR insection42.12.129, ARM. Thatregulation states: "(1)In order to determine if the provisions of 16-3-306, MCA, 

### are applicable, the department utilizes a 

### two step test: (a) determination of street of location; and (b) determination of distance between entrance doors. (2) (a) A building 

### is considered to be on each 

### street that abuts the building and appurtenant land. An alley is generally not considered 

### to be 

### a streetunless it 

### is used by the general public as a public thoroughfarefor vehicular travel. (b) If the proposed premises for liquor sales 

### are not located on the same street 

### as a place of worship or school, the provisions of 16-3-306, MCA, 

### are not applicable. If the proposed premises are on the same street, then the second step of the tests, provided for in subsection (3)r 

### is utilized. (3) (a) If the proposed premises 

### are on the 

### same street, the distance between entrance doors is measured by a geometric straight line, regardless of intervening property and buildings. An entrance is considered 

### to be 

### a means of ingress 

### to the premises generally used by the public. (b) If the distance 

### is more than 600 feet, the provisions of 16-3-306, MCA, 

### are not applicable. If the distance is 

### less than or equal to600 feet, Section 16-3-306, MCA applies." This particular regulation places a corner building on both streets on which it abuts rather than only on the street where 

### itsentrance and address

### are located. In such 

### matters of statutory interpretation, the court must first look for the intention of the legislature in the plain meaning of the words used, and may go no further when the interpretationof the statutecanbe made from itswords. Dunphy

v. Anaconda Company (1968), 151Mont. 76, 438 P.2d 660; Statev. Hubbard (1982),649 P.2d 1331, 39 St.Rep. 1608. The statuteinvolved inthepresent case 

### is section16-3-306, MCA, and readsasfollows: "(1) Except 

### as provided in subsections (2) and (3),no 

### retail licensemay be issued pursuant to this code 

### to any business or enterprise whose premises 

### are within 600 feet of and on the 

### same street as a building used exclusively as a church, synagogue, or other place of worship 

### or 

### as a school other than 

### a commerciallyoperated 

### or postsecondary school. This distance shall be measured ina straight line from the center of the nearest entrance of the place of worship or school to the nearest entrance of the licensee's premises. This section is a limitation upon the department s licensing authority. 

### "(2) However, the department may renew a license for any establishment located in violation of thissectionif the licenseedoes not relocate hisentrances any closer than the existing entrances and if the establishment: "(a) was located on the sitebefore theplace of worship 

### or school opened; or "(b) 

### was located in 

### a bona fide hotel, restaurant, 

### or fraternal organizationbuilding atthe 

### site sinceJanuary 1, 1937."(3) Subsection (1)does not apply to licen

### ses for the sale of beer, table wine, 

### or both in the originalpackage for off-premises consumption." Section 16-3-306, MCA. We are concerned here with subsection one of the statute. The phraseology of that subsection shows the intent 

### of the legislature. Where the phrase "on the 

### same street" is viewed in conjunction with the second sentence of subsection one, which requires the distancebetween the premises and a church 

### or school to be measured in a straight line from entrance to entrance, it is evident that the legislature only intended this section to applywhere the entrances 

### were on the 

### same street. There is no reference to the abutting principal set out in the DOR1s regulation. Thus, the import of the language of the statute is plain and it can only be applied where the entrances to the buildings used as churches and the premises 

### are "on the 

### same street." Further support is lent to our construction of this statute by the reenactment doctrine, as the DOR1s interpretation of the statute 

### is apparently inconsistent with the way the statutehas been administered since its inception in 1937. The appellant, during the hearings, brought inexamples of how establishments in 

### similar situations 

### to hishad licenses and 

### were operating. Also, the case of Fletcher v. DOR, supra, which presented almost the identical issuewas being litigated atthe 

### same timeas thisproceeding. The parties tothisactionstipulated intoevidence all the exhibits introduced inthe Fletchercase. Contained inthose exhibits 

### was a letter dated July 6, 1971, from Joseph T. Shea, administrator of the old liquor control board, to the city manager of Bozeman explaining that the "on the same street" requirement of then section4-415, RCM, 1947, (now16-3-306, MCA)


### was interpreted 

### so that it onlycame intoplaywhen both thepre

### mises and church had their addresses on the 

### same street. This is exactly how the appellant contends that the statute should be applied. The reenactment doctrine has been recognized in Montana inthe 

### cases of Stateex rel. Lewis and Clark County v. StateBoard of Public Welfare (1962), 141Mont. 209, 376 P.2d 1002; Vgntura 

### 9 v. Montana Liquor Control Board (1942), 113Mont. 265, 124 P.2d 569. The statute inquestion

### was originallyenacted in1937. It has been amended twice, first in 1975, atwhich 

### time its number

was also changed from section 4-415, RCM, 1947, to section 4-4-107, RCM, 1947, and 

### most recently in 1981to

### itspresent version, section 16-3-306, MCA. Each version of the statutemaintained the operative language that no license be issued "on the



### same street"and within 600 feetof 

### a place of worship orschool, and kept the same method of performing the measurement of the distance. Based on the letter from the administrator of the old liquor control board and the examples of other premises locations in relation to churches and schools, introduced at trial, it 

### is apparent thatprior tothe DOR1sattempt 

### to change themeaning of "on the 

### same street" it 

### was interpreted and applied 

### so that the statuteonly

### came intoplay when the premises' and the churches'



### or schools' 

### streetaddresses were on the 

### same street. Itdid not apply where, as in the present 

### case, the restaurant 

### is on Third Avenue North and the church 

### is on the 

### cross street, North 27th Street

# . This Court, in discussing the reenactment doctrine in the past, has stated: "The rule is that in adopting a statute the legislature is presumed 

### to have acted with knowledge of the previous construct ion of similar statutes (United States v. Albright, D. C., 234 Fed. 202) and tohave adopted such construction (United Statesv. Ryan, 284 U. S. 167, 52 Sup. Ct. 65, 76 L. Ed. 244.) This rule applies not only 

### to Acts previously construed by the courts, but has equal applicationto statutespreviously construed by the executive or administrative departmeat of the government. (59 C. J. 1064.)'' V&ntura v. Montana Liquor Control Board, 113 Mont. 

### at 270-271. This position 

### is strengthened furtherby the holdingsof the federal courts as evidenced by the United States Supreme Court

case of Commissioner of InternalRevenue Servicev. 

### Noel IsEstate(1965), 380 U.S. 678, 85 S.Ct. 1238,\4 L.Ed.2d 159, where the court stated: 

### "[A] long-standing administrative interpretation, applying to a substantiallyre-enacted statute, is deemed to have received congressional approval and has the effect of 

### law. See, e.g. National Lead Co. v. United States, 252 U.S. 140, 146, 40 Sect.237, 239, 64 L.Ed. 496; United States v. Dakota-Montana OilCo., 288 U.S. 459, 466, 53 S.Ct. 435, 438, 77 L.Ed. 893." 380 U.S. at682. The opinion of the United States District Court in Newman v. Vessel Lady Arnnette (D S.C. 1979) 470 F.Supp. 520, further clarifies and concisely 

### states the rules governing the present situationwhere it states: "The U.S. Supreme Court has stated 

### as a general principle that a long-standing administrative interpretation applying 

### to a substantially reenacted statute is deemed 

### to have Congressional approval and hence the force and effect of law, C. I. R. v. Noel's Estate, 380 U.S. 678, 85 S.Ct. 1238, 14 L.Ed .2d 159 (1965). Although this principle 

### ismore persuasivewhen it canbe demonstrated that Congress 

### was 

### aware of the administrative construction at the time of the reenactment, Mitchell v. C. I. R., 300 F.2d 533 (4th Cir. 1962),Congressional awarenessmay be presumed where, as here, the administrative construction is consistent and long-standing, Lorillard v. Pons, 434 U.S. 575, 98 S.Ct. 866, 55 L.Ed.2d 40 (1978)r particularly when Congress has shown specific and repeated interest in the administratively construed sections prior to the reenactment." 470 F.Supp. at527. Based on the above-cited principles, it is evident that the long-standing interpretation of what constitutes "on the 

### same street" has the force and effect of 

### law due to the repeated reenactment by the legislature

## , of the operative parts, without change. Thus, it cannot be changed by administrative reinterpretation and therefore section42.12.129, ARM, is invalid. We therefore hold that a writ of mandate should have been issued by the District Court, allowingMr. Hovey to apply forone of the sixnew liquor licenses, because under the plain language of section 16-3-306, MCA, and 

### its legislatively-approved interpretation, through repeated reenactment, he had 

### met all the requirements imposed by it. Where such requirements 

### are metthere is a clear legal duty on the part of the DOR to allow appellant to apply, and where such a duty exists, mandamus is proper. Cainv. Department of Health and Environmental Sciences, (1978), 177Mont. 448, 451, 582 P.2d 332. It is true that the granting of 

### a writof mandate is a discretionary act which will be upheld unless there is a showing that the District Court abused its discretion. Cain v. Department of Health and Environmental Sciences, supra. But, based on theplain import of the language of the statute and the long-standing legislative acceptance of the interpretationplaced on it,we believe such 

### a showing of abuse of discretion 

### was made 

### as the DOR had a legal duty due to these interpretations to allow Hovey 

### to apply. Therefore, thejudgment of theDistrict Court is reversed and 

# ,-/ this cause remanded for the issuance of an.,,:%propriate 

### writ. / /

Justice, 

# %~Adl* &!ii 

# WLQ Chief Justice

### Mr. Justice DanielJ. Shea,concurring:



### I agree with the resultof themajority opinion but not in all that is said. I further emphasize that the handling of the case of Fletcher v. DOR, supra,which casewas being processed through the District Court almost simultaneously with this case,is hardly an example of even-handed treatment by the agency. 

### In Fletcher v. DOR, a Bozeman liquor license applicant

was faced with virtually the sameproblem as exists in this

case. However,onMarch 8,1982, the District Court for the

same First Judicial District (Judge Arnold Olsen presiding) held the regulation involved here to be invalid. The agency did not appeal from this ruling, the result being that the applicantreceived the liquor license. In arguing this appeal, counsel for the agency acknowledged this inconsistency,butproperly argued thathe,

as one of the attorneys, is not responsible for the agency's decisions. Nonetheless, someone in that agency, in deciding not to appeal theFletcher case,permitted a license to issue by the simple expedient of ordering that the agency not appeal from theDistrictCourt's ruling. Yet, in this case, after obtaining a result 180 degrees from the decision in Fletcher, the agency argues that the applicant should notbe permitted to apply for a licensebecause of the proximity of his establishmentto a church. The agency surelydidn't thinkmuch of its regulation in theFletcher case if itdecided not to take an appeal. It is

now more than a little inconsistent and more than a little unfair for the agency to argue here that the agency regulation should 

### be given full force and effect. How can

### the agency claim to be effectively enforcing statutes and regulationsunder the policepower of the State when it took 

### -- such a 

### diametrically opposed position in the Fletcher case? 

### --- This Court and most courts have been most reluctant to apply equitable estoppel to a governmental agency, but perhaps the time has come to rigorously apply this doctrine. Itmay well be time for this Court to breathemore life into this doctrine by rigorously applying it to governmental agencies when grossly inequitable results may be the result ofnotapplying it. Iwould apply a formof collateral estoppelorwaiver in 

## m* this case. In the Fletcher case, the agency 42.12.129 A.R.M., the sa.merule on which the District Court in this

case relied,on in refusing relief to the petitioner here. And now, '

### of course, the agency relies on this rule in defending the appeal. I 

### would not permit the agency to do

so. Once the 60 

### days expired for the agency to take its appeal -in the Fletcher case, the agency effectively acquiesced ina ruling that the rulewas invalid. The petitioner here had a right to hold the agency to its acquiescence in the Fletcher case that the rule was invalid. If invalidas to the Fletcher application,the rule

was also invalid as to the license application in this case.