No. 2-09- 1094 File d: 11-18-10

______________________________________________________________________________ IN THE APP ELL ATE C OURT

OF IL LINO IS SECOND DI STRICT

______________________________________________________________________________ KENNETH D. KOEHLER, Local ) Ap peal f rom th e Ci rcui t Court Li quor Con trol C omm

i ssi oner, ) o f Mc He nr y Co un t y. Co un t y o f Mc He nr y, ) ) Pl ai n ti f f -A pp el l an t, )

) v. ) No. 08-- MR--364 ) ILLINOIS LIQUOR CONTROL ) COMMISSIO

N ("IL CC" ); IR

VING J
. ) KOPP EL, as I LCC C hairman; ) RA CH INA -1 , IN C. , d/

b /a Mobi l Sp ee d M ar

t; ) PAT EL AV IN D; P ATE L SU NI L; and ) PIYUSH JOSHI, ) Ho no r ab le ) Mic ha el T
. Ca ldw ell, Defendan ts-Appellees. ) Judge, Presi din g.

______________________________________________________________________________ JU STI CEJO RGEN SEN

de l i v ered th e op i n i on of th e c our t: OnAu gust 20 , 2008, the McHenry County Local Li quor Contr ol Comm

issi on (MLCC) , through it s c o mmissio ner , p laint iff Kenne t h Ko ehle r, re vo ke d d efe ndan t Rach i na -1, Inc.' s l

i quor li cense. Rachi

na-1 o per ates as a dramshop at a Mobi l Spee d Mart gas station i n uni ncorporat ed McH en ry County. Defendants Patel Avi nd, Pat el Suni

l, and Pi yush Josh i arei ts owne rs. Ra chi na-1 appe al ed the l i cens e re voc ati on to the Ill in ois Li quor Cont rol Comm

is si on (ILCC). On Septemb er 24, 2008, t he ILCC, thro ugh its comm issi oner, d efendan

t Ir vi ng J. Koppel , modi fi

ed the MLCC order by reducing the li

censere v oca

ti on to a t empo ra ry license su spe nsion. Plaint iff so ught administr at ive reviewbef

ore t he trial

cou rt, and on Jul

y 27, 2009, the court aff

irm ed the ILCC order. On Septemb erNo. 2-- 09--1094

-2-

21, 2009, the court denied plaint iff 's mot ion t o r eco nsider . P laintiff appe als. F or t he fo llowing
reas ons, we rev

erse the tri al court's order af f i rm i ng th e ILC C an

d we re i nstate the M

LCC order. I. BACKG

ROUND A. ML CC H ear ing The fac t s a r e u nd isp ut ed
. On Ap r il 8, 2007, the MLCC i ssued to Rachi na-1 a l iquor lic ense. On Decem ber 13, 2007, the M cHen

ry County sh

erif f' s departmen

t, along wi

th the Ill in ois State Polic e and a representa tive f

rom the ILCC, per formed at Rachin a-1 "a n al cohol

coun ter m eas ure enfo rc ement detail" ( i.e. , a sting operat i on) to m onitor t he sales of alcoholi c beverages to minors. Dur ingt he st ingop er at ion, one o f Ra ch ina
- 1' s e mplo yee s, Ra mes h B ar o t , so ld a lco ho l t o a mino rin vi ol ati on of local and s t at e laws . T he MLCC issued to Rachi na-1 a ci tation and n

ot ic e of hea

rin g, with a heari ng date sche dule d for June 11, 2008. O nD ecem

ber 27, 2007, 14 days

after the f

irst vi olation a nd be fore the heari

ng occurred, Ba rotag ai n sol d al coh ol to a minor dur ing a se co nd st ing o per at ion. The MLC C i ssued to Rachi na-1 a second ci

tation and n

ot ic e of hea

rin g, again setting the h

earin g for June 11, 2008. On June 3, 2008, co-o wner Joshi subm itted to the MLCC an

aff ida vi t in wh ic h he wai ved Rac hina-1 's right to a hearin g, admitted t o t he two instances o f sa les o f alcoho l to a minor , a nd accepted from the MLCC the f

oll owing pe nal ties: (1) asa penal

ty f or t he f irst off ense, a $1,000 f

in e; and (2) as a penal

ty f or t he second of

fen se, a $1,500 fi

ne. Rach in a-1 paid b ot h fi

nes b y J une 11, 2008, and no hea

rin g was hel d. In addi ti on to the MLCC -i

m posed pen al tie s, Ra chi na-1 wa s a

l so p en al ize d by the IL CCf or it s i nf racti ons . Sp ec i f

i cal l y , th e IL CCi

m pos ed upon Rach i na -1 a $50 0 f i ne f ort he f i rs t vi ol ati on. ForNo. 2-- 09--1094

-3-

t he second vi

olation, the ILCC

im posedupon

Rach i na -1 a $2, 500 f i ne an d a three -da y su sp en si on of its state li quor license. Ap pr o ximat ely

one m onth l ater, onJu ly 16 , 20 08 , Ra ch ina
- 1, ag ain t hr o ug h B ar o t , so ld al coh ol to a minor in a thir d st ing o per at ion. As befo re , t he MLC C issue d t o R achina- 1 a c itat ion and noticeof he ari ng . Th i s ti me, h owe ve r, R ac hi na -1 d i d n ot wai ve i ts ri gh t to a hea ri ng an d, on August 20, 2008, t he ML CC hel

d a public hea ring t o de t er mine w he t he rRa ch ina
- 1' s t hir d v io lat io n sh o uld
r es ult i n: (1 ) a thi rd fine; (2) sus pens ion o f Rachina- 1's liquo r license ; o r ( 3) re voc at ion o f Rachina- 1's li quor license. Rac hina-1 's o wne rs at t end ed t he h ea ring o n it s be half. Jo shi sti pul ate d th at, on th re e s ep arate
oc cas ions in

less than eigh t months, Baro t so ld al

cohol to mi

nors. T he MLCC asked whether Rachi na-1 had taken an

y rem edi al actions or had i

mposed upo n Bar ot any punishment . Joshi stated that they spoke to Barot and provided hi m wi th advice on how to check iden tifi cation. Jo sh i expl ai ned that t hey "told [Barot] every

thin g, what happen

ed, what is go ing

on, he m i gh t l ose the j ob and al l th at. " J osh i to l d th e M LC C th at "w e h av e b ee n he r e [ eig ht ] yea r s. We ne ve rha d t his pr o ble m. *** It is just a p ur e mis t ak e. And I kn o w t ha t pe o ple mak e mis t ak es . So t his tim e we l et hi m go ***." Jo shi acknowl edged

tha t, af ter th e f i rs t of f en se , th e MLC C h

ad rec om men de d that B arot

take BA SSET t ra ining

(a pr ogram de si gn ed to ed uc ate se l l er s of al coh ol on h ow to re spo nsibly

ser ve and sel l). Jo sh i sta t ed t hat , be cau se t he se co nd vio latio n oc cur re d t wo wee ks a fte r t he first violat ion, Ba rotdi d not hav e ti

me to enrol

l i n the trai ni ng u nti l af ter the s econ

d vi ola tion
. A l thou gh Ba rothad signed up f

or t he course, whi

ch was s chedul

ed to take place

in Jul y, the thi rd violation, on Jul

y 16,No. 2-- 09--1094

-4-

2008, occ ur re d b ef oreh e rec ei

v ed th e trai n i n g. J osh i i n f orm ed th e MLC C th

at he had b een

in busi nessat t he Ra ch ina
- 1 lo ca t io n fo r8 ye ar s, t ha t he ha d b ee n in t he bu sine ss o f se lling a lco ho lic beverages f

or 15 y ears , and tha

t "thi s has n

ev er happe

ne d." Joshi

agre ed t hat t he ab ilit y t o se ll al coh ol is a pr iv ile ge. Jo shi was a ske d why t he o wner s did no t t er minate B ar ot aft er t he se co nd offense , e spe cially

given t hat it w as t wo wee ks a fte r t he f i rst of f en se. Herep l i ed

tha t the y tri ed to, butt hat t hey have o nly a cou ple o f employees and t hey co uld no t "find" t he r igh t pe r so n ( it is uncl ear whether Joshi m eant that they could not "fi nd," i.e. , ide nt ify, w hic h em ployee sol

d to m i nor s, or wh ethe r they could not "f

i nd" the ri ght pe rson to repl ace

Barot). The MLCC v

ot ed to revoke Rac hina-1 's liquo r license . I n anno uncing t he MLC C de cision, several voting m em bers stated their rati onal es theref or. T hose bas es i

ncl ude d th at: ( 1) a s a

l i quor li censehol de r, R ac hi na -1 w as res pon si bl e f ort he ac t ions o f its emplo yees and for ensu ring t hat t he
em ploy ees we r e p r o pe r ly

trai ned to foll

ow the law; (2) despite a thi rd violation, Rac

hi na-1 had presented no p lan for co rr ect ingthe problem , nor had i t t aken an y c orrect iv

e action af ter the fi rst t wo violations, such

asf i ri ng Ba rot or s ch ed ul i ng a s ec ond pe rs on to work a

l ong si deBa rotto ensure that he di d n ot agai n sel l a lc ohol to a mi

nor; (3) holdi

ng a l iquor lic ense i

s a pri vi le ge an d, he re, Ra chi na-1 adm itted sel l i ng a l cohol to mi norson t hre e inst ance s in an eight -mo nt h per iod ; and ( 4) t he MLC C's great est re sp on si

b i l i ty is t o pr o t ec t t he co un t y's ju ve niles , t ha t Ra ch ina
- 1 h ad wa nt o nly and on three
oc cas ions violated

t he pr ivileg e o f ho ldin g a liqu o rlice nse , an d t ha t "it i s c om pl ete l y un ac ce pta b l e to t his Comm

issi on and this co mm

unit y's st anda rd s for t hat t ype o f behavior ." In c onc lusion, one
me mb er sum ma rized:No. 2-- 09--1094

1 Jo shi t es t ified be fo r e t he I LC C t ha t t he r e is a li quo r st or e in t he Vi ll age of Hun

tley that -5- "We are sorry f

or you that you weren't abl e to handl e the r es po nsib il ity. This is a pri vi le ge of our c ounty

to protect our chi

l dren , protect the a

dul ts an d the peopl e wh o are driv in g. And es pec ially

see ingas y

ou a rei n a p l ac e w h ere c ar s a

rei n moti on al l th e ti me, to have 3 vi olations of this, i t just shows our Comm

ittee that you don't take your re sp on si b i l i ty seri ousl y ." On A ugust 20, 2008, t he ML CC revocation order i ssued. B. ILC C He ar ing On Septembe

r 9, 2008, Ra chi

na-1 appealed the MLCC decis ion to t he ILCC. 235 ILCS 5/7--9(We st 2008 ). On

Septem ber 24, 20 08, the

ILCC he l d a h eari ng. Th ere, R ach i na-1 adm itted t ha t Ba r o t , o n t hr ee o cc as io ns in l es s th an on e y ea r, s ol d al coh

ol to minors in violat ion o f local and sta te l aw s. It n

oted th at, af ter th e f i rs t two v i ol ati on s, th e ILCC had, separat e from the MLCC, penal iz ed Rachi na-1 i n the f orm of a $50 0 f i ne f or the f i rst vi ola tion and, f or the s econ

d vi ola tion , a $2,500 f i ne an d a three -da y l i cens e suspe ns i on . Never t heless, Rac hina-1 ar gue d t hat t he MLC C's
rev oca ti on of the l i quor li cense a fter the thi rd violation was too harsh a penal ty, notin g that Barot had si nce b een f

ired. Rach

in a-1's counse l s

umm arize d as it s a r gu men t t ha t "t he pr o ble m t ha t my client had was one empl

oyee. He didn't have mul tiple em ployees, or di

f f ere nt e m pl oyee s, s el l i ng al coh ol to mi nors . It was just

one employee [w hom] he has t er minated . H e und er st ands t he gr avity o f the si tua ti on now *** ." Co unse l not ed t hat , in eight years of bu siness, t he violat ions all ha pp en ed in one year and due to o ne em

ployee' s actions. 1No. 2-- 09--1094

maintains its licens e de spit e having r ece ived t hre e t icket s in one day . No o bj ection was rai sed t o t his statement, but pla

in tif f' s counsel

co nfirmed for t he I LCC t hat , in t he Village o f Hunt ley, t he may or, not MLCC, is responsibl

e for li quor li censes. 2 Ko pp el, ILC C's cha irman, al so noted on several occasions that Rachi

na-1 had b een the target of t hre e st ingoperations i n e i ght m onths
. A m

emb er of the ILCC remin ded Koppel that t he ILCC and t he St at e Po lice had p ar t icipat ed in t he st ings wit h t he Mc Henr y Cou nt y sheriff's dep ar t ment a nd that st in gs are repeat ed at fail

in g locations. -6- The ILCC, notin

g that Rachi

na-1 had b een i

n bus in ess f or eight y ears, asked

pla in tif f' s counsel whether it wa s t ypi ca l fo rMc He nr y Co un t y to revoke a l icense after three violations. 2 Plaint iff 's counsel responded that she was n ot aware of the ML CC hav in g e ve r be f

ore revoked a lic ense. Counsel argued that the li

cen se rev oc at ion, given t he circ umst ance s o f rep eat ed vio latio ns in a
r ela t ive ly sh o r t pe r io d, wa s n o t t o o se ve r e a pe na lt y. On Septembe

r 24, 2008, t he ILCC

is sued an or der mod ify

ing t he MLCC decis ion. The ILCC suspen ded Rachi na-1's li cense f or 30 co nsecuti

ve day s af ter t he date of i

ts order and stated: "The mod ifi

cat ion o f the penal

ty i s bas ed upon the fa

ct that t he Local

Li quor Con trol Comm is si oner has n ot f ol l owe d a prog res si ve di sc i pl i ne pl an by wa y of a suspe ns i on of [Rachi na-1' s] l i cense pri or to revocati

on." On Novem

ber 24, 2008, the ILCC deni ed pl ai ntif f' s petiti on for reheari

ng. C. Trial CourtNo. 2-- 09--1094

3 The Act permi ts the ILCC to r evi

ew o nly the re cord tha

t was b ef ore the M LCC
. 235 ILCS 5/7--9(We st 2008 ). -7- On Decem ber 23, 2008, plai

ntif f f i l ed wi th the tria l courta co mplaint se eking a dministr at ive review. 235 ILCS 5/7--11 (West 2008). Plai ntif f' s compl ai nt all eged th at the ILCC decisi on was
erroneous because : (1) Rach i n a- 1 w as su b j ec ted to progres si

v e d i sc i pl i n e w h ere, pri or to the license
re voc at ion, the MLCC h

ad i mposed two, pro gressi

vel y i ncreasi ng f in es and wh

ere the ILCC ha

d im posed, i n addi tion to fi ne s, a t hre e- day license s usp ensio n; and ( 2) in any even t, th e MLC C w asnot required to follow a pro gressi ve disc ipline plan pr ior t o r evo king a liqu or license. Fur t her , in a f oo tnot e i n pl ai ntif f 's repl y to the ILC C an

d K oppel 's mem orand um i n s upport of the IL CC orde

r, pla in tif f n ot ed: "Al thoughR ac hina-1 's at t or ney st at ed a t t he I LCC he ar ing t hat t he o ffending
em ploy ee had ' si nce b een termi

nated,' thi s evi

dence was out si de the scope of

the re cord b ef

ore t he ILCC an

d should n ot have be en co nsider ed. *** It is clear fro m the M LCC he ar ing transcript t ha t as o f t he da t e o f t ha t he ar ing , Ra mes h B ar o t wa s s t ill em ploy ed wi th Ra chi na-1 and t hat he had not t ake n BASS ET t ra ining. T hus, t he ILCC cl early erredwhen

it consi dered Ram esh Barot' s term

i na tion as a m i tig ati ng f actor when

i t asse sse d a pe

na l ty." 3 In addi ti on , pl ai n ti f f re i terate d i n i ts rep l y to Ra ch ina
- 1 a nd it s o wn er s' me mo r an du m in su ppor t of the ILCC order that it was cl ear that, at the tim e of the MLC C heari

ng, Barot had not

been fi red. Af ter a heari

ng, the tri al

cou rt, on Ju l y 27 , 20 09 , a f

f i rm ed th e I LC C or

der. In i ts
me morandum

opi ni on, the courtco nclude d t hat t he fo llowing fac t or s su ppo rt ed t he ILC C de cision:No. 2-- 09--1094

4 The cou rt n oted th at, at t he I LCC he ar ing, J os hi had ad vised t he ILCC that hi s store had been in business for eight yea

rswi th out a prior vi olation, that the off

endi ng em ploy ee had b een termi

nated, and t hat , w hen a liquo r st or e in Hunt ley had t hre e violat ions, it had not re ceived a license r evo cat ion. The co ur t furt her not ed t hat t his te st imony came into t he r eco rd wit hou t objec t ion. -8- (1) th at, pri or to th

e l i cen se re v oca ti on, t her e ha d been onl

y one enf orcement pro ceeding agai nst Rachi na-1, notwithstandi

ng the f act that it was co mpr ise d o f t wo co un t s; ( 2) Ra ch ina
- 1 h ad be en in busi nessfor eight ye ars wi

thout any prior vi olations of the local l

iqu or ord in ance; (3) all

three violat ions were

co mmi t t ed by t he sa me employee dur ingst ing o per at ions; ( 4) given t hat t he o ffending
em ploy ee wa s n o l ong er e m pl oyed by Rach i na -1 a t the ti me of the ILCC heari

ng, Rach in a-1 off ered proof of re medi al meas ures to ensu re f uture com pli ance; and (5) " there

is the su gg esti on of di sp arate t re at ment by

another l i censee f or si m i l ar vi ola tions." 4 The cou

rt f oun d th at, "assum

in g" the ILCC h

as "a policy of graduated penal

ties," am endi ng the ML CC orde r t o imp ose a suspens ion was an appr opri ate

ex ercise of

ILCC 's power. "R

eq ui ri ng a suspe ns i on of

a l ocal l i quor license bet wee n t he penal tiesof fine and re voc at ion is a r eas ona ble po licy." The co ur t held t hat, viewi ng t he fac t s in pla int if f's fav o r , it co uld no t sa y t ha t r ev o ca t io n w as t he o nly ap pr o pr iat e p en alt y fo rRa ch in a-1' s violations. In t he al tern ative, the cour t not ed that , even i f: (1) the ILCC do es not ha ve a p ol i cy of graduated enf

orcemen t; (2) Rachi

na-1's record was conside

red as two cases or violations, rather than one; (3) Barot stil

l worked f

or Rachi na-1; and (4 ) there w as

n o su gg esti on of di sp arate tre atm en t, revocat ion could stil

l b e considered an excessi ve penal ty . The cour t reaso ned as fol lows:No. 2-- 09--1094

-9- "Wh en t hre e po ssible pena lties a re available t o a re gulat or y body, employing t he most stri ngent p enal

ty i n the ab sence of

particularly

egregious conduct can

be v ie wed as in appropriate. In

th e p re se n t ca se , the l

oca l l i qu or c om

m i ss i on er pr ogres se d f

rom f i n e to increa sed fi ne an d then revocati on of the l ic ense. No suspensi on was i mposed. This wa s do ne to pu

n i sh con du ct i n i ti ate d b y th e c oun ty i n i ts s ti ng op erations rat her than to punis h ab erran t conduct occurri

ng i nde pen den tly." Thus , the c ourt found that, under any ci rcumstances, the ILCC or der modif yi ng the MLCC order was wi

thin its di scr e ti on . O n

Septem b er 21 , 20 09 , the c our

t den i ed pl ai n ti f f ' s m oti on to reconsider. Plain

tiff appeals. II. AN AL YSIS A. Standards of Rev

ie w The partiesdis agree on: (1 ) t he st anda rd of r eview w e sho uld ap ply to t he I LCC d ecisio n; and (2) wh ethe r o ur rev

i ew of the IL CC decision nece ssi tates considerati

on of the MLCC

order. We add re ss ea ch issue in tu rn.1. A ppe l l ateCou

rt Re vi ew of A ge nc y De ci si on It is cl ear that, in an

app eal fro m the ju dgment in an administr at ive pr oc eed ing, t he appe l l ate courtrevi ewsthe a

dm i nistrati ve agen cy 's deci sion, n ot the tri al

court's
. Dowrick v. Vil l ag e of DownersGr ove , 362 Ill . App. 3d512, 515 (200 5) . T he pa rt ies ag re e t hat we d o no t re view t he ILC C's deci si on under the m anifes t-weight-of-the-evi

dence stan

dard, as re aso ned by an o lder line of
cases. See, e.g. , Si

m mons v. Ill i noi s L i quor Con trol Com m'n , 92 Il l . Ap p. 3d 38 7, 392 ( 1980) ; Ke ss ell v. I lli

nois L iquo r Co nt ro l Comm'n , 56 Il l . Ap p. 3d 48 5, 490- 91 (1 9 78 )
. Ho we ve r , wh ileNo. 2-- 09--1094

-10-

def endan ts ass ertthat the a

bus e-of -di scre tion stan dard i s ap pli cab l e (se e, e.g. , Jacquel yn 's Lounge , Inc. v. Lice nse Ap pea l Comm'n , 277 Il l . Ap p. 3d 95 9, 967 ( 1996) ; Ha ns on v . Il l i noi s L i quor Con trol Co mm'n, 201 Ill. App. 3d 9 74, 984 (19 90) ; Solda no v . Il l i noi s L i quor Co nt ro l Comm'n , 131 Ill . App. 3d 10, 16 ( 1985) ) , p laintiff asser t s t hat mor e r ece nt cas es fro m ou r su pr eme co ur t hold t hat t he stan dard o f r ev iew ap plic ab le t o an ad minist r at ive ag en cy d ec isio n d ep en ds up o n t he qu es t io n pr es ent ed . W e a gr ee wit h pla int iff. The Li quor Con trol Act of 1934 (Act) (235 ILCS 5/1--1 et seq. (West 2008)) provides that fi nal deci sions of the IL CC a

re subj ect to judi

ci al review pursuant to t he A

dmi ni strative Rev

ie w Law (735 ILCS 5/3--101 et seq. (West 2008)). 235 ILCS 5/7--1 1 (West 200 8). Our supreme court has he ld that, wh erejudi ci al review of an

agency deci si on is

governed by

the Adm in is trat iv e Revi ew Law, "[t ]he app licable st anda rd of r eview, which de t er mines the deg re e o f defer ence given t o t he age ncy's dec ision, depe nds u

pon whether th

e q ue sti on pres en ted i s on e of f ac t, on e of

l aw , or a m i xe d qu es ti on of law an d fact." AFM

Messen ger Servi ce, Inc. v . D ep ar tmen t of Em pl oy men t Se cu ri ty , 19 8 I ll. 2d 38 0, 3 90 (2 00 1) . A

n ag en cy ' s f i n di n gsof f ac t wi l l b e u ph el d u n l es s c on tra ry to t he manifest weight of the evi de nce, whi

le we review de novo i

ts rul i ngs on que sti ons of

l aw. Ci nkus v . Vil

la ge o f Stickney Mun i ci pal Of f i cers El ectoral Board , 228 I ll. 2d 2 00, 210 (20 08) . A

n a ge nc y's de ci si ons on mi xed questions of l

awand f act wi l l be upheld un

l ess clearl y errone ous. Ci

nkus , 228 Ill . 2d at 211. A m i xe d qu es ti on of l aw an d f act i s one wh ere the hi storical

facts are adm

itted and the rule of law is u nd isp ut ed , bu t t he iss ue is whether: (1) the fa cts satisf y the statut ory standard, or (2) the rul e of l aw as appl i ed to the f

acts was v

i ola ted. AFM

Messen ger , 198 Ill . 2d at 391. "Clearl y erroneous" is an i nterm edi ate stan dard bet wee n de no vo an

d m an i f est-w ei gh t re v i ew , i s s om

ew h at def eren ti al toNo. 2-- 09--1094

-11-

t he ag en cy, an d me an s t ha t t he ag en cy's de cis io n w ill be r ev er se d o nly wh ere the rev

i ewi ng c ourt is left with a defi ni te and fi rm conv iction thata m

i stake ha s b een com m i tted. AFM

Messen ger , 19 8 I ll. 2d at 3 92, 395 ; s eealso Ci

nkus , 228 Ill . 2d at 211-12 (reaff irm in g AFM Messen ger 's el uc i da ti on of t he "clearly

erroneous" standard of revi ew). "Thatt he cle ar ly er r o ne o us st an da r d is lar ge ly deferen tial does not mean, howe

ver, that a re

vi ewi ng c ourt must bl

in dly defer to the agency' s decisi on." AFM Messen ger , 198 Ill . 2d at 395. The re are no dis

putes her e r ega rd ing t he hist or ical fact s o r t he la w. As f or t he f acts, Rachi

na1 adm itted the alle ged

violat ions, and th ere a

ren o f ac tual di spute s reg ar

di n g th e u n derl y i n g ev en ts
orpr oc eed ings. As for t he ap plicable law, t her e is no dispu t e t hat t he A ct g ra n ts th e I LC C a uth ori ty to hear and det er mine appe als fro m the lo cal co mmi ssio n (2 35 I LCS 5/ 3- -1 2( a) (6 ) ( West 200 8) ) a nd th at, in doing s o, t he ILCC

applie s secti on 7--9 of the Act (235 ILCS 5 /7--9 ( West

200 8) ). Thu s, t he que sti on presented

here i s a m

ix ed que st ion o f law and fa ct , na mely, whet her , u nder t hese fact s, t he ILC C's review compl

ie d with s ection 7--9 of the A ct. See AFM

Messen ger , 198 Ill . 2d at 391. Accordin gly , we revi ew the ILCC' s deci si on under the "cl early erroneous" standard. 2. ILCC's Revi ew of MLCC Ne xt, we ad dr ess w het her ou r r eview o f the ILC C de cision invo lves co nsider at ion o f the MLCC o r de r . S pe cif

ica lly, defen

dants assert that our review of the ILCC de ci sion requires tha t we det er mine o nly

whether the ILCC exceeded its authority

when it suspen ded Rachi

na-1's li cense. While defen

dants agree wi

t h p laint if

f that the ILCC was not , he r e, au t ho r ize d t o ap pl y de no voNo. 2-- 09--1094

5 The parties agree that, whi le the Act provides

that t he ILCC

ma y rev ie w de novo an

appeal in sp ec ific circu msta nces , na mely, when cit y pop ulat ions meet specif ied parameters (see 235 ILCS 5/7--9(We st 2008 )), de no vo review was not appropriate in

this case. -12- review, 5 and t hat t he ILC C wa s re quir ed t o c ons ider t he pr op riet y of t he MLC C de cision by app lyi ng
se cti on 7- -9 of th e A ct, th ey do n ot ex pl i ci tl y sta te w h eth er th e I LC C w as

re qui re d to consider

t he MLC C dec i sion wi

th an y def eren ce. We dis agree wi

th defen dan ts' sugg es t io n t ha t o ur r ev iew o f t he I LC C d ec isio n is e nt ire ly div orced fro m the MLCC or der . T o d et er mine whet her t he I LCC o rd er mod ify ing the MLCC order is cl ea rl y er ron eou s, we m us t as certai

n th e stand ar d o f r ev ie w or deference, i f an y, the ILC C was required t o g ive to t he loc al age ncy's de cision. Fo r t he followi ng reasons, we conc lude

that the Act requires t ha t t he I LC C, in

ap pl y i n g s ec ti on

7- -9 , de ter m i n e w h eth er th e l oca l ag en cy ab us ed i ts discr et ion. Section 7-- 9 of the Act pr ovides: "The [ILCC] shal

l rev ie w the propriet y

of t he orde

r or acti on of the l ocal l i quor con trol commi ssioner [bei

ng appealed] and shal

l consi der t he f ollowi ng questions: (a) whether the l

ocal liqu o rco nt r o l co mmiss io ne rha s p r o ce ed ed in the ma nne r provided b

y l aw; (b) whether t he order is suppor ted by the fi ndi ngs; (c) whether the f

in din gs are supported by su bst an t ial e vid en ce in the l i gh t of the whol e record.No. 2-- 09--1094

-13- The o nly evidenc e which may be considered in the review[by t he I LCC] , sha ll be the evi dence fou nd in the certif ie d off ic ia l rec ord of the proc ee di ng s of the l ocal l i quor con trol
com m i ssi oner. No new o r a ddit ional evide nce s hall beadm itted or co nsi

dered. The [ILCC] sha ll ren de r a d ec i si on a f f i rm i ng , re ve rs i ng ormo difying t he o r de ro rac t io n r ev iew ed wit hin 30 da y s af ter the a ppea l washe ard." (Em

phases adde d.) 235 ILCS 5/7--9(We st 2008 ). In Ke ss ell , t he cou rt considered the meaning of the ILC C' s revi ew of the "propriety " of an order. Ke ss ell , 56 Ill . App. 3d at 489-90. T here, the c ourt hel d that such revi

ew m andated
asse ssment o f t he di sc r et io n u se d b y t he lo ca l au t ho r it y, sta tin g th at " [t]h e f un cti on of th e S tate
com m i ss i on, the n, i n c ond uc ti ng a re vi ew on th e re cord of l i cense s uspe ns i on proce edi

ngs be f ore a local l i qu or c on

trol com m i ss i on er i s to consider whether

the local comm

issi oner co mm

itted an abuse of discretion." Ke ss ell , 56 Ill . App. 3d at 490 (citin g Wei nstei n v. Dal ey , 85 I ll. App. 2d 470, 481-82 (1967) (question of rev

ocation of a l

iquor lic ense " presents a pecul ia rly local problem whi ch can be bestsolved by

the resp ec t iv e [ l]o cal [c ]o mmi ssio ner s who , be cau se o f the ir pr oximity t o a nd f am i l i ari ty with the s ituation, h

ave greater acce s s t o info rmat ion fro m which an inte lli gent de term i na ti on can b e m ade. That determi

nation s hould n ot be di stur bed

in the absen

ce of a cl ear abuse of dis cretion"), and Nechi

v. Daley , 4 0 I ll. App. 2d 3 26, 337 (1 963 ), quo t ing Dahy v. Li cence Appeal Co mm'n, 11 Ill . App
. 2d 42 1, 42 5- 26 ( 19 56 ) ( jud icia l inq uir y o f t he pr o pr iet y o f a p ub lic aut ho r it y' s act ions invo lves " 'jud gment upo n t he disc re t ion and wisdo m exerc ised in t he circumstances' " (e

m phas i s om

i tted), s uch that " 'the issue on appeal is whether or not t he l

ocal
comm is si oner abused h is dis cretionary

power, and wh ethe r he

ac ted arbi trar i l y an d w i thou t good cause' ")); see a l so Ro ach E nt er pr ises, Inc . v. Licence Appe al Co mm'n, 277 Ill . App. 3d 523, 529No. 2-- 09--1094

6 We n ote, too, th

at th e h i sto rica l an d s tatu tory n otes ac com pa n y i n g s ec ti on 7- -9 re f l ec t th at, when ori gi n al l y en ac ted , s ec ti on

7- -9 pr ov i de d th

at a n appe al f rom th e l oca l com m i ss i on to th e state
com m i ss i on would be reviewed de novo in all circumst ance s. H ow ever , p ur sua nt to am en dm en ts that be ca me eff

ective August 19, 1961, the section was rewritten to require the state com m i ss i on to consider the three questions of

whether t he loc al co mmi

ssio n pr oc eed ed in a ma

nne r provided b

y l aw, whether the order is supported by the f in din gs, and wh

ether the fi

ndi ngs are supported by

substantial
ev ide nc e in lightof t he ent ire r eco rd . T o u s, t he infere nce t o be dr awn fr om t his chang e is t hat t he legislat ur e inte nded t o p ro vide mor e de fere nt ial review o f the loca l agenc y's dec ision. -14- (1996) (under the Act, l ocal com mi ssioners hav

e considerabl

e di scretion to revoke l i quor l i censes ); Dal ey v. Li cense A ppeal Co mm'n, 11 I ll. A

pp. 2d 4 21, 425 -26(19 56)(re j ec ti ng arg um en t tha t, on ap pe al, sta

te co mmi ssio n may make indep ende nt f i nd i ng s a ki n to de novo review, noting that the Act gr ant s t he loc al co mmi

ssio ner discr et ionar y pow er t o g ra nt or revok e l i quor l i censes and tha t, "[i ]f t he l ocal com m i ss i one r doe s n ot have t his discr et ion, his de ci sions i n these matters ar

e of no m ore eff ect t ha n a r ec o mmend at io n t o t he [ ap pe als co mmiss io n. ] T his is clear ly not co nt emplat ed by t he l anguag e of

the statute"). 6 The f ore goi n g c as e l aw re f l ec ts th at th e A ct, i n man da ti n g th at th e I LCC r eview t he "p r o pr iet y" of

th e MLC C or

der, req ui re s th e I LC C to d

ete rm i n e w h eth er th e MLC C a

b us ed i ts discr et ion, by

considerin

g o nly t he r eco rd t hat was befo re t he MLCC an d determi ni ng: (1) whether t he MLCC proceeded i

n a m ann er provided

by la w; (2 ) w het her t he MLC C o rd er is sup po rt ed by t he fi ndi ngs; and ( 3) whet her t he MLC C findings ar e su ppo rt ed by su bst ant ial evi denc e in light o f theNo. 2-- 09--1094

-15-

wh o le record. 235 ILC S 5 /7
-- 9 ( West 200 8) . T her efo re , w e do not merely re view whe t her t he ILCC was withi n i ts aut hority to impose upon Rachin a-1 a licensesus

pen sion. Ra t he r , mo r e s pe cif ica lly, to dete rmine whe ther t he ILCC order was clearl y erroneous, we consider whether the ILCC considered

t he pr opri ety

of th e MLC C dec i si

on b y appl y i n g th e th re e f ac torsset f

orth i n s ection 7--9 of t he Act t o d et er mine whet her t he MLC C abu sed its d iscre t ion. B. ILCC Order i s Clearly

Erro neous Tu rning now to the merits o f t h e a pp ea l, pla int iff ar gu es t ha t t he I LC C o r de ris c lea r ly
err oneous b ec au se

appl i ca ti on of se cti on 7- -9 of th e A ct ref l ec ts th at th e MLC C d

i d n ot a bu se it s di screti on and that i

t pro perly ordered a r evo ca t io n o f Ra china -1 's lice nse . S pe cifica lly, p laint iff argues t hat t he three sect io n 7- -9 qu es t io ns c o uld be a nsw er ed o nly in t he a ffirmat ive. Pla int iff
su gg ests th at th

e I LC C d i d n ot ev en con si der th ose qu esti on s, n oti

n g th at t he IL CCorde

r di d n ot sta te t hat t he MLC C had er re d und er any o f t he se ct io n 7
- - 9 fa ct o r s. Ra t he r , t he o nly sp ec ified ba sis f orthe ILCC's

deci si on was thatthe MLCC did not previously im pose aga inst R achina- 1 pr og re ssive discipline i

n the f orm of a l i cense s uspe ns i on. Pl ai ntif f argue s tha

t thereis no re quir ement unde r t he Act or o therwis e that a local com missioner i

mpose pro gressive di

scipl in e for a series of vi

olations; in deed, he n

ot es that the Act permi

ts the local comm

is si oner to revoke a lic ense at hi s or her di screti on upo n any

vi ola tion of a state or local

l i quor law (23 5 ILC S 5/7--5 (We st 2008 )). Moreov er, pla

in tif f argues , the ILCC's order ignored that Rachi na-1 was t he r ecipient of p ro gr essive discipline because , bef

ore t he l ic ense rev

ocation, Rachi

na-1 was pen

al iz ed with f

in es for its fi

rst infract ion, increa sed fines for t he se co nd i nf racti on, an

d, a l so f orthe s econ

d i nf raction, a tem

porary li censesuspen si on by

the ILCC. Thus, pl

ai ntif f argues , the MLCC di

d n ot ab us e it s d isc r et io n inNo. 2-- 09--1094

-16-

imposing a l

i cens e re voc ati on f or th e th i rd i nf racti on wher e it w as a war e t hat pr og re ssively increas ing fi nesand a li

cense suspensi

on had not r emedi

ed the pro blem. We agree and concl ude that the ILCC ord er is cl early erro neous. Apply in g the sect ion 7--9 factor s, fi rst, the MLCC proceeded in a m ann er provided

by la w. The re are n o ch al l en ge s h ere to the pro cedures employ ed by the MLCC ( i.e. , noti ce, h eari ng, e tc.), and t he Act pr ovid es t hat a loc al co mmi ssio n may revo ke o r su spe nd a licens e iss ue d b y it if it determi nesthat the

l i censee ha s v i ola ted an y provisions of

state or local

l i quor law. 23 5 ILC S 5/7--5 (Wes t 200 8); se e al so Jacquel yn 's Lounge , Inc. , 277 Ill . App. 3d at 966 ("It is well e stablis

hed that t he vio lat io n o f an y st at ut e, o r din an ce , o rr eg ula t io n r ela ted f ai rl y to the con trol of l i quor , up on li quor-li censed

pr emis es , ge ne r ally c o nst it ut es ca us e fo rr ev o ca t io n o f a lic ense") ; Roach , 27 7 I ll. App. 3d at 5 29 (local comm issi oner has wide di scretion in revokin g li censefor cause)
. Sec ond , t he MLCC' s order was supported by the findings. The MLCC re vok ed t he license ba sed on it s finding that Rach i na -1 h ad sol d al coh ol t o mino rs in vio latio n of st at e and loca l law. As no t ed, t he MLCC
wo uld h av

e b een wi th i n i ts a uth ori ty to revoke the li

cense on one

violation a

lone ; ho we ve r , he r e, it fou nd t hat Rac hina-1 ha d vio lat ed st at e a nd lo ca l law , in t he sa me ma nne ran d t hr o ug h t he sa me
em ploy ee, t hre e t imes in an eight -mo nt h per iod . T hird, all of t hese findings wer e su ppo rt ed by substantial

evi dence in li ght of the whole record, because Rach in a-1 adm itted to all three violations. On ap pea l, de fendant s ag re e t hat t he IL CC did no t , in it s o rd er , s pe cify unde r w hich of t he f ore goi n g s ec ti on

7- -9 qu esti on s i

t f oun d error i n th e MLC C or

der. N ev er th el es s, de f en da n ts n ote that the ILCC was n

ot required to make s

peci fi c fi ndi ngs an d, in any even t, t hatimplic it in

the ILCC order was a

find ing t ha t t he ML CC er r ed o n a se ct io n 7
- - 9 f ac t o r ; n ame ly, the fi

rst- -that the MLCCNo. 2-- 09--1094

-17-

did not proce ed

i n a man ne r provi de d by l aw --b ec au se

i t did n ot imp ose progressive

dis ci pli ne. Ac co r di ng ly, noting that courts have he l d that i m pos i ng prog ressi ve di sc i pl i ne i s n ot an ab us e of di scre tion (see , e.g., Addi son Group, Inc. v. Daley , 382 Ill . App. 3d

103 6 (2 008 )) a

nd tha t se cti on 7--9 provides

that t he ILCC

ma y a ff irm , reverse, or m

odi f y th e l oca l com m i ss i on ' s or der, def en da n ts
a rgue tha t the IL CCcl ea rl y ac ted wi thi n i ts d i screti on to m odif y the orde r to i ns ti tute a sa nc ti on refl ectin g progressive di sci

pli ne. We rej ect def

endan ts' a rgum en ts f or three reas ons. Fi

rs t, w e n ote th at, whi l e def

endan ts are correct that t he ILCC is not re quir ed u nder t he Act to specif y the bases for i ts decis ion, the ab sence of sp ec i f i c b as eswe akens th

e f orce of i ts determ i na ti on (see One W

ay Liquo rs, Inc . v. Byrne , 10 5 I ll. App. 3d 8 56, 861 -62 (19 82) ; Ke ss ell , 56Ill . A pp. 3d a t 490 ). Th

us , to the extent o ur "c lea r ly
erro neous" re view r equ ires s ome d efer ence t o t he ag ency's dec ision ( AFM Messen ger , 198 Ill . 2d at 392), that de f

ere nc e i s s omew

ha t di m i ni sh ed by the ab senc e of

sp ec i f i c f i nd i ng s of err orun de r s ec ti on 7--9. Second, defendan ts' arguments mi ss th e ma rk. T he r e is no qu es t io n t ha t t he Ac t ge ne r ally perm i ts the IL CCto af

f i rm, reve rs e, or modif y the l ocal com m i ss i on 's o rd er and t hat pr og re ssive discipline can

be an appropri ate m ethod f or im pl em en tin g sa nctions. Ra

ther, the que sti on here i nv olv es w hether there w as a

proper ba sis un

der the A ct f or m odi f y i n g th e MLC C or

der to im pose a di ff erent, alb ei

t availa ble, remedy

, giv en that t he ILCC was not t o assess de no vo th e a pp rop riate
sanc t ion, but , r at her , w as t o a pply t he se ct ion 7
-- 9 fact or s t o d et er mine t he "p r o pr iet y" of the MLCC order ( i.e. , wh et he rt he ML CC ab us ed it s d isc r et io n)
. I n o t he rwo r ds , wh ile t he I LCC might haveNo. 2-- 09--1094

-18-

t hou ght that t he pen

al ty was h arsh an d th at i t woul d have i

m pos ed a di f f ere nt p en al ty , i t wa s n ot autho rized under the Act t o merely substitute its judgment for that o f the MLCC. Third , t he so le s pe cifie d b as is fo rt he I LC C' s mo dific at io n is unsu ppo rt ed by t he r eco rd and arb i trary (see A l ba zz az v. De pa rtm en t of Prof es si ona l Re gul ati on , 314 Ill . App. 3d 97, 101-02 (2000) (r eviewing cour t may rev

erse agency

's deci si on to im pose certain s ancti ons i f i

t fi ndsthat t he agen

cy abused its d iscre t ion by imposing a sanc t ion t hat is unre aso nable o r a rbit ra ry)) . P re lim ina r ily , t he ILC C concl

ude d t hat t he MLC C er re d bec aus e it fa iled t o implement pr og re ssive disc ipline in the f orm of a l ic ense s uspens ion b efore a

license r evo cat ion. Ho weve r, defend ant s po intto n o au th ori ty
r ef lec t ing t ha t pr o gr es siv e d isc ip line ( sp ec ific ally, t ha t a s us pe nsio n mu st pr ec ed e a r ev o ca t io n) is a la w, pol i cy , ru l e, or re gul ati

on wi th wh ich a lo ca l co mmiss io n mu st co mply. T he I LC C' s p o sit io n in t his ca se - - t ha t pr o gr es sive dis cip line s ho uld or must be impo se d in a s er ies o f vio lat io ns- - se eming ly
su gg ests that t he ML CC has n o au th ori ty to revoke a lic ense on an

in itial vi olation. Thi

s, cle arly , fl ie s in t he face of t he Act 's pr ovisio ns. 2 35 I LCS 5/ 7- -5 (Wes t 200 8) . Mo re ove r, even if pr og re ssive discipline is

a poli cy o r r ec o mmend ed co ur se o f ac t io n in su ch c as es , w e a gr ee wit h pla int iff t hat t he record refl ects that Rachi

na-1 was the recipien

t o f progressive di scipl

in e, incl uding a l icense
sus pens ion, pr ior t o t he r evo cat ion. Defend ant s do not explain why o r u nder what aut hor ity t hey find supp ort for the notion that, for pr o gressi ve di sci pli ne to be properly

im posed, the MLCC was required t o imp o se a s an ct io n o f su sp en sio n, wh er e it ha d a lr ea dy i m pos ed p ro gr essive fines a nd wh ere i t was aware that t he ILCC ha d i m pos ed a suspe ns i on prior to Ra ch i na -1' s th i rd v i ol ati on . S ur ely, t he MLC C, when c ons ider ing app ro pr iate sanc t ions for repeat ed vi olations, n ee d n ot ope ra te as thoug h i

t has no knowledge of the ILCC's actions.No. 2-- 09--1094

-19-

To the extent that de f

en da n ts a rgue th at th e MLC C a

b us ed i ts discr et ion simply becau se t he pen al ty was to o harshunde r t he ci rc um sta n ce s, we di sa gr ee . In su pp ort of th ei r p osi ti on , de f en da n ts ci te cases wh

ere the revocation of l

iquor lic enses

was reverse d as too harsh , but those cas es a re dis t ing uis ha ble in

signifi cant respects. In each

case, the court found that the local comm is si on acted
un r ea so na bly

and arbi traril y b y i mposi ng a license r evo cat ion aft er one violat ion and wher e t he owner had no kn owl edge of the actions tha

t caus ed th e vi ola

tion
. Jacquel

yn 's Lounge , Inc. , 27 7 I ll. App. 3d a t 967(pl ai nti f f s w ere unaw are of the sa l e of coc ai ne on their prem

is es and had no prior license violat ions in e igh t yea r s o f ho ldin g t he ir li quo r license); Ha

ns on , 20 1 I ll. Ap p. 3d at 98 4 ( pla int iffs
were un aw ar e o f t he sa le of cocai ne at thei r bar and h

ad no prev i ousl i cens e v

i ol ati on i n 5 1⁄2 y ea rs of operation); So ldano , 131 Ill . App. 3d at 16 ( pla int iff o pe r at ed his bu si ne ss f or 40 yea rs wi th n o pri or li censevi ola tions). In contras t, we f i nd n o such ci rcum stan ces here. De f

en da n ts make muc h of t he fact t hat t hey had " no pr io rvio lat io ns" in e igh t yea r s o f o pe r at io n a t t he Mo bil S pe ed Ma r t . T his is bel ie d by the re cord. Indeed, Rach in a-1's l ic ense was revoked af

ter t he thi rd violat ion. The f

act that t he fi rst two v i ol ati ons occurred sh ortl y be f ore th e th i rd v i ol ati on do es no t op er at e t o c ombine t he three vi ola tions i nto one "b i g" v i ola tion
. Moreov er, un

l i ke i n th e f ore goi n g c as es , the rec ord

re f l ec ts that defen dants had kn

owledge of the

conduct giv

in g rise to the vi olations . The owners were notif ie d after each vi ol ati on and the b ehav

ior rem ai ned un correct ed; Barot was apparently not t ermi nated un t il after the M LCC rendered i ts order. In t hat vein, wef i nd thi s c as e m ore s i m i l ar to Spiros Lounge, Inc.
v. Illinois Liquo r Co nt ro l Comm'n , 98 Ill . App. 3d 280, 287 -88 (1981) , wh ere the app el l ate court reversed the trial court 's reversal

of a l ic ense rev ocation, fi ndi ng that the local and s t at e co mmi

ssio ns actedr eas ona bly by

suspen din g and then

revokin g a lic ense upon f

in din g that t he l

ic ensee s ervedNo. 2-- 09--1094

-20-

l i quor t o mi nors twice i

n a f iv e-month peri

od. Here, t he ML CC acted reasonabl y b y i mpo sin g pr o gr es sive ly

in creasing f in es and then revoking the l icense where it f

ound that Rachi

na-1 served li quor t o mi

nors on three occasions

in an ei ght-month peri

od. Fin ally, we

wish to ad dr es s def en da n ts' su gg esti on th at ther e is insufficient e vidence in the record to support t he ML CC's

fi ndi ngs that Rach

in a-1 to ok no mean

in gful action af ter t he fi rst t wo violations. De f

en da nts note tha t Joshi sp oketo Ba

rot ab out c he ck

i ng i de nti f i ca ti on, tol d hi m "eve ryt hing

that was going on," an

d, after the third of

fen se, termi nated hi m. Howe ve r, when t he ML CC r en de r ed it s o r de r , it wa s a wa r e t ha t t he o nly act ions taken by

Rachi na-1 af ter t he f irst two vi olations were to speak t o Barot and to refer Barot t o t rain in g, whi ch h e had n ot ye t done. T hese f ac ts re f l ec t t h at the MLCC's

fi ndi ng that Rachi

na-1 too k no me ani

ngf ul a ction af ter t he f irst two vi ola tions wa s su

pported b y the re cord b ef

ore i t. A s to the termi

nation a fter the thi

rd offense , a nd
as evid enc ed by pla int iff's br iefs be f ore t he t rial co ur t , t he evide nce r elayed a t t he MLC C hea ring
never expl

ic itl y ref le cted that Baro t had been termi nated, le t al one when . In an y even t, wh ether or not Baro t had been t ermin

ate d, t he reco rd befor e it suppo rt ed t he MLC C's f i ndi ng th at Rachi na-1 took no me ani ngf ul a ction af ter th e f i rs t two vi olations and be f ore t he t hird vio latio n (a nd su bseq uent ter m i n ati on) occ ur

re d. A cc ordi n gl y , a n d a s prev i ous l

y i n di ca ted , the MLC C d

i d n ot ab us e i ts dis cretion i

n revoki ng the l ic ense. In co nclusio n, our review l

eaves us with a defi ni te and fi rm conv iction thatthe ILCC's

order is clear ly erro neo us. We re ver se t he t rial co ur t 's o rd er affirming the I LCC o rd er and we re insta t e t he MLC C order. III. CONCLUSIONNo. 2-- 09--1094

-21-

For the forego in

g reasons, t he judg ment o f the ci rcuit court o f M cHenry

County i s reversed
. Reversed
. BUR KE a nd H UDSO N, JJ ., conc

ur.