No. 88-490 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1989 

JOHN A. BROERS, 

Petitioner and Appellant, 

-vsMONTANA DEPARTMENT OF REVENUE and its 

LIQUOR DIVISION, 

Respondent. 

APPEAL FROM: District Court of the Eleventh ~udicial District, 

In and for the County of Flathead, 

The Honorable ~ichael H.Keedy, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Hash, OtBrien & Bartlett; James C. Bartlett argued, 

Kalispell, Montana 

For Respondent: 

Eric J. ~ehlig argued, Dept. of Revenue, Legal affairs, 

I-.. 

Helena, Montana 

Submitted: Ma~ch 30, 1989 

Decided: May 11, 1989 
Mr. ~ustice John Conway Harrison delivered the Opinion of the 

Court. 

The Department of Revenue denied renewal of appellant's 

all-beverages liquor license. Appellant challenges the 

sufficiency of the evidence and the constitutionality of the 

statutes upon which the renewal was denied. We affirm. 

John Broers (Broers) was the owner of Stanton Creek 

Lodge & Outfitters, near Essex, Montana. In June, 1986, 

Broers applied with the Department of Revenue (Department) 

for a renewal of the all-beverages liquor license. On 

September 19, 1986, the Department denied the renewal because 

Broers had not demonstrated he was likely to operate his 

establishment in compliance with applicable state and local 

laws. Broers sought administrative review before the 

Department, and judicial review before the ~istrict Court of 

the Eleventh ~udicial ~istrict, Flathead County, Montana. At 

each stage, the denial was affirmed. 

Broers raises the following issues for review: 

1. Are the statutory provisions upon which the license 

was denied unconstitutionally vague and overbroad? 

2. Must the Department limit its examination to 

violations of the Montana Alcoholic Beverage Code, zoning and 

nuisance laws when considering applications for liquor 

licenses? 

3. Was there sufficient evidence to deny Broers' 

application for a license renewal? 

Broers was granted an all-beverages liquor license for 

his Stanton Creek Lodge each year since 1975. The five years 

which preceded the denial of the liquor license were 

punctuated by instances of criminal conduct by Broers. These 

instances, all of which resulted in misdemeanor convictions, 

included DUI, outfitting without a federal license, 

disorderly conduct, reckless driving, criminal mischief, and 
assault. Of greatest importance to this case were two 

incidents which directly involved the liquor establishment. 

In August, 1985, Herb Strong, his wife and three 

children stopped at Broers' Lodge because his two boys had to 

use the restroom. Soon after the boys entered the Lodge, 

they emerged very upset because Broers had confronted them 

about making a purchase in order to use his restroom. As Mr. 

Strong had his children get back into their vehicle, Broers 

called for Mr. Strong to come to him. Strong retorted using 

a two-word expletive, climbed into his vehicle and began to 

drive away. 

As Stongs' vehicle left the Lodge parking lot, Mrs. 

Strong saw Broers pointing a rifle at them from the doorway 

of the Lodge. Mrs. Strong had her children duck from view as 

Mr. Strong drove them from the area. 

Broers followed the Strongs in his pickup and 

confronted them a short distance away where the Strongs were 

stopping to tie down gear on their fishing boat. Broers 

asked Mr. Strong whether the boys owed him something for 

using the restroom. Strong stated that they did not, backed 

up his vehicle and proceeded down the road. 

Again Broers followed. Although it is not exactly 

clear what happened next, the two vehicles collided when 

Broers was passing the Strong vehicle. Neither vehicle 

stopped. Broers drove ahead to a farmhouse to call the 

sheriff. Strong notified the sheriff in Kalispell. Broers 

was convicted on four counts of misdemeanor assault. 

In another incident at the Lodge, on January 1, 1986, 

Broers plowed the snow from the Lodge parking lot onto U.S. 

Highway 2 during a heavy snowfall. The resulting large snow 

berm caused a two car collision and Broers was convicted of 

misdemeanor criminal mischief. 
The Department informed Broers by letter dated 

September 19, 1986 that his application for renewal was 

denied. Broers requested administrative review and on 

December 17, 1986 and January 23, 1987, a hearing was held 

before an examiner from Agency Legal Services Bureau. The 

hearings examiner concluded Broers had failed to demonstrate 

he would operate his establishment in accordance with Montana 

law. Exceptions and legal arguments were made to the 

Director of the Department of Revenue. The Director adopted 

the findings of the hearings examiner and ordered the denial 

be the final decision of the Department. 

The matter was appealed to the ~istrict Court. The 

Department's decision was affirmed by District Judge Michael 

Keedy . 

Issue No. 1 

Are the statutory provisions upon which the license was 

denied unconstitutionally vague and overbroad? 

We begin by noting that under the Twenty-first 

Amendment to the united States Constitution, states are 

granted extensive regulatory power of the liquor industry. 

~alifornia v. LaRue (1972), 409 U.S. 109, 115, 93 S.Ct. 390, 

395, 34 L.Ed.2d 342, 350. The Montana ~lcoholic Beverage 

Code is an exercise of our State's police power and as such 

should be interpreted to further its declared policy: to 

protect the welfare, health, peace, morals and safety of the 

people of Montana. section 16-1-101(3), MCA. 

The statute at issue here, 5 16-4-401, MCA, formed the 

basis upon which the Department denied Broers' renewal of his 

liquor license. That statute reads in part: 

(2) Except as provided in subsection 

(6), in the case of a license that 

permits on-premises consumption, the 

department must find in every case in 

which it makes an order for issuance of a 
new license [or renewal of a license, 

42.12.121(2), ARM]. . . : 

(a) in the case of an individual 

applicant: 

(iv) the applicant's past record 

and present status as a purveyor of 

alcoholic beverages and as a businessman 

and citizen demonstrate that he is likely 

to operate his establishment in 

compliance with all applicable laws of 

the state and local governments; . . . 

It is Broers ' contention this section is 

unconstitutionally vague because it does not describe 

prohibited conduct sufficiently to give a person of ordinary 

intelligence fair notice. Additionally, Broers claims the 

statute impermissibly gives unbridled discretion to the 

Department to grant or deny licenses upon any facts it wishes 

to accept. We disagree. 

VAGUENESS 

Broers argues the statute is unconstitutionally vague 

because it does not specifically declare what past record and 

present status is to be considered by the Department. 

Similarly, Broers argues the statute does not inform an 

applicant or licensee that violations of Montana's criminal 

code can result in a denial. 

The United States Supreme Court has held that 

noncriminal statutes are unconstitutionally vague if persons 

of common intelligence must necessarily guess at their 

meaning. Broadrick v. Oklahoma (1973), 413 U.S. 601, 607, 93 

S.Ct. 2908, 2913, 37 L.Ed.2d 830, 837; ~eyishian v. Board of 

Regents (1967), 385 U.S. 589, 604, 87 S.Ct. 675, 684, 17 

L.Ed.2d 629, 641. However, an unreasonable interpretation 

and dissection of a statute will not render it void for 
vagueness. It is the duty of the courts to uphold the 

constitutionality of a statute if such can be accomplished by 

reasonable construction. North Central services, Inc. v. 

Hafdahl (Mont. 1981), 625 P.2d 56, 58, 38 St.Rep. 372, 374. 

Undoubtedly the legislature has granted substantial 

discretion to the Department of Revenue to investigate 

applicants and grant or deny licenses. still, the statute is 

not without standards. As the District Court of Appeals of 

Florida noted in a challenge to statutes which limit the 

issuance of a beverage license to "persons of good moral 

character": 

". . . We doubt that the leaislature 

could in its infinite wisdom detail each 

salient standard for good moral 

character. What constitutes good moral 

character is a matter to be developed by 

facts, evaluated by the agency, with a 

judicial review of same ever available. 

The subject statute is constitutional I1 . . . 

Zemour, Inc. v. State ~ivision of Beverage (~la.~pp. 1977!, 

347 So.2d 1102, 1103, citing white v. Beary (Fla.App. 19701, 

237 S0.2d 263, 265-66. 

The discretion granted to the Department is not without 

limit. The "past record and present status" is clearly 

limited and defined within the remainder of the statute. The 

scope of the Department's investigation is limited to a 

person's past record and present status "as a purveyor of 

alcoholic beverages" and as a businessman and citizen which 

demonstrates likely operation of the liquor establishment in 

compliance with all applicable laws of the state and local 

governments. 

A person's past record or present status as an income 

tax protestor, or, as argued at bar, a trespasser at 

Malmstrom ~ir Force Base bears no rela.tion to the operation 

of a liquor establishment. A denial on those grounds would 
constitute an abuse of the Department's discretion and would 

not survive judicial review. 

Additionally, Broers argues the phrase "all applicable 

laws of the state and local governments" is vague because it 

does not adequately inform a person which laws he or she may 

disobey before a liquor license will be denied. We disagree. 

The statue is capable of reasonable interpretation and 

construction. As stated in 1 Am.Jur.2d1 Administrative Law 

while the words of a statute are 

the basic data from which to draw its 

meaning, not every problem of statutory 

construction should be solved simply by a 

literal reading of the language. 

Particular language may and should be 

construed in the light of the purposes of 

the legislation, especially a declared 

purpose and policy. The meaning of a 

particular word may be determined by the 

purposes of the legislation; for a word 

may take color from its surroundings and 

derive meaning from the context of the 

statute, which must be read in the light 

of the mischief to be corrected and the 

end to be attained. 

There is no question but that Montana's ~lcoholic 

Beverage Code has a definite and substantial public policy 

goal. That public policy is clearly stated in 9 16-1-101(3), 

MCA : 

 his code is an exercise of the 

police power of the state, in and for the 

protection of the welfare, health, peace, 

morals, and safety of the people of the 

state, - and - its provisions shall - be 

construed for the accomplishment -- of such 

purposes. (Emphasis added.) 

The meaning of the statute ' s "all applicable laws" 

language is obvious. All applicable laws are those which are 

designed to protect the welfare, health, peace, morals, and 

safety of the citizens of this State as they relate to the 
manufacture, sale, and distribution of alcoholic beverages 

within the State of Montana. Neither income tax protestation 

nor advocation of nuclear disarmament bear any relation to 

the manufacture, sale, or distribution of alcoholic 

beverages. However, assault with a firearm upon a family who 

innocently stops to use a restroom in a liquor establishment 

licensed by the State d.efinitely falls within the logical 

nexus of laws designed to protect our citizens where the sale 

and distribution of alcoholic beverages are concerned. The 

statute is set out in terms the ordinary person exercising 

ordinary common sense can understand and comply with, and 

therefore, is not unconstitutionally vague. 

OVERBREADTH 

Broers contends the statute is unconstitutionally 

overbroad because a liquor license could be denied to one who 

"is not popular with the general public" and could curtail 

the right of free speech and association. Broers ' 

overbreadth argument spills over to his contention that the 

statute is vague. Therefore, in light of our conclusion 

regarding the vagueness challenge, we will only briefly 

examine this issue. 

Recently, the United States Supreme Court has held that 

statutes should be construed narrowly, where possible, to 

bring them in line with constitutional requirements of due 

process. 

It has long been a tenet of First 

Amendment law that in determining a 

facial challenge to a statute, If it be 

"readily susceptible" to a narrowing 

construction that would make it 

constitutional, it will be upheld. 

~rznoznik v. City of ~acksonville, 422 

U.S. 205, 95 S.Ct. 2268, 45 L.Ed.2d 125 

(1975); roadr rick v. Oklahoma, 413 U.S. 

601, 93 S.Ct. 2908, 37 L.Ed.2d 830 

(1973) . 
virginia v. ~merican Booksellers Assn., Inc. (1988), 484 U.S. 

Additionally, the Supreme Court stated in city of Houston v. 

Hill (1987), 482 U.S. 451, 458, 107 S.Ct. 2502, 2508, 96 

Only a statute that is substantially 

overbroad may be invalidated on its face. 

New York v. Ferber (1982), 458 U.S. 747, 

769, 102 S.Ct. 3348, 73 L.Ed.2d 1113; 

Broadrick v. Oklahoma, supra. "We have 

never held that a statute should be held 

invalid on its face merely because it is 

possible to conceive of a single 

impermissible application . . . 'I Id., 

at 630, 93 S.Ct. 2908, 37 L.Ed.2d 830. 

See also, Members of City Council of City of Los Angeles v. 

Taxpayers for Vincent (1984), 466 U.S. 789, 104 S.Ct. 2118, 

80 L.Ed.2d 772. We conclude our interpretation and 

construction of 5 16-4-401 (2) (a) (iv) adequately protects 

First Amendment rights. Broers' overbreadth and vagueness 

challenges must fail. 

Issue No. 2 

Must the Department limit its examination to violations 

of the Montana Alcoholic Beverage Code, zoning and nuisance 

laws when considering applications for liquor licenses? 

Broers erroneously believes the phrase "all applicable 

laws of the state and local governments" does not extend 

beyond the specific provisions of the Alcoholic Beverage 

Code and the zoning and nuisance laws. Laws under the 

Alcoholic Beverage Code include prohibitions against the sale 

of alcohol to intoxicated person and persons under the age of 

21, and the sale of alcohol not purchased from the State 

liquor store. However, a renewal of a liquor license is 

granted under the same criteria as a new license. Under 

Broers ' int.erpretation, such limitation would have no 
practical application to first-time applicants since the 

Department would have no prior history on which to base its 

decision. More importantly, this narrow reading of the 

statute would unreasonably limit the Department's 

investigative ability and restrict its power to grant 

licenses to qualified applicants. The very purpose of the 

Code, to secure the welfare, health, peace, morals and safety 

of the people of Montana would be lost. 

Issue No. 3 

Was there sufficient evidence to deny Broers' 

application for a license renewal? 

The standard of review of agency decisions is whether 

the findings of fact are clearly erroneous in view of the 

reliable, probative, and substantial evidence on the whole 

record. Section 2-4-704 (2) , MCA. We conclude the findings 

of the hearings examiner are not clearly erroneous and are 

based upon reliable, probative and substantial evidence on 

the whole record. 

The Department did consider Broers' criminal acts which 

did not have a direct connection with the operation of the 

Stanton Creek Lodge. These acts included misdemeanor 

convictions for DUI, reckless driving, barroom brawling, and 

discharging a firearm in the direction of a passing motorist. 

These incidents alone may not have been sufficient to deny 

the license renewal. However, viewed as a whole, Broers' 

actions indicated to the Department that he had a disregard 

for the safety of others, a violent temperament and a 

tendency toward alcohol abuse. When viewed in connection 

with the Strong family and snowplowing incidents, there was 

ample evidence to support the Department's conclusion that 

Broers' license renewal must be denied. 
As noted earlier, a license renewal is granted under 

the same criteria as any new license. Broers' license was 

not revoked or suspended. Section 16-4-401(1), MCA, clearly 

states that a "license under this code is a privilege which 

the state may grant to an applicant and is not a right to 

which any applicant is entitled." The ~lcoholic Beverage 

Code also provides grounds upon which a license may be 

denied. Under § 16-4-405(3), MCA, a license may not "be 

issued if the department finds from the evidence . . . that 

the purposes of this code will not be carried out by the 

issuance of such license." After its investigation, the 

Department concluded the purposes of the Code, to protect the 

welfare, health, peace, morals and safety of Montana's 

citizens, would not be carried out by a renewal of Broers' 

liquor license. 

The judgment of the ~istrict Court is affirmed. 

A 

We concur: 

lef Justlce 

Justices '/ 
Mr. Justice William E. Hunt, Sr., dissenting: 

I dissent. The statute is overbroad and I believe the 

legislature has gone too far in delegating its responsibility 

and authority to the Department of Revenue. 

The purpose of the Department of Revenue is to raise 

revenues and not to establish or enforce the moral standards 

of businessmen or anyone else. 

I concur in the foregoing dissent of Justice Hunt.