Source: http://www.nalcp.net/index.php?option=com_content&view=article&id=115:court-of-appeals-shines-light-on-liquor-licensing-in-california-by-soloman--saltsman--jamieson-october-2015&catid=22:associate-member-articles-&Itemid=130
Timestamp: 2018-08-20 20:10:35
Document Index: 692289710

Matched Legal Cases: ['§25958', '§25958', '§ 1094', '§25658', '§25658', '§23958', '§23090', '§23958']

Published Tuesday, October 20, 2015, Page 9 THE LEGAL COMMUNITY
Government Regulation: Court of Appeal Shines Light on Liquor Licensing
By RALPH BARAT SALTSMAN, STEPHEN WARREN SOLOMON AND STEPHEN ALLEN JAMIESON
(The authors are partners in the Law Firm of Solomon, Saltsman & Jamieson in Los Angeles)
Did you hear the one about the convenience store owner who attempts to hold up the competing convenience store across the street? Ok. So there really wasn’t a robbery, but…this store owner really did try to hold up the city and state application process so that a competing store would never open its doors across from his business. This holdup man came armed with public forums and some serious misinterpretations of state law. He failed at each step along the way, and the saga ended in two published companion opinions by the Court of Appeal.
Business and Professions Code §25958.4 (1995) created this threshold process for municipalities and county governments, but the underlying investigation of determining whether the license should issue remains exclusively with the ABC.
Crucial to the two recent Court of Appeals decisions, Business and Professions Code §25958.4 was amended in 1996 to provide, in relevant part:
The facts underlying both decisions show that on June 29, 2010 the Department of Alcoholic Beverage Control informed the City of Lake Forest that 7-Eleven would be filing a request for a municipal determination that Public Convenience or Necessity would be served by issuance of this license. 7-Eleven lodged its request with the City Development Director on July 6, 2010. The City found that 7-Eleven’s request constituted the “completed application” under city requirements. Lake Forest determined Public Convenience or Necessity on Oct. 4, 2010, that is, within 90 days after 7-Eleven’s completed application. Appeals were brought by Nick, a nearby competitor, through the city appellate process which concluded before the City Council. After a public hearing, the council affirmed the earlier finding of Public Convenience or Necessity and made its own extensive factual findings as to how Public Convenience or Necessity would be served by issuance of this license.
Nick challenged this City Council decision in the Superior Court under Code of Civil Procedure § 1094.5. Nick argued that the language of the Lake Forest ordinance did not reflect the statute’s mandate. The Superior Court upheld the City Council decision noting any phraseology distinction between ordinance and statute was insignificant. At the Court of Appeal, Nick argued that the City did not act timely. Ultimately, in its opinion, the Court of Appeal recognized the clear language of §25658.4(b)(2) which provides that the 90-day count begins with notification that an application is made or when the city receives a completed application “whichever is later.” (emphasis by the Court) The City’s finding was upheld as timely.
The Court in Nick v. Lake Forest also examined the city’s findings and found them to be a sound exercise of discretion conferred on the city by §25658.4. The Court also acknowledged prior Court of Appeal opinions (such as Sepatis v. Alcoholic Beverage Control Appeals Board, 110 Cal.App.3d 93 (1980)) which reviewed Public Convenience or Necessity determinations made by the Alcoholic Beverage Control based on the ABC rule which preceded Business and Professions Code §23958.4. The Court in Nick noted there is no definition of what constitutes Public Convenience or Necessity but that the term vests broad discretion so long as the decision maker does not act arbitrarily or on factors nor supported by substantial evidence. The Court opined that the findings made by the city were reasonable and supported by substantial evidence.
The ABC decision was appealed to the ABC Appeals Board, the administrative appellate body which affirmed the Department’s issuance of the license. In an original proceeding before the Court of Appeal (see Business and Professions Code §23090), Nick argued that the Department did not engage in its statutory mandate to “make a thorough investigation” into the application (see §23958) but unlawfully relied on the City’s Public Convenience or Necessity finding.
The Court of Appeal upheld the department’s decision and the appeals board’s affirming opinion that the ABC properly reviewed the city’s finding of Public Convenience or Necessity and also conducted its statutory mandated investigation and properly concluded, based on the evidence, that the license should issue.
Post script—The administrative hearings before the city and the ABC, as well as the cases before the Court of Appeal were litigated by Solomon Saltsman & Jamieson. Nick filed Petitions for Review before the California Supreme Court which were summarily denied on March 11, 2015 and April 15, 2015, respectively. The ABC license was issued May 27, 2015, nearly five (5) years after application. By permit 7-Eleven was open and operating beginning April 2011.