Opinion ID: 2451804
Heading Depth: 3
Heading Rank: 1

Heading: The Borough's Protest Authority

Text: Stevens argues that both the ABC Board and the superior court erred in upholding a protest filed by the Director, rather than by the Borough itself. Stevens concurs with the general principle that municipalities may broadly delegate their powers, but argues that the Borough did not actually delegate the Borough's protest authority to the Director. The ALJ examined the liquor licensing protest procedures and stated that [n]othing... suggests a restriction on how, within the bounds of law, a `local governing body' must act to file a protest. The ALJ noted that the Borough properly passed an ordinance delegating its protest authority to the Director, who acted in accordance with the procedure set out in that ordinance. The ALJ concluded that the Borough was not required to bring a protest of Stevens's liquor license before the Borough Assembly or its planning commission and that the Director followed Borough procedures established by ordinance in protesting Stevens's liquor license. The superior court briefly reviewed past versions of the Borough Code and noted that [i]t was clearly the intent of the Borough Assembly to broadly delegate the authority to file protests [to] the planning and land use office. The superior court concluded that the Borough permissibly delegated its protest authority to the Director, who properly protested on the Borough's behalf. We begin by noting the general principle that municipalities may broadly delegate powers to municipal agencies or officers. Article X, section 1 of the Alaska Constitution provides in relevant part that a liberal construction shall be given to the powers of local government units. Alaska Statute 29.20.400(a) provides that the governing body [of a municipality] may establish municipal departments and distribute functions among them. [12] Alaska Statute 29.35.410 reinforces this authority by conferring upon municipalities all powers and functions necessarily or fairly implied in or incident to the purpose of the powers contained in Title 29, including the power to establish departments and distribute functions to those departments as provided by AS 29.20.400(a). [13] Alaska Statute 04.11.480(a) permits municipalities to protest the issuance, renewal, relocation, transfer, or continued operation of liquor licenses within their borders. It follows that absent some reason to believe the legislature limited a municipality's authority under AS 04.11.480, the Borough may delegate its protest power to a department or department head, such as the Director. Stevens offers no such reason, and we find none. Stevens instead narrowly argues that the Borough Code does not actually empower the Director to protest the continued operation of his license. In relevant part, MSBC 08.40.010 provides: (A) Upon notice from [the ABC Board] of an application within the Borough for the issuance, renewal, or transfer of location [of a liquor license] as defined in AS 04.11.480, the planning and use department shall: (1) review the application for compliance with MSBC 17.70 to determine that no permit is required, or that the applicant has obtained any permits required and no violations to a permit exist[];.... Stevens's argument relies on MSBC 08.40.010's failure to mention procedures for protesting a liquor license's continued operation. Stevens proposes we interpret MSBC 08.40.010 as excluding protests against continued operation from the Borough's delegation to the Director. We decline to do so. When the Borough adopted MSBC 08.40.010, the then-current version of AS 04.11.480(a) allowed municipalities to protest the issuance, renewal, or transfer of a liquor license, but it did not allow municipalities to protest a license holder's continued operation. [14] At the time, MSBC 08.40.010 tracked former AS 04.11.480(a) in delegating the Borough's protest authority in each licensing posture to the Director. The legislature amended AS 04.11.480(a) in 1995 to enable municipalities to protest a liquor license's continued operation through its second year. [15] The 1995 amendment added that the procedures for action on a protest of continued operation of a license are the same as the procedures for action on a protest of a renewal application. [16] In light of this legislative history, we read MSBC 08.40.010 as delegating the Director authority to protest the continued operation of a liquor license to the same extent as for a license issuance, renewal, or transfer. We nonetheless note that MSBC 08.40 substantially restricts the Director's discretion in filing a protest. The Director is required to review each license application for compliance with the Borough's conditional use permit requirements. [17] If the applicant meets conditional use permit requirementseither because no permit is necessary or because of compliance with all necessary permitsthe Director shall notify the ABC Board that the Borough waives its right to protest the license. [18] If the applicant is in violation of any conditional use permit requirements, the Director shall file a protest with the ABC Board indicating the reasons for protesting the license. [19] The ordinance language is mandatory; the Director must either waive protest or file a protest. [20] Because we read this provision to include protests to a license holder's continued operation, MSBC 08.40 permits the Director to protest a license holder's continued operation only if the licensee is out of compliance with a conditional use permit requirement. [21] The Director protested Stevens's continued operation under his license on two separate grounds: Stevens's violations of MSBC 08.52, a noise ordinance, and of MSBC 17.90, an adult entertainment ordinance. Like the superior court, we only need to consider the first basis for the Director's protest. The Borough's standards for conditional use permits include whether an establishment negatively affects neighboring properties through dust, noise, obtrusive advertising[,] and glare. [22] This general proscription embraces disruptive noise levels, the subject matter of MSBC 08.52, and provides the legal foundation for the Director's protest. Even if this conclusion were incorrect, the Borough's participation at every procedural level is sufficient to cure any deficiencies in the Director's authority to file the protest. The Borough's attorneys appeared before the ALJ, the superior court, and this court. At each stage of the proceedings the Borough's attorneys maintained that the Director's actions properly represented the Borough's wishes, that the Borough supported the protest against Stevens, and that Stevens operated Fish Heads contrary to the Borough's interests. We note several other state courts have concluded that a municipality may cure the absence of a delegation of authority by ratifying an agent's act so long as the municipality held the power to perform the original act. For example, the Supreme Court of Washington recently distinguished between municipal acts ultra vires those made beyond a municipality's statutory authorityand acts within a municipality's power that merely suffer from some procedural irregularity. [23] Although acts performed with no legal authority... cannot be validated by later ratification, [24] those merely exercised through unauthorized procedural means may be later ratified and thereby adopted by a municipality. [25] Other courts have similarly concluded that when a municipality or agency possesses a power and a subordinate improperly exercises that power, the municipality or agency acting as principal may endorse that action and adopt it as its own through either express or implied ratification. [26] We conclude that the Borough's extensive and continuing support ratified the Director's protest, curing any possible defect and adopting that protest as if the Borough had filed it directly with the ABC Board. We therefore affirm the superior court's conclusion that the ALJ correctly upheld the validity of the Borough's protest against Stevens.