Opinion ID: 2451804
Heading Depth: 3
Heading Rank: 2

Heading: Due Process And AS 04.11.480's Burden-Shifting Regime

Text: Stevens raises two related issues regarding the burden of proof before the ALJ, that: (1) two sections of Title 4 hopelessly contradict[] one another, rendering it legal error to place the burden of proof on him; and (2) the Alaska Constitution's due process clause prohibits placing the burden of proof on a liquor licensee in protest proceedings. Stevens argues that the ALJ applied an unconstitutional construction of the liquor licensing statutes and that we should vacate the proceedings below, directing the ALJ to place the burden of proof on the Borough as the entity lodging the protest. Alaska Statute 04.11.370 provides that [a] license or permit shall be suspended or revoked if the [ABC Board] finds a licensee has committed one of 11 prohibited acts or omissions. [27] Stevens interprets this section as requiring the ABC Board to bear the burden of proving one of 11 enumerated grounds before suspending or revoking his license. Alaska Statute 04.11.480 provides that a local governing body may object to an application for the issuance, renewal, transfer, or continued operation of a liquor license. When such a municipal protest is properly filed, the [ABC Board] shall deny the application or continued operation unless the [ABC Board] finds that the protest is arbitrary, capricious, and unreasonable. [28] Stevens argues that section .480 clearly puts the burden on the license holder ... to somehow prove [a municipality's p]rotest was arbitrary, capricious, and unreasonable. Neither section, however, provides procedures for ABC Board hearings. Another section of the liquor licensing lawsAS 04.11.510provides these procedures. Alaska Statute 04.11.510(c) states that as a default, [B]oard proceedings to suspend or revoke a license shall be conducted in accordance with [the APA]. In turn, the APA provides that [u]nless a different standard of proof is stated in applicable law, the ... petitioner has the burden of proof by a preponderance of the evidence if an accusation has been filed ... or if the renewal of a right, authority, license, or privilege has been denied. [29] Section .480 is such an applicable law. As Stevens concedes, AS 04.11.480 shifts the burden of proof to the licensee when a municipality successfully protests the issuance, renewal, transfer, or continued operation of a liquor license. Sections .370 and .480 do not contradict one anotherthey apply in different circumstances. Section .370 is a penal provision under which the regulatory agency is the petitioner subject to the burden of proof. Section .480 provides a mechanism for public influence over liquor licenses; after a municipal protest under AS 04.11.480 the licensee, seeking to overcome the cessation of its operations under its license, bears the burden of proof. Stevens alternatively argues that the Alaska Constitution's due process clause [30] forbids shifting the burden of proof to a licensee in the face of a municipal protest. We construe this as an argument that the Alaska Constitution forbids placing the burden of persuasionthe burden of establishing a fact by a given degree of proofon a liquor license holder to retain that license in light of a municipal protest. [31] Stevens claims such a placement is inconsistent with constitutional due process requirements. We disagree. Stevens correctly notes we have held that a liquor license is a valuable property right for which a holder is entitled to due process before suspension or revocation. [32] We have explained that before the property interest in a liquor license can be taken, due process requires that [a license holder] be provided with notice and an opportunity to be heard in a meaningful, impartial hearing. [33] These procedures need not be elaborate, however, and due process merely require[s] the [ABC] Board to hold a hearing before it [can] suspend a liquor license. [34] Nothing about requiring Stevens, rather than the Borough, to carry the burden of persuasion would deprive Stevens of notice, an opportunity to be heard, or the impartiality or significance of his hearing. We have implicitly acknowledged the procedural propriety of such burden-shifting in another context, [35] and although we do not preclude the possibility that due process could prevent the legislature from shifting either the burden of production or persuasion in other contexts, we hold that it does not do so under AS 04.11.480. [36] We finally note that although the ALJ correctly articulated the burden of proof and its placement on Stevens, the record before us suggests that Stevens may not in fact have been held to that burden. The ALJ described the Borough as the first party and took the Borough's opening statement first. The Borough maintained in its opening statement that it had a valid basis that [was] not arbitrary, capricious[,] and unreasonable for protesting Stevens's license. The Borough then called witnesses demonstrating Stevens's operation of Fish Heads created excessive noise, took testimony from the Director explaining why the Borough filed the protest, and introduced evidence of Stevens's Borough Code violations. Despite the ALJ's statements to the contrary, the record before us suggests that the Borough, rather than Stevens, took on and successfully carried the burden of persuasion. In that light, Stevens fails to show that he was prejudiced by the statutory burden-shifting regime. [37] We therefore conclude that Stevens's due process rights were not violated at the hearing before the ALJ.