Court Opinion

ID: 4206630
Source: CourtListenerOpinion
Date Created: 2017-09-27 16:08:21.219952+00
Date Added: 2024-06-11T14:40:49.776654
License: Public Domain

FILED
                                                                                Sep 27 2017, 10:33 am

                                                                                     CLERK
                                                                                 Indiana Supreme Court
                                                                                    Court of Appeals
                                                                                      and Tax Court

ATTORNEYS FOR APPELLANT                                    ATTORNEYS FOR APPELLEE
Michael A. Wukmer                                          Curtis T. Hill, Jr.
Derek R. Molter                                            Attorney General of Indiana
Robert A. Jorczak                                          Patricia C. McMath
Ice Miller, LLP                                            Aaron T. Craft
Indianapolis, Indiana                                      Deputy Attorneys General
                                                           Indianapolis, Indiana

                                            IN THE
    COURT OF APPEALS OF INDIANA

21st Amendment, Inc.,                                      September 27, 2017
Appellant-Petitioner,                                      Court of Appeals Case No.
                                                           49A05-1612-PL-2863
        v.                                                 Appeal from the Marion Superior
                                                           Court
Indiana Alcohol & Tobacco                                  The Honorable Heather A. Welch,
Commission,                                                Special Judge
Appellee-Respondent.                                       Trial Court Cause No.
                                                           49D01-1606-PL-20999

Riley, Judge.

Court of Appeals of Indiana | Opinion 49A05-1612-PL-2863 | September 27, 2017                Page 1 of 13
                                 STATEMENT OF THE CASE
[1]   Appellant-Petitioner, 21st Amendment, Inc. (21st Amendment), appeals the trial

      court’s Order granting a motion to dismiss filed by Appellee-Respondent, the

      Indiana Alcohol & Tobacco Commission (Commission). 1

[2]   We affirm.

                                                     ISSUE
[3]   21st Amendment raises one issue on appeal, which we restate as: Whether the

      trial court properly dismissed 21st Amendment’s petition for judicial review of

      an administrative decision by the Commission on the basis that 21st

      Amendment lacks standing.

                       FACTS AND PROCEDURAL HISTORY
[4]   LD Ventures, Inc. d/b/a Grapevine Cottage (Grapevine Cottage) holds a Type

      115 grocery store alcoholic beverage permit, which allows it to sell beer and

      wine as a “specialty or gourmet food store” in Fishers, Hamilton County,

      Indiana. (Appellant’s App. Vol. II, p. 36). After Grapevine Cottage filed

      applications with the Commission to renew and transfer the location of its

      permit, on March 8, 2016, the Hamilton County Local Alcoholic Beverage

      Board (Local Board) conducted a hearing. 21st Amendment, a permittee

      1
        We held oral argument in this matter on September 11, 2017, at the Indiana Court of Appeals courtroom in
      Indianapolis, Indiana. We commend counsel for their excellent advocacy.

      Court of Appeals of Indiana | Opinion 49A05-1612-PL-2863 | September 27, 2017                 Page 2 of 13
      authorized to sell alcoholic beverages in Hamilton County and thus a

      competitor of Grapevine Cottage, appeared at the hearing as a remonstrator.

      21st Amendment argued that Grapevine Cottage is ineligible for a Type 115

      grocery store alcoholic beverage permit because it does not primarily engage in

      the sale of specialty foods as statutorily required. Rather, 21st Amendment

      presented evidence that the bulk of Grapevine Cottage’s revenue is derived from

      alcohol sales. After the hearing, the Local Board voted to approve Grapevine

      Cottage’s applications for renewal and transfer over 21st Amendment’s

      remonstrance. On March 15, 2016, the Commission affirmed the Local

      Board’s decision.

[5]   On April 5, 2016, 21st Amendment filed an Objection, Petition for Intervention,

      and Request for Appeal Hearing with the Commission. 21st Amendment

      sought to intervene on grounds that it would be “personally aggrieved or

      adversely affected if the permit is granted” because the value of its own Type

      217 package store alcoholic beverage permit would be diluted. (Appellant’s

      App. Vol. II, p. 36). Moreover, 21st Amendment asserted that it “has a

      statutory right to bring an action to abate the sale of alcohol . . . which

      constitutes a nuisance.” (Appellant’s App. Vol. II, p. 37). On May 13, 2016,

      the Commission denied 21st Amendment’s petition to intervene, thereby

      denying 21st Amendment the right to administratively appeal the renewal and

      location transfer of Grapevine Cottage’s Type 115 grocery store alcoholic

      beverage permit.

      Court of Appeals of Indiana | Opinion 49A05-1612-PL-2863 | September 27, 2017   Page 3 of 13
[6]   On June 13, 2016, 21st Amendment filed a Verified Petition for Judicial Review

      pursuant to the Administrative Orders and Procedures Act (AOPA). 21st

      Amendment contended that it had standing to contest the Commission’s

      decision because it is “directly impacted and aggrieved or adversely affected by

      the agency’s actions,” and because it is “a permittee with a statutory right to

      abate a nuisance.” (Appellant’s App. Vol. II, p. 18). On August 22, 2016, the

      Commission filed a Motion to Dismiss 21st Amendment’s petition for judicial

      review pursuant to Indiana Trial Rule 12(B)(6). The Commission argued that

      21st Amendment is barred from seeking judicial review of its decision under

      Indiana law. Alternatively, even if not barred by law, the Commission asserted

      that 21st Amendment lacked standing to seek judicial review. On September 6,

      2016, 21st Amendment filed a response opposing the Commission’s Motion to

      Dismiss, and on October 4, 2016, the Commission filed a response in

      opposition to 21st Amendment’s opposition.

[7]   On October 24, 2016, the trial court heard arguments, and on November 22,

      2016, the trial court issued an Order granting the Commission’s motion to

      dismiss. The trial court found that

              21st Amendment cannot seek to abate a public nuisance on
              petition for judicial review. . . . Abating a public nuisance is not a
              petition for judicial review. Rather, it is a separate cause of
              action that allows several individuals, including [an alcoholic
              beverage] permittee, to enjoin an act, practice, or manner of
              conducting business by a permittee or by a non-permittee that is
              contrary [to] a rule or regulation of the [Commission] or the
              [a]lcohol and [t]obacco statutes provided in the Indiana Code.

      Court of Appeals of Indiana | Opinion 49A05-1612-PL-2863 | September 27, 2017   Page 4 of 13
      (Appellant’s App. Vol. II, p. 13). Accordingly, the trial court determined that

      21st Amendment lacked standing to proceed on a petition for judicial review.

      However, because “21st Amendment may still pursue its abatement of public

      nuisance claim,” the trial court accorded thirty days for 21st Amendment to file

      an amended complaint.

[8]   21st Amendment now appeals. Additional facts will be provided as necessary.

                               DISCUSSION AND DECISION
                                             I. Standard of Review

[9]   The trial court granted the Commission’s Trial Rule 12(B)(6) motion to dismiss

      based on 21st Amendment’s lack of standing. Trial Rule 12(B)(6) allows for

      dismissal for “[f]ail[ing] to state a claim upon which relief can be granted.” A

      plaintiff’s alleged lack of standing falls under the category of failure to state a

      claim upon which relief can be granted. Thomas v. Blackford Cnty. Area Bd. of

      Zoning Appeals, 907 N.E.2d 988, 990 (Ind. 2009). A motion to dismiss tests the

      legal sufficiency of a claim, rather than the facts that support it. Nat’l Wine &

      Spirits Corp. v. Ind. Alcohol & Tobacco Comm’n, 945 N.E.2d 182 186 (Ind. Ct.

      App. 2011), trans. dismissed. Thus, when considering a motion to dismiss under

      Trial Rule 12(B)(6), “the allegations of the complaint are required to be taken as

      true.” Thomas, 907 N.E.2d at 990. Only “where it appears that under no set of

      facts could the plaintiff be granted relief is dismissal appropriate.” Nat’l Wine &

      Spirits Corp., 945 N.E.2d at 186. “A successful 12(B)(6) motion alleging lack of

      standing requires that the lack of standing be apparent on the face of the

      Court of Appeals of Indiana | Opinion 49A05-1612-PL-2863 | September 27, 2017   Page 5 of 13
       complaint.” Thomas, 907 N.E.2d at 990. We review rulings on a 12(B)(6)

       motion to dismiss de novo. Liberty Landowners Ass’n, Inc. v. Porter Cnty. Comm’rs,

       913 N.E.2d 1245, 1249 (Ind. Ct. App. 2009), trans. denied. Whether a party has

       standing is purely a question of law and requires no deference to the trial court’s

       decision. Common Council of Mich. City v. Bd. of Zoning Appeals of Mich. City, 881
N.E.2d 1012, 1014 (Ind. Ct. App. 2008).

                                         II. Standing Under the AOPA

[10]   The AOPA specifies, in relevant part, that only parties who have standing are

       entitled to judicial review of a final agency action. Ind. Ass’n of Beverage

       Retailers, Inc. v. Ind. Alcohol & Tobacco Comm’n, 836 N.E.2d 255, 257 (Ind. 2005);

       see Ind. Code §4-21.5-5-2(b). “The judicial doctrine of standing focuses on

       whether the complaining party is the proper person to invoke the court’s

       power.” Nat’l Wine & Spirits Corp., 945 N.E.2d at 184. “The standing

       requirement is a limit on the court’s jurisdiction which restrains the judiciary to

       resolving real controversies in which the complaining party has a demonstrable

       injury.” Id. (quoting Schloss v. City of Indianapolis, 553 N.E.2d 1204, 1206 (Ind.

       1990)). The AOPA has specifically delineated that

               [t]he following have standing to obtain judicial review of an
               agency action:
               (1) A person to whom the final agency action is specifically
               directed.
               (2) A person who was a party to the proceedings of the ultimate
               authority that led to the final agency action, including the agency
               whose order was under review in the proceeding.
               (3) A person eligible for standing under a law applicable to the
               final agency action.
       Court of Appeals of Indiana | Opinion 49A05-1612-PL-2863 | September 27, 2017   Page 6 of 13
                (4) A person otherwise aggrieved or adversely affected by the
                final agency action.[ 2]

       I.C. § 4-21.5-5-3(a).

[11]   Under the AOPA, “a person must be ‘aggrieved or adversely affected’ in order

       to seek administrative review” as an intervening remonstrator. Ind. Ass’n of

       Beverage Retailers, Inc., 836 N.E.2d at 259; see 905 IAC § 1-36-2(d). Thereafter,

       in seeking judicial review, a party must have standing and must have exhausted

       the administrative remedies—i.e., “must have pursued administrative review.”

       Ind. Ass’n of Beverage Retailers, Inc., 836 N.E.2d at 259. Accordingly, our

       supreme court has stated that “the standing requirement for judicial review is

       essentially congruent with the ‘aggrieved or adversely affected’ requirement for

       administrative review.” Id. In this case, 21st Amendment pursued its

       administrative remedies by petitioning to become an intervening remonstrator

       and requesting an administrative appeal. The Commission denied 21st

       Amendment’s petition to intervene, in part, on the basis that 21st Amendment

       was not adversely affected or aggrieved as required for administrative review.

       In seeking judicial review, 21st Amendment claimed that it had standing not

       2
          In this case, the trial court also concluded that 21st Amendment lacks standing because it is not personally
       aggrieved. However, during the hearing, 21st Amendment indicated that while it was not waiving its
       argument concerning its status as an aggrieved party, it was only actively pursuing its claim that it was
       statutorily entitled to abate a nuisance and therefore had standing under Indiana Code section 4-21.5-5-
       3(a)(3). On appeal, 21st Amendment relies primarily on its theory of standing under a law applicable to the
       final agency action, only briefly mentioning in a footnote that it is also an aggrieved party. We find that 21st
       Amendment has waived any claim regarding Indiana Code section 4-21.5-5-3(a)(4) on appeal by failing to
       develop a cogent, appropriately-cited argument. Ind. Appellate Rule 46(A)(8)(a).

       Court of Appeals of Indiana | Opinion 49A05-1612-PL-2863 | September 27, 2017                        Page 7 of 13
       because it was adversely affected or aggrieved, but because it had standing

       under another law applicable to the Commission’s action—namely, the public

       nuisance statutes.

[12]   Thus, at issue in this case is Indiana Code section 4-21.5-5-3(a)(3), which

       accords standing for judicial review if the party has “standing under a law

       applicable to the final agency action.” While our courts have previously

       decided standing questions under the other subsections of the statute, it appears

       that our courts have not yet had occasion to address standing under Indiana

       Code section 4-21.5-5-3(a)(3). Thus, 21st Amendment has presented this court

       with an issue of first impression.

[13]   Statutory interpretation is a matter of law and is reviewed de novo. City of

       Greenwood v. Town of Bargersville, 930 N.E.2d 58, 68 (Ind. Ct. App. 2010), transfer

       granted and opinion reinstated. The primary purpose of statutory interpretation

       “is to ascertain and give effect to” the intent of the legislature. Id. (quoting State

       v. Oddi-Smith, 878 N.E.2d 1245, 1248 (Ind. 2008)). The best evidence of

       legislative intent is the statutory language itself, “and we strive to give the words

       in a statute their plain and ordinary meaning.” Id. (quoting Oddi-Smith, 878

       N.E.2d at 1248). “A statute should be examined as a whole, avoiding excessive

       reliance upon a strict literal meaning or the selective reading of individual

       words. The [c]ourt presumes that the legislature intended for the statutory

       language to be applied in a logical manner consistent with the statute’s

       underlying policy and goals.” Id. (quoting Oddi-Smith, 878 N.E.2d at 1248).

       Court of Appeals of Indiana | Opinion 49A05-1612-PL-2863 | September 27, 2017   Page 8 of 13
[14]   Title 7.1 of the Indiana Code governs alcohol and tobacco. It specifically

       provides that any building or structure where “[a]n alcoholic beverage of any

       type is sold[ or] possessed” in violation of the law or a rule of the Commission,

       or “[a] place where alcoholic beverages are kept for sale” in violation of the law

       or a rule of the Commission, is “declared to be a public nuisance.” I.C. § 7.1-2-

       6-1(a)(1)(A), -(2). Also, “[a]n act or practice, or manner of conducting a

       business by a permittee contrary to a provision of [Title 7.1] or to a rule or

       regulation of the [C]ommission, . . . shall also constitute a public nuisance if

       done, carried on, or permitted to take place in a building or upon a premises in

       or on which an alcoholic beverage is possessed, kept, stored, or consumed . . .

       .” I.C. § 7.1-2-6-2.

[15]   According to 21st Amendment, Grapevine Cottage’s sales practices constitute a

       public nuisance because they do not comport with Title 7.1. Specifically,

       evidence presented at the hearing before the Local Board indicates that

       Grapevine Cottage primarily derives its revenue from the sale of alcohol. Yet,

       Grapevine Cottage holds a Type 115 grocery store alcoholic beverage permit,

       and Indiana Code section 7.1-1-3-18.5(a)(4) defines a grocery store, in relevant

       part, as

               a store or part of a store that is known generally as: . . . a
               specialty or gourmet food store primarily engaged in the retail sale
               of miscellaneous specialty foods not for immediate consumption
               and not made on the premises, not including:
               (A) meat, fish, and seafood;
               (B) fruits and vegetables;

       Court of Appeals of Indiana | Opinion 49A05-1612-PL-2863 | September 27, 2017   Page 9 of 13
               (C) confections, nuts, and popcorn; and
               (D) baked goods.

       (Emphasis added). Thus, 21st Amendment maintains that the Commission

       should not have renewed Grapevine Cottage’s Type 115 permit as Grapevine

       Cottage’s sales run afoul of Title 7.1.

[16]   Indiana Code section 7.1-2-6-4 provides that

               [t]he [C]omission, the chairman, the attorney general, a
               prosecuting attorney, a permittee authorized to sell alcoholic beverages
               within the county in which a common nuisance exists, kept, or
               maintained, or a number of permittees authorized to sell
               alcoholic beverages within the county or elsewhere within the
               state, or a taxpayer of the county, may maintain an action in the
               name of the state to abate and perpetually enjoin a public
               nuisance or to abate, or enjoin, or both, a practice, or conduct of
               a person, whether a permittee or not, in violation of this title or a
               rule or regulation of the [C]ommission.

       I.C. §7.1-2-6-4 (emphasis added). Notwithstanding the merits of the underlying

       public nuisance claim, based on its statutory right to abate and perpetually

       enjoin a public nuisance for improper alcohol sales, 21st Amendment now

       argues that it has standing to pursue judicial review in the instant case because

       of its “standing under a law applicable to the final agency action.” I.C. § 4-

       21.5-5-3(a)(3).

[17]   In this case, the trial court gave 21st Amendment leave to amend its complaint

       to “style the lawsuit as pursuing an abatement of public nuisance claim under

       Title 7.1 rather than as a petition for judicial review under [the] AOPA.”

       Court of Appeals of Indiana | Opinion 49A05-1612-PL-2863 | September 27, 2017   Page 10 of 13
       (Appellant’s Br. p. 19). However, 21st Amendment argues that the trial court’s

       “reasoning misapprehends the plain language of [the] AOPA.” (Appellant’s Br.

       p. 19). According to 21st Amendment, the

               AOPA does not preclude standing for judicial review where the
               party’s standing is based on a law outside of [the] AOPA that is
               applicable to the agency action (e.g., Title 7.1), and [the] AOPA
               does not provide that the party must instead sue under the
               separate statute that is applicable to the final agency action.

       (Appellant’s Br. pp. 19-20). If such were the case, 21st Amendment insists that

       “there would be no use for [Indiana Code section 4-21.5-5-3(a)(3)], as the party

       would just always have to sue under the separate statute applicable to the

       agency action.” (Appellant’s Br. p. 20). Furthermore, 21st Amendment argues

       that

               [u]nder the Commission’s view, the only parties with standing to
               challenge the issuance of a specialty grocery store permit would
               be the business that received the illegally issued permit and
               parties that the Commission granted intervening remonstrator
               status. That view in effect insulates the Commission’s decision
               from any judicial review, as no business that is improperly issued
               a permit would seek judicial review, and it is the Commission
               that decides whether to grant intervening remonstrator status.

       (Appellant’s Br. p. 24) (internal citation omitted).

[18]   We agree with 21st Amendment to the extent that a party with “standing under

       a law applicable to the final agency action” is not obligated to pursue relief

       under the separate statute; rather, judicial review under the AOPA is

       Court of Appeals of Indiana | Opinion 49A05-1612-PL-2863 | September 27, 2017   Page 11 of 13
appropriate in those situations. I.C. § 4-21.5-5-3(a)(3). Here, however, we

cannot say that the Commission’s issuance of an alcoholic beverage permit

constitutes a final agency action to which the public nuisance laws apply.

Rather, as the public nuisance statutes establish, it is the conduct of the

permittee (i.e., Grapevine Cottage) or conduct otherwise carried on in premises

where alcoholic beverages are kept/sold that may give rise to a public nuisance

claim. See I.C. §§ 7.1-2-6-1; -2. As the alleged nuisance is not the result of the

agency’s action, but rather the subsequent conduct of the permittee, 21st

Amendment does not have standing under Indiana Code section 4-21.5-5-

3(a)(3) of the AOPA. As the trial court found, 21st Amendment’s statutory right

to abate and enjoin a public nuisance for improper alcohol sales must be

achieved through a separate nuisance action. 3

3
  In the alternative, 21st Amendment claims that it should be able to pursue judicial review under the public
standing doctrine. The public standing doctrine “is an exception to the general requirement that a plaintiff
must have an interest in the outcome of the litigation different from that of the general public.” Liberty
Landowners Ass’n, Inc., 913 N.E.2d at 1251. The public standing doctrine is applicable in cases that involve
the “enforcement of a public rather than a private right” and “is limited to extreme circumstances and should
be applied with ‘cautious restraint.’” State ex rel. Cittadine v. Ind. Dep’t of Transp., 790 N.E.2d 978, 980 (Ind.
2003) (quoting Schloss, 553 N.E.2d at 1206 n.3); Liberty Landowners Ass’n, Inc., 913 N.E.2d at 1251 (quoting
Cittadine, 790 N.E.2d at 983). Although noted by neither the Commission nor 21st Amendment itself, we are
unable to find any indication in the record that 21st Amendment raised the matter of public standing before
the trial court. In fact, we do not find any mention of the term ‘public standing’ in any filings; rather, 21st
Amendment relied solely on the statutory bases for standing under the AOPA. Accordingly, 21st
Amendment has waived the issue for our review. See Liberty Landowners Ass’n, Inc., 913 N.E.2d at 1251.

Court of Appeals of Indiana | Opinion 49A05-1612-PL-2863 | September 27, 2017                       Page 12 of 13
                                              CONCLUSION
[19]   Based on the foregoing, we conclude that the trial court properly granted the

       Commission’s motion to dismiss because 21st Amendment lacks standing to

       pursue judicial review under the AOPA.

[20]   Affirmed.

[21]   Najam, J. and Bradford, J. concur

       Court of Appeals of Indiana | Opinion 49A05-1612-PL-2863 | September 27, 2017   Page 13 of 13