Club Misty v. Laski

• Decision Date: 03 April 2000
• Docket Number: Nos. 99-1597 and 99-1628,s. 99-1597 and 99-1628
• Citation: 208 F.3d 615
• Parties: (7th Cir. 2000) CLUB MISTY, Inc., doing business as Tequila Roadhouse, et al., Plaintiffs-Appellants, v. James LASKI, Clerk of the City of Chicago, et al., Defendants-Appellees
• Court: U.S. Court of Appeals — Seventh Circuit

Page 615

208 F.3d 615 (7th Cir. 2000)

CLUB MISTY, Inc., doing business as Tequila Roadhouse, et al., Plaintiffs-Appellants, v. James LASKI, Clerk of the City of Chicago, et al., Defendants-Appellees.

Nos. 99-1597 and 99-1628

In the United States Court of Appeals For the Seventh Circuit

Argued February 18, 2000

Decided April 3, 2000

Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. Nos. 98 C 7831 & 98 C 8054--Charles R. Norgle, Sr., Judge.

Before Posner, Chief Judge, and Bauer and Manion, Circuit Judges.

Posner, Chief Judge.

Two licensed taverns in Chicago appeal from the district court's dismissal of their suit to enjoin an Illinois state statute pursuant to which the plaintiffs would have lost their licenses had they not been granted preliminary relief that continues on appeal. The statute, 235 ILCS 5/9-1 et seq., is challenged both as depriving the plaintiffs of their property without due process of law and as a bill of attainder.

Illinois liquor licenses are revocable only for good cause during the one-year term of the license and renewable as a matter of right when the term expires unless the licensee is unqualified or his premises unsuitable. 235 ILCS 5/3-14, 5/5-2, 5/6-1, 5/7-5. (A tavern must have a local license as well, see 235 ILCS 5/3-14, 5/7-6; Chi. Munic. Code sec.sec. 4-60-20(a), 60(a), but the parties make nothing of this, so we won't either.) There is no suggestion that either plaintiff gave cause to have its license revoked or not renewed. Each simply lost a vote by the residents of the precinct in which its tavern is located. The vote was authorized by 235 ILCS 5/9-2, which provides that if 40 percent of the registered voters in a precinct petition the board of elections for a vote on whether to prohibit the sale of liquor at a particular street address, the question shall be put to the precinct electorate at the next election and if a majority votes in favor of the prohibition the license of the establishment located at that address shall become void thirty days after the election. 235 ILCS 5/9-3. The record is silent on why these particular taverns incurred the voters' wrath; neither the petitioners nor the voters are required to give reasons. All we know, besides that the plaintiffs' taverns were duly licensed, is that in each precinct there are other liquor licensees who have not been voted out.

On the view we take of the case, we shall not have to decide whether the statute is a bill of attainder, U.S. Const., art. I, sec. 10, cl. 1; but we shall not conceal our skepticism that it is. A bill of attainder is a legislative punishment, and we may assume without having to decide both that a legislative delegation to the electorate of a standardless authority to punish would fall afoul of the prohibition of bills of attainder by constituting the electorate a surrogate legislature engaged in administering punishment, see Joint Anti-Fascist Refugee Committee v. McGrath, 341 U.S. 123, 144 (1951) (concurring opinion); Dehainaut v. Pena, 32 F.3d 1066, 1070-71 (7th Cir. 1994); Laurence H. Tribe, American Constitutional Law sec. 10-6, pp. 660-61 (2d ed. 1988); cf. Citizens Against Rent Control/Coalition for Fair Housing v. City of Berkeley, 454 U.S. 290, 295 (1981), and that corporations as well as individuals are protected by the constitutional prohibition. See Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 239 n. 9 (1995); BellSouth Corporation v. FCC, 144 F.3d 58, 63 (D.C. Cir. 1998); BellSouth Corporation v. FCC, 162 F.3d 678, 684 (D.C. Cir. 1998); SBC Communications, Inc. v. FCC, 154 F.3d 226, 234 and n. 11 (5th Cir. 1998). Even so, it is doubtful that what the voters have voted to do to the plaintiffs can be regarded as punishment.

The requirement of punishment is most clearly satisfied when a punitive purpose is conjoined with a characteristically punitive sanction, such as a fine. See generally Nixon v. Administrator of General Services, 433 U.S. 425 (1977). (During the impeachment of President Clinton, there was much discussion of whether a congressional resolution censuring him would have been a bill of attainder.) We may assume, again without having to decide still another unsettled issue, that either a punitive purpose or a characteristically punitive sanction would suffice to make legislation directed against a particular individual or firm (of which a given street address is a transparent proxy) a bill of attainder. Selective Service System v. Minnesota Public Interest Research Group, 468 U.S. 841, 852-54 (1984); Nixon v. Administrator of General Services, supra, 433 U.S. at 473-84; De Veau v. Braisted, 363 U.S. 144, 160 (1960); Dehainaut v. Pena, supra, 32 F.3d at 1071-73; Planned Parenthood of Mid-Missouri and Eastern Kansas, Inc. v. Dempsey, 167 F.3d 458, 465 (8th Cir. 1999); SBC Communications, Inc. v. FCC, supra, 154 F.3d at 241; Tribe, supra, sec. 10-5, p. 655. The problem here is that we have no information about the purpose that actuated the petitions and the votes against these licensees; nor is the revocation of a license a characteristically punitive sanction, Brookpark Entertainment, Inc. v. Taft, 951 F.2d 710, 717 (6th Cir. 1991); cf. Rivera v. Pugh, 194 F.3d 1064, 1068 (9th Cir. 1999); United States v. Emerson, 107 F.3d 77, 81- 83 (1st Cir. 1997), though it can inflict great hardship.

We need not pursue the issue further, as we think the statute is unconstitutional as a denial of due process of law even if it is not a bill of attainder. We reach this conclusion on the basis of two previous decisions of this court, Reed v. Village of Shorewood, 704 F.2d 943 (7th Cir. 1983), and Philly's v. Byrne, 732 F.2d 87 (7th Cir. 1984). Neither side in the present litigation challenges the soundness of either decision. They differ as to the decisions' correct interpretation but they do not ask us to overrule either one in whole or in part. And so those decisions provide the framework for our analysis.

Reed holds that an Illinois liquor license is a property right within the meaning of the due process clause of the Fourteenth Amendment. 704 F.2d at 948-49. The license is revocable during its term only for cause, just like a public school teacher's tenure contract--a familiar example of "property" as the Supreme Court has defined the term in the due process clauses of the Fifth and Fourteenth Amendments. E.g., Perry v. Sindermann, 408 U.S. 593, 601 (1972). Were renewal a matter of administrative grace, the challenged statute would be vulnerable only in cases in which the license was voided before the expiration of its current term. E.g., Movers Warehouse, Inc. v. City of Little Canada, 71 F.3d 716, 718-19 (8th Cir. 1995); Kraft v. Jacka, 872 F.2d 862, 866-68 (9th Cir. 1989), overruled on other grounds by Dennis v. Higgins, 498 U.S. 439 (1991). But we held in Reed, relying on the Illinois Appellate Court's decision in City of Wyoming v. Liquor Control Comm'n, 362 N.E.2d 1080, 1084 (Ill. App. 1977), that Illinois law treats a refusal to renew a liquor license as equivalent to revocation, entitling the licensee "to all the protections, procedural and substantive, of the revocation process, [and] thus making [the licensee's] interest in renewal a property right for purposes of the Fourteenth Amendment." 704 F.2d at 949. We followed Reed in Kelly v. City of Chicago, 4 F.3d 509, 511 (7th Cir. 1993), as well as in Philly's v. Byrne, supra, 732 F.2d at 90, as did the Sixth Circuit in Brookpark Entertainment, Inc. v. Taft, supra, 951 F.2d at 714-15; see also Easter House v. Felder, 910 F.2d 1387, 1395 (7th Cir. 1990) (en banc); compare Herz v. Degnan, 648 F.2d 201, 208 (3d Cir. 1981).

The City of Chicago (the principal defendant) does not challenge any of these cases though it tweaks us a bit by remarking in a footnote that our holding that a liquor license is property has been rejected by the Illinois Appellate Court in decisions rendered after Reed. See Blue Cat Lounge, Inc. v. License Appeal Comm'n, 667 N.E.2d 554, 557 (Ill. App. 1996); Ole, Ole, Inc. v. Kozubowski, 543 N.E.2d 178, 181-82 (Ill. App. 1989); Ross v. Kozubowski, 538 N.E.2d 623, 626 (Ill. App. 1989); Black Knight Restaurant, Inc. v. City of Oak Forest, 513 N.E.2d 109, 111 (Ill. App. 1987). These cases rely on a provision of the Illinois Liquor Control Act which states that a liquor license is not property, 235 ILCS 5/6-1, and on "the wooden distinction between 'rights' and 'privileges'" that the Supreme Court has "fully and finally rejected." Board of Regents v. Roth, 408 U.S. 564, 571 (1972). As we explained in Reed, such a declaration and such a distinction cannot conclude the constitutional issue of whether the license is property, and indeed has very little relevance to it. Memphis Light, Gas & Water Division v. Craft, 436 U.S. 1, 9 (1978); Brookpark Entertainment, Inc. v. Taft, supra, 951 F.2d at 714; Sea Girt Restaurant & Tavern Owners Ass'n, Inc. v. Borough of Sea Girt, 625 F. Supp. 1482, 1486-88 (D. N.J.), aff'd without opinion, 802 F.2d 448 (3d Cir. 1986). Think back to the classic case of constitutional property--a teacher's tenure contract. Obviously such a contract would not be classified as "property" or a "property right" under state law, a classification that would weirdly imply that a teacher could sue his employer for trespass if he were fired in breach of the contract. For most purposes, perhaps for all but one purpose, an Illinois liquor license is not property; but insofar as it is revocable (or nonrenewable) only for cause, it is property for purposes of determining whether the state can deprive the licensee of it without according him due process of law. Baer v. City of Wauwatosa, 716 F.2d 1117, 1122 (7th Cir. 1983); see also Perry v. Sindermann, supra, 408 U.S. at 601.

The City denies that a liquor license is property for a reason unrelated to Reed--that the challenged statute so eviscerates the rights of liquor licensees as to...