Philly's v. Byrne

• Decision Date: 29 May 1984
• Docket Number: Nos. 83-1945,83-1946,s. 83-1945
• Citation: 732 F.2d 87
• Parties: PHILLY'S, the Original Philadelphia Cheese Steak, Inc., Plaintiff-Appellant, v. Jane M. BYRNE, as Mayor and as Liquor Control Commissioner of the City of Chicago, Defendant-Appellee, and Illinois Liquor Control Commission, Defendant-Intervenor-Appellee. LOS FARRALLONES, INC., an Illinois Corporation, Jorge Aristizabal, and Nick Andrews, Plaintiffs-Appellants, v. Jane M. BYRNE, as Mayor and as Liquor Control Commissioner of the City of Chicago, Defendant-Appellee, and Illinois Liquor Control Commission, Defendant-Intervenor-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 87

732 F.2d 87

PHILLY'S, the Original Philadelphia Cheese Steak, Inc., Plaintiff-Appellant, v. Jane M. BYRNE, as Mayor and as Liquor Control Commissioner

of the City of Chicago, Defendant-Appellee,

and

Illinois Liquor Control Commission, Defendant-Intervenor-Appellee.

LOS FARRALLONES, INC., an Illinois Corporation, Jorge

Aristizabal, and Nick Andrews, Plaintiffs-Appellants, v. Jane M. BYRNE, as Mayor and as Liquor Control Commissioner

of the City of Chicago, Defendant-Appellee,

and

Illinois Liquor Control Commission, Defendant-Intervenor-Appellee.

Nos. 83-1945, 83-1946.

United States Court of Appeals, Seventh Circuit.

Argued Jan. 3, 1984.

Decided April 19, 1984.

As Amended on Denial of Rehearing May 29, 1984.

Richard L. Cantor, Chicago, Ill., for plaintiffs-appellants.

Lynn K. Mitchell, Asst. Corp. Counsel, for defendant-appellee.

Kathleen Lien, Asst. Atty. Gen., Chicago, Ill., for defendant-intervenor-appellee.

Before WOOD, ESCHBACH and POSNER, Circuit Judges.

POSNER, Circuit Judge.

These appeals are from the dismissal, on the defendants' motion for summary judgment, of a suit under section 1 of the Civil Rights Act of 1871 (now 42 U.S.C. Sec. 1983) against Chicago's (former) mayor and liquor control commissioner. The suit was for damages and injunctive relief, and alleged that the operation of Illinois' local-option liquor law, which so far as relevant here allows the voters in a precinct to vote the precinct "dry," deprived the plaintiffs of property without due process of law, in violation of the Fourteenth Amendment. Other constitutional violations were also alleged, but these allegations, to the extent they have any substance at all, merely ring changes on the due process theme.

Article IX of the Illinois Liquor Control Act, Ill.Rev.Stat.1981, ch. 43, paragraphs 166 et seq., provides that upon the filing, at least 90 days before the next regularly scheduled general election, of a petition signed by 25 percent or more of a precinct's registered voters, the question whether to ban the retail sale of alcoholic beverages in the precinct shall be placed on the ballot at the election. (Except in cities of more than 200,000 people, the electoral unit is the entire city, town, or village, rather than the individual precinct. See p 167.) If the vote is to ban, any license to sell liquor in the precinct lapses automatically 30 days after the election. The appellants in No. 83-1946 (Los Farrallones ), who own a restaurant in Chicago, lost their liquor license as a result of such a referendum; the vote was 188 to 58. In No. 83-1945 (Philly's ), the appellant had not yet been issued a license when the referendum in its precinct was held, although its application for a license had been approved. The vote in this precinct was 152 to 71 to ban the sale of liquor.

In Rippey v. Texas, 193 U.S. 504, 24 S.Ct. 516, 48 L.Ed. 767 (1904), the Supreme Court, in an opinion by Justice Holmes, rejected a claim that an Alabama law similar to the local-option provision in the Illinois Liquor Control Act denied due process of law by subjecting the liquor seller's property rights to the whim of the electorate. Rippey has never been overruled; and it is cited with approval in several modern cases. See Salsburg v. Maryland, 346 U.S. 545, 552 n. 7, 74 S.Ct. 280, 284 n. 7, 98 L.Ed. 281 (1954); Griffin v. Board of Supervisors, 322 F.2d 332, 342 and n. 25 (4th Cir.1963), rev'd, 377 U.S. 218, 84 S.Ct. 1226, 12 L.Ed.2d 256 (1964); Graham v. State, 45 Ala.App. 79, 224 So.2d 905 (1969), app. dismissed, 396 U.S. 279, 90 S.Ct. 567, 24 L.Ed.2d 466 (1970); McDonald v. Brewer, 295 F.Supp. 1135, 1139 (N.D.Ala.1968); Hall v. St. Helena Parish School Bd., 197 F.Supp. 649, 658 (E.D.La.1961) (three-judge court) (per curiam), aff'd mem., 368 U.S. 515, 82 S.Ct. 529, 7 L.Ed.2d 521 (1962). Yet it would be risky to rest decision on Rippey alone, especially when the only modern cases upholding local-option laws against due process challenges (Illinois cases by the way) do so, as we shall see, on the ground rejected in Reed v. Village of Shorewood, 704 F.2d 943, 948-49 (7th Cir.1983), that a liquor license is a privilege and not a right. See Seals v. City of Chicago, 93 Ill.App.3d 678, 680, 49 Ill.Dec. 153, 155, 417 N.E.2d 843, 845 (1981); Duncan v. Marcin, 82 Ill.App.3d 963, 967-68, 38 Ill.Dec. 422, 425, 403 N.E.2d 653, 656 (1980); Malito v. Marcin, 14 Ill.App.3d 658, 662, 303 N.E.2d 262, 265 (1973), leave to appeal denied, 55 Ill.2d 602 (1974), app. dismissed, 417 U.S. 963, 94 S.Ct. 3165, 41 L.Ed.2d 1135 (1974). A number of modern cases, however, uphold this kind of law against other challenges. Besides Griffin, Graham, and McDonald, supra, see Two Guys from Harrison, Inc. v. Furman, 32 N.J. 199, 223-30, 160 A.2d 265, 280-81 (1960), and Alkire v. Cashman, 350 F.Supp. 360, 365 (S.D.Ohio 1972), aff'd without opinion, 477 F.2d 598 (6th Cir.1973).

The Supreme Court's opinion in Rippey depends entirely on the idea that the power to prohibit implies an unlimited power to regulate short of prohibition, so that if the government is allowed by the Constitution to prohibit some activity (or deny some benefit) altogether it can attach any condition it wants to the conduct of the activity or the receipt of the benefit. This idea was a favorite of Holmes'. See, e.g., Western Union Tel. Co. v. Kansas, 216 U.S. 1, 53, 30 S.Ct. 190, 208, 54 L.Ed. 355 (1910) (dissenting opinion); Commonwealth v. Davis, 162 Mass. 510, 511-12, 39 N.E. 113 (1895); McAuliffe v. Mayor, 155 Mass. 216, 220, 29 N.E. 517 (1892) ("The petitioner may have a constitutional right to talk politics, but he has no constitutional right to be a policeman"). But it is rejected in the modern cases, e.g., Garrity v. New Jersey, 385 U.S. 493, 500, 87 S.Ct. 616, 620, 17 L.Ed.2d 562 (1967); Sherbert v. Verner, 374 U.S. 398, 404-06, 83 S.Ct. 1790, 1794-95, 10 L.Ed.2d 965 (1967); Speiser v. Randall, 357 U.S. 513, 528-29, 78 S.Ct. 1332, 1343-44, 2 L.Ed.2d 1460 (1958); Bart v. Telford, 677 F.2d 622, 625 (7th Cir.1982), at least in the unqualified form in which Holmes stated it in Rippey (as elsewhere): "the state has power to prohibit the sale of intoxicating liquors altogether, if it sees fit ... and that being so it has power to prohibit it conditionally." 193 U.S. at 509, 24 S.Ct. at 517 (citation omitted).

No one believes any more that since the captain of a warship has no duty to let members of the general public on board to visit the ship when it is docked, he can decide to allow only Protestant visitors on board. But the idea that the greater governmental power includes the lesser may not be completely dead. There is a difference, as we shall see, between conditioning a benefit on the relinquishment of a substantive constitutional right, such as the right to the free exercise of religion or (in McAuliffe ) to freedom of speech, and conditioning it on the acceptance of something less than the full range of possible procedural safeguards to protect its enjoyment. But the distinction is not made in Rippey.

Rippey also long predates the systematizing of due process analysis by Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972). Roth provides the inspiration for the syllogism that the appellants press on us: a liquor license is a species of property within the meaning of the due process clause of the Fourteenth Amendment; they were deprived of this property by a referendum, which, as a naked appeal to majority rule, is the antithesis of a due process hearing; therefore their rights under the Fourteenth Amendment were violated.

We agree that there was a deprivation. In contrast to cases such as Brown v. Brienen, 722 F.2d 360, 366 (7th Cir.1983), where the existence of a state-court remedy for the injury of which the plaintiffs complained made it problematic whether there had been a deprivation within the meaning of the Fourteenth Amendment, the plaintiffs here have no remedy under state law for what has been done to them (assuming the referenda were not conducted in a fraudulent or otherwise unlawful manner), except to campaign for repeal in four years. But whether the deprivation was of property depends not only on whether an Illinois liquor license is property within the meaning of the Fourteenth Amendment, as held in Reed v. Village of Shorewood, supra, 704 F.2d at 948-49 (we shall not have to decide whether an approved application, as in No. 83-1946, creates a property right even before a license is issued), but also on the precise dimensions of the right. The defendants in Reed by a pattern of harassment drove the plaintiffs to give up their liquor license before its expiration. The present case concerns the date of expiration. Every liquor license in Illinois has a variable expiration date: either the date stamped on the license or the date on which the licensee is required to surrender the license because the precinct where the licensed premises are located has voted to go dry--whichever is earlier. Just as a tenant is not deprived of a property right when he is ejected from the premises at the expiration of his lease, so it can be argued that when a precinct votes itself dry any liquor licensees' property rights are extinguished by the terms of the licenses. True, if a condition that limits a property right infringes a constitutional liberty--if, for example, liquor licenses expired by their terms when the licensee criticized the Liquor Control Commission--then, contrary to the rejected teaching of cases like McAuliffe, there would be a deprivation of which a licensee could complain under the Constitution, a deprivation of liberty (liberty of expression, in our example). But a referendum does not invade any constitutional liberty.

This is a powerful analysis--maybe too powerful. If Illinois provided that a liquor license could be taken away only for cause but cause as determined by the Liquor Control Commission without any notice to the licensee or...