Arizona State Liquor Bd. of Dept. of Liquor Licenses and Control v. Ali

• Decision Date: 15 June 1976
• Docket Number: CA-CIV,No. 2,2
• Citation: 550 P.2d 663,27 Ariz.App. 16
• Parties: ARIZONA STATE LIQUOR BOARD OF the DEPARTMENT OF LIQUOR LICENSES AND CONTROL, Appellant, v. Cosmo Luigi ALI, d/b/a DaVinci Restaurant, for a Series #7 Original License, Application #566, Appellee. 2067.
• Court: Arizona Court of Appeals

Page 663

550 P.2d 663

27 Ariz.App. 16

ARIZONA STATE LIQUOR BOARD OF the DEPARTMENT OF LIQUOR LICENSES AND CONTROL, Appellant, v. Cosmo Luigi ALI, d/b/a DaVinci Restaurant, for a Series #7 Original License, Application #566, Appellee.

No. 2 CA-CIV 2067.

Court of Appeals of Arizona, Division 2.

June 15, 1976.

Rehearing Denied July 16, 1976.

Bruce E. Babbitt, Atty. Gen., by Charles E. Buri, Asst. Atty. Gen., Tucson, for appellant

Dominic Piccirilli, Tucson, for appellee.

OPINION

HOWARD, Chief Judge.

The main question which surfaces in this appeal is whether the statutory exclusion of aliens from obtaining a spirituous liquor license constitutes a denial of equal protection of the law.

Appellee is a 38 year-old permanent resident alien who has been a resident of the United States and Arizona since November 17, 1970. He is married, has no criminal record, is the owner of DaVinci Restaurant on Fort Lowell Road in Tucson, Arizona and has declared his intent to become a citizen of the United States.

On November 4, 1974, appellee applied to the State of Arizona Department of Liquor Licenses and Control for issuance of a Series #7 spirituous liquor license. After a hearing, the State Liquor Board disapproved the application based on the fact that appellee was not a citizen of the United States as required by A.R.S. Sec. 4--202(A).

Appellee appealed the decision of the State Liquor Board to superior court, alleging that the proscription of A.R.S. Sec. 4--202(A) was violative of the Equal Protection Clause of the Fourteenth Amendment of the United States Constitution. The court reversed the Board's decision, declaring unconstitutional the requirement of A.R.S. Sec. 4--202(A) that every spirituous liquor licensee shall be a citizen of the United States. The State Liquor Board of the Arizona Department of Liquor Licenses and Control now appeals.

Appellant contends that (1) the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution does not apply to the case sub judice; (2) A.R.S. Sec. 4--202(A) is necessary and proper to protect substantial interests of the citizenry and (3) A.R.S. Sec. 4--202(A) is necessary to protect the state's resources.

The sole basis for appellant's refusal to issue a license to appellee is A.R.S. Sec. 4--202(A) which provides:

'Every spirituous liquor licensee, other than a club licensee, a corporation licensee, a hotel-motel licensee, or a restaurant licensee shall be a citizen of the United States and a bona fide resident of the state. If a partnership, each partner shall be a citizen of the United States and a bona fide resident of the state. If a corporation, it shall be a domestic corporation or a foreign corporation which has qualified to do business in this state, and shall hold its license through an agent.'

The leading principles governing the case at bar were recently enunciated in Graham v. Richardson, 403 U.S. 365, 371--372, 91 S.Ct. 1848, 1851--1852, 29 L.Ed.2d 534 (1971), wherein the court announced:

'The Fourteenth Amendment provides, '(N)or shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.' It has long been settled, and it is not disputed here, that the term 'person' in this context encompasses lawfully admitted resident aliens as well as citizens of the United States and entitles both citizens and aliens to the equal protection of the laws of the State in which they reside. Yick Wo v. Hopkins, 118 U.S. 356, 369, 6 S.Ct. 1064, 1070, 30 L.Ed. 220 (1886); Truax v. Raich, 239 U.S. 33, 39, 3 S.Ct. 7, 9, 60 L.Ed. 131 (1915); Takahashi v. Fish & Game Comm'n, 334 U.S., at 420, 68 S.Ct., at 1143.

Under traditional equal protection principles, a State retains broad discretion to classify as long as its classification has a reasonable basis. Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61, 78, 31 S.Ct. 337, 340, 55 L.Ed. 369 (1911); Williamson v. Lee Optical Co., 348 U.S. 483, 489, 75 S.Ct. 461, 465, 99 L.Ed. 563 1955); Morey v. Doud, 354 U.S. 457, 465, 77 S.Ct. 1344, 1350, 1 L.Ed.2d 1485 (1957); McGowan v. Maryland, 366 U.S. 420, 425--427, 81 S.Ct. 1101, 1106, 6 L.Ed.2d 393 (1961). This is so in 'the area of economics and social welfare.' Dandridge v. Williams, 397 U.S. 471, 485, 90 S.Ct. 1153, 1161, 25 L.Ed.2d 491 (1970). But the Court's decisions have established that classifications based on alienage, like those based on nationality or race, are inherently suspect and subject to close judicial scrutiny. Aliens as a class are a prime example of a 'discrete and insular' minority (see United States v. Carolene Products Co., 304 U.S. 144, 152--153, n. 4, 58 S.Ct. 778, 783--784, 82 L.Ed. 1234 (1938)) for whom such heightened judicial solicitude is appropriate. Accordingly, it was said in Takahashi, 334 U.S., at 420, 68 S.Ct., at 1143, that 'the power of a state to apply its laws exclusively to its alien inhabitants as a class is confined within narrow limits. " (Footnotes omitted)

These same principles were recognized in Purdy & Fitzpatrick v. State, 71 Cal.2d 566, 79 Cal.Rptr. 77, 456 P.2d 645 (1969), where the court held that discrimination on the basis of alienage invokes a strict standard of review. Similarly, in Raffaelli v. Committee of Bar Examiners, 7 Cal.3d 288, 101 Cal.Rptr. 896, 496 P.2d 1264 (1972) the court noted that particular alien groups and aliens in general have suffered prejudice and that a special mandate compelled them to guard the interests of aliens from the ever-present risk of prejudice. The Raffaelli court went on to hold that courts should approach discriminatory legislation with special solicitude. It is not only the basis of discrimination--alienage--which prompts the concern of the courts, but the method by which that discrimination is often practiced, i.e., by totally excluding aliens from engaging in certain businesses. Raffaelli, supra, at 7 Cal.3d 292--293, 101 Cal.Rptr. 896, 496 P.2d 1264. The state may not arbitrarily foreclose to any person the right to pursue an otherwise lawful occupation. Any limitation on the opportunity for employment impedes the achievement of economic security, which is essential for the pursuit of life, liberty and happiness; courts sustain such limitations only after careful scrutiny. Purdy v. Fitzpatrick, supra.

Statutes analogous to A.R.S. Sec. 4--202(A) that make distinctions between classes of its citizens are accustomed to judicial scrutiny. The aforementioned principles have been applied to strike down as violations of equal protection of the law, state statutes excluding aliens from a variety of occupations. ¹ A state can require high standards in licensing liquor applicants, A.R.S. Sec. 4--202, but any qualifications must have a rational connection with the applicant's fitness to hold that license. In applying permissible standards a state cannot exclude an applicant where there is no basis for finding that he or she fails to meet its standards or where its action is invidiously discriminatory. We recognize the importance of leaving states free to set their own licensing laws, but it is equally important that the states not exercise their power in an arbitrary or discriminatory manner.

With these principles in mind, we now reach the questions presented in the case at bar; whether being a citizen bears a rational relationship to appellee's fitness to have a liquor license and hence, whether the citizenship requirement in A.R.S. Sec. 4--202(A) constitutes arbitrary and invidious discrimination in violation of the equal protection clause.

Initially appellant contends that the power of the states over intoxicating liquor, as conferred by the Twenty-first Amendment to the United States Constitution, is not bounded by the proscription of the Fourteenth Amendment. Appellant argues that when the constitutionality of the state statute concerning the regulation and control of liquor is involved we are dealing with an area of law that is unique, Garcia v. Arizona State Liquor Board, 21 Ariz.App. 456, 520 P.2d 852 (1974), and a business which is not one of the common or natural occupations of the community.

The Twenty-first Amendment extends to the states the absolute power to prohibit or limit traffic of intoxicating liquors and associated activities within their own borders. Appellant refers us to Seidenberg v. McSorleys' Old Ale House, Inc., 317 F.Supp. 593, 600 (D.C.1970) wherein the court quoted from Joseph E. Seagram & Sons, Inc. v. Hostetter, 16 N.Y.2d 47, 262 N.Y.S.2d 75 at 79, 209 N.E.2d 701 at 704:

"A long history of regulation, control, price fixing, place of time and sale setting, and outright extinction lies behind the liquor business in this country since Colonial times, and it is too late today to suggest that the rights of those who choose to engage in it are on a constitutional or legal parity with the rights of people who trade in bicycles, or cosmetics, or furniture."

In Goesaert v. Cleary, 335 U.S. 464, 465, 69 S.Ct. 198, 199, 93 L.Ed.2d 163 (1968), the court remarked:

'The Fourteenth Amendment did not tear history up by the roots, and the regulation of the liquor traffic is one of the oldest and most untrammeled of legislature powers.'

See also, Kaname Tokaji v. State Board of Equalization, 20 Cal.App.2d 612, 67 P.2d 1082 (1937), where it was held that a person has no inherent right to deal in intoxicating liquors.

Appellant further argues that the Twenty-first Amendment makes plenary the power of the states over trafficking in intoxicating liquors and in support of this proposition refers us to Bartemeyer v. State of Iowa, 18 Wall. 129, 85 U.S. 129, 21 L.Ed. 929 (1878) where it was said that prior to the adoption of the Fourteenth Amendment, state enactments, regulating or prohibiting traffic in intoxicating liquors, raised no question under the Constitution of the United States. Such legislation was left to the judgment of the...