Board of Selectmen of Barnstable v. Alcoholic Beverages Control Commission

• Decision Date: 21 November 1977
• Parties: BOARD OF SELECTMEN OF BARNSTABLE v. ALCOHOLIC BEVERAGES CONTROL COMMISSION et al. 1
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 1011

369 N.E.2d 1011

373 Mass. 708

BOARD OF SELECTMEN OF BARNSTABLE v. ALCOHOLIC BEVERAGES CONTROL COMMISSION et al. ¹

Supreme Judicial Court of Massachusetts, Barnstable.

Argued Sept. 14, 1977.

Decided Nov. 21, 1977.

Andrew J. McElaney, Jr., Asst. Atty. Gen., for Alcoholic Beverages Control Commission.

Edward W. Kirk, Falmouth, for Tri-Nel Management, Inc.

J. Douglas Murphy, Asst. Town Counsel, Hyannis, for the Board of Selectmen of Barnstable.

Alan A. Green, Hyannis, for M. D. Armstrong's, Inc.

Before HENNESSEY, C. J., and QUIRICO, BRAUCHER, KAPLAN and WILKINS, JJ.

KAPLAN, Justice.

Because of increase in its population, the town of Barnstable became eligible in 1976 to make awards of seven new year-round licenses for the sale by common victuallers of all alcoholic beverages to be drunk on the premises ("pouring" licenses). See G.L. c. 138, §§ 12, 17. Twenty-seven firms or individuals presented applications to the board of selectmen (hereafter the board), which acts as the local licensing authority (see G.L. c. 138, § 1, and note 16 infra ), and the board after hearings granted licenses to seven of these applicants. Tri-Nel Management, Inc., owner of the Windjammer Lounge, was one of those denied a license a near miss, as will appear, as Tri-Nel might have been granted a license, had not a license been awarded to M.D. Armstrong's, Inc., owner of a restaurant of that name. Tri-Nel appealed from the denial to the Alcoholic Beverages Control Commission (commission) pursuant to G.L. c. 138, § 67, ² claiming that there were material flaws in the board's proceedings because of the relation to and participation in them of Mrs. Mary K. Montagna, who was one of the three selectmen constituting the board and the wife of a successful applicant, Cosmo J. Montagna, owner of the Marlin restaurant. The commission held a hearing at which, in addition to receiving minutes of the hearings held by the board, it heard testimony by each of the selectmen. The commission filed a written decision holding that there had been procedural impropriety, and accordingly it withheld approval under G.L. c. 138, §§ 12 and 67 (texts at note 9 infra ) of six of the licenses granted by the board, ³ and remanded to the board for new hearings for the applicants for those licenses. The board, as plaintiff, sought review under the State Administrative Procedure Act, G.L. c. 30A, § 14, of the decision in the Superior Court, with the commission as defendant, and Tri-Nel and M.D. Armstrong's, Inc., admitted as interveners. ⁴ A judge of the Superior Court reversed the commission's decision, and in his judgment directed, among other things, that the commission approve the six licenses granted by the board. The commission appealed to the Appeals Court, and we granted a request for direct review under G.L. c. 211A, § 10(A). We disagree with the judge; he failed to take due account of the irregularities in the proceedings before the board, and took too narrow a view of the commission's authority. We reverse the judgment and reinstate the commission's decision.

1. Procedural irregularities. When Mrs. Montagna was elected as a member of the board of selectmen in March, 1975, it was recognized that problems were likely to arise about her participation in the board's work as liquor licensing authority. Therefore the board sought an opinion of town counsel. His advice, summed up, was that Mrs. Montagna should avoid acting on the Marlin's then current application for renewal of a seasonal license, and, if that were granted, should avoid "acting on any matter involving any on premise pouring liquor license within a reasonable proximity" of the Marlin. ⁵ It will be seen that the board and Mrs. Montagna took some precautions about the consideration of a license to the Marlin itself, but ignored or misunderstood the problem about other licenses.

On Friday, February 20, 1976, when the board's hearings began, a decision was taken without Mrs. Montagna's participation to consider applications in the order in which they were filed. The Marlin application was dealt with first, Mrs. Montagna abstaining. (Actually it is not clear from the record that that application was the first filed among the three earliest filed, all on January 23, 1976.) Selectman Eshbaugh pointed out that the statute (c. 138, § 16B) required that applications be acted on within a period of thirty days of receipt, which would expire the next Monday. He remarked, in effect, that it would be well to dispose of the Marlin application so that it would not be "hanging over" the other applications on which Mrs. Montagna would be deliberating and voting. With very brief discussion in which no other application was mentioned, selectmen Eshbaugh and Brown voted a license for the Marlin.

Consideration and disposition of the other twenty-six applications, with Mrs. Montagna participating and voting, took place later on February 20, and on February 24, 25, and 26. The plan of following the order of filing was not adhered to after February 20. Five licenses were granted in the Main Street area of Hyannis. These restaurants were not in the Marlin's immediate neighborhood. On the road on which the Marlin was located (Route 132 becoming Route 28) the only other award, evidently a meritorious one, was made to the Ramada Inn (see note 3 supra ), which, however, was closer to Main Street and the Hyannis town center than to the Marlin. Mrs. Montagna spoke up when two applicants on the road were considered, the Windjammer and the Red Coach Grille, both ultimately unsuccessful but discussed with more favor than any of the other failing applicants. Mrs. Montagna argued that the Red Coach should be denied a license because the owner, the Howard Johnson Company, already had a license on Main Street. At the commission hearing she said she voted against the Red Coach because of a parking problem and road congestion (although it already had a summer license, a season when these difficulties presumably were aggravated). The last award made was to M.D. Armstrong's on Main Street. Mrs. Montagna endorsed that application while selectman Eshbaugh was torn between that restaurant and the Windjammer. ⁶

Appraising the whole case before it, the commission said in its decision (set out in part in the margin) ⁷ that there was no evidence of improper exercise of influence by Mrs. Montagna. But it held that "the manner in which the proceedings were held and the participation of Mrs. Montagna in decisions relating to the locations of potential competitors was improper." The "appearance of conflict and the potential for deference by other Selectmen to her interests is too real and obvious to be ignored." As to the award to the Marlin itself, in the rush to consider and dispose of that application "(e) ffective discussion relating to the comparative merits of the Marlin Restaurant for the license as opposed to the other applicants was . . . inhibited and put to bed very early in the day." After that award, Mrs. Montagna had an evident interest as a competitor in the awards of licenses to others which made it awkward to the point of impropriety for her to participate in the discussion and voting on those applications. Hence the commission decided to refuse approval of the licenses and indicated that Mrs. Montagna should take no part in any resumed proceedings by the board.

Whether the licensing function is characterized by the term "quasi judicial," see Albano v. Selectmen of S. Hadley, 341 Mass. 494, 495, 170 N.E.2d 685 (1960), or by some other term betokening impartiality and disinterestedness, it seems to us that the standards of propriety to which the commission appealed were commonsensical (see Jaffarian v. Murphy, 280 Mass. 402, 405, 183 N.E. 110 (1932); Josephson v. Planning Bd. of Stamford, 151 Conn. 489, 199 A.2d 690 (1964); S & L Associates, Inc. v. Washington, 61 N.J.Super. 312, 160 A.2d 635 (1960), aff'd in part and rev'd in part, 35 N.J. 224, 172 A.2d 657 (1961)), and the decision reached was supported by substantial evidence. See G.L. c. 30A, § 14(8)(e ); Katz v. Massachusetts Comm'n Against Discrimination, 365 Mass. 357, 365, 312 N.E.2d 182 (1974); Almeida Bus Lines, Inc. v. Department of Pub. Utils., 348 Mass. 331, 341-342, 203 N.E.2d 556 (1965). As to the desirability of a comparative assessment regarding the Marlin application, it may be acknowledged that the realities of proceedings before a board of selectmen may often prevent perfect comparison when many applicants apply for a limited number of licenses; but however flexible the criterion may have to be, it is nevertheless significant and should not be ignored. Cf. Bay State Harness Horse Racing & Breeding Ass'n v. State Racing Comm'n, 342 Mass. 694, 702-703, 175 N.E.2d 244 (1961). Here more meaningful comparative appraisal was possible and should have been pursued. The commission was warranted in finding that, in a situation calling particularly for circumspection, all sense of comparison was abandoned in the anxiety to free Mrs. Montagna to join in discussing and voting on the other applications. ⁸ Then, coming to the participation of Mrs. Montagna in deciding those other applications, her special interest was such as amply to warrant her disqualification. As this court said in the Albano case, supra, involving alleged improper participation by a selectman in the grant of a permit, what was to be avoided was "suspicion or suggestion of action motivated in part by private interest." Id. 341 Mass. at 496, 170 N.E.2d at 686. It would not matter that in the end the licenses might be found in a substantive sense to have gone to the most meritorious applicants (an inquiry which the commission did not reach). The procedure was faulty and vitiated the result.

2. Authority of the commission. Answering the challenge to the authority of the commission to check the local board as it did here, we hold that the commission had competence to decline...