City Council of City of Reno v. Irvine, 16810
| Decision Date | 26 June 1986 |
| Docket Number | No. 16810,16810 |
| Citation | 102 Nev. 277,721 P.2d 371 |
| Parties | CITY COUNCIL OF the CITY OF RENO, State of Nevada, Appellant, v. Richard D. IRVINE, Respondent. |
| Court | Nevada Supreme Court |
The City of Reno brings this appeal because the district court has commanded it to issue a cabaret license 1 for "Le Cabaret," proposed to be operated by respondent Irvine next door to his Virginia Street Adult Book Store, which features an "X-rated 8 channel private video arcade" known to display on video screens unadorned homosexual and heterosexual activities.
The city refused to grant the license because it was "contrary to public welfare." We hold that the Reno City Council acted well within its powers in denying the license and reverse the order of the district court commanding issuance of the license.
Irvine seeks a license to operate a cabaret, that is, a license which permits "singing, dancing, floor show and other live entertainment ... in [an] establishment where alcoholic beverages are sold...." R.M.C. § 4.06.290. Such licenses are authorized by the municipal code only when they are in harmony with the "general welfare of the inhabitants of the city." R.M.C. § 4.06.020.
The municipal code gives the council broad discretion in granting this kind of license, and as a general rule the courts will not interfere with such discretion. Gragson v. Toco, 90 Nev. 131, 520 P.2d 616 (1974). An exception to this general rule can be found in cases in which the council acts arbitrarily or capriciously. Gragson at p. 133, 520 P.2d 616; Henderson v. Henderson Auto, 77 Nev. 118, 359 P.2d 743 (1961).
The city council certainly has the general power to determine whether the granting of this kind of license privilege is contrary to the general welfare of the inhabitants of the city. The courts, as a general rule, have no business telling a city board who should or who should not be granted this kind of license or which cabaret licenses would be and which cabaret licenses would not be contrary to the public welfare. Only rarely may a court interfere with such a decision of a municipality's governing board, and then only when it can be demonstrated by the one seeking the privilege that the governing board is acting outside of its legal powers.
If one seeking such a privilege can show that the city board, in denying the license, acted in a manner that was arbitrary (baseless, despotic) 2 or capricious (caprice: "a sudden turn of mind without apparent motive; a freak, whim, mere fancy"), 3 then the board is said to be abusing its discretion and is not acting within its legally delegated powers. Such illegal actions on the part of a city's governing board may be subject to judicial action to prevent interference with a license applicant's legal or constitutional rights.
If a municipal governing body decides to deny a license, even of the highly privileged kind involved here, in an arbitrary and capricious manner, it has abused its discretion and invited judicial review. As stated in Henderson, the license applicant has the burden of demonstrating the impropriety of governmental action and is required before the trial court "to establish abuse of discretion on the part of the city council in the denial by that body" of the application. Henderson, 77 Nev. at 122, 359 P.2d at 745. Interference by the court is not warranted "except where there [is] a manifest abuse of discretion." 77 Nev. at 122; 359 P.2d at 745. The question here, then, is whether Irvine has sustained his burden before the trial court of proving a manifest abuse of discretion by way of establishing the groundless, arbitrary or capricious action of the city council in denying the license. It is clear that Irvine has not sustained this burden and that the trial court has erred in commanding the council to issue a license.
A city board acts arbitrarily and capriciously when it denies a license without any reason for doing so. In previous cases, e.g., Henderson, we have spoken in terms of there being a "lack of substantial evidence 4 before the council" (77 Nev. at 122, 359 P.2d 743); but the essence of the abuse of discretion, of the arbitrariness or capriciousness of governmental action in denying a license application, is most often found in an apparent absence of any grounds or reasons for the decision. "We did it just because we did it."
A perfect example of this kind of groundless, arbitrary denial can be found in the case of County of Clark v. Atlantic Seafoods, 96 Nev. 608, 615 P.2d 233 (1980).
The owner of Atlantic Seafoods sought a license to sell packages of wine or beer to his seafood customers. Clark County said "no" and gave no reason. The trial court ordered that the license be issued because, there being no evidence or apparent reason to support the denial, the board's exercise of discretion was capricious and arbitrary.
On appeal the county argued that Atlantic's being a fish market was sufficient reason to deny its application for a license. This court affirmed, holding that the county board's decision must be related to the public welfare and not arbitrary and capricious. We noted that the mere
fact that Atlantic is a fish market has no bearing on the public health and welfare. Atlantic Seafood appears to be an appropriate place to sell wine and beer. The county has not affirmatively explained how the denial promotes the public welfare or why Atlantic would be an inappropriate licensee. Consequently, the denial was a clear abuse of discretion because it was not based on any good and sufficient reason related to the public's well being. 5
(Our emphasis).
Henderson is another example of a case in which the trial court ruled that where there is no evidence or reason found in the record of the licensing proceedings to support a license denial, the license must be issued. These cases do not stand for the proposition that the board must "explain" its decision or even that it must make formal findings or conclusions. The decision of the trial court in these matters must, rather, be based upon the applicant's ability to establish in some manner that the council has abused its discretion. This may be done, as it was in Seafoods and Henderson by showing that the municipal record discloses no sufficient reason to support the denial.
We have recently had occasion to apply these principles in a zoning case, City Council, Reno v. Travelers Hotel, 100 Nev. 436, 683 P.2d 960 (1984), Travelers Hotel sought a special use permit to build a 305-room hotel-casino complex. The planning commission recommended issuance of the permit. No objections were made to issuance of the permit at the public hearing. At the hearing before the council testimony was limited to one witness who testified that she thought the project was too close to a high school. The trial court found that the denial under these circumstances "was an abuse of discretion and not supported by substantial evidence."
This court upheld the trial court in Travelers, noting that the mere statements of interested parties and their counsel and the opinions of council members did not provide a proper reason for the decision. In coming to this conclusion we cited with approval language from Henderson which declared the above-discussed principles relating to the nature of judicial intervention in license denial...
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