City of Burlington v. Wash. State Liquor Control Bd.

• Decision Date: 26 May 2015
• Docket Number: No. 72438–0–I.,72438–0–I.
• Citation: 351 P.3d 875,187 Wash.App. 853
• Court: Washington Court of Appeals
• Parties: CITY OF BURLINGTON, a Washington municipal corporation, Appellant, v. WASHINGTON STATE LIQUOR CONTROL BOARD, a Washington Agency; Hakam Singh and Jane Doe Singh, and the marital community composed thereof; and HK International, LLC, a Washington limited liability company, Respondents.

187 Wash.App. 853

351 P.3d 875

CITY OF BURLINGTON, a Washington municipal corporation, Appellant

v.WASHINGTON STATE LIQUOR CONTROL BOARD, a Washington Agency; Hakam Singh and Jane Doe Singh, and the marital community composed thereof; and HK International, LLC, a Washington limited liability company, Respondents.

No. 72438–0–I.

Court of Appeals of Washington, Division 1.

May 26, 2015.

As Amended June 17, 2015.

Philip Albert Talmadge, Thomas M. Fitzpatrick, Talmadge/fitzpatrick/Tribe, Seattle, WA, Leif P. Johnson, City of Burlington, Burlington, WA, for Appellant.

Mary Maureen Tennyson, Washington Atty. General, R. July Simpson, Washington Atty. General Olympia, WA, Corbin T. Volluz, Law Office of Corbin T. Volluz, Mount Vernon, WA, for Respondents.

Daniel G. Lloyd, Vancouver City Attorney's Office, Vancouver, WA, Josh Weiss, WA State Assn of Counties Olympia, WA, for Amicus Curiae on behalf of Association of Municipal Attorneys & Association of Counties.

Opinion

LAU, J.

¶ 1 The City of Burlington, Washington, appeals the Washington State Liquor Control Board's decision to grant a spirits license to Hakam Singh and to allow Singh to relocate the license from the previously state-run location to a small convenience store he already owned.¹ The City argued the Board exceeded its statutory authority by allowing Singh to relocate the spirits license. The trial court rejected the City's appeal, concluding the City lacked standing to seek judicial review of the Board's action under the Administrative Procedure Act (APA), chapter 34.05 RCW. Because the Board's action directly impacts the City's interest to protect the safety of the public by ensuring alcohol sales are properly regulated, and because the City presented sufficient facts to demonstrate an injury in fact, we conclude the City has standing to challenge the Board's relocation of Singh's license. Accordingly, we reverse and remand for further proceedings consistent with this opinion.

FACTS

¶ 2 In November 2011, Washington voters approved Initiative Measure No. 1183 (I–1183), a measure privatizing liquor sales. I–1183 directed the Washington State Liquor Control Board to “sell by auction open to the public the right at each state-owned store location ... to operate a liquor store upon the premises.” I–1183 § 102(4)(c); RCW 66.24.620(4)(c). On April 20, 2012, respondents Hakam Singh and HK International (HK) submitted the highest bid for a liquor retail license at former Board Store No. 152, then located at 912 South Burlington Boulevard, in Burlington, Washington. On May 7, Singh submitted a store relocation request to the Board. Singh indicated that the landlord refused to lease at the original store location. Singh proposed a new location: the Skagit Big Mini Mart, a gas station and convenience store he already owned, located at 157 South Burlington Boulevard, approximately one half-mile north of the original store location. On May 14, the Board notified the City of Burlington about Singh's relocation request in compliance with RCW 66.24.010(8). Should the City object, the Board's notice form directed the City to “attach a letter to the Board detailing the reason(s) for the objection and a statement of all facts on which [the City's] objection(s) are based.” Administrative Record (AR) at 36.

¶ 3 On May 30, the City responded objecting to the new location and requesting an adjudicative hearing before the Board took any final action. The City included a brief letter detailing its reasons for the objection. First, the City argued that the Board lacked the legal authority to relocate the license attached to Store No. 152 because “[t]he clear language of [RCW 66.24.620(4)(c) ] provides that the rights to be sold by the Board are linked to the then-current location of the liquor store.” AR at 37. Second, the City noted that language in the voter pamphlet indicated that I–1183 “prevent[ed] liquor sales at gas stations and convenience stores....” AR at 38.² Finally, the City expressed concern regarding how the liquor sales might affect the surrounding area, stating, “The Burlington Police Department has logged many calls to the proposed license location, reflecting the high level of crime that occurs at the licensee's business.” AR at 39. The City also emphasized that the proposed location is just over 500 feet from Burlington High School.³ The Board solicited comments from its own enforcement officer, who repeated the City's concerns: “One of the Investigative Aids I work with goes to that high school and he says he knows kids who buy alcohol there all the time.... As a liquor officer and a parent I am concerned a spirits license for this premises is an invitation to add to the serious problem of youth access to alcohol.” AR at 41.

¶ 4 On August 31, the Board issued a Statement of Intent to Approve Liquor License Over the Objection from the City of Burlington. The Board found no liquor violations at that location in the past four years, the City's challenge of the Board's interpretation of I–1183 was not grounds for denial, and “[t]he City did not demonstrate any conduct that constitutes chronic illegal activity as defined by RCW 66.24.010(12) at this premise.” AR at 30. On September 11, the Board issued a final order denying the City an adjudicative hearing and issuing the license for the minimart.⁴

¶ 5 The City promptly appealed the Board's decision to Thurston County Superior Court. The City's opening brief asserted it had standing. The Board's response brief challenged the City's standing. After oral argument, the trial court allowed the parties to “supplement the record” with up to five pages each on the standing issue. Report of Proceedings (RP) (Jul. 19, 2013) at 40. The City submitted declarations from three individuals: Burlington Mayor Steve Sexton; City Planning Director Margaret Fleek, and City Police Lieutenant Tom Moser. The Board moved to strike this evidence, arguing that the court requested additional briefing, not evidence. The court struck the declarations, clarifying that it invited the parties to submit supplemental briefing only. In its oral ruling, the court apologized for any confusion and emphasized that “it was never the intent of the Court that there be supplemental declarations submitted....” RP (Aug. 23, 2013) at 21.

¶ 6 The court dismissed the City's petition for judicial review for lack of standing. The court found that the City failed to meet the “injury in fact” test “because there was no immediate, concrete or specific injury really that was argued or put into the record by the City, and the few statements that were made were really conjectural and hypothetical.” RP (Aug. 23, 2013) at 34. The trial court also denied the City's “request to overturn the Board's grant of a liquor license to HK International LLC.” Clerk's Papers (CP) at 225. The City appeals.

ANALYSIS

Standard of Review

¶ 7 Standing is reviewed de novo. In re Estate of Becker, 177 Wash.2d 242, 246, 298 P.3d 720 (2013). When reviewing a party's standing, this court stands in the same position as the superior court. Patterson v. Segale, 171 Wash.App. 251, 257, 289 P.3d 657 (2012). The party seeking judicial review of agency action—the City—bears the burden of establishing standing. KS Tacoma Holdings, LLC v. Shorelines Hr'gs Bd.,

166 Wash.App. 117, 127, 272 P.3d 876 (2012).

Standing

¶ 8 The APA delineates standing requirements that differ from the general standing test applicable in other contexts:

A person has standing to obtain judicial review of agency action if that person is aggrieved or adversely affected by the agency action. A person is aggrieved or adversely affected within the meaning of this section only when all three of the following conditions are present:

(1) The agency action has prejudiced or is likely to prejudice that person;

(2) That person's asserted interests are among those that the agency was required to consider when it engaged in the agency action challenged; and

(3) A judgment in favor of that person would substantially eliminate or redress the prejudice to that person caused or likely to be caused by the agency action.

RCW 34.05.530. “These three conditions are derived from federal case law.”⁵ Seattle Bldg. & Const. Trades Council v. Apprenticeship & Training Council, 129 Wash.2d 787, 793, 920 P.2d 581 (1996) (citing St. Joseph Hosp. & Health Care Ctr. v. Dep't of Health, 125 Wash.2d 733, 739, 887 P.2d 891 (1995).) The second prong is the “zone of interest” test, while the first and third prongs constitute the “injury-in-fact” test. Allan v. Univ. of Wash., 140 Wash.2d 323, 327, 997 P.2d 360 (2000).

1. Zone of Interest⁶

¶ 9 The parties agree that the City satisfies the zone of interest test. Nevertheless, the City's unique and compelling interest adversely affected by the Board's action here merits further discussion.

¶ 10 The zone of interest test limits judicial review of an agency action to litigants with a viable interest at stake, rather than individuals with only an attenuated interest in the agency action:

[N]ot every person who can show an injury in fact should be permitted to have judicial review. There are many people potentially affected by agency action in a complex interdependent society. To permit them all to seek review would overburden both the courts and the agencies. Hence, the courts have felt that a further filter was needed.... [T]he [zone of interest] test seeks another rational means for limiting review to those for whom it is most appropriate. Here, the focus is on legislative intent.... [T]he underlying question is whether the legislature intended the agency to consider the applicant's interests when taking the action it took.

William R. Andersen, The 1988 Washington Administrative Procedure Act—An Introduction, 64 Wash. L.Rev. 781, 824–25 (1989) ;⁷ see also Trades Council, 129 Wash.2d at 797, 920 P.2d 581 (“The test focuses on whether the Legislature intended the agency to protect the party's interests when taking the action at issue.” (...