Cooper v. Hauschild, s. 18702

• Decision Date: 01 December 1994
• Docket Number: Nos. 18702,18703,s. 18702
• Citation: 527 N.W.2d 908
• Parties: Jim COOPER, Plaintiff and Appellant, v. Wayne HAUSCHILD, Betty Prunty, Sam Artz, Mike Oster, and Barb Murra, as City Commissioners of the City of Brookings and the City of Brookings, a Municipal Corporation, Defendants and Appellees. . Considered on Briefs
• Court: South Dakota Supreme Court

Page 908

527 N.W.2d 908

Jim COOPER, Plaintiff and Appellant, v. Wayne HAUSCHILD, Betty Prunty, Sam Artz, Mike Oster, and Barb Murra, as City Commissioners of the City of Brookings and the City of Brookings, a Municipal Corporation Defendants and Appellees.

Nos. 18702, 18703.

Supreme Court of South Dakota.

Considered on Briefs Dec. 1, 1994.

Decided Feb. 15, 1995.

Rehearing Denied March 14, 1995.

Jim Cooper, pro se.

Alan F. Glover, of Denholm and Glover, Brookings, for defendants and appellees.

PER CURIAM

Jim Cooper ("Cooper") appeals from a judgment quashing a Writ of Mandamus, arising from proceedings relating to his application to the Brookings City Commission ("City") for a malt beverage license. We affirm in part, reverse in part, and remand.

FACTS

On November 22, 1993, Cooper applied for a Uniform Alcoholic Beverage License to the City of Brookings. In his application, he requested a retail on/off sale malt beverage license for a business to be known as JD's Casino located in Brookings. The Notice of Public Hearing on Application for Alcoholic Beverage License was published as required by SDCL 35-2-5.

On December 14, 1993, City held a regular meeting at which the public hearing on Cooper's application was considered, together with objections to the application. City Commissioners Wayne Hauschild, Sam Artz, and Mike Oster voted to approve the application, while Commissioners Betty Prunty and Barb Murra voted to disapprove it. The 3-2 vote approving Cooper's application was recorded in the minutes of the City Commission meeting. Despite the approval of Cooper's application, the City's approval was not endorsed on Cooper's license application or forwarded to the State Department of Revenue for actual issuance of the license.

At its next regular weekly meeting on December 21, 1993, Commissioner Oster (who had previously voted to approve the license) made a motion to reconsider the approval of Cooper's license application. The motion was approved by a unanimous vote. Further action was deferred until the January 4, 1994 meeting, also by unanimous vote.

At the time of the vote to reconsider the approval of Cooper's license, there had been no change in Cooper's character, and no change in the proposed location of the business. After the vote to reconsider, however, Cooper informed the City he no longer intended to combine his alcoholic beverage license and video lottery machines with the operations of a laundromat, but would operate only a bar and casino.

At the following meeting on December 28, 1993, a motion was made to introduce and give first reading to proposed City Ordinance 30-93. The Ordinance proposed to prohibit the consideration for approval of any new or additional malt beverage retailer licenses or on-sale wine licenses in the City of Brookings. The motion carried by unanimous vote and the first reading was conducted.

The next regular meeting was the January 4, 1994 meeting. At this meeting, Ordinance 30-93 was read for its second time and approved by a unanimous vote. Also on the agenda was action on the motion to reconsider the approval of Cooper's malt beverage license. Another motion was made and approved to defer further action on Cooper's license until April.

Cooper then brought an action for an Alternative Writ of Mandamus to compel City to endorse its approval, granted at the December 14 meeting, on the license application and forward it to the Department of Revenue for issuance of the license. The trial court, after a complete trial on the matter, quashed Cooper's Alternative Writ of Mandamus, holding the City had the authority to reconsider its prior approval of Cooper's license but the Court held that Ordinance 30-93 was invalid. Both parties appeal.

ISSUE

DID THE TRIAL COURT ERR IN DETERMINING THAT CITY COULD

RECONSIDER ITS PRIOR APPROVAL OF COOPER'S MALT

BEVERAGE LICENSE APPLICATION?

Cooper contends City's action in approving his license was not subject to reconsideration. He argues the statutory scheme for the approval and issuance of alcoholic beverage licenses does not authorize a local government board which has approved a license to take action which has the effect of revoking that license. As a result, according to Cooper, upon approval of his license he was entitled to operate until such time as the license expired or was revoked by the Department of Revenue.

An application for a license to sell alcoholic beverages within a city must be submitted to, and approved by, the city board of commissioners, which has "discretion to approve or disapprove the application depending on whether it deems the applicant a suitable person to hold such license and whether it considers the proposed location suitable." SDCL 35-2-1.2. ¹ Luke v. Mellette County, 508 N.W.2d 6, 7 (S.D.1993). While the governing body has broad discretion in acting on the application, that discretion is limited to consideration of the suitability of the applicant and proposed location. See Luke; Rushmore State Bank v. Kurylas, Inc., 424 N.W.2d 649 (S.D.1988). There is no dispute between the parties that the public hearing was held on Cooper's application as required by SDCL 35-2-5, ² and City found both applicant and location to be suitable.

Cooper claims the City could not reconsider its action. SDCL 35-2-5.2 sets out the procedure to be followed once a license application is approved by the local governing board:

In the event of the approval of such application, the approval shall be endorsed thereon and also upon the present license and the licensee shall thereupon be entitled to operate under the license for the succeeding licensing year. However, if any transfer of ownership or location occurs, or if the licensee shall have been convicted of any criminal offense during the past licensing year, the application together with the approval of the local governing body shall be forwarded to the secretary of revenue who shall have discretion to approve or disapprove the same. The license fee shall be deposited in the general fund of the first or second class municipality or county.

(Emphasis added).

This statute has not previously been passed upon by this Court. The express language, however, employs the mandatory term "shall" both in directing that approval be endorsed on the application and in stating the entitlement to operate based on the approval. See Farmland Ins. Co. v. Heitmann 498 N.W.2d 620, 624 (S.D.1993) (the word "shall" in a statute is mandatory).

Was the City required to endorse its approval and forward it to the Department of Revenue? Alternatively, may the City wait and, in the intervening time, reconsider and adopt an ordinance effectively denying the application? Chapter 35-2 does not provide any guidance as to the time within which the approval must be endorsed on the application after the governing board has approved it. City relies upon a procedural argument that it has adopted Roberts Rules of Order which permit them to reconsider any action they have previously taken.

Essentially, City is attempting to do indirectly what it cannot do directly. That is, after a license has been approved and issued, City does not have the authority to revoke or suspend the license, only the Department of Revenue can do so. SDCL 35-2-11.1. ³ City's authority is limited to making a recommendation to the Secretary of Revenue that an application which it has approved be suspended or revoked. Id. In addition, SDCL 35-2-10 (license may be revoked or suspended by secretary of revenue), SDCL 35-2-12 (institution of revocation proceedings), and SDCL 35-2-21 (suspension in lieu of revocation), all make it clear that any action to affect the status of an approved license lies within the jurisdiction of the Secretary of Revenue. Janssen v. Maxam, 289 N.W.2d 256 (S.D.1980).

Since City does not have the authority to suspend or revoke Cooper's license once they had approved it, City could not reconsider its approval and then indefinitely suspend action on it as a mechanism to prevent him from operating. This Court will not...