Dallas Merchant's and Concessionaire's Ass'n v. City of Dallas

• Decision Date: 07 April 1993
• Docket Number: No. D-2159,D-2159
• Parties: DALLAS MERCHANT'S AND CONCESSIONAIRE'S ASSOCIATION et al., Petitioners, v. CITY OF DALLAS, Respondent.
• Court: Texas Supreme Court

Page 489

852 S.W.2d 489

DALLAS MERCHANT'S AND CONCESSIONAIRE'S ASSOCIATION et al., Petitioners, v. CITY OF DALLAS, Respondent.

No. D-2159.

Supreme Court of Texas.

April 7, 1993.

Rehearing Overruled June 3, 1993.

Richard M. Lannen, Diane Snelson, Eric V. Moye, Eric R. Cromartie, David C. Godbey, Andrew L. Siegel, Dallas, for petitioners.

Dan Morales, Austin, John Rogers, Dallas, W. Reed Lockhoof, Austin, Analeslie U. Muncy, Fort Worth, Angela Washington,

Sam A. Lindsay, Dallas, for respondent

OPINION

HIGHTOWER, Justice.

In this cause, we consider whether an ordinance of a home-rule city prohibiting the sale of alcoholic beverages within 300 feet of a residential area is preempted by the Texas Alcoholic Beverage Code (TABC). In 1990, the Dallas Merchants and Concessionaires Association, the Texas Package Stores Association, and other individuals (hereinafter "Merchants") filed suit against the City of Dallas ("City") for declaratory and injunctive relief. The trial court held that the ordinance was preempted by the TABC. The court of appeals reversed. 823 S.W.2d 347. We hold that an ordinance of a home-rule city prohibiting the sale of alcoholic beverages within 300 feet of a residential area is preempted by the TABC. Consequently, we reverse the judgment of the court of appeals and affirm the judgment of the trial court.

On September 30, 1987, the Dallas City Council ("Council") passed Ordinance No. 19694 ("Ordinance"), which created new zoning categories for South Dallas. The Ordinance imposed a D-1 overlay on certain areas of South Dallas and exempted certain areas that are outside of and do not effect the residential areas of South Dallas. In this D-1 overlay area, no business is allowed to sell or serve alcoholic beverages within 300 feet of residentially zoned properties not located on a freeway service road or other specified road. However, a business in a D-1 overlay area may sell or serve alcoholic beverages if the Council grants a specific use permit (SUP). On October 12, 1988, the Council approved Resolution 883306, which established the guidelines for evaluating SUP applications for selling or serving alcoholic beverages in areas of South Dallas affected by the D-1 overlay. In June 1990, the Merchants filed suit against the City.

Following a bench trial, the trial court rendered judgment which, among other things, granted the declaratory and injunctive relief requested by the Merchants. The trial court concluded that the D-1 overlay provisions of the Ordinance conflicted with the TABC and was void to that extent under article XI, section 5 of the Texas Constitution. ¹ The trial court also permanently enjoined the City from enforcing the D-1 overlay provisions of the Ordinance. The court of appeals reversed and rendered judgment.

I.

The Merchants argue that the Ordinance is preempted by the TABC. We agree.

PREEMPTION OF HOME-RULE CITIES

To determine whether the Ordinance is preempted by the Texas Alcoholic Beverage Code, we must decide whether the Legislature, by enacting and amending the TABC, preempted ordinances of home-rule cities that prohibit the sale of alcoholic beverages under these circumstances. Home-rule cities have broad discretionary powers, provided that no ordinance "shall contain any provision inconsistent with the Constitution of the State, or of the general laws enacted by the Legislature of this State." TEX. CONST. art. XI, § 5. Home-rule cities possess the full power of self government and look to the Legislature not for grants of power, but only for limitations on their power. MJR's Fare of Dallas v. City of Dallas, 792 S.W.2d 569, 573 (Tex.App.--Dallas 1990, writ denied).

An ordinance of a home-rule city that attempts to regulate a subject matter preempted by a state statute is unenforceable to the extent it conflicts with the state statute. See City of Brookside Village v. Comeau, 633 S.W.2d 790, 796 (Tex.1982), cert. denied, 459 U.S. 1087, 103 S.Ct. 570, 74 L.Ed.2d 932 (1982). However, "the mere fact that the legislature has enacted a law addressing a subject does not mean the complete subject matter is completely preempted." City of Richardson v. Responsible Dog Owners, 794 S.W.2d 17, 19 (Tex.1990). "[A] general law and a city ordinance will not be held repugnant to each other if any other reasonable construction leaving both in effect can be reached." City of Beaumont v. Fall, 116 Tex. 314, 291 S.W. 202, 206 (1927). Thus, if the Legislature chooses to preempt a subject matter usually encompassed by the broad powers of a home-rule city, it must do so with unmistakable clarity. See City of Sweetwater v. Geron, 380 S.W.2d 550, 552 (Tex.1964).

TEXAS ALCOHOLIC BEVERAGE CODE

In 1977, the Legislature codified the Texas Liquor Control Act into the TABC. ² Prior to the codification, several courts of appeals held that various ordinances of home-rule cities prohibiting the sale of alcoholic beverages were not preempted by the Texas Liquor Control Act. See, e.g., City of Clute v. Linscomb, 446 S.W.2d 377 (Tex.Civ.App.--Houston [1st Dist.] 1969, no writ); Louder v. Texas Control Board, 214 S.W.2d 336 (Tex.Civ.App.--Beaumont 1948, writ ref'd n.r.e.); Eckert v. Jacobs, 142 S.W.2d 374 (Tex.Civ.App.--Austin 1940, no writ). Subsequent to the codification, the Eleventh Court of Appeals held that the TABC did not preempt ordinances prohibiting the sale of alcoholic beverages. See Young, Wilkinson & Roberts v. City of Abilene, 704 S.W.2d 380, 383 (Tex.App.--Eastland 1985, writ ref'd n.r.e.) ("We hold that the Constitution and general statutes of this State do not deny the City [a home rule city] the right to regulate the area of the City in which liquor could be sold."); Abilene Oil Distributors v. City of Abilene, 712 S.W.2d 644 (Tex.App.--Eastland 1986, writ ref'd n.r.e.).

Subsequently, in 1987, the Legislature added section 109.57 to the TABC and further amended it in 1991 to read in part:

(a) Except as expressly authorized by this code, a regulation, charter, or ordinance promulgated by a governmental entity of this state may not impose stricter standards on premises or businesses required to have a license or permit under this code than are imposed on similar premises or businesses that are not required to have such a license or permit.

(b) It is the intent of the legislature that this code shall exclusively govern the regulation of alcoholic beverages in this state, and that except as permitted by this code, a governmental entity of this state may not discriminate against a business holding a license or permit under this code.

(c) Neither this section nor Section 1.06 of this code affects the validity or invalidity of a zoning regulation that was formally enacted before June 11, 1987 and that is otherwise valid, or any amendment to such a regulation enacted after June 11, 1987 if the amendment lessens the restrictions on the licensee or permittee or does not impose additional restrictions on the licensee or permittee. For purposes of this subsection, "zoning regulation" means any charter provision, rule regulation, or other enactment governing the location or use of buildings, other structures, and land.

TEX.ALCO.BEV.CODE ANN. § 109.57(a), (b) & (c) (Vernon Supp.1992). The Legislature's intent is clearly expressed in section 109.57(b) of the TABC--the regulation of alcoholic beverages is exclusively governed by the provisions of the TABC unless otherwise provided. ³ TEX.ALCO.BEV.CODE ANN. § 109.57(b) (Vernon Supp.1992). Section 109.57 clearly preempts an ordinance of a home-rule city that regulates where alcoholic beverages are sold under most circumstances. ⁴ Accordingly, we hold that, to the extent of any conflict, the TABC preempts the Ordinance. ⁵

II.

The City argues that if section 109.57 preempts an ordinance of a home-rule city regulating where alcoholic beverages are sold, sections 61.37, 109.31, 109.32, and 109.33 will be rendered meaningless. ⁶ We disagree.

Section 109.57 expressly states that the TABC will exclusively govern the regulation of alcoholic beverages except as otherwise provided by the TABC. ⁷ TEX.ALCO.BEV.CODE ANN. § 109.57 (Vernon Supp.1992). Thus, the TABC allows ordinances of home-rule cities to prohibit the sale of alcoholic beverages only under limited circumstances. Pursuant to section 109.31, the sale of liquor may be prohibited within residential areas only by charter. TEX.ALCO.BEV.CODE ANN. § 109.31 (Vernon 1978). Under section 109.32, the sale of beer may be prohibited within residential areas by ordinance or charter. TEX.ALCO.BEV.CODE ANN. § 109.32 (Vernon 1978). These options are still available to the City. However, in this case, the Ordinance attempts to prohibit the sale of liquor and beer in non-residential areas. An ordinance may not prohibit the sale of beer in non-residential areas or the sale of liquor in residential or non-residential areas. See TEX.ALCO.BEV.CODE ANN. §§ 109.31-32 (Vernon 1978).

Section 109.33 permits a county or city to prohibit the sale of alcoholic beverages by a dealer whose place of business is within 300 feet of a church, school, or public hospital. TEX.ALCO.BEV.CODE § 109.33(a) (Vernon Supp.1992). This option is still available to the City. ⁸ However, in this case, the Ordinance attempts to prohibit the sale of alcoholic beverages within 300 feet of a residential area--not within 300 feet of a church, school or public hospital.

Likewise, section 61.37 does not conflict with section 109.57. Section 61.37 states that a city secretary will merely certify whether an ordinance or charter prohibits the sale of alcoholic beverages in the area where alcoholic beverages will potentially be sold. TEX.ALCO.BEV.CODE ANN. § 61.37 (Vernon 1978). Under this section, certification is properly withheld only if an ordinance or charter prohibits the sale of alcoholic beverages in a manner allowed by the TABC. See TEX.ALCO.BEV.CODE ANN. § 61.37 (Vernon 1978).

We recognize the benefits of ordinances which...