DLC Corp., In re, 97-321

• Decision Date: 01 May 1998
• Docket Number: No. 97-321,97-321
• Citation: 167 Vt. 544,712 A.2d 389
• Court: Vermont Supreme Court
• Parties: In re DLC CORPORATION d/b/a Pour Man's Pub.

Page 389

712 A.2d 389

167 Vt. 544

In re DLC CORPORATION d/b/a Pour Man's Pub.

No. 97-321.

Supreme Court of Vermont.

May 1, 1998.

Lamar Enzor of Abatiell & Valerio, Rutland, for Plaintiff-Appellant.

William H. Sorrell, Attorney General, and William Griffin, Chief Assistant Attorney General, Montpelier, for Defendant-Appellee.

Before DOOLEY, MORSE, JOHNSON and SKOGLUND, JJ.

SKOGLUND, Justice.

DLC Corporation d/b/a/ Pour Man's Pub appeals an order of the Vermont Liquor Control Board, which issued a first and third-class liquor license to DLC subject to several conditions. DLC contends that the Board exceeded both its constitutional and statutory authority by placing those conditions upon DLC's liquor license. We affirm.

Laurel Chapman is the sole director and stockholder of DLC, which leased a building in Rutland to be used as a bar--Pour Man's Pub. The building had housed another bar--June's Corner Bar--previously, and Glenn David Chapman, Ms. Chapman's husband, managed June's Corner Bar for several months before DLC leased the premises. While not formally connected with DLC, Mr. Chapman helped develop DLC's business plan, and both the husband and wife had spoken of Pour Man's Pub as if it were a jointly-held business. After Pour Man's Pub opened, Mr. Chapman performed janitorial services and "odd jobs" for the pub. In addition, he tended bar part-time and arranged promotional events and hired entertainment for the pub.

In 1996, DLC applied to the Board for a liquor license, and a hearing was held. At that time, Mr. Chapman had been charged with, but not yet convicted of, the crime of conspiracy relating to the delivery of cocaine, in violation of 13 V.S.A. § 1404(a). On May 16, 1996, the Board granted DLC a first-class ¹ and third-class ² liquor license with the following condition It is a specific condition of the continued licensure that Mr. Glenn David Chapman NOT be convicted of the crime he is currently charged with or any other crime of any type, misdemeanor or felony. In the event a conviction of any crime occurs, these licenses shall be subject to immediate review by the Board of Liquor Control and treated as ... new license applications. The Board will then offer the licensee a hearing and make a decision whether or not to revoke the conditional license issued this date, whether or not to issue a new license, and if so, whether to subject and condition such further license.

In November 1996, a police officer discovered Mr. Chapman smoking marijuana and sitting in an automobile owned and licensed by DLC that was parked in an alley next to the Pour Man's Pub. A small amount of marijuana was also found on Mr. Chapman. He was arrested and later pleaded nolo contendere and was adjudicated guilty of the misdemeanor crime of possession of marijuana. See 18 V.S.A. § 4230(a).

Mr. Chapman's pending conspiracy charge was subsequently amended to a misdemeanor charge of possession of cocaine. On January 8, 1997, Mr. Chapman pleaded nolo contendere to the amended charge and was adjudicated guilty. ³ Upon learning that the condition under which DLC's license was granted had been violated, the Board informed DLC that if DLC did not request a hearing within five days then DLC's liquor license would be revoked. DLC requested a hearing, and the Board held proceedings on June 17, 1997. After the hearing, the Board issued DLC a first-class and third-class liquor license with the following conditions:

1. Glenn David Chapman shall have no legal or de facto ownership interest in or managerial responsibilities for the DLC Corporation, d/b/a Pour Man's Pub; and

2. Because of Glenn David Chapman's prior and repeated criminal activities, including those criminal activities taking place outside of licensed premises, the Board finds it necessary in the public interest and considering the public health, safety and morals, that in the event Glenn David Chapman were to be found on the licensed premises by any competent evidence therefore, this Board will issue an emergency closing order by which the liquor license issued to the DLC Corporation, d/b/a/ Pour Man's Pub will be immediately revoked pending a hearing which shall be granted on short notice, at which hearing the Board will determine whether once again Glenn David Chapman violated the condition under which the license was issued by being physically on the premises. If this Board finds that CHAPMAN was in fact upon the premises, the license in the discretion of this Board, will be permanently revoked.

This appeal followed.

DLC contends that by conditioning its liquor license upon the requirement that DLC "absolutely" control Mr. Chapman's access to the premises, the Board exceeded its statutory and constitutional authority. First, DLC contends that the second condition is improper because it has nothing to do with the fitness of DLC to conduct its business and sell liquor. In addition, DLC contends that the second condition interferes with its constitutionally-protected right to run a business. Finally, DLC alleges that DLC cannot lawfully control the movements of Mr. Chapman because Mr. Chapman is not a shareholder, owner, or employee of DLC and, therefore, the condition is unreasonable and impossible for DLC to enforce. We disagree.

Traditionally, federal and state treatment of intoxicating liquors has been markedly different than their treatment of most other items of commerce. This disparity in treatment is directly related to intoxicating liquor's "tendency ... to deprave public morals." Green Mountain Post No. 1 v. Liquor Control Bd., 117 Vt. 405, 409, 94 A.2d 230, 233 (1953). Thus, "it has come to be the generally accepted doctrine that the manufacture or sale of such liquors, and even their possession or use, is not a matter of 'common' 'inherent', or 'natural' right, but, if a right at all, is one held subject to the police power of the state." Id.; see also Billado v. Control Comm'rs, 114 Vt. 350, 354, 45 A.2d 430, 432 (1946) ( " 'There is no inherent right in a citizen to ... sell intoxicating liquors by retail; it is not a privilege of a citizen of the State or of a citizen of the United States.' ") (quoting Crowley v. Christensen, 137 U.S. 86, 91, 11 S.Ct. 13, 34 L.Ed. 620 (1890)).

Because of intoxicating liquor's potential danger to the community's safety and general welfare, a state has the authority to prohibit its manufacture and sale within the state's boundaries. See Billado, 114 Vt. at 354, 45 A.2d at 432. In place of a complete ban, a state may instead permit the manufacture and sale of intoxicating liquor " 'under such conditions as will limit to the utmost its evils.' " Id. at 354-55, 45 A.2d at 432 (quoting Crowley, 137 U.S. at 91, 11 S.Ct. 13). Vermont has chosen the second option--permitting the manufacture and sale of alcoholic beverages but under conditions set forth by the Legislature, see 7 V.S.A. §§ 1-807, and the Legislature has determined that it will exercise its authority in this area to its constitutionally-permissible limits. See id. § 1 ("This title is based on the taxing power and the police power of the state, and is for the protection of the public welfare, good order, health, peace, safety and morals of the people of the state, and all of its provisions shall be liberally construed for the accomplishment of the purposes set forth herein."). Therefore, the Legislature has great latitude in exercising and delegating its authority, fashioning conditions, and regulating the alcoholic beverage field. See, e.g., Green Mountain Post No. 1, 117 Vt. at 411, 94 A.2d at 234 ("What a legislative body may entirely prohibit, it certainly can regulate drastically.").

The Legislature created the Liquor Control Board to administer the laws that govern the distribution and sale of alcoholic beverages in Vermont. See 7 V.S.A. § 104. The Board has the express authority to "issue permits under such terms and conditions as it may impose for the furnishing, purchasing, selling, bartering, transporting, importing, exporting, delivering and possessing of alcohol...." Id. § 104(8); see also id. §§ 221-241 (sections delineating the duties of the Board with...