Dodge City Saloon, Inc. v. Washington State Liquor Control Bd.

• Decision Date: 28 February 2012
• Docket Number: No. 41454–6–II.,41454–6–II.
• Citation: 271 P.3d 363
• Parties: DODGE CITY SALOON, INC., Petitioner, v. WASHINGTON STATE LIQUOR CONTROL BOARD, Respondent.
• Court: Washington Court of Appeals

271 P.3d 363

DODGE CITY SALOON, INC., Petitioner,

v.WASHINGTON STATE LIQUOR CONTROL BOARD, Respondent.

No. 41454–6–II.

Court of Appeals of Washington, Division 2.

Feb. 28, 2012.

Ben Shafton, Attorney at Law, Vancouver, WA, for Petitioner.

Gordon P. Karg, Washington State Attorney General's Office, Olympia, WA, for Respondent.

QUINN–BRINTNALL, J.

¶ 1 Dodge City Saloon, Inc. appeals a Washington State Liquor Control Board's (Liquor Board) final order finding that it allowed an underage person into an area off limits to persons under the age of 21. Dodge City asserts that because the Liquor Board's compliance checks are administrative inspections subject to U.S. Const. amend. IV and Wash. Const. art. I, § 7 warrant requirements, the administrative law judge (ALJ) should have suppressed all evidence discovered as a result of the Liquor Board's warrantless inspection of Dodge City. Dodge City further argues that the ALJ should have dismissed the Liquor Board's complaint under the doctrines of entrapment and outrageous conduct and that the ALJ erred when it denied its motion for continuance. Last, Dodge City asserts it is entitled to attorney fees. We hold that because the Liquor Board's compliance check in this case was not a search, Dodge City cannot challenge it under either U.S. Const. amend. IV or Wash. Const. art. I, § 7. We also hold that Dodge City may not assert an entrapment or outrageous conduct defense in a civil administrative proceeding and that the ALJ did not err when it denied Dodge City's motion for continuance. We deny Dodge City's request for attorney fees and affirm.

FACTS

¶ 2 On October 10, 2008, the Liquor Board filed a complaint alleging that Dodge City, a nightclub in Vancouver, Washington, “allowed a person under the age of twenty-one to remain in a licensed premise off-limits to persons under the age of twenty-one, contrary to [former] RCW 66.44.310(1)(a) [ (2007) ] and WAC 314–11–020(2).” ¹ Administrative Record (AR) at 551. Generally, the Liquor Board issues licenses to businesses throughout Washington in accord with ch. 66.24 RCW. The Liquor Board monitors its licensees through a program of compliance checks wherein investigatory aides under the age of 21 attempt to enter a licensed establishment and make a controlled liquor purchase from the bar. A commissioned liquor enforcement officer supervises the compliance checks.

¶ 3 The basis of the Liquor Board's complaint at issue arose during a series of compliance checks of several establishments that began on May 16. On that evening, C.M., an investigative aide then 17 years old, carried his Washington State identification card and his vertical driver's license.² Both cards showed his date of birth as in October 1990. Liquor enforcement officer Marc Edmonds searched C.M. before the compliance check, mistakenly saw only the identification card, and allowed C.M. to proceed. Under the supervision of several liquor enforcement officers, including liquor enforcement officer Diana Peters, who was waiting inside the bar to observe in an undercover capacity, C.M. presented his identification card to Dodge City's bouncer, Jeffrey Hilker. Hilker inspected the card with a black light, told C.M. to pay a five dollar cover fee, and stamped C.M.'s hand. C.M. entered Dodge City and remained inside for three minutes.

¶ 4 After C.M. left Dodge City, liquor enforcement officer Almir Karic went inside to serve an administrative violation notice (AVN) on the bartender, Erick Gill. The AVN charged Hilker with violating former RCW 66.44.310(1)(a), which prohibits allowing a person under 21 years old into an area considered off limits. Karic noted in the AVN summary that Hilker stated he thought C.M.'s identification card was a horizontal license and had a different birthday.

¶ 5 Dodge City made pretrial motions to suppress all evidence and testimony by the Liquor Board, to dismiss the Board's entire case, and to continue. The ALJ denied the motions. During the Liquor Board's formal hearing, Dodge City argued that C.M. looked “deceptively mature” and that “the [Liquor] Board was essentially attempting to entrap the Licensee.” AR at 503. The ALJ rejected Dodge City's entrapment argument, reasoning that

[C.M.'s] firsthand testimony was that Mr. Hilker not only looked at his valid identification card, but also placed it under the black light of a machine especially designed to read such identification. The fulcrum point upon which the [Liquor] Board's key argument rests is that card itself stated clearly when [C.M.] would turn 18, which also clearly meant that at the time he was not 21 either. Irrespective of how [C.M.] looked, his valid identification card indicated that he was too young to be granted admittance.

AR at 505. The ALJ then entered an initial order in favor of the Liquor Board, concluding that the Liquor Board had met its burden to “establish by a preponderance of the evidence that: a) the Licensee or an employee, b) allowed, c) a person under the age of twenty-one, d) to remain, e) in an off-limits section of the premises.” AR at 504. The ALJ affirmed the AVN, sustained the complaint, and suspended Dodge City's license for seven days.

¶ 6 Dodge City timely appealed, but the Liquor Board Enforcement Division did not timely respond. Thus, in making its determination, the Liquor Board's appellate division relied on the Liquor Board's briefing submitted before entry of the initial order. On December 29, 2009, the Liquor Board's appellate division issued a final order affirming and adopting the ALJ's initial order, except to correct apparent scrivener's errors. The Liquor Board suspended Dodge City's liquor license privileges for seven days, from February 16, 2010 until February 23, 2010.

¶ 7 Dodge City appealed the Liquor Board's final order in Clark County Superior Court, which affirmed on October 14, 2010. Dodge City timely appeals.

DISCUSSION

¶ 8 Dodge City argues that because the Liquor Board's May 16, 2008 compliance check violated the Fourth Amendment and article I, section 7, the ALJ erred in denying its motion to suppress all evidence and testimony from state actors. Dodge City further argues that the ALJ erred in denying its motions to dismiss the Liquor Board's complaint under the doctrines of entrapment and outrageous conduct, and its motion for continuance. Last, Dodge City asserts that the trial court erred in denying its request for attorney fees under RCW 4.84.350. We affirm.

¶ 9 Under the Administrative Procedures Act (APA), ch. 34.05 RCW, Dodge City bears the burden of demonstrating the final order's invalidity. RCW 34.05.570(1)(a). We sit in the same position as the superior court when reviewing an agency action. Valley Fruit v. Dep't of Revenue, 92 Wash.App. 413, 417, 963 P.2d 886 (1998) (citing Tapper v. State Emp't Sec. Dep't, 122 Wash.2d 397, 402, 858 P.2d 494 (1993)), review denied, 137 Wash.2d 1017, 978 P.2d 1098 (1999). We review the record before the reviewing administrative agency that issued the final order, here the Liquor Board; we do not consider the record before the superior court. Valley Fruit, 92 Wash.App. at 417, 963 P.2d 886 (citing Inland Empire Distribution Sys., Inc. v. Utils. & Transp. Comm'n, 112 Wash.2d 278, 282, 770 P.2d 624 (1989)). Because Dodge City does not challenge the Liquor Board's findings, they are verities. Bullseye Distrib. LLC v. Wash. State Gambling Comm'n, 127 Wash.App. 231, 236, 110 P.3d 1162 (citing Hertzke v. Dep't of Ret. Sys., 104 Wash.App. 920, 927, 18 P.3d 588 (2001)), review denied, 155 Wash.2d 1027, 126 P.3d 820 (2005). We review conclusions of law de novo. Bullseye, 127 Wash.App. at 237, 110 P.3d 1162 (citing RCW 34.05.570(3)(d)).

¶ 10 In a de novo review of an agency decision, we may reverse the Liquor Board's final order only if the order, or the statute or rule on which the order is based, is in violation of constitutional provisions on its face or as applied, the agency has erroneously interpreted or applied the law, or the order is arbitrary or capricious. RCW 34.05.570(3)(a), (d), (i). If Dodge City is entitled to relief, we may order the Liquor Board to take action required by law or set aside, enjoin, or stay the final order. RCW 34.05.574(1)(b). Generally, we must remand to an administrative agency's board for modification of the final order, unless remand is inappropriate or would cause unnecessary delay. RCW 34.05.574(1)(b).

Compliance Checks

¶ 11 Dodge City asserts that the ALJ should have suppressed all of the Liquor Board's evidence because the compliance checks violate constitutional protections against unreasonable searches and seizures. U.S. Const. amend. IV; Wash. Const. art. I, § 7. Specifically, Dodge City argues that (1) the compliance check constituted a Fourth Amendment “search” and was therefore an administrative inspection, and (2) such search violated the Fourth Amendment warrant requirement. See Camara v. Mun. Court of City & County of San Francisco, 387 U.S. 523, 534, 87 S.Ct. 1727, 18 L.Ed.2d 930 (1967). The Liquor Board asserts that the compliance checks fall “squarely within the [Liquor] Board's authority to enforce liquor laws and to regulate those who voluntarily engage in the pervasively regulated liquor sales industry.” Br. of Resp't at 9. The Liquor Board argues that because it conducts compliance checks in areas open to the public for business, e.g., the front door and bar, Dodge City cannot have any expectation of privacy in those areas. Because the Liquor Board's compliance check was not a search under the meaning of either the Fourth Amendment or article I, section 7, we hold that Dodge City cannot challenge the compliance check at issue here.

¶ 12 Generally, the presiding officer of a hearing has discretion to admit evidence, including hearsay evidence, if the evidence “is the kind of evidence on which reasonably prudent persons are accustomed to rely in the conduct of their affairs.” RCW 34.05.452(1). The presiding...