Evineyard v. Alcoholic Beverages Control

• Decision Date: 18 March 2008
• Docket Number: SJC-09948.
• Citation: 882 N.E.2d 334,450 Mass. 825
• Parties: eVINEYARD RETAIL SALES-MASSACHUSETTS, INC. v. ALCOHOLIC BEVERAGES CONTROL COMMISSION.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

882 N.E.2d 334

450 Mass. 825

eVINEYARD RETAIL SALES-MASSACHUSETTS, INC. v. ALCOHOLIC BEVERAGES CONTROL COMMISSION.

SJC-09948.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued January 10, 2008.

Decided March 18, 2008.

David Hadas, Assistant Attorney General, for the defendant.

Mitchel S. Ross (Francis X. Hubbard & Stephen V. Miller with him), Boston, for the plaintiff.

Present: MARSHALL, C.J., GREANEY, IRELAND, SPINA, COWIN, CORDY, & BOTSFORD, JJ.

CORDY, J.

Wine.com, Inc. (wine.com), is a corporation in the business of selling wine directly to consumers throughout the country. The plaintiff, eVineyard Retail Sales-Massachusetts, Inc. (eVineyard), is a wholly owned subsidiary of wine.com, through which it sells wine to customers in Massachusetts.¹ eVineyard is licensed by G.L. c. 138, § 15, to sell at retail alcoholic beverages that are "not to be drunk on the premises" to citizens and residents of the Commonwealth.

As part of an Attorney General "sting" operation, an underage decoy — a nineteen year old cooperating individual (CI) — ordered wine from wine.com over the Internet. To place her order, the CI opened an account with eVineyard, submitting her name, address, and a fictitious date of birth, which indicated that she was twenty-two years of age. She agreed to the Web site's terms of service, which state that wine will not be sold or delivered to persons under the age of twenty-one years.²

The CI's wine order was processed by eVineyard, and delivered to her by Federal Express, with whom eVineyard contracts for the delivery of all of its orders. In the contract, Federal Express agreed to deliver wine orders to customers in compliance with certain age verification requirements. eVineyard paid Federal Express an extra two dollars per delivery for its carriers to check identification and verify that each recipient is twenty-one years of age or older.³ eVineyard places labels on its packages informing the carrier that the packages contain alcohol and that a driver should not deliver the package to anyone under twenty-one years of age or visibly intoxicated, and that, if reasonable doubt about age exists, the driver should verify age and record the recipient's driver's license number or other identification. Federal Express also requires that certain labels be used on packages containing alcohol. Federal Express delivered the wine, in this case, to the underage CI without asking for identification or proof of age.

As a result of this and a second sting operation, eVineyard was administratively charged with two counts of violating G.L. c. 138, § 34, which prohibits the sale or delivery of alcohol to minors. The Alcoholic Beverages Control Commission (commission) held a hearing to assess whether eVineyard violated G.L. c. 138, § 34. The commission found that it had, and ordered a ten-day suspension of its license, five days for each violation. Only the first violation is before us.⁴ Federal Express, which is separately licensed by the commission to "transport and deliver ... alcoholic beverages" in the Commonwealth pursuant to G.L. c. 138, § 22, admitted responsibility for delivering to a minor, in connection with this same sale. Accordingly, Federal Express was found to have violated G.L. c. 138 § 34, and the commission ordered a three-day suspension of its license to deliver alcohol.

eVineyard filed a petition for review of the commission's decision in the Superior Court, pursuant to G.L. c. 30A, § 14, challenging the finding of a violation, and, in the alternative, contending that it was entrapped into violating the law. A Superior Court judge allowed eVineyard's motion for judgment on the pleadings, concluding that the "single wrong that violated the spirit of G.L. c. 138, § 34," was the delivery of wine by Federal Express. We transferred the commission's appeal to this court on our own motion. We reverse.

Scope of review. "The scope of review of the commission's decision, both in the Superior Court and in [the appellate courts], is defined by G.L. c. 30A, § 14." Howard Johnson Co. v. Alcoholic Beverages Control Comm'n, 24 Mass.App.Ct. 487, 490, 510 N.E.2d 293 (1987), quoting Burlington v. Labor Relations Comm'n, 390 Mass. 157, 161, 454 N.E.2d 465 (1983). A decision may be set aside if "the substantial rights of any party may have been prejudiced" because it is based on an error of law or on an unlawful procedure, is arbitrary or capricious, is unwarranted by the facts found by the agency, is unconstitutional, is in excess of statutory authority or jurisdiction, or is not supported by substantial evidence. G.L. c. 30A, § 14(7). Substantial evidence is "such evidence as a reasonable mind might accept as adequate to support a conclusion." G.L. c. 30A, § 1(6).

"Our review of the commission's decisions under the Liquor Control Act, G.L. c. 138, is undertaken within the context of the commission's considerable statutory powers." BAA Mass., Inc. v. Alcoholic Beverages Control Comm'n, 49 Mass. App.Ct. 839, 842, 733 N.E.2d 564 (2000). General Laws c. 10, § 71, confers on the commission "general supervision of the conduct of the business of ... selling alcoholic beverages." The commission also has "comprehensive powers of supervision over licensees, including the power to revoke, modify, or suspend licenses." Howard Johnson Co. v. Alcoholic Beverages Control Comm'n, supra at 491, citing G.L. c. 138, § 23.

The reviewing court may not substitute its judgment on questions of fact for that of the agency. Olde Towne Liquor Store, Inc. v. Alcoholic Beverages Control Comm'n, 372 Mass. 152 154, 360 N.E.2d 1057 (1977). When questions of law are at issue, we exercise de novo review, giving "substantial deference to a reasonable interpretation of a statute by the administrative agency charged with its administration [and] enforcement." Commerce Ins. Co. v. Commissioner of Ins., 447 Mass. 478, 481, 852 N.E.2d 1061 (2006).

Mootness. eVineyard first argues that the suspension imposed on it is unenforceable because the license it was holding at the time of the violation, March of 2004, expired, and it subsequently obtained a new license.⁵ Consequently, it contends, the commission's decision is moot. We disagree.

General Laws c. 138, § 15, authorizes the issuance of licenses for the sale of alcohol, at retail, for consumption off the premises.⁶ Such a license is renewed annually. Id.

The suspension of a license does not merely impact the actual license held by the licensee; it impacts the licensee's right to hold a license. See Wang v. Board of Registration in Med., 405 Mass. 15, 19, 537 N.E.2d 1216 (1989) (revocation of registration revoked right to reestablish status as licensed physician in Massachusetts by completing renewal process). Whether through a new or renewed certificate issued by the licensing authority, a licensee obtains the privilege of selling alcoholic beverages. G.L. c. 138, §§ 15, 16A. See Jubinville v. Jubinville, 313 Mass. 103, 106, 46 N.E.2d 533 (1943) ("A liquor license once granted does not run with the business. It is a nontransferable personal privilege, revocable at pleasure, and conveying no vested interest to the licensee"). That privilege may be suspended at any time by the commission "upon satisfactory proof that [a licensee] has violated or permitted a violation of any condition thereof, or any law of the commonwealth." G.L. c. 138, § 64. See G.L. c. 138, § 23.

eVineyard's position would allow a licensee facing suspension to evade the sanction by allowing its former license to expire and then obtaining a new one. This is plainly not what the Legislature intended with regard to G.L. c. 138, § 64. Cf. Perry v. Medical Practice Bd., 169 Vt. 399, 404, 737 A.2d 900 (1999), and cases cited ("It is well settled that a licensee may not evade disciplinary action merely by resigning or allowing a license to expire.... Otherwise, the licensee could apply for admission in another jurisdiction, or subsequently reapply in the same jurisdiction, and maintain that he or she has never been disciplined for professional misconduct." [Emphasis in original] ).⁷ The commission may proceed to suspend a licensee's current license based on an offense committed by it under its prior license.

Statutory violation. General Laws c. 138, § 34, makes it unlawful for anyone to make "a sale or delivery of any alcoholic beverage or alcohol to any person under 21 years of age" (emphasis added).⁸ The statute evidences the Legislature's strong policy against the sale of alcoholic beverages to minors. See Michnik-Zilberman v. Gordon's Liquor, Inc., 390 Mass. 6, 10-12, 453 N.E.2d 430 (1983); Howard Johnson Co. v. Alcoholic Beverages Control Comm'n, 24 Mass.App.Ct. 487, 492-493, 510 N.E.2d 293 (1987). This policy is consistently recognized in other provisions of G.L. c. 138, including § 34A (prohibiting purchase of alcohol by persons under age of twenty-one years and misrepresentation of age), § 34B (requiring identification cards), and § 34C (prohibiting transportation of alcohol by minor). The purpose of these provisions is to protect the welfare of minors from the danger of alcohol. See Fran's Lunch, Inc. v. Alcoholic Beverages Control Comm'n, 45 Mass.App.Ct. 663, 664, 700 N.E.2d 843 (1998).

It is well settled that a "statute is to be construed as written, in keeping with its plain meaning." Stop & Shop Supermarket Co. v. Urstadt Biddle Props., Inc., 433 Mass. 285, 289, 740 N.E.2d 1286 (2001), and cases cited. The plain language of the statute is unambiguous: it forbids both the sale and the delivery of alcohol to minors.⁹ The commission's interpretation of the statute as allowing it to proceed separately against both the licensed seller of alcohol, eVineyard, and the licensed deliverer, Federal Express, accords with the statute's language and with its legislative intent.

There is no question in this case that both a sale and a delivery of alcohol was made to a person under the age of twenty-one years...