Howard Johnson Co. v. Alcoholic Beverages Control Com'n

• Decision Date: 01 October 1987
• Citation: 510 N.E.2d 293,24 Mass.App.Ct. 487
• Parties: HOWARD JOHNSON COMPANY v. ALCOHOLIC BEVERAGES CONTROL COMMISSION.
• Court: Appeals Court of Massachusetts

Page 293

510 N.E.2d 293

24 Mass.App.Ct. 487

HOWARD JOHNSON COMPANY v. ALCOHOLIC BEVERAGES CONTROL COMMISSION.

Appeals Court of Massachusetts Suffolk.

Argued March 16, 1987.

Decided July 17, 1987.

Further Appellate Review Denied Oct. 1, 1987.

Douglas H. Wilkins, Asst. Atty. Gen., for defendant.

Frank A. Marinelli, Braintree, for plaintiff.

Before PERRETTA, KAPLAN and SMITH, JJ.

SMITH, Justice.

Howard Johnson Company, doing business as The Ground Round (licensee) in Braintree, was charged by the Alcoholic Beverages Control Commission (commission) with two counts of sale or delivery of alcoholic beverages to minors, in violation of G.L. c. 138, § 34, as amended through St. 1982, c. 627, § 13. In addition, it was charged with one count of operating a licensed premises without a proper manager. G.L. c. 138, § 26.

The following evidence was heard by the commission on the sale to minors charges. On October 18, 1984, the commission's investigators entered an establishment operated by the licensee in Braintree. They observed two young patrons drinking alcoholic beverages. After questioning, the patrons stated that they were underage, one seventeen years of age, the other eighteen. ¹ A waitress admitted serving them and not requesting proof of age from either of them. She stated that both minors had been in the establishment three or four days earlier and that they had shown her Massachusetts drivers' licenses or liquor purchase identification cards that showed them to be of legal age. ² The minors had no identification with them on October 18, 1984.

The licensee based its defense on the provisions of G.L. c. 138, § 34B, as amended by St. 1979, c. 15, § 8. That statute provides that it is a defense to a proceeding for suspension of a liquor license if the "licensee, or agent or employee thereof, ... reasonably relies on ... a liquor purchase identification card or [Massachusetts] motor vehicle license ... for proof of a person's identity and age...." In the instant case, the licensee contended that its liquor license should not be suspended because it reasonably relied on the identifications displayed by the patrons three or four days earlier. The commission rejected that defense, ruling that "[f]or reliance on identification as proof of age to be reasonable, the display of such identification must be on the day or evening of the transaction in question."

In regard to the improper manager charge, under the provisions of G.L. c. 138, § 26, the licensee was required to appoint a manager to have "full authority and control of the premises ... and of the conduct of all business therein relative to alcoholic beverages...." After discovering the two sales to minors, the investigators asked to see the liquor license for the premises. When the license was produced, it listed an individual who had left the employ of the licensee some time before September, 1983. The licensee told the commission that it had filed on September 13, 1983, an application with the local licensing authority requesting a change of its manager. However, the local board failed to act on the application despite several requests of the licensee. The licensee admitted that, for over a year, it failed to report the problem to the commission. The commission ruled that the licensee had violated G.L. c. 138, § 26. It stated that "the failure of the licensee to bring this problem to the attention of the [c]ommission during a full year is not consistent with its claim that it did everything possible to record its change of management."

Because of the violations, the commission ordered the licensee's liquor license suspended for a total of thirteen days--six days on each of the sales to a minor and one day on the improper manager offense.

The licensee filed a complaint in the Superior Court for judicial review of the decision of the commission, pursuant to G.L. c. 30A, § 14. The matter was heard by a judge solely on the basis of the certified record. The judge ruled that the commission's decision on the sales to the minors charges was, among other things, based on an error of law. On the improper manager charge, he ruled that the licensee was "not at fault" when the name of the manager was not changed in a timely manner. Judgment issued vacating the decision and order of the commission. The commission has appealed the judge's action.

1. Scope of the 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." Burlington v. Labor Relations Commn., 390 Mass. 157, 161, 454 N.E.2d 465 (1983). Under the statute, the judge may set aside a commission's decision only on those grounds set out in § 14(7)(a )-(g ). Olde Towne Liquor Store, Inc. v. Alcoholic Beverages Control Commn., 372 Mass. 152, 153 n. 2, 360 N.E.2d 1057 (1977). One of the specified grounds is that the decision of the commission was based on an error of law. See G.L. c. 30A, § 14(7)(c ).

2. The sale to the minors charges. The licensee argued to the judge that the commission's decision was based on an error of law for alternative reasons, namely, (1) the commission exceeded its statutory authority by interpreting G.L. c. 138, § 34B, or (2) it misinterpreted the statute. In agreeing with the licensee, the judge did not specify the ground or grounds upon which he based his decision. Therefore, we discuss both arguments raised below by the licensee. ³

a. Claim that commission lacked authority to interpret G.L. c. 138, § 34B. It has been held that an agency charged with the administration of a statute may, in a decision, define or interpret statutory terms, at least in the first instance. Cleary v. Cardullo's, Inc., 347 Mass. 337, 343-344, 198 N.E.2d 281 (1964). School Comm. of Springfield v. Board of Educ., 362 Mass. 417, 441 n. 22, 287 N.E.2d 438 (1972). Cella, Administrative Law and Practice § 747 (1986). This is particularly so where the statute is ambiguous or the details of legislative policy have not been spelled out in the statute. Cleary v. Cardullo's, Inc., supra.

The commission plays an important role in the administration of G.L. c. 138, the statute concerned with alcoholic beverages. It has, by statute, "general supervision of the conduct of the business of ... selling alcoholic beverages...." G.L. c. 6, § 44. It also has comprehensive powers of supervision over licensees, including the power to revoke, modify, or suspend licenses. G.L. c. 138, § 23. Connolly v. Alcoholic Beverages Control Commn., 334 Mass. 613, 617, 138 N.E.2d 131 (1956).

Although G.L. c. 138, § 34B, provides a defense to a suspension of a liquor license if the "licensee, or agent or employee thereof, ... reasonably relies on ... a liquor purchase identification card or motor vehicle license ... for proof of a person's identity and age," neither that provision nor any other provision of the General Laws specifies what constitutes reasonable reliance by a licensee. In particular, the statute is silent on when the identification must be presented to the licensee and whether showing the identification on an earlier occasion suffices to show reasonable reliance within the meaning of the statute. Here, the commission conducted a hearing pursuant to its statutory duties of supervision over licenses. Because G.L. c. 138, § 34B, is silent as to the particular type of conduct by the licensee that would constitute reasonable reliance under the statute, the commission had the power to interpret the statute by defining appropriate standards of conduct, at least in the absence of any judicial decision to the contrary. ⁴

b. Claim that commission misinterpreted G.L. c. 138, § 34B. The licensee argues that the commission misinterpreted G.L. c. 138, § 34B, with the result that its decision was based on an error of law. Johnson v. Martignetti, 374 Mass. 784, 790, 375 N.E.2d 290 (1978).

We are not, of course, bound by the commission's interpretation of the statute. Massachusetts Organization of State Engrs. & Scientists v. Labor Relations Commn., 389 Mass. 920, 924, 452 N.E.2d 1117 (1983). A court, in reviewing an agency's interpretation, however, must give "due weight to the experience, technical competence, and specialized knowledge of the agency, as well as to the discretionary authority conferred upon it." G.L. c. 30A, § 14(7). Dohoney v. Director of the Div. of Employment Sec., 377 Mass. 333, 337 n. 3, 386 N.E.2d 10 (1979). ⁵ In addition, "[t]he importance of an administrative interpretation of a statute is 'never greater than where, as here, an agency must interpret a legislative policy which is only broadly set out in the governing statute.' " Consolidated Cigar Corp. v. Department of Pub. Health, 372 Mass. 844, 850, 364 N.E.2d 1202 (1977), quoting from School Comm. of Springfield v. Board of Educ., 362 Mass. at 442, 287 N.E.2d 438. Also see Amari v. Rent Control Bd. of Cambridge, 21 Mass.App.Ct. 598, 604-605, 488 N.E.2d 1180 (1986). ⁶

A general principle of statutory construction supports the commission's interpretation. The Legislature has announced a strong policy against the sale of alcoholic beverages to minors. G.L. c. 138, § 34. Michnik-Zilberman v. Gordon's Liquor, Inc., 390 Mass. 6, 11, 453 N.E.2d 430 (1983). The defense of reasonable reliance is an exception to the general rule of liability set forth in G.L. c. 138, § 34. "Exceptions to a general law, whether statutory or constitutional, should be strictly construed." Commonwealth v. Yee, 361 Mass. 533, 537, 281 N.E.2d 248 (1972).

The record before the...