E & J Lounge Operating Co. v. Liquor Com'n
| Decision Date | 29 July 2008 |
| Docket Number | No. 27940.,27940. |
| Citation | 189 P.3d 432,118 Hawai'i 320 |
| Parties | E & J LOUNGE OPERATING COMPANY, INC., a Hawai`i corporation, Petitioner/Appellant-Appellee/Cross-Appellee, v. LIQUOR COMMISSION OF the CITY AND COUNTY OF HONOLULU, Respondent/Appellee-Appellant/Cross-Appellee. and H. James Stahl; Tyson J. Thomas; Randi Thomas; Emily Reed; and Bill Maxwell, Respondents/Intervenors Appellees/Intervenors-Cross-Appellants. |
| Court | Hawaii Supreme Court |
David W.H. Chee, Wahiawa (Brooks Tom Porter & Quitiquit), for Petitioner/Appellant-Appellee/Cross-Appellee E & J Operating Company, Inc.
Randi Thomas, pro se (H. James Stahl, Tyson J. Thomas, Bill Maxwell, and Emily Reed, pro se, with her on the briefs), Respondents/Intervenors-Appellees/Intervenors-Cross-Appellants.
Petitioner/Appellant-Appellee/Cross-Appellee E & J Lounge Operating Company, Inc., a Hawai`i corporation (Petitioner), seeks review of the judgment of the Intermediate Court of Appeals (the ICA)1 filed on January 8, 2008, pursuant to its December 24, 2007 published opinion vacating the April 20, 2006(1) Findings of Fact (FOF), Conclusions of Law (COL) and Decision and Order and (2) Judgment of the Circuit Court of the First Circuit2 (the court), and remanding the case to the court to determine Petitioner's appeal on the merits. See E & J Lounge Operating Co. v. Liquor Comm'n, City & County of Honolulu, 116 Hawai`i 528, 556, 174 P.3d 367, 395 (App.2007).
We hold that (1) public hearings on liquor license applications held by the liquor commission are contested case hearings such that Hawai`i Revised Statutes (HRS) § 91-11 (1993)3 requires any commissioner who is not present at any stage of the public hearing to become familiar with the record before voting on a liquor license application, unless the application is automatically rejected pursuant to HRS § 281-59(a) (2007),4 (2) Respondent/Appellee-Appellant/Cross-Appellee Liquor Commission of the City & County of Honolulu (the Commission) did not comply with HRS § 91-11 in this case, (3) HRS § 91-13.5 (Supp.2004)5 does not require automatic approval of Petitioner's liquor license application, and (4) the court's finding, that it is unclear from the present state of the record whether the Commission complied with the notice requirements of HRS § 281-57 (Supp.2006),6 because it was not challenged on secondary appeal to the ICA or this court, is affirmed. Thus, we vacate the ICA's judgment, affirm the court's decision and order as clarified below, and remand the case to the court with instructions to (1) vacate the Commission's decision and order and (2) remand the application to the Commission for decision-making in compliance with the court's order and this opinion, specifically, (a) to determine whether the notices sent by Petitioner complied with HRS § 281-57 and, if so, (b) to rule on the application after all voting commissioners have reviewed the entire agency record in accordance with HRS § 91-11.
Petitioner submitted an Application for Liquor License to the Commission for a General Dispenser License for the Island Colony condominium located at 445 Seaside Avenue in Waikiki. On February 24, 2005, pursuant to HRS § 281-57(a),7 the Commission held a preliminary hearing to determine whether Petitioner's application should be scheduled for a public hearing or denied. The Commission voted three-to-one in favor of scheduling a public hearing for Petitioner's application.
On April 21, 2005, the first of what would be three public hearing-dates pursuant to HRS § 281-57(b),8 the public hearing on Petitioner's application commenced and the Commission received substantial testimony and evidence. At that hearing, only three of the five Commissioners were present: Dennis Enomoto (Enomoto), Danny Kim (Kim), and Chu Lan Shubert Kwock (Kwock). E & J Lounge, 116 Hawai`i at 541, 174 P.3d at 380.
The hearing was continued to April 28, 2005, at which time the Commission received additional testimony and evidence. Four out of five Commissioners were in attendance at that hearing: Enomoto, Kim, Kwock, and Danny Auyoung (Auyoung). Id.
The hearing was again continued to May 12, 2005. Three out of the five Commissioners were in attendance at the meeting: Auyoung, Enomoto, and Kwock. Id. at 542, 174 P.3d at 381. On that date, the Commission voted to deny Petitioner's license application.
On July 14, 2005, the Commission served Petitioner's attorney a certified copy of its June 16, 2005 written FOF, COL, and Decision and Order. Id.
On August 11, 2005, Petitioner filed a notice of appeal to the court pursuant to HRS § 91-14 (1993 & Supp.2004), alleging that the Commission violated HRS chapter 91.9 Petitioner argued, among other things, that because Auyoung was to render a decision on May 12, 2005 but did not hear all the evidence because he was absent from the first hearing on April 21, 2005, the Commission was required under HRS § 91-1110 to issue a proposed decision and provide an opportunity for Petitioner to file exceptions and present arguments on the proposed decision prior to issuance of a final decision. Petitioner therefore contended that the Commission violated HRS § 91-11 in failing to follow this procedure prior to issuing its final decision.11
The court ruled that the public hearing required pursuant to HRS § 281-52 (1993) was a contested case hearing and that "the Commission was required to comply with the contested case procedures" in HRS chapter 91, but that the Commission "did not comply with HRS § 91-11." On April 20, 2006, the court entered its FOF, COL, and Decision and Order. The court found as follows:
1. [Petitioner] filed a Liquor License application for a Dispenser General License (Category 3-Live Entertainment, Recorded Music, and Dancing) with the Commission on January 10, 2005 (herein "Application").
2. On February 24, 2005, the Commission held a preliminary hearing to review the Application. Commissioners were provided with the investigation report and [Petitioner] did not object to the contents of the investigation report, the Commission approved the setting of a Public Hearing for the Application.
3. The Commission is composed of five members, who are appointed for terms of five years. HRS § 281-11. At the February 24, 2005 preliminary hearing, four Commissioners attended the hearing; Chair [Enomoto], Co-Vice Chairs Clyde J. Eugenio [(Eugenio)] and [Kwock] and Commissioner [Kim]. At that time, the fifth commissioner's seat was vacant.
4. On February 25, 2005, [Petitioner] was informed that the public hearing would be scheduled for April 21, 2005.
5. As required under HRS § 281-57(b), notice of the public hearing for [Petitioner's] application was published in the Midweek and Honolulu Star-Bulletin on March 3rd and 10th, 2005. In addition to the publication of the public notice, [Petitioner] submitted an affidavit that the mailing of notices of the hearing to those who reside within the five hundred feet of the premises was completed as required by HRS § 281-57.
6. On April 21.2005, the public hearing for [Petitioner's] liquor license application began. The Commissioners that were present were Chair Enomoto, Co-Vice Chair Kwock and Member Kim. Two Commissioners were absent, Co-Vice Chair Eugenio and Member Au Young. [Petitioner] was represented by its President William Comerford and Counsel Wayne Luke.
7. Testimony from the members of the public Questioned the Commission as to whether the proper notices were sent out as required under HRS § 281-57. The Commissioners commented that this matter should be looked into.
8. The Commission was again provided with the investigation report and received both written comments and oral testimony regarding [Petitioner's] liquor license application. The Commissioners then decided to continue the public hearing to April 28, 2005.
9. At the April 28, 2005 continuation of the public meeting, present were Chair Enomoto, Co-Vice Chair Kwock, Member Kim and Member Au Young. [Petitioner] was represented by its President William Comerford and Counsel Wayne Luke. Again, the Commissioners were provided with the investigation report. In addition, the Commissioners were provided with a supplemental investigation report. The Commission continued to accept oral testimony and written comments. Prior to ending or closing the public hearing, [Petitioner] through its President Mr. Comerford was permitted to respond on questions and comments raised during the two days of public hearings.
10. Testimony from the members of the public again questioned whether the number of notices as required under HRS § 281-57 was sent out.
11. At the end of the April 28 2005 meeting, the Administrator of the [Commission] requested two weeks to verify the total number of written protest. The Commission ended or closed the public hearing and continued its decision making to May 12, 2005. In addition, the Commission permitted additional written comments to be accepted up until April 29, 2005.
12. At the continued hearing of May 12, 2005, Chair Enomoto, Co-Vice Chair Kwock and Member Au Young were present. [Petitioner] was again represented by its President William Comerford and Counsel Wayne Luke.
13. At the May 12, 2005 public hearing, the investigator for the Liquor Administrator informed the Commission that he was not able to verify the total number of owners and lessees who opposed the liquor license. The investigator further informed the Commission that thirty-two percent of the registered voters within five hundred feet of the proposed liquor license premises opposed the liquor license.
14. Counsel for [Petitioner] then objected to Commissioner Au Young participating in the decision since he was not present at...
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