Kiser v. STATE, DEPT. OF REVENUE, 99-253.
| Decision Date | 28 September 1999 |
| Docket Number | No. 99-253.,99-253. |
| Citation | 1999 MT 228,987 P.2d 363 |
| Parties | Philip G. KISER, Petitioner and Appellant, v. STATE of Montana, DEPARTMENT OF REVENUE and Hassbra, Inc., a Montana Corporation, Respondents and Respondents. |
| Court | Montana Supreme Court |
Gregory G. Smith, Smith Law Offices, Great Falls, Montana, For Appellant.
R. Bruce McGinnis, Department of Revenue, Helena, Montana, Karl P. Seel, Attorney at Law, Bozeman, Montana, For Respondents.
¶ 1 This is an appeal from a decision of the First Judicial District Court, Lewis and Clark County, which affirmed the issuance of a retail beer/wine license to Hassbra, Inc., d/b/a Café Internationalé. We affirm.
¶ 2 We restate the issues as follows:
¶ 3 1. Did the District Court err in determining that the Department of Revenue's (DOR's) decision awarding the subject license to Café Internationalé was supported by substantial evidence, particularly in relation to liquor licensing requirements pertaining to public convenience and necessity? ¶ 4 2. Is the location requirement of DOR's liquor licensing process unreasonable, discriminatory, and unconstitutional as applied by DOR?
¶ 5 The District Court succinctly summarized the background facts:
Based on the 1994 census update, DOR determined that because of an increase in population in Bozeman, Montana, one additional retail beer/wine license could be issued in the Bozeman quota area. A number of applicants applied for the license, including Kiser and [Café Internationalé]. Although DOR initially returned Kiser's application because it failed to specify a proposed location, Kiser was allowed to participate in the proceedings and his application was considered by the hearing examiner. Following a public hearing, the hearing examiner found that public convenience and necessity would best be served by awarding the license to [Café Internationalé]. DOR adopted the hearing examiner's recommendation and issued the license to [Café Internationalé]. [Café Internationalé] has been operating under the license since January 5, 1998.
After reviewing the record, the District Court issued a memorandum and order stating that the detailed findings of fact made by DOR's hearing examiner were supported by substantial evidence and did not indicate a misapprehension of the effect of the evidence. The court ruled that DOR's decision to issue the beer/wine license to the established business at Café Internationalé instead of to Kiser's potential business venture was not clearly erroneous.
¶ 6 Did the District Court err in determining that DOR's decision awarding the subject license to Café Internationalé was supported by substantial evidence, particularly in relation to liquor licensing requirements pertaining to public convenience and necessity?
¶ 7 The standard of review of findings of fact to determine whether they are clearly erroneous was set forth in Weitz v. Department of Natural Resources & Conservation (1997), 284 Mont. 130, 133-34, 943 P.2d 990, 992:
(1) the record will be reviewed to see if the findings are supported by substantial evidence; (2) if the findings are supported by substantial evidence, it will be determined whether the trial court misapprehended the effect of evidence; and (3) if substantial evidence exists and the effect of evidence has not been misapprehended, the Supreme Court may still decide that a finding is clearly erroneous when, although there is evidence to support it, a review of the record leaves the Court with the definite and firm conviction that a mistake has been committed.
We review conclusions of law to determine if the agency's interpretation of the law is correct. Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 474, 803 P.2d 601, 603.
¶ 8 In this case, § 16-4-203, MCA (1995), controlled. That statute stated that a beer/wine license may be approved "only if the department has determined, upon a hearing held pursuant to the Montana Administrative Procedure Act, that the issuance or transfer of the license is justified by public convenience and necessity." The statute did not provide a definition for the term "public convenience and necessity,"
¶ 9 The main thrust of Kiser's argument on appeal is that the hearing examiner erred in finding that Café Internationalé is the applicant best able to satisfy public convenience and necessity. Kiser essentially argues that public convenience and necessity require that the new liquor license must be issued to the applicant best able to supply the most liquor to the most people for the most hours per day. He asserts that Café Internationalé is not that applicant, because Café Internationalé proposed to serve liquor only during the evening hours and only with restaurant dinners, and did not plan to advertise the availability of liquor on the outside of its building. Kiser contends that his proposed business could distribute more liquor to more people, which he paradoxically asserts is the goal of Montana's quota system limiting the number of liquor licenses available in any given area. ¶ 10 Kiser unpersuasively points to various administrative regulations in support of his public convenience and necessity argument. None of the regulations are dispositive. This Court has recognized that rigid rules defining the term public convenience and necessity are not necessary, because public convenience and necessity involve a fact-intensive inquiry. Ramage v. Department of Revenue (1989), 236 Mont. 69, 73, 768 P.2d 864, 866. Several factors should be considered:
[P]ublic convenience and necessity are advanced where the issuance of the license will materially promote the public's ability to engage in the licensed activity. This determination involves an evaluation of a variety of criteria, including inter alia the business abilities and character of the applicant, the demand for services in the area to be served, the impact on existing purveyors, and any adverse impact on the area to be served. No single factor is a necessary or sufficient indicator of public convenience and necessity....
Ramage, 236 Mont. at 74, 768 P.2d at 867.
¶ 11 The District Court noted that the hearing examiner made detailed findings of fact and thoroughly analyzed all of the applicants for the beer/wine license. The court correctly stated that it could not substitute its judgment as to the weight of the evidence on questions of fact. It noted the evidence of strong public support for Café Internationalé's application, "in spite of" the limitations on availability of service. In determining that Café Internationalé was most deserving of the available license, the hearing examiner noted that Café Internationalé's application was supported by more persons than any other applicant's. Petitions were submitted containing 721 signatures supporting the application of Café Internationalé and separate letters of support were received from nine families and fifty-five individuals. Further, the hearing examiner deemed it important that Café Internationalé had demonstrated itself to be a successful enterprise, even without a liquor license. Kiser's proposed establishment, in contrast, was untested as a business.
¶ 12 Kiser specifically challenges the hearing examiner's finding that the lack of a beer/wine license has "hampered [Café Internationalé's] catering efforts." Kiser argues that this is irrelevant; the question is whether the public's need for catering of alcohol is currently being met...
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Owens v. Montana Dept. of Revenue
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