Limon v. State

• Decision Date: 22 May 1997
• Docket Number: No. 03-96-00468-CV,03-96-00468-CV
• Citation: 947 S.W.2d 620
• Parties: Jorge LIMON (dba Las Muchachitas Nite Club), et al., Appellants, v. STATE of Texas, Texas Alcoholic Beverage Commission and Doyne Bailey, Administrator, Appellees.
• Court: Texas Court of Appeals

Page 620

947 S.W.2d 620

Jorge LIMON (dba Las Muchachitas Nite Club), et al., Appellants, v. STATE of Texas, Texas Alcoholic Beverage Commission and Doyne Bailey, Administrator, Appellees.

No. 03-96-00468-CV.

Court of Appeals of Texas,

Austin.

May 22, 1997.

Jennifer S. Riggs, Riggs & Associates, P.C., Austin, for Appellants.

Sharon Felfe, Assistant Attorney General, Austin, for Appellees.

Before CARROLL, C.J., and ABOUSSIE and B.A. SMITH, JJ.

BEA ANN SMITH, Justice.

Appellants, eleven bar owners, ¹ sought a judgment declaring that recently enacted "good conduct" bond requirements of the Texas Alcoholic Beverage Code are unconstitutional and to enjoin their enforcement by the Texas Alcoholic Beverage Commission. See Tex.Alco.Bev.Code Ann. §§ 11.11, 61.13 (West Supp.1997) ("Code"). The trial court determined that sections 11.11 and 61.13 are constitutional and denied the requested relief. The bar owners appeal the trial court's order. Because the appellants have standing to challenge only the actual imposition of the bonds but not their forfeiture, we will modify the trial court's judgment and affirm it as modified.

BACKGROUND

In 1995, the legislature amended the Texas Alcoholic Beverage Code to require all Texas businesses selling alcoholic beverages for three years or less to post "conduct surety" bonds before obtaining a license or permit ² under the Code. Establishments seeking permission to serve alcohol on their premises must post a $5,000 bond; businesses seeking to serve alcohol on their premises or sell it for off-premises consumption and that are located within one thousand feet of a school must post a $10,000 bond. Code §§ 11.11(a)(1), (2), 61.13(a). ³ The Code excepts After the bond requirements were enacted, the Commission sent letters to existing permit holders to notify them of the new legislation. The letters stated, "YOUR BOND MUST ACCOMPANY YOUR RENEWAL APPLICATION OR THE APPLICATION WILL BE DENIED." The Commission later notified renewal applicants who had failed to post the bond that it was forwarding their applications to the agency's legal division and recommending that they be denied. Several of the appellants testified that they were going to lose their permits because they were financially unable to purchase the bond. Appellants, through their attorney, complained to the Commission that the lack of procedures allowing them to contest the bond requirements denied them due process of law. The day before the legislation took effect, they filed this suit in district court seeking to enjoin the Commission from enforcement and asking the trial court to declare the bond provisions unconstitutional, facially and as applied, because they violate state constitutional guarantees of due course of law, equal protection, access to courts, and protections against unauthorized imposition of taxes and retroactive laws. See Tex. Const. art. I, §§ 3, 3a, 13, 19. After a bench trial, the trial court determined the provisions were constitutional and denied all relief sought. It made findings of fact and conclusions of law. The plaintiffs appeal; the State brings a cross-point of error contending these bar owners lack standing to challenge certain aspects of the bond requirements.

from the bond requirement businesses that sell only beer for off-premises consumption. Both original and renewal applicants must furnish the appropriate bond with their application. The bonds are to state that the permit holder agrees that the bond shall be forfeited upon final adjudication of a violation of the Code. Id. §§ 11.11(b)(2), 61.13(b)(2).

DISCUSSION

I. Standing

As a preliminary matter, we note that while all of the appellants are subject to the bond requirements, and three of them have actually posted bonds, the Commission has not attempted to forfeit any applicant's bond due to a Code violation. Standing is a component of subject matter jurisdiction that may be raised by an appellate court sua sponte. Texas Workers' Compensation Comm'n v. Garcia, 893 S.W.2d 504, 517 n. 15 (Tex.1995); Texas Ass'n of Business v. Texas Air Control Bd., 852 S.W.2d 440, 445-46 (Tex.1993). Actions for declaratory relief require the existence of a real controversy between the parties that will actually be resolved by the declaration sought. See Bonham State Bank v. Beadle, 907 S.W.2d 465, 467 (Tex.1995); Texas Ass'n of Business, 852 S.W.2d at 446; Southwest Airlines v. Texas High-Speed Rail, 863 S.W.2d 123, 125 (Tex.App.--Austin 1993, writ denied). In order to challenge a statute, the plaintiff must suffer some actual or threatened injury under the statute, and must contend that the statute unconstitutionally restricts the plaintiff's own rights. Barshop v. Medina County Underground Water Conservation Dist., 925 S.W.2d 618, 626 (Tex.1996), Garcia, 893 S.W.2d at 518. Courts may not make declarations on matters based upon speculative, hypothetical, or contingent situations. Garcia, 893 S.W.2d at 519; Coalson v. City Council of Victoria, 610 S.W.2d 744, 747 (Tex.1980); Empire Life Ins. Co. v. Moody, 584 S.W.2d 855, 858 (Tex.1979). A trial court also lacks jurisdiction to enjoin conjectural or speculative events under the injunction statute. See Tex.Civ.Prac. & Rem.Code Ann. § 65.011 (West 1986); Camarena v. Texas Employment Comm'n, 754 S.W.2d 149, 151 (Tex.1988); City of Houston v. Cascades, Inc., 730 S.W.2d 59, 61 (Tex.App.--Houston [14th Dist.] 1987, writ dism'd).

Appellants' challenges to the statute can effectively be divided into two categories: those against actual imposition of the bond as a prerequisite to obtaining a liquor permit, and those against forfeiture of the bond upon a violation of the Code. Several appellants have refused to post the bond, causing the Commission to recommend denial of their applications. They consequently have standing to challenge the bond requirements. But there is no controversy, real or threatened, that enables us to determine whether forfeiture of the bond would be constitutional. None of the appellants has been charged The trial court ruled that sections 11.11 and 61.13 do not violate, facially or as applied, the constitutional guarantees of equal protection, due course of law, or open courts. Subsection (a) of those sections imposes the bond requirement, while subsection (b) relates to forfeiture. See Code §§ 11.11(a), (b); 61.13(a), (b). We hold the trial court had jurisdiction to review only the constitutionality of sections 11.11(a) and 61.13(a); its judgment will be modified accordingly. Consequently, we limit our review to appellants' arguments challenging the bond as a prerequisite to obtaining a permit and do not address the first, third, or fifth points of error. ⁴

with violating the Code or a Commission rule subjecting them to bond forfeiture, and they may never be. Much of the trial focused on whether the Commission would enforce the forfeiture provision after one violation or three and whether it would grant a hearing when the situation arose. We cannot speculate on what will happen if the Commission seeks forfeiture of a bond; any opinion delivered now would be advisory. Therefore, we hold that appellants lack standing to challenge the statutory provisions as they relate to bond forfeiture. See Garcia, 893 S.W.2d at 519; Coalson, 610 S.W.2d at 747.

In addition, the Commission contends by cross-point of error that appellants lack standing to challenge the bond requirements in three respects. First, it contends the appellants cannot challenge section 61.13, which imposes a bond on those seeking licenses to sell only beer for on-premises consumption, see Code § 61.13(a), because none of the appellants seeks such a license. Second, it contends they cannot challenge the $10,000 bond requirement under either section 11.11 or 61.13 because the only appellant located within 1000 feet of a school had applied at the time of trial for a food and beverage permit which would exempt it from the challenged bonding requirements. See Code § 28.18 (West Supp.1997). Finally, the Commission contends the appellants cannot challenge the exclusion of beer-only off-premises retailers from the bonds because the appellants, all bar owners (on-premises dealers), "are not similarly situated to" off-premises dealers.

Regarding section 61.13(a), one of the appellants, Federico Presas, holds a license subject to that provision and thus has standing to challenge its constitutionality. Because the other appellants bring the same facial challenges and seek the same relief as Presas, we need not address their individual standing. See Barshop, 925 S.W.2d at 627; Garcia, 893 S.W.2d at 519. Appellants have standing to challenge section 61.13(a).

Regarding the $10,000 bond, Post Time Pub was subject to the $10,000 bond at the time of trial. Simply because Post Time Pub may be exempt from the bond requirement in the future if it obtains a food and beverage permit does not deprive it of standing to challenge the bond. Accordingly, the appellants may challenge the $10,000 bond requirement.

Finally, all of the appellants are bar owners subject to the bond requirement. A party need not be identically situated to challenge a statutory classification. Appellants, as permittees under the Code, have standing to complain that the statute impermissibly favors retailers selling beer for consumption off premises by exempting them from the bond requirement. We overrule the cross point of error.

II. The Challenges

We will first address the constitutional challenges voiced in appellants' fourth and sixth points of error. The fourth point of error asserts that requiring a bond effectively revokes existing permits without a hearing, in violation of the constitutional guarantee

                to due process of law. 5  See Tex.  Const. art.  I, § 19.  In their sixth point of error, appellants contend the bond provisions are unconstitutionally retroactive.  See Tex.  Const. art I, § 16
                

A. Due Process of Law

A due process analysis requires...