Matunuck Beach Hotel, Inc. v. Sheldon

• Decision Date: 27 March 1979
• Docket Number: Nos. 76-429-A,s. 76-429-A
• Citation: 121 R.I. 386,399 A.2d 489
• Parties: MATUNUCK BEACH HOTEL, INC., d/b/a Driftwood Restaurant v. Foster SHELDON et al. Lewis B. BISCHOFF et al. v. Deeb G. SARKAS, Liquor Control Adm'r. ppeal, 76-282-M.P. and 77-29-M.P.
• Court: Rhode Island Supreme Court

Page 489

399 A.2d 489

121 R.I. 386

MATUNUCK BEACH HOTEL, INC., d/b/a Driftwood Restaurant v. Foster SHELDON et al.

Lewis B. BISCHOFF et al. v. Deeb G. SARKAS, Liquor Control Adm'r.

Nos. 76-429-Appeal, 76-282-M.P. and 77-29-M.P.

Supreme Court of Rhode Island.

March 27, 1979.

[121 R.I. 399] Moses Kando, Pawtucket for Matunuck Beach Hotel, Inc. d.b.a. Driftwood Restaurant.

Dennis J. Roberts, II, Atty. Gen., Forrest Avila, Sp. Asst. Atty. Gen., Archibald B. Kenyon, Jr., Town Sol., South Kingstown, for Foster Sheldon et al., and Lewis B. Bischoff et al.

OPINION

JOSLIN, Justice.

These three cases involve the Matunuck Beach Hotel, Inc. (the hotel), a tavern located in the town of South Kingstown, and its attempts to obtain a liquor license. In one of the cases we issued a writ of certiorari to review a decision of the state liquor control administrator (the administrator) overruling the local license commissioners' (the commissioners) denial of the hotel's initial application for an annual class B tavern alcoholic beverage license. Bischoff v. Sarkas, 117 R.I. 903, 360 A.2d 879 (1976). In another case, we issued a writ of certiorari to review the administrator's overruling of the commissioners' denial of a renewal of that license. Bischoff v. Sarkas, 117 R.I. 993, 371 A.2d 275 (1977). In the third case, we consider the town clerk's appeal from the issuance by the Superior Court of a writ of mandamus ordering him to issue a class B license to the hotel. Matunuck Beach Hotel, Inc. v. Sheldon, 384 A.2d 1071 (R.I. 1976). The three cases were consolidated for argument and their facts, though undisputed, are interwoven and somewhat complex. ¹

The Facts

In 1975 the South Kingstown zoning ordinance provided that alcoholic beverages could not be sold on premises located in a commercial waterfront district without a special exception permitting that use. The hotel was located in such a district and, sometime in 1975, it applied for a special exception. The town's zoning board denied that application. On appeal, the Superior Court reversed and remanded the case, directing the board to grant the hotel a special exception.

The zoning board complied with the Superior Court's order and granted the special exception on June 16, 1975. Even though the special exception had been granted, almost a year passed before the hotel applied to the commissioners for a liquor license. By then, however, the zoning ordinance had been revised to prohibit the use of premises located in a commercial waterfront district for the sale of alcoholic beverages. Accordingly, the commissioners denied the application on the strength of that prohibition and of another provision of the zoning ordinance stating that no license should be issued for the conduct of any business or the performance of any act that violated the town's zoning ordinance. ²

The hotel appealed that decision to the administrator, who reversed on the ground that the special exception issued by the zoning board at the direction of the Superior Court was still operative and prevailed over the ordinance provisions relied upon by the commissioners. ³ We granted the commissioners' petition for certiorari to review that decision. Essentially the same scenario was repeated in November 1976, when the hotel applied for a renewal of its liquor license and we again granted the commissioners' petition to review the administrator's decision.

On the same date that the commissioners initiated the first certiorari proceeding, the hotel, relying on the administrator's decision in its favor, requested the town clerk to issue a liquor license. He refused and the hotel petitioned the Superior Court for a writ of mandamus to compel him to take that action. The writ issued and the clerk appealed to this court.

The Certiorari Cases

At the threshold we consider whether the commissioners had standing to seek judicial review of the administrator's decision. If they did, we must then decide what procedural route they should have followed to obtain that review. Because our case law on these questions is far from clear, we are required to reexamine closely several cases in order to ameliorate the existing confusion in this area.

Our starting point is Tillinghast v. Brown University, 24 R.I. 179, 52 A. 891 (1902), where we said that the rule generally followed in construing statutes containing a standing or aggrievement requirement

"is that a party is aggrieved by the judgment or decree when it operates on his rights of property or bears directly upon his interest. (citation omitted) The word 'aggrieved' refers to a substantial grievance, a denial of some personal or property right or the imposition upon a party of a burden or obligation." Id. at 183-84, 52 A. at 892.

The Tillinghast rule was for many years consistently followed by this court. See, e. g., Hassell v. Zoning Board of Review, 108 R.I. 349, 275 A.2d 646 (1971); Malinou v. Kiernan, 107 R.I. 342, 267 A.2d 692 (1970); Jeffrey v. Platting Board of Review, 103 R.I. 578, 239 A.2d 731 (1968); Paterson v. Corcoran, 100 R.I. 475, 217 A.2d 88 (1966); Malinou v. Mears, 97 R.I. 15, 195 A.2d 232 (1963); Greene v. Willis, 47 R.I. 251, 132 A. 545, Rehearing denied, 47 R.I. 375, 133 A. 651 (1926); McKenna v. McKenna, 29 R.I. 224, 69 A. 844 (1908); Cf. Vermette v. Cirillo, 114 R.I. 66, 328 A.2d 419 (1974); Roullard v. McSoley, 54 R.I. 232, 172 A. 326 (1934); Hall v. Burgess, 40 R.I. 314, 100 A. 1013 (1917) (cases holding that the administrator or executor of an estate comes within the Tillinghast rule because of injury suffered in his representative capacity).

In recent years, however, and particularly since the enactment of the Administrative Procedures Act (APA), G.L.1956 (1977 Reenactment) ch. 35 of tit. 42, the trend has been away from that rule and in the direction of a more liberal standard. The trend began with Newport National Bank v. Providence Institution for Savings, 101 R.I. 614, 226 A.2d 137 (1967), where we held that competing banking institutions were aggrieved within the contemplation of sections 15(a) and (b) of the APA ⁴ and could therefore seek review in the Superior Court of a decision of the Board of Bank Incorporation allowing certain banks to locate a branch bank in the same community served by the competing banks. The test we applied was

"Whether they (persons aggrieved) may be adversely affected by the administrative action and whether the realities of the situation in reason require that they have standing to seek judicial review. The better-reasoned cases hold that a person who is directly adversely affected in his economic interest by the administrative decision which he challenges has the required standing." (Citations omitted.) Id. at 622, 226 A.2d at 142.

Little more than a year later, however, a unanimous court in New England Telephone & Telegraph Co. v. Fascio, 105 R.I. 711, 254 A.2d 758 (1969), although citing the Newport National Bank case as authority, in reality cut across its grain and reverted to the more stringent Tillinghast rule. In that case, we held that an employer lacked standing under the APA to seek judicial review in the Superior Court of a decision of the Department of Employment Security's Board of Review granting compensation benefits to company employees who were on strike. We found no "substantial" injury to a "personal or property right," nor imposition of a "burden or obligation."

Not long thereafter, in Buffi v. Ferri, 106 R.I. 349, 259 A.2d 847 (1969), we faced a slightly different issue. The question there was whether the Commission for Human Rights had standing under section 16 of the APA ⁵ to seek review of a Superior Court judgment reversing its decision that a property owner had violated the Fair Housing Practices Act. We recognized that the public had a very real and substantial interest in protecting the right of all individuals to equal housing opportunities regardless of race, color, religion, or country of ancestral origin. It was obvious, however, that the public interest would not be protected if the Tillinghast rule were strictly applied. Therefore, in order to insure protection of that public interest, we applied an exception that was first alluded to in Board of Police Commissioners v. Reynolds, 86 R.I. 172, 178, 133 A.2d 737, 741 (1957), and we held that the Tillinghast rule

"like most rules of general application, has its exceptions. One permits an agency itself to seek review, even though not technically aggrieved, if the public has an interest in the issue which reaches out beyond that of the immediate parties." Buffi v. Ferri, 106 R.I. at 351, 259 A.2d at 849. ⁶

Finally, in Rhode Island Ophthalmological Society v. Cannon, 113 R.I. 16, 317 A.2d 124 (1974), we completely abandoned the Tillinghast rule when, in a case holding that ophthalmologists had standing to challenge the validity of a statute permitting optometrists to administer drugs during eye examinations, we said:

"The Newport National Bank case is the precursor of today's rule. It is our belief that standing can now be determined by our adoption of the first of the Data Processing criteria (Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970)). The question is whether the person whose standing is challenged has alleged an Injury in fact resulting from the challenged statute. If he has, he satisfies the requirement of standing." 113 R.I. at 25-26, 317 A.2d at 129 (emphasis added).

Moreover, the injury need not be to an economic interest to satisfy this test. Since the Ophthalmological decision, the injury-in-fact test has been relied upon generally to determine standing questions. ⁷

Furthermore, the public interest exception has been liberally applied to permit an agency to challenge a decision which, right or wrong, might otherwise be completely shielded from judicial review. This exception, as we said in Altman v. School Committee, 115...