Moedern v. McGinnis

• Decision Date: 19 December 1975
• Docket Number: No. 522,522
• Citation: 236 N.W.2d 240,70 Wis.2d 1056
• Parties: Fred MOEDERN and Tavern League of Wisconsin, Inc., Appellants, v. Charles McGINNIS et al., Respondents.
• Court: Wisconsin Supreme Court

Page 240

236 N.W.2d 240

70 Wis.2d 1056

Fred MOEDERN and Tavern League of Wisconsin, Inc., Appellants, v. Charles McGINNIS et al., Respondents.

No. 522.

Supreme Court of Wisconsin.

Dec. 19, 1975.

Ray T. McCann, Milwaukee, for appellants; John T. McCann, Milwaukee, of counsel.

Fritschler, Pellino & Associates, Madison, Korth, Rodd, Sommer & Mouw, S.C., Rhinelander, Bronson C. La Follette, Atty. Gen., Stephen L. Morgan, Asst. Atty. Gen., Madison, for respondents.

CONNOR T. HANSEN, Justice.

Chapter 213, sec. 5, Laws of 1971, changed the age of majority from twenty-one years to eighteen years, and thereafter persons eighteen years of age and older could legally consume intoxicating liquor. Persons holding Class 'B' fermented malt beverages licenses (sec. 66.054(8)(c), Stats.) were licensed to sell fermented malt beverages to persons over eighteen years of age. The number or 'quota' of Class 'B' retail liquor licenses that a municipality can issue is restricted by sec. 176.05(21).

The result of this situation apparently brought about the enactment of ch. 48, Laws of 1973, which created sec. 176.05(21)(h), Stats., and became effective on June 28, 1973.

As we view this case, the principal thrust of the action is a challenge to the constitutionality of sec. 176.05(21)(h), Stats., which reads in pertinent part, as follows:

'176.05 Liquor licenses

'. . .

'(21) Quotas of 'Class B' retail liquor licenses.

'. . .

'(h) Notwithstanding this subsection, the governing body of any town, village or city may by a three-fourths vote of all members of the governing body grant a 'Class B' retail intoxicating liquor license to any person who on February 1, 1972, held a valid class 'B' retail license under s. 66.054 or who can demonstrate with a bona fide offer to purchase an intent to purchase premises licensed under that section prior to February 1, 1972, or who on February 1, 1973, held a valid class 'B' retail license under s. 66.054 and who is engaged in preserving historic inns and hotels established during this state's territorial period 1836--1848 or who is engaged in preserving historic homes built during the post-civil war era in Wisconsin (1865--1880), if the application is made before June 30, 1974. Any such license shall not affect the quota of any town, village or city under this subsection, but no other premises may be licensed under this section, except when a license is transferred under sub. (14), until the total number of licenses in the municipality is again within the quota, except in the case of annexations under par. (c). At its option, the governing body may limit the period for which the license is granted to less than one year. No license may be granted under this paragraph:

'1. For 5 years after the first granting under this paragraph to any person other than the licensee under s. 66.054 on February 1, 1972. If the licensee dies, becomes incapacitated because of illness, becomes bankrupt or makes an assignment for the benefit of creditors, a license may be granted to the surviving spouse, administrator, executor, receiver or trustee.

'. . .

'3. To any person failing to demonstrate that prior to February 1, 1972, the sales of fermented malt beverages under the license held under s. 66.054 were greater than 50% of either the gross receipts or the net profit of business operations as reported on the operator's 1971 income tax return. The determination that such sales were or were not an essential part of the applicant's business shall be made by the licensing body.'

The plaintiff-Moedern is a resident of the Town of Little Rice, Oneida county, and holds a Class 'B' liquor license, issued pursuant to the provisions of sec. 176.05(2)(a) and (b), Stats. The plaintiff-Tavern League of Wisconsin, Inc., represents holders of Class 'B' liquor licenses throughout the state.

Defendants, Weber, Vranik and McGinnis, comprise the town board of the Town of Little Rice. Sec. 176.05(21)(h), Stats., charges the town board with responsibility of issuing licenses in accordance with the provisions thereof. The action is brought against them in their capacity as members of the town board. The complaint alleges that Weber was the holder of a Class 'B' liquor license and that Vranik is the landlord or owner of a Class 'B' liquor-licensed establishment in the town of Cassian, Oneida county.

McGinnis was also named as an individual defendant. It is alleged that he was a holder of a sec. 66.054(8)(c), Stats., fermented malt beverage license and as a member of the town board, voted for the issuance of his own Class 'B' liquor license under sec. 176.05(21)(h).

Defendants-Albright and Stone allegedly obtained Class 'B' liquor licenses under the challenged statute. Defendant-Moedernorfer was the owner or operator of the establishment operating under the license issued to Stone.

The defendants argue that the plaintiffs lack standing to bring this action. Sec. 176.05(21)(h), Stats., attempted to alleviate the purported injurious effects of the lowering of the age of majority upon the holders of Class 'B' fermented malt beverage licenses. The statute does this by providing for issuance of a number of Class 'B' intoxicating liquor licenses above the quotas set by the remaining provisions of sec. 176.05(21) to persons who held valid Class 'B' fermented malt beverage licenses on February 1, 1972, and could demonstrate on the basis of their 1971 income tax return that prior to February 1, 1972, the sales of fermented malt beverages pursuant to that license were greater than 50 percent of either the gross receipts or the net profit of their business operations. The license must be granted by a three-fourths vote of the members of the governing body of any town, village or city.

The defendants contend that the complaint, even construed in a light most favorable to plaintiffs, alleges no specific discrimination or denial of equal protection to these particular plaintiffs. Assuming that the real harm suffered by plaintiffs is a possible increase in competition, defendants assert that this has neither been alleged nor shown and, even if it had been alleged, there is no right to be free from lawful competition.

Plaintiffs argue that a liquor license is a protectable property right and that this right has been infringed by the economically injurious effect of the quota exception. Moreover, the action of defendant McGinnis in voting for his own license was illegal and illustrative of the discriminatory nature of the provisions of the challenged section.

The trial court found that plaintiffs lacked standing to sue because the legislature apparently intended an increase in competition to Class 'B' liquor license holders by making this exception to the quota limitation and that such a legislatively mandated competitive increase could not confer standing on these plaintiffs. Furthermore, the operation of the provisions of the statute actually complained of by plaintiffs results in no direct discrimination or injury relating to them, insofar as the complaint shows or can be construed to show.

In determining whether a party has standing to challenge the constitutionality of a statute, it has often been held that a person does not have standing to challenge a statute on constitutional grounds upon a point not affecting his rights, Scharping v. Johnson (1966), 32 Wis.2d 383, 395, 145 N.W.2d 691, nor to challenge the unequal protection afforded to members of a class unless he is a member of that class. Dane County v. McManus (1972), 55 Wis.2d 413, 426, 198 N.W.2d 667.

In Sierra Club v. Morton (1972), 405 U.S. 727, 732, 92 S.Ct. 1361, 1364, 31 L.Ed.2d 636, it was stated:

'. . . Where the party does not rely on any specific statute authorizing invocation of the judicial process, the question of standing depends upon whether the party has alleged such a 'personal stake in the outcome of the controversy,' Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663, as to ensure that 'the dispute sought to be adjudicated will be presented in an adversary context and in a form historically viewed as capable of judicial resolution.' Flast v. Cohen, 392 U.S. 83, 101, 88 S.Ct. 1942, 1953, 20 L.Ed.2d 947. Where, however, Congress has authorized public officials to perform certain functions according to law, and has provided by statute for judicial review of those actions under certain circumstances, the inquiry as to standing must begin with a determination of whether the statute in question authorizes review at the behest of the plaintiff.'

Flast v. Cohen (1968), 392 U.S. 83, 88 S.Ct. 1942, 20 L.Ed.2d 947, was a case in which federal taxpayers asserted standing to challenge the constitutionality of certain federal taxing and spending programs. The court pointed out that the gist of the requirements relating to standing, presumably in any prospective litigation, is to assure that the party seeking relief has alleged such a personal stake in the outcome of the controversy as to give rise to that adverseness necessary to sharpen the presentation of issues for illumination of constitutional questions. Whether or not the allegation of personal stake in the outcome is sufficient to confer standing depends on whether there is a 'logical nexus between the status asserted and the claim sought to be adjudicated,' Flast, supra, p. 102, 88 S.Ct. p. 1953. The court further stated that the nexus required of the federal taxpayer challengers involved, first, the establishment of a logical link between the status of the party asserting standing and the type of legislative enactment attacked, and secondly, the establishment of a nexus between that status and the precise nature of the constitutional infringement alleged. In the instant case it could be said that there was a logical link between the status of plaintiffs as holders of Class 'B' liquor licenses and the subject matter of the challenged statute. However, we cannot conclude that the...