Oznemoc, Inc. v. Alcoholic Beverages Control Com'n

• Decision Date: 02 March 1992
• Citation: 587 N.E.2d 751,412 Mass. 100
• Parties: OZNEMOC, INC. v. ALCOHOLIC BEVERAGES CONTROL COMMISSION.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 751

587 N.E.2d 751

412 Mass. 100

OZNEMOC, INC. v. ALCOHOLIC BEVERAGES CONTROL COMMISSION.

Supreme Judicial Court of Massachusetts Suffolk.

Argued Dec. 3, 1991.

Decided March 2, 1992.

Jon Laramore, Asst. Atty. Gen., for defendant.

David R. Kerrigan, Boston (Morris M. Goldings, with him), for plaintiff.

Before LIACOS, C.J., and WILKINS, ABRAMS and GREANEY, JJ.

ABRAMS, Justice.

The first of these two appeals results from a Superior Court judge's ruling affirming a decision of the Alcoholic Beverages Control Commission (commission). After hearing, the commission suspended for ninety-five days the liquor license of the plaintiff, Oznemoc, Inc. (Oznemoc). On appeal, Oznemoc contends that one portion of the suspension violates both the Federal and Massachusetts Constitutions and that another portion of the suspension is unlawful because it is not supported by substantial evidence. The second appeal is by the commission from a decision of a single justice of this court staying the enforcement of the suspension pending the resolution of Oznemoc's appeal. ¹ We conclude that there is no merit in either appeal. We therefore affirm the judgment of the Superior Court and vacate the stay.

IPrior proceedings. The licensing board of Boston (board) held hearings in this matter on May 9, 1989. The board heard six charges against Oznemoc, doing business as "The Naked I Lounge," for violations of the liquor licensing law. After hearing, the board concluded that Oznemoc had violated the liquor laws on six occasions and voted to revoke Oznemoc's liquor license. ²

Oznemoc appealed the board's decision to the commission, which held hearings on June 29 and August 3, 1989. ³ The commission approved all but one of the board's determinations. The commission, however, reversed the revocation order and reduced the suspension period to ninety-five days. ⁴

Oznemoc sought judicial review of the commission's decision. Oznemoc asked the Superior Court to reverse the commission's decision and also requested a stay of the imposition of the penalties during the pendency of the appeal in the Superior Court. The request for a stay was allowed. After hearing, a Superior Court judge affirmed the commission's decision, and Oznemoc appealed. ⁵

Oznemoc unsuccessfully sought continuation of the stay pending appeal. Oznemoc then sought a stay pending appeal to a single justice of the Appeals Court, who denied the stay. Pursuant to G.L. c. 211, § 3 (1990 ed.), Oznemoc filed a request for a stay in the county court. After hearing, a single justice of this court allowed the stay. See note 1, supra. The commission appealed from that decision. The two appeals have been consolidated. We granted the commission's application for direct appellate review. We affirm both the judgment of the Superior Court and the single justice's decision to stay the suspensions pending appeal.

The two-month suspension. The commission approved a two-month suspension of Oznemoc's license for an incident on November 3, 1988, in which an employee of "The Naked I Lounge" assaulted a customer. On appeal, Oznemoc raises two claims. First, Oznemoc contends that the commission's decision to proceed with the licensing hearings, while a criminal assault charge arising out of the November 3 incident was pending against its employee, violated the employee's rights under the Fifth Amendment to the United States Constitution and art. 12 of the Massachusetts Declaration of Rights. Second, Oznemoc maintains that by proceeding with the hearings before the conclusion of the criminal case, the board and the commission violated Oznemoc's right to due process of law under the Fourteenth Amendment to the United States Constitution. We do not reach the first contention; we reject the second.

1. The Fifth Amendment and art. 12 claims. Oznemoc argues that the commission's failure to postpone its hearings until after the conclusion of the employee's criminal trial violates the employee's Fifth Amendment and art. 12 rights. Oznemoc has no standing to assert the Fifth Amendment or art. 12 rights of its employee. See Commonwealth v. Simpson, 370 Mass. 119, 121, 345 N.E.2d 899 (1976). "The privilege against self-incrimination ... is personal to the witness" and not assertable by others. Goldstein v. United States, 316 U.S. 114, 121 n. 11, 62 S.Ct. 1000, 1004 n. 11, 86 L.Ed. 1312 (1942). Commonwealth v. Shaw, 4 Cush. 594, 595 (1849).

2. The due process claim. Oznemoc maintains that it was prevented from mounting a "full and fair defense" by the commission's refusal to postpone its proceedings until after the conclusion of the criminal action against Oznemoc's employee. Oznemoc contends that the only witness who could rebut the assault charges, its employee, would not testify because of the pendency of a criminal action against him. Postponing the hearing until the conclusion of the criminal case, Oznemoc contends, could have prevented this alleged unfairness. The commission's failure to continue its proceedings, Oznemoc alleges, violated its right to due process of law under the Fourteenth Amendment.

As an initial matter, we note that Oznemoc has failed to demonstrate that its employee would have invoked the privilege had he been called to testify before the commission. ⁶ Moreover, Oznemoc asserts, without any support in the record, that its employee's testimony would have rebutted the charges against it. Nor does the record support Oznemoc's contentions that only its employee's testimony would have aided its defense and that there were no other witnesses, such as customers, it could use in its defense. There is, therefore, no evidence on this record to support Oznemoc's contention that it could not go forward in the administrative proceedings prior to the conclusion of the criminal case.

Even if there were such record support, we would decline to adopt a rule that would require administrative agencies to delay hearings until the conclusion of any related criminal action against a witness. "It would stultify enforcement of [State licensing] law to require a governmental agency such as the [commission] invariably to choose either to forgo recommendation of a criminal prosecution once it seeks civil relief, or to defer civil proceedings pending the ultimate outcome of a criminal trial." United States v. Kordel, 397 U.S. 1, 11, 90 S.Ct. 763, 769, 25 L.Ed.2d 1 (1970). The United States Supreme Court held in Kordel, supra, that due process does not require an administrative agency automatically to postpone civil proceedings against a corporation where related criminal actions are pending against corporate officers. ⁷ We also reject an automatic rule.

Oznemoc's due process argument, such as it is, rests on the contention "that the threat of subsequent criminal proceedings unfairly force[d] [its employee] to remain silent and thus constitute[d] an unconstitutional restriction on the evidence the [commission] accepts" (citation omitted). Arthurs v. Stern, 560 F.2d 477, 479 n. 4 (1st Cir.1977), cert. denied, 434 U.S. 1034, 98 S.Ct. 768, 54 L.Ed.2d 782 (1978). Courts generally reject claims by parties to administrative proceedings that they are entitled to continuances until after their criminal trials because they will not testify for fear of self-incrimination. Cf. Wansong v. Wansong, 395 Mass. 154, 157, 478 N.E.2d 1270 (1985). Peiffer v. Lebanon School Dist., 848 F.2d 44, 46 (3d Cir.1988), and cases cited. Hoover v. Knight, 678 F.2d 578, 581 (5th Cir.1982). Arthurs v. Stern, supra. Flint v. Mullen, 499 F.2d 100, 104 (1st Cir.1974). There is no reason not to follow the general rule in a case such as this, where the party to an administrative proceeding is not involved in any way in the related criminal case. ⁸

In reviewing an agency's decision not to continue administrative proceedings against a party while a related criminal case is pending against that party, a judge must "balance any prejudice to the other civil litigants which might result [from delaying the administrative proceedings] against the potential harm to the party claiming the privilege if he is compelled to choose between defending the civil action and protecting himself from criminal prosecution" (citations omitted). Wansong v. Wansong, 395 Mass. 154, 157, 478 N.E.2d 1270 (1985). Arthurs v. Stern, supra at 477. Cf. United States v. Kordel, supra 397 U.S. at 8-10, 90 S.Ct. at 767-769.

Assuming, without deciding, that the present case required the judge to weigh the public's interest in enforcing the liquor licensing laws against the prejudice to Oznemoc resulting from the commission's decision to proceed, there was no error. The threat to the public from Oznemoc's repeated violations of the liquor licensing law more than justified the commission in proceeding with its hearings.

The ten-day suspension. We reject Oznemoc's contention that the commission's determination that Oznemoc charged different prices for the same alcoholic beverage on the same day is not supported by substantial evidence. We review the commission's decision to determine whether it is supported by substantial evidence. G.L. c. 30A, § 14(7) (e ) (1990 ed.). " 'Substantial evidence' means such evidence as a reasonable mind might accept as adequate to support a conclusion." G.L. c. 30A, § 1(6) (1990 ed.). See Embers of Salisbury, Inc. v. Alcoholic Beverages Control Comm'n, 401 Mass. 526, 528, 517 N.E.2d 830 (1988).

A police officer testified that, on September 3, 1988, he went to "The Naked I Lounge" and asked for a price list. Although the issue was contested, the commission could have found that the individual who gave the price list to the police officer was the lounge's day manager. The price list plainly shows "day" and "nite" prices for the same alcoholic beverages. Oznemoc does not dispute that the police officer went to "The Naked I Lounge," and it does not dispute that the price list reflected different daytime and nighttime prices.

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