Sam & Ali, Inc. v. Ohio Dept. of Liquor Control

• Decision Date: 15 October 1998
• Docket Number: No. 97-3546,97-3546
• Citation: 158 F.3d 397
• Parties: SAM & ALI, INC.; Aleb, Inc.; Mallough, Inc.; and Murib, Inc., Plaintiffs-Appellants, v. OHIO DEPARTMENT OF LIQUOR CONTROL and William A. Vasil, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 397

158 F.3d 397

SAM & ALI, INC.; Aleb, Inc.; Mallough, Inc.; and Murib Inc., Plaintiffs-Appellants, v. OHIO DEPARTMENT OF LIQUOR CONTROL and William A. Vasil Defendants-Appellees.

No. 97-3546.

United States Court of Appeals Sixth Circuit.

Argued Aug. 6, 1998.

Decided Oct. 15, 1998.

Gary W. Lyons (argued and briefed), DeLibera, Lyons & Bibbo, Columbus, OH for Plaintiffs-Appellants.

Chester T. Lyman, Jr. (argued and briefed), James M. Guthrie, Office of the Attorney General of Ohio, Columbus, OH, for Defendants-Appellees.

Before: KRUPANSKY, NORRIS, and SILER, Circuit Judges.

SILER, J., delivered the opinion of the court, in which NORRIS, J., joined. KRUPANSKY, J. (pp. 400-07), delivered a separate opinion concurring only in the result.

SILER, Circuit Judge.

Plaintiffs appeal the dismissal of their complaint raising federal constitutional challenges to an Ohio statute authorizing local option elections to ban sales of alcohol by holders of class C and D liquor permits. For the following reasons, we AFFIRM.

I.

Plaintiffs brought this action challenging the constitutionality of OHIO REV.CODE § 4305.14, which allows voters to petition for local option elections to determine whether the sale of beer by holders of class C or D liquor permits would be allowed in the precinct. Each of the plaintiffs holds either a class C or D permit. Generally, class C permit holders may sell alcoholic beverages which are not to be consumed upon the premises, OHIO REV.CODE § § 4304.11-.121, and class D permit holders may sell alcoholic beverages for consumption upon the premises. OHIO REV.CODE § 4303.13-.183. Local option elections only affect holders of class C and D permits. Class A-1-A permits, which are not covered by the local option election statute, operate in the same manner as a D-5 permit in that they allow holders to serve beer or liquor by the glass for on-premises consumption. The only difference between the two permits is that an A-1-A permit may only be issued to a microbrewery or winery. See OHIO REV.CODE §§ 4303.21, 4303.18.

Pursuant to OHIO REV.CODE § 4305.14, voters presented petitions to the Franklin County Board of Elections seeking an election on the question of whether beer sales by holders of class C or D permits would be allowed in certain precincts within the city of Columbus. A majority of voters in each precinct voted to end the sale of beer by holders of class C or D permits.

The plaintiffs then filed suit against several defendants alleging that the statutory provisions allowing local option elections on this question violated their due process rights under the Fifth Amendment, interfered with their right to contract in violation of the Contracts Clause, and violated their right to equal protection. They also alleged that acts of the defendants to enforce the statute violated their rights under the First, Fourth, Fifth, Sixth, Eighth and Fourteenth Amendments. The remaining defendants on appeal are the Ohio Department of Liquor Control and William Vasil, Director of the Department.

The district court dismissed each of the claims. In issuing its decision, the court relied heavily on the reasoning of Colson v. City of Shaker Heights, 880 F.Supp. 1161 (N.D.Ohio 1995), aff'd, No. 95-3538, 1996 WL 683595 (6th Cir., Nov.22, 1996), and held that the Ohio legislature may treat various classes of liquor permit holders differently so long as distinctions between the classes are rationally related to a governmental interest. The court concluded that the distinctions implemented by the Ohio legislature were rational and that the local option election statute was therefore constitutionally sound.

II.

As an initial matter, it is not clear whether the plaintiffs are attacking Ohio's local option election scheme on its face or as applied. Their complaint filed in the district court and brief filed with this court do not directly address this issue, and oral argument did not clarify this question. Their arguments seem to attack the Ohio statutes both on their face and as applied. ¹ Plaintiffs' claims would fail under either a facial or as applied analysis but for different reasons. Therefore, we will read their complaint as if they are making both types of attacks and consider each argument.

A.

Any facial attack on the constitutionality of OHIO REV. CODE §§ 4305.14 and 4305.16 is precluded by 37712, Inc. v. Ohio Dep't of Liquor Control, 113 F.3d 614 (6th Cir.1997), decided after the district court's decision in this case. In 37712, Inc., the plaintiffs were a group of businesses who possessed class C and D liquor permits which permitted the retail sale of beer. Some of the plaintiffs operated in precincts where voters had decided, pursuant to local option election, to ban the sale of alcohol under such permits. Other plaintiffs operated in precincts which had not held such elections but sought injunctions invalidating Ohio's local option election statutes. Id. at 617-18. The plaintiffs argued that the statutes "facially violate[d] the due process and the equal protection clauses of the Fourteenth Amendment." Id. at 618. This court rejected both arguments and upheld the district court's dismissal of the case.

Plaintiffs first argued that the statutes violated their procedural due process rights because "no hearing is afforded prior to the taking of the owner's alleged property interest in the use of its liquor permit in a particular locality." Id. at 619. The court rejected that argument, noting that "no notice or opportunity to be heard need proceed [sic] any legislative action of general applicability." Id.

Plaintiffs in 37712, Inc. also made a substantive due process challenge on the grounds that the law allowed voters to target certain establishments for closure while allowing others to continue operations. They focused on the fact that class A-1-A permits were not subject to the local option election, even though they conferred the same rights to dispense alcoholic beverages as D-5 permits. Id. at 620-21. The court rejected this specific argument, stating that "the current version of Ohio's local option laws avoid this constitutional defect because all holders of the same type of license to dispense alcoholic beverages in a particular precinct or residence district are exposed to the same potential disabilities consequent to a local option election." Id. at 620. As to the distinction in treatment between class A-1-A and class C and D permits, the court concluded "[b]eyond contradiction, the holders of A-1-A licenses are not similarly situated with ordinary retailers of alcoholic beverages, and hence the challenged legislative distinction is not arbitrary and capricious." Id. at 621 (citing Colson, 880 F.Supp. at 1166).

The court rejected plaintiffs' equal protection argument on the same grounds. Borrowing from the reasoning of Colson, the court held that plaintiffs had not met their burden of showing that the classification scheme was arbitrary and did not serve a legitimate governmental purpose. Id. at 622. To the contrary, the distinction between class A-1-A and class C and D permits by the Ohio legislature was rational and related to a governmental interest.

Manifestly, a legislative judgment that retail beer sales of the type allowed under an A-1-A permit by a brewery or a brew pub do not pose the same risks of fights, automobile accidents, public disorderly conduct, crime, neighborhood decay, alcohol abuse, and other conceivable ills, as might be presented by ordinary taverns or carry out stores, is not irrational. Additionally, the exemption afforded by A-1-A licenses to breweries and brew pubs from exposure to termination, by local option election, or retail beer sales, is supported by a legislative public policy decision to encourage and protect private investment in costly brewery and brew pub equipment and facilities, and to promote domestic in-state production of beer.

Id. at 621. Therefore, the court concluded, the local option election did not violate plaintiffs' equal protection rights.

Plaintiffs in this case raise the same challenges to the same statute. Moreover, like the plaintiffs in 37712, Inc., they focus on the similarities between class A-1-A and class C and D permits. However, that argument was soundly rejected by this court in 37712, Inc., and plaintiffs' efforts to distinguish or otherwise to discredit that case are without merit. Therefore, plaintiffs' facial challenges to the constitutionality of Ohio's local option election scheme as it applies to holders of class C and D permits is rejected.

B.

We decline to consider an applied challenge to the Ohio statutes because we determine that it is not ripe for judicial review.

"The ripeness doctrine not only depends on the finding of a case and controversy ..., but it also requires that the court exercise its discretion to determine if judicial resolution would be desirable under all of the circumstances." Brown v. Ferro Corp., 763 F.2d 798 (6th Cir.1985). The basic ripeness analysis requires this court "to evaluate both the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration." Abbott Laboratories v. Gardner, 387 U.S. 136, 149, 87 S.Ct 1507, 18 L.Ed.2d 681 (1967)(abrogated on other grounds by Califano v. Sanders, 430 U.S. 99, 105, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977)). This court has identified several factors to weigh in deciding whether an issue is ripe for review. First, we must consider the hardship to the parties if review is denied. Second, we must examine whether the harm that plaintiffs allege "will ever come to pass." Finally, "we must consider whether the case is fit for judicial resolution ..., which requires a determination of whether the factual record is sufficiently developed to produce a fair adjudication of the merits of the parties' respective claims." National Rifle Ass'n of America v. Magaw, 132 F.3d 272, 284 (6th Cir.1997) (...