Saxon Coffee Shop, Inc. v. Boston Licensing Bd.

• Decision Date: 23 June 1980
• Citation: 407 N.E.2d 311,380 Mass. 919
• Parties: SAXON COFFEE SHOP, INC. v. BOSTON LICENSING BOARD.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 311

407 N.E.2d 311

380 Mass. 919

SAXON COFFEE SHOP, INC. v. BOSTON LICENSING BOARD.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued Feb. 6, 1980.

Decided June 23, 1980.

Francis J. DiMento, Boston, for plaintiff.

John L. Keefe, Asst. Corp. Counsel, Boston, for defendant.

Before HENNESSEY, C. J., and QUIRICO, BRAUCHER, KAPLAN and LIACOS, JJ.

QUIRICO, Justice.

This is an appeal from a judgment of the Superior Court affirming a decision of the Boston Licensing Board (board) to revoke the common victualler's license of the appellant, pursuant to G.L. c. 140, § 9, as amended by St. 1975, c. 256, § 2. The appellant sought review in the Superior Court under G.L. c. 249, § 4. Jurisdiction of this court is based on G.L. c. 211A, § 10. We annul the decision of the board as unsupported by substantial evidence.

The Saxon Coffee Shop is located at 224A Tremont Street in Boston, in the "theatre district," and it is also in, or on the fringes of, the "combat zone." The coffee shop occupies the first floor of a five-story building, which contains fifteen apartments on the upper floors. Andreou owns the entire building. He is also the principal stockholder of the coffee shop, and manages the shop during the day.

In August, 1978, the Boston police department began an investigation of prostitution in the area. As a result of their investigation, they filed two reports which were referred to the board. The reports asserted that known female prostitutes congregated both inside the shop and on the street in front of the shop, and signaled to or talked to passing males. When policemen arrived, the women would run inside the coffee shop and "stay there with the apparent cooperation of the management until the Police Unit (left) the area." The police reports further alleged that Andreou refused to "cooperate" when warned of possible criminal action.

On November 16, 1978, the board held a hearing. Two police officers involved in the investigation testified substantially to what was in their reports, with certain exceptions as discussed below. In addition, they testified that the apartments over the coffee shop were being used for prostitution. This conclusion was allegedly based on conversation with some "known prostitutes," and a conversation with another unnamed policeman who purportedly had seen some of these apartments furnished with only a mattress on the floor. Both police officers testified that "legitimate" women were being harassed by men in the area, and they considered the situation a "public safety factor." The officers said that Andreou had refused to cooperate by asking the women in question to leave his shop. One officer testified that other establishments in the area were not presenting similar "problems."

Andreou, who appeared at the hearing without an attorney, testified that he was aware that there were prostitutes in the area, but that this was "the polices' fault." He did not believe he had the right to ask anyone to leave his shop, and that even when he had to expel a "drunk" he had to call the police. He said he screened the people who rented his apartments, and checked to be certain they were employed, but that these tenants had given their keys to prostitutes. To combat this problem he had evicted some people and hired a live-in manager to keep out people "who don't belong there."

On December 14, 1978, the board issued its decision revoking Andreou's license and stating its reasons therefor. The reasons were:

"1. The management, one Alexander Andreau (sic ) is owner and Peter Dardonis, as night manager, has allowed the premises to be used for prostitution.

"2. Alexander Andreau (sic ) owns the entire building at 224a Tremont Street which consists of the Saxon Coffee Shop, Inc. on the first floor and apartments on remaining floors.

"3. A pattern existed whereby apartments in the building were used to consumate (sic ) the solicitation made in the coffee shop(.)

"4. The licensee failed to cooperate with the police in investigating prostitution on the premises.

"5. The licensee expressed to the Board at the hearing that in his opinion it is not his responsibility to ascertain the occupation or activities of his patrons.

"6. The licensee, as the owner of the building in which these prostitutes operate is receiving a financial gain and appears to have no interest in ending this enterprise. Some of the apartments are furnished with only a mattress in the middle of the floor.

"7. Other licensed premises on the same street within a block or two have had no problems with use of the premises by prostitutes. The problem here is due to the attitude of management."

On December 26, 1978, the coffee shop sought review in the Superior Court. It sought a preliminary injunction against enforcement of the board's decision, which injunction was granted. The case was tried before a judge, who entered judgment on February 21 dismissing the complaint with costs. ¹ After a hearing on February 23, the preliminary injunction was reinstated pending appeal. The coffee shop appealed to the Appeals Court, and we transferred the case to this court on our own motion.

The statute under which the board revoked the shop's license reads as follows: "If, in the opinion of the licensing authorities, a licensee as an innholder or a common victualler ceases to be engaged in the business he is licensed to pursue, or fails to maintain upon his premises the implements and facilities required by this chapter, they shall immediately revoke his license. If a licensee at any time conducts his licensed business in an improper manner, the licensing authorities, after notice to the licensee and reasonable opportunity for a hearing, may upon satisfactory proof thereof suspend or revoke his license. An innholder who violates section seven shall forfeit his license. A licensee who is convicted a second time of the violation of any of the provisions of sections six to eighteen, inclusive, shall forfeit his license." G.L. c. 140, § 9, as amended by St. 1975, c. 256, § 2.

1. Standard of review. General Laws c. 140, § 9, does not provide for either further administrative review or judicial review of the decision of the board. ² The board is not a State "agency" within the meaning of the State Administrative Procedure Act, G.L. c. 30A, § 1(2). United Food Corp. v. Alcoholic Beverages Control Comm'n, --- Mass. ---, --- ^a, 376 N.E.2d 833 (1978), ³ and cases cited. Saxon therefore brought this action in the Superior Court under G.L. c. 249, § 4, a civil action in the nature of certiorari. This is the appropriate channel for review in this case, where a proceeding of an adjudicatory nature resulted in injury in the form of a lost license, and there is no other "reasonably adequate" remedy. See Boston Edison Co. v. Selectmen of Concord, 355 Mass. 79, 82-83, 242 N.E.2d 868 (1968); School Comm. of Salem v. Civil Serv. Comm'n, 348 Mass. 696, 697-698, 205 N.E.2d 707 (1965); Connolly v. Alcoholic Beverages Control Comm'n, 334 Mass. 613, 138 N.E.2d 131 (1956); Miami Grove, Inc. v. Licensing Bd. of Boston, 312 Mass. 318, 319, 44 N.E.2d 637 (1942); Coyne v. Alcoholic Beverages Control Comm'n, 312 Mass. 224, 44 N.E.2d 692 (1942).

We said in McSweeney v. Town Manager of Lexington, --- Mass. ---, --- ^b, 401 N.E.2d 113, 117 (1980), that the appropriate standard of review in a certiorari case must be determined according to "the nature of the action sought to be reviewed." See Boston Edison Co. v. Boston Redevelopment Auth., 374 Mass. 37, --- ^c, 371 N.E.2d 728 (1977); Sherman v. Rent Control Bd. of Brookline, 367 Mass. 1, 7-10, 323 N.E.2d 730 (1975). We declined to apply the substantial evidence test in McSweeney, and instead applied the "arbitrary, capricious or an abuse of discretion" standard for termination of employment. That standard of removal "for cause" had been defined by this court to be whether "there has been an arbitrary exercise of power, and the cause alleged for the removal is unreasonable and in law insufficient." Dunn v. Mayor of Taunton, 200 Mass. 252, 258, 86 N.E. 313, 315 (1908).

The standard for revocation of common victuallers' licenses by local licensing boards is less clear. In Miami Grove, supra, decided prior to the enlargement of the scope of review in certiorari cases to include review of the evidence, we did not consider whether the evidence supported the board's findings. See id. 312 Mass. at 324, 44 N.E.2d 637. In Dixie's Bar, Inc. v. Boston Licensing Bd., 357 Mass. 699, 703, 259 N.E.2d 777 (1970), we inquired whether the board had committed an error of law, had abused its discretion, or had taken arbitrary or capricious action.

The standard of review in liquor license revocation cases, initiated under G.L. c. 138, § 23, but appealed from the Alcoholic Beverages Control Commission, is the substantial evidence test. Olde Towne Liquor Store, Inc. v. Alcoholic Beverages Control Comm'n, 372 Mass. 152, 153, 360 N.E.2d 1057 (1977). While it is true that this test is mandated by the State Administrative Procedure Act, G.L. c. 30A, § 14(7)(e), applied to the ABCC because it is a State agency, we see no difference in the "nature of the claim" in a liquor license revocation appeal and an appeal from revocation of a common victualler's license. Revocation proceedings in both instances are required by statute, and are adjudicatory in nature. The legal rights and duties of licensees are determined therein. See G.L. c. 138, § 67; G.L. c. 140, § 9. The "nature of the claim" is virtually identical on appeal. Therefore, we believe the proper standard of review in cases where a local licensing board has revoked a common victualler's license under G.L. c. 140, § 9, is the substantial evidence test. See Boston Edison Co. v. Boston Redevelopment Auth., supra; School Comm. of Salem, supra, 348 Mass. at 698, 205 N.E.2d 707. Cf. Young v. Mayor of Brockton, 346 Mass. 123, 125, 190 N.E.2d 396 (1963) (licensing boards may be...