SBC Enterprises, Inc. v. City of South Burlington Liquor Control Com'n, s. 95-532

Decision Date13 December 1996
Docket Number95-565,Nos. 95-532,s. 95-532
Citation166 Vt. 79,689 A.2d 427
PartiesSBC ENTERPRISES, INC. v. CITY OF SOUTH BURLINGTON LIQUOR CONTROL COMMISSION. CITY OF SOUTH BURLINGTON v. SBC ENTERPRISES, INC.
CourtVermont Supreme Court

Karen Rush Shingler, Burlington, for plaintiff-appellant (95-532), defendant-appellant (95-565).

Steven F. Stitzel and Joseph S. McLean of Stitzel & Page, P.C., Burlington, for defendant-appellee (95-532), plaintiff-appellee (95-565).

Before ALLEN, C.J., and GIBSON, DOOLEY, MORSE and JOHNSON, JJ.

GIBSON, Justice.

SBC Enterprises, Inc. appeals from a superior court order that declared valid an ordinance of the City of South Burlington requiring a license to provide live entertainment, and that enjoined SBC from providing live dance performances at Club Fantasy until it obtains a license. SBC also appeals from an order of the City's Liquor Control Commission that suspended SBC's liquor license for violating the City's entertainment and public-indecency ordinances. SBC argues that the City Council lacked authority to enact the entertainment ordinance, and that the Liquor Control Commission lacked authority to suspend a liquor license for violations of laws unrelated to the sale of alcoholic beverages. We affirm the judgment of the superior court, but reverse the order of the Liquor Control Commission because it exceeded the scope of its statutory grant of authority.

SBC operates a nightclub in South Burlington called Club Fantasy. On May 22, 1995, the Liquor Control Commission granted SBC a liquor license subject to certain conditions. Condition IV stated, "Licensee shall, at all times, comply with all applicable federal and state laws and ordinances of the City of South Burlington, including without limitation, the City's Zoning Ordinance and the Public Indecency Ordinance." The license further provided that any violation of the conditions shall constitute sufficient grounds for revocation of the license.

On June 5, the South Burlington City Council adopted an amendment of the South Burlington Ordinance, requiring a license to offer live entertainment, and on June 19, the City Council approved an annual entertainment license for SBC to offer "[r]ecorded and live music, patron dancing, stand-up comedy, television, [and] video arcade games." Club Fantasy opened on July 28 and offered performances by live dancers. Between July 29 and September 10, City police officers issued forty-nine citations to SBC, Shawn Cliche, the president of SBC, individual employees and dancers. Forty-eight citations were for violations of the entertainment ordinance and one was for violating the public-indecency ordinance. On August 22, the City filed a complaint in superior court seeking a declaration that the entertainment ordinance is valid, and a permanent injunction barring SBC from further violating the ordinance.

On September 1, the City notified SBC to appear at a September 18 public hearing before the Liquor Control Commission to consider suspension of SBC's liquor license for violating Condition IV of the license by failing to comply with the entertainment ordinance, the public-indecency ordinance and the zoning regulations of the City. At the hearing, SBC admitted violating the entertainment ordinance, but argued that the ordinance was invalid because the City Council did not have authority to enact it. SBC denied violating the public-indecency ordinance and denied receiving notice of the zoning violation. The Liquor Control Commission issued its decision on September 25, concluding that the entertainment ordinance was valid and that SBC had violated both the entertainment and public-indecency ordinances. It did not rely on the zoning violation due to the alleged lack of notice. The Commission suspended SBC's liquor license for forty-five days to begin October 13, 1995.

On September 29, the superior court ruled that the City's entertainment ordinance is valid and granted a permanent injunction barring SBC from further violations. Subsequently, the City Council granted SBC an entertainment license for live dancers, and SBC requested that the Commission stay the liquor-license suspension. The Commission denied the request on October 13, and SBC renewed its request before this Court, which granted the stay on October 20.

I.

SBC argues that the superior court erred by declaring the entertainment ordinance valid because the City Council lacked authority under 24 V.S.A. § 2291(11) to enact the ordinance. "[A] municipality has only those powers and functions expressly granted to it by the [L]egislature, such additional functions as may be incident, subordinate or necessary to the exercise thereof, and such powers as are essential to the declared objects and purposes of the municipality." Robes v. Town of Hartford, 161 Vt. 187, 190, 636 A.2d 342, 345 (1993). Section 12 of the entertainment ordinance states that the ordinance is enacted by the City Council under the authority granted by 24 V.S.A. § 2291 and by the South Burlington City Charter. The superior court held that the entertainment ordinance was authorized by both § 2291(11) and the City Charter § 104(g).

Section 104(g) of the City Charter authorizes the City "to adopt and enforce ordinances for the purpose of regulations and licensing ... places o[f] public resort or public amusement whether indoor or outdoor; places dispensing food and drink to the public, such as restaurants, bars or inns." SBC does not contest the court's application or interpretation of the charter provision. Accordingly, we hold that the City Charter authorized the City to enact the entertainment ordinance, and we need not decide whether 24 V.S.A. § 2291(11) also authorizes the ordinance. *

II.

SBC argues that the Liquor Control Commission exceeded its authority by suspending SBC's liquor license for activities beyond the scope of the liquor-control enabling legislation. SBC did not raise this argument before the Commission, and ordinarily it would not be preserved for review. In re Denio, 158 Vt. 230, 234, 608 A.2d 1166, 1168 (1992). The question of an agency's authority, however, is one of jurisdiction, see Verrill v. Dewey, 130 Vt. 627, 632, 299 A.2d 182, 185 (1972) (authority of public official to act is synonymous with jurisdiction of court), which may be raised for the first time on appeal. Town of Charlotte v. Richmond, 158 Vt. 354, 358, 609 A.2d 638, 640 (1992).

The State Liquor Control Board has only those powers expressly granted by the Legislature and those incidental powers as are necessarily implied for the full exercise of the legislative grant. In re Club 107, 152 Vt. 320, 323, 566 A.2d 966, 967 (1989). Under the legislative scheme, the Board is the paramount authority, and the local liquor control commissions are constituted as subordinate agencies. Verrill v. Daley, 126 Vt. 444, 446, 236 A.2d 238, 239-40 (1967). The duties of the State Board are set forth by 7 V.S.A. *430s 104, which authorizes the Board to "[s]ee that the laws relating to intoxicating liquor and to the manufacture, sale, transportation, barter, furnishing, importation, exportation, delivery, prescription and possession of malt and vinous beverages, spirituous liquors and alcohol by licensees and others are enforced." 7 V.S.A. § 104(1). The Board also has the authority to promulgate related rules and issue permits ...

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