State ex rel. Richardson v. Pierandozzi

• Decision Date: 19 December 1989
• Docket Number: No. 17863,17863
• Citation: 117 Idaho 1,784 P.2d 331
• Court: Idaho Supreme Court
• Parties: The STATE of Idaho, ex. rel., Mack W. RICHARDSON, Jr., Director, Department of Law Enforcement of the State of Idaho, Plaintiff-Respondent, v. Dante & Janet PIERANDOZZI, d/b/a, D & J Lounge, City of Montpelier, County of Bear Lake, State of Idaho, Defendants-Appellants.

Page 331

784 P.2d 331

117 Idaho 1

The STATE of Idaho, ex. rel., Mack W. RICHARDSON, Jr., Director, Department of Law Enforcement of the State of Idaho, Plaintiff-Respondent, v. Dante & Janet PIERANDOZZI, d/b/a, D & J Lounge, City of Montpelier, County of Bear Lake, State of Idaho, Defendants-Appellants.

No. 17863.

Supreme Court of Idaho.

Dec. 19, 1989.

Ardee Helm, Jr., Montpelier, for defendants-appellants.

Jim Jones, Atty. Gen., Robert M. MacConnell, Chief Counsel, Dept. of Law Enforcement, Boise, argued, for plaintiff-respondent.

McDEVITT, Justice.

Appellants Dante and Janet Pierandozzi are the holders of an alcoholic beverage license for their business, the D & J Lounge in Montpelier, Idaho. On November 6, 1986, appellants employed the Westworld Playmates Male Dance Review to perform on the licensed premises. Undercover Department of Law Enforcement agents attended the show. The agents later testified that during the course of the performance the dancers exposed to view clefts of buttocks, pubic hair, and the anus of one of the dancers.

As a result of this performance, the department of law enforcement initiated administrative proceedings to revoke the liquor license of appellants for violations of I.C. § 23-1010A, which prohibits licensees from allowing nudity on the licensed premises.

Appellants were notified of the revocation proceeding by personal service of the Petition to Revoke and Notice of Revocation on December 30, 1986, and a Notice of Hearing mailed to appellants on April 20, 1987.

On May 12, 1987, an administrative hearing was held where each of the parties presented witnesses. The Hearing Examiner concluded that I.C. § 23-1010A had been violated, and revoked appellants' liquor license. The District Court upheld that determination, and appellants now challenge that holding before this Court. Appellants argue that 1) the notice of the hearing was inadequate, 2) the hearing Examiner's findings were clearly erroneous, 3) revocation of their liquor license is in excess of statutory authority, 4) the Department of Law Enforcement is enforcing the statute in an arbitrary manner, and 5) enforcement of the statute is unconstitutional.

I. Adequacy of Notice

Appellants assert that the notice they received was inadequate under I.C. § 67-5209. We find that the notice did fulfill the statutory requirements of that section.

Section 67-5209 provides that in a contested case, the parties shall have an opportunity for a hearing after reasonable notice. The statute lists the specific information to be included in that notice. ¹ In this case, the record reflects that a Petition to Revoke and a Notice of Revocation were personally served upon appellants more than four months before the hearing. Three weeks before the hearing, a Notice of Hearing was mailed to appellants. Taken together, the information contained in the three documents satisfy the notice requirement of § 67-5209.

The purpose of the notice requirement is to inform parties of the particular facts and issues to be addressed in the hearing, allowing an opportunity to prepare a defense. Department of Law Enforcement v. Engberg, 109 Idaho 530, 708 P.2d 935 (Ct.App.1985). In this case appellants have only challenged the statutory sufficiency of the Notice of Hearing, and do not allege that they were unable to prepare an adequate defense. We find that both the letter and the spirit of the notice requirement were satisfied by the notice to appellants.

II. Standard of Review of the Agency Findings

Appellants also urge this Court to reverse the findings reached by the Hearing Examiner. The standard of judicial review of agency actions is supplied by I.C. § 67-5215(g). That section allows a court to reverse or modify an agency decision only under limited circumstances, including, inter alia, a constitutional violation, action in excess of statutory authority, clearly erroneous findings of fact, an arbitrary and capricious decision or one characterized by an abuse of discretion.

A. Constitutional Violation

Appellants challenge the constitutionality of the procedure whereby the Hearing Examiners are chosen from a list maintained by the Department of Law Enforcement and are compensated by the Department on a case by case basis. In support of this challenge appellants draw an analogy between this current system at the Department of Law Enforcement and the former Justice of the Peace system which was condemned by the U.S. Supreme Court in Tumey v. Ohio, 273 U.S. 510, 47 S.Ct. 437, 71 L.Ed. 749 (1927), where the Court held that due process of law was denied to one tried before a judicial officer whose sole source of income was the fines collected from the accused.

We find this rule to be inapplicable in this case for several reasons. First, the only authority which appellants cite to support this challenge unequivocally states that Tumey only relates to judicial officers, and has never been applied to disqualify quasi-judicial or administrative officers. 72 A.L.R. 375 § 1. In addition, assuming arguendo that the rule does apply to administrative officers, it is limited to disqualification of officers who are paid only if they convict the accused, and does not apply where the officer is merely compensated according to the number of cases heard. 72 A.L.R. 397, et seq., § 10. Finally, appellants claim that the Hearing Examiner is inclined to find in favor of the Department of Law Enforcement in order to attract future cases and compensation from the Department. This potential for bias is cured by the fact that the parties have the right to judicial appeal of any administrative decision manifesting an abuse of discretion, arbitrary and capricious disposition, or findings which are clearly erroneous in light of the evidence presented at the hearing. I.C. § 67-5215(g). Appellants have failed to demonstrate any such bias on the part of the Hearing Examiner on the record of this case. Consequently, this Court has no basis on which to find a denial of due process resulting from the procedures of the hearing.

B. Excess of Statutory Authority

Appellants assert that the conduct at issue is not within the scope of the statute which they are accused of violating. I.C. § 23-1010A prohibits in a licensed premises the "[e]mployment or use of any person while such person is unclothed or in such attire ... as to expose to view any portion of the female breast below the top of the areola or of any portion of the pubic hair, anus, cleft of buttocks, vulva, or genitals." Appellants suggest that the word "female" modifies the entire list of nouns, thus excluding male nudity as a grounds for license revocation. This argument is not persuasive.

The word "person" indicates that the legislature intended the statute to apply to nudity of either sex. Further, the word "or" following the "female breast" clause is a disjunctive term, separating the "female" adjective from the remainder of the list. Thus, the conduct of the male dancers employed by appellants is clearly within the plain meaning of the statute.

Another issue concerning the scope of the statute is whether under the terms of the statute appellants can be held liable for the illegal conduct of the dancers in their employ. In order to have their liquor license subject to revocation, the licensees must be found guilty of "conducting, permitting, or encouraging" the illegal activity on the licensed premises. I.C. § 23-1010A. The record reflects that appellants were aware of the conditions attached to their liquor license and gave detailed instructions to the dancers before the performance as to what was not permitted under the law. Thus, they argue that they did not sanction or encourage the illegal activity, and did not have the requisite intent to violate the statute.

Although the statute does provide for misdemeanor penalties where its nudity provisions are violated, appellants in this case are not charged with a criminal offense. The sanctions provided for in the context of liquor licensing are not intended to punish the individual proprietors. State v. Meyers, 85 Idaho 129, 132-33, 376 P.2d 710, 711 (1962). They are part of an administrative system within the legitimate scope of the State's police power to protect the public health, safety and morals. The terms and conditions under which a liquor license is granted are subject to the pleasure of the legislature under the "broad sweep" of authority granted to the states under the Twenty-First Amendment of the U.S. Constitution. California v. LaRue, 409 U.S. 109, 93 S.Ct. 390, 34 L.Ed.2d 342 (1972); Crazy Horse, Inc. v. Pearce, 98 Idaho 762, 765, 572 P.2d 865, 868 (1977), citing Gartland v. Talbott, 72 Idaho 125, 131, 237 P.2d 1067 (1951).

Another of the terms and conditions imposed upon holders of Idaho liquor licenses by the legislature is contained in § 23-935, which provides in part: "A violation of any of the provisions of [Title 23] by any agent, employee, servant, or other person in any way acting on behalf of the licensee shall be presumed to be a violation by the licensee." In addition to this statutory authority, this rule is supported by the case law of Idaho. In State v. Meyers, 85 Idaho 129, 376 P.2d 710 (1962), this Court held that licensees must be responsible to the licensing authority for the conduct of their employees. Similarly, in Palm Gardens v. Oregon Liquor Control Commission, 15 Or.App. 20, 514 P.2d 888 (1973) the Oregon court held that a bar owner could be held responsible for lewd conduct of dancers which violated liquor licensing statutes based on the fact that the bar owner was present and at all times had a right to control the conduct of the dancers.

Even without the benefit of the foregoing statutory presumption, the appellants would be personally liable for violating the provisions of § 23-1010A if they conducted, permitted, or encouraged the violation. Although it is uncontested that Dante Pierandozzi explained to...