Texas Liquor Control Bd. v. Attic Club, Inc.

• Decision Date: 08 July 1970
• Docket Number: No. B--2031,B--2031
• Citation: 457 S.W.2d 41
• Parties: TEXAS LIQUOR CONTROL BOARD, Petitioner, v. The ATTIC CLUB, INC. et al., Respondents.
• Court: Texas Supreme Court

Page 41

457 S.W.2d 41

TEXAS LIQUOR CONTROL BOARD, Petitioner, v. The ATTIC CLUB, INC. et al., Respondents.

No. B--2031.

Supreme Court of Texas.

July 8, 1970.

Rehearing Denied July 29, 1970.

Crawford C. Martin, Atty. Gen., Jay Floyd, Asst. Atty. Gen., Austin, for petitioner.

Carr, Osorio, Palmer, Dickson, Long & Coleman, E. Eugene Palmer, Austin, for respondents.

STEAKLEY, Justice.

The Texas Liquor Control Board, now the Texas Alcoholic Beverage Commission, ¹ on May 14, 1969, promulgated Rule and Regulation No. 56 to become effective on September 1, 1969. Its full text is set forth in the attached Appendix. Respondents, The Attic Club, Inc., and the Black Garter Club, private club registration permittees under the Texas Liquor Control Act, Art. 666--1 et seq., Vernon's Texas Penal Code, filed this suit for themselves and as a class action to restrain enforcement of the rule. See Kee v. Baber, 157 Tex. 387, 303 S.W.2d 376 (1957); Cobb v. Harrington, 144 Tex. 360, 190 S.W.2d 709 (1945); and cf. Texas State Board of Examiners in Optometry v. Carp, 162 Tex. 1, 343 S.W.2d 242 (1961). Upon temporary injunction hearing, the trial court found probable injury but not probable right and denied temporary injunctive relief; ² see Texas Liquor Control Board v. Diners' Club, Inc., 347 S.W.2d 763 (Tex.Civ.App.1961, error ref'd n.r.e.). The Court of Civil Appeals reversed and rendered judgment for Respondents. 450 S.W.2d 149. We reverse.

Art. 666--2 of the Texas Liquor Control Act, recites that 'This entire Act shall be deemed an exercise of the police power of the State for the protection of the welfare, health, peace, temperance, and safety of the people of State' and directs that 'all its provisions shall be liberally construed for the accomplishment of that purpose.'

Art. 666--6 vests the Commission with 'power and authority to prescribe all necessary rules and regulations to that end;' namely: 'to supervise, inspect, and regulate every phase of the business of manufacturing, importation, exportation, transportation, storage, sale, distribution, possession for the purpose of sale, and possession of all alcoholic beverages, including the advertising and labeling thereof, in all respects necessary to accomplish the purposes of this Act.'

Art. 666--7a provides the procedure for the adoption of rules or regulations for which a penalty is prescribed:

'No rule or regulation for which a penalty is prescribed either by this Act or by the Board, shall be adopted by the Board except after notice and hearing. Notice of such hearing shall be given by publication in three (3) newspapers of general circulation in different sections of the State.

Such notice shall specify the date and place of hearing and the subject matter of the proposed rule or regulation and shall constitute sufficient notice to all parties. The date of hearing shall be not less than ten (10) days from the date of publication of notice. At such hearing any person, either by himself or by attorney, may present relevant facts either in support or opposition thereto. The Board shall upon a finding of facts, have the authority and power to adopt, modify, nullify, or alter such rules or regulations.

Upon the final adoption of any rule or regulation, the Board shall cause the same to be published one time in a newspaper of general circulation in this State and the same shall have the force and effect of law as of the date of publication, unless a different date is specified therein. The publication thereof shall be sufficient notice to all parties. Any person who violates any valid rule or regulation or any provision thereof shall be guilty of a misdemeanor and upon conviction thereof shall be subject to the penalty as prescribed in Section 41, Article I of this Act.'

Respondents acknowledge that the Board conformed to the statutory requirements of notice, hearing and publication in the promulgation of Rule 56. They say, however, that the absence of findings of fact is fatal to its validity. The contention is that Art. 666--7a conditions the authority and power of the Board to adopt rules and regulations upon findings of fact reduced to writing in the promulgating order, or in other records of the Board. Additionally, Respondents contend that Sections 3 and 4 of the Rule are unenforceably vague, indefinite and ambiguous.

The statutory procedure for the adoption of rules and regulations for which a penalty is prescribed is plainly stated. There must be notice and hearing and at the hearing any person may present relevant facts either in support of or in opposition to the proposal. The Board is clothed with the authority and power to adopt the proposal if the facts are found to support such action. It is not here contended as a basis for the claimed procedural invalidity that the Board did not act upon the basis of facts found, or that the facts do not support its action. The argument of invalidity, and the ruling of the Court of Civil Appeals, are grounded on the proposition that specific fact findings were not contained in the promulgating order, or in other records of the Board, the presupposition being that such is a requirement of the statute.

The intermediate court cited Skates v. City of Paris, 363 S.W.2d 425 (Tex.Sup.1963) as controlling; reference was also made to Railroad Commission v. Roberdeau, 150 Tex. 506, 242 S.W.2d 881 (1951); Thompson v. Railroad Commission, 150 Tex. 307, 240 S.W.2d 759 (1951); and Thompson v. Hovey Petroleum Company, 149 Tex. 554, 236 S.W.2d 491 (1951). The statute in Skates, and in City of Houston v. Melton, 163 Tex. 294, 354 S.W.2d 387 (1962), concerned the dismissal of a particular employee and provided that such should not be done 'except on a finding by the Commission of the truth of specific charges against such employee.' The Roberdeau, Thompson, and Hovey Petroleum cases concerned the granting of motor carrier operating rights to a particular applicant, it being provided by statute that the order granting the application would 'be void' unless 'full and complete findings of fact' were set forth in the order. In each instance compliance with the statutory requirement was held to be prerequisite to the validity of the order in question. The statute here, however, concerns the adoption, after notice and hearing, of rules and regulations that are legislative in nature and which carry a presumption of the existence of facts justifying the specific exercise of the legally delegated authority. This presumption is strengthened in an exertion of the police power where the regulation is adopted after notice and public hearing. Trapp v. Shell Oil Co., 145 Tex. 323, 198 S.W.2d 424 (1946). Article 666--7a does not require an order of the Board adopting rules in an exercise of its delegated powers to contain findings of fact, or that findings of fact be otherwise reduced to writing. The statute says no more than that the Board is empowered to act upon a finding of facts; special or written findings are not declared prerequisite to the validity of the order. The statute may not be enlarged by implication to include these unstated requirements, particularly where the subject matter is regulation for general application within delegated authority and not action affecting a particular person or entity. This distinction is drawn in Pacific States Box & Basket Company v. White, 296 U.S. 176, 56 S.Ct. 159, 80 L.Ed. 138 (1935):

'But where the regulation is within the scope of authority legally delegated, the presumption of the existence of facts justifying its specific exercise attaches alike to statutes, to municipal ordinances, and to orders of administrative bodies. * * * Here there is added reason for applying the presumption of validity; for the regulation now challenged was adopted after notice and public hearing as the statute required. It is contended that the order is void because the administrative body made no special findings of fact. But the statute did not require special findings; doubtless because the regulation authorized was general legislation, not an administrative order in the nature of a judgment directed against an individual concern.'

The second attack upon Rule 56 claims unconstitutional vagueness in these provisions:

Section 3(3):

'The word 'guest' shall mean an individual who is personally known by the member or one of the member's family and who is admitted to the club premises by personal introduction of, or in the physical company of, the member or one of the member's family. If a guest who is not in the physical company of a member or one of the member's family incurs an indebtedness, such indebtedness shall be billed to and paid by the member.'

Section 4:

'A Private Club shall provide regular food service adequate for its members and their guests. The term 'food service adequate for its members and their guests' shall mean that complete meals shall be available on the club premises for service to members, their families, and guests.'

Art. 666--15(e) contains the following definitions:

1. 'For purposes of this Act, the following definition of words and terms shall apply:

(a) 'Private Club' shall mean an association of persons, whether unincorporated or incorporated under the laws of the State of Texas, for the promotion of some common object and whose members must be passed upon and elected as individuals, by a committee or board made of members of the club. Such club shall own, lease or rent a building, or space in a building of such extent and character as in the judgment of the Liquor Control Board, is suitable and adequate for Its members and their guests ³ and shall provide regular food service adequate for Its members and their guests * * *.

(b) 'Locker System' shall mean that system of alcoholic beverages storage whereby the club rents to its members lockers wherein the member may store alcoholic beverages for consumption by himself Or his quests. All such alcoholic beverages so stored under...