Ullis v. Inhabitants of Town of Boothbay Harbor

• Decision Date: 13 April 1983
• Citation: 459 A.2d 153
• Parties: Richard and Frieda ULLIS v. INHABITANTS OF the TOWN OF BOOTHBAY HARBOR and eleven other cases.
• Court: Maine Supreme Court

Page 153

459 A.2d 153

Richard and Frieda ULLIS v. INHABITANTS OF the TOWN OF BOOTHBAY HARBOR and eleven other cases.

Supreme Judicial Court of Maine.

Argued March 10, 1983.

Decided April 13, 1983.

Thomas A. Berry (orally), Boothbay Harbor, for plaintiff.

Bernstein, Shur, Sawyer & Nelson, Geoffrey H. Hole (orally), Portland, for Inhabitants of Town of Boothbay Harbor and Licensing Bd. of the Town of Boothbay Harbor.

Peter J. Brann (orally), Clifford B. Olson, Phillip M. Kilmister, Augusta, for Maine State Liquor Com'n, et al.

Before McKUSICK, C.J., and GODFREY, NICHOLS, CARTER, VIOLETTE and WATHEN, JJ.

McKUSICK, Chief Justice.

The Town of Boothbay Harbor appeals from the adverse judgment of the Superior Court (Lincoln County) in twelve separate actions consolidated below for hearing and now on appeal. At issue in each case was the validity or proper application of the Town's victualer's ordinance, which requires all restaurants serving alcoholic beverages to obtain a "Class H" license from the Town licensing board, and which prohibits the issuance of a Class H victualer's license to any establishment within 1200 feet of a preexisting Class H licensee. ¹ The Superior Court held that section 8.3 of the ordinance--the 1200-foot provision--cannot be used to deny victualer's license applications because it conflicts with the statewide liquor licensing scheme enacted by the legislature, and that it cannot "operate as a vehicle by which a municipality may impose further restrictions on the issuance of [state] liquor licenses." In order to deal with these cases coherently on appeal, we divide them into five categories. Cases in the first three categories must be disposed of on procedural grounds. Cases in categories four and five squarely present the question whether section 8.3 of the Boothbay Harbor's victualer's ordinance may be used to deny restaurateurs' applications for state liquor licenses and local Class H victualers' licenses, respectively. We hold that it may not be so used, and affirm the decision of the Superior Court in those cases.

I. Lack of Standing

In case No. CV-81-72, we must vacate the judgment of the Superior Court and remand with directions to dismiss. The plaintiff in the Superior Court was the Town of Boothbay Harbor, which sought review of a decision of the State Liquor Commission pursuant to 5 M.R.S.A. § 11001(1) (Supp. 1982-1983) and M.R.Civ.P. 80B. The State Liquor Commission had denied Richard and Frieda Ullis, proprietors of the Harbor Deli in downtown Boothbay Harbor, a state liquor license, thereby affirming a preliminary liquor license denial by the Town's selectmen. ² The commission's holding rested on its determination that the Ullises' restaurant was within 300 feet of a nearby church and therefore ineligible for a liquor license under 28 M.R.S.A. § 301 (1974) ³--an issue never addressed by the selectmen. The commission's opinion also stated--in a dictum--that the selectmen had erred when they denied the Ullises' liquor license application on the sole ground that their restaurant was ineligible for a local Class H victualer's license. The Town objected to this dictum and asked the Superior Court to "overturn" it.

Because the commission affirmed the Town's denial of the Ullises' liquor license application (albeit for reasons different from the selectmen's), the Town was not "aggrieved" by the commission decision and had no standing to challenge it in the courts. Only aggrieved parties may appeal agency action to the Superior Court. 5 M.R.S.A. § 11001(1). Thus, we must remand to the Superior Court for entry of an order dismissing the Town's petition for review. See Singal v. City of Bangor, 440 A.2d 1048, 1050 (Me.1982).

II. Lack of a Public Hearing

Cases No. CV-82-23, CV-82-68, CV-82-73, and CV-82-80 must be sent back to the State Liquor Commission for public hearings. In each of these cases, a Boothbay Harbor restaurant owner applied to the Town selectmen for a state liquor license. ⁴ In each case the selectmen refused to issue a license on the ground that the applicant was ineligible for a local Class H victualer's license. In each case the applicant appealed to the State Liquor Commission pursuant to 28 M.R.S.A. § 252-A(3) (Supp.1982-1983), which states, "Any applicant aggrieved by the decision of the municipal officers ... may appeal to the commission, who shall hold a public hearing in the ... town ... where the premises are located." (Emphasis added) In view of the fact that several 1981 cases raising the same issue were already pending in Superior Court, the commission, the applicants, and the Town agreed in these 1982 cases to dispense with a public hearing before the commission, stipulating that the selectmen's decision was based solely on section 8.3 of the Town's ordinance. The commission reversed the selectmen in each case and issued the liquor licenses. It held that an applicant's ineligibility for a Class H license under section 8.3 of the Town's victualer's ordinance could not justify the selectmen's denial of a state liquor license. The Town appealed to the Superior Court, which upheld the commission, and then to the Law Court.

Because section 252-A(3) was not complied with in these cases, we remand to the Superior Court for the entry of orders remanding them to the commission for public hearings. Section 252-A(3), although it speaks of an "appeal" to the commission, clearly requires the commission to do more than merely review for legal sufficiency the reasons given by the municipal officers for their decision. The requirement that the State Liquor Commission hold a public hearing militates strongly against a construction that the "appeal" from the municipal officers' denial is on questions of law only. Furthermore, section 252-A(3)(B) states:

If the decision appealed from was to deny the application or request, the commission may grant the application or request only if it finds by clear and convincing evidence that the decision was without justifiable cause.

We read this provision as requiring the commission to uphold the municipal officers' denial of a license application whenever that denial in fact was proper under title 28--even if the reasons stated by the officers in their decision would not support the denial. ⁵ Finally, the commission is given no power under section 252-A(3)(B) to remand a case to the municipal officers; it must either "affirm" the officers' denial or grant the application itself. These factors convince us that the commission is required, on "appeal," to conduct essentially a de novo hearing on the liquor license application (with appropriate deference paid, of course, to any factual findings actually made by the municipal officers). The commission may take new evidence from the public on any issue relevant to the grant or denial of a license application under title 28. This being so, members of the public retain an interest in the case on "appeal" beyond the usual public interest in knowing the doings of a state agency. ⁶ Their interest, and their right to be heard, may not be sacrificed for the stipulated convenience of the named "parties" before the commission. It is an obvious principle of law and of common sense that parties may not by stipulation affect the rights of any who have not joined in the stipulation. See 73 Am.Jur.2d Stipulations § 9 (1974). The applicant and the municipal officers cannot waive the statutorily mandated public hearing before the commission any more than they could waive the public hearing required by section 252-A(1) to be held before the municipal officers in the first instance. Nor can the commission, by joining in a stipulation with the named parties before it, avoid its statutory responsibility to hear any member of the public who comes forward at the required public hearing with evidence tending to prove alternative reasons for denying the license application.

Since the license applicants, the Town, and the commission all joined in the stipulation to dispense with the public hearing before the commission, they naturally have made no issue of this deficiency in their appellate arguments before either the Superior Court or the Law Court. The failure of the regulatory agency to carry out its statutory responsibility is, however, evident on the face of this record. In such circumstances, this court must, on its own initiative, remand for the commission to hold the public hearings required by section 252-A(3). Cf. Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 111, 88 S.Ct. 733, 738, 19 L.Ed.2d 936 (1968) ("When necessary, however, a court of appeals should, on its own initiative, take steps to protect the absent party who of course had no opportunity to plead and prove his interest below.").

III. Lack of Agency Action

Case No. CV-82-72 must be remanded to the Superior Court with directions to dismiss. Richard and Frieda Ullis initiated the case by filing in the Superior Court a petition for review of final agency action. Their petition alleged that they applied to the Town selectmen for a state liquor license in 1982 and that "the parties have stipulated to the same results in this application as in the 1981 application." ⁷ There is no evidence in the record that either the selectmen or the State Liquor Commission actually issued a decision in this case. In fact, it appears that the Ullises' 1982 liquor license application was neither approved nor denied by the commission. There was therefore no "final agency action" or "decision of the State Liquor Commission" to appeal from under 5 M.R.S.A. § 11001(1) and 28 M.R.S.A. § 252-A(5), respectively. Nor was there a "failure or refusal of an agency to act," made reviewable by 5 M.R.S.A. § 11001(2) (1979), as neither the Town nor the Ullises requested a decision from the commission. Our civil rules reflect the statutory requirement that appeals may be taken only from actual decisions of an administrative agency. ...