WCI, Inc. v. Ohio State Liquor Control Comm'n
| Decision Date | 30 June 2016 |
| Docket Number | No. 16AP–72.,16AP–72. |
| Citation | 68 N.E.3d 250,2016 Ohio 4778 |
| Parties | WCI, INC., dba Cheeks, Appellant–Appellant, v. OHIO STATE LIQUOR CONTROL COMMISSION et al., Appellee–Appellee. |
| Court | Ohio Court of Appeals |
On brief: Cicero Adams, LLC, Anthony R. Cicero, Canton, and Luke Lirot (Pro Hac Vice) for appellant.
On brief: Mike DeWine, Attorney General, and Charles E. Febus, for appellee.
{¶ 1} Appellant, WCI, Inc., dba Cheeks, a liquor permit holder, appeals the decision of the Franklin County Court of Common Pleas affirming an order of appellee, the Ohio State Liquor Control Commission ("Commission"), which required the paying of a forfeiture of $25,000 or the revocation of the permit holder's license. For the following reasons, we affirm the decision of the trial court.
{¶ 2} WCI brings four errors for our consideration:
{¶ 3} Appellant, WCI, Inc., which does business as Cheeks, runs a business in the Dayton area. Cheeks is a club that serves alcohol and has dancers perform on stage as well as allowing dancers to perform individual dances for patrons in private areas of the club.
{¶ 4} On March 8, 2014, the Department of Public Safety conducted an investigation of Cheeks. While performing a private dance for one the investigators, the dancer behaved in a manner that violated R.C. 2907.40(C)(2). An employee knowingly touched the investigator while nude or seminude. The investigator reported that at the end of the private dance, the performer led the investigator to a table that was located at the entrance of the private area where she gave another employee an undetermined amount of money. (Public Safety Report at 2.)
{¶ 5} The performer's violations were the basis for the Commission's actions against WCI, which was found to be in violation of Ohio Adm.Code 4301:1–1–52. A hearing was held on August 5, 2012, in which WCI stipulated to the facts in the record as they pertained to Violation 2. (Tr. at 6.) At the hearing, WCI presented documents and argued mitigating circumstances of how it attempts to prevent the behavior that occurred at its club on March 8, 2014.
{¶ 6} The Commission issued an order on August 20, 2015, finding that WCI had violated Ohio Adm.Code 4301:1–1–52(B) :
{¶ 7} The Commission ordered a revocation of WCI's D–5 liquor permit, or in lieu of revocation, the option to pay a $25,000 forfeiture. WCI filed a motion for reconsideration of the penalty only. On September 10, 2015, the Commission denied the motion. WCI filed a notice of appeal with the Franklin County Court of Common Pleas pursuant to R.C. Chapter 119 and filed a motion for stay of the order, which was granted.
{¶ 8} On January 5, 2016, the trial court issued its decision affirming the Commission's order of September 10, 2015. The court found that Ohio Adm.Code 4301:1–1–52 ("Rule 52"), is constitutional and that the Commission acts within its authority when it regulates or sanctions a permit holder when there is evidence of a violation of regulations. The trial court found that the Commission's order was supported by reliable, probative and substantial evidence and is in accordance with law. WCI timely appealed to this court.
{¶ 9} R.C. 119.12 allows an appeal to the common pleas court for a party "adversely affected" by an order of an administrative agency or commission issued pursuant to "adjudication." "To constitute an adjudication for purposes of R.C. 119.12, a determination must be (1) that of the highest or ultimate authority of an agency which (2) determines the rights, privileges, benefits, or other legal relationships of a person." Gwinn v. Ohio Elections Comm., 187 Ohio App.3d 742, 2010-Ohio-1587, 933 N.E.2d 1112, ¶ 10 (10th Dist.) ; see also R.C. 119.01(D) (defining "adjudication").
{¶ 10} Pursuant to R.C. 119.12, a reviewing trial court must affirm the order of an administrative agency if it is supported by reliable, probative, and substantial evidence and is in accordance with law. Univ. of Cincinnati v. Conrad, 63 Ohio St.2d 108, 111, 407 N.E.2d 1265 (1980). "Reliable" evidence is dependable; that is, it can be confidently trusted. In order to be reliable, there must be a reasonable probability that the evidence is true.
"Probative" evidence is evidence that tends to prove the issue in question; it must be relevant in determining the issue. "Substantial" evidence is evidence with some weight; it must have importance and value. Our Place, Inc. v. Liquor Control Comm., 63 Ohio St.3d 570, 571, 589 N.E.2d 1303 (1992). In reviewing the decision of an administrative agency, considerable deference should be accorded to an agency's interpretation of rules the agency is required to administer. State ex rel. Celebrezze v. Natl. Lime & Stone Co., 68 Ohio St.3d 377, 382, 627 N.E.2d 538 (1994). Although the trial court must give deference to the administrative agency's resolution of evidentiary conflicts, the agency's findings are not conclusive. Univ. of Cincinnati at 111, 407 N.E.2d 1265.
{¶ 11} In reviewing an order of an administrative agency, an appellate court's role is more limited than that of a common pleas court reviewing the same order. It is incumbent on the common pleas court to examine the evidence. Such is not the charge of the appellate court. The appellate court is to determine only if the common pleas court has abused its discretion. Lorain City School Dist. Bd. of Edn. v. State Emp. Relations Bd., 40 Ohio St.3d 257, 261, 533 N.E.2d 264 (1988). "The term ‘abuse of discretion’ connotes more than an error of law or judgment, it implies that the court's attitude is unreasonable, arbitrary or unconscionable." Blakemore v. Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d 1140 (1983). As to questions of law, "this court must make its own independent determination of the law to be applied to the facts found by the agency and held by the common pleas court to be supported by reliable, probative and substantial evidence." Franklin Cty. Bd. of Commrs. v. State Emp. Relations Bd., 92 Ohio App.3d 585, 588, 636 N.E.2d 407 (10th Dist.1993).
{¶ 12} The first assignment of error argues that the trial court erred in finding that the Commission's order was supported by reliable, probative and substantial evidence: specifically that the punishment was in accordance with the law. There clearly is reliable, probative and substantial evidence to support both the violation and the punishment and we find that the Commission's order was in accordance with the law.
{¶ 13} WCI did stipulate to certain facts in the investigator's report but the hearing brought to light other facts that support a forfeiture of $25,000 or revocation of the liquor license. (Tr. at 6.) There were cameras that were supposed to be monitoring the private dance rooms. (Tr. at 17.) WCI could not determine what the cameras were supposed to show. Either the cameras were malfunctioning or were not being monitored. Id. The investigator's report stated that at the end of the private dance the performer led the investigator to a table that was located at the entrance of the private area where she gave another employee an undetermined amount of money. (Public Safety Report at 2.)
{¶ 14} The Commission also noted at the hearing that WCI was recently before them for actions that occurred on January 3, 2013 in which WCI's liquor license would have been revoked unless they paid a $10,000 forfeiture. (Tr. at 19.) The evidence indicates that the Commission has required substantial forfeitures from WCI before for similar violations. The Commission chose to impose an increased forfeiture of $25,000 rather than a $10,000 forfeiture that was imposed less than one year before.
{¶ 15} The first assignment of error is overruled.
{¶ 16} The second assignment of error argues that the Commission's order violates WCI's due process rights. WCI states in its brief that Ohio Adm.Code 4301:1–1–52 violates due process by imputing criminal liability for the acts of other persons. WCI argues essentially that it was not in a position to prevent the performer from removing her clothes and being nude and thus should not be subject to what WCI considers criminal punishment.
{¶ 17} First, it is well settled that a liquor permit does not create a property right subject to traditional due process. WCI, Inc. v. Ohio Liquor Control Comm., 116 Ohio St.3d 547, 2008-Ohio-88, 880 N.E.2d 901, ¶ 24, citing State ex rel. Zugravu v. O'Brien, 130 Ohio St. 23, 27, 196 N.E. 664 (1935) ().
{¶ 18} Second, a liquor permit holder may be sanctioned through the suspension or revocation of its liquor permit for the violation of any restriction of R.C. Chapter 4301 and 4303, or any lawful rule of the Commission, or for other sufficient cause. See Elhanise, Inc. v. Ohio Liquor Control Comm., 10th Dist. No. 13AP–937, 2014-Ohio-2243, 2014 WL 2192963, ¶ 11.
{¶ 19} ...
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