West Virginia Nonintoxicating Beer Com'r v. A & H Tavern, 18628

• Decision Date: 03 July 1989
• Docket Number: No. 18628,18628
• Citation: 181 W.Va. 364,382 S.E.2d 558
• Court: West Virginia Supreme Court
• Parties: W.VA. NONINTOXICATING BEER COMMR. v. A & H TAVERN, et al.

Page 558

382 S.E.2d 558

181 W.Va. 364

W.VA. NONINTOXICATING BEER COMMR. v. A & H TAVERN, et al.

No. 18628.

Supreme Court of Appeals of West Virginia.

July 3, 1989.

Syllabus by the Court

1. "Interpretations of statutes by bodies charged with their administration are given great weight unless clearly erroneous." Syl. Pt. 4, Security National Bank and Trust Co. v. First W. Va. Bancorp Inc., 166 W.Va. 775, 277 S.E.2d 613, 614 (1981), appeal dismissed, 454 U.S. 1131, 102 S.Ct. 986, 71 L.Ed.2d 284 (1982).

2. "There is no inherent right in any individual ... to engage in a business which the state, in the exercise of the police power, has placed under surveillance and permits only as a privilege or franchise." State ex rel. Morris v. W.Va. Racing Comm'n, 133 W.Va. 179, 55 S.E.2d 263, 270 (1949) (citing Hinebaugh v. James, 119 W.Va. 162, 192 S.E. 177 (1937)).

3. The Nonintoxicating Beer Commissioner is vested with discretion to determine locations suitable for licensed sale of nonintoxicating beer and persons suitable to receive such license, and such discretion will not be interfered with by the Court, unless this discretion is exercised in an arbitrary or fraudulent manner. Brackman's, Inc. v. City of Huntington, 126 W.Va. 21, 27 S.E.2d 71, 79 (1943).

4. "The purpose of notice requirements is to make certain that the prospective party in a contested case is aware of the impending proceeding and its substance with sufficient certainty to be in a position to answer and participate." McJunkin Corp. v. W. Va. Human Rights Comm'n, 179 W.Va. 417, 369 S.E.2d 720, 723 (1988).

Jan L. Fox, Asst. Atty. Gen., Charleston, for WV Beer Comm.

Tom Rodd, Morgantown, for A & H Tavern.

WORKMAN, Justice:

The West Virginia Nonintoxicating Beer Commission ("Commission") appeals from an order of the Kanawha County Circuit Court directing the Nonintoxicating Beer Commissioner ("Commissioner") to issue a Class A beer license to the A & H Tavern. The Commissioner had previously refused to reissue the tavern's license because he had found it was not a "suitable place" for the sale of beer. The operators of the tavern argued before the Kanawha County Circuit Court that the Commissioner had employed the wrong criteria in judging the suitability of their establishment and abused his discretion in refusing to renew their license. The Commissioner's position is that he acted within his discretion in refusing to reissue the license. We agree and reverse.

On June 9, 1986, the Commissioner wrote the owners of the A & H Tavern declining to reissue their Class A beer license. The letter stated "[b]ecause of previous violations at the establishment, the premises to be licensed is not a suitable place for a Class A license." (Commissioner's letter of June 9, 1986). Additionally the Commissioner's letter cited West Virginia Code § 11-16-12(b) [1937] which is now amended to Code, 11-16-8(c)(2) [1986]. ¹ This Code section states "[t]he commissioner may refuse a license to any applicant under the provisions of this article if the commissioner shall be of the opinion: ... (2) That the place to be occupied by the applicant is not a suitable place; ...."

After receiving this notice, A & H Tavern filed a petition for a writ of mandamus before the Kanawha County Circuit Court on July 7, 1986. The circuit court held that since the license was not reissued rather than cancelled or revoked, this was a matter within the Commissioner's discretion and mandamus would not lie. The tavern owners were directed to the Administrative Procedures Act, W.Va.Code § 29A-5-1 et seq., as amended, to request an administrative hearing. This administrative hearing was held on September 25, 1986, before a specially appointed hearing examiner. A & H Tavern argued that Code, 11-16-12(b) [1937] was a physical location statute, or in the alternative, that the evidence of conduct problems was insufficient to deny reissuance.. In a written decision dated June 10, 1987, the hearing examiner held

a "suitable place" in Chapter 11, Article 16, Section 8 of the West Virginia Code refers to the physical location and not to the activities occurring there, that there is insufficient proof that the ... (Licensee) did not have a suitable place, and that the Nonintoxicating Beer Commissioner acted arbitrarily in not renewing the license of the ... (Licensee) based on not having a suitable place.

Hearing examiner's opinion at 6.

The Commissioner petitioned the Kanawha County Circuit Court to reverse the decision. On September 8, 1987, that court affirmed the decision of the special hearing examiner. It is from that order that the Nonintoxicating Beer Commissioner appeals.

The evidence presented at the administrative hearing reveals that A & H Tavern was one of seventy bars in Morgantown, West Virginia. It ranked first in terms of the number of complaints received by the police. The tavern's reputation was one of "if you want to get into a fight, you go to A & H." (Hearing Transcript at 15, testimony of Michael Ward, neighbor). The local neighborhood society tried without success to have the city council declare the tavern a public nuisance.

The police and city council received multiple complaints from 1983 until June, 1986, when the tavern closed. Fights, loud noises, and litter problems made up the bulk of these complaints. In March, 1986, the son of a police officer pulled a knife on another customer, and a fight ensued. In April, 1986, a police officer's nephew became angry when asked to leave and broke a window. The nephew was prosecuted by the owners and convicted of assault and destruction of property. In April and May of 1986 the Morgantown police sent a computer printout and additional information to the Nonintoxicating Beer Commissioner demonstrating numerous visits to and complaints about the tavern. The Commissioner investigated the problem and on June 9, 1986, he wrote the current owners declining to reissue their Class A beer license.

The current owners introduced evidence showing they became half owners of A & H Tavern in the fall of 1985 and full owners in January 1986. The owners attempted to demonstrate that the negative reputation preceded their lease.

This case presents two issues. The first issue is whether the Nonintoxicating Beer Commissioner exceeded his discretion, or acted arbitrarily or capriciously in refusing to reissue a Class A beer license to A & H Tavern because the place was not a suitable place. The second issue is whether the owners were given clear notice why their license was not reissued so they could attempt to rebut this reason through the administrative appeals process.

The legislature has declared that it is in the public interest to regulate and control the sale of beer, and statutes regulating the sale of beer are "a necessary, proper and valid exercise of the State's police power...." W.Va.Code § 11-16-2 [1986]. It is well-settled law in West Virginia that the State's police power is broad and sweeping and this power may be delegated, within limits, by the Legislature to the executive branch to enact rules and regulations to protect the welfare, safety, and health of the public. State ex rel. Barker v. Manchin, 167 W.Va. 155, 279 S.E.2d 622, 631 (1981); Tri-State Greyhound Racing, Inc. v. Johnson, 160 W.Va. 33, 230 S.E.2d 837, 839 (1976). The statutes regulating beer are "intended for the protection of public safety, welfare, health, peace and morals and are further intended to eliminate, or to minimize to the extent practicable, the evils attendant to the unregulated, unlicensed, and unlawful" sale of beer. Code, 11-16-2. In order to further these goals the Legislature delegated to the Nonintoxicating Beer Commissioner all necessary power and authority to regulate the manufacture, sale, distribution, transportation, storage, and consumption of beer. W.Va.Code §§ 11-16-4(a) and 11-16-2 [1986].

Among these delegated powers is the authority to license or refuse to license establishments which sell beer. See State v. Huber, 129 W.Va. 198, 40 S.E.2d 11, 19 (1946). All businesses which are licensed are subject to some regulation. The amount of regulation permitted is determined by the type of business to be licensed. The state places more stringent regulations on businesses "within the category of social and economic evils, such as gaming, the liquor traffic and numerous others." Tweel v. W. Va. Racing Comm'n, 138 W.Va. 531, 76 S.E.2d 874, 880 (1953), appeal dismissed,346 U.S. 869, 74 S.Ct. 123, 98 L.Ed. 379 (1953). See also Tri-State Greyhound Racing, 160 W.Va. at 230, S.E.2d at 839. As a way of regulating "liquor traffic", the Legislature delegated to the Commissioner the exclusive power to grant and refuse licenses relating to the sale of beer. Code, 11-16-4(a). A license to sell beer is not a property right but is a privilege granted by the State to an individual for a specified time. See State ex rel. Morris v. W. Va. Racing Comm'n, 133 W.Va. 179, 55 S.E.2d 263, 270-71 (1949) (licensure for horse trainers). For the license to be reissued the licensee must be qualified, that is, must meet the guidelines outlined by the Legislature in the statutes and the commissioner in his rules and regulations. Id.; Accord State ex rel. Perry v. Miller, 171 W.Va. 509, 300 S.E.2d 622 (1983).

The Legislature gave the Commissioner the power to deny a beer license on three grounds. W.Va.Code § 11-16-8(c) [1986] lists these grounds as:

The commissioner may refuse a license to any applicant under the provisions of this article if the commissioner shall be of the opinion: (1) [t]hat the applicant is not a suitable person to be licensed; (2) [t]hat the place to be occupied by the...