CDS v. Camper
Annotate this CaseJanuary 1993 Term
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No. 21228
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CDS, INC., d/b/a POWER DOME,
Petitioner Below, Appellee
v.
HARRY G. CAMPER, JR., ADMINISTRATOR,
ALCOHOL BEVERAGE CONTROL ADMINISTRATION,
DEPARTMENT OF TAXATION AND REVENUE,
STATE OF WEST VIRGINIA,
Respondents Below, Appellants
___________________________________________________
Appeal From the Circuit Court of Kanawha County
Honorable John Hey, Judge
Civil Action No. 92-AA-62
REVERSED AND REMANDED
___________________________________________________
Submitted: January 19, 1993
Filed: February 11, 1993
Richard G. Gay, Esq.
Berkeley Springs, West Virginia
Attorney for the Appellee
Mario J. Palumbo, Esq.
Attorney General
Andrew F. Tarr, Esq.
Assistant Attorney General
Charleston, West Virginia
Attorneys for the Appellants
The Opinion of the Court was delivered PER CURIAM.
SYLLABUS BY THE COURT
1. "'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))." Syllabus Point 2,
W. Va. Nonintoxicating Beer Comm'r v. A & H Tavern, 181 W. Va. 364,
382 S.E.2d 558 (1989).
2. "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)." Syllabus Point 3, W. Va.
Nonintoxicating Beer Comm'r v. A & H Tavern, 181 W. Va. 364, 382 S.E.2d 558 (1989).
3. "Upon judicial review of a contested case under the
West Virginia Administrative Procedure Act, Chapter 29A, Article 5,
Section 4(g), the circuit court may affirm the order or decision of
the agency or remand the case for further proceedings. The circuit
court shall reverse, vacate or modify the order or decision of the
agency if the substantial rights of the petitioner or petitioners
have been prejudiced because the administrative findings,
inferences, conclusions, decisions or order are: '(1) In violation
of constitutional or statutory provisions; or (2) In excess of the
statutory authority or jurisdiction of the agency; or (3) Made upon
unlawful procedures; or (4) Affected by other error of law; or (5)
Clearly wrong in view of the reliable, probative and substantial
evidence on the whole record; or (6) Arbitrary or capricious or
characterized by abuse of discretion or clearly unwarranted
exercise of discretion.'" Syllabus Point 2, Shepherdstown
Volunteer Fire Dept. v. State ex rel. State of W. Va. Human Rights
Commission, 172 W. Va. 627, 309 S.E.2d 342 (1983).
Per Curiam:
Harry G. Camper, Jr., the Commissioner of the West
Virginia Alcohol Beverage Control Commission (ABC), appeals an
order of the Circuit Court of Kanawha County denying his motion for
reconsideration and reaffirming an order directing him to issue
CDS, Inc., d/b/a Power Dome, the appropriate licenses to operate a
private club and to sell non-intoxicating beer. On appeal, the
Commissioner argues that the circuit court should have remanded the
case to him to supplement the record because his denial of CDS's
applications was based, in part, on investigations that were not
included in the evidence considered by the circuit court. Because
the circuit court did not consider all of the evidence obtained by
the Commissioner, the case is remanded to the Commissioner to
supplement the record.
In October 1991, CDS filed applications with the ABC to
operate a private club and for a license to sell non-intoxicating
beer.See footnote 1 Power Dome, CDS's proposed club, is to be located in a
former supermarket along State Route 11 near Martinsburg, Berkeley
County, West Virginia. Because the Commissioner received several
written and verbal protests before CDS's applications were filed,
the Commissioner personally inspected the club's proposed site in
September 1991. A public hearing, conducted by the Commissioner
personally, attended by approximately 150 people, was held on
November 6, 1991. The only favorable witness was CDS's president,
and the opposing witnesses included area residents, business
persons, the Sheriff of Berkeley County and three members of the
Berkeley County Commission. The opposing witnesses said that
another club, especially a large club attracting out-of-town
clients, would intensify the problems of drunk driving and traffic
congestion, increase the amount of crime, and change the character
of the neighborhood.
On the day of the hearing the Commissioner and his staff
inspected the exterior of the proposed club and the surrounding
area. On the day after the hearing, at the invitation of CDS, the
Commissioner inspected the proposed club's interior, exterior and
parking lot. The Commissioner also toured the immediate vicinity
including a residential neighborhood.
On November 15, 1991, the Commissioner denied CDS's
application because of (1) problems relating to the neighborhood's
peace and good order, (2) an adverse impact on property values and
(3) an adverse impact on the public welfare. The Commissioner was
particularly concerned because CDS planned to attract large crowds
by featuring live bands on the weekends.
At CDS's request a second public hearing was held on
December 16, 1991. At the second hearing, CDS submitted various
permits relating to the club's physical plant and in addition to
CDS's two owners, two other witnesses spoke in favor of the club.
One of the favorable witnesses was an attorney and the other was an
operator of a local private club who did not foresee any unusual
noise or other problems relating to the proposed club. The
opposing witnesses included the sheriff, two members of the W. Va.
House of Delegates, area residents and local business persons. The
opposing witnesses reiterated the problems outlined in the earlier
public hearing.
On January 28, 1992, the Commissioner affirmed his
initial order denying CDS's license applications. Although both
the Commissioner's initial and the final orders referred to the
Commissioner's on-site inspections, the record contained no
separate evidence of the inspections. CDS appealed the
Commissioner's final order to the circuit court, who found no
direct evidence showing that the proposed club would create a
nuisance or overflow, an adverse affect on adjacent businesses, or
an adverse affect on the traffic on State Route 11. The only
evidence considered by the circuit court were the transcripts of
the two public hearings.
After the circuit court reversed the Commissioner's
order, the Commissioner filed a motion to reconsider requesting
that if the direct evidence was insufficient to uphold his
decision, the case be remanded to him to include specific evidence
of his on-site inspections. After the circuit court denied his
motion to reconsider, the Commissioner appealed to this Court.
I
"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. (Citations omitted)." W. Va. Nonintoxicating Beer
Comm'r v. A & H Tavern, 181 W. Va. 364, 366, 382 S.E.2d 558, 560
(1989). It is also well recognized that the regulation and control
of the sale of alcohol and beer are designed to protect the public
interest. A & H Tavern, id.; Anderson v. Moulder, 183 W. Va. 77,
83, 394 S.E.2d 61, 67 (1990). Although all licensed businesses are
subject to some regulation, "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.'" A & H Tavern, supra at 367, 382 S.E.2d at 561, quoting,
Tweel v. W. Va. Racing Commission, 138 W. Va. 531, 540, 76 S.E.2d 874, 880 (1953), appeal dismissed, 346 U.S. 869 (1953).
One way that the state controls the liquor traffic is by
requiring licenses to sell nonintoxicating beer under W. Va. Code
11-16-1 et seq. [1992] and to operate a private club serving liquor
under W. Va. Code 60-7-1 et seq. [1991].See footnote 2 The power to grant or
refuse licenses for the sale of beer and to operate a private club
have been delegated to the Commissioner. See W. Va. Code 11-16-4(a) [1992] (relating to a beer license); W. Va. Code 60-7-10
[1972] (relating to a private club license). In Syllabus Point 1,
A & H Tavern, supra, we stated:
"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)).
Because licenses to sell beer and operate a private club
are not property rights but are privileges granted by the state for
a specified time, license applicants must meet the statutory
guidelines and the Commissioner's rules and regulations. W. Va.
Code 11-16-8(c) [1990] provides the following grounds for the
refusal of a beer license:
The commissioner may refuse a license to any
applicant under the provisions of this article
if the commissioner shall be of the opinion:
(1) That the applicant is not a suitable
person to be licensed;
(2) That the place to be occupied by the
applicant is not a suitable place; or is
within three hundred feet of any school or
church . . .; or
(3) That the license should not be issued
for reason of conduct declared to be unlawful
by this article.
W. Va. Code 60-7-5(a) [1977] also provides that the Commissioner
can refuse a private club license and states, in pertinent part:
Upon receipt of the application referred to
in section four [§ 60-7-4] of this article,
together with the accompanying fee and bond,
the commissioner shall conduct an
investigation to determine the accuracy of the
matters contained in such application and
whether applicant is a bona fide private club
of good reputation in the community in which
it shall operate. For the purpose of
conducting such investigation, the
commissioner may withhold the granting or
refusal to grant such license for a period not
to exceed thirty days. If it shall appear
that such applicant is a bona fide private
club, of good reputation in the community in
which it shall operate and that there is no
false statement contained in such application,
the commissioner shall issue a license
authorizing the applicant to sell alcoholic
liquors as provided in section three [§ 60-7-3] of this article, and otherwise shall refuse
to issue such license. . . .See footnote 3
In Syllabus Point 3, A & H Tavern, supra, we said:
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).
Both the chapter of the Code dealing with beer licenses
and the chapter of the Code dealing with private clubs authorize
the Commissioner to investigate when a license is sought. See W.
Va. Code 11-16-4(b) [1992] (beer license)See footnote 4; W. Va. Code 60-7-5(a)
[1977] (private club license). Indeed the power of the
Commissioner to inspect a licensee's premises continues after the
licenses have been granted. See W. Va. Code 11-16-4(b) [1992](beer
license); W. Va. Code 60-7-10 [1972] (private club license).See footnote 5
In the present case, the Commissioner, after conducting
two on-site inspections and holding two public hearings, denied
CDS's license applications. However, when CDS appealed to the
circuit court, the Commissioner's inspections, although referred to
in his orders, were not detailed in the evidence. Only the public
hearing transcripts were reviewed by the circuit court. Based on
an incomplete record, the circuit court, finding insufficient
direct evidence to deny CDS the licenses, ordered the Commissioner
to issue the licenses. Then, the Commissioner requested the case
be remanded to include evidence obtained as a result of his
inspections. The circuit court denied the remand and ordered the
issuance of the licenses.
W. Va. Code 29A-5-4(g) [1964], the judicial review
provision of the Administrative Procedures Act, allows a court to
"affirm the order or decision of the agency or remand the case for
further proceedings (emphasis added)" and specifies the
circumstances when a court "shall reverse, vacate or modify the
order or decision of the agency." In Syllabus Point 2,
Shepherdstown Volunteer Fire Dept. v. State ex rel State of W. Va.
Human Rights Commission, 172 W. Va. 627, 309 S.E.2d 342 (1983), we
stated:
Upon judicial review of a contested case
under the West Virginia Administrative
Procedure Act, Chapter 29A, Article 5, Section
4(g), the circuit court may affirm the order
or decision of the agency or remand the case
for further proceedings. The circuit court
shall reverse, vacate or modify the order or
decision of the agency if the substantial
rights of the petitioner or petitioners have
been prejudiced because the administrative
findings, inferences, conclusions, decisions
or order are: "(1) In violation of
constitutional or statutory provisions; or (2)
In excess of the statutory authority or
jurisdiction of the agency; or (3) Made upon
unlawful procedures; or (4) Affected by other
error of law; or (5) Clearly wrong in view of
the reliable, probative and substantial
evidence on the whole record; or (6) Arbitrary
or capricious or characterized by abuse of
discretion or clearly unwarranted exercise of
discretion."
In accord Syllabus Point 1, FMC Corp. v. W. Va. Human Rights
Commission, 184 W. Va. 712, 403 S.E.2d 729 (1991); Frank's Shoe
Store v. W. Va. Human Rights Commission, 179 W. Va. 53, 365 S.E.2d 251 (1986).
The Commissioner argues that a remand is appropriate
because his decision was based on his inspections and the results
of the inspections were not considered by the circuit court. The
Commissioner notes that although his orders refer to the
inspections, he was unaware of the need to include inspection
reports for the circuit court's review. CDS maintains that the
Commissioner had ample opportunity to include reports of his
inspections and that the delay caused by a remand will cause
economic hardship.
Although the reports should have been submitted to the
circuit court, their inadvertent omission from the record provides
an insufficient basis for requiring the Commissioner to issue the
requested licenses. We also note that any hardship to CDS caused
by a remand is minimal because the material should be readily
available. Because the circuit court's decision should be based on
the "record made before the agency" (W. Va. Code, 29A-5-4(f)
[1964]), we find that the circuit court should have remanded this
case to the Commissioner to supplement the record. In order to
ensure a minimal delay, however, we require that the Commissioner's
complete record, including his inspection reports, be returned to
the circuit court within 30 days after this opinion is initially
filed unless CDS shall notify the Commissioner and the Court within
three days of the filing of this opinion that it may or will avail
itself of the opportunity to apply for rehearing.
For the above stated reasons, the judgment of the Circuit
Court of Kanawha County is reversed and the case is remanded to the
Commissioner of the West Virginia Alcohol Beverage Control
Commission for further proceedings consistent with this opinion.
Reversed and Remanded.
Footnote: 1Although both parties agree that CDS applied for licenses to
operate a private club and to sell nonintoxicating beer, the only
application included in the record before this Court was for a
private club.
Footnote: 2A private club is not prohibited from obtaining a license for
the sale of nonintoxicating beer, according to W. Va. Code 60-7-15
[1967], which states:
Notwithstanding any other provision of this
Code to the contrary, no licensee shall be
prohibited from obtaining a license for the
sale of nonintoxicating beer under the
provisions of article sixteen [§ 11-16-1 et
seq.] of chapter eleven of this Code because
such licensee sells alcoholic liquors, permits
the consumption of alcoholic liquor on his
premises, or is the holder of a federal tax
stamp permitting the sale of such alcoholic
liquor.
A similar provision is found in W. Va. Code 11-16-18(a)(10) [1991]
excepting "the holder of a license to operate a private club issued
under the provisions of article seven, chapter sixty of this code"
from the prohibition against "the sale, possession or consumption
of any alcoholic liquors on the premises covered by" a license for
the sale of nonintoxicating beer.
Footnote: 3CDS argues that the legislative regulations governing the
private club license, 175 C.R.S. 2 [1991], are more restrictive
that the statute, and are ambiguous and vague. However given the
incomplete record, a discussion of these arguments is not necessary
for our decision.
Footnote: 4W. Va. Code 11-16-4(b) [1992] states, in pertinent part:
The commissioner shall appoint an adequate number of competent persons . . . for the purpose of . . . investigating applicants for license and places of business of retailers, distributors and brewers. . . . Footnote: 5Both chapters of the Code identify, as unlawful, certain acts of a licensee and provide for criminal penalties. For example, W. Va. Code 11-16-18(a) [1991] (beer license) makes it unlawful "(7)
[f]or any licensee to permit in his premises any lewd, immoral or
improper entertainment, conduct or practice;" and "(12) [f]or any
licensee to permit loud, boisterous or disorderly conduct of any
kind upon his or her premises or to permit the use of loud musical
instruments if either or any of the same may disturb the peace and
quietude of the community wherein such business is located. . . ."
W. Va. Code 60-7-12(a) [1991](private club license) states that
"[i]t shall be unlawful for any licensee, or agent, employee or
member thereof, on such licensee's premises to. . . [a]uthorize or
permit any disturbance of the peace; obscene, lewd, immoral or
improper entertainment, conduct or practice. . . ."
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