Office of the Commissioner, Delaware Alcoholic Beverage Control v. Appeals Commission, Delaware Alcoholic Beverage Control ( 2015 )

1N TI-HE SUPREIVIE COURT OF THE STATE OF DELAWARE
OFFICE OF THE COMMISSIONER,§
DELAWARE ALCOHOLIC § No. 101, 2014
BEVERAGE CONTROL, §
§
Appellant-Below, § Court Below — Superior Court
Appellant, § of the State of Delaware,
§ in and for New Castle County
V. § CA. N0. N1 lA-09-OO8 JRJ
§
APPEALS COMMISSION, §
DELAWARE ALCOHOLIC §
BEVERAGE CONTROL, and §
LEX-PAC, INC. d/b/a HAK’S §
SPORTS BAR & RESTAURANT, §
§
Appellees—Below, §
Appellees. §
Submitted: May 13, 2015
Decided: June 2, 2015
Before STRINE, Chief Justice, HOLLAND and VALIHURA, Justices.
Upon Appeal from the Superior Court. AFFIRMED.
Lawrence W. Lewis, Esquire (argued), Laura L. Gerard, Esquire, Department of
Justice, Wilmington, Delaware, Appellant-Below, Appellant.
Andrew G. Kerber, Esquire, Department of Justice, Wilmington, Delaware,
Attorney for Appellee-Below, Appellee, Appeals Commission, Delaware
Alcoholic Beverage Control.
Adam L. Balick, Esquire (argued), Melony R. Anderson, Esquire, Balick &
Balick, LLC, Wilmington, Delaware, Attorneys for Appellee-Below, Appellee,
Lex—Pac, Inc., d/b/a Hak’s Sports Bar & Restaurant.
HOLLAND, Justice:
This is an appeal by the Delaware Alcoholic Beverage Control
Commissioner (the “ABC Commissioner”), from a final judgment of the Superior
Court that dismissed his claim against the Delaware Alcoholic Beverage Control
Appeals Commission (the “Appeals Commission”) for lack of standing. The
Appeals Commission was created by the General Assembly to hear appeals from
the ABC Commissioner’s decisions, including those granting or denying a liquor
license application. In this case, the Appeals Commission overturned the ABC
Commissioner’s decision to deny an application for a change of license
classification by Lex—Pac, Inc. d/b/a Hak’s Sports Bar & Restaurant (“Hak’s”).
The ABC Commissioner then appealed the Appeals Commission’s decision
to the Superior Court. Hak’s filed a motion to dismiss on the grounds that the
ABC Commissioner lacked standing. The Superior Court agreed and dismissed
the case. We have concluded that the Delaware Code does not vest the ABC
Commissioner with standing to pursue an appeal from a decision by the Appeals
Commission. Therefore, the judgment of the Superior Court must be affirmed.
Background
In 2000, the General Assembly enacted several legislative changes to alter
1
the regulation of alcoholic beverage sales in Delaware. By amending Title 4 of
the Delaware Code, the General Assembly replaced the previous Commission,
1 72 Del. Laws ch. 486.
Standing is a “threshold” issue: if the plaintiff does not have standing, the appeal
is improper and this Court cannot consider the merits of the argument.28
To determine whether the ABC Commissioner has standing to appeal from
decisions by the Appeals Commission, we begin with the language of Title 4, the
statute governing liquor license applications: because “no party has a right to
appeal unless the statute governing the matter has conferred a right to do so.”29
Similarly, “[i]t is well established that administrative agencies . . . derive their
powers and authority solely from the statute creating such agencies and which
n30
define their powers and authority. Accordingly, if there is no statutory
authorization to appeal provided in Title 4, which governs both the ABC
Commissioner’s powers and the appeal process for liquor license applications, no
such right exists.
Unlike other analogous provisions of the Delaware Code, the General
Assembly did not expressly grant the ABC Commissioner the authority to appeal a
decision by the Appeals Commission.31 Rather, Title 4 states that only “a party to
such hearing,” i.e., the hearing before the Appeals Commission, has the right to
28 See, e.g., Dover Historical Soc’y v. City of Dover Planning Comm ’n, 838 A.2d 1103, 1110
(Del. 2003) (“Standing is a threshold question that must be answered by a court affirmatively to
ensure that the litigation before the tribunal is a ‘case or controversy’ that is appropriate for the
exercise of the court’s judicial powers”).
29 Oceanport Indus, Inc. v. Wilmington Stevedores, Inc., 636 A.2d 892, 900 (Del. 1994).
3° Wilmington Vitamin & Cosmetic Corp. v. Tigue, 183 A.2d 731, 740 (Del. Super. Ct. 1962)
(emphasis added) (citations omitted).
31 See, e.g., 19 Del. C. § 3320(a) (“Appeals to the [Unemployment Insurance Appeal Board] may
be made by the parties . . . as well as by the claims deputy whose decision is modified or
reversed by an appeals tribunal.”).
11
appeal to the Superior Court.32 Title 4 does not define “party.” Delaware’s
Administrative Procedures Act does, but its definition does not provide much
‘6‘
guidance in this context: [p]arty’ means each person or agency named or
admitted in an agency proceeding as a party, or properly seeking and entitled as of
right to be admitted as a party to an agency proceeding.”33
Reading Title 4 as a whole reflects that the General Assembly did not intend
for the ABC Commissioner to be considered a “party” for purposes of filing an
appeal from the Appeals Commission.34 First, the provision of the statute
governing appeals to the Superior Court exactly mirrors the provision of the statute
governing appeals to the Appeals Commission. Both stipulate that appeals must be
brought by “a party to the hearing.”35 The ABC Commissioner cannot be a party
to his own hearing, which suggests that he would not then be considered a party to
32 Under the current version of the Code, only a “party who is aggrieved by a final decision of
the Appeals Commission may file a written appeal with the Superior Court . . . .” 4 Del. C. §
541(d). The difference in wording would not lead to a different result under this analysis. Cf.
Dir., Oflice of Workers’ Comp. Programs v. Newport News Shipbuilding & Dry Dock Co., 514
US. 122, 127 (1995) (“Given the long lineage of the text in question, it is significant that
counsel have cited to us no case, neither in this Court nor in the courts of appeals, neither under
the APA nor under individual statutory-review provisions such as the present one, which holds
that, without benefit of specific authorization to appeal, an agency, in its regulatory or policy-
making capacity, is ‘adversely affected’ or ‘aggrieved.”’).
33 29 Del. C. 10102(6).
34 See, e.g., Broadmeadow Inv., LLC, 56 A.3d at 1061 (“When construing the provisions in a
legislative enactment, this Court will attempt to harmonize them to the extent possible. This is
accomplished by reading the statutory provisions in pari materia.” (footnote omitted».
35 Compare 4 Del. C. § 541(c) (before 2012) with 4 Del. C. § 304(b).
12
the hearing before the Appeals Commission and the Superior Court in the same
0386.36
The statute’s lack of an explicit grant of authority to the ABC Commissioner
to appeal is particularly relevant in this context because he seeks to appeal from the
decision of his own agency. Although this Court has not directly addressed this
issue before,37 the Court of Chancery has observed that, “absent express statutory
authorization, courts of other jurisdictions have generally not sanctioned the
3938
practice of agencies seeking judicial review of their own decisions. For
example, it is well-established that “a subordinate state agency does not have
standing for judicial review of a superior agency’s actions unless the legislature
has expressly authorized such a suit.”39
Equally well—established is the principle that “[a]dministrative agencies
generally lack standing to seek review of their own orders, except as expressly
authorized by statute . . . . In the absence of express statutory authorization or
other special circumstances, a subordinate agency lacks standing to obtain judicial
36 See, e.g., Cebrick, 426 A.2d at 320 (“[T]he Commission is not a party to proceedings before
itself”).
37 This Court has stated that “persons performing adjudicatory functions have no cognizable
personal interest before a higher tribunal in seeking to have their rulings sustained.” Brooks v.
Johnson, 560 A.2d 1001, 1004 (Del. 1989) (citing Wilmington Trust Co. v. Barron, 470 A.2d
257, 261-62 (Del. 1983)). The same principle applies here, and weighs against granting standing
to a subordinate administrative body when its ruling is overturned on appeal.
38 Ropp v. King, 2007 WL 2198771, at *5 (Del. Ch. July 25, 2007).
39 2 Am. Jur. 2d Administrative Law, § 416.
13
3340
review of the action of a superior agency. This principle is reflected in
decisions by courts across the country, including the United States Supreme
Court.41
The Administrative Procedures Act42 only permits an appeal from an agency
decision by a “party aggrieved” or “against whom a case decision has been
decided. . . 3’43 The Appeals Commission’s ruling is the final decision of the ABC
Commission. The ABC Commissioner cannot be “aggrieved” by the decision of
his own agency.44
Perhaps because the presumption that a subordinate tribunal cannot
challenge the decision of its superior, absent explicit statutory authority, is so well-
40 73A C.J.S. Public Administrative Law and Procedure, § 409.
41 See, e.g., Dir., Ofiice of Workers’ Comp. Programs, 514 U.S. at 129 (holding that the Director
of the Office of Workers’ Compensation Programs in the U.S. Dept. of Labor lacked standing to
challenge a decision by the Benefits Review Board, and finding that “when an agency in its
governmental capacity is meant to have standing, Congress says so” (emphasis in original));
Nat’l Ass ’n of Sec. Dealers, Inc. v. SEC, 431 F.3d 803, 809-10 (DC. Cir. 2005) (“Simply put,
NASD appears before this court as a disgruntled first-level tribunal, complaining because it has
been reversed by a higher tribunal. This case thus turns on one question: Whether NASD can
claim to be a ‘person aggrieved’ . . . when the Commission reverses a disciplinary action taken
by NASD as a first-level adjudicator under the Act. We hold that NASD has no right under the
Act to bring this petition for review”); Mortensen v. Pyramid Sav. & Loan Ass ’n of Milwaukee,
191 N.W.2d 730, 731 (Wis. 1971) (“An administrative officer is not a party for the purposes of
seeking a review of a reversal of his determination by a board of appeals”); State ex rel.
Broadway Petroleum Corp. v. City of Elyria, 247 N.E.2d 471, 475 (Ohio 1969) (“To permit the
building inspector to attack the decision of the board of zoning appeals would allow him to
nullify the authorized action of his superior authority”); Dept. of Labor v. Unemployment Comp.
Bd. of Rev., 67 A.2d 114, 116 (Pa. 1949) (“The provision for appeal ‘by any party claiming to be
aggrieved . . .’ obviously refers to the party claimant or the claimant’s employer, as defined in
the statute. The words ‘any party claiming to be aggrieved . . .’ certainly do not include the
Department of Labor and Industry because that department was not a party; on the contrary, the
Department was the administrative tribunal authorized to try the case in the first instance”).
42 See 4 Del. C. § 304(b).
43 See 29 Del. C. §§ 10141 & 10142.
44 Cf. Dir., Oflice of Workers’ Comp. Programs, 514 U.S. at 127; Brooks, 560 A.2d at 1004.
14
established, the ABC Commissioner argues that he is not part of the same agency
as the Appeals Commission. The Superior Court Commissioner concluded that it
appears to be “self-evident” that the two together comprise one agency, the
Delaware Alcoholic Beverage Control Commission.45 The office of the ABC
Commissioner and the Appeals Commission were created at the same time,
through the same legislation, and in the same section of the Delaware Code.
Indeed, the mandate to designate all four positions (one Commissioner and three
members of the Appeals Commission) is contained within the same sentence of
Title 4.46
The statute also provides that the ABC Commissioner and the Appeals
Commission will share “personnel services and other necessary support
services . . . 3’47 This administrative economy is logical, as the only purpose of the
Appeals Commission is to hear appeals from the ABC Commissioner, and it only
meets when an appeal is filed.48 Hence, the Superior Court, in another case,
referred to an appeal between the ABC Commissioner and the Appeals
Commission as “internal,” and described the latter’s decision as the “agency’s final
- - 49
dec1s1on.”
45 Oflice of the Comm ’r, 2013 WL 3816682, at *4.
46 4 Del. C. §301(b).
47 Id. § 303.
48 Id. § 301(1); § 304(b).
49 Nischay, Inc. v. Alcoholic Bev. Control Appeals Comm ’n, 2011 WL 1743976, at *4 (Del.
Super. Ct. Mar. 16, 2011); cf. 2 Am. Jur. 2d Administrative Law, § 445 (“An agency action is not
15
Because the ABC Commissioner provides the first level of review within a
two-tiered agency, persuasive authority from other states and federal courts
supports a conclusion that he does not have standing to appeal from decisions of
the second-level reviewer, the Appeals Commission, absent express statutory
authority. Moreover, because the General Assembly did not grant the ABC
Commissioner such explicit authority, the default under either an analysis of
standing generally or the specific powers of an administrative agency is to presume
that the ABC Commissioner does not have standing. The Superior Court properly
concluded that the ABC Commissioner does not have standing to pursue this
appeal.
Quasi-Regulatory Role Does Not Grant Standing
In addition to arguing that he is not part of the same agency as the Appeals
Commission, and thus the presumption against granting him standing to appeal
does not apply, the ABC Commissioner also claims that his status as a “public
advocate” empowers him to pursue an appeal, at least for an unprotested
application. The Superior Court recognized that, under Delaware law, neither a
judicial officer or a person acting in a quasi-judicial role has “a cognizable interest
in seeking to have his [or her] rulings sustained.” The ABC Commissioner argues
final for purposes of judicial review under the Administrative Procedure Act if the action is only
tentative or the ruling of a subordinate official.” (footnotes omitted».
16
that the Superior Court incorrectly focused on his quasi-judicial role rather than his
regulatory role in representing the public interest.50
As a function of this separate role, the ABC Commissioner posits, he is a
“necessary party” to any proceeding involving alcohol regulation, including
appeals to the Superior Court from the Appeals Commission. This argument is not
supported by the statutory scheme enacted by the General Assembly.51 Title 4
does vest the ABC Commissioner with regulatory authority over alcoholic
beverage sales in the State of Delaware. But it expressly provides that the ABC
Commissioner’s decision, on any particular application, is not “final and
conclusive” if it is appealed to the Appeals Commission by a party to the hearing.52
Thus, the General Assembly clearly intended for the Appeals Commission to
provide oversight over decisions by the ABC Commissioner, and thereby to limit
his authority exclusively to a quasi-judicial role in a specific case.
Our reading of the statute’s elimination of the ABC Commissioner’s role as
a public advocate in a specific case is consistent with 4 Del. C. § 541(c), which
states that “the Superior Court Commissioner may . . . remand the cause to the
50 See Opening Br. at 22.
51 Cf. Dir., Oflice of Workers’ Comp. Programs, 514 US. at 134 (“If the correctness of
adjudications were essential to the Director’s performance of her assigned duties, Congress
would presumably have done what it has done with many other agencies: made adjudication her
responsibility. In fact, however, it has taken pains to remove adjudication from her realm. . . .
The assertion that proper adjudication is essential to proper performance of the Director’s
functions is quite simply contrary to the whole structure of the Act.” (emphasis in original)).
52 Compare 4 Del. C. § 541(c) (before 2012) with 4 Del. C. § 304(b).
17
Commissioner for taking additional evidence on the record.”53 If the General
Assembly had intended for the ABC Commissioner to be considered a “party” to
the Appeals Commission and Superior Court proceedings, it would be incongruous
for him to be expected to impartially “tak[e] additional evidence” on remand in a
specific case.54
The ABC Commissioner maintains that the deliberate use of “party” in
§541(c) (governing all appeals from the Appeals Commission to the Superior
Court) rather than “applicant,” as in § 544 (governing only unprotested
applications), clarifies that the General Assembly intended for the ABC
Commissioner to have standing before the Appeals Commission and in the
Superior Court proceedings for unprotested applications, because otherwise there
would only be one “party” before the Superior Court.55 But § 541(c) applies both
to protested and unprotested applications. Thus, the use of the term “party” was
meant to include applicants as well as protestors, both of whom would be parties to
the hearings before the ABC Commissioner and the Appeals Commission. It
53 4 Del. C. 541(c) (emphasis added) (before 2012).
54 “No man is allowed to be a judge in his own cause, because his interest would certainly bias
his judgment, and, not improbably, corrupt his integrity. With equal, nay with greater reason, a
body of men are unfit to be both judges and parties at the same time . . . .” THE FEDERALIST
PAPERS: NO. 10, available at http://avalon.law.yale.edu/18th_century/fed10.asp; see also
Gutierrez de Martinez v. Lamagno, 515 US. 417, 428 (1995) (quoting In re Murchison, 349 US.
133, 136 (1955)) (“[O]ur system of law has always endeavored to prevent even the probability of
unfairness. To this end no man can be a judge in his own case and no man is permitted to try
cases where he has an interest in the outcome”).
55 See Opening Br. at 18.
18
would stretch the statutory language to assume that the word “party” in that context
was intended to specifically refer to the ABC Cormnissioner.56
Moreover, this case does not present the question of whether the agency—
acting through the Appeals Commission—has standing to argue in an appeal from
its decision to the Supreme Court or from an adverse decision by the Superior
Court. In such situations, this Court’s precedent suggests that the agency would
have standing to represent the public interest.57 As the Superior Court
Commissioner’s opinion discussed, this Court determined in Cebrz'ck, that the
Alcoholic Beverage Control Commission, then consisting of five commissioners,
had standing to appeal an order of the Superior Court after the court ruled in favor
of applicants who were denied a license.58 The Superior Court Commissioner in
this case found that Cebrz'ck did not control the result here, because the appeal in
56 Cf Balma v. Tidewater Oil Co., 214 A.2d 560, 562 (Del. 1965) (“Any such conclusion would
be unreasonable, we think, and would require an unwarranted stretching of the language of the
Statute.”).
57 See, e.g., Broadmeadow Inv., LLC, 56 A.3d at 1062 (“Serious concerns would be raised by a
statutory scheme that created an adversarial administrative proceeding but only permitted an
appeal by one category of adversary, e.g. the losing applicant”). The ABC Commissioner
argues that the Court’s analysis in Broadmeadow applies here, but that case is distinguishable.
In Broadmeadow, the Court determined that the applicant’s competitor, who protested the
application at the public hearing, had standing to pursue an appeal as a “party aggrieved” by the
Board’s decision to grant the application. Id. The Court’s “serious concern” was that the statute
could not be read to only afford a right to appeal to an aggrieved applicant, and not other
“aggrieved parties,” including those who protested the application. Id. Whether a subordinate
review board could appeal a decision by a “superior” reviewer was not at issue.
5" Cebrick, 426 A.2d at 321.
19
Cebrick was from the final decision of the agency, not the first level of a two—part
review process.59
The Superior Court Commissioner properly concluded that Cebrick does not
control the outcome of this case. In Cebrick, this Court considered whether the
Commission—at that time, a one-tier agency—could appeal an adverse decision by
the Superior Court. Here, Title 4 provides that the ABC Commissioner’s decision
is not “final and conclusive” if it is appealed to the Appeals Commission.60 Thus,
the only final agency decision that can be appealed to the Superior Court is the
decision of the Appeals Commission, not the ABC Commissioner. Because the
General Assembly created the Appeals Commission expressly for the purpose of
reviewing the decisions of the ABC Commissioner, enabling the ABC
Commissioner to bypass the Appeals Commission, as would be the net effect of
granting him standing, would circumvent the statutory scheme. Cebrick stands
only for the proposition that the current Appeals Commission has standing to
represent the public interest in an appeal from its final decision in both the
Superior Court and in this Court.61
59 Ofi‘ice ofthe Comm ’r, 2013 WL 3816682, at *3.
6° 4 Del. C. § 544.
61 Cf. Nischay, Inc., 2011 WL 1743976 (discussing the appeals process established in Title 4, and
affirming the decisions of the ABC Commissioner and the Appeals Commission to deny the
application at issue); see also Christian v. Del. Alcoholic Bev. Control Appeals Comm ’n, 2003
WL 21733139, at *4 (Del. Super. Ct. June 20, 2003) (affirming the decision of the Appeals
Commission overturning the ABC Commissioner’s denial of a license application), a ’d, 839
A.2d 665 (Del. 2003).
20
composed of five part-time Commissioners, with one full-time ABC
Commissioner who has the authority to regulate the manufacture, sale, distribution,
and importation of alcohol within Delaware and to resolve disputes between
applicants or licensees, determine license violations, and decide whether to grant,
deny, cancel, or transfer a liquor license.2
Under its previous configuration, the five-member ABC Commission issued
decisions that were final unless appealed by a party to the Superior Court.3 When
the General Assembly established the ABC Commissioner’s position, however, it
also established a three-member Appeals Commission to hear appeals and to
“affirm, reverse or modify the decision of the Commissioner.”4 Section 301(b) of
Title 4 provides that the “Commissioner and 3 members of the Appeals
Commission . . . shall be appointed by the Governor and confirmed by a majority
ofthe . . . Senate . . . .”5
As part of these legislative changes, the General Assembly also created a
new procedure to consider license applications. The ABC Commissioner decides
on all applications in the first instance,6 but the process differs slightly depending
on whether the application is protested by “at least 10 individuals who are residents
2 See 4 Del. C. § 304.
3 Id. § 541(c); § 544.
4 Id. §304(b).
5 Id. §301(b).
6 Id. §541(a).
Conclusion
The General Assembly created a detailed process to review liquor license
applications, with the ABC Commissioner’s decisions expressly subject to
oversight and review by the Appeals Commission. Finding that the ABC
Commissioner had standing to contest the Appeals Commission’s decisions would
be inconsistent with the statutory scheme, would exceed the express grant of
statutory authority to the ABC Commissioner, and would go against the strong
presumption that a first-level reviewer does not have standing to challenge the
decision of the second—level reviewer. Accordingly, we affirm the final judgment
of the Superior Court that dismissed the ABC Commissioner’s claim for lack of
standing.62
62 At oral argument, the ABC Commissioner noted that an issue that was not presented in this
case has been taken as decided by the Appeals Commission. That is, the ABC Commissioner
argues that the Appeals Commission has apparently determined, on the basis of its reading of the
Superior Court’s decision, that it cannot hear from the ABC Commissioner if an appeal is taken
by a party from one of his rulings. If that is the case, in a situation like this, where there are no
other private parties to defend the ABC Commissioner’s ruling, the Appeals Commission could
be left without the ability to hear from anyone other than the applicant. But nothing in the
proceedings before the Superior Court or this Court required determination of that distinct
question, and nothing in this decision affirming the Superior Court should be taken as
determining, one way or the other, whether the Appeals Commission has the discretion to hear
from the ABC Commissioner if it wishes when considering an appeal from one of his rulings.
21
of the neighborhood.”7 If so, the ABC Commissioner is required to hold a public
hearing.8 Following that hearing, the ABC Commissioner issues a decision, which:
[S]hall be final and conclusive unless, within 30 days
after notice thereof has been mailed by the
Commissioner’s office, a party to such hearing files an
appeal in the office of the Commissioner. Upon receipt
of the appeal, the Commissioner shall cause the
Chairperson of the Appeals Commission to be advised of
the pending appeal and the Chairperson shall cause the
Commission to be convened with at least 20 days notice
to all parties. The appeal shall be heard by the Appeals
Commission, who shall, in accordance with the
Administrative Procedures Act . . ., review the matter on
the record and affirm, reverse or modify the decision of
the Commissioner.9
If no members of the community protest, as was the case here, the ABC
Commissioner is still authorized to hold a hearing but is not required to do so.10
After considering an unprotested application, the statute provides that the ABC
Commissioner must “render the decision promptly in writing,”11 which “shall be
final and conclusive unless, within 30 days after notice thereof has been mailed by
the Commissioner’s office, the applicant files an appeal in the office of the
a912
Commissioner. The applicant is then entitled to a hearing before the Appeals
7 Id §304(a)(5).
8 Idaho
9 Id § 304(b) (emphasis added).
1° Id § 541(b).
“Id § 544.
‘2 Id. (emphasis added).
Commission, following the same procedural requirements as for a protested
application.13
Under the process mandated at the time the ABC Commissioner filed his
appeal in this case,14 the statute provided that “the decision of the Appeals
Commission shall be final and conclusive unless, within 30 days after notice
thereof has been mailed by the Appeals Commission, a party to such hearing files
an appeal in the Superior Court of the County within which the applicant sought a
3,15
license. The provision applied to appeals from both protested and unprotested
applications. The statute then stated that:
Unless otherwise agreed by all parties, in every appeal
the cause shall be first decided by an arbitration . . . by a
Superior Court Commissioner from the record, and the
Superior Court Commissioner may affirm, reverse or
modify the Appeals Commission’s decision. . . . If the
Superior Court Commissioner finds that additional
evidence should be taken, the Superior Court
Commissioner may take the additional evidence or
remand the cause to the [ABC] Commissioner for taking
additional evidence on the record.16
The Superior Court could then consider the Superior Court Commissioner’s
decision, and “reverse or modify the decision of the Superior Court Commissioner
or Appeals Commission and render an appropriate judgment” if it found that “the
13 Id. (“The appeal shall follow the procedure outlined in § 541 ofthis title”).
14 The General Assembly has continued to make changes to the application process, including by
eliminating the mandatory arbitration provision. See 78 Del. Laws ch. 384, § 1. All references
in this Opinion are to the legislative scheme at the time applicable to this case.
15 4 Del. C. § 541(c) (emphasis added) (before 2012).
16 Id. (emphasis added).
5
Superior Court Commissioner or Appeals Commission has made an error of
law ”17
ABC Commissioner Denies Hak’s Application
In this case, Hak’s submitted an application to the ABC Commissioner to
change its liquor license classification from a taproom to a restaurant in June 2008.
Hak’s, which advertised itself as a “Sports Bar/Gentleman’s Club,” had been
disciplined by the ABC Commissioner in May 2008 for employing female dancers
under the age of 21, which was permissible for a restaurant, but not a taproom.
Hak’s “candidly indicate[d]” that being able to employ people under 21 was its
purpose in seeking a license change.
In November 2009, the ABC Commissioner sent a letter to Hak’s declaring
his intention to deny the application.18 The letter notified Hak’s that it had ten days
to petition for a hearing. Hak’s declined to seek a hearing, stating that it believed
that the application could be decided “on the record,” and noting that it believed
“many of the bases that [he] seem[ed] to rely upon . . . [were] not part of the
record.” Accordingly, the ABC Commissioner issued his official decision denying
Hak’s request for a change of classification in January 2010.
17 Id. § 541(d).
18 The delay between the date of Hak’s application submission and the ABC Commissioner’s
decision was the result of ongoing discussions.
6
Appeals Commission Reverses ABC Commissioner
Hak’s appealed the ABC Commissioner’s decision to the Appeals
Commission, which scheduled a hearing in March 2010. At the hearing, Hak’s and
the ABC Commissioner were both given ten minutes to present oral argument.
Hak’s contended that the relevant facts were undisputed, but that the ABC
Commissioner had erred in his interpretation of the law. Hak’s also alleged that
some of the ABC Commissioner’s findings were not from the record, but instead
from the ABC Commissioner’s “own research.” Hak’s then contended that other
restaurants were typically permitted an eight-month trial period to demonstrate that
they could achieve sufficient sales of “complete meals,” as required to obtain a
restaurant license.
The ABC Commissioner argued, in response, that his decision was based on
substantial evidence and should be upheld. He asserted that he was entitled to infer
from the record that Hak’s was primarily an “entertainment establishment,” not a
restaurant. He also argued that Hak’s would be unable to restrict underage patrons
from entering the “restauran ” at appropriate times, because as a restaurant, it
would be required to remain open as a “place of public accommodation.” He did
not dispute Hak’s claim that other restaurants were routinely granted provisional
licenses.
In April 2010, the Appeals Commission issued its decision and order,
reversing the ABC Commissioner’s decision and granting Hak’s application, albeit
on a provisional basis. The Appeals Commission adopted, as a Whole, the ABC
Commissioner’s findings of fact as “supported by substantial evidence,” and
observed that the “[ABC] Commissioner is vested with discretion to grant or refuse
9
licenses.’ Nevertheless, the Appeals Commission approved {'ak’s change of
license, conditioned on proof that “at least 60% of Haks gross revenues are derived
fiom the sale of complete meals” after six months.
The ABC Commissioner then appealed the Appeals Commission’s decision
to the Superior Court. The Superior Court remanded the case to the Appeals
Commission to provide “further explanation,” which resulted in a reissued order
with revised findings of fact but the same result for Hak’s.19 In that amended
decision and order, the Appeals Commission explained that it found the ABC
Commissioner’s determination that Hak’s “would not operate as a restaurant is not
supported by substantial evidence.” The Appeals Commission thus found the ABC
Commissioner had abused his discretion in denying the application. Finally, the
Appeals Commission noted that “the Commissioner did not dispute the
representation by Haks that the ABC Commissioner has previously allowed all
‘9 Ofi’z‘ce ofthe Comm ’r v. Appeals Comm ’n, 2011 WL 285597, at *3 (Del. Super. Ct. Jan. 19,
2011).
8
applicants to have an eight month [trial] period,” but “offered no explanation as to
why Haks could not be afforded a similar” trial period.
Superior Court’s Dismissal
The Superior Court then assigned the case to a Superior Court
Commissioner to begin arbitration in accordance with Title 4. During the
discovery phase of that proceeding, Hak’s filed a motion to dismiss, arguing that
the ABC Commissioner did not have standing to pursue an appeal from the
Appeals Commission’s decision. The Appeals Commission joined Hak’s motion.
After hearing oral argument from the ABC Commissioner, Hak’s, and the Appeals
Commission, the Superior Court Commissioner issued an opinion and order
granting the motion.20
In that opinion, the Superior Court Commissioner found that the “General
Assembly did not confer any right (or power) upon the Commissioner of the
[Delaware Alcoholic Beverage Control Commission] to appeal a decision from the
Appeals Commission of the [Delaware Alcoholic Beverage Control Commission]
to the Superior Court.”21 Because “an administrative body . . . has no powers other
than those conferred upon it by statute by which it was created,” the Superior Court
Commissioner determined that the ABC Commissioner lacked standing to appeal
2‘: Ofi‘ice of the Comm ’r v. Appeals Comm ’n, 2013 WL 3816682 (Del. Super. Ct. July 17, 2013).
Id. at *3.
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the Appeals Commission’s decisions.22 The Superior Court Commissioner
distinguished Cebrz'ck v. Peake,23 a decision by this Court, in 1981, holding that the
Delaware Alcoholic Beverage Control Commission had standing to appeal the
Superior Court’s reversal of its order, on the grounds that the decision was no
longer controlling, given the General Assembly’s restructuring of the agency.24
The Superior Court Commissioner also rejected the ABC Commissioner’s
argument that he was not part of the same agency as the Appeals Commission.25
After conducting a de novo review, the Superior Court affirmed the Superior
Court Commissioner’s dismissal.26 The ABC Commissioner has now appealed to
this Court, contending that he has standing to appeal decisions by the Appeals
Commission, and that its order in this case to grant Hak’s application should be
overturned on the merits.
ABC Commissioner Lacks Standing
The ABC Commissioner first argues that the Superior Court erred in finding
that he lacks standing to appeal a decision by the Appeals Commission. We
review questions of law, including whether a party has standing, de novo.27
22 Idaho
23 426 A.2d 319 (Del. 1981).
2“ Ofi’ice ofthe Comm ’7', 2013 WL 3816682, at *4.
25 Id. at *5.
26 Office ofthe Comm ’r v. Appeals Comm ’n, 2014 WL 601384 (Del. Super. Ct. Jan. 31, 2014).
27 Broadmeadow Inv., LLC v. Delaware Health Res. 361., 56 A.3d 1057, 1059 (Del. 2012).
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