Adams v. Department of Law Enforcement

McFADDEN, Justice.

This appeal is from a judgment denying appellant’s petition for writ of mandate to compel issuance of a retail liquor license. We affirm.

The stipulated facts are that appellant leases the bar and restaurant portion of the Woodside Racquet Club in Hailey, Idaho. Woodside Racquet Club is a tennis facility with courts, clubhouse, restaurant and cocktail lounge located within the Hailey city limits. Appellant held valid state, county and municipal retail beer and wine licenses and sought to obtain a state retail liquor license in order to sell liquor by the drink in the club. Appellant’s retail liquor license application was denied because Hailey, a city of 1,425 population, already had five renewed liquor licenses and no new liquor licenses were available.

Appellant sought to compel issuance of the liquor license by a petition for peremptory writ of mandate. This appeal is from a denial of writ of mandate by the district court.

Licenses for the retail sale of liquor by the drink are governed by I.C. § 23-903:

The director of the department of law enforcement is hereby empowered, authorized, and directed to issue licenses to qualified applicants, as herein provided . . No license shall be issued for the sale of liquor on any premises outside the incorporated limits of any city except as provided in this act and the number of licenses so issued for any city shall not exceed one (1) license for each one thousand five hundred (1,500) of population of said city or fraction thereof [hereinafter quota system] . . . except that upon proper application thereof not more than two (2) licenses may be issued for each incorporated city with a population of one thousand five hundred (1,500) or less . . . provided, however, that any license heretofore issued may be renewed from year to year without regard to the population of the city for which such license is issued [hereinafter grandfather clause].

Exemptions to the above-stated quota system, however, are allowed for qualifying golf courses and ski resorts,¹ common carriers,² lake resorts,³ and operators of convention centers.⁴

Appellant recognizes that no new liquor licenses are available under I.C. § 23-903 for the city of Hailey.⁵ However, appellant argues that the exemptions contained in title 23, chapter 9 violated the equal protection clause because not all similarly situated retail establishments are granted exemptions.

Regulation and control of the sale of intoxicating liquors, including licensing of retail liquor outlets, is vested in the legislature. U.S.Const. amend. XXI; Idaho Const, art. 3, § 26. Licensing regulations for the retail sale of liquor “are enacted by the legislature for the protection, health, welfare and safety of the people of the state of Idaho and for the purpose of promoting and encouraging temperance in the use of alcoholic beverages within said state of Idaho.” I.C. § 23-901. In State v. Cantrell, 94 Idaho 653, 496 P.2d 276 (1972), this court recognized that although the regulation of retail liquor outlets was for a legitimate stated public purpose, the regulatory classifications of the licensing act must nevertheless reasonably relate to the accomplishment of that purpose.

Some discrimination is inherent in any legislative attempt to limit the number of retail outlets for liquor by the drink, and because any legislation is presumed to be constitutional [footnote omitted], a mere showing of discrimination has been held insufficient to defeat the regulatory scheme. [Footnote omitted] Nevertheless, to comply with the equal protection requirements of the federal and state constitutions, the discriminatory classification must reflect a reasonably conceivable, legitimate public purpose, [footnote omitted] and it must relate reasonably to that ascribed purpose. [Footnote omitted] Because a legitimate public purpose appears, prima facie, from the language of I.C. § 23-901, the issue is narrowed to whether the . . . classification is reasonably related to that purpose.

Id. 94 Idaho at 655-56, 496 P.2d at 278-79.

In State v. Cantrell, supra, the court concluded that the regulatory licensing scheme was reasonably related to the purpose of insuring adequate police protection by limiting liquor licenses either to establishments within a municipality or to substantial enterprises outside the municipality that posed few police protection problems. That decision also addressed the argument advanced here that all establishments that might qualify under this rationale are not granted exemptions. In State v. Cantrell, 94 Idaho at 656, 496 P.2d at 279, this court stated:

It is argued that enterprises other than those specifically identified in Title 23 might qualify for liquor licenses under the state’s rationale. In that respect the classification may be “under-inclusive” because it benefits some persons in a manner which furthers a legitimate public purpose but does not confer the same benefit on others alleged to be similarly situated [footnote omitted]. However, in appropriate cases the courts prudently have modified the strict theory that the classification must include all those similarly situated with respect to the purpose, holding that equal protection has not been denied. Acceptance of under-inclusion is justified on practical grounds when the legislature, exercising the police power, must be free to remedy parts of a problem, or to recognize degrees of a problem and to formulate solutions in the areas it determines to be more in need or more readily corrected than others. [Footnote omitted] In the complex field of licensing retail sales of liquor by the drink, to require either that the legislature remedy at once all aspects of a particular problem or that it do nothing would emasculate the plenary power expressly granted by the state constitution.

This reasoning disposes of appellant’s constitutional challenge in the instant case. We hold that appellant was not denied equal protection of the law by respondent’s denial of his liquor license application.

We do not express our approval, however, of the piecemeal statutory regulation of retail liquor sales. The need for a reappraisal of the entire statutory scheme is suggested by the almost annual amendments to the statute. Again in 1978, I.C. § 23-903 was amended by 1978 Idaho Sess. Laws, Ch. 126, in an attempt to encourage “tourism” and “economic development of the state”. We recognize the constitutional validity of legislation reasonably related to the purpose of promoting economic development, however, we do not express an opinion as to the continued validity of future piecemeal modifications to an exception-ridden licensing statute. Statutory modifications, although individually reasonable, may as a whole become unreasonable, arbitrary and capricious and thereby pose serious constitutional problems.

The judgment of the district court is affirmed.

SHEPARD, C. J., and BAKES, J., concur.

1 . I.C. § 23-903 provides: “Nothing herein contained shall prohibit the issuance of a license to the owner, operator, or lessee of an actual, bona fide golf course, or ski resort . . . For purposes of the section, a golf course must be 40 acres in area, contain 9 tees and be regularly used for playing golf. A ski resort, under the statutory exemption, must be 10 acres in area exclusive of the skiing terrain, contain overnight accommodations for 100 people and be regularly operated as a ski resort in the winter.

2 . I.C. § 23-903 grants an exemption to the population quota system to operators of restaurants located on qualifying airports owned by a county or municipality. Additionally, common carrier airlines, boat lines and railroads are allowed exemptions under I.C. § 23-906.

3 . Operators of lake resorts as defined by I.C. § 23-948 are allowed exemptions whether located within or outside the incorporated limits of a municipality.

4 . Effective March 16, 1978, I.C. § 23-903 was amended by 1978 Idaho Sess.Laws, Ch. 126 (House Bill No. 495) to allow a statutory exemption to the quota system limitation for convention centers located within cities not already having a convention center that have a population of 3000 or more. The stated purpose of the amended legislation is stated in § 1: “It is the purpose of the legislature to encourage the economic development of the state of Idaho and its tourist and tourist-related industries by supporting the construction and operation of convention centers in those Idaho cities of sufficient size and economic base to maintain bona fide convention centers, who do not presently have such convention centers.”

5 .Appellant originally argued that two new liquor licenses were available for the city of Hailey, in addition to the five licenses that had been renewed under the grandfather clause of I.C. § 23-903. A similar argument was dismissed by this court in Crazy Horse, Inc. v. Pearce, 98 Idaho 762, 572 P.2d 865 (1977), decided since filing this appeal. At oral argument appellant abandoned this argument as being foreclosed by Crazy Horse, Inc. v. Pearce, supra.