Fuller Central Park Properties v. City of Birmingham

97 Mich. App. 517 (1980) 296 N.W.2d 88

FULLER CENTRAL PARK PROPERTIES
v.
CITY OF BIRMINGHAM
CLANCY MULDOON'S, INC
v.
CITY OF BIRMINGHAM

Docket Nos. 44179, 44227.

Michigan Court of Appeals.

Decided May 19, 1980.

August, Thompson, Sherr, Clarke & Shafer, P.C. (by Alan R. Miller), for plaintiff Fuller Central Park Properties.

Simpson, Moran & Burnett (by James A. Simpson and C. Denton Wolf), for plaintiff Clancy Muldoon's Inc.

Beier, Howlett, McConnell, Googasian & McCann, for defendants City of Birmingham and Birmingham City Commissioners.

Before: BRONSON, P.J., and BEASLEY and D.C. RILEY, JJ.

BEASLEY, J.

Plaintiffs, each seeking to compel municipal approval for issuance of a liquor license by the Michigan Liquor Control Commission (hereinafter referred to as MLCC) brought separate actions against defendants for orders of superintending control after defendants denied approval of their applications. Defendants counter-claimed in each action for a declaratory judgment determining that the city commission had no obligation to approve the maximum number of licenses authorized by law, even though qualified applicants were seeking licenses. The cases were consolidated and, after remand to defendant commission to supplement the record regarding reasons for denial, the two trial judges to whom the cases were assigned joined together in one opinion denying plaintiffs the relief they sought.

Summary judgments were granted defendants, denying relief on the complaints for superintending control and granting declaratory judgments on the counter-claims, which hold that the statute does not require defendant city commission to approve the maximum number of licenses permitted under the statute. Plaintiffs now appeal as a matter of right.

In a referendum held on November 7, 1972, Birmingham voters approved the sale of liquor by the glass for consumption on the premises. Prior to the referendum, neither the legislative body (city commission) nor the electorate of the City of Birmingham had availed itself of the post-prohibition statutes which would have permitted sale of liquor by the glass for consumption on the premises within the city. On the contrary, both the city commission and the electorate had declined to take that legal step.

Under the quota provisions of MCL 436.19c; MSA 18.990(3), a total of 17 Class C liquor licenses are available for issuance in the City of Birmingham. Ten of the 17 available licenses have either been issued by the MLCC or approved by defendant city for issuance, 2 of the 10 such licenses being not currently operational.

Thus, there remain 7 licenses of the maximum of 17 still unissued and available. Each plaintiff-appellant has applied for one of the 7 unissued Class C licenses. For purposes of this appeal, no question has been raised as to the qualifications of each individual plaintiff as a licensee, nor with respect to the sites proposed for their respective establishments; that is, they are in locations which would meet defendant city's code requirements regarding use.

Prior to the 1972 referendum, on October 23, 1972, defendant city adopted a resolution setting forth its policy regarding liquor licenses, if the referendum would pass.^[1] Subsequently, on October 30, 1978, defendant city adopted a further resolution indicating that it had decided, after review, that the best interest of the City of Birmingham and its citizens would be to decline the issuance of any further liquor licenses at that time.^[2] It is the October 30, 1978, resolution that gives rise to the within litigation.

Plaintiffs first argue that the Birmingham City Commission does not have the power to limit the number of liquor licenses which will be issued below the maximum number allowed by statute. Plaintiffs reason that the Legislature has preempted this field of regulation. We do not agree.

The Michigan Constitution provides that municipalities have the power to adopt resolutions and ordinances relating to their municipal concerns "subject to the constitution and law".^[3] A municipality is precluded from enacting an ordinance (or adopting a resolution) if (1) it is in direct conflict with a state statutory scheme or (2) if the state statutory scheme pre-empts the ordinance by occupying the field of regulation which the municipality seeks to enter, even where there is no direct conflict between the two schemes of regulation.^[4]

Initially, we conclude that there is no direct conflict between the Birmingham resolution and the Michigan Liquor Control Act.^[5]

The pertinent section of the act, which plaintiffs allege is in direct conflict with defendant commission's resolution, is as follows:

"(1) A public license shall not be granted for the sale of alcoholic liquor for consumption on the premises in excess of 1 license for each 1,500 of population or major fraction thereof."^[6]

Plaintiffs reason that this statute provides, as applied to the City of Birmingham, that 17 liquor licenses must be issued. Plaintiffs argue that since there were seven licenses still unissued and available at the time defendant passed its resolution refusing to grant any more licenses, that resolution was in direct conflict with the statute.

If we were to adopt plaintiffs' reasoning, we would have to find that MCL 436.19c; MSA 18.990(3) places a minimum as well as a maximum limit on the number of liquor licenses which can issue in each municipality. This we decline to do.

The primary rule of statutory construction is that the Legislature is presumed to have intended the plain meaning of the words used by it.^[7] In interpreting statutes, all words and phrases should be construed according to the common and approved usage of the language.^[8] Correct and proper interpretation means giving effect to every word of the statute. Every effort must be made to avoid declaring any portion of the Legislature's language to be surplusage.^[9] The definition for the phrase "in excess of" in Webster's New Collegiate Dictionary (2nd College Edition, 1974) is "more than".

If we accepted plaintiffs' argument that this statute places both a ceiling on and a floor under the number of liquor licenses to be issued in each community, it would result in a finding that "not" and "in excess of" are pure surplusage. Clearly, this was not the intent of the Legislature.^[10]

Accordingly, we conclude that the Birmingham commission's resolution, which in effect limits the number of Class C liquor licenses, is not in direct conflict with the Michigan Liquor Control Act.

The question then becomes whether the state statute has pre-empted the city's ordinance by occupying the field of regulation which the municipality seeks to enter.^[11] To determine if pre-emption has occurred, we must look at four factors.

First, if the state law expressly provides that the state's power to regulate in a specific area is exclusive, a municipal, regulation is pre-empted. Second, pre-emption may be implied from the legislative history of the statute. Third, the pervasiveness of the state statutory scheme may indicate pre-emption. Fourth, the nature of the regulated subject matter may demand exclusive state regulation to achieve uniformity.^[12]

Applying these four factors to the case at hand, we find that the state has not pre-empted the field of regulation which the City of Birmingham seeks to regulate.

First, we find that the Legislature has not expressly provided that the state's power to regulate in this area is exclusive. MCL 436.1; MSA 18.971 provides, in part, as follows:

"Except as by this act otherwise provided, the commission shall have the sole right, power and duty to control the alcoholic beverage traffic and traffic in other alcoholic liquor within the state of Michigan, including the manufacture, importation, possession, transportation and sale thereof." (Emphasis added.)

This section clearly indicates that there are some exceptions to the control of the MLCC, those specified in the statute. Specifically, MCL 436.17; MSA 18.988 provides as follows:

"Applications for licenses to sell beer and wine or spirits for consumption on the premises, except in a city of 1,000,000 population or over, shall be approved by the local legislative body in which the applicant's place of business is located before being granted a license by the commission, * * *." (Emphasis added.)

Accordingly, although the MLCC is granted broad power in issuing licenses, that power is subject to the requirement that certain cities (Birmingham included) approve licenses before they may issue. We find that the Legislature has not expressly provided that the power of MLCC to regulate in the area of issuance of liquor licenses is exclusive. Rather, cities of under 1,000,000 population are specifically given the power to approve applications for licenses.^[13]

Further indication that the power to regulate vested in the MLCC by the Legislature is not exclusive is the fact that after repeal of prohibition, home rule cities, like Birmingham, retained the power to prohibit sale of liquor by the glass within their boundaries. The effect of that right was to give the city the power to deprive the MLCC of power to issue any license for sale of liquor by the glass for consumption on the premises within the city's boundaries.

Second, the legislative history of this statute may properly be understood only within the context of the full history of the effort in this state and in the nation to control the liquor traffic. For our purpose here, we need only remember that in Michigan liquor is and always has been treated specially and quite differently from other products. Going back as far as 1850, Michigan Constitutions have contained provisions dealing with intoxicating liquor. In 1933, after repeal of the National Prohibition Amendment (XVIIIth), the Michigan Constitution was amended to permit the licensing of persons to sell alcoholic beverages. As amended in 1978, Article 4, § 40 of the 1963 Michigan Constitution provides as follows:

"The legislature may by law establish a liquor control commission which, subject to statutory limitations, shall exercise complete control of the alcoholic beverage traffic within this state, including the retail sales thereof. The legislature may provide for an excise tax on such sales. Neither the legislature nor the commission may authorize the manufacture or sale of alcoholic beverages in any county in which a majority of the electors voting thereon shall prohibit the same."

We do not interpret this constitutional provision or the legislative history as showing an intent that the state pre-empt regulation in this phase of the liquor business. Moreover, although the liquor act is pervasive and deals with multiple facets of liquor control, there is no indication that the Legislature intended to pre-empt city action adopting a policy of approving fewer licenses than the maximum number permitted by statute. Rather, the Legislature specifically provided that the cities with populations less than a million have authority to approve license applications as a condition precedent to their issuance by the MLCC.

Lastly, we find that the nature of the regulated subject matter does not demand exclusive state regulation to achieve uniformity. We note that the Legislature has set the absolute maximum number of licenses which can be issued in a city the size of Birmingham at 17. While, in the name of uniformity, the Legislature may see fit to set a maximum number of such licenses which a city cannot exceed, there is no good reason why a city cannot choose to establish a lower, temporary-maximum number.

Therefore, we conclude that the City of Birmingham's resolution limiting the number of liquor licenses to be issued at the present time is neither in direct conflict with the Michigan Liquor Control Act, nor pre-empted by the Legislature.

The question then becomes whether the City of Birmingham's action in limiting the number of licenses was arbitrary and capricious. We find that it was not.

In this connection, we note that defendants argue that the courts may not review the city commission's denial of plaintiffs' applications for new liquor licenses. While we would tend to believe that the scope of judicial review of a denial of an application for a new liquor license is very narrow and limited,^[14] that question is not properly before this Court for review.^[15] Moreover, our decision in this case makes its discussion unnecessary.

Although home rule cities, like Birmingham, enjoy some power to control alcoholic beverage traffic, they cannot act arbitrarily and capriciously. The burden is on plaintiffs, however, to establish a showing of an abuse of discretion, or an arbitrary exercise of power on the part of the city commission.^[16] Plaintiffs have failed to show such an abuse of discretion or arbitrary exercise of power by defendant commission in this case. Defendant commission denied plaintiffs' applications for liquor licenses on the ground that they believed it was in the city's best interest that no new licenses currently issue and that plaintiffs had failed to establish the "public need or convenience" for such licenses to issue. We find no indication that adoption of this resolution was an abuse of discretion. This is a proper ground for the denial of such a license.^[17]

Plaintiff, Clancy Muldoon's, Inc., argues that the denial of its application, while other licensees are permitted to operate in the city, constitutes a denial of equal protection.^[18] This argument is without merit.

The right to equal protection of the law is not denied by a state law or course of procedure where the same law or course of procedure would have been applied to any other person in the same state under similar circumstances and conditions.^[19]

In this case, plaintiff was treated identically with other liquor license applicants in similar circumstances. All were denied a license due to the decision of the city commission that the best interest of the city would be served by not issuing any more liquor licenses at this time.

The balance of plaintiff's claims are similarly without merit.

In summary, we find that the trial court's judgment denying plaintiffs' application for a writ of superintending control was proper. There was no clear legal duty requiring defendant Birmingham City Commission to approve plaintiffs' applications for liquor licenses in this case.

Affirmed.

BRONSON, P.J., concurred.

D.C. RILEY, J. (dissenting).

I am in accord with the majority in their determination that the City of Birmingham may limit the number of liquor licenses to be issued, and that in so doing their resolution is not in conflict with the Michigan Liquor Control Act, nor preempted by the Legislature.

The right to ration such licenses carries with it the obligation, however, to do so in a manner that is neither arbitrary nor capricious. The rationing procedure should be fair and equitable, capable of explanation and understanding, and most of all, determined and announced in advance of its being instituted.

The city's denial of the two applications before us was arbitrary and capricious, for the reason that these applications were pending prior to the city's adoption of their limit. Again, basic fairness requires that notice be given of any limitation established. This was not done here. Therefore, the city cannot reject these applicants at the same hearing at which it announces the limitation on the basis of the limit set. Rather, they must treat these applicants as they had all others who preceded their limitation and give valid reasons for disqualification.^[1]

Inasmuch as it is stipulated that the two applicants herein involved were otherwise qualified and would have been issued licenses but for the disqualifying limitation which I find to have been arbitrarily imposed, I would reverse and remand to the trial court for an order compelling approval of the issuance of the disputed licenses.

NOTES

[1] The resolution stated as follows:

"WHEREAS, the electors of the City of Birmingham will, as the result of a petition filed with the City Clerk, vote on November 7, 1972, on the question of whether the sale of alcoholic beverages for consumption on the premises shall be permitted with the City, and

"WHEREAS, citizens have expressed their concern as to the power of the City, through its City Commission, to regulate and control the licensing and operation of establishments for the sale and consumption on the premises of liquor, and

"WHEREAS, the Commission deems it desirable to advise the electors as to what the City's authority and policy is with regard to regulating and controlling such establishments.

"NOW, THEREFORE, BE IT RESOLVED that the electors of the City of Birmingham be advised by this Commission as follows:

"1. If sale of liquor for consumption on the premises is approved by the voters, under present state law, no license for the sale of liquor for consumption on the premises within the City may be issued by the State Liquor Control Commission unless first approved by this Commission.

"2. This Commission has the authority to impose limitations and regulations which will permit the number of such establishments within the City, control their location, the type of establishment which may be licensed, and the physical facilities to be used. Each license must be renewed each year and the Commission has the same controls over renewals as it has over the original issuance of licenses.

"3. This Commission is unalterably opposed to permitting any license to be issued to permit such an establishment in a residential zone or in any area presently zoned B-1 — Neighborhood Business.

"4. This Commission is unalterably opposed to approve the licensing of any such establishments unless it is a restaurant with complete dining facilities and it derives the major portion of its income from the sale of food."

[2] The resolution stated as follows:

"WHEREAS, the Birmingham City Commission has reviewed the following liquor license applications:

Monahan's Beef Buffet Pheonicia Restaurant P.J. Clarke's Central Park Properties (Les Collisse) Clancy Muldoon's (Studio 4)

"WHEREAS, the Birmingham City Commission may elect to issue a liquor license to the most qualified applicant, above all others, on file at time of said hearing, and

"WHEREAS, there exist two licenses which are not in operation at this time, and the full effect of these licenses on the community is not know. [sic]

"NOW, THEREFORE, BE IT RESOLVED that the Birmingham City Commission, having reviewed the above applications, deems it in the best interest of the City of Birmingham and its citizens to decline the issuance of any liquor license at this time."

[3] Const 1963, art 7, § 22.

[4] People v Llewellyn, 401 Mich. 314, 322; 257 NW2d 902 (1977).

[5] MCL 436.1 et seq.; MSA 18.971 et seq.

[6] MCL 436.19c; MSA 18.990(3).

[7] Florentine Ristorante, Inc v City of Grandville, 88 Mich. App. 614; 278 NW2d 694 (1979), Gordon Grossman Building Co v Elliott, 382 Mich. 596; 171 NW2d 441 (1969).

[8] MCL 8.3a; MSA 2.212(1); Bragg v Kalamazoo, 86 Mich. App. 700; 273 NW2d 530 (1978).

[9] Deshler v Grigg, 90 Mich. App. 49; 282 NW2d 237 (1979), Stowers v Wolodzko, 386 Mich. 119; 191 NW2d 355 (1971).

[10] See, Smock v Coots, 165 Ind App 474; 333 NE2d 119 (1975).

[11] See, People v Llewellyn, supra.

[12] Id.

[13] We distinguish Noey v Saginaw, 271 Mich. 595; 261 N.W. 88 (1935). In that case, the Court held that the City of Saginaw could not fix the closing hours of places licensed to sell liquor to a period shorter than that specified by the Michigan Liquor Control Commission. The Court found that the commission was granted the exclusive power to regulate and control alcohol beverage traffic subject only to specified statutory exclusions, and that no statutory exclusion was applicable.

[14] See, Stafford's Restaurant of Bloomfield, Inc v West Bloomfield Twp Board, 82 Mich. App. 607; 267 NW2d 461 (1978), BEASLEY, J. dissenting.

[15] We note that the trial court held the city commission's actions reviewable, and defendants have not taken an appeal from that decision.

[16] Bundo v Walled Lake, 395 Mich. 679; 238 NW2d 154 (1976), Stafford's Restaurant of Bloomfield, Inc v West Bloomfield Twp Board, supra.

[17] See, Smock v Coots, supra, Hobday v O'Dowd, 94 RI 172; 179 A2d 319 (1962).

[18] US Const, Am XIV; Const 1963, art 1, § 2.

[19] Moore v Spangler, 401 Mich. 360; 258 NW2d 34 (1977).

[1] It is worthy to note that one of the applicants before us was rejected in April, 1978, because they did not have a full-service restaurant. They reapplied as such a restaurant in September, 1978, only to be rejected on October 30, 1978, because of the limit set coincident with the hearing.