Rice v. Alcoholic Beverage Control Appeals Board

California Court of Appeal Apr 4, 1978 No. Civ. No. 42849Published

Before: Caldecott, Christian

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Holding. The court held that California Administrative Code, title 4, section 66 (Rule 66) authorizes the Department of Alcoholic Beverage Control to automatically deny a license application for premises where a prior application was denied within the preceding year for reasons pertaining to the premises. The Department is not required to re-litigate the underlying reasons for the prior denial unless it chooses to exercise its discretion to determine if those reasons no longer exist.

Issues

Whether the Alcoholic Beverage Control Appeals Board erred in its interpretation of Rule 66 regarding the Department's authority to deny a license application within one year of a prior denial.
Whether Rule 66 is a valid exercise of the Department's rule-making power under the California Constitution and Business and Professions Code.

Disposition. reversed

Quotations verified verbatim against the opinion

“The board erred as a matter of law when it reversed the department’s decision; rule 66 explicitly authorizes the denial of an application for a license for any premises for which an application has been denied within one year”

“The appeals board’s construction, that “the question involved in the prior as well as the current application is whether issuance of the license would aggravate an existing police problem,” would have the effect of nullifying rule 66”

Opinion — Christian

[374]Opinion

CHRISTIAN, J. —The Director of the Department of Alcoholic Beverage Control seeks review of an order of respondent Alcoholic Beverage Control Appeals Board which reversed a decision of the department denying an application by real party Anthony V. Machiano for issuance of an on-sale beer and wine license.

On November 4, 1976, Machiano applied for a license for a restaurant which he planned to open at a hotel in South San Francisco. The South San Francisco police filed a protest, alleging that to issue a license for the designated premises “would be contrary to public welfare and morals, and would greatly aggravate an already existing police problem.” The department denied the application, stating three grounds for that action:

“Issuance of the license would aggravate an existing policing problem.

“Issuance of a license would result in or add to an undue concentration of licenses in the area.

“Premises have been denied a license within one year immediately preceding the application.”

At the request of Machiano the matter was then heard before an administrative law judge. At that hearing evidence was taken and the judge rendered a proposed decision of denial. The department adopted the proposed decision, and real party in interest appealed to respondent appeals board. The board reversed the decision of the department, whereupon the department sought further review in this court.

The power of the appeals board in reviewing license decisions of the department is “limited to the questions whether the department has proceeded without or in excess of its jurisdiction, whether the department has proceeded in the manner required by law, whether the decision is supported by the findings, and whether the findings are supported by substantial evidence in the light of the whole record.” (Cal. Const., art. XX, § 22; Bus. & Prof. Code, §§ 23084, 23085.) Here, the department denied the application for a license on the sole basis that a previous application had been denied less than a year before, for reasons pertaining to the premises. California Administrative Code, title 4, section 66 (commonly referred to as “rule 66”), provides in pertinent part: “No license shall be issued for any premises for which an

Rice v. Alcoholic Beverage Control Appeals Board

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Opinion — Christian

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Dissent — Caldecott

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