Michael Long v. Liquor Control Commission
322 Mich. App. 60
| Mich. Ct. App. | 2017Background
- Michael Long has operated Par-T-Pac, an SDD (specially designated distributor) liquor licensee in Boyne City since 1990.
- In 2013 the Michigan Liquor Control Commission (LCC) issued an SDD “resort” license to a Family Fare supermarket that was within the statutory distance/quota limits that otherwise would have restricted new SDDs.
- Long alleges that Family Fare’s license reduced his sales and the resale value of his license, constituting an uncompensated taking (inverse condemnation) because the LCC effectively transferred his market value to a private business.
- The LCC moved for summary disposition under MCR 2.116(C)(8); Long sought leave to amend to plead inverse condemnation more directly.
- The trial court granted the LCC’s motion and denied leave to amend as futile; Long appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Long has a vested property right in being free from competition/retaining market share | Long: his SDD license included protection from competition via quota/distance rules, giving him a vested entitlement to market share and license value | LCC: license grants the right to sell alcohol, not a right to exclude competitors or guarantee profits | Held: No. The statute does not create a property right to be free from competition or to a specific market share |
| Whether issuance of a third SDD to Family Fare constituted a de facto taking aimed at Long’s property | Long: by exempting Family Fare, the LCC effectively transferred Long’s property value to a private entity for public benefit | LCC: issuing a license to a private party is not government action aimed directly at Long’s license; any harm was incidental | Held: No. Granting the license to Family Fare was not an affirmative governmental action aimed directly at Long’s property, so no taking |
| Whether Long adequately pleaded elements of inverse condemnation | Long: alleged diminished license value and sales after Family Fare’s license issuance | LCC: pleadings do not allege abuse of power or targeted action at Long’s property | Held: Long failed to plead facts showing abuse of legitimate power or direct targeting; (C)(8) dismissal proper |
| Whether amendment should have been permitted | Long: amendment would plead inverse condemnation explicitly and establish property interest | LCC: amendment would be futile because law does not recognize the claimed property interest | Held: Denial of leave to amend was not an abuse of discretion; amendment would be futile |
Key Cases Cited
- Peterman v. State Dep’t of Natural Resources, 446 Mich. 177 (Mich. 1994) (recognizes inverse/reverse condemnation cause of action for de facto takings)
- Marilyn Froling Revocable Living Trust v. Bloomfield Hills Country Club, 283 Mich. App. 264 (Mich. Ct. App. 2009) (government must abuse legitimate powers in affirmative actions directly aimed at property to support de facto taking)
- In re Certified Question, 447 Mich. 765 (Mich. 1994) (plaintiff must establish a vested property right before pursuing a takings claim)
- Adams Outdoor Advertising v. East Lansing, 463 Mich. 17 (Mich. 2000) (courts first examine whether the claimant possesses the interest alleged to be taken)
- Bundo v. Walled Lake, 395 Mich. 679 (Mich. 1976) (licensees possess a property interest in a liquor license renewal)
- Spiek v. Michigan Dep’t of Transportation, 456 Mich. 331 (Mich. 1998) (incidental or consequential effects of government action do not constitute a taking)
- Minneapolis Taxi Owners Coalition, Inc. v. Minneapolis, 572 F.3d 502 (8th Cir. 2009) (taxicab medallions do not confer a monopoly; holders have no right to a closed market)