Godfrey v. State, Department of Community & Economic Development

GODFREY, Mendenhall Richard d/b/a

Valley Tesoro, Appellant, Alaska, DEPARTMENT

STATE of OF AND ECONOMIC

COMMUNITY

DEVELOPMENT, Appellee.

No. S-11894.

Supreme Court of Alaska.

Nov.

Rehearing Denied Feb.

H99 Hoffman, Robertson, Paul M. Monagle & P.C., Juneau, Eastaugh Appellant. for Cynthia Drinkwater, C. Attorney Assistant General, Anchorage, Márquez, and David W. Attorney General, Juneau, Appellee. for BRYNER, Justice, Before: Chief MATTHEWS, EASTAUGH, FABE, and CARPENETI, Justices.

OPINION EASTAUGH, Justice.

I. INTRODUCTION Alaska, authority State of under of AS 43.70.075, administratively suspended Rich- Godfrey’s ard authority to sell tobacco for sixty-five days imposed civil fines be- cause two employees of his had been convict- 11.76.100(a)(1) ed under AS negligently selling cigarettes to minors. The here is whether it Godfrey’s denial of due rights impose pen- these civil alties Godfrey without permitting dispute him to proceed- administrative ings employees whether his negli- had been gent. “by Because even a plea” licensing satisfies the statute and because Godfrey challenge could in the administrative proceedings whether the had fact been convicted or had acted within the scope of employment, we conclude that Godfrey’s process rights were violat- ed.

II. AND FACTS PROCEEDINGS 20, 2002, February On a woman under the age working of nineteen with the Juneau Department purchased pack ciga- Police Tesoro, Valley rettes at gas Mendenhall station and convenience store owned Rich- Godfrey, ard Valley Mendenhall Teso- d/b/a ro.1 The clerk who made the sale was Mi- Godfrey's Valley managing authority. brief states that designated Mendenhall has But he liability company Tesoro is a caption appeal, connoting limited and that he for the a sole "d/b/a” Department Community by a Alaska Ratzat. The sale was observed chael Development gave Economic notice Department Police officer who cited Juneau 11.76.100(a), suspend that it the tobacco endorse- violating which Ratzat twenty days ciga- ment to his business license it an offense to sell makes impose penalty and a civil of of consequence As a of the because $300 rettes to minors.2 conviction, citation, impose an resigna- Ratzat’s and would ad- Godfrey accepted Ratzat’s period forty-five suspension days of pleaded guilty Ratzat and there- ditional tion. was 11.76.100(a)(1) penalty and of an additional violating AS a civil $500 fore convicted of of Laurenzana’s conviction. This no- Ratzat cited he because and fined When was $200. proceedings tice the un- that he check the marked initiation of stated did not identification 43.70.075, provides that if buyer recognized he her and der AS which ei- of the “has employee on a ther the licensee or his thought prior he had carded her occa- been 11.76.100,” violating of convicted AS the en- sion. penal- civil suspended dorsement will be and place July on A similar sale took imposed.3 Godfrey requested ties an will clerk Laurenzana. Lau- The sales was Julia hearings hearing. administrative Two were purchaser’s looked renzana at the identifica- conducted, employee one for each sale. If an tion, accurately which revealed him to be of of violating the licensee has been convicted age. under Nonetheless Laurenzana sold 11.76.100, 43.70.075(m)(l) AS AS limits the cigarettes. Depart- him The Juneau Police questions suspension hearing at the license the ment officer who observed sale issued employee to the was convicted of whether 11.76.100(a)(1). violating citation AS her a for violating acting AS 11.76.100 “while within employment was Laurenzana’s terminated. ... scope employment.”4 the of the the pleaded no contest to citation and She violating suspension therefore of AS the first convicted Before God- 11.76.100(a)(1) frey suspension pro- and fined moved dismiss the $300. 43.70.075(d) provides part: proprietorship. pertinent We will assume that Mendenhall AS Valley proprietorship. Tesoro a sole person a who holds an endorsement is- If section, agent this sued under or an or an provides part: 2.AS 11.76.100 in relevant person a who holds an endorsement of (a) person selling acting A commits the or issued under this section offense of person giving the agency tobacco to a minor scope employment, the or has been if of (1) cigarette, negligently cigar, 11.76.100, sells a a to- violating convicted ... of bacco, containing product or a to a tobacco suspend department shall the endorsement a age; years under person period of of (2) years age negligent- is 19 or older of and (1) days impose penalty and a civil of exchanges cigarette, cigar, ly gives or a a to- person previously $300 the has been con- not if bacco, containing product or a to a 11.76.100, violating AS ... and victed is not of age.... person years under 19 of subject to otherwise the sanctions described in subsection; (2)-(4) of this (f) (a) person violates section of this (2) days impose penalty a civil of the date of guilty upon of a violation and conviction is if, $500 within the 24 months before punishable by $300. a fine of not less than (m) department's the tion, notice under of sec- this added.) (Emphasis person, agent or an or of 11.76.100(f)provides that the sale person while within a of tobacco to minor is a "violation.” agency person, or was con- A "violation” is defined as violating .... victed once AS 11.76.100 punishable only by a noncriminal offense added.) (Emphasis fine, by imprisonment penalty; but not or other give does of violation rise 43.70.075(m) provides: 4. AS any disability legal disadvantage on or based department may suspension crime; initiate person charged conviction of a with a right business license or the endorsement violation is not entitled (A) obtain a business license endorsement under by jury; ato trial or subject (B) sending person section public defender have or other coun- mail, suspension notice certified re- appointed public expense represent sel at receipt requested, by delivering person.... turn 11.81.900(b)(63). person. must notice The notice contain Violations "characteristi- person cally inappropriate orderly information that informs the involve conduct to an any suspension, length society criminality grounds but ... do not denote in their sus- 11.81.250(a)(6). sought, right pension person's commission.” AS to ad- 43.70.075(m) is which ceedings, claiming apply independent that AS law to we our employers it unconstitutional because denies Likewise, judgment.6 “[w]hether statute required by fair a full and violates the Alaska is a Constitution ap- Godfrey argued “[t]hrough process. law, novo, which we adopting review de plication statutory estoppel, collateral re- persuasive law that rule of is most a full spondent given is never and fair hear- light precedent, policy, and reason.”7 clerk ing on whether sold its age [or] under the Primary Arguments Appeal B. entrapment.”5 there hear- whether ground officer denied motion on appeal Godfrey’s argument On main is that court, agency, from a as distinct lacks process rights his due were violated because authority to rule that statute is unconstitu- requires suspension 43.70.075 of his to- evidentiary At the of the first tional. outset upon employees’ bacco endorsement his con- hearing, officer hearing ruled that he negligently cigarettes victions of selling to finding make no inconsistent with minors, gave Godfrey opportunity no to for the that offense but be heard on his contention the convictions Godfrey record his relating could make a to disputing factually supportable. were not proposed legally defenses that the convic- or factually legally supportable. tion was or At Contending suspension that would result in hearing, hearing the conclusion of each $14,000 in profits, more than lost in addition acting officer found that the were fine, subject- to the civil argues he that $800 scope employment within the of their when ing magnitude him to of sanctions this they they sold tobacco minors and that solely because an was found had been convicted of violations under guilty summary proceed- of a violation in a hearing II.76.100. The officer rec- therefore ing process is offensive to the of due law. suspension period ommended cumulative of The given opportunity license holder is no sixty-five days civil totaling and a fine $800. dispute any whatsoever whether accepted law The commissioner these recommen- actually was dations. violated. The license holder’s represented interests are not at the sum- court, Godfrey appealed superior to the mary criminal let proceeding, by alone appeals which affirmed. nowHe to us. someone with the same who interests is a III. DISCUSSION party.

A. Standard of Review Godfrey concludes that a violation of “[i]t is process judgment binding for a be

Whether there was a of violation Godfrey’s right litigant question party privy to due is a was not a or a (Footnote omitted.) suspension begins ministrative A review. 30 5. listed defense days receipt after of notice described this they preclud- issues he would contest if were not person timely subsection unless the delivers a 43.70.075(m), including ed AS whether there hearing request department written for a provided by regulations part on the of clerk and in the manner of entrapment. As to whether there the clerk department. hearing requested If a is under Ratzat, Godfrey put as follows: subsection, officer of the office sale, Ratzat "was Mr. if the (AS hearings 44.64.010) of administrative shall person buying presented previously had I.D. by using preponder- determine the issues ance of the evidence test and years age, she 19 showed was more than shall, such that it was reasonable to believe she was they regulations extent do not conflict with years age.” still 19 more than 44.64.060, adopted under AS conduct the hear- ing by regulations provided in the manner State, Entry v. Fisheries Dominish Commercial department. under this subsec- Comm’n, (Alaska 1995). P.2d 907 492 following questions: tion is limited to the (1) person holding was the the business license endorsement, agent or an or Green, rel. 156 Sands ex Sands v. P.3d agency while (Alaska 2007); State, Revenue, Dep't person, plea or convicted Div., Support Child ex rel. Husa v. Enforcement judicial violating finding .... 11.76.100 Schofield, P.2d added.) (Emphasis lack of evidence can affirmed for to be this case opportunity had an has never

therefore defenses. supporting the would-be heard.”8 essence, then, dispute main response that the argues $300 The state procedure and the whether the statute potentially fíne assessable criminal deprived Godfrey of due department followed sell- employees for the offense the statute will cause process of law because gives employees suffi- ing to minors giving without him large him a financial loss to contest citations under AS cient incentive dispute facts that he a fair Godfrey’s tes- The relies on 11.76.100. state inherently thinks are relevant. money to these timony that is a lot “$300 Considering that the av- people sometimes.” Licensing C. Statute $8.00-8.50, hourly the state erage wage is exposure The nature of a licensee’s almost one week’s contends $300 43.70.075(d) penalty is not civil under AS thirty-five working gross pay for clerk appears to superior court have obvious. It therefore asserts that forty hours a week. liability. Compar- characterized it as strict significant” incentive to con- clerks have “a holding in to our Alesna AS 43.70.075 charge “if have a basis the criminal test LeGrue,9 superior court determined that the if concludes that doing for so.” The state liability on em- imposes 43.70.075 strict AS charges it more contest the clerks do not by of to minors ployers for the sale tobacco have a viable likely because do not acting scope employ- the of in defense, they do not have the not because below, it did the state appeal, ment. On as counsel, Godfrey asserts. to hire funds imposing the statute as seems to characterize Furthermore, that the the state notes statute liability, arguing that AS 43.70.075 vicarious suspension. trigger a requires a conviction liability mandatory imposes vicarious state, “[Requiring a convic- According to the employ- the retailer based on its penalties on convict- employee [is means the who tion that state, According im- illegal ee’s acts. trial, right right ... has had ed] liability under this statute is posing vicarious witnesses, right to question confront and jurisdictions have with how other consistent behalf, and subpoena on his or her witnesses sell or distribute regulated licensees who prove the ele- the state has had to [that] Godfrey, observing dangerous products. beyond a of 11.76.100 reasonable ments impute employ- the that the statute does means, state, according This doubt.” to the licensee or state that ee’s acts employee unfair to use convictions it is not liable, strictly it as licensee is characterizes any that em- against licensees because risk property him unique deprives it of factually or le- ployee convictions would be entirely person’s on a third criminal based hypothetical.” gally improper “purely conviction. argues also that AS 43.70.075 is The state necessary in case to distin- It is not government’s sig- constitutional because the possible theories guish precisely between protecting the health of nificant interest liability civil for violations based on regulating products by citizens employee. its of the licensee’s private economic outweighs an individual’s the state has the initial is whether deprivation and the risk of erroneous penalty giv- interest power impose such a without Finally, state private interest. an to dis- the license holder Godfrey presented employee that no evidence pute asserts the criminal fault of the hearings concerning selling at the administrative convicted of to- has been statute, 43.70.075, be able to defenses he contended he should bacco to a minor. theory liability. It raise, namely specify entrapment and absence does not follows, licensing action is to be argues, simply provides negligence. It the state acting available, taken if the licensee’s was legally are even if these defenses LeGrue, 1387, Hosiery 614 P.2d Godfrey quotes Co. v. 9. Alesna 8. Here Parklane Shore, S.Ct. 439 U.S. 327 n. (1979). L.Ed.2d 552 scope employment types and was and other enterprise business licens es, convicted under AS 11.76.100. Alaska Stat- protected it is by process the due clause 43.70.075(m) permits ute licensee dis- of the Alaska and United States Constitut pute whether the within process ions.11 Due of law thus entitles the employment and whether there holder of endorsement permitting the sale conviction; nothing section .075 meaningful implicitly explicitly or makes the issue may before the endorsement be removed or employee’s negligence material the licens- suspended.12 “Considerations of fundamen ing proceeding; only employee’s convic- guide tal fairness” our determination of what tion and status are relevant. meaningful constitutes a hearing.13 .075(m)(l) The text of subsection makes it “by immaterial whether the conviction was To determine what re plea judicial finding.”10 or Alaska Statute quires in particular disputes adopted we have conviction, simply requires proof 43.70.075 sliding scale set out the United States for, require, provide and does not a de Supreme Court Eldridge.14 Mathews v. regarding novo trial or retrial We will consider: negligence. It is true that there must be a First, the private interest that will be af finding conviction under action; second, fected the official 11.76.100(a)(1) judicial on a finding. based deprivation risk of an erroneous of such 11.76.100(a)(1) But a conviction under AS can through procedures used, interest alternatively guilty plea be based on a or a value, probable any, if of additional or plea of nolo contendere. Alaska Statute procedural safeguards; substitute and fi 43.70.075(m)(l) licensing penalties authorizes nally, interest, including Government’s even if plea, the conviction is on a based the function involved and the fiscal and judicial finding. not on a administrative burdens that the additional Thus, essentially here is procedural requirement or substitute process requires whether due that the license entail.[15] licensing holder be allowed in the proceeding challenge employee’s criminal fault. products The sale of heavily tobacco regulated because tobacco has hazardous im- Godfrey’s D. Due Process Not Was Vio- pacts public impacts health.16 These are by lated the Statute. especially great products when tobacco are A tobacco sold to In involving heavily endorsement is a valu minors. cases property able liquor regulated interest. Like licenses activities and in commerce hazard- 43.70.075(m) provides pertinent part 10. AS Dep’t Assn, in Valley Hosp. Health & Soc. Servs. v. 580, (Alaska 2005)). following that "[a] ... is limited to the 116 P.3d 583 (1) questions: was ... an ... ... con- by plea judicial finding violating victed or 335, 15. at Id. 96 S.Ct. 893. added.) (Emphasis 11.76.100.” Partners, Beebe, 16. Int’l Tobacco Ltd. v. 420 See, e.g., Municipality Anchorage, Hilbers v. 989, (W.D.Ark.2006) F.Supp.2d (recogniz 1003 31, (Alaska 1980) (business 611 P.2d 36 license ing industry heavily regulated); tobacco see State, protected by process); Herscher v. 525, Reilly, also Lorillard Tobacco Co. v. 533 U.S. Commerce, 996, Dep't 568 P.2d 1002 570-71, 2404, (2001), 121 S.Ct. 150 L.Ed.2d 532 1977) Saloon, license); (hunting guide Frontier stating policy perspective, "[f]rom it is Bd., Beverage Inc. v. Alcoholic Control 524 P.2d attempt pre understandable for the States to 657, (Alaska 1974) license). (liquor 659-60 using products vent minors from tobacco before age they capable an where reach are State, Revenue, Dep’t 12. See Rollins v. Alcohol- weighing potential for themselves the risks and Bd., (Alas- Beverage ic Control 991 P.2d 211 use, benefits of tobacco and other adult activi ka Supreme ties.” The Court has also stated that use, particularly among "tobacco children and Dep’t Safety, 13. Javed v. Pub. Div. Motor adolescents, poses perhaps single signif of 620, most Vehicles, (Alaska 1996). 921 P.2d 622 public icant threat health in the United States." FDA v. Brown & Williamson Tobacco 319, 334-35, 120, 161, Eldridge, Corp., Mathews v. U.S. 529 U.S. 120 S.Ct. (1976) (cited State, (2000). S.Ct. 47 L.Ed.2d 18 L.Ed.2d 121 ment, substances, consistently recog- violating convicted of have has been we

ous may department be ... sus that administrative sanctions 11.76.100 shall nized finding or pend applicable of intentional imposed [the without the endorsement 075(d)(1)-(4) negligent misconduct.17 The sale period paragraphs. even specified readily this cat- products falls within tobacco ].[20 ]

which cannot have a interest regardless of whether ing gent underage abet non-negligent because the derage carcerated convicted criminal code. ers 11.76.100(a)(1),undeniably punishes only sell- egory of who are tobacco,19 unlawful criminal sales, strong and commerce. of an offense holding hardly minors from criminal code negligent.18 to a child into lawful regardless of be conduct, sale, any sale to a sales cause And provision regulated. strictly transforms the individuals licensed legitimate abets an unlawful because even punishable knowingly possess- accountable Yet the pertinent whether the always state public To the seller could minor, administrative will act of sell- bars unin- absence of harm and under the non-negli- contrary, here, conduct for un- even always to sell crim- act, flects Furthermore, tions tus and the fact of the seller’s conviction. relevant part, subsection intent sion on administrative an ee’s victed ingAS 11.76.100.... agency person holding the business license en dorsement, underage guilt. hearing under this subsection is concerning by explicitly plain language proof while legislature’s or following questions: Subsection plea sale, employment of the of the or because subsection suspension the seller’s or not on limiting agent judicial finding within intent ^[21] .075(m) of this proof or .075(m) provides: the issues at an the scope hinge suspen- conviction for provision confirms this (1) person, ,075(m)(l) of violat- employ- limited of the ques- con sta- re- expressly contemplates “by plea a conviction particular inal code classifies a sale as a judicial finding,” legisla- it seems clear punishable offense. might ture that convictions result understood 43.70.075(d) to en- Alaska Statute strives pleas, findings negli- from without trial strong preventing force the state’s interest then, gence. together, read When subsec- underage holding liable all sales licensees .075(d) (m) any tions erase doubt as sale, any whether or not. for such legislature’s intent to hold civil- licensees .075(d) unequivo- The clear text of subsection ly selling liable for tobacco to mi- department suspend an cally requires the upon employees’ nors proof of their convic- proof employee’s on endorsement based of an tions, making liability depend without 11.76.100; under AS it does not proof employees’ negligence. of their employee’s guilt: require proof of the actual liability person Godfrey argues imposed holds that this a who an endorsement If section, by agent precisely under this or an what makes it issued or statute Citing employee person of a who holds an en- unconstitutional on its face. v. Javed acting Department Safety, under dorsement issued this section Public Division Vehicles,22 scope agency employ- argues of the Motor he within the or the statute Hazelwood, apply person 880-84 This does not 17. See State 946 P.2d subsection 1997); LeGrue, facility, prisoner Alesna v. P.2d is a at an adult correctional (Alaska 1980). (b) of tobacco a viola- Possession minor is tion. ("A 11.76.100(a) person 18. AS commits the of- added). 43.70.075(d) giving (emphasis selling 20. AS fense of or tobacco to a minor if (1) negligently cigarette, person sells a 43.70.075(m). tobacco, 21. AS containing cigar, product aor tobacco years person age....”). to a under 19 Safety, Dep’t Motor Javed v. Pub. Div. provides: Vehicles, (Alaska 1996) 19. AS 11.76.105 921 P.2d 622-23 (a) years age may (considering impor- not issues are of "central under 19 what tobacco, cigarette, prior knowingly possess cigar, tance" li- to be determined driver’s revocation). containing product cense or a tobacco in this state. An grants opportunity him to contest issues conviction for no importance” licensing minor, deci- of “central selling by plea tobacco to a whether licensing sion because the statute dictates the judicial finding, provides a reliable basis result. finding both for that the license holder has given a minor unlawful access to tobacco and might appear glance,

At first it that what imposing for administrative sanctions on that applies we said Javed about revocation Therefore, light danger ground. legislature’s here. But in of the inherent reliance sales, posed by leg- commercial tobacco presumptive on the fact of conviction as proof regulate islature’s clear intent of sanctionable conduct has a rational basis firm provide sales and to mechanisms for arbitrary capricious. and is neither nor As minors, curtailing tobacco use and the out, points the state other courts have viewed entirely commercial nature licensee’s analogous legislative provisions imposing interest, analogous. Javed is not liability upheld vicarious and have their valid- case, legislature sought young to restrict ity regardless ability of the state’s to estab- and, people’s access to tobacco as one mech- lish fault.24 so, doing provided holding anism for personal without fault licensee who is admin- Applying sliding scale of Mathe istratively employee’s illegal liable for the Godfrey’s process argument ws25 to con Regardless conduct. of whether the em- vinces us that the administrative did ployee negligent in making improper deprive process. not him of due As we noted sale, underlying purpose of the statute is above, Godfrey property has a valuable inter protect by restricting minors their access est his tobacco endorsement. But there Thus, hypothetical to tobacco. unlike the deprivation was no risk of erroneous under Javed, contemplated situation there would 43.70.075 and the state has a substantial nothing suspending irrational about a to- regulating interest the sale of tobacco to underlying prohib- bacco endorsement if the Likewise, requires minors. the statute ited conduct —a sale to a minor —has oc- any suspension conviction before for an em analogous, curred. Javed is therefore not ployee’s imposed.26 sale can be Section .075 because the “central element” of the licens- dispute allowed whether either purchased action is whether a minor to- employee had been convicted under AS license, through Godfrey’s bacco 11.76.100 and whether either whether negligent. was indeed employm of his or her Moreover, Javed did not involve strict or Furthermore, ent.27 the state has a sub theories, liability vicarious and there was no protecting stantial interest in the health of its any adjudication whether citizens, minors, especially through regu Here, actually driving.23 Javed had been products. lation of tobacco The sale of to opportunity each a full had to re- heavily regulated activity, bacco is and the quire prove the state to both that the sale protect designed statute was the health of place negligent- took and that the clerk acted by ensuring they minors do not have access out, ly. points penalty As the state the factors, Applying to tobacco. the Mathews gave employees ample amount the incentive Godfrey we conclude that was not denied due opportunity to defend themselves. This and process: the state’s interest and the low risk oneself, incentive to defend and one’s em- deprivation outweigh of erroneous his eco ployee, against conviction was therefore unsuspended nomic in an enough proeedurally that interest ensure this issue was not foreclosed. endorsement. 334-35,

23. 921 P.2d at 623-24. 25. 424 U.S. at 96 S.Ct. 893. See, Int'l, e.g., Hearing Randall's Inc. v. Bd. of 43.70.075(d). 26. See AS Liquor Dep't, Iowa Beer & Control N.W.2d (Iowa 1988); Liquor Hoge Control 43.70.075(m)(l). 27. See AS Comm'n, App.2d 18 Ohio 248 N.E.2d (1969). 632-33 sell tobacco to company policy to fair- fundamental argued that might It minors; making the entrapped from Ratzat was department preclude the ness would minor; the Ratzat’s sale was conclu- to a and employee’s conviction sale treating an conduct, Godfrey misconduct. government sale to prohibited result sive evidence plausi- sought entrapment no argument would have also to raise minor. That Godfrey Laurenzana’s here because as to factual foundation defenses ble dispute, although hearing we officer ruled that genuine it in put prosecution. never defenses, given that in a these Godfrey for discussion’s sake allowed to raise assume a licensee to process might ruling entitle make no that case due that he could but stated underage that no to establish conviction. invalidate a criminal would Nonetheless, actually here occurred. sale hearing did not err describ- officer licensing dispute in the licensee did not the imposed on the limitations the statute underage sales had oc- proceedings that ability the defenses God- agency’s to consider curred, sought to defend on a and instead Godfrey’s proffered frey wanted to assert. negligence. As theory that there was no merely disputes have raised evidence above, selling to a noted negligent in clerks were as to whether the in unlawful harm and results child causes conduct making or whether their the sales whether the act of regardless of conduct criminally Be- been excused. should have evi- negligence, proffered selling involves negligence or criminal dispute cause no about dispel the non-negligence could not dence after relevant under AS 43.70.075 fault was administratively sanctionable presumption of convicted, hearing employees were a convic- the fact of conduct established any such evi- refusal to consider officer’s 11.76.100. tion under AS Godfrey’s right to due dence did not violate industry process. en summary, when an activity routinely gages in commercial Godfrey argues that also harm, significant exposes public comply with 43.70.075 because failed to interest in hold legislature legitimate has a implement department required industry’s participants ac ing the licensed Godfrey points to AS hearing procedures. exercising all conduct countable for 43.70.075(m), that a offi which states license, just personal licensee’s not for the hearing in ... conduct the cer “shall Here AS 43.70.075 negligence or fault. regulations provided manner legitimate purpose of hold serves the social depart department,” argues “In participants accountable: ing licensed adopt procedures for required to ment was larger good puts it the burden interest of the hearing. But the text of the administrative otherwise upon at hazard depart require that subsection does standing responsible relation innocent but only requires adopt procedures; it ment to danger.”28 public procedures if the hearing officer to follow adopted them. And department has Godfrey’s Right to Due Process Was E. procedural errors points prejudicial to no Not Violated. regulations, to the absence attributable meaningful hearing Godfrey argues that a inability proffered to raise his apart from his present him to defenses would have allowed licensing sanctions. defenses Regard- regarding employees’ his conduct. Moreover, department conviction, if the had Godfrey previously even ing Ratzat’s regulations, procedural promulgated these defens- argued he would have asserted Godfrey to raise permitted not have negligent he would Ratzat not because es: Any proce wanted to raise. iden- the defenses he previously had checked the believed he regulations would have conformed buying and it dural tobacco tification of the implied expressed limitations valid; acting Ratzat was not within statute, Godfrey’s Per that it was AS 43.70.075. scope of his because Hazelwood, 875, Dotterweich, 946 P.2d State v. 320 U.S. 28. United States v. (1943); see also 64 S.Ct. 88 L.Ed. relevant, yes rejected were not and the ion would answer because it concludes defenses regula negligence in department adopted making could not have that actual a sale to a part that would have made them relevant. minor on the retail clerk is not a tions required imposing condition of sanctions on a Finally, Godfrey that contends licensee. I would answer the hearings right process violated his to due negative negli- because I think that actual intelligently prepare could not because he gence required imposi- is a condition to the proceed or decide to without know defense tion of licensee sanctions. I Because apply the rules that would at the hear statute, also conclude that ings. gave Godfrey But 43.70.075 notice 43.70.075(m)(l), precludes that a licensee of the issues to be determined at the hear offering proof from on the issue of clerk by ings. surprised anything If he was negligence, violates the licensee’s explanation officer said in or elabora rights. My reaching reasons for these con- hearings began, tion when the he should have clusions follow. asked for a continuance. He did not. There Godfrey’s right pro is no indication to due Preliminary Discussion by way hearings cess was violated my I agreement At the outset note with were conducted. First, today’s opinion points. on two is a hazardous and addictive substance that is IV. CONCLUSION properly by regulated Consump- the State. reasons, opinion supe- For these of the tobacco, minors, especially pres- tion of rior court is AFFIRMED. public danger. ents a substantial health Sec- ond, because tobacco use is a hazard and MATTHEWS, Justice, FABE, with whom regulated, tobacco sales are sellers can be Justice, joins, dissenting. subjected to administrative sanctions on MATTHEWS, Justice, FABE, liability liability” with whom strict basis.1 “Strict here Justice, fault, joins, dissenting. including negli- means without direct gence, part on the of licensees and without The issue this case can be understood vicarious fault based on the conduct of licen- by considering following hypothetical. acting sees’ while young purchases cigarettes woman from a employment. “Vicarious fault” showing convenience store after clerk would include the of a retail clerk indicating legal age. ID that she is of taking who sells tobacco to a minor without fact, well-produced forgery ID a age steps reasonable to ascertain the young year age. woman is one under purchaser. caught smoking by parent, When she tells parent though impose a bought cigarettes where she Even the State could reports purchase system dispenses liability parent and the her to the that with vicarious police. predicate imposition clerk of sanctions The convenience store licensee, charged negligent with the sale of tobacco this is not what AS products requires to a minor. The clerk does not 43.70.075 does. The statute to—as pleads a clerk convicted of believe he was but no con- sales clerks —that charge prosecutor specified requiring negli- offenses at least test to the has legisla- gence part told him that his fine will be and the on the of the clerk. The $300 contemplate him sanctions clerk knows that it would cost at least ture did not imposed against lawyer to hire a to defend the ease. would be a licensee when $1000 exercising Assuming the clerk was not in fact while reasonable care clerk Thus, negligent, system imposing to a minor. does Alaska’s sells vicarious, strict, sanctions on licensees call for licensee sanc- 43.70.075 is based on Today’s opin- liability. tions these circumstances? 875, (Alaska 1980). Hazelwood,

1. 946 P.2d 1390-91 880-84 v. See State (Alaska 1997); 1387, LeGrue, P.2d 614 v. Alesna 1208 place.”8 Hearing driving a in the first We Requires on Im- vehicle Due Process Javed, in that the statute

portant therefore held Issues. applied 28.15.166(g), unconstitutional was is a valuable inter- endorsement issue to permit it that critical did types of liquor licenses and other Like est. adjudicated.9 be licenses, protected it is enterprise business process clauses of the Alaska by the due importance to the The issues of central Due Constitutions.2 United States clearly suspension of a tobacco endorsement an a holder of endorsement of law entitles place took a sale to a minor include whether products to permitting the sale of tobacco the sale was the clerk who made and whether hearing before the endorsement meaningful in the of his or her may suspended.3 were place. took These issues when the sale fairness” of fundamental case, “[C]onsiderations present in the uncontested constitutes a guide our determination of what Godfrey by hearing against were decided hearing.4 now we have not meaningful Until employ- question is whether the officer. The meaningful hearing makes a examined what negligence making in the sales was also ees’ endorsement sus- in the context of an importance of and thus an issue central spoken But we have of pension proceeding. right Godfrey have had the should issue requirements of fundamental fairness to contest. pro- of driver’s license revocation the context have held that ceedings. In that context we Is Not Bound Clerks’ hearing a licensee must be in a revocation Convictions. challenge given opportunity to “issues of an addressing question, ap- it is Before importance’ to the revocation deci- ‘central 5 point at that God- propriate to establish Department Public In Javed v. sion.” frey constitutionally be bound cannot Vehicles, that Safety, Motor Division of proceedings in the facts determined revoked, could be meant that before license make hearing officer did not the clerks. needed who failed a breath test the licensee any findings as to whether either present to be afforded they made the negligent clerks were when driving.6 The evidence that he had not been sales. Their convictions for the offense governing statute limited the terms of the pre- negligent sale of tobacco in Javed to whether the driver issues contesting clude them from the test and whether failed or refused to take subsequent proceedings, unless grounds arresting officer had reasonable prosecution at stake in the amount driving at that the licensee was to believe so proceeding sale “It hard intoxication.7 stated: time of We .limited comparison to amount at stake a sub- impor- imagine an of more ‘central issue inappro- proceeding that it would be sequent tance’ to a driver’s license revocation binding priate give effect to the former.10 than accused of DWI whether 1331); see, Thorne, See, e.g., 774 P.2d at Municipality Anchorage, Graham 2. e.g., v. Hilbers 211, (Alaska 1981). 31, State, (Alaska 1980) (business 633 P.2d 216 n. 12 license v. 611 P.2d 36 State, protected by process); Herscher v. 996, (Alaska Commerce, 568 P.2d 1002 Dep’t 6. 921 P.2d at 624. license); Saloon, 1977) guide (hunting Frontier Bd., 524 P.2d Beverage Control Inc. v. Alcoholic 7. at 623. Id. license). 657, (Alaska 1974) (liquor 659-60 Id. State, Revenue, 3. See Rollins v. Dep't Alcoholic (Alaska Bd., 991 P.2d 211 at Beverage Control 624-25. Id. 10. See Restatement Judgments (Second) Snow, 28(5)(c) (1980); Pennington § 370, 471 P.2d 774 P.2d Safety,

4. Thorne v. Dep’t Pub. (Alaska 1970): (Alaska 1989). court case amount at stake in district [T]he less than amounts involved was far Safety, 5. Javed v. Dep’t Div. Motor Pub. 1996) (quot- superior we were to hold the Vehicles, court action. If P.2d formulating In noted that could not have standard we clerks’ convictions But the Godfrey Godfrey preclusive guided by requirements effect “we are the of due against proceedings the party Here, not a Godfrey process.”13 had neither no- privity in with them. nor was he the clerks opportunity tice nor an to be heard with respect prosecution to the of the citations may against party one not judgment against employees. his He thus did not have party preclusive against effect another have litigate opportunity whether the em- party can said to be in the other be unless ployees negligent were when made the party against whom the privity with question.14 a judgment runs. “It is violation sales judgment binding on a

process for a privy litigant party who was not a or a and Employee Negli- Vicarious Fault — opportunity an to be therefore has never had gence Required for Licensee Sanc- —Is Pennington ob heard.”11 Snow we tions. may privity that “before be found to served It is clear based on the text of AS exist, non-party must have an notice.and 43.70.075(d) (m)(l) legislature and heard; procedure opportunity to be must imposition did not intend to condition the rights and inter protection insure the against only upon sanctions a licensee direct non-party, and he must in fact be ests of the adequately represented by parties.”12 part fault on the of a licensee. A clerk’s act findings case, of the district court conclusive in this the licensee cannot be bound them because he binding appel- party prosecutions against we would in effect be was not a accept consequences of a suit in lant to clerks and did not assume control of their defens- prepare which she had less time to her case Judgments § es. See Restatement 39: (Second) adjudicate and less incentive to all of the issues party "A who is not a to an action but to the fullest extent. substantially participates in the controls (Footnote omitted.) Today’s opinion states that presentation party control of the on behalf of clerks accused of the violation of sale bound the determination of issues decided as “ample of tobacco to a minor have an though party.” he were a require incentive to defend themselves” and “to place prove the state to both that the sale took Shore, 322, Hosiery 11. Parklane Co. v. 439 U.S. negligently.” Majority and that the clerk acted (1979). 327 n. 99 S.Ct. 58 L.Ed.2d 552 "ample language ap- incentive” at 1205. This pears use a clerk's to be reference to the Pennington, 471 P.2d at 375-76. subsequent proceedings. conviction in Lack of adequate a full and fair an adjudication incentive obtain recog- an initial action is a well at 13. Id. refusing preclusive ground nized effect to the subsequent

judgment in the initial action in a today's opinion suggests 14. To the extent that controversy action: “The amount in in the first opportunity requirement that the to be heard may action have been so small in relation to the a licensee has the satisfied because preclu- controversy amount in in the second that proceeding, jn a to defend his clerk violation plainly sion would be unfair.” Restatement (Sec- ignores Majority at the court number j. § 28 cmt. If there were Judgments ond) First, may have the licensee considerations. subsequent proceedings with serious conse- charges. In this case the notice of the exception quences against ap- clerks this officer found that notice of Lau- lacked punishable ply. Violations are non-criminal acts proceeding. The renzana's citation and court only by They give any legal rise to fine. do not finding way did not make a either officer little, disability carry any, public opprobri- if and Ratzat, though Godfrey regard to claims he with 11.76.100(f); 11.81.900(b)(63). um. proceeding well. Sec- notice of this lacked Publicly provided pros- counsel are not funded ond, employee may to be defended. not want 11.81.900(b)(63)(B). ecutions for violations. pay employee may fine want to small attorney hiring The cost of to defend such engaged put matter to rest rather than be charges exceeds the small fines associated far Third, potentially long proceeding. adversarial case, $200 them—in this for Ratzat and with licensee-spon- employee agreed even if case, present $300 In the how- for Laurenzana. defense, may the licensee's con- sored interests ever, only subsequent proceedings are employee's, rendering licensee con- flict with the against adequate the licensee. The lack of an Finally, assuming inappropriate. that the trol part incentive on the of the clerks to defend vigorous defense on behalf licensee undertook preclusive themselves would also bar use of their licensee, radically employee, alter what of his this could proceeding convictions in a except that, simple legislature explained meant to be a brief for the reasons dissent, proceeding a mere violation. discussion that follows in the text of this sanctioned, text,

may respect explained cause a licensee to be With to the also above, negligence required is for a clerk’s only is convicted of a but when the clerk conviction, may imposed and no sanctions be negligent sale while against a licensee without a conviction. employment. Negligence, of of his or her course, required a element of the offense is respect legislative history, the de- With sale, negligent of and a clerk’s conviction is a concerning bates AS 43.70.075 focused on necessary predicate imposition imposing liability to the of sanc- whether vicarious on licen- Thus, sanctioning employee’s for an licensees employing tions on the licensee. sees— fault rather than the direct fault of a licen- reading statutory literal relevant sec- see—would be unfair to a licensee. The tions, legislature to have intended seems prevailing imposing view was that licensee against there should be no sanctions employees sanctions where were at fault was only licensee unless a clerk makes not a sale acceptable employees train could —licensees minor, but a sale minor. legislator expressed to avoid mistakes.15 No appears of a clerk’s Use to be the view that it would fair sanction a proving shortcut method both fact of when an licensee was not at fault. negligence. But the the sale and clerk’s Concerning the State’s concession that vi- seen, problem, as we have is that this method carious fault in the form of clerk proof also shortcuts due where the required, explicitly the concession is made licensee has not had an to be caption argument. in the to the State’s first underlying heard on the issues. reads, caption part, in relevant as fol- legislature I believe that the intended that lows; 4-3.70.075, public “AS as a welfare stat- against there be no sanctions a licensee with- ute, designed employers to hold liable for words, out at least vicarious fault. In other employees the acts their no sanctions a licensee were contem- sell to minors."16 The same concession is plated non-negligent when a clerk makes a repeated body of the State’s brief: support sale to a minor. Three sources 43.70.075], “The framework of which im- [AS (1) statutory sys- conclusion: the text of the poses liability vicarious on a retailer based (2) (3) tem; legislative history; its and employee’s illegal on its acts and for manda- tory penalties, State’s concession. is consistent with how other (Alaska Leg., 15. The Slate characterizes the 1989 debates con- 16th 1st Sess. Judiciary, Mar. cerning 1989). the bill that respect became AS 43.70.075 as With to the 2001 amend- 43.70.075, follows: ments to AS which increased sanc- mandatory, and tions made them the State char- legislators expressed Some concern about the "Representative acterized the debates as follows: bill, observing adversely that it could affect Hayes expressed suspension Joe concern that the vendor’s license when in fact an periods essentially punish the business for representatives pointed at fault. But other out Representative Meyer mistake. suspension periods that the would work as an responded responsible that businesses are for incentive curtail the sale of tobacco to mi- employees and to make need sure that likely nors because vendors would be more adequately are trained.” See An Act scrupulous employees hire and to educate Relating Giving Selling to the Tobac- Offense of them. Minor, Accounting co to to the Fees from Relating See An Act to Tobacco and Products Business License Endorsements Tobacco Prod- for Containing Hearing Tobacco: on H.B. No. 141 ucts, Comm, Disclosure Certain Confidential Cmty. Reg’l Affairs, the S. on & Before Cigarette Information, and Tobacco Product (Alaska 27, 1989); Leg., Apr. 16th 1st Sess. Re- Regarding Cigarette Tobacco, lating to Retail Sale Notification Manufacturer's Tobacco Prod- Noncompliance with the Tobacco Product Master ucts, Smoking Hearing and Devices Tobacco: for Comm, Agreement, Settlement to Business License En- Fin., on H.B. No. 141 the H. on Before Products, (Alaska 1989); dorsements Sale Tobacco to Cita- Leg., Apr. 16th 1st Sess. Act An for Tobacco, Illegal tions Penalties Sales Tobacco Relating to Retail Sale Tobacco Prod- for Products; ucts, Providing Date: Smoking Hearing and Devices Tobacco: for Effective Comm, Comm, Fin., Hearing on H.B. No. 228 the H. on on H.B. No. 141 the H. on Before Before (Alaska Commerce, 30, 1989); Leg., Leg., 22d 1st 16th 1st Sess. Sess. Labor and Mar. An Tobacco, Apr. Relating Act to Retail Sale Tobacco Products, Smoking and Devices Tobacco: Comm, added.) (Emphasis Hearing on H.B. No. 141 the H. Before regulated licensees who jurisdictions have dangerous products.”17

sell or distribute

Conclusion reasons, negligence on

For the above is, view, my an issue of

part of a clerk pro- importance in licensee sanction

central is entitled to a mean-

ceedings and a licensee that, this issue. It follows

ingful 43.70.075(m)(l) bars

to the extent due hearing, it violates a licensee’s

such

process rights. MAY, Appellant,

Bert E.

v. Alaska, COMMERCIAL

STATE ENTRY COM-

FISHERIES

MISSION, Appellee. S-12451,

Nos. S-12452.

Supreme of Alaska. Court 21, 2007.

Dec.

Rehearing Denied Feb. added.) the offense in- (Emphasis be held accountable whenever In its discussion of licen- jurisdictions, general pub- in other the State see sanctions repeatedly a violation of a volved consists of requirement of vicari- added.) adverts to the regulation. (Emphasis lic welfare liability may liability. argues, "[c]riminal ous It quo- explanatory accompanying footnote although found an accused the ac- in the State’s brief states: tation only vicariously the act because cused is liable for Pest Con- Aantex Pest Control Co. v. Structural ‘public such an act comes under the rubric Board, Cal.App.3d Cal.Rptr. [108 696] trol ” added.) (Emphasis welfare offense.' The State (license upheld (Cal.App.1980) revocation “there are stat- further observes that numerous employee’s negligent use of an exter- based on involving licensing utes beverages, of sellers of alcoholic though employer minating agent, lacked even product, similarly age-restricted company’s possession knowledge vicariously employers which hold liable for it); employee’s use of see also chemical and of (Em- negligent or criminal conduct." Youde, 161,] Cal.App.3d [95 Camacho added.) phasis The State's brief features (upholding Cal.Rptr. (Cal.App.1979) 60- following quotation court: from California suspension day based on an license statutory pub- long recognized It has been applying pesticides; no conduct in involved re- lic welfare offenses such as here objective violation because Thus, guilty knowledge quire nor intent. neither relating proceeding to a li- an administrative employer although ordinarily can- an innocent suspension protect public.)[.] is to cense not be held liable this misconduct of added.) (Emphasis employer employee, such an will nonetheless

Case Details

Case Name: Godfrey v. State, Department of Community & Economic Development

Court Name: Alaska Supreme Court

Date Published: Nov 23, 2007

Citation: 175 P.3d 1198

Docket Number: S-11894

Court Abbreviation: Alaska