*1 Beverage 1978] License v Behnan MICHIGAN LICENSE BEVERAGE ASSOCIATION v BEHNAN HALL, INC. 20, 1977, 77-795. Submitted
Docket No. December at Detroit. De- 3, April cided 1978. Michigan The brought Association an action against Hall, Inc., permanently enjoin Behnan the defendant renting premises consumption for others of alco- beverages food, providing holic and from further bartend- ers, beverages and assorted liquor nonalcoholic to be used with premises, claiming on the Michigan rented a violation of the Liquor argued Control Act. The defendant standing association lacked to maintain the action since it did possess liquor not engaged license and was not activity commercial which would be affected the outcome of litigation. equity jurisdiciton It also contended that was not available in this instance to a violation of a criminal County Court, Webster, statute. The Oakland Circuit Robert B. J., standing found that the did have to maintain the representative liquor and, action as the of its licensee members finding equity jurisdiction invoked, properly granted was permanent injunction prohibiting providing the defendant from food, beverages premises to be used with on the Liquor because such conduct was violative of the Control Act damaging property rights represented by plaintiff. appeals arguing Plaintiff that the injunction’s prohibition should have included a ban on the consumption beverages premises. alcoholic on the rented cross-appeals, primarily Defendant contending that the lacked to maintain the action. Held: plaintiff nonprofit corporation, The possess which did not engaged any activity license and was not which would [1, [2] [8] [4] [5, [10] 45 Am Jur 3, 6, 45 Am Jur 59 Am Jur 42 Am Jur Am Jur 7] 59 Am Jur 2d, 2d, Intoxicating Liquors 2d, Intoxicating Liquors 2d, Declaratory References 2d, Parties Injunctions 2d, Parties 81.§ for Points in Headnotes Judgments §§ §§ 26, § § 27. 161. 445 et 448. 25.§ seq. litigation by the outcome of the and which was not be affected representative litigation purposes according constituted charter, did not have to maintain the action. properly brought Court also found that the action was not *2 legal given there was no indication of notice because liquor plaintiff’s licensee members which would have made the them, adjudication binding upon equity and that outcome of an enjoin jurisdiciton properly was not invoked to this violation of plaintiff’s conclusory allegations a criminal statute because enough demonstrating injury were not to meet its burden of public private injury property rights, or nuisance or to its directly alleged traceable to the unlawful conduct of the de- fendant. Reversed and dismissed. Beasley Judge partially ground judicial dissented on the justiciable freely review of issues should be available to obvi- ously parties judicial interested to an action with the least liquor prop- encumbrance. He would find that have a licensees right equitable erty justify in their licenses which would inter- vention on their behalf to criminal acts which would concluded, injure rights, majority, those but as did the that the plaintiff in this instance was not entitled to such relief because evidentiary showing pecuniary it had to make an failed damages directly allegedly wrongful traceable defendant’s
conduct.
Opinion op the Court Standing—Interest Litigation 1. Words and Phrases — —Advo- cacy. Standing legal is the term used to denote the existence of a party’s litigation, interest the outcome of an interest vigorous advocacy. will assure sincere and Intoxicating Standing—Licenses—Liquor 2. Licensees — Parties — Liquors Activities. —Affected nonprofit corporation A purpose which was formed for the stated educating liquor moral, licensees as to their ethical and civic responsibilities legal standing does not have to maintain an injunction space action for an to bar a hall which rents its guests furnishes food and soft drinks its tenants and their profiting provision goods from the of these and services to conjunction liquor corporation be used in with where the itself possess engaged does not license and is not activity litiga- which would be affected the outcome of the tion. v Behnan Hall Representative Corporate Litigation Purposes— — 3. Parties — Standing to Sue. consisting nonprofit corporation who are A members representative rights may legal not assert under the corporation of its members where the was not licenses representative purposes the facts constituted and where corporate purpose is unrelated to that of a indicate litigation representative. Litigation Adjudications— Representative Binding 4. Parties — — Notice. judicial principal objective
Economic utilization of resources is a representative litigation; paramount it is therefore that the binding upon represented; adjudication outcome of an those by litigation those whose are to be determined must be given pendency opportunity participate notice of its and an personally through representative. a class Injunctions—Nuisance—Conclusory Equity 5. Acts — —Criminal Injury. Allegations —Traceable general only in It rule that cases of is well-established *3 property rights equity juris- private injury to will nuisance violations; enjoin criminal mere conclu- diction be available to insufficient; sory allegations injury plaintiff must show as pre-condition obtaining equitable injury relief that the was a to directly alleged unlawful conduct of the de- traceable fendant. by Beasley,
Partial Dissent J. Right Standing 6. to Parties — Sue —Justiciable Issues —Claim —Interested Parties —Judicial Encumbrance. interpretation grants The law should favor an which to party a where there is a obtain resolution of an issue genuine justiciable party issue raised under a claim of contesting it; right against judicial one who has an interest in justiciable freely with the review of issues should be available encumbrance, judicial least Standing Representative Litigation 7. Parties — —Intoxi- Sue — cating Liquors —Licenses. according by- nonproñt corporation organized, to its A which was laws, improvement, protection mutual and beneñt of its for the bring granted licensee members should be Mich op Opinion the Court members, even protect license interests of those lawsuit to possess such a license. itself it does not where Rights Injunction Intoxicating Liquors Property — Licenses — 8. — Acts. —Criminal right property Liquor in their licenses have a justify equitable intervention on their behalf to which would injure enjoin those acts a defendant which would criminal property rights. Damage Property Equity Injunction—Criminal Acts — 9. — Damages op Rights Pecuniary —Burden Proof. — seeking plaintiff Injunctive not available to a relief is alleges causing damage property he is to a criminal act which evidentiary right to make an is unable where alleged pecuniary damages directly showing traceable to the unlawful conduct of the defendant. Judgment Statutes—Interpretation. Declaratory —
10. Actions — proper declaratory judgment means to seek an An action for interpretation binding of a statute. authoritative Plunkett, & Campbell, Kurzman plaintiff. Nachman, Gurwin, Friedman & Winkle- Hyman, man, for defendant. Beasley J., and D. E. P.
Before: Bashara, JJ. Holbrook, Jr., from a trial appeals P. Plaintiff
Bashara, against relief granting injunctive court judgment defendant, alleged by conduct prohibiting pertain Michigan Liquor to be violation of is that Control Act.1 The contention not en- prohibition of the does scope injunction’s con- unlawful join allegedly all defendant’s *4 duct. Its from the cross-appeals judgment.
Defendant lacked stand- primary contention is that relief. To injunctive to maintain the action for ing 436.1, 18.971, seq; seq. et MSA et MCLA Beverage v Behnan op Opinion the Court argument, asserts sustain the defendant any by alleged interest the lacks affected conduct, and that unlawful has failed to upon any equity jurisdiction basis which establish Additionally, be founded. can defendant contends plaintiff complains the of conduct which is § not violative of 26c of the act.2 by
This trial case was submitted to the court stipulation adopted by facts, of which were the trial court. Those the facts disclose that defendant operating catering is in the business hall. facility persons That organizations is rented various holding wedding recep-
for use in banquets, gatherings. tions, part and similar social As lessees, of its business services to those de- provides bartender, food, fendant and assorted beverages, nonalcoholic some of which are used conjunction liquor, agreed upon price with an person. per
Any beverages alcoholic consumed on defend- premises by guests ant’s the lessees or their purchase furnished lessees. lessees liquor, defendant, not but from licensees liquor, under act. Defendant not does sell profit derives no others, from its sale nor is it licensed to do so under the act.
Proceedings by plaintiff, were initiated a non- profit corporation whose members are licensees operation act, under the of defend- 18.997(3). 436.26c; MCLA MSA This section states as follows: person maintain, operate, "No shall lease or otherwise furnish to persons any premises place other which not licensed under act, persons may drinking engage wherein other such beverages, any including alcoholic for a fee or for other consideration food, mixers, the sale ice or with other fluids used alcoholic drinks storage liquors: Provided, provisions or the of alcoholic That apply any this section shall hotel not nor to licensee under further, provisions provisions of this this act: Provided That repeal provisions of section shall not be construed to or amend the 26b of section this act.” *5 Opinion of the Court permitted consump- itas the insofar ant’s business premises. predicated Suit was on its tion of activity upon allegations vio- such business property injures of the act § 26c lates rights plaintiffs li- in their members censes.
Initially, analyze the contentions we defendant’s standing plaintiffs to maintain relative equity of a basis the existence action and jurisdiction. standing questions of this case
In the context of closely jurisdiction Indeed, related. much and of defendant’s pertinent argument as denominated standing actually at the existence of aimed equity jurisdiction. Therefore, distinction clarified. should be legal
Standing used to denote the is the term party’s outcome of interest existence of litigation; will assure sincere an interest advocacy. vigorous Morton, 405 Club v Sierra 1361, 1364; 31 L Ed 2d 727, 731-732; 92 S Ct US (1972). standing Conceptually, was ad- 636, 641 eptly in the Club Court the Sierra described following terminology: in an stake other- party "Whether a has sufficient justiciable controversy judicial resolution to obtain
wise of red question traditionally been refer- controversy is what has * * * question to sue. as [T]he party depends upon whether in the alleged 'personal such outcome has stake Carr, 186, 204, 82 S Ct 369 US controversy,’ Baker v 691, 663, dispute 703, as 'the 7 L Ed 2d to ensure that presented in an adver- sought adjudicated will to be capa- as historically sary and in a form viewed context Cohen, 392 US Flast v judicial ble of resolution.’ 101, 1942, 1953; 20 L 2d 947.” Id. 88 S Ct Ed Seldin, 490, 499; 95 S Ct v 422 US See also Warth v Behnan Hall op Opinion the Court (1975), 2197, 343, 2205; 45 L Ed 2d and United SCRAP, 669, 687; v 412 US 2405, States 93 S Ct 2416; 37 L Ed 2d
Accordingly, question the threshold is whether plaintiff has an interest outcome litigation controversy-re- sufficient to invoke *6 powers solving stipulation judiciary. of the The of facts discloses that does not have a engaged any license, nor is it commercial activ- ity litigation. that will be affected of outcome this corporation, separate legal entity,
As a plaintiff possesses no interest that we are able to upon requisite standing discern that confers to maintain this action. it the upon Relying Improvement Lake White Assoc v City App Whitehall, 22 262; of Mich 177 NW2d (1970), plaintiff 473 asserts that the commercial of interests its members constitute a sufficient repre- basis to conclude that it has as a non-profit In sentative. the White Lake case a corporation represent was held to have riparian its landowner-members a suit to pollution of a Id. lake. at 271-274. This conclu- notwithstanding sion was obtained that the associ- riparian ation itself was not landowner.
A circumstance the White Lake case that distinguishes it facts us before is that the solely association in the former was constituted for representative purposes. 272; Id. at 177 at NW2d 477. In the case under review the facts indicate plaintiff’s corporate purpose that unrelated litigation representative.3 Further, a of 3 corporate purpose incorpora Plaintiffs is stated in its articles of tion to as be follows: purpose purposes corporation "Article II —The of this are as Liquor purpose educating Michigan follows: The of responsibilities Control Commission as moral, their from a standpoint purpose ethical and civic of of view for the understanding.” mutual benefit that accrues from such an Mich op Opinion Court premised 5upon in- Lake was which White cases4 represent- aas class that acted associations volved rights they sought in which establish ative or their interest, or which exis- had without a direct of these factors char- terminate.6 None tence would acterize litigation. plaintiffs position in the instant importantly, economic utilization of since More objective repre- principal judicial of is a resources paramount litigation, it that the becomes sentative binding upon adjudication be those outcome represented. procedural conception our with Consistent imports process, those
due litigation are to be determined whose opportunity given pendency and an notice through repre- participate personally class e.g., See, Central Mullane v Hanover sentative. 652, Co, 306, 313; S Ct Trust 339 US Bank & L Ed 872-873 stipulation indicates facts members know of its has does not whether litigation. knowledge pendency of this Con- *7 adjudicate comitantly, if the al- seeks by leged property interests of its members this upon binding action, the effect its members under foregoing principle tenuous, at be best. the would Consequently, the neither a has since prop- of nor a interest in the cause action direct position, erly representative we must constituted requisite standing pursue conclude the litigation is absent. 4 Whitehall, Improvement City Lake Assoc v of See White (1970). 473, App 262, 14; 273-274 fn 12 and 177 NW2d 477-478 and 5 Lake, 274, reported example, 14 in White at fn For the cases brought v of as a action in Board the association suit class Smith (CA 8, 32, 770, 777 F2d
Education of Morrilton School District No 365 1966), litigated organizational or essential to its existence and NAACP, interest, v had a in the cases of Louisiana in which it direct 293, 294; 1333, 301, (1961), 1334; and 6 L Ed 2d 303 366 US 81 S Ct Button, 415, 428-429; 328, 335; 9 L Ed 2d 83 S Ct NAACP v 371 US Alabama, 405, (1963), respectively. 357 US See also NAACP v 1488, 449, 1163, 1170; 2 L 78 S Ct Ed 2d 1978] v Behnan Opinion of the Court
Should establish to maintain assuming by proper representative this action status,6 by equi- record, under the the facts shown table relief would nevertheless remain unavaila- ble. Such result obtain would because of the ab- any grounds upon of sence equity jurisdiction which the invocation of party
can founded. Even if a be injunctive has to maintain a for suit additionally allege relief, he must and establish a jurisdiction. equity basis by are, § 50, Violations of the act of terms general deemed to be crimes.7 rule, aAs well-established only private in the of cases or nui- instituting litigation representative provided means by One of governing the court rule enables class actions. See GCR 208. This rule by court to assure that all those who are to be bound judgment proper litigation. provides: receive notice of the Rule 208.4 any stage "Protective Orders. The court at of an action under sub- may require security impose rules 208.1 or 208.2 as shall association in order that notice pendency or persons such such terms fairly adequately protect the interests of the class or brought may behalf whose the action is or defended. It given, direct, may it be in such manner as of the action, proposed entry judgment, of the of a settlement action, any proceedings including other in the notice to the absent they may present they come and claims and defenses if representation appears so desire. Whenever to the court inade- quate fairly protect persons may the interests of absent who judgment, may any prior judgment bound the court at time pleadings, eliminating order an amendment therefrom all representation persons, reference to order of absent and the court shall entry judgment parties only in such form as to affect adequately represented.” the action and those 436.50; 18.1021, MCLA MSA which states follows: as Any person, persons required "PENALTIES. other than to be act, any provisions licensed under this act shall be who shall violate of this guilty of a misdemeanor. "Any act, provisions licensee shall who violate of this any shall be regulation hereunder, promulgated rule or of the commission guilty misdemeanor, punishable by imprisonment of a county jail not than more 6 months or a fine of not than 500 more dollars, both, in the discretion of the court. *8 person, "Any any required shall who do act for a which license is obtaining under this act any person without first said or who license any liquor any prohib- county shall sell alcoholic shall which have provisions ited the sale of alcoholic under the of section 57 hereof, guilty punishable by felony, imprisonment shall 319 Mich 82 328 Opinion of Court equity will property to injury sanee or to criminal viola- be available jurisdiction County ex rel Washtenaw e.g. State tions. See Telegraph v Union Prosecuting Attorney Western (1953), 537, 540 Co, 57 84, 90; NW2d 336 Mich 216, 220; 213 NW Malloska, Glover v McFarlan, 33 Johns v Village St (1927), 107, allegations No 72; 20 AR Mich does the act plaintiff, nor were made nuisánce However, a nuisance. to be declare violations in their plaintiff’s members interests property rights sufficient constitute may licenses But need not we equity jurisdiction. to invoke decide that issue. arguendo, the existence
Assuming, of. of any record devoid property rights, that al- finding for defendant’s evidentiary basis any injury the act resulted in leged violations of allegations conclusory Mere those interests. show, as pre-condition Plaintiff must insufficient. relief, injury was obtaining equitable alleged unlawful con- traceable” "directly Malloska, supra at v of defendant. Glover duct 221. was traceability of direct reas- requirement This Corp United-Detroit Theaters v Colonial serted in Inc, 425, 430-431; Mich Enterprise Theatrical (1937). There, Supreme Court NW injunctive relief because reversed an order prop- an injury plaintiff’s record failed show Id. erty interest their business. trial court
Accordingly, we conclude 1,000 prison year fine of more than not more than 1 or not state dollars, both, in the of the court. or discretion court, legislature imposing “It is the intent of the section, provisions punishment should discriminate under the of this slight of alcoholic sales or violations and habitual between casual attempts or of this act commercialize violations promulgated regulations hereunder.” of the commission rules *9 v Behnan by Beasley, Dissent J. Partial granting injunctive plaintiff. erred relief to the Further, it is our conclusion that the action should plaintiff have been dismissed because lacked stand- ing Consequently, the suit. to maintain we need not reach an evaluation of the trial court’s inter- pretation § 26c of the act. to defendant.
Reversed dismissed. Costs J., D. E. Holbrook, concurred. (dissenting).
Beasley, J. I respectfully dissent. interpretation case, In this seeks 18.997(3), provides: 436.26c; MCLA MSA which maintain, person operate, "No shall lease or other- persons any premises place wise furnish to other act, which is not licensed under this wherein such other persons may engage ages, drinking of alcoholic bever- any including for a fee or for other consideration food, mixers, the sale of ice or other fluids used with storage liquors: alcoholic drinks or the Provided, of alcoholic provisions That of this section shall not apply any provi- hotel nor to licensee under the further, provisions sions of this act: Provided That repeal of this section shall not be construed to provisions amend the of section 26b of this act.” reading cursory Even a of the statute above plenty differing interpreta- reveals tions. In a of room for
nutshell, claims the statute furnishing prohibits persons unlicensed premises engage drinking for a fee where others beverages premises. alcoholic on the says, person may Defendant an fur- unlicensed premises including pop food, ice, nish mix and person to another permits drinking for a fee where the second beverages of alcoholic on premises. binding interpretation authoritative, An should this issue. of the statute be made to resolve Beasley, Partial Dissent urges appeal, defendant on trial and Both at party improper stand- and lacks is an argues bring ing Defendant this action. Liquor crime, Act are a Control violations essentially position plaintiffs that defend- permitting Liquor Act Control ant violates premises promoting in may only served to be and rented for enjoined activity fee, that criminal *10 private or a it is either where property injury caused to or where nuisance rights pecuniary another; that interests of pecu- rights property plaintiff not have does arising license, that, niary from interests primary jurisdiction doctrine, addition, under Liquor Control in the remedies administrative exhausted, and that must first be Commission separate entity nonprofit plaintiff association is pays taxes, members, and does no distinct from injury defendant’s because cannot suffer not and operations. that concludes Defendant bring standing action. this lacks rejected that claim defendant’s court The trial finding standing, that, under lacked plaintiffs possessed Bisco’s,2 Bundo1 and members liquor property licenses. in their valuable The trial court right property that since reasoned Liquor Con- involved, violations was private enjoined nuisances. as Act could be trol The argument rejected defendant’s trial court plaintiffs bringing vires under suit was ultra this indicating incorporation, this suit was articles purpose court The trial mutual benefit. for the primary apply the doctrine declined to also Liquor jurisdiction Commission Control this the facts of case.__ (1976). 1 Lake, 679; 238 NW2d 395 Mich Bundo v Walled Commission, Bisco’s, Liquor Control Inc v
NW2d 1978] v Behnan Hall Beasley, Partial Dissent analyzing
In issue, I would start proposition with the where, here, as there is a genuine justiciable issue, is, the assertion of a right against claim of one who has an interest contesting interpreta- it,3 the law should favor that grants standing tion which to obtain resolution of justiciable the issue. Judicial review of issues freely judicial should be available with the least encumbrance.4 justiciable is, § issue does 26c of the prohibit performing
law defendant the acts stipulated delineated in the facts?5 plaintiff, If is denied then who can question raise the as to whether defendant’s busi- police ness is in violation? It is assumed that agencies empowered listed in the statute are to see that the law is enforced. It would also be assumed compe- that a licensee who was in economic tition with this unlicensed defendant would have standing to seek determination of whether defendant is in violation of the control law.6 nonprofit But, corporation holding is neither. Plaintiff is a
no
own,
license of its
representing
but
2,902
some
licensees statewide.
appeal,
majority
On
conclude that
"standing”
bring
Michigan,
lacks
to
this
In
action.
leading
dealing
subject
case
with of stand-
Whitehall,7
ing is White Lake Association v
In
(now Justice)
Judge
case,
that
the
indicated that
Levin
nonprofit corporations
challenge
of
to
3
(4th ed),
Dictionary
p
Black’s Law
1004.
4See,
(1961), citing
75 Harvard L Rev
257-258
FCC v Sanders
Station,
(1940).
470;
693;
Brothers Radio
309 US
60 S Ct
Plaintiff was formed incorporation II of the articles of 1946. Article provided: corporation are as purpose purposes of this "The Michi- educating purpose licensees of
follows: *12 ppat 272-273. 8 Id. Beverage v Behnan Beasley, Dissent Partial responsibili- as to their
gan Liquor Control Commission moral, and the from a ethical civic stand- ties to purpose for the of mutual benefit that point of view and understanding.” from such an accrues other provide, among by-laws things, as follows:
"Therefore, we, Michigan the Licensed As- sociation, pledge unitedly ourselves to labor in behalf of following principles: organiza-
"1. To affiliate all licensees into one state tion. organization perpetuate
"2. an for To establish and purpose improvement, protection mutual and moral, social, promote improve- intellectual benefit to Michigan. State of ment of the encourage, just "3. To sustain and assist and laws, equitable enforcement of and in the effort to legis- oppressive legislation, promote beneficial defeat lation, support objects of the and to maintain organization.” nonprofit corporation attempt
For binding adjudication secure a as to whether cater- halls, defendant, ing li- like must obtain censes would seem to be for the "mutual clearly improvement, protection and benefit” of its mem- and, thus, contemplation bers not outside incorporation plain- articles of by-laws tiff. circumstances, bringing
Under these appear cause of does not by plaintiff within action to be an ultra vires action. I incline
Contrary majority, would that, delineated believe the same reasons Association, Lake supra, White has stand- ing bring suggest this action. The majority and, since does not hold a license *13 82 Mich Beasley, by J. Dissent Partial of thus, in the outcome no interest has direct litigation, equitable not relief is available plaintiff plaintiff. However, non- the members profit corporation in the have a direct interest do litigation. outcome of this that there is direct is taken notice
Judicial liquor competition between economic catering plaintiff comprise similar halls who case, the form of relief In within to defendant. sweeping sought plaintiff reality by twofold; in is operating injunction his "Defendant Liquor Michigan in violation of establishment implicitly, Act”, and, that a declaration Control liquor interpretation § statute of 26c of urged by correct. is say majority that since violations punishable acts, as criminal statute pri- injunctive only if relief available injury property is estab- vate nuisance They no that has such maintain there been lished. showing case.
in within contrary, that the mem- To the I would conclude right property their have bers of right property licenses,9 that would be that injured law and control violations seeking plaintiff represents members in prevent injury. such majority,
However,
I
acknowl-
with the
would
appar-
edge
plaintiff has
within case
showing
pecuniary
ently
evidentiary
no
made
alleged
damages "directly
unlaw-
traceable”
showing ful conduct
defendant.10 Without
injunctive
traceability,
is not available
direct
relief
9Bundo,
Bisco’s,
supra
supra.
(1927),
Malloska,
United-
Mich
1978] v Behnan by Beasley, Partial Dissent plaintiff. agree Therefore, I would with the majority injunctive proper relief was not the within case on the facts indicated in the plaintiff’s However, record. an action for find I would treat cause as declaratory judgment11 and would to seek an authoritative, binding interpretation Liquor §of 26c of the Con- allegedly trol Act it as relates to the unlawful activities of defendant. I would address that issue meaning; as to the statute’s but since this is a good purpose dissent, no will be served *14 further comment. 1963, 521, Detroit, App 502, 504; 11 GCR Kuhn v East
NW2d 599