Sam & Ali, Inc. Aleb, Inc. Mallough, Inc. And Murib, Inc. v. Ohio Department of Liquor Control and William A. Vasil

ALI, INC.; Aleb, Inc.; Mallough, & SAM

Inc.; Murib, Inc., Plaintiffs-

Appellants, LIQUOR DEPARTMENT

OHIO OF Vasil,

CONTROL and William A.

Defendants-Appellees.

No. 97-3546. Appeals,

United States Court of

Sixth Circuit.

Argued Aug. 1998.

Decided Oct. briefed),

Gary Lyons (argued W. De- Libera, Lyons Bibbo, Columbus, & OH for Plaintiffs-Appellants. Lyman,

Chester T. (argued Jr. briefed), Guthrie, James M. Office of the Ohio, Columbus, OH, Attorney General of Defendants-Appellees. KRUPANSKY, NORRIS,

Before: SILER, Judges. Circuit J., SILER, opinion delivered the court, J., NORRIS, joined. in which KRUPANSKY, 400-07), (pp. J. delivered a separate opinion concurring only in the result.

SILER, Judge. Circuit appeal Plaintiffs the dismissal of their com- plaint raising federal constitutional chal- lenges to an authorizing Ohio statute elections to ban of alcohol sales permits. D liquor holders class C and For reasons, following we AFFIRM. I. The district court dismissed each of the decision, issuing In claims. the court brought challenging Plaintiffs this action heavily reasoning of relied the Colson constitutionality of Ohio Rev.Code the F.Supp. City Heights, Shaker of 4305.14, petition which allows voters (N.D.Ohio 1995), 95-3538, aff'd, No. 1996WL option elections to determine whether local (6th Cir., Nov.22, 1996), held that of of class C or D the sale beer holders may various legislature treat classes pre- in the liquor permits would be allowed permit differently liquor long of holders so plaintiffs cinct. Each of the holds either a distinctions the classes are rational between Generally, permit. or D C class C ly governmental related to a interest. The may beverages permit holders sell alcoholic imple court concluded that the distinctions upon to be which are consumed legislature mented were rational Ohio 4304.11-.121, § § premises, Ohio Rev.Code option and that the local election statute was permit D and class holders sell alcoholic constitutionally therefore sound. upon premis- op- Local es. Ohio Rev.Code 4303.13-183. II. only affect of class tion elections holders C matter, As an initial it is not clear whether permits. permits, D A-l-A Class plaintiffs option attacking are Ohio’slocal not covered election are local applied. on its or election scheme face statute, operate in the same manner as a D-5 complaint Their filed in the district court and they in that allow holders to serve directly brief filed with this court do not liquor by glass or issue, argument address this and oral did not consumption. only difference between clarify question. arguments this Their seem permits permit may the two is that an A-l-A to attack the Ohio statutes both on their face microbrewery winery. be issued to a applied.1 and as Plaintiffs’ claims would fail 4303.21, §§ See Ohio Rev.Code applied analysis under either a facial or as 4305.14, Pursuant to vot- Therefore, but for different we reasons. will presented petitions to ers the Franklin Coun- complaint making read their as if are ty seeking of an Board Elections election on argu- both of attacks and consider each question of whether beer sales holders ment. or D class C would be allowed precincts city certain within Columbus. A. majority precinct A of voters each voted to Any facial attack on the constitution the sale of beer of class end holders C §§ ality of 4305.14 and rev. Code permits. precluded by 4305.16 is Inc. v. (6th Control, plaintiffs against Dep’t Liquor then filed suit sever- 113 F.3d 614 Cir.1997), alleging statutory pro- al defendants decided after the district court’s 37712, Inc., allowing visions elections on this decision in this case. question process rights group their violated were a of businesses who Amendment, possessed the Fifth with under interfered C and right their to contract in violation of the the retail sale of beer. Some Clause, right plaintiffs operated precincts and violated their where Contracts decided, equal protection. They alleged pursuant also that acts voters had election, of the defendants to enforce the statute vio- to ban the sale of alcohol under such First, Fourth, rights permits. plaintiffs operated pre lated under Other Fifth, Sixth, Eighth and Fourteenth Amend- cincts which had not held such elections but remaining appeal sought injunctions invalidating ments. The defendants on Ohio’s Department Liquor option election statutes. at 617-18. The are the Ohio Control Id. Vasil, “facially Depart- plaintiffs argued Director of the the statutes and William equal pro- ment. the due and the violate[d] example, argument, plaintiffs’ implement- election scheme "as 1. For oral coun- the local making he a facial attack on ed” in this case. sel stated that was Manifestly, legislative judgment that re- Fourteenth Amend- tection clauses tail beer sales of the allowed under an rejected both This court ment.” Id. at 618. by brewery pub or a brew upheld the district court’s arguments pose fights, risks do not the same auto- of the case. dismissal accidents, public disorderly mobile con- vio- argued that the statutes Plaintiffs first duct, crime, neighborhood decay, alcohol process rights be- procedural due lated their ills, abuse, might conceivable and other prior to the hearing is afforded cause “no presented by ordinary carry taverns or property inter- alleged owner’s taking of the stores, Additionally, out is not irrational. partic- in a of its est in the use exemption afforded A-l-A licenses rejected locality.” at 619. The court ular Id. pubs exposure breweries and brew from to op- “no notice or argument, noting that that election, termination, by option to local proceed [sic] to be heard need portunity sales, supported by legisla- retail beer is applicability.” general action of legislative public policy encourage tive decision to and Id. costly protect private investment brew- facilities, ery pub equipment and and brew a sub Plaintiffs in Inc. also made promote produc- and to domestic in-state challenge on the stantive tion of beer. target voters to grounds that the law allowed for closure while al certain establishments concluded, Therefore, at 621. the court Id. operations. They lowing to continue others option plain- not violate the local election did fact that class focused on the equal protection rights. tiffs’ election, option subject to the local were not Plaintiffs in raise the same chal- this ease rights though they conferred the same even Moreover, lenges to the statute. like same beverages per dispense alcoholic as D-5 37712, Inc., plaintiffs focus on the rejected at 620-21. court this mits. Id. class A-l-A class C similarities between specific argument, stating that “the current However, permits. argument D laws avoid this version Ohio’s soundly rejected by this court in was because all holders of constitutional defect Inc., plaintiffs’ distinguish efforts dispense the same license that ease are without otherwise to discredit particular precinct in a or resi Therefore, plaintiffs’ challenges merit. exposed poten to the same district are dence constitutionality of Ohio’s consequent to a local tial disabilities applies to holders of election scheme as at 620. As to the distinction election.” Id. rejected. class C and A-l-A and class C treatment between class “[bjeyond permits, court concluded and D B. contradiction, of A-l-A licenses the holders applied to consider an We decline similarly ordinary with re are not situated we challenge to statutes because beverages, of alcoholic and hence the tailers judicial ripe for re that it is not determine not arbi challenged legislative distinction is view. trary capricious.” (citing at 621 Col Id. 1166).

son, F.Supp. at ripeness de “The doctrine case and controver protec- pends finding on the of a rejected plaintiffs’ equal The court ..., the court sy requires but it also grounds. same Bor- argument on the Colson, judicial if its discretion to determine reasoning of exercise rowing from the all of the desirable under not met their resolution would be had court held Corp., v. Ferro circumstances.” Brown showing the classification burden of (6th Cir.1985). ripeness The basic a F.2d 798 arbitrary and did not serve scheme was “to evaluate both analysis requires this court purpose. Id. at 622. legitimate governmental judicial decision fitness of the issues contrary, between class To the the distinction withhold hardship parties to the permits by and the A-l-A and C Abbott Laborato ing court consideration.” related to a legislature was rational and Gardner, ries v. governmental interest. (1967)(abrogated as-ap- our discretion to decline to hear an 18 L.Ed.2d 681 Sanders, grounds by plied challenge to the elec- other Califano 99, 105, 51 L.Ed.2d 192 U.S. S.Ct. tion scheme this case. (1977)). This court has identified several AFFIRMED. weigh deciding an issue factors to whether First, ripe for review. we must consider parties hardship to the if review is de CONCURRENCE Second, nied. we must examine whether the KRUPANSKY, Judge, concurring Circuit plaintiffs allege “will harm that ever come to only in the result. Finally, pass.” “we must whether consider ..., judicial the case is fit for resolution Ali, plaintiffs-appellants, Sam & Inc. requires a determination of whether (d/b/a (d/b/a Food); Aleb, Sam’s Lin- sufficiently developed the factual record is (d/b/a Out); Carry Mallough, moor Inc. Oa- produce adjudication a fair of merits of the (d/b/a sis); Murib, and Inc. Cleveland-Wind- parties’ respective the Ri claims.” National Market), corpora- sor each of which named Magaw, America v. F.3d Ass’n 132 fle of tions are licensed the state of toOhio sell (6th Cir.1997) (citations omitted). off-premises on-premises beer for and/or case, Columbus, Ohio, Applying consumption in these factors to this we have chal- as-applied challenge lenged that an conclude is not the district court’s dismissal of their ripe judicial judg- for review. Plaintiffs conceded Fed.R.Civ.P. 60 motion to correct its argument defendants-appellees in oral that there are no A-l-A ment for the Ohio De- (“ODLC”) partment Liquor holders who were affected Control and Vasil, precinct. held in their un- election director William as well as its Therefore, they derlying prejudice have suffered no harm rela- dismissal with holders, plaintiffs’ complaint. tive to other classes and amended That com- plaint sought not clear that such harm will ever occur. had a declaration that Ohio Moreover, § the factual transgressed plain- record is not sufficient- Rev.Code 4305.141 ly developed pro- for us to consider a tiffs’ equal substantive due and applied. point, rights guaranteed by the statute as At this we tection the Fourteenth have no more facts to than consider were Amendment to the United States Constitu- 1983; presented permanent § to the court in tion2 There- U.S.C. a fore, any injunction analysis barring of this issue would neces- en- defendants from sarily analysis forcing against mirror the set out them the adverse results of result, § court in a Inc. As we exercise certain 4305.14 local elections which permits permits on-premises § 4305.14 "local which authorize sale for 1. Ohio Rev.Code whereby particular elections” voters consumption only, permits and under precinct may, by or "residence district” referen- authorize sale for both and off- dum, outlaw certain retail beer within their sales premises consumption, permitted be in this (A borders. “residence district” is two or more (district)?" (precinct) contiguous precincts election located within the § 4305.14. The of a failure Ohio Rev.Code county same municipal corporation and also located within same § conforming question 4305.14 referendum unincorpo- or within the liquor permits no. invalidates the C use township. rated area of the same pertinent region, rejec- within the whereas the (A)(l9)). § 4301 comporting question tion of measure with no. permits following questions The Code area, liquor negates type within that appear regarding on a local ballot beer sales: statutory with accordance terms. Ohio Rev Code (B) following questions regarding the sale 4305.14(E); further C see discussion of permits may of beer C or D holders of liquor and D licenses below. presented qualified to the electors of an elec- precinct or residential district: complaint Although plaintiffs’ amended fur- (1) "Shall as sale of beer defined alleged additionally that the statute ther section permits of the Revised Code under 4305.08 First, Fourth, Sixth, Eighth affronted off-premises which authorize sale Constitution, to the well Amendments consumption only this within I, 10), (U.S. (district)?” art. (precinct) Contracts Clause Const (2) develop any failed to theories before this of those "Shall the sale of beer as defined in reviewing under court. section 4305.08 of Revised Code .183). §§ plaintiff pos- Each herein sale of beer certain Co- the retail halted 4303.13— monetary- precincts; license, liquor lumbus electoral sessed either class C or attor- including litigation costs and damages licenses, a combination of autho- ney fees. the retail sale of rized off-premises consumption.4 customer major ten and/or legislature has created Ohio (incorporating numerous sub classifications 19, 1993, August County On the Franklin sell, manufacture, or categories) of licenses to Board of Elections received valid initiative namely types transport beverages,3 petitions requesting that referenda under through A I W. Rev.Code Ohio appear on the No- Rev.Code §§ 4303.02-.231. con Under vember 1993 local election ballots Ward laws, purchase one of the trol “retailers who B; E; Precinct Precinct Ward distribute, various class C sub (each Ward Precinct D located within the terms, conditions, ject to the and restrictions Columbus). city The business of each particular sub appertaining to the license plaintiff herein was situated within one beer, wine, type, including intoxicants and/or precincts. those three Columbus each consump mixed precinct, majority of the votes cast on Dept. Liquor tion.” Inc. v. Ohio November of all favored termination (6th Cir.1997) Control, 113 F.3d carry retail beer sales for both out and on- 4303.11-.121). {citing §§ Rev.Code premises consumption any class under C “[sjerviee Additionally, in establishments 26, 1993, permit. D On November restaurants, hotels, clubs, cluding and duly plaintiff ODLC notified each as of procure sundry like which one of the class 26, 1993, beverage December its alcoholic terms, retail, to the licenses license(s) longer retail distribution could no conditions, applicable to the and restrictions location, customary be used at its business particular subeategory, license alcoholic bev license(s) liquor and that it must deliver its on-premises consumption or for erages for “safekeeping”5 voluntary for or off-premises consump ODLC on-premises both (citing tion.” cancellation. Id. Ohio Rev.Code beverage” gener- cating by glass liquor used or in containers

3. The term "alcoholic for ically concurring opinion to subsume ev- consumption in this and the retail sale beer, wine, ery type regulated alcohol-containing beverages state containers of or mixed for beer, wine, beverage, including nonmedicinal off-premises consumption, the fee for which was "Intoxicating spirits, $1,875. distilled and mixed drinks. § 4303.18. Intervenor Rev.Code Ohio beer, liquor” any beverage, indicates other than plaintiff Society possessed $282 Ohio Historical a by which contains or more alcohol volume. .5% class D-2 authorization which allowed the retail 4301.01(A)(1). § "Beer” includes beverages by glass Ohio Rev.Code and mixed or sale of wine ale, stout, liquor, malt and all other brewed or by on-premises consumption, the container for beverages containing at least fermented malt .5% by off-premises consump- the container for than alcohol volume but not more alcohol 6% 4303.14, tion, type § $188 a D-2x Ohio Rev.Code 4301.01(B)(2). § weight. See Ohio Rev.Code permit it as a D-2 licensee to which licensed "liquor generically signifies any A license" state- glass retail beer or in containers for on- any permit issued to traffic in alcoholic bever- premises consumption the container for age(s). off-premises consumption, Ohio Rev Code 4303.141, § $600 a D-3 license which Inc., Ali, possessed 4. & a class C-l Plaintiff Sam liquor by spirituous allowed the retail sale of permit which authorized the retail sale of beer in individual drink until 1 a.m. for off-premises consumption. containers for Ohio § consumption, Ohio Rev.Code 4303.15. per- § The fee for a class C-l 4303.11. Rev.Code Aleb, pur- $126.00. Inc. had mit is Plaintiff 4301.39(E), § a $188.00, 5.Under Ohio Rev.Code if permit- chased a C-2 license for which illegalizes use of a election beverages ted of wine and mixed the retail sale license, designated on the at the location off-premises consumption, containers for may, thirty days 4303.12; holder within of certification of plus § $a 126 class C-2x Rev.Code result, deposit with ODLC the election its license permit, which allowed it as an owner of 4303.272, "safekeeping.” together Section C-2 license to vend beer in containers for off- therein, provisions procedures created premises consumption, with cited Rev.Code Murib, whereby of an alcohol retained acquired type § owner Plaintiff arrange "safekeeping” ODLC could for the C-l license and a class C-2 license. Plaintiff (wet) nightclub to an alternate situs Mallough, license transfer of that license Inc. held a class D-5 permitted the retail sale of beer or intoxi- within the state. plaintiffs inaugurated complaint Generally, possess the states broad author- 27,1993, in district court on December ity Twenty-first under the Amendment to the December (which amended on 1993. Their Constitution of the United States re- theory upon alleged rested discriminato- pealed prohibition national sale ry § confluence of Ohio Rev.Code 4305.14 beverages), as well po- as inherent (authorizing elections to termi- powers, restrict, regulate, lice or ban the nate the local retail sales of beer for off- sale of alcoholic within their bor- premises consumption under class C Island, ders. Liquormart, Inc. v. Rhode to forestall local retail sales of beer and/or 484, 514-15, on-premises consumption or both on- (1996). Nevertheless, L.Ed.2d 711 plain- premises off-premises consumption un- tiffs have marshalled a constitutional assault licenses, type D supra) der see note against § incorporated aspects 4305.14which § (permitting, 4303.021 un- ap- of both a “facial” and an “as $3,125 license, der a class A-l-A the retail plied” offensive, attack.7 Via their sale of all intoxicating libations for charged have 4305.14 cannot on-premises consumption at a beer or wine constitutionally applied Ohio beer manufacturing facility, effectively thus ex- retailer, themselves, including because empting on-prem- retail beer distribution for insulation, 4303.021’s pre- from local ises at such locations from the beer, wine, emption, of retail spir- or distilled option exposure which threatens retail on-premises consumption sales for under on-premises consumption beer sales for un- license, while simulta- license).6 der a class D litigants filed neously exposes to local termination joint Stipulation of Facts on November all retail beer sales for and/or Following briefing hearing, and a on-premises consumption by type authorized April trial court on 1997 dismissed the permits, purportedly C or inherently complaint prejudice. May amended with On arbitrary capricious, irrational. and/or 28, 1997, summarily the initial forum denied plaintiffs’ motion for process proscriptions correction of its Substantive due dic- judgment, timely appeal and a followed. tate legislative that state or local measure dictates, proviso part: 6. This any force the statute under circumstances. Traditionally, plaintiff's burden in an as- may Permit A-l-A be issued to the holder of applied challenge is different from that in a [brewery] [winery] permit an A-l or A-2 to sell challenge. as-applied challenge, facial In an retail, any intoxicating liquor beer and at plaintiff application "the contends that glass the individual drink in or from a particular statute in the context in which he container, provided permit premis- such A-l-A acted, act, proposes has or in which he to parcel are es situated on the same or tract of would unconstitutional.” [Citation]. manufacturing land as the related A-2 A-l or Therefore, inquiry the constitutional in an as- permit premises separated or are therefrom applied challenge plaintiff's is limited to only by public highways streets or other particular comparison, situation. the Court lands owned the holder of the A-l or A-2 explained in Salerno that and used the holder in connection is, challenge legislative [a] to a Act promotion with or in of the holder's A-l or A- course, challenge the most difficult to mount 2 business. successfully, challenger since the must estab- Ohio Rev Code lish that no set circumstances exists under which the Act would he valid. The fact recently 7. This circuit has reiterated the distinc- might operate unconstitutionally [an Act] un- “applied" tion challenges between "facial” and der some set conceivable circumstances is legislative to enactments: wholly render invalid [.] insufficient may Voinovich, A court hold a statute Corp. unconstitutional Women’sMedical v. Professional 187, (6th Cir.1997) either because it invalid (emphasis is "on its face” or 130 F.3d 193 add ed) Salerno, applied" (quoting because it is unconstitutional "as to a United States v. U.S. 481 739, 745, particular 2095, holding set of circumstances. Each 107 S.Ct. 95 L.Ed.2d 697 — denied, (1987)), -, important carries an difference in terms of cert. U.S. 118 S.Ct. 1347, (1998). outcome: If a statute is unconstitutional as 140 L.Ed.2d 496 See also id. at applied, may (resolving the State except continue to enforce the 194 in all circumstances regula statute in different where circumstances it is the constitutional review of abortions unconstitutional, tions, but if statute is uncon- "a facial to a statute should fail face, may stitutional application.”) on its the State not en- if the statute has a constitutional

403 regulatory classifica though, practice, if it its face necessar judicially voidable is trigger inequities. which are at issue some in all cases tion compels ily results City relation bearing Organization, no v. capricious, Peoples Rights Inc. “arbitrary and Cir.1998) (6th City 522, Columbus, v. Forest Eastlake police power.” 152 F.3d 533 to the 668, 676, Inc., S.Ct. Hahn, 1, 10, 96 426 U.S. Enterprises, 505 (citing Nordlinger v. U.S. (1976); also Gutz 2358, 132 see (1992);9 49 L.Ed.2d 1 120 L.Ed.2d 112 S.Ct. (6th Fenik, 1328 860 F.2d v. willer Maryland, 366 425- v. U.S. McGowan Cir.1988). legit However, any if conceivable (1961)). As L.Ed.2d 393 81 S.Ct. supports interest governmental imate analogous due in the substantive ordinance, not “ar measure is contested above, an enactment sub analysis articulated of hence cannot capricious” and bitrary and relationship” equal protec ject “rational process norms. due Curto substantive fend if must be sustained conceiv tion review (6th Woods, 954 F.2d Harper v. rationally supports it. Federal able basis Cir.1992). Beach v. Commission Communications equal protection pursuant Communications, 307, 313, 113 Similarly, Inc., 508 U.S. strictures, ordinary or economic social (1993). Thus, where 124 L.Ed.2d S.Ct. (such controversy as the legislation is party seeking to over upon a “[t]he burden issue), no sus at control statutes irrationally enactment for legislative turn peculiarly bur class is quasi-suspect pect or groups under discriminating between any per right of and no fundamental dened extremely heavy an equal protection clause is legislation uniquely threatened is son Borman’s, Prop. & Michigan one.” v. (as herein),8 “wide are states afforded (6th Ass’n, F.2d Cas. Guar. presumes that latitude, and Constitution 823, 112 Cir.), denied, S.Ct. cert. 502 U.S. eventually be will improvident '1ecisions even (1991). L.Ed.2d 58 processes.” Cle by the democratic rectified plaintiffs’ contention Center, Living burne Cleburne tandem, 4303.021, when assessed 432, 440, 87 L.Ed.2d pro- facially their substantive offended omitted). (1985) (citations assess courts rights because protection or equal cess highly under the deferential enactments superi- purportedly attained A-l-A licensees rig relationship” inquiry, the least “rational legislators denied which the legal benefits protec equal traditional orous of three rational D licensees without C and tests, “legislation presumed whereby by binding direct precluded justification, was if the classi sustained and will be to be valid Following the lower precedent. Sixth Circuit rationally by the statute fication drawn 29, of the April 1997 dismissal court’s initial Id. state interest.” legitimate related to a prior to complaint, but amended Evans, plaintiffs’ (citations omitted); 517 Romer v. see 28, May 1997 denial 1620, the trial court’s 631, 620, 134 L.Ed.2d U.S. 116 S.Ct. judg- to correct Rule 60 motion (1996). plaintiffs’ prevails even presumption This tions) legitimate "substantially ato tripartite or is related a Supreme has fashioned Court 8. The classifications). Id. inquiry. (illegitimacy equal protection Where a or statute state interest” omitted). (citations adversely "suspect 440-41, impacts uniquely a ordinance 105 S.Ct. at race, alienage, by or as one defined implicated class” such the not two standards are These right” origin, a invades "fundamental Rather, national or developed infra, this subject appeal. freedom, rigorous religious speech such as or demanding by of governed the least action is whereby scrutiny” governs, "strict standard tests, namely equal protection the "rational three only suitably if are "will be sustained laws relationship” standard. compelling a state interest.” tailored to serve Center, Living Cleburne Cleburne 440, Supreme Nordlinger, commented Court (cita- (1985) 87 L.Ed.2d 105 S.Ct. Equal does not for- Clause Protection "[t]he omitted). legislation uniquely af- Where tions governmental simply keeps It bid classifications. distin- "quasi-suspect” {i.e. one a fects guished differently persons treating from decisionmakers illegitimacy), by gender a or somewhat Nordling- respects relevant alike.'' who are all (some- stringent norm controls less evaluative Hahn, U.S. er v. whereby scrutiny”) a called times legislative “intermediate added; (1992) citation (emphasis L.Ed.2d 1 legitimate if it deemed is classification omitted). sufficiently impor- "substantially to a related is (gender governmental interest” classifica- tant ment, May this circuit on consumption by overruled breweries process equal protec a broad due and possessed which permits, class A-1-A while against option tion offensive the Ohio local authorizing local deprive electors to all other Dept. statutes v. Ohio Li retailers functioned under class C of Control, (6th Cir.1997). quor 113 F.3d 614 A court, Dor licenses of their commerce. This option local election had invalidated discarding hypothesis, pronounced: of liquor permits Inc.’s use its class C Dand Contrary posture, howev- off-premises the retail sale of beer for or er, non-arbitrary material distinctions exist on-premises consumption. Id. at 617-18. between breweries which sell beer as an ultimately This court mandated that the Ohio incident manufacturing operations, to their election facially statutes do not operations and retail merely dis- (which procedural afoul process run due is pense beer for implicated currently not in the cause at consumption. bench), process, equal substantive Manifestly, legislative judgment that re- protection. Id. at 619-23. tail beer sales of the allowed under an Initially rejecting plaintiffs protest permit by brewery or a brew pub Ohio local facially infringed laws pose do not risks fights, same auto- substantive due norms because accidents, public mobile disorderly con- beer outlets which functioned under class C duct, crime, neighborhood decay, alcohol or D were closed abuse, ills, and other conceivable might issue, election at whereas businesses of presented by ordinary carry taverns or beverage other alcoholic outlets within the stores, out is not irrational. Additionally, voting precinct same were to con- exemption afforded A-l-A licenses tinue sales authorized or DC licens- pubs breweries exposure and from brew es, Inc. court remarked: termination, election, sales, possess legitimate Local voters supported interest retail beer a legisla- modes, regulating types, public policy and cir- tive encourage decision to neigh- protect private cumstances alcohol sales in their in costly investment brew- Legislative borhood. ery pub facilities, distinctions between equipment and brew modes, types, promote various and circumstances of and to produc- domestic in-state dispensing alcoholic generally Beyond contradiction, tion of beer.10 constitute reasonable means of further- holders of A-l-A similarly licenses are not ing public Simply ordinary interest- stat- situated with retailers ed, categories beverages, distinct alcoholic beverage challenged hence the legis- vendors, categories and sales of different arbitrary lative distinction capri- beverages, may of alcoholic reasonably cious. legitimately regula- to different (citation omitted). Id. at 621 facially tions without offending the due Inc. court then resolved process clause. because the challenged legislative classifica- (note omitted).

Id. at 620 rationally tions legitimate public advanced 37712, The Inc. court disposed then of the interests and thus satisfied substantive due plaintiffs argument norms, alternate that the above, state pronounced as legislature facially arbitrarily had acted also equal protection fulfilled requisites.11 capriciously exempting retail beer sales Id. at 621-23. part legislature’s

10. At least apparent Clearly, of the Ohio located.” protect, lawmakers state intended to measure, purpose very capital for the in excep- some limited local the massive breweries, preexisting perhaps investments encourage favoring enterprises A-l-A is reflected via expensive future investment alco- 4303.021, § part which dictates in beverage manufacturing technology holic and/or “no new that A-l-A shall be issued to the production commodity frequently domestic of a [winery] per- holder of an A-l [brewery] or A-2 imported from outside the state. intoxicating liquor mit unless sale of beer and under class in the resi- 11. It should be noted even in the of absence dence district in A-l which the or A-2 37712, decision, Inc. the two Sixth Circuit

405 (6th Cir.1985); 685, Circuit Inter- Sixth have 689 judice essence appellants sub Operating 22.4.1. nal Procedure 37712, foreclosed their Inc. conceded 4303.021, hypothesis that events, purported analytical In all facially violated substan- together, when read faulted the which the have flaws for equal protection stric- process and tive due 37712, Inc. decision were misconceived. tures, directed that precedent 37712, because Inc. court plaintiffs have accused the “ju improperly taking “judicial between notice” of legislature’s distinction of the Ohio dicially support facts” to manufactured beverage retailing activities of may rationally ruling that state lawmakers licenses A-l-A authorized manufacturers non-capriciously treat the holders ordinary retailing activities and the beer permits differently than owners taverns enabled carry out stores or 37712, However, D licenses. of class C or non-arbi- was sensible and C or challenge Inc. involved a constitutional However, argued plaintiffs have trary. laws, which focused to the Ohio local 37712, in- analysis was Inc. that the court’s sensibility legislative of the solely upon the should not legal error and hence fected with per se. categorizations rule They urged have that the followed. Thus, applied as no constitutional because 37712, revised revisited and Inc. should be 37712, Inc., no sault been advocated had by this court. found material “facts” had been essential Brookpark En adjudicating court. See However, analytic error inhered even if tertainment, Taft, F.2d 714 Inc. v. 951 (which not, developed it did as Inc. (6th Cir.1991) (mandating that no real issues below), consti precedent nonetheless for resolution presented fact are of material legal au decisis. No binding stare tutes ordinance), a statute or upon a facial reconsider, panel thority empowers this denied, 113 S.Ct. rt. ce overrule, reverse, modify legal pro (1992). Rather, because 121 35 L.Ed.2d published opinion of prior nouncements of rational, material distinction conceivable Rather, may be set this circuit. beverage re two of alcoholic between a decision or altered aside legislative regulation justifies variant tailers by the Supreme States Court United other, compared to the group one sitting en banc. See United Circuit Sixth possible merely identified Inc. forum 510, 517 & Washington, v. 127 F.3d States support a which could rational motivations — denied, (6th Cir.1997), U.S. cert. n. 9 immunize, from the lo legislative election (1998); -, 141 L.Ed. 2718 option, retail beer sales cal Ward, Coal, 93 F.3d Inc. v. Mountain Cross production facilities consumption at (6th Cir.1996); Secretary A-l-A au Salmi outlets under operate retail thorizations, expose dram Services, opting to while 774 F.2d Health and Human forum, Nov.22, 1996), adop- unpublished this via primarily upon by precedents relied the instant square- opinion, published court district support thesis. tion of plaintiffs would not Entertainment, materially differently situated Taft, ly pronounced F.2d Brookpark Inc. v. retailers, denied, (6th Cir.1991), which sell for on- such as those U.S. alcohol cert. (1992), which sell premises versus those this court S.Ct. 121 L.Ed.2d consumption, non-arbitrari- merely for ly that former sections of ruled regulation, because to dissimilar empowered the which had statutes business, legitimate rationally related to "is target particular this distinction local voters to unruly be- crowd control rationally concerns such as opposed to a distinct classification retailers, may accompany sales for facially impinged substantive havior inehriant Colson, premises." consumption on the adjudication process. did not menace This However, sug- classification, did not judi- F.Supp. Colson at 1167. as the one sub legislative ce, retailers which gest distinction between categorized materially dis that the separately which consumption retailers on-premises variant sell for retailers tinct of alcohol supports concerns, off-premises consumption developed sell for which legitimate public interest rationally justifiable regulatoiy discrimi- only Heights, F.Supp. the v. Shaker herein. In Colson (Ta categories in alcohol- (N.D.Ohio 1995), of retailers aff'd, nation between F.3d 129 (6th 95-3538, ble), beverages. Cir. ic WL 683595 No. shops operate which class D However, § under licenses12 Rev.Code 4301.35.13 because option upon § restrictions their governs retail only class D liquor C and (see on-premises beer sales for consumption, permits irre- 1, supra), note class A-l-A spective of the common factor that establish- retailers are state insulated law from local operating ments either an A-l-A or a D restrictions upon state-granted permit may business have been licensed privilege to on-premises sell beer for usage. on-premises to sell beer for consump- Accordingly, by operation pertinent tion. statutes, Ohio local a class D-5 licen- alternatively have see confronts contended certain disabilities not faced that, even if class C a type permittee, licensees and most A-l-A but concomitantly permittees sufficiently enjoys are dissimilarly advantages certain sit- vis a vis a class A- to A-l-A 1-A permit-holder uated licensee. The legitimate dispa- licensees to D-5 is fa- regulation, vored in night rate state that its permit the club court license fee is significantly had failed to license, consider that lower that the A-l-A owners (such yet liquor permits class D-5 plaintiff nonetheless affords him Inc.) privilege of Mallough, facially vending identically are situat- for both grantees with the licenses; ed consump- A-l-A tion; by contrast, thus the diverse the costlier A-l-A treatment of these two authorizes the retail sale of alcoholic classes licensees is inescapably bever- irrational ages by a beer or only wine arbitrary capricious. manufacturer for However, and/or on-premises consumption. On this assertion the other is patently fallacious. A class hand, the law license, the A-l-A benefits $1,875 fee, D-5 licensee in available for autho- that it authorizes retail sale of beer for proprietor rizes the nightclub of a to retail on-premises consumption and is immunized intoxicating liquor beer or glass or in option restriction, from local whereas the D- consumption containers for on-premises, and 5 businessperson exposed to that beer, contin- wine, to vend and mixed drinks in gency. consumption containers for off-premises. contrast, By 4303.18. Ohio Rev.Code Because privileges bestowed and dis- permit, $3,125, which costs allows the imposed by abilities categories the two of a brewery owner (including a (A-l-A microbrew- D-5) liquor licenses are not iden- ery pub) winery brew or a to sell beer or tical, the compelled conclusion is that the two any intoxicating liquor by glass or in types of facially concerns are not similarly containers consumption for only on the brew- situated in respects. all material According- ery winery premises. ly, legislature may, general proposi- as a Rev.Code Moreover, 4303.021. the same tion, rationally operations classify of the kind regulating laws the retail sale of intoxicating conducted under D-5 licenses differently beer) liquor (excluding apply to both class A- than transacting businesses A-l-A com- 1-A licensees and class D-5 licensees. Ohio merce.14 Colson, 12. Under (B) may because class C retailers "Shall the beverag- sale wine and mixed only es, sell beer off-premises usage, for permits the Ohio under which authorize sale for on- legislature clearly facially deprived premise had only, and under equal C protection license holders of or substan- on-premise authorize for sale both process by tive due safeguarding, against off-premise consumption, permitted be termination, right of A-l-A license in.... ?” (C) holders to sell beer spirituous con- "Shall the liquors by sale of Colson, sumption. F.Supp. glass (D) See permitted at 1167. be in....?” “Shall state stores for the sale of spirituous liquor by package, consump- specifies

13. The Ohio Revised Code the local sold, premises tion off the option questions where be respecting sales of wine and/or in....?” straight spirits placed or mixed a local ballot via initiative: (A)"Shall the sale of beverag- and mixed legislature wine 14.While apparently de- package, es signed exemption under which autho- primarily the A-l-A to benefit off-premise breweries, rize sale consumption only, inclusion wineries within the permitted in.... ?" acquire class of eligible industries A-l-A li- “case or no actual have advanced case, plaintiffs D-lieensed contrast, proper in a By Const, Ill, § 2. art. controversy.” See U.S. on-premises of beer retailer applied chal- an successfully promote might herein, Accordingly, for the stated reasons adverse (see 7, against an supra) note lenge that majority’s resolution I concur with can if it option referendum § 4305.14 local be af- should judgment court’s the district evidence, its enter- record on the prove firmed. in all similarly situated precisely was prise opera- A-l-A to an extant respects material pub) (such microbrewery or brew aas However, the locality. affected

within join standing no have

instant they have because challenge applied an LABOR RELATIONS NATIONAL business licensed no A-l-A that conceded Petitioner, BOARD, pre- the Columbus any within operated subject to the local which were

cincts this issue controversy, and hence elections Workers, and Commercial Food United day. Be- another on await resolution must Intervening- 1444, No. Local operated within no A-l-A licensee cause Petitioner, existed possibility no precincts, implicated been could have licensee v. any A-l-A that any plaintiff, similarly situated precisely GRANCARE, INC., Health Audubon d/b/a option referenda subject local and thus the Center, Respondent. Care inequitably unfairly accorded not have could No. 97-3431. enterprise treatment favorable controversy. statutes of the Ohio by virtue Appeals, Court United States govern- rules in the traditional “Embedded Seventh Circuit. principle is the adjudication constitutional ing 15, 1998. Argued April may consti- a statute to whom person that heard to not be applied tutionally will Sept. Decided ground that statute on Rehearing Suggestion for Rehearing and unconstitutionally conceivably applied Granted, Panel Decision En Banc others, not before situations other 30, 1998. Nov. Vacated Hunt, 455 U.S. Murphy v. Court.” (1982) 71 L.Ed.2d 102 S.Ct. n. curiam) Okla- (quoting Broadrick (per homa, 93 S.Ct. 413 U.S. (1973)). plaintiffs lack

L.Ed.2d 830 challenge to applied an

standing to assert they laws because liquor control present actual to “demonstrate

have failed future possibility significant or a

harm Inc. v. Organization,

harm,” Rights Peoples (6th Columbus, F.3d City of

Cir.1998), proved not thus have (citing, “injury-in-fact,” id. an suffered

have Wildlife, alia, Lujan v. inter Defenders 560-61, (1992)). Consequently, L.Ed.2d 351 sales retail beer irrational, bans against local given A-l-A li- not censes was likely in- consumption would sale the retail authorize terms censes winery including typical wine. beverages, significant traffic at spire all legislature could consumption. Rev.Code presume the A-l-A fortification reasonably

Case Details

Case Name: Sam & Ali, Inc. Aleb, Inc. Mallough, Inc. And Murib, Inc. v. Ohio Department of Liquor Control and William A. Vasil

Court Name: Court of Appeals for the Sixth Circuit

Date Published: Oct 15, 1998

Citation: 158 F.3d 397

Docket Number: 97-3546

Court Abbreviation: 6th Cir.