Kirby v. Alcoholic Beverage Control Appeals Board

498 P.2d 1105, 7 Cal. 3d 433, 102 Cal. Rptr. 857, 1972 Cal. LEXIS 201

• Court: California Supreme Court
• Decided: July 7, 1972
• Docket: L.A. 29932
• Status: Published

Opinions

Opinion

BURKE, J.

In this case we are asked to review a decision of the Alcoholic Beverage Control Appeals Board (Board) which reversed a decision of the Department of Alcoholic Beverage Control (Department) denying a petition for an off-sale beer and wine license. Since it appears that the Department’s decision was supported by substantial evidence and was within its powers, we have concluded that the Board’s contrary decision must be reversed.

On May 19, 1970, real party Schaeffer filed an application for an off-sale beer and wine license¹ for premises located in a college community generally known as Isla Vista, and adjacent to the University of California at Santa Barbara. On June 15, a protest was filed by James A. Webster, then Sheriff of Santa Barbara County. The protest asserted that if the license were granted to Schaeffer’s premises, “it will tend to create a policing problem because of its proximity to the Santa Barbara campus of the University of California and the recent civil disturbances which occurred in this area.” On August 6, the Department issued a notice of denial of the application, and on August 17, Schaeffer filed a petition for a hearing on the matter. (See Bus. & Prof. Code, § 24011.)

On September 21, a hearing was held and evidence taken on the question whether an off-sale license should be granted. Following the hearing, the hearing examiner issued a proposed decision in which he made certain findings of fact and recommended that the protest be overruled and the petition for license granted. The Department adopted all but one of the examiner’s findings but refused to adopt his proposed decision. Instead, the Department sustained the protest and denied Schaeffer’s petition based upon the following determination: “It would be contrary to public welfare and. morals to issue a conditional off-sale beer and wine license to the applicant at these premises in that: 1. The premises is in a residential area and normal operation would interfere with the quiet enjoyment of their property by residents. 2. Issuance would create or aggravate an existing police problem in the area.”

Schaeffer appealed the Department’s decision to the Board, which reviewed the evidence and applicable law, concluded that the Department’s decision lacked evidentiary support, was arbitrary and constituted an abuse of discretion, and accordingly reversed that decision. The Department herein seeks review of the Board’s decision, contending that the Board disregarded substantial evidence in support of the Department’s findings and erred in concluding that the Department had abused its discretion. (See Bus. & Prof. Code, § 23090 et seq., regarding judicial review of the Board’s decisions.)

Before we discuss the evidence, it is appropriate that we set forth the applicable rules which govern review of decisions of the Department. By reason of article XX, section 22 of the California Constitution, the Department has “the power, in its discretion, to deny, suspend or revoke any specific alcoholic beverage license if it shall determine for good cause that the granting or continuance of such license would be contrary to public welfare or morals . . . .” Section 22 also sets forth the Board’s scope of review of decisions of the Department, providing that “[rjeview by the board of a decision of the department shall be limited to the questions whether the department has proceeded ... in the manner required by law, whether the decision is supported by the findings, and whether the findings are supported by substantial evidence in the light of the whole record.”

Under section 23090.2 of the Business and Professions Code, appellate judicial review of decisions of the Department is identical to that of the Board, requiring us to determine whether the Department’s findings are supported by substantial evidence in the light of the whole record. (See Boreta Enterprises, Inc. v. Department of Alcoholic Beverage Control, 2 Cal.3d 85, 94-95 [84 Cal.Rptr. 113, 465 P.2d 1]; Kirby v. Alcoholic Bev. etc. App. Bd., 261 Cal.App.2d 119, 121-122 [67 Cal.Rptr. 628].) Neither this court nor the Board may “ ‘disregard or overturn a finding of fact of the Department ... for the reason that it is considered that a contrary finding would have been equally or more reasonable.’ ” (Boreta Enterprises, Inc. v. Department of Alcoholic Beverage Control, supra, at p. 94.) “[I]f it be conceded that reasonable minds might differ as to whether granting [a license] would or would not be contrary to public welfare, such concession merely shows that the determination of the question falls within the broad area of discretion which the Department was empowered to exercise.” (Martin v. Alcoholic Bev. etc. Appeals Bd., 55 Cal.2d 867, 876 [13 Cal.Rptr. 513, 362 P.2d 337].)

Of course, the discretion exercised by the Department under section 22 of article XX of our Constitution “ ‘is not absolute but must be exercised in accordance with the law, and the provision that it may revoke [or deny] a license “for good cause” necessarily implies that its decisions should be based on sufficient evidence and that it should not act arbitrarily in determining what is contrary to public welfare or morals.’ ’’ (Martin v. Alcoholic Bev. etc. Appeals Board, supra, 55 Cal.2d 867, 876; see Boreta Enterprises, Inc. v. Department of Alcoholic Beverage Control, supra, 2 Cal.3d 85, 95-96.) Nevertheless, it is the Department, and not the Board or the courts, which must determine whether “good cause” exists for denying a license upon the ground that its issuance would be contrary to public welfare or morals. (See Torres v. Dept. Alcoholic Bev. Control, 192 Cal.App.2d 541, 545-546 [13 Cal.Rptr. 531]; Kirby v. Alcoholic Bev. etc. App. Bd., supra, 261 Cal.App.2d 119, 122.)

As set forth above, the Department concluded that it would be contrary to public welfare and morals to issue an off-sale license to Schaeffer in that (1) the premises are in a residential area and normal operation would interfere with the residents’ quiet enjoyment of their property, and (2) issuance would create or aggravate an existing police problem in the area. The foregoing conclusions were supported by the Department’s findings and by substantial evidence in the record.

The evidence, much of which is summarized in the Board’s findings, disclosed that Isla Vista is an unincorporated village approximately three-quarters of a mile in area, containing approximately 10,300 residents. Isla Vista, which is almost totally surrounded by the University of California at Santa Barbara campus, is a “bedroom” community for staff, students, administrative personnel and others employed by the university, as well as the home community for approximately 1,500 persons not associated with the university. There is a single shopping area for the entire village and university, in which real party Schaeffer owns several adjoining stores, including the proposed premises and a nearby restaurant offering take-out food service.

The median age of Isla Vista’s population is 20 years. A county research analyst testified that as of February 1969, 40 to 45 percent of Isla Vista’s 10,300 population consisted of persons 18, 19 or 20 years of age, 2,000 were 21 years old, and 5 to 10 percent were 17 years old or younger. More than half of the population were students with no other occupation. The foregoing figures do not include approximately 2,500 unmarried students living on campus. According to the university registrar, the total enrollment for Spring 1970 was 12,882, ranging in ages from 18 to 23; all but 2,100 students either lived in Isla Vista or on campus.

The premises sought to be licensed herein are located approximately 350 to 400 feet from the university campus; numerous, off-campus residences and apartments are in close proximity to the premises, some as close as 150 feet. The closest on-campus student residence is 700 feet away. A Bank of America building and so-called “Perfect Park,” each the scene of recent student disturbances, are 210 and 100 feet respectively from the premises. There is no existing licensed premises of any kind in either Isla Vista or on the university campus; the nearest off-sale premises is three miles distant and serves Isla Vista patrons by a delivery service.

Sheriff Webster, who filed a protest with the Department, testified concerning the police problems which Isla Vista had recently experienced with its youthful population. Webster, who had been associated with the Santa Barbara County Sheriff’s Department for the past 25 years and who had been its sheriff for eight years and nine months, explained that four separate incidents had occurred in the area from January 30, 1970, through June 12, 1970. The first occurrence took place on the university campus and lasted from January 30 through February 4; the next three incidents involved Isla Vista itself and extended respectively from February 24 to March 3, from April 16 to April 22, and from June 3 to June 12.

In connection with the. initial, on-campus episode the university asked for and received assistance from outside law enforcement agencies, including the Sheriff’s Departments of Santa Barbara, San Luis Obispo, Ventura and Los Angeles Counties, and the California Highway Patrol. Together, these agencies contributed an average of 200 men daily to assist the university in controlling the situation. During the second incident, a Bank of America building (located 210 feet from the proposed premises) was burned to the ground and the California. National Guard was brought in to assist local agencies. During the three Isla Vista incidents, Sheriff Webster, whose force totaled 210 men, committed a minimum of 45 and a maximum of 140 men daily to restore order; in addition he received 'substantial assistance from other law enforcement agencies.

Webster personally witnessed each of the above occurrences, and described the rioting, property damage, burnings., window breakage and looting which took place. He noted that some of the rioters appeared to have been drinking, and he explained that his men could not effectively protect against looters merely by closing retail stores for some closed stores were broken into and damaged.

According to Webster-, Isla Vista has the highest crime rate in Santa Barbara County. In Webster’s opinion, based upon his 25 years’ experience with the sheriff’s department, at least 50 to 60 percent of all persons arrested in the county were under the influence of alcohol. In view of the high crime rate in Isla Vista, and the fact that approximately 50 percent of its population were under 21 years of age, Webster had adopted a policy, even before the 1970 riots, of protesting the issuance of liquor licenses in Isla Vista. Webster further pointed out that denial of Schaeffer’s application would eliminate the possibility, in the event of renewed disturbances or rioting, that his store would be broken into and alcoholic beverages taken and consumed by looters and rioters. Webster explained that roadblocks could be set up to prevent the delivery of liquor into Isla Vista, but that there was no assurance that merely closing Schaeffer’s store would prevent looters from breaking in.

There was, on the other hand, substantial evidence introduced to support Schaeffer’s application. For example, the Department found, based upon testimony by persons favoring the application, that the residents of Isla Vista, and the university population and administration are “overwhelmingly” in favor of the application, and that the business interests and local community and service organizations are “predominantly” in favor thereof. The record also discloses that, on January 8, 1971, following the conclusion of the hearings but prior to issuance of the Department’s decision, John W. Carpenter, newly elected Sheriff of Santa Barbara County and Webster’s successor, sent a letter to the Department advising it that he would not protest Schaeffer’s application.

In spite of the contrary evidence in the record, it is readily apparent that substantial evidence exists to support the Department’s findings and conclusions. Evidence of Isla Vista’s high crime rate and youthful population, the recent series of disturbances and rioting, the proximity of the proposed premises to the university campus and student residences, and the relationship between crime and intoxication, together constitute ample evidence from which reasonable men might conclude that the existence of the licensed premises could cause or aggravate a police problem, could interfere with the residents’ quiet enjoyment of their property, and consequently would be contrary to public welfare and morals. Although reasonable minds might differ on the question, based perhaps upon the fact that Isla Vista residents and businessmen, and university administration, failed to protest the application,² “ ‘such concession merely shows that the determination of the question falls within the broad area of discretion which the Department was empowered to exercise.’ ” (Martin v. Alcoholic Bev. etc. Appeals Bd., supra, 55 Cal.2d 867, 876.)

The courts often have affirmed denials of licenses under similar circumstances. The cases generally agree that mere proximity to schools or churches may not constitute good cause for denial of a license. (See Martin v. Alcoholic Bev. etc. Appeals Bd., supra, 55 Cal.2d 867, 875 [premises near church, but church did not protest and eight licensed premises already existed within 600-foot radius]; Reimel v. Alcoholic Bev. etc. App. Bd., 255 Cal.App.2d 40, 45 [62 Cal.Rptr. 778] [premises near elementary school, but three licensed premises already existed within 900 feet from school, and no expert testimony introduced to support possible harm to public welfare].) On the other hand, proximity to a church or school coupled with some additional evidence disclosing a potential threat to the public welfare or morals has been held sufficient to justify denial of a license. (See Weiss v. State Board of Equalization, 40 Cal.2d 772, 774 [256 P.2d 1] [proposed off-sale premises located 80 feet from, public high school, and some buildings used for R.O.T.C.]; Kirby v. Alcoholic Bev. etc. App. Bd., supra., 261 Cal.App.2d 119 [off-sale premises located 250-400 feet from school whose pupils ranged from ages 5 to 14; area largely residential; takeout food sold in nearby restaurant]; Reimel v. Alcoholic Bev. etc. App. Bd., 250 Cal.App.2d 673 [58 Cal.Rptr. 788] [off-sale premises located 200 feet from elementary school in residential area; likely that beer and wine would be consumed near school]; Bowman v. Alcoholic Bev. etc. Board, 171 Cal.App.2d 467 [340 P.2d 652] [on-sale premises in religious community with nearby youth camps and school]; Schaub’s Inc. v. Dept. Alc. Bev. Control, 153 Cal.App.2d 858 [315 P.2d 459] [off-sale premises 100 feet from church holding frequent youth meetings for children aged 12 through 20]; Hansen v. State Board of Equalization, 43 Cal.App.2d 176 [110 P.2d 453] [off-sale premises near school and church, in residential community where no licensed premises exist].)

The instant case seemingly would fall within the second category of cases, since the premises’ proximity to¡ the university was coupled with such additional factors as the age and past “exuberance” of the Isla Vista and university population, the absence of any other licensed premises in the area, and the presence of a nearby restaurant which would enhance the likelihood that beer would be consumed near the campus. (Compare Kirby v. Alcoholic Bev. etc. App. Bd., supra, 261 Cal.App.2d 119, 127, with Reimel v. Alcoholic Bev. etc. App. Bd., supra, 255 Cal.App.2d 40, 49.)

In addition to cases which involve proposed premises in close proximity to schools or churches, there is a line of authority squarely holding that the Department may deny, suspend or revoke a license whenever it determines, on substantial evidence, that the premises might present, or have presented, a law enforcement problem. (See Harris v. Alcoholic Bev. Con. Appeals Bd., 212 Cal.App.2d 106, 118-119 [28 Cal.Rptr. 74]; Torres v. Dept. of Alcoholic Bev. Control, supra, 192 Cal.App.2d 541, 559; Parente v. State Board of Equalization, 1 Cal.App.2d 238, 245-246 [36 P.2d 437]; Bus. & Prof. Code, § 23958 [“The department further may deny an application for a license if issuance of such license would tend to create a law enforcement problem . . .”]; Bus. & Prof. Code, § 23987 [requiring, immediate transmittal of a copy of license applications to sheriff or chief of police].)

The Board and real party Schaeffer take the position that the evidence failed to establish that the civil disturbances and campus disruptions, testified to by Sheriff Webster were in any way attributable to the consumption of beer or other alcoholic beverages; these parties suggest that Webster’s testimony regarding the relationship between crime and intoxication and the likelihood that the premises might aggravate police problems was mere “opinion” testimony and wholly speculative. As the cases make clear, however, the Department’s role in evaluating an application for a license to sell alcoholic beverages is to assure that the public, welfare and morals are preserved “from probable impairment in the future.” (Harris v. Alcoholic Bev. Con. Appeals Bd., supra, 212 Cal.App.2d 106, 119.) Of necessity, in appraising the likelihood of future harm to the public welfare, the Department must be guided to a large extent by past experience and the opinions of experts. As stated in Kirby v. Alcoholic Bev. etc. App. Bd., supra, 261 Cal.App.2d 119, 129, “Complaint is made that some of the evidence is opinion testimony purely speculative and conjectural, i.e., the litter problem, and the likelihood of consumption of alcoholic beverages around the hamburger stand, but it should be borne in mind that the proposed business is not yet in, operation and the attempt to assess its future impact on public welfare and morals must be and is based on experience, sound reason and evidence in the record. (See Iscoff v. Police Com., 222 Cal.App.2d 395, 410, 411 ... in which similar opinions and other statements constituted sufficient evidence upon which the board [the board of permit appeals] in the exercise of its sound discretion made its order of denial.)” (Italics added.)

The Board emphasizes the fact that following the conclusion of the hearings, but prior to the Department’s decision, as previously noted, newly elected Sheriff Carpenter advised the Department that he would not protest Schaeffer’s application. Even were we to assume that Carpenter’s letter constituted the announcement of a formal change of official policy, . at least on the part of the head of one police agency, regarding the issuance of licenses in Isla Vista, nothing in the law thereby permitted or required the Department to disregard its constitutional responsibilities to pass upon the evidence before it and determine the effect upon public welfare and morals. Sheriff Webster’s testimony had, of course, an independent significance apart from merely declaring the policy of the Santa Barbara County Sheriff’s Department—it constituted evidence, based upon Webster’s 25 years’ prior experience as a law enforcement officer in the area, that the granting of a license to Schaeffer could aggravate an existing law enforcement problem and thus be contrary to the public welfare. The subsequent statement by his successor in office that he would not oppose issuance of the license could not and did not depreciate the evidentiary value of Webster’s testimony.

Schaeffer’s application was filed, and the Department’s decision made, at a time when the Isla Vista disturbances were painfully fresh. Whether or not the Department might now take a different view toward a renewed application based upon present conditions in the area, we are not entitled to speculate. That decision must rest with the Department and hot with the Board or this court. Since the Department was justified in denying Schaeffer’s 1970 application on the evidence placed before it, the Board erred in reversing the Department’s decision.

The decision of the Board is hereby reversed and the decision of the Department affirmed.

Wright, C. J., McComb, J., and Sullivan, J., concurred.

1 The application sought a conditional license authorizing the sale of wine and malt beverages containing not more than 3.2 percent alcohol and of beer, in order to comply with applicable state law restricting the sale of intoxicating liquor within one mile of the university. (See Pen. Code, § 172.)

2 The Department may have discounted the lack of protests from residents, businessmen or university spokesmen on the basis that it represented either a natural reluctance to take a position unpopular in the community, an attempt to pacify the youthful population, or even an overriding self-interest. Most witnesses testifying in support of the application emphasized a general feeling of resentment or frustration in the community regarding the inability to purchase alcoholic beverages in Isla Vista.