Michigan License Beverage Ass'n v. Behnan Hall, Inc.

266 N.W.2d 808, 82 Mich. App. 319, 1978 Mich. App. LEXIS 2227
CourtMichigan Court of Appeals
DecidedApril 3, 1978
DocketDocket 77-795
StatusPublished
Cited by23 cases

This text of 266 N.W.2d 808 (Michigan License Beverage Ass'n v. Behnan Hall, Inc.) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Michigan License Beverage Ass'n v. Behnan Hall, Inc., 266 N.W.2d 808, 82 Mich. App. 319, 1978 Mich. App. LEXIS 2227 (Mich. Ct. App. 1978).

Opinions

Bashara, P. J.

Plaintiff appeals from a trial court judgment granting injunctive relief against defendant, prohibiting pertain conduct alleged by plaintiff to be in violation of the Michigan Liquor Control Act.1 The contention of plaintiff is that the scope of the injunction’s prohibition does not enjoin all of the defendant’s allegedly unlawful conduct.

Defendant cross-appeals from the judgment. Its primary contention is that plaintiff lacked standing to maintain the action for injunctive relief. To [323]*323sustain the argument, defendant asserts that plaintiff lacks any interest affected by the alleged unlawful conduct, and that plaintiff has failed to establish any basis upon which equity jurisdiction can be founded. Additionally, defendant contends that the conduct of which plaintiff complains is not violative of § 26c of the act.2

This case was submitted to the trial court by stipulation of facts, which were adopted by the trial court. Those facts disclose that the defendant is in the business of operating a catering hall. That facility is rented to various persons and organizations for use in holding wedding receptions, banquets, and similar social gatherings. As part of its business services to those lessees, defendant provides food, a bartender, and assorted nonalcoholic beverages, some of which are used in conjunction with liquor, for an agreed upon price per person.

Any alcoholic beverages consumed on defendant’s premises by the lessees or their guests are furnished by the lessees. The lessees purchase the liquor, not from defendant, but from licensees under the act. Defendant does not sell liquor, derives no profit from its sale by others, nor is it licensed to do so under the act.

Proceedings were initiated by plaintiff, a nonprofit corporation whose members are licensees under the act, to enjoin the operation of defend[324]*324ant’s business insofar as it permitted the consumption of liquor on its premises. Suit was predicated upon allegations that such business activity violates § 26c of the act and injures the property rights of plaintiffs members in their liquor licenses.

Initially, we analyze the defendant’s contentions relative to plaintiffs standing to maintain the action and the existence of a basis for equity jurisdiction.

In the context of this case questions of standing and jurisdiction are closely related. Indeed, much of defendant’s argument denominated as pertinent to standing is actually aimed at the existence of equity jurisdiction. Therefore, the distinction should be clarified.

Standing is the legal term used to denote the existence of a party’s interest in the outcome of the litigation; an interest that will assure sincere and vigorous advocacy. Sierra Club v Morton, 405 US 727, 731-732; 92 S Ct 1361, 1364; 31 L Ed 2d 636, 641 (1972). Conceptually, standing was adeptly described by the Sierra Club Court in the following terminology:

"Whether a party has a sufficient stake in an otherwise justiciable controversy to obtain judicial resolution of that controversy is what has traditionally been referred to as the question of standing to sue. * * * [T]he question of standing depends upon whether the party has alleged such a 'personal stake in the outcome of the controversy,’ Baker v Carr, 369 US 186, 204, 82 S Ct 691, 703, 7 L Ed 2d 663, as to ensure that 'the dispute sought to be adjudicated will be presented in an adversary context and in a form historically viewed as capable of judicial resolution.’ Flast v Cohen, 392 US 83; 101, 88 S Ct 1942, 1953; 20 L Ed 2d 947.” Id.

See also Warth v Seldin, 422 US 490, 499; 95 S Ct [325]*3252197, 2205; 45 L Ed 2d 343, 354 (1975), and United States v SCRAP, 412 US 669, 687; 93 S Ct 2405, 2416; 37 L Ed 2d 254, 269 (1973).

Accordingly, the threshold question is whether plaintiff has an interest in the outcome of this litigation sufficient to invoke the controversy-resolving powers of the judiciary. The stipulation of facts discloses that plaintiff does not have a liquor license, nor is it engaged in any commercial activity that will be affected by the outcome of this litigation. As a corporation, a separate legal entity, plaintiff possesses no interest that we are able to discern that confers upon it the requisite standing to maintain this action.

Relying upon White Lake Improvement Assoc v City of Whitehall, 22 Mich App 262; 177 NW2d 473 (1970), plaintiff asserts that the commercial interests of its members constitute a sufficient basis to conclude that it has standing as a representative. In the White Lake case a non-profit corporation was held to have standing to represent its riparian landowner-members in a suit to enjoin the pollution of a lake. Id. at 271-274. This conclusion was obtained notwithstanding that the association itself was not a riparian landowner.

A circumstance in the White Lake case that distinguishes it from the facts before us is that the association in the former was constituted for solely representative purposes. Id. at 272; 177 NW2d at 477. In the case under review the facts indicate that plaintiff’s corporate purpose is unrelated to that of a litigation representative.3 Further, the [326]*326cases4 5upon which White Lake was premised involved associations that acted as a class representative or sought to establish rights in which they had a direct interest, or without which their existence would terminate.6 None of these factors characterize plaintiffs position in the instant litigation.

More importantly, since economic utilization of judicial resources is a principal objective of representative litigation, it becomes paramount that the outcome of the adjudication be binding upon those represented. Consistent with our conception of procedural due process, this imports that those whose rights are to be determined by litigation be given notice of its pendency and an opportunity to participate personally or through a class representative. See, e.g., Mullane v Central Hanover Bank & Trust Co, 339 US 306, 313; 70 S Ct 652, 656; 94 L Ed 865, 872-873 (1950).

The stipulation of facts indicates that plaintiff does not know whether any of its members has knowledge of the pendency of this litigation. Concomitantly, if plaintiff seeks to adjudicate the alleged property interests of its members by this action, the binding effect upon its members under the foregoing principle would be tenuous, at best. Consequently, since the plaintiff has neither a direct interest in the cause of action nor a properly constituted representative position, we must conclude that the requisite standing to pursue this litigation is absent.

[327]*327Should plaintiff establish standing to maintain this action by assuming a proper representative status,6 under the facts shown by the record, equitable relief would nevertheless remain unavailable. Such result would obtain because of the absence of any grounds upon which the invocation of equity jurisdiction can be founded. Even if a party has standing to maintain a suit for injunctive relief, he must additionally allege and establish a basis for equity jurisdiction.

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Michigan License Beverage Ass'n v. Behnan Hall, Inc.
266 N.W.2d 808 (Michigan Court of Appeals, 1978)

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Bluebook (online)
266 N.W.2d 808, 82 Mich. App. 319, 1978 Mich. App. LEXIS 2227, Counsel Stack Legal Research, https://law.counselstack.com/opinion/michigan-license-beverage-assn-v-behnan-hall-inc-michctapp-1978.