Sheppard v. Arkansas Alcoholic Beverage Control Board

2014 Ark. App. 604, 447 S.W.3d 614, 2014 Ark. App. LEXIS 912
CourtCourt of Appeals of Arkansas
DecidedNovember 5, 2014
DocketCV-14-80
StatusPublished
Cited by5 cases

This text of 2014 Ark. App. 604 (Sheppard v. Arkansas Alcoholic Beverage Control Board) is published on Counsel Stack Legal Research, covering Court of Appeals of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sheppard v. Arkansas Alcoholic Beverage Control Board, 2014 Ark. App. 604, 447 S.W.3d 614, 2014 Ark. App. LEXIS 912 (Ark. Ct. App. 2014).

Opinions

JOHN MAUZY PITTMAN, Judge.

11 Louis A. Sheppard appeals the decision of the Arkansas Alcoholic Beverage Control Board (the “Board”), which cancelled his conditionally granted application for A permit to operate a retail liquor store. He raises several points on appeal, and after considering each of his arguments, we affirm the decision of the Board.

In November 2010, the people of Clark County, Arkansas, voted to allow alcohol sales. After this vote, the Arkansas Alcoholic Beverage Control Board began accepting applications for retail liquor-store permits. Sheppard applied for a permit, and the Board conditionally granted his application on October 16, 2011.

The approval of Sheppard’s permit was conditioned upon several modifications to the premises where he intended to do business. The conditions required the remodeling of the building, the installation of a fire-exit light and telephone, and re-inspection of the premises. Alcoholic Beverage Control Division Rules and Regulations section 1.35 requires that any | ¡.conditions attached to the granting óf a permit be met within twelve months or the application will be cancelled. Sheppard was allowed two extensions to this twelve-month deadline, and he was given until December 31, 2012, to meet the conditions imposed by the Board.

On December 31, 2012, Sheppard notified the Board that he was ready for a final inspection. Seletia Smith, an inspection agent for the Alcoholic Beverage Control Division, inspected the premises on January 2, 2013, and found that there was a restaurant buffet in the center of the store, and that the premises lacked a telephone and shelving units. She returned several days later, and a telephone had been installed. However, the buffet server remained in the middle of the store, shelving units were not installed, and portions of the building were partitioned off with plastic sheeting.

In the meantime, the Director of the Alcoholic Beverage Control Division, Michael Langley, received a letter from Charles Singleton1 on January 3, 2013. In the correspondence, Singleton asked that Sheppard’s conditionally granted application be rescinded because of false material statements in his application and the delay in opening the business. On January 16, 2013, Langley advised the Board of the correspondence, and the Board determined that it would hold a hearing on February 20, 2018, to review the information received.

The Board held an administrative hearing, and at its conclusion, it voted to terminate Sheppard’s conditionally granted permit because of the delay in opening the liquor store and 13false material statements in his application. Sheppard appealed the Board’s decision to the Pulaski County Circuit Court, and the circuit court affirmed the Board’s decision. This timely appeal followed.

On appeal, Sheppard contends that: (1) the Board lacked jurisdiction to revoke his permit based upon conditions it had no power to impose, (2) the Board lacked jurisdiction to act because only the Director of the Alcoholic Beverage Control Division has the authority to revoke a permit, (3) the Board lacked authority to revoke his permit for failure to conduct business, (4) the Board lacked jurisdiction because it did not comply with notice requirements, (5) the Director engaged in an improper ex parte communication with Charles Singleton, (6) the Board lacked authority to apply Arkansas Code Annotated section 3-4-301 (a)(2)(Repl.2008), and (7) even if it had authority under section 3-4-301 (a)(2), that section was arbitrarily applied.

We first consider whether the Board had the authority to conditionally grant Sheppard’s application for a permit. State agencies only possess such powers as are conferred by statute or necessarily implied from a statute. Brookshire v. Adcock, 2009 Ark. 207, 307 S.W.3d 22. Although not binding, this court gives great deference to an agency interpretation of a statute, and will not overturn the construction of a state statute by an administrative agency unless it is clearly wrong. Id. Our review encompasses several statutory 'provisions relating to the powers of the Board, and we read these statutes relating to the same subject in a harmonious manner if possible. City of Fort Smith v. Tate, 311 Ark. 405, 410, 844 S.W.2d 356, 359 (1993).

|4Arkansas Code Annotated section 3-4-208(g)(1) (Repl.2008) provides that an application for permit will be approved if the Board finds that “an applicant is qualified and that his or her proposed premises meet the public convenience and advantage of the area in question.” Sheppard argues that, because this section is silent regarding the Board’s authority to impose conditions on the approval of applications, the Board has no such power. We disagree. Arkansas Code Annotated section 3^4-201(c)(2)(B) (Repl.2008) vests the Board with the authority to set qualifications for applicants. Furthermore, Arkansas Code Annotated section 3^4-704 (Repl.2008) provides that the “Alcoholic Beverage Control Division is authorized to adopt reasonable rules and regulations to carry out the intent and provisions of this subchapter,” and Arkansas Code Annotated section 3-2-205(b)(2) (Repl.2008) provides the Board with the authority to adopt rules and regulations for the supervision and control of the manufacture and sale of alcohol.

From this authority, the Board has enacted the Alcoholic Beverage Control Division Rules and Regulations. These rules and regulations are contemplated by the legislature and within the Board’s jurisdiction. They set forth requirements regarding the supervision and control of alcohol sales and allow the Board to impose conditions to meet these requirements. After a' de novo review of these statutory provisions, we find that the Board had the authority to enact rules and regulations, which included the imposition of conditions on granting permit applications.

Sheppard contends that the Board’s action on February 20, 2013, was to revoke his permit. Only permits that have been issued may be revoked. Ark. Code Ann. § 3-4-301 (a) |s(Repl.20Q8). Sheppard was never issued a permit; the Board merely conditionally granted his application for permit. Therefore, the Board could not have revoked Sheppard’s permit, and we need not address Sheppard’s arguments regarding whether the Board had the authority to revoke his permit and whether it complied with revocation procedures.

Next, we consider whether the Board had the authority to act on Sheppard’s permit following its conditional grant of his application. Arkansas Code Annotated section 3-2-214 (Repl.2008) allows the Board to review, on its own motion, any action of the director in granting or failing to grant, renewing or failing to renew, revoking or suspending, or failing to revoke or suspend upon complaint, any permit. This statutory provision afforded the Board the authority to review Sheppard’s application to determine why the director had failed to issue a permit fifteen months after his application had been conditionally granted.

Finding that the Board had the authority to conditionally grant Sheppard’s application and to hold a review hearing to determine why the director had failed to issue a permit, we shift to Sheppard’s argument that he was not provided with sufficient notice of the proceeding held on February 20, 2013.

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Bluebook (online)
2014 Ark. App. 604, 447 S.W.3d 614, 2014 Ark. App. LEXIS 912, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sheppard-v-arkansas-alcoholic-beverage-control-board-arkctapp-2014.