STATE OF MICHIGAN IN THE COURT OF APPEALS In re HOOTERS OF TROY INC ...
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The web site itself may have changed. You can check the current page or check for previous versions at the Internet Archive.Yahoo! is not affiliated with the authors of this page or responsible for its content.STATE OF MICHIGAN IN THE COURT OF APPEALS In re HOOTERS OF TROY INC. Court of Appeals No. 272155STATE OF MICHIGANIN THE COURT OF APPEALS
In re HOOTERS OF TROY INC.Court of Appeals No. 272155
Plaintiff. OaklandCountyCircuitCourt CaseNo.06-075618AS Hon.JohnJ.McDonald________________________________/
EDWARD G. LENNON PLLC
Edward G. Lennon (P42278)
Attorney for Plaintiff-Appellant
HYMAN LIPPITT, P.C.
Stephen McKenney (P65673)
Co-Counsel for Plaintiff-Appellant
322 N. Old Woodward
Birmingham, MI 48009
(248) 723-1276
CITY OF TROY
CITY ATTORNEYS OFFICE
Lori Grigg Bluhm (P46908)
Christopher J. Forsyth (P63025)
Attorneys for Defendant-Appellee
500 W. Big Beaver Road
Troy, MI 48084
(248) 524-3320
_________________________________/DEFENDANT-APPELLEE CITY OF TROYSBRIEF ON APPEALORAL ARGUMENT REQUESTED2TABLE OF CONTENTSIndex Of Authorities..iii
Statement Of Jurisdictional Basis...1
Counter-Statement Of Questions Involved2
Counter-Statement Of Facts....3
ArgumentA. The Trial Court correctly determined that Troy City Councils decision tonot approve Plaintiff-Appellants request to transfer a Class C liquor
license was a discretionary legislative function....14B. Since Plaintiff-Appellant applied for the transfer of a liquor license and isnot seeking renewal of its existing license, Plaintiff-Appellant is not entitled
to due process as provided in the Michigan and United States
Constitutions...23
C. Troy City Council had legitimate reasons to deny Plaintiff-Appellantsapplication to transfer a Class C liquor license.....26Relief Sought......34
Exhibits:
A.Web Page from Hooters Web Site
B.Aerial photography of Maple & John R Roads
C.Zoning map of Maple & John R Roads
D.Aerial photography of Big Beaver & Rochester Roads
E.Zoning map of Big Beaver & Rochester
F.Photographs of Wagon Wheel Restaurant
G. Big Beaver corridor study
H.Police memorandum
I.Police memorandum addressed to Acting City Manager3J.Preliminary building plans
K.Synopsis of comments from June 19, 2006 Troy City Council Meeting
L.Motion hearing transcript
M. Order denying Plaintiff-Appellants motion4INDEX OF AUTHORITIESCases
Adams Outdoor Advertising, Inc. v City of Holland, 234 Mich App 681,693; 600NW2d 339 (1999) ............................................................................................34Biscos Inc at 716, Shamie v City of Pontiac, 620 F2d 118, 120 (1980)..............24
Biscos Inc. v Michigan Liquor Control Commission, 395 Mich 706; 238 NW2d166 (1976).......................................................................................................18Bundo v City of Walled Lake, 395 Mich 679; 238 NW2d 154 (1976) ..................18
City of Detroit v Hosmer, 79 Mich 384, 387; 44 NW 622 (1890) .........................16
City of Essexville v Carrollton Concrete Mix, Inc. 259 Mich App 257, 268; 673NW2d 815 (2003) ............................................................................................29DeRose v City of Lansing, 13 Mich App 238; 240-01; 163 NW2d 839 (1969......28
Jones v City of Troy, 405 F Supp 464, 471-472 (E D Mich 1975) .......................34
Kropf v Sterling Heights, 391 Mich 139, 162; 215 NW2d 179 (1974)..................29
Morse v Liquor Control Commission, 319 Mich 52,65; 29 NW2d 316 (1947) .....24
Outdoor Systems, Inc. v City of Clawson, 262 Mich App 716, 723-724; 686NW2d 815 (2004) ............................................................................................34Pease v City Council of City of St. Clair Shores, 85 Mich App 371; 271 NW2d236 (1978).......................................................................................................27Scott v Township Board of Arcada Township, 268 Mich 170; 255 NW2d 752(1934)..............................................................................................................15Sun Oil Company v City of Madison Heights, 41 Mich App 47, 53-54; 199 NW 2d525 (1972).......................................................................................................34Warda at 334, citing People v Gardner, 143 Mich 104, 106; 106 NW 541 (1906)........................................................................................................................16White v City of Grand Rapids, 260 Mich 267, 275; 244 NW 469 (1932) .............16
Wojick v City of Romulus, 257 F3d 600, 610 (2001) ...........................................25
Wong v City of Riverview, cited infra, Roselind Inn, Inc. v McClain, 118 Mich App724; 325 NW2d 551 (1982) .............................................................................28Yee v Shiawassee County Board of Commissioners, 251 Mich App 379, 400; 651NW2d 756 (2002). ...........................................................................................28Statutes
MCL 436. 1501(2) ...............................................................................................15
MCL 436.1501 (2)),.............................................................................................30
MCL 436.1501(2) ..........................................................................................20, 23
MCL 691.1408 (2). Id at 329. .............................................................................18
MCL 691.1408(2) ................................................................................................19
Court Rules
MCR 7.215 (J)(1), ...............................................................................................285STATEMENT OF JURISDICTIONAL BASISDefendant-Appellee concurs with Plaintiff-Appellants Statement ofJurisdictional Basis.6COUNTER-STATEMENT OF QUESTIONS INVOLVEDI.Did the trial court properly characterize Troy City Councils conclusionto deny Plaintiff-Appellants application for a transfer of a Class CLiquor License as a discretionary legislative decision?Plaintiff-Appellant answers: NO
Defendant-Appellee answers: YES
The Trial Court answered:YESII.Did the Trial Court properly distinguish between the renewal of anexisting liquor license and the application for a new or a transferredlicense, which is not a property interest that triggers the right of dueprocess, as provided in the Michigan and United States Constitutions?Plaintiff-Appellant answers: NO
Defendant-Appellee answers: YES
The Trial Court answered: YESIII.Did the Troy City Council properly exercise its legislative discretion indenying Plaintiff-Appellants application for a transfer of a Class CLiquor License?Plaintiff-Appellant answers: NO
Defendant-Appellee answers: YES
The Trial Court answered:YES7COUNTER-STATEMENT OF FACTSA. IntroductionPlaintiff-Appellant unsuccessfully filed the underlying lawsuit with theOakland County Circuit Court, seeking an order of superintending control thatwould reverse the Troy City Councils denial of a liquor license transfer request.On June 19, 2006, the Troy City Council denied the application of Hooters ofTroy, Inc. to transfer a Class C (On- Premises) liquor license from the Sign of theBeefcarver to Hooters of Troy, Inc.. This transfer would have allowed thePlaintiff-Appellant to move from its current location, where it has operated forapproximately 10 years, to a new location at the corner of Rochester and BigBeaver Road, in the City of Troy. According to the Plaintiff-Appellantsrepresentations, Hooters of Troy, Inc. entered into an agreement to lease thebuilding at 2950 Rochester Road, which was previously occupied by the WagonWheel Saloon (Wagon Wheel). The Sign of the Beefcarver now owns thebuilding (and the liquor license), and temporarily operated the restaurant as TheWagon Wheel until the time of the above referenced lease agreement.The case in the lower court was expedited by the filing of Defendant-Appellees Motion for summary disposition at the earliest opportunity. Plaintiff-Appellant also filed a motion requesting a superintending control order with theOakland County Circuit Court Judge. After being presented with the argumentsof the parties, Judge John J. McDonald denied Plaintiff-Appellants motionrequesting superintending control. This ruling implicitly granted the Defendant-Appellee City of Troys Motion for Summary Disposition, and a final order was8entered on July 28, 2006 dismissing the case. On August 4, 2006, Plaintiff-Appellant sought a reversal of this order by filing a Claim of Appeal, a Motion forImmediate Consideration, and a Motion for Peremptory Reversal. On August 16,2006, this Court denied Plaintiff- Appellants Motion for Peremptory Reversal,after granting the Motion for Immediate Consideration. Thereafter, Plaintiff-Appellant filed its Brief on Appeal.B. The Nature of Plaintiff-Appellants BusinessPlaintiff-Appellant operates a chain of restaurants that advertise thebusiness as delightfully tacky yet unrefined. (web page from Hooters website,attached as Exhibit A)1. For the purposes of this appeal, however, Plaintiff-Appellant attempts to portray Hooters as a family restaurant, and implies thatHooters is recognized for its casual beach theme. This image is contradictedby the Hooters web site, attached as Exhibit A, where Plaintiff-Appellant boaststhat [t]he element of sex appeal is prevalent in the restaurants. Id. Thewaitresses are referred to as Hooter Girls, and the waitstaff is required to wearorange shorts and tight fitting tank tops. Id. Hooter Girls are the corner stone ofthe Hooters concept. Id. Although Plaintiff- Appellant may attempt to describethe uniforms as casual beach attire, the website explicitly ties the theme toparts of the female anatomy. Plaintiff- Appellant actually boasts on its webpagethat many consider Hooters a slang term for a portion of the femaleanatomy. . . . Id.1 All exhibits attached were presented to the trial court.9C. The Nature of the Proposed New Location of HootersApproximately ten years ago, Hooters opened a restaurant at 1686 JohnR. Road, near the Maple Road intersection in the City of Troy. Plaintiff-Appellantrepresents that this location is primarily residential. However, both Maple andJohn R are five-lane highways. There are business, light industrial, office, andsingle-family residential uses in the vicinity of the John R. Road location ofHooters, as portrayed on the zoning map of the City of Troy (attached as ExhibitB) and the aerial photograph of the area (attached as Exhibit C).Upon information and belief, Hooters negotiated a lease, which includedan agreement to purchase the liquor license for the building at the southeastcorner of Rochester and Big Beaver Roads.2 This building was occupied by theWagon Wheel restaurant, and was located in a predominantly commercial, office,and residential area. (Aerial Photography attached as Exhibit D, and Zoning Mapattached as Exhibit E). The commercial establishments are located near theintersection, and single- family residential homes and condominiums are also inthe immediate vicinity of the building. Id. In addition to the surrounding uses of the proposed new location, thephysical characteristics of the property at 2950 Rochester Road are relevant tothis case. The building is non-conforming, as a result of earlier road wideningprojects on Big Beaver and Rochester Roads. The building is a legal non-conforming structure because it lacks setbacks and is located extremely close tothe rights-of-way for both Big Beaver and Rochester Road. (Exhibit D, andPhotographs of Wagon Wheel, attached collectively as Exhibit F). The building is2 Plaintiff-Appellants Brief on Appeal at 3.10also located just off the Rochester Road I-75 expressway entrance ramp, andserves as a gateway to the Big Beaver Corridor in the City of Troy. (Exhibit D).The Big Beaver Corridor is an extension of the Troy Downtown DevelopmentDistrict, which covers Big Beaver Road, between Adams and John R. Road.Rochester Road intersects Big Beaver at approximately the mid-point of the BigBeaver Corridor. (City Council Agenda Item, Big Beaver Corridor Study, attachedas Exhibit G). The Big Beaver corridor features many corporate headquarterlocations, as well as fine dining restaurants and upscale shopping, including theSomerset Mall. Id. Prior to the initiation of this lawsuit, and also independent ofthis lawsuit, the Troy Downtown Development Authority commissioned acomprehensive planning study of the Big Beaver Corridor, which was designed toprovide ideas, mechanisms, and a plan to transform the Corridor into a world-class boulevard. Id.D.Application Process for Transfer of Class C Liquor License
As stated in the brief of Plaintiff-Appellant, Hooters submitted anapplication to the Michigan Liquor Control Commission on January 17, 2006,seeking to transfer the Wagon Wheel Class C liquor license.3 In accordance withprocedures established pursuant to the Michigan Liquor Control Commission,MCL 436.1101 et. seq., any such request would initiate the multi-step applicationprocess. One of these steps is to secure the recommendation of approval fromthe local legislative body, which is the Troy City Council.The application is not submitted to the Troy City Council until the TroyPolice Department has conducted its required background investigation of the3 Plaintiff-Appellants Brief on Appeal at 3.11applicants. As a part of this required investigation, the Troy Police Departmentreviewed the ten- year liquor compliance history of the John R. Road Hooterslocation. According to the record, Hooters had three liquor license violationsduring the preceding ten- year period of time. (Police memorandum, attached asExhibit H). The record also revealed that the Troy Police Department hadreceived eighty service calls to the John R. Hooters location since 2001. Id.These service calls could include break-ins, fights, disturbances, liquor violations,or any other incident where the Troy Police Department were called to therestaurant. This number of service calls was extremely high, in comparison tothe number of service calls received by Joe Kools, Spectadium, and the WagonWheel, which are all comparable Class C licensed establishments. According tothe report, Joe Kools had only 15 service calls to the Troy Police Department forthe same period of time. Spectadium had 6 service calls since 2001, and theWagon Wheel had 27 service calls. Id. Plaintiff-Appellant attempts to minimizethis distinction by intimating that almost all of the calls at the Hooters locationwere related to larcenies from vehicles. However, a close review of the numbersreveals that Hooters also had more service calls for suspicious vehicles,customer troubles, and stolen vehicles than the other Class C establishments.Plaintiff-Appellant initially inferred that the Troy Police Departmentsupported the requested transfer of the Wagon Wheel license to Hooters. In theappellate brief, Plaintiff- Appellant correctly states that the Troy PoliceDepartment was not opposed to the requested transfer of the Wagon Wheel12license to Hooters, which was set forth in a memo to the Acting City ManagerJohn Lamerato. (Attached as Exhibit I).Plaintiff-Appellants Statement of Facts fails to mention that Hooters alsosubmitted preliminary building plans to the City of Troys Building Departmentprior to City Council consideration of the requested transfer of the liquor license.These plans show the type and extent of remodeling that Hooters initiallyintended for 2950 Rochester Road location. (Preliminary Plans attached asExhibit J). According to these plans, Hooters intended to retain the footprint ofthe building, but was going to substantially add to the signage on the building.The plans call for two large owls to be painted on the north and south sides of thebuilding, as well as LED (lighted) signs with the Hooters name at four prominentpositions on different parts of the building. Id.E.Troy City Councils ConsiderationPlaintiff- Appellants request for a transfer of the Sign of the BeefCarvers Class C liquor license was an agenda item at the June 19, 2006 regularmeeting of the Troy City Council. At that time, there were some members of thepublic who addressed the City Council. Plaintiff-Appellants representatives alsospoke at that meeting, and addressed some of the concerns of the Councilmembers. The Council members deliberated the matter, and subsequentlydenied the request. Although Plaintiff-Appellant focuses on the commentsconcerning the impression or image of Hooters, this was only one item that wasdiscussed at the City Council meeting. (See attached Synopsis of Commentsfrom City Council Meeting, attached as Exhibit K.) For example,13Councilmember Fleming was concerned about the number of liquor violations atthe John R. Hooters location during the past ten years. Id. CouncilmemberBroomfield highlighted the increased visibility of the Rochester Road location,and questioned whether Hooters would be appropriate at this particularintersection. Id.F. ProceduralHistoryIn the Oakland County proceedings, which were filed almost immediatelyafter the Troy City Council meeting, Plaintiff-Appellant unsuccessfully challengedthe City Council denial as an arbitrary and capricious action. Plaintiff-Appellantalso alleged unconstitutional due process and/or equal protection rightsviolations. In this action, Plaintiff-Appellant unsuccessfully filed a motionrequesting a superintending control order that would have essentially forced theTroy City Council to approve the requested transfer of the liquor license fromSign of the Beefcarver to Hooters of Troy, Inc. . The Court, however, rejectedPlaintiff- Appellants arguments, and recognized that there was legislativediscretion afforded to the Troy City Council, as a legislative body, in its liquorlicense transfer decision (Transcript of Motion Hearing, attached as exhibit L).This discretion, however, could not be exercised in an arbitrary or capriciousfashion. In an oral opinion, the Court concluded that the Troy City Council hadproperly exercised its legislative discretion, and opined: as long as theressome basis for it and its not arbitrary and capricious. I am going to deny yourrequest. Id. On July 28, 2006, the Court entered its final order, denying Hooters14motion and dismissing its complaint. (Order Denying Plaintiffs Motion, attachedas exhibit M).ARGUMENTA. THE TRIAL COURT CORRECTLY DENIED PLAINTIFF-APPELLANTSREQUEST FOR SUPERINTENDING CONTROL, BASED ON THECONCLUSION THAT TROY CITY COUNCILS DECISION TO DENYPLAINTIFF-APPELLANTS REQUEST TO TRANSFER A CLASS C LIQUORLICENSE WAS A DISCRETIONARY LEGISLATIVE FUNCTION.1. Standard of ReviewSuperintending control is an extreme remedy that should only be grantedwhen the Plaintiff has no legal remedy and it has been shown that the lower courtor tribunal has failed to perform a clear legal duty. Shepard Montessori CenterMilan v Ann Arbor Charter Township, 259 Mich. App. 315, 347; 675 NW2d 271(2003). Plaintiff has the burden to present proof that Defendant has a clear legalduty to perform in the manner requested. In re Rupert, 205 Mich. App. 474, 478;517 NW2d 794 (1994). An order denying a request for superintending control isreviewed for an abuse of discretion. Id.2. ArgumentPlaintiff-Appellant has failed to satisfy the burden of proof to reverse thetrial courts decision denying the motion for an order of superintending controland dismissing the case. In making his ruling, Judge McDonald properlyrecognized long held principles that municipalities are given broad discretion with15respect to the regulation of liquor within their boundaries, and that courts shouldnot interfere with this discretion.According to Scott v Township Board of Arcada Township, 268 Mich 170;255 NW2d 752 (1934) the Michigan Liquor Control Act (Act) clearly gives amunicipality full discretion in deciding whether to approve a transfer of a liquorlicense. The Act does not contain any express limitations or set forth anymandatory criteria for this discretion. There is also no explicit right in thelegislation that allows the Courts to review this exercise of a municipalitysdiscretion.MCL 436. 1501(2) sets forth the application process for new andtransferred liquor licenses, and it provides in relevant part:An application for a license to sell alcoholic liquor for consumption
on the premises, except in a city having a population of 750,000 or
more, shall be approved by the local legislative body in which
the applicant's place of business is located before the license is
granted by the commission, except that in the case of an
application for renewal of an existing license, if an objection to a
renewal has not been filed with the commission by the local
legislative body not less than 30 days before the date of expiration
of the license, the approval of the local legislative body shall not be
required. The commission shall provide the local legislative body
and the local chief of police with the name, home and business
addresses, and home and business phone numbers to
accomplish the local legislative reviews of new and transferred
license applications required by this subsection. (emphasis
added)This section delegates to each municipality the legislative function ofreviewing applications for new or transferred liquor licenses, and it clearly gives acity, village, or township complete discretion as to whether to approve anapplication for these types of liquor license. Scott, at 173.16Michigan law has long held that Courts should not interfere with amunicipalitys discretionary legislative power. Randall v Township Board ofMeridian Township, 342 Mich 605, 608; 70 NW2d 728 (1955). As noted by theCourt in White v City of Grand Rapids, 260 Mich 267, 275; 244 NW 469 (1932)[T]he main thing plaintiffs forget is the principle of law so often approved byour Supreme Court, that the discretion vested in city officials is not subject toreview by the Courts Id.; see also City of Detroit v Hosmer, 79 Mich 384, 387; 44NW 622 (1890). The Michigan Supreme Court recently stated in Warda v. City ofFlushing, 472 Mich. 326, 696 NW2d 671 (2005):The general rule is well established that courts will not inquire into
the motives of legislators where they possess the power to do the
act, and it has been exercised as prescribed by the organic law. In
such case the doctrine is that the legislators are responsible alone
to the people who elect them. And this principle is generally applied
to purely legislative acts of municipal corporations. Warda at 334,
citing People v Gardner, 143 Mich 104, 106; 106 NW 541 (1906). InScott, supra, Plaintiff sought approval of an on-premises beer and winelicense from the Arcada Township Board. Scott at 171. The Township Boardrefused to approve the liquor license request. Id. Plaintiff then filed with thecircuit court a complaint seeking a writ of mandamus, asking the court to compelthe Arcada Township Board to approve his application for a liquor license. Id.The trial court refused to issue a writ, and Plaintiff appealed, arguing that theTownship Board acted arbitrarily and capriciously. Id.In ruling against Plaintiff in the Scott case, the Michigan Supreme Courtbegan its analysis of Plaintiffs claim by looking at the statute that was in effect atthat time, which is almost identical to the present statute. Id at 172. Specifically,17the Supreme Court examined Section 17 of Act No. 8, First Extra Session 1933,which states in part all applications for licenses to sell beer and/or wine and/orspirits for consumption on the premises shall be approved by the local legislativebody Id.Based on the clear and unambiguous language of the statute, the ScottCourt opined that the statute gives a municipality broad discretion in liquorlicensing matters. Such discretionary action is not subject to review by a Court.Id at 174. The Court stated:The Legislature provided in no uncertain terms that plaintiff's
application for a license must be approved by the defendant board.
It contains no direction or guide to the board, and no definite rule by
which is [sic] shall be governed in its action in approving or
declining to do so. The purpose of the provision undoubtedly was to
permit each local municipality to determine whether beer and wine
should be sold for consumption on the premises within its limits. To
avoid the expense incident to submitting the question of approval to
the voters, its determination was left to the township board, the
official representative of the township. By so doing the Legislature
assumed that this board by its determination would represent the
judgment of the voters. Id at 173.Although the Michigan Supreme Court discussed the validity of Scott inBundo v City of Walled Lake, 395 Mich 679; 238 NW2d 154 (1976) and BiscosInc. v Michigan Liquor Control Commission, 395 Mich 706; 238 NW2d 166(1976), there can be no doubt that the principles regarding legislative discretionestablished in Scott are valid. This is especially true in light of the 2005 SupremeCourt decision Warda v City Council of City of Flushing, supra.The issue in Warda was whether a Court had the jurisdiction to review aCity Councils decision to refuse reimbursement of attorney fees to one of itspolice officers, who was a defendant in a criminal case that was ultimately18acquitted. Id at 328. After his acquittal, the police officer requested that theFlushing City Council reimburse him for all attorney fees incurred in his defense,which is authorized by MCL 691.1408 (2). Id. at 329. The City Council deniedthis request, and Plaintiff filed suit, contending the City Council abused itsdiscretion in failing to pay his attorney fees. Plaintiff also requested declaratoryrelief. Id. After a bench trial, the Court awarded Plaintiff attorney fees and foundthat the City Council failed to offer any credible or acceptable reason for denyinghis request for reimbursement of attorney fees. Id at 330. The Court of Appealsaffirmed the trial court. Id. The Michigan Supreme Court reversed the Court ofAppeals. In so doing, the Supreme Court reviewed the statutory language thatgoverns reimbursement of attorney fees (MCL 691.1408(2)). The Court opined:this statute uses the word may which means that the decision to pay an officerattorney fees is a matter left to the discretion of the municipality. Id at 331-33</i>2.Since there was no statutory language, words, or phrases that would otherwiselimit or qualify the discretion of the City Council, the Supreme Court held that theCity Council had complete discretion in deciding whether to pay attorney fees. Id.After determining that the municipality was vested with discretion, theCourt next discussed the jurisdiction of the courts to review a purely discretionaryaction taken by a governmental agency. Id. The Court concluded that there is nojudicial review of these municipal discretionary decisions, based on the languageof the statute. Id. at 333. The statute uses the word may, and says nothingabout the limits within which that discretion is to be exercised. Based on this,the Michigan Supreme Court decided that the decision of the Flushing City19Council could not be reviewed and/or reversed by the Court. Id. Whether thecouncil acted wisely or unwisely, prudently or imprudently, is not for theconsideration or determination of this court. Id. Following this, discretionarymunicipal decisions are reviewable only when there is some allegation (andproof) that the municipality violated the Constitution. Id. at 335.Scott and Warda make it clear that in cases where municipalities areprovided with complete discretion, the Court cannot overturn such a discretionarylegislative decision, even if there is disagreement with the decision. MCL436.1501(2) gives the Troy City Council complete and total discretion in decidingwhether to approve the request to transfer a Class C Liquor License to Hooters(Plaintiff- Appellant). There are no limitations to this legislative discretion setforth in the statute (MCL 436.1501 (2)). Similarly, there are no mandatoryguidelines for a City Council to follow in making its legislative determinations.There is no express provision for an appellate review process. In other statuteswhere appellate review of a decision is contemplated, the statutes set forth thespecific process, or at least some guidelines for review of a decision. There areno such guidelines set forth in MCL 436.1501 (2), the statute that vests totallegislative discretion for the approval of new or transferred liquor licenses withthe municipality. The trial court properly recognized this principle when itconcluded that Troy City Council is a legislative body that is vested withdiscretion, and denied Plaintiffs motion and dismissed its complaint.Plaintiff-Appellant incorrectly argues that the Michigan Supreme Courtinvalidated Scott in Bundo. There is no explicit language expressly invalidating20Scott in the Bundo case. In addition, the facts of Bundo are distinguishable fromthe facts in the Scott case. The Scott case is controlling law for this case.In Bundo, the Plaintiff was a current holder of a liquor license who wasseeking a renewal of the existing license. Id at 684. The renewal of liquorlicenses occurs annually and automatically under Michigan law. (MCL436.1501(2)). This is distinguishable from a new license or a transferred license.In Bundo, the Court recognized that the possession of an existing liquor licensewas a property interest that entitled Plaintiff to due process before the licensewas taken away. Id at 695. Once a liquor license has been granted, a licensee isrequired to make a significant investment into a building and/or the business. Idat 694. This is not necessarily true of new liquor licenses or transferred liquorlicenses, where there are escape clauses if a licensee is unable to secure aliquor license. A new or a transferred liquor licensee similarly does not generallyrequire the same level of investment into fixtures and furniture, which aregenerally purchased after a new or transferred liquor license is acquired. Oncea licensee has an existing business, and has expended start up costs, as well asadvertising dollars, a licensee has a property interest, and due process must beafforded before a license can be taken away. The Bundo case is applicable inthose cases where a municipality objects to the automatic renewal of an existingliquor licensee, and it precludes the municipality from acting in an arbitrary andcapricious manner in its review. Id at 698. The Bundo Court recognized thisdistinction between new and existing liquor licenses, and explicitly stated, ourholding that courts may review arbitrary and capricious actions taken by21legislative bodies in recommending to the MLCC that liquor license not berenewed in no way reduces the traditional and broad authority of these bodiesId at 704. (emphasis added). In order to support its argument that Scott was overruled, Plaintiff-Appellant takes a quote from the Bundo case out of context, and concludes:Thus in ScottJohnson v Michigan Liquor Control Commission, supra, wasmisconstruedcases which misconstrued the law no longer can be followed.4However, Scott is not expressly overruled in the Bundo case. The passage fromBundo actually states, Hanson and the other cases which misconstrued the lawno longer can be followed. Id. at 703. In the next sentence, which is crucial, theBundo Court stated: In those instances where there has been a showing that theactions of the local legislative bodies in recommending non renewal of liquorlicenses have been arbitrary and capricious, those actions are subject to judicialreview. Id. (emphasis added). Bundo did not decide the same issues as Scott,since Bundo discussed renewal of existing liquor licenses, and Scott involvedapplications for new or transferred licenses, which are distinguishable, as setforth above. Oakland County Circuit Court Judge McDonald understood thedistinction between Bundo and Scott, and correctly deferred to the City of Troy,which was vested with the authority to approve or deny the request for a transfer/new license request. There were no required elevated protections, as in Bundo,since there was no existing liquor license at issue. Plaintiff-Appellant also unsuccessfully argues that Warda was notapplicable to this case. In its brief, Plaintiff-Appellant claims that Warda was4 Plaintiff-Appellants Brief on Appeal at 12.22solely limited to the issue of whether a [sic] there was judicial review of a citycouncils determination to deny a request for reimbursement of attorney fees.5However, Plaintiff-Appellant misinterprets Warda, just as it misinterpreted Bundo.The Warda court unambiguously held that when a state statute gives agovernmental agency full discretion to make a decision, there is no judicialreview of the agencys decision. The Warda Court stated in the concludingsection of the opinion:Where a statute permits a governmental agency to undertake a
discretionary decision, and provides no limits to guide either the
agencys exercise of that discretion or the judiciarys review of that
exercise, the decision is not subject to judicial review absent an
allegation that the exercise of discretion was in some way
unconstitutional. Warda at 341.
Wardas holding was not limited to the attorney fee statute, and insteadwas extended to all statutes, including MCL 436.1501(2), which gives amunicipality full discretion to approve an application for a new or transferredliquor license. If Warda was intended to have limited application, then the Courtwould not have used the terminology a statute, but instead would haveexpressly limited or identified the statutes to which the principle applied.Following this, the trial court correctly concluded that Troy City Council is alegislative body that is given discretion in deciding whether to approve anapplication for the transfer of a Class C Liquor License. Plaintiff-Appellant hasfailed to meet its burden to demonstrate that the lower court abused itsdiscretion. Therefore, the trial court determination should be upheld.5 Plaintiff-Appellants Brief on Appeal at 13 fn 7.23B. PLAINTIFF-APPELLANT APPLIED FOR THE TRANSFER OF THELIQUOR LICENSE OF ANOTHER ENTITY, WHICH IS TREATED AS A NEWLICENSE APPLICATION, WHERE THERE IS NO ENTITLEMENT TO DUEPROCESS1. Standard of ReviewDefendant-Appellee concurs with the Standard of Review set forth byPlaintiff-Appellant on page 6 of its brief.2. Argument
As previously stated, the trial court properly recognized that municipalitiesare provided with complete discretion in deciding whether or not to grant a newliquor license. As set forth infra, Warda holds that discretionary municipaldecisions are not reviewable unless there is an allegation and evidence that themunicipality violated the Constitution. In an effort to reverse the trial courtsaffirmance of the City of Troys denial of the transfer application, the Plaintiff-Appellant asserts that the City violated Hooters constitutionally guaranteedproperty rights. It claims it has a property interest in its license, which isprotected by the constitutional right to due process.6 Plaintiff-Appellants claimlacks merit.The courts have long held that there are no due process rights related toapplications for new or transferred liquor licenses. Morse v Liquor ControlCommission, 319 Mich 52,65; 29 NW2d 316 (1947); Biscos Inc at 718 fn 15;Shamie v City of Pontiac, 620 F2d 118, 120 (6th Cir 1980); Wong v City ofRiverview, 126 Mich App 589, 593; 337 NW 2d 589 (1983). According toShamie, In the present case, Shamie is a first time liquor license applicanthe6 Plaintiff-Appellants Brief on Appeal at 14.24does not enjoy procedural due process rights. Also, in Wojick v City ofRomulus, 257 F3d 600, 610 (6th Cir 2001), the Court stated, As partiesrequesting the transfer of an entertainment permit,7 Plaintiffs were essentially inthe position of new applicants and did not have a property interest so as toentitle them to procedural or substantive due process rights The Wojick Courtfurther stated:Mrs. Wojcik is therefore not entitled to the same due process
protections she would enjoy if she were seeking to secure the
renewal or to prevent the revocation of a permit which she had
herself possessed at some point. Without a protected property or
liberty interest at stake, Plaintiffs cannot prove a due process
violation as a matter of law. Id at 611
In this case, Plaintiff-Appellant Hooters is not seeking a renewal of anexisting license, and neither is the City of Troy attempting to revoke a currentliquor license. Plaintiff-Appellant would like this Court to transfer any propertyinterest it has in the John R. Road Hooters restaurant to the new location at BigBeaver and Rochester Road. However, this case is required to be processed asa new liquor license application, since Hooters is actually seeking the liquorlicense that currently belongs to the Sign of the Beefcarver. Like the Plaintiff inthe Wojick case, Plaintiff-Appellant in this case does not have a property interestin the transfer of Wagon Wheels liquor license. Plaintiff-Appellant admits this inits brief: Admittedly, in the current application, Hooters is seeking transfer ofWagon Wheels license and seeking to place its own license in escrow.87 An entertainment permit is issued by the Michigan Liquor Control Commission pursuant to theAct, and is treated in the same manner as a liquor license. Wojcik at 609.8 Plaintiff-Appellants Brief on Appeal at 14.25Plaintiff-Appellant disingenuously argues that its existing liquor license atthe John R. Hooters restaurant extends due process guarantees to therestaurant at Big Beaver and Rochester Road. There is no legal support for thisargument. Each liquor license application is evaluated independently, andconsiders the characteristics of the prospective operators, as well as the uniquecharacteristics of the location of the establishment. This case does not involve aproposed revocation or an objection to the automatic renewal of the existinglicense at the John R. Road Hooters Restaurant. This case does not impact theexisting liquor license, which Plaintiff-Appellant indicates it would put into escrowif Hooters were granted the liquor license that currently belongs to the Sign of theBeefcarver. The only liquor license at issue in this case is the liquor license thatcurrently belongs to the Sign of the Beefcarver, and is issued for the Rochesterand Big Beaver Road location. This is the license that Hooters has requested totransfer. Hooters had no guarantee that it would receive this license from theSign of the Beefcarver. As such, the law concerning a new liquor license isapplicable to this situation. Plaintiff-Appellant is not entitled to due processprotections, since there are no property rights in applications for new ortransferred liquor licenses.26C. TROY CITY COUNCIL HAD LEGITIMATE REASONS TO DENYPLAINTIFF-APPELLANTS APPLICATION TO TRANSFER A CLASS CLIQUOR LICENSE.1. Standard of ReviewDefendant-Appellee concurs with the Standard of Review set forth byPlaintiff-Appellant on page 6 of its brief.2. ArgumentPlaintiff-Appellant incorrectly argues that Troy City Council acted arbitrarilyand capriciously in refusing to approve its application. Like the other argumentsraised by Plaintiff-Appellant, this argument also lacks merit. There were severallegitimate reasons that led the Troy City Council to deny Plaintiff-Appellantsapplication. As such, Plaintiff-Appellant has failed to show that the trial courtabused its discretion in denying its motion and dismissing its case. The trial courtdecision should be affirmed.Plaintiff-Appellant extensively cites to Pease v City Council of City of St.Clair Shores, 85 Mich App 371; 271 NW2d 236 (1978) in support of its positionthat Troy City Council allegedly acted arbitrarily and capriciously.9 However,Pease and other Court of Appeals cases cited by Plaintiff-Appellant are no longerviable, in light of the recent Michigan Supreme Court declarations in the Wardacase.10 Warda makes it clear that there is no judicial review of a local legislativedecision when it is exercised pursuant to a statute that vests full discretion with9 Plaintiff-Appellants Brief on Appeal at 6-8.10 Wong v City of Riverview, cited infra, Roselind Inn, Inc. v McClain, 118 Mich App 724; 325NW2d 551 (1982). Plaintiff-Appellant also cites to DeRose v City of Lansing, 13 Mich App 238;
240-01; 163 NW2d 839 (1969), which was published before Bundo and Biscos Inc. In DeRose,
there was an allegation, and actual evidence that the City of Lansing violated Plaintiff-Appellants
equal protection rights. Id at 240, 241. Therefore, DeRose is distinguishable from Plaintiff-
Appellants case, and the other Court of Appeals decisions cited by Plaintiff-Appellant.27the legislative body, and does not contain any express limitations or mandatoryguidelines for the exercise of the discretion.Plaintiff-Appellant implies that this Court has no choice but to reverse thetrial Court, based on the Pease decision.11 However, Pease was decided priorto November 1, 1990, and as such, it is not mandatory precedent. According toMCR 7.215 (J)(1), the Court of Appeals is not bound to follow Court decisionsreleased prior to November 1, 1990, and especially this case, which has beenimplicitly overruled by the Warda case, which was just recently decided by theMichigan Supreme Court. Yee v Shiawassee County Board of Commissioners,251 Mich App 379, 400; 651 NW2d 756 (2002).This Court does not need to expressly overrule Pease and its progeny,however, since Plaintiff-Appellant has not met its burden to prove that the TroyCity Council acted arbitrarily and capriciously in refusing to approve the transferof the liquor license. The facts in this case are easily distinguishable from thefacts in the Pease case.First, if a legislative decision is to be reviewed, the Court must review thecase in an extremely narrow manner. Wong at 593. The Courts inquiry islimited to whether the city has acted arbitrarily and capriciously. Id. A city hasnot acted arbitrarily and capriciouslywhen the reviewing court can determineon the record that the decision not to issue the liquor license was neitherarbitrary and capricious. Id. Arbitrary is defined as without consideration oradjustment with reference to principles, circumstances, or significance. Bundo at703 fn 17. Capricious is defined as freakish; whimsical; humorous. Id.11 Plaintiff-Appellants Brief on Appeal at 1.28Arbitrary and capricious is a term that is also used in zoning cases, and isdefined as an arbitrary fiat, a whimsical ipse dixit, where there is no room forlegitimate differences of opinion. City of Essexville v Carrollton Concrete Mix, Inc.259 Mich App 257, 268; 673 NW2d 815 (2003), Kropf v Sterling Heights, 391Mich 139, 162; 215 NW2d 179 (1974).Although the Court did not articulate the basis of the alleged due processentitlement, the Court of Appeals did grant judicial review of the municipalitysdenial of a liquor license denial in Pease. In Pease, Plaintiff had an agreement topurchase a business that was currently operating under a Class C liquor license.The Plaintiff wanted the liquor license to be transferred to her and her partners.Id., at 372. Plaintiff initially appeared before City Council, where the request totransfer the liquor license was deliberated. After that meeting, and in response tosome of the concerns that were raised at the meeting, Ms. Pease modified theapplication and the accompanying plans to obviate the concerns that were statedat that meeting. Id at fn 1. This process was repeated after the second and thirdtime that Plaintiff appeared before the City Council. When her revisedapplication was denied by the City Council a fourth time, Plaintiff filed a complaintseeking an order of superintending control. Id.Plaintiffs repeated modifications to her application, which were made toobviate some of the articulated concerns of the City Council, could have providedthe Court with some justification for reversing the City Councils denial of theliquor license. The Pease Court avoided the statutory language of MCL29436.1501(2), and instead relied upon its own (and arguably erroneous)interpretation of Bundo, as well as decisions from other jurisdictions. Id at 373.The Pease Court created its own set of factors to consider in anapplication for a liquor license, which were largely derived from cases in otherjurisdictions. These factors include the moral character of applicant, theapplicants compliance with zoning ordinances, the fitness of the building, andpeculiar circumstances of time and place. Id. According to Pease, amunicipalitys decision on a liquor license application that was based on theseenumerated factors would defeat a claim that the decision was arbitrary orcapricious. Id at 374, 375. If the enumerated criteria were not applicable to aspecific request, then the Pease court required that the denial of a liquor licensemust be based on some unusual circumstance or other criteria that wouldreasonably justify such a refusal. Id.The Pease Court expressly recognized the broad discretion granted tomunicipalities in making liquor license decisions. The Court expressly stated:we do not intend to limit the broad discretion of local bodies in granting ordenying liquor license applications. Id at 375, fn 3. However, Plaintiff-Appellantignores this holding, and argues that the failure to specifically address each ofthe enumerated criteria of Pease results in an arbitrary and capricious decision.The Pease court analyzed the reasons given by the City Council of St.Clair Shores in repeatedly denying Plaintiffs request for a transfer of a liquorlicense. The Pease Court determined that the objections raised by the St. ClairShores City Council were general in nature, devoid of merit, and were not30supported by any evidence, and were therefore arbitrary and capricious. Id at377, 378.The instant case is quite different than Pease. In this case, Plaintiff-Appellant appeared before Troy City Council only one time. Unlike in Pease, theTroy City Council did not make any implicit promises that might lead an applicantto rely on approval if suggested modifications were made. There was noguarantee that the Troy City Council would approve the requested transfer of theliquor license. The Troy City Council also had concrete evidence of disparitybetween this liquor license applicant and other liquor licensees in the City. First,Hooters had three liquor license violations at its John R. restaurant during thelast ten years. (Police memorandum, attached as Exhibit H). There were also adisproportionate amount of police runs to the John R. Road location of Hooters.Id. Hooters had 80 runs, which was significantly more runs than the other threerestaurants combined. Id. This is important to note for two reasons. First, theTroy Police Departments continual presence at Plaintiff-Appellants restaurant isa drain on city resources, even if the restaurants management is not directlyresponsible for the majority of the offenses. Second, Hooters proposed move toa location that was even closer to the exit ramp to I-75 could exacerbate thisproblem because suspects and criminals could flee easily and elude capture byentering onto the I-75 expressway. (see Exhibits D and E).This location right off of the Rochester Road expressway, and at thegateway to the Big Beaver Corridor, is another unusual circumstance thatjustifies the Troy City Councils decision to deny the requested transfer of the31liquor license. The building at Rochester Road and Big Beaver is highly visibleand aesthetically incompatible with surrounding uses. City Council wasconcerned about the visibility of Hooters in this particular area. (see Exhibit K).The restaurant is also extremely close to the intersection of Rochester and BigBeaver Roads, which provides for even greater visibility, since it protrudes closerto the road than all other adjacent buildings. (see Exhibits D, E, and F). UnlikeHooters current location, the Wagon Wheel restaurant is not set back from thesetwo streets. Id.Plaintiff-Appellant is also proposing to draw more attention to the buildingby constructing four large signs, and by painting two orange owls on either sideof the building. (see Exhibit J). The building will also have exposed outdoorseating, which is visible from Rochester Road. (see Exhibit K). The presence ofscantily clad Hooter Girls in this area will likely add to the increased visibility ofthe restaurant, and especially for those motorists exiting the I-75 expressway andentering Troy. (Exhibits D and F).A Hooters at this location would be highly visible, as well as aestheticallyincompatible with other businesses, restaurants, or uses at or near RochesterRoad and Big Beaver. This intersection is a part of the Big Beaver Corridor,where there are corporate headquarters, fine dining establishments, and upscaleshopping. (see Exhibit G). The City has already commissioned a study toimplement upgrades to the Corridor, and is prepared to work towards turning BigBeaver into a world-class boulevard. Id.32Hooters promotes itself as anything but world class. According to itswebsite, Hooters relishesthe fact that its name is a double entendre. (see ExhibitA). According to the website, Hooters is not a typical family restaurant andHooters unabashedly markets sex appeal. Id.Hooters waitresses, referred to asHooter Girls wear sexually provocative uniforms. Id. Hooters describes itsbusiness as delightfully tacky yet unrefined, which would clash with thebusinesses that currently exist in the Big Beaver Corridor, and undermine theCitys efforts to turn it into a world-class boulevard.A municipalitys interest in aesthetics is a legitimate basis to restrict aparticular use. Adams Outdoor Advertising, Inc. v City of Holland, 234 Mich App681,693; 600 NW2d 339 (1999), Outdoor Systems, Inc. v City of Clawson, 262Mich App 716, 723-724; 686 NW2d 815 (2004). As the Court of Appeals stated inthe context of litigation involving restriction of a sign advertising a gas station,[w]e should begin to realizethat a visually satisfying city can stimulate anidentity and pride which is the foundation for social responsibility and citizenship.These are proper concerns of the general welfare. Sun Oil Company v City ofMadison Heights, 41 Mich App 47, 53-54; 199 NW 2d 525 (1972). Mostimportantly, it is proper and legitimate for a City Council to consider land use anddevelopment issues, like the above outlined aesthetic concerns, when reviewingliquor license applications. Jones v City of Troy, 405 F Supp 464, 471-472 (E DMich 1975). A Hooters at this particular location is no different than an unsightlybillboard. The Troy City Councils aesthetic concern is a reasonable and33legitimate basis for not approving the transfer of the liquor license, and asdistinguished from Pease, there is ample concrete evidence that supports thisaesthetic concern. This is a legitimate concern, just as the criminal activityconcerns outlined above are also legitimate concerns on which to base arejection of a liquor license transfer.Plaintiff-Appellant disingenuously argues that these above referencedconcerns are unrelated to the sale of liquor, since Troys denial of the transfer ofthe liquor license would not prevent a Hooters restaurant, exclusive of liquorsales from locating at the Big Beaver and Rochester Road location12. The onlyitem for action by the Troy City Council was whether or not to approve a transferof the liquor license. Upon information and belief, all of the Hooters restaurantsin the chain serve alcohol, so it would be very unlikely that the restaurant wouldoperate exclusive of liquor sales. Some of the factors that were considered bythe Troy City Council are exacerbated with the serving of alcohol. For example,the number of police runs to a restaurant will likely be impacted by the service ofalcohol. The Plaintiff-Appellants past liquor license record (3 violations in thepast 10 years) is also something that is directly related to liquor consumption.The Troy City Council also properly considered the impact of an approval of thetransfer of the liquor license on its existing license at the John R. Road location.Hooters represented that the current license for the John R. Hooters locationwould ultimately be sold or placed in escrow. It is unknown how long the escrowperiod would be. The approval of the requested transfer of the liquor licensecould result in having the building of the current Hooters vacant, for a extended12 Plaintiff-Appellants brief on Appeal at 1534period of time, which could contribute to blight in the City. In addition, there wasno binding commitment to limit Hooters to having only one location in the City ofTroy. The possibility of two potential Hooters restaurants was also be a validconsideration of the Troy City Council. The Troy City Council had severalreasons that supported the denial of the application to transfer the liquor license.As such, the trial court properly denied Plaintiff- Appellants motion, anddismissed its case. Plaintiff has not established that the trial court abused itsdiscretion in its factual analysis. This Honorable Court should affirm the trialcourts well-reasoned opinion.RELIEF SOUGHTDefendant-Appellee City of Troy respectfully requests this HonorableCourt to affirm the trial Courts order denying Plaintiff-Appellants Motion forOrder of Superintending Control and dismissing Plaintiff-Appellants case.Respectfully submitted:CITY OF TROY CITYATTORNEYSOFFICE
By:___________________________
LoriGriggBluhm(P46908)Christopher J. Forsyth (P63025) AttorneysforDefendant 500W.BigBeaverRoad Troy,MI48084Dated:_____________ (248)524-3320
refer page:-------http://www.officesoon.com/doc/110084-state-of-michigan-in-the-court-of-appeals-in-re-hooters-of-troy-inc
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