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The City of Burlington v. The Washington State Liquor Control Bd.

Court of Appeals of Washington, Division 1

May 26, 2015

The City of Burlington , Appellant ,
v.
The Washington State Liquor Control Board et al. , Respondents

Oral Argument November 7, 2014.

As amended by order of the Court of Appeals June 22, 2015.

Page 876

Appeal from Thurston Superior Court. Docket No: 12-2-01879-8. Judge signing: Honorable Christine Schaller. Judgment or order under review. Date filed: 10/25/2013.

Philip A. Talmadge and Thomas M. Fitzpatrick (of Talmadge/Fitzpatrick/Tribe ); and Leif P. Johnson, City Attorney, for appellant.

Robert W. Ferguson, Attorney General, and Mary M. Tennyson and R. July Simpson, Assistants ; and Corbin T. Volluz (of Law Office of Corbin T. Volluz ), for respondents.

Daniel G. Lloyd and Josh Weiss on behalf of Association of Municipal Attorneys and Association of Counties, amici curiae.

Authored by Linda Lau. Concurring: Mary Kay Becker, Michael J. Trickey.

OPINION

Page 877

[187 Wn.App. 858] Lau, J.

[¶1] The city of Burlington (City), Washington, appeals the Washington State Liquor Control Board's (Board) decision to grant a spirits license to Hakam Singh and to allow Singh to relocate the license from the previously state-run location to a small convenience store he already owned.[1] The City argued the Board exceeded its statutory authority by allowing Singh to relocate the spirits license. The trial court rejected the City's appeal, concluding the City lacked standing to seek judicial review of the Board's action under the Administrative Procedure Act (APA), chapter 34.05 RCW. Because the Board's action directly impacts the City's interest to protect the safety of the public by ensuring alcohol sales are properly regulated, and because the City presented sufficient facts to demonstrate an injury in fact, we conclude the City has standing to challenge the Board's relocation of Singh's license. Accordingly, we reverse and remand for further proceedings consistent with this opinion.

FACTS

[¶2] In November 2011, Washington voters approved Initiative Measure 1183 (I-1183), a measure privatizing liquor [187 Wn.App. 859] sales. I-1183 directed the Washington State Liquor Control Board to " sell by auction open to the public the right at each state-owned store location ... to operate a liquor store upon the premises." Laws of 2012, ch. 2, § 102(4)(c); RCW 66.24.620(4)(c). On April 20, 2012, respondents Hakam Singh and HK International submitted the highest bid for a liquor retail license at former Board Store No. 152, then located at 912 South Burlington Boulevard, in Burlington, Washington. On May 7, Singh submitted a store relocation request to the Board. Singh indicated that the landlord refused to lease at the original store location. Singh proposed a new location: the Skagit Big Mini Mart, a gas station and convenience store he already owned, located at 157 South Burlington Boulevard, approximately one half-mile north of the original store location. On May 14, the Board notified the city of Burlington about Singh's relocation request in compliance with RCW 66.24.010(8). Should the City object, the Board's notice form directed the City to " attach a letter to the Board detailing the reason(s) for the objection and a statement of all facts on which [the City's] objection(s) are based." Admin. Record (AR) at 36.

[¶3] On May 30, the City responded, objecting to the new location and requesting an adjudicative hearing before the Board took any final action. The City included a brief letter detailing its reasons for the objection. First, the City argued that the Board lacked

Page 878

the legal authority to relocate the license attached to Store No. 152 because " [t]he clear language of [RCW 66.24.620(4)(c)] provides that the rights to be sold by the Board are linked to the then-current location of the liquor store." AR at 37. Second, the City noted that language in the voter pamphlet indicated that I-1183 " prevent[ed] liquor sales at gas stations and convenience stores ... ." AR at 38.[2] Finally, the City expressed concern regarding how the liquor sales might affect the surrounding [187 Wn.App. 860] area, stating, " The Burlington Police Department has logged many calls to the proposed license location, reflecting the high level of crime that occurs at the licensee's business." AR at 39. The City also emphasized that the proposed location is just over 500 feet from Burlington High School.[3] The Board solicited comments from its own enforcement officer, who repeated the City's concerns: " One of the Investigative Aids I work with goes to that high school and he says he knows kids who buy alcohol there all the time. ... As a liquor officer and a parent I am concerned a spirits license for this premises is an invitation to add to the serious problem of youth access to alcohol." AR at 41.

[¶4] On August 31, the Board issued a " Statement of Intent to Approve Liquor License Over the Objection from the City of Burlington." The Board found no liquor violations at that location in the past four years, the City's challenge of the Board's interpretation of I-1183 was not grounds for denial, and " [t]he City did not demonstrate any conduct that constitutes chronic illegal activity as defined by RCW 66.24.010(12) at this premise." AR at 30. On September 11, the Board issued a final order denying the City an adjudicative hearing and issuing the license for the minimart.[4]

[¶5] The City promptly appealed the Board's decision to Thurston County Superior Court. The City's opening brief asserted it had standing. The Board's response brief challenged the City's standing. After oral argument, the trial court allowed the parties to " supplement the record" with up to five pages each on the standing issue. Report of Proceedings (RP) (July 19, 2013) at 40. The City submitted declarations from three individuals: Burlington Mayor [187 Wn.App. 861] Steve Sexton, City Planning Director Margaret Fleek, and City Police Lieutenant Tom Moser. The Board moved to strike this evidence, arguing that the court requested additional briefing, not evidence. The court struck the declarations, clarifying that it invited the parties to submit supplemental briefing only. In its oral ruling, the court apologized for any confusion and emphasized that " it was never the intent of the Court that there be supplemental declarations submitted ... ." RP (Aug. 23, 2013) at 21.

[¶6] The court dismissed the City's petition for judicial review for lack of standing. The court found that the City failed to meet the " injury in fact" test " because there was no immediate, concrete or specific injury really that was argued or put into the record by the City, and the few statements that were made were really conjectural and hypothetical." RP (Aug. 23, 2013) at 34. The trial court also denied the City's " request to overturn the Board's grant of a liquor license to HK International LLC." Clerk's Papers (CP) at 225. The City appeals.

ANALYSIS

Standard of Review

[¶7] Standing is reviewed de novo. In re Estate of Becker, 177 Wn.2d 242, 246, 298 P.3d 720 (2013). When reviewing a party's standing, this court stands in the same position as the superior court. Patterson v. Segale, 171 Wn.App. 251, 257, 289 P.3d 657 (2012). The party seeking judicial review of agency action--the City--bears the burden of establishing standing.

Page 879

KS Tacoma Holdings, LLC v. Shorelines Hr'gs Bd., 166 Wn.App. 117, 127, 272 P.3d 876 (2012).

Standing

[¶8] The APA delineates standing requirements that differ from the general standing test applicable in other contexts:

[187 Wn.App. 862] A person has standing to obtain judicial review of agency action if that person is aggrieved or adversely affected by the agency action. A person is aggrieved or adversely affected within the meaning of this section only when all three of the following conditions are present:
(1) The agency action has prejudiced or is likely to prejudice that person;
(2) That person's asserted interests are among those that the agency was required to consider when it engaged in the agency action challenged; and
(3) A judgment in favor of that person would substantially eliminate or redress the prejudice to that person caused or likely to be caused by the agency action.

RCW 34.05.530. " These three conditions are derived from federal case law." [5] Seattle Bldg. & Constr. Trades Council v. Apprenticeship & Training Council, 129 Wn.2d 787, 793, 920 P.2d 581 (1996) (citing St. Joseph Hosp. & Health Care Ctr. v. Dep't of Health, 125 Wn.2d 733, 739, 887 P.2d 891 (1995)). The second prong is the " zone of interest" test, while the first and third prongs constitute the " injury in fact" test. Allan v. Univ. of Wash., 140 Wn.2d 323, 327, 997 P.2d 360 (2000).

1. Zone of Interest[6]

[¶9] The parties agree that the City satisfies the zone of interest test. Nevertheless, the City's unique and compelling interest adversely affected by the Board's action here merits further discussion.

[¶10] The zone of interest test limits judicial review of an agency action to litigants with a viable interest at stake, rather than individuals with only an ...


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