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01/27/76 BISCO'S v. LIQUOR CONTROL COMMISSION

January 27, 1976

BISCO'S, INC.
v.
LIQUOR CONTROL COMMISSION



Williams, J. (to reverse and remand). Coleman and Fitzgerald, JJ., concurred with Williams, J. Lindemer and Ryan, JJ., took no part in the decision of this case. Levin, J. Kavanagh, C. J., concurred with Levin, J.

SYLLABUS BY THE COURT

Opinion of the Court

1. Intoxicating Liquors -- Licenses -- Renewal -- Constitutional Law -- Due Process.

An individual seeking renewal of a liquor license under the Michigan Liquor Control Act has an interest in property such that he is entitled to due process protection (MCL 436.17; MSA 18.988, US Const, Am XIV).

2. Intoxicating Liquors -- Licenses -- Renewal -- Local Legislative Bodies -- Due Process.

Arbitrary and capricious actions by local legislative bodies in recommending to the Liquor Control Commission that a liquor license not be renewed are subject to judicial review (MCL 436.17; MSA 18.988).

Separate Opinion

T. G. Kavanagh, C. J., and Levin, J.

3. Intoxicating Liquors -- Licenses -- Constitutional Law -- Due Process.

A person holding a liquor license has a property interest in the liquor license within the meaning of the Due Process Clause (US Const, Am XIV; Const 1963, art 1, § 17).

4. Intoxicating Liquors -- Licenses -- Renewal -- Due Process.

An application for renewal of a liquor license cannot be denied, under the Due Process Clause, without providing the licensee notice and an opportunity for an evidentiary hearing (US Const, Am XIV; Const 1963, art 1, § 17).

5. Constitutional Law -- Due Process -- Property Interests.

Property interests subject to procedural due process protection are not limited by a few rigid technical forms; "property" denotes a broad range of interests that are secured by existing rules or understandings, and the applicability of procedural due process rights is not determined by the label attached to the interest at stake, whether it is called a mere "privilege" or a "right".

6. Intoxicating Liquors -- Licenses.

A liquor license is a franchise bestowed by the sovereign, and just as the state may choose not to issue a license, it may place reasonable conditions on it.

7. Intoxicating Liquors -- Licenses -- Constitutional Law -- Due Process.

Once a liquor license has been issued and expenditures have been made in reliance upon it, the licensee has acquired a property interest secured by existing rules or understandings that there is a reasonable expectation that, in practice, the license will be automatically renewed in most instances.

8. Intoxicating Liquors -- Licenses -- Constitutional Law -- Due Process -- Statutes.

The Michigan Liquor Control Act is unconstitutional insofar as it fails to provide notice to a liquor licensee and an opportunity for an evidentiary hearing before denial of an application for renewal of a liquor license upon objection of a local legislative body (MCL 436.17; MSA 18.988).

9. Intoxicating Liquors -- Licenses -- Renewal -- Administrative Law -- Hearing.

Nonrenewal of a liquor license is a contested case; where the Liquor Control Commission finds sufficient merit in an objection to renewal to indicate there may be cause to deny renewal of the license the commission must give the licensee notice and an opportunity for an evidentiary hearing conforming with the provisions of the Administrative Procedures Act of 1969 for a contested case (MCL 24.271 et seq.; MSA 3.560[171] et seq.).

10. Intoxicating Liquors -- Licenses -- Renewal -- Administrative Law.

The decision of the Liquor Control Commission to deny renewal of a liquor license is a final decision of an agency which affects private rights or licenses and is, accordingly, subject to direct review by the courts; the minimal standard of review under the Constitution is not whether the decision is arbitrary or capricious, but whether the decision is supported by competent, material and substantial evidence on the whole record (Const 1963, art 6, § 28, MCL 24.306; MSA 3.560[206]).

The opinion of the court was delivered by: Williams; Levin

Plaintiff Bisco's, Inc. obtained a B-hotel liquor license with a dance entertainment permit from the Liquor Control Commission with the approval of the Village of Emmett. The village filed an objection to renewal of the license based upon allegations that Bisco's entertainment violated a new village ordinance prohibiting "topless" exposure in public places. The Liquor Control Commission, without notice to plaintiff and without opportunity for a hearing, advised Bisco's that the license would not be renewed. The Court of Appeals, Bashara, P. J., and V. J. Brennan and O'Hara, JJ., dismissed ...


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