Is Your Liquor Ordinance Tight Enough to Hold Water (Or Beer)?

Its closing time, and you may be wondering where your liquor ordinance is. Is it working for your city? Is it drafted to require patrons to stop drinking and start heading home in a prompt manner? Does it require bar staff to vacate the city premises within ½ hour of closing? Or is it letting those wily partiers simply close the doors and claim that they’re having a private party where (wink, wink) no one is being served.

Or is it license renewal time and you’re faced with a bar owner who won’t maintain the bar’s property. Are you wondering if you’ll be able to deny the renewal, because of the litter on the property? Have you checked your ordinance lately?

Or maybe the city has a bar owner who doesn’t hire adequate security and allows fights to break out. Or regularly violates noise restrictions and now the city would like to revoke the establishment’s liquor license. Does your ordinance address the procedures the council should follow to provide sufficient due process? Council may fear letting the bar owner continue to endanger the public, but also the lawsuit that might result if the disgruntled bar owner doesn’t get a fair process.

Over the years, I have heard staff and officials voice these types of nuisance concerns about liquor establishments in their city many times. Often they want to know if state law covers their concerns and provides a means to address them. Most of the time, however, it simply doesn’t. This surprises many city officials.

State Law Regulation of Liquor Establishments:

The Minnesota Liquor Act heavily regulates two main issues. First, it regulates the issuance of licenses (types of licenses, who gets them, insurance required, license fees, etc). Second, it regulates illegal sales (to minors or obviously intoxicated persons, at the wrong day or time, etc.) and related dram shop liability issues. The Liquor Act doesn’t offer much to help cities trying to deal with nuisance behaviors that can occur around liquor establishments – for example, unsightly properties, noise and disorderly conduct.

Fortunately, the Liquor Act favors city ordinance regulation on these topics. Minn. Stat. § 340A.509 states, “a local authority may impose further restrictions and regulations on the sale and possession of alcoholic beverages within its limits.” As a result, city ordinance may always be more restrictive than the Liquor Act and it can certainly “fill in the blanks” where state law is silent.

What Should We Include in Our Liquor Ordinance?

Here are some suggestions for provisions to include in your local liquor ordinance to make it tight enough to hold water (or beer). These suggestions all relate to issues generally not covered in depth by the Liquor Act. Most of these suggestions are drawn from the Model LMC Liquor Licensing Ordinance that can be found at this link: http://www.lmc.org/media/document/1/liquorlicensingandregulation.pdf. You can also find detailed sample language for these provisions there.

Evacuation Clause:

An evacuation clause requires the bar to have a “last call” and to have customers leave promptly at closing time. This prevents lingering and socializing that may create a noise nuisance or other disorderly conduct. It also reduces the temptation for illegal sales when the bar doors have closed to the public and the supposed “private party” commences. Some evacuation clauses also require staff to leave the premises within a reasonable time after closing, while still allowing for clean-up and other end of shift activities.

Nudity and Adult Uses:

Cities may ban liquor establishments from having adult entertainment or nudity on the premises. The First Amendment offers important protections to exotic dancers and other adult uses. However, the First Amendment does not protect the right of people to drink while performing (or watching) exotic dancing.

Location of Liquor Establishments:

For cities, the only state Liquor Act restriction on liquor establishment location relates to state facilities and zoning. Minn. Stat. § 340A.412 prohibits locating a liquor establishment in “areas restricted against commercial uses through zoning.” Cities who don’t want liquor establishments near schools, daycares, churches or youth centers should put these restrictions in their local ordinance. If a city doesn’t have zoning in place, the city may also wish to restrict location near residences as well.

Types of Licenses:

Over the past few years, the State Legislature has added several new types of licenses to the Liquor Act. It has also broadened the categories of businesses that may receive existing licenses. If you haven’t updated your liquor ordinance in the past decade, you may be missing out on brew-pub licenses, culinary class licenses and wine licenses for theaters. Cities are not required to issue these types of licenses, but if they choose to issue, must authorize them through local ordinance.

Times and Days of Sale:

Cities are authorized by Minn. Stat. § 340A.504 to restrict times and days of sale beyond state law requirements. However, restricted on-sale hours for intoxicating liquor must apply equally to on-sale hours of 3.2 percent malt liquor. A city may not permit the sale of alcoholic beverages during hours when the sale is prohibited by the Liquor Act.

Define Liquor Act Terms More Restrictively:

The Liquor Act allows restaurants to obtain on-sale licenses. Minn. Stat. § 340A.101 Subd. 25 defines the term restaurant pretty simply as “an establishment . . . where meals are regularly prepared on the premises and served at tables to the general public, and having a minimum seating capacity for guests as prescribed by the appropriate license issuing authority.” Cities may wish to define a restaurant more narrowly. For example, requiring a certain percentage of the profits to be related to food sales, require a minimum seating capacity, require menus and waiters, and prohibit “heat and eat” type establishments where only pizza is reheated and offered to customers.

Cities may also wish to define the terms “non-profit” or “charitable organization” for the purpose of temporary 3.2 beer licenses under Minn. Stat. § 340A.403 and “compact and contiguous” for the purposes of Minn. Stat. § 340A.410. These are both relatively vague terms found in the Liquor Act that raise concerns from time to time.

Due Process Concerns

Violations of city liquor ordinances can result in both civil and criminal penalties. As a result, ordinances should be written clearly to avoid US Constitutional 14th Amendment concerns (ordinances provisions that are vague will be considered void). The city liquor ordinance should specify the types of behaviors/problems that may result in penalties. This puts the liquor licensee on notice that they may be punished –either civilly or criminally – for violations.

There are also state law due process requirements that should be met in the city liquor ordinance. The Liquor Act at Minn. Stat. § 340A.415 specifically enumerates acts for which a license may be revoked or a penalty imposed. This is a limited list that includes:

• Selling alcoholic beverages to another retail licensee for the purpose of resale;

• Purchasing alcoholic beverages from another retail licensee for the purpose of resale

• Conducting or permitting the conduct of gambling on the licensed premises in violation of the law;

• Failing to remove or dispose of alcoholic beverages when ordered by the commissioner to do so; and

• Failing to comply with an applicable statute, rule, or ordinance relating to alcoholic beverages,

As a result, cities are limited by the Liquor Act to revoking licenses or imposing civil penalties for issues that violate city ordinance. Prohibited nuisance behaviors should be listed and defined in the liquor ordinance, if the city would like to revoke licenses or impose penalties related to these issues. For example, litter, noise, disorderly conduct, etc. The city may also choose to simply cross-reference other sections of city ordinance on these topics in the liquor ordinance.

Finally, the Liquor Act requires that notice and hearing must be provided to a licensee prior to a suspicion or revocation. As a result, city ordinance should also specify procedures for notice, hearing and imposition of any penalty.

Conclusion

Liquor establishments can be thriving local businesses that add to the local community and economy. However, these types of businesses may also create unique nuisance concerns. A carefully drafted city liquor ordinance must be the bedrock for city regulation and enforcement efforts.