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BV Beverage Co., LLC v. State

Supreme Court of Idaho

December 4, 2013

BV BEVERAGE COMPANY, LLC, an Idaho limited liability company, Petitioner-Appellant,
v.
The STATE of Idaho, Department of Idaho State Police/Alcohol Beverage Control, G. Jerry Russell, in his official capacity as Director of Idaho State Police, Respondent.

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Rainey Law Office, Boise, attorney for Appellant. Rebecca A. Rainey argued.

Hon. Lawrence G. Wasden, Idaho Attorney General, Boise, attorney for Respondent. Cheryl A. Meade argued.

W. JONES, Justice.

I. NATURE OF THE CASE

This is an appeal of the district court's dismissal of BV Beverage Company, LLC's (" BV Beverage" ) petition for judicial review arising from the expiration of its liquor license. Idaho Alcohol Beverage Control (" ABC" ) contends that BV Beverage's interest in its license expired by operation of law when BV Beverage's lessee failed to timely renew. BV Beverage contends that the agency's procedures deprive it of adequate procedural due process. The district court dismissed BV Beverage's petition for judicial review because there was no agency action to review, but even if there was agency action, the action did not violate procedural due process because BV Beverage had actual knowledge of the expiration date of the liquor license. BV Beverage appeals to this Court.

II. FACTUAL AND PROCEDURAL BACKGROUND

In September 2007, BV Beverage purchased the liquor license in dispute in this matter. In November 2007, BV Beverage applied to lease the liquor license it purchased to Iggy's Restaurant (" Iggy's" ). ABC issued a liquor license to BV Beverage on December 17, 2007, license number 4314. ABC subsequently issued Iggy's a liquor license on October 1, 2008. Iggy's renewed the liquor license in 2009. The liquor license was set to expire on September 30, 2010. This expiration date was printed on the face of the liquor license. ABC sent Iggy's the renewal forms on July 30, 2010, which were returned as undeliverable on August 4, 2010. ABC did not inform BV Beverage that the renewal forms had been returned as undeliverable. These renewal forms were not sent to BV Beverage.

On September 29, 2010, Iggy's sent BV Beverage a Release of Interest document-

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before the liquor license expired. This document was sent to BV Beverage but not ABC. This document informed BV Beverage that Iggy's was releasing its interest in the use of the license back to BV Beverage. BV Beverage notes that this document did not allow BV Beverage to renew the license but would be part of a transfer application of the license back to BV Beverage, which BV Beverage could have filed to have the license renewed in its name. But BV Beverage did not timely file to have that done.

ABC began proceedings to revoke Iggy's liquor license for failure to keep the license in actual use as required by IDAPA 11.05.01.10.02. At the request of BV Beverage, ABC agreed to stay the revocation proceedings on September 29, 2010, on the condition that BV Beverage work to put the license into actual use. The license expired at 1:00 AM on October 1, 2010, but there was an additional thirty-one day grace period in which BV Beverage could apply for renewal pursuant to I.C. ยง 23-908(1). BV Beverage negotiated with another restaurant to lease the liquor license. BV Beverage submitted the transfer application paperwork to ABC on January 7, 2011. On January 10, 2011, ABC rejected BV Beverage's lease application because the license had not been timely renewed and expired by operation of law.

BV Beverage filed a petition for judicial review in this matter on March 31, 2011. BV Beverage argued that it had a constitutionally protected property right in the liquor license it owned, which included the right to renew the license. BV Beverage argued that the renewal procedures adopted by ABC, which did not afford it the opportunity to renew the license but required the lessee to renew the license, denied it minimal due process protections. On July 28, 2011, ABC requested dismissal of BV Beverage's petition for judicial review.

On November 15, 2011, the district court dismissed BV Beverage's petition for judicial review. The district court first ruled that there was no agency action in the instant case to review because ABC had no duties to perform in relation to the expiration of BV Beverage's liquor license except to process the application. The district court nonetheless concluded that BV Beverage had a property interest in the liquor license that was entitled to due process protections. However, the district court concluded that because BV Beverage knew of the expiration date of its liquor license but failed to inquire into the status of the renewal or pursue the process available to renew the license, its due process rights were not violated.

BV Beverage filed a petition for rehearing with the district court on December 6, 2011. The district court denied BV Beverage's petition for rehearing on January 17, 2012. BV Beverage filed its ...


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