Original Author: Hemsley, Sid
Date of Material: 04/15/2002
Alcoholic beverages--Laws and regulations
Beer--Laws and regulations
Beer--Licenses and permits
Reviewed Date: 07/15/2021
MTAS was asked where the city has no brown bagging regulations can a restaurant that does not hold a beer license allow brown bagging.
You have two questions:
1. Where the city has no brown-bagging regulations can a restaurant that does not hold a beer license allow brown-bagging?
The answer is yes. There is no state law governing brown-bagging in Tennessee. In fact, several times the attorney general opined that a municipality cannot prohibit brown-bagging. The Tennessee Supreme Court did not agree in Metropolitan Government v. Shaw, 721 S.W.2d 799 (Tenn. 1986). There it upheld a municipal ordinance that prohibited brown-bagging in establishments that held a beer license, unless the establishment also held a liquor license.
The facts behind your question indicate that the restaurant in question does not have a beer permit (too close to a church). The City has authorized liquor-by-the-drink, but the restaurant in question does not have a liquor license. Even if it did, it was held in State ex rel. Amvets Post 27 v. Beer Board of the City of Jellico, 717 S.W.2d 878 (Tenn. 1986), that an establishment that holds a liquor license must obtain a beer permit. However, there is no state law regulating brown-bagging, and the city does not prohibit or otherwise restrict brown-bagging.
The extent to which the city could even regulate brown-bagging in a restaurant has been called into question. In Lovelace v. City of Knoxville, 2001 WL 293001 (Tenn. Ct. App.) the Court of Appeals, citing Shaw and other cases (including Underground II, Inc. v. City of Knoxville, 1998 WL 46447 (Tenn. Ct. App.), in which the Knoxville brown-bagging ordinance was stricken down for its failure to contain objective guidelines to officers who enforced the ordinance and because it imposed certain unreasonable burdens on establishments to which the ordinance applied, following which the city amended the ordinance), generally upheld the right of a municipality to regulate brown-bagging. The Knoxville ordinance prohibited the following brown-bagging activities during certain hours:
1. The consumption by any person of beer or an alcoholic beverage not lawfully sold by the business on the premises of any business open for business during those hours;
2. The possession of an open container of beer or an alcoholic beverage not lawfully sold by the business on the premise of any business open for business during those hours;
3. The owner’s intentional and knowing permit of a person to possess or consume an open container of beer or an alcoholic beverage not lawfully sold on the premises. Notice to the agent or employee of a business was notice to the owner of the business. The open display by any person on the premises an open container of beer or an alcoholic beverage marked as if for resale and not lawfully sold by the business was evidence of a violation of this provision.
Under the ordinance the owner of the business had a duty to give actual or constructive notice to inform all persons in the establishment of the prohibitions in this ordinance.
The Court of Appeals struck down parts of the ordinance, but upheld the right of a municipality to enact a brown-bagging ordinance. However, in responding to the plaintiff’s challenge that the ordinance was overbroad on several grounds, the Court noted that:
A statute is overbroad when, based upon its text in actual fact there are a substantial number of instances where the law cannot be applied constitutionally. [Citations omitted.] The overbreadth doctrine not only prohibits a statute from criminalizing constitutionally protected activity, but may also render a statute unconstitutional, if its sweep has a chilling effect upon constitutionally protected conduct, even though the statute does not directly forbid protected activity. A statute is not, however, vulnerable to the overbreadth challenge simply because unconstitutional conduct can be imagined. When a statute regulates economic conduct, its overbreadth must be real as well as substantial when judged in relation to its plainly legitimate sweep. [Citations omitted.] The purpose behind the Ordinance clearly relates to the “brown-bagging” clubs, such as those operated by the plaintiff. However, the City’s Ordinance is not limited in application to such establishments, but applies to “any business” that is open between the hours of 1:00 and 6:00 A.M.. This would include restaurants, businesses that hold grand opening parties at night and, as mentioned during arguments, it might even include an attorney who decides to have a beer while working in his law office during those hours. [At 7] [Emphasis is mine.]
The ordinance was not facially overbroad, concluded the Court, but its application might be in some cases, including, apparently, in the case of restaurants and businesses that hold grand opening parties.
Of course, Lovelace is an unreported case and for that reason cannot be cited as precedent, but it probably gives a fairly good indication on which way the courts would go in cases involving municipal regulation of brown-bagging.
2. Can the restaurant hold private parties and allow brown-bagging at those parties?
The answer is yes, for the same reasons that apply to the answer to question 1.
3. Can the restaurant hold private parties that include food and beer, and charge a per head fee?
The answer is probably no.
While I can find no specific case on this question, such an arrangement is not brown-bagging as that term is commonly understood, and per head charge seems to me to clearly include the sale of beer under the city’s beer regulations contained in the City’s Municipal Code.
Sidney D. Hemsley
Senior Law Consultant