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Municipal Technical Advisory Service (MTAS)

Original Author: Shechter, Leslie
Date of Material: 03/11/1992

Alcoholic beverages
Alcoholic beverages--Laws and regulations
Beer--Laws and regulations
Beer--Licenses and permits

Composition and Authority of the City Beer Board

Reviewed Date: 07/15/2021
MTAS was asked whether the composition of the board can be changed and whether the board has the authority to deny a beer permit to an applicant that meets the requirements set out in the beer ordinance

March 11, 1992

You have asked several questions regarding the City Beer Board, including whether the composition of the board can be changed and whether the board has the authority to deny a beer permit to an applicant that meets the requirements set out in the beer ordinance. You have also asked whether the street right-of-way measurement of the distance between the establishment selling beer and a church or school is valid. I have reviewed the case law on this subject and your ordinance, and offer the following opinion.

The beer ordinance is codified in Title 2, Chapter 2 of the Municipal Code. In Section 2-201 the beer board is established. That section provides:

"There is hereby established a beer board to be composed of all the members of the board of mayor and aldermen."

There is nothing I can find in your charter or state law that restricts the composition of the beer board to the governing body. In fact, Tennessee Code Annotated, Section 57-5-108, in describing the method of suspending or repealing beer permits provides that:

"Any permits or licenses issued under this chapter by the governmental body of any incorporated city, or by any committee or board created by such governmental body, may be revoked or suspended by such governmental body, committee or board.

Thus, the board of mayor and aldermen could choose to appoint a beer board to be composed of citizens instead of, or in addition to several members of the governing body. A simple amendment to the ordinance could accomplish this change.

A municipality has wide discretion in controlling and regulating the sale of beer, including the authority to prohibit its sale entirely. However, the regulations and restrictions a municipality desires to place on the sale of beer must be detailed in a municipal ordinance. This ordinance controls and guides the beer board's determination to grant or deny a permit. If a restriction is not set out in the ordinance, the beer board cannot impose that restriction. For example, if the ordinance sets no limit on the number of permits that can be issued, the beer board has no discretion to deny a permit on the grounds that there are too many beer establishments in the community. Brooks v. Garner, 566 S.W.2d 531 (Tenn. 1978).

According to the city beer ordinance, if the applicant meets the criteria set out in Section 2-207, the beer board can only justify denial of the application on the grounds that the business:

"...would cause congestion of traffic or would interfere with schools, churches, or other places of public gathering, or would otherwise interfere with the public health, safety, and morals."

This determination, however must be based on objective evidence not subjective opinions. In Hinkle v. Montgomery, the Tennessee Supreme Court found that a decision to deny a permit based on increased traffic congestion, must be substantiated by a showing that the issuance of a permit would cause traffic to be more congested and more hazardous than it was prior to issuance of a permit; "a fact most difficult to establish with respect to a location at which beer has not been sold previously." Hinkle v. Montgomery, 596 S.W.2d 800 (Tenn. 1980).

The beer board's discretion in denying a permit must be exercised in a manner that is not arbitrary or capricious. In Case v. Carney, the Tennessee Supreme Court held:

"This is a discretion to be exercised reasonably and in good faith, and not in a discriminatory and arbitrary manner...It is not to be used as a subterfuge for refusing licenses at the behest of those who do not agree with the ordinances of the municipality regulating the issuance of such licenses." 213 Tenn. 597, 376 S.W.2d 492, 495 (Tenn. 1964).

In light of the case law, it is my opinion that the beer board may only deny a permit if the applicant fails to meet the criteria established in your ordinance and not because of a general bias against the sale of alcoholic beverages. If there is no objective evidence that the applicant failed to meet the standard of the ordinance and the board deny's the applicant's permit request, it could be found liable for arbitrary and capricious conduct.

In reviewing your ordinance, I noticed several concerns that need to be considered and addressed in any ordinance amending your current beer ordinance. The first problem is the prohibition against granting a permit to an alien. This prohibition is constitutionally suspect and should not be enforced. Thus, Section 2-207 (1) and (2) and Section 2-209 should be eliminated.

Also, Section 2-212 contains some problematic language. While the sale of beer to minors may be prohibited, the prohibition against allowing minors to work in beer establishments appears to violate state law. (See OAG 87-28 which explains why this is the case) Thus, Section 2-212(2) will need to be changed to reflect the state law.

Section 2-212(3)(a)(6) and (7) are also unenforceable for vagueness and overbreadth. There is no legal way to keep out or even identify "disreputable" persons. The city can regulate certain conduct of customers and patrons in beer establishments, but, as Sid Hemsley points out, "cannot require such places to assess them on the basis of their repute or disrepute." Finally, refusal to serve beer to the "feeble-minded, insane or otherwise mentally incapacited" is much too far-reaching and violates the rights of persons with disabilities.

Regarding the language of Section 2-210, the law is clear that in measuring distances between places of public gathering and the beer establishment, street rights-of-way may not be used. The courts require that the distance be measured in a straight line from point to point. The municipality can establish the points to be the nearest property line or the nearest building corner, but the measurement must be in a straight line. For a complete discussion of the law on this point, see the attached Technical Bulletin written by Sid Hemsley, our attorney in Knoxville.

If you have additional questions or concerns regarding this matter or need assistance in drafting a new beer ordinance, do not hesitate to contact me.

Leslie Shechter
Legal Consultant