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Gildehaus v. Arkansas Alcoholic Beverage Control Board

Supreme Court of Arkansas

December 1, 2016




          Steel, Wright & Collier, PLLC, by: Jeremy Y. Hutchinson, for appellants.

          Mary Robin Casteel, Arkansas Alcoholic Beverage Control Administration, for appellee.


         Appellant Sarah Gildehaus appeals the order entered by the Benton County Circuit Court dismissing her petition for judicial review of the decision of appellee, the Arkansas Alcoholic Beverage Control Board (Board), on the basis that she lacked standing. Gildehaus also contests the circuit court's alternative ruling that even if she did have standing, it would affirm the findings of the Board. For reversal, Gildehaus argues that (1) the circuit court erred in dismissing the amended petition based on a lack of standing; (2) the circuit court erred in refusing to consider the entire record on appeal; and (3) the circuit court erred in allowing the issuance of a retail liquor permit to appellee Christopher Moore, despite numerous violations of the law. We conclude that there is substantial evidence to support the Board's decision, and we affirm on this basis.

         The facts in this case, which are essentially undisputed, are as follows. Michelle Jameson received Conditional Permit No. 05132 for a retail liquor store located at 2800 West Hudson Road, Suite D, in Rogers, Arkansas. She opened and operated her store, Spiriteaux Wine and Liquors, for one day, on December 11, 2013, when she sold one bottle of liquor. The Board subsequently granted approval to place Jameon's permit on inactive status on January 15, 2014. On February 24, 2014, Jameson applied to the Board to transfer her inactive permit to Moore, who was a friend and a previous employer, at a new location at 2001 S. Belleview Road in Rogers. At the time of the replacement notice, Moore already had one conditional liquor license, permit No. 05013, located at 2090 W. Pleasant Grove Road in Rogers. However, there was no building in which a liquor store could be operated at that location, and Moore agreed in a letter to the Board that he would relinquish this conditional permit upon approval of the transferred license from Jameson.

         On April 17, 2014, the director of the ABC denied the request to transfer permit No. 05132 to Moore. Moore appealed to the Board, which held a hearing in September 2014. Jameson testified that she had borrowed $4, 000 from Moore to rent the space in Rogers at which she opened her liquor store on December 11, 2013. She admitted that she did not have a sales-tax permit on that date, stating that she had applied for a permit but was later denied it on the basis that her liquor license was inactive by the time the application was reviewed. She introduced a receipt for the bottle of liquor that she sold on December 11, 2013, as well as pictures of her store that she had emailed to the Board inspector as he had instructed.

         Moore testified that on the application to transfer Jameson's license, he had indicated that he was the owner of the premises where the store was to be located. He explained, however, that although he had originally believed that he would be an owner of the property, his wife and his father-in-law had instead formed Eleanor Holdings, LLC, to buy the building for financial reasons. Moore stated that he planned to lease the property from Eleanor Holdings.

         Following the hearing, the Board unanimously approved the transfer of permit No. 05132 to Moore in a decision filed on September 17, 2014. The Board found that Moore was qualified to replace Jameson as holder of permit No. 05132 on the condition that he contemporaneously relinquish any interest he had in permit No. 05013. The Board further found that the new location met the public convenience and advantage requirements found in Arkansas Code Annotated section 3-4-208(g) (Repl. 2008) and in the applicable Alcoholic Beverage Control (ABC) regulations. Gildehaus timely filed a petition for judicial review on October 13, 2014, and she filed an amended petition on December 18, 2014.

         Following a hearing before the circuit court on March 9, 2015, as well as posttrial briefs filed by the parties, the circuit court entered its decision on April 15, 2015. The court sua sponte found that Gildehaus lacked standing to challenge the Board's decision and dismissed her petition. The court further found that, even if Gildehaus did have standing, there was substantial evidence to support the Board's decision to allow the transfer of permit No. 05132 to Moore. Gildehaus appealed the circuit court's decision to the court of appeals, which affirmed the circuit court's dismissal of her petition due to lack of standing. Gildehaus v. Ark. Alcoholic Beverage Control Bd., 2016 Ark.App. 160.

         Gildehaus filed a petition for review with this court, which we granted on June 23, 2016, and the case is now before us. When we grant a petition for review, we treat the appeal as if it had been originally filed in this court. Holland v. State, 2015 Ark. 341, 471 S.W.3d 179.

         On appeal, our review is directed toward the decision of the administrative agency, rather than the decision of the circuit court. Ark. Beverage Retailers Ass'n v. Langley, 2009 Ark. 187, 305 S.W.3d 427. Considerable deference is accorded the decision of the administrative agency in part because these agencies are better equipped by specialization, insight through experience, and more flexible procedures than courts to determine and analyze legal issues affecting their agencies. Ark. State Hwy & Transp. Dep't v. Lamar Advantage Holding Co., 2011 Ark. 195, 381 S.W.3d 787. As with all appeals from administrative decisions under the Administrative Procedure Act (APA), the circuit court or appellate court may reverse the agency decision if it concludes that the substantial rights of the petitioner have been prejudiced because the administrative findings, inferences, conclusions, or decisions are: (1) in violation of constitutional or statutory provisions; (2) in excess of the agency's statutory authority; (3) made upon unlawful procedure; (4) affected by other error or law; (5) not supported by substantial evidence of record; or (6) arbitrary, capricious, or characterized by abuse of discretion. Walker v. Ark. State Bd. of Educ., 2010 Ark. 277, 365 S.W.3d 899; Ark. Code Ann. § 25-15-212(h) (Repl. 2014).

         In her first point on appeal, Gildehaus argues that the circuit court erred in dismissing her amended petition based on a lack of standing. We agree with Gildehaus on this issue and instead focus on her remaining arguments with respect to the circuit court's ...

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