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Sajjan Enterprises, LLC v. Alcoholic Beverages Control Commission (Lawyers Weekly No. 09-012-18)

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COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT
CIVIL ACTION
NO. 16-02564
SAJJAN ENTERPRISES, LLC d/b/a COHASSET WINE AND SPIRITS
vs.
ALCOHOLIC BEVERAGES CONTROL COMMISSION
MEMORANDUM OF DECISION AND ORDER ON CROSS-MOTIONS FOR JUDGMENT ON THE PLEADINGS
In this action, plaintiff Sajjan Enterprises, LLC (“Sajjan”) seeks judicial review under G.L. c. 30A, §14, of a decision of defendant Alcoholic Beverages Control Commission (“ABCC”) dismissing as moot Sajjan’s appeal from the denial by the Town of Cohasset Board of Selectmen (“the Board”) of Sajjan’s application to transfer its liquor license from a location where Sajjan had previously operated to a new location.
Before the Court are cross-motions for judgment on the pleadings under Rule 12(c), Mass. R. Civ. P. Sajjan seeks an order reversing the ABCC’s decision and remanding this matter to it for further consideration. The ABCC seeks affirmation of its determination.
In consideration of the parties’ memoranda of law and oral arguments, and for the reasons that follow, Sajjan’s motion for judgment on the pleadings is ALLOWED, the ABCC’s cross-motion for judgment on the pleadings is DENIED, and the matter is REMANDED to the ABCC for further consideration in accordance with this decision.
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FACTS
Claims for judicial review of administrative agency proceedings are resolved through motions for judgment on the pleadings under Mass. R. Civ. P. 12(c). See Massachusetts Superior Court Standing Order 1-96, §4. The Court’s “review shall be confined to the record.” Id. at §5. “Such record ‘shall consist of … the entire proceedings.’” Id. at §2, quoting G. L. c. 30A, §14. The record of the proceedings in this matter shows the following facts:
Sajjan is a Massachusetts limited liability corporation that held an all-alcohol retail package store license, Alcoholic Beverage License Number 023800015 (the “License”), for the premises located at 27-29 South Main Street, Cohasset (the “Main Street Premises”), where Sajjan operated Cohasset Wine and Spirits. The License was first issued in September 2013 and was valid through December 2014.
In October 2014, Sajjan’s lease for the Main Street Premises ended and was not renewed. On November 20, 2014, Sajjan signed a Purchase and Sale Agreement to purchase 807 Chief Justice Cushing Highway in Cohasset (the “Cushing Highway Premises”). Sajjan intended to operate Cohasset Wine and Spirits at this location, and the purchase and sale was contingent on Sajjan’s obtaining a transfer of the License from the Main Street Premises.
On November 24, 2014, the Sajjan filed an application with the Board seeking renewal of the License for 2015. Even though Sajjan was not operating out of the Main Street Premises any longer, the Board approved the renewal. On that same day, Sajjan filed an application to the Board to change the location of the License from the Main Street Premises to the Cushing Highway Premises (the “Transfer Application”).
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Thereafter, and until the appeal that underlies this case was filed with the ABCC, this rather unorthodox state of affairs persisted – Sajjan requested and was granted renewal of the License, even though he had no location at which to use it, while his application to transfer the License to a new location was pending.
The Board opened a public hearing to consider the Sajjan’s Transfer Application on January 20, 2015 and closed it on November 24, 2015. During the eleven-month hearing process, Sajjan sought multiple delays of the Board’s consideration of the Transfer Application, explaining that its purchase of the Cushing Highway Premises was contingent on the Transfer Application being approved by the Board as well as by other bodies, including the Cohasset Planning Board, the Massachusetts Highway Department and the Cohasset Conservation Commission. The Board granted the continuances, although over time expressed its concern about the delays and the inactivity of the License. Also during the hearing process, on November 11, 2015, Sajjan timely filed another application to renew the License with the Board, and included a check for $ 1,800 to make full payment of the renewal fee. The application form showed the License location as the Main Street Premises, even though the Cohasset Wine and Spirits had not been operating out of that location for over a year.
On November 24, 2015, the Board held the final public hearing on Sajjan’s Transfer Application. At its conclusion, the Board denied the Transfer Application, finding that for “more than a year after filing an application for transfer of location, the License Holder still did not possess a legal location at which to operate a retail liquor store … [and] substantial questions remain as to whether the License Holder would be able to acquire the proper permits in order to legally operate at his proposed site at any
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point in the foreseeable future.” The Board also noted that it would “consider the dormancy of the current license at the upcoming annual renewals.”
On December 9, 2015, pursuant to G.L. c. 138, §15A, Sajjan filed a timely appeal of the Board’s denial of the Transfer Application to the ABCC.
After the appeal was filed, the Board, on December 22, 2015, alerted the ABCC that it had denied Sajjan’s license renewal request for 2016. The record reflects no evidence that Sajjan received notice of this denial. In any event, that denial was not before the ABCC in Sajjan’s appeal.
In January 2016, the ABCC notified Sajjan that an appeal hearing would be held on March 30, 2016 regarding the Board’s denial of Sajjan’s Transfer Application, the caption of the letter reading, “Appeal from the Action of the Town of Cohasset Board of Selectmen for Denying the §15 All Alcoholic Beverages License Application for Change of Location of Sajjan Enterprises, LLC.”
At the start of the hearing on Sajjan’s appeal, Commissioner McNally of the ABCC discussed Sajjan’s renewal application with the Board’s representative, Jennifer Oram. Oram reported that the renewal had been denied. The following exchange then occurred:
COMMISSIONER MCNALLY: And he filed a renewal during November 1st to November 30th for 2016 —
ORAM: And the Board of Selectmen denied the renewal
COMMISSIONER MCNALLY: OK. Legally he’s allowed to renew it as long as he has an appeal pending. Have you issued that license to anyone else?
ORAM: No, no, we’ve held it.
COMMISSIONER MCNALLY: OK, you’ve held it. OK. All Right.
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ORAM: Yea, so we understood that. We also sent in all the paperwork to the ABCC but that’s what we did with an [] explanation that that’s renewal paperwork. I – I noted it, I attached the denial, everything went back to the ABCC.
* * * * * *
COMMISSIONER MCNALLY: OK. So he – you have that, though, and you have not reissued –
ORAM: No, No.
COMMISSIONER MCNALLY: — that license because he’s – he has stayed those proceedings with this appeal.
ORAM: Exactly. I – I even held his check …
COMMISSIONER MCNALLY: Thank you.
The parties then proceeded to present evidence regarding the Board’s denial of the Transfer Application. No evidence concerning the non-renewal was presented by either side during the hearing.
On February 24, 2016, Sajjan received site plan approval for the Cushing Highway Property from the Planning Board.
On July 20, 2016, the ABCC issued a written decision dismissing Sajjan’s appeal without prejudice, finding that the issue of the Transfer Application was moot because the Board denied Sajjan’s license renewal application and because Sajjan failed to appeal that decision.1 The ABCC found that had the renewal application been approved, it would have issued a determination on the Transfer Application, but concluded that “[w]ithout a renewed license, [Sajjan’s] underlying appeal before the Commission is moot.”
1 On August 9, 2016, the ABCC issued an “amended decision” to correct an error which is of no moment here.
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DISCUSSION
The ABCC’s decision may be set aside by the Court only on the grounds set forth in G.L. c. 30A, §14. See Howard Johnson Co. v. Alcoholic Beverages Control Comm’n, 24 Mass. App. Ct. 487, 490 (1987). The Court thus reviews the ABCC’s decision to determine whether it was not supported by substantial evidence, was arbitrary or capricious, or was based on an error of law. G.L. c. 30A, §14(7); see also, e.g., The Local Citizen Group v. New England Wind, LLC, 457 Mass. 222, 228 (2010).
The ABCC grounds its dismissal of Sajjan’s appeal on the Board’s denial of the Sajjan’s renewal application. Sajjan contends that the ABCC lacked substantial evidence to determine the Transfer Application appeal was moot on this basis. The record shows that Sajjan is correct – the renewal (or not) of the License was not a subject of Sajjan’s appeal and was not substantively addressed during the hearing. Indeed, the Board did not alert the ABCC that it had denied the renewal until after the appeal had been filed, and at the beginning of the hearing, the Board and ABCC concurred that the renewal issue had been stayed pending the resolution of the Transfer Application appeal. The ABCC thus provided Sajjan with no notice that he must develop a record, either before the ABCC or the Board, regarding the renewal rejection. Under these facts, Sajjan was without sufficient notice that the renewal denial was at issue during the hearing and was therefore not properly afforded an opportunity to assemble and present evidence on this point. Indeed, while Sajjan did not appeal the non-renewal of the license in this proceeding, it is not clear from this record that Sajjan did not do so in another appeal or, if he failed to appeal, whether Sajjan should be excused from doing so under these facts.
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Where, as here, there was insufficient notice to a claimant of the issues before an administrative agency which was necessary “to afford [the claimant of a] reasonable opportunity to prepare and present evidence and argument” as required under G. L. ch. 30A, §11, the resulting administrative decision is “[m]ade upon unlawful procedure” under G.L. c. 30A, §14(7)(d). See Aristocratic Rest. of Massachusetts, Inc. v. Alcoholic Beverages Control Comm’n (No. 1), 374 Mass. 547, 551 (1978). As the ABCC properly points out, however, any such unlawful procedure is actionable only if Sajjan’s substantial rights were adversely affected. See G.L. 30A, §14(7); Aristocratic, 374 Mass. at 551 (lack of notice actionable if “the substantial rights of any party may have been prejudiced”). The ABCC argues that Sajjan’s substantial rights could not have been harmed since Sajjan had moved out of the Main Street Premises and would not have qualified for a renewed license under G.L. c. 138, §16A. But the record does not support that conclusion, and the ABCC’s argument ignores both the history of this case – during which Sajjan received renewals of the License even though he had moved out of the Main Street Premises – as well as the fact that the ABCC informed Sajjan at the start of the appeal hearing that it viewed the renewal issue as having been stayed by the Transfer Application appeal. Moreover, §16A does not state that an applicant like Sajjan would have been somehow barred from obtaining a license if his location changed; it instead states that if the location of the licensee does change, the renewal application “shall be treated as an application for a new license and all the procedures set forth under section fifteen A shall be applicable thereto.” No evidence was adduced at the hearing regarding the non-renewal. The record thus does not provide an adequate basis upon which the ABCC could conclude that the non-renewal mooted the Transfer Application appeal.
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Accordingly, and pursuant to G.L. c. 30A, §14, the Court remands this matter for further proceedings before the ABCC consistent with this decision. The Court leaves to the ABCC whether a further remand to the Board to address the renewal issue is appropriate, but notes that the ABCC’s denial of Sajjan’s Transfer Application appeal without prejudice certainly permits that step.
ORDER
Sajjan’s motion for judgment on the pleadings is ALLOWED, the ABCC’s cross-motion for judgment on the pleadings is DENIED, and the matter is REMANDED to the ABCC for further consideration in accordance with this opinion.
SO ORDERED.
_____________________
MICHAEL D. RICCIUTI
Justice of the Superior Court
Date: February 8, 2017 read more

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Posted by Massachusetts Legal Resources - February 9, 2018 at 8:23 pm

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