Please E-mail suggested additions, comments and/or corrections to Kent@MoreLaw.Com.
Help support the publication of case reports on MoreLaw
Date: 08-17-2020
Case Style:
Floyd's Legacy, LLC d.b.a. Club De Ja Vu v. Ohio Liquor Control Commission
Case Number: 19AP-704
Judge: Lisa Sadler
Court: IN THE COURT OF APPEALS OF OHIO TENTH APPELLATE DISTRICT
Plaintiff's Attorney:
Call 918-582-6422 for free help finding a great liquor license lawyer.
Defendant's Attorney: Dave Yost, Attorney General, and Hallie C. Saferin
Description:
 |
{¶ 2} Appellant operates as a night club located in Youngstown, Ohio. At all
relevant times, appellant held a Class D-1, 2, 3, 3-A liquor permit issued by the Ohio
Division of Liquor Control ("division"). Darlene Harris has been owner and managing
member of appellant since 2015.
No. 19AP-704 2
{¶ 3} On November 4, 2017, at approximately 2:20 a.m., a shooting occurred
within the club and a second shooting outside the permit premises resulting in injuries to
four people. Around this time, appellant filed its renewal applications for its Class D-1, 2,
3, 3-A liquor permit. On December 20, 2017, the Youngstown City Council ("city")
presented objections and concerns to the renewal of appellant's liquor permit and
requested a hearing. (Ex. C: Youngstown City Council Resolution 17-43.) On July 12, 2018,
the division held a hearing to determine if appellant's renewal applications for 2017-2018
and 2018-2019 should be denied for the reasons stated in R.C. 4303.292(A). On
September 25, 2018, the division sent a letter by certified and first-class mail to Harris, as
managing member and individually, denying appellant's liquor permit applications. The
division provided the following reasons for the denial:
1) The applicant, any partner, member, officer, director, or
manager thereof has shown a disregard for the laws,
regulations, or local ordinances of the State, and will
operate the permit business in a manner that demonstrates
a disregard for the laws, regulations, or local ordinances of
the State. R.C. §4303.292(A)(1)(b).
2) The applicant has failed to provide a penalty of ten percent
of the permit fee, despite having filed the Class D-1-2-3-3A
liquor permit renewal application less than fifteen days
prior to the expiration of the permit. R.C. §§4303.13,
4303.14, 4303.15, 4303.16, 4303.24, and 4303.271(C).1
* * *
3) The Division also denies and rejects the 2017-2018 and
2018-2019 renewal applications for good cause pursuant to
its general authority to grant and refuse permits. The
Division has considered environmental factors affecting the
maintenance of public decency, sobriety, and good order,
including the number and location of permit premises in
the immediate area as authorized or required by law. R.C.
§§4303.271(A), 4301.10(A)(2), and O.A.C. §4301:1-1-12(B).
(Sept. 25, 2018 Order.)
{¶ 4} At appellant's request, a hearing before the commission was held on April 11,
2019. Appellant received notice of the hearing as evidenced by the March 21, 2019 return
1 At the April 11, 2019 hearing, the parties stipulated before the commission that while appellant tried to remit
payment, the division refused to accept it since, at the time payment was attempted, the renewal application
had already been denied. Appellant was able to make payment, and the commission dismissed the violation
on motion of the attorney general.
No. 19AP-704 3
receipt entered into the record. The hearing included testimony from three witnesses:
Detective Michael Lambert, Harris, and April Jackson. Lambert testified he has been a
detective sergeant with the Youngstown Police Department since 2001. Lambert stated
that on November 4, 2017, he was dispatched with his partner to assist the patrol division
in the investigation of a shooting at the club. It was later discovered that two individuals
were shot inside the club on the dance floor and two outside of the permit premises.
Lambert further testified he reviewed the security video and confirmed when law
enforcement initially arrived, they were denied entry into the club for 15 minutes. Lambert
testified one report indicated law enforcement was only allowed in the club after
threatening to revoke the club's liquor permit. At approximately 2:43 a.m., the police were
eventually granted access to the building.
{¶ 5} Lambert testified the Youngstown Police Department had been called out to
the club on multiple occasions from May 29, 2016 to November 4, 2017 for incidents such
as theft, assault, and other serious issues. Lambert testified the club has a reputation as a
place "where people drink, carry guns, get into gunfights and people get shot." (Tr. at 39.)
Lambert did concede that the incidents before the November 4 shooting did not constitute
liquor permit violations.
{¶ 6} Next, Harris testified she has been the owner and managing member of
appellant since 2015. Harris stated that during normal business operation, the club
generally opens at 8:00 p.m. and closes at 2:30 a.m. The physical layout of the bar includes
16 video cameras that cover the inside and outside of the club with monitors located in the
manager's office. The front entrance has 2 sets of steel doors: 1 front exterior door and 1
front interior door separated by approximately 4 feet. Before the November 4 shooting,
Harris testified the club had no prior liquor permit violations.
{¶ 7} Finally, Jackson testified she was the manager of the club during the
November 4 shooting. According to Jackson, the club had three security guards on duty to
check patrons for identification and weapons. Jackson characterized the scene after the
shooting as "chaos." (Tr. at 62.) Jackson stated she was not aware of any club employee
calling the police to report the shooting. Jackson did concede that before police arrived,
one employee started cleaning up the area where the shooting occurred. Jackson further
testified cleaning was just part of the employee's normal duties. "[Y]ou grab the dust mop,
No. 19AP-704 4
you go to clean it, you see a spill, you get the mop. That's it." (Tr. at 56.) Jackson claimed
that denying law enforcement access to the club was unintentional because she could not
hear the knocking through the two sets of steel doors. Jackson stated she immediately
opened the door after seeing law enforcement on the video monitor.
{¶ 8} Following the hearing, on May 2, 2019, the commission affirmed the
division's denial of appellant's 2017-2018 and 2018-2019 renewal applications. The
commission provided appellant notice of its right to appeal, pursuant to R.C. 119.12, by
filing within 21 days after the mailing date of the order.
{¶ 9} On May 16, 2019, appellant appealed to the Franklin County Court of
Common Pleas asserting two assignments of error. Appellant alleged a number of due
process violations and that the commission's ruling was an unlawful penalty based solely
on the events of November 4, 2017. On September 11, 2019, the trial court overruled
appellant's objections and affirmed the administrative ruling. The trial court found the
commission provided appellant adequate notice under R.C. 119.07 and concluded
appellant's due process rights were not violated. The trial court also found that even if there
were any due process discrepancies, appellant failed to provide any explanation as to how
the four allegations prejudiced its ability to present its case.
{¶ 10} Regarding the second assignment of error, the trial court determined the
commission's ruling was based on reliable, probative, and substantial evidence. "[T]he
Appellant failed to put forth a valid argument that the evidence relied upon by the
Commission was internally inconsistent, or was impeached by evidence of a prior
inconsistent statement. Here the Appellant relied upon its own evidence concerning its
explanation of the events of November 4, 2017." (Sept. 11, 2019 Decision & Entry at 7.) The
trial court also rejected appellant's contention that there was no evidence that supported
the finding the permit holder acted with disregard of the laws, regulations, or local
ordinances citing Lambert's testimony at the hearing. Finally, the trial court found that
while appellant claimed the penalty was too severe given its record of good conduct, the
trial court held it was not permitted under Ohio law to review the penalty if the punishment
was within the commission's lawful authority.
{¶ 11} Appellant filed a timely appeal.
No. 19AP-704 5
II. ASSIGNMENTS OF ERROR
{¶ 12} Appellant assigns the following as trial court error:
[1.] The due process rights of Floyd's Legacy, LLC, Darlene
Harris, Managing Member and Darlene Harris, Individually,
have been violated.
[2.] The Appellee's failure to renew the liquor permit
applications for the years 2017-18 and 2018-19 is an unlawful
penalty solely based on the events of November 4, 2017.
III. STANDARD OF REVIEW
{¶ 13} Pursuant to R.C. 119.12, when reviewing an order of an administrative
agency, a common pleas court must review the entire record to determine whether reliable,
probative, and substantial evidence supports the agency's order and whether the order is in
accordance with law. Univ. of Cincinnati v. Conrad, 63 Ohio St.2d 108, 110-11 (1980). The
Supreme Court of Ohio has defined the terms reliable, probative, and substantial evidence
as follows:
(1) "Reliable" evidence is dependable; that is, it can be
confidently trusted. In order to be reliable, there must be a
reasonable probability that the evidence is true.
(2) "Probative" evidence is evidence that tends to prove the
issue in question; it must be relevant in determining the issue.
(3) "Substantial" evidence is evidence with some weight; it
must have importance and value.
Our Place, Inc. v. Ohio Liquor Control Comm., 63 Ohio St.3d 570, 571 (1992).
{¶ 14} The common pleas court must give due deference to the administrative
agency's resolution of evidentiary conflicts, but "the findings of the agency are by no means
conclusive." Conrad at 111. The trial court's "review of the administrative record is neither
a trial de novo nor an appeal on questions of law only, but a hybrid review in which the
court 'must appraise all the evidence as to the credibility of the witnesses, the probative
character of the evidence, and the weight thereof.' " Lies v. Ohio Veterinary Med. Bd., 2
Ohio App.3d 204, 207 (1st Dist.1981), quoting Andrews v. Bd. of Liquor Control, 164 Ohio
St. 275, 280 (1955). The common pleas court conducts a de novo review of questions of
law, exercising its independent judgment in determining whether the administrative order
is " 'in accordance with law.' " Ohio Historical Soc. v. State Emp. Relations Bd., 66 Ohio
St.3d 466, 471 (1993), quoting R.C. 119.12.
No. 19AP-704 6
{¶ 15} An appellate court's review of an administrative decision is more limited than
that of the trial court. Pons v. Ohio State Med. Bd., 66 Ohio St.3d 619, 621 (1993). The
appellate court is to determine only whether the common pleas court abused its discretion.
Id. Absent an abuse of discretion, a court of appeals may not substitute its judgment for
that of an administrative agency or the common pleas court. Id. An appellate court,
however, has plenary review of purely legal questions. Big Bob's, Inc. v. Ohio Liquor
Control Comm., 151 Ohio App.3d 498, 2003-Ohio-418, ¶ 15 (10th Dist.).
IV. LEGAL ANALYSIS
A. Appellant's First Assignment of Error
{¶ 16} In its first assignment of error, appellant argues its due process rights were
violated on four separate occasions.2 For the reasons that follow, we disagree.
{¶ 17} The Fourteenth Amendment to the United States Constitution and Section
16, Article I of the Ohio Constitution mandate that administrative proceedings are
consistent with due process. Richmond v. Ohio Bd. of Nursing, 10th Dist. No. 12AP-328,
2013-Ohio-110, ¶ 10, citing Mathews v. Eldridge, 424 U.S. 319 (1976); Doyle v. Ohio Bur.
of Motor Vehicles, 51 Ohio St.3d 46 (1990). "Procedural due process requires
administrative agencies to provide an individual with fair notice of the precise nature of the
charges that the agency will pursue at a disciplinary hearing." Macheret v. State Med. Bd.,
188 Ohio App.3d 469, 2010-Ohio-3483, ¶ 24 (10th Dist.). "When a liquor permit holder's
right to operate under his permit is in jeopardy, due process of law mandates that the
permit holder have an opportunity to be heard at a hearing, and that the permit holder
receive adequate notice of the hearing." C & H Investors v. Ohio Liquor Control Comm.,
10th Dist. No. 98AP-1519 (Dec. 9, 1999). Determining whether due process requirements
have been satisfied presents a legal question we review de novo. Flynn v. State Med. Bd. of
Ohio, 10th Dist. No. 16AP-29, 2016-Ohio-5903, ¶ 46, citing Judd v. Meszaros, 10th Dist.
No. 10AP-1189, 2011-Ohio-4983, ¶ 19. Appellant must also show that any violation of due
2 Appellant has alleged that the due process rights of the club, Harris, as managing member, and Harris,
individually, were violated. The club is the only party named in this action. While notice requirements to
permit holders contemplate service on a managing member or an agent for the company, the due process
rights of those individuals are only relevant as they relate to appellant. Accordingly, our analysis will be
limited as to whether the four allegations violate appellant's due process rights.
No. 19AP-704 7
process resulted in prejudice. Griffin v. State Med. Bd. of Ohio, 10th Dist. No. 11AP-174,
2011-Ohio-6089, ¶ 26.
{¶ 18} Pursuant to R.C. 4301.25(A), "[t]he liquor control commission may suspend
or revoke any permit issued under this chapter or Chapter 4303. of the Revised Code for
the violation of any * * * lawful rule of the commission." Ohio Adm.Code 4301:1-1-65
provides notice and hearing requirements for the commission. Notice of a hearing before
the commission to determine whether the permit will be revoked, suspended, or cancelled
must be sent "by certified mail, return receipt requested, to the holder of the permit at the
address set forth in the permit." Ohio Adm.Code 4301:1-1-65(A). While it is not expressly
stated in the code, we have held that R.C. 119.07 provides an alternative method of service
if notice by certified mail is unsuccessful. C & H Investors.
{¶ 19} R.C. 119.07 requires " 'notice shall be given by registered mail, return receipt
requested,' 'except when a statute prescribes a notice and the persons to whom it shall be
given[.]' When notice by registered mail is returned due to failure of delivery, notice may
be given either by personal delivery or by publication in a newspaper in the manner
specified in R.C. 119.07." Id., quoting R.C. 119.07.
{¶ 20} We have found that notice consistent with R.C. 119.07 " 'satisfies these
procedural due process requirements because it sets forth a process reasonably calculated
to apprise the party of the charges against him and the opportunity to request a hearing.' "
Richmond, 2013-Ohio-110, at ¶ 11, quoting Kellough v. Ohio State Bd. of Edn., 10th Dist.
No. 10AP-419, 2011-Ohio-431, ¶ 36; see also C & H Investors (finding compliance with the
secondary method of notice under R.C. 119.07 satisfies procedural due process of notice).
1. Notice to Permit Holder
{¶ 21} Appellant argues that its due process rights were violated when notice was
not provided to the permit holder of "any ongoing liquor control violations and notice of
the conclusion of such an investigation." (Appellant's Amended Brief at 3.) After a review
of the record, we conclude appellant has been consistently appraised of the status of the
investigation since its inception. The Youngstown Police Department narrative notes on
November 13, 2017, "[o]wners of the bar Darlene harris [sic] * * * came into the detective
division and I explained the situation and their employees['] activities. They stated they
pay the security cash and will attempt to get their information [and] they stated they were
No. 19AP-704 8
not present that night and were not aware of the employees interfering." (Ex. D:
Youngstown Police Department Case Records Report.) As the commission noted in its
brief, appellant was also on notice of the investigation when it received the initial citation
on November 24, 2017. In a letter dated March 12, 2018, the permit holder was provided
notice of the April 12, 2018 citation hearing. At the April 12 hearing, the permit holder
"entered a plea of Denial W/Stipulation as to violation(s) 1, 3." (Apr. 26, 2018 Order.)
Finally, on April 26, 2018, appellant was sent the initial order noting the commission found
the permit holder committed violations 1 and 3 as set forth in the March 12 notice. Based
on the forgoing, appellant was consistently on notice of the status and conclusion of the
investigation.
2. Notice to Undersigned Counsel
{¶ 22} Next, appellant argues that its due process rights were violated when notice
was not provided to the undersigned counsel. We disagree. R.C. 119.07 only requires notice
be provided to the permit holder. Appellant has presented no evidence that the commission
was notified of counsel's representation before the initial notice was issued. Once appellant
identified counsel, the division and commission provided notice to counsel going forward.
Counsel was sent subsequent mailings of the September 25, 2018 order from the division,
the March 12, 2019 notice of hearing before the commission scheduled for April 11, 2019,
and the commission's May 2, 2019 order. As such, we find appellant's due process
argument unpersuasive.
3. Report
{¶ 23} Appellant next argues it was never provided a copy of the hearing officer's
report and recommendation after the July 12, 2018 hearing between the city and appellant.
R.C. 119.07 requires notice of the hearing "shall include the charges or other reasons for the
proposed action, the law or rule directly involved, and a statement informing the party that
the party is entitled to a hearing if the party requests it within thirty days of the time of
mailing the notice." The intent of R.C. 119.07 is to afford adequate notice to appellant to
prepare and present a defense. Backside, Inc. v. Ohio Liquor Control Comm., 10th Dist.
No. 03AP-516, 2004-Ohio-1009, ¶ 20.
{¶ 24} We find the commission's order was consistent with R.C. 119.07 and satisfied
all procedural due process requirements of the notice. The September 25, 2018 order
No. 19AP-704 9
included the grounds for rejecting the liquor permit applications, identified the purported
violations and law directly involved, and a statement notifying appellant of its right to a
hearing. Service was completed on the permit holder as evidenced by the signed return
receipt entered into the record at the April 11, 2019 hearing. Moreover, the April 11, 2019
hearing was de novo and included live testimony from three witnesses key to the resolution
of the case. See Ohio Adm.Code 4301:1-1-65(C), (D), and (E). Appellant was afforded a
meaningful hearing to present any evidence it deemed relevant to the issues at hand.
Accordingly, appellant was provided a full and fair opportunity to prepare a defense before
the commission, and no due process violation occurred.
4. Pictures
{¶ 25} Finally, appellant argues that its due process rights were violated when the
city "never furnished pictures of the permit establishment and * * * failed to make all these
photographs as part of the Record at the hearing before the Ohio Liquor Control
Commission." (Appellant's Amended Brief at 4.) This argument is without merit.
{¶ 26} The city was not required to offer evidence at the April 11, 2019 hearing and
was only a party pursuant to R.C. 4301.28. The evidentiary burden is on the "division of
liquor control, with regard to any appeal, filed by the permit holder or applicant, of an order
rejecting the issuance, transfer, or renewal of the permit." Ohio Adm.Code 4301:1-1-
65(E)(2). The city was under no obligation to present pictures of the club during the
proceeding.
{¶ 27} As such, we find no violation of appellant's due process rights occurred and
overrule appellant's first assignment of error.
B. Appellant's Second Assignment of Error
{¶ 28} In its second assignment of error, appellant argues the commission's failure
to renew the liquor permit for 2017-2018 and 2018-2019 was an unlawful penalty based
solely on the events of November 4, 2017. While appellant contests the lawfulness of the
penalty imposed by the commission in the body of its assignment of error, in its conclusion
appellant asserts the trial court erred by finding the commission's ruling was based on
reliable, probative, and substantial evidence. For clarity of analysis, we will address both
arguments together.
No. 19AP-704 10
{¶ 29} Questions of law on appeal are reviewed de novo. Altercare of Canal
Winchester Post-Acute Rehab. Ctr., Inc. v. Turner, 10th Dist. No. 18AP-466, 2019-Ohio1011, ¶ 15, citing PHH Mtge. Corp. v. Ramsey, 10th Dist. No. 13AP-925, 2014-Ohio-3519,
¶ 14. Pursuant to R.C. 4301.04(A) and 4301.25(A), the commission is authorized to
suspend or revoke any liquor permit for violation of a lawful rule of the commission. This
court has previously held that "under the relevant statutory language, the commission may
revoke a permit based on one violation." HDV Cleveland, LLC v. Ohio Liquor Control
Comm., 10th Dist. No. 17AP-362, 2017-Ohio-9032, ¶ 38; see also DKA, Inc. v. Ohio Liquor
Control Comm., 10th Dist. No. 03AP-316, 2004-Ohio-837, ¶ 13, citing Tolbert v. Ohio
Liquor Control Comm., 10th Dist. No. 98AP-285 (Dec. 3, 1998) ("[T]he commission may
revoke a permit based on only one violation.").
{¶ 30} In the instant case, while Lambert testified to several other serious incidents
at the club, the November 4 shooting is the only one that constituted a permit violation.
Because the commission is authorized to deny appellant's renewal applications based on a
single violation, as a matter of law, the November 4 violation is enough to revoke appellant's
permit if the ruling is supported by reliable, probative, and substantial evidence.
Accordingly, appellant's argument that the trial court erred as a matter of law in revoking
the permit solely on November 4, 2017 is without merit.
{¶ 31} Appellant next argues the trial court erred in finding there was reliable,
probative, and substantial evidence for the commission to deny appellant's renewal
applications. When the commission reviews a renewal application of an existing permit
holder, "the division shall renew the permit unless good cause for rejection is shown."
(Emphasis omitted.) SM & AM, Inc. v. Ohio Liquor Control Comm., 10th Dist. No. 00AP1298 (May 22, 2001), citing R.C. 4303.271(A). " 'Good cause rejection is not restricted to a
clearly identifiable incident but, instead, the division may examine the cumulative effects
of adverse environmental conditions, objections to renewal, the impact on police
enforcement, and other relevant circumstances.' " Barnhill v. Ohio Liquor Control Comm.,
10th Dist. No. 15AP-30, 2015-Ohio-3747, ¶ 14, quoting 3M, Inc. v. Liquor Control Comm.,
10th Dist. No. 00AP-529 (Jan. 25, 2001). R.C. 4303.292 provides the various grounds the
division may cite for rejection of a liquor permit. "The commission may draw reasonable
inferences based on the evidence before it." Valentino v. Ohio Liquor Control Comm., 10th
No. 19AP-704 11
Dist. No. 02AP-586, 2003-Ohio-1937, ¶ 20. If the trial court determines there is reliable,
probative, and substantial evidence in the record to support the commission's ruling, it
must be upheld. Barnhill at ¶ 14, citing Marciano v. Ohio Liquor Control Comm., 10th
Dist. No. 02AP-943, 2003-Ohio-2023, ¶ 19. At the appellate level, we are limited in our
review to determine only if the trial court abused its discretion and may not substitute our
judgment for that of the court or commission. Pons, 66 Ohio St.3d at 621.
{¶ 32} After a review of the record, we find the trial court did not abuse its discretion
in affirming the order of the commission. On November 4, 2017, a shooting occurred on
the dance floor of the club and a second shooting occurred minutes later outside the permit
premises resulting in injuries to four people. Testimony at the hearing revealed neither the
manager nor the employees called law enforcement to alert them to the shootings. Once
law enforcement did arrive, they were denied entry into the club for 15 minutes. While the
police were precluded from entering the club, an employee compromised the crime scene
by mopping up blood on the dance floor presumably from one of the victims. Testimony
that the employee was only conducting his normal closing procedures contradicts
appellant's previous argument that law enforcement was not called due to the chaotic scene
after the shooting. Accordingly, the trial court did not abuse its discretion concluding that
there was reliable, probative, and substantial evidence for the commission to deny the
renewal applications of appellant.
{¶ 33} Finally, appellant argues the penalty of revoking the liquor permit was too
severe. As the trial court correctly concluded, it is well-settled law that if an agency board's
order is supported by reliable, probative, and substantial evidence, the reviewing court may
not modify the sanction authorized by the statute. Henry's Cafe, Inc. v. Bd. of Liquor
Control, 170 Ohio St. 233 (1959). "[W]e have consistently held that we lack authority to
modify a penalty lawfully imposed by the commission, even where it is argued that the
penalty is unduly harsh." Deanru, LLC v. Ohio Liquor Control Comm., 10th Dist. No.17AP777, 2018-Ohio-2854, ¶ 12, citing Abdel Latif, Inc. v. Ohio Liquor Control Comm., 10th
Dist. No. 06AP-1078, 2007-Ohio-2943, ¶ 14; Goldfinger Ents., Inc. v. Ohio Liquor Control
Comm., 10th Dist. No. 01AP-1172, 2002-Ohio-2770, ¶ 13-17. See also, e.g., Lindner v. Ohio
Liquor Control Comm., 10th Dist. No. 00AP-1430 (May 31, 2001) ("As a practical matter,
courts have no power to review penalties meted out by the commission. Thus, we have little
No. 19AP-704 12
or no ability to review a penalty even if it seems on the surface to be unreasonable or unduly
harsh."); Merritt v. Ohio Liquor Control Comm., 10th Dist. No. 02AP-709, 2003-Ohio-822,
¶ 34. Because the commission was within its authority to deny appellant's renewal
applications for the liquor permit, we have no power to review the penalty handed out by
the commission.
{¶ 34} Accordingly, appellant's second assignment of error is overruled.
Outcome: For the forgoing reasons, we overrule appellant's first and second
assignments of error and affirm the judgment of the Franklin County Court of Common
Pleas.
Plaintiff's Experts:
Defendant's Experts:
Comments: