Is Your Liquor Ordinance Tight Enough to Hold Water (Or Beer)?

By Rachel Carlson, LMC Staff Attorney, http://lmccodification.blogspot.com

Its closing time, and you may be wondering where your liquor ordinance is. Is it working
for your city? Is it drafted to require patrons to stop drinking and start heading home in
a prompt manner? Does it require bar staff to vacate the city premises within ½ hour of
closing? Or is it letting those wily partiers simply close the doors and claim that they’re
having a private party where (wink, wink) no one is being served.

Or is it license renewal time and you’re faced with a bar owner who won’t maintain the
bar’s property. Are you wondering if you’ll be able to deny the renewal, because of the
litter on the property? Have you checked your ordinance lately?

Or maybe the city has a bar owner who doesn’t hire adequate security and allows fights
to break out. Or regularly violates noise restrictions and now the city would like to
revoke the establishment’s liquor license. Does your ordinance address the procedures
the council should follow to provide sufficient due process? Council may fear letting the
bar owner continue to endanger the public, but also the lawsuit that might result if the
disgruntled bar owner doesn’t get a fair process.

Over the years, I have heard staff and officials voice these types of nuisance concerns
about liquor establishments in their city many times. Often they want to know if state
law covers their concerns and provides a means to address them. Most of the time,
however, it simply doesn’t. This surprises many city officials.

State Law Regulation of Liquor Establishments:

The Minnesota Liquor Act heavily regulates two main issues. First, it regulates the
issuance of licenses (types of licenses, who gets them, insurance required, license fees,
etc). Second, it regulates illegal sales (to minors or obviously intoxicated persons, at the
wrong day or time, etc.) and related dram shop liability issues. The Liquor Act doesn’t
offer much to help cities trying to deal with nuisance behaviors that can occur around
liquor establishments – for example, unsightly properties, noise and disorderly conduct.

Fortunately, the Liquor Act favors city ordinance regulation on these topics. Minn. Stat.
§ 340A.509 states, “a local authority may impose further restrictions and regulations
on the sale and possession of alcoholic beverages within its limits.” As a result, city
ordinance may always be more restrictive than the Liquor Act and it can certainly “fill in
the blanks” where state law is silent.

What Should We Include in Our Liquor Ordinance?

Here are some suggestions for provisions to include in your local liquor ordinance to
make it tight enough to hold water (or beer). These suggestions all relate to issues
generally not covered in depth by the Liquor Act. Most of these suggestions are drawn
from the Model LMC Liquor Licensing Ordinance that can be found at this link:
http://tinyurl.com/23xkxys. You can also find detailed sample language for these
provisions there.

Evacuation Clause:

An evacuation clause requires the bar to have a “last call” and to have customers leave
promptly at closing time. This prevents lingering and socializing that may create a noise
nuisance or other disorderly conduct. It also reduces the temptation for illegal sales
when the bar doors have closed to the public and the supposed “private party”
commences. Some evacuation clauses also require staff to leave the premises within a
reasonable time after closing, while still allowing for clean-up and other end of shift
activities.

Nudity and Adult Uses:

Cities may ban liquor establishments from having adult entertainment or nudity on the
premises. The First Amendment offers important protections to exotic dancers and
other adult uses. However, the First Amendment does not protect the right of people to
drink while performing (or watching) exotic dancing.

Location of Liquor Establishments:

For cities, the only state Liquor Act restriction on liquor establishment location relates
to state facilities and zoning. Minn. Stat. § 340A.412 prohibits locating a liquor
establishment in “areas restricted against commercial uses through zoning.” Cities who
don’t want liquor establishments near schools, daycares, churches or youth centers
should put these restrictions in their local ordinance. If a city doesn’t have zoning in
place, the city may also wish to restrict location near residences as well.

Types of Licenses:

Over the past few years, the State Legislature has added several new types of licenses to
the Liquor Act. It has also broadened the categories of businesses that may receive
existing licenses. If you haven’t updated your liquor ordinance in the past decade, you
may be missing out on brew-pub licenses, culinary class licenses and wine licenses for
theaters. Cities are not required to issue these types of licenses, but if they choose to
issue, must authorize them through local ordinance.

Times and Days of Sale:

Cities are authorized by Minn. Stat. § 340A.504 to restrict times and days of sale beyond
state law requirements. However, restricted on-sale hours for intoxicating liquor must
apply equally to on-sale hours of 3.2 percent malt liquor. A city may not permit the sale
of alcoholic beverages during hours when the sale is prohibited by the Liquor Act.
Define Liquor Act Terms More Restrictively:

The Liquor Act allows restaurants to obtain on-sale licenses. Minn. Stat. § 340A.101
Subd. 25 defines the term restaurant pretty simply as “an establishment . . . where meals
are regularly prepared on the premises and served at tables to the general public, and
having a minimum seating capacity for guests as prescribed by the appropriate license
issuing authority.” Cities may wish to define a restaurant more narrowly. For example,
requiring a certain percentage of the profits to be related to food sales, require a
minimum seating capacity, require menus and waiters, and prohibit “heat and eat” type
establishments where only pizza is reheated and offered to customers.

Cities may also wish to define the terms “non-profit” or “charitable organization” for the
purpose of temporary 3.2 beer licenses under Minn. Stat. § 340A.403 and “compact and
contiguous” for the purposes of Minn. Stat. § 340A.410. These are both relatively vague
terms found in the Liquor Act that raise concerns from time to time.

Due Process Concerns

Violations of city liquor ordinances can result in both civil and criminal penalties. As a
result, ordinances should be written clearly to avoid US Constitutional 14th Amendment
concerns (ordinances provisions that are vague will be considered void). The city liquor
ordinance should specify the types of behaviors/problems that may result in penalties.
This puts the liquor licensee on notice that they may be punished –either civilly or
criminally – for violations.

There are also state law due process requirements that should be met in the city liquor
ordinance. The Liquor Act at Minn. Stat. § 340A.415 specifically enumerates acts for
which a license may be revoked or a penalty imposed. This is a limited list that includes:

• Selling alcoholic beverages to another retail licensee for the purpose of resale;

• Purchasing alcoholic beverages from another retail licensee for the purpose of resale

• Conducting or permitting the conduct of gambling on the licensed premises in

violation of the law;

• Failing to remove or dispose of alcoholic beverages when ordered by the commissioner

to do so; and

• Failing to comply with an applicable statute, rule, or ordinance relating to alcoholic

beverages,

As a result, cities are limited by the Liquor Act to revoking licenses or imposing civil
penalties for issues that violate city ordinance. Prohibited nuisance behaviors should be
listed and defined in the liquor ordinance, if the city would like to revoke licenses or
impose penalties related to these issues. For example, litter, noise, disorderly conduct,
etc. The city may also choose to simply cross-reference other sections of city ordinance
on these topics in the liquor ordinance.

Finally, the Liquor Act requires that notice and hearing must be provided to a licensee
prior to a suspicion or revocation. As a result, city ordinance should also specify
procedures for notice, hearing and imposition of any penalty.

Conclusion

Liquor establishments can be thriving local businesses that add to the local community
and economy. However, these types of businesses may also create unique nuisance
concerns. A carefully drafted city liquor ordinance must be the bedrock for city
regulation and enforcement efforts.

About the Author:

Rachel Carlson is an attorney with the League of Minnesota Cities. The League of
Minnesota Cities is a membership organization serving Minnesota cities since 1913.
LMC Codification is a specialized service to help our cities maintain complete, up to
date and affordable code books in a frequently changing legal landscape. The LMC
Codification blog can be found at: http://lmccodification.blogspot.com.