Commonwealth Journal

February 22, 2014

City’s case against ABC to move ahead

Appellate Court denies petition by state to dismiss liquor license lawsuit

by Heather Tomlinson
Commonwealth Journal

Somerset —

It appears the city’s case against the state alcohol licensing board is moving forward. 
In an opinion handed down Feb. 18 and signed by Appellate Court Judge Janet L. Stumbo, the petition for a writ of prohibition, filed by the Kentucky Department of Alcoholic Beverage Control in the City of Somerset’s case against the ABC, was denied. 
The opinion is good news to the City of Somerset, which last year filed legal action against the state to force the ABC to answer how they arrived at the decision that the city should be awarded five quota liquor licenses and which businesses should get them. The city felt that the ABC ignored its projections for what would most economically benefit Somerset and made decisions in an “arbitrary and capricious” manner. 
Following the June, 2012 vote by Somerset citizens to allow legal alcohol sales within the city limits, expected plans for incoming liquor stores included a proposed $5 million investment by regional business Liquor World to not only locate in the North Plaza shopping center but renovate it and even bring in a chain restaurant interest.
Instead, the ABC issued licenses to three smaller-inventory stores — Apple’s Wine and Spirits, First Stop Party Supply, and Wildcat Beer, Wine and Spirits (though the city has noted that the latter was more in line with their expectations) — and two pharmacy chains with a limited supply, Rite-Aid and Walgreens.
The city felt that the ABC didn’t take their needs and economic forecast into consider-ation, and even held up issuing licenses to some of the above businesses while they tried a two-fold approach to working out a deal for more licenses — both through the courts and more directly. 
It seemed that the two parties would reach a compromise — allowing for the city’s court case against the ABC to initially be dropped — when, following administrative proceedings, the ABC agreed to increase the license allotment to Somerset. But that decision was quickly shot down after when a review subcommittee — of which Somerset’s own state representative Tommy Turner was a part — ruled the ABC’s regulations deficient. That decision sent the two parties back to the drawing board, and Somerset again turned to the court in August in seeking a resolution. 
Pulaski Circuit Judge David A. Tapp has since denied a motion from the ABC to dismiss the case, and in November 2013, the ABC asked the Kentucky Court of Appeals “to prohibit the Pulaski Circuit Court from acting outside its subject matter jurisdiction,” which, it claimed, would “cause immediate irreparable harm” to the state.
The ABC filed a petition for writ of prohibition “to prohibit the continued prosecution of an action in the Pulaski Circuit Court,” following Judge Tapp’s decision to let the case continue here in Somerset rather than in Frankfort, where the ABC’s offices are located.
In its denial of the writ of prohibition, the appellate court stated that the dispute between the city and ABC is an “actual controversy” — meaning Somerset, or the plaintiff, can seek relief through the local trial court. 
The appellate court also found that the ABC failed to both show evidence of irreparable and immediate injury, caused by Tapp’s decision to allow the case to continue in Pulaski County, and demonstrate a lack of another remedy by appeal. 
“Issues of standing have been routinely considered by this Court on direct appeal” states the appellate opinion. “ ... We further conclude that this case does not implicate the certain special cases exception because “the exception allows a petitioner to avoid only the requirement of great and irreparable injury, not the requirement of lack of an adequate remedy by appeal.”