Oregon Advisory Opinions January 01, 1958: OP 3894

Advisory Opinion Text

Action of Oregon Liquor Control Com­mission on application for license must be based on particular facts presented. It cannot be based merely on the fact that applicant's premises are within a "dry zone" established by commission action.

No. 3894 January 2, 1958 Oregon Liquor Control Commission

You state that for many years your commission has realized that "it was not a good policy to issue licenses immedi­ately adjacent to a university or col­lege." That accordingly, beginning with 1951, no license has been granted or re­newed for the sale of intoxicating liquor within a five-block area surrounding the campus of the University of Oregon in Eugene. You have requested my opinion as to whether such a license policy is contrary to the liquor statutes, which provide for local option.

ORS 471.030 (1) states as a purpose that "The Liquor Control Act shall be liberally construed so as:

* * *

"(c) To protect the safety, welfare, health, peace and morals of the people of the state.'*

ORS 471.040 gives your commission general "powers necessary to enable it

to carry out fully arid effectually all the purposes" of the Act.

ORS 471.215 authorizes your commis­sion to issue the various types of li­censes, "subject to its regulations and restrictions and the provisions of the Liquor Control Act."

ORS 471.290 forbids the granting or renewal of any license "until the provi­sions of the Liquor Control Act and the regulations of the commission have been complied with."

The statutory grounds for refusal to license an applicant are set forth in ORS 471.295, and include, if the commission has reasonable ground to believe it to be true, * * * that the granting of a license in the locality set out in the application is not demanded by public interest or conveni­ence."

It was pointed out in Perry v. Oregon Liquor Control Commission, 180 Or. 495, that the Liquor Control Act was enacted for the purpose of controlling the sale and consumption of alcoholic beverages, the regulation of which has always been "a vexatious and difficult problem." Further, that the commission was cre­ated and vested with wide discretion by the legislature, and that courts should not interfere with the exercise of dis­cretion by such an administrative agency, "unless it plainly appears that there has been an abuse thereof."

To like effect is Casciato v. Oregon Liquor Control Commission, 181 Or. 707, where it was said, at page 716:

"While the principle, that where judicial discretion is given to a court, the action of such court will not be overruled or reversed unless it be shown that such court abused its discretion is supported by the authorities above quoted and cited, that principle is equally applicable to the orders of adminis­trative bodies vested with discretion in mak­ing or refusing to make such orders."

In Olds v. Kirkpatrick et al., 183 Or. 105, at page 109, the Supreme Court said:

"The Oregon Liquor Control Commission has been vested by the legislature with dis­cretionary power to grant or to refuse an application for a license to sell beer at re­tail. Unless the Commission's action in grant­ing or in refusing a license is clearly an abuse of discretion, the courts will not review it. Casciato v. Oregon Liquor Control Comm., Or. 185 P. (2d) 246, 250. Refusal by the Com­mission to issue a license, without having made due inquiry into the relevant facts and without stating its reasons for such refusal, would be arbitrary and not the exercise of legal discretion. * * *"

But,

"* * * On the other hand, where a li­censing board does assign a valid reason for refusing to grant a license, the courts, in the absence of a showing that the action of the board was an abuse of its clear legal duty in the premises, will not assume that the reason assigned by the board was lacking in substance. * * *"

Again,

"The Commission may refuse to issue a license if it has reasonable ground to believe that the granting of a license in the locality of the applicant's premises is not demanded by public interest or convenience. * * *"

The court further said that in passing upon applications the commission is con­cerned primarily in ascertaining and promoting the public interest, is not limited in the scope of its inquiry, and must rely to a considerable extent upon the reports of its own investigators. The commission's general finding, based upon relevant facts, to the effect that issu­ance of a license was not demanded by public interest or convenience, suffici­ently states the reason for the rejection of an application; hence no duty rested upon the commission to issue one.

The smallest unit with which the local option law is concerned is an incorpo­rated city, and there is no method pro­vided whereby the question of prohibit­ing the sale of alcoholic liquor in a por­tion of such a city may be submitted to the electorate. Consequently, the pol­icy which you mentioned respecting an area surrounding the University of Ore­gon campus does not conflict with the local option provisions. Such area com­prises only a small portion of the total area of the City of Eugene. But such provisions do not relieve the commission of its duty and responsibility to deter­mine whether the granting of licenses for the sale of alcoholic liquor in such area is demanded "by public interest or convenience."

In performing that duty and responsi­bility the commission performs a quasi judicial function. In making its deci­sion the commission's discretion is not absolute but must be exercised in ac­cordance with the law. Gouge v. David et al., 185 Or. 437. The provision that it may deny a license when "the grant­ing of a license in the locality set out in the application is not demanded by public interest or convenience" neces­sarily implies that its decision should be based on the evidence in the particular case.

In determining the power and author­ity of an administrative agency of the state one must necessarily look to the statute creating such agency, as the agency has only those powers expressly granted to it by statute and those neces­sarily implied therefrom. Gouge v. David, supra; Sunshine Dairy v. Peter­son, 183 Or. 305, 326; Opinions of the Attorney General, 1954-1956, p. 111.

The state liquor statutes are bare of any provision authorizing the creation by the commission, or any one else for that matter, of a so-called "dry zone", except via a city-wide or county-wide local option election, as previously noted. Denial of an application on the ground that the premises sought to be licensed are within the boundaries of a five-block zone immediately adjacent to the Uni­versity of Oregon, which zone has, ac­cording to your letter, heretofore been established, would appear to be clearly arbitrary, capricious and unauthorized by any existing provision of law. See Olds v. Kirkpatrick, supra.

The establishment of fixed "dry zones" within certain distances, of schools, colleges, universities, churches, etc., is a matter which should be ad­dressed to the legislature for its con­sideration.

Your duty under the law is to con­sider each application for a license to sell alcoholic liquors as it is presented. In giving consideration to local condi­tions the commission may require the recommendation of the county court or city commission. ORS 471.210 (2). Li­censes are granted or denied upon statu­tory grounds. The grounds for refusal have been expressly set out in ORS 471.295. Within the enumerated grounds for refusal of a license the commission may act. To deny or refuse a license by creating an arbitrary zone would be exercising powers exclusively granted to the legislature under the Constitu­tion. Gouge v. David, supra.

This is not to say that the commission cannot, on reasonable grounds, deny an application for a license to premises im­mediately adjacent to universities and colleges. The opinion expressed herein is that the commission's action on each application must be based on the par­ticular facts presented, and cannot be based merely on whether the premises fall either within or without the bound­aries of an arbitrary "dry zone" es­tablished not by law, but by commission action.

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