Challenge to alcohol permit presents issue of first impression


Jennifer Nelson for

A liquor store seeking to challenge the type of alcohol permit awarded to a Hamilton County specialty food store does not have standing to pursue judicial review under the Administrative Orders and Procedures Act, the Indiana Court of Appeals ruled in a first impression case.

21st Amendment Inc. objected at a hearing held by the Hamilton County Local Alcoholic Beverage Board in which Grapevine Cottage, a local specialty food shop that also sold alcohol, sought to renew and transfer its license. Grapevine holds a Type 115 grocery store alcoholic beverage permit; 21st Amendment has a Type 217 package store alcoholic beverage permit. It claimed most of Grapevine’s sales were in alcohol so it should have to hold a different permit and that granting Grapevine’s request would dilute 21st Amendment’s permit.

21st Amendment claimed it had a statutory right to bring an action to abate the sale of alcohol that constitutes a nuisance. The Indiana Alcohol & Tobacco Commission denied its petition to intervene, leading to the liquor store to file a verified petition for judicial review under AOPA. 21st Amendment claimed it had standing because it is a “permittee with a statutory right to abate a nuisance.” The commission filed a motion to dismiss, claiming 21st Amendment is barred from seeking judicial review under law, or lacks standing to do so. The trial court found the liquor store couldn’t seek to abate the public nuisance on a petition for judicial review and gave it 30 days to file a separate amended complaint on that issue.

“At issue in this case is Indiana Code section 4-21.5-5-3(a)(3), which accords standing for judicial review if the party has ‘standing under a law applicable to the final agency action.’ While our courts have previously decided standing questions under the other subsections of the statute, it appears that our courts have not yet had occasion to address standing under Indiana Code section 4-21.5-5-3(a)(3),” Judge Patricia Riley wrote.

“We agree with 21st Amendment to the extent that a party with ‘standing under a law applicable to the final agency action’ is not obligated to pursue relief under the separate statute; rather, judicial review under the AOPA is appropriate in those situations. I.C. § 4-21.5-5-3(a)(3). Here, however, we cannot say that the Commission’s issuance of an alcoholic beverage permit constitutes a final agency action to which the public nuisance laws apply,” she continued.

“Rather, as the public nuisance statutes establish, it is the conduct of the permittee (i.e., Grapevine Cottage) or conduct otherwise carried on in premises where alcoholic beverages are kept/sold that may give rise to a public nuisance claim. See I.C. §§ 7.1-2-6-1; -2. As the alleged nuisance is not the result of the agency’s action, but rather the subsequent conduct of the permittee, 21st Amendment does not have standing under Indiana Code section 4-21.5-5-3(a)(3) of the AOPA. As the trial court found, 21st Amendment’s statutory right to abate and enjoin a public nuisance for improper alcohol sales must be achieved through a separate nuisance action.”

The case is 21st Amendment, Inc. v. Indiana Alcohol & Tobacco Commission, 49A05-1612-PL-2863.