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Decatur Liquors, Inc. v. District of Columbia

June 16, 2005

DECATUR LIQUORS, INC., ET AL., PLAINTIFFS,
v.
DISTRICT OF COLUMBIA, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Rosemary M. Collyer United States District Judge

MEMORANDUM OPINION

Can the Council of the District of Columbia adopt a substantive change to a legislative bill at its Final Reading and pass the bill as amended without public notice and an opportunity for public discussion? Finding that this procedure violated a mandatory provision of the Home Rule Act, the Court will declare the Targeted Ward 4 Moratorium Zone, as provided in Title 1, Section 101(o) of the Omnibus Alcoholic Beverage Amendment Act of 2004 ("Omnibus Act" or "Act"), null and void.

PROCEDURAL SUMMARY

Plaintiffs are holders of Class A and Class B liquor licenses in Ward 4 of the District of Columbia. On November 12, 2004, they filed a complaint and moved for a temporary restraining order ("TRO") to prohibit the District of Columbia and the Alcoholic Beverage Regulation Administration ("Defendants") from enforcing the Targeted Ward 4 Moratorium Zone and its related provisions, as provided in Title I, Section 101(o) of the Omnibus Act, D.C. LAW 15-187 (to be codified at D.C. CODE § 25-3419(a)-(d)). These provisions would, inter alia, place a moratorium on the sale of single containers of beer, malt liquor, and ale in parts of Ward 4 in Washington, D.C. Plaintiffs allege that the Omnibus Act: 1) was not duly enacted and is null and void; 2) denies due process to current license holders; 3) denies equal protection to license holders; and 4) is void for vagueness. After a hearing held on November 12, 2004, the Court issued a Temporary Restraining Order that was later extended by agreement of the parties.

In anticipation of oral argument on the motion for a preliminary injunction, Defendants filed a motion to dismiss or for summary judgment, which was fully briefed. On December 21, 2004, the Court heard oral argument, ruled on the record in open court, and issued a preliminary injunction. The Court found that "Plaintiffs have made a substantial showing of their likelihood of success on the merits of their claim that their class A and class B liquor licenses qualify as 'property' -- thereby implicating the protections of procedural due process under the Fifth Amendment to the United States Constitution -- and that their rights to procedural due process have been violated." See Dkt. No. 15 (December 21, 2004 Preliminary Injunction) at 2.*fn1

At the suggestion of the parties, the Court approved limited discovery and set a schedule for briefing and argument on dispositive motions. On April 29, 2005, Defendants filed a Motion to Dismiss or, in the Alternative, for Summary Judgment ("Defs.' Mot.") and Plaintiffs filed a Motion for Partial Summary Judgment ("Pls.' Mot."). The Court received oppositions and replies and the parties filed a stipulation regarding the legislative history of the Omnibus Act.

The wisdom of the legislation is not at issue and is solely a matter for elected representatives. The questions are entirely legal: was the Omnibus Act properly enacted; does the Targeted Ward 4 Moratorium violate Plaintiffs' constitutional rights; and is the moratorium otherwise constitutionally invalid? After oral argument on June 3, 2005 and after consideration of the now-voluminous briefs and legislative record, the Court finds that the D.C. Council did not observe the requirements of the D.C. Home Rule Act, D.C. CODE § 1-201.01 et seq., when it passed the Omnibus Act because the inclusion of the moratorium on the sale of alcoholic beverages in Ward 4 was a substantial change in the legislation that required a "second reading" prior to passage. Because mandatory legislative process was not observed, the portions of the Omnibus Act that pertain to this moratorium are null and void and summary judgment will be granted for Plaintiffs on this count. Because the Court's injunction stalled enforcement of the law and because the Court has found the relevant portions of the Omnibus Act null and void, Plaintiffs have not and will not incur a cognizable injury and the remaining constitutional claims will be denied as moot.

HOME RULE ACT

Through the Home Rule Act, Congress "delegate[d] certain legislative powers to the government of the District of Columbia . . . and, to the greatest extent possible, consistent with the constitutional mandate, relieve[d] Congress of the burden of legislating upon essentially local District matters." D.C. CODE § 1-201.02(a). To achieve these purposes, Congress established the Council of the District of Columbia, D.C. CODE § 1-204-01, and vested it with "legislative power" subject to certain procedural limitations. D.C. CODE § 1-204-04(a). Chief among these limitations is a requirement that acts be read twice in substantially the same form prior to adoption.

The Council, to discharge the powers and duties imposed herein, shall pass acts and adopt resolutions, upon a vote of a majority of the members of the Council present and voting, unless otherwise provided in this chapter or by the Council. Except as provided in the last sentence of this subsection, the Council shall use acts for all legislative purposes. Each proposed act (other than an act to which § 1-204.46 applies) shall be read twice in substantially the same form, with at least 13 days intervening between each reading. Upon final adoption by the Council each act shall be made immediately available to the public in a manner which the Council shall determine.

D.C. CODE § 1-204.12(a) (emphasis added).

LEGISLATIVE RECORD

The Omnibus Act went into effect on September 30, 2004, nearly a year after it was first proposed.*fn2 Title I, Section 101(o) of the Act establishes a four-year moratorium on the sale of single containers of beer, malt liquor, and ale in an area designated as the Targeted Ward 4 Moratorium Zone ("Targeted Zone"). See Stipulated Designation of Legislative Materials ("Stipulated Materials"), Ex. 17 (Enrolled Original, Bill 15-516 (May 18, 2004)) at 4-5. Within the Targeted Zone, "a licensee under an off-premises retailer's license, class A or B, shall not divide a manufacturer's package of more than one container of beer, malt liquor or ale, to sell an individual container of the package . . . [nor] sell, give, offer, expose for sale, or deliver an individual container of beer, malt liquor, or ale with a capacity of 70 ounces or less." D.C. LAW 15-187.*fn3 The Targeted Zone is defined in forty-two single-spaced lines as "the area bounded by the line starting [and ending] at 13th Street, N.W. and Eastern Avenue, N.W." See Stipulated Materials, Ex. 21 (D.C. Act 15-442 (June 23, 2004)) at 4. If this dense text is plotted on a map, it is evident that the Targeted Zone is finely drawn to include each and every business in Ward 4 that holds a Class A or Class B off-premises liquor retailer's license. See Plaintiffs' Opposition to Motion to Dismiss, Ex. F (Map of Targeted Zone's coverage of license holders in Ward 4).*fn4 The Moratorium also prohibits the transfer of Class A or Class B licenses to areas within Ward 4 that are outside the Targeted Zone.

Resolution of Plaintiffs' challenge under the Home Rule Act demands that the Court thoroughly scrutinize the sequence of legislative events. In October of 2003, Mayor Anthony Williams proposed the "Omnibus Alcoholic Beverage Amendment Act of 2003." Stipulated Materials, Ex. 1 (Mayor Anthony Williams's October 17, 2003 Letter to Linda Cropp) at 1. The proposed legislation, later designated Bill 15-516, addressed Alcoholic Beverage Control ("ABC") manager training, ABC licensing of certain events, and the powers of investigators and police officers to prosecute minors for underage drinking. As initially conceived, Bill 15-516 did not contain restrictions on the sale of alcoholic beverages by Class A or Class B licensees in Ward 4.

On October 21, 2003, D.C. Council ("Council") Chairperson Linda Cropp referred Bill 15-516, along with Bills 15-510 ("Restaurant Amendment Act of 2003") and 15-513 ("Catering Amendment Act of 2003") to the District of Columbia Committee on Consumer and Regulatory Affairs ("CCRA"), a committee of the Council. The CCRA published notice of intent to act on new legislation and notice of public hearings. Stipulated Materials, Exs. 2-4 (notices of public hearing dated October 31, 2003 and November 14, 2003). After public hearings in November 2003, at which testimony was received, the CCRA consolidated the three bills into Bill 15-516 and the Council placed the bill on its legislative agenda. See Stipulated Materials, Ex. 5 (Committee on Consumer and Regulatory Affairs March 9, 2004 Report).

Bill 15-516 received its "first reading" by the Council on April 20, 2004. Stipulated Materials, Ex. 7 (Mark-up Agenda Noting Council Actions and Assignments, Tuesday, April 6, 2004). That same day, Councilmember Adrian Fenty proposed an amendment to the bill that would ban the sale of single containers of certain types of alcohol in all of Ward 4 to combat "intolerable levels of loitering, public drunkeness, public indecency, and littering on residential streets of this section of the District." Stipulated Materials, Ex. 8 (Amendment offered by Councilmember Fenty (April 20, 2004)) at 2. This proposed amendment failed on roll call and did not become a part of Engrossed Bill 15-516.*fn5 The Council voted seven to six against adopting the Ward-wide ban. Among the most vocal critics of the proposed amendment were Councilmembers Carol Schwartz, David Catania, and Sharon Ambrose who described the legislation variously as discriminatory, repressive, and overbroad.

After public notice that Bill 15-516 was scheduled for its "Final Reading and Final Vote," the bill was presented to the Council for a second reading on May 18, 2004. Stipulated Materials, Ex. 12 (Mark-Up Agenda Noting Council Actions and Assignments, Tuesday, May 4, 2004) at 46. See also Plaintiffs' Statement of Material Facts ("Pls.' Facts") ¶ 17 (disputed by Defendants in part). Prior to a vote on Bill 15-516, Councilmember Fenty again introduced an amendment that would restrict the sale of certain alcoholic beverages in Ward 4. This amendment ("Fenty Amendment") proposed a restriction on the sale of individual containers of beer, malt liquor, and ale within a "targeted" area of Ward 4. According to Councilmember Fenty, the new version of the moratorium was narrowly-tailored because it attacked specific trouble spots in Ward 4 -- an area designated the Targeted Ward 4 Moratorium Zone.

Notably, the amendment was co-sponsored by, among others, Councilmembers Schwartz and Catania, who had argued against the proposed moratorium in April. Although Councilmember Ambrose also appeared to believe that the Fenty Amendment was narrowly-tailored, she remained steadfast in her opposition, arguing that it constituted a substantial change to the Omnibus Act that required a third reading before adoption. Chairperson Cropp tersely disagreed, stating that the amendment narrowed the previously-rejected Ward-wide ban and, in any event, was not a new issue before the Council that required a third reading. See Stipulated Materials, Streaming Video of May 18, 2004 Council Session, available at http://www.dccouncil.washington.dc.us.*fn6

As "tailored," the moratorium on the sale of alcohol in the Targeted Zone passed on roll call vote and the Fenty Amendment was included as a new section in Bill 15-516 -- Title I, Section 101(o). See id. (nine votes in favor, three votes against, and one abstention). The bill received its "Final Reading" that same day, was adopted by the Council, see Stipulated Materials, Ex. 16 (Council Vote on "Final Reading" (May 18, 2004)), and transmitted to the Mayor for his review, see Pls.' Facts ¶ 26. An "enrolled original" of the Act, as adopted on May 18, 2004, was produced. See Stipulated Materials, Ex. 17 (Enrolled Original, Bill 15-516 (May 18, 2004)).*fn7

Chairperson Cropp thereafter recalled the bill from the Mayor. On June 1, 2004, prior to the conclusion of the Mayor's review period and without public notice, the Council reconsidered and amended portions of Bill 15-516 to extend the hours of businesses with class B licenses that qualify as "supermarket[s]" ("Supermarket Amendment"). See Pls.' Facts ¶¶ 27 & 28; Stipulated Materials, Ex. 20 (Council Vote on Reconsideration (June 1, 2004)). There appear to be only five qualifying supermarkets in the entire District of Columbia; the record is unclear as to whether any of them is in Ward 4. One Councilmember objected to the Supermarket Amendment because it extended beyond the geographic scope of the Fenty Amendment, which the Council had just passed.

This was the only reference on June 1 to the Fenty Amendment. On June 9, 2004, the Council retransmitted Bill 15-516, as reconsidered and amended on June 1, 2004, to the Mayor and, on June 23, 2004, the Mayor approved and signed Bill 15-516, which became D.C. Act 15-442. Stipulated Materials, Ex. 21 (D.C. Act 15-442 (June 23, 2004)).

The Mayor then submitted the Omnibus Act to Congress for the statutorily-required period of review. After this period expired, the Act took effect and the Alcoholic Beverage Regulation Administration ("ABRA") notified Class A and Class B licensees in Ward 4 that the Omnibus Act would be enforced commencing on November 12, 2004. Before the Act could be enforced, Plaintiffs brought suit alleging a ...


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