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Philly's v. Byrne

decided: April 19, 1984.

PHILLY'S, THE ORIGINAL PHILADELPHIA CHEESE STEAK, INC., PLAINTIFF-APPELLANT,
v.
JANE M. BYRNE, AS MAYOR AND AS LIQUOR CONTROL COMMISSIONER OF THE CITY OF CHICAGO, DEFENDANT-APPELLEE, AND ILLINOIS LIQUOR CONTROL COMMISSION, DEFENDANT-INTERVENOR-APPELLEE, LOS FARRALLONES, INC., AN ILLINOIS CORPORATION, JORGE ARISTIZABAL, AND NICK ANDREWS, PLAINTIFFS-APPELLANTS, V. JANE M. BYRNE, AS MAYOR AND AS LIQUOR CONTROL COMMISSIONER OF THE CITY OF CHICAGO, DEFENDANT-APPELLEE, AND ILLINOIS LIQUOR CONTROL COMMISSION, DEFENDANT-INTERVENOR-APPELLEE



Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. No. 82 C 7952 -- Charles P. Kocoras, Judge.

Wood, Eschbach, and Posner, Circuit Judges. Wood, Circuit Judge, concurring.

Author: Posner

POSNER, Circuit Judge.

These appeals are from the dismissal, on the defendants' motion for summary judgment, of a suit under section 1 of the Civil Rights Act of 1871 (now 42 U.S.C. ยง 1983) against Chicago's (former) mayor and liquor control commissioner. The suit was for damages and injunctive relief, and alleged that the operation of Illinois' local-option liquor law, which so far as relevant here allows the voters in a precinct to vote the precinct "dry," deprived the plaintiffs of property without due process of law, in violation of the Fourteenth Amendment. Other constitutional violations were also alleged, but these allegations, to the extent they have any substance at all, merely ring changes on the due process theme.

Article IX of the Illinois Liquor Control Act, Ill. Rev. Stat. 1981, ch. 43, paras. 166 et seq., provides that upon the filing, at least 90 days before the next regularly scheduled general election, of a petition signed by 25 percent or more of a precinct's registered voters, the question whether to ban the retail sale of alcoholic beverages in the precinct shall be placed on the ballot at the election. (Except in cities of more than 200,000 people, the electoral unit is the entire city, town, or village, rather than the individual precinct. See para. 167.) If the vote is to ban, any license to sell liquor in the precinct lapses automatically 30 days after the election. The appellants in No. 83-1946 (Los Farrallones), who own a restaurant in Chicago, lost their liquor license as a result of such a referendum; the vote was 188 to 58. In No. 83-1945 (Philly's), the appellant had not yet been issued a license when the referendum in its precinct was held, although its application for a license had been approved. The vote in this precinct was 152 to 71 to ban the sale of liquor.

In Rippey v. Texas, 193 U.S. 504, 48 L. Ed. 767, 24 S. Ct. 516 (1904), the Supreme Court, in an opinion by Justice Holmes, rejected a claim that an Alabama law similar to the local-option provision in the Illinois Liquor Control Act denied due process of law by subjecting the liquor seller's property rights to the whim of the electorate. Rippey has never been overruled; and it is cited with approval in several modern cases. See Salsburg v. Maryland, 346 U.S. 545, 552 n.7, 98 L. Ed. 281, 74 S. Ct. 280 (1954); Griffin v. Board of Supervisors, 322 F.2d 332, 342 and n.25 (4th Cir. 1963), rev'd, 377 U.S. 218, 12 L. Ed. 2d 256, 84 S. Ct. 1226 (1964); Graham v. State, 45 Ala. App. 79, 224 So. 2d 905 (1969), app. dismissed, 396 U.S. 279, 24 L. Ed. 2d 466, 90 S. Ct. 567 (1970); McDonald v. Brewer, 295 F. Supp. 1135, 1139 (N.D. Ala. 1968); Hall v. St. Helena Parish School Bd., 197 F. Supp. 649, 658 (E.D.La. 1961) (three-judge court) (per curiam), aff'd mem., 368 U.S. 515, 7 L. Ed. 2d 521, 82 S. Ct. 529 (1962). Yet it would be risky to rest decision on Rippey alone, especially when the only modern cases upholding local-option laws against due process challenges (Illinois cases by the way) do so, as we shall see, on the ground rejected in Reed v. Village of Shorewood, 704 F.2d 943, 948-49 (7th Cir. 1983), that a liquor license is a privilege and not a right. See Seals v. City of Chicago, 93 Ill. App. 3d 678, 680, 417 N.E.2d 843, 845, 49 Ill. Dec. 153 (1981); Duncan v. Marcin, 82 Ill. App. 3d 963, 967-68, 403 N.E.2d 653, 656, 38 Ill. Dec. 422 (1980); Malito v. Marcin, 14 Ill. App. 3d 658, 662, 303 N.E.2d 262, 265 (1973), leave to appeal denied, 55 Ill. 2d 602 (1974), app. dismissed, 417 U.S. 963, 41 L. Ed. 2d 1135, 94 S. Ct. 3165 (1974). A number of modern cases, however, uphold this kind of law against other challenges. Besides Griffin, Graham, and McDonald, supra, see Two Guys from Harrison, Inc. v. Furman, 32 N.J. 199, 223-30, 160 A.2d 265, 280-81 (1960), and Alkire v. Cashman, 350 F. Supp. 360, 365 (S.D. Ohio 1972), aff'd without opinion, 477 F.2d 598 (6th Cir. 1973).

The Supreme Court's opinion in Rippey depends entirely on the idea that the power to prohibit implies an unlimited power to regulate short of prohibition, so that if the government is allowed by the Constitution to prohibit some activity (or deny some benefit) altogether it can attach any condition it wants to the conduct of the activity or the receipt of the benefit. This idea was a favorite of Holmes'. See e.g., Western Union Tel. Co. v. Kansas, 216 U.S. 1, 53, 54 L. Ed. 355, 30 S. Ct. 190 (1910) (dissenting opinion); Commonwealth v. Davis, 162 Mass. 510, 511-12, 39 N.E. 113 (1895); McAuliffe v. Mayor, 155 Mass. 216, 220, 29 N.E. 517 (1892) ("The petitioner may have a constitutional right to talk politics, but he has no constitutional right to be a policeman"). But it is rejected in the modern cases, e.g., Garrity v. New Jersey, 385 U.S. 493, 500, 17 L. Ed. 2d 562, 87 S. Ct. 616 (1967); Sherbert v. Verner, 374 U.S. 398, 404-06, 10 L. Ed. 2d 965, 83 S. Ct. 1790 (1963); Speiser v. Randall, 357 U.S. 513, 528-29, 2 L. Ed. 2d 1460, 78 S. Ct. 1332 (1958); Bart v. Telford, 677 F.2d 622, 625 (7th Cir. 1982), at least in the unqualified form in which Holmes stated it in Rippey (as elsewhere): "the state has power to prohibit the sale of intoxicating liquors altogether, if it sees fit . . . and that being so it has power to prohibit it conditionally." 193 U.S. at 509 (citation omitted).

No one believes any more that since the captain of a warship has no duty to let members of the general public on board to visit the ship when it is docked, he can decide to allow only Protestant visitors on board. But the idea that the greater governmental power includes the lesser may not be completely dead. There is a difference, as we shall see, between conditioning a benefit on the relinquishment of a substantive constitutional right, such as the right to the free exercise of religion or (in McAuliffe) to freedom of speech, and conditioning it on the acceptance of something less than the full range of possible procedural safeguards to protect its enjoyment. But the distinction is not made in Rippey.

Rippey also long predates the systematizing of due process analysis by Board of Regents v. Roth, 408 U.S. 564, 33 L. Ed. 2d 548, 92 S. Ct. 2701 (1972). Roth provides the inspiration for the syllogism that the appellants press on us: a liquor license is a species of property within the meaning of the due process clause of the Fourteenth Amendment; they were deprived of this property as a result of the referendum, which, as a naked appeal to majority rule, is the antithesis of a due process hearing; therefore their rights under the Fourteenth Amendment were violated.

We agree that there was a deprivation. In contrast to cases such as Brown v. Brienen, 722 F.2d 360, 366 (7th Cir. 1983), where the existence of a state-court remedy for the injury of which the plaintiffs complained made it problematic whether there had been a deprivation within the meaning of the Fourteenth Amendment, the plaintiffs here have no remedy under state law for what has been done to them (assuming the referendum was not carried out in a fraudulent or otherwise unlawful manner), except to campaign for repeal in four years. But whether the deprivation was of property depends not only on whether an Illinois liquor license is property within the meaning of the Fourteenth Amendment, as held in Reed v. Village of Shorewood, supra, 704 F.2d at 948-49 (we shall not have to decide whether an approved application, as in No. 83-1946, creates a property right even before a license is issued), but also on the precise dimensions of the right. The defendants in Reed by a pattern of harassment drove the plaintiffs to give up their liquor license before its expiration. The present case concerns the date of expiration. Every liquor license in Illinois has a variable expiration date: either the date stamped on the license or the date on which the licensee is required to surrender the license because the precinct where the licensed premises are located has voted to go dry -- whichever is earlier. Just as a tenant is not deprived of a property right when he is ejected from the premises at the expiration of his lease, so it can be argued that when a precinct votes itself dry any liquor licensees' property rights are extinguished by the terms of the licenses. True, if a condition that limits a property right infringes a constitutional liberty -- if, for example, liquor licenses expired by their terms when the licensee criticized the Liquor Control Commission -- then, contrary to the rejected teaching of cases like McAuliffe, there would be a deprivation of which a licensee could complain under the Constitution, a deprivation of liberty (liberty of expression, in our example). But a referendum does not invade any constitutional liberty.

This is a powerful analysis -- maybe too powerful. If Illinois provided that a liquor license could be taken away only for cause but cause as determined by the Liquor Control Commission without any notice to the licensee or opportunity for a hearing, the state could argue that this was simply a condition, not unlawful in itself (for there is no general constitutional requirement that government act only after notice and hearing), that limited the right. The holder of the right could complain only if the procedures the state prescribed, however meager, were not followed.

Although supported by Justice Rehnquist's plurality opinion in Arnett v. Kennedy, 416 U.S. 134, 155, 40 L. Ed. 2d 15, 94 S. Ct. 1633 (1974), and vigorously argued in Easterbrook, Substance and Due Process, 1982 S. Ct. Rev. 85, 113, this approach is not yet law. See, e.g., Logan v. Zimmerman Brush Co., 455 U.S. 422, 432-36, 71 L. Ed. 2d 265, 102 S. Ct. 1148 (1982); Fuentes v. Shevin, 407 U.S. 67, 96, 32 L. Ed. 2d 556, 92 S. Ct. 1983 (1972). Maybe the parallel argument that a liquor licensee's rights are merely conditional on the voters' not voting the precinct dry also fails. But this we need not decide, for even if there was a deprivation of property here, there was no denial of due process.

This may seem a startling conclusion. To make rights depend on the outcome of a popular election may seem the very opposite of due process of law. The Constitution would not have empowered judges insulated from the electoral process to protect the members of electoral minorities from certain consequences of majority rule unless the framers had to some extent distrusted popular elections. The Constitution's provisions for the indirect election of the President and (until the Seventeenth Amendment was adopted) the Senate as well are further evidence of this distrust. If there is cause to distrust majority rule even when mediated through legislative representatives, who exercise some independent judgment and are not merely transmission belts for their constituents' desires, there is greater cause to distrust lawmaking by referendum. Voters, even more obviously than legislators, are not judges, are guided by no standards, do not give reasons for their decisions, and are not subject to judicial review. To entrust rights to their discretion may therefore seem to eliminate the due process clause as a bulwark against the tyranny of majorities.

But to equate due process of law with a particular type of procedure, the adversary hearing modeled on the Anglo-American trial, and thus to create an unbridgeable chasm between democracy and due process, would take too narrow a view of due process. Whatever the original meaning of the term, a question on which much ink has been spilled, it has come to stand (quite independently of the concept of "substantive due process") for a general requirement of "a fair process of decision-making . . . ." Fuentes v. Shevin, supra, 407 U.S. at 80; see also Owen v. Lash, 682 F.2d 648, 652 (7th Cir. 1982). That is not the same thing as a uniform code of procedure. "The Fifth Amendment guarantees no particular form of procedure; it protects substantial rights." NLRB v. Mackay Radio & Telegraph Co., 304 U.S. 333, 351, 82 L. Ed. 1381, 58 S. Ct. 904 (1938); see also FCC v. WJR, The Goodwill Station, Inc., 337 U.S. 265, 275 and n. 9, 93 L. Ed. 1353, 69 S. Ct. 1097 and n. 9 (1949). Of course we must not lean too heavily on general language; none of the cases from which we have just quoted dealt with the popular referendum as a method of decision-making. In many settings, for example that of proceedings to revoke a television broadcast license because of the licensee's misconduct, a referendum would be a highly questionable method of decision-making, to say the least. But used to decide whether liquor may be sold in a particular area it is a pragmatic as well as venerable response to the social problems created by the sale and consumption of liquor. As the bitter experience of Prohibition should remind us, no national or even regional consensus has emerged with respect to the morality and consequences of alcoholic beverages. It has seemed best in default of consensus to leave the matter to local preference as expressed in the voting booth. Illinois' local-option liquor law is just section 2 of the ...


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