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08/24/87 Black Knight Restaurant, v. the City of Oak Forest Et

August 24, 1987





513 N.E.2d 109, 159 Ill. App. 3d 1016, 111 Ill. Dec. 863 1987.IL.1222

Appeal from the Circuit Court of Cook County; the Hon. David J. Shields, Judge, presiding.


JUSTICE CAMPBELL delivered the opinion of the court. QUINLAN, P.J., and BUCKLEY, J., concur.


This appeal was brought by plaintiff, Black Knight Restaurant, Inc., d/b/a Juke Box Saturday Night, from the dismissal of its first amended complaint seeking, inter alia, to enjoin defendants from enforcing an amendment to the Oak Forest liquor ordinance which eliminated extended-hour liquor licenses. The city of Oak Forest, the aldermen of Oak Forest, individually and in their official capacities, and James Malecky, individually, as mayor of Oak Forest and as ex officio Oak Forest liquor control commissioner, were named defendants. As grounds for its contention that the trial court erred in granting defendants' motion to dismiss, plaintiff contends on appeal that its extended-hour liquor license constituted a property right subject to due process protections which were violated by defendants' failure to give notice or to hold a hearing with respect to the amendment. *fn1 For the following reasons, we affirm the judgment of the trial court.

The record sets forth the following facts relevant to this appeal. Plaintiff has been in the retail business of selling food, alcoholic and nonalcoholic beverages since 1975. On January 25, 1984, Oak Forest enacted liquor control ordinance 1326 which permitted the use and consumption of alcoholic beverages upon licensed premises. Section 8 of the ordinance established various classes of liquor licenses. With the exception of establishments having either a class "A-1" or class "B-1" license, section 22 prohibited the retail sale of alcoholic beverages between 2 a.m. and 7 a.m. on weekdays, between 3 a.m. and 7 a.m. on Saturdays, and between 3 a.m. and 9 a.m. on Sundays. Those establishments having either a class "A-1" or class "B-1" license were permitted to remain open an additional two hours each morning. Section 12 of the ordinance limited the number of class "A-1" and class "B-1" extended-hour liquor licenses to a total of two.

Plaintiff had the sole class "A-1" liquor license issued by Oak Forest. The record is unclear as to whether a class "B-1" liquor license had ever been issued. Pursuant to section 11 of the ordinance, all liquor licenses expired on the April 30 following their issuance. In late March 1985, plaintiff applied for renewal of its class "A-1" license for the 1985-86 licensing period.

On April 10, 1985, prior to commencement of the renewal period, the Oak Forest city council adopted ordinance 1379, which amended ordinance 1326 to eliminate all class "A-1" and class "B-1" extended-hour liquor licenses. The amendment was effective April 11, 1985. As a result of the amendment, plaintiff was unable to renew its class "A-1" liquor license and, instead, was issued a class "A" license, which necessitated that its hours of operation be shortened by two hours each morning.

On May 1, 1985, plaintiff filed a complaint for injunctive and declaratory relief as well as for monetary damages. The complaint was subsequently amended on September 23, 1985. Count I of the first amended complaint alleged that defendants' actions in amending the ordinance to reduce the hours of operation caused a reduction in plaintiff's business which acted to deny plaintiff its right to make a living and effectuated a taking of its property without due process or just compensation. Count I further alleged that defendants' action violated plaintiff's right to equal protection because it was the only liquor licensee to have its hours reduced. Count II was predicated upon an antitrust theory. Count III alleged intentional interference of plaintiff's business

On October 18, 1985, defendants moved to dismiss the cause of action pursuant to section 2-615 of the Code of Civil Procedure. (Ill. Rev. Stat. 1985, ch. 110, par. 2-615.) The trial court granted defendants' motion, finding that, as a matter of law, plaintiff's complaint failed to state a cause of action. Although given leave to file an amended complaint, plaintiff declined to do so and its timely appeal followed.

It is well established under Illinois law that a license to sell alcoholic beverages is a privilege, not a property right, and, thus, is not subject to due process protections. (Great Atlantic & Pacific Tea Co. v. Mayor & Commissioners (1937), 367 Ill. 310, 11 N.E.2d 388; People v. McBride (1908), 234 Ill. 146, 84 N.E. 865; Huguley v. Marcin (1976), 39 Ill. App. 3d 230, 349 N.E.2d 564; Malito v. Marcin (1973), 14 Ill. App. 3d 658, 303 N.E.2d 262; Ill. Rev. Stat. 1985, ch. 43, par. 119. See also Two Kats, Inc. v. Village of Chicago Ridge (1986), 147 Ill. App. 3d 440, 497 N.E.2d 1314.) In its argument, plaintiff has overlooked this entire line of cases and, instead, relies on Reed v. Village of Shorewood (7th Cir. 1983), 704 F.2d 943, and City of Wyoming v. Illinois Liquor Control Com. (1977), 48 Ill. App. 3d 404, 362 N.E.2d 1080. In our view, neither of these cases is persuasive of plaintiff's position.

In Reed, defendants continuously harassed plaintiff until plaintiff finally gave up its liquor license prior to its expiration. Specifically, over a two-year period, defendants arrested plaintiff's customers and employees on groundless charges, suspended plaintiff's liquor license for alleged infractions of the local liquor control ordinance, revoked plaintiff's license on trumped-up charges until it was reinstated by the Illinois Liquor Control Commission, and refused to renew the liquor license until it was ordered to do so by the Commission. Plaintiff filed a suit for damages under 42 U.S.C. 1983 (1981), alleging unconstitutional deprivation of property.

At the outset of its analysis, the Reed court "juxtaposed" Board of Regents v. Roth (1972), 408 U.S. 564, 33 L. Ed. 2d 598, 92 S. Ct. 2701, with section 6.1 of the Liquor Control Act of 1934 (Ill. Rev. Stat. 1985, ch. 43, par. 119), which, together, clearly indicate that, under Illinois law, a license is not a property right. Roth held that the decision of whether a license is property for purposes of the fourteenth amendment due process clause depends on State law. Section 6.1 of the Illinois Liquor Control Act provides: "A ...

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