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Beware the Short Shelf-Life of Your Liquor License

Added by Hawley Troxell in Articles & Publications, Wine, Brew, Spirits Law on December 16, 2013

The Idaho Supreme Court last week issued a warning to liquor license holders: your liquor may have a long shelf-life, but your liquor license does not. In BV Beverage Company, LLC v. ABC, 2013 Op. No. 129 (Dec. 4, 2013), the court determined that a liquor license holder, BV Beverage, was not entitled to an appeal from the expiration of its liquor license. The decision means that if you fail to submit an application for renewal within the time provided by Idaho law, you can’t ask a judge for a second chance.

BV Beverage had purchased its liquor license in September 2007 and submitted the necessary paperwork to ABC to lease it to Iggy’s Restaurant. ABC granted the lease application and issued the license to Iggy’s, which Iggy’s renewed in 2009. The renewed license was set to expire on September 30, 2010, and the expiration date was printed on its face. However, when ABC sent Iggy’s the renewal forms in July 2010, they were returned as undeliverable. The forms were not sent to BV Beverage. On September 29, 2010—the day before the license’s expiration—Iggy’s released its interest in the license back to BV Beverage.

ABC began proceedings to revoke the license for non-use, but BV Beverage requested additional time to work on finding a new lessee. In the meantime, however, the September 30 expiration date blew by—as did the 31-day grace period in which BV Beverage could have applied for renewal under Idaho law. BV Beverage applied to transfer the license to a new lessee in January 2011, but ABC denied the application on the basis that the license was long-expired.

Idaho law generally allows parties to file a petition for review—i.e., an appeal—from “agency action,” including an action taken by ABC affecting a liquor license. BV Beverage filed such a petition with the district court, claiming that ABC procedures did not allow it to renew the liquor license leased to Iggy’s—instead, they only allowed Iggy’s to renew. BV Beverage claimed that the absence of those procedures effectively deprived it of its constitutional right to due process.

However, the district court concluded—and the Idaho Supreme Court agreed—that the expiration of BV Beverage’s license involved no “agency action” that could be appealed. Under Idaho law, the liquor license automatically expired as of 1 a.m. October 1, 2010, requiring no review or action by ABC at all. The Supreme Court also found that there were procedures in place to protect BV Beverage’s due process rights, and all BV Beverage had to do to trigger those procedures was apply for renewal within the time allowed under Idaho law—before the expiration date or within the following 31-day grace period. Had BV Beverage done so and its application been denied by ABC, it would have had a right to appeal. However, because BV Beverage took no action at all, the court’s hands were tied.

The case is a perfect example of how precarious the maintenance of a liquor license can be—particularly one that is leased to another party. Our wine, brew, spirits group has extensive history and experience assisting clients in navigating these nuances. For more information, please contact us at 208.344.6000.