This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2002).
STATE OF MINNESOTA
IN COURT OF APPEALS
Resolution Determining Certain
Findings of Fact Regarding Certain
Matters Surrounding and/or Involving
the Establishment Known as Cadillac
Jacks, an On-Sale Liquor Licensee
in the City of Chaska, and the
Imposition of Sanctions as Provided
in Minnesota Statutes, Section 340A.415.
Filed April 22, 2003
Chaska City Council
File No. 02-42
Steven L. Theesfeld, Yost & Baill, LLP, 2350 One Financial Plaza, 120 South Sixth Street, Minneapolis, Minnesota 55402 (for appellant Cadillac Jacks)
Luke Melchert, R. Lawrence Harris, Thomas J. Seymour, Melchert Hubert Sjodin, PLLP, 112 Second Street West, P.O. Box 67, Chaska, Minnesota 55318 (for respondent City of Chaska)
Considered and decided by Kalitowski, Presiding Judge, Hudson, Judge, and Poritsky, Judge.*
U N P U B L I S H E D O P I N I O N
In this certiorari appeal, relator Cadillac Jacks challenges the three-day suspension of its liquor license, asserting that the Chaska City Council acted arbitrarily and capriciously and employed unlawful procedure when deciding the matter, and that there was insufficient evidence to support its determination. Because the city council acted properly and the record supports the city council’s decision, we affirm.
The Chaska City Council sanctioned Cadillac Jacks by suspending the establishment's liquor license for three days. Cadillac Jacks received two warning letters from the Chaska Police Department (CPD) before these proceedings were instigated and the city council held two hearings on the matter. At the first hearing held June 17, 2002, Police Chief Scott Knight outlined a chronology of police responses to service calls related to Cadillac Jacks. The evidence shows that from February 2001 to mid-June 2002, CPD issued twenty-one driving-under-the-influence (DWI) citations to intoxicated persons who had just left Cadillac Jacks. Four patrons of Cadillac Jacks were involved in accidents after intoxicated persons left the bar and drove automobiles, and three persons were sent to detox after leaving the bar. In addition, four assault calls were reported for Cadillac Jacks during this time period. Chief Knight testified that, compared to other bars, Cadillac Jacks has received a much higher volume of police calls and has had a greater number of DWI citations, assault charges, detox commits and motor vehicle accidents. Chief Knight indicated that the high number of DWI citations issued to Cadillac Jacks patrons posed a serious safety threat to the public. Cadillac Jacks thoroughly cross-examined Chief Knight about his testimony.
Two of Cadillac Jacks’ owners gave testimony at this hearing as well. Beth Voronyak, apparently the business manager, explained that the bar has established such measures as placing an “ID-checker” at the door and another behind the bar, as well as a documentation schedule where bartenders list the nightly occurrences such as persons the bartenders refused to serve. Voronyak also sent bar employees to training for identifying underage and/or intoxicated persons. Brent Jarvis, the night manager, testified that he is responsible for hiring and firing personnel, and has fired bartenders for “over-serving.” In addition, Jarvis said he takes extra precautions, such as calling a cab or driving the person home himself, to see that intoxicated persons do not drive home from the bar.
The council issued its findings and conclusions on July 1, 2002, stating that the suspension would take place in September, and that Cadillac Jacks would have the opportunity to present evidence prior to the suspension that demonstrated substantial improvement by the establishment to justify revoking the order of suspension. This certiorari appeal followed.
Municipal authorities have broad discretion to decide the manner in which liquor licenses are issued, regulated, and revoked. Bourbon Bar & Cafe Corp. v. City of St. Paul, 466 N.W.2d 438, 440 (Minn. App. 1991). When reviewing an agency decision, we
may affirm the decision of the agency or remand the case for further proceedings; or * * * reverse or modify the decision if the substantial rights of the [parties] may have been prejudiced because the administrative finding, inferences, conclusion, or decisions are:
(a) in violation of constitutional provisions; or
(b) in excess of the statutory authority or jurisdiction of the agency; or
(c) made upon unlawful procedure; or
(d) affected by other error of law; or
(e) unsupported by substantial evidence in view of the entire record as submitted; or
(f) arbitrary and capricious.
Minn. Stat. § 14.69 (2002). Our review is confined to “the record before the city council at the time it made its decision.” Hard Times Café, Inc. v. City of Minneapolis, 625 N.W.2d 165, 173 (Minn. App. 2001) (quotation omitted). Agencies enjoy a broad presumption of propriety in their decisions, to which we defer. In re Excess Surplus Status of Blue Cross & Blue Shield, 624 N.W.2d 264, 278 (Minn. 2001). We must narrow our review of agency decisions to avoid substituting our judgment for that of the agency. Id. at 277. This court will not label an agency’s decision arbitrary and capricious if a rational relationship exists between the facts and choice made. Id. Appellant bears the burden of proof in demonstrating that an agency’s decision constitutes reversible error. In re Am. Iron & Supply Co.’s Proposed Metal Shredding Facility, 604 N.W.2d 140, 149 (Minn. App. 2000).
No citizen has an inherent or vested right to sell intoxicating liquors, and municipal authorities have broad discretion within their geographical jurisdiction to determine the manner in which liquor licenses shall be issued, regulated and revoked. Inherent in the right to control the sale of liquor is the power to regulate activities on the licensed premises. Basically it is the council's duty to decide whether the licensee has been guilty of such unlawful conduct in the operation of his business that its continuance is detrimental to the public good.
Sabes v. City of Minneapolis, 265 Minn. 166, 171, 120 N.W.2d 871, 875 (1963) (footnotes omitted).
Section 340A.415 (2002) governs liquor license suspension and revocation, and provides that a municipality may suspend or revoke a liquor license for any of five types of violations: (1) selling alcoholic beverages to another retail licensee for resale; (2) purchasing alcoholic beverages from another retail licensee for resale; (3) conducting or allowing unlawful gambling on licensed premises; (4) failure to remove or dispose of alcoholic beverages pursuant to commissioner’s order; (5) failure to comply with an applicable statute, rule or ordinance relating to alcoholic beverages. Violations of this statute can result in up to a 60-day suspension or revocation of the license and the imposition of civil penalties. Minn. Stat. § 340A.415. No sanctions may be imposed without first conducting a hearing. Id.
Here, the city council held two hearings concerning sanctions on Cadillac Jacks’ liquor license. The council heard extensive testimony from Chief Knight and two of the owners, and based its decision primarily on testimony and documentary evidence from Chief Knight. The evidence shows that after responding to a call, police officers filled out an initial complaint report (ICR), describing the incident. Summaries of those ICRs were then prepared by a CPD sergeant and Chief Knight testified primarily from those summaries. Chief Knight testified that the ICRs were prepared during the ordinary course of business by the officer who responded to the service call.
The council found that the number of police responses to Cadillac Jacks “is inordinately high when compared to other * * * establishments * * * thereby placing an undue burden on the Chaska Police Department.” The council further found that Cadillac Jacks served alcohol to obviously intoxicated patrons, as evidenced by the responses of numerous drivers who, upon being stopped by Chaska police for suspected DWI, stated that they were drinking at Cadillac Jacks prior to the traffic stop. The council found that the inordinate number of drivers leaving Cadillac Jacks suspected of driving under the influence of alcohol posed “a significant threat to the health, safety and welfare of the citizens of Chaska.” Finally, the council found that other incidents involving Cadillac Jacks (apparently referring to motor vehicle accidents, assaults, detox placements, etc.) also posed a threat and were “potentially injurious to the health safety and welfare of the citizens of Chaska.” Based on these findings, the council determined that a three-day suspension was appropriate, but stayed the suspension until September to allow Cadillac Jacks time to remedy the situation.
Cadillac Jacks challenges the suspension on two grounds. First, Cadillac Jacks argues that the council failed to specify which of the five grounds in section 340A.415 it based its decision on, and that this omission constitutes unlawful procedure under section 14.69(c). But it cites to no authority for the proposition that such an omission is prejudicial to a party’s substantial rights. Furthermore, Cadillac Jacks acknowledges that the decision fits only under the fifth factor, a violation of an “applicable statute, rule, or ordinance relating to alcoholic beverages.” Nevertheless, Cadillac Jacks maintains that section 14.69 mandates “automatic invalidation” for the council’s failure to specify which of the five factors it based its decision on, and that Cadillac Jacks was presumptively prejudiced by this omission.
Cadillac Jacks reads section 14.69 too narrowly. The statute provides that where a party challenges an agency’s decision upon any of the enumerated grounds, the court “may reverse or modify the decision if the substantial rights of the petitioners may have been prejudiced * * * .” Minn. Stat. § 14.69 (emphasis added). There is no provision for “automatic invalidation.” Cadillac Jacks acknowledges that the council’s conclusion is based on the fifth factor—violation of an applicable law relating to alcoholic beverages—yet maintains it does not know the basis for the council’s decision and therefore cannot be expected to modify its behavior to avoid further sanctions. We find this argument disingenuous. Serving intoxicated persons was the sole issue before the council. Moreover, Cadillac Jacks received two written warnings from Chief Knight before these proceedings were instigated. In the first letter, dated March 15, 2002, Chief Knight offered to meet with Cadillac Jacks’ owners to review the bar’s police “call” history and discuss their future strategies for improvement. A meeting was then held with the owners. More importantly, the second letter, dated April 10, 2002, specifically stated that Chief Knight was “extremely concerned about the number of intoxicated persons who leave Cadillac Jacks.” Thus, the police department had clearly identified the problem and what Cadillac Jacks needed to do to correct the situation. In fact, the city made commendable efforts to work with Cadillac Jacks to retain its license and stay in operation. Finally, Cadillac Jacks has not shown that any prejudice resulted from the city council's failure to specify which subdivision it relied on in making its decision. Subdivision 5 is plainly the only applicable provision, and any error in failing to state this is harmless.
Cadillac Jacks’ second contention is that the police reports relied on by the city council were inadmissible because Chief Knight did not have first-hand knowledge of any of the events he testified about, and because the police reports contained multiple levels of hearsay. We find no merit in this argument.
Formal rules of evidence are relaxed in administrative proceedings. See Minn. Stat. § 14.60 (2002). Admissible evidence in administrative proceedings “possesses probative value commonly accepted by reasonable prudent persons in the conduct of their affairs.” Id., subd. 1. Incompetent, irrelevant, immaterial and cumulative evidence may be excluded. Id. Oral and/or documentary evidence may be considered so long as it is made part of the record. See id., subd. 2. Each party or agency may cross-examine testifying witnesses and present rebuttal evidence. Id., subd. 3. Finally, an agency presiding over a contested hearing may take official notice of “judicially cognizable facts” as well as “general, technical, or scientific facts” within the agency’s specialized knowledge. Minn. Stat. § 14.60 (2002).
Cadillac Jacks relies on Sabes v. City of Minneapolis, 265 Minn. at 173-75, 120 N.W.2d at 876-78, for the proposition that the police reports relied on by the city council were inadmissible hearsay because the content of the reports did not reflect Chief Knight’s personal observations. As we previously noted, formal rules of evidence are relaxed in administrative proceedings. Minn. Stat. § 14.60. But we also note that Sabes was decided prior to the adoption of the Minnesota Rules of Evidence in 1977. Under the current rules of evidence, the records here clearly fall within the business records exception, as Chief Knight testified that the summaries were based on the ICR police reports which were composed in the ordinary course of business. See Minn. R. Evid. 803(6) (business records exception).
Cadillac Jacks also challenges the reliability of statements that intoxicated drivers gave to the Chaska police. Many intoxicated drivers told the police officers that they were consuming alcohol at Cadillac Jacks prior to the traffic stops. These statements were admissible as statements against penal interests. See Minn. R. Evid. 804(b) (3) (statements-against-interest exception to hearsay rule). Moreover, as respondent notes, presenting evidence by way of summary was mainly a matter of administrative convenience. “We have noted that most of the world's work is done without relying on jury-trial rules of evidence, and that the receipt of evidence before administrative bodies is to some extent a matter of practical convenience.” Sabes, 265 Minn. at 173, 120 N.W.2d at 876. Even when it is physically possible to produce a witness who has made a report, it would tend to disrupt the efficient functioning of public employees to require their repeated attendance in court. Id., 265 Minn. at 174, 120 N.W.2d at 876. Moreover, here, the evidence was probably clearer and easier to comprehend than if given piecemeal by each responding officer. Therefore, we conclude that the summaries of police reports relied on by the city council were properly admitted into evidence.
Because this court’s scope of review is limited to whether the record supports the council’s decision, we conclude that Cadillac Jacks’ claims are without merit. The council had before it overwhelming evidence that Cadillac Jacks was “over-serving” intoxicated persons, as evidenced by the numerous DWI citations issued to Cadillac Jacks’ patrons. The council heard that, within the bar’s first 18 months of operation, three detox commits and four assault reports came directly from this establishment, more than any other bars in the city in that same time frame. In addition, several motor vehicle accidents occurred after intoxicated persons left the bar, another obvious indication of a threat to public safety. These facts amply support the city council’s conclusion that Cadillac Jacks’ operating procedures at that time posed a significant threat to the health, safety, and welfare of the citizens of Chaska.
Because we conclude that the city acted properly when it decided to suspend Cadillac Jacks’ liquor license, we affirm its decision in all respects.
* Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.
 We also note that only in its reply brief does Cadillac Jacks attack the sufficiency of the evidence supporting the council’s decision. Issues not raised or argued in appellant’s brief cannot be revived in a reply brief. McIntire v. State, 458 N.W.2d 714, 717 n.2 (Minn. App. 1990), review denied (Minn. Sept. 28, 1990) (stating issues may not be raised for first time in reply brief).