OFFICES AND OFFICERS ‑- STATE ‑- WASHINGTON STATE LIQUOR CONTROL BOARD ‑- CITIES AND TOWNS ‑- ON-PREMISE SALE OF LIQUOR ONLY TO PERSONS CONSUMING FOOD

OFFICES AND OFFICERS ‑- STATE ‑- WASHINGTON STATE LIQUOR CONTROL BOARD ‑- CITIES AND TOWNS ‑- ON-PREMISE SALE OF LIQUOR ONLY TO PERSONS CONSUMING FOOD

(1) The Washington State Liquor Control Board does not have the authority, under existing law, to restrict the on-premise sale of liquor by state licensees ". . . to customers who are seated at a table and also consuming food . . ." based upon a finding that a cocktail lounge or bar-type atmosphere would be compatible or disruptive to adjacent land uses.

(2) A city may not, in the exercise of its police power, impose conditions or restrictions upon restaurant liquor licensees limiting the service of liquor for on-premise consumption to seated customers consuming food because such an ordinance would conflict with certain provisions of the state liquor code.

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                                                                October 25, 1978

Honorable H. A. "Barney" Goltz
State Senator, 42nd District
3003 Vallette Street
Bellingham, Washington 98225

                                                                                                                 Cite as:  AGO 1978 No. 27

Dear Sir:

            By letter previously acknowledged you requested our opinion on two questions which, on the basis of subsequent developments, we would now paraphrase as follows:

            (1) Does the Washington State Liquor Control Board have the authority to provide, by duly adopted regulation, as follows:

                        "Whenever the Liquor Control Board determines, on the basis of all relevant evidence available to it, that the proposed place of operation  [[Orig. Op. Page 2]] of an applicant for a state liquor license is such that a cocktail lounge or bar-type atmosphere would be incompatible or disruptive to adjacent land uses, the resulting liquor license, if issued, shall be conditioned only to permit the service or sale of liquor to customers who are seated at a table and also consuming food and no bar service whatsoever shall be authorized within the establishment."

            (2) May a city, in the exercise of its police power, impose conditions or restrictions upon restaurant liquor licensees limiting the service of liquor for on-premise consumption to seated customers consuming food?

            We answer both questions in the negative for the reasons set forth in our analysis.

                                                                     ANALYSIS

            Question (1):

            The general rule‑making authority of the State Liquor Control Board is set forth in RCW 66.08.030 which reads, in pertinent part, as follows:

            "(1) For the purpose of carrying into effect the provisions of this title according to their true intent or of supplying any deficiency therein, the board may make such regulationsnot inconsistent with the spirit of this title as are deemed necessary or advisable.  All regulations so made shall be a public record and shall be filed in the office of the code reviser, and thereupon shall have the same force and effect as if incorporated in this title. . . ."  (Emphasis supplied)

            Ensuing subsections of this statute enumerate, without limiting the generality of the above‑quoted portion, some twenty-six control functions which may be the subject matter of regulations.  Expressly included therein is the power to make regulations:

             [[Orig. Op. Page 3]]

            "(r) prescribing theconditions, accommodations and qualifications requisite for the obtaining of licenses to sell beer and wines, and regulating the sale of beer and wines thereunder. . . ."  (Emphasis supplied)

            By reason of another section of the liquor code, RCW 66.98.070, this same rule‑making power now also extends to the licensing of premises for the sale of liquor by the drink (i.e., Class H licensees) under chapter 5, Laws of 1949 (Initiative 171), now principally codified in RCW 66.24.400‑-66.24.450.

            Also to be noted in connection with your first question is RCW 66.24.010 which provides, in part, as follows:

            ". . .

            "(2) For the purpose of considering any application for a license, the board may cause an inspection of the premises to be made, and may inquire into all matters in connection with the construction and operation of the premises.  The board may, in its discretion, grant or refuse the license applied for.  No retail license of any kind shall be issued to:

            ". . .

            "(6) Every license issued under this section shall be subject to all conditions and restrictions imposed by this title or by the regulations in force from time to time.

            ". . .

            "(8) Before the board shall issue a license to an applicant it shall give notice of such application to the chief executive officer of the incorporated city or town, if the application be for a license within an incorporated city or town, or to the board of county commissioners, if the application be for a license outside the boundaries of incorporated cities or towns; and such incorporated city or town, through the official or employee selected by it, or the board of county commissioners or the official or employee, selected  [[Orig. Op. Page 4]] by it, shall have the right to file with the board within twenty days after date of transmittal of such notice, written objections against the applicant or against the premises for which the license is asked, and shall include with such objections a statement of all facts upon which such objections are based, and in case written objections are filed, may request and the liquor control board may in its discretion hold a formal hearing subject to the applicable provisions of chapter 34.04 RCW, as now or hereafter amended.  Upon the granting of a license under this title the board shall cause a duplicate of the license to be transmitted to the chief executive officer of the incorporated city or town in which the license is granted, or to the board of county commissioners if the license is granted outside the boundaries of incorporated cities or towns.

            ". . ."

            As we understand it, the underlying basis for your opinion request stems from the interrelationship between the Liquor Control Board and local authorities under the last quoted subsection of this statute.  Although the Liquor Control Board may grant a license notwithstanding official local objections to the applicant or location, we are informed that the board accords great weight to such objections and holds formal hearings when requested by city or county officials.  In some instances, however, the particular local authorities involved would prefer to see the board take a middle road somewhere between outright denial and unqualified approval of a given license application.  Accordingly, it has been informally proposed that the board adopt a regulation along the lines set forth in your question as above paraphrased; i.e., a regulation reading as follows:

            "Whenever the Liquor Control Board determines, on the basis of all relevant evidence available to it, that the proposed place of operation of an applicant for a state liquor license is such that a cocktail lounge or bar-type atmosphere would be incompatible or disruptive to adjacent uses, the resulting liquor license, if issued, shall be conditioned only to permit the service or sale of liquor to customers who are seated at  [[Orig. Op. Page 5]] a table and also consuming food and no bar service whatsoever shall be authorized within the establishment."

            This proposed regulation, it is to be noted, would not require the Liquor Control Board to so condition a given license when requested to do so by the applicable local authorities.  Rather, the ultimate determination would be made by the board itself, on the basis of all relevant evidence including, but not limited to, such evidence as might be supplied by the county or city in which the licensed establishment would be situated.  With that in mind let us now turn directly to your question itself which, of course, is whether the Liquor Control Board presently possesses the legal ability to adopt such a regulation.

            At the outset, our attention has been directed to an existing Liquor Board regulation, WAC 314-16-190 (Rule 35), which relates to the qualifications required of applicants for a Class H (liquor by the drink) license and reads, in part, as follows:

            ". . .

            "(4) To demonstrate to the satisfaction of the board that a Class H restaurant as defined in RCW 66.24.410(2) is maintained in a substantial manner as a place for preparing, cooking and serving of complete meals, a Class H restaurant shall maintain daily average gross food sales of one hundred dollars or more, and such food sales shall amount to forty percent or more of the restaurant's total food‑-liquor sales.

            "(5) Each Class H restaurant licensee shall submit semi-annual reports on forms provided by the board, showing its gross food and liquor sales.  If for two successive semi-annual reports, a Class H restaurant's daily average gross food sales are less than one hundred dollars, or its food sales are less than forty percent of its total food‑-liquor sales, such restaurant shall be ineligible to retain its Class H license.

            ". . ."

             [[Orig. Op. Page 6]]

            The suggested relevance of this particular regulation, as we understand it, is that the same underlying rationale which supports its provisions would also support the further proposed regulation with which we are here concerned.  In our opinion, however, that argument fails on fairly obvious logical grounds.  Clearly, the rationale for the above‑quoted provisions of WAC 314-16-190 is simply that those provisions further develop and refine the statutory definition of the term "restaurant" as contained in RCW 66.24.410(2), the full text of which reads as follows:

            "(2) 'Restaurant' as used in RCW 66.24.400 to 66.24.470, inclusive, means an establishment provided with special space and accommodations where, in consideration of payment, food, without lodgings, is habitually furnished to the public, not including drug stores and soda fountains:  PROVIDED, That such establishments shall be approved by the board and that the board shall be satisfied that such establishment is maintained in a substantial manner as a place for preparing, cooking and serving of complete meals.  The service of only fry orders or such food and victuals as sandwiches, hamburgers, or salads shall not be deemed in compliance with this definition."1/

             The problem, obviously, is that in order for this same basis to be used as a justification for the further administrative regulation here proposed there would first have to be accepted the plausibility of two separate definitions of the term "restaurant."  One such definition (the existing one based upon the "60-40" rule) would apply in the absence of a special finding by the board as contemplated by the proposed regulation, and the other (an establishment which sells liquor only to ". . . customers who are seated at a table and also consuming food . . .") would apply in the presence of such a finding; i.e., that ".  . . a cocktail lounge or bar-type atmosphere would be incompatible or disruptive to adjacent uses, . . ."  It  [[Orig. Op. Page 7]] seems apparent, however, that the underlying statute, RCW 66.24.410(2), supra, envisions only one such definition.2/

             Having so disposed of this suggested rationale or basis for the proposed regulation we must turn, next, to another section of the liquor code which, in our view, would constitute a further impediment to the adoption of such a regulation by the board.  We have reference to RCW 66.28.130, codifying § 2, chapter 112, Laws of 1969, Ex. Sess. and reading as follows:

            "It shall not be unlawful for a retail licensee whose premises are open to the general public to sell, supply or serve liquor to a person for consumption on the licensed retail premises if said person is standing or walking, nor shall it be unlawful for such licensee to permit any said person so standing or walking to consume liquor on such premises:  PROVIDED HOWEVER, That the retail licensee of such a premises may at his discretion, promulgate a house rule that no person shall be served nor allowed to consume liquor unless said person is seated."

            This statute clearly permits the sale and service of liquor to persons while standing or walking within the licensed retail premises and it also permits such persons to consume liquor‑-subject only to the licensee's discretion to promulgate a house rule requiring such persons to be seated.  At the same time, the statute does not require food to be consumed by persons consuming liquor while standing or walking.  Accordingly, the proposed regulation here in question would have the effect of prohibiting, within certain licensed establishments, that which is affirmatively permitted or sanctioned by state law in all such establishments except those which have, by their own house rule, provided, otherwise.  Yet as we noted earlier in quoting from RCW 66.08.030, supra, the board is only authorized to ". . . make such regulations [as are] not inconsistent with  [[Orig. Op. Page 8]] the spirit of this title . . .;"i.e., the state liquor code of which RCW 66.28.130,supra, is a part.  And, as you will readily understand, any administrative regulation inconsistent and not authorized by the statutory authority it proposes to implement is void.  Fecht v. Dep't Social & Health Services, 86 Wn.2d 109, 542 P.2d 780;Baker v. Morris, 84 Wn.2d 804, 529 P.2d 1091 (1974).

            Question (2):

            Your second question, repeated for ease of reference, asks:

            May a city, in the exercise of its police power, impose conditions or restrictions upon restaurant liquor licensees limiting the service of liquor for on-premise consumption to seated customers consuming food?

            Article XI, § 11 of our state constitution contains the following self-executing grant of authority, commonly referred to as the police power, to all counties, cities and towns:

            "Any county, city, town or township may make and enforce within its limits all such local police, sanitary and other regulations as are not in conflict with general laws."

            See also, insofar as your immediate question is concerned, the following statutory language of RCW 66.08.120:

            "No municipality or county shall have power to license the sale of, or impose an excise tax upon, liquor as defined in this title, or to license the sale or distribution thereof in any manner; and any power now conferred by law on any municipality or county to license premises which may be licensed under this section, or to impose an excise tax upon liquor, or to license the sale and distribution thereof, as defined in this title, shall be suspended and shall be of no further effect:  PROVIDED, That municipalities and counties shall have power to adopt police ordinances and regulations not in conflict with this title or with the regulations made by the board."

             [[Orig. Op. Page 9]]

            Perhaps the most succinct explanation by the court of how to determine whether or not a given municipal ordinance is in conflict with the "general laws" of the state appears in the oft-cited case of Bellingham v. Schampera, 57 Wn.2d 106, 356 P.2d 292 (1960), as follows:

            "'"'In determining whether an ordinance is in "conflict" with general laws, the test is whether the ordinance permits or licenses that which the statute forbids and prohibits, and vice versa.' . . ."

            Moreover, essentially this same test is to be applied under RCW 66.08.120,supra, in analyzing the interrelationship between a municipal ordinance and a section of the state liquor code or a regulation promulgated thereunder.  See,e.g.,Corral, Inc. v. Liquor Control Board, 17 Wn.App. 753, 556 P.2d 214 (1977).  In that case it was argued to the court that it was up to local authorities, and not the Liquor Control Board, to regulate personal conduct within licensed premises notwithstanding an existing board regulation, WAC 314-16-120, which prohibited licensees from permitting disorderly persons to remain within their licensed establishments.  The court, however, rejected this contention and sustained the regulation.  In essence, the court concluded that the police power of local authorities must be exercised within the narrow confines of the powers circumscribed by RCW 66.08.120,supra, declaring the state's preemptive control over all facets of liquor traffic, as augmented by validly promulgated regulations of the board.3/

             Along these same lines, by letter opinion dated October 9, 1946, to the then prosecuting attorney of Chelan County (copy enclosed) this office ruled that a board of county commissioners lacked the power temporarily to prohibit the sale of wine by retail liquor licensees for a period of several weeks.  We there first pointed out that municipal and county ordinances and regulations with respect to the holders of state liquor licenses cannot conflict with the applicable state statutes.  Then, secondly, we explained that even if there is no such conflict a test of reasonableness must be applied.  Accord, 45 Am.Jur.2d, Intoxicating Liquors, § 27 wherein the following statement of principles appears:

             [[Orig. Op. Page 10]]

            "In other words, municipal ordinances which relate to and regulate or prohibit traffic in intoxicants and are not expressly authorized by a valid legislative enactment, like other municipal police regulations, must be reasonable, or, at least, not unreasonable and oppressive.  A municipality is not permitted under the pretext of regulation of traffic in intoxicants, where such traffic is not prohibited by general laws, to enact and enforce ordinances which impose arbitrary, oppressive, unreasonable, and vexatious restrictions upon those who engage or seek to engage in the liquor business."

            In the instant case we again note that both statutory definitions of "restaurant" quoted earlier in this opinion4/ refer to establishments in which food is "habitually furnished to the public."  (Emphasis supplied)  From this it follows that the issuance of a liquor license to a "restaurant" carries with it the right to sell and serve liquor to all classes of customers except those excluded by age or condition.  Furthermore, in view of the above‑quoted provisions of RCW 66.28.130 it is the prerogative of each licensee, on an establishment-by-establishment basis, to decide whether or not such customers may stand and walk, or must be seated, while consuming the liquor they have purchased.  Accordingly, under the above‑outlined legal principles it necessarily follows that such a city ordinance as is contemplated by your question would be invalid under both Article XI, § 11 and RCW 66.08.120, supra, in that the ordinance would have the effect of prohibiting conduct which is permitted by applicable state law; i.e., the state liquor code and regulations promulgated thereunder.  We thus must also answer your second question, as above set forth, in the negative, which is to say, simply, that a city may not, in the exercise of its police power, ". . . impose conditions or restrictions upon restaurant liquor licensees limiting the service of liquor for on-premise consumption to seated customers consuming food. . . ."