Why The Rule Of Law Matters

It's been several days since the Marion County Alcoholic Beverage Board unanimously voted to approve an alcohol permit for the 300 East bar in the Julia Carson Government Center over the protestations of several neighborhood remonstrators. I deliberately withheld comment until I had a chance to review the recorded hearing on WCTY. I watched the hearing the other night, and I must say it was as disillusioning to watch as the zoning hearing a couple of months earlier. Now, before anyone trots out the argument that opposition to the license came from partisan Republicans and anti-Carson forces, stop and listen. This issue has always been about the rule of law so don't try to obfuscate the real issue. Allow me to explain.

Under the principle of the rule of law, nobody can claim privilege above the law. Rather, rules are set forth in advance, are published for all to read, and are applied impartially to rulers and ruled alike. The rule of law preserves limited government because it forces everyone, including all people in positions of authority, to obey the laws. It is more, however, than just having written laws. The “rule of law” abhors arbitrary and capricious “rule of men.” It is essential to ordered liberty that nobody be allowed to decide for themselves what the law is and how and when the law is to be enforced.

What I saw watching the hearing on 300 East was a complete breakdown in the application of the rule of law. Under Indiana's alcoholic licensing system, after applying for a license from the Indiana Alcoholic and Beverage Commission, applicants are required to appear at a public hearing conducted by the local board after satisfying certain statutory requirements. If members of the public appear to remonstrate against the proposed licensee, the board is required to conduct a hearing at which the remonstrators are allowed to present evidence against the issuance of the license, while the applicant is permitted to cross-examine the remonstrators and offer rebuttal evidence and testimony in support of its license. Theoretically, that took place at the hearing, but for reasons I shall discuss, the process fell short of upholding our tradition of adhering to the rule of law.

Let me begin with the manner in which the hearing officer conducted the hearing. Van Barteau, an attorney and member of the local alcohol board, acted as the hearing officer for the remonstrance hearing. The hearing officer's job is to ensure that the proceeding is conducted in a fair and impartial manner. There were several occasions during the hearing where Barteau expressed his own personal opinions, stated legal opinions not supported by the law and even offered testimony in support of the applicant's petition. His conduct of the hearing was inappropriate and completely unnecessary. The applicant was ably represented at the hearing by two very competent attorneys from Ice Miller. They didn't need the assistance of Mr. Barteau in presenting a case for their petition.

During the hearing, local attorney Ross Stovall raised a number of legal points on behalf of the remonstrators. Stovall challenged the sufficiency of the notices provided by the applicants. Specifically, he complained that the notice of the hearing mailed to the neighbors failed to identify the type of license being sought by the applicant. Indiana law details the type of notice and to whom the notice must be mailed so many days prior to a hearing at which a license is being considered. The statute lists several things the applicant "must" include in the notice, including information on "the type of license applied for." This bit of information is extremely important because there are more than three dozen types of retail alcohol permits which can be issued under Indiana law. And in the case of this particular applicant, the nature of the permit has been a moving target. It was first promoted as a private, social club, then a bar and later as a family restaurant.

Stovall, to my surprise, claimed that all assurances the applicant had made during its zoning hearing before the Metropolitan Development Commission as to its proposed operations had only been verbalized and were not written into the zoning variance approved by the Commission. Stovall also noted that the large orange placard applicants are required to post on the building of the proposed establishment facing a common thoroughfare was not posted properly, or at least in a place where it was easily accessible to the public.

Without any prompting from the applicant's attorney, Barteau dismissed the deficiencies in the notice raised by Stovall. He offered his own opinion that the applicant's license had been widely discussed in the local media and had become an issue in the election; therefore, he surmised that nobody could challenge the sufficiency of the notice required by the statute. The affidavits filed by the applicant said notice had been properly given, and that was all that was required as far as he was concerned. If Barteau read the statute, he would understand that it says the applicant "must" and not "may" include certain items in its notice. One of those requirements is the type of license applied for. Is it a 2-way or a 3-way license? Is it for a liquor store, a social club, a restaurant or a bar? Do they allow carry out? These are matters lawmakers decided were important enough to require the applicant to include in its notice to inform the affected neighbors of the nature of the alcoholic establishment being proposed for their neighborhood.

During Stovall's testimony, another local board member, Belle Choate, angrily dressed down Stovall for failing to provide a list of people to whom he wanted notice given of the hearing. The applicant's hearing was continued from an earlier hearing at which the Board had apparently asked Stovall if he would provide such a list to the applicant's attorneys. He agreed to do so, but the applicant's attorneys noted at the outset of the hearing he had never provided them a list. As a point of order, a remonstrator has no legal duty to provide a list of who gets notice of an applicant's license. The statute clearly delineates who must receive notice of the hearing, and it imposes the burden of providing that notice solely on the applicant. Stovall didn't contest that mailed notice had been given; only the content of the notice. Choate's outburst at Stovall was disturbing and inappropriate. It sent a message loud and clear that she was completely antagonistic toward his arguments about the inadequacy of the notice, regardless of what the law provided.

Stovall also raised a point I've raised on this blog a number of times in the past--the lack of an executed lease between the Center Township Trustee and the applicant in accordance with state law. An applicant must disclose whether he owns the building or has a valid leasehold interest in the premises where the proposed licensee is to be located. Trustee Carl Drummer candidly admitted in an interview with WXNT's Abdul Hakim-Shabazz that he had never executed a lease with the owners of 300 East. He simply turned the premises over to the 300 East owners nearly a year ago, allowed them to completely alter the space with a half-million dollars in improvements, all without obtaining the necessary building permits, abiding by state and local building code requirements or having the appropriate zoning approvals. And the 300 East owners have yet to pay any rent to Center Township taxpayers.

Again, Barteau was very dismissive of Stovall's argument. Barteau very matter-of-factly stated that Indiana law does not require townships to abide by any competitive requirement to ensure the adequacy of a lease. I've read the statute authorizing local governments to dispose of government-owned real estate by lease or sale, and I find no exemption from the law for townships. But more to the point, the applicant's attorney were unable to provide a copy of the lease to Barteau when he requested a copy because no lease exists to this day. Stovall noted that several public records request failed to produce a lease.

A little more than a year ago, I was indirectly involved in assisting an applicant with a transfer of an existing license to a new location--exactly what was being proposed at this hearing. During the hearing, a dissident family member of the owner of the premises where the licensee was to be located came forward and falsely asserted that the applicant had no valid lease with the owner. A lease was produced which had been approved by a court order. Barteau and Choate, nonetheless, urged a continuance of the hearing until proof of the court order could be presented to the Board. Under the circumstances, I felt the Board's actions then were appropriate. It's just hard for me to understand why Barteau and Choate would impose a higher burden of proof on an applicant involving two private citizens than it would impose on an applicant involving a governmental entity and a private business. Center Township Trustee Carl Drummer didn't even appear at the hearing to testify for the applicant, or to explain the lease.

While we're on the point of legalities, an extremely important legal argument was raised during the hearing by another attorney remonstrator, Darla Williams. Williams questioned the legal authority for the Commission to issue an alcoholic permit for an establishment to be located in a government office building. She observed that the state statute governing alcohol permits provides a specific grant of authority in every other instance where alcohol is permitted to be sold on government-owned property. And sure enough, right there at I.C. 7.1-3-1-25, the statute clearly sets out authorization to permit the sale of alcoholic beverages at certain public facilities, such as the RCA Dome, Conseco Fieldhouse, community social centers, golf courses and so on.

If the sale of alcohol on government-owned property were generally permitted, why then are there all these specific authorizations in the statute? It is a maxim of statutory construction that the expression of one thing in a statute means the exclusion of others. "A statute specifying the method by which something shall be done evinces a legislative intent that it not be done otherwise." In other words, the statute doesn't permit the sale of alcoholic beverages at the government-owned Julia Carson Government Center or any other government-owned building, except as authorized in the statute. Barteau was noticeably silent on this point, and the attorneys representing the applicant didn't seem anxious to take up the argument either.

Let's now move on to the issue of the desirability of the applicant's petition. Indiana law makes it clear there must be an investigation of the desirability of the permit in regard to geographic location before issuing a permit. The statute spells out several factors that are to be considered, including: (a) the need for such services at the location of the permit; (b) the desire of the neighborhood or the community to receive such services; (c) impact of such services on other business in the neighborhood or community; (d) impact of such services on the neighborhood or community. The overarching concern here, you can see, is what is in the best interests of the neighborhood. On this point, the local board heard compelling testimony from a long-time resident of Mapleton-Fall Creek, David Leonards. He presented compelling evidence of overwhelming opposition to 300 East from the neighbors most immediately impacted. He carefully surveyed area residents and presented signatures of those residents expressing their position on the proposed license.

A particularly troubling aspect of Leonards' testimony was the extent to which two neighborhood leaders, Claire Warner and Al Polin, had gone to thwart the clear will of the majority of the neighborhood residents. Leonards testified it had been a long-standing policy of the neighborhood association to support the will expressed by a majority of the residents most directly impacted by a zoning change. His survey showed virtually all the closest neighbors opposed 300 East. He testified about parliamentary maneuvers of Warner and Polin at neighborhood meetings prior to the hearing, which had the effect of preventing an official position being taken by a vote of the neighborhood association. Instead, Polin and Warner represented to the Commission and again to the local alcohol board, that they had surveyed the neigbhorhood and most supported it.

The remonstrators also raised questions about the character of the applicant. Indiana law specifically provides that it is appropriate to consider, in addition to prior criminal offenses committed by an applicant "the esteem in which the person is held by members of his community, and such assessment of his character as may reasonably be inferred from police reports, evidence admitted in court and commission proceedings, information contained in public records and other sources of information." The 300 East was an appropriate case to consider the applicant for two reasons. Firstly, the person whose name appeared on the original application, Lacy Johnson, III, was convicted of driving while under the influence while the petition was pending. Johnson was noticeably absent from the hearing. In his place, wealthy businessman Bill Mays, one of the principal investors in 300 East, appeared on behalf of the applicant. Mays also owned the controversial Savoy nightclub on the city's northside, which was recently forced to close its doors because of numerous city and zoning code violations, as well as a public nuisance it had created in the St. Vincent Hospital neigbhorhood, which raised the ire of its neighbors. It was also disclosed that the Savoy's application for a zoning variance included petitions containing a number of forged signatures of neighbors. Take it however you want, but suffice it to say, the board was not moved in the least bit to consider the character of the applicant.

Notwithstanding any number of reasons the local board could have relied upon to deny 300 East's application for an alcohol license, or at the very least, delayed action until patent deficiencies were resolved, the board unanimously approved the license. How could this happen? How could so many laws and rules be ignored in the consideration of this petition. Unfortunately, the answer is that if you are a wealthy business owner who makes generous campaign contributions to political officeholders and you're represented by the state's most powerful law firm, the written laws are going to be applied more generously to your benefit than if you are just an ordinary citizen asking the government to grant you a privilege of owning an alcohol license.

The remonstrators can appeal the decision of the local board to the state's Alcohol and Tobacco Commission, but they must do so within 15 days of the decision. That can prove costly and time-consuming to the remonstrators, but as a matter of principle, I hope they do.