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| City Muddies the Waters |
I concluded my last post by telling
you that the City, at the upcoming BMA meeting on May 8, wants to ban
liquor stores from T4 while simultaneously permitting restaurants to sell
alcoholic beverages in these areas. I further wrote that the City seeks to
accomplish this objective by doing two things: (1) enacting proposed Ordinance 2017-6 to retract the permission that it had granted on November 28, 2016, via Ordinance 2016-10, to liquor stores to operate in T4 areas, and (2) trying to convince us that restaurants already were permitted, prior to November 28, 2016, to
sell alcoholic beverages in T4 areas.
The City’s argument that restaurants were already allowed to sell alcoholic beverages in T4 areas is of particular importance to the City’s efforts. The City wants us to believe that the action it took on November 28 made no change regarding the permission enjoyed by T4 restaurants to sell alcoholic beverages. To citizens now complaining about T4 restaurants having permission to sell alcoholic beverages, the City is saying in essence: "Sorry, but you are complaining about something that already existed before we enacted Ordinance 2016-10. That horse had left the barn well before November 28."
Here is what section 3-116 said before it was amended by Ordinance 2016-10:
And here is what section 3-116 said after the enactment of Ordinance 2016-10 last November 28 (red-lined from the Aldermen's packets):
As you can see, the pre-November 28 version of section 3-116 prohibited
the sale of alcoholic beverages anywhere within the City except in those particular areas specified in subsection (a) and in retirement homes, as spelled out in subsection (b). In the pre-November 28 version of section 3-116, T4 was not listed among the exceptions - i.e., the designated areas where alcoholic
beverages could be lawfully sold. But, as you can further see, this changed on November 28. Specifically, the changes made
to section 3-116 on November 28 by Ordinance 2016-10 added, in
subsection (a), T4 to those excepted areas where
alcoholic beverages could lawfully be sold.
This seems pretty cut and dried to me: The pre-November 28 version of section 3-116 said a retail establishment could not sell alcoholic beverages in T4, and the post-November 28 version said they could. Restaurants thus formerly could not, but now they can, legally sell alcoholic beverages in T4 areas.
Not so fast says the City. A restaurant, the City now says, is not a “retail establishment” as that term is used in section 3-116. According to the City, section 3-116 does not even apply to restaurants, and, therefore, section 3-116 did not prohibit T4 restaurants from selling alcoholic beverages.
The City’s position is, for two irrefutable reasons, legally untenable.
1. Section 3-116 did not expressly exclude restaurants from its scope.
First, we must keep in mind that the City's Code of Ordinances must conform to state law. The City's grant of permission to sell alcoholic beverages may be extended only to those businesses that are permitted to do so by state law. The City may choose to bar a state-permitted business from designated areas (for example, the City may prohibit a liquor store from opening in T3). The City may not, however, grant permission to sell alcoholic beverages to businesses that are not allowed to do so by state law (for example the City may not permit, say, an automobile dealership to sell alcoholic beverages anywhere within the city).
The drafters of section 3-116 thus knew, when they enacted section 3-116, that this code section could be used to grant permission to sell alcoholic beverages only to those types of businesses permitted to do so by state law. At the time section 3-116 was enacted, grocery stores had not yet been permitted by state law to sell alcoholic beverages. Consequently, section 3-116, when it was enacted, could be applied only to three types of businesses: liquor wholesalers, retail liquor stores, and restaurants. It is the City's position that the drafters chose to apply section 3-116 to only two of these three - liquor wholesalers and retail liquor stores. The City is wrong. Section 3-116 applies to restaurants as well.
Courts require that the words used in laws, including code sections, be given their natural and ordinary meaning. The words "retail establishment", when given their natural and ordinary meaning, encompass a restaurant. If the drafters of section 3-116 had intended to exclude restaurants from this section's scope, they would have stated this exception clearly. In fact, the drafters would have done so simply by using the word "Retailer", instead of the words "retail establishment", to refer to liquor stores. Section 3-21 of Article II (again, Article II comprises the code sections that regulate "Intoxicating Liquors") says "Retailer means a person who sells intoxicating liquors in sealed containers for consumption, and not for resale."
The drafters' use of the term "retail establishment" rather than "Retailer" signifies that the retail businesses governed by section 3-116 include both liquor stores and restaurants, not just liquor stores alone.
This becomes even clearer when one takes into account the fact that section 3-116 applies not only to "liquors in sealed containers", but also to the entire array of "alcoholic beverages" defined broadly in another section of Article II, section 3-107:
Now that I have shown that section 3-116’s regulation of “retail establishments” applies to restaurants (as well as liquor stores), I want to fill you in on something you will find quite interesting. Cameron Ross, the city official who is now arguing that restaurants in T4 have always been permitted to sell alcoholic beverages, appears to have taken just the opposite position when, in January, I wrote a post depicting a liquor store in T4 Bars and Liquor Stores, In transition T4 Zoning? . At that time, Mr. Ross, decrying such a terrible event, said that the City never intended to allow liquor stores in T4. I believe this is true - that is, I believe the City never intended to permit liquor stores in T4.
Mr. Ross said that Ordinance 2016-10's authorization for liquor stores in T4 had been a “drafting error.” Mr. Ross will likely deny this, but common sense suggests that, when he made his “drafting error” comment, the City knew very well that Ordinance 2016-10 changed Section 3-116 to allow restaurants in T4 areas to sell alcoholic beverages in T4. If the City never intended to permit liquor stores in T4 (again, I believe this to be true), what explanation is there for amending section 3-116 other than an intention on the City's part to expand to T4 permission for restaurants to sell alcoholic beverages? After all, the City spent considerable time in the fall on changing section 3-116. It seems strange indeed that, accepting as I do the City's insistence that it never intended to permit liquor stores in T4, the City would not have realized that it was changing section 3-116 to permit restaurants in T4 to sell alcoholic beverages.
Let’s now focus on the column for T4. As you can see, all “Residential" uses, two of the three “Lodging" uses, both “Office” uses, and a few of the “Civic” uses are permitted in T4. Of course, our focus is on “Retail” uses. Accordingly, we must turn our attention to this particular category in some detail.
Within the “Retail” category, there are six potential retail uses that may be permitted in a zoning area: Open-Market Building, Retail Building, Display Gallery, Restaurant, Kiosk, Push Cart, and Liquor Selling Establishments. As you can see, none of these six uses are allowed in T3, while all but two, push carts and liquor selling establishments, are permitted in T4.
It is, as you can plainly see, beyond dispute that restaurants were permitted to operate in T4 prior to this past November 28. No one, myself included, has ever disputed this point. If you scroll down to the second chart, which appears in subsection C, “Additional Use Standards,” you will see that any restaurant in T4 must seat no more than 100. But, again, no one disputes the proposition that restaurants were permitted to operate in T4 areas. This, however, does not answer the question that is central to the City’s last-ditch argument: Did section 23-763 permit restaurants in T4 to sell alcoholic beverages prior to November 28, 2016? The answer is: No.
One would think this ends the analysis: A 100-seat-or-smaller restaurant may, under section 23-763, operate in T4; however, it is not permitted to sell liquor. But, alas, the City will not accept “no” for an answer. Just as it tortured the meaning of “retail establishments” in Section 3-116 to argue that it means only liquor stores, the City now contends, if I understand its argument correctly, that “liquor selling establishment”, as the term is used in section 23-763, means only a liquor store. From this dubious proposition, the City then leaps (if, again, I understand its argument correctly) to the conclusion that a restaurant in T4 is permitted to sell liquor. At the risk of undue repetition, the foregoing is what I understand the City's argument to be. Please look at the You Tube recording of the argument made by Mr. Ross on April 24, and see for yourself. If I have mischaracterized the City’s position, I assure you I have done so inadvertently.
..........................(snip)...................If what this is intended to mean, at "for retail liquor selling establishment" is a liquor store, then the word we need to put in there is quote Retailer."
At that point, Mr. Harris was of course just thinking out loud. He had not been asked to opine on the meaning and application of either section 23-763 or section 3-116. Let's hope he can give us his views soon.
That the term “liquor selling establishment”, as used in section 23-763, is not limited to liquor stores is easy to see.
1) To begin with, we must adhere to the principle that the various sections of the Code must be read together and harmonized if at all possible. I have already shown that section 3-116 prohibited restaurants from selling alcoholic beverages prior to November 28. It would be absurd to give a section of Article VII a diametrically opposed interpretation from that given to a section of Article II. The drafters of the Smart Growth Plan could not have intended, in section 23-763, to permit restaurants to sell alcoholic beverages when section 3-116 squarely prohibited such sales.
2) Even apart from the need for inter-article consistency, section 23-763 still prohibits restaurants in T4 from selling alcoholic beverages. Consider the natural and ordinary meaning of the words "liquor selling establishment". Would anyone seeking to refer solely to a liquor store use the much broader term “liquor selling establishment”? Of course not. That is particularly the case here, given Article II's mandate that the word “Retailer” be used to refer to a liquor store. If the drafters of the Smart Growth Plan had intended to bar only liquor stores from a given zoning area, they would have used the term “Retailer” in order to make the Smart Growth Plan consistent with Article II's command that a liquor store be referred to as a Retailer. I don't want to put words in Mr. Harris' mouth, but I deduce from the above-quoted remarks that he would agree with me that the word "Retailer" would have been used if the drafters of section 23-763 had intended for the term "retail liquor establishment" to refer only to a liquor store.
3) It is significant that the particular permitted retail use at issue here uses the broad term "liquor", not liquor that is "sold in sealed containers". This is consistent with Article II's broad definition of "Intoxicating Liquors":
If the drafters of section 23-763 had intended that its alcohol-related permitted retail use apply only to liquor stores, they would have, consistent with the definition of "Retailer" in section 3-21 (see immediately above), specified that that use be for liquor "sold in sealed containers". That the drafters chose not to do so shows that they intended that the term "liquor selling establishment" encompass all businesses that sell the full array of intoxicating liquors.
4) Not that any more icing needs to be put on this cake, but take a look below at the chart I prepared from certain of the headings contained within Article II:
As you can see, the "Intoxicating Liquors" taxed and otherwise regulated by Article II include, among other liquor-based drinks, those served for consumption at restaurants. Adherence to the principle that code sections must be harmonized necessarily leads to the conclusion that the drafters of Section 23-763 intended, when they specified “liquor selling establishment” as a permitted retail use, that such establishments encompass all retail businesses that sell intoxicating liquors, not just liquor stores.
The City in fact knew, in the fall of 2016, that section 23-763 prohibited restaurants in T4 from selling liquor.
In my last post, I told you that the City had proposed an ordinance, 2016-11, that later was tabled. This is the proposed ordinance that Sarah Wilkerson-Freeman happened to be examining, back in the November-January time frame, when she first got an inkling that something might be going on regarding the sale of alcoholic beverages in T4. Look below at the red-lined version of a portion of proposed Ordinance 2016-11 (this red-lined version was prepared sometime in November 2016, prior to the enactment of Ordinance 2016-10):
I do not have the entire red-lined version of this proposed ordinance. I am showing you all that I have. Still, we have enough to discern that one of the purposes of proposed Ordinance 2016-11 was an amendment of section 23-763. Refer to the vertical T4 column where it intersects with the retail use, "Liquor Selling Establishment". You will see a dark red box. This shows, I believe, that the City intended to put a dark box in that square, thus designating that, henceforth, a liquor selling establishment would constitute a permitted use in T4 areas. If section 23-763 already permitted restaurants in T4 to sell alcoholic beverages, there would have been no need to make this change. After all, the City has assured us that it never intended to allow liquor stores in T4; therefore, a desire to permit liquor stores in T4 cannot explain this proposed change to section 23-763. The conclusion is inescapable that the City knew in the fall of 2016 that section 23-763 prohibited restaurants in T4 from selling liquor - just as the City knew that section 3-116 contained the same prohibition. The City has already told us that Ordinance 2016-10's amendment of section 3-116 was a "drafting error". Surely, it does not intend to claim that its red-lined proposed change to section 23-763 was also a drafting error!
Why is the City Arguing That Restaurants in T4 Were Allowed to Sell Alcoholic Beverages Prior to November 28?
At first glance, it may seem odd that the City would choose to make the weak argument that restaurants in T4 were allowed to sell alcoholic beverages prior to the November 28 passage of Ordinance 2016-10. If one scratches below the surface, however, one can understand why the City is making this argument.
The City gave inadequate notice by mislabeling each of the three agenda items used to describe then-proposed Ordinance 20I6-10. Ordinance 2016-10 did not deal solely with beer. The citizens should have been told that Ordinance 2016-10 also addressed the sale of alcoholic beverages in T4. (See Cheers! Part III). The City now seeks to justify its inadequate notice by telling us, in essence: "Inadequate notice? No big deal. Restaurants could always sell liquor by the drink in T4 areas, so there was no reason to call attention to the change made in Ordinance 2016-10. We apologize for inadvertently allowing liquor stores in T4, but we are going to rectify that mistake."
It is instructive at this point to consider what the state of Tennessee says about adequate notice:
Notice Required in State of Tennessee
"If the meeting is one that would not be expected to be of interest to the general public, the notice requirements may not be as stringent as if the issue is one that is expected to be of great public concern."
By now claiming that restaurants in T4 have always been permitted to sell alcoholic beverages, the City seeks to characterize its amendment of section 3-116 as a matter "that would not be expected to be of interest to the general public". That way, the City's action would be governed by "less stringent" notice requirements. Because restaurants have not always been permitted to sell alcoholic beverages in T4 areas, the City's characterization must fail.
In concluding this post, I reiterate that I take no position on whether restaurants in T4 should be permitted to sell alcoholic beverages. My concern is for those citizens who showed up at the April 24 BMA meeting to argue against a change to restaurant alcohol policy that had been enacted months earlier without their knowledge. These citizens deserve adequate notice of intended actions so that they may have the opportunity to be heard. They deserve public agenda notices that have not been mislabeled. And, they deserve to be spared weak legal arguments designed to conceal the fact that the City, without adequate public notice, had made important changes that will affect their neighborhoods. So do we all. We all deserve transparency. Ordinance 2016-10's changes to section 3-116 cannot be fixed by the enactment of proposed Ordinance 2017-6 if the City persists in taking the position that section 3-116 does not apply to restaurants.
Here is the complete list of posts in the series on the recent alcohol ordinances:
Cheers! Part I, The Ordinance Nobody Knew About
Cheers! Part II, The City Muddies the Waters with Last Ditch Legal Argument.
Cheers! Part III, The City Fails to Adequately Notify the Public.
Cheers! Part IV, Between the Second and Third Reading of Ordinance 2016-10, the City Eliminates Distance Protections.
Cheers! Part V Proposed ordinance 2017-6
The City’s argument that restaurants were already allowed to sell alcoholic beverages in T4 areas is of particular importance to the City’s efforts. The City wants us to believe that the action it took on November 28 made no change regarding the permission enjoyed by T4 restaurants to sell alcoholic beverages. To citizens now complaining about T4 restaurants having permission to sell alcoholic beverages, the City is saying in essence: "Sorry, but you are complaining about something that already existed before we enacted Ordinance 2016-10. That horse had left the barn well before November 28."
I am not a lawyer, but I strongly believe, and I intend now to show,
that the City is incorrect when it says restaurants in T4 were already
permitted to sell alcoholic beverages. The City advanced this position at
the last BMA meeting on April 24. Cameron Ross, who is not a lawyer,
made the argument.
David Harris, the City’s attorney, was present at the meeting, but he was not asked, nor did he volunteer, to opine on whether restaurants in T4 were, prior to November 28, permitted to sell alcoholic beverages. Alderman Janda chose to pose this question solely to Mr. Ross, who, as the recording of the meeting strongly suggests, had prepared in advance to make his argument. (I embed the YouTube recording of the dialogue between Alderman Janda and Mr. Ross later in this post when I focus in more detail on Mr. Ross' specific argument.) Perhaps at the upcoming May 8 meeting, Mr. Janda or one of the other aldermen will ask Mr. Harris to opine on whether restaurants in T4 were permitted, prior to November 28, to sell alcoholic beverages. Or, better yet, maybe one of the aldermen will ask Mr. Harris for a written opinion even if that necessitates tabling the matter at the May 8 meeting.
WHY THE CITY’S LEGAL ARGUMENT IS WRONG
The code sections that are determinative of this legal issue are sections 3-116 and 23-763 of the Code of Ordinances. Both of these code sections were already in effect before this controversy erupted. Section 3-116 is part of Article II, the group of
ordinances that governs "Intoxicating Liquors". Section 23-763 is part of the "Smart Growth Plan" (Article VII). I will now separately discuss each of these code sections and explain why each, prior to November 28, did not permit restaurants in T4 areas to sell alcoholic beverages.
Section 3-116
Section 3-116
Section 3-116 specifies the locations
where alcoholic beverages may be sold. Ordinance 2016-10, discussed at length in my preceding post, amended section
3-116. Proposed ordinance 2017-6, which I briefly discussed at the conclusion of this same post, seeks to make additional changes to section 3-116. More specifically, 2017-6 would, in part, as I explained in this same earlier post, retract some of the changes to section 3-116 that had been made on November 28 by Ordinance
2016-10.
Now that we know the code
numbers, let’s examine both the language of section 3-116 as it existed prior to November 28, and the changes that were made to Section 3-116 on November 28 by Ordinance 2016-10. We need
not concern ourselves at this point with proposed Ordinance 2017-6,
because an examination of that proposed ordinance does not answer the
question on which we are now focusing - i.e., whether restaurants in T4
areas were already permitted to sell alcoholic beverages before November
28. Proposed Ordinance 2017-6 is scheduled for its final reading at the upcoming May 8 meeting.
Here is what section 3-116 said before it was amended by Ordinance 2016-10:
And here is what section 3-116 said after the enactment of Ordinance 2016-10 last November 28 (red-lined from the Aldermen's packets):
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Alderman Packet Red Lined Version of 2016-10
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This seems pretty cut and dried to me: The pre-November 28 version of section 3-116 said a retail establishment could not sell alcoholic beverages in T4, and the post-November 28 version said they could. Restaurants thus formerly could not, but now they can, legally sell alcoholic beverages in T4 areas.
Not so fast says the City. A restaurant, the City now says, is not a “retail establishment” as that term is used in section 3-116. According to the City, section 3-116 does not even apply to restaurants, and, therefore, section 3-116 did not prohibit T4 restaurants from selling alcoholic beverages.
The City’s position is, for two irrefutable reasons, legally untenable.
1. Section 3-116 did not expressly exclude restaurants from its scope.
First, we must keep in mind that the City's Code of Ordinances must conform to state law. The City's grant of permission to sell alcoholic beverages may be extended only to those businesses that are permitted to do so by state law. The City may choose to bar a state-permitted business from designated areas (for example, the City may prohibit a liquor store from opening in T3). The City may not, however, grant permission to sell alcoholic beverages to businesses that are not allowed to do so by state law (for example the City may not permit, say, an automobile dealership to sell alcoholic beverages anywhere within the city).
The drafters of section 3-116 thus knew, when they enacted section 3-116, that this code section could be used to grant permission to sell alcoholic beverages only to those types of businesses permitted to do so by state law. At the time section 3-116 was enacted, grocery stores had not yet been permitted by state law to sell alcoholic beverages. Consequently, section 3-116, when it was enacted, could be applied only to three types of businesses: liquor wholesalers, retail liquor stores, and restaurants. It is the City's position that the drafters chose to apply section 3-116 to only two of these three - liquor wholesalers and retail liquor stores. The City is wrong. Section 3-116 applies to restaurants as well.
Courts require that the words used in laws, including code sections, be given their natural and ordinary meaning. The words "retail establishment", when given their natural and ordinary meaning, encompass a restaurant. If the drafters of section 3-116 had intended to exclude restaurants from this section's scope, they would have stated this exception clearly. In fact, the drafters would have done so simply by using the word "Retailer", instead of the words "retail establishment", to refer to liquor stores. Section 3-21 of Article II (again, Article II comprises the code sections that regulate "Intoxicating Liquors") says "Retailer means a person who sells intoxicating liquors in sealed containers for consumption, and not for resale."
The drafters' use of the term "retail establishment" rather than "Retailer" signifies that the retail businesses governed by section 3-116 include both liquor stores and restaurants, not just liquor stores alone. This becomes even clearer when one takes into account the fact that section 3-116 applies not only to "liquors in sealed containers", but also to the entire array of "alcoholic beverages" defined broadly in another section of Article II, section 3-107:
Sec. 3-107. - Definition.
The term "alcoholic beverage," as used in this article, means and includes alcohol, spirits, liquor, wine and every liquid containing alcohol, spirits, wine and capable of being consumed by a human being, other than patent medicine, or beer where the latter contains an alcoholic content of five percent by weight or less. Notwithstanding any provision to the contrary in this article, "alcoholic beverage" or "beverage" also includes any liquid product containing distilled alcohol capable of being consumed by a human being, manufactured or made with distilled alcohol irrespective of alcohol content. Notwithstanding the provisions of this definition, products or beverages containing less than one half of one percent alcohol by volume, other than wine as defined in this section, shall not be considered to be alcoholic beverages and shall not be subject to regulation or taxation pursuant to this article. Notwithstanding the provisions of this definition, ethanol produced in a facility whose production process is primarily a wet milling process in bulk and sold and transported in bulk lots of 5,000 gallons or more and not packaged for retail sale by the holder of a valid alcohol fuels permit or a valid distilled spirits permit:
It is beyond reasonable dispute that the drafters, when they chose to apply section 3-116 to "retail establishments that sell alcoholic beverages," intended this section to regulate liquor wholesalers, retail liquor stores, and restaurants, not just liquor wholesalers and retail liquor stores.
2. Subsection (b)'s exception for retirement homes further refutes the City's argument.
As previously noted, subsection (b) excepts retirement homes from section 3-116's prohibition against the sale of alcoholic beverages. Subsection (b) permits retirement homes, when operating in a dining setting, to sell alcoholic beverages. If, as the City maintains, the only retail business to which section 3-116 was intended to apply is a liquor store, there would have been no need to carve out an exception for a retirement home's retail sales for on-premises consumption. How can a retirement home dining room's sales of alcoholic beverages be included as an exception in a code section whose sole retail application is liquor stores? Answer: It can't. A retirement home's dining room is a "retail establishment", as that term is used in section 3-116, and so is a restaurant.
The City flip flops.
2. Subsection (b)'s exception for retirement homes further refutes the City's argument.
As previously noted, subsection (b) excepts retirement homes from section 3-116's prohibition against the sale of alcoholic beverages. Subsection (b) permits retirement homes, when operating in a dining setting, to sell alcoholic beverages. If, as the City maintains, the only retail business to which section 3-116 was intended to apply is a liquor store, there would have been no need to carve out an exception for a retirement home's retail sales for on-premises consumption. How can a retirement home dining room's sales of alcoholic beverages be included as an exception in a code section whose sole retail application is liquor stores? Answer: It can't. A retirement home's dining room is a "retail establishment", as that term is used in section 3-116, and so is a restaurant.
The City flip flops.
Now that I have shown that section 3-116’s regulation of “retail establishments” applies to restaurants (as well as liquor stores), I want to fill you in on something you will find quite interesting. Cameron Ross, the city official who is now arguing that restaurants in T4 have always been permitted to sell alcoholic beverages, appears to have taken just the opposite position when, in January, I wrote a post depicting a liquor store in T4 Bars and Liquor Stores, In transition T4 Zoning? . At that time, Mr. Ross, decrying such a terrible event, said that the City never intended to allow liquor stores in T4. I believe this is true - that is, I believe the City never intended to permit liquor stores in T4.
Mr. Ross said that Ordinance 2016-10's authorization for liquor stores in T4 had been a “drafting error.” Mr. Ross will likely deny this, but common sense suggests that, when he made his “drafting error” comment, the City knew very well that Ordinance 2016-10 changed Section 3-116 to allow restaurants in T4 areas to sell alcoholic beverages in T4. If the City never intended to permit liquor stores in T4 (again, I believe this to be true), what explanation is there for amending section 3-116 other than an intention on the City's part to expand to T4 permission for restaurants to sell alcoholic beverages? After all, the City spent considerable time in the fall on changing section 3-116. It seems strange indeed that, accepting as I do the City's insistence that it never intended to permit liquor stores in T4, the City would not have realized that it was changing section 3-116 to permit restaurants in T4 to sell alcoholic beverages.
SECTION 23-763, JUST LIKE SECTION 3-116, DID NOT PERMIT RESTAURANTS IN T4 TO SELL ALCOHOLIC BEVERAGES PRIOR TO NOVEMBER 28, 2016.
There is another code provision that comes into play here - section 23-763. This section is part of the Smart Growth Plan. The City, having taken the position that Section 3-116 does not regulate restaurants, maintains that section 23-763 is the sole applicable code section and that it permitted restaurants in T4 to sell alcoholic beverages before November 28, 2016. The City is wrong, as I will now explain.
The City is correct when it says that section 23-763 governs this issue. The City is wrong, however, when it says that section 23-763 is the only code section that is determinative of whether restaurants were permitted to sell alcoholic beverages prior to November 28, 2016. Both sections 23-763 and 3-116 (as I have explained above) are determinative of this issue. If there were a conflict between the pre-November 28 version of section 23-763 and section 3-116, we would be forced to figure out how to resolve that discrepancy. Fortunately, however, no such conflict existed prior to November 28. Of course, thanks to the City's enactment of Ordinance 2016-10, there is now a conflict between sections 23-763 and 3-116. For our purposes, what's important is the fact that both section 23-763 and the pre-November 28 version of section 3-116 prohibited restaurants in T4 from selling alcoholic beverages.
The Germantown Smart Growth Plan consists of twelve divisions and is comprised of sections ranging from section 23-741 through section 23-833. Section 23-763 falls within Division 3, which is labeled “Use Standards 9”. Section 23-763 was already in effect during the time that this controversy arose.
I am working with the version of the Smart Growth Plan available on the City website. The Smart Growth Plan was, according to my understanding, last changed in April 2015. If there have been changes made to it since then, I do not believe they would alter the analysis of the issue we now confront - namely, whether section 23-763 permitted restaurants in T4 to sell alcoholic beverages prior to November 28, 2016. As I will now explain, section 23-763 did not, prior to November 28, nor does it now, permit restaurants in T4 to sell alcoholic beverages. The City’s argument to the contrary is, therefore, incorrect.
Let's now look closely at section 23-763:
The City is correct when it says that section 23-763 governs this issue. The City is wrong, however, when it says that section 23-763 is the only code section that is determinative of whether restaurants were permitted to sell alcoholic beverages prior to November 28, 2016. Both sections 23-763 and 3-116 (as I have explained above) are determinative of this issue. If there were a conflict between the pre-November 28 version of section 23-763 and section 3-116, we would be forced to figure out how to resolve that discrepancy. Fortunately, however, no such conflict existed prior to November 28. Of course, thanks to the City's enactment of Ordinance 2016-10, there is now a conflict between sections 23-763 and 3-116. For our purposes, what's important is the fact that both section 23-763 and the pre-November 28 version of section 3-116 prohibited restaurants in T4 from selling alcoholic beverages.
The Germantown Smart Growth Plan consists of twelve divisions and is comprised of sections ranging from section 23-741 through section 23-833. Section 23-763 falls within Division 3, which is labeled “Use Standards 9”. Section 23-763 was already in effect during the time that this controversy arose.
I am working with the version of the Smart Growth Plan available on the City website. The Smart Growth Plan was, according to my understanding, last changed in April 2015. If there have been changes made to it since then, I do not believe they would alter the analysis of the issue we now confront - namely, whether section 23-763 permitted restaurants in T4 to sell alcoholic beverages prior to November 28, 2016. As I will now explain, section 23-763 did not, prior to November 28, nor does it now, permit restaurants in T4 to sell alcoholic beverages. The City’s argument to the contrary is, therefore, incorrect.
Let's now look closely at section 23-763:
As you can see, subsection A provides a chart that identifies the various specific uses that are permitted in T3, T4, T5, and T6 - whether permitted by right or by warrant. The black boxes denote that a specific use is permitted by right, the dashes tell us that a specified use is prohibited altogether, and the white blocks indicate that a specified use may be permitted by
warrant upon BMA approval.
Let’s now focus on the column for T4. As you can see, all “Residential" uses, two of the three “Lodging" uses, both “Office” uses, and a few of the “Civic” uses are permitted in T4. Of course, our focus is on “Retail” uses. Accordingly, we must turn our attention to this particular category in some detail.
Within the “Retail” category, there are six potential retail uses that may be permitted in a zoning area: Open-Market Building, Retail Building, Display Gallery, Restaurant, Kiosk, Push Cart, and Liquor Selling Establishments. As you can see, none of these six uses are allowed in T3, while all but two, push carts and liquor selling establishments, are permitted in T4.
It is, as you can plainly see, beyond dispute that restaurants were permitted to operate in T4 prior to this past November 28. No one, myself included, has ever disputed this point. If you scroll down to the second chart, which appears in subsection C, “Additional Use Standards,” you will see that any restaurant in T4 must seat no more than 100. But, again, no one disputes the proposition that restaurants were permitted to operate in T4 areas. This, however, does not answer the question that is central to the City’s last-ditch argument: Did section 23-763 permit restaurants in T4 to sell alcoholic beverages prior to November 28, 2016? The answer is: No.
Please look again at the chart in subsection A. In the far left column, you
can see that one of the specific retail uses potentially available for a
given zoning area is “Liquor Selling Establishment.” Now, please look
to the right at the vertical column for T4. The dash tells us that a liquor selling establishment is not permitted in T4.
One would think this ends the analysis: A 100-seat-or-smaller restaurant may, under section 23-763, operate in T4; however, it is not permitted to sell liquor. But, alas, the City will not accept “no” for an answer. Just as it tortured the meaning of “retail establishments” in Section 3-116 to argue that it means only liquor stores, the City now contends, if I understand its argument correctly, that “liquor selling establishment”, as the term is used in section 23-763, means only a liquor store. From this dubious proposition, the City then leaps (if, again, I understand its argument correctly) to the conclusion that a restaurant in T4 is permitted to sell liquor. At the risk of undue repetition, the foregoing is what I understand the City's argument to be. Please look at the You Tube recording of the argument made by Mr. Ross on April 24, and see for yourself. If I have mischaracterized the City’s position, I assure you I have done so inadvertently.
Here is Mr. Ross contending that alcoholic beverages were allowed in restaurants in T4 areas prior to the enactment of Ordinance 2016-10 (begin at 5:16):
Comments by Cameron Ross April 2017-pdf link
In answer to a direct question by Alderman Rocky Janda on whether restaurants were allowed to serve alcohol in T4 areas prior to November 28, Mr. Ross did not answer with a simple yes or no:
The drafters of the code specifically parsed out restaurants as a separate use from a retail liquor selling establishment. So by virtue of what was drafted in the original code one can assume that restaurants are judged on their own merits rather than separate from a retail liquor selling establishment."
Comments by Cameron Ross April 2017-pdf link
In answer to a direct question by Alderman Rocky Janda on whether restaurants were allowed to serve alcohol in T4 areas prior to November 28, Mr. Ross did not answer with a simple yes or no:
I find this argument confusing. Just because a restaurant and a liquor selling establishment are separate uses, it does not necessarily follow that a restaurant is permitted to sell liquor. And, of course, this argument becomes even more puzzling when we take into account that, as I have previously explained in this post, a particular section of the "Intoxicating Liquors" article, the pre-November 28 version of section 3-116, tells us (notwithstanding the City's argument to the contrary) that restaurants in T4 were not permitted to sell alcoholic beverages.
Mr. Harris' input could be helpful. At the BMA retreat in February, Mr. Harris, commenting in part on section 23-763, said the following at about 1:25.
City Attorney Remarks at BMA Retreat February-PDF Link
"The question really is what "for a retail liquor selling establishment" means. If it means liquor store, then the word in the Tennessee Code and the word in our alcoholic beverage ordinance for that is Retailer. Mr. Harris' input could be helpful. At the BMA retreat in February, Mr. Harris, commenting in part on section 23-763, said the following at about 1:25.
City Attorney Remarks at BMA Retreat February-PDF Link
..........................(snip)...................If what this is intended to mean, at "for retail liquor selling establishment" is a liquor store, then the word we need to put in there is quote Retailer."
At that point, Mr. Harris was of course just thinking out loud. He had not been asked to opine on the meaning and application of either section 23-763 or section 3-116. Let's hope he can give us his views soon.
That the term “liquor selling establishment”, as used in section 23-763, is not limited to liquor stores is easy to see.
1) To begin with, we must adhere to the principle that the various sections of the Code must be read together and harmonized if at all possible. I have already shown that section 3-116 prohibited restaurants from selling alcoholic beverages prior to November 28. It would be absurd to give a section of Article VII a diametrically opposed interpretation from that given to a section of Article II. The drafters of the Smart Growth Plan could not have intended, in section 23-763, to permit restaurants to sell alcoholic beverages when section 3-116 squarely prohibited such sales.
2) Even apart from the need for inter-article consistency, section 23-763 still prohibits restaurants in T4 from selling alcoholic beverages. Consider the natural and ordinary meaning of the words "liquor selling establishment". Would anyone seeking to refer solely to a liquor store use the much broader term “liquor selling establishment”? Of course not. That is particularly the case here, given Article II's mandate that the word “Retailer” be used to refer to a liquor store. If the drafters of the Smart Growth Plan had intended to bar only liquor stores from a given zoning area, they would have used the term “Retailer” in order to make the Smart Growth Plan consistent with Article II's command that a liquor store be referred to as a Retailer. I don't want to put words in Mr. Harris' mouth, but I deduce from the above-quoted remarks that he would agree with me that the word "Retailer" would have been used if the drafters of section 23-763 had intended for the term "retail liquor establishment" to refer only to a liquor store.
3) It is significant that the particular permitted retail use at issue here uses the broad term "liquor", not liquor that is "sold in sealed containers". This is consistent with Article II's broad definition of "Intoxicating Liquors":
If the drafters of section 23-763 had intended that its alcohol-related permitted retail use apply only to liquor stores, they would have, consistent with the definition of "Retailer" in section 3-21 (see immediately above), specified that that use be for liquor "sold in sealed containers". That the drafters chose not to do so shows that they intended that the term "liquor selling establishment" encompass all businesses that sell the full array of intoxicating liquors.
4) Not that any more icing needs to be put on this cake, but take a look below at the chart I prepared from certain of the headings contained within Article II:
As you can see, the "Intoxicating Liquors" taxed and otherwise regulated by Article II include, among other liquor-based drinks, those served for consumption at restaurants. Adherence to the principle that code sections must be harmonized necessarily leads to the conclusion that the drafters of Section 23-763 intended, when they specified “liquor selling establishment” as a permitted retail use, that such establishments encompass all retail businesses that sell intoxicating liquors, not just liquor stores.
The City in fact knew, in the fall of 2016, that section 23-763 prohibited restaurants in T4 from selling liquor.
In my last post, I told you that the City had proposed an ordinance, 2016-11, that later was tabled. This is the proposed ordinance that Sarah Wilkerson-Freeman happened to be examining, back in the November-January time frame, when she first got an inkling that something might be going on regarding the sale of alcoholic beverages in T4. Look below at the red-lined version of a portion of proposed Ordinance 2016-11 (this red-lined version was prepared sometime in November 2016, prior to the enactment of Ordinance 2016-10):
I do not have the entire red-lined version of this proposed ordinance. I am showing you all that I have. Still, we have enough to discern that one of the purposes of proposed Ordinance 2016-11 was an amendment of section 23-763. Refer to the vertical T4 column where it intersects with the retail use, "Liquor Selling Establishment". You will see a dark red box. This shows, I believe, that the City intended to put a dark box in that square, thus designating that, henceforth, a liquor selling establishment would constitute a permitted use in T4 areas. If section 23-763 already permitted restaurants in T4 to sell alcoholic beverages, there would have been no need to make this change. After all, the City has assured us that it never intended to allow liquor stores in T4; therefore, a desire to permit liquor stores in T4 cannot explain this proposed change to section 23-763. The conclusion is inescapable that the City knew in the fall of 2016 that section 23-763 prohibited restaurants in T4 from selling liquor - just as the City knew that section 3-116 contained the same prohibition. The City has already told us that Ordinance 2016-10's amendment of section 3-116 was a "drafting error". Surely, it does not intend to claim that its red-lined proposed change to section 23-763 was also a drafting error!
Why is the City Arguing That Restaurants in T4 Were Allowed to Sell Alcoholic Beverages Prior to November 28?
At first glance, it may seem odd that the City would choose to make the weak argument that restaurants in T4 were allowed to sell alcoholic beverages prior to the November 28 passage of Ordinance 2016-10. If one scratches below the surface, however, one can understand why the City is making this argument.
The City gave inadequate notice by mislabeling each of the three agenda items used to describe then-proposed Ordinance 20I6-10. Ordinance 2016-10 did not deal solely with beer. The citizens should have been told that Ordinance 2016-10 also addressed the sale of alcoholic beverages in T4. (See Cheers! Part III). The City now seeks to justify its inadequate notice by telling us, in essence: "Inadequate notice? No big deal. Restaurants could always sell liquor by the drink in T4 areas, so there was no reason to call attention to the change made in Ordinance 2016-10. We apologize for inadvertently allowing liquor stores in T4, but we are going to rectify that mistake."
It is instructive at this point to consider what the state of Tennessee says about adequate notice:
Notice Required in State of Tennessee
"If the meeting is one that would not be expected to be of interest to the general public, the notice requirements may not be as stringent as if the issue is one that is expected to be of great public concern."
By now claiming that restaurants in T4 have always been permitted to sell alcoholic beverages, the City seeks to characterize its amendment of section 3-116 as a matter "that would not be expected to be of interest to the general public". That way, the City's action would be governed by "less stringent" notice requirements. Because restaurants have not always been permitted to sell alcoholic beverages in T4 areas, the City's characterization must fail.
CONCLUSION
In concluding this post, I reiterate that I take no position on whether restaurants in T4 should be permitted to sell alcoholic beverages. My concern is for those citizens who showed up at the April 24 BMA meeting to argue against a change to restaurant alcohol policy that had been enacted months earlier without their knowledge. These citizens deserve adequate notice of intended actions so that they may have the opportunity to be heard. They deserve public agenda notices that have not been mislabeled. And, they deserve to be spared weak legal arguments designed to conceal the fact that the City, without adequate public notice, had made important changes that will affect their neighborhoods. So do we all. We all deserve transparency. Ordinance 2016-10's changes to section 3-116 cannot be fixed by the enactment of proposed Ordinance 2017-6 if the City persists in taking the position that section 3-116 does not apply to restaurants.
Here is the complete list of posts in the series on the recent alcohol ordinances:
Cheers! Part I, The Ordinance Nobody Knew About
Cheers! Part II, The City Muddies the Waters with Last Ditch Legal Argument.
Cheers! Part III, The City Fails to Adequately Notify the Public.
Cheers! Part IV, Between the Second and Third Reading of Ordinance 2016-10, the City Eliminates Distance Protections.
Cheers! Part V Proposed ordinance 2017-6
