Wednesday, August 27, 2014

Kentucky Supreme Court Strikes Down Statute Limiting Proximity of Bars/Restaurants in Louisville

Kentucky Supreme Court Strikes Down Statute Limiting Proximity of
Bars/Restaurants in Louisville

      In a recent decision, the Kentucky Supreme Court has struck down a statute that precluded certain holders of retail alcoholic drink licenses from being located within 700 feet of one another.  KRS § 241.075 precluded the issuance of a retail drink license to an applicant located in a “combination business and residential area” of a first-class city of another “establishment” was located within 700 feet of the applicant.  At the time this dispute arose, Louisville was unique in the Commonwealth of Kentucky as the only first-class city.  This statute, effectively applicable only in Louisville, was found to violate §§ 59 and 60 of the Kentucky Constitution, they precluding local and special legislation.  Louisville/Jefferson County Metro Government v. O’Shea’s-Baxter, LLC, 0085-DG, 2014 WL 4116490 (Ky. Aug. 21, 2014). 
      O’Shea’s-Baxter, LLC, doing business as Flanagan’s, applied for a retail liquor drink license to replace its restaurant drink license.  That application was denied on the basis that there were similar establishments within 700 feet.  Flanagan’s appealed that ruling on a number of grounds, including that the 700-foot requirement was unconstitutional as either special or local legislation otherwise forbidden by the Kentucky Constitution.  While the trial court rejected that notion, it was accepted by the Kentucky Court of Appeals.  There then followed an appeal to the Kentucky Supreme Court.
      Notwithstanding the fact that laws governing the regulation of alcoholic beverages are given great deference, the Supreme Court found that this statute violated the prohibition in the Kentucky Constitution against special and local legislation.  Essentially, the Court found that the purported aim of the statute, namely to reduce the concentration of establishments selling alcoholic beverages, is no different between Louisville, Lexington and other urban centers in Kentucky irrespective of whether those urban centers are located in cities of the first class.  Rather, the Supreme Court found:
[N]o rational basis is readily apparent to us by which we might presume that the circumstances associated with a concentration of liquor licenses in the “combination business and residential area” in Louisville are any different than they would be in other sizeable cities not designated as first-class or consolidated local governments, such as Lexington, Bowling Green, or Covington.  The business and residential areas in these other cities are not immune to whatever evils may flow from a concentration of retail drink licenses.  Thus, there is no reason to assume that the concentration of retail drink licenses in Louisville is “fraught with other or different consequences” than the concentration of similar licenses in other Kentucky cities.
      This was a unanimous decision of the Kentucky Supreme Court.

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