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Tuesday, May 27, 2014

Liquor Revocation Did Not Violate Due Process

The Liquor Commissioner of the City of Peoria revoked the liquor license for Sheridan Liquors, a local liquor store after the City discovered that the owner and one of the managers were indicted under the Money Laundering Control Act.  According to the indictment, the owner and manager operated a check cashing business at the liquor store.  They structured the necessary withdrawals from the liquor store bank account to cover the cash needed for the check cashing business in order to avoid federal reporting requirements.  

After the  owner was guilty of all counts in the federal indictment, the City sent notice of a violation of the local liquor regulations that prohibit a liquor licensee from engaging in any activity prohibited by federal law. A revocation hearing was conducted by the local liquor commissioner, and evidence of the criminal trial was introduced into the record of the hearing, over the objection of the owner's counsel.  The owner and City presented evidence to support their cases before the liquor commissioner, and at the conclusion of the hearing, the commissioner revoked the liquor license.  He also issued a written order, with findings of fact based on the evidence submitted at the hearing.  

Sheridan Liquors appealed to the state liquor commission, which confirmed the revocation. The local and state commission decisions were upheld on administrative review appeal to the circuit court, and again at the appellate court.

The Illinois Supreme Court considered three issues on appeal:  (1) whether the local commissioner denied the licensee due process; (2) whether the local commissioner's findings were supported by substantial evidence and (3) whether the local commissioner's decision to revoke the license was supported by the record.  

The Supreme Court concluded that the revocation procedure did not violate Sheridan Liquors' due process rights.  Wisam 1, Inc. v. Illinois Liquor Control Commission, 2014 IL 116173 (May 22, 2014).  First, the Court held that due process did not require the liquor commissioner to allow the owner to "relitigate" the owner's criminal conviction.  Furthermore, the liquor statute clearly states that a licensee can be held responsible for the conduct of its officers, managers, and other agents - in this case, the convicted individual was an employee/manager and agent of the business. Second, although the Court did find that the City improperly sought to admit the entire transcript (inadmissible heresay evidence), there was sufficient competent evidence elsewhere in the hearing to support the liquor commissioner's decision, and the admission did not rise to the level of prejudicial error.  

Post Authored by Julie Tappendorf, Ancel Glink


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