Posted by: Patricia Salkin | January 3, 2014

7th Circuit Court of Appeals Holds that Site Approval for Retail Sale of Alcohol is Not a Protected Property Right

The Frey Corporation brought an appeal against the City of Peoria, Illinois, after an unfavorable disposition of its case in the district court. Frey has owned the commercial property located at 1823 West Lincoln Avenue, Peoria, Illinois 61605, for more than forty years. A shopping center is located on the property, which includes retail space for a grocery store. On November 5, 2009, the tenant renting Frey’s grocery store space was Krunal and Jiger, Inc. d/b/a Shop Rite Supermarket. The President of this Shop Rite franchise, Vasant Patel, was illegally selling Viagra from inside the store and was arrested, indicted on felony drug charges, and later pled guilty to misdemeanor drug charges. The City of Peoria took legal action against Patel personally, and against Patel’s business, Shop Rite. The City charged the store with a violation of Peoria, Ill., Code § 3–28, which prohibits officers of a business holding a liquor license from “engag[ing] in any activity … which is prohibited by … the law of the state or the United States.” The Peoria Liquor Commission held a hearing regarding Shop Rite’s liquor license on November 24, 2009, and after evaluating the evidence, decided the next day to revoke the grocery store’s liquor license. The issue of this case was whether the additional action taken by the Commission to not only revoke Shop Rite’s liquor license, but also revoke “site approval for the retail sale of alcoholic liquors at the location” denied the corporation of its property without due process of law.

The court reasoned that because the Peoria, Ill., Code makes it clear that site approval may be revoked at any time, even if the revocation results from actions taken by a third party, this interest cannot constitute a protected property right under the due process clause of the Fourteenth Amendment. Because site approval for the retail sale of alcohol is not a protected property right under the due process clause of the Fourteenth Amendment, Frey’s procedural due process claim automatically failed. Accordingly, the Seventh Circuit affirmed the district court’s holding in favor of the City of Peoria.

Frey Corp. v. City of Peoria, Ill., 735 F.3d 505 (7th Cir. 8/16/2013)

The opinion can be accessed at:

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