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Martell's Waters Edge, LLC v. Governing Body of the Township of Berkeley


April 3, 2008


On appeal from a Final Agency Decision of the Department of Law and Public Safety, Division of Alcoholic Beverage Control, Docket No. 7122.

Per curiam.


Argued March 10, 2008

Before Judges Graves and Sabatino.

Martell's Waters Edge, LLC ("Martell's"), the corporate owner of a restaurant with a liquor license in Berkeley Township ("the Township"), appeals a final agency decision of the Director of the Division of Alcoholic Beverage Control ("ABC") issued on December 21, 2006. In that final decision, the ABC Director ratified the finding of an administrative law judge ("ALJ") that the Township did not abuse its police powers in rejecting Martell's request to amend its license. The requested amendment would have extended the hours in which music can be played on the restaurant's outdoor deck from Sunday through Thursday evenings. We affirm.

The restaurant involved in this case, now known as "Water's Edge," is located in the Bayville section of the Township. The restaurant is bordered by a commercial boatyard to the south, by undeveloped property to the west, and by Barnegat Bay to the east. A residential neighborhood, known as the "Good Luck Point" development, is located to the north and northeast side of the establishment. Martell's purchased the restaurant in 2003.

The restaurant has an outdoor deck that juts out easterly into the bay. The closest residence is about four hundred feet from the deck. The deck includes a bar. It also includes a bandstand, which is screened on several sides by noise barriers. The deck is typically used, weather permitting, on weekends in the spring through Memorial Day, daily from Memorial Day through Labor Day, and for two or three weekends after Labor Day.

From 1994 through the present, the establishment's liquor license has restricted the playing of music on the outdoor deck to certain designated hours. Specifically, the license prohibits such music after midnight on Fridays, Saturdays and holidays, and after 10:00 p.m. on non-holiday Sundays through Thursdays. These restrictions have persisted for fourteen years to the present time.

Responding to local complaints about noise emanating from the deck under the restaurant's former management, the Township adopted a resolution in 2000 that attempted to amend the liquor license. Among other things, the resolution sought to prohibit music on the deck after 10:00 p.m. every day, including weekends and holidays. That particular resolution was nullified, however, by the ABC Director in 2002, following a trial that same year before ALJ Edgar Holmes. Relying in part upon noise measurements presented by the then-licensee's acoustical expert, ALJ Holmes determined that the Township's attempted cutback of the music hours was arbitrary and capricious.

The result of ALJ Holmes's decision, as ratified by the ABC Director, was to maintain the hours permitted under the license for outdoor music, respectively, until 10:00 p.m. Sunday through Thursday nights and until midnight on Fridays, Saturdays, and holidays. At the same time, the Director adopted ALJ Holmes's separate determination that the Township had acted reasonably in prohibiting competitive boat racing, or similar boating events, starting from the docks behind the premises.

After Martell's acquired the restaurant in 2003, it undertook further measures to limit the impact of music from the outdoor bandstand. It installed additional sound barriers, so that the bandstand is now buffered, at least in part, on two of its three sides. Martell's also bought additional land around the restaurant, further distancing the outdoor deck from nearby properties.

According to the testimony of Martell's owner, the music typically played on the outdoor deck is of a "reggae" or "island" style, rather than "hard rock." The record indicates that the establishment has not been cited for violations of the State or local noise ordinances in at least the past two years, even on weekends when it plays music up to midnight. The solitary noise complaint in the record, a police printout dated September 30, 2005, indicates that a neighbor had called the police that night after two attempts to have the music lowered. The police then verified from the restaurant's manager that he had indeed turned down the music, and no summons issued.

In June 2005, Martell's requested the Township to amend the terms of its license so that it could play music out on the deck on every night until midnight, rather than only on weekends and holidays. Recognizing that the request could draw substantial opposition from neighbors, the Township's Council referred the matter for a hearing before a special projects committee. Martell's attorney appeared before that committee on July 12, 2005, and he explained the owner's reasons for seeking the extended weeknight hours. After hearing from counsel, the committee members expressed receptivity to allowing the restaurant to play outdoor music until 11:00 p.m. on weeknights on a trial basis for one month. At this point, Martell's attorney left the committee meeting. Following his departure, five citizens addressed the committee and expressed objections to the extended hours. The objections prompted the committee members to withdraw their tentative support of a one-month trial period. The matter was then rescheduled for a public hearing before the full Council on July 26, 2005.

At the July 26, 2005 meeting, Martell's general manager testified. He reiterated why the restaurant would like to extend its weeknight music hours, and he outlined the measures that it had taken to muffle the sound of the music. Martell's also presented testimony from a noise expert, who testified that he had measured the sounds emanating from the deck when music was being played. The expert confirmed that, after factoring in the effects of ambient sounds from the bay, the sounds he had measured from Martell's were within the decibel levels allowed under State and municipal noise regulations.*fn1

After the restaurant's presentation, five*fn2 citizens addressed the Council in opposition to Martell's request. Although some of the objectors noted their appreciation of the steps the restaurant's new management had undertaken to contain noise, they urged that no extension of the music hours be approved, even on a trial basis. The objectors emphasized that allowing music to be played until midnight on weeknights would disturb the peaceful enjoyment of residents in their homes, and would particularly interfere with the sleep of those who had to get up early for work on weekdays.

After considering the pros and cons involved, the Council unanimously voted to deny Martell's application. Martell's then sought review of that local decision with the ABC, and the matter was referred for another trial in the Office of Administrative Law. The trial was conducted before ALJ Dennis Blake on a single day in April 2006. Martell's presented the testimony of its owner and its sound expert, both of whom were cross-examined by the Township's attorney. Although the Township did not put on any live witnesses, it appears that the ALJ was furnished with copies of the transcripts of the hearings before the Council and the Council's special committee, containing the neighbors' objections and the questions posed by Council members to Martell's representatives.

Upon considering these proofs, ALJ Blake issued a written decision on June 19, 2006 upholding the Township's denial. Among other things, the ALJ found that the residents who opposed Martell's request had presented a "desire for peace and quiet to enable them to sleep during the work week." The ALJ concluded that this rationale "is clearly associated with public health and the general welfare and is a sufficient and appropriate justification for [the Township's] decision to deny [Martell's] request for expanded [music] hours."

After Martell's filed exceptions, the ABC Director issued a ten-page final decision on December 21, 2006, ratifying ALJ Blake's determination. The Director echoed the ALJ in finding that the Township had a reasonable basis to deny the expanded music hours on weeknights, in light of the numerous objections raised by residents. The Director found that "the issue of music emanating late at night from the licensed premises does impact on the quality of life of the residents surrounding the licensed business." The Director also found it "noteworthy that the condition has existed on the . . . premises for the last twelve years, and that the neighbors have developed an expectation of peace and quiet after 10:00 p.m. during [weeknights]." Consequently, the Director affirmed the ALJ and the Township's rulings, thereby continuing the hour restrictions for the 2005-06 and 2006-07 license terms.

On appeal, Martell's contends that the agency's determination was manifestly unreasonable. It stresses that it has not violated any noise ordinances while operating the facility. It also maintains that the neighbors' objections to their expanded music hours were not widespread. Having considered these points and the other various points raised on appeal, the record as a whole and the applicable law, we affirm the ABC's final decision, substantially for the reasons set forth in ALJ Blake's opinion and Director Jerry Fischer's well-reasoned final agency decision. We add only a few supplementary comments.

As a general matter, the judicial review of final decisions by State administrative agencies is circumscribed. Our role as an appellate court is restricted to four inquiries:

(1) whether the agency's decision offends the State or Federal Constitution; (2) whether the agency's action violates express or implied legislative policies; (3) whether the record contains substantial evidence to support the findings on which the agency based its action; and (4) whether in applying the legislative policies to the facts, the agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors. [George Harms Constr. Co. v. N.J. Tpk. Auth., 137 N.J. 8, 27 (1994).]

On the whole, "[o]ur function is to determine whether the administrative action was arbitrary, capricious or unreasonable." Burris v. Police Dep't, Twp. of W. Orange, 338 N.J. Super. 493, 496 (App. Div. 2001) (citing Henry v. Rahway State Prison, 81 N.J. 571, 580 (1980)). See also Aqua Beach Condo. Ass'n v. Dep't of Cmty. Affairs, 186 N.J. 5, 16 (2006). "The burden of demonstrating that the agency's action was arbitrary, capricious or unreasonable rests upon the [party] challenging the administrative action." In re Arenas, 385 N.J. Super. 440, 443-44 (App. Div.), certif. denied, 188 N.J. 219 (2006); Barone v. Dep't. of Human Servs., 210 N.J. Super. 276, 285 (App. Div. 1986), aff'd, 107 N.J. 355 (1987).

With respect to liquor licenses regulated by municipalities under the oversight of the ABC, the government has possessed long-standing police powers to protect the public health and welfare. See N.J.S.A. 33:1-3.1; Lyons Farm Tavern, Inc. v. Mun. Bd. of Alcoholic Bev. Control, 55 N.J. 292 (1970). In exercising those powers, the "'interests of effective liquor control are best advanced where the municipal licensing program displays fair regard not only for the convenience of residents who purchase alcoholic beverages but also for the sentiments of residents who are unsympathetic or hostile to their sale.'" Lyons Farm, supra, 55 N.J. at 306 (quoting Borough of Fanwood v. Rocco, 33 N.J. 404, 415 (1960)). This sensitivity to local residents extends to a licensee's requests to enlarge its activities. Id. at 306-07.

Martell's incorrectly focuses upon the fact that it has not been found during its ownership in violation of the general noise ordinances. There is nothing in the State's noise control statute, N.J.S.A. 13:1G-1 to -23, or other legal authority, that preempts the police powers of a municipality or the ABC to impose reasonable noise-related conditions on a liquor licensee.

The question is not merely one of adhering to prescribed decibel levels. There is a reasonable distinction between the sound of music that may emanate from a residence having an occasional social gathering, and a restaurant and bar that intends to play outdoor music on a regular and sustained basis during the summer months. Although reasonable minds might differ about such matters, and we also recognize the earnest efforts of Martell's to be considerate of its neighbors, we cannot conclude that the ultimate judgments of the Township and the ABC Director here were arbitrary or capricious.


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