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North Star Saddle Brook Management, L.L.C v. Governing Body of the Township of Saddle Brook

March 22, 2011

NORTH STAR SADDLE BROOK MANAGEMENT, L.L.C., PETITIONER-APPELLANT,
v.
GOVERNING BODY OF THE TOWNSHIP OF SADDLE BROOK, RESPONDENT-RESPONDENT, AND DIVISION OF ALCOHOLIC BEVERAGE CONTROL, RESPONDENT.



On appeal from a Final Agency Decision of the Director, Division of Alcoholic Beverage Control, Appeal No. 7245.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted February 15, 2011 --

Before Judges Yannotti and Skillman.

North Star Saddle Brook Management, L.L.C. (North Star), appeals from a final determination of the Director of the Division of Alcoholic Beverage Control (Director), which affirmed the denial by the Township of Saddle Brook (Township) of its application for issuance of a new plenary retail liquor consumption license. We affirm.

The relevant facts are essentially undisputed. Saddle Brook Hospitality, L.L.C. (SBH), is the owner of a hotel in the Township. North Star is an affiliate of SBH and is responsible for day-to-day management of the hotel. North Star entered into an agreement with Saddle Brook Hobevco, Inc. (Hobevco), under which Hobevco provides alcoholic beverage service at the hotel through Hobevco's liquor license.

On October 14, 2005, North Star submitted an application to the Township for a new plenary retail liquor consumption license. On December 12, 2006, the Township's Council conducted a hearing in the matter and voted to deny the application. The Council's action was memorialized in a resolution that the Council approved on December 14, 2006.

North Star appealed the Township's action to the Division, which referred the matter to the Office of Administrative Law for a hearing before an Administrative Law Judge (ALJ). On June 23, 2009, the ALJ issued an initial decision in which he concluded that the Township's determination was unreasonable and should be reversed.

In his decision, the ALJ found that the Township had not established that there were too many liquor licenses in the municipality; the Township had failed to show that denial of the application was warranted in the interest of the public's safety or welfare; North Star had adequately explained its need for a new license because it had no ownership interest in Hobevco's license; and the Township had improperly considered Hobevco's future use of its license in rendering its decision.

The Director issued a final determination in the matter on February 2, 2010, rejecting the ALJ's initial decision and affirming the Township's denial of North Star's application. The Director found that, under the circumstances, the Township had no legal obligation to consider North Star's application.

In his decision, the Director stated that, before a new license is issued, the municipality must determine, by ordinance or resolution, that it is in the public interest to do so. Then, the Township is required to afford all interested parties an opportunity to apply for the license or bid upon the license at a public sale. Because the Township had not passed a resolution calling for the issuance of the license, and had not sought applications or bids for the license, the Township had no obligation to consider North Star's application or grant it a license.

The Director also stated that, assuming the Township had the authority to consider North Star's application, it acted properly in denying it. The Director noted that Hobevco has a license for the proposed license location. The Director stated that, "[i]f a new license were granted, the existing license would be deactivated and 'pocketed' until such time as the present owner is able to sell it." The Director concluded that, under the circumstances, North Star did not show that it needed the license, or that the Township needs another license.

On appeal, North Star argues that it was entitled to the issuance of the new license under the hotel/motel exception in N.J.S.A. 33:1-12.20. North Star also argues that the Township acted arbitrarily, capriciously and unreasonably in denying its application for the license because there was no evidence indicating that issuance of the license would not be in the public interest.

The scope of our review in an appeal from a final decision of an administrative agency is strictly limited. Circus Liquors, Inc. v. Governing Body of Middletown Twp., 199 N.J. 1, 9 (2009). We must sustain the agency's action in the absence of a "'clear showing' that it is arbitrary, ...


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