What is Deemed Approved?

deemed approvedA number of California cities and counties are adopting “deemed approved” ordinances.  These ordinances target existing grocery stores, liquor stores, and specialty stores, which sell alcoholic beverages to take home (or elsewhere).

In municipal codes, these businesses are often referred to as “off-sale” businesses, “alcoholic beverage outlets” or “package stores.”  In particular, deemed approved ordinances target businesses which are “grandfathered,” i.e., subject only to restrictions applied to their licenses when the businesses came into existence.  In other words, “grandfathered” businesses often benefit from fewer restrictions than newly licensed businesses.  As long as the location, size, and scope of the business remains unchanged, there is no significant interruption in the operation of the business, and there is no significant disciplinary action against the business license, the business continues to benefit from the lesser restrictions.  In municipal codes, terms like “legal non-conforming” or “previously conforming” are used to denote “grandfathered” businesses.

“Deemed approved” literally refers to the businesses which are already legally operating at the time a new ordinance regulating local alcohol sales is adopted.  In particular, deemed approved ordinances are intended to give cities more enforcement tools against grandfathered  businesses, including the ability to “revoke” a business’s right to exist.

The California constitution generally prohibits cities from retroactively applying restrictions on existing businesses with alcohol licenses.  Cities adopting “deemed approved” ordinances attempt to offset this constitutional protection by coupling nuisance oriented performance standards, targeted enforcement, and zoning laws.  Because nuisance can be a rather subjective and hard to define concept, the nuisance standards in deemed approved ordinances are typically made to be complaint-driven, resulting in a hearing in which testimony is given and a hearing officer, panel, commission, or city council decides whether the business is a “nuisance.”  Nuisance evidence will typically consist of things like law enforcement “calls for service” to the businesses address, crime rate near the business, evidence linking inebriate crimes (e.g., public drunkenness, DWIs, etc.) to the business, and complaints from nearby residents or other businesses about the business. Cities with deemed approved ordinances City of El Cajon report: Alameda County, San Francisco, Oakland, Ontario, Oxnard, Pasadena, Petaluma, Richmond, Rohnert Park, San Bernardino, Santa Cruz, Santa Rosa, Vallejo, Ventura, and Walnut Creek.

While the general concept of “deemed approved” ordinances is legally sound, the devil is in the details.  There will likely be several court challenges as more of these ordinances are adopted, and some of them will be legally over-broad or not well drafted.

About William Adams

Attorney at Norton, Moore, & Adams, LLP.
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