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Opinion No. 5521

July 9, 1979


Request of local legislative body to revoke license


Due process of law in proceedings of legislative body requesting revocation of license


Request for revocation of license

The legislative body of a city may delegate to a hearing officer the conduct of the hearing to determine whether to request revocation of a liquor license where the legislative body makes the final decision on such request.

Honorable George Cushingberry, Jr.

State Representative

The Capitol

Lansing, Michigan 48909

You have requested my opinion as to whether the Common Council for the City of Detroit may delegate to a hearing officer the conduct of a hearing to determine whether to request revocation of a liquor license. Such hearings are conducted pursuant to 1933 ex sess PA 8, Sec. 17, MCLA 436.17(3); MSA 18.988(3) (1), which states in pertinent part:

'Upon request of the local legislative body, after due notice and proper hearing by the body, the commission shall revoke the license of a licensee granted a license to sell beer and wine or spirits for consumption on the premises.'

[Emphasis added]

Due process requirements must be met by local governing bodies when they act pursuant to 1933 ex sess PA 8, Sec. 17, supra. Bundo v Walled Lake, 395 Mich 679; 238 NW2d 154 (1976); Stafford's Restaurant of Bloomfield, Inc v West Bloomfield Township Board, 82 Mich App 607; 267 NW2d 461 (1978); Pease v St Clair Shores City Counsel, 85 Mich App 371; 271 NW2d 236 (1978). In Bundo, supra, the Michigan Supreme Court required a local legislative body to conduct a hearing prior to requesting the Commission not to renew a license indicating that a liquor licensee being put out of business by governmental action is entitled to 'rudimentary due process'. See also Sponick v Detroit Police Department, 48 Mich App 162, 189; 211 NW2d 674 (1973). The Bundo court, 395 Mich at 697; 238 NW2d at 162, also stated:

'We find it necessary to impose one modification upon this general requirement in order to better fit the needs and interests involved in this case. There should be no requirement that the hearing examiner be someone other than the members of the local legislative body. To require an independent examiner would deprive the local body of discretion to rule on the matter. The local body itself may conduct the hearing.'

Thus, it is clear from Bundo that when governmental action may result in the non-renewal of a liquor license, the due process hearing may be presided over by the local legislative body or may be delegated to a hearing officer who conducts the hearing and may recommend a decision to the local legislative body.

The same due process requirements for non-renewal of a liquor license also apply to revocations. Thus, in Napuche v Liquor Control Commission, 336 Mich 398; 58 NW2d 118 (1953), the court stated that before a liquor license may be revoked, due process requires a hearing before a properly authorized body and full consideration and a fair determination according to the evidence of the controversy by the body based upon the full record.

By analogy, it may be noted that the Michigan Liquor Control Commission's power to revoke liquor licenses is exercised pursuant to 1933 ex sess PA 8, supra, Sec. 20, and such hearings had been conducted by hearing examiners who reported their findings of fact to the Commission for decision. (2) In Case v Liquor Control Commission, 314 Mich. 632; 23 NW2d 109 (1946), the Michigan Supreme Court upheld the constitutionality of this procedure stating that it did not represent an unconstitutional delegation of the function of the Liquor Control Commission. In so ruling, the court stated:

'The attorney general claims that inasmuch as article 16, Sec. 11, of the 1908 Constitution provides that the legislature may by law establish a liquor control commission, who, subject to statutory limitations, shall exercise complete control of the alcoholic beverage traffic within this State, the legislature may not delegate any part of the control to a board of hearing examiners. This would be true if such board had the power to suspend or revoke a license. It will be found upon examination of Section 5a, supra, that such board is merely a fact-finding board which makes its findings to the commission which, however, has and retains complete power to suspend and revoke the licenses. The commission has the right to accept or refuse to accept the findings of the board. The commission may take further testimony if it sees fit, and either the commission or a commissioner may suspend or revoke the licenses.

'There may be some evil in having the liquor commission make the complaint and then take testimony and make the final decision. The legislature wanted a board of hearing examiners to first take the testimony and make findings for the benefit of the commission, but specified that the commission should have the final word and thus left the complete control in the commission. The hearing before the board was merely ministerial, . . .' 314 Mich at 638-640; 23 NW2d at 112.

In 1 Sutherland, Statutory Construction, Sec. 4.14, pp 98-99 (4th ed, 1972), it is stated:

'When the power delegated is legislative, the purpose of a pluralheaded agency is defeated if subdelegation is permitted. The legislative desire for multiple judgment in rule-making would be defeated. To a lesser degree this is also true in the case of final adjudicative determinations. It is equally obvious that ministerial or administrative functions may be subdelegated for the ordinary board or commission could not personally perform the multitude of clerical, physical and nondiscretionary acts required of the usual administrative agency.

'The general principle which appears to govern decision in all of these situations is that if it is reasonable to believe the legislature intended a particular function to be performed by designated persons because of their special qualifications, then a subdelegation is invalid; but where no particular qualifications are necessary for the exercise of the function its exercise may be delegated to subordinate officials.'

Also, in 1 Davis, Administrative Law, Secs. 3:16-3:18, pp 218-219 (2 ed 1978), it is stated:

"The reduction of existing delays in our regulatory agencies requires the elimination of needless work at their top levels . . . [U]nnecessary and unimportant details occupy far too much of the time and energy of agency members, and prevent full and expeditious consideration of the more important issues.

"The remedy is a far wider range of delegations to smaller panels of agency members, or to agency employee boards, and to give their decisions and those of the hearing examiners a considerable degree of finality, conserving the full agency membership for issues of true moment. Such delegation would not be an abnegation of responsibility if the agency retained a discretionary right of review of all such decisions, exercisable either upon its own initiative or upon the petition of a party demonstrating to the agency that the matter in issue is of such substantial importance that it calls for determination at the highest agency level."

It is, therefore, my opinion that the Common Council for the City of Detroit may delegate to a hearing officer the conduct of the hearing to determine whether to request revocation of a liquor license as long as the final decision rests with the Common Council.

Frank J. Kelley

Attorney General

(1) This section was last amended by 1978 PA 6 pursuant to which cities over 1,000,000 are granted power to request the revocation of a liquor license similar to the power long held by cities with a population of less than 1,000,000.

(2) In 1957 the Legislature replaced hearing examiners with liquor commissioners who heard cases directly and then rendered decisions, subject to appeal to the Commission. 1933 ex sess PA 8, supra, Sec. 5, as amended by 1957 PA 264.