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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Stevens v. State, Alcoholic Beverage Control Board (8/12/2011) sp-6588

Stevens v. State, Alcoholic Beverage Control Board (8/12/2011) sp-6588, 257 P3d 1154

        Notice:  This opinion is subject to correction before publication in the PACIFIC REPORTER. 
        Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts, 303 
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BAR & GRILL,                                       ) 
                                                   )    Supreme Court No. S-13436 
                        Appellant,                 ) 
                                                   )    Superior Court No. 3AN-06-09309 CI 
        v.                                         ) 
                                                   )    O P I N I O N 
STATE OF ALASKA, ALCOHOLIC                         ) 
BEVERAGE CONTROL BOARD and                          )   No. 6588 - August 12, 2011 
MATANUSKA-SUSITNA BOROUGH,                         )
                        Appellees.                 )

                Appeal from the Superior Court of the State of Alaska, Third 
                Judicial District, Anchorage, Sen K. Tan, Judge. 

                Appearances: Christine S. Schleuss, Law Office of Christine 
                Schleuss, Anchorage, for Appellant. John J. Novak, Assistant 
                Attorney      General,    Anchorage,      and   Daniel    S.  Sullivan, 
                Attorney General, Juneau, for Appellee State of Alaska. John 
                Aschenbrenner,   Deputy   Borough   Attorney,   Lisa   Thomas, 
                Assistant     Borough     Attorney,    and   Nicholas     Spiropoulos, 
                Borough Attorney, Palmer, for Appellee Matanuska-Susitna 

                Before:     Fabe,   Winfree,   Christen,   and   Stowers,   Justices. 
                [Carpeneti, Chief Justice, not participating.] 

                WINFREE, Justice. 

----------------------- Page 2-----------------------


               A bar owner was charged with and convicted of violating borough noise and 

adult entertainment ordinances.  The borough later protested continued operation under 

the bar owner's liquor license to the Alcoholic Beverage Control Board (ABC Board). 

The ABC Board sustained the protest and denied the bar owner's continued operation 

under his liquor license.      The bar owner requested an adjudicatory hearing before an 

administrative law judge to review the ABC Board's decision.  The administrative law 

judge recommended the ABC Board uphold its initial decision and enforce the denial of 

continued operation under the license.        The ABC Board adopted the recommendation. 

The bar owner appealed to the superior court, which affirmed the ABC Board's decision. 

The bar owner appeals, and we affirm the superior court's decision. 


               Robert Stevens owned and operated Fish Heads Bar & Grill (Fish Heads) 

in the Matanuska-Susitna Borough and held a biennial liquor license.               Because Fish 

Heads   operated   outside   designated   commercial   use   areas   in   the   Matanuska-Susitna 
Borough, Borough Code required Stevens to obtain a conditional use permit.1 

               Fish Heads drew excessive-noise complaints from neighbors. The Borough 

hired an acoustics expert to determine whether Fish Heads complied with applicable 

Borough noise ordinances; it did.         The Borough then enacted a new noise ordinance 

prohibiting both:     (1) emitting noise "plainly audible outside the real boundary of the 

property" during certain hours and (2) operating sound-amplifying devices that "create[] 

vibration which is above the vibration perception threshold of an individual at or beyond 

        1      See   Matanuska-Susitna       Borough    Code   (MSBC)      17.70.020(A)(1),    (B) 

(requiring "uses [of land] requiring a beverage dispensary license under AS 04.11.090 
(bar, lounge, and the like)" to obtain conditional use permit). 

                                                -2-                                           6588 

----------------------- Page 3-----------------------

the real property boundary of the source of the vibration."2 

                The   Borough   cited   Stevens   twice   in  May   2004   for   violating   this   new 

ordinance and he was convicted of both violations.               Stevens unsuccessfully appealed 
these convictions to the court of appeals.3        Stevens also staged adult dance performances 

in November 2004; the Borough cited              Stevens for violating an ordinance requiring a 
conditional use permit to operate an "adult cabaret"4 and he was subsequently convicted. 

Stevens   appealed   these   convictions   to   the   court   of   appeals,   which   concluded   the 

Borough's adult entertainment ordinance presented a "significant possibility" of a First 

                           5                                                                       6 
Amendment violation.         The court of appeals remanded the case to the district court,  and 

the Borough later dropped its adult entertainment case against Stevens. 

                In   January    2005    the  Borough's      Director   of  Planning     and   Land    Use 

(Director) protested Stevens's continued operation under his liquor license. The Director 

relied on the ordinance violations in alleging that Stevens's continued operation of Fish 

Heads was "contrary to the best interests of the public."               In February 2005 the ABC 

Board accepted the Director's protest and denied Stevens's continued operation under 

        2       Former MSBC 08.52.015(A), (B) (2004). The Borough Assembly repealed 

these   subsections   of   MSBC   08.52.015   in   2008.        See  Matanuska-Susitna   Borough 
Ordinance 08-005,  4 (2008). 

        3       Stevens v. Matanuska-Susitna Borough, 146 P.3d 3, 13 (Alaska App. 2006). 

        4       See MSBC 17.90.015. 

        5       Stevens v. Matanuska-Susitna Borough, Nos. A-9674, A-9683, 2007 WL 

2143008, at *1 (Alaska App. July 25, 2007). 

        6       Id. at *3. 

                                                   -3-                                             6588

----------------------- Page 4-----------------------

his license,7 but allowed Fish Heads to operate pending the outcome of an adjudicatory 

hearing under the Administrative Procedure Act (APA).8  Stevens challenged the protest 

as both untimely and improperly filed by a Borough employee instead of the Borough 

itself.  An administrative law judge (ALJ) concluded the Borough's protest was timely 

and properly filed and denied Stevens's motion for summary adjudication. 

                The ALJ held a two-day hearing in January 2006 to provide Stevens "an 

opportunity   to   show   that   [the   Borough's]   protest   was   arbitrary,   capricious[,]   and 

unreasonable."        The   Borough   presented   its   history   of   problems   with   Fish   Heads, 

including past ordinance violations.           Stevens and his bar manager both testified about 

efforts to minimize the noise.        The ALJ ultimately concluded that:           (1) the Borough's 

protest was properly filed; (2) the Borough was not required to bring its protest before 

the Borough Assembly or its planning commission before filing it with the ABC Board; 

and (3) because Fish Heads repeatedly violated local ordinances, the Borough's protest 

was not arbitrary, capricious, and unreasonable. The ALJ recommended the ABC Board 

deny Stevens's continued operation under his liquor license.   The ABC Board adopted 

the ALJ's recommendation. 

                Stevens   appealed   the   ABC   Board's   decision   to   the   superior   court.      In 

January 2009 the superior court concluded that:               (1) the Director properly protested 

Stevens's license on the Borough's behalf pursuant to a lawful delegation of Borough 

        7       A   local   governing   body   may   object   to   an   application   for   the   issuance, 

renewal, transfer, or continued operation of a liquor license.             AS 04.11.480(a).        When 
such a municipal protest is properly filed, "the [ABC Board] shall deny the application 
or   continued   operation   unless   the   [ABC   Board]   finds   that   the   protest   is   arbitrary, 
capricious, and unreasonable." Id. 

        8       AS 44.62.950 ("This chapter may be cited as the Administrative Procedure 


                                                   -4-                                             6588

----------------------- Page 5-----------------------

authority; (2) the ALJ correctly required Stevens to prove the Borough's protest was 

arbitrary, capricious, and unreasonable; (3) Stevens failed to properly raise before the 

ABC Board or ALJ whether the Borough had authority to enact the noise ordinance that 

formed one of the bases for its protest; (4) because Stevens's noise ordinance violations 

resulted in criminal convictions, the Borough's reliance on those convictions as a basis 

for its protest was not arbitrary, capricious, and unreasonable; and (5) because Stevens's 

noise ordinance convictions properly formed a basis for the Borough's protest, the court 

did not need to reach the issue of Stevens's adult entertainment ordinance violation. 

Stevens appeals. 


               When     a  superior  court  acts  as  an  intermediate   court  of  appeal,   we 
independently review the merits of an underlying administrative decision.9          "We apply 

our independent judgment to questions of law that do not involve agency expertise, 
including constitutional questions."10    We "apply our independent judgment to statutory 

interpretation, adopting the rule of law most persuasive in light of precedent, reason, and 

       9       Nelson v. State, Commercial Fisheries Entry Comm'n, 186 P.3d 582, 585 

(Alaska 2008) (citing Simpson v. State, Commercial Fisheries Entry Comm'n, 101 P.3d 
605, 609 (Alaska 2004)). 

       10      Squires v. Alaska Bd. of Architects, Eng'rs, & Land Surveyors, 205 P.3d 

326, 332 (Alaska 2009) (citing Church v. State, Dep't of Revenue, 973 P.2d 1125, 1127 
(Alaska 1999)). 

       11      Alaska Nat'l Ins. Co. v. Nw. Cedar Structures, Inc., 153 P.3d 336, 338 

(Alaska 2007) (citing In re Life Ins. Co. of Alaska, 76 P.3d 366, 368 (Alaska 2003)). 

                                              -5-                                           6588 

----------------------- Page 6-----------------------


        A.     The Borough's Protest Authority 

               Stevens argues that both the ABC Board and the superior court erred in 

upholding a protest filed by the Director, rather than by the Borough itself.  Stevens 

concurs with the general principle that municipalities may broadly delegate their powers, 

but argues that the Borough did not actually delegate the Borough's protest authority to 

the Director. 

               The ALJ examined the liquor licensing protest procedures and stated that 

"[n]othing . . . suggests a restriction on how, within the bounds of law, a 'local governing 

body' must act to file a protest."     The ALJ noted that the Borough properly passed an 

ordinance delegating its protest authority to the Director, who acted "in accordance with 

the procedure set out in that ordinance."  The ALJ concluded that the Borough was not 

required to bring a protest of Stevens's liquor license before the Borough Assembly or 

its planning commission and that the Director followed Borough procedures established 

by ordinance in protesting Stevens's liquor license. 

               The superior court briefly reviewed past versions of the Borough Code and 

noted that "[i]t was clearly the intent of the Borough Assembly to broadly delegate the 

authority to file protests [to] the planning and land use office."           The superior court 

concluded that the Borough permissibly delegated its protest authority to the Director, 

who properly protested on the Borough's behalf. 

               We begin by noting the general principle that municipalities may broadly 

delegate powers to municipal agencies or officers.          Article X, section 1 of the Alaska 

Constitution provides in relevant part that a "liberal construction shall be given to the 

powers   of   local   government   units."   Alaska   Statute   29.20.400(a)   provides   that   the 

"governing body [of a municipality] may establish municipal departments and distribute 

                                                -6-                                           6588

----------------------- Page 7-----------------------

functions     among     them."12     Alaska    Statute   29.35.410     reinforces   this  authority    by 

conferring upon municipalities "all powers and functions necessarily or fairly implied in 

or incident to the purpose of" the powers contained in Title 29, including the power to 

establish departments and distribute functions to those departments as provided by AS 

                Alaska Statute 04.11.480(a) permits municipalities to protest the issuance, 

renewal,   relocation,   transfer,   or   continued   operation   of   liquor   licenses   within   their 

borders.      It  follows   that  absent   some    reason    to  believe   the  legislature   limited    a 

municipality's authority under AS 04.11.480, the Borough may delegate its protest power 

to a department or department head, such as the Director. Stevens offers no such reason, 

and we find none. 

                Stevens instead narrowly argues that the Borough Code does not actually 

empower the Director to protest the continued operation of his license.  In relevant part, 

MSBC 08.40.010 provides: 

                (A) Upon notice from [the ABC Board] of an application 
                within the Borough for the issuance, renewal, or transfer of 
                location [of a liquor license] as defined in AS 04.11.480, the 
                planning and use department shall: 

                        (1) review the application for compliance with 
                        MSBC   17.70   to   determine   that   no   permit   is 
                        required, or that the applicant has obtained any 
                        permits required and no violations to a permit 
                        exist[]; . . . . 

                Stevens's      argument     relies  on   MSBC      08.40.010's     failure  to  mention 

        12      Alaska Statutes Title 29, Chapter 20 is entitled "Municipal Officers and 

Employees."  Id. 

        13      Alaska Statutes Title 29, Chapter 35 is entitled "Municipal Powers and 

Duties."  Id. 

                                                   -7-                                               6588 

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procedures for protesting a liquor license's "continued operation." Stevens proposes we 

interpret MSBC 08.40.010 as excluding protests against continued operation from the 

Borough's delegation to the Director.   We decline to do so. 

                When the Borough adopted MSBC 08.40.010, the then-current version of 

AS 04.11.480(a) allowed municipalities to protest the issuance, renewal, or transfer of 

a liquor license, but it did not allow municipalities to protest a license holder's continued 
operation.14  At the time, MSBC 08.40.010 tracked former AS 04.11.480(a) in delegating 

the Borough's protest authority in each licensing posture to the Director. The legislature 

amended AS 04.11.480(a) in 1995 to enable municipalities to protest a liquor license's 
continued operation through its second year.15            The 1995 amendment added that "the 

procedures for action on a protest of continued operation of a license are the same as the 
procedures for action on a protest of a renewal application."16           In light of this legislative 

history, we read MSBC 08.40.010 as delegating the Director authority to protest the 

continued operation of a liquor license to the same extent as for a license issuance, 

renewal, or transfer. 

                We nonetheless note that MSBC 08.40 substantially restricts the Director's 

discretion in filing a protest.  The Director is required to review each license application 
for   compliance   with   the   Borough's   conditional   use   permit  requirements.17         If   the 

applicant   meets   conditional   use   permit   requirements   -   either   because   no   permit   is 

necessary or because of compliance with all necessary permits - the Director shall 

        14      Former AS 04.11.480(a) (1994). 

        15      See  ch. 101,  20, SLA 1995 (providing for municipal protests against 

continued operation of liquor licenses). 

        16      Id.; see also AS 04.11.480(a). 

        17      MSBC 08.40.010(A)(1) requires the Director to "review . . . for compliance 

with MSBC 17.70." 

                                                  -8-                                            6588

----------------------- Page 9-----------------------

notify the ABC Board that the Borough waives its right to protest the license.18                     If the 

applicant is in violation of any conditional use permit requirements, the Director shall file 
a protest with the ABC Board indicating the reasons for protesting the license.19                     The 

ordinance   language   is   mandatory;   the   Director   must   either   waive  protest   or   file   a 
protest.20     Because   we   read   this   provision   to   include   protests   to   a   license   holder's 

continued operation, MSBC 08.40 permits the Director to protest a license holder's 

continued operation only if the licensee is out of compliance with a conditional use 
permit requirement.21 

                 The Director protested Stevens's continued operation under his license on 

two separate grounds:         Stevens's violations of MSBC 08.52, a noise ordinance, and of 

MSBC 17.90, an adult entertainment ordinance.  Like the superior court, we only need 

to   consider   the   first   basis   for   the   Director's   protest. The   Borough's   standards   for 

conditional use permits include whether an establishment negatively affects neighboring 
properties   through   "dust,   noise,   obtrusive   advertising[,]   and   glare."22       This   general 

proscription embraces disruptive noise levels, the subject matter of MSBC 08.52, and 

provides the legal foundation for the Director's protest. 

        18       MSBC 08.40.020 ("If the . . . department determines that the requirements 

of [MSBC] 08.40.010 are satisfied, the department shall . . . notify the [ABC Board] that 
[the Borough] waives its right to protest the application."). 

        19       MSBC 08.40.030(A) ("If the . . . department determines that any of the 

requirements . . . are not satisfied, the department shall . . . notify the [ABC Board] that 
[the   Borough]   protests   the   application.      The   protest   shall   state   the   reasons   for   the 

        20       See MSBC 17.125.005(A)(3) (defining "shall" as "mandatory"). 

        21       MSBC 08.40.010(A)(1), .020, .030(A). 

        22       MSBC 17.70.100(A)(2)(a). 

                                                    -9-                                              6588

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                Even if this conclusion were incorrect, the Borough's participation at every 

procedural level is sufficient to cure any deficiencies in the Director's authority to file 

the protest.    The Borough's attorneys appeared before the ALJ, the superior court, and 

this court.   At each stage of the proceedings the Borough's attorneys maintained that the 

Director's     actions   properly    represented     the  Borough's      wishes,    that  the  Borough 

supported the protest against Stevens, and that Stevens operated Fish Heads contrary to 

the Borough's interests. 

                We note several other state courts have concluded that a municipality may 

cure the absence of a delegation of authority by ratifying an agent's act so long as the 

municipality held the power to perform the original act. For example, the Supreme Court 

of Washington recently distinguished between municipal acts ultra vires - those made 

beyond a municipality's statutory authority - and acts within a municipality's power 
that merely "suffer from some procedural irregularity."23  Although acts "performed with 

no legal authority . . . cannot be validated by later ratification,"24 those merely exercised 

through unauthorized procedural means may be later ratified and thereby adopted by a 
municipality.25     Other   courts   have   similarly   concluded   that   when   a   municipality   or 

agency   possesses   a   power   and   a   subordinate   improperly   exercises   that   power,   the 

municipality or agency acting as principal may endorse that action and adopt it as its own 
through either express or implied ratification.26 

        23      S. Tacoma Way, LLC v. State, 233 P.3d 871, 873 (Wash. 2010). 

        24      Id. at 874. 

        25      Id. at 873-74. 

        26      See, e.g., id.; Cal. Sch. Emp. Ass'n v. Pers. Comm'n, 474 P.2d 436, 439 

(Cal.   1970)   ("Moreover,   an   agency's   subsequent   approval   or   ratification   of   an   act 
delegated to a subordinate validates the act, which becomes the act of the agency itself."); 

                                                  -10-                                               6588 

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                We conclude that the Borough's extensive and continuing support ratified 

the Director's protest, curing any possible  defect and adopting that protest as if the 

Borough had filed it directly with the ABC Board.               We therefore affirm the superior 

court's conclusion that the ALJ correctly upheld the validity of the Borough's protest 

against Stevens. 

        B.      Due Process And AS 04.11.480's Burden-Shifting Regime 

                Stevens raises two related issues regarding the burden of proof before the 

ALJ, that:     (1) two sections of Title 4 "hopelessly contradict[]" one another, rendering 

it legal error to place the burden of proof on him; and (2) the Alaska Constitution's due 

process   clause   prohibits   placing   the   burden   of   proof on   a   liquor   licensee   in   protest 

proceedings. Stevens argues that the ALJ applied an unconstitutional construction of the 

liquor licensing statutes and that we should vacate the proceedings below, directing the 

ALJ to place the burden of proof on the Borough as the "entity lodging the protest." 

                Alaska   Statute   04.11.370   provides   that  "[a]   license   or   permit   shall   be 

suspended or revoked if the [ABC Board] finds" a licensee has committed one of 11 
prohibited acts or  omissions.27        Stevens interprets this section as requiring the ABC 

Board to bear the burden of proving one of 11 enumerated grounds before suspending 

or revoking his license. 

                Alaska Statute 04.11.480 provides that a local governing body may object 

to an application for the issuance, renewal, transfer, or continued operation of a liquor 

        26      (...continued) 

Edwards v. Mettler, 129 N.W.2d 805, 809 (Minn. 1964) ("We have frequently held that, 
where official action is insufficient, a board or municipal corporation may ratify or adopt 
that which it could have done to begin with."); Casamasino v. City of Jersey City, 730 
A.2d 287, 295 (N.J. 1999) (noting that "an intra vires act . . . may be ratified" by a 

        27      AS 04.11.370(a)(1)-(11). 

                                                  -11-                                            6588

----------------------- Page 12-----------------------

license.   When such a municipal protest is properly filed, "the [ABC Board] shall deny 

the application or continued operation unless the [ABC Board] finds that the protest is 
arbitrary, capricious, and unreasonable."28  Stevens argues that section .480 "clearly puts 

the burden on the license holder . . . to somehow prove [a municipality's p]rotest was 

arbitrary, capricious, and unreasonable." 

                Neither section, however, provides procedures for ABC Board hearings. 

Another   section   of   the   liquor   licensing   laws   -   AS   04.11.510   -   provides   these 

procedures.      Alaska Statute 04.11.510(c) states that as a default, "[B]oard proceedings 

to suspend or revoke a license shall be conducted in accordance with [the APA]."                      In 

turn, the APA provides that "[u]nless a different standard of proof is stated in applicable 

law, the . . . petitioner has the burden of proof by a preponderance of the evidence if an 

accusation has been filed . . . or if the renewal of a right, authority, license, or privilege 
has been denied."29     Section .480 is such an "applicable law."  As Stevens concedes, AS 

04.11.480 shifts the burden of proof to the licensee when a municipality successfully 

protests the issuance, renewal, transfer, or continued operation of a liquor license. 

                Sections .370 and .480 do not contradict one another - they apply in 

different circumstances.       Section .370 is a penal provision under which the regulatory 

agency   is   the   petitioner   subject   to   the   burden   of   proof. Section   .480   provides   a 

mechanism for public influence over liquor licenses; after a municipal protest under AS 

04.11.480 the licensee, seeking to overcome the cessation of its operations under its 

license, bears the burden of proof. 

                Stevens alternatively argues that the Alaska Constitution's due process 

        28      AS 04.11.480(a). 

        29      AS 44.62.460(e)-(e)(1). 

                                                  -12-                                               6588 

----------------------- Page 13-----------------------

clause30 forbids shifting the burden of proof to a licensee in the face of a municipal 

protest. We construe this as an argument that the Alaska Constitution forbids placing the 

burden of persuasion - the burden of establishing a fact by a given degree of proof - 
on a liquor license holder to retain that license in light of a municipal protest.31  Stevens 

claims such a placement is inconsistent with constitutional due process requirements. 

We disagree. 

                Stevens correctly notes we have held that a liquor license is a valuable 

property   right   for   which   a   holder   is   entitled   to   due   process   before   suspension   or 
revocation.32    We have explained that before the property interest in a liquor license can 

be taken, "due process requires that [a license holder] be provided with notice and an 
opportunity to be heard in a meaningful, impartial hearing."33   These procedures "need 

not be elaborate," however, and due process "merely require[s] the [ABC] Board to hold 
a hearing before it [can] suspend a liquor license."34   Nothing about requiring Stevens, 

rather than the Borough, to carry the burden of persuasion would deprive Stevens of 

        30      Alaska Const. art. I,  7. 

        31      See State v. 45,621 Square Feet of Land, 475 P.2d 553, 555-56 (Alaska 

1970) (explaining "burden of production" and "burden of persuasion" facets of "burden 
of proof").    This burden is separate and distinct from the burden of production - the 
burden of establishing a prima facie case to avoid summary judgment or a directed 
verdict on an issue - which the Borough successfully bore.                 See Kinzel v. Discovery 
Drilling, Inc., 93 P.3d 427, 433 (Alaska 2004) (describing how proponent bearing burden 
of production must establish prima facie case of given fact). 

        32      Rollins v. State, Dep't of Revenue, Alcoholic Beverage Control Bd., 991 

P.2d 202, 211 (Alaska 1999). 

        33      Id.   (citing  Thorne   v.   State,   Dep't   of   Pub.   Safety,   774   P.2d   1326,   1329 

(Alaska 1989)). 

        34      Id. 

                                                  -13-                                            6588

----------------------- Page 14-----------------------

notice, an opportunity to be heard, or the impartiality or significance of his hearing.  We 

have implicitly acknowledged the procedural propriety of such burden-shifting in another 
context,35 and although we do not preclude the possibility that due process could prevent 

the   legislature   from   shifting   either   the   burden   of   production   or   persuasion   in   other 
contexts, we hold that it does not do so under AS 04.11.480.36 

                 We finally note that although the ALJ correctly articulated the burden of 

proof and its placement on Stevens, the record before us suggests that Stevens may not 

in fact have been held to that burden. The ALJ described the Borough as the "first party" 

and took the Borough's opening statement first.  The Borough maintained in its opening 

statement that it had a "valid basis that [was] not arbitrary, capricious[,] and unreasonable 

for protesting" Stevens's license.          The Borough then called witnesses demonstrating 

Stevens's operation of Fish Heads created excessive noise, took testimony from the 

Director   explaining   why   the   Borough   filed  the   protest,   and   introduced   evidence   of 

Stevens's Borough Code violations.              Despite the ALJ's statements to the contrary, the 

record before us suggests that the Borough, rather than Stevens, took on and successfully 

carried   the   burden   of   persuasion.     In   that   light,   Stevens   fails   to   show   that   he   was 

        35       See, e.g.,Ehredt v. DeHavilland Aircraft Co. of Canada, 705 P.2d 913, 916, 

916 n.5 (Alaska 1985) (noting employer who failed to provide coverage as required by 
workers' compensation laws bore burden of proving non-negligence in subsequent civil 

        36       Stevens's reliance on two of our previous decisions is misplaced. Alcoholic 

Beverage Control Bd. v. Malcolm, Inc. examined a liquor license revoked for violation 
of a statute analogous to current AS 04.11.370(a); as Stevens acknowledges, subsection 
.370(a) places the burden on the ABC Board to demonstrate the act or omission alleged. 
391 P.2d 441, 444 (Alaska 1964).  Alcoholic Beverage Control Bd. v. Decker involved 
the ABC Board's license denial as against the public interest as required by statute, not 
a protest by a municipality or citizens.  700 P.2d 483, 485 (Alaska 1985).   Neither case 
addressed the due process requirements for the burden of proof or analyzed liquor license 
protest procedures under section .480. 

                                                   -14-                                              6588

----------------------- Page 15-----------------------

prejudiced by the statutory burden-shifting regime.37 

                We therefore conclude that Stevens's due process rights were not violated 

at the hearing before the ALJ. 

        C.      Stevens's Collateral Challenge On His Citation Convictions 

                Stevens raises several arguments challenging the validity of the ordinance 

on which his citation convictions were based.              Stevens reasons that to the extent the 

Borough's protest was based in whole or great part on these citations, the protest also is 

invalid. Stevens maintains, in relevant part, that: (1) he is not estopped from challenging 

the noise ordinance's validity by virtue of his arguments before the court of appeals; and 

(2)   due   to   the   Borough's   failure   to   follow   required   procedures   to   pass   the   noise 

ordinance, it is invalid. 

                As the superior court noted, Stevens failed to brief these arguments before 

either the ABC Board or ALJ, and, except in passing, failed to mention them during oral 

argument before the ALJ.  Stevens instead merely referenced his then-ongoing citation 

conviction challenges before the court of appeals - which ultimately affirmed Stevens's 


                To the extent Stevens might have been permitted to collaterally challenge 

the citation convictions, he was required to brief adequately his challenge as an initial 
matter before the ALJ.38        Failure to do so precludes Stevens's attempt to collaterally 

        37      Alaska R. Civ. P. 61 (directing court to "disregard any error or defect . . . 

which does not affect the substantial rights of the parties"); see also Dobos v. Ingersoll, 
9 P.3d 1020, 1024 (Alaska 2000) (holding appellant bears burden of demonstrating 
prejudice from error). 

        38      Palmer v. Municipality of Anchorage, Police & Fire Ret. Bd., 65 P.3d 832, 

839   n.16   (Alaska   2003)   ("We   do   not   generally   reach   the   merits   of   arguments   not 
presented to the agency whose decision is appealed.") (citing Amerada Hess Pipeline 
Corp. v. Alaska Pub. Utils. Comm'n, 711 P.2d 1170, 1181 n.22 (Alaska 1986)). 

                                                  -15-                                             6588

----------------------- Page 16-----------------------

challenge his citation convictions here, especially in light of both his knowledge as a 

liquor licensee that violations of local law could result in the revocation of his liquor 

license and his repeated encounters with the Borough preceding and following his initial 

citation.   Although Stevens unsuccessfully challenged the noise ordinance on direct 
appeal by failing to preserve the issue,39 he also could have filed a declaratory action 

against the ordinance's validity or attacked the ordinance's validity before the ALJ as an 

initial matter in this case.  Stevens's failure to do so does not create a new avenue before 

this court by which he may challenge his convictions. 

               On this record, Stevens's citation convictions themselves are sufficient to 

overcome      a  challenge   that  the  Borough    behaved    in  an  arbitrary,  capricious,   and 

unreasonable   manner   in   protesting   Stevens's   continued   operation   under   his   liquor 

license. We therefore affirm the superior court's conclusion that the ALJ correctly found 

the Borough's protest was not arbitrary, capricious, and unreasonable. 


               We AFFIRM the decision of the superior court upholding the ABC Board's 


        39     Stevens, 146 P.3d at 8-9, 13. 

                                               -16-                                            6588 
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