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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Fantasies on 5th Avenue, LLC. v State of Alaska, Alcoholic Beverage Control Board (8/9/2019) sp-7394

Fantasies on 5th Avenue, LLC. v State of Alaska, Alcoholic Beverage Control Board (8/9/2019) sp-7394

          Notice:   This opinion is subject to correction before publication in the P                    ACIFIC  REPORTER.  

          Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,  


          303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email  



                     THE  SUPREME  COURT  OF  THE  STATE  OF  ALASKA  

FANTASIES  ON  5TH  AvENUE,  LLC,                                )  

                                                                 )    Supreme  Court  No.  S-16981  

                              Appellant,                         )  


                                                                 )    Superior Court No. 3AN-17-05294 CI  

          v.                                                     )  


                                                                      O P I N I O N  


STATE OF ALASKA, ALCOHOLIC                                       )  


BEvERAGE CONTROL BOARD,                                          )                                       

                                                                      No. 7394 - August 9, 2019  


                              Appellee.                          )


                    Appeal from the Superior Court of the State of Alaska, Third  


                    Judicial District, Anchorage, William F. Morse, Judge.  


                    Appearances:               Brian       Stibitz,      Reeves        Amodio          LLC,  


                    Anchorage,  for  Appellant.                    Harriet  D.  Milks,  Assistant  


                    Attorney General, and Jahna Lindemuth, Attorney General,  


                    Juneau, for Appellee.  


                    Before:  Bolger, Chief Justice, Winfree, Stowers, Maassen,  


                    and Carney, Justices.  


                    CARNEY, Justice.  



                    After an Anchorage strip club applied to have its liquor license renewed the  


Alcohol  and  Beverage  Control  Board  received  multiple  objections  to  the  renewal.  


Former employees, the Department of Labor, and the Municipality of Anchorage each  


alleged wage law violations, untrustworthy management,  and unsafe policies.   After  


three hearings before the Board and one before an administrative law judge, the Board  

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

denied renewal because it was not in the public interest.   The club appealed to the  


superior court, which affirmed the Board's decision.                                   The club now appeals to us,  


arguing it was unreasonable to find that renewal was not in the public interest and that  


the  club  was  denied  due  process  in  the  administrative  proceeding.                                   We  affirm the  


superior court's decision to uphold the Board's determination.  



          A.         Facts  


                     1.        The Club's Management  


                     Fantasies on 5th Avenue, LLC is a "strip club business" operating under  


various names since 1989. For most of the time between 1989 and 2013 Kathy Hartman  


owned the club.  In July 2013 Hartman transferred 100% ownership of the club to her  


son Travis Gravelle.   This transfer occurred approximately one year after a federal  


judgment was entered against Hartman in a wage and hour lawsuit over the club's claim  


that its dancers were "independent contractors."  Gravelle remains the sole owner of  




                     Gravelle testified that he received no income from his ownership, knew  


nothing about the business's operation, had no control over its finances or any of its bank  


accounts until after the start of the administrative proceedings regarding the license  


renewal, and was only physically present in the club a few times in the past several years.  


A former employee testified that Gravelle was not allowed to drink at the club or even  


be on the premises.  


                     DespiteGravelle'sownership,evidenceshowed that Fantasies has been run  


by Hartman's boyfriend, Eugene Greaves.  Greaves referred to himself as the general  


manager of Fantasies, but testified that he received no income from the position.  As  


manager, Greaves classified the DJs, janitors, security, and other workers as contractors  


rather than employees, denying them employee benefits.  He also required dancers to  

                                                                -2-                                                         7394

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

sign agreements to be tenants of the club and pay hourly rent to use the facilities for                                                                                                                                                                                                


                                             Fantasies paid no wages to its dancers; their income came solely from tips.                                                                                                                                                                            

Moreover, they were required to pay rent to Fantasies at the end of each shift from the                                                                                                                                                                                                

tips they had received.                                                      If dancers did not make enough to pay rent, they were required                                                                                                                          

to pay the remainder from the next shift's tips in addition to paying that next shift's rent.                                                                                                                                                                                                       

                                             Objections to the club's license renewal included allegations about unsafe                                                                                                                                                    

and illegal practices at the club including that Fantasies did not allow workers to make                                                                                                                                                                                       

911 emergency calls from the club.                                                                                    The Board noted two such incidents:                                                                                           no calls were                

made when a dancer fell on her head from six feet above the floor or when an intoxicated                                                                                                                                                                    

customer passed out and suffered seizures.                                                                                                           Another complaint noted that Fantasies'                                                                  

contract with its manager provided a "bonus" when the club made more than $2,000 in                                                                                                                                                                                                       

one night, apparently violating the licensing statute which states that "[a] person other   

than a licensee may not have a direct or indirect financial interest in the business for                                                                                                                                                                                               


which a license is issued."                                                                  

                                             2.                    The Current Liquor License  


                                             From March 2014 through the denial of its liquor license in July 2016,  


Fantasies held liquor license number 1078.  Gravelle was Fantasies' sole owner when it  


obtained the license.  Despite Gravelle's ownership, Greaves worked with the Board to  


obtain  the  license  transfer.                                                                    The  Board  staff  member  who  interacted  with  Greaves  


testified that she had not even heard Gravelle's voice until the Board's February 2016  


meeting.  Greaves had obtained a power of attorney from Gravelle and signed all the  


necessary paperwork on Gravelle's behalf.  The Board staff member testified that this  


                       1                     AS 04.11.450(a).  


                                                                                                                                            -3-                                                                                                                                  7394  

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"raised red flags" and that she had never seen that done in her five years of processing  




                    In  early  November  2015  the  Department  of  Labor  and  Workforce  


Development's Wage and Hour Administration (DOL) notified Fantasies of its intent to  


conduct a wage audit of the club for the period between December 2013 and November  


2015.  The wage investigation was ongoing when Fantasies applied to renew its liquor  




          B.        Proceedings  


                    In November 2015Fantasies applied torenewitsliquor license. Boardstaff  


noticed  an  irregularity  in  the  application  and  contacted  Gravelle  for  clarification.  


Although  Gravelle  had  signed  the  form,  affirming  that  he  had  "examined  this  


application . . . and it [was] true, correct, and complete," he responded that a friend had  


filled out the form on his behalf while he was out of town.  Board staff considered his  


answer to be "a huge red flag" because the applicable statutes and regulations require the  


license owner to be personally responsible for its use, and because there had been  


previous cases with other licensees violating AS 04.11.450, prohibiting non-licensees  


from having a financial interest in the business.  


                    After more thoroughly examining Fantasies' application, Board staff grew  


"very concerned about prohibited financial interest" and decided it was necessary for the  


application to go before the Board.  The Board scheduled a hearing in February 2016 to  


consider  the  license  renewal  application.                       Prior  to  the  hearing  the  Board  received  


objections  from  DOL,  the  Municipality  of  Anchorage,  and  four  former  Fantasies  




                    DOLobjected based on its investigation, whichhadrevealedthat Fantasies'  


dancers should have been classified as employees and that "thirty or more workers did  


not receive minimumwage, or any wage, to which they were entitled." The Municipality  

                                                                -4-                                                         7394

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objected to renewing the license until the wage and hour violations were resolved.  And  


four  former  workers  filed  objections  alleging  that  (1)  non-licensees  had  financial  


interests, (2) wage and hour laws continued to be broken, and (3) renewal was not in the  


best interest of the public.   At the hearing the DOL investigator, the Municipality's  

attorney, and Fantasies' attorney testified.  Because DOL's investigation had not been  


completed, the Board deferred its decision until its next scheduled meeting in April.  


                    About a week after the February Board hearing, Fantasies' lawyer sent  


DOL a letter asking it to stop its investigation "or Fantasies [would] take appropriate  


legal action against [DOL] and [the assigned investigator] personally."  As a result, the  


DOL staff member temporarily halted the investigation until directed to continue despite  


Fantasies' threatened action.  


                    Before the April meeting DOL asked the Board to "withhold any transfer  


of the liquor license for [Gravelle] . . . pending resolution of unpaid wages."  DOL's  


continuing investigation was still "in the process of auditing records to determine wages  


due to workers" and "estimate[d] a minimum amount of unpaid wages at $500,000 plus  


liquidated damages, for failure to pay minimum wage."  The Board nevertheless held a  


continued hearing in April.  A former Fantasies dancer testified on behalf of herself and  


three other former dancers, each of whom had filed written objections with the Board.  


The Board once again deferred its decision until its next scheduled meeting at the request  


of the Municipality, which had not yet held a public hearing on the protest.  


                    In May DOL concluded its investigation into Fantasies' wage and hour  


violations.   It found that:  workers' services were misclassified as contract labor, no  


records of hours were kept, dancers were not paid at all and instead forced to pay rent as  


tenants, managers failed to maintain daily and weekly records of hours worked, and the  


club either did not maintain or destroyed certain records related to the hiring and firing  

                                                               -5-                                                         7394

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

of workers.                   DOL acknowledged that it had not yet calculated the amount of money                                                                                        

Fantasies owed as a result of the violations.                                                          

                               The Board addressed Fantasies' license renewal for a third and final time                                                                                       

at its July meeting.                          Based on the objections and testimony from all three hearings, the                                                                                  

                                                                                                                                                                                            2   The  

Board determined renewal of Fantasies' license would not be in the public interest.                                                                                                             

Board informed Fantasies of its right to a hearing as provided by AS 44.62.330-630.  


                               Fantasies filed a Notice of Defense and Request for a Hearing in August.3  


It disputed the Board's findings that renewal was not in the public's best interests, that  


non-licensees had direct or indirect financial interests in the license, and that it had  


committed wage and hour violations.  The administrative hearing took place over three  


days in 2016 before an administrative law judge (ALJ).   A former dancer, the DOL  


investigator, Greaves, Hartman, Gravelle, and two Board staff members testified.  


                               Fantasies' lawyer Brian Stibitz cross-examined the former dancer about  


whether she had been given the choice to work as an employee or an independent  


contractor. After she repeatedly denied having a choice, he directed her to read a section  


of the "Entertainer Lease" she had signed that stated she would be liable for liquidated  


damages and attorney's fees if she asserted in any court action that her relationship with  


Fantasies was anything other than that of a landlord and tenant.   After she read the  


section he warned her that it applied to the questions he was about to ask.  The Board's  


lawyer objected to its relevance, leading to an extended colloquy between the court and  


counsel. The ALJ addressed the Board's concern that Stibitz was badgering the witness  


by noting that it, too, was "worr[ied] about the . . . intimidating effect of . . . waving [the  


                2              See  AS 04.11.330(a)(1) (requiring denial of renewal application if [B]oard                                                                             

finds not in best interests of public).                           

                3              See AS44.62.390(a) (detailing timelimitand substanceofwhat respondent  


may file in notice of defense, including request for hearing).  


                                                                                                 -6-                                                                                         7394

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

document] in [the witness's] face."  The ALJ ordered Stibitz to move on to a different                                                                                                  


                                Following three days of hearings, the ALJ affirmed the Board's decision                                                        

denying the renewal.                                 The ALJ issued her decision in November 2016, and the Board                                                                                  

adopted it at its February 2017 meeting.                                                          The determination was based on:                                                    

                                 [DOL]'s finding                           of ongoing wage-hour                                      violations;   public  

                                safety             concerns                  related              to        suppression                      of       911           calls;  

                                Mr.           Gravelle's                    complete                    lack           of        knowledge                       of        or  

                                involvement in the business; Mr. Greaves's role in "running"                                                             

                                the business and the license; an alleged undisclosed financial                                                              

                                interest   by   Mr.   Greaves   and   Ms.   Hartman;   and   alleged  

                                undisclosed                        financial                   interests                 through                  management  


                                Fantasies appealed to the superior court.                                                          4    The superior court upheld the  


Board's decision in January 2018, finding it had a rational basis for concluding that  


renewing Fantasies' license was not in the public interest.  


                                Fantasies appeals, arguing that the superior court erred by affirming the  


Board's  decision  because  the  Board  violated  its  right  to  due  process  and  acted  


unreasonably by finding renewal would not be in the public interest.  Because there is  


substantial evidence to support the Board's denial of the renewal application and there  


was no deprivation of Fantasies' right to due process, we affirm the superior court's  


decision upholding the Board's determination.  


III.            STANDARD OF REvIEW  


                                "When  the  superior  court  acts  as  an  intermediate  appellate  court,  we  


independently review the merits of the underlying administrative decision. The specific  


                4               See  AS 44.62.560(a) ("[j]udicial review by the superior court of a final                                                                                           

administrative order may be had by filing a notice                                                                                of appeal"); Alaska R. App. P.                                           

602(a)(2) (same).   

                                                                                                     -7-                                                                                             7394

----------------------- Page 8-----------------------

form our independent review takes is de novo review:                                            We adopt the rule of law that is                     

most persuasive in light of precedent, reason, and policy."                                           5  

                        Whenreviewingadministrativedecisionsweusethe"substantial evidence"  


test for questions of fact and the "reasonable basis" test for questions of law involving  


agency expertise.6  Review of the Board's factual findings is limited to whether there was  


substantial evidence in the record to support those findings.7                                                  We do not "weigh the  


quality of the evidence relied upon by the [Board]; at issue for the purposes of our review  


is simply whether substantial evidence exists."8                                    "Substantial evidence is 'such relevant  


evidence as a reasonable mind might accept as adequate to support a conclusion.' "9  


                        The reasonable basis test applies to the Board's exercise of discretion in  


denying Fantasies' license renewal after determining it was not in the public's best  


                                                        10  When reviewing whether an administrative decision  

interest under AS 04.11.330(a).                                                                                                           


was reasonable we ask "whether there was a prejudicial abuse of discretion," which we  


will find "if the agency has not proceeded in the manner required by law, the order or  


decision is not supported by the findings, or the findings are not supported by the  


            5          Heller   v.   State,   Dep't  of   Revenue,   314   P.3d   69,   72-73   (Alaska   2013)  

(footnotes omitted).   

            6          Rollins v. State, Dep't of Pub. Safety, 312 P.3d 1091, 1094 (Alaska 2013).  


            7          Halter v.State, Dep't of Commerce&Econ. Dev., Med. Bd., 990 P.2d 1035,  


 1037 (Alaska 1999).  


            8           S. Anchorage Concerned Coal., Inc. v. Municipality of Anchorage Bd. of  


Adjustment , 172 P.3d 774, 780 (Alaska 2007).  


            9          Id. (quoting Leigh v. Seekins Ford, 136 P.3d 214, 216 (Alaska 2006)).  


            10          See  Rollins  v.  State,  Dep't  of  Pub.  Safety,  312  P.3d  at  1094  ("[T]he  


 'reasonable basis' test applies to questions of law involving agency expertise.").  


                                                                         -8-                                                                   7394

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                        Weapply our independent judgmenttoquestionsofconstitutionallaw, such                                                       

as due process.            12  

Iv.	        DISCUSSION  

                        Fantasies claims the Board unreasonably denied its liquor license renewal  


application as not in the public interest under AS 04.11.330(a)(1). Fantasies also claims  


it  did  not  receive  due  process  because  it  had  no  notice  of  the  basis  for  denial,  no  


opportunity  to  be  heard,  that  AS  04.11.510  (the  procedure  for  license  renewal  


applications) violatesdueprocess onits face, and that the statutes and regulations applied  


are unconstitutionally vague.  


            A.	         The  Board  Did  Not  Abuse  Its  Discretion  By  Denying  Fantasies'  


                        License Renewal Application.  


                        Fantasies  argues  that  the  Board  abused  its  discretion  by  relying  on  


"[a]llegations of [l]abor [v]iolations," "Gravelle's [a]lleged [l]ack of [i]nvolvement [i]n  


[t]he  [b]usiness,"  an  "[e]xpired  [m]anagement  [a]greement,"  and  "a  policy  of  


discouraging 911 calls," to determine that renewing Fantasies' license was not in the  


public  interest.                 When  reviewing  administrative  fact  findings  in  quasi-judicial  


proceedings, we have "consistently adhered to the substantial evidence on the whole  


record test under AS 44.62.570(c)(2)."13   The Board did not abuse its discretion because  


            11          See   AS   44.62.570(b)(3)   (specifying   review   by   superior   court,   but   we  

independently review merits of underlying decision).                          

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


P.2d 202, 206 (Alaska 1999).  


            13          State,  Alcoholic  Beverage  Control  Bd.  v.  Decker,  700  P.2d  483,  486  


(Alaska   1985),   overruled   on   other   grounds   by   Rollins,   312   P.3d   at   1095.  


AS 44.62.570(c)(2) states that abuse of discretion is established if the court determines  



                                                                           -9-	                                                                   7394

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there is substantial evidence supporting each of its findings.                                                    

                              Fantasies   also   argues   that   regardless  of   whether   there   was   substantial  

supporting evidence, these findings are not listed among the factors the Board may                                                                                                    

consider when making a public interest finding under 3 Alaska Administrative Code                                                                                                   

(AAC)   304.180,   and   that   the   Board   therefore   erred   by  considering   them.     But   the  

regulation authorizes the Board to make its decision based on any of the enumerated                                                                                   

factors  as well as                   any other factor deemed relevant to the public interest; it does not limit                                                                      

                                                                      14     The Board did not abuse its discretion by denying  

the Board to the listed factors.                                                                                                                                              

Fantasies' license renewal as not in the public interest.  


                              1.             Substantial evidence supports the Board's findings.  


                              The Board decided that renewing Fantasies' license was not in the public  


interest  based  on  the  following  findings:                                                             (1)  DOL  determined  that  Fantasies  


misclassified dancers and other employees to evade wage and hour laws; (2) managers  


discouraged  dancers  from  calling  911  during  apparent  medical  emergencies;  (3)  


Gravelle, the LLC's owner, had little, if any, meaningful knowledge about how the club  


was being operated; (4) Gravelle had no understanding of the statutory requirements for  


liquor license operation15 or how the license was being operated, and no apparent interest  


in  how it was being  operated;  and  (5)  the club's management agreement gave the  


manager an illegal direct financial interest in the license.  There is substantial evidence  


supporting each of these findings.  


               13             (...continued)  

that  the  findings  are  not  supported  by  "substantial  evidence  in  light  of  the  whole  record."  

               14             3  AAC  304.180(a)(4).  

               15             See,         e.g.         AS         04.11.010-.700                         (licensing),                 04.21.010-.080                         (general  


                                                                                            -10-                                                                                     7394

----------------------- Page 11-----------------------


                              a.	       DOL determined wage and hour violations.  


                    The  record  contains  testimony  and  numerous  letters  demonstrating  


Fantasies' failure to comply with wage and hour laws.   The documented violations  


included treating dancers as tenants required to pay rent to the club instead of receiving  


wages, not keeping adequate records of employee pay, having an operating agreement  


that  seemed  to  have  been  "done  after  the  fact"  and  back-dated,  hindering  DOL's  


investigation, forcing dancers to "work to pay off a debt for not showing up at work,"  


and having employees work for free for the for-profit business.  The DOL investigator  


testified that it is a "sign[] of labor trafficking, when somebody has to work to pay off  


a debt and not earn any money." In May 2016 DOL found Fantasies in violation of wage  


and  hour  laws;  its  finding  provides  substantial  evidence  in  support  of  the  Board's  



                              b.	       Fantasies discouraged dancers from calling 911 during  


                                        medical emergencies.  


                    A former dancer testified that Fantasies' dancers were not allowed to call  


911 for apparent medical emergencies at the club.  Greaves testified that the dancer's  


claim  was  an  "asinine  statement,"  but  offered  no  evidence  to  refute  it.                                       While  


acknowledging that the evidence was somewhat limited, the ALJ cited the dancer's  


credible description of "two instances of being intimidated out of calling 911 when such  


a call would have been appropriate" and noted that Fantasies had not produced any  


witness with knowledge of the club's day-to-day operations to dispute her testimony.  


The Board's finding is supported by substantial evidence.  


                              c.	       The owner lacked knowledge of club operations.  


                    Gravelle is Fantasies' sole owner but plays no role in running the club. He  


testified that he had never run an LLC before, did not manage the business, did not know  


how much money Fantasies made, had no access to the business bank accounts prior to  

                                                              -11-	                                                       7394

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

the   denial   of   the   license   renewal,   and   did   not   know   if   Fantasies   had   any   kind   of  

management agreements with anyone.                                                                                 A former dancer testified that Gravelle had not                                                                                    

even been allowed into the club during open hours more than a couple times over the                                                                                                                                                                   

past few years.                               There is substantial evidence to support the finding that Gravelle lacks                                                                                                                          

knowledge of club operations legally required of a sole owner of an LLC operating a                                                                                                                                                                         

liquor license.   

                                                           d.                  The owner lacked knowledge of legal requirements                                                                                                                 .  

                                       As a liquor license owner, Gravelle is required to understand the laws                                                                                                                                    

                                                      16  But Gravelle was not aware of the club's day-to-day operations and  

controlling its use.                                                                                                                                                                                                                                  

consequently had no means of knowing whether the club was in compliance with these  


laws. Gravelle testified to knowing nothing about the business's finances or tax returns,  


even though Fantasies' income and losses were attributed to Gravelle for tax purposes.  


Much of Fantasies' paperwork was not even signed by Gravelle, but by Greaves through  


the power of attorney that Gravelle had given him.  Only Greaves had been involved in  


applying for Board renewal, further illustrating Gravelle's divorce from operating the  


license he owned.  The Board staff member testified she had never met nor even heard  


Gravelle's voice until the first Board meeting in February 2016. There was no evidence  


that he had attempted to learn the laws or anything about the operation of the license.  


Thefinding that Gravellehad no understanding of the requirements for operating aliquor  


license is supported by substantial evidence.  


                                                           e.                  A non-owner had a direct financial interest in the license.  


                                        The ALJ heard evidence that Fantasies had a number of managers over the  


preceding ten years.  Some, but not all, of them had written management agreements  


                    16                 AS 04.21.030 ("The licensee has a duty to exercise that degree of care that                                                                                                                                   

a reasonable person would observe to ensure that a business under the person's control                                                                                                                                                     

is lawfully conducted.").        

                                                                                                                          -12-                                                                                                                   7394

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

with Fantasies.                                                       The Board found that the lack of paperwork relating to these managers                                                                                                                                                                                                              

 left the Board                                                    unable to                                       determine   who was responsible for                                                                                                                                       potential violations in                                                                      

 operating Fantasies' license.                                                                                                     

                                                             One of the two management agreements presented to the Board contained                                                                                                                                                                                                                       

 an incentive clause reading:                                                           

                                                            As an added Incentive for the Manager, where the daily gross                                                                                                                                                                                         

                                                            revenue exceeds                                                                  two thousand dollars, the Manager shall                                                                                                                              

                                                            receive seventy per cent of that amount above two thousand                                                                                                                                                                          

                                                             dollars, and the Owner shall receive thirty per cent of that                                                                                                                                                                                              

                                                             amount over two thousand dollars.                                                                                                                           This shall apply for each                                                                  

                                                             and every day over said amount.                                                                                                                     

Alaska Statute 04.11.450(a) mandates that "[a] person other than a licensee may not have                                                                                                                                                                                                                                                                                        

 a direct or indirect financial interest in the business for which                                                                                                                                                                                                                                       a license is issued."                                                                         

Fantasies' agreement to pay its manager 70% of revenue exceeding $2,000 clearly gave                                                                                                                                                                                                                                                                                           

the manager a "direct . . . financial interest in the business for which [the] license is                                                                                                                                                                                                                                                                                                   

 issued."    This management agreement alone provides substantial evidence of a non-                                                                                                                                                                                                                                                                                          

 licensee having a direct financial interest in the license.                                                                                                                                                          

                                                            2.	                            The   evidence   supports  finding  renewal  is  not  in   the public   


                                                             "An application requesting renewal of a license shall be denied if . . . the                                                                                                                                                                                                                                              

 [B]oard finds, after review of all relevant information, that renewal of the license would                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                17            We have held that other sections of the  

not be in the best interests of the public."                                                                                                                                                                                                                                                                                                                                         

 alcohol licensing statutes "authorize[] broad discretion in denial [of liquor licenses] for  


 any  reason  found  incompatible  with  the  public  interest."18                                                                                                                                                                                                                                       And  the  regulation  


                               17                           AS 04.11.330(a)(1).   



                                                            Decker, 700 P.2d at 487 (second alteration in original), overruled on other  


grounds by Rollins, 312 P.3d at 1095.  

                                                                                                                                                                                          -13-	                                                                                                                                                                                7394

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

implementing those statutes authorizes the Board, when deciding whether to renew a                                                                                         

liquor license, to exercise its discretion to consider the applicant's past criminal acts                                                          

involving "moral turpitude," violations of statutes or regulations governing alcoholic                                               

beverages, violations of another state's                                     laws governing alcoholic beverages, and felonies                                 

                                                                          19  The regulation also allows the Board to consider  

committed in the preceding ten years.                                                                                                                        

whether  the  applicant  is  "untrustworthy,  unfit  to  conduct  a  licensed  business,  or  a  


potential source of harm to the public;" whether the applicant has permitted "sexual  


contact" on the licensed premises; and "all other factors the [B]oard in its discretion  


determines relevant tothepublicinterest."20  Fantasiesargues that becausethisregulation  


does not explicitly list the exact findings the Board made, its findings are not valid bases  


to deny renewal.  


                           But Fantasies misunderstands the regulation.  The factors the Board may  

consider  "include" those listed  in  the statute,  but the list is not exhaustive.21                                                                               And  


3 AAC 304.180(a)(4) explicitly gives the Board even greater discretion by allowing it  


to consider "all other factors the [B]oard in its discretion determines relevant to the  


public interest." The findings on which the Board based its denial of Fantasies' renewal  


thus relate to factors it was authorized to consider in determining whether the renewal  


is in the public's best interest.  


             B.            Fantasies Received Due Process.  


                           Fantasies asserts four violations of due process.  It challenges the process  


              19           3  AAC  304.180(a)(1).  

             20            3  AAC  304.180(a).  

             21            3  AAC  304.180(a)  ("The  factors  the  board  will,  in  its  discretion,  consider  

in determining  whether  it  is  in  the  public  interest  to   .   .   .  refuse  to  renew  or  transfer a  

license  include  .  .  .  .).  

                                                                                   -14-                                                                            7394

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

provided in the statutory renewal procedure, arguing that the club received no notice of                                                                                                                                             

the basis or opportunity to be heard, and that the specific license renewal process set out                                                                                                                                       

                                                                                                                                           22      In addition Fantasies argues that  

 in AS 04.11.510 does not comply with due process.                                                                                                                                                                              

AS 04.11.330(a)(1) and 3 AAC 304.180 - allowing denial of an application when a  


 license would not be in the public's best interests - are unconstitutionally vague.  The  


 due process clauses of both the United States and Alaska Constitutions require "that  


 adequate notice and a meaningful opportunity to be heard . . . be afforded to liquor  


 licensees  before  their  licenses  can  be  suspended."23                                                                                            This  due  process  requirement  


 similarly applies when a license's renewal is denied. Fantasies received adequate notice  


 and an opportunity to be heard in the three Board hearings, as well as through written  


notices of hearings, decisions, and opportunities to appeal, and in the subsequent hearing  


before the ALJ.  


                                     1.               Fantasies received an opportunity to be heard.  


                                    Due process "merely require[s] the Board to hold a hearing before it [can]  


 suspend a liquor license. . . . [T]he hearing need not be elaborate, and the Board need not  


make written findings or even file a written opinion explaining its action so long as it  


                  22                While AS 04.11.510 lays out the general procedure for actions on license                                                                                                            

 applications, suspensions, and revocations, Fantasies received more opportunity to be                                                                                                                                              

heard   than   the   statute   requires,   having   been   provided   three   Board   hearings,  an  

 administrative appeal, and a superior court appeal.                                                                                             Because we find that Fantasies                                 

received due process and thus was not injured by the purportedly deficient statute, we                                                            

 decline to address this purely legal issue.                                                                          See State v. Am. Civil Liberties Union of                                                                     

Alaska , 204 P.3d364,368-69                                                    (Alaska2009) ("[W]hileAlaska'sstanding                                                                             rulesareliberal         

this court should not issue advisory opinions or resolve abstract questions of law."                                                                                                                                       

 (alteration in original) (quoting                                                   Bowers Office Prods., Inc. v. Univ. of Alaska                                                                             , 755 P.2d     

 1095, 1097-98 (Alaska 1988))).                                  

                  23                FrontierSaloon,Inc. v. AlcoholicBeverage Control Bd., 524 P.2d 657, 661  


 (Alaska 1974); see also Rollins v. State, Dep't of Revenue, Alcoholic Beverage Control  


Bd., 991 P.2d 202, 211 (Alaska 1999).  


                                                                                                                -15-                                                                                                         7394

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


reached its decision after hearing the appellant's presentation."                                                             Fantasies was entitled      

to "an opportunity to be heard in a meaningful, impartial administrative hearing in full                                                                          

                                                                                                         25    Fantasies received three such  

compliance with the Administrative Procedures Act."                                                                                                             

opportunities before the Board and an additional opportunity before an ALJ.  


                          Fantasies' attorney attended all three Board hearings and the ALJ hearing  


on the club's behalf, vigorously questioned witnesses, testified himself, and answered  


Board questions during two of the meetings.   Fantasies claims it is entitled to more  


process despite the licensing statute's lack of requirement of any hearing:  the Board  


"may review an application for the . . . renewal . . . of a license without affording the  



applicant notice or hearing."                                The fact that Fantasies participated in multiple hearings  


more than satisfies due process.  


                          2.	          Fantasies received notice of the basis for denial of the license  




                          Fantasies argues that it had no notice of the reasons why its license renewal  


was denied either at the Board meetings or at the administrative hearing.  Fantasies also  


argues  that  it  was  denied  notice  before  the  administrative  hearing  that  the  2014  


management agreement was a basis for non-renewal.   Alaska Statute   04.11.510(b)  


allows the Board to review a renewal application "without affording the applicant notice  


or hearing."   We have nonetheless held that due process requires both notice and a  


hearing before the Board can take an individual's property interest in a liquor license.27  



             24           Rollins v. State, Dep't of Revenue                              , 991 P.2d at 211 (citing                     Frontier Saloon                ,  

524 P.2d at 659).       

             25           Id.  

             26           AS 04.11.510(b) (emphases added).  


             27           Stevens   v.  State,  Alcoholic  Beverage   Control  Bd.,   257   P.3d   1154,   1160  


                                                                                -16-	                                                                          7394

----------------------- Page 17-----------------------

But "[t]hese procedures 'need not be elaborate,' . . . and due process 'merely require[s]                                             


the [ABC] Board to hold a hearing before it [can] suspend a liquor license."                                                          Fantasies  


received three separate hearings before the Board during which it was presented with the  


objections to its renewal and had an opportunity to refute them.   The same written  


objections to the renewal were before the Board at each hearing.  Fantasies received  


adequate notice through the Board hearings and written objections.  


                       Fantasies claims that it was not until the administrative hearing that the  


Board raised the issue of the management agreement violating the license.  The Board's  


written notice of denial following its vote to deny renewal must state "the reason for the  

                                                                    29    The Board's notification letter to Fantasies  


denial in clear and concise language." 

stated that, "per AS 04.11.330(a)(1) . . . the renewal of the license would not be in the  


best interest of the public."  The letter also refers to the three Board hearings, during  


which former workers and DOL objected due to non-licensees having financial interests  


in the license.  


                       Before a hearing with an ALJ, the Administrative Procedure Act requires  


that the hearing file include a statement of issues specifying the statute with which  


compliance must be shown and the "particular matters that have come to the attention of  


            27         (...continued)  


(Alaska 2011) (requiring merely that Board hold hearing before suspending license); see  


also Frontier Saloon, Inc., 524 P.2d at 661 (holding that state and federal due process  


clauses require hearing before license can be suspended by Board).  

            28         Stevens, 257 P.3d at 1160 (third, fourth, and fifth alterations in original)  


(quoting Rollins v. State, Dep't of Revenue, 991 P.2d at 211).  


            29         AS 04.11.510(b)(1).  Written notice was provided to Fantasies on July 21,  


2016, the day after its application was denied at the Board meeting.  


                                                                        -17-                                                                  7394

----------------------- Page 18-----------------------


the initiating party and that would authorize a denial of the agency action sought."                                                                                                       But  

there is no similar requirement for the Board, only for the party initiating the ALJ                                                                                                      

hearing, and the Act does not include such requirements for an agency's notice of denial.                                                                                                             

We have considered cases where the Board provided more detailed findings of fact                                                                                                           

explaining why it denied a license, specifying the precise reasons it found granting a                                                                                                           

                                                                                                 31     But we have upheld the final decision in  

license would not be in the public interest.                                                                                                                                                    

other contexts so long as "the subject matter remains the same[,] the public has been  


reasonably notified," and it is "a logical outgrowth of that notice."32  


                              Consideration of the management agreement is a logical outgrowth of  


DOL's initial concerns listed in its January 2016 letter to the Board.  The agreement  


violated AS04.11.450, prohibiting non-licensees fromhaving direct or indirect financial  


interests in the licensed business.  DOL's initial objection letter asserted that it "ha[d]  


ascertained credible information that . . . a person(s) other than the licensee has direct and  


indirect financial interest in the business."  The management agreement is evidence that  


directly supports DOL's objection.  


                              Furthermore,  Fantasies  itself  listed  the  issue  of  a  prohibited  financial  


interest in its request for the administrative hearing.  Having itself noted that this issue  


               30             AS 44.62.370(a).   

               31             See State, Alcoholic Beverage Control Bd. v. Decker, 700 P.2d 483, 487  


(Alaska  1985)  (affirming  Board's  denial  of  liquor  license  as  not  in  public  interest  


because it would contribute to teenage drinking at nearby schools and was not necessary  


to serve area's reasonable alcohol requirements), overruled on other grounds by Rollins  


v. State, Dep't of Pub. Safety, 312 P.3d 1091, 1095 (Alaska 2013).  


               32              Trs. for Alaska v. State, Dep't of Nat. Res., 795 P.2d 805, 808-09 (Alaska  


 1990) (finding adequate notice because potential for offshore facilities to support oil  


development was "logical outgrowth" of notice saying sale could occur without onshore  


support from specific site).  


                                                                                             -18-                                                                                        7394

----------------------- Page 19-----------------------

was a basis for its appeal to the ALJ, Fantasies cannot now prevail on a claim that it had                                                                                                                                 

no notice that evidence relating to the issue of a prohibited financial interest would be  

raised at the administrative hearing.                                     

                                    3.               The licensing laws are not unconstitutionally vague.                                                                                                 

                                    Both AS 04.11.330(a)(1) and 3 AAC 304.180(a)(4) authorize the Board to                                                                                                                        


deny a license application if it finds that renewal is not in the public's best interests.                                                                                                                                               


Fantasies argues that both the statute and the regulation are unconstitutionally vague.  


"[A] law may be unconstitutionally vague if the scope of exceptions and the scope of  



                                                                  We consider two elements in evaluating whether a law is void  

defenses are unclear." 


for vagueness:  "First . . . whether there is a history or a strong likelihood of arbitrary  


enforcement and  uneven  application.                                                                      Second . .  . whether  the regulation  provides  



adequate  notice  of  prohibited  conduct."                                                                             Because  there  is  no  history  of  arbitrary  


enforcement and Fantasies was given notice, these laws are not vague as applied to  



Fantasies' denial. 

                  33                "An application requesting renewal of a license shall be denied if . . . the                                                                                                              

 [B]oard finds . . . that renewal of the license would not be in the best interests of the                                                                                                                                    

public."  AS 04.11.330(a)(1).   "The factors the [B]oard will, in its discretion, consider  

in determining whether it is in the public interest to . . . refuse to renew . . . a license                                                                                                                 

include . . . all other factors the [B]oard in its discretion determines relevant to the public                                                                                                                       

interest."   3 AAC 304.180(a)(4).                

                  34               Halliburton Energy Servs. v. State, Dep't of Labor, 2 P.3d 41, 50 (Alaska  



                  35               Id.  


                  36               See id. ("When evaluating whether [a regulation] is void for vagueness, we  


must determine whether the regulation is vague as applied to the particular conduct for  


which a citation was issued.").  


                                                                                                              -19-                                                                                                       7394

----------------------- Page 20-----------------------

                                               a.	            The   Board   did   not   arbitrarily   enforce   the   statute   or  

                                                              regulation against Fantasies.                  

                               Fantasiesclaims                        that theBoardarbitrarilyenforced                                              AS04.11.330(a)(1)and                          

3 AAC 304.180. But this claim is made without analysis or explanation. Consequently,                                                                                    


any claims of arbitrary enforcement by the Board are waived.                                                                                                                     

                                                                                                                                                          The only articulated  


claim of arbitrary enforcement is against DOL, claiming that DOL arbitrarily filed an  


objection to Fantasies' license with the Board when it had settled with two restaurants  


for unpaid wages in an unrelated matter. The question of arbitrary enforcement by DOL  


is not properly before us because this is not a review of DOL's actions; DOL investigates  


claims of wage violations and routinely shares information with other agencies when  




                                               b.	            The licensing laws provide adequate notice of conduct  


                                                              that is not in the public's best interests.  


                               A law which "either forbids or requires the doing of an act in terms so  


vague that [people] of common intelligence must necessarily guess at its meaning and  



differ as to its application violates the first essential of due process of law."                                                                                                     As used  


in the statute and regulation, the term "best interests of the public" is not vague.  The  


statute lists a number of factors that can lead to a determination that renewal would not  


be in the public interest, including criminal acts, violations of regulations or other laws,  


untrustworthiness, unfitness to conduct a licensed business, being a potential source of  

                37             See Windel v. Carnahan                                    , 379 P.3d 971, 980 (Alaska 2016) ("[W]here a                                                                 

point is given only a cursory statement in the argument portion of a brief, the point will                                                                                                       

not be considered on appeal.") (quoting                                                            Burts v. Burts                    , 266 P.3d 337, 344 (Alaska                       


                38             Halliburton, 2P.3dat51(quoting LazyMountainLandClub v. Matanuska- 


Susitna Borough Bd. of Adjustment & Appeals, 904 P.2d 373, 382 (Alaska 1995)).  


                                                                                                -20-	                                                                                         7394

----------------------- Page 21-----------------------


public harm, and allowing sexual contact on the licensed premises.                                                                                The regulation   

names these factors and allows the Board to consider "all other factors the [B]oard in its                                                                                    

discretion determines relevant to the public interest."40  While this scope is broad, it is  

not unconstitutionally vague:  the regulation lists the very factors on which the Board  


decided to deny Fantasies' renewal application.  Factors such as prohibiting 911 calls  


during  medical  emergencies  can  easily  be  understood  by  those  with  "common  


intelligence" as not in the public interest.41  


                            Each of the Board's findings correlates to the licensing laws.  The Board's  


finding that Fantasies violated wage and hour laws was based upon DOL's investigation  


which determined that Fantasies violated AS 04.21.030's requirement that a business be  


lawfully conducted.  This in turn satisfies 3 AAC 304.180(a)(1)(B), listing "a violation  


of AS 04" as one factor to be considered in determining whether license renewal is in the  


public's best interest.  


                            The Board's finding that Fantasies discouraged dancers from calling 911  


during medical emergencies is not only generally against the public interest, it is also "a  


potential source of harm to the public," a factor listed under 3 AAC 304.180(a)(2).  


Additionally, the finding that Gravelle lacks knowledge of club operations suggests he  


is "unfit to  conduct a licensed  business," another  factor  enumerated  under  3  AAC  


304.180(a)(2).   The finding that Gravelle does not know the legal requirements for  


operating Fantasies' license similarly indicates that he is "unfit to conduct a licensed  


business"  as  well  as  "untrustworthy"  because  he  had  signed  a  document  claiming  


familiarity with Title 4 of the Alaska Statutes and its regulations.  Both of these factors  


              39            3 AAC 304.180(a)(1)-(3).     

              40            3 AAC 304.180(a)(4).     

              41           Halliburton, 2 P.3d at 51.                      

                                                                                     -21-                                                                               7394

----------------------- Page 22-----------------------

are listed in 3 AAC 304.180(a)(2). And the finding that a management agreement gives                                                                                              

a manager a direct financial interest in the license also demonstrated that Fantasies                                                                                   



violated AS 04.11.450(a).                                     Failure to lawfully conduct business is a factor listed in 3  


AAC 304.180(a)(1)(B).  


                             In addition to the specific listed factors on  which  the Board based its  


decision, it had discretion to consider "all other factors . . . relevant to the public interest"  


under 3 AAC 304.180(a)(4).  Even if the factors on which the Board based its decision  


were not specifically listed for its consideration, it is apparent that people "of common  


intelligence" would consider most, if not all, of these factors relevant to the public  



                             TheBoard'sdenial ofFantasies' licenserenewal as notin thepublicinterest  


is not unconstitutionally vague.  The Board's findings are included in the list of factors  


the Board may consider.   A regulation need not explicitly list every permutation of  


proscribed behavior "[s]o long as the mandate affords a reasonable warning . . . in light  



of common understanding and practice[s]." 

v.             CONCLUSION  

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


determination denying the renewal of Fantasies' liquor license number 1078 and find no  


due process violation.  


               42            AS 04.11.450(a) ("A person other than a licensee may not have a direct or                                                                                   

indirect financial interest in the business for which a license is issued.").                                                             

               43            See Halliburton, 2 P.3d at 51.  


               44            Id. (first alteration in original) (quoting  vanco Constr., Inc. v. Donovan,  


723 F.2d 410, 412 (5th Cir. 1984)).  


                                                                                          -22-                                                                                    7394

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