CALIFORNIA STORES FIGHT ALCOHOL LIABILITY RULE

LISA SAXTON

OAKLAND, Calif. -- Retailers operating in California are facing off against the municipal government here over a controversial ordinance that would make grocers and other licensed alcoholic beverage sellers liable for crimes committed in the vicinity of their stores.

In a confrontation that has been escalating since October, California retailers challenged the city ordinance, filing a suit against the city and finally winning a temporary injunction from the Alameda County Superior Court against its implementation. The two sides now await a hearing on the city's appeal against the injunction.

The conditional use permit ordinance would make vandalism, drug sales, assault, prostitution, public drinking, graffiti, gambling and public urination grounds for revoking any nearby retailer's license to sell alcohol. In addition, the city could fine a retailer $200 if police receive complaints from neighbors about people loitering near a store. The city also has been collecting $600 from each licensed merchant as a new annual fee.

The ordinance is being supported by Oakland neighborhood groups and other organizations trying to fight alcohol abuse and related crimes in the city. They see some neighborhood retail outlets as magnets for crime, but opponents see the ordinance as overkill.

The case has implications reaching beyond Oakland. The California Beverage Retailer Coalition, formed to combat the city's action, said similar ordinances are planned or already in place in more than 90 California cities. Ordinances also are being considered in Arizona and other states, the coalition said.

"So now we're just sitting and waiting to see when the hearing is going to be," said Don Beaver, chairman of the coalition and president of the California Grocers Association, based in Sacramento. The coalition represents more than 40,000 grocery stores, convenience stores, liquor stores and distributors.

"Safeway and Lucky Stores are on the board of the coalition; they are the two biggest [supermarket] companies," said Beaver. "But we're representing all the licenses. We're asking them all to contribute to the lawsuit, and that includes Vons, Ralphs, Hughes, Stater Bros., as well as liquor store operators, small grocers and service station operators who operate grocery stores."

The coalition's suit charges that the ordinance violates the state constitution and the California Beverage Control Act by placing additional zoning and fee requirements on existing licensed beverage establishments.

In the suit, the coalition claims that retailers' rights to due process have been violated because the ordinance fails to require a causal link between a local business operation and the conduct of third parties outside the business, and fails to provide business owners with guidelines for controlling local crime.

Renee Wasserman, a litigation attorney at the Oakland office of Donahue, Gallagher, Woods & Wood, representing the coalition, said the city is now in the process of refunding the $600 fee it collected from some retailers under the ordinance. "The retailers had to pay the $600 by January 1994; some paid in advance," she explained.

Wasserman added that the city may now be in the process of rewriting the legislation.

"What they're doing is working with various anti-alcohol groups on proposing statewide legislation -- a bill in the state legislature that would allow municipalities to have some kind of local control over high-crime and high-violence areas, in relation to the sale of alcohol and beverages," she said.

Beaver said the coalition hopes the city's appeal will be denied. "If the Court of Appeals upholds the lower court's decision, this is going to have a lot of meaning statewide," said Beaver.

"If we lost at the Court of Appeals, we would just go to trial," he continued. "And we still think we can win on the merits of the case."

Beaver said Oakland caught the "wrath of retailers for even imposing the ordinance." But, in the end, Beaver thinks the city will change the ordinance to make it more workable for all concerned.