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Blue Iguana, Inc. v. Oregon Liquor Control Commission

Court of Appeals of Oregon

September 18, 2013

BLUE IGUANA, INC., dba Blue Iguana Mexican Restaurant & Cantina, Petitioner,

Submitted on January 22, 2013.

Oregon Liquor Control Commission OLCC09V035, OLCC09V035A, OLCC09V035B

Michael Shurtleff argued the cause for petitioner. With him on the brief were Michael Mills and Mills Jacobson Halliday, PC. With him on the reply brief was Mills Jacobson Halliday, PC.

Christina M. Hutchins, Senior Assistant Attorney General, argued the cause for respondent. With her on the brief were John R. Kroger, Attorney General, and Mary H. Williams, Solicitor General.

Before Schuman, Presiding Judge, and Wollheim, Judge, and Duncan, Judge.


The Oregon Liquor Control Commission (OLCC) penalized petitioner, a licensee, for allowing persons who did not have legally required certification as private security professionals to act in that capacity on petitioner's premises during an event in November 2008. At a subsequent contested case hearing, petitioner argued that the certification requirement did not apply because the event in question met all of the criteria for an exemption from the certification requirement. In rejecting that argument, OLCC ruled that one of the requirements for exemption is that it applies only at an "organized event" and the alleged offense did not occur during one. OLCC also rejected petitioner's alternative arguments: first, that the agency could not enforce the statute in the absence of formally promulgated administrative rules defining what an "organized event" is; and second, if the agency could define "organized event" in the process of deciding contested cases, the event in question met that definition. Petitioner seeks judicial review. We conclude that the exemption applies only at organized events and that OLCC may (and did) define "organized event" without formal rulemaking. We do not reach petitioner's argument that the event at which the offenses occurred was, in fact, an organized event, because petitioner first advanced that argument in its reply brief. We therefore affirm.

The following facts from the OLCC order are, unless otherwise noted, unchallenged and are, therefore, the facts for purposes of our judicial review. Meltebeke v. Bureau of Labor and Industries, 322 Or 132, 134, 903 P.2d 351 (1995). The challenged finding is reviewed for substantial evidence, that is, we accept the agency's finding if "the record, viewed as a whole, would permit a reasonable person to make that finding." ORS 183.482(8)(c).

Petitioner, Blue Iguana Mexican Restaurant and Cantina, holds an OLCC license. In 2008, inspectors went to that establishment to conduct a compliance check and discovered that eight persons wearing yellow shirts marked "Security" were checking IDs and patting down patrons before allowing them to enter. The security professionals also told an OLCC inspector that their security duties included, if necessary, breaking up fights and asking unruly patrons to leave. None of the security professionals had "Private Security Identification" cards issued by the Department of Public Safety Standards and Training (DPSST). Of the eight security professionals interviewed, seven were subsequently convicted of violating ORS 181.991(1)(b), which prohibits a person from providing "private security services as a private security professional without being certified to do so" by DPSST. Petitioner, in turn, was cited for violating OAR 845-006-0347(3) (11/07/08), which prohibits an OLCC licensee from permitting "any activity that violates a criminal statute."[1] After a contested case hearing, OLCC concluded that petitioner had violated the rule by permitting uncertified security personnel to work on petitioner's premises; for that violation, OLCC imposed a license suspension of 74 days, with the proviso that petitioner could reduce the suspension to 22 days by paying a civil penalty of $8, 580.

On judicial review, petitioner renews the arguments it made at the administrative hearing, focusing on a specific part of the hybrid statutory and regulatory scheme governing the use of security personnel at premises licensed by OLCC--in particular, on an exception to the requirement that such personnel be certified. Under that scheme, a private security professional must be certified by DPSST. ORS 181.873(1)(a). A person is a private security professional if he or she performs specified functions, including "[c]ontrolling access to premises being protected." ORS 181.870(8)(d).[2]Providing private security services as a private security professional without a license is a Class A violation. ORS 181.991(1)(b). However, there is an exemption from the certification requirement for a "person performing crowd management, * * * including * * * a person employed for the purpose of age verification by a licensee of the Oregon Liquor Control Commission." ORS 181.871(1)(k). (For the purpose of clarity, we will refer to that exemption as the "general crowd management exemption.") However--and herein lies the dispute--in order to qualify for the general crowd management exemption, uncertified security personnel must also meet the following more specific requirements:

"The [general crowd management] exemption provided by [ORS 181.871](1)(k) applies only:
"(a) If there is at least one person on-site who is certified or licensed under ORS 181.878 for every 10 or fewer uncertified persons performing [crowd management or guest services] described in subsection (1)(k) of this section;
"(b) If any enforcement action, * * * other than incidental or temporary action, is taken by or under the supervision of a person certified or licensed under ORS 181.878; and
"(c) During the time when a crowd has assembled for the purpose of attending or taking part in an organized event, including pre-event assembly, event operation hours and ...

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