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Liquor-store owners sue the City of El Cajon

New alcohol-sales regulations are claimed to favor big-box retailers

The City of El Cajon will have to defend in federal court a newly adopted ordinance that places tougher regulations on liquor stores.

Two liquor-store owners who own and operate three stores in El Cajon filed a complaint against the city, saying the law is unfair to small-business owners and favors big-box retailers.

"The Ordinance deprives new and existing small and neighborhood retailers that conduct off-sale alcoholic beverage sales of the right to sell alcohol in any manner not preferred in the Ordinance. However, big-box retailers (who typically sell even more alcohol than the small neighborhood retailers affected by this Ordinance) were expressly exempted from the Ordinance. The Ordinance thus effectively deprives the smaller neighborhood retailers, like Plaintiffs, from the right to continue operating their businesses, depriving them the right to be treated equally under the law when compared to big-box competitors, and places an unfair and burdensome amount of restrictions and limitations on the manner in which these smaller businesses operate."

The El Cajon City Council adopted the new law in August of this year and it went into effect on November 1. The ordinance is meant to reduce public drunkeness and curb under-age drinking. No other cities in the county, and, according to a report in the U-T, only 21 cities in the state — including Oakland, San Francisco, and Pasadena — have taken such steps.

The so-called "Alcohol Sales and Deemed Approved Alcohol Sales Regulations Ordinance" was the result of more than seven months of work by city staff. For existing stores, the law requires that employees receive training in order to sell alcohol. In addition, owners are required to obtain a conditional use permit when modifying the store, meaning existing store owners could be subject to the same requirements as new stores, which include restrictions on the amounts and types of alcohol they sell, a buffer zone from residential developments and schools and playgrounds, as well as other regulations.

On the other hand, the ordinance doesn't focus on big-box retailers, mainly because, according to an August 27 staff report, those retail establishments provide more "goods and services" and are not financially dependent on alcohol sales like the smaller stores are.

The lawsuit declares, "A business that sells alcohol has a vested right to continue to conduct business in compliance with the state laws governing the sale of alcohol. A city’s power to revoke a permit or deemed approved status is limited."

In addition to favoring large businesses, the complaint alleges that the "Annual Alcohol Sales Regulatory Fee" that liquor-store owners are forced to pay is a "special tax" and thus violates the state's constitution by not having the electorate approve the tax.

The liquor-store owners who filed the complaint aren't the only ones finding flaws with the ordinance; the Neighborhood Market Association has also come out against El Cajon's new booze law.

"We do not agree with any legislature or ordinance that oversteps that which is a necessity within the community. [This ordinance] is most certainly an overreach of what one would expect of local government. California is, and should be the only body to govern and enforce laws regarding distribution and sales of alcohol," reads a statement from organization head Mark Paul Arabo.

According to their statement, the association has received "numerous complaints from small businesses within El Cajon about the added costs and red tape." Representatives for the group are meeting with city councilmembers to try and come to a compromise.

"I hope that the city and the storeowner come to a mutual agreement so that [the ordinance] is dropped. But ultimately, it seems as though the courts will have the final say on these matters."

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The City of El Cajon will have to defend in federal court a newly adopted ordinance that places tougher regulations on liquor stores.

Two liquor-store owners who own and operate three stores in El Cajon filed a complaint against the city, saying the law is unfair to small-business owners and favors big-box retailers.

"The Ordinance deprives new and existing small and neighborhood retailers that conduct off-sale alcoholic beverage sales of the right to sell alcohol in any manner not preferred in the Ordinance. However, big-box retailers (who typically sell even more alcohol than the small neighborhood retailers affected by this Ordinance) were expressly exempted from the Ordinance. The Ordinance thus effectively deprives the smaller neighborhood retailers, like Plaintiffs, from the right to continue operating their businesses, depriving them the right to be treated equally under the law when compared to big-box competitors, and places an unfair and burdensome amount of restrictions and limitations on the manner in which these smaller businesses operate."

The El Cajon City Council adopted the new law in August of this year and it went into effect on November 1. The ordinance is meant to reduce public drunkeness and curb under-age drinking. No other cities in the county, and, according to a report in the U-T, only 21 cities in the state — including Oakland, San Francisco, and Pasadena — have taken such steps.

The so-called "Alcohol Sales and Deemed Approved Alcohol Sales Regulations Ordinance" was the result of more than seven months of work by city staff. For existing stores, the law requires that employees receive training in order to sell alcohol. In addition, owners are required to obtain a conditional use permit when modifying the store, meaning existing store owners could be subject to the same requirements as new stores, which include restrictions on the amounts and types of alcohol they sell, a buffer zone from residential developments and schools and playgrounds, as well as other regulations.

On the other hand, the ordinance doesn't focus on big-box retailers, mainly because, according to an August 27 staff report, those retail establishments provide more "goods and services" and are not financially dependent on alcohol sales like the smaller stores are.

The lawsuit declares, "A business that sells alcohol has a vested right to continue to conduct business in compliance with the state laws governing the sale of alcohol. A city’s power to revoke a permit or deemed approved status is limited."

In addition to favoring large businesses, the complaint alleges that the "Annual Alcohol Sales Regulatory Fee" that liquor-store owners are forced to pay is a "special tax" and thus violates the state's constitution by not having the electorate approve the tax.

The liquor-store owners who filed the complaint aren't the only ones finding flaws with the ordinance; the Neighborhood Market Association has also come out against El Cajon's new booze law.

"We do not agree with any legislature or ordinance that oversteps that which is a necessity within the community. [This ordinance] is most certainly an overreach of what one would expect of local government. California is, and should be the only body to govern and enforce laws regarding distribution and sales of alcohol," reads a statement from organization head Mark Paul Arabo.

According to their statement, the association has received "numerous complaints from small businesses within El Cajon about the added costs and red tape." Representatives for the group are meeting with city councilmembers to try and come to a compromise.

"I hope that the city and the storeowner come to a mutual agreement so that [the ordinance] is dropped. But ultimately, it seems as though the courts will have the final say on these matters."

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