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Court upholds Newport in liquor fight

Newport will have one liquor store for the foreseeable future.

A Minnesota Court of Appeals ruled Monday that the Newport City Council did not abuse its discretion or violate the right to equal protection when it denied Stephen Linn a liquor license last year after he planned to build near an existing liquor store.

The court's resolution, which came just 32 days after oral arguments were heard, said Linn failed to persuade the city council that a second liquor store in Newport was necessary and that the city council did not act arbitrarily in denying the request.

"I'm glad to see that this was the decision and that it was in favor of the city's position," Newport Mayor Tim Geraghty said. "I was fairly confident that we would prevail and it's good to see that. I think we followed our laws and ordinances and believe that it was done in the interest of the public welfare."

Geraghty had voted with a majority of council members last year to deny Linn a permit.

Newport City Attorney Fritz Knaak agreed with Geraghty about the court's decision and said the ruling was expected.

"The courts affirmed, in all respects, the city's decision and its procedures," Knaak said. "This has been our position from the beginning and it was handled correctly."

Linn, owner of Woodbury-based Linn Companies, proposed opening a liquor store in one of his vacant properties at 1594 Hastings Ave., about 500 feet from Newport Liquor, a longtime business in the city. Linn's property has been vacant since November 2011, after Linn relocated a Napa Auto Parts store to a nearby building.

"We respect the court's decision, but it is disappointing," said David Gates, an attorney representing Linn Companies.

In an 11-page unpublished opinion filed Monday, the judges affirmed that the city of Newport has an adequate number of off-sale liquor stores in the vicinity of the existing Newport Liquor. The document added that limiting the issuance of liquor licenses "falls within a city's police power" under the basis of protecting the public health, safety, and welfare.

Linn disputed that finding.

"Our proposal was to create jobs in Newport," Linn said. "Our proposal was to create additional traffic flow, which the city so desperately needs. Our proposal was to bring additional services by expanding on what is offered at a competitive price with increased capacity. Ultimately, I think the people who lose out the most are the residents of Newport."

During oral arguments in March, Gates said the city acted with extreme bias and invited the notion of protectionism into the case. However, Knaak said it was a piece of the case the city was allowed to consider in its decision to reject Linn's request.

"I think (the right to equal protection) was a red herring raised during proceedings and the bottom line is that the council has a lot of discretion in dealing with liquor cases," Knaak explained. "The courts agree that the council considered the viability and livelihood of a small store already in the city. I think the court acted correctly to defer to the council's decision."

Gates said Tuesday that while he respects the appellate court's opinion, he felt its findings left a crucial question unanswered: what part of the comprehensive, long-term plan for the city would a second liquor store violate?

"The city never identified that," Gates argued. "(The council) just asserted that it was contrary to that plan. That was something we argued. I still think that council members' decision to allow individual preferences for a particular type of business to be the basis (of their defense) is inherently arbitrary."

Both Linn and Gates said it is too early to tell if an appeal will be filed, but confirmed it is something they could talk about. If an appeal is desired, Gates said Linn has 30 days to file a petition for review, which would bring the case before the Minnesota Supreme Court.

"The review is completely discretionary, meaning they don't have to review it," Gates explained. "If Mr. Linn does decide to file a petition and the Supreme Court denies it, that's the end of the case."

It is hard to tell if the Supreme Court would take on the petition, Gates added, but the appellate court's decision isn't hindering Linn from continuing to bring business to Newport.

"We do intend to stay in the city of Newport operating our other business, but we're disappointed that we have brought so much to the city and they didn't honor our desire to further expand and create additional jobs in the city," Linn said.