From a Wrongful Local Refusal to a Lawsuit That Seeks to Compel Certification

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A business refused a local certification has a statutory first step before any lawsuit. Since September 1, 2019, Section 11.37(d) of the Alcoholic Beverage Code has entitled a prospective applicant to a hearing before the county judge when a county clerk, city secretary, or city clerk certifies that a location is not wet or refuses to certify it. Court action comes after that, or instead of it when the problem is a local ordinance rather than the certification itself, and it is a matter for a Texas attorney.

Step one: get the refusal and its ground in writing

Every later step depends on what the office actually decided. The record should show:

  • which office acted, the county clerk or the city secretary or clerk;
  • whether it certified the location as not wet, refused to certify, or returned the request as incomplete; and
  • the stated reason, such as the location’s wet or dry status, a commissioners court order, a city ordinance or charter provision, or a distance rule.

A return for missing information is not a refusal and is fixed by correcting the request. A refusal based on a valid ordinance the Code authorizes is not wrongful. Reconsideration, the county judge hearing, and a court action are for a refusal that rests on a ground the Code does not support.

Step two: ask the office to reconsider

A dispute can turn on how an office read the Code. A written request to reconsider, pointing to the provision that governs, can resolve the matter at the lowest cost:

  • the certification questions in Section 11.37 of the Alcoholic Beverage Code, which are whether the location is wet and whether a valid order, ordinance, or charter provision prohibits the sale;
  • TABC’s guidance that local governments should certify based on the latest local option elections for the jurisdiction, not on the type of permit sought;
  • Section 109.57, which bars local rules that impose stricter standards on licensed businesses than on similar unlicensed ones except where the Code expressly allows; and
  • Section 11.38(c), which states that the Code does not give political subdivisions authority to regulate permittees beyond the fees and powers the Code grants.

Step three: the county judge hearing

Section 11.37(d), added by House Bill 1443 in 2019, gives the prospective applicant a hearing before the county judge to contest a certification that the location is not wet, or a refusal to certify. The applicant submits a written request to the county judge, and the judge must hold the hearing within 30 days after receiving it. Section 61.37(d) gives applicants for licenses the same hearing right.

The hearing is designed for the certification dispute. It is the direct route when the question is whether the address is wet, or whether the office had a lawful basis to withhold the certificate.

Step four: court

If the refusal stands, or the obstacle is a local ordinance the business believes the Code preempts, the next forum is a court. Challenges to a local alcohol ordinance as preempted by the Code have been brought as suits for declaratory and injunctive relief against the city, and the Supreme Court of Texas has held a city’s alcohol ordinance preempted on that basis.

A suit may also ask a court to order an official to issue a certification. Whether that relief is available, and in which court, depends on the specific duty, the record from the earlier steps, and the facts, which is why this step belongs with a lawyer who handles Texas alcoholic beverage and local government disputes. Filing a suit does not guarantee a result.

Keeping the application alive meanwhile

A dispute over a certification can take longer than the rest of the application. During it, the applicant can keep the lease position, the entity records, and other application materials current, and track any deadlines the city, county, or TABC sets, so that a favorable outcome can be used without starting the application over.

This article is general information about Texas alcoholic beverage law, not legal advice, and reading it does not create an attorney-client relationship. Statutes and TABC rules change; confirm current requirements with the Texas Alcoholic Beverage Commission, the relevant city or county, or a licensed Texas attorney before acting.

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