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Part Of Liquor Law Struck Down - Stripping Municipalities Of A Voice In A Dance Permit Applications

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Ronald D. Richards, Jr.
Foster Swift Municipal Law News
January 2013

Recently, a federal court in Michigan struck down part of the Michigan Liquor Control Act. S.A. Restaurants, Inc. v Deloney. Many of you may know that MCL 436.1916(10) of the Liquor Control Act requires the Michigan Liquor Control Commission (MLCC) and local municipal approval to get a dance-entertainment permit for dancing and live entertainment at an on-premises liquor-licensed business. The federal court in Deloney held that MCL 436.1916(10) is unconstitutional and unenforceable as a prior restraint on expressive activity.

At the moment, the impact that this ruling has on municipalities is unclear. A strict and broad view of the ruling may lead one to conclude that on-premises licensees do not have to get state and local approval for dance-entertainment activity. On the other hand, a municipality may still be able to file objections with the MLCC regarding a licensee's proposed activities. Also, courts in other contexts have upheld limits on speech – so-called "prior restraints" – if there are certain protections expressly stated in the law, such as strictly defined and objective requirements that are not content-based and a prompt judicial review process. Yet, ultimately, the MLCC may only deny proposed activities through a decision that complies with freedom of speech principles.