G and N Restaurant Group, Inc. d/b/a City Cafe Diner v. City of Chattanooga

This action involves the constitutionality of a city ordinance regulating beer sales by establishments operating twenty-four hours a day. In June 2006, the defendant city amended its beer ordinance, which previously had required restaurants serving beer and other alcoholic beverages to serve no alcohol between the hours of 3:00 a.m. and 8:00 a.m. on weekdays and 3:00 a.m. and 12:00 noon on Sundays. Pursuant to the amended code section, no establishment remaining open for business of any type between the hours of 3:00 a.m. and 8:00 a.m. is permitted to simultaneously maintain a beer permit. The plaintiff restaurant is located within a hotel in Chattanooga and serves a wide variety of food items twenty-four hours a day. Upon its opening in 2004 and subsequent reopening in April 2006, pursuant to the unamended version of the city code, the restaurant served beer during the hours allowed. The restaurant continued to serve beer until it received a letter alleging a code violation from the Chattanooga Police Department in June 2011. Following a mandatory appearance before the Chattanooga Beer Board, the restaurant surrendered its beer permit. The restaurant brought this action in the trial court, alleging that the city code subsection at issue violated the restaurant’s substantive due process rights pursuant to the Fourteenth Amendment of the United States Constitution and article 1, section 8 of the Tennessee Constitution. The trial court ruled in favor of the city, finding, inter alia, that the code subsection was rationally related to a legitimate government interest. The restaurant appeals. Because we determine that the code subsection is not rationally related to a legitimate government interest, we reverse the judgment of the trial court and grant the restaurant’s request for a judgment declaring the subsection to be constitutionally invalid. We remand for further proceedings consistent with this opinion.