August 27, 2026- G-12 Entertainment, Inc. v. Phillip Sanchez, No. A-1-CA-42662

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IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number:
Court of Appeals of New Mexico Filed 8/27/2026 9:21 AM
Filing Date: August 27, 2026
Mark Reynolds
No. A-1-CA-42662
G-12 ENTERTAINMENT, INC., d/b/a KNOCKOUTS,
Petitioner-Appellee,
V.
PHILLIP SANCHEZ, Director of the Alcohol Beverage Control Division; and THE NEW MEXICO REGULATION AND LICENSING DEPARTMENT,
Respondents-Appellants.
APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY Nancy J. Franchini, District Court Judge
Kennedy, Hernandez & Harrison, P.C. Paul J. Kennedy Jessica M. Hernandez
Elizabeth A. Harrison
Noah T. Allaire
Albuquerque, NM
for Appellee
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

Raúl Torrez, Attorney General	1
Seth C. McMillan, Deputy Solicitor General	2
Santa Fe, NM	3
Alexander W. Tucker, Assistant Solicitor General	4
Albuquerque, NM	5
for Appellants	6
Lauren Keefe, City Attorney	7
Andrew S. Coon, Deputy City Attorney	8
Albuquerque, NM	9
for Amicus Curiae City of Albuquerque	10

OPINION	1
MEDINA, Chief Judge.	2
{1} Appellants Alcoholic Beverage Control Division (ABC) Director Phillip	3
Sanchez (the Director) and New Mexico Regulation and Licensing Department	4
challenge the district court’s determination that Appellee G-12 Entertainment, Inc.,	5
d/b/a Knockouts (Knockouts) was deprived of its right to a jury trial, under Article	6
II, Section 12 of the New Mexico Constitution, when the Director revoked	7
Knockouts’ liquor license and assessed civil penalties against it in an administrative	8
proceeding under NMSA 1978, Section 60-6C-1 (2021). 1 Concluding that	9
Knockouts is not entitled to a jury trial, we reverse.	10
BACKGROUND	11
{2} This appeal stems from events that occurred during the early morning hours	12
in December 2023. Police officers responded to a shooting at Knockouts’ licensed	13
premises.2 A man had been shot and killed; the alleged shooter was a sixteen-year-	14
old. As a result, the Director charged Knockouts with violating six provisions of the	15
1We forgo a discussion on Knockouts’ right to a jury trial under the Seventh
Amendment of the United States Constitution because the Seventh Amendment only
applies to actions in federal courts, and “[s]tates are not required by the United States
Constitution to provide jury trials in civil cases.” Bd. of Educ. of Carlsbad Mun.
Schs. v. Harrell, 1994-NMSC-096, ¶ 34, 118 N.M. 470, 882 P.2d 511 (citing
Minneapolis & St. Louis R.R. Co. v. Bombolis, 241 U.S. 211, 217 (1916).
2At the time of these events, Knockouts owned Inter-Local Dispenser Liquor
License #2754.

2
Liquor Control Act (LCA), NMSA 1978, Chapter 60, Articles 3A, 5A, 6A, 6B, 6C,	1
6E, 7A, 7B (1981, as amended through 2025), and the New Mexico Administrative	2
Code. These alleged violations included:	3
(1) two charges of selling alcohol to intoxicated persons, contrary to	4
Section 60-7A-16 and 15.10.51.11 NMAC;	5
(2) allowing an unaccompanied minor to enter and remain on the	6
licensed premises, contrary to Section 60-7B-10 and	7
15.10.33.8 NMAC;	8
(3) serving alcohol to a minor, contrary to Section 60-7B-1 and	9
15.10.33.10 NMAC;	10
(4) failing to ensure “the interior lighting [of the licensed premises	11
was] sufficient to make easily discernible to persons of average	12
vision, the appearance, age and conduct of all persons on the	13
premises,” contrary to 15.10.31.8 NMAC; and	14
(5) obstructing the administration of the LCA, contrary to Section	15
60-7A-24.	16
{3} Pursuant to his authority under Section 60-6C-4(F), the Director appointed a	17
hearing officer, and the hearing was held more than ten days thereafter. The hearing	18
officer found Knockouts in violation of all of the charges except the two charges of	19
selling alcohol to intoxicated persons. The Director accepted the hearing officer’s	20
findings of fact and conclusions of law, concluding that they were based upon	21
“substantial, competent, and relevant evidence,” and the violations were supported	22
by a preponderance of the evidence. The Director further found that “substantial,	23
competent, and relevant evidence” warranted enhancing Knockouts’ penalties.	24

3
Consequently, the Director revoked Knockouts’ liquor license and issued a $10,000	1
fine. See § 60-6C-1(A).	2
{4} Knockouts appealed the Director’s order to the district court, claiming that (1)	3
the hearing officer and the Director acted arbitrarily and capriciously in finding	4
against Knockouts on insufficient and insubstantial evidence; (2) the Director	5
violated Article II, Section 13 of the New Mexico Constitution and the Eighth and	6
Fourteenth Amendments to the United States Constitution related to the prohibition	7
on excessive fines and fees; and (3) the administrative proceeding violated	8
Knockouts’ right to a jury trial, pursuant to Article II, Section 12 of the New Mexico	9
Constitution, the Due Process Clause of the Fourteenth Amendment to the United	10
States Constitution, and the Seventh Amendment to the United States Constitution.	11
The district court rejected Knockouts’ first two arguments, but concluded that	12
Knockouts was entitled to a jury trial. The district court therefore reversed the	13
Director’s decision.	14
{5} Based on the district court’s order and subsequent order denying rehearing,	15
Appellants filed a petition for writ of certiorari (the Petition) to this Court. Because	16
Appellants, joined by amicus City of Albuquerque, challenge whether Knockouts is	17
entitled to a jury trial—a constitutional question arising from the district court’s	18
exercise of its original jurisdiction—we construed the Petition as a direct appeal.	19

4
DISCUSSION	1
{6} The issue on appeal is whether the New Mexico Constitution entitles	2
Knockouts to a jury trial for liquor license violations under the LCA. “Constitutional	3
challenges to a statute are reviewed de novo.” Siebert v. Okun, 2021-NMSC-016,	4
¶ 12, 485 P.3d 1265. “When reviewing a statute under a constitutional challenge, a	5
strong presumption in favor of constitutional validity attaches to legislative	6
enactments.” Id. (omission, internal quotation marks, and citation omitted).	7
{7} Appellants argue that Knockouts is not entitled to a jury trial for the following	8
four reasons. First, the public rights doctrine applies and permits the Director to	9
administratively adjudicate liquor license violations under the LCA. Second, LCA	10
enforcement proceedings have no historical, prestatehood statutory or common-law	11
analog. Third, ABC’s license revocation and $10,000 fine are equitable—not legal—	12
penalties because they serve a predominantly compensatory or remedial purpose.	13
Fourth, entitling licensees to a jury trial to determine liquor license sanctions would	14
be “unworkable for New Mexico.” Knockouts disagrees, arguing that it is entitled to	15
a jury trial because (1) the public rights doctrine does not apply; (2) there are	16
historical, common-law analogs to LCA enforcement proceedings; (3) the Director’s	17
sanctions were legal, not equitable, remedies; and (4) Appellants’ argument would	18
provide New Mexicans with less protections under the State Constitution than under	19
the United States Constitution. Because application of the public rights doctrine is	20

5
dispositive in this case, and because we find it applicable here, we address only the	1
arguments relevant to application of the public rights doctrine.	2
The Public Rights Doctrine Under Current New Mexico Precedent	3
{8} Appellants contend that proper application of the public rights doctrine	4
permits the Director to administratively adjudicate Knockouts for liquor license	5
violations under the LCA. Knockouts counters, arguing that the public rights	6
doctrine is inapplicable because this case presumptively involves private—not	7
public—rights. We agree with Appellants: The public rights doctrine applies and	8
permits the Director to exercise his statutory authority to administratively adjudicate	9
Knockouts for liquor license violations under the LCA. We explain.	10
{9} Article II, Section 12 of the New Mexico Constitution provides that “[t]he	11
right of trial by jury as it has heretofore existed shall be secured to all and remain	12
inviolate.” As a general rule, “[t]his right pertains to civil causes of action that were	13
triable by jury at the time the New Mexico Constitution was adopted and took	14
effect.” Siebert, 2021-NMSC-016, ¶ 13. However, the public rights doctrine	15
provides an exception to this general rule. The two key cases discussing the public	16
rights doctrine under the New Mexico Constitution are Board of Education of	17
Carlsbad Municipal Schools. v. Harrell, 1994-NMSC-096, 118 N.M. 470, 882 P.2d	18
511, and Lisanti v. Alamo Title Insurance of Texas, 2002-NMSC-032, 132 N.M. 750,	19
55 P.3d 962.	20

6
{10} In Harrell, our Supreme Court discussed the application of the public rights	1
doctrine under the School Personnel Act (SPA). There, the board discharged a school	2
district superintendent based on a breach of his employment contract. Harrell, 1994-	3
NMSC-096, ¶¶ 1-2, 33. The superintendent appealed his discharge, but under the	4
SPA, he was statutorily required to arbitrate his appeal. See id. ¶ 6. The	5
superintendent argued this statutorily-required arbitration abridged his right to a jury	6
trial under Article II, Section 12, of the New Mexico Constitution. Harrell, 1994-	7
NMSC-096, ¶¶ 8, 33. Our Supreme Court disagreed. The Court explained that the	8
superintendent was not entitled to a jury trial because his cause of action against the	9
board did not exist at common law at the time our constitution was adopted, and he	10
was requesting essentially equitable relief. Id. ¶ 37. But the Court went further,	11
providing an alternative holding based on the public rights doctrine. See id. ¶¶ 38-	12
39. It stated that even if the superintendent had stated that “a legal claim cognizable	13
at common law at the time our constitution was adopted,” he would still not have	14
been entitled to a jury trial. Id. ¶ 38 (citing Granfinanciera, S.A. v. Nordberg, 492	15
U.S. 33, 42 (1989)). The Court explained that the superintendent’s right to continued	16
employment was a public right created by the SPA. Id. ¶ 39. In support of its	17
determination, the Court looked to the SPA’s design and public policy objectives.	18
See id. Specifically, the SPA’s design was “to protect school employees from	19
wrongful discharge and to allow school boards to properly manage their personnel,”	20

7
and its public policy objectives were to encourage “qualified and talented individuals	1
to seek employment with the public schools.” Id. Accordingly, the Legislature was	2
permitted to “constitutionally prescribe the methods for adjudicating a dispute over	3
termination of that right.” Id. (citing Wylie Corp. v. Mowrer, 1986-NMSC-075, ¶¶	4
5-6, 104 N.M. 751, 726 P.2d 1381).	5
{11} In Lisanti, our Supreme Court discussed the limits of the public rights	6
doctrine. There, a dispute arose between insurer and insureds regarding insurance	7
policy coverage. 2002-NMSC-032, ¶ 2. The insureds alleged breach of contract and	8
breach of fiduciary duty claims, among others. Id. As in Harrell, the law—in this	9
instance, a regulation promulgated by the superintendent of insurance—required the	10
dispute to be arbitrated. See Lisanti, 2002-NMSC-032 ¶¶ 3-5. But unlike in Harrell,	11
our Supreme Court determined that the rights at issue in the underlying dispute were	12
“the equivalent of . . . paradigmatic private rights.” Lisanti, 2002-NMSC-032, ¶ 23	13
(internal quotation marks and citation omitted). The Court rejected the insurers’	14
contention that the public rights doctrine applied to “any heavily-regulated	15
industry.” Id. Instead, the Court held that for the public rights doctrine to apply, a	16
right of action must be “‘closely intertwined’ with a federal regulatory program.” Id.	17
(quoting Granfinanciera, 492 U.S. at 54). It is not sufficient for an asserted public	18
right to be only “casually or indirectly related to the regulatory scheme.” Id. The	19
Court also stated that the public rights doctrine is not implicated in “wholly private	20

8
tort, contract, and property cases.” Id. (internal quotation marks and citation	1
omitted).	2
{12} Under Harrell and Lisanti, to determine whether the public rights doctrine	3
applies, we must study the regulatory scheme and identify its relationship to the	4
claims made by ABC against Knockouts. The LCA is “an exercise of the police	5
power of the state.” Baca v. Grisolano, 1953-NMSC-028, ¶¶ 25-26, 57 N.M. 176,	6
256 P.2d 792 (internal quotation marks and citation omitted). Indeed, the “[s]tate	7
control of the liquor business under the police power is so great as to range from	8
complete prohibition to lesser degrees of regulation and constant surveillance.”	9
Kearns v. Aragon, 1959-NMSC-102, ¶ 16, 65 N.M. 119, 333 P.2d 607; see also U.S.	10
Brewers Ass’n, Inc. v. Dir. of N.M. Dep’t of Alcoholic Beverage Control, 1983-	11
NMSC-059, ¶ 30, 100 N.M. 216, 668 P.2d 1093 (“By virtue of the Twenty-[F]irst	12
Amendment, the states have been conferred with something more than a nominal	13
degree of authority over public health, welfare and morals when they act to regulate	14
the liquor business.”). In enacting the LCA, “the Legislature sought to tighten this	15
state’s liquor control laws.” Town & Country Food Stores, Inc. v. N.M. Regul. &	16
Licensing Dep’t, 2012-NMCA-046, ¶ 13, 277 P.3d 490 (internal quotation marks	17
and citation omitted). The LCA’s stated policy is to license, regulate, and control	18
“the sale, service and public consumption of alcoholic beverages in the state . . . so	19
as to protect the public health, safety and morals of every community in the state.”	20

9
Section 60-3A-2(A). This policy aligns with the LCA’s purpose “to regulate and	1
place limitations on the sale of alcohol, not to promote it,” and when interpreting the	2
LCA, “we employ a liberal interpretation to give effect to this legislative purpose	3
and to facilitate temperance.” Town & Country Food Stores, Inc., 2012-NMCA-046,	4
¶ 13 (alteration, internal quotation marks, and citation omitted). To further the	5
LCA’s policy and fulfill its purpose, the Legislature has authorized the Director to	6
adjudicate liquor license violations through administrative proceedings. See §§ 60-	7
3A-7 to -10; §§ 60-6C-1 to -9.	8
{13} In this case, the enforcement action and sanctions that the Director brought	9
against Knockouts under the LCA fall squarely within the public rights doctrine.	10
Harrell and Lisanti support this conclusion. We agree with ABC and the Director	11
that their enforcement action is analogous to the board’s enforcement action in	12
Harrell. Like the SPA—which was designed to benefit school employees while at	13
the same time allowing school boards to properly manage their personnel—the LCA	14
was designed to allow entities like Knockouts to apply for, receive, and benefit from	15
a liquor license while at the same time providing ABC with the authority to “regulate	16
and place limitations on the sale of alcohol.” See Santillo v. N.M. Dep’t of Pub.	17
Safety, 2007-NMCA-159, ¶ 19, 143 N.M. 84, 173 P.3d 6. This authority clearly	18
permits the Director to revoke licenses and impose civil fines when licensees violate	19
the LCA’s statutory conditions. Sections 60-3A-7; -6C-1. Furthermore, as explained	20

10
in Lisanti, application of the public rights doctrine requires a right of action to be	1
“closely intertwined with a regulatory program.” 2002-NMSC-032, ¶ 23. There can	2
be no dispute that ABC’s proceedings are closely intertwined with the LCA’s	3
regulatory program. By enacting the LCA, the Legislature provided a uniform,	4
comprehensive regulatory scheme in order to protect the public from licensees who	5
violate the statute. See Drink, Inc. v. Babcock, 1966-NMSC-236, ¶ 13, 77 N.M. 277,	6
421 P.2d 798 (“The [LCA] was enacted as comprehensive legislation to regulate and	7
control the sale of alcoholic beverages.”). The LCA’s regulatory scheme plainly	8
provides the Director with a right of action to administratively adjudicate liquor	9
license violations, and the Director brought such an action here for the specific	10
purpose of directly enforcing various provisions of the LCA’s regulatory scheme.	11
The action brought by the Director cannot plausibly “be characterized as casually or	12
indirectly related” to the LCA’s regulatory scheme. See Lisanti, 2002-NMSC-032,	13
¶ 23.	14
{14} Knockouts, however, contends that the public rights doctrine does not apply	15
here because this case presumptively involves private rights. We are unpersuaded.	16
The heart of Knockouts’ argument is that the administrative adjudication revoking	17
its liquor license has common-law antecedents and that, along with the $10,000 fine,	18

11
amounts to a legal—not equitable—remedy.3 Consequently, Knockouts argues that	1
the administrative adjudication of liquor license violations presumptively concerns	2
private rights under the recent United States Supreme Court decision applying the	3
Seventh Amendment to the United States Constitution in Securities and Exchange	4
Commission v. Jarkesy, 603 U.S. 109 (2024). We disagree.	5
{15} In Jarkesy, the Securities and Exchange Commission (SEC) imposed civil	6
penalties against two defendants for securities fraud through administrative	7
proceedings. 603 U.S. at 118-19. The Court held that the Seventh Amendment	8
entitled the defendants to a jury trial because (1) the SEC’s anti-fraud provisions had	9
antecedents in common-law fraud claims, which had traditionally been heard by a	10
jury; and (2) the SEC’s monetary civil penalties were punitive in nature. Id. at 124-	11
26, 140-41. The Court also concluded that the public rights doctrine was	12
inapplicable. Id. at 134. Because, as previously explained, the Seventh Amendment	13
does not apply to the states, Jarkesy is not binding.	14
{16} We find Jarkesy’s analysis unhelpful in deciding the question presented in the	15
case before us. Importantly, Jarkesy focuses exclusively on application of the public	16
3 Although we address the monetary penalty later in our discussion, it is
without question that Knockouts had no vested property right in its liquor license.
See Yarbrough v. Montoya, 1950-NMSC-006, ¶11, 54 N.M. 91, 214 P.2d 769 (“[A
liquor] license is a privilege and not property within the meaning of the due process
and contract clauses of the constitutions of the [s]tate and the nation, and in them
licensees have no vested property rights.” (internal quotation marks and citation
omitted)).

12
rights doctrine in the context of the federal right to a jury trial and the separation of	1
powers under the United States Constitution and, in any event, it declined to	2
“definitively explain[] the distinction between public and private rights,” despite	3
acknowledging that the case law related to the public rights doctrine is “an area of	4
frequently arcane distinctions and confusing precedents.” Jarkesy, 603 U.S. at 130-	5
31 (internal quotation marks and citations omitted). Jarkesy provides no guidance as	6
to how the public rights doctrine applies under the proper exercise of police powers	7
reserved to the states. See generally Jarkesy, 603 U.S. 109 (addressing the public	8
rights doctrine without addressing its application to matters arising under the states’	9
reserved police powers). As Knockouts correctly notes, the public rights doctrine is	10
an evolving concept “under either the federal [c]onstitution or the state constitution.”	11
Thus, while Jarkesy may have evolved the public rights doctrine under the federal	12
constitution, it is not apparent that it evolved the concept under our state’s	13
constitution. See, e.g., id. at 128-30 (recognizing the application of the public rights	14
doctrine in cases relating to Congress’ enumerated powers under Article I, Section	15
8 of the United States Constitution). Consequently, given Jarkesy’s lack of guidance	16
on state law issues, we rely on precedent from our Supreme Court interpreting the	17
New Mexico Constitution—precedent which, as we have explained, supports	18
application of the public rights doctrine to the facts of this case.	19

13
{17} Of at least equal importance is that, unlike the petitioner in Jarkesy,	1
Knockouts has not identified a common law antecedent to which the right to a jury	2
trial attached; Knockouts has provided no common law antecedent to administrative	3
adjudications of liquor license violations under the LCA. In Jarkesy, the fact that the	4
SEC’s anti-fraud provision had a common-law antecedent was crucial to the	5
conclusion that the public rights doctrine was inapplicable. See 603 U.S. at 135-37	6
(noting that the public rights doctrine applied for a cause of action brought under the	7
Occupational Health and Safety Act (OSHA), because OSHA did not borrow its	8
cause of action from the common law). Knockouts attempts to analogize the	9
administrative adjudication in this case to territorial-era criminal proceedings	10
because both center on allegations of serving alcohol to minors. 4 Because a	11
defendant was entitled to a jury trial under territorial-era statutes criminalizing the	12
sale of alcohol to minors, Knockouts argues it is entitled to a jury trial for liquor	13
license violations if premised on the same conduct. We disagree. Administrative	14
4 We note that although Knockouts attempts to frame its liquor license
sanctions as flowing only from serving alcohol to a minor, the record demonstrates
otherwise. As recounted in the background section above, the Director found the
following violations were supported by a preponderance of evidence: (1) Knockouts
allowed an unaccompanied minor to enter and remain on the licensed premises,
contrary to Section 60-7B-10 and 15.10.33.8 NMAC; (2) Knockouts served alcohol
to a minor, contrary to Section 60-7B-1 and 15.10.33.10 NMAC; (3) Knockouts
failed to ensure “the interior lighting [of the licensed premises was] sufficient to
make easily discernible to persons of average vision, the appearance, age and
conduct of all persons on the premises,” contrary to 15.10.31.8 NMAC; and (4)
Knockouts obstructed the administration of the LCA, contrary to Section 60-7A-24.

14
proceedings for liquor license violations brought pursuant to the LCA are distinct	1
from criminal proceedings even if both proceedings rely on some of the same	2
underlying facts. See, e.g., Town & Country Food Stores, Inc., 2012-NMCA-046,	3
¶¶ 10-16 (recognizing that LCA enforcement proceedings are civil, not criminal).	4
There is no indication that liquor license revocation proceedings served as a	5
substitute for criminal proceedings. Instead, administrative adjudication of liquor	6
license violations can proceed in addition to the jury trials the defendants have	7
been—and continue to be—entitled to when charged with serving alcohol to a minor.	8
See § 60-7B-1 (providing that in addition to being subject to administrative penalties,	9
a person who serves alcohol to a minor is also subject to criminal penalties). We are	10
therefore satisfied that the New Mexico Legislature did not “withdraw from judicial	11
cognizance any matter which, from its nature, is the subject of a suit at the common	12
law.” See Jarkesy, 603 U.S. at 132 (emphasizing, in the context of the public rights	13
doctrine, that Congress cannot “withdraw from judicial cognizance any matter	14
which, from its nature, is the subject of a suit at the common law”). We are	15
unpersuaded that liquor license revocation proceedings bear sufficient similarity to	16
any territorial-era criminal proceedings to warrant treating them as analogous.	17
{18} Under New Mexico law, even if administrative adjudications of liquor license	18
violations had common-law antecedents and the sanctions in this case were legal in	19
nature, the public rights doctrine would apply in this case. Under Harrell, the public	20

15
rights doctrine would apply even if we determined that administrative adjudications	1
of liquor license violations had common-law antecedents. See 1994-NMSC-096,	2
¶ 38 (“Even if we interpreted [the appellant’s] claim as stating a legal claim	3
cognizable at common law at the time our constitution was adopted, it nonetheless	4
would be permissible for the [L]egislature to assign resolution of the claim to an	5
adjudicative body that does not use a jury as fact[-]finder.”). And under Lisanti, even	6
if we considered the monetary penalty that the Director imposed to be legal in nature,	7
the public rights doctrine would apply because, as discussed above, ABC’s	8
administrative adjudication of Knockouts’ liquor license violations are “closely	9
intertwined” with the LCA’s regulatory program. Thus, for all of the reasons	10
discussed above, we conclude that Knockouts is not entitled to a jury trial.	11
CONCLUSION	12
{19} We reverse the district court’s order concluding that Knockouts was entitled	13
to a jury trial under the New Mexico Constitution, and we remand for proceedings	14
consistent with this opinion.	15
{20} IT IS SO ORDERED.	16
____________________________________	17
JACQUELINE R. MEDINA, Chief Judge	18

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WE CONCUR:

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MEGAN P. DUFFY, (/udge

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ZACHARY A. IVES, Judge

16