JOSEPH VARS, IT’S MY LICENSE, INC., AMY VARS, and MICHAEL VARS v. Laura Citrin, Richard C. Sardella, James Baccari, Jeanne Marie Napolitano, Richard…

Of the Northern District of California, sitting by *
designation.
United States Court of Appeals
For the First Circuit
No. 06-1043
JOSEPH VARS, IT’S MY LICENSE, INC., AMY VARS,
and MICHAEL VARS,
Plaintiffs, Appellants,
v.
LAURA CITRIN, RICHARD C. SARDELLA, JAMES BACCARI,
JEANNE MARIE NAPOLITANO, RICHARD O’NEIL,
STEPHEN C. WALUK, KATHERINE LEONARD, JOHN J. TRIFERO,
MARILYN SHANNON MCCONAGHY, JEFFREY GREER,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Hon. Ernest C. Torres, Chief U.S. District Judge]
Before
Boudin, Chief Judge,
Torruella, Circuit Judge
and Schwarzer, Senior District Judge *
Marty C. Marran with whom Edward G. Lawson was on brief for
appellants.
Marc DeSisto with whom Kathleen M. Daniels and DeSisto Law
were on brief for appellees.
December 6, 2006

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Schwarzer, Senior District Judge. Joseph Vars, It's My
License, Inc., Amy Vars and Michael Vars (the Varses) appeal the
summary judgment dismissing their 42 U.S.C. § 1983 action against
Laura Citrin, et al., for due process violations in connection with
the termination of a liquor license in which they held a security
interest. Because the license expired by its terms, the Varses
ceased to have a protectable property interest. We therefore
affirm.
The Varses owned and operated a restaurant and pub in
Newport, Rhode Island, which held a Class BV Alcoholic Beverage
Retailer's Permit. In 1999, they sold the business and equipment,
leased the premises, and transferred the liquor license to Jake &
Ella's Corp. As security for the unpaid balance due on the sale,
the Varses obtained a security agreement and an assignment of
rights in the liquor license, along with a power of attorney. They
filed a UCC lien with the Secretary of State.
The first episode underlying the Varses' due process
claim arose out of proceedings to revoke the license. In January
2001, the Board of License Commissioners, following an evidentiary
hearing on police citations for after-hours drinking and disorderly
conduct, ordered the license revoked. The Department of Business
Regulation affirmed the revocation. On appeal, the Superior Court
vacated the sanction imposed and remanded, and the license was
reinstated in April 2002.

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The Varses make a vague claim that they were "denied the
contractual agreement" with the licensees and suffered damages.
However that may be, in this action they have failed to show a due
process violation inasmuch as they had been accorded full process
in these proceedings.
The second episode arose out of the expiration of the
license. The Varses' security interest was in a Class BV Permit
which remains valid for only one year, expiring on December 1 of
each year, in this case on December 1, 2002. R.I. Gen.
Laws § 3-5-8 (2005). At the Varses' request, the Newport City
Clerk forwarded an application for renewal to the Varses' counsel
on December 20, 2002. But neither the Varses nor Jake & Ella's
applied for renewal. Varses' counsel, aware of a January 8, 2003
City Council meeting at which the now unattached license faced
retirement, faxed a letter to the Clerk on January 7, 2003. The
letter described efforts to renew Jake & Ella's corporate charter
(revoked in 2001 for failure to pay corporate taxes) and asserted
that as soon as the Department of Taxation issued a letter of good
standing, counsel would attempt to renew the liquor license. The
letter asked that the Clerk read it into the City Council meeting's
record, which was not done. After discussion the Council passed an
ordinance reducing the number of available permits from 59 to 58.
Rhode Island courts have recognized that a liquor
license, though not property in the traditional sense, is valuable

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and the holder of such a license enjoys some protection. Beacon
Rest., Inc. v. Adamo, 241 A.2d 291, 294 (R.I. 1968); Vitterito v.
Sportsman's Lodge & Rest., 228 A.2d 119, 122-23 (R.I. 1967). The
liquor business, however, is subject to the police power which
permits the government to restrict sale or prohibit it entirely.
Vitterito, 228 A.2d at 122. Rhode Island law limits the term of
the liquor license to one year. The Varses' interest, moreover,
was derivative of that of Jake & Ella's who held the license.
While the Varses had a protectable interest during the
pendency of the 2001 revocation process, they had none when the
City Council reduced the number of liquor licenses. At the time of
the Council meeting, almost two months after the license had
expired and with no application for renewal having been filed, the
Varses were without a right or interest on which to base a due
process claim.
Affirmed.

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