Target Corporation, Relator,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2018).

STATE OF MINNESOTA
IN COURT OF APPEALS
A19-1321

Target Corporation,
Relator,

vs.

City of Minnetonka,
Respondent.

Filed May 18, 2020
Affirmed
Worke, Judge

Brandt F. Erwin, Megan J. Kunze, Christ opher W. Bowman, Madigan, Dahl & Harlan,
P.A., Minneapolis, Minnesota (for relator)

James J. Thomson, Mary D. Tietjen, Kennedy & Graven, Chartered, Minneapolis,
Minnesota; and

Corrine A. Heine, City of Minnetonka, Minnetonka, Minnesota (for respondent)

Considered and decided by Florey, Presiding Judge; Worke, Judge; and Larkin,
Judge.
U N P U B L I S H E D O P I N I O N
WORKE, Judge
Relator challenges respondent’s denial of relator’s applica tion for an off-sale
intoxicating liquor license, arguing that the decision was arbitrary and capricious because
respondent misapplied its policy and violated relator’s right to equal protection. We affirm.

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FACTS
In March 2019, relator Targ et Corporation (Target) applied for an off-sale
intoxicating liquor license (application) from respondent City of Minnetonka (city) for its
store located on County Road 101. Target included a letter outlining its intent to purchase
a liquor store in the city which already held a liquor license.
In May 2019, the city council opened a public hearing on the application and
continued it to a later hearing. Prior to th e public hearing, the city manager submitted a
report that included comments from residents. Some residents expressed concerns due to
the proposed location’s proximity to schools, the proposed store’s potential to hurt smaller
liquor stores, and the “village center” already having a sufficient number of liquor stores.
Other residents expressed supp ort, highlighting convenience, the potential to attract
residents to the city, and Target’s commitment to the community. City staff recommended
granting the application.
In July 2019, the city council continued the public hearing on the application. City
staff gave a presentation, which informed th e city council about the ten existing off-sale
liquor stores in the city and the locations of those stores in relation to the city’s schools.
City staff also outlined th e city council’s policy when considering liquor-license
applications, noting that they could consid er, among other things, land use and zoning,
traffic, parking, and proxim ity to youth-oriented facilitie s. City staff recommended
approval.
Two representatives from Target spoke at the hearing. The first representative
emphasized Target’s commitment to the city, the convenience that the proposed liquor

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store would bring to citizens, plans for ensuri ng that no alcohol would be sold to minors,
that neither the city’s superi ntendent of schools nor the prin cipal of the high school were
opposed to the application, and that the prop osed purchase of another liquor store would
ensure that there was not an increase in the city’s total number of liquor stores. The second
representative highlighted Target’s customers’ desire for convenience, that Target had been
successful in selling 3.2 alcohol without any vi olations, and its plan to prevent sales to
minors.
After closing the public hearing, the city council members discussed their positions
on the application. Concerns included the existence of other liquor stores, approval setting
a precedent and saturation of liquor stores, a nd how another liquor store would affect the
city’s image. City council members also discussed the schools and how Target had
indicated that the schools did not oppose the application, but in reality the schools did not
support granting the application either.
The city council, in a 5-1 vot e, denied the application. The city formally notified
Target of the decision, listing the following reasons: (1) the liquor store would not offer a
distinctive specialty service; (2) while a liquor store would complement Target’s business,
the addition of the store would not add positively to living and working in the city; (3) the
location was adequately served by an existi ng liquor store; (4) there was concern about
establishing an undesirable precedent that would allow Cub Foods, located across the
street, to request a liquor license and saturate the area with liquor stores; and (5) Target’s
proposed purchase of an existing liquor store would remove the only liquor store from that
“village center.” This certiorari appeal followed.

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D E C I S I O N
A city council is vested with broad disc retion in determining whether to issue a
liquor license. Wajda v. City of Minneapolis , 246 N.W.2d 455, 457 (Minn. 1976). This
court’s review of a municipality’s decision regarding a liquor-license application is narrow
and “should be exercised most cautiously ,” granting relief only from “unreasonable,
arbitrary, capricious, or fraudulent action.” Id. A decision is arbitrary and capricious when
it represents the city council’s will rather than its judgment. In re Hutchinson, 440 N.W.2d
171, 177 (Minn. App. 1989), review denied (Minn. Aug. 9, 1989). Our review is confined
“to the record before the city council at the time it made its decision.” Hard Times Cafe,
Inc. v. City of Minneapolis, 625 N.W.2d 165, 173 (Minn. App. 2001) (quotation omitted).
An applicant bears the burden of proving that the city council acted in an arbitrary manner.
Country Liquors, Inc. v. City Council, 264 N.W.2d 821, 824 (Minn. 1978).
A city council has the ability to deny a liquor license for reasons relating to the
welfare of its city. Polman v. City of Royalton , 249 N.W.2d 466, 467 (Minn. 1977). In
addition, the city ordinance applicable to this case provides that a liquor license is a
privilege, not a right, and the city council has broad discretion to limit the number of
licenses when “the welfare of the city suggests such action.” Minnetonka, Minn., Code of
Ordinances (MCO) § 600.060(6) (2015). The or dinance also states th at the city council
may develop criteria for evaluating liquor-license applications. Id. The city council did so
through its adoption of Policy 6.1, which outlines the standards and criteria the city council
will apply when considering the issuance of liquor licenses. Relevant to this appeal, the
policy states,

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Standards
It is expected that all estab lishments holdin g liquor licenses
will be operated in accordance with the following standards:
 Type of Establishment
The proposed liquor license should be considered in terms
of the type of establishm ent being proposed and the
propriety of having the esta blishment at the proposed
location.

. . . .

Criteria
The city council will consider the following criteria prior to
issuing liquor licenses:

 Off-Sale Licenses
Off-sale establishments prov ide intoxicating liquor that
will be consumed in environmen ts that are not monitored.
An increase in the number of those outlets increases the
access to liquor, contributes to public safety concerns, and
detracts from the desired image of the city. Accordingly,
the city council determines that the 12 off-sale intoxicating
liquor licenses existing as of March 22, 2010 are generally
adequate to serve the city. However, the council reserves
the right not to issue any licen se even if the number falls
below 12. Despite this maximum number, the council will
consider, but not necessarily approve, additional off sale
intoxicating liquor licenses only if the council finds in its
sole discretion that the business:
a. offers a distinctive specialty service, or
b. is a complementary part of a business that would add
positively to the experience of living and working in
the city; or
c. is part of a village center that is not currently served.

. . . .

 Proximity to Schools, Churches, Youth Oriented Facilities,
etc.
The proposed liquor license should be considered in terms
of proximity of the establishment to schools, churches, and
youth related and other public facilities. It is expected that

6
liquor establishments will be located in areas that minimize
the impact on such facilities.

Target argues that the city council acted arbitrarily and capriciously by denying its
application because it disregarded the considerations required in Policy 6.1. Specifically,
Target contends that the city council improperly relied on the subfactors under the criteria
for off-sale licenses, which it claims “are only to be analyzed in the event a proposed liquor
license application would result in the total number of stores exceeding the [c]ity’s self-
imposed quota.”
Our review of the record indicates that th e city’s denial of th e application was not
arbitrary and capricious because the city based its decision on factors relating to the city’s
welfare. Further, nothing in the policy’ s language precluded the city council from
considering the subfactors that Target clai ms could not be applie d when the number of
liquor stores is less than twelve.
1 Here, the record reflects that the city council considered
the proposed liquor store’s location, future ra mifications of granting the application, and
the image the city wished to portray. These concerns, whic h relate directly to the city’s
welfare, were also listed in the denial letter as support for the city council’s decision.
Target also argues that the city’s denial on the hypothetical future conduct of Cub
Foods renders the city’s decision arbitrary and capricious and that “substantial evidence in
the record demonstrates that Target satisfied the city’s required fact ors.” Both of these

1 We note that the policy in this case is poo rly drafted, particularly with respect to the
consideration of the subfactors . Regardless of whether the city violated Policy 6.1, its
decision was not arbitrary and ca pricious given that its denial was made in consideration
of the city’s welfare. Further, Policy 6.1 expressly reserves the city’s discretion to deny a
liquor license even if the number of liquor stores is less than 12.

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arguments are without merit. A city council is able to consid er the future adverse effects
of granting a liquor license. See Country Liquors , 264 N.W.2d at 823 n.1 (considering
potential adverse effects proposed liquor st ore would have on community programs and
institutions). And while Target may have satisfi ed the city’s requirements, a city council
has broad discretion to deny a liquor-license application even when an applicant meets the
minimum requirements. Id. at 824 (noting that city council is not required to grant liquor
license despite applicant meeting minimum standards); see also MCO § 600.060(6) (“Even
if [an applicant] meets the minimum requireme nts for a license, the city council is not
obligated to grant the license.”).
Equal protection
Target also appears to argue that the denial of their application violated its right to
equal protection because the city previously issued a liquor license to Total Wine in 2017.
Both the United States Constitution and Minne sota Constitution guarantee the right to
equal protection of the law. U.S. Const. amend. XIV, § 1; Minn. Const. art. I, § 2.
The initial inquiry in an equal-protection analysis focuses on whether the challenger
has been treated differently by the governme nt from others who are similarly situated.
Odunlade v. City of Minneapolis , 823 N.W.2d 638, 647 (Minn. 2012). In determining
whether groups are similarly situated, the focus is on whether “they are alike in all relevant
respects.” State v. Cox, 798 N.W.2d 517, 522 (Minn. 2011). If this threshold requirement
is satisfied, the next issue is whether there is a rational basis for the different treatment.
See Kayo Oil Co. v. City of Hopkins, 397 N.W.2d 612, 614 (Mi nn. App. 1986) (applying
rational-basis scrutiny to equal-protection cl aim arising from denial of liquor-license

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application). Under rational-basis scrutiny, a classification is upheld when it is “rationally
related to the achievement of a legitimate governmental purpose.” Id. The denial of a
liquor license falls within a city’s police power, which “will be upheld [under rational-basis
scrutiny] where it has for its object the public health, safety, morality or welfare and where
it is reasonably related to the attainment of those objectives.” Id. at 615.
After considering Target’s equal-protectio n argument, we determine that it has
failed to establish that it is similarly situated to Total Wine. However, even if we were to
assume that Target and Total Wine are simi larly-situated applican ts, Target would not
prevail because the city’s denial was rati onally related to the city’s welfare. See id.
(holding denial of liquor-license application did not violate equal protection when related
to city’s welfare).
Affirmed.