In AZ
SPE, LLC v. City of Chicago, an Appellate Court dismissed a due process lawsuit brought by a company whose tobacco licenses had been revoked.

AZ SPE, LLC (AZ) leases property to gas station operators. Advanced Petroleum, one of AZ’s tenants, received notice from the City’s Department of Business Affairs and Consumer Protection (Department) of a hearing to
determine if its tobacco retail license should be revoked as a result of alleged sales of tobacco to minors. At the hearing, the City presented evidence of three
violations and the hearing officer found Advanced Petroleum responsible and
revoked its tobacco license.

Section 4-64-935(c) of the City’s Code provides that when
a tobacco license is revoked, no tobacco license can be granted to any entity
for a year for the premises described in the revoked license. AZ
was notified by the Department that the revocation of Advanced Petroleum’s license
would apply to AZ’s property and that any new application for a tobacco license for that property would be denied during the one-year ban.

AZ sued, alleging that the City Code deprived it of its property interest because the ban lasts for
one-year on the premises, making its property less attractive to
prospective tenants. AZ also argued that it was
entitled to notice of the revocation hearing and an opportunity to be heard at
the hearing under the 14th Amendment as the owner of the property. Finally, AZ argued that punishing the property owner for the actions of its tenant violated its due process rights. 

The Appellate Court first held that the right to sell tobacco is not a protected property
right under the constitution so AZ’s due process claims were not viable. The Court also noted that the City Code provisions authorizing revocation for selling tobacco to minors were not arbitrary nor discriminatory
and were rationally related to the City’s interest in protecting minors from the
sale of tobacco products. As a result,
the Appellate Court upheld the trial court’s dismissal of AZ’s lawsuit against the City.

Post Authored by Alexis Carter & Julie Tappendorf, Ancel Glink