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Mugged by the State Mugged by the State, by Randall Fitzgerald

A Cure in Search of a Problem

(The following is an excerpt from Randall Fitzgerald's book, Mugged by the State, (Regnery, 2003). This book is available from the Cato bookstore.)

John Clayton operated Uncle John's Tavern, a small neighborhood bar in Seattle, Washington, for over four years without hearing any complaints from the police or the state liquor control board. An army veteran and a retired U.S. Public Health Service employee, Clayton had invested his life savings to renovate the bar and buy equipment. The business provided income for him and his wife, Louise, while realizing his lifelong dream to host a social gathering spot for his friends and neighbors.

All of his ambitions began to evaporate on July 20, 1995, with receipt of a registered letter from the Seattle Police Department warning that "drug activity has been reported" on or around his property. Clayton and his wife took this news with shock and disbelief.

"Have you seen any drug use?" Louise asked.

"No, I haven't," John replied, "How can the police hold us responsible for what happens outside our doors?"

In early August Clayton met with representatives of the Seattle Police and received a "drug elimination plan" with a list of actions he must take, or face closure of his business and confiscation of his property under the state drug abatement law. That statute, passed by the Washington legislature in 1988, had been designed to seize and close crackhouses. After Mark Sidran became Seattle city attorney in 1990, he expanded enforcement of the abatement law to include nightclubs, bars, and restaurants.

Police demanded a series of actions from Clayton -- hiring a security guard for nightly patrol duty, locking bathrooms with the bartender controlling the keys, requiring all customers to show identification to enter the tavern, barring from entry any patrons whose names appeared on a police-compiled list of undesirables, installing parking lot lighting, and setting up a video camera inside the tavern so the police could remove the tape and review it at any time. Taken together, these actions would turn a casual, friendly neighborhood tavern into something more closely resembling an uptight private members-only club.

As a small business clearing only $200 a night on average, the employment of a security guard and a second employee to check identification at the door created a severe financial hardship for Clayton. But he complied anyway. He also began implementing the other steps, starting with outside lighting. But apparently he didn't move fast enough.

On December 20, the city of Seattle requested that the Washington state Liquor Control Board not renew Clayton's license. "While the owners have taken control of the inside of the tavern," Acting Police Commander Judy de Mello conceded in a letter to the board, they have "neglected to take control of the exterior perimeter." Furthermore, she alleged that the forty-three "incident reports" involving the tavern parking lot, most for narcotics violations, had been recorded during 1995. Three months later, the city was forced to revise that number down to twenty-eight after Clayton's attorney made a discovery request for documentation.

One week after getting the city's letter the control board issued notice that Clayton's liquor license would not be renewed. Clayton requested a public hearing. This delayed the board in revoking his license. At this point Seattle city officials raised the stakes. A drug abatement action was filed against Clayton on March 15 seeking "to vacate and close the Tavern based upon drug trafficking activity."

At a hearing on the city's motion for a preliminary injunction to close Clayton down, superior court judge Joseph Wesley acknowledged being in the difficult position of balancing the "community's interest in combating drug traffic and an individual's right to operate his business free of government interference." Clayton's attorney, Howard Pruzan, made an impassioned plea in response. "Honest to goodness, we want to help eradicate drug activity. Seriously, what can Mr. Clayton do? Supposing that he believes someone in his parking lot is doing something suspicious. He can't arrest them. He can't search them. He can call the police department. I am told by his security person they have done that and the police have not responded for three or four hours at a minimum."

Judge Wesley then signaled his intentions and parroted the city's position. "It may well be that one can't run that business in that location. Maybe that's the answer." Judge Wesley denied the city's motion to close Clayton down pending a trial.

Soon after this hearing, tragedy struck. Louise Clayton was diagnosed with an advanced stage of cancer. Now the stress of his personal misfortune, combined with the legal expenses of fighting a two-front war against the city and the control board, took a heavy emotional toll on Clayton. He found himself distracted, in constant turmoil, and his business began to suffer.

Just before the scheduled abatement trial on August 5, the city attorney's office dropped its lawsuit, "based on the absence of drug trafficking activity at Uncle John's Tavern since the preliminary injunction hearing." However, the city attorney continued to argue before the control board that Clayton's liquor license be revoked, which would effectively close him down. The control board subsequently issued a final order affirming non-renewal of the license.

Several years later and Clayton's attorney still cannot contain his outrage. "The city knew it couldn't win in a trial so it resorts to a backdoor to put him out of business. There has never been any evidence presented that John Clayton or any of his employees ever permitted drug activity. The tavern has never been charged with any liquor law violations. The city attorney's office was willing to say anything to end his livelihood. In my fifty-one years as an attorney, this was one of the gravest injustices I've seen."

Early in 1997 Clayton closed Uncle John's Tavern with six months left on the building's lease. He had to leave behind $10,000 worth of equipment to cover the remaining lease payments. In April, his beloved wife died. To pay for her funeral and expenses related to his legal fight, Clayton had to take a night job as a janitor. This experience with the drug abatement law broke him financially and spiritually. "I feel like my life is over," he told me. "Their regulation was mean-spirited. I learned the hard way that if the city decides it wants a small businessman gone, there's not much he can do."

Property rights advocates in the state of Washington are deeply troubled by the drug abatement program's impact on small-business owners. Nearly one hundred abatement actions have been taken by the city since 1992, most against African-American businessmen like John Clayton. "The law has proven effective in closing down crack houses," points out Richard Shepard, director of the Northwest Legal Foundation in Tacoma, "Now we have a cure in search of a problem. Seattle officials targeted business owners in undesirable areas and used drug abatement as a redevelopment tool. In the process they're undermining our most fundamental property rights."