Steamboat Springs After a short-lived victory, Kevin Nerney lost the latest battle in the war for his liquor license Thursday.
In a proceeding at the Routt County Justice Center, Judge Mary Hoak of Hot Sulphur Springs ruled that Nerney will not be allowed to serve alcohol while she reviews the city of Steamboat Springs' revocation of his license. Nerney had been granted a temporary stay of that revocation for 10 days prior to Thursday's hearing.
Hoak's ruling has done little to discourage Nerney, owner of the Jade Summit restaurant and its upstairs bar, Pirate's Pub, in Ski Time Square.
"I'm not going away," Nerney said Friday. "We're going to pursue this to the 'nth degree of the law."
Nerney and his wife, Kathy, plan to hold their annual New Year's Eve celebration at the pub - with a DJ, but minus booze - and encouraged people to come by for a meal anytime.
"Jade Summit is still open and thriving and welcoming people to a family-friendly atmosphere as it always has," Kathy Nerney said.
City officials revoked Kevin Nerney's liquor license Nov. 8, a decision Nerney has asked the courts to review. Hoak is hearing the case because Routt County Judge Michael O'Hara recused himself.
Nerney requested a review of the city's decision under Rule 106, which allows appeals of quasi-judicial actions of government. Tom Lyons of the Denver firm Hall & Evans represented the city in Thursday's hearing. Lyons said the path Nerney is taking in the courts is similar to an appeal, but could not result in an outright reversal of the revocation - rather, it could result in a determination of whether the city acted properly.
"They wouldn't reverse," Lyons said. "They would send it back with instructions on how to do it correctly."
City Attorney Tony Lettunich said he was not surprised by Thursday's outcome because the criteria for such injunctions constitute "a pretty steep hill to climb." A brief filed by the city noted that allowing Nerney to serve alcohol while the revocation is reviewed would constitute "judicial interference" of action taken by another branch of government - meaning the Steamboat Springs City Council, acting as the city's Liquor License Authority - and should not be done unless the action taken was "clearly erroneous."
There are six criteria a plaintiff must meet to receive an injunction, which is what Nerney sought. Among the criteria is a demonstrated likelihood of ultimately winning the case.
"Obviously the court made a very reasonable decision based on the criteria they're supposed to use," Lyons said.
Nerney's attorney, Kris Hammond, did not return messages seeking comment Friday.
The Steamboat Springs City Council voted, 3-2, on Nov. 8 to revoke Nerney's liquor license, in response to allegations that Nerney made unlawful sexual contact earlier this year with a patron at his bar. Nerney was found not guilty of the charges in criminal court, but the council, acting as the city's Liquor License Authority, moved forward with its own hearings and voted unanimously - using a less rigorous standard of proof - that Nerney violated state liquor codes.
The split vote was the result of disagreement about the severity of Nerney's punishment.
Nerney said Friday that the revocation has reduced business "to the tune of $50,000 so far and counting." An affidavit he filed in court claims that in December 2006, he sold $32,700 in food and $34,100 in alcohol. The affidavit says Nerney's overhead costs are $45,000.
"There is simply no way to meet the Jade Summit's overhead without the sale of alcohol," Nerney wrote. "The city's revocation of my liquor license will cause immediate and irreparable economic harm which I cannot recoup or otherwise mitigate."
The city, however, argued that monetary losses are not "irreparable." City briefs point out other businesses that lack a liquor license and say that Nerney should make business modifications to mitigate the loss.
"The privilege of selling alcohol to tourists is not a permanent entitlement," a brief on behalf of the city states.
While economic concerns played a large role in Nerney's court arguments, he said Friday that his war with the city is now one of principle.
"It's no longer about the money because the ski season will never be long enough to recoup that," said Nerney, whose business, along with the rest of Ski Time Square, will be torn down by developers at the end of this ski season.
Nerney is pursuing avenues outside the courts as well, and his wife is attempting to secure a liquor license of her own. Nerney said his efforts are being frustrated by the city at every turn.
"We will do whatever the city requires to reopen 1890 Ski Time Square," Nerney said. "If they want 10 pieces of paper, I'll give them 20. If they want 500, I'll give them 1,000. They're trying to stop me, and I'm going to pursue it until I get what I want."
Nerney could have avoided the city's hearings in August, when the city offered him a 15-day suspension, with 10 days held in abeyance. Had he taken that offer, his liquor license would have been suspended for a total of nine days, including four days held in abeyance from a 2006 violation.
Hoak will continue reviewing the city's revocation of Nerney's liquor license, with information from both sides, and likely will make a decision in a matter of weeks. No other court proceeding is needed.