Thrifty Oil Loses Round in Fight Over Costa Mesa Mini-Marts

Thrifty Oil Co. and a consortium of 14 companies and industry associations have lost a round in their legal challenge to a Costa Mesa ordinance regulating the sale of alcohol at gas station mini-marts, according to court records released Monday.

Orange County Superior Court Judge Harmon G. Scoville on Friday refused to grant a preliminary injunction that would have stopped the city from implementing the ordinance until the issue is resolved in court.

Les A. Hausrath, an attorney for Thrifty Oil and the trade group coalition, said Monday that he is disappointed with the ruling. Hausrath said he did not know whether his clients will appeal Friday’s decision or forgo an appeal but take the suit to trial, among other options.

Before Friday’s ruling, Costa Mesa had been prevented under a temporary restraining order won by the challengers last month from implementing a part of its Jan. 20 ordinance that bans exterior liquor ads at mini-marts already holding liquor permits.

The preliminary injunction request was filed last week by Thrifty and the Food and Fuel Retailers for Economic Equality--which includes Southland Corp. (owners of 7-Eleven stores) and the National Assn. of Convenience Stores. Thrifty Oil is both a separate plaintiff and a member of the coalition.

Costa Mesa, like other cities, adopted a new law regulating the sale of alcohol at gas stations with convenience stores in hopes of decreasing the number of drunk-driving incidents. Several cities with similar laws, such as Laguna Beach, are keeping tabs on the lawsuit.

While banning the sale of alcoholic beverages at new gas station mini-marts, Costa Mesa also implemented regulations affecting existing mini-marts: The stores could not sell chilled drinks or advertise alcohol.

Van S. Tarver, Thrifty Oil vice president of retail operations, said the local laws “discriminate against our industry and our company.”

Hausrath said cities such as Costa Mesa are targeting one type of retailer specifically, although drivers can stop at liquor marts, supermarkets and other stores to purchase alcohol. Those who criticize ordinances against concurrent gas and liquor sales say there is no data to support the concept that joint sales lead to drunk driving.

Costa Mesa Assistant City Atty. Eleanor M. Frey said the local law is not discriminatory. The station convenience markets are targeted because, according to “information we’ve been getting, there is a tendency on part of concurrent-sale places to encourage consumption of beer and wine in the car while driving,” Frey said.

In the lawsuit, Hausrath argued that regulation of alcohol sales falls under state--not local--jurisdiction. Frey countered that there is “ample room for local police controls such as this one” in the area of alcohol consumption. As an example, Frey cited local bans on drinking alcoholic beverages at beaches and public parks.

The lawsuit also asserts the convenience marts’ “vested right” to continue selling what they were permitted to sell when they opened.

“Based on that original permission, they made investments and opened stores at great expense, and now they’re being told they can’t do what they were told they could do,” Hausrath said.

In response, Frey said that while gas stations were permitted to open with mini-marts or expand into mini-marts, their permits neither denied nor approved the sale of alcohol. Frey dismissed the “vested right” argument, saying, “when any new law goes into effect, people can say, ‘well, I’ve been doing this for a long time.’ ”

Hausrath said similar laws in Napa and Merced have been challenged in court by other parties. The Napa lawsuit was dropped when the store owner and the city resolved their differences, he said. The lawsuit against Costa Mesa is the first such challenge in Orange County.

Meanwhile, in Anaheim, City Councilman E. Llewellyn Overholt Jr. has asked the city attorney to check whether another oil company, Arco, is allowed by local permit to sell hot food at its mini-marts. Overholt has said such sales could encourage customers to drink and drive.

Anaheim city officials last year decided on a 3-2 vote to allow the concurrent sale of gasoline and alcoholic beverages. Now, Overholt said, he feels that Arco, which last year fought a proposed ban by pledging to conform to new regulations, has “duped” the city with its new sales of hamburgers to go. Overholt reasoned that customers buying hot food may also buy cold beer or wine and won’t wait until they get home to drink it because the food would get cold. An Arco spokesman said he knew of no studies showing that sales of hot food and gasoline at the same outlets contribute to drunk driving.