Under the neon lights of the City Cafe Diner, Matt Derrick brings food from the kitchen to a table at the restaurant after midnight. File photo.The Tennessee Court of Appeals in Knoxville ruled Thursday that Chattanooga's beer board was wrong when it told the City Café it had to stop selling beer or shut down all operations from 3 a.m. to 8 a.m. on weekdays, and 3 a.m. to noon on Sundays, when beer cannot legally be served.
The 24-hour diner, which has locations in hotels downtown and on Lee Highway, gave up its beer license at its Lee Highway location after being cited by Chattanooga police in June 2011.
Since August 2011, City Café has fought the citation - and sought $4,500 a month in damages for loss of business during the months it couldn't sell beer, according to court documents.
On Thursday, the appellate court overruled the trial court and sided with City Café. The appeals court said the entire clause related to this - subsection 5-47(c) of the Chattanooga City Code - is "on its face unconstitutional," according to the court documents.
That clause essentially says no business possessing a permit to sell beer or alcohol can be open except during the hours when they're authorized to serve beer or alcohol. And City Café, being a 24-hour business, violated that clause by staying open to serve just food during the hours when it could not serve beer.
The city argued in court that the clause was born out of a need to protect public safety, since alcohol-fueled fights may break out at night even after an establishment stops serving alcohol.
In response to this, the appeals court said in its ruling, "Restaurants ... are then forced to choose between operating without a beer permit and serving early morning breakfast, an activity not shown as related to violent behavior, or maintaining a beer permit and closing during the restricted hours."
It's also noted in the ruling that, before 2011, the restaurant had never been cited before, for fights or any other violations.
The appeals court sent the case back to trial court for further proceedings.
Contact staff reporter Hannah Smith at hsmith@timesfreepress.com or at 423-757-6731.