JUNCTION CITY — Beer sales had barely begun in this small Boyle County city when a suit was filed to stop those transactions.
The complaint, filed in late December, seeks to declare as unconstitutional and void the 2011 law that allowed Junction City to be reclassified from a fifth-class to a fourth-class city. That law allowed the city to hold an Oct. 4 local-option election in which residents approved alcohol sales by a vote of 198-195. State law prohibits fifth-class cities from holding such elections.
The suits names Junction City, its council members and mayor as defendants.
Package beer sales began three weeks ago at two convenience stores: Redi Mart/Shell on U.S. 127 and Quick Stop Food Mart/Marathon on Hustonville Road.
The plaintiffs who filed the suit are Junction City resident Joseph O. Perry and a corporation called EJPKD LLC, which does business as Liquor Mart. The company has stores in Lancaster and Richmond, and a store in south Danville that is less than a mile north of the Junction City limits.
LeeRoy Hardin, a former Boyle County sheriff who now owns the Quick Stop Food Mart in Junction City, said he sees the issue as a bigger business trying to remove the competition of a smaller business.
"When you come in here and try to squash the little guy, people are not going to like that," Hardin said.
Customers buying beer in Hardin's store agreed.
"They need to quit being greedy and share the wealth," Junction City resident Henry Walker said of Liquor Mart as he carried beer.
Bruce Simpson, a Lexington lawyer who represents Perry and Liquor Mart, said the suit was not about competition because there are plenty of other package stores in Danville. Rather, the basic question is whether the General Assembly enacted a law that violates Kentucky's Constitution.
"This is about fairness in the legislative process from start to finish," Simpson said.
The suit says Junction City adopted a resolution in 2008 "purporting to certify that the population of Junction City exceeded 3,000 persons," the threshold to become a fourth-class city.
However, the 2010 Census results, released six months before the local-option election, counted 2,241 people in Junction City, an increase of 57 people during the previous decade.
Brad Guthrie, city attorney for Junction City, said that he has information that Junction City's population exceeds the threshold and that he might seek to have the suit dismissed based on that information.
Nevertheless, the purpose of the 2008 resolution was to request state Sen. Tom Buford to file a bill in the legislature that would reclassify Junction City from a fifth-class to a fourth-class city. That reclassification, the suit says, would allow Junction City to hold a local-option election in which residents could decide whether alcohol should be sold within city limits.
The suit says the resolution "was not true" when it said Junction City had 3,000 people. "All of the census data up to now has indicated that Junction City has never had 3,000 people," Simpson said.
But there's another quirk that complicates the issue.
According to the Kentucky League of Cities, only 57 cities meet the population requirements to be a fourth-class city — but 112 cities have that classification. And about one-third of all Kentucky cities are not in the appropriate classification by population standards, according to a revised 2011 report from the league.
The section of the state Constitution that classified cities by population was repealed in 1994 and was replaced by a section that allowed the legislature to create classifications as it deemed necessary.
Simpson said the General Assembly has never adopted new legislation about the classification of cities. Simpson and Laura Milam Ross, legal services counsel for the Kentucky League of Cities, said population thresholds remain in effect until the lawmakers create new classifications.
In 2011, when the Kentucky General Assembly enacted Senate Bill 82, it relied on information that Junction City's population "is such to justify" the reclassification to a fourth-class city.
The suit says lawmakers relied only on information presented in the 2008 resolution, which was based on a census estimate and "new growth, new development and housing, new building permits and a door-to-door census." Simpson said he sought but could not get that supporting data through an open-records request.
Gov. Steve Beshear signed the reclassification bill into law on March 16, the day before the 2010 Census results were released.
That same law also made Midway, Greensburg and the Western Kentucky town of Guthrie fourth-class cities. All three cities have 2010 populations of fewer than 3,000 people, too. Guthrie voters approved expanded alcohol sales on the same day as Junction City's local-option election.
In any case, the suit says, Junction City was not allowed by law to hold a local-option election, and the city's ordinance authorizing alcohol sales violates state law.
The suit says Junction City should "be barred from authorizing the sale of alcoholic beverages ... until such time as it has a population of 3,000 persons or more" and is properly classified as a fourth-class city.
An attorney for the Kentucky Department of Alcoholic Beverage Control was not aware of any other challenges of a local-option election through the classification of a city, spokesman Nathan Jones said.
Perry is a Junction City resident who objects to the sale of alcoholic beverages but has no connection to Liquor Mart, Simpson said.
"He just expressed an interest in challenging the action," Simpson said.
If alcohol sales are stopped, Hardin said, he would countersue to recoup the thousands of dollars he invested in a refrigeration unit that keeps beer cold.
A hearing on the suit before Boyle Circuit Judge Darren Peckler has not been scheduled.
Kentucky Attorney General Jack Conway also is named as a defendant in the suit, as is required when a civil action challenges the constitutionality of any state law.