Topeka The state on Tuesday urged an appellate court to uphold a ruling to revoke the liquor licenses of Dan and Jill Blomgren, who own Cork and Barrel stores in Lawrence.
But attorneys for the Blomgrens said the couple have been caught in an undeserved legal and bureaucratic morass that threatens their livelihood.
Judges on the Kansas Court of Appeals gave no indication on when a decision would be handed down.
In 2006, then-Douglas County Judge Steve Six found that the state's Alcoholic Beverage Control division was within its rights to revoke Dan Blomgren's license for the Cork and Barrel at 901 Miss. because of a hidden ownership scheme.
But Six found the state went too far in its efforts to punish Blomgren's wife, Jill, by revoking her license for the store at 2000 W. 23rd St.
The stores remain open as the appeals go through the courts.
On Tuesday, assistant attorney general Sarah Byrne urged the appellate court to uphold the decision by the ABC to revoke the liquor licenses.
"If revocation was unreasonable in this case, then licensees can act with impunity knowing that there is no real consequence for the illegal actions," Byrne said.
Byrne said Dan Blomgren tried to hide his ownership of Parkway Liquors to sidestep state law that prohibits people from having an ownership interest in more than one liquor store, with the exception that a married couple can own one each.
He placed ownership of the store in a friend's name but maintained control over the business, she said.
And Jill Blomgren conceded to having committed numerous violations at her store, including selling alcohol on credit, or giving it away, and delivering alcohol to unlicensed events, Byrne said.
But the Blomgrens' attorneys - Daniel Owen and Anthony Bonuchi - defended their clients, saying Dan Blomgren didn't have a concealed ownership in Parkway Liquors.
"He did not have any ownership in any other liquor store," Bonuchi said.
Much of the arguments dealt with procedural issues in the case over whether the Blomgrens had properly exhausted their administrative appeals before seeking court relief and whether the state had improperly called the ABC division's ruling a "final order."
"There's plenty of confusion here. Believe me, we know that," Chief Judge Gary Rulon said.