Summit owner Mike Porter’s lawsuit against Iowa City could decide the future of the city’s PAULA-ratio policy. But an expected loss of revenue until then may be hard for the downtown bar to swallow.

The Iowa City City Council voted Tuesday to deny Summit’s liquor-license renewal, following new guidelines mandating police recommend the council deny a license for any bar in which officers write an average of more than one PAULA per police visit.

Summit, 10 S. Clinton St., became the third bar to be denied a license. The others — Et Cetera and 3rd Base — are awaiting the result of their appeal to the state.

But Porter’s suit went further than the appeals, seeking to not only keep his liquor-license but asking the court to declare the policy unconstitutional and to allow him to recoup damages, such as a loss of revenue, caused by the policy.

“When it says on the front of the paper, ‘Summit denied liquor license’ — same as for Fieldhouse and Et Cetera — people tend to not go there because they think they are closed,” said Leah Cohen, the owner of Bo James, 118 E. Washington St.

George Etre, the owner of Et Cetera, 118 S. Dubuque St., said he didn’t have exact revenue figures Wednesday evening. But the confusion caused over whether his bar was open after the City Council voted to deny his license “didn’t help business,” he said.

Bars are allowed to remain open while they appeal to the state.

The lawsuit will likely not affect Summit’s appeal with the Alcoholic Beverages Commission, said Lynn Walding, an administrator with the Commission, though he hadn’t seen the lawsuit on Wednesday evening.

The appeal is an administrative process to determine whether the applicant has “good moral character” — part of the criteria for holding a liquor-license in Iowa. The lawsuit will decide whether the city’s policy is constitutional, and the two will likely proceed concurrently but separately.

Still, the results of the lawsuit could have lasting effects. The judge’s decision — which could rule the policy illegal — will set a precedent in the 6th District, said Todd Pettys, a UI law professor.

Among other allegations, the lawsuit called the city’s actions “arbitrary, capricious, and/or without reasonable cause.”

Porter also claimed the law was overly vague and didn’t adequately define a “police visit,” as well as targets certain bars.

Summit had a PAULA ratio of 1.925, the highest in the city. But it also has one of the highest capacities in Iowa City — a major issue when large bars such as Summit are being assessed with the same criteria as much smaller establishments, Cohen said.

Inconsistencies in how the policy is applied was a concern for Cohen as well. But another major question is whether the bars, rather than the patrons, broke a law. For Cohen, the answer is simple: No.

Prior to their applications being denied, none of the three bars had been charged with selling alcohol to minors.

City attorney Eleanor Dilkes could not be reached for comment, and it is unclear what the next step in the lawsuit will be.