El Di, Inc. v. Town of Bethany Beach
Delaware Supreme Court
477 A.2d 1066 (Del. 1984)
A restrictive covenant dating to around 1900 barred alcohol sales and commercial construction across roughly two-thirds of Bethany Beach to preserve its quiet, family-oriented character; over time the town expanded so the restriction now covers only about 15% of it, with numerous unchallenged commercial businesses built in the once-restricted area and tourism growing substantially. El Di (defendant) bought its restaurant in 1969 and permitted brown-bagging (customers bringing their own alcohol), which was feasible because alcohol was readily purchasable nearby; El Di later obtained a permit to sell alcohol itself specifically to better control the excessive drinking brown-bagging had encouraged. The Town (plaintiff) sued to enforce the covenant and enjoin El Di's alcohol sales; the Court of Chancery granted the injunction, and El Di appealed.
Whether a restrictive covenant prohibiting alcohol sales is enforceable against a restaurant in a town that has fundamentally transformed from a quiet residential community into a commercialized tourist destination where alcohol consumption occurs regardless of the restriction.