The United States 1st Circuit Court of Appeals Tuesday upheld a state law forbidding Grendel's Restaurant to obtain a liquor license because it is located within 500 feet of the Holy Cross Roman Catholic Armenian Church.

In a 2-1 decision, the court rejected Grendel's argument that the state law--which gives any church the right to veto granting a liquor license to an establishment within 500 feet of its property--represents an unconstitutional mixing of church and state.

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But they upheld the restaurant's right to a trial on the grounds that the church's absolute veto power violates federal antitrust laws, enabling it to eliminate competition for other neighborhood restaurants and bars which have gained the church's support through "various tangible and intangible favors," Laurence H. Tribe '62, professor of Law and attorney for Grendel's said yesterday.

Chief Justice Frank M. Coffin dissented from the majority opinion.

Tribe called the losing appeal an "intermediate step" and said he will pursue the case to the U.S. Supreme Court. "The arguments we made were convincing, and we'll repeat them; it's just a matter of repeating them to other people," he added