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Linnan & Fallon Attorneys Attend ESRTA Annual Meeting

On Wednesday October 22, 2014 attorneys James D. Linnan and Shawn T. May presented at the annual meeting of the Empire State Restaurant and Tavern Association in Lake George, New York. The topic of discussion was, of course, the New York State Liquor Authority. One of the topics covered by Mr. Linnan, which garnered a lot of discussion among the attendees, was peer to peer (retailer to retailer) sales. Peer to peer sales was originally a part of the wine in grocery store legislative package that was unsuccessful in passing the state legislature. Peer to peer sales have been back in the forefront recently as a result of sting operations conducted by the State Liquor Authority targeting liquor stores that sell to on-premises licensees for resale at restaurants and taverns. While the Restaurant and Tavern Association has lobbied for the amendment of the ABC law to allow these peer to peer sales, its association with the wine in grocery stores bill as well as resistance from the two major wholesalers, have prevented this proposal from moving forward. As pointed out by Mr. Linnan and echoed by the restaurant and tavern owners in attendance, requiring on-premises licensees to purchase liquor and wine only from wholesalers creates a real hardship, particularly for those smaller operations who are unable to purchase and store multiple cases as well as those retailers located in more rural areas that only receive infrequent scheduled deliveries from the wholesalers. The benefits of allowing peer to peer sales, such as more flexibility for restaurant and tavern owners, increased sales tax to New York State and a better selection along with lower prices for consumers far outweigh the only real downside: marginally smaller profits for the giant wholesalers. Scott Wexler, President of the Empire State Restaurant and Tavern Association, vowed to continue the fight to have this portion of the ABC law amended.

Another topic of interest to the meetings attendees and discussed by Mr. May was the enforcement practices of the State Liquor Authority. While it is true that there are a number of bad actors holding liquor licenses in New York State, a vast majority of licensees are small business owners striving to operate within the context of an outdated and convoluted set of laws. Further clouding the issue is an agency that operates within the context of rules that are not vetted by the public and are often not well known by licensees. For example, the practice of setting fine amounts. Under the current system if a licensee has been hit with a violation of the ABC law within the last five years, a new violation will result in a new fine in addition to the requirement that the licensee repay the prior fine amount. Some attendees expressed genuine surprise over the practice, especially those licensees who negotiated a violation with the Authority without having been informed of the policy by the Authority, which in most cases would have changed the licensee's position. Under the present scheme a licensee, who may honestly be trying to operate in accordance with the ABC law, could be liable for a fine of $6,000.00 or more for a first time sale to minor charge if they had a prior violation such as disorderly premises or any other number or violations handed out by the authority. Compounding the problem is the unwritten rule that the attorneys handling these cases for the Authority have been stripped of their ability to view these matters on a case to case basis but are constrained to hand out fines simply based on the alleged violation and history of violations at the premises. It was clear from the feedback of the attendees that uniform fines across the board for all licensees, big or small, cannot be categorized as fair or equitable in an industry as large and diverse as this one. If you receive a Notice of Pleading it is imperative that you contact an attorney with knowlegde of the Liquor Authority's internal rules and regulations before you enter into any plea negotiations with the Authority.

The presentation wrapped up with a discussion of the amendment to the penal law pertaining to sale to minor charges and the steps that should be taken to protect a bartender or server who is arrested or given an appearance ticket following an underage sting operation, followed by a question and answer session on a number of other topics of interest to restaurant and tavern owners. All in all it was another informative and productive meeting of the Empire State Restaurant and Tavern Association and we strongly encourage anyone involved in the business to join this organization dedicated to furthering the interest of this important segment of the business community.

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