Matter of MJS Sports Bar & Grill, Inc. v. New York State Liquor Authority Division of Alcoholic Beverage Control , 12 N.Y.S.3d 343 ( 2015 )

State of New York
Supreme Court, Appellate Division
Third Judicial Department
Decided and Entered: June 18, 2015 520035
________________________________
In the Matter of MJS SPORTS
BAR & GRILL, INC.,
Petitioner,
v
MEMORANDUM AND JUDGMENT
NEW YORK STATE LIQUOR AUTHORITY
DIVISION OF ALCOHOLIC
BEVERAGE CONTROL
et al.,
Respondents.
________________________________
Calendar Date: April 22, 2015
Before: Lahtinen, J.P., Garry, Lynch and Clark, JJ.
__________
James Kleinbaum, Chatham, for petitioner.
Mark D. Frering, New York State Liquor Authority, Albany,
for respondents.
__________
Garry, J.
Proceeding pursuant to CPLR article 78 (transferred to this
Court by order of the Supreme Court, entered in Albany County) to
review a determination of respondent State Liquor Authority which
imposed a civil penalty upon petitioner.
Petitioner holds a license authorizing the sale of liquor,
wine and beer on its premises in the Town of Chatham, Columbia
County. Based upon a series of incidents between January 2010
and October 2011, the Division of Alcoholic Beverage Control
instituted a proceeding to cancel or revoke petitioner's license
for violations of Alcoholic Beverage Control Law § 118 (1) and
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(3) and rule 36.1 (q) of the Rules of the State Liquor Authority
(see 9 NYCRR 53.1 [q]). Following a hearing, an Administrative
Law Judge found that substantial evidence existed to sustain both
charges. Respondent State Liquor Authority adopted this
determination and imposed a civil penalty of $5,500. Petitioner
commenced this CPLR article 78 proceeding, which was transferred
to this Court (see CPLR 7804 [g]).
A liquor license may be revoked or cancelled or a civil
penalty may be imposed where "the existence of a sustained and
continuing pattern of noise, disturbance, misconduct or disorder
on or about the licensed premises . . . adversely affects the
health, welfare or safety of the inhabitants of the area in which
such licensed premises are located" (Alcoholic Beverage Control
Law § 118 [3]; see Alcoholic Beverage Control Law § 118 [1]).
Rule 36.1 (q) provides, in pertinent part, that cause to revoke,
suspend or cancel a liquor license exists "[w]hen any noise,
disturbance, misconduct, disorder, act or activity occur[ing] [on
or about the licensed premises] . . . results in the licensed
premises becoming a focal point for police attention" (9 NYCRR
53.1 [q]). Here, the Division submitted incident reports and
police testimony describing 18 occasions when officers responded
to complaints of noise, disorderly conduct and other issues at
petitioner's establishment. As petitioner argues, many of the
noise complaints came from a single individual who resided across
the street from petitioner's establishment, next door to a
restaurant operated by that individual's family. Although
petitioner asserts that this individual was motivated to complain
by the restaurant's competing interest, the record neither
reveals whether the businesses were, in fact, competitors, nor
that the complaints were fabricated. Instead, in most instances,
the responding officers determined that the individual's
complaints were justified and asked petitioner to lower the
volume; on one occasion, the officers were able to hear the noise
inside the complainant's apartment.
The record supports petitioner's contentions that some of
the calls involving disorderly conduct were initiated by
petitioner's representatives seeking police assistance in
maintaining order, that petitioner's representatives consistently
cooperated with the police, and that petitioner was not shown to
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have tolerated or allowed any disorderly conduct. However, no
showing that petitioner knowingly permitted misconduct to occur
was required to establish the charged violations. No such
requirement appears in the language of either provision (see
Alcoholic Beverage Control Law § 118 [3]; 9 NYCRR 53.1 [q];
compare Alcoholic Beverage Control Law § 106 [6]; Matter of
Playboy Club of N.Y. v State Liq. Auth. of State of N.Y., 23 NY2d
544, 550 [1969]). Critically, and contrary to petitioner's
argument, application of the governing rules no longer requires a
showing that the licensee "suffer[ed] or permit[ted]" disorderly
conduct (Matter of Beer Garden v New York State Liq. Auth., 79
NY2d 266, 276 [1992] [internal quotation marks and citations
omitted]). Instead, in a direct response to the Beer Garden
holding, the Legislature added Alcoholic Beverage Control Law
§ 118 (3) to the statute in 1996, with the specific purpose of
providing statutory authority to sanction licensees for
violations of rule 36.1 (q) without a finding that they knowingly
suffered or permitted misconduct (see Mem in Support of
Legislation, Bill Jacket, L 1996, ch 536 at 8-9).
Next, petitioner contends that the Authority did not show
that its establishment had a negative effect on the health,
welfare or safety of local inhabitants or that it "bec[ame] a
focal point of police attention" (9 NYCRR 53.1 [q]; see Alcoholic
Beverage Control Law § 118 [3]). Notably, all of the testifying
police officers – including the police chief – stated that
petitioner's establishment did not warrant more police attention
than other local enterprises and had no adverse affect on health,
welfare or safety. Nonetheless, rule 36.1 (q) provides that the
determination whether disorder at a licensed establishment has
negatively affected the community or made the establishment a
focal point for police attention is a question to be resolved "in
the judgment of the [A]uthority" (9 NYCRR 53.1 [q]), and we find
no reason to read a different requirement into Alcoholic Beverage
Control Law § 118 (3). The testifying officers were not present
for all of the incidents that led to the charges against
petitioner. The incident reports themselves reveal that, during
the pertinent time period of almost two years, the incidents at
petitioner's establishment resulted in a sustained and continuous
need for police intervention, and prompted citizen complaints
that ultimately resulted in a police referral to the Authority.
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Although unsupported by the police testimony, we decline to find
that the remaining record evidence did not amount to substantial
evidence sufficient to support the Authority's conclusion that
petitioner's establishment became a focal point of police
attention, and that the health, welfare and safety of the
community were adversely affected (see Matter of Sherwyn Toppin
Mktg. Consultants, Inc. v New York State Liq. Auth., 103 AD3d
648, 652 [2013], lv denied 21 NY3d 858 [2013]; Matter of MGN, LLC
v New York State Liq. Auth., 81 AD3d 492, 493 [2011]; Matter of
7th Ave. & Grove St. Corp. v New York State Liq. Auth., 215 AD2d
107, 108 [1995]).
Finally, petitioner contends that the fine imposed by the
Authority was excessive in light of all the circumstances,
including petitioner's cooperation with police and the fact that
it was not shown to have knowingly tolerated any misconduct. A
fine was the least severe penalty that could have been imposed;
the other available penalties included the revocation,
cancellation or suspension of petitioner's license (see Alcoholic
Beverage Control Law § 118 [1]; 9 NYCRR 54.6 [a]). In that
light, we cannot find that the mitigating factors that petitioner
points to are not reflected in the penalty. Upon review, we do
not find the penalty imposed to be "so disproportionate to the
offense, in light of all the circumstances, as to be shocking to
one's sense of fairness" (Matter of JMH, Inc. v New York State
Liq. Auth., 61 AD3d 1260, 1262 [2009] [internal quotation marks
and citations omitted]; compare Matter of Le Cave LLC v New York
State Liq. Auth., 107 AD3d 447, 448 [2013]; Matter of Sherwyn
Toppin Mktg. Consultants, Inc. v New York State Liq. Auth., 103
AD3d at 652; Matter of La Trieste Rest. & Cabaret v New York
State Liq. Auth., 249 AD2d 156, 156 [1998], lv denied 92 NY2d 809
[1998]).
Lahtinen, J.P., Lynch and Clark, JJ., concur.
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ADJUDGED that the determination is confirmed, without
costs, and petition dismissed.
ENTER:
Robert D. Mayberger
Clerk of the Court