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ABC Conditions: A Licensee's Nightmare

By Ralph Saltsman - June 19 2013

Beware of Conditions on your License.

Under the ABC Act, the Department can refuse to issue or transfer a license unless conditions are "agreed" to by an applicant. This is true for an application on a new license, a person to person transfer of an existing license, even certain corporate share transfers.

Local law enforcement agencies are invited to lodge requests for conditions to be imposed in a transfer. The Department may also require conditions as a result of a disciplinary process.

Conditions may allow the Department frightening power over a license augmenting very limited power provided by statute. For example, the Department may require a licensee’s sales of alcohol to not exceed the sales of food on a quarterly basis. There is no statute or rule that grants the ABC that extent of supervision over any licensed premises. Certainly service of food and maintenance of kitchen facilities are mandated by law in restaurants with ABC licenses, but there is no legal requirement for licensed premises to meet an arbitrary sales comparative between food and alcohol. An otherwise law-abiding licensee could lose a license for violating this or some other condition.

Presently, the ABC is on a condition binge imposing conditions on licenses in order to grant the ABC authority over licensees not contemplated by the legislature. Conditions can gut a successful business or deprive an applicant a reasonable opportunity to succeed. "No Happy Hour" or "close at 11:00 PM" or "no alcohol on the patio" could guarantee failure. The nightmare illustrations are without limit.

In an application process, the applicant can always say “no” to a condition. The Department then has the option of denying the transfer setting up a trial on the application before an administrative law judge.

One final note, once a condition is on the license, it’s misery to try and get it removed. It’s possible, and an administrative process is available where the Department refuses to modify or delete conditions. The process is slow and the outcome never assured. By law, in order to remove a condition, the licensee has the burden of demonstrating the reason for imposition of the condition no longer exists.

So…the lesson to be learned is: avoid conditions where possible. In the alternative, pursue removal of conditions before there’s a violation charged by the ABC.


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