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ABCC Clarifies “Store Limit” Procedure

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On January 1, 2016, the number of off-premises (or “package store”) liquor licenses any person or combination of persons will be authorized to legally hold in Massachusetts, directly or indirectly, will increase from five (5) to seven (7). While the increase will go into effect as of New Year’s Day, there was some confusion as to the mechanics to be used to go about getting a 6th or 7th license.

Normally, any prospective liquor licensee files an application with the local licensing authorities. Notice of the application is then published and abutters are notified of the application, a public hearing is held at the local level, and then the application is forwarded to the state Alcoholic Beverages Control Commission (“ABCC”) for their consideration and approval as well. Generally, at best, there is a two to three month lag between the initial filing of an application and actually receiving issuance of a license. Accordingly, in order to receive a license as soon after January 1 as possible, some prospective multiple licensees had filed applications with local licensing authorities in 2015, hoping to gain approvals in advance of January 1 and be ready to open as soon after January 1, 2016 as possible.

However, the ABCC recently issued an Advisory clarifying the procedures to be followed. In the Advisory, the ABCC basically said, “Not so fast!” The ABCC says that any person seeking a 6th or 7th liquor license cannot file an application before January 1, 2016. Since January 4 is the first business day in 2016, don’t look for companies that already hold 5 licenses to be open for business in additional locations until later in January or, more likely, February of the new year.

Summary of ABCC Actions – January 2015

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Summary of ABCC Actions

 

Eight recently published ABCC decisions decided cases dealing with gambling devices on licensed premises, sales of alcohol to a minor and intoxicated persons, and purchase of alcohol by a restaurant from a non-wholesaler.

The non-permitted gambling devices cases involved the Billerica Elks Lodge, American Legion Post in Kingston, and the Malden Elks and Moose Lodges.  In the former three cases, the ABCC suspended the clubs licenses for five days, two days to be served and three to be held in abeyance for two years provided no further violations occurred.  The ABCC also stipulated that each licensee not possess in or on the licensed premises any automatic amusement device or video poker machine.  The Billerica Elks Lodge received only a three day suspension, with all three days to be held in abeyance for 2 years pending any further violation.  However, the Lodge had also not filed required annual reports with the ABCC with the names and addresses of corporate officers and the compensation paid to employees, so the ABCC added a separate 3 day suspension for this, with those 3 days also to be held in abeyance for 2 years (the suspensions to run concurrently).  Also, the ABCC directed the Lodge to file annual reports for the years 2003 to 2014 within one week of receiving their decision, or face “indefinite suspension” of their license.

GPS Wine & Spirits in Brookline was found to have made a sale to a minor, and was given an eight day suspension, with one day to be served and seven to be held in abeyance for two years.  Interestingly, the business had an Advanced ID Detection Scan machine, but when the ABCC investigator passed the fraudulent ID used by the minor in question through the scanner, it was not approved.

The ABCC ordered a four day suspension (2 to be served and 2 to be held in abeyance for 2 years) for the Sinnis Pub in Dudley, after they were found to have provided several “shots” of alcohol to an intoxicated patron. An ABCC investigator on hand saw the patron, determined he was intoxicated, and then viewed sales of several shots to the patron thereafter within a relatively brief period.  When asked for identification by the investigator, the intoxicated patron responded with a succinct “verbal salute” (set out in quotes in the ABCC decision) which evidenced truculence if not intoxication!

The Singapore Restaurant in Fitchburg also was found to have made a sale to an intoxicated person, as was given a six day suspension, two to be served and four to be held in abeyance for two years

Finally, the Kathmandu Spice Restaurant in Arlington was found to have repeatedly purchased alcohol from a package store rather than a wholesaler, and was given a thirty day suspension and ordered to destroy the alcoholic beverages in question.  The restaurant was also given a warning for failure to post required notices of penalties.

ABCC Investigates Pay-to-Play

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According to the Boston Globe the Alcoholic Beverages Control Commission (“ABCC”) has issued subpoenas to breweries, distributors, and retailers as part of an investigation  into whether breweries or distributors have made payments to retailers for shelf and tap space, a practice known as pay-to-play. This practice is illegal under both state and federal law

Examples the Globe gives for what may constitute pay-to-play includes salesman offering a retailer a cut of the commission or marketing budget, a brewer offering to donate additional beer to a restaurant, a bar demanding a rebate for stocking company’s beer, or a distributor giving free equipment.

The Globe article mentions that the ABCC has not sanctioned a a business for pay-to-play in at least 18 years. This coupled with the fact that the number of investigators in the agency is in decline and the number of craft breweries in the state is growing creates an environment where there is more competition for shelf space and less of an opportunity for oversight.

 

Summary of ABCC Actions – November 2014

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The Massachusetts Alcoholic Beverages Control Commission (“ABCC” or “Commission”) recently published five new decisions:

First, the ABCC ruled on an appeal from a Chicopee decision to deny a §15 all alcohol license transfer. In the appeal the appellant, Mormax Corporation d/b/a BJ’s Wholesalers, argued that the town’s decision to deny a license transferred from Winn Liquors, Inc. was arbitrary and capricious.

After a Local Board hearing on May 17, 2012, Chicopee cited two reasons for denying the transfer application: 1) the lack of public need or interest for another liquor license in the immediate area; and 2) an overflow crowd of individuals expressing opposition to the transfer at the public hearing.

The Commission found as the appellant argued that the decision from the local board was inadequate as it lacked legally sufficient ground by not setting forth anything other than insignificant general findings. The Commission noted that at least six residents who spoke in opposition were owners of competing package stores and two others were current or past employees of competing package stores. In doing so the Commission  restated in the decision that competition should not be considered when determining whether a license should be granted or transferred.

Further, the appellant argued, and the Commission agreed, that the Local Board failed to consider the “preferred zone” where the new licensee would be located which is separate from residential areas, close to where the original licensee operated, and in a commercial district with a portion of the residents coming from outside of the community.

The matter was remanded back to the local board with the recommendation that the license transfer be granted.

The Commission also held a hearing regarding a violation of 204 CMR 2.05 at Pier 37 Boathouse in Falmouth. After an investigation it was found that the licensee had failed to complete the fire and building safety checklist as prescribed by the Fire Marshal prior to each opening. The licensee stipulated to the violation and the Commission suspended the license for 16 days of which nine days were held in abeyance for a period of two years.

In April, the Commission held a hearing regarding licensee Ancient Marinere in Foxborough. Investigators allegedly discovered fruit flies in multiple liquor bottles during an investigation on August 23, 2013. Citing a violation of 204 CMR 2.05(2) to wit: M.G.L. c. 94 § 186, the ABCC suspended the license for two days with the full suspension in abeyance for a period of two years.

The Commission heard an appeal from a Grafton decision to revoke a §15 wine and malt beverage license from Village Dairy after a sting operation allegedly caught the licensee selling alcoholic beverages to a person under 21 in violation of M.G.L. c. 138 § 34. The Commission found that the penalty by the board was unreasonable as the Commission has consistently held that the policy behind a sting operation should be the education of licensees in the risks associated with selling alcoholic beverages without requesting proof age.

The Commission remanded to the Local Board with the recommendation the license be suspended for 20 days and that the licensee submit an application for a change of manager.

Finally, the Commission held a hearing regarding an alleged violation at East Side Athletic Assn. of Malden. There investigators found three devices in the club characterized as gambling devices. After finding there was a violation of 204 CMR 2.05(i) the Commission suspended the license for 20 days with 5 days held in abeyance. The devices were removed and the licensee was ordered not to possess any automatic amusement devices or video poker machines.

Legal Advisory: New Massachusetts Retainage Law for Private Construction Projects

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NEW MASSACHUSETTS RETAINAGE LAW (M.G.L. c. 149, §29F)

TO GOVERN PRIVATE CONSTRUCTION PROJECTS

EFFECTIVE – NOVEMBER 6, 2014

Q. What private construction projects does the new Massachusetts Retainage Law affect?

A.  The law applies to all private construction projects in which the prime contract exceeds
$3 million (except those involving 1-4 unit residential projects).

Q. What are the main elements of the new Massachusetts Retainage Law?

A. The main elements include:

  • Limits retainage on periodic payments to no more than 5%
  • Requires Prime Contractor to submit notice of substantial completion to Owner within 14 days of substantial completion
  • Owner to accept or reject notice of substantial completion within 14 days of receipt of notice
  • Defines substantial completion as date the work is sufficiently complete so that Owner may occupy or utilize project for its intended use.
  • Requires party withholding retainage to first provide written notice describing incomplete or defective work and deliverables
  • Requires Owner to furnish Prime Contractor with written punch list, including deliverables, within 14 days after acceptance of notice of substantial completion
  • Requires Prime Contractor to furnish subcontractors with written punch list, including deliverables, within 21 days after Owner’s acceptance of notice of substantial completion
  • Requires good faith certifications to be made
  • Allows for electronic communications
  • Any contract provision that “purports to waive, limit or subvert” the Retainage Law or “redefine or expand the conditions for achievement of substantial completion for payment of retainage” will be void and unenforceable

ABCC Issues Advisory On New Sunday Opening Time

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This month the ABCC released an advisory  highlighting and explaining the new changes to Sunday opening times for off-premise licensees.

Effective on October 23, 2014 off-premise licensees may sell alcoholic beverages beginning at 10:00 a.m on Sundays. However, this new opening time does not come without certain actions that must be taken by the licensee.

In the advisory the ABCC writes, “Although under the law, these licensees are entitled as a matter of right to open at 10:00 a.m. and as such do not need the approval of the Local Licensing Authorities, licensees must notify the Local Licensing Authorities about the change of hours.”

This step should not be an overwhelming deterrence to the new early opening times as it can be completed by following the the change of hours process found on the ABCC’s website. Through this process licensees will be able to notify their local licensing authority of their new opening time. Since the law does not go into effect for another twenty days this gives licensees plenty of time to complete this process in time for early opening.

If a licensees fails to follow this process the licensee will be prohibited from making sales at the earlier time.

Solutions to Boston’s Permitting Problems

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On June 18, 2014 At-Large City Councilor Michelle Wu submitted an interim report that addresses various permitting and zoning obstacles facing Boston businesses. The report comes from the Special Committee on Small Business, Entrepreneurship, and Innovation which Councilor Wu chairs.

The proposals address the barrier to entry for new businesses and streamlines a process which has in some cases become bloated, over-regulated, and antiquated. After Mayor Walsh or other members of the City Council comment on the report, some or all of the proposals may be considered by the full City Council for a vote.

It can be difficult for a new business to plan openings, construction, and hiring when timelines for permits and licenses are a mystery. Even worse this timeline can be a surprise to new entrepreneurs who have never navigated the permitting procedures of ISD and City Hall.

Some of the highlights of Councilor Wu’s report include:

1.            Publicizing estimated timelines for obtaining various permits and licenses based on data.

2.            Institute a case manager system

3.            Implement technology to shorten unnecessary delays by several weeks.

This week, the Boston IT department announced a hack-a-thon to solicit ideas from local developers. The hack-a-thon will tackle some of the problems discussed in the interim report including:

  • Which Permits Do I Need?: A single project may require multiple permits. Applicants need a clear, intuitive, and enjoyable guide that will help applicants identify the permits they need to start working!
  • What’s my Address of Record?: Every project needs to be linked to an address in the City’s master database.  In the current system, finding your address is tougher than it should be. Our new online system needs a clear way to search addresses and suggest alternatives, getting it right the first time.
  • Can I Apply for that Permit Online?: With September 1st weeks away, developers will try their hand at a challenge to provide a very practical solution using the City’s new API – creating a simple online and/or mobile application for Street Occupancy permits required to block space for a moving truck.
  • Where am I in the Approval Process?: Complex building projects can take months to review and permit, even if the process works correctly. Residents needs a clear way to track all permits associated with their project, which helps them understand how close they are to getting underway.
From : http://hubhacks.challengepost.com/

 

New “Direct Wine Shipper” License Included In State Budget

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The FY 2015 state budget signed by Governor Deval Patrick last week includes a provision that creates a new Direct Wine Shipper license in Massachusetts. The law will take effect on January 1, 2015 and will take Massachusetts off of a dwindling list of states that bar direct wine shipping, a list that includes: Alabama, Arkansas, Delaware, Kentucky, Mississippi, Oklahoma, Pennsylvania, South Dakota, and Utah. This change in Massachusetts law comes after intense pressure by industry groups and local sports figures.

The new law requires wineries, vineyards, or manufacturers to apply for a state-issued shipping license and pay a $300 fee, with a $150 renewal fee every year. All shipped packages must be marked to require a signature upon deliver with the words “CONTAINS ALCOHOL: REQUIRES SIGNATURE OF AND PERSONAL DELIVERT TO A PERSON LEGALLY AUTHORIZED TO CONSUME ALCOHOLIC BEVERAGES IN THE COMMONWEALTH” with a seal of licensure. The wine must be purchased and shipped to a Massachusetts resident who is 21 years of age and older. The new license allows shippers to deliver no more than 12 cases of wine to consumers each year.

Any person, firm, or corporation who violates these new provisions will be deemed to have engaged in a deceptive act or practice under chapter 93A and may be subject to license suspension or fines.

The new law does not address the delivery-truck law which requires a delivery permit for each truck involved in the delivery of alcohol, at a cost of $200 per permit. Most states allow for one permit to cover an entire freight company. According to the Boston Globe, State Representative Ted Speliotis of Danvers will push for a fleet-wide permit system if the existing law has a detrimental effect to wine shippers.

State House Action May Lead to Direct Shipment of Wine in Massachusetts

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The Massachusetts Legislature moved a step closer to bringing direct shipment of wine to Massachusetts residents. Something the Boston Herald recently noted is long overdue. The House proposal which was added as an amendment to the state budget is now seeking support in the Senate.

If passed Massachusetts residents would be able to order wine online from out of state and have it shipped to their home. Although Massachusetts residents drink (and tweet about) wine at a much higher rate than the rest of the country, Massachusetts is one of nine states that bans direct shipment.

Liquor stores and wholesalers are opposed to the change, fearing that it could hurt sales. Others worry that direct shipment may be abused by those underage. But when a federal judge calls the restriction unconstitutional, and when Drew Bledsoe says that the restriction is a big deal for small wineries the state house starts to listen.

This is a part of the new changes to how consumers find and enjoy their favorite drinks. Recent successes of Drizly (an alcohol delivery service now available in Boston) Delectable (an  iphone app that helps you find and share wine recommendations), and Drync (an iphone app from a Cambridge start-up that helps users organize and order their favorite wines) all point to a shift away from the local package store as the only place in town to go for recommendations and purchases.

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