Hurwitz, Richard & Sencabaugh LLP is pleased to announce that Bob Hurwitz and Gene Richard have been named Massachusetts and New England Super Lawyers for the fifteenth consecutive year, and that Dan Sencabaugh has been named a Massachusetts and New England Rising Star for the third time. Bob Hurwitz and Dan Sencabaugh received their honor in the field of construction law while Gene Richard received his recognition in the field of administrative law for his work as a liquor licensing attorney. The Super Lawyers and Rising Stars lists appear in Boston Magazine as well as the publication New England Super Lawyers. The Super Lawyers list recognizes the top five percent of attorneys in New England while the Rising Stars list recognizes the top 2.5 percent of attorneys 40 years old and under or in practice for 10 years or less.
One year ago, Massachusetts Treasurer Deborah Goldberg convened an Alcohol Task Force to review the state’s alcoholic beverages industry. The idea was to generate “forward looking” recommendations of ways to modernize the state’s alcoholic beverage regulations. All matters relating to alcoholic beverages are broadly under the jurisdiction of the Massachusetts Alcoholic Beverages Control Commission (“ABCC”), an agency within the state Treasurer’s department.
In late 2017, the Task Force released a lengthy report containing numerous findings and recommendations. https://www.mass.gov/news/alcohol-task-force-report
As an example, regarding grocery stores, the Task Force recommended:
- That local licensing authorities (LLAs) have the authority to decide the number of liquor licenses to be issued to grocery stores and supermarkets in their community. This would be a marked change from the current law, which puts a “quota” on the number of off-premises or “package store” licenses available in particular municipalities, based on their population; and
- That the ABCC be able to require grocery stores and supermarkets to designate a separate and/or particular area to sell alcohol within the licensed building, preferably with a separate door entrance and separate from the general areas to purchase non‐alcohol products.
Another Task Force recommendation proposed adopting a rule that out‐of‐state drivers licenses be an acceptable form of identification that a customer is of legal age to purchase alcohol in Massachusetts. Another calls for more flexibility regarding licensee manager eligibility, despite prior criminal records.
The Task Force’s report only contains recommendations – it does not by itself change anything. Its recommendations are subject to legislative and administrative review and modification before any may be enacted. Even if its recommendations are substantially changed, or ignored, the report is worthwhile as a snapshot of an alcoholic beverages industry in transition, as well as a road map for routes into a future that may, or may not, be taken.
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.
The federal Alcohol and Tobacco Tax and Trade Bureau (“TTB”) recently approved the sale of four powdered alcohol products. This follows the approval and later rescission of approval by TTB of seven powdered alcohol products in 2014.
Although this time it appears the TTB approval will stand, the Massachusetts Alcoholic Beverages Control Commission (“ABCC”) quickly issued an advisory ruling essentially stating “NOT IN MY COMMONWEALTH!” Two days after the TTB approval, the ABCC Advisory stated that Massachusetts laws prohibit the importation, sale, and manufacturing of powdered alcohol in Massachusetts.
The ABCC reasoned that:
1. M.G.L. Chapter 138 regulates both alcoholic beverages and alcohol;
2. Powdered alcohol is not a “liquid”, and thus not an “alcoholic beverage”; and
3. Existing liquor licenses for wholesalers, manufacturers and retailers only authorize the sale of alcoholic beverages – and thus, not alcohol in powdered, non-liquid form.
Some wags were heard to wonder if the ABCC were called only the Massachusetts Alcohol Control Commission whether the Advisory would have come out the other way. California, for example, took a much more welcoming approach to powders years ago in Regulation 2557.
The company that came up with “Palcohol” extols its convenience, portability and flexibility, noting that hikers for example would be able to enjoy an alcoholic beverage by a stream in the woods after a long day on the trail, without having had to carry the beverage part of their beverage all day long.
Opponents note the same convenience, portability and flexibility of Palcohol might prove irresistible to minors and other mischief-minded or just careless individuals.
Next up? How the state will regulate different forms of marijuana if legalized.
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.
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.
A new restaurant will soon be opening in Downtown Crossing and with a unique service that will set it apart from other options in the city. Mast’ Restaurant located at 145 Province Street will have a bottle-keep service, which according to general manager Nicholas Garoufalis does not exist anywhere else in the city.
A bottle-keep service allows patrons to store unfinished bottles of liquor at the restaurant in their name for future use. The bottle will be kept in the name of the purchaser at the restaurant and can also be gifted to other friends. This service is seen in other parts of the country and is popular oversees in places like Japan.
204 C.M.R. 2.18 allows a section 12 licensee to reseal a bottle of wine for a purchaser to take off the premises. The regulation does not address liquors, or resealing to keep at the licensed premises.
204-4.03 prohibits certain practices which are close to the bottle-keep service but are factually different. These include:
(a) offer or deliver any free drinks to any person or group of persons;
(b) deliver more than two drinks to one person at one time;
(c) sell, offer to sell or deliver to any person or group of persons any
drinks at a price less than the price regularly charged for such drinks
during the same calendar week, except at private functions not open to
(d) sell, offer to sell or deliver to any person an unlimited number of
drinks during any set period of time for a fixed price, except at private
functions not open to the public;
(e) sell, offer to sell or deliver drinks to any person or group of
persons on any one day at prices less than those charged the general
public on that day, except at private functions not open to the public;
(f) sell, offer to sell or deliver malt beverages or mixed drinks by the
pitcher except to two or more persons at any one time;
(g) increase the volume of alcoholic beverages contained in a drink
without increasing proportionately the price regularly charged for such
drink during the same calendar week;
(h) encourage or permit, on the licensed premises, any game or contest
which involves drinking or the awarding of drinks as prizes.
The difference is that Mast’ will likely keep a regular price list for the bottle, only provide one drink from the bottle at a time, and possibly keep the price per drink in proportion to the single drink prices. Because this service differs slightly from bottle service it may cause change to how the licensing board views these services and how restaurants offer them.
The novelty of the service, and potentially the popularity of it, will determine whether it catches on at other Boston restaurants.
Ten recent decisions by the Massachusetts Alcoholic Beverages Control Commission (“ABCC” or “Commission”) were published in early June.
One “automatic amusement device” case was brought against a licensee, the Knights of Columbus lodge in Wakefield, for permitting gambling on its premises in violation of 204 CMR 2.05(2). Two machines located in a room near the entrance were determined by investigators to be gambling devices. The manager reported that the lodge had arranged a 50-50 proceeds split with the owner of the machines. The licensee was ordered to have the devices removed immediately and the Commission suspended the license for ten days, with five days to be served and five days to be held in abeyance for two years, provided that no further violations occur.
Two cases involved restaurant licensees charged with purchasing alcoholic beverages from package stores (rather than from wholesalers, importers or manufacturers). Whaleback Restaurant (Bourne) and Combination Improvement Club (Methuen) each stipulated to allegations of sales of alcoholic beverages purchased from a §15 package store, in violation of M.G.L. c. 138 § 23. Evidence of the transgressions included admissions from the licensee, package store stickers on bottles and evidence of glue-like substances in the shape of a retail price sticker. Because the licensees had been in business for lengthy periods of time (10 years and more than 50 years, respectively) without a record of previous violations, the Commission issued each a warning.
Five “sale to minor decisions” were published, with four of the five cases involving “sting operations,” in which ABCC Investigators utilized underage operatives to attempt to purchase alcohol on licensed premises:
Licensees Sinnis Pub (Dudley) and Kwik Stop (Dudley) each stipulated to allegations of making a sale or delivery of alcoholic beverages to a person under 21 years of age after an underage operative working with ABCC investigators purchased alcohol without being asked for identification. Because each licensee had been in business for ten years with no previous violations, the Commission issued each a warning. Similarly, licensee Vorelli’s (Provincetown) was determined to have permitted the sale or delivery of an alcoholic beverage to a minor when an underage operative was in possession of an alcoholic beverage on its premises and was not asked for identification. Because the licensee had been in business for more than thirty-five years with no previous violations, the Commission issued a warning. Nor’east Beer Garden (Provincetown) also stipulated to a sale or delivery to an underage person after failing to request ID from an operative; a three day suspension was issued, to be held in abeyance for two years, provided that no further violations occur.
Bay State Wine & Spirits (Canton) was also investigated for alleged sales or deliveries of alcoholic beverages to underage individuals, partially in response to information provided to the ABCC by the Canton Police Department. During a span of thirty minutes on an evening in October 2013, Investigators recorded two sales to underage individuals using a fraudulent ID (neither individual working with ABCC investigators) on the premises. Subsequent to the incidents, the licensee made efforts to institute additional employee training and to confiscate fraudulent identification. The Commission suspended the license for five days, with the suspension to be held in abeyance for two years provided that no further violations occur.
Acting on an anonymous complaint filed with the Commission, ABCC Investigators reported a violation of M.G.L. c. 94 § 186 at The End Zone Sports Pub (Mendon) for falling below standards of purity. Investigators reported finding twelve alcoholic beverage bottles that contained foreign matter (fruit flies). Because the licensee had been in business for 10 years with no previous violations, the Commission issued a warning.
Finally, the license of the Hillside Country Club (Rehoboth) had previously been indefinitely suspended for violations of M.G.L. 151A §§ 14 and 15 (regarding payroll taxes). Based on evidence introduced at a hearing in November 2013 that demonstrated the licensee’s good standing with the state and with wholesalers, the indefinite suspension was reversed to a suspension of time served (from January 17, 2013 to October 5, 2013).
Fourteen recent decisions by the Massachusetts Alcoholic Beverages Control Commission (“ABCC” or “Commission”) were published in early May. Eleven of the fourteen decisions involved allegations of sales of alcoholic beverages to a person under the age of 21, two concerned “automatic amusement devices”, and one the rules for “club” licenses. The moral of the May decisions? If you have to be a liquor licensee caught violating a liquor law, be in business for many years before that happens – and don’t let it happen twice!
The club license decision was perhaps the most unusual. The Polish American Citizens Club of Webster received an indefinite suspension from the Commission in July of last year for failing to file annual reports with the ABCC for the years 2003 – 2012, and also for having changed officers and directors without appropriate approvals from local and state licensing authorities. The Club brought its records up to date, and the ABCC rescinded the indefinite suspension. However, the Club went without a license from the end of July to the beginning of November. The decision serves as a reminder to club licensees of the need to file annual reports with the ABCC concerning their officers and their compensation.
The two “automatic amusement devices” cases were brought for having such devices (which are licensed under M.G.L. c. 140 §177A) in rooms that were closed off and not in open view at all times. The Commission cited the licensees under the Alcoholic Beverages laws for “permitting an illegality” on their premises, in violation of 204 CMR 2.05(2). Each of the licensees installed “see-through” doors after the date they were cited but before the hearing, and was given a warning by the Commission, which noted that each licensee had been in operation for many years without previous violations (for 22 years and “over 100 years”, respectively).
Turning to the “sales to minor” decisions, ten of the eleven concerned “sting operations,” where ABCC Investigators send an underage operative into a licensed premises to attempt to purchase alcohol. In the eleventh case, the ABCC investigators encountered an under-aged patron who had already been served an alcoholic beverage without benefit of a “sting”. In each of the eleven decisions, the licensee stipulated to the violation, so only the penalty portion of the ABCC’s decision was really at issue.
Six of the eleven licensees were given warnings, mostly due to having been in business for extended periods without any previous violations. These included: Panchos Mexican Restaurant (Pittsfield) (over ten years); Plainville Liquors (Plainville package store) (nineteen years); South Liquor Mart (Plainville package store) (more than twenty years); Xtra Mart (Spencer package store) (more than twenty years); and Powers Restaurant & Café (West Springfield restaurant) (a truly remarkable more than sixty years with no previous violations). Another licensee with no previous violations was also given a warning, Rama Wine & Spirits (Norwood package store), not because of the length of time it had been in business, but because “The Commission considered the extenuating circumstances which occurred at the time of the offense and which later resulted in the death of the clerk’s family member…..” The Commission did not elaborate within their decision as to the specific nature of the “extenuating circumstances”.
Four more licensees were presumably first time violators, but perhaps not in business for such significant periods of time, as they were each given three day suspensions, to be held in abeyance for two years provided no further violations occur. These four included Seaside Wine & Spirits (New Bedford package store); The Thirsty Whale (Newburyport restaurant); King Jade Restaurant (Northridge); and Sharon Market (Sharon package store).
The last “stung” licensee was Knox Trail Inn (Otis). Within the previous two (2) years, the Commission had already found a violation and ordered a three (3) day suspension, to be held in abeyance provided no further violations occurred. Accordingly, for this second violation within two years, the Commission suspended the license for four days, of which two will be served and two to be held in abeyance for two years provided no further violations occur. Plus, the Commission reinstated the prior suspension, so the licensee will serve a total of five (5) days, with two to be held in abeyance.
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.