Liquor Licensing

What are ‘Interlocking Interests’?

One aspect of obtaining or renewing a liquor license is the consideration of any liquor related businesses you have an interest in. Earlier this year this issue came up involving Mario Batali and the Bastianich family.

The New York State Liquor Authority (NYSLA) looks at an applicant’s “interlocking interests” with other liquor related businesses when a person or entity is seeking to obtain or renew a liquor license. Applicants are required to disclose any interest, whether it’s direct or indirect, in any premises currently licensed by the NYSLA and/or any business that manufactures alcoholic beverages or transports or sells such beverages at wholesale. The second step has been interpreted broadly by the NYSLA, so any interest in such a business, anywhere, brings up these concerns.

In 2014, the State of New York legalized the use of medical marijuana.  The possession and private use of minor amounts of the substance has been decriminalized in the state since 1977. Even so, tens of thousands of arrests are made each year in New York City for what is characterized as public use of the drug.  Now, legislators are seeking to put an end to that.

Democratic Senator Liz Krueger is committed to pushing the Marijuana Regulation and Taxation Act in early 2015.  The bill was introduced last year, rejected and has since been amended.  If passes, it would allow marijuana dispensaries regulated by the State Liquor Authority to be launched in New York.  The marijuana would be taxed and individuals would be permitted to possess two ounces and six plants for personal use only. 

Earlier in the year, there was some controversy regarding the legality of the ever popular bottomless brunch in New York City.  On Saturdays and Sundays a large number of New Yorkers attend all you can eat brunches that also include unlimited alcohol.  Now, one NYC hot spot might be losing its liquor license due to problems resulting from its booze-filled brunch.

Pranna Restaurant on 28th and Madison offers a $45 brunch that includes unlimited alcoholic drinks such as mimosas and sangria.  Residents of the area are claiming that this is causing a major problem in the neighborhood.  They allege that the excessive drinking is resulting in customers leaving the restaurant belligerent or being escorted out because of severe intoxication.  The patrons are unable to walk, throwing up and urinating in the street, lying down on the sidewalk, sitting in the street and fighting.  Residents also say that the restaurant is creating excessive noise and the customers are littering in the area.  Many of the complaints have been documented by residents using photographs and video recordings.  Residents also claim that the restaurant is operating as a nightclub with a club atmosphere and cabaret girls.  If Pranna was a nightclub this might not be such a big problem.  But, the establishment is a restaurant is not authorized to operate as a nightclub.

This Thursday August 28, 2014 from 5:30 to 7:30 p.m. I’ll be giving a seminar in the Restaurant Management Bootcamp 2.0 Series that is hosted by NYC Small Business Solutions.  The Course Description is copied below:

Restaurant Management Bootcamp 2.0: Legal Considerations when Opening a Bar or Restaurant
An insider look at tips, tricks, and best practices to start your first restaurant in NYC, presented by Restaurant Attorney James D. DiPasquale.  To start and run a successful restaurant you must understand many different legal considerations which make operating in New York City, particularly unique.  Whether you are a new or existing restaurant owner, this special follow-up to the Restaurant Management Bootcamp class will help you gain a deeper understanding of all of the basic requirements to get your business up and running.

When the State Liquor Authority (“SLA”) commences an investigation, they can do so in one of many ways including:  (a) on-site inspections; (b) on-site undercover investigations by SLA Investigators and other law enforcement agencies; (c) a review of reports and investigations by the police and regulatory agencies; and (d) speaking to witnesses and gathering evidence of suspected violations.

The information is then evaluated to see whether there is sufficient evidence to initiate charges against an establishment. If there is sufficient evidence, the SLA issues a Notice of Pleading that describes the violations that are being charged.  It is at this point where the license holder enters a plea of not guilty, no-contest, or conditional no-contest. 

Dealing with the New York State Liquor Authority (NYSLA) is usually no picnic, and many established New York City restaurants are given unnecessary grief upon applying for a license. For this reason, many restaurants have found it beneficial to work with a NYC liquor license attorney through the process. An attorney can not only walk you through the procedures involved in the application process, but will work on your behalf in the event an appeal becomes necessary. Whether your restaurant is located in Manhattan, Queens, Brooklyn, the Bronx or Staten Island, we encourage you to contact our experienced liquor license law firm today.

The process for renewing a liquor license is about to change. New York State Senator Klein and Assemblyman Crespo recently sponsored a bill that passed both houses in the state legislature and is merely awaiting the signature of Governor Cuomo to take effect. The new law will allow the State Liquor Authority to have increased access to New York Police Department records regarding crimes and complaints associated with licensed premises, thus creating a more difficult renewal process for bar and restaurant owners.  

According to the Press Release by Senator Klein’s office, the proposed legislation will allow community boards to recommend that the NYPD provide the SLA with “useable information.” It is unclear what exactly falls into the category of “useable information” and to what extent 311 complaints will be included. Any bar or restaurant owner who has had to deal with crazy neighbors knows that 311 complaints are not always the most reliable source of concerns, and could pose a bigger problem than necessary if taken at face value.

I. All Night Permits

Establishments that currently have an active license to sell alcohol at retail on their premises (“on premise license”) may apply for a special “all night permit.” An all night permit allows licensees to remain open until 8:00 a.m., and is most commonly used for New Year’s Eve parties.  Before the State Liquor Authority will issue this special permit, certain conditions must be met.

Firstly, the State Liquor Authority must receive the application for an all night permit no later than 45 days prior to the date of the event. For New Year’s Eve, the application deadline is quickly approaching on November 16^th.  The applicant must also notify the local police department or county sheriff’s department of their intention to apply for the special permit, and any restrictions or conditions (aside from closing time) that the licensee must adhere to under their normal license will still apply.

The State Liquor Authority will consider any past or pending disciplinary actions against the establishment when deciding whether to grant the all night permit.

On Monday, September 23, 2013 from 3:00 to 5:00 p.m., I’ll be teaching the Restaurant Management Bootcamp 2.0 Series which is hosted by NYC Small Business Solutions.  The Course Description is copied below:

Restaurant Management Bootcamp 2.0: Legal Considerations of Opening a Bar or Restaurant in NYC.

An insider look at tips, tricks, and best practices to start your first restaurant in NYC, presented by Restaurant Attorney James D. DiPasquale.  To start and run a successful restaurant you must understand many different legal considerations which make operating in New York City, particularly unique.  Whether you are a new or existing restaurant owner, this special follow-up to the Restaurant Management Bootcamp class will help you gain a deeper understanding of all of the basic requirements to get your business up and running.

Restaurant goers are always looking for the next new and exciting dining experience. It is no surprise, then, that “underground supper clubs” are becoming increasingly popular – not only in New York City, but throughout the world. An underground supper club allows diners to reserve a spot in someone’s private home where they pay the host for their meal.

Several companies have created websites to facilitate these intimate and unique gatherings. For example, EatWith is a company that was founded in 2012 in Tel Aviv and has quickly expanded in Europe, South America and now the United States. While other countries may be more accepting of this practice, health and sanitation laws in the United States present huge roadblocks for supper club enthusiasts.

Can I allow customers to “BYOB” while my liquor license application is pending?

NO! Restaurants and bars may not allow customers to “BYOB” (Bring Your Own Bottle) while a license is pending. Although we have all seen establishments advertise that they are “BYOB,” doing so without a license is not legal in New York State and puts you at risk of getting your pending (or future) license application denied by the State Liquor Authority. Establishments that want to allow customers to BYOB must apply to the State Liquor Authority for a “bottle club license.”

Can my establishment host an open bar? Can we serve “bottomless brunches”?

NO! The Alcoholic Beverage and Control Law prohibits open bars. Specifically, the law does not allow patrons to pay a fixed price for an unlimited number of drinks during a set time. For this same reason, “bottomless brunches” where patrons can pay for a brunch meal with unlimited mimosa, bloody marys, etc. is illegal.  The State Liquor Authority does allow, however, “2 for 1” drinks and other similar drink specials as long as the price of a drink is not lower than ½ of the premise’s regular drink price.

I am buying a restaurant that already has a liquor license. Can the seller transfer the liquor license to me?