Unlimited drink specials are illegal in New York (with limited exception for private events). This Prohibition included “bottomless glass” of champagne brunch specials but it is regularly ignored because most owners are simply not aware of it. However, the prohibition was recently placed into the spotlight and the New York State Liquor Authority (NYSLA) issued the following statement on Feb. 26, 2014 which was supposed to ease and clarify the prohibition:
“Serving unlimited drinks to a patron is prohibited under the Alcoholic Beverage Control law, and instances of over serving by our licensees will be investigated and prosecuted. However, there is a limited exception in the statute when the service of alcohol is incidental to the event, such as in the case of certain brunch specials. Even under these limited exceptions, licensees still have a legal obligation not to over serve patrons. The SLA will continue to take a balanced regulatory approach by allowing licensees to conduct specials where alcohol is an accompaniment, while simultaneously cracking down on specials that promote excessive drinking.” -New York State Liquor Authority
The New York City Hospitality Alliance publicly commended the NYSLA for issuing this statement and for providing such clarity. However, all the rest of us must have missed the “clarity” that the NYC Hospitality Alliance apparently saw in that statement.
“…there is a limited exception in the statute when the service of alcohol is incidental to the event, such as in the case of certain brunch specials.” When is the service of alcohol incidental to the event/brunch? Always? Sometimes? When there are pancakes on the menu? Why just brunch? If the service of alcohol can now be now deemed incidental during brunch, why is it not deemed incidental during lunch or dinner as well?
The reality is that the NYSLA statement provides no clarity whatsoever on the prohibition and in fact causes more confusion because now there appears to be some new exception to the prohibition that applies to certain brunch specials . . .but leaves us all in the dark as to the necessary elements of this exception. Until there is some actual clarification or specifically stated exception to the prohibition, we still recommend that you do not offer any unlimited drink specials during brunch, lunch, dinner or otherwise.
BYOB, or “Bring Your Own Bottle,” where owners of establishments allow their customers to bring alcoholic beverages to their premises to be consumed on site, is NOT PERMITTED in unlicensed businesses in New York State unless the Certificate of Occupancy for the premise is for less than 20 people.
GENERAL RULE: BYOB is illegal in New York.
You MUST have a license or permit to sell/serve beer, wine or liquor to the public. Venues without a license or permit may not allow patrons to “bring their own” alcoholic beverages for consumption. In addition, owners of businesses may not give away alcoholic beverages to their patrons. Those that do are in violation of the NYS Alcoholic Beverage Control Law.
Applicants should be aware that allowing BYOB without a license may jeopardize their chances for approval of their license.
You are required to provide the local Community Board (“CB”) with notice at least 30 days prior to filing an on-premise liquor license application the New York State Liquor Authority (“NYSLA”). The CB may then put you on their hearing agenda to find out more about your project. At the CB hearing they may ask you about everything from the type of cuisine that you plan on selling to your affiliations with any other NYSLA licensed premises. Nothing is off limits.
I am always asked, “Do I need to have a lawyer with me at this hearing?” My response, which is not going to please my fellow attorneys, is absolutely not. In fact, I typically recommend that you don’t bring an attorney there and that you should never have an attorney go in place of you. The reason is simple. If you were a CB member, would you want to hear the details about the restaurant / bar project from an attorney or directly from the owner/operator of the project? The CB does not want to hear an attorney describe the type of cuisine that you are offering, or what you will do to prevent people from lining up outside, or that you will not have dancing in your premises. They want to hear these assurances from you . . .the operator; the person responsible for ensuring that all of these assurances are going to be kept. I typically recommend that you retain an attorney to be present at the CB hearing only in the event that (i) you anticipate strong opposition to your project, or (ii) are uncomfortable with public speaking. Otherwise, save yourself money and have the person who is best able to present the details of your project present them. . .you.
In a related matter, Community Board 1 in Queens, NY, has just voted against the issuance of a liquor license for a bar where all the female staff would serve wearing only bikinis. The CB cited, amongst the reasons, that this type of establishment would not be appropriate surrounding family oriented community. The proposed name of the bar . . . “Racks.”
When applying for a liquor license, the application of the “500 foot rule” often results in the application being rejected. It is imperative that an applicant know whether the rule will apply to their license application and, if it does, to prepare accordingly.
GENERAL RULE: No license for on-premises liquor consumption may be granted for any premise within 500 feet of three or more existing premises licensed and operating with an on-premises liquor license. BUT the State Liquor Authority, in it’s discretion, may still issue the license if they determine that the license would be “in the public interest” after consulting with the local Community Board and holding a public hearing upon notice (a/k/a The 500 Foot Hearing).
Factors the Liquor Authority consider relevant when determining if the license would be “in the public interest” include the type of the proposed establishment (i.e., restaurant or bar), and the number, classes and types of businesses licensed within 500 feet of the proposed premise. They also consider whether the applicant has had prior violations or complaints at other establishments and quality of life issues such as anticipated increased traffic, potential parking problems and noise issues.
The 500 foot hearing is held at the Liquor Authority and individuals and community groups may appear to challenge the granting of a license. A consultation with an experienced liquor license attorney is highly recommended prior to attending this hearing. But in general, wear a suit and be prepared to answer any and all questions regarding your proposed establishment. Bring a copy of your completed liquor license application with you along with all supporting documents filed therewith.
NOTE: The 500 Foot Rule is not applicable if the premises has been continuously licensed on or prior to November 1, 1993 or if the County has a population of less than 20,000.
The New York State Liquor Authority (SLA) recently concluded an underage sting operation in New York City where SLA investigators sent underage volunteer decoys into 239 licensed premises in all five New York City boroughs. In total, the decoys were able to purchase alcohol at an astounding 124 establishments. The sting was conducted from March 29 through April 5, 2012.
The outcome of this sting is surprising. More than half of the premises that were raided had violated the law and served alcohol to minors. These violations are accompanied by monetary penalties and worse. For a first offense, a Licensee may be able to get away with paying a fine in the amount of $2,500.00 or so to the SLA to settle the charge . . .but if it is not their first violation, they may be looking at having a costly suspension or revocation hearing at the SLA.
However, the good news is that avoiding these violations are very easy. Licensee’s must (i) train their employees as to what forms of ID are acceptable; (ii) insist that their employees require valid ID from all individuals that appear to be less than the age of 45 (just to safe) and (iii) inform employees that they are subject to job termination should they fail to properly check ID.
MUNICIPAL NOTIFICATION CHANGES ‐ Effective immediately there are major changes in the 30 day advance municipal notification requirements. Some changes affect the entire state, others affect licensees in New York City and still others affect licensees outside of the five boroughs of New York City. Here is a breakdown of the changes:
STATEWIDE: Municipal notification for original on‐premises applications remains in place statewide;
All licensees must now pay the same $128.00 corporate change fee.
OUTSIDE OF NEW YORK CITY: All alteration and license renewal notification requirements for licensees are eliminated outside of the City of New York.
NEW YORK CITY: Substantial corporate changes (80% ownership interest or more) will now require 30 days prior notification to Community Boards for New York City licensees. Alteration and license renewal notification requirements remain in place for New York City licensees with the exception of off‐premises licensees who will no longer need to notify Community Boards of alterations.
In anticipation of their upcoming IPO, Groupon requested a declaratory judgment from the New York State Liquor Authority (NYSLA) regarding whether there was any violation involved with having Groupon offer 50% off of alcoholic beverages at various establishments in New York.
After much deliberation, the NYSLA ruled that the 50% off offer was perfectly legal. The NYSLA stated that since customers received no more than 50% off of the retailers’ drink prices, it did not constitute a violation of the “unlimited drinks offering” prohibition.
Formerly, a convicted felon could not be employed in a New York State Liquor Authority licensed premise with first obtaining a Certificate of Relief from Disabilities. Obtaining that Certificate was often a difficult, expensive and time intensive task. In 2010, the New York State Liquor Authority eased the restriction as follows:
a. Anyone who is convicted of a felony or convicted of:
i. Illegally using, carrying or possessing a pistol or other dangerous weapon;
ii. Making or possessing burglar’s instruments;
iii. Buying or receiving or criminally possessing stolen property;
iv. Unlawful entry of a building;
v. Aiding escape from prison;
vi. Unlawfully possessing or distributing habit forming narcotic drugs;
vii. Jostling (Penal Law §165.25), fraudulent accosting (Penal Law §165.30) or
loitering (Penal Law §240.35);
viii. Vagrancy or prostitution; or
ix. Ownership, operation, possession, custody or control of a still.
b. May work in any of the following licensed premises:
i. Catering establishments (CT);
ii. Hotel (HL);
iii. Restaurant (see “restaurant” definition in §3 of the NY ABC Law);
iv. Club (CL); or
v. Recreational Facility (theatre; concert hall; opera house; bowling establishment;
excursion and sightseeing vessel; facilities for golf, tennis, swimming, skiing or
boating; or accommodation of athletic events, sporting events, expositions and
other similar events or occasions requiring the accommodation of large
gatherings of persons),
c. May not work in the following licensed premises, unless such individual has received and executive pardon removing any civil disabilities, a certificate of good conduct, other relief from disabilities or upon the written approval of the New York State Liquor Authority:
i. Nightclub (OP), if not a “Restaurant”;
ii. Tavern (TL, TW);
iii. Cabaret (CR); or
iv. Bar (OP), if not a “Restaurant”.
Previously, the ABC Law required most license applicants and renewal applicants file notifications via certified mail with their local community boards a minimum of 30 days in advance of filings with the New York State Liquor Authority. Effective January 11, 2011, the types of notice that are considered legally sufficient to satisfy these notice requirements have expanded as follows: overnight delivery or personal service is added to the list of options available for new or renewal applicants for on-premises beer licenses, full on-premises liquor licenses, restaurant-brewer licenses, cabaret licenses, and on-premises wine licenses. In addition, overnight delivery is added to the list of options available for alteration applications [ABCL §99-d(1)].
On November 17, 2010, the Executive Committee of the New York State Liquor Authority authorized the issuance of a new permit to liquor license applicants. Specifically, the New York State Liquor Authority may now issue a 20 Day Temporary Letter allowing the applicant to serve for 20 days provided that they are only missing the following from their liquor license application:
1) Certificate of Authority;
2) Workers’ Compensation or Disability Insurance;
3) Newspaper Affidavit;
4) Photos showing that the applicant is ready to open; and/or
5) Surrender of the current license in effect for the premise, if any.
Presently, this new 20 Day permit policy will remain in effect until February 17, 2011 at which point it will be revisited by the Authority.