June 9, 2004

California Department of Alcoholic Beverage Control Penalty Guideline Emergency Rule; Effective 4-14-2004

Holland & Knight Alert
Michael Brill Newman

Important News for Alcohol Beverage Retailers, Wholesalers, Importers, Suppliers, Brand Owners, and Manufacturers

The California Department of Alcoholic Beverage Control (ABC) has just received approval for its emergency administrative rule dealing with penalties the ABC will assess for purported violations of laws and regulations committed by ABC licensees, their employees or agents. This emergency rule became effective retroactively on April 14, 2004, and will be followed for the 120-day period following April 14.  During this period the ABC will begin the administrative process of adopting a permanent administrative rule on the subject of Penalty Guidelines. The ABC will hold public hearings on the permanent rule on July 12 in Los Angeles and July 13 in Sacramento. Interested persons may also submit written comments to the ABC on or before July 13.

This is too important for California licensees to ignore, since it will create the penalties the ABC will seek for violations by licensees, their employees and patrons at a licensed premises.  You are encouraged to participate in the rule-making process to protect your investment from penalties that are too harsh or unreasonable, which government officials may propose for violations.  All licensees should participate in this process to try to define the point at which the business owner should be held accountable for conduct on their licensed premises or when their patrons, agents, servants, or employees violate a California law or administrative rule in the scope of employment. 

Holland & Knight’s Alcohol Beverage Team has two former directors of state alcohol beverage regulatory agencies (Manny Espinoza retired California ABC Director and John Harris, retired Florida Division of Alcoholic Beverages & Tobacco Director) and several other former senior staff members of the U.S. Trade and Tax Bureau as well as Michael Newman, who has been a practicing alcohol beverage attorney for the past 18 years in California.  Manny, John, and Michael have a total of 100 years experience in the area of administrative rule making and how to accomplish a client’s objectives in a manner consistent with good government.

If you have any questions about this new emergency rule or the rule making process in California, please feel free to contact Michael Newman 415.743.6989 or michael.newman@hklaw.com, who is our Alcohol Beverage Team’s lead client advisor regarding the California Penalty Guideline Rule Making Process that began April 14.  Our two state governmental consultants, Manny Espinoza and John Harris, believe that the creation of a state ABC penalty guideline rule is probably the single most important issue a licensed business owner should be involved in. According to Manny and John,  the rule-making process gives licensees the opportunity to provide input and help shape state policy on the fairness of proposed penalties which impose license suspensions or revocation which can threaten the survival of a business.

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