Justice Doris Ling-Cohan, a Manhattan judge, reversed the New York State Liquor Authority’s (“NYSLA”) decision to revoke the license of a Long Island farm winery. The judge dismissed three charges brought on behalf of the NYSLA against Vineyard 48, a Southold, Long Island-based farm winery. Justice Ling-Cohan noted that the revocation, along with the three charges brought on behalf of the NYSLA, “shocked the court’s sense of justice.” See N.Y. Winery Defeats Bid to Have License Revoked.
The NYSLA argued that Vineyard 48 violated its farm winery license by “permitting a dance party type atmosphere.” Id. Neighbors of the winery alleged that the owner “turned the place into a rock concert venue, complete with violent, lewd and drunken behavior.” Id. At a board meeting to adopt the revocation recommendation of the administrative law judge, the chairman of the NYSLA voted to revoke the license, noting, “I think I know what a wine tasting is,” and that Vineyard 48’s DJ, dancing, and nightclub atmosphere did not fit such definition.
Despite the SLA’s findings, the court in Joseph Paul Winery v. New York State Liquor Authority, 101755/2013, held the NYSLA ignored its own due process protections as well as the Administrative Procedure Act (“APA”) by allowing complainants to testify before the NYSLA’s governing board without giving prior notice to Vineyard 48. Further, the witnesses were not sworn in, nor was Vineyard 48 granted the opportunity to cross examine the witnesses. Justice Ling-Cohan noted that the NYSLA’s allowance of unsworn testimony outside the record violated the winery’s due process rights.
Further, the court noted that, despite the APA’s requirement that the NYSLA issue regulations defining permissible activities by farm wineries, none had been adopted by the NYSLA since 1974 (the year the Farm Winery Act was originally passed). In other words, the statute as written permits wine tastings but does not define the term or prescribe any requirements other than the proprietor be personally present and only New York State-produced wines can be poured. The judge noted that the permissible activities were extremely broad. Currently, the statute is written such that a farm winery may “engage in any business on the licensed premises subject to such rules and regulations as the NYSLA may prescribe.” Id. The judge particularly noted that, while the NYSLA’s chairman may “know what a wine tasting is . . . unless petitioner and the wine-making community are also mind readers, his personal and subjective opinion as to how to conduct wine tastings” was immaterial in the absence of any duly enacted regulations on behalf of the NYSLA. Id. As a result, the court held that the charges be dismissed as void for vagueness.
The court said that “the extreme penalty of revocation, in the absence of any prior prosecutions of violations or notice of objectionable conduct” was unwarranted for the three remaining charges. Instead, the court reasoned, if the NYSLA were to issue a penalty, the penalty needed to be lesser than revocation.
This is an interesting result, especially given the upcoming license revocation hearing scheduled for Empire Wine. In September, Empire brought suit against the NYSLA in a New York court, which dismissed the suit in November. While the suit against the NYSLA was not dismissed on the merits, Empire was instructed to exhaust administrative remedies first. A dismissal of this type does not preclude the retailer from bringing a suit against the NYSLA once administrative remedies are exhausted, and Empire contends that the company is prepared to fight the NYSLA going forward. If, after administrative remedies are exhausted, Empire brings suit agains the NYSLA again, it is curious how a court might interpret the statute upon which the NYSLA currently relies to support its argument in favor of jurisdiction over out-of-state shipments of wine by a New York licensed retailer. In the above case, the court dismissed the NYSLA’s charges as void for vagueness, considering the absence of duly enacted regulations on behalf of the NYSLA. In the Empire case, the retailer argues that the statute at issue is also vague—but this time, in the context of out-of-state wine shipments and “improper conduct” on behalf of a licensee or permittee. For more information on the Empire Wine lawsuit against the NYSLA, please see Retailer Empire Wine Sues New York State Liquor Authority: Direct Shipping and Court Dismisses Empire’s Lawsuit Against NYSLA.
Update: After the publication of this article, the revocation hearing for Empire Wine was rescheduled from December 3rd to January 23rd. This is the second time the hearing has been delayed (the original hearing was scheduled for October 23rd). Read more at Empire Wine Hearing Delayed After FOIL Appeal.
For more information on New York State wine or alcohol law, or establishing a winery, brewery, or distillery in New York, please contact Lindsey Zahn.
DISCLAIMER: This blog post is for general information purposes only, is not intended to constitute legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.