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Bill to Amend ABC Laws Seen As Guaranteeing Due Process For Liquor License Holders

Accompanying images can be viewed in the current issue PDF

By P.L. Wolff

The sentiment expressed last month by Restaurant Association of Metropolitan Washington President Lynne Breaux that “allowing only a handful of residents to protest a liquor license application results in lengthy delays in review by the ABC Board causing great hardship for local businesses,” has more and more been echoed not only by business owners but also by residents around the District who are for the most part very supportive of their neighborhood bars and restaurants.

Recently, the Hank’s Oyster Bar case has energized opposition to the parts of the District’s ABC law and regulations that many see as imposing unreasonable burdens on law-abiding business owners. (See accompanying new story.) In her recent comments, Breaux noted that this case “has dragged on for more than seven years,” concluding that “[t]he appropriate neighborhood forum for licensing review and input is the Advisory Neighborhood Commission (ANC) elected by area residents, not . . . ad hoc local groups.”

Ward 1 Councilmember Jim Graham, who chairs the city council’s Committee on Human Services, which has alcoholic beverage control oversight jurisdiction, has undertaken a comprehensive review of the current ABC law, regulations and procedures of both the Alcoholic Beverage Control (ABC) Board and the Alcoholic Beverage Regulation Administration (ABRA). As a result of substantial citizen input during three public roundtable sessions this past spring, along with 10 separate meetings with a task force comprised of citizens, neighborhood leaders and business representatives which produced a comprehensive report containing 43 recommendations for changes to the law and regulations, on June 26, 2012 Graham introduced the “Omnibus Alcoholic Beverage Regulation Amendment Act of 2012.”

A major change this bill, if enacted as written, would bring about is a substantial reduction in the power that could be exercised by small, self-identified ad hoc groups of persons that current law allows to intervene in ABC license proceedings. Specifically, although such groups will continue to be limited to no less than five persons, the law would be amended to restrict membership to persons who are “residents or property owners of the District residing or owning property within a 400 foot radius of the Applicant’s establishment.” (Emphasis ours.)

Also included in the bill is a provision that requires an ANC or other community group intending to review a license application ensure that applicants be “offered an opportunity to address the voting body concerning the application at a duly called meeting . . . [and that] notice of the meeting [be] given to [both] the voting body and the applicant at least seven (7) days before the date of the meeting.” (Emphasis ours.)

An even more restrictive provision designed to bring finality to protest proceedings following the submission by an affected ANC of a voluntary agreement negotiated with an applicant establishment situated within its boundaries is that “the Board shall dismiss the remaining protest groups upon its approval of the [ANC’s negotiated] voluntary agreement.”

The Graham bill also tackles the thorny matter of what kinds of restrictions a voluntary agreement can legally contain. This issue has been a bone of contention for many years as citizen groups and even ANCs have routinely insisted in inserting restrictions that many have contended not only violate a licensee’s First Amendment rights but also often amount to legally questionable restraints of trade.

Since these voluntary agreements are adopted by the ABC Board and made part of the license pursuant to statute, First Amendment issues are pertinent. A common example has been the penchant for prohibiting the playing of certain forms of music notwithstanding that noise issues were not even in contention. The bill, therefore, mandates that a “voluntary agreement shall not prohibit an applicant or existing licensee from providing specific types of music or entertainment for indoor and outdoor facilities. Restrictions on entertainment shall be limited to the following: “(i) Prohibition on entertainment (ii) Hours of entertainment; and (iii) Specification of physical attributes to mitigate noise emanating from the outdoor facility.” These include such things as sound barriers and how speaker systems are installed and “may specify methods to mitigate the level of noise heard outside of the establishment. . . .”

Numerous other matters would continue to be considered for inclusion in voluntary agreements, including matters relating to controlling trash, parking, security, hours of operation, occupancy and seating.

Possibly the most sweeping reform regarding what can be permissible for inclusion in voluntary agreements is the bill’s section dealing with limitations on the restraint of trade.

Specifically prohibited would be various requirements that have frequently been demanded of applicants, including that ANCs “or other community members approve future ownership changes . . . [and] be notified of intent to transfer ownership”; that applicants or existing licensees be barred from filing an application to change license class; that applicants not be required to change their license class prior to selling the license; that applicants be prohibited “from applying for changes to licensed operation procedures, including applications for summer gardens, sidewalk cafes, rooftop decks, entertainment endorsements, and changes of hours”; “mandates regarding specific brands of alcohol or pricing for alcohol, restrictions on the age of patrons, and requirements that the applicant or existing licensee use a specific company for services” would also all be prohibited from inclusion in voluntary agreements.

Finally, the statute if enacted as written will prohibit including in voluntary agreements requirements to be in attendance at ANC or other community meetings, nor shall there be allowed requirements for “provid[ing] money, special considerations, or other financial benefits to the community . . . [nor for “join[ing] any group . . . [nor for “hir[ing] local individuals.” Neither will it be permissible to include provisions requiring “that contracts, incident logs, or similar documents, be made available to the ANC or other community groups or members.” Rather the bill provides that copies of such documents “may be requested by the ANC or community groups from ABRA or the Board.”