ABC License Revoked for Licensee Who Merely Filed Annual Report Late.

Can an ABC licensee lose its license to sell alcoholic beverages merely by filing its annual report late?

Absolutely!

Notice that we did not ask “Can an ABC licensee lose its license by failing to file its annual report.  We merely asked “…by filing its report late?”  In a recent ABC case, the Hearing Officer revoked a merchant’s license to sell alcohol because the annual report was late and the inventory had not yet been filed.

When the merchant, a restaurant, received notice of the violation, it did not seem like a big deal to them.  The restaurant went to the license revocation hearing unrepresented.  The owner simply lost track of the annual report.  When it was informed by the ABC that the annual report had not been filed, it compiled the information and filed it.  Granted it was two months late, but by the time the restaurant was at the hearing, the annual report had been filed.

The Hearing Officer revoked the ABC license anyway.  He stated that his only option was revocation.  This, however, was an incorrect statement of the law.  In fact, had the restaurant been represented, the attorney could have pointed out that the Virginia Code § 4.1-226 only has two violations which require revocation:  Violations that (1) are “… relating to illegal possession of gambling device…,” or (2) are relating to mixed beverage licenses where there is “striptease” or there “… are employees who solicit the sale of alcoholic beverages.”  Filing reports late, or even not filing one at all, may result in a revocation, but it is not mandatory.

The restaurant hired a good ABC attorney who appealed the decision.  In the end, everything worked out.  Since the restaurant had taken corrective action to make sure it would comply with all future reports in a timely manner, and recognizing that revocation of the license was not mandated, the ABC Board instituted a $500.00 civil penalty and allowed the restaurant to keep its license.

Lessons learned:  (1) A business doesn’t have to have an attorney at a hearing — but, you never know what will happen.  Sometimes seemingly small things turn into a nightmare.  This misstep was fixed; not all can be.  (2) Hearing Officers are not infallible.  ABC Law is complicated and even an experienced Hearing Officer can get the law wrong.

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May Law are Virginia ABC attorneys.  For more information of Virginia ABC Law, click here.  To contact us, click here.