Oregon licensees may elect to purchase age verification equipment (“AVE”) instead of receiving the standard sanction for a first or second Category III or III(a) under certain circumstances. The licensee must purchase and use the AVE in order to qualify for the reduced sanction. The change clarifies the definition of “equipment” and does not represent a material change in OLCC practice.
For more information about the rule change, click here.
The OLCC is in the process of clarifying and streamlining its rules that specify when the agency has a basis to deny a service permit application and when “good cause” exists for overcoming such denial criteria. The proposed changes are consistent with the OLCC’s regulatory goals and should not be unduly burdensome to future service permit applicants.
The denial criteria would be broken into three general categories:
1. Felony Convictions.
2. DUII’s and Liquor Law Violations.
3. Habit of Using to Excess.
Felony convictions that could serve as a basis for denying a service permit application include convictions involving drugs, violence, or driving while suspended. The rule is drafted broadly to include such convictions under both Oregon and non-Oregon law. The Commission would look back two years for individuals with a single felony conviction and four years for multiple felony convictions from the date that the Commission receives an application.
DUII and liquor law violations include both felony and misdemeanor convictions. The rule is drafted broadly to include convictions related to or involving alcohol generally. The Commission would deny an application if the applicant had two or more such violations provided that at least two of them occurred within four years of the date that the application was received.
The Commission will determine that the applicant has a “habit of using to excess” based on a number of factors. The Commission will deny a service permit if the applicant has two or more drug or DUII convictions, or diversions, provided that at least two of incidents occurred within five years of the date the Commission received the application and at least one occurred within the last 12 months.
“Good Cause” largely would turn on whether the applicant had a drug or alcohol addiction problem at the time of the incidents that are the basis for the denial criteria. The applicant would have the burden of establishing good cause by providing the following:
1. Evidence of drug or alcohol addiction problems;
2. Sworn statement that the applicant has not used alcohol or controlled substances in the preceding 12 months;
3. Written proof of completion of a treatment program and continuing compliance with any treatment recommendations; and
4. Evidence that the applicant is complying with any probation requirements (if applicable).
To learn more about the rule making, click here.
The TTB Recently Issued Guidance on Social Media Advertising
The TTB recently issued Industry Circular 2013-01, “Use of Social Media in the Advertising of Alcohol Beverages.” You can find it here.
Social Media = Advertising
In short, the Circular’s point is that the TTB considers social media to be advertising, and, as such, it is subject to TTB’s advertising regulations. The TTB has provided clear guidance that it plans to hold industry members responsible for the content related to alcohol beverage products posted by industry members on social media sites. Industry members should be careful to comply with the mandatory statements and prohibited advertising practices in both social and conventional media contexts, and to generally take into account the same considerations. Because social media moves faster and has been sometimes operating in parallel to convention media promotions, industry members may be well served by auditing their current social media content and practices.
Key points include:
Social Networking Pages
The TTB has determined that these pages are “advertisements” under federal law. Anything posted to a page by an industry member is considered part of the advertisement, including information, images, or content created by a third-party and re-posted by the industry member. Because pages are advertisements, they must include all mandatory statements. The entire fan page is considered one advertisement, so the mandatory statements need only appear once such as on the home page. The regulations do not require that mandatory statements appear in a specific location, but they should appear where viewers would “most logically expect to find information about the brand or company,” such as an “About” section. Importantly, the mandatory statements should not be “hidden” or “buried.” The prohibited practices apply.
Video Sharing Sites
Videos and channels created by the industry member are considered advertisements. As a result, the rules on mandatory statements and prohibited practices apply. Again, the TTB recommends that industry members place the mandatory statements where viewers would expect to find such information. Additionally, the videos themselves must each contain the mandatory statements if they are downloadable by viewers, or if there is no associated channel or profile page. As a best practice, the TTB recommends placing the mandatory information on both the channel or profile page and the individual videos.
Blogs
An industry member’s blog is considered to be an advertisement if it discusses its products, which is the point of a blog. As a result, the rules on mandatory statements and prohibited practices apply.
Microblogs
Unlike blogs, microblogs (Twitter and Tumblr) contain very short posts, brief sentence fragments, images, or links to videos. These microblogs are considered by the TTB to be advertisements and, accordingly, subject to the mandatory statement and prohibited practice rules. Because microblogs, by definition, have strict character limits, it is impractical to require the inclusion of mandatory statements in each post. For this reason, the TTB allows industry members to include the mandatory statements on its home or similar pages.
Mobile Apps
Some industry members are creating apps for mobile phones that have some utility to the consumer. Apps may provide drink recipes, help consumers find locations where a product is served, or provide other information related to the relevant alcoholic beverage. The TTB has determined that apps are consumer specialty advertisements, i.e. “items that are designed to be carried away by the consumer…” because they are downloaded by the consumer onto a mobile device. As a result, the only mandatory statements required are the company name or the brand name of the product. Not surprisingly, the regulations on prohibited practices also apply to apps.
Links
Industry members often post links to other sites. The TTB has retained discretion to determine whether the linked content will be considered an advertisement based on the totality of the circumstances. The TTB did indicate that the industry member’s description of the linked site or page is considered part of its advertisement and thus must comply with the prohibited practices or statements rules. If the industry member provides links to other websites or pages for different alcoholic beverages or companies for which it is the responsible advertiser, the linked website or page is considered to be a separate advertisement that must contain all necessary mandatory information and comply with the prohibited practices or statements regulations.
The OLCC recently adopted amendments to OAR 845-006-0347 that increased the sanctions for certain types of unlawful activity that a licensee permits to occur on the licensed premises. Before the amendment, violations involving permitting unlawful activity on the premises were category III violations. Now, violations that involve death, serious physical injury, use or attempted use of a deadly weapon, or certain sexual offenses are category I violations. Violations that involve the use of a dangerous weapon with intent to cause death or serious physical injury are category III violations.
What does this mean to licensees? If a situation arises in which any of the types of unlawful activity described above appear imminent or are occurring, licensees should take immediate action to prevent them from occurring. Hoping that the situation will resolve itself or waiting to call the police until it’s too late can result in serious consequences. Licensees that have reason to believe that patrons may be brining weapons onto their premise may want to consider policies that ban weapons on the premises and the use of screening methods to prevent patrons from bringing them into the premises. Establishing solid house policies coupled with consistent training can help prevent problems, including those addressed by this rule.
The OLCC recently amended OAR 845-006-0345 to set a uniform standard for when licensees must allow OLCC inspectors and police officers to enter the premises to conduct a reasonable search to ensure compliance with Oregon’s alcoholic beverage laws. In short, a licensee must allow an OLCC inspector or police officer to enter the premises if they identify themselves and desire to enter the licensed premises. If the premises is or appears to be closed, the law enforcement officer must have a reason to believe an alcoholic beverage law violation is occurring. In addition, after the law enforcement officer is on the licensed premises, the licensee must allow the officer to conduct a reasonable search before asking them to leave the premises.
A violation of these prohibitions is a category II violation. Violations are divided into five categories with a category I violation being the most serious and a category V violation being the least. The proposed penalty for a violation is based on the category of the violation and is more harsh for more serious violations. In addition, the OLCC has adopted an escalating penalty schedule in which the suggested sanction for each successive violation in the same category within a two year period is increasingly harsh. For example, the proposed penalty for a first category II violation is a 30 days suspension. The proposed penalty for a second category II violation within a two year period is cancellation. Although the penalties proposed by the penalty schedule are suggestions, the penalties imposed by the OLCC often closely track those set out in the penalty schedule.
What’s the take away here? Licensees are responsible for the acts and omissions of their employees and agents while acting on behalf of the licensee. At a minimum, licensees should discuss these prohibitions with their staff to make sure that they understand when they need to allow law enforcement officers into the licensed premises. The proposed penalty for a first violation of these prohibitions is a 30 day license suspension and could have a serious impact on the continued success and operations of a business. The best practice is to address this issue in a house alcohol service policy that is reviewed and signed by all employees.
Disclaimer. This is for information purposes only and is not intended to and does not constitute legal advise. Please contact an attorney if you have any questions or concerns.