Tag Archives: OLCC Case Profile

OLCC Case Profile: The OLCC Dismissed Two “Permitting” Violations in Bradley’s Bar & Grill

The OLCC dismissed two “permitting” violations in Bradley’s Bar & Grill.  In doing so, the case provides some useful guidance to existing licensees.

The Law.  “Permitting” violations requires that the OLCC show two elements.  The first element is a showing that the licensee had knowledge of the proscribed activity.  The second element is a showing that the licensee failed to take reasonable steps to prevent or control the proscribed activity.

The proscribed activity may be unlawful activity, disorderly conduct, or having a minor in an area in which minors are prohibited.  Knowledge may be shown in a number of ways: actual, constructive, or imputed.  Constructive knowledge is where the nature of the proscribed activity was such that it would have been evident to persons working in the establishment.  The knowledge can also be imputed to the licensee from one of the licensee’s agents or employees.

First Alleged Violation.  The first alleged violation was that the licensee permitted unlawful activity when a patron sold drugs to a confidential reliable informant (a “CRI”).  It was undisputed that the employee on duty had no actual knowledge that a CRI was attempting to buy drugs in the bar.  In addition, it was not evident to persons working at the bar that the two patrons talking privately near the bar were negotiating a drug sale.

OLCC staff contended that licensee’s employees should have monitored the private conversation between the patrons and thus should have been aware of the drug sale.  The Commission determined that that was not a reasonable expectation.  Even if the employee in question had stopped performing their duties and focused entirely on drug transaction, the Commission determined that it would have not been evident to a reasonable person that a drug transaction was occurring.

Take Away Point.  Licensees are responsible for taking reasonable steps to prevent drug activity at or adjacent to the licensed premises.  If their employees become aware that such drug transactions are occurring or such activity becomes conspicuous, a licensee is responsible to taking reasonable steps to prevent such drug activity.  That being said, if the drug activity is “surreptitious and subtle” and the licensee does not have actual or constructive knowledge of it, a licensee will not be sanctioned by the OLCC.  The take away is that licensees should take care to train their staff to be observant of their surroundings and to report any criminal or suspicious activity to the manager or owner.  Communication between staff and management is essential and there are a number of tools that licensees can put into place to mitigate risk here.

Second Alleged Violation.  The second alleged violation was that the licensee permitted a minor to be on the licensed premises where minors were prohibited.  For this type of violation, the knowledge element can be met either by showing that the licensee had (1) actual knowledge that the minor was on the licensed premises or (2) sufficient time and opportunity to detect and determine the minor’s presence at the premises.

In this case, it was undisputed that the licensee’s employee was unaware of the minor’s presence at the bar.  As a result, the case turned on whether the licensee’s employee had “sufficient time or opportunity” to discover the minor.

The Commission has determined that 10 or 15 minutes is “sufficient time and opportunity” exists when a premises is busy.  Here, the minor was in the bar for a little over 9 minutes and the bar was busy.  The unique fact presented was that two other patrons that were sitting at the table where the minor was seated caused a disturbance for much of the 9 minutes.   Accordingly, the server’s attention was rightfully focused on resolving the immediate situation.  In this case, the Commission found that the server did not have sufficient opportunity to detect the minor’s presence because of the disruptive behavior of the other patrons.  The disruptive behavior constituted an immediate public safety concern and required the immediate attention of the server.


OLCC Case Profile: The OLCC Canceled the Liquor License of Liquid Club & Lounge in Bend, Oregon for License Restriction Violations

The OLCC canceled the liquor license of the Liquid Club & Lounge located in Bend, Oregon in later October. The basis for cancelling the liquor license was that the licensee violated a number of license restrictions imposed on the license when it was issued. It serves as a good case study about the risks of having a liquor license with restrictions. Here, the OLCC imposed restrictions on the liquor license because the previous licensee had its license cancelled for a history of serious and persistent problems.

The OLCC can impose restrictions on a liquor license when there is a basis for denying an applicant’s application. The denial basis may be related to characteristics or the compliance history of the applicant, or it may be related to recent compliance problems at the location to be licensed. Applicants should carefully consider whether to accept a license with restrictions. Depending on the situation, it may make sense to appeal the restrictions or simply walk away from the business opportunity. If an applicant decides to accept license restrictions, they need to take great care to ensure total compliance with the restrictions going forward.

The reason that license restrictions are so serious is that the standard penalty for a first license restriction violation is license cancellation. The license restrictions at issue here were as follows:

• Licensee shall limit each person to possessing no more than one container of alcohol at one time and limit the amount of alcohol in a container to no more than 16 ounces of malt beverage, 6 ounces of wine, or 1.5 ounces of distilled spirits.
• Licensee shall ensure that the parking lot area under the licensee’s control and the outside area adjacent to the premises are patrolled on Friday and Saturday at lease every five minutes starting at 10:00 pm and continuing until 30 minutes after the close of business to discourage loitering and illegal activity.

The OLCC showed that the licensee violated the license restrictions on five separate occasions. In order to cancel the license, the OLCC must show that restriction violations are substantial enough to warrant cancellation. The Commission considers four factors in determining whether a restriction violation is substantial enough to warrant the presumed penalty of cancellation.

• Timing—with breaches soon after the license issues considered to be more serious. Here, the violations occurred almost immediately.
• Willful—restriction violations that are committed willfully by the licensee are considered to be more serious. Here, the licensee was found to be aware of the restrictions and voluntarily allowed them to be violated.
• Number of violations—five separate violations are considered to be more serious than an isolated incident.
• Hardship—breaches that strike at the heart of the restriction are considered to be more serious than more peripheral violations.

In this case, the OLCC found that all four of these factors weighed against the licensee and that license cancellation was thus warranted.

Licensees that currently have license restrictions should consider requesting their removal as soon as is practical, but should take care that they have a plan for ensuring 100% compliance while the OLCC is considering the request. The OLCC will typically not seriously consider requests to remove restrictions if the restrictions have been in place for less than one year. The burden is on the licensee to show that the original basis for imposing the restrictions no longer exists and explaining how they will ensure compliance going forward. Applicants that are facing a decision about whether to accept a license with license restrictions should also think carefully about the practical realities of operating with license restrictions and what other business opportunities are available.