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Adam’s Morgan Moratorium Renewed, New Restaurant Licenses Available

On July 9, 2014, the Alcoholic Beverage Control Board (“ABC Board”) renewed the Adams Morgan moratorium zone.  The ABC Board consulted with the business community and the Advisory Neighborhood Commission 1C, which provided a proposal to modify some of aspects of the moratorium.

The ABC Board adopted the ANC’s proposal to remove the prohibition on new restaurant licenses in the moratorium zone.  In considering this request, the ABC board commented that more licenses can foster greater competition in the Adams Morgan commercial zone, which will ultimately lead to improvement in services for customers. However, the other restrictions, including ones on tavern and multipurpose facilities licenses, nightclub licenses, and promotional activities focused on nightclub and pub-crawl activities, are still in place.

The ABC Board also decided to reduce the term of the moratorium from five to three years, in order to monitor the effect of the extra restaurant licenses in the area.

The renewal is currently in effect only as on an emergency basis, however, and is subject to a 30-day public comment period pending final approval from the District of Columbia Council. Members of the public who wish to submit public comment can send theirs to martha.jenkins@dc.gov.

The exact geographic boundaries of the moratorium zone can be found here:
http://abra.dc.gov/sites/default/files/dc/sites/abra/publication/attachments/Adams_Morgan_ABC_Moratorium.pdf

Restaurants Targeted for Intellectual Property Violations for Allegedly Pirating Sporting Events

With the growing popularity of World Cup soccer in the Washington, D.C. area,  more and more bars and restaurants are hosting watch parties and cashing in on the merriment of this quadrennial soccer carnival.

As with playing copyrighted music (See here for our post discussing music licenses), restaurant and bar owners need to know the licensing rules for broadcasting major sporting events at their establishments.

In the last several years, thousands of restaurants have been sued in federal court for allegedly intercepting and showing licensed sporting events illegally.  The results of the lawsuits – defendant restaurants have been forced to pay $25,000, $50,000 and even upwards of $100,000 for statutory violations of federal law.

Many restaurants purchase commercial cable subscriptions and pay additional pay-per-view fees in order to broadcast certain sporting events at their establishments.  Commercial pay-per-view licensees and exclusive domestic commercial distributor of such sporting programs as Ultimate Fighting Championship (“UFC”) fighting matches, CONCACAF Champions League soccer matches, and FIFA’s World Cup games, monitor restaurants and bars to see who is broadcasting their programming.   These licensees send private investigators, some with cameras, to document restaurants that show these sporting events.  If the restaurant does not have a contract to show these events, or the restaurant is using a residential pay-per-view account rather than the more expensive business account, then the licensees or its agents sue the restaurant in federal court.

UFC has reported that from 2006 through January 2012, it collected $4.7 million in settlements from these commercial cases.[1]  J&J Sports Productions, Innovation Sports Management, Joe Hand Promotions, Inc, frequently file complaints in federal district court alleging violations of 47 U.S.C. § 605 of the Federal Communications Act of 1934, as amended (“FCA”), 47 U.S.C. § 553 of The Cable and Television Consumer Protection and Competition Act of 1992, as amended, and common law conversion claims.  Many of these law suits name the individual owners of the restaurants and bars as defendants along with the corporate entity.

Restaurants and bars who receive demand letters or complaints against them for these types of violations need to take these allegations seriously.  The sports licensees have won a number of substantial default judgments against restaurants who have failed to respond to these complaints.[2]  Restaurants should read their cable/satellite contract or pay-per-view contract carefully to ensure it allows for the public broadcast of such sporting events.

Doyle, Barlow & Mazard PLLC has successfully defended clients against these types of cases in federal district court on behalf of restaurant clients.  For more information, contact :

profile_blogRosemarie Salguero, Esq.
rsalguero@dbmlawgroup.com
(202) 589-1836

 

 

 

 


[1] http://www.businessweek.com/articles/2012-04-12/pay-per-view-wrestles-with-bar-owners

[2] http://www.bloomberg.com/news/2012-04-13/ultimate-fighting-boxing-on-pay-tv-spark-pirate-lawsuits.html

ABRA Issues Cease and Desist Order to Online Alcohol Vendor

On June 26, 2014, the Alcoholic Beverage Regulation Administration (“ABRA”) issued a cease-and-desist order against an online business that sells alcoholic beverages in the District of Columbia as a third-party without a license. 

ABRA issued the order to online alcohol vendor Ultra for selling alcoholic beverages in Washington, D.C. without a license. Ultra partners with local liquor stores to deliver alcohol directly to local consumers.  Consumer pays Ultra directly; Ultra then forwards the payment to the local liquor store minus an agreed upon percentage that is retained by Ultra.

Under District of Columbia law, no person or entity is permitted to sell or solicit orders for sale any alcoholic beverage without the proper license.  However, not all online sales are illegal. Liquor stores that have the proper licenses in Washington, D.C. can conduct online sales and deliveries in the District of Columbia.

ABRA issued an advisory opinion (Board Order No. 2013-062) last year related to “the operation of a similar online business,” with consistent findings.

ABRA Hosts New ABC Holder Orientation Session

ABRA will be hosting an orientation training session for new ABC license holders and other members of the public on Thursday, August 14th, from 2-5:00 p.m.

According to ABRA, the training will cover:

  • District ABC laws and regulations (including recent changes to the law)
  • Working with the community
  • Settlement Agreements
  • Expectations of ABC licensees
  • Tips for best practices
  • Noise abatement and sound management

Read more

Montgomery County Council Contemplates DLC Reform

Montgomery’s unique government-owned liquor distribution and retail system is once again in the cross-hair of reformers. Montgomery County Councilman Hans Riemer is the newest addition to a long list of politicians, as well as non-governmental campaigners who attempted to change, or abolish the system altogether.  Mr. Riemer is worried about the competitiveness of the alcohol monopoly of the Montgomery County Department of Liquor Control (“DLC”).  In an era where consumers’ selection of wines and beers is becoming more and more diverse due to the rise of micro-brews and family-run wineries, Mr. Riemer is concerned about the structural impediments that keep the DLC’s inventory limited to only the largest and most ubiquitous brands.  

Mr. Riemer’s sentiments are shared by many hospitality entrepreneurs who do business in Montgomery County.  One restaurant owner complained that under the current system, he must keep at least $20,000 tied down in inventory due to the slow speed of the DLC’s order fulfillment, as well as its limited selection.  For example, the DLC only fulfills orders once per week, even for the most popular beer and wine brands, when most orders placed elsewhere to private enterprises get filled the next day. Moreover, because the DLC places the burden of introducing new items to its inventory on the brewers and distillers themselves, many boutique brewers do not bother to navigate the complex bureaucratic process to place their items on the DLC inventory—and these items are therefore not stocked in the DLC warehouse.  For orders of these esoteric brands and distilled liquor, the DLC resorts to a “special order” system that outsources fulfillment to third-party agents at the cost of a markup that reaches 35% of shelf price, as well as wait periods of as long as two months.  These obstacles force restaurateurs and bar owners to invest in large inventories to anticipate the increasingly diverse preferences of customers.

Consequently, alcohol in Montgomery County is both harder to find and costs more than elsewhere.  This increased cost hurts businesses as well as consumers, and, given that Montgomery County is trying to attract more millennial settlers, who favor microbrews and craft-cocktails, to replace its graying tax-base, its restrictive alcohol policy is unlikely to do itself any favors.  Many who recognize these problems, whether they are local politicians or entrepreneurs, tried to either reform the most cumbersome parts of the DLC system or abolish it altogether in favor of the private market.  Yet, their attempts have been all thwarted so far.  The DLC lobby is quite powerful both in the county and in the statehouse in Annapolis, and successfully withstood these challenges for about twenty years.

The lobby is powerful for a multitude of reasons.  First, the union United Food and Commercial Workers, which counts 350 DLC employees among its members, remains a steadfast supporter of the status quo, though it recently warmed to the idea of reforms that will both make the existing system more efficient and keep the wages and benefits of DLC workers intact.  Second, the Montgomery County government is still a strong supporter of the DLC, because the latter contributes over $20 million a year to the county’s revenues.  These revenues are unlikely to be replaced should the DLC be privatized, according to the county government.

Therefore, the current reform proposal by Mr. Riemer does not attempt to dismantle the DLC altogether.  Instead, it seeks to make the DLC more efficient and more responsive to the needs of its customers.  Some of the key recommendations of the proposal are:

  • Develop an educational Patron Responsibility Program.
  • Utilize the Alcohol Beverage Advisory Boardto study and make recommendations regarding special orders, product placement, and customer service for the Department of Liquor Control.
  • Formalize the Department of Liquor Control Early Assistance Team and CountySafetyAlliance.
  • Expedite completion and implementation of the Department of Liquor Control Warehouse Management system in order to effect immediate improvements to selection, ordering, and delivery processes.
  • Support an Office of Legislative Oversight study, in conjunction with CountySTAT and other agencies as appropriate, to better understand how the Department of Liquor Control can improve its services and efficiencies in support of its nighttime economy.
  • Extend the hours of operation for venues with beer/wine/liquor licenses to 2 am on Sundays through Thursdays, and to 3 am on Fridays, Saturdays, and the Sundays before Monday federal holidays.
  • Expedite the creation of a social venue license, and modify the current alcohol to food ratio under the Class B beer/wine/liquor license from 50/50 to 60/40, to reflect the change in increased demand for higher quality, higher priced alcoholic beverages and to encourage establishment and operation of venues that host live music and other events.

Mr. Riemer also emphasized his commitment to DLC employees.  However, others prefer the complete privatization of the DLC.  Maryland’s State Comptroller Peter Franchot, a resident of Takoma Park, just recently urged Montgomery County’s business community to push for privatization.  He promised to conduct a feasibility study of privatization, and he believes the losses to the county’s revenue can be made up through increased economic activity, as well as Montgomery County customers returning to the county to do their shopping.  He also believes his plans can succeed if the business community and the public join him. Many entrepreneurs also see privatization as the best outcome.

ABRA Discusses Adams Morgan Moratorium Zone

On May 9, 2014, the Alcoholic Beverage Control Board (Board) held a hearing on two proposals regarding the future of a current moratorium on new restaurant, tavern, nightclub and multipurpose licenses in the Adams Morgan neighborhood. During the hearing, local residents, civil society and business owners submitted comments and offered testimonies, with their positioning varying from modifying the terms of the moratorium, to extending the status quo, to its abolishment altogether.

Under the current terms of the moratorium, ABRA will not issue any restaurant, tavern, nightclub and multipurpose licenses in the Adams Morgan neighborhood. The number of existing tavern and multipurpose licenses is also limited to ten, and other license holders cannot change its license class to tavern or multipurpose if there are already ten such licenses. Hotels and off-premise retailers (class A and B) are exempt from the moratorium.

The Board is expected to vote on a decision before the moratorium expires on July 12, 2014.

The boundaries of the Adams Morgan moratorium zone can be found here.

Restaurateurs Camp Out for ABRA’s Georgetown Licenses

On the evening of April 10, 2014, a number of restaurateurs camped overnight in front of the DC Reeves Municipal Center, waiting to submit applications for the three restaurant licenses and one tavern license which the DC alcohol Beverage Regulation Administration (“ABRA”) made available in the Georgetown Historic District. The camping was necessary because of ABRA’s “first-come, first-serve” policy for the available licenses.

Here is the list of applicants from ABRA:

  • Restaurant Enterprises, Inc. trading as Smith Point (applied for a tavern license)
  • AN & JM (trade name is TBD) (applied for a restaurant license)
  • FR & LH, LLC (trade name is TBD) (applied for a restaurant license)
  • Ching, LLC trading as So MI (applied for a restaurant license)
  • Luke’s Lobster VIII, LLC trading as Luke’s Lobster (applied for a restaurant license)
  • Georgetown Restaurant Partners, LLC (trade name is TBD) (applied for a restaurant license)
  • Restaurants, LLC trading as Yummi Crawfish and Seafood Restaurant (applied for a restaurant license)
  • Prospect Dining, LLC trading as George (applied for a tavern license)

There has been a moratorium on liquor licenses in the Georgetown Historic District since the 1990s. The number of restaurant licenses has been holding steady at 68, and tavern licenses at 6.

Liquor licenses rarely become available through ABRA in Georgetown. When Gypsy Sally’s recently obtained a tavern license, it had been 20 years since such an opening.

For more information on the licenses, please see here.

ABRA To Host ID Compliance Training Sessions

From April 25 – April 27, the D.C. Alcoholic Beverage Regulation Administration (“ABRA”) will be hosting a series of ID compliance training sessions for ABC licensees and their staff. According to ABRA, the training topics will include:

  • Techniques for properly verifying IDs
  • Tips for spotting fake IDs
  • Information on ABRA compliance checks

The training sessions will be during the following dates and times:

  • 9-11 a.m., Friday, April 25
  • 11:30 a.m.-1:30 p.m., Friday, April 25
  • 3-5 p.m., Friday, April 25
  • 9-11 a.m., Saturday, April 26
  • 11:30 a.m.-1:30 p.m., Saturday, April 26
  • 3-5 p.m., Saturday, April 26
  • 9-11 a.m., Sunday, April 27 (Korean interpreter available)
  • 11:30 a.m.-1:30 p.m., Sunday, April 27 (Spanish interpreter available)
  • 3-5 p.m., Sunday, April 27

To RSVP for the training sessions, contact ABRA Operations Manager Jackie Richardson at:

Training will be located at the ReevesCenter:

2000 14th Street, NW
Suite 400 South, 4th Floor
Washington, DC20009

Four ABRA Licenses Available in Georgetown

The D.C. Alcoholic Beverage Regulation Administration (“ABRA”) announced it will be accepting applications for 4 ABC licenses starting on Thursday, April 10th. The available licenses are:

  • One tavern license – available only to an existing restaurant located in Georgetown’s Historical District. Application may be made for either a tavern or  nightclub license in the Historic District.
  • Three new restaurant licenses (either C/R or D/R) in Georgetown.

The number of restaurant licenses is capped at 68 in the Georgetown neighborhood; there are currently 65 operating licenses, while the three available are currently “underperforming” or “left on the shelf.”

 

To apply for a tavern license, applicants should:

  • Complete a License Class Change application.
  • Submit the application and all required materials in person to ABRA beginning at 8:30 am on Thursday, April 10. The office is located at the Reeves Center, 2000 14th Street, NW, Suite 400 South, 4th Floor, Washington, D.C. 20009.

To apply for a new restaurant license, applicants should:

  • Complete an ABC License application.
  • Submit a Tax Registration Certificate with the application. Obtain a Tax Registration form by filing for a DC business tax number at the Office of Tax and Revenue.
  • Provide a Clean Hands Certificate with the application. The Clean Hands Certification form (to be filled out when you obtain your certificate) is included with the ABC License application, and confirms that you do not owe more than $100 in outstanding debts to the District.
  • Submit the application and all required materials in person to ABRA beginning at 8:30 am on Thursday, April 10. The office is located at the Reeves Center, 2000 14th Street, NW, Suite 400 South, 4th Floor, Washington, D.C. 20009.

Completed applications for the licenses will be reviewed on a first-come, first-served basis and are subject to the consideration of the Alcoholic Beverage Control Board.

Members of the public who have questions can call ABRA at 202-442-4423.

 

You can find the boundary of the Georgetown Historic District here.

DC Council Introduces Bill to Regulate Event Promoters

In response to several incidents of violence at promoter-hosted events in DC, DC Councilman Jim Graham introduced a bill that would require independent event and party promoters in DC to be licensed by the DC government. Specifically, licensed promoters would have to attend training sessions conducted by the DC Alcoholic Beverage Regulation Administration (“ABRA”), maintain personal liability umbrella insurance with a minimum liability limit of $3 million, and pay a $250 registration fee. In justifying the bill, Mr. Graham noted three serious incidents of violence near bars and restaurants which occurred during promoter-hosted events during the last two years.

However, many promoters are against the new regulations. One seasoned promoter believes the bill is targeting the wrong people. He notes that even though promoters are tasked with bringing in patrons and even hosting the events, the security and the responsibility to operate the premise still lies entirely within the purview of the restaurant operator, as is codified in DC hospitality laws. While violent incidents are unfortunate, unavoidable occurrences, the main responsibility should lie with the owner and operator of the venue, not the promoters, as is clearly stipulated in DC law. The instances where promoters were given partial control over the venue due to poor management or lax security should never have happened if existing laws were adequately enforced. In addition, he noted that the bill can be easily evaded if the venue simply registers independent promoters as temporary staff during events.

Council members Anita Bonds and Jack Evans co-sponsored the bill. It has been referred to the Committee on Business, Consumer, and Regulatory Affairs.