AAIAC

The Alliance of Alcohol Industry Attorneys & Consultants is a select organization of alcoholic beverage licensing and compliance professionals.

When is Happy Hour Not so Happy In Tennessee?

The rules on Happy Hour in Tennessee can drive you to drink.  Make that a double.

Nothing good seems to happens after 10 pm, or at least so thinks the Tennessee state legislature. After 10 pm, bars cannot:

sell or serve more than one drink at a time pour more alcohol for the same price

The exceptions to the rules make it fun – for sick folks that like obtuse facts, like lawyers.

First of all, beer is happy, day or night.  Happy hour rules do not apply to beer.

Half price cocktails and other drink discounts are timeless.  Tennessee ditched the old rule that prohibited discounting drinks after 10 pm.

2-4-1 is tricky.  Although you can discount drinks until close, you cannot serve 2 drinks to a customer after 10 pm.

And speaking of doubles, bring it on, as long as the price for a second shot is the same, day or night.  Offering discounted doubles after 10 pm can violate the rule against pouring more alcohol for the same price after 10 pm.

Be careful with drink chips and other free drink promotions.  Tennessee state law prohibits giving away wine or spirits.  You can do 2-4-1 with a drink chip, as long as the chip is redeemed by 10 pm.  Redeem the chip after 10 pm and you violate happy hour laws.  If the customer tries to redeem the chip for a drink on the next day, you are giving away liquor and can be cited.

Beware of bottomless mimosas, bloody mary’s and other cocktails.  Serving too many drinks for a fixed price can violate the rule against giving away liquor.  You can also get folks drunk.  State law prohibits serving alcohol to a visibly intoxicated person.

I know, isn’t that the whole purpose for going to a bar anyway: to get drunk?

We have been quietly humming the Ren & Stimpy oh-so-sarcastic theme song whilst posting this happy hour nonsense:

Happy Happy Joy Joy
Happy Happy Joy Joy Joy
I don’t think you’re happy enough. That’s right! I’ll teach you to be
Happy. I’ll teach your grandmother to suck eggs
Happy Happy Joy Joy…

Original author: William T. Cheek III
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Landlords with Percent Rent from Liquor Get Some Love from Tennessee ABC

By - September 19, 2017 | Alcoholic Beverage Law | Email Will Cheek

Landlords know this problem all too well. The Tennessee Alcoholic Beverage Commission calls a landlord an “indirect owner” if the landlord that receives 5% or more in percentage rent from the sale of alcohol.

The ABC requires that the landlord file an ABC questionnaire for the landlord company.  Recently, the ABC has been requiring that at least one corporate officer of the landlord also file an ABC questionnaire.

Landlords are understandably concerned about having an “indirect interest” in a liquor license.  Landlords generally have nothing to do with the sale of alcohol, other than an arms-length lease to a tenant that holds an alcoholic beverage license.  Filing a questionnaire or otherwise “being on the liquor license” raises concerns that a plaintiff might sue the landlord in a dram shop action for liquor liability.

In addition, ABC questionnaires require officers to divulge confidential personal information, including a social security number.

We are pleased to announce that the ABC recently discontinued ABC questionnaires for landlords having percent rent.  Instead, the ABC published the “Landlord Interest Affidavit.”

The Landlord Interest Affidavit dispatches with personal information and is limited to factors that would disqualify a landlord from receiving rental income from the sale of alcohol.

Snoop Dogg’s classic “Show Me Some Love” seems appropriate:

You don’t show me some love
(show me love, for real, you gets no love, yea)
You gets no loving babe 
(you gets no love, you ain’t gonna miss it till it’s gone) 

We applaud the ABC for responding to this industry concern and showing some love to landlords.

Original author: William T. Cheek III
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Roll Out the Red Tape for Tennessee Retail Liquor and Grocery Stores: Background Checks Now Mandatory

Anyone that has applied for a liquor license for a grocery or retail liquor store in Tennessee understands red tape. We purchase the stuff by the truckload around here. We seem to consume more red tape than oxygen and bourbon – combined.

Starting July 1, 2017, applications for Certificate of Compliance in Tennessee must be filed with national and local background checks. The new Tennessee law requires that:

Each applicant or officer … must obtain and submit with the certificate a local and national criminal history record obtained from a third party using a multistate criminal records locator or similar nationwide database with validation.

The background checks are to prove that the applicant or officer has not been convicted of felony in the last 10 years. Read the full text here PC 357.

Problem is, seems only a handful of folks in Tennessee know about the new requirement. We are advising liquor and food store owners to submit the background checks, even if the city says they are not required. It is, after all, state law.

Questions abound.

Who is required to submit the background checks? Certainly not every corporate officer of a publicly traded company. Do we just pick the people? If so, seems to be a great way to hide your favorite felon.

What is a local background check? For that matter, what is a “national criminal history record?”

We recommend satisfying the local requirement by filing a TBI background check. TBI checks cost $29, can be run online and do not require fingerprints. Results are back in days, if not hours. Start the process here. We can see some cities requiring their own police or other “local” background checks.

National background checks require a little more effort. We had to become qualified to pull them.

Plan in advance. At this juncture, no one knows what each city will want.

The new requirement could be a train wreck for unsuspecting liquor store owners and grocers looking to renew. Certificates of Compliance must be renewed every two years. The weeks leading up to July 1, 2018 will be particularly hectic, with several hundred certificates coming due on the two year anniversary of WIGS – Wine In Grocery Stores.

Not sure why, but we find ourselves humming the Grateful Dead train crash tune:

Driving that train, high on cocaine,
Casey Jones you better watch your speed
Trouble ahead, trouble behind
And you know that notion just crossed my mind

We hope the kinks are resolved long before 2018.

Original author: William T. Cheek III
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Metro Nashville Beer Board Shakes it Off

By - July 21, 2017 | Alcoholic Beverage Law | Email Will Cheek

Major change is afoot at the Metro Nashville Beer Board.

After several years of dedicated service, longtime Beer Board Chair Anne Arney “retired.” Like most Tennessee beer boards, Nashville’s board is lead by volunteers, appointed by the mayor.

Brian Taylor was elected chair by the board at the June 28, 2017 meeting.

Executive Director Jackie Eslick, the head honcho of the paid staff, moved to another Metro position. Benton McDonough has been tapped Interim Director.  For betting types, odds are good Mr. McDonough’s position will become permanent.

We thank Ms. Arney and Ms. Eslick for serving the Metro Beer Board all these years.

Liquor licensing experts like consistency. Tell us how to get a license and we can follow a predictable road map to obtain the approvals to stock the bar.

But change is inevitable and licensing specialists have to be adept. Taylor Swift celebrates the skills of licensing stars in mega-hit “Shake it Off”

I never miss a beat, I’m lightning on my feet
And that’s what they don’t see, that’s what they don’t see
I’m dancing on my own, I make the moves up as I go
And that’s what they don’t know, that’s what they don’t know

So far though, we like what we see.

Original author: William T. Cheek III
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3rd Quarter SC Alcohol Licensing Newsletter

3rd-Quarter-SC-Alcohol-Licensing-Newsletter

New Alcohol laws include:

  1. Non-profits now allowed to solicit alcohol donations from suppliers for special events under certain circumstances. S 0114 Signed by the Governor on May 19th.
  2.  Renewals and new applications for on-premise  licenses now required to show proof of minimum million dollars of liquor liability insurance. S -116
  3. Breweries may now apply for permit to sell liquor by the drink, and provision for a brewpub to become a brewery. S 0275 Signed by the Governor on May 19th.
  4. The ability to obtain liquor by the drink licenses has been expanded to include motorsports, tennis, and baseball complexes.  S 0334 Signed by the Governor on May 19th.
  5. Tasting options for micro-distillers have been expanded. H 3137
  6. The THREE store limit on liquor stores was re-enacted but the new law expires on April 5, 2018. H 3137
  7. Brewery samplings of beer modified with some additions and some deletions. H 3137

 In total 5 bills became law and 16 were carried over until January of 2018.
 To read these new laws click on this link, select alcohol beverages and click submit.

Read more...

 

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Duncan Liquor Newsletter - June 2017

In This Month's Edition:

  • The New Common Consumption Area and other new laws [Kansas]
  • A CASE WORTHY OF STUDY FOR ANYONEA CASE WORTHY OF STUDY FOR ANYONEHANDLING ADMINISTRATIVE APPEALS
  • Hawaii: Group files suit over liquor rule changes
  • Kansas woman seeking body-cam video of police shooting wins her appeal
  • IN THE SUPERIOR COURT OF THE STATE OF DELAWAREIN THE SUPERIOR COURT OF THE STATE OF DELAWAREWORLD CLASS WHOLESALE, LLC, a Delaware Limited Liability Company, Plaintiff, V. STAR INDUSTRIES, INC., A Delaware Corporation, Defendant.
  • Nevada: Liquor Industry Lawsuit May Sideline Nevada's Cannabis Launch Date
  • Utah: Liquor lobbying group declares war on UtahUtah: Liquor lobbying group declares war on Utahwith ad campaign in neighboring states over strict drunk driving law
  • Impaired lawmakingImpaired lawmakingCommon sense goes tipsy with a new Utah drunken-driving statute
  • Utah: Lawmakers Review New DUI Law but Won't Budge on 0.05 Limit
  • Trump Says D.C. Wine Bar Can't Sue Him Over Unfair Competition
  • 'Drunk driver' sues the bars that served him
  • Washington: New Washington laws cover liquor samples,Washington: New Washington laws cover liquor samples,wine auctions, tasting rooms
  • For Total Wine, it's total war against alcohol regulation
  • Five Guys' Website Must Follow ADA Too, Blind Users Say
  • Budweiser Uses Giveaway Fridges to Freeze Out Rivals, State Alleges
  • Judge Likes Terminated WA Distribs' Case Against Pabst
  • A-B: DOJ Ain't Balking, So Don't Come a Knockin'
  • SENATE BILL 378-  THE PROPOSED DEMISE OF DUE PROCESS FOR ALCOHOL LICENSEES
  • Grocery Wine Sales Bring Major ChangeGrocery Wine Sales Bring Major ChangeTo Pennsylvania Retail LandscapeMay 31, 2017
  • Terroir Life's Charles Banks Reaches Settlement With SECTerroir Life's Charles Banks Reaches Settlement With SEC
  • The Ban on Consignment Sales The Ban on Consignment Sales Texas Supreme Court Weighs In on Tied House

Read More

 

 

 

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What’s On Your Wall?

By - May 19, 2017 | Alcoholic Beverage Law | Email Will Cheek

Restaurant and hospitality insiders call it the wall.  You know, the place where you have to publicly display your liquor license and other stuff the State of Tennessee issues.

Where hear it all to often from restaurant, bar and hotel owners: what signs do I have to post on the wall?

Here is what Tennessee state law requires you to publicly post:

ABC Liquor License City or County Beer permit Certificate of Registration City Business License County Business License Certificate of Occupancy Most recent Health Inspection Report ABC pregnancy warning sign

If you want to prohibit licensed gun owners from packing heat at your watering hole, post the universal no gun sign at every public entrance and exit.

The 1971 political “Signs” by one hit wonder 5 Man Electrical Band rings in our ears:

Sign, sign, everywhere a sign
Blockin’ out the scenery, breakin’ my mind
Do this, don’t do that, can’t you read the sign?

Many cities require that you post the fire occupancy or other fire marshal approval. Your local city may also require additional signs, and we encourage you to look around at what thy neighbor does.  If several  area restaurants post a sign that is not on your wall, you might ask whether you should add the sign to your collection.

Original author: William T. Cheek III
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Duncan Liquid Law Letter - May 2017

In This Edition...In This Edition...

In this Issue:

KANSAS LEGISLATURE PASSES AND GOVERNOR APPROVES BILL TO LET GROCERY AND C-STORE TO SELL BEER NOT TO EXCEED 6% BEGINING APRIL 1, 2019 

SOUTH CAROLINA LAWMAKERS DELAY SUPREME COURT DECISION ON LIQUOR LICENSE CAPS 

Widow Jane Pushes Back Against Acquisition 

TEXAS SENATE VOTES TO ELIMINATE LIQUOR LICENSE LOOPHOLE 

A-B Disapproves MegaMerger in Southeast

WHISTLEPIG AND CHATHAM BUTT HEADS OVER USE OF "CROP" TERM 

Carrabba's Italian Grill Hit With Nationwide Overtime Suit Legal,

Political and Practical Challenges in Regulating Recreational Marijuana
BY ARTHUR J. DECELLE ON APRIL 5, 2017 POSTED IN ADVERTISING AND MARKETING, DISTRIBUTION, FOOD SAFETY AND FDA, GENERAL INTEREST,IMPORT/EXPORT, TRADE PRACTICES, TRANSACTIONS

Read More

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Drink, Drank, Drunk. Drinking 23 Hours 7 Days a Week Headed to Tennessee

By - May 03, 2017 | Alcoholic Beverage Law | Email Will Cheek

For the first time ever, you can belly up to the bar after last call at two Nashville restaurants  – The Diner and The Scoreboard. Thanks to legislation inked by Tennessee Governor Haslam just hours ago, the two watering holes can sell beer, wine and spirits from 4 am in the morning until the following 3 am.  Seven days a week.  The bars only close for one hour – from 3 until 4 am.

We have heard from scores of businesses asking how they get added to the list.  Folks are inquiring, why are these two places given a license to mint money after hours.

Sorry Charlie. Diner and Scoreboard employed fantastic legislative strategy, hired a lobbyist extraordinaire and changed state law. With the Tennessee legislature adjourned until next year, no one will be following in their footsteps until at least spring 2018.

Proponents of the law say that allowing late night bar service at these two venues is a “test case” to see how it works.  The Diner in SoBro Nashville and the Scoreboard near Opryland Hotel can serve thousands of bartenders, waiters and other service industry personnel that work late nights and might want to quaff a cold one after quitting time.

Revelers are required to forgo drinking for an hour before bellying up to the bar at 4 am.  Both of the restaurants will serve meals at 3 am, to encourage late night dining before drinking commences again.

Of course, Hank Williams Jr. crones the perfect lines – from Whiskey Bent and Hell Bound:

Sure enough about closin’ time
‘Bout stoned out of my mind
And I end up with some honkytonk special I found
Just as sure as the mornin’ sun comes
Thinkin of my sweet girl at home
And I need to get whiskey bent and hell bound

Stay tuned for more news from the 2017 legislative session.

Original author: William T. Cheek III
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Tennessee Liquor Team Welcomes Baby Girl

By - May 01, 2017 | Alcoholic Beverage Law | Email Will Cheek

Many of our loyal readers know Beth Frasch, who is charged with the near impossible task of keeping yours truly, as well as managing the workflow for the Bone McAllester alcoholic beverage team.

Beth’s family welcomes baby Riley Hayden Frasch, born 4:55 pm Wednesday April 26, 2017.

 

Riley weighed in at 9lbs 9oz, just like her sister Hannah, and measured 191/2 inches long.

We wish the Frasch family well, although Beth is sorely missed here in the salt mine.

Forgive us whilst we get a wee bit sappy, thinking about a tune crooned by Martina McBride and written by one of Willa’s friends:

And when she wraps her hand around my finger,
How it puts a smile in my heart,
Everything becomes a little clearer,
I realize what life is all about,
It’s hanging on when your heart is had enough,
It’s giving more when you feel like giving up,
I’ve seen the light,
It’s in my daughter’s eyes

Original author: William T. Cheek III
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Early Bird Gets The WIGS?

Maybe so, if you are a food store looking to renew your wine in grocery store license, which we affectionately call WIGS.

What gives?

Picture this.  Several hundred grocery stores all filed applications to obtain liquor licenses to sell wine beginning July 1, 2016.  The Tennessee Alcoholic Beverage Commission, acting with near superhero powers, pre-approved WIGS applications in droves in June, allowing grocers to stock and prepare for the first day of wine sales.

This worked perfectly for the historic debut of WIGS on July 1, 2016.

Problem is, all those liquor licenses expire on the same date – July 1, 2017.  We see a train wreck in the making if human nature prevails and the vast majority of food stores wait until the last minute to try to renew WIGS licenses.

Conjures up the bizarre ode about Casey Jones’ untimely death saving the lives of scores of train passengers, often sung by Jerry Garcia with the Grateful Dead:

Mrs Casey when she heard the news
Sitting on her bedside, she was lacing up her shoes
Children, children now hold your breath
You will draw a pension at your Papa’s death

We strongly encourage food stores to file applications for WIGS renewals as soon as possible.  For dilatory filers, our crystal ball conjures up images of headaches, red tape and possible interruptions in sales.

Fortunately, the ABC gave the industry a heads up about WIGS renewals and provided helpful instructions.  Read the FAQs here WIGSrenewal.  We will continue to update WIGS renewals as July 1, 2017 D-Day approaches.

Original author: William T. Cheek III
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Duncan Liquor Law Letter

In this edition:

Court Finds State's 3 Store ownership limit unconstitutional - Read

BevMo Complaint On Total Wine Is Referred To FTC, But Total Says It's Without Merit - Read

Understanding the Three-Tier System: Its Impacts on U.S. Craft Beer and You - Read

Dan Aykroyd Breaks Down Booze Bottle Angles In IP Trial  
ROUND TWO: KAH TEQUILA V. CRYSTAL HEAD VODKA - Read More

And for more news - go to Duncan Liquor Law Letter

THE STATE OF SOUTH CAROLINA In The Supreme Court Retail Services & Systems, Inc., d/b/a Total Wine & More, Appellant, v. South Carolina Department of Revenue and ABC Stores of South Carolina, Respondents. Appellate Case No. 2014-002728 Appeal From Aiken County Doyet A. Early III, Circuit Court Judge Opinion No. 27709 Heard November 5, 2015 - Filed March 29, 2017

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Tennessee ABC Names New Commissioner

Richard Skiles was named the Tennessee Alcoholic Beverage Commissioner for the Western Section of Tennessee at the April 6, 2017 TABC meeting. Commissioner Skiles replaces Mary McDaniel, which we blogged about here.

Commissioner Skiles hails from the Home of the White Squirrel, Kenton, located in northwest Tennessee near Union City. We understand that Randy Boyd also calls Kenton home, which may have a little something to do with Commissioner Skiles’ appointment. Mr. Boyd is the former Commissioner of Economic Development and a personal friend of Governor Haslam.

Commissioner Skiles is also from Representative Bill Sanderson’s district. Representative Sanderson is Chair of the House State Government Subcommittee, a position of some power, and also well-versed in alcoholic beverage law. Representative Sanderson owns a winery and is pals with Michael Ballard, purveyor of Full Throttle Sloonshine.

At this point, we know have no information about Commissioner Skiles, but stay tuned for more info.

We make a rare departure from quoting a raucous song to leave you with some trivia about the home of the white squirrel, courtesy of Wiki:  Kenton is one of four communities in the United States that has a large population of albino squirrels. In 2006 the population was estimated at 200, or about one for every six residents.  The town celebrates this anomaly with its annual White Squirrel Festival held during the week in which the Fourth of July falls.

And as long as we are gabbing about the TABC, well-placed sources tell us that the bill to increase the number of Commissioners from three to five is destined to become law. HB1294 has passed the Senate and is set for approval in the House. The bill adds two Commissioners, one appointed by the Speaker of each Chamber.

Original author: William T. Cheek III
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Tennessee Restaurants and Bars Celebrate Larger ABC Fines for Sales to Minors

By - March 17, 2017 | Alcoholic Beverage Law | Email Will Cheek

We rarely hear business owners excited to pay more money to government.  But many Tennessee restaurants, bars and venues are eagerly supporting pending legislation to allow the ABC to increase fines for sales to minors to $10,000.

You can read the entire bill here HB 935

Reliable sources on the Hill say that the bill will become law.

Tennessee is well-known in the nation for under 21 ID stings.  The Tennessee ABC and local law enforcement have been quite successful citing liquor license holders for sales to minors.

Current law limits ABC fines to $1,500 for sales to minors.  Understandably, the ABC has favored suspensions for a second sale to minor within 2 years.  Many licensees have served 7 to 14 day suspensions for a second sale.  Most of the time, an ABC suspension also leads to a beer board suspension.

Industry has been clamoring for allowing the ABC to increase the fine for a second sale to minor – instead of devastating suspensions.

Our good buddy Willa reminds us of the classic John Conlee tune:

The bills are all due
The babies need shoes
I’m busted

Stay tuned for updates about the 2017 legislation session.

Original author: William T. Cheek III
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How Do I Transfer a Liquor License When I Purchase a Restaurant or Bar in Tennessee?

By - March 12, 2017 | Alcoholic Beverage Law | Email Will Cheek

We hear it all the time.  A top of the charts question is how do I transfer the liquor license when I purchase a restaurant or bar in Tennessee?

Here is a simple guide.

1. Liquor licenses in Tennessee are not bought and sold.  Unlike many states, liquor  licenses and beer permits are issued to any qualified applicant in Tennessee.  Licenses have no value.

2. When you buy a business that serves beer, wine and spirits, you have to obtain your own beer and liquor licenses.  You can be looking at a prolonged interruption in service if you fail to apply and obtain your own beer and liquor licenses.

3. Make sure you understand local beer board practices.  The rules vary widely from city to city.  For example, in Nashville, it is best to apply at closing, or the beer inspector may visit and tell you to stop selling beer.  Check with your local beer board before closing and make sure you know what you need to do to.  Most importantly, do what you are told by your local beer board.

4. The Tennessee ABC will accept an interim management agreement that allows you to “use” the seller’s liquor license.  The interim management agreement must have some magic language and we strongly advise that you file a copy of the agreement with the ABC at closing.  Otherwise, you risk the ABC revoking the license, which means an interruption in service.

5. Make sure you complete all the steps to obtain your own beer permit and liquor license.  Too often, we hear from well-intentioned purchasers that are facing an interruption in service because they do not obtain their own licenses.

Classic Hank Williams Jr. comes to mind:

Play me the songs about ramblin man
Put old Jim Beam in my hand
Cause you know I still love to get drunk
And hear country sounds

 

 

Original author: William T. Cheek III
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Tennessee Restaurants, Bars and Hotels Be on the Alert for Immigration Raids

Just today, we heard from a restaurant that was “inspected” by agents looking for illegal immigrants and asking about proper documentation.  Scary stuff.  We understand that one or more Tennessee ABC agents lead the investigation.

Bone McAllester immigration expert Raquel Bellamy offers these Top 5 Immigration Tips for Employers.

Unauthorized immigration is a hot topic these days. Undocumented immigrants are roughly 5% of the U.S. civilian labor force, as reported by the Pew Research Center.  We suspect that many restaurants, bars and hotels have a much higher percentage of illegals.

Some employees give employers fake documents. Other employers intentionally hire undocumented immigrants, to gain a competitive advantage by offering lower pay and fewer protections. In the most egregious scenarios, employers falsify records and participate in labor trafficking by recruiting and smuggling workers from abroad (a big no no!).

A recent federal immigration executive order deputizes state and local law enforcement authorities to act as ICE agents.  Legally, TABC agents, local police and even beer board inspectors can now search your business for illegal or improperly documented immigrants.

Here are our top five immigration tips for employers:

1. Anticipate increased auditing of records to verify I-9 compliance. Locate and organize your records to avoid costly delays. You should have a completed I-9 for each employee.

2. Prepare for the inevitable by conducting an internal audit, which will help you identify any I-9 compliance issues.

3. Consult a competent employment attorney regarding any potential liability for violations of I-9 regulations.

4. Train front office staff (receptionists, hostesses, etc.) on how to respond to law enforcement officials who enter the premises to inquire about immigration violations. Know your rights to limit access of law enforcement officers.

5. Avoid discrimination based on national origin against potential employees. During the interview phase, limit your inquiry to whether the applicant is authorized to work in the United States and whether the applicant will require sponsorship to obtain work authorization. If an applicant or a current employee is confused about work authorization, you should encourage him/her to seek independent counsel.

6. I know I said 5, but who doesn’t love a bonus? Show compassion for workers who are experiencing personal trauma as a result of the changes in immigration enforcement priorities. Even U.S. citizens may experience a high level of anxiety over the potential impact to their family members and friends. Be mindful of negative interactions between employees. Some of my clients have reported workplace harassment. In one instance, a worker was blackmailed by a co-worker who threatened to call ICE. Employers should be aware of any workplace intimidation and maintain a policy against bullying. Again, regardless of your position on the debate, we are all less safe when pockets of our population are particularly vulnerable.

Ray Stevens controversial tune “Come to the U.S.A.” seems timely:

If you thinkin’ about illegal immigration
Be careful when you’re choosin’ the nation
‘Cause breakin’ the law in some countries is frowned upon.
Imagine that.

In a rare bit of shameless self-promotion, we can help you make sure you are properly documented, in case agents come a knockin’.  Feel free to e-mail us at This email address is being protected from spambots. You need JavaScript enabled to view it.

Original author: William T. Cheek III
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Duncan Liquor Law Letter

In this edition:

  • EN BANC REVIEW OF RETAIL DIGITAL NETWORK CASE IS UNDERWAY - Read

  • Missouri Broadcasters Association Wins Appeal of Lawsuit Challenging the State's Restrictive Alcohol Advertising Statute and Regulations - Read

  • US appeals court reinstates suit over Missouri alcohol ads - Read...

And more for more news - go to Duncan Liquor Law Letter

EN BANC REVIEW OF RETAIL DIGITAL NETWORK CASE IS UNDERWAY

All 11 judges from the 9th Circuit gathered in San Francisco this past week to hear oral arguments on the Retail Digital Network appeal, per Alcohol Law Review blog. This step marks the beginning of the "en banc" review of the case.

The blog gave us a brief summary of what took place last week saying, the "judges did seem to struggle with the specific details of the law in question [tied-house laws] and how it works in the marketplace" and the panel also had plenty of "questions on the state of commercial free speech law in the United States Supreme Court."

The blog didn't offer up its guess on the final outcome as it is a "terribly imprecise science," but it did say, "with additional cases on commercial free speech pending before the Supreme Court, the Ninth Circuit may take awhile to issue a decision."

Missouri Broadcasters Association Wins Appeal of Lawsuit Challenging the State's Restrictive Alcohol Advertising Statute and Regulations

JEFFERSON CITY, MO, January 20, 2017 - Yesterday the U.S. Circuit Court of Appeals for the Eighth Circuit unanimously revived our lawsuit that challenges a Missouri statute and two Missouri regulations that we believe illegally limit alcohol advertising.

These Missouri laws prevent consumers from receiving truthful information in advertising. Specifically, although retailers can offer price discounts and promotions on alcoholic beverages, these laws keep citizens from learning about those discounts in advance, through radio, television, and newspaper ads.
Our radio and television stations are key sources of information for Missourians. Just as with news, listeners and viewers learn about the availability of goods and services through radio and TV advertising, and a restriction on advertising truthful information only keeps relevant and useful information from consumers. That's why the MBA and several other entities challenged these laws under the First Amendment, and its guarantee of commercial free speech.

The antiquated Missouri laws at issue prohibit our advertisers from being able to advertise alcohol discounts, even though those discounts can be advertised on premise. The state contends that the restrictions are intended to discourage binge drinking, but binge drinking is more likely to be encouraged by promotions inside a bar than from media advertisements heard or seen in one's living room.
The MBA is pleased that the appeals court pointed out the many inconsistencies in the regulations, which we believe demonstrate their unconstitutionality. The Supreme Court's precedents protecting truthful commercial speech permit restrictions on commercial speech only if they are closely tailored to the state's needs, and we believe the many inconsistencies in Missouri alcohol advertising regulations show that these laws are not so limited.

Additionally, because advertising of special pricing is allowed in all our bordering states, we believe that these laws create an unfair competitive disadvantage to Missouri businesses.

The laws are also ill-suited for the era social media, which college students in a bar can use to instantly publicize alcohol discounts, and to today's world of ubiquitous and growing microbreweries and wineries, which have special exemptions from some of the restrictions.
If these laws are found unconstitutional, or removed by legislative and regulatory action, price-conscious consumers will have better information and be able to make better alcoholic beverage purchasing choices.

The immediate effect of the Eighth Circuit decision is to send the case back to the U.S. District Court for the Western District of Missouri. MBA and its co-plaintiffs intend to vigorously pursue their claims in that court, particularly in light of the Eighth Circuit's legal analysis which is highly favorable to the strength and validity of these claims.

For more information contact: Mark Gordon, President/CEO Missouri Broadcasters Association 573-636-6692

US appeals court reinstates suit over Missouri alcohol ads
By JIM SUHR Associated Press Updated Jan 19, 2017

KANSAS CITY, Mo. (AP) - A federal appeals court on Thursday revived a lawsuit challenging Missouri regulations that broadcasters and others say illegally limit how they can market alcohol.

In reinstating the case, which was tossed out last year by U.S. District Judge Fernando Gaitan Jr. at the state's behest, an 8th U.S. Circuit Court of Appeals panel unanimously ruled the plaintiffs "plausibly stated a claim upon which relief could be granted."

The 8th Circuit noted the state's justification that the restrictions are in the public interest by trying to blunt irresponsible alcohol use and underage drinking. But the appellate court cited inconsistencies in the application of the regulations, which permit advertising such generic things as "Happy Hour" and "Ladies Night" - as well as marketing all sales, promotions and discounts - on the retailer's premises.

The defendants "apparently are not as concerned with retailers baiting consumers to drink excessively once they arrive," Chief Judge William Jay Riley wrote for the three-judge panel.

In their 2013 lawsuit, the Missouri Broadcasters Association, Zimmer Radio group, Springfield winemaker Meyer Farms and Uncle D's Sports Bar & Grill in St. Joseph challenged, among other things, the state's Discount Advertising Prohibition Regulation. That rule makes it illegal for an alcohol advertisement to mention prices, rebates or discounts, essentially barring references to such things as two-for-one beer specials, a wine shop's going-out-of-business sale or a restaurant special offer of a free drink with a meal purchase.

Calling such regulations an unconstitutional and "chilling" infringement of free speech, broadcasters pressing the lawsuit have said the restrictions have cost them immeasurable potential advertising money.

On Thursday, the St. Louis-based 8th Circuit declared that those suing over the regulations have "included sufficient allegations that the challenged provisions did not directly advance the substantial interest of promoting responsible drinking."

"A theoretical increase in demand for alcohol based on a lower price does not necessarily mean any consumption of that alcohol is irresponsible," Riley wrote, adding that "the multiple inconsistencies within the regulations poke obvious holes in any potential advancement of the interest in promoting responsible drinking."

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And the Envelope Please…Oscars Not Alone in Accounting Problems: Tennessee Revenue Partially Shut Down for Liquor License Holders

Bone McAllester paralegal extraordinaire, Jennifer Maxey, tells us that the Tennessee Department of Revenue will not process new registrations for sales tax numbers, known as Certificates of Registration, until March 6, 2017.  Apparently, Revenue is the lucky recipient of a computer upgrade.

We understand that as long as a liquor license holder already has a sales tax number, Revenue can accept a new liquor-by-the-drink bond or bond rider.  Distilleries, wineries and breweries can also register new brands, as long as they already have a certificate of registration.

Original author: William T. Cheek III
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Survey Says: Tennesseans Want to Buy Wine in Groceries on Sundays

We figured that following passage of Wine in Grocery Store legislation, which we affectionately call WIGS, popular demand among consumers would lead to more changes in Tennessee law.

We blogged about pending legislation to legalize the sale of many wine coolers and niche products like sangria mixes in groceries and other food stores.  https://www.lastcalltn.com/tennessee-considers-more-wine-in-grocery-stores-with-legislation/

In our not so humble opinion, one of the biggest changes in Tennessee law is legalizing Sunday sales of wine in Kroger, Publix, Wal-Mart and other food stores.  We figure that the vast majority of shoppers would love to be able to buy wine on Sundays.

If Tennessee legalizes Sunday sales of wine in grocery stores, it seems only fair that liquor stores would also be allowed to open on Sunday.  Problem is, we think Tennessee liquor stores will oppose Sunday sales.

Based on our unscientific observations, Sunday is a big day for grocery shopping.  Grocers probably figure that many Sunday shoppers will put a couple of bottles of wine in their carts, if Sunday sales of wine are legal.  Sunday wine at a grocery is essentially an impulse purchase; if I can buy wine when I am Krogering on Sunday, great, if not, I am not going to trek back later in the week to buy wine from a grocery or a liquor store.

Tennessee liquor stores probably see Sunday sales as something they have to do, if food stores can sell wine.  But for a liquor store, being open on Sunday is not likely to draw many new sales.  Grocers already do huge business on Sunday.  Liquor store owners are closed.  Opening Sunday increases employee salaries and other liquor store expenses.

Plus, Tennessee restaurants could see a decline in wine sales from folks that cannot buy wine on Sunday, but want a glass with lunch or dinner.

Our buddy Willa reminds us of “Sunday in the South” by Shenandoah:

Mill worker houses lined up in a row, 
Another southern Sunday morning blow 
Beneath the steeple all the people have begun 
Shakin’ hands with the man who grips the gospel gun

Original author: William T. Cheek III
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Tennessee Considers More Wine in Grocery Stores with Legislation

Wine in Grocery Store legislation, which we affectionately call WIGS, allowed Tennessee grocery stores to sell wine beginning July 1, 2016, with a food store license issued by the Tennessee Alcoholic Beverage Commission.

WIGS was a messy compromise.  We expected that WIGS would be revised to fix thorny issues.

A bill pending in the 2017 Tennessee Legislature will change the legal definition of wine and, in our humble opinion, allow food stores to legally sell many wine coolers and wine cocktails that are already on shelves.

Here is the problem.  Current law says that wine sold by a grocery store must be:

the product of the normal alcoholic fermentation of the juice of fresh, sound, ripe grapes, with the usual cellar treatment and necessary additions to correct defects due to climatic, saccharine and seasonal conditions, including champagne, sparkling and fortified wine of an alcoholic content not to exceed eighteen percent (18%) by volume. No other product shall be called “wine” unless designated by appropriate prefixes descriptive of the fruit or other product from which the same was predominantly produced, or an artificial or imitation wine.

Are you asleep yet?  Seriously, the definition is so hopelessly complicated that in our opinion, it is pretty much unenforceable by the TABC.

Pending legislation expands the definition of wine to eliminate the controversy.

The Tennessee ABC describes the legislative change at Sections 4, 5, and 6 – Definition of Wine  SB695-HB435 Legislation Summary

The entire bill is here.  HB0435 HB0435

Paralegal extraordinaire Vicki reminds us of a fitting Kenny Chesney song:

Mama told them Jesus loves a sinner
His daddy said that music saved his soul
Between the rockers and the band
It’s a fitting promise land

Original author: William T. Cheek III
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