AAIAC

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Hail to the chief: Tennessee ABC names new top dog

Jan 31, 2019

Drumroll please  . . . cue the trumpets for the fanfare . . .

Russell F. Thomas was named Director for the Tennessee Alcoholic Beverage Commission at today’s regular TABC meeting.  Director Thomas assumes the top leadership position following the resignation of Interim Director Zack Blair and former Director Clay Byrd. 

The Tullahoma native holds a B.A. in political science from the University of Tennessee at Knoxville.  He was an Alpha Tau Omega.

Thomas earned his J.D. from UT in 2003.  He practiced for four years as an Assistant District Attorney General in Nashville, where he “prosecuted hundreds of misdemeanor and felony cases, including D.U.I. drug offenses, white-collar offenses and murder,” according to Justia.

He worked as a solo practitioner from 2007 until his appointment, where he specialized in criminal defense, DUI and general civil litigation.  He is a 2014 Fellow of the Nashville Bar Foundation.

Thomas’ wife, Mary Beth Thomas, serves as General Counsel to the Tennessee Secretary of State, where she has worked since 2013.  We suspect they are former buddies from UT Knoxville, from which Mary Beth Thomas holds a B.S. in Finance and a 2003 J.D.  Mary Beth Thomas is an alum of our firm, Waller, where she worked as a litigator. 

All this talking about the Tennessee ABC reminds us of Midland’s hit song, “Drinkin’ Problem”

“People say I got a drinkin’ problem

But I got no problem drinkin’ at all

They keep on talkin’

Drawing conclusions

They call it a problem,

I call it a solution.”

Drinking is our business and it ain’t no problem. 

We welcome Director Thomas and wish him well in his new position.

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New TABC Director?

Jan 30, 2019

The Tennessee Alcoholic Beverage Commission agenda has officially been published, but all eyes for this Thursday’s meeting at 10 a.m. will be focused on an item conspicuously absent:  Will the Commission name a new Director?

As federal employees headed back to work this week, the top two positions at the Tennessee ABC remain vacant.  We understand that the Commission has been quietly winnowing down a list of candidates for the Director’s position.  Although liquor gossip is usually insanely rampant, we have heard nothing about a likely successor to Clay Byrd.

We will be on the edge of our seats at the meeting tomorrow and certainly keep you posted.

Meanwhile, former Interim Director Zack Blair has assumed the role of Director of Legislation and Rules at the Tennessee Department of Mental Health and Substance Abuse Services.  We have been remiss in not congratulating Mr. Blair for his fabulous new gig.  Mr. Blair departed the ABC in late December for what he describes as the perfect position for him to make a difference.

We will sorely miss Mr. Blair and wish him the best of continued success.

Mr. Blair’s legacy has national implications, now that he is the named defendant in the pending U.S. Supreme Court case that was recently heard for argument and is expected to be decided in June of this year.  If anyone would like to read more details about this fascinating dormant commerce clause argument, or is in need of a sure cure for insomnia, here is a link to the transcript of the Supreme Court hearing.

As always, please stay tuned for more details about leadership at the Tennessee ABC and the Tennessee Wine & Spirits Retailers Association v. Blair decision.

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How does the federal shutdown affect my liquor license application?

Jan 2, 2019

As of today, January 2, 2019, the continued closure of the federal government should have very little impact on pending liquor license applications. If the federal shutdown continues for much longer, we expect that backlogs will persist, even after a budget is approved and Tax and Trade Bureau (TTB) workers return to their jobs.

One thing is clear, though: no new applications will be approved until the budget impasse is resolved. That includes transfers in bond, formulas, COLAs and anything else that requires approval by TTB.

Keep in mind that state and local governments are not affected by the federal shutdown.  There are no delays with the Tennessee ABC or local beer boards.

We also understand that the IRS is continuing to process applications for new federal identification numbers, known as EIN’s, which are required for every new company.

Because of the holidays, we expect that TTB is not too far behind in its review of basic permits, DSP’s, brewer’s notices, TIB’s and other federal permit applications. Both the public and private sector were sufficiently distracted by Santa, Father Time and other holiday festivities.

The TTB on-line filing system seems to be functioning as normal. We encourage folks to continue filing applications online, with the understanding that no one is going to review them until TTB returns to work.

A prolonged shutdown of the federal government will lead to a significant backlog in application review, which we expect to continue long after TTB workers return to their desks. Before the shutdown, TTB indicated the following normal processing times for applications:

Type	Average days to process permits
Brewery	86
DSP	71
Winery	85
Wholesaler	73

It is fairly reasonable to presume that for every business day TTB staff is not working on applications, the review time will increase by another day.

This has to be particularly disappointing for TTB workers, who have been successfully toiling for months to reduce the backlog of applications and approval times.

Conjures up a Styx classic:

We wish our friends at TTB well and know workers look forward to a speedy return to the building mountain of applications.

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Catering conundrum created by Tennessee RLPS

Dec 26, 2018

The Tennessee ABC’s fancy new online filing system known as RLPS has changed the landscape for liquor licensing in Tennessee.  The system generally works well.

Notices of catered events, however, present an opportunity for the system to do better.

Obtaining a catering license works like any other liquor license application. Once the catering license is issued, the problem begins for many caterers.

In order to file a notice of catered event, the person filing the notice must have access to the full license record. A notice of catered event essentially creates an amendment to the catering license. This means, if an assistant manager is tasked with filing notices of catered event, the assistant manager can also go in and change the ownership, criminal history disclosure of owners or otherwise amend the entire catering license.

We do not see this as a problem for mom-and-pop operations where mom and pop own the catering business and file their own notices of catered event.

The real issue is for larger companies that hold catering licenses. We do not recommend that on-site managers be granted access to RLPS for purposes of filing notices of catered event. Even if the on-site manager is not malicious, it is far too easy to “mess up” the RLPS record.  Because the RLPS system contains disclosures upon which the license is statutorily based, even inadvertent amendments can affect the underlying qualification of the applicant to hold a license, potentially causing disclosure issues with the ABC and leading to sanctions.

According to the ABC, this is an RLPS system limitation that cannot easily be fixed. Allowing an on-site manager to file notices of catered event, without having access to the rest of the license record in RLPS, is going to require an upgrade to the underlying software that powers RLPS.

Another anomaly with filing notices of catered events is the amendment process. A notice of catered event is an amendment to the liquor license in the RLPS system. As an amendment, the status of the amendment – the notice of catered event – will show up as “In Review,” as if the notice of catered event needs approval. We have been assured that the ABC is not approving catering notices. It is just an RLPS thing.

We advise folks to disregard the “In Review” flag and know that once a notice of catered event is properly filed, no further action is required.

Sick and tired of Christmas songs, how about a little Weird Al’s Eat It, courtesy of our friend Willa:

So eat it

I don't care if you're full

Just eat it, eat it

Open up your mouth and feed it

Stay tuned for more developments with RLPS.

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Starwood data breach serves as wakeup call to Tennessee bars, hotels and restaurants

Nov 30, 2018

We suspect that thousands of Tennessee restaurants, hotels, bars and other hospitality businesses gather personal information from their customers for marketing purposes.  

It’s just a birthdate, address, anniversary, spouse’s name – good stuff to know, right?

That’s all fine and dandy until some hacker steals the information.  Marriott’s disclosure that 500 million Starwood Hotel guests’ personal data was stolen should be a wakeup call. 

We’ve had Beastie Boys’ classic Paul Revere stuck in our head all morning:

The kid said, “Get ready ‘cause this ain’t funny

My name’s Mike D and I’m about to get money”

Pulled out the jammy, aimed it at the sky

He yelled, “Stick ‘em up!” and let two fly

Hands went up and people hit the floor

He wasted two kids that ran for the door

Don’t expect Mike D to come knocking on the door at your restaurant demanding you to turn over personal information squirreled away in a computer somewhere in the back office.  Modern Mike D is coming through the internet.  He’s gonna hack your computer while you are sleeping off that last martini.

Don’t delay.  Call or email your IT person now and review your security procedures to ensure that employee data, as well as customer data, is protected.  Although your system may not be sophisticated enough to withstand cyberattacks from the likes of Mike D in Ukraine, anything you do is better than nothing.

Here are a few simple tips from Waller’s IT team:

Physically lock the office where the computer is located when it is not in use Use a password to log in Use complex passwords and change them regularly Create very simple software that requires password changes, which annoy the heck out of us but work Encrypt your hard drive with BitLocker or other encryption software, so that if the computer or drive is stolen, the data is not easily read Password protect important files, particularly those that contain personal data such as social security numbers and dates of birth

One of the easiest things to do is minimize the amount of personal information you amass.  Although an owner needs employee data, do you really need personal data on your customers?

Heed the warning and be on the lookout for Mike D.

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Never gonna keep the Tennessee Distiller's Guild down

Nov 7, 2018

A look back at the inaugural whiskey festival in 2014. 

Twenty-nine of the licensed distillers in Tennessee poured their finest at the third annual Grains & Grits Festival in Townsend, Tennessee this past weekend.  The distillers rocked a crowd of approximately 750 thirsty fans, which we figure was pretty much the perfect crowd for the evening.  Rocked on by FGL House band January Noise, there was a ton of energy, enthusiasm and thirst quenching without long lines.

The Third Annual Grains & Grits reminded us how far the Tennessee Distiller’s Guild has come since its first whiskey festival, in the middle of the speedway at the Tennessee State Fair on September 6, 2014. During the past 4 years, Tennessee Distillers have been laying back aged whiskey, with a healthy number of distilleries pouring samples of really tasty samples at this weekend’s fest.

To all the Tennessee distillers out there:  We’re really proud of you guys.  You are killing it.

Chumbawamba’s all-too-catchy thub-thumping is stuck in our heads: 

He drinks a whisky drink

He drinks a vodka drink

He drinks a lager drink

He drinks a cider drink . . .

I get knocked down, but

I get up again

You’re never gonna keep

Me down.

Grains & Grits is a fundraiser for the Tennessee Distiller’s Guild, a 501(c)(6) business league that supports the whiskey industry in Tennessee.  We hope to see you at the Fourth Annual Grains & Grits next Fall. 

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The future is now at the Metro Nashville Beer Board

Oct 23, 2018

Today, the Metro Nashville Beer Board makes history, becoming the first Tennessee beer board to officially enter cyberspace.

On Monday, Beer Board Executive Director Benton McDonough and Amanda Webb demonstrated the new online filing system for beer board applications, and now, it's up and running.

Stardate 10.23.2018: The Metro Beer Board filing system is live.  You can now file beer applications online at this link https://epermits.nashville.gov/#/   The beer application is in the list on the left-hand side.

Our own Kimberly Faye Clark filed the very first application online.  Particularly fitting since Kimberly also filed the first RLPS application with the Tennessee ABC.

Gone are the days of yesteryear when you had to schlep downtown to the Howard School Building and present an original application, signed in the presence of a notary.  Also gone are the days where you had to trudge back downtown to pick up an original beer permit, signed in blue ink by the Executive Director.

Although the entire Waller staff will miss seeing the smiling faces of Amanda, Benton, Doug, Jesus and Terrence at the beer board, the convenience and time savings from filing online are greatly appreciated.

In addition to being able to file beer applications, the new system also allows you to file multiple attachments online and specify outdoor seating areas.  You can also schedule your beer inspection online.

Online filing fees must be paid by credit card, with the dreaded 2.3% convenience fee.

Before you file the application, you can print the Beer Board checklist and see a list of items needed to complete the application.  Once filed, the beer board sends an email with a receipt and access code to complete the application.

Currently, temporary permits are issued the old-fashioned way, in person, at the Howard School building. 

Renewals will continue to be simple.  Unlike the intense RLPS renewal process for Tennessee ABC liquor applications, the Metro Beer Board will simply require paying the privilege tax.  No renewal applications are currently planned.

As much as we despise the catchy Timbuk 3 1980s one-hit wonder “The Future’s So Bright, I Gotta Wear Shades,” it seems apropos:

I study nuclear science

I love my classes

I got a crazy teacher, he wears dark glasses

Things are going great, and they're only getting better

I'm doing all right, getting good grades

The future's so bright, I gotta wear shades

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Supreme Court to determine if Tennessee can require residency for retail liquor stores

Sep 27, 2018

The U.S. Supreme Court granted permission to appeal a Tennessee case involving the constitutionality of the Tennessee residency requirement for retail liquor stores. The petition was granted on September 27, 2018, on an appeal from the Sixth Circuit in Tennessee Wine and Spirits Retailers Association v. Clayton Byrd.

The Supreme Court takes up the case in order to decide a split between federal appeals courts. The Sixth Circuit in the Tennessee case found that requiring owners of retail liquor stores to be Tennessee residents violated the dormant Commerce Clause of the U.S. Constitution. You can read more at the Supreme Court Docket.

We know, if you’re not a lawyer, we just bored you to death.

The reason this case is important is that different appeals courts in the United States have reached different results about whether a state can impose residency requirements for wholesale and retail liquor licenses.  Most likely, the Supreme Court took the case to declare a uniform rule of law that will be applied in all states. In other words, it will either be legal – or not legal – for states to impose residency requirements for wholesalers and retailers.

Read more about the Sixth Circuit case here. 

For some reason, we hear the dulcet tones of Bessie Smith’s haunting melody Send Me To The 'lectric Chair

Judge you wanna hear my plea

Before you open up your court

But I don't want no sympathy

'Cause I done cut my good man's throat

Don’t look for an answer to this question any time soon. The Supreme Court will likely issue a decision in Summer 2019.