New York Law Review

Tag: Disorderly Premises

  • Matter of Playboy Club of N.Y., Inc. v. State Liquor Authority, 23 N.Y.2d 541 (1969): Licensee Responsibility for Isolated Employee Actions

    Matter of Playboy Club of N.Y., Inc. v. State Liquor Authority, 23 N.Y.2d 541 (1969)

    A licensee is not responsible for every single isolated act of an employee unless the licensee or manager knew or should have known of the disorderly condition and tolerated its existence; a single act of self-defense by an employee against an unruly patron does not automatically render the premises disorderly.

    Summary

    The Playboy Club challenged a 15-day suspension of its liquor license imposed by the State Liquor Authority after an employee allegedly assaulted a patron. The New York Court of Appeals reversed the suspension, holding that the evidence did not support the Authority’s conclusion that the club “suffered or permitted” the premises to become disorderly. The court emphasized that the club was authorized to use reasonable force to maintain order and that the employee’s action appeared to be a single instance of self-defense against an unruly patron, for which the club could not be held responsible absent a showing of knowledge or tolerance of the disorderly conduct.

    Facts

    Michael Kendall, a heavily intoxicated patron at the Playboy Club, became disruptive while arguing with a coatroom attendant about a missing check stub. Kendall blocked other patrons from accessing the coatroom. Bruce Graziano, another employee, escorted Kendall to a service area away from public view and asked him to leave. Kendall refused and, according to Kendall’s testimony, Graziano struck him in the eye after Kendall drew back his fist to strike Graziano. The club provided Kendall with ice for his injury.

    Procedural History

    The State Liquor Authority suspended the Playboy Club’s license for 15 days (5 days deferred). The club initiated an Article 78 proceeding seeking to annul the Authority’s determination. The lower courts upheld the suspension. The New York Court of Appeals granted leave to appeal and reversed the lower court’s decision, annulling the State Liquor Authority’s determination.

    Issue(s)

    Whether the State Liquor Authority’s finding that the Playboy Club “suffered or permitted” the premises to become disorderly, based on the actions of its employee in an altercation with a patron, was supported by substantial evidence.

    Holding

    No, because the evidence indicated a single, isolated act of self-defense by an employee against an unruly patron, and there was no evidence that the club management knew or should have known of the potential for such an incident or tolerated any disorderly conduct.

    Court’s Reasoning

    The court reasoned that the club was justified in removing Kendall from the coatroom area due to his disruptive behavior. The court emphasized that allowing Kendall’s behavior to continue would itself constitute suffering or permitting disorder. Referencing previous guidance from the Authority, the court acknowledged that the club was permitted to use reasonable force to maintain order. The court then examined Kendall’s testimony, noting that it established that Graziano struck Kendall in self-defense, after Kendall had drawn back his fist to strike Graziano first. The court stated, “When an unruly patron, who refuses to leave the premises, threatens an employee with an upraised fist, a single punch, thrown to counter the anticipated blow, does not render the premises disorderly.”

    The court also addressed the issue of licensee responsibility for employee actions, stating that “a licensee cannot possibly control—and, hence, is not to be held responsible for—every single act of all persons in his employ.” The court reaffirmed the rule that conduct is not “suffered or permitted” unless “‘the licensee or his manager knew or should have known’ ” of the asserted disorderly condition on the premises and tolerated its existence. The court found no evidence that the club management was aware of or could have anticipated the incident. The Court cited Matter of Missouri Realty Corp. v. New York State Liq. Auth., 22 N.Y.2d 233, for the principle that awareness or foreseeability is required for a licensee to be held responsible.

    Thus, the court concluded that there was no basis in fact or law for finding a violation of Section 106 of the Alcoholic Beverage Control Law, and it reversed the lower court’s order and annulled the Authority’s determination.

  • Matter of Avon Bar & Grill v. O’Connell, 301 N.Y. 150 (1950): Standard for Liquor License Revocation Based on Disorderly Premises

    Matter of Avon Bar & Grill, Inc. v. O’Connell, 301 N.Y. 150 (1950)

    A liquor license can be revoked if the licensee knew or should have known, through reasonable diligence, that their premises were being used for disorderly conduct, such as homosexual activity, violating Alcoholic Beverage Control Law § 106(6).

    Summary

    Avon Bar & Grill sought to overturn the State Liquor Authority’s decision to revoke its liquor license. The Authority argued the bar permitted the premises to become disorderly by allowing homosexual activity. The Court of Appeals held that the Authority’s determination was supported by substantial evidence that the licensee knew or should have known about the activity. The dismissal of criminal charges related to the same activity in a lower court did not preclude the Authority from using the evidence in administrative proceedings. The court reversed the Appellate Division’s order and confirmed the Authority’s determination.

    Facts

    The State Liquor Authority revoked Avon Bar & Grill’s liquor license based on evidence suggesting the bar permitted homosexual activities on its premises. The evidence included observations by investigators and reports of solicitations and encounters within the bar. A criminal charge related to these activities had been dismissed in a magistrate’s court. The Authority argued that the licensee knew or should have known about the illicit conduct through reasonable diligence.

    Procedural History

    The State Liquor Authority revoked Avon Bar & Grill’s liquor license. Avon Bar & Grill brought an Article 78 proceeding to review the Authority’s determination. The Appellate Division reversed the Authority’s decision. The State Liquor Authority appealed to the New York Court of Appeals.

    Issue(s)

    Whether the State Liquor Authority had substantial evidence to support its determination that Avon Bar & Grill knew or should have known that its premises were being used for disorderly conduct in violation of Alcoholic Beverage Control Law § 106(6), thereby justifying the revocation of its liquor license.

    Holding

    Yes, because ample proof was presented to the State Liquor Authority demonstrating that the licensee either knew or should have known, with reasonable diligence, that homosexual activities were occurring on the premises, thus supporting the conclusion that the licensee permitted the premises to become “disorderly” in violation of Alcoholic Beverage Control Law § 106(6).

    Court’s Reasoning

    The Court of Appeals relied on the principle that an administrative agency’s determination should be upheld if supported by “substantial evidence.” The court emphasized that the evidence presented to the State Liquor Authority was sufficient to warrant the finding that the licensee either knew or should have known about the homosexual activity on the premises. The court stated, “ample proof was adduced before the State Liquor Authority… to warrant the Authority (1) in finding that the licensee actually knew or should have known, had reasonable diligence been exercised, that homosexual activities were being carried on in its premises, and (2) in concluding that such licensee had suffered or permitted the premises to become ‘disorderly’ in violation of subdivision 6 of section 106 of the Alcoholic Beverage Control Law.” The court also clarified that the dismissal of criminal charges in a lower court did not preclude the Authority from relying on the same evidence in an administrative proceeding. The court cited Matter of Cohen v. Board of Regents, 299 N.Y. 582, as precedent supporting the use of evidence in administrative proceedings even if criminal charges based on the same evidence were dismissed. The court effectively established a lower bar of evidence for administrative action compared to criminal prosecution. The court’s decision underscores the broad discretion afforded to the State Liquor Authority in regulating establishments that serve alcohol and the importance of licensees exercising due diligence in monitoring activities on their premises. The case illustrates how administrative agencies can act on evidence even when it’s insufficient for a criminal conviction. This has significant implications for businesses holding licenses that are subject to administrative oversight.