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NJ Appellate Court Rejects Municipal Restrictions on Liquor License

Great news for retail liquor license holders! The Appellate Division in New Jersey just recently issued is an Unpublished Opinion regarding the ability of towns to place restrictions on a liquor license at renewal, issuance and transfer. This ruling will have an impact on all retail liquor license holders of a plenary retail consumption license, plenary retail distribution license  and club license. Prior to this ruling, the Division of Alcoholic Beverage Control and Municipal Licensing Authorities have been quick to place restrictions on local restaurants, bars and liquor stores. However, with this new ruling, liquor license holders will have support in fighting against any possible restrictions or conditions being placed upon their license at renewal or transfer. 

Can Towns Restrict the Hours When Alcoholic Beverages Can Be Sold?

This case involves an appeal by a bar/restaurant located in Morristown against the town of Morristown (which acts as the municipal licensing authority for all Class C licenses in the town). Morristown’s licensing authority attempted to impose a restriction regarding hours of alcoholic beverage sales  as a condition of granting the transfer of a plenary retail consumption license. Under the condition, the applicant, Iron Bar, LLC, was not allowed to sell alcoholic beverages beyond 11:00 pm on Sunday-Thursday and 11:30 pm on Friday-Saturday. This was contrary to the municipal ordinance that allowed all other retail consumption licenses the ability to sell and serve alcoholic beverages up and until 2:00 am. 

Generally, municipal licenses control the hours under which alcoholic beverages can be sold/consumed on licensed premises by way of ordinances. When a municipality wants to impose further restrictions upon specific liquor licenses, they may do so pursuant to N.J.S.A. 33:1-32. This statute, N.J.S.A. 33:1-32 states that:

Subject to rules and regulations, each issuing authority by resolution, first approved by the commissioner, may impose any condition or conditions to the issuance of any license deemed necessary and proper to accomplish the objects of this chapter and secure compliance with the provisions hereof, and all such licenses shall become effective only upon compliance with the conditions so stated and shall be revocable for subsequent violation thereof.”

 

The township of Morristown attempted to use this authority to impose the hours restriction upon Iron Bar, LLC, upon the issuance of the liquor license at transfer. Iron Bar, LLC, objected to this restriction and an appeal was taken to the Division of Alcoholic Beverage Control.

What Was the Court’s Ruling on the Hour Restriction?

The Appellate Division upheld the Ruling of the Director of the Division Alcoholic Beverage Control which rejected the municipalities imposition of restrictions. In affirming the Director’s Ruling, the Appellate Division held that there was not a “sufficient nexus” between any perceived issues by the licensee and the proposed hours restrictions. Citing prior case law, the Director found that the imposition of a restriction on one licensee as opposed to other similarly situated licensees failed to demonstrate a sufficient and reasonable basis for the special condition. This is particularly true when the bar/restaurant had no prior record of ABC violations. Finally, the Director and the Appellate Division found that the municipality failed to demonstrate “widespread community sentiment” to support its need for special conditions on the license. 

NJ Lawyers For Liquor License Renewal Issues

If you own or operate a liquor license in New Jersey, it is important that you have a clear understanding of the various rules and regulations. Running a business in today’s environment is hard enough, without facing additional municipal restrictions. For a consultation with a New Jersey Alcoholic Beverage Law Attorney, please call (732) 858-5857. Firm Partner, William C. Fay, IV, Esq. is a former Deputy Attorney General with the Division of Alcoholic Beverage Control in New Jersey. Call today to find out how Mr. Fay can help you in your pending liquor license matter. 

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