Henry Street Liquors, Inc. v. New York State Liquor Authority
Court: Appellate Division of the Supreme Court of the State of New York; May 21, 1996; New York; State Appellate Court
In this CPLR article 78 proceeding, the court vacated and annulled the respondent's order that suspended the petitioner's license to sell alcoholic beverages for 60 days and imposed a $1,000 suspension bond, ruling in favor of the petitioner without costs. The petitioner, operating a licensed retail liquor store in Hempstead, faced charges of unlicensed wholesale of alcoholic beverages under Alcoholic Beverage Control Law § 100 (1). The first charge involved an incident on December 9, 1992, where state investigators observed a delivery van owned by the petitioner’s delivery man loading over 25 cases of alcoholic beverages, including Absolut vodka. The investigators did not confirm the delivery's contents and the owner of Bride’s Pub, who was separately contesting a related charge, testified that her establishment had never conducted business with the petitioner. A neighboring paint store owner confirmed purchasing five cases of Absolut vodka from the petitioner for holiday gifts, supported by an invoice and a canceled check demonstrating payment.
The Administrative Law Judge noted inconsistencies in witness testimonies regarding the number of cases delivered and failed to mention the invoice and check in sustaining the charge. The ALJ suggested the investigators observed a different delivery, citing a significant price difference as a motive for illegal activity. The second charge arose from incidents observed by the same investigators four months later, where liquor was delivered from the petitioner’s store to various retail establishments. On April 20, 1993, investigators witnessed two cases of liquor being taken to Burgundy’s bar, where the driver admitted to delivering liquor without the petitioner’s knowledge. Later, another delivery to Ohio State Liquors involved an employee of that store, who acknowledged purchasing liquor from the petitioner but denied any prior arrangement.
Investigators followed an individual delivering three cases of liquor to Vinnie’s Place, a bar and restaurant in Hempstead. When questioned, the bar owner was uncooperative and did not indicate that the petitioner was aware of the delivery's destination. The owner also failed to provide an invoice, leading to the confiscation of six bottles of liquor. The Administrative Law Judge (ALJ) did not analyze the evidence in sustaining the second charge, merely reciting the facts. The burden of proof rests on the respondent to establish its determination by substantial evidence. The evidence presented was deemed inadequate across all counts, as sales in case lots are common for discount liquor stores. The mere delivery of 10 cases of alcohol on two specified dates did not substantiate claims of the petitioner’s involvement in illegal wholesale sales. The ALJ’s role does not include making inferences from insufficient investigations. Consequently, the lack of evidence negated the need to consider other arguments raised by the petitioner. Concurrence from Justices Rosenberger, Wallach, Nardelli, Williams, and Tom is noted.
