Oregon Administrative Sanctions for Violations of Liquor Laws

1. Oregon Administrative Sanctions for Violations of Liquor Laws Linda Ignowski Oregon Liquor Control Commission October 2008

2. Guiding Factors forthe Sanction Schedule • Limitation by State Statutes • Fines - $5,000/violation • Limits type of sanction: RVP, Age verification, Allowing VIP • Factors to Consider • Effectiveness to prevent further violations • Fair and Consistent • Conscience of the political forces • Heavy Handed vs. No Impact • Example: Responsible Vendor Program III(a) • Use of Age Verification Equipment

3. Administrative Violation Process Enforcement Actions: • Verbal Instructions • Formal or informal verbal communication designed to educate licensees and servers about liquor laws based on complaints that result in unproven violations. • Notices of Warning • Notice to licensee or server that because of specific identified problem indicators, or a violation probably occurred but we lack all the elements to make the case and there is high probability for future violations. • Notice of Violations • The most serious compliance action, resulting from a proven violation. Sanctions range from Letter of Reprimand to cancellation of license or service permit.

4. Administrative Violation Process, cont. • Immediate Suspension • Immediate suspension of the license if there is evidence that continued sale or service of alcohol would be a serious danger to public health and safety. • Settlements • Enter into a settlement when licensees takes responsibility for violation and it is in the best interest of both parties for time and expense, to enter into a settlement agreement. • Administrative Hearing • Administrative hearing by an outside agency Administrative law judge • Court of Appeals • Decision may be heard by the Court of Appeals

5. Statistics for 2007 • Issued 638 Administrative violation tickets • Cancelled 6 liquor licenses • Conducted 10 Administrative hearings • Settled 55 cases • Lost one case

6. Settlements • Cases may be resolved through settlement agreements—9% • Accept responsibility for violation • Reduced fine by 30% • May add restrictions to license • Examples include but not limited to: • Hours of operation • Security staffing • Drink size and restricting “stacking” of drinks • Entertainment-no live music or DJ music • Use of age verification equipment

7. Administrative Sanction ScheduleOAR 845-006-0500 • Violation Categories • I - Make licensees ineligible for a license • II - Create an immediate threat to public health and safety • IIa - Unlawful drug activity • III - Create a potential threat to public health or safety • IIIa - Sale of alcohol to a minor when the retail licensee qualifies under the Responsible Vendor Program • IV - Create a climate conducive to abuses associated with the sale of service of alcoholic beverages • V - Inconsistent with the orderly regulation of the sale or service of alcoholic beverages.

8. Sanction Schedule

9. Mitigation and Aggravation • Most Mitigation and Aggravation are set in Oregon Administrative Rule (OAR 845-006-0500). • Fines are increased by two days for each aggravating circumstance and reduced for each mitigating circumstance. • Licensee and employees are treated separately for their own individual acts and sanctioned separately. Licensee is always held accountable for acts of their employees.

10. Common Mitigating Factors • Good faith effort to prevent a violation • Extraordinary cooperation in the investigation that shows licensee accepts responsibility • Purchase of Age Verification Equipment • Licensee has corrected the problem immediately may reduce a cancellation to a fine/suspension • Violations of the same category are discovered at the same time are charged at the same step

11. Common Aggravation Factors • Multiple violations from a single act (multiple people involved) • Prior Warning about the compliance problem • Licensee personally participates in the violation • Licensee or employee makes effort to conceal violation • Violation involved a juvenile • Violation is intentional

12. Common Aggravation Factors (cont.) • Violation results in serious injury or death • Premises has a reputation for selling to minors • Licensee permits employee to work 6 months or longer without a service permit • Licensees fails to use age verification equipment if allowed to purchase the equipment in lieu of a fine for sale to minor

13. Challenges • Length of time to adjudicate through administrative hearings process - 6-9 months • Statute limitations (i.e. “knowing”) • Adequate staffing • Need for a higher fine limitation • When is mitigation and aggravation appropriate?

14. Contact Information Linda Ignowski Regulatory Services Director Oregon Liquor Control Commission 503-873-5115 linda.ignowski@state.or.us