Skip to content

News

Search And Seizure And The New York State Liquor Authority

city skyline

The State Liquor Authority (“SLA”) has broad powers to conduct searches under the Alcoholic Beverage Control (“ABC”) Law. Section 18 of the ABC Law authorizes the SLA to inspect “any premises where alcoholic beverages are manufactured or sold.”  With regard to on-premises licensees, Section 106 says, “All retail licensed premises shall be subject to inspection by . . . the duly authorized representatives of the liquor authority, during the hours when the said premises are open for the transaction of business.”  Section 105(15) grants the SLA the right to inspect the licensee’s books and records. In addition, licensees have a duty to cooperate with an SLA investigation.

            Even so, people, including businesses, are protected against unreasonable governmental searches and seizures by the Fourth Amendment.  Whether the Fourth Amendment will limit the SLA’s power to inspect is fact dependent.  Still, a review of case law is helpful.

In Finn’s Liquor Shop, Inc. v State Liquor Authority, 24 NY2d 647, the Court of Appeals examined three cases involving the use of unlawfully obtained evidence against a licensee.  In one of these cases, SLA investigators entered a liquor store and with the manager’s approval conducted a search of the premises.  Without determining who owned it, an inspector ruffled through a jacket hanging in a back room and discovered evidence liquor had been sold on credit illegally.  The SLA brought charges. 

At his hearing, the principal requested all evidence resulting from the jacket search be excluded because it was illegally obtained.  The Court of Appeals concluded the jacket was not open to the public and searching it violated the Fourth Amendment rights of the principal.  The Court evoked the exclusionary rule, which requires evidence obtained in violation of the Fourth Amendment be suppressed

Another case involved a hotel liquor licensee whose phones had been illegally wiretapped by police.  The SLA relied on evidence gained from the wiretap and sought to cancel the license.  Although it knew the criminal court had ordered the evidence suppressed, the SLA insisted it could use the evidence.  The SLA argued that the purpose of the exclusionary rule is to take away the incentive to invade a person’s Fourth Amendment rights.  Because it was not associated with the agency that instituted the illegal wiretap, the SLA argued it was free to use the suppressed evidence. The Court opined, “Simply put, the evidence against this petitioner, having been obtained through the use of an ex parte eavesdropping order which was invalidated by competent judicial authority, was inadmissible for any purpose.”

            Originally, the Court suppressed all evidence taken under governmental authority in violation of the Fourth Amendment.  But “[i]n recent cases, the Court has stated that ‘the application and scope of the exclusionary rule is ascertained by balancing the foreseeable deterrent effect against the adverse impact of suppression upon the truth-finding process.”  Even so, the Court expressly reaffirmed the Finn’s cases by pointing out that the illegal searches were conducted by either agents of the SLA or agents of the police acting in concert with the SLA.  It also said that the SLA has the power to penalize and therefore its proceedings are more akin to criminal proceedings.  Boyd v. Constantine, 81 NY2d 189 (1993). These cases show that the SLA does not have absolute power to conduct warrantless searches of every inch of a licensed premise and everything in it.  But they are a reminder that licensees also have a duty to cooperate with an SLA investigation.  Care must be taken to balance the requirement to cooperate with the licensee’s constitutional right to be free from warrantless or improper searches and seizures.  With so many legal nuances and issues at stake, a licensee under investigation should consult an attorney.

This article is not intended to give specific legal advice.  Before taking any action, the reader should consult with an attorney familiar with the relevant facts and circumstances.

Written by

Keven Danow

Founding and Senior Partner
Read bio

Categorized in

Latest News

Stay informed on the critical current issues impacting the beverage alcohol industry

Wine and Spirits Labeled as Organic

Because a growing number of consumers believe there is an advantage to purchasing organic products, the United States Department of Agriculture (“USDA”) is concentrating on eliminating food and beverages improperly labeled as organic.  The USDA National Organic Program (“NOP”) published its final rule entitled “Strengthening Organic Enforcement (“SOE”).  This rule will be implemented as of […]

OUTDOOR DINING

The New York City Department of Transportation has published final rules regarding the open restaurant program.  Any restaurant that erected an outside dining structure or engaged in outdoor dining on a public road or street pursuant to prior rules must apply for revocable consent under the new regulations within five months of the new rules […]

Corporate Transparency Act Held Unconstitutional

CORPORATE TRANSPARENCY ACT HELD UNCONSTITUTIONAL The Corporate Transparency Act (“CTA”) requires each person to disclose to the Financial Crimes Enforcement Network (“FinCen”), acting on behalf of the United States Treasury Department, the beneficial owner and applicant for each entity to be formed by a filing with a state or an Indian tribe as well as […]

Ready to get started?

Attorney Advertising: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.
The Danow Group PLLC is the successor to Danow, McMullan & Panoff, P.C.
The Danow Group PLLC is a professional limited liability company formed under the laws of the state of New York.
© 2024 All Rights Reserved, The Danow Group, PLLC
website developer nyc