When ALE agents or local ABC officers come across ABC violations during enforcement actions or inspections, they report the violations to the ABC Commission by directing a report to ABC Legal. ABC learns of permittee violations in other ways as well (i.e., through audit reports, local law enforcement, and news media).
If ABC Legal determines that a violation has occurred warranting a fine, suspension, or revocation, it sends the permittee a “Notice of Alleged Violation” (NOAV) that gives a short description of the alleged violation or violations, as well as a list of options for the permittee’s consideration. These options include speaking to an attorney or paralegal at ABC Legal or settling the matter by signing an enclosed “Proposed Stipulation and Offer in Compromise” (OIC). The NOAV also informs the permittee of its right to request a hearing at which ABC Legal and the permittee will have the right to put on evidence before an Administrative Law Judge. Finally, the NOAV informs the permittee that if no response is given by a certain date, ABC will treat the failure to respond as a request for a hearing.
The OIC is the ABC attorney’s offer to settle the case. It includes a list of the permits held by the permittee, a statement of prior ABC violations by the permittee, and the same short description of wrongdoing contained in the NOAV. It then sets forth the proposed penalty, which can be a fine, suspension, revocation, or a combination of fine and suspension.
In considering ABC’s offer, the permittee is entitled to request the reporting officer’s Violation Report, which is a narrative that provides details of the officer’s activities and observations in conducting enforcement related to the alleged violation. If the permittee wishes to avoid a hearing, it may sign and return the OIC, which will be submitted to the Commission for approval at its next meeting. The permittee may also attempt to negotiate the amount or length of the penalty with ABC Legal. In the interests of maintaining uniformity of penalties, ABC tends to resist departing from OICs to any significant degree. The permittee at any time in the process may determine its interests would be best protected by engaging a lawyer.
If the permittee does not wish to admit wrongdoing or otherwise wishes to have a hearing on the violation, it may notify ABC or it may do nothing. As long as the permittee is not operating under temporary permits or posing an imminent danger to the public, ABC must file a petition, present evidence, and obtain an administrative ruling before imposing a penalty. ABC does this by filing a Petition for Contested Case Hearing in administrative court, known as the Office of Administrative Hearings. The Petition is essentially the same as a complaint in a civil lawsuit. From this point forward, the case is treated like a civil court case, with filing deadlines, sworn depositions, motions, and a trial.
Like most prosecutors, if unable to settle the case at an early stage, ABC generally will seek a much harsher punishment at the evidentiary hearing, or trial. For this reason, a permittee proceeding without counsel at this point is at significant risk. A neutral Administrative Law Judge is assigned to resolve any disputes leading up to the evidentiary hearing, as well as to preside over the hearing and render a decision. An adverse ruling may be appealed to Superior Court, which has strict limitations on grounds for reversing the administrative court decision. From Superior Court, a petitioner may, but seldom does, appeal to higher appellate courts.