By John Hinman and Gillian Garrett
The ABC “Emergency Rules,” the Delivery Driver Minor Decoy Sting Program and Cocktails-To-Go
As regular readers of this blog are aware Hinman & Carmichael LLP has been defending licensees charged with selling alcohol to minors for well over 30 years. We have defended hundreds of cases and, when justified by regulatory or law enforcement overreach, have successfully taken cases as far as the California Supreme Court. We know the ABC, and they know us, so when the delivery driver “emergency rules” and related “minor decoy” operations were adopted we took a hard look at the legality and appropriateness of the programs from the perspective of defense lawyers.
We agree (as surprising as that will be to the ABC) with the ABC that the delivery driver decoy programs are necessary. Preventing the delivery of cocktails and other alcoholic beverages to minors is a core mission of the ABC and is in the interest of every licensee in the state. The statistics showing delivery driver non-compliance are shocking.
We also expect to see traditional minor decoy and other enforcement programs operated on-site in all on-premises establishments as re-openings occur. Restaurants, bars and winery, distillery, and brewery tasting rooms will all be targeted. These decoy and enforcement programs likely will be extended to entertainment venues once such venues are permitted to re-open.
One outcome of the ABC regulatory relaxation resulting from the COVID 19 crisis will be that cocktails-to-go may stay legal when the crisis is over. Cocktails-to-go are already close to being made permanent in at least six states (Oklahoma, Ohio, Iowa, Texas, Florida, and Tennessee) and are under consideration in many other states, including California. This recognizes the consumer convenience and safety of at-home consumption, and the benefit to the licensee community of serving customers who cannot come into the bars or restaurants now because of COVID 19, and later because of preference. The world has changed.
It behooves the licensed beverage industry to demonstrate it can responsibly exercise the privilege of delivering alcohol beverages, including cocktails.
The June 24th ABC Stakeholders Meeting – the Statistics of Compliance
On June 24, 2020, the ABC hosted its annual “stakeholders” meeting by video conference. This meeting takes place every year and reviews the ABC’s organization, personnel, budget, and enforcement priorities. This year the meeting focused on the ABC’s response to the pandemic, enforcement priorities, and regulatory relaxations related to the ever-changing COVID 19 public health orders. Public health orders are coming at the ABC as fast (and as complicated) as they are coming at the rest of us.
ABC Director Jacob Appelsmith emphasized deliveries of alcohol to minors were the ONLY significant negative consequence of the Department’s temporary regulations/relief for licensees.
The ABC believes that though many licensees have effective policies in place on their websites and in their ordering software, delivery personnel are commonly deviating from those policies in the field by leaving deliveries containing alcohol on doorsteps without checking ID, or by otherwise short-cutting the identification part of the delivery process.
The Department started conducting delivery stings using decoys in April, revealing a 50-79% violation rate for delivery drivers. This “failure” rate is shockingly high; historically, decoy operations inside licensed establishments had a 14% violation rate. Director Appelsmith warned licensees the ABC will hold them responsible for any deliveries of alcohol to minors by their delivery personnel (whether in-house employees, professional delivery services or common carriers, including third party delivery drivers), and the delivery driver minor decoy operations will continue until compliance rates reach an acceptable level.
The ABC Industry Advisory on Alcohol Delivery
The Industry Advisory issued by the ABC on June 5, 2020, admonishing licensees about the high rate of complaints of delivery personnel furnishing alcohol to minors, should be reviewed by every licensee. The full text of the ABC’s warning to licensees to comply with all ABC delivery laws is available here. Legally, a delivery driver is the agent of the licensee for whom it makes a delivery, and both the driver and licensee are responsible (criminally and administratively) for compliance with the law against selling or furnishing alcohol to a minor.
The Minor Decoy Enforcement Regulations, and Funding
The ABC has new regulatory tools for addressing sales of alcohol to minors by delivery personnel. On June 5, 2020, the ABC announced the Office of Administrative Law had approved the new ABC regulations (Rule 141.1) related to using minor decoys in enforcement operations involving delivery personnel. The Emergency Rules are only effective until January 26, 2021, though the ABC has announced it will seek to make them permanent (See here).
One significant feature of the new rules (and an area of potential challenge) is that the minor decoys may check the box representing that they are over 21 on the ordering website. This means that no licensee may rely on its ordering documentation for protection from delivery liability. The portion of the rule that requires a decoy, when questioned, to state his or her true age remains. The argument for this rule change is allowing lying on the website will focus the enforcement effort on the delivery aspect of the transaction (“furnishing” alcohol, which is as unlawful as selling) rather than the paperwork and financial aspect of the sale.
Despite the shortfall in funding due to the pandemic, ample funding is available for ABC enforcement operations. On June 16, 2020, the ABC announced it is granting $3 million to local law enforcement agencies to address alcohol sales to minors and obviously intoxicated persons. The full text of the ABC’s announcement is available here.
Taking Reasonable Steps to Prevent Sales of Alcohol to Minors
California Law requires licensees to take “reasonable” steps to prevent sales of alcohol to minors. (Cal. Bus & Prof. Code § 25658(a); § 25660.) What is reasonable has been (and will be in the future) the subject of many court cases. ABC agents in plain clothes (not uniformed) routinely conduct enforcement operations, watching for alcohol sales to customers they suspect of being underage or of using fake IDs. The agents often conduct these operations when they know licensees are most busy or most distracted because that is when minors are most likely to attempt to take advantage of licensees.
ABC agents also use decoys – often police cadets under 21 – to purchase alcohol from licensees in stores, restaurants, or bars to test whether the cashier or server will ask for ID. The ABC delivery driver minor decoy program works in a similar fashion.
Based on our experience defending ABC accusations of all kinds, including accusations involving delivery violations and sales or furnishing of alcohol to minors, if the ABC catches a licensee with one violation, it targets that licensee for future enforcement operations. Director Appelsmith, in response to a question, affirmed this as current ABC practice. The cases become progressively harder to defend (and the penalties more draconian – up to revocation) the more the ABC establishes a record of noncompliance. If the ABC prevails in three sale or furnishing to minor accusations within 36 months, then it seeks revocation of the license in the third proceeding (although it may seek revocation earlier if the incident was aggravated or because the ABC or the local police have a history of enforcement problems with the particular licensee).
Civil and Criminal Liability
Besides the licensee being liable for the sale, delivery personnel are criminally liable for furnishing alcohol to minors. The ABC typically cites licensee employees with a misdemeanor criminal violation for a sale. It is an open question whether the employee back at the store who processed the transaction (where the delivery driver is the one who completed the transaction and furnished the alcohol) may also be criminally prosecuted for the offense. We would argue that such a charge is not proper or justified absent notice that the purchaser was a minor, but the issue has not yet been tried in the criminal courts.
Compliance Training Programs and Secret Shoppers
We recommend licensees implement virtual training programs to ensure compliance with all legal requirements and document that implementation. Licensees using third party services for delivery should contact the services about compliance and review the delivery service compliance programs. Due diligence will be important for mitigation should there be a violation. All licensees should use “secret shopper” programs to test compliance and keep track of any results.
Best Practices for ID Inspection
We recommend these best practices for inspecting IDs and preventing sales to minors upon delivery of alcoholic beverages to consumers at home, and for selling alcoholic beverages in the restaurant or bar, or in the winery, brewery or distillery tasting room. These steps are not expressly required by California law, but the ABC interprets the law as requiring them in practice. All delivery and other personnel should:
· Transport the alcohol in your trunk for delivery.
· Notice if youthful patrons appear nervous. The ABC considers a nervous demeanor inside a store or in an on-premises establishment a red flag.
· Do not deliver alcohol to anyone who is obviously intoxicated.
· Always deliver the alcohol to the customer who made the order.
· Ask for ID from anyone who appears to be under 30 years old.
· Ask customers to remove IDs from wallets so the entire ID may be inspected.
· Ask customers to lower their masks so you can properly verify the customer matches the photo and physical description on the ID.
· Using gloves, physically touch the ID and feel for any obvious defects.
· Look at both sides of the ID.
· Check the birthdate to make sure the customer is over 21.
· Check the expiration date to be sure the ID is still valid.
· Ask customers who appear under 30, “Are you over 21?” Decoys legally must state their true age. Just by asking this question, delivery personnel can prevent furnishing alcoholic beverages to decoys.
· Watch for mixed-age couples. If drinks “to go” appear to be for both, then ask for ID from both.
· Call a manager for assistance if there is anything suspicious about the sale.
· Ensure managers have access to an ID checking guide. (See e.g., here)
Be Careful, Its Dangerous Out There - - From More Than the pandemic
The privilege of being permitted to deliver alcohol to persons at home, whether cocktails, wine, or beer, is a critical tool in the survival belt of every alcohol licensed business. A 50 to 79% non-compliance rate when testing whether delivery drivers will furnish alcohol to persons under the age or 21 is unacceptable if the programs are operated in a fair and legally compliant fashion.
It remains to be seen how fairly the actual minor decoy compliance programs were, and will be, operated. However, at the stakeholders meeting, the ABC reported that it had issued 108 citations since April. Each citation will turn into an accusation against the selling licensee and a likely criminal charge against the delivery driver.
Be ready and hope you were not one of the targets.
Please contact us with questions.
This blog is dedicated to occasional (and hopefully interesting) reports of state and national alcoholic beverage regulatory developments that we encounter in our practice. Booze Rules (and any comments below) are intended for informational use only and are not to be construed as legal advice. If you need legal advice please consult with your counsel.