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Kenneth D. Koehler v. Illinois Liquor Control Commission ("Ilcc

November 18, 2010

KENNETH D. KOEHLER, PLAINTIFF-APPELLANT,
v.
ILLINOIS LIQUOR CONTROL COMMISSION ("ILCC"); IRVING J. KOPPEL, AS ILCC CHAIRMAN; RACHINA-1, INC., D/B/A MOBIL SPEED MART; PATEL AVIND; PATEL SUNIL; AND PIYUSH JOSHI, DEFENDANTS-APPELLEES.



Local Appeal from the Circuit Court Liquor Control Commissioner, of McHenry County. County of McHenry, Honorable Michael T. Caldwell, Judge, Presiding. No. 08--MR--364

The opinion of the court was delivered by: Justice Jorgensen

JUSTICE JORGENSEN delivered the opinion of the court: On August 20, 2008, the McHenry County Local Liquor Control Commission (MLCC), through its commissioner, plaintiff Kenneth Koehler, revoked defendant Rachina-1, Inc.'s liquor license. Rachina-1 operates as a dramshop at a Mobil Speed Mart gas station in unincorporated McHenry County. Defendants Patel Avind, Patel Sunil, and Piyush Joshi are its owners. Rachina-1 appealed the license revocation to the Illinois Liquor Control Commission (ILCC). On September 24, 2008, the ILCC, through its commissioner, defendant Irving J. Koppel, modified the MLCC order by reducing the license revocation to a temporary license suspension. Plaintiff sought administrative review before the trial court, and on July 27, 2009, the court affirmed the ILCC order. On September 21, 2009, the court denied plaintiff's motion to reconsider. Plaintiff appeals. For the following reasons, we reverse the trial court's order affirming the ILCC and we reinstate the MLCC order.

I. BACKGROUND

A. MLCC Hearing

The facts are undisputed. On April 8, 2007, the MLCC issued to Rachina-1 a liquor license. On December 13, 2007, the McHenry County sheriff's department, along with the Illinois State Police and a representative from the ILCC, performed at Rachina-1 "an alcohol counter measure enforcement detail" (i.e., a sting operation) to monitor the sales of alcoholic beverages to minors. During the sting operation, one of Rachina-1's employees, Ramesh Barot, sold alcohol to a minor in violation of local and state laws. The MLCC issued to Rachina-1 a citation and notice of hearing, with a hearing date scheduled for June 11, 2008.

On December 27, 2007, 14 days after the first violation and before the hearing occurred, Barot again sold alcohol to a minor during a second sting operation. The MLCC issued to Rachina-1 a second citation and notice of hearing, again setting the hearing for June 11, 2008.

On June 3, 2008, co-owner Joshi submitted to the MLCC an affidavit in which he waived Rachina-1's right to a hearing, admitted to the two instances of sales of alcohol to a minor, and accepted from the MLCC the following penalties: (1) as a penalty for the first offense, a $1,000 fine; and (2) as a penalty for the second offense, a $1,500 fine. Rachina-1 paid both fines by June 11, 2008, and no hearing was held.

In addition to the MLCC-imposed penalties, Rachina-1 was also penalized by the ILCC for its infractions. Specifically, the ILCC imposed upon Rachina-1 a $500 fine for the first violation. For the second violation, the ILCC imposed upon Rachina-1 a $2,500 fine and a three-day suspension of its state liquor license.

Approximately one month later, on July 16, 2008, Rachina-1, again through Barot, sold alcohol to a minor in a third sting operation. As before, the MLCC issued to Rachina-1 a citation and notice of hearing. This time, however, Rachina-1 did not waive its right to a hearing and, on August 20, 2008, the MLCC held a public hearing to determine whether Rachina-1's third violation should result in: (1) a third fine; (2) suspension of Rachina-1's liquor license; or (3) revocation of Rachina-1's liquor license.

Rachina-1's owners attended the hearing on its behalf. Joshi stipulated that, on three separate occasions in less than eight months, Barot sold alcohol to minors. The MLCC asked whether Rachina-1 had taken any remedial actions or had imposed upon Barot any punishment. Joshi stated that they spoke to Barot and provided him with advice on how to check identification. Joshi explained that they "told [Barot] everything, what happened, what is going on, he might lose the job and all that." Joshi told the MLCC that "we have been here [eight] years. We never had this problem. *** It is just a pure mistake. And I know that people make mistakes. So this time we let him go ***."

Joshi acknowledged that, after the first offense, the MLCC had recommended that Barot take BASSET training (a program designed to educate sellers of alcohol on how to responsibly serve and sell). Joshi stated that, because the second violation occurred two weeks after the first violation, Barot did not have time to enroll in the training until after the second violation. Although Barot had signed up for the course, which was scheduled to take place in July, the third violation, on July 16, 2008, occurred before he received the training. Joshi informed the MLCC that he had been in business at the Rachina-1 location for 8 years, that he had been in the business of selling alcoholic beverages for 15 years, and that "this has never happened." Joshi agreed that the ability to sell alcohol is a privilege. Joshi was asked why the owners did not terminate Barot after the second offense, especially given that it was two weeks after the first offense. He replied that they tried to, but that they have only a couple of employees and they could not "find" the right person (it is unclear whether Joshi meant that they could not "find," i.e., identify, which employee sold to minors, or whether they could not "find" the right person to replace Barot).

The MLCC voted to revoke Rachina-1's liquor license. In announcing the MLCC decision, several voting members stated their rationales therefor. Those bases included that: (1) as a liquor license holder, Rachina-1 was responsible for the actions of its employees and for ensuring that the employees were properly trained to follow the law; (2) despite a third violation, Rachina-1 had presented no plan for correcting the problem, nor had it taken any corrective action after the first two violations, such as firing Barot or scheduling a second person to work alongside Barot to ensure that he did not again sell alcohol to a minor; (3) holding a liquor license is a privilege and, here, Rachina-1 admitted selling alcohol to minors on three instances in an eight-month period; and (4) the MLCC's greatest responsibility is to protect the county's juveniles, that Rachina-1 had wantonly and on three occasions violated the privilege of holding a liquor license, and that "it is completely unacceptable to this Commission and this community's standards for that type of behavior." In conclusion, one member summarized: "We are sorry for you that you weren't able to handle the responsibility. This is a privilege of our county to protect our children, protect the adults and the people who are driving. And especially seeing as you are in a place where cars are in motion all the time, to have 3 violations of this, it just shows our Committee that you don't take your responsibility seriously."

On August 20, 2008, the MLCC revocation order issued.

B. ILCC Hearing

On September 9, 2008, Rachina-1 appealed the MLCC decision to the ILCC. 235 ILCS 5/7--9 (West 2008). On September 24, 2008, the ILCC held a hearing. There, Rachina-1 admitted that Barot, on three occasions in less than one year, sold alcohol to minors in violation of local and state laws. It noted that, after the first two violations, the ILCC had, separate from the MLCC, penalized Rachina-1 in the form of a $500 fine for the first violation and, for the second violation, a $2,500 fine and a three-day license suspension. Nevertheless, Rachina-1 argued that the MLCC's revocation of the liquor license after the third violation was too harsh a penalty, noting that Barot had since been fired. Rachina-1's counsel summarized as its argument that "the problem that my client had was one employee. He didn't have multiple employees, or different employees, selling alcohol to minors. It was just one employee [whom] he has terminated. He understands the gravity of the situation now ***." Counsel noted that, in eight years of business, the violations all happened in one year and due to one employee's actions.*fn1

The ILCC, noting that Rachina-1 had been in business for eight years, asked plaintiff's counsel whether it was typical for McHenry County to revoke a license after three violations.*fn2 Plaintiff's counsel responded that she was not aware of the MLCC having ever before revoked a license. Counsel argued that the license revocation, given the circumstances of repeated violations in a relatively short period, was not too severe a penalty.

On September 24, 2008, the ILCC issued an order modifying the MLCC decision. The ILCC suspended Rachina-1's license for 30 consecutive days ...


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