Loading...
HomeMy WebLinkAbout20090406 - VIII-C-1VIII-C -1 FLUEGEL LAW FIRM P.A. Donald J. Ftuegel * Attorneys At L.aw Telephone 65 f-438-9777 Daniel J. Fluegel 1303 South Frontage Road, Suite 5 Fax 651-438-9775 Sean R. McCarthy Hastings, MN 55(133-2477 William J. Markers Jc MEMORANDUM TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS FROM: DANIEL J. FLUEGEL DATE: MARCH 11, 2009 SUBJECT: PHOENIX FOODS, INC. d/b/a LEVEE CAFE ALLEGED LIQUOR LICENSE VIOLATION The Hastings Police Department received a report from the Alcohol and Gambling Enforcement Division of the Minnesota Department of Public Safety regarding the Levee Cafe liquor sales. The report indicates the Levee Cafe has been posted on the Minnesota Department of Revenue Tax Delinquent Liquor Posting since July 15, 2008. Once posted on the tax list, Minnesota Statutes ~270C.725 prohibits alcoholic beverage wholesale distributors from selling or delivering any alcohalic beverage products to the retailer. Also, under the provisions of Minnesota Statutes §340A.415, it is illegal for a retailer of alcoholic beverages to purchase liquor from another retailer of alcoholic beverages for the purpose of resale. According to the Department of Revenue Liquor Posting, July 20, 2008 was the last day the Levee Cafe could receive alcoholic beverages, shipments or sales from their wholesale distributors. The report by the Minnesota Department of Public Safety Alcohol and Gambling Enforcement Division alleges that on January 23, 2009, a State Representative visited the Cafe and following an inspection in which he located several varieties of malt beverage, all with production dates after the July 2008 date, he determined that the malt beverage products were delivered to or brought into the business in violation of Minnesota Statutes§340A.425. The State Representative seized evidence supporting that determination. In addition, the Hastings Police Department executed a Search Warrant at the Levee Cafe premises on March 5, 2009 and seized additional alcoholic beverage products and records supporting the determination that liquor license violations have occurred. Because information contained in the Alcohol and Gambling Enforcement Division report as well as the Hastings Police Department reports may be considered criminal investigative data under the Minnesota Data Practices Act, I am enclosing copies of those two reports to the Council as confidential or protected non-public information and I request that you segregate these reports from the rest of the Council packet and that you do not disseminate this information to any other person. Because the City Council is the licensing authority for the current liquor * Also admitted to practice in Wisconsin license issued to Phoenix Foods, Inc. d/b/a Levee Cafe, this information can be made available to the Council notwithstanding the active investigation. I am also enclosing a copy of the letter sent to Phoenix Foods, Inc. d/b/a Levee Cafe and Jeffrey A. Kasa, the owner and operator of the Levee Cafe. As you will see, the letter requested that Mr. Kasa contact me on or before March 11, 2009 and to date,l have received no response from Mr. Kasa. The Council is asked to consider action imposing a civil penalty that may include suspension or revocation of the Levee Cafe liquor license. Mr. Kasa has been notified that this matter will be considered by the City Council at the March 16, 2009 City Council Meeting. As with other Liquor License matters, the licensee has the right to demand a formal administrative hearing and we will prepare for that hearing if it is, in fact, demanded. This type of alleged liquor license violation is different from other violations the City Council has seen in the past. As a result, there is no established policy or past action of the Council to suggest what an appropriate sanction may be, if a violation is found to have occurred. Factors the City Council should consider would include the following: The Length of rime the licensee has been unable to purchase alcoholic beverages for resale and the inability or unwillingness of the licensee to cure the underlying tax problem since July 2008. ~ The overwhelming evidence supporting that continued and multiple liquor license violations have occurred over the last several months. Any information supplied by the licensee at or before the City Council Meeting suggesting whether or not he has the ability to correct this ongoing problem. ~ The lack of response from the licensee to inquiries from the Alcohol and Gambling Enforcement Division representative and to my letter on behalf of the City of Hastings. My recommendation to the Council for deciding how to proceed is to first receive any relevant information from the licensee. If the licensee provides reliable informatian suggesting the problem can be cured, the Council should take that into consideration when imposing any sanction. If the licensee either does not appear, or appears and cannot provide a timeframe when the problem can be cured, that should also be considered. It is also possible the licensee will request some additional time before the Council takes action. As noted in the Police Reports, Jeffrey Kasa was out of the State on the date the Search Warrant was executed. Should the Council be inclined to provide the licensee additional time to either prepare for the hearing or to take action to cure the underlying tax and licensing issues, there is no problem with the Council continuing the hearing to a later City Council Meeting. The new date would be selected based on the information provided and at the discretion of the City Council. In the event the Council wishes to take action at the March 16, 2009 Meeting, my suggestion is that the Council treat this as a fairly serious violation. The range of civil penalties that can be imposed include a fnancial penalty of up to $2,000.00, a suspension of the license for up to a maximum of 60 days, a combination of those two penalties, or revocation of the liquor license. Revocation of a liquor license wilt generally prevent the licensee from obtaining another liquor license for several years. At a minimum, I propose this ongoing and knowing violation should be treated more seriously than a second time or third time compliance check failure which would result in presumptive penalties of a $750.00 civil penalty and a two day license suspension or a $1,000.00 civil penalty and a five day Iicense suspension, respectively. If a liquor license suspension is considered, information from the licensee identifying the date when the underlying tax problem can be corrected and the purchasing permit reinstated may be factored into the length of the suspension. Staff considers this a serious violation that should at a minimum result in a liquor license suspension and imposition of a civil penalty but as to the exact number of days or whether a license revocation should be considered, that needs to be decided by the Council after reviewing any information submitted by the licensee. I will bring with me to the Council Meeting a formal, written resolution containing Findings of Fact and Conclusions that I believe will be supported by the record but I will leave open the portion of the document relating to sanctions which can be completed after the Council makes its decision. As always, please do not hesitate to contact me if you have any questions or if there is anything you would like to discuss. If I receive any additional information prior to the Council Meeting, I will follow up by email to the extent possible. Donald J. Fluegel * Daniel J. Fluegel Senn R. McCarthy William J. Marken Jc FLUEGEL LAW FIRM P.A. Attorneys At Law 1303 South Frontage Road, Suite 5 Hastings, MN 55033_2.177 March S, 2009 Phoenix Foods, Inc. dba Levee Cafe Attention: Jeffrey A. Kasa I00 Sibley Street Hastings MN SS033 Jeffrey A. Kasa 3104-65th Street East, #309 Inver Grove Heights MN 55076 Re: Phoenac Foods, InG, dba Levee Cafd Alleged Liquor License ~olahon Notice of Hearing Dear Mr. Kass: ~~P17 Telephone 651--138-9777 Fax b51--13R-9775 I am writing on behalf of the City of Hastings, the licensing authority for the current liquor license issued to Phoenix Foods, Inc, dba Levee Cafd at 100 Sibley Street in the City of Hastings. The City has received a report from the Alcohol and Gambling Enforcement Division of the Minnesota Department of Public Safety regarding the Levee Cafe liquor sales. The report indicates that the Levee Cafe has been posted on the Minnesota Department of Revenue Tax Delinquent Liquor- Posting since July 15, 2008. Once posted an the tax list, Minnesota Statute 270.73 prohibits alcoholic beverage wholesale distributors from selling or delivering any alcoholic beverage products to the retailer. Also, under the provisions of Minnesota Statue 340A.415, it is iliegat for a retailer of alcoholic beverages to purchase liquor from another retailer of alcoholic beverages for the purpose of resale. According to the Department of Revenue Liquor Posting, July 20, 2008 was the last day the Levee Cafe could receive alcoholic beverages shipments or sales from their wholesale distributors. The report by the Minnesota Department of Public Safety Alcohol and Gambling Enforcement Division alleges that on January 23, 2009, a state representative visited the cafe and following an inspection in which he located several vanities of malt beverage, all with production dates after the July 2008 (no ship) date, he determined and that the malt beverage products were delivered to or brought into the business in violation of Minnesota Statute 340A.415. The state representative seized evidence supporting that determination. In addition, the Hastings Police Department executed * Also admitned to practice in Wisconsin .• a seazch warrant at the Levee Cafd premises on March 5, 2009 and seized additional alcoholic beverage products and records supporting the determination that liquor license violations have occurred. As a result of the foregoing and additional infom~ation obtained by the City of Hastings, this matter will be submitted to the Hastings City Council for consideration. The City Council will be asked to consider action imposing a civil penalty that may include suspension or revocation of the Levee Caf6 liquor Iicense as authorized under Hastuags City Code 111.10 and Minnesota Statute 340A.415. The City Council also has the authority to impose other intermediate civil penalties. The City Council will considersach action at 7:00 p.m. on March I6, 2009 at Hastings City Ha11,101-4th Street East, Hastings, Minnesota. You will have an opportunity to address the Council and present any testimony and evidence you feel relevant. The Council will then determine what penalty, if any, will be imposed. As the licensee, you may demand a hearing be conducted under Sections 14.57 to 14.69 of the Minnesota Administrative Procedures Act. Please be aware that the civil penalties may include a financial penalty of up to $2,000.00, a suspension of the license up to a maximum of 60 days, a combination of those two penalties, or revocation of the liquor license. You may represent yourself at the City Council hearing or you may be represented by an attomey. I ask that you or your attomey contact me prior to March 11, 2009 to discuss whether you wish to exercise your right to have this hearing or if you would prefer to waive your right to a formal hearing. Even if you waive your right to a formal administrative hearing, you or your attorney may still address the Council at the meeting. You should also be aware that the actions alleged may constitute a crime in the State of Minnesota and in the event criminal charges are filed for that conduct, the criminal proceedings will be undertaken in a completely separate action in the Dakota County District Court. Although no action or decision has been made by the Hastings City Council regarding your liquor license, you are hereby notified that you are prohibited from undertaking any illegal purchases or sales of alcoholic beverages and any ongoing illegal purchases or sales may be used as a basis to suspend or revoke this liquor license. As a result, I request that you address these serious violations immediately. If you have any procedural questions regarding these matter, you or your representative may contact the undersigned. very truly yours, F EL LAfYFIRMP.A. ege City Attorney DAN/ham cc David M. Osberg, City Administrator Melanie Mesko Lee, Assistant City Administrator/City Clerk Page 1 of 5 ~1/1~taV1~ M.S.A. § 340A.4I5 Page 1 Minnesota Statutes Annotated Currentness Police Regulations (Ch. 340-348} '~j Chapter 340A. Liquor Fyj Retait Licenses -- 340A.415. License revocatlon or suspension; dull Penalty On a finding that the license or permit holder has (1) sold alcoholic beverages to another t+etaii licensee for the purpose of resale, (2) Purchased alcoholic beverages from another n;tail licensee for the purpose of resale, (3) conducted or permitted the conduct of gambling on the licensed premises in violation of the law, (4) failed to re- move or dispose of alcoholic beverages when ordered by the commissioner to do sounder section 340A.508, subdivision 3, or (5) failed to comply with an applicable statute, rule, or ordmance relating to alcoholic bever- ages, the commissioner or the authority issuing a retail license or permit under this chapter may revoke the li- cense orpermit, suspend the license or permit for up to 60 days, impose a civil penalty of up to $2,000 for each violation, or impose any combination of these sanctions. No suspension or revocation takes effect until the li- cense orpermitholderhas been-given an opportunity for a hearing under sections 14.57 to 14.68 of the Admin- istrative Procedure Act. This section does not require a political subdivision to conduct the hearing before an employee of the Office of Administrative Hearings: imposition of a penalty or suspension by either the issuing anthority or the wmmissioner does not preclude imposition of an additional penalty or suspension by the other so long as the total penalty or suspension does not exceed the stated maximum. CREDIT(S) Laws 1985, c. 305, art. 6, § 15; Laws 1985, c. 309, § 1 i; Laws 1985, 1st Sp., c. 16, art. 2, § 3, subd. 1. Amended by Laws 1985, c. 248, § 70; Laws I986, 1st Sp., c. 3, art. 1, § 42; Laws 1987, a 152. art. 1, § I; Laws 1987, c. 3I0, § 12; Laws 1988, c. 534. § 2; Laws 1991. c. ?49, § 19; Laws 1993, c. 350, § 11; Laws 1994, c. 611, § 23. HISTORICAL AND STATUTORY NOTES 2004 Main Volume Derivation: St.1984, § 340.l3S. Laws 1982. c. 424, § 130. Laws 1975, c. 231, § 1. Laws 1967, c. 19, § 9. Following repeal of §340.135, that section was amended by Laws 1985, c. 309, § I 1 by substituting "shall" for "may" and imposing a $2,000 fine. The amendatory provisions were transferred to §§ 344A.304 and 340A.415 ® 2009 Thomson Reuters/9Vest. No Claim to Orig. US Gov. Works. httn•//wPh~ wPCtlaw rnmlrnintlrn~intetrPam acnY?ev=Cnl;tRrrlAer~t,at;n„-hr.,R,~,t;.i-t,~;f~,,,- ~/7'7~~nno Page 1 of 2 Wes~lavu, M.S.A. § 2700.725 page i Minnesota Statutes Annotated Currentness Taxation, Supervision, Data Practices {Ch. 270-271 App.) '~i Chapter 2700. Department of Revenue ~ Collection .~ 2700.725. Posting of tax delinquency; sale of liquor or beer Subdivision L Postidg, notice. pursuant to the authority to disclose under section 270B.12, subdivision 4, the commissioner shall, by the 15th of each month, submit to the commissioner of public safety a list of all taxpay- ers who are required to pay, withhold, ~ collect the tax imposed by section 290.02, 290.0922, 290.92, 290.9727, 290.9728, 290.9729, or 297A.62, or local sales and use tax payable to the commissioner, or a local option tax administered and collected by the commissioner, and who are ten days or more delinquent in either filing a tax return or paying the tax. The commissioner is under no obligation to list a taxpayer whose business is inactive. At least ten days before notifying the commissioner of public safety, the commissioner shall nottfy the taxpayer of the intended action. The commissioner of public safety shall post the list in the same manor as provided in section 3~30A.318, subdi- vision 3. The list will prominently show the date of posting, H a taxpayer previously listed files ail returns and pays all taxes specified in his subdivision then due, the commissioner shall notify the commissioner of public safety within two business days. 5ubd. 2. Sales prohibited. Begmning the third business day afhn• the list is posted, no wholesaler, manufac- turer, or brewer may sell or deliver any product to a taxpayer included on the posted list. Snbd. 3. Penalty. A wholesaler, manufacturer, or brewer of intoxicating liquor or 3.2 percent malt liquor who violates subdivision 2 is subject to the penalties provided in section 340A.304. CREDTi'{S) Laws 2005, c. 151, art. 1, § 90, eff. Aug. 1, 2005. HISTORICAL AND STATUTORY NOTES 2007 Main Volume Derivation: St.2004, § 270.73. Laws 2001, 1st Sp., c. 5, art. 7, § 7. ® 2009 Thomson Reuters/West. No Claim to Orig. US Gov. Works. httn•//we~h~I wPCtiaw rpm/print/rni»tetrPam ac»v9re-Wi WQ (17Rs~s+etin~tinn-oM.4snrFt._L7T Z/1 7 /7MC]