NIEL AKSHAR, INC., T/A REUBEN LIQUORS VS. CITY OF UNION CITY (DIVISION OF ALCOHOLIC BEVERAGE CONTROL)

• Court: New Jersey Superior Court Appellate Division
• Decided: May 17, 2019
• Docket: A-4881-17T4
• Status: Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-4881-17T4

NIEL AKSHAR, INC., t/a REUBEN LIQUORS,

Petitioner-Respondent,

v.

CITY OF UNION CITY,

Respondent-Appellant. __________________________

Submitted May 1, 2019 – Decided May 17, 2019

Before Judges Accurso, Vernoia and Moynihan.

On appeal from the New Jersey Department of Law and Public Safety, Division of Alcoholic Beverage Control.

Gregory T. Farmer, attorney for appellant.

Tomas Espinosa, attorney for respondent Niel Akshar, Inc.

Gurbir S. Grewal, Attorney General, attorney for respondent Division of Alcoholic Beverage Control (Cameshia T. Caldwell, Deputy Attorney General, of counsel and on the brief). PER CURIAM

The City of Union City appeals from the Director of the Division of

Alcoholic Beverage Control's February 8, 2018 order holding in abeyance for

one year the suspension of Niel Akshar, Inc.'s (Akshar) retail liquor license for

violating N.J.A.C. 13:2-23.1(a) by selling alcohol to an underage, undercover

police officer, and a May 23, 2018 final agency decision denying the City's

motion for reconsideration of the February 8, 2018 order. Based on our review

of the record, we are convinced the City failed to establish the Director 's

decision is not founded on sufficient credible evidence or is otherwise arbitrary,

capricious or unreasonable, and affirm.

I.

In 2016, the City's Alcoholic Beverage Control Board (Board) issued a

notice of charges alleging that on March 27, 2016, Akshar violated N.J.A.C.

13:2-23.1(a), which prohibits the sale of alcoholic beverages "to any person

under the legal age to purchase . . . alcoholic beverages," by selling alcoholic

beverages to a minor. 1 Mayuri Patel, an Akshar employee, received a summons

1 The notice of charges also alleged Akshar violated City ordinance 58-9C. We do not address the alleged violation of the ordinance because the Director's orders from which the appeal is taken do not find an ordinance violation. A-4881-17T4 2 charging a violation of Union City ordinance 58-9C, by selling alcohol to a

minor. Patel pleaded guilty to the charge in the Union City Municipal Court.

Following the Board's hearing on the charges against Akshar, the City

adopted a Resolution and Order finding that on March 27, 2016, Akshar violated

N.J.A.C. 13:2-23.1(a) by selling alcoholic beverages to a minor. 2 The City

imposed a fifteen-day suspension of Akshar's retail liquor license.

Akshar appealed to the State Division of Alcoholic Beverage Control

(ABC), and the matter was referred to the Office of Administrative Law for a

hearing before an Administrative Law Judge (ALJ). The ABC stayed the license

suspension pending disposition of Akshar's appeal.

Following the exchange of discovery, the City moved for a summary

decision, arguing that no facts were in dispute and the suspension should be

upheld as a matter of law. The ALJ granted the motion in a written decision

finding the record established that on March 27, 2016, a twenty-year-old Union

City police officer entered Akshar's store in plain clothes and purchased a bottle

containing an alcoholic beverage from Patel. The record further showed Patel

asked the officer for identification, he said he did not have identification and

Patel asked for the year of his birth. The officer responded, "1993." Patel said,

2 The Resolution and Order also found a violation of City ordinance 58-9C. A-4881-17T4 3 "Okay, I trust you," and the sale was consummated. The officer asked for a bag

for the bottle but Patel did not give him one; instead she instructed that he place

the bottle in his jacket. He complied and exited the store.

Patel submitted a certification in opposition to the City's motion admitting

the transaction, but explaining that she had seen the officer in his police uniform

prior to March 27, 2016, knew he was a police officer and did not expect a police

officer to lie about his age. The record further reflected that Patel pleaded guilty

to the summons charging her with unlawfully serving alcoholic beverages to a

minor, but she filed a motion to retract her guilty plea that had not yet been

decided.

The ALJ found Patel's guilty plea was unnecessary to a determination that

she sold an alcoholic beverage to a minor because Patel admitted in her

certification that she sold the beverage to the officer without obtaining any proof

of his age. The ALJ concluded Patel violated N.J.A.C. 13:2-23.1(a) by selling

A-4881-17T4 4 alcohol to a person "under the legal age [of twenty-one],3 but over the age of

eighteen."4

The ALJ further explained that the presumptive penalty for a first

violation of N.J.A.C. 13:2-23.1(a) is a fifteen-day license suspension. See

N.J.A.C. 13:2-19.11(i). The ALJ noted that the presumptive penalty may be

increased or decreased by the finding of aggravating or mitigating factors. See

N.J.A.C. 13:2-19.13(a). The ALJ did not find any mitigating factors, cited

Akshar's history of prior violations and recommended the fifteen-day suspension

imposed by the City.

In a February 8, 2018 Final Conclusion and Order, the Director adopted

the ALJ's finding that Akshar violated N.J.A.C. 13:2-23.1(a). The Director,

however, ordered the fifteen-day suspension to be held in abeyance for a period

of one year and, if Akshar violated the statute within one year, "the [fifteen]-day

suspension will be imposed and no monetary compromise in lieu of suspension

will be accepted." The Director determined that if Akshar did not violate

3 See N.J.S.A. 9:17B-1(b) (establishing twenty-one as the legal age to purchase alcoholic beverages in New Jersey). 4 The ALJ did not consider or determine if Akshar violated City ordinance 58- 9C because a copy of the ordinance was not provided in support of the City's summary disposition motion. A copy of the ordinance is not included in the record on appeal. A-4881-17T4 5 N.J.A.C. 13:2-23.1(a) during the one-year period, the fifteen-day suspension

"will dissolve and this matter will be closed."

The Director explained that Akshar argued an affirmative defense of

entrapment under N.J.S.A. 2C:2-12 before the ALJ based on the claim that the

undercover officer misrepresented his age, but that neither party submitted

evidence permitting a determination on the entrapment issue. The Director

further noted that Akshar failed to file any exceptions to the ALJ's determination

as to the violation and penalty.

The Director explained that "[t]he affirmative defense to selling to a

person under the legal age, codified in N.J.S.A. 33:1-77, presupposes either a

false representation in writing or the production of government issued

identification." The Director noted that a licensee's reliance on a verbal

representation of a purchaser's age "is never enough," "proper identification"

should always be requested and where there is any doubt about the documents

provided, "the licensee should refuse the sale."

The Director further suggested that "to avoid allegations of entrapment,"

police departments should adopt standard operating procedures governing the

use of undercover underage police officers in investigations of liquor law

compliance. The Director recommended that such procedures require that

A-4881-17T4 6 underage undercover officers provide either correct identification or none at all,

and only make accurate representations of their age. The Director founded his

decision to hold the fifteen-day suspension in abeyance on "the unique

circumstances of this case."

The City filed a motion for reconsideration, arguing the Director applied

the incorrect standard in his review and modification of the fifteen-day

suspension. The City claimed the Director erred by considering the officer's

misrepresentation of his age as a mitigating factor in the determination of the

penalty.

In a May 23, 2018 order, the Director denied the reconsideration motion.

The Director explained that although the imposition of a penalty for violating

the State's liquor laws and regulations is within the discretion of the adjudicating

authority, see Benedetti v. Bd. of Comm'rs of Trenton, 35 N.J. Super. 30, 35

(App. Div. 1955), the Director retains "ample implied authority to deal fairly

with parties when executing his extensive authority over alcoholic beverage

licenses," Circus Liquors, Inc. v. Governing Body of Middletown Twp., 199 N.J.

1, 13 (2009).

The Director noted that the sale of alcoholic beverages to underage

individuals is strictly forbidden, but expressed concern with law enforcement

A-4881-17T4 7 officers misrepresenting their ages to licensees during investigations of illegal

underage liquor sales. The Director explained that former Attorney General

Deborah T. Poritz issued a 1995 "Plan for the Uniform Enforcement of the

Alcoholic Beverage Control Laws" (Plan), which included a "Protocol for the

Use of Underage Cooperating Witnesses in Investigations of Premises Selling,

Serving or Delivering Alcoholic Beverages" (Protocol) prohibiting a

cooperating underage witness from misrepresenting his or her age or date of

birth while participating in a law enforcement investigation of liquor sales to

underage individuals. The Director noted that although the Protocol might not

directly govern law enforcement's use of an underage law enforcement officer,

it does not "indicate[] that underage police officers can misrepresent their ages

to persuade or coax a licensee to complete an illegal sale." The Protocol further

states that its guidelines "are intended to control circumstances in which persons

under [twenty-one] are utilized by an enforcement agency" to investigate

licensees' compliance with the liquor laws.

In addition, the Director found as a matter of fact that Patel recognized

the undercover officer as a police officer, his representations concerning his age

conveyed "that she would not be subject to jeopardy by completing the sale

because the sale would be legal" and she "relied on the police officer's factual

A-4881-17T4 8 representation to her detriment." The Director explained that citizens "must be

able to believe and rely on police officers, even when they are wearing street

clothes" and the officer's false statements about his age violated the Protocol's

prohibition against law enforcement attempting "by any means to influence or

persuade a licensee to make the sale."

The Director reiterated that the responsibility for ensuring liquor sales are

not made to individuals who are underage is vested with the licensees, but "they

should not be subjected to deceptive practices by law enforcement designed to

induce a violation." The Director distinguished this case from others, stating

that here "a known police officer misrepresented his age in an effort to influence

or persuade . . . Patel into making the sale for which [Akshar] was prosecuted."

The Director rejected the City's claim that holding the suspension in abeyance

allows Akshar to escape disciplinary action, noting that the penalty will be

imposed if Akshar commits another violation within one year and Akshar is

exposed to enhanced penalties for a second offense under N.J.A.C. 13:2-19.11(i)

for any violations occurring within two years. The City appealed.

II.

"Our review of administrative agency action is limited." Russo v. Bd. of

Trs., Police & Firemen's Ret. Sys., 206 N.J. 14, 27 (2011). A reviewing court

A-4881-17T4 9 will presume the validity of the "administrative agency's exercise of its

statutorily delegated responsibilities," Lavezzi v. State, 219 N.J. 163, 171

(2014), and recognize, where appropriate, an "agency's 'expertise and superior

knowledge of a particular field,'" Circus Liquors, 199 N.J. at 10 (quoting

Greenwood v. State Police Training Ctr., 127 N.J. 500, 513 (1992)). Thus, "an

appellate court ordinarily should not disturb an administrative agency's

determinations or findings unless there is a clear showing that (1) the agency

did not follow the law; (2) the decision was arbitrary, capricious, or

unreasonable; or (3) the decision was not supported by substantial evidence." In

re Virtua-West Jersey Hosp. Voorhees for a Certificate of Need, 194 N.J. 413,

422 (2008). "The burden of demonstrating that the agency's action was

arbitrary, capricious or unreasonable rests upon the [party] challenging the

administrative action." In re Arenas, 385 N.J. Super. 440, 443-44 (App. Div.

2006). "Where . . . the determination is founded upon sufficient credible

evidence seen from the totality of the record and on that record findings have

been made and conclusions reached involving agency expertise, the agency

decision should be sustained." Gerba v. Bd. of Trs., Pub. Emps.' Ret. Sys., 83

N.J. 174, 189 (1980).

A-4881-17T4 10 We accord "substantial deference" to the Director's determinations

enforcing the State's regulations concerning the sale of alcoholic beverages.

Circus Liquors, 199 N.J. at 10. "[T]he 'Director has powers of supervision and

control which set him apart from any other formal appellate tribunal.'" Ibid.

(quoting Blanck v. Mayor of Magnolia, 38 N.J. 484, 491 (1962)). Because the

State's regulation of liquor "is a subject by itself," we cannot indiscriminately

apply principles we otherwise apply when we review actions of administrative

agencies. Ibid. (quoting Blanck, 38 N.J. at 490).

Measured against these standards, we discern no abuse of discretion in the

Director's reasoned decision to hold in abeyance the fifteen-day suspension

under the circumstances presented here. The Director's decision is founded on

concerns particularly within his expertise: the integrity and validity of the

investigative process employed in the circumstances where a known police

officer misrepresents his age to entice a licensee to make an unlawful sale of

liquor. The Director found the officer's conduct violates the spirit, if not the

letter, of the Attorney General's longstanding Protocol, and that Patel's reliance

on the known officer's false representations constituted a mitigating factor

permitting a reduction, through the conditional abeyance, of the sanction

imposed.

A-4881-17T4 11 We defer to the Director's expertise concerning an investigative technique

that relies on false statements by known law enforcement officers to entice a

licensee to make an unlawful liquor sale, see Circus Liquors, 199 N.J. at 10, and

find no basis in the record to conclude the Director's decision is arbitrary,

capricious, unreasonable or not supported by the record. Indeed, "governmental

action is relevant, together with all other relevant factors, in respect of the

measure of punishment to be imposed." Div. of Alcoholic Beverage Control v.

Maynards Inc., 192 N.J. 158, 161-62 (2007). The Director is required to

determine the reasonableness of the penalty imposed by a municipality, N.J.A.C.

13:2-19.15, and consider aggravating and mitigating factors in his determination

of the appropriateness of a penalty, N.J.A.C. 13:2-19.13(a). That is precisely

what the Director did here.

We reject the claim the Director did not give due deference to the City's

determination as to the appropriate penalty. The City claims the Director is

required to affirm its suspension unless he concludes the City's penalty is either

not supported by sufficient credible evidence or is otherwise arbitrar y,

capricious or unreasonable. The City contends the Director incorrectly

substituted his judgment for the City's and that once the municipal authority "has

made its decision, its exercise of discretion should be accepted [by the Director]

A-4881-17T4 12 on review so long as that exercise is reasonable." Great Atl. & Pac. Tea Co. v.

Mayor of Point Pleasant Beach, 220 N.J. Super. 119, 128 (App. Div. 1987).

The record does not support the City's contention. The Director

considered the City's penalty and "conclude[d] that [it] abused its discretion in

imposing the [fifteen]-day suspension," explaining that the City failed to

consider the known police officer's false statements concerning his age and

Patel's reliance on those false statements as mitigating factors pertinent to the

appropriate penalty. Again, we find the Director's conclusion supported by the

evidence. The City also fails to demonstrate that the Director's findings or

conclusion are arbitrary, capricious or unreasonable or otherwise constitute an

abuse of discretion. See In re Arenas, 385 N.J. Super. at 443-44. Moreover, the

City fails to demonstrate that the Director's penalty "is so disproportionate to

the offense, in light of all the circumstances, as to be shocking to one 's sense of

fairness." Maynards Inc., 192 N.J. at 184 (quoting In re License Issued to Zahl,

186 N.J. 341, 354 (2006)).

We also reject the City's contention that the undercover officer's false

statements about his age cannot constitute a mitigating factor permitting a

reduction in the penalty. The argument is based on the following assertions: (1)

entrapment is not a defense to a license disciplinary proceeding; (2) the facts

A-4881-17T4 13 here do not prove statutory entrapment; (3) the facts here do not prove the

constitutional due process defense of entrapment; and (4) an undercover

underage police officer's misrepresentation of his age does not violate the law.

Again, the City ignores the record. The Director did not find the

undercover officer's false statements constituted entrapment. To the contrary,

the Director found there was insufficient evidence presented to support the

claimed entrapment defense. Thus, while the Director expressed concern

regarding a potential entrapment defense if known law enforcement officers

employed false statements to entice licensees to violate the liquor laws, his

findings and conclusion are not in any manner dependent on a purported

determination concerning a putative defense of entrapment.

We last address Akshar's arguments that the Director's finding it violated

N.J.A.C. 13:2-23.1(a) should be reversed because it was entrapped by the

undercover officer's conduct. Akshar did not appeal from the Director's orders,

has not filed a cross-appeal and its contentions are not merely "alternative

arguments for affirmance" which may be presented without filing a cross-

appeal. Kimball Int'l, Inc. v. Northfield Metal Prods., 334 N.J. Super. 596, 604

n.1 (App. Div. 2000). We therefore do not consider, and reject, Akshar's

A-4881-17T4 14 assertion we should reverse the Director's finding Akshar violated N.J.A.C.

13:2-23.1(a).

Affirmed.

A-4881-17T4 15