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9 N.J.A.R. 403

T.L.S., Inc., a New Jersey Corp. v. Bayonne, City of and the Municipal Council of the City of
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Citation: 9 N.J.A.R. 403
Decision Date: 1985
Agency: DIVISION OF ALCOHOLIC BEVERAGE CONTROL
Synopsis: Appellant was charged with a violation of N.J.A.C. 13:2-23.5(b) in that he allowed, permitted or suffered the sale of narcotics upon a licensed premises and respondent ordered the license suspended for six months. The administrative law judge assigned to the case found that although there had been an unlawful sale of cocaine upon the premises there had been no opportunity for any of the appellant's employees to observe the sale or to prevent the prohibited activity. The judge concluded that a licensee cannot allow, permit or suffer unlawful drug activity upon its premises unless it knows or should know that such activity has taken place. Accordingly, the charges against appellant were dismissed. Upon review, this decision was rejected by the Director of the Division of Alcoholic Beverage Control. The Director noted that case law was clear in imposing nearly strict liability upon a licensee for any prohibited activities. He rejected the judge's attempt to distinguish and thereby limit such liability to 'liquor traffic violations'.' occurring on its licensed premises. This liability had been imposed in numerous instances where the mere presence of marijuana was discovered during a police investigation. These instances included those where the licensee had advised its employees to be especially observant against drug violations; where prohibited transactions were engaged in by irregularly employed, off-duty employees; where the licensee had been cooperating in a police investigation; and where a licensee had had virtually no chance to prevent any prohibited activity. Here, testimony indicated that two drug transactions took place within 15 minutes of each other at a time when there were only approximately 7 people in the bar. In addition, the Director found the testimony of the arresting detectives that this licensed premises was a persistent complaint area to be credible even without supporting documentary evidence. He specifically noted that the detectives testified that they had previously smelled marijuana on this premises. Additionally, the Director found that the testimony elicited on behalf of the appellant to be self-serving. Accordingly, the Director concluded that the appellant had had prior notice of narcotics activities on the premises and thus had allowed, permitted or suffered the sale of narcotics upon the licensed premises in violation of N.J.A.C. 13:2-23.5(b). In light of penalties imposed in similar cases, the Director reduced the penalty imposed from six months to sixty days and, since this was a first offense, allowed for the substitution of a monetary penalty in lieu of serving the suspension.