4-210

4-210. Grounds for revocation, suspension and
refusal to renew; notice; complaints; hearings

A. After notice and hearing, the director may suspend, revoke or refuse to renew
any license issued pursuant to this chapter for any of the following reasons:

1. There occurs on the licensed premises repeated acts of violence or disorderly
conduct.

2. The licensee fails to satisfactorily maintain the capability, qualifications and
reliability requirements of an applicant for a license prescribed in section 4-202 or
4-203.

3. The licensee or controlling person knowingly files with the department an
application or other document which contains material information which is false or
misleading or while under oath knowingly gives testimony in an investigation or other
proceeding under this title which is false or misleading.

4. The licensee or controlling person is on the premises habitually intoxicated.

5. The licensed business is delinquent for more than ninety days in the payment of
taxes, penalties or interest to the state or to any political subdivision of the state.

6. The licensee or controlling person obtains, assigns, transfers or sells a
spirituous liquor license without compliance with this title or leases or subleases a
license.

7. The licensee fails to keep for two years and make available to the department
upon reasonable request all invoices, records, bills or other papers and documents
relating to the purchase, sale and delivery of spirituous liquors and, in the case of a
restaurant or hotel-motel licensee, all invoices, records, bills or other papers and
documents relating to the purchase, sale and delivery of food.

8. The licensee or controlling person is convicted of a felony provided that for a
conviction of a corporation to serve as a reason for any action by the director, conduct
which constitutes the corporate offense and was the basis for the felony conviction must
have been engaged in, authorized, solicited, commanded or recklessly tolerated by the
directors of the corporation or by a high managerial agent acting within the scope of
employment.

9. The licensee or controlling person violates or fails to comply with this title,
any rule adopted pursuant to this title or any liquor law of this state or any other
state.

10. The licensee fails to take reasonable steps to protect the safety of a customer
of the licensee entering, leaving or remaining on the licensed premises when the licensee
knew or reasonably should have known of the danger to such person, or the licensee fails
to take reasonable steps to intervene by notifying law enforcement officials or otherwise
to prevent or break up an act of violence or an altercation occurring on the licensed
premises or immediately adjacent to the premises when the licensee knew or reasonably
should have known of such acts of violence or altercations.

11. The licensee or controlling person lacks good moral character.

12. The licensee or controlling person knowingly associates with a person who has
engaged in racketeering, as defined in section 13-2301, or has been convicted of a
felony, and the association is of such a nature as to create a reasonable risk that the
licensee will fail to conform to the requirements of this title or of any criminal
statute of this state.

B. For the purposes of:

1. Subsection A, paragraph 8 of this section, "high managerial agent" means an
officer of a corporation or any other agent of the corporation in a position of
comparable authority with respect to the formulation of corporate policy.

2. Subsection A, paragraphs 9 and 10 of this section, acts or omissions of an
employee of a licensee, which violate any provision of this title or rules adopted
pursuant to this title shall be deemed to be acts or omissions of the licensee. Acts or
omissions by an employee or licensee committed during the time the licensed premises were
operated pursuant to an interim permit or without a license may be charged as if they had
been committed during the period the premises were duly licensed.

C. The director may suspend, revoke or refuse to issue, transfer or renew a license
under this section based solely on the unrelated conduct or fitness of any officer,
director, managing agent or other controlling person if the controlling person retains
any interest in or control of the licensee after sixty days following written notice to
the licensee. If the controlling person holds stock in a corporate licensee or is a
partner in a partnership licensee, the controlling person may only divest himself of his
interest by transferring the interest to the existing stockholders or partners who must
demonstrate to the department that they meet all the requirements for licensure. For the
purposes of this subsection, the conduct or fitness of a controlling person is unrelated
if it would not be attributable to the licensee.

D. If the director finds, based on clear and convincing evidence in the record,
that a violation involves the use by the licensee of a drive-through or other physical
feature of the licensed premises that allows a customer to purchase spirituous liquor
without leaving the customer's vehicle and that the use of that drive-through or other
physical feature caused the violation, the director may suspend or terminate the
licensee's use of the drive-through or other physical feature for the sale of spirituous
liquor, in addition to any other sanction.

E. The director may refuse to transfer any license or issue a new license at the
same location if the director has filed a complaint against the license or location which
has not been resolved alleging a violation of any of the grounds set forth in subsection
A of this section until such time as the complaint has been finally adjudicated.

F. The director shall receive all complaints of alleged violations of this chapter
and is responsible for the investigation of all allegations of a violation of, or
noncompliance with, this title, any rule adopted pursuant to this title or any condition
imposed upon the licensee by the license. When the director receives three such
complaints from any law enforcement agency resulting from three separate incidents at a
licensed establishment within a twelve-month period, the director shall transmit a
written report to the board setting forth the complaints, the results of any
investigation conducted by the law enforcement agency or the department relating to the
complaints and a history of all prior complaints against the license and their
disposition. The board shall review the report and may direct the director to conduct
further investigation of a complaint or to serve a licensee with a complaint and notice
of a hearing pursuant to subsection G of this section.

G. Upon the director's initiation of an investigation or upon the receipt of a
complaint and an investigation of the complaint as deemed necessary, the director may
cause a complaint and notice of a hearing to be directed to the licensee setting forth
the violations alleged against the licensee and directing the licensee, within fifteen
days after service of the complaint and notice of a hearing, to appear by filing with the
director an answer to the complaint. Failure of the licensee to answer may be deemed an
admission by the licensee of commission of the act charged in the complaint. The
director may then vacate the hearing and impose any sanction provided by this article.
The director may waive any sanction for good cause shown including excusable neglect.
With respect to any violation of this title or any rule adopted pursuant to this title
that is based on the act or omission of a licensee's employee, the director shall
consider evidence of mitigation presented by the licensee and established by a
preponderance of the evidence that the employee acted intentionally and in violation of
the express direction or policy adopted by the licensee and communicated to the employee
and that the employee successfully completed training in a course approved by the
director pursuant to section 4-112, subsection G, paragraph 2. The director may set the
hearing before himself or an administrative law judge on any of the grounds set forth in
subsection A of this section. Instead of issuing a complaint, the director may provide
for informal disposition of the matter by consent agreement or may issue a written
warning to the licensee. If a warning is issued, the licensee may reply in writing and
the director shall keep a record of the warning and the reply.

H. A hearing shall conform to the requirements of title 41, chapter 6, article 10.
At the hearing an attorney or corporate officer or employee of a corporation may
represent the corporation.

I. The expiration, cancellation, revocation, reversion, surrender, acceptance of
surrender or termination in any other manner of a license does not prevent the initiation
or completion of a disciplinary proceeding pursuant to this section against the licensee
or license. An order issued pursuant to a disciplinary proceeding against a license is
enforceable against other licenses or subsequent licenses in which the licensee or
controlling person of the license has a controlling interest.

J. The department shall provide the same notice as is provided to the licensee to a
lienholder, which has provided a document under section 4-112, subsection B, paragraph 3,
of all disciplinary or compliance action with respect to a license issued pursuant to
this title. The state shall not be liable for damages for any failure to provide any
notice pursuant to this subsection.

K. In any disciplinary action pursuant to this title, a lienholder may participate
in the determination of the action. The director shall consider mitigation on behalf of
the lienholder if the lienholder proves all of the following by a preponderance of the
evidence:

1. That the lienholder's interest is a bona fide security interest. For the
purposes of this paragraph, "bona fide security interest" means the lienholder provides
actual consideration to the licensee or the licensee's predecessor in interest in
exchange for the lienholder's interest. Bona fide security interest includes a lien taken
by the seller of a license as security for the seller's receipt of all or part of the
purchase price of the license.

2. That a statement of legal or equitable interest was filed with the department
before the alleged conduct occurred which is the basis for the action against the
license.

3. That the lienholder took reasonable steps to correct the licensee's prior
actions, if any, or initiated an action pursuant to available contract rights against the
licensee for the forfeiture of the license after being provided with notice by the
department of disciplinary action as provided in subsection J of this section.

4. That the lienholder was free of responsibility for the conduct which is the
basis for the proposed revocation.

5. That the lienholder reasonably attempted to remain informed by the licensee
about the business' conduct.

L. If the director decides not to revoke the license based on the circumstances
provided in subsection K of this section, the director may issue an order requiring
either, or both, of the following:

1. The forfeiture of all interest of the licensee in the license.

2. The lienholder to pay any civil monetary penalty imposed on the licensee.

M. If any on-sale licensee proposes to provide large capacity entertainment events
or sporting events with an attendance capacity exceeding a limit established by the
director, the director may request a security plan from the licensee that may include
trained security officers, lighting and other requirements. This subsection exclusively
prescribes the security requirements for a licensee and does not create any civil
liability for the state, its agencies, agents or employees or a person licensed under
this title or agents or employees of a licensee.