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HomeMy WebLinkAbout2019-02-21 Liquor Adjudication Board Minutes (2)COUNTY OF HAWAI`l DEPARTMENT OF LIQUOR CONTROL LIQUOR ADJUDICATION BOARD February 21, 2019 H I LO LAGOON CENTRE, 101 AU P U N I STREET, UNIT 230, H I LO, HAWAI `l I. Call to Order The meeting was called to order by Vice Chair Riley Smith at 10:14 A.M., in the Meeting Room, Department of Liquor Control, Hilo Lagoon centre, 101 Aupuni Street, Unit 230, Hilo, Hawaii. The following were present and constituted a quorum: Board Members: Riley Smith, Vice chair Dwayne Mukai, Board Member Art Taniguchi, Board Member Absent and Excused: Geraldine Giffin, chair Andi Pawasarat, Board Member Others Present: Brandon Gonzalez, Administrative officer Renee Schoen, Assistant corporation counsel (Department/Prosecutor) Craig Masuda, Deputy Corporation Counsel (Board) Dorsi Lim, Secretary to the Board & commission Smith: Can we introduce ourselves, please? Taniguchi: Art Taniguchi, Board Member. Mukai: Dwayne Mukai, Board Member. Smith: Riley Smith, Board Member and Vice Chair. Masuda: Craig Masuda, Board counsel. Lim: Dorsi Lim, Secretary. Schoen: Renee Schoen, Assistant Corporation Counsel. Gonzalez: Good morning. Brandon Gonzalez, Administrative officer. Smith: Thank you everyone. We have two board members that are absent and excused today, Geraldine Giffin, Chair and Andi Pawasarat, Board Member. I ask that each of you turn off your cell phones or put them on silent mode. Thank you very much. Hawaii County is an Equal Opportunity Provider and Employer 11. Approval of Minutes Smith: First item of business, we'd like to go through our minutes of the last meeting. The December 5, 2018, meeting minutes were circulated via email on February 14, 2019. Taniguchi: Move to accept. Mukai: Second. Mr. Taniguchi moved to approve the minutes of December 6, 2018; seconded by Mr. Mukai, Smith: Thank you very much. The motion has been seconded. Is there any discussion? There was no discussion from the Board Members. Smith: Hearing none, all those in favor say, "Aye." The Board Members voted "Aye." There was no opposition by the Board. Smith: Motion carried. Thank you very much. The motion was carried unanimously. III. Hearings Smith: If there are no objections, we'll take No. 5, Case No. 2018-012 out of order. There were no objections from the Board Members. Smith: This is No. 5, Case No. 2018-012, in the Matter of the Accusation Against Longs Drug Stores California, L.L.C., dba Longs Drugs #2405 (Waimea), located at Waimea, Hawaii. 5. CASE No. 2018-012 (10:15 A.M. ) In the Matter of the Accusation Against Longs Drug Stores California, L.L.C., dba Longs Drugs #2405 (Waimea), located at Waimea, Hawaii. Informal Hearing (Alternative 11) on violation of Rule 5-2 of the Rules and Regulations of the Liquor Commission of the Department of Liquor Control of the County of Hawaii, State of Hawaii, for failure to have a Person in Active Charge of the premises at all times while the premises was open for business to provide proper supervision in the exercise of the liquor license in accordance with the liquor laws. Newton Chu, Esq. and Jaimelyn Kori, District Leader, were present. FEBRUARY 27, 2019 - LIQUOR ADJUDICATION BOARD MINUTES 2 Smith: Would you please identify yourselves? Chu: Yes, thank you chairman Smith. I'm Newton Chu, legal counsel to Longs Drug Stores California, L.L.C. To my left, Jaimelyn Kon, District Leader of Longs Drugs Stores on this island. We previously filed a notice and we plead no contest, and we also will waive reading of the charge. Schoen: Mr. chair, Renee Schoen, Assistant corporation Counsel on behalf of the Department. Because the Licensee has chosen Alternative II and is waiving reading of the complaint, I am not going to do that now. The Board can proceed with a motion to find the Licensee in violation. Smith: okay, thank you very much. Do I have a motion to find the Licensee in violation of the charge? Mukai: So move. Taniguchi: Second. Mr. Mukai moved that the Licensee in Case No. 2018-012, be found in violation of Rule 5-2, of the Rules and Regulations of the Liquor Commission of the Department of Liquor control of the County of Hawaii; seconded by Mr. Taniguchi. Smith: We have a motion and second to find the Licensee in violation of the charge. All those in favor say, "Aye." The Board Members voted "Aye." Smith: Any opposition? There was no opposition from the Board Members. Smith: Hearing none, motion carried. Thank you very much. The motion was carried unanimously. Smith: Prior to assessing penalty, you may proceed with your presentation of the circumstances surrounding the violation. Chu: Chairman Smith, we just have an explanation that it was not an intentional violation. It was an inadvertent violation. As you know, Longs is a retail store and pharmacy with seven stores on this island. This was a case where there was a last minute change in supervision that evening. The Store Manager had the late night Store Manager split her shifts so she worked the evening shift. Chu: She was scheduled to take the liquor class in the morning and he didn't want her to drive from when she got off her shift at 6:00 A.M. to Hilo to take the class. He forgot that he could not have her alone without somebody else. A lot of times there are multiple people in the store FEBRUARY 2 1, 2019 - LIQUOR ADJUDICATION BOARD MINUTES 3 with multiple licenses, so when they shift, it's not a big deal. We normally have six managers that are certified, so it was an inadvertent shift change. We made note of it and now have it on a checklist to be sure to have someone who is a person on active duty with a card and that the card is on file with the store before a shift is changed. We apologize for that error and we assure the (Board) that we won't have that happen again. We ask for your consideration of those facts. Smith: All right, thank you. Any discussion from the Members? Smith: I have a question. You are tidying up your procedures to try to prevent this from happening again. What is your protocol should you not have someone on premises. They call in sick, they don't show up or something; what would you do if that happens? Kon: Usually if a manager calls out sick, another person that's a key carrier can cover that shift. What we're doing right now is requiring anyone who might be promoted to be a key carrier, attend the liquor class before being promoted. So whoever is going to cover that person who called out sick would be another key carrier and they will have their liquor license. My training manager who makes sure that everyone completes their training modules will also make sure that they have their liquor license prior to us promoting them to be a key carrier. This is for all stores on the island. Chu: So we're increasing the number of people who take the course who becomes a key carrying person. We're actually updating our whole staff because it's due February 28th. We're identifying others to take the class. Smith: What if you can't find somebody? Kon: The Store Manager has to cover. Same with the Pharmacist, if we can't find another Pharmacist the Pharmacy Manager has to cover. Smith: Okay. And if there's a gap, like an hour for the person to show up, what are you going to do? Kon: Usually the person that's on the morning shift will stay until the second person comes in, the Store Manager. If I called out sick and was supposed to start at 2:00, and he was supposed to be done at 2:00, he would stay until someone else could get there. The store cannot be open without a key carrier. Smith: okay, got it. I think in other situations, in bars and restaurants, if you don't have a person with the proper licenses, can you stay open and not sell alcohol? Is that an option? Gonzalez: Chair Smith, the Department has made that accommodation to bars and dispensers if they call the Department to notify us. They cannot do it on their own. If they call the Department to notify us, we can tell them it is okay to stop liquor sales, post Signs that there will be no liquor sales; but their food service or non -liquor beverage service can continue. Smith: I live in Waimea and you have a really good operation. You sell a lot of products and provide a necessary service to our community, so I hate for you to have an issue with someone not showing up and you would have to close the whole store and the Pharmacy in the back and FEBRUARY 2 7, 2019 -- LIQUOR ADJUDICATION BOARD MINUTES 4 the drive-through window and all of that just because one person isn't there. If you understand that you have some options, we don't want to impact your profitability as a business by trying to comply with the liquor rules. Kan: That's good to know, thank you. Smith: Do we need to vote on a penalty or are you going to discuss that? Schoen: Mr. Chair, the original license was issued in May of 2013. There has been no previous violation. The Licensee took responsibility and based on that, we are recommending $1,000 fine, $500 suspended for one year on the condition there will be no similar violations within the year and that amount will be payable to the Department of Liquor Control within 30 days of receipt of the Decision and Order. Smith: Okay. I need a motion on that. Mukai: I move to accept the legal counsel's recommendation. Taniguchi: Second. Mr. M u kai moved that the Licensee in Case No. 2018-012, be assessed a penalty in the amount of $1,000 with $500 suspended for one year from the date of service of the Decision and order, on the condition that there is no similar violation relating to Rule 5-2, and that $500 is to be paid within thirty (30) days upon receipt of the Decision and order; seconded by Mr. Taniguchi. Smith: Any discussion? There was no discussion from the Board Members. Smith: All those in favor say, "Aye." The Board Members voted "Aye." Smith: No opposition, motion carried. The motion was carried unanimously. Chu: I have something to add to this. Smith: what would you like to say? Chu: I think the fine is a little high only because as part of the discovery process, they asked for our sales for that evening and there were only three sales during that time. I just want to say that Longs did not unduly profit during that period of time. I think a thousand dollar fine is high considering the amount of sales. Smith: Okay. FEBRUARY 27, 2019 - LIQUOR ADJUDICATION BOARD MINUTES 5 Schoen: The Department did look at the fact that there were three sales during that three-hour period and the finding recommended is consistent with other fines that this (Board) has been issuing. Taniguchi: Actually, it's $500, right? Schoen: It is $1,000. Taniguchi: $1,000, but $500 is suspended, so it's $500. Chu: If there are no other violations, the $500 goes away? Masuda: Right. That is correct. Chu: I would like to put that on the record. I was in a situation where they said "suspended," and a year later, they called and said it was suspended for a year. I said `yes, but it's supposed to go away' and they said they looked at the transcript and it doesn't say that it goes away. Now, when go to Honolulu, I always make sure it's on the record that it goes away after a year. Masuda: As- long as there is no similar violation. Chu: Right. What's the point of suspending it and you get no violations and you have to pay it a year from now? Mukai: This is the County of Hawaii. It's suspended, if nothing, then it's gone. It disappears. Chu: I appreciate the Board and Counsel recognizing that is what the purpose of what that's about. Smith: We have a lot of integrity. We are the Liquor Adjudication Board and we do not do those kinds of things. The motion has been carried. The penalty is $1,000; $500 will be waived if there's no further violation in the area. Newton, part of this is that we need to support our investigators and we need to enforce the rules that are in place. I think the leniency is that because Longs has been a good corporate citizen in the community, Corporation Counsel is recommending waiving 50 percent of that. Chu: Yes, and we accept it. I just thought that I'd say it. Smith: Thank you for sharing your thoughts. Based on that, a written Decision and Order will be prepared and served upon the Licensee, which will be due and payable within 30 days of its receipt. Any questions? Chu: No, no questions. Smith: Thank you very much. Good luck. Gonzalez: Mr. Chu, would you like to be mailed a courtesy copy of the Decision and order? Chu: Yes, please. Email is fine. Thank you. FEBRUARY 21, 2019 - LIQUOR ADJUDICATION BOARD MINUTES 6 Smith: Thank you for being patient with us. Moving on to Case No. 1, this is case No. 2018-008, in the Matter of the Accusation Against MS Keaau, LLC, dba Minit Stop (Keaau), located at Keaau, Hawaii. '1. CASE NO. 2018-008 (10:20 A.M.) In the Matter of the Accusation Against MS Keaau, LLC, dba Minit Stop (Keaau), located at Keaau, Hawaii. Informal Hearing (Alternative II) on violation of Section 281-44(a) of the Hawaii Revised Statutes, as amended, for failure to post a sign in or about the premises containing and notifying all customers and other persons of the possible sanctions that may be imposed for operating a vehicle under the influence of an intoxicant under Sections 291 E-41 and 291 E-01, more commonly known as a "D. U.I. poster." Jon Miyabuchi Mice President of Retail Operations and General Manager, was present. Smith: could you please identify yourself? Miyabuchi: Yes, I'm Jon Miyabuchi the Vice President of Retail operations for Hawaii Petroleum, as well as the General Manager. Smith: Thank you very much. Renee, could you read the complaint? Schoen: Thank you, Mr. Chair. The Complaint states that on or about the 21st day of October 2018, in the County and State of Hawaii, the Licensee MS Keaau, LLC, dba Minit Stop (Keaau), did fail to post a sign in or about the premises containing and notifying all customers and other persons of the possible sanctions that may be imposed for operating a vehicle under the influence of an intoxicant under Sections 291 E-41 and 291 E-01, more commonly known as a "D.U.I poster," in violation of Section 281-44(a) of the Hawaii Remised Statutes, as amended. Schoen: Mr. chair, the Licensee has chosen Alternative II, they acknowledge receipt of the Complaint, admitted the allegation and stipulated that disciplinary action may be taken and they are waiving their right to appear and appeal and want to present the circumstances surrounding the situation. Smith: Do I have a motion to find the Licensee in violation of the charge? Mukai: So move. Taniguchi: Second. Mr. Mukai moved that the Licensee in Case No. 2018-008, be found in violation of Section 281-44(a) of the Hawaii Revised Statutes, as amended, for failure to post a sign in or about the premises containing and notifying all customers and other persons FEBRUARY 21, 2019 - LIQUOR ADJUDICATION BOARD MINUTES 7 of the possible sanctions that may be imposed for operating a vehicle under the influence of an intoxicant under Sections 291E-41 and 291E-61, more commonly known as a "D.U.I. poster"; seconded by Mr. Taniguchi. Smith: Thank you very much. Motioned and seconded, any discussion? Does the Board have any comments? Mukai: Yes, I just read the explanation. (to Mr. Miyabuchi) Was the original sign that wasn't put back up ever found? Miyabuchi: What happened was they took all the signs down to clean the walls. I guess when they put it back, it had slipped out somewhere. They could never find it again. We don't know what happened. They're so used to seeing it up there, I guess when they put up all the signs again, no one thought twice about not seeing it. Until the liquor inspector came, no one knew it was missing. I think a couple of months had passed by the time it was checked and found missing. Smith: I'm sorry, we should vote on this before we can have dialogue. Masuda: (to Chair Smith) So, we vote to find him in violation. Though he's already given his right of elocution, he's already explained what happened; you can vote to find in violation at this point. Smith: Motioned and seconded, all those in favor say, "Aye." The Board Members voted "Aye." Smith: Any opposition? There was no opposition from the Board Members. Smith: Hearing none... The motion was carried unanimously. Masuda: Mr. Miyabuchi, did you want to explain anything further about what happened? Miyabuchi: No, that was it. As soon as we got the citation, we got our replacement sign. We also called all the other stores to make sure everyone else had their sign to make sure they were all in compliance. We dealt with it right away. I'm sorry we couldn't tell it was missing. Gonzalez: Mr. Chair, Brandon Gonzalez from the Department, i would like to thank the Licensee for taking the steps he did. Mr. Miyabuchi is correct in that upon immediately receiving the citation, their island supervisor actually called our office to inform us they were checking all the stores island wide to make sure they had the posters available. Like Mr. Miyabuchi set forth in his January 10, 2019 letter, the circumstances in this were unfortunate. But they took responsibility right away and said they didn't have it, and that is why the explanation of their circumstances FEBRUARY 21, 2019 - LIQUOR ADJUDICATION BOARD MINUTES 8 played into the penalty that will be recommended to be assessed; which was actually based on an agreement between the Department and the attorney for the Licensee when they explained the circumstances. Masuda: Thank you. (to Counsel) Read the recommendation please. Schoen: The recommendation is a $100 fine to be paid within thirty (30) days of receipt of the Decision and Order, made payable to the Department of Liquor Control. There have been no prior violations. Smith: Are there any comments or questions? When I've gone into retail establishments and I see all the signs you have to put up, there are a lot. Aside from telling your managers that you need to have all the signs up, do you have a template or a frame that everything goes in so when you take it down, you can put it up rather than taking individual (signs to put up)? How do you prevent this from happening again? Miyabuchi: For the (inaudible) signage which is the licenses and stuff like that, that would go into a binder we haven't had before and that goes up behind the register. For the D.U. I. poster that is only for the liquor sales, that one goes by the door. At one point some stores had one on every door. But now we only have one. As part of our ongoing inspections, we have a district manager that goes in and inspects all the region stores every month. We've added D.U.I. posters as part of their checklist. And we have a photo of where it's supposed to be that's added to the checklist. Gonzalez: So the unfortunate thing with this type of signage, the D. U.I. and No Sale to Minors, it is put in locations where the public customer can clearly see it, because that's the requirement. But sometimes it's stolen, for whatever reason. We've had that be the explanation in the past, and we need to have it reprinted and replaced for them, take it out to them. But that wasn't the case in this situation. That's just more background. Smith: okay. Mukai: I move to accept the recommendation of our legal counsel. Taniguchi: Second. Mr. Mukai moved that the Licensee in Case No. 2018-008, be assessed a penalty in the amount of $100, to be paid within thirty (30) days upon receipt of the Decision and order; seconded by Mr. Taniguchi. Smith: Any further discussion? There was no further discussion from the Board Members. Smith: If not, all in favor say, "Aye." The Board Members voted "Aye." FEBRUARY 21, 2019 -- LIQUOR ADJUDICATION BOARD MINUTES 9 Smith: No opposition, the motion carries. Thank you very much. The motion was carried unanimously. Smith: Based on that, a written Decision and order will be prepared and served upon the Licensee, which will be due and payable within 30 days of its receipt. Any other comments or questions? Thank you for being pro -active in addressing the situation. There were no other comments or questions from the Board Members. Taniguchi: Thank you, thanks for coming. Masuda: Do you want to proceed? The Board recessed at 10:30 A.M. and reconvened at 10:35 A.M. Smith: Item No. 2, Case No. 2018-009, in the Matter of the Accusation Against oriental Garden, LLD, dba club Rose, located at Hilo, Hawaii. 2. CASE NO. 2018-009 (10: 35 A.M.) In the Matter of the Accusation Against oriental Garden, LLC, dba Club Rose, located at Hilo, Hawaii. COUNT I Informal Hearing (Alternative I) on violation of Rule 3-1(F)(3) of the Rules and Regulations of the Liquor Commission of the Department of Liquor Control of the County of Hawaii, State of Hawaii, for failure of employee (Mi Yong Arce) to register as a hostess with the Department of Liquor Control prior to such employment as a hostess at Club Rose. COUNT II Informal Hearing (Alternative 1) on violation of Rule 3-1(F)(3) of the Rules and Regulations of the Liquor commission of the Department of Liquor Control of the County of Hawaii, State of Hawaii, for failure of employee (In Won "Michele" Jun) to register as a hostess with the Department of Liquor Control prior to such employment as a hostess at club Rose. COUNT III Informal Hearing (Alternative 1) on violation of Rule 5-1(B) of the Rules and Regulations of the Liquor Commission of the Department of Liquor Control of the County of Hawaii, State of Hawaii, for failure to maintain and post a daily schedule of employees on duty that shall be readily available for inspection. FEBRUARY 2 T, 2019 -- LIQUOR ADJUDICATION BOARD MINUTES 10 Smith: corporation Counsel Schoen, could you read the Complaint? Schoen: Thank you, Mr. Chair. Actually, based upon the Licensee's choosing Alternative I, we are going to dispense with reading the Complaint because you just read it and the Licensee is admitting to the violations. Smith: The Licensee, Oriental Garden, LLC, dba Club Rose, has selected Alternative I, admitting to the allegations and stipulates that disciplinary action may be taken without the presence of the licensee and that the licensee has waived their right to a hearing and appeal. Smith: Do I have a motion to find the Licensee in violation of the charges in Counts 1 and 2 and pursuant to the Department's Motion, dismiss Count 3? Mukai: So move. Schoen: Mr. Chairman, if I may, the Department is going to request a motion to dismiss Count 3. The reason is that the Department has worked with the Licensee and we believe that the last count should be dismissed. Masuda: The motion as it stands will be motion to find them in violation of Counts 1 and 2, and to dismiss Count 3. Taniguchi: Second. Mr. Mukai moved that the Licensee in Case No. 2018-009, be found in violation of Rule 3-1(F)(3) of the Rules and Regulations of the Liquor Commission of the Department of Liquor control of the county of Hawaii, State of Hawaii, for failure of employee (Mi Yong Arce) in Count 1, and employee (In Won "Michele" Jun) in count 2, to register as a hostess with the Department of Liquor Control prior to such employment as a hostess at Club Rose; seconded by Mr. Taniguchi. Smith: Moved and seconded. Any discussion? There was no discussion from the Board Members. Smith: Hearing none, all in favor say, "Aye." The Board Members voted "Aye." Smith: No opposition? There was no opposition from the Board Members. Smith: Hearing none, motion carried. The motion was carried unanimously. FEBRUARY 27, 2019 - LIQUOR ADJUDICATION BOARD MINUTES 11 Smith: Renee, can you read the report from the Department? Schoen: Sure. The original license was issued in August 2009. There is one prior violation in 2014, and that was related to consuming liquor while on duty in violation of Rule 5-4(B). They were fined $2,000 for that. There is no other similar violation for this, so we are recommending for Count 1 a $500 fine with $250 suspended for one year from the date of the service of the Decision and order, on the condition that there is no similar rule violation and that the $250 is to be paid within thirty (30) days. on Count 2, $500 fine with $250 suspended for a year from the date of the service of the Decision and order, on the condition that there be no similar violation of Rule 3-1(F)(3), and this is also to be paid within thirty (30) days upon the receipt of the Decision and order. The Licensee did take responsibility in this case, they took immediate action to register the two hostesses, and on that basis, recommended the $250. Mukai: I move to accept the recommendation of our legal counsel. Taniguchi: Second. Mr. Mukai moved that the Licensee in Case No. 2018-009, be assessed a penalty for Count 1, a $500 fine with $250 suspended for one year from the date of the service of the Decision and order, on the condition there is no similar rule violation and that the $250 is to be paid within thirty (30) days; and for Count 2, a $500 fine with $250 suspended for a year from the date of the service of the Decision and order, on the condition that there will be no similar violation of Rule 3-1(F)(3), and that is also to be paid within thirty (30) days upon the receipt of the Decision and order; seconded by Mr. Taniguchi. Smith: Any discussion? Taniguchi: I have a question. Why was Count 1 less? Schoen: I'm sorry, I might have misspoke. It was $500 and $500. Mukai: It was the same. Taniguchi: The $250 will be waived for both (Counts)? Schoen: $500 fine with $250 suspended. Mukai: What is the rationale for dismissing Count 3? Gonzalez: Thank you for that question. In discussion with the Director, the more troubling violation here was the fact that they had hostesses working there that were not registered with the Department. Those were the more serious violations we were looking at. If they gave us the excuse that they were off-duty, the only way we can verify that is to cross-check with the schedule. Because they took responsibility for having the hostesses registered so quickly, they came in the next day and did not want to contest the charge, the Director thought it was fair to them to dismiss Count 3. It is already on the record that they violated it and they FEBRUARY 21, 2019 -- LIQUOR ADJUDICATION BOARD MINUTES 12 admitted to it; but to give them that incentive for cooperating with the investigation, that is the rationale. Mukai: Thank you. Taniguchi: How much does it cost to register? Gonzalez: I think it is less than five dollars. I think all we do is charge them for the blank card. There is no extra fee associated with it. Taniguchi: So it's real nominal. Gonzalez: Yes. Masuda: You just charge them for the ID? Gonzalez: For making the ID card. 1 don't even think we do an administrative charge for the paperwork involved. Smith: Is there a test? Gonzalez: There is no test. Smith: They apply for it and they're given it? Gonzalez: A hostess card. Smith: So it's not like you have to know what the rules are? Gonzalez: No. It is different from a blue card holder as a server would have and it is different from the yellow card holder for the retail establishments. Because they are working in there as a hostess, they need to be registered with us. Taniguchi: So the hostess cannot serve? Gonzalez: Usually, if they are going to serve, we ask them to take the class. In most cases, the main thing that this rule focuses on is that they register with the Department. Smith: Any other questions? Taniguchi: So it's an expensive (violation). For five dollars, it went to $250. Gonzalez: Yes. Taniguchi: They should have just registered since it's so cheap. Smith: I have a couple of questions. In the report it said that both of these individuals were prior hostesses that had licenses in the past, that let them lapse. They knew what the rules were. FEBRUARY 271 2019 - LIQUOR ADJUDICATION BOARD MINUTES 13 Gonzalez: Yes. I believe the report states that these were prior hostesses that had been registered as hostesses at a different establishment before so they should have known. Smith: Right. They did know because they were registered. Did you take that into account when you were assessing the fine? Gonzalez: We did. It kind of worked against us because the Licensee may have misunderstood. She knew that they were already registered as hostesses, so the nuance there is that they have to register for each bar they work in. They may have been registered as hostesses at another bar, they may not have renewed; but we couldn't determine clearly if that was clearly communicated to the owner from the hostess holding it. That is a really good question. Smith: Okay. Taniguchi: on the card it says the name of the establishment? Schoen: The person I thought, it would be the person. Gonzalez: It is the person. We keep track, we have the list for each of the hostess bars of who is registered there. That's a good question, though. Masuda: So they don't have one card per bar? Gonzalez: The way the Rule reads they are supposed to. I will have to take a look at that because we might only give them one card with a hostess number and we keep a list for each bar they're at. Then you don't have to keep making different cards for them. Do you see what I'm saying? Mukai: So they actually had a card on them, then? Smith: It expired. Mukai: Oh, it expired? Gonzalez: There was an expired one. M u kai : Oh, I see. Gonzalez: And one I think, couldn't provide a card for us. Smith: But in your research it showed that one of them had it in 2014 and one of them had it in 2010, and it expired since they're only good for two years, right? Gonzalez: Yes. Smith: Okay. The other related question I have is the initial complaint that came in from the patron, talked about them watering down liquor and it had the investigator open a couple bottles of tequila and vodka, smelled it and said it smelled like alcohol. It seemed like there was a complaint about them adulterating, putting something in bottles they are not supposed to. What's the procedure to determine whether they're compliant and not doing what the complainant said? FEBRUARY 21, 2019 - LIQUOR ADJUDICATION BOARD MINUTES 14 Gonzalez: Thank you for that question. We have reviewed it with our investigative staff on the types of methodology they would use to follow up on these kinds of complaints. They not only have to check the open inventory behind the bar that the seal is already broken, but they should also be checking a sampling of the inventory that's in the storage area. I think the initial checking is a common sense thing, they test it for smell. It's been very rare where they try to taste it. We've had reports of the alcohol being spoiled or tasting funny. We had a recent investigation of that, but the bartender tasted it in front of the investigator. So, to answer your question, the smell test is usually the first thing. I think the complaint was that it was watered down or they were just pouring water. What we can do as well, is to collect a sample and enter it into evidence and have it tested for the correct proof. Taniguchi: Who would test that? Gonzalez: We would have to send that away to an independent laboratory. Taniguchi: Where? In Honolulu? Gonzalez: Yes. There was one time it was sent to the mainland. Smith: clinical Labs can do that. Gonzalez: They may be able to test for certain things, but in the liquor industry, it is so litigated because there is the oversight ... they keep track of the batches made and they can verify the pureness of that label. Smith: oh, because it's not only the proof but it's whether that manufacturer... Gonzalez: That's why there are SKU numbers for every type of alcohol out there. The regulatory agency on the manufacturing side are supposed to provide samples of that SKU number as a control sample. That's the difference. Smith: So do our inspectors have test kits to grab a sample? Gonzalez: We do have the means to collect samples, seal and store it as evidence. Taniguchi: What happens if you find it is watered down? Do they lose their license? Gonzalez: If we do have a sample of alcohol being tampered with or not of pure quality, that is a violation of our section. We would probably bring a case in front of the Adjudication Board and the penalties could range from license revocation to suspension to a fine. Actually, several years ago there was such a case brought before the Adjudication Board for a Licensee in Hilo. It started with employees drinking on duty. Smith: That was the one they lined up the shots on the bar and they said it wasn't alcohol. Gonzalez: They claimed the shots they were pouring wasn't real alcohol, but only water. The Department said `you admitted to that, we're going to charge you with both.' Smith: What establishment was that? Not this one? FEBRUARY 21, 2019 - LIQUOR ADJUDICATION BOARD MINUTES 15 Gonzalez: No, it wasn't this one. Masuda: We're getting kind of (off track). Smith: Yes, okay, but it's part of education. So we already voted on it, right? Gonzalez: You voted for the violation. You still have to vote on the penalty. Smith: Any further discussion? There was no further discussion from the Board Members. Smith: All in favor say, "Aye." The Board Members voted "Aye." Smith: Any opposition? There was no opposition from the Board Members. Smith: Hearing none, motion carried. The motion was carried unanimously. Smith: A written Decision and Order will be prepared and served upon the Licensee, which will be due and payable within thirty (30) days of its receipt. Brandon, will you go back and take samples of the alcohol? Gonzalez: Yes, we can. We can go back and collect samples. We can collect and test them. Mukai: I have a question. Let's say that the findings say that the alcohol was tampered with. Do we bill the vendor or the license holder for the cost of the test? Gonzalez: No, we do not. But I guess it could be imposed as part of the penalty. Mukai: I think going forward, we should probably consider it. Taniguchi: We can do it at the penalty phase. We can just add that. Gonzalez: We can add that part. That might be something... Mukai: Okay, thank you. Smith: But if the penalty is revocation, I mean, you know. Mukai: Oh, that's true. Smith: okay. Item No. 3, Case No. 2018-010, In the Matter of the Accusation Against Leatherman Libations, LLC, dba Kona Wine Market, located at Kailua-Kona, Hawaii. FEBRUARY 21, 2019 - LIQUOR ADJUDICATION BOARD MINUTES 16 Smith: Renee, would you like to read the complaint? Schoen: Sure. on or about the 15th day of November, 2018, in the county and State of Hawaii, Leatherman Libations, LLC, dba Kona Wine Market, did fail to submit its payment of percentage fees due for the license year in violation of Rule 3-6(C) of the Rules and Regulations of the Liquor Commission of the Department of Liquor control of the county of Hawaii, State of Hawaii. They have chosen Alternative I, a stipulation and waiver, and a stipulation to disciplinary action may be taken without (their) presence. Smith: okay. Do I have a motion to find the Licensee in violation of the charge? Mukai: So moved. Smith: Second? Taniguchi: Second. Mr. Mukai moved to find that the Licensee in Case No. 2018-010, be found in violation of Rule 3-6(C) of the Rules and Regulations of the Liquor Commission of the Department of Liquor Control of the county of Hawaii, State of Hawaii; seconded by Mr. Taniguchi. Smith: Thank you. Any discussion? Taniguchi: Yes. What was this violation then, failure to? Schoen: This was related to not paying their percentage fee. Four thousand four hundred eighty-six dollars and seventy-eight cents was due on November 15, 2018, and they came in one day late. Taniguchi: So they didn't pay it on time? They were one day late? Smith: That information is in your packet, Mr. Taniguchi. Taniguchi: l know, that's what worried me, is that... Masuda: Discuss that further in the penalty phase. Smith: okay. All in favor to find the Licensee in violation of the charge say, "Aye." The Board Members voted "Aye." Smith: Motion carried. The motion was carried unanimously. Smith: Renee, you want to read the report on the penalty? FEBRUARY 27, 2019 -- LIQUOR ADJUDICA TION BOARD MINUTES 17 The Board Members voted "Aye." Smith: Motion carried. The motion was carried unanimously. Smith: Renee, you want to read the report on the penalty? Schoen: Sure. The original license was issued on October 21, 2014. There's been no previous violation by this Licensee. The Department is recommending $150 fine to be paid within thirty (30) days upon receipt of the Decision and order for the violation, made payable to the Department of Liquor Control. The basis for the fine was that this Licensee did take responsibility and there's been no previous violations. Smith: Okay. Schoen: So basically they hand -walked in the payment the next day. Taniguchi: So they hand -carried, it wasn't mailed? Smith: Do I have a motion to approve the penalty as recommended? Mukai: So moved. Taniguchi: Second. Mr. Mukai moved that the Licensee in Case No. 2018010, be assessed a penalty in the amount of $'150, to be paid within thirty (30) days upon receipt of the Decision and order; seconded by Mr. Taniguchi. Smith: Any discussion? I had a question. For these kinds of administrative things where they're supposed to do something by a certain date, and if the Licensee doesn't, we send an investigator out? Gonzalez: Yes. Especially in this case where there were at least two written reminders of the due date and then the Secretary for the Department actually called and spoke to the Store Manager to tell them, "I'm in Kona, drop it off before we close the office" and they didn't show up. Then they walked in the day after and dropped it off at the Mayor's Office. After emailing and mailing notices, as well as a telephone conversation, we felt that a person-to-person reminder (the investigator going out) in this case was worth it; now we had to send somebody (out). Smith: Okay, so there's a progressive method you're using here with face-to-face being like a last step? Gonzalez: Yes. Masuda: Just understand, too, though, the efforts they made is out of courtesy to the Licensee. There's no requirement that they do so. FEBRUARY 27, 2019 - LIQUOR ADJUDICATION BOARD MINUTES 18 Gonzalez: Yes. Masuda: Just understand, too, though, the efforts they made is out of courtesy to the Licensee. There's no requirement that they do so. Smith: oh, okay. I'm just thinking that if we have a limited amount of investigators and typically they work in the evenings and then they have to go to these businesses to cite them, it just seems like a waste of time for them. Gonzalez: Right. We're lucky though, since this location is close within the Kona district, the investigators can usually multi -task and check. What actually came about was they applied for a Special Permit, a tasting that night in the store, so the investigators were going to go by to make sure they were abiding by that. But we were not going to authorize that until they were caught up on their payment. That's how we would normally treat a renewal. That was also an incentive for them to turn in their payment. Smith: So what is the penalty again? Schoen: one fifty. one hundred fifty. Smith: Okay, and that's standard? Gonzalez: That is standard. we've had at least seven rule violations of this nature. The only deviation was in 2017 with two, Licensees where the circumstances were very different from this. They had bounced checks and they actually had missed several deadlines on a payment plan. The fine in those cases were $2,000. Smith: All right. Motion seconded, any further discussion? There was no further discussion from the Board Members. Smith: All those in favor say, "Aye." The Board Members voted "Aye." Smith: Any opposition? There was no opposition by the Board Members. Smith: Hearing none, motion carried. The â–ºnotion was carried unanimously. Smith: A written Decision and order will be prepared and served upon the Licensee, which shall be due and payable within thirty (30) days of its receipt. Smith: case No. 4, In the Matter of the Accusation Against JKGS corporation, dba Al Vicolo Italian Restaurant, located at Kamuela, Hawaii. FEBRUARY 21, 2019 - LIQUOR ADJUDICATION BOARD MINUTES 19 Informal Hearing (Alternative 11) on violation of Rule 3-6(C) of the Rules and Regulations of the Liquor Commission of the Department of Liquor Control of the County of Hawaii, State of Hawaii, for failure to submit percentage fees due for the license year. Smith: They waived being present? Schoen: They chose Alternative Il, but they're not here. Masuda: Let the record reflect it's now 10:55 A.M. and this matter was scheduled for 10:00 A.M. Gonzalez: The Department has received no communication from the Licensee that they weren't planning to attend, other than the Alternative 11 selection. They didn't call to say they were going to be late or anything. Schoen: Mr. Chair, if 1 may, the complaint does state that on or about the 16th day of November, 2018, in the County and State of Hawaii, JKGS Corporation, dba Al Vicolo Italian Restaurant, did fail to submit its payment of percentage fees due for the license year by November 15, 2018, in violation of Rule 3-6(C) of the Rules and Regulations of the Liquor Commission of the Department of Liquor Control of the County of Hawaii, State of Hawaii. Smith: Do I have a motion to find the Licensee in violation of the charge? Mukai: So moved. Smith: Second? Taniguchi: Second. Mr. Mukai moved to find that the Licensee in Case No. 2018-011, be found in violation of Rule 3-6(C) of the Rules and Regulations of the Liquor Commission of the Department of Liquor Control of the County of Hawaii, State of Hawaii; seconded by Mr. Taniguchi. Smith: Thank you. Any discussion? There was no discussion from the Board Members. Smith: Hearing none, all in favor say, "Aye." The Board Members voted "Aye." Smith: No opposition? There was no opposition from the Board Members. Smith: Motion carried. The motion was carried unanimously. FEBRUARY 21, 2019 - LIQUOR ADJUDICATION BOARD MINUTES 20 Smith: Renee, can you tell us what the recommendation is? Schoen: Yes, thank you, Chair. The original license was issued on December 5, 2012. There've been no previous violations. The Department is recommending a $150 fine to be paid within thirty (30) days upon receipt of the Decision and order. Similar to the last case. Payment in this case was due on November 15 (2018), they attempted to make payment via mail on November 17. That payment was not received by the Department until the 20th, but it wasn't signed, the check wasn't signed. Another check was issued on the 27th and when we tried to cash that, it was not payable and then the Department received cash payment on December 25, 2018. Smith: okay. I've got a few questions. Does anybody else have any comments? There were no other comments from the Board Members. Smith: This establishment had the license from 2012? Schoen: Yes. Smith: But they weren't open in 2012. They've only opened in the last two years. Was it an assigned license? Gonzalez: It may have been transferred and that's why we say the license number was originally issued in 2012. Smith: Okay. I guess my concern is that I try to compare the last case that we assessed a $150 fine where it seemed like it was an oversight and they immediately paid it and in this case, it was an oversight, they sent in a check that wasn't signed, and then they sent in a check that was signed, however, wasn't negotiable. I think these are two distinct cases that I would not give them the same fine. I don't want to enter into other issues with this restaurant but unlike Longs Drugs in Waimea that I think is a good corporate citizen, this restaurant is not, so I would not give them the benefit of the doubt on anything. That's my personal feeling as a resident of Waimea. Does the Board have any thoughts on this? Mukai: I have a procedural question. Did we hear from Counsel on the recommendation of the fine? Smith: one hundred fifty. Mukai: oh, and did we vote on it? Smith: No. We're considering it. Gonzalez: There's no motion made yet. Mukai: Should we approve and then discuss the fine? Masuda: At this point, no. Since there's only three of you, somebody should make a motion as to what they believe an appropriate fine amount should be and then have discussion among yourselves. FEBRUARY 21, 2019 - LIQUOR ADJUDICA TION BOARD MINUTES 21 Mukai: So Renee's recommendation is up for discussion now? Masuda: okay. Mukai: I'm totally in agreement with the Chair. I read this and felt we should fine them more, because to notify them and they send us an unsigned check? Then they send us a non-negotiable check? That's unheard of. It's not like the amount of the check is something astronomical. It's $771. I'm in the same mode as the Chairperson that it's a little different scenario and I think the fine should be higher. Taniguchi: Well, with the other one, too. (The Department) called them a couple of times, although it's one day. Gonzalez: Mr. Taniguchi, you are correct. However, I do see a factual distinction in this case from the previous case. And I will have to state that the Board's observation that there's strong circumstantial evidence that there may have been some actions here to mess with the timeliness of the payment exists. So if you are going to recommend a higher fine, I do believe there is circumstantial evidence to support that. The Department, in making its recommendation, was giving the benefit of the doubt to the Licensee, could not definitively prove intent to not pay the Department on time; however in this case, we did at least two written notifications, we called and left a message, and then we gave them the benefit of, that even though it wasn't postmarked by the 15th, we accepted that it was in transit, once they were reminded. And then it was unsigned, and we had to go through those hoops and send an investigator to get another check and then that checked bounced and we had to send an investigator back to let them know that it bounced and we were only going to accept cash now. So, the facts in this (case) are distinguishable from the case we just heard for Leatherman Libations. Mukai: I have another comment. I know times are hard. The restaurant business is a very tough business, but a normal business person, knowing they did not have the funds available, would notify the, if I was the individual I would say, "Hey, you know, I'm sorry. I apologize. Honestly, we don't have the money. I can make it good in two weeks. Or I can make it in a week and a half.'' Then I can see where a fine of $150 or whatever the going fines are, because at least they were on the up and up with us. This almost seems like deceit in my mind. That's why I'm more inclined to have a higher fine in this situation. Smith: What's the highest fine you ever issued in this kind of case? Masuda: Two thousand. Gonzalez: As of now, we've had at least eight violations of Rule 3-0(C), the most recent just occurring a few minutes ago. The highest fine we have ever issued in these cases has been $2,000. Smith: I guess it's compounding the situation that they said they were going to be here and they didn't show up, right? They're supposed to show up for this hearing, right? Taniguchi: But they said they acknowledge the complaint and they waived their rights to this. Schoen: Yes. I would not, I guess because they acknowledged the allegations in the complaint, admitting, disciplinary action should be taken without a hearing, basically when they choose that FEBRUARY 21, 2019 - LIQUOR ADJUDICATION BOARD MINUTES 22 Alternative, they're just trying to explain. So the fact that they're not here, although they said they were going to be and they're not, the Board can still proceed with the hearing. Masuda: Again, I would also caution the Board not to read too much into their non-appearance. But just to confirm, they had never submitted anything on any elocution or any reason about what happened? Gonzalez: Thank you. They did not submit anything in writing explaining the circumstances or apologizing or stating that they definitively plan to attend. The Alternative says `may be present.' Gonzalez: I did not get any communication this morning that they may be running late or would be here. Masuda: So again, don't read... Taniguchi: It says that they're... Smith: But you were under the impression that they were going to be here? Gonzalez: No, I was not. Smith: why did we say it's a certain time and they're not here? Masuda: That's just to protect the record that they, if they come back and say `well we put in Alternative II, and you know, you guys started without us.' Taniguchi: And it says 10:00 anyway. Masuda: And it says 10:00. That's just to cover the record. Smith: okay. Taniguchi: one thing I'd like to add is, Dwayne is a very honest guy, but I've been in this business a long time. This happens all the time. It's very common. It's not something that, and they do these kinds of tricks all the time. The one thing is, if you just play it down and run the check through it probably would've bounced anyway, the first time. Gonzalez: The unsigned check? Taniguchi: Yes. Mukai: Legal counsel, could you repeat the recommendation, please? Schoen: A $150 fine to be paid to the Department of Liquor. Mukai: So we're not waiving anything, it's just $150 straight up? Schoen: Yes. Mukai: okay, got it. FEBRUARY 21, 2019 - LIQUOR ADJUDICATION BOARD MINUTES 23 Taniguchi: One more question. Let's say we fine them and they don't pay within thirty (30) days, then what happens? Gonzalez: what would happen is because we had issued the Decision and Order they can be found in violation of actually not following an order of the Adjudication Board. Basically, we would file new charges against them as well as an order to show cause as to why they did not comply with the Decision and Order. Taniguchi: Okay. Gonzalez: And to address Mr. Mukai's comment about there being another option for the Licensee to come in and make payment right away. That is absolutely correct. That has been done in the past for other Licensees. The Director has granted payment plans to accommodate the financial situations of the Licensees. We don't have any type of information on our end that this Licensee was in that situation. They did not make that type of request to us. It is reflected in the report. Taniguchi: So they've been operating since 2014? Gonzalez: I would have to go back and look because it could have just been a transfer between people that had been part of the original license. Taniguchi: Have they had prior violations of this sort? Gonzalez: No. Smith: This restaurant opened in 2016. Taniguchi: '16? Smith: Yes. Gonzalez: In a previous space that was licensed by... Smith: This location opened under that name in 2016. Taniguchi: So, for two years they didn't have anything? They never did violate this? Smith: They didn't violate any liquor laws that we're aware of. Gonzalez: There were none. Mukai: I'd like to vote. Her motion is still on the floor, right? Masuda: No, she has no motion. She issued the recommendation. Mukai: I'd like to make the motion that we fine the Licensee $250 for this violation. The rationale... Masuda: You can speak your motion, if there's a second. FEBRUARY 21, 2019 - LIQUOR ADJUDICATION BOARD MINUTES 24 .r~ ,0aft. Mukai: I'd like to vote. Her motion is still on the floor, right? Masuda: No, she has no motion. She issued the recommendation. Mukai: I'd like to make the motion that we fine the Licensee $250 for this violation. The rationale... Masuda: You can speak your motion, if there's a second. Taniguchi: Second. Mukai: The rationale for this and because we have concerns about their responses were to us. I felt that the recommendation of the. $150 fine should be increased to let them know of the seriousness of their not communicating with the Department. This sends them a message. The fine amount is not astronomical where it hopefully will not hurt their business too negatively, but at least it will send a message to them that there should be open lines of communication with the Department in reasonably addressing the violation. Smith: Motioned. Taniguchi: I second. Mr, Mukai moved that the Licensee in Case No. 2018-011, be assessed a penalty in the amount of $250, to be paid within thirty (30) days upon receipt of the Decision and order; seconded by Mr. Taniguchi. Smith: Seconded. I have a question. Do the facts support that level of fine? Gonzalez: From the Department's perspective I would say there is. Based on the discussion and the review of the reports and evidence, there is evidence to support that and this is not imposing a punitive type of penalty. Smith: Assuming we pass this and assess the fine of $250, wait thirty (30) days, if they don't make payment, then you'll file additional charges and that would be added to the next (matter) that would come before us and could have an increased penalty or further consequences? Gonzalez: Correct, yes. Smith: okay. All those in favor say, "Aye." The Board Members voted "Aye." Smith: Any opposition? There was no opposition from the Board Members. Smith: Hearing none, motion carried. A written Decision and order will be prepared and served upon the Licensee, which shall be due and payable within thirty (30) days of its receipt. FEBRUARY 21, 2019 -LIQUOR ADJUDICATION BOARD MINUTES 25 V. New Business Smith: Any new business? There was no new business. Vl. Announcements Smith: Announcements, upcoming meetings March 21, 2019, to be determined; April 18, 20199 to be determined. Any further announcements? Meetings of Liquor Adjudication Board March 21, 2019, TBD April 18, 20'19, TBD Gonzalez: Thank you, Mr. Chair. Regarding March 21, 2019, 1 think it is safe to say that there will not be an Adjudication Board meeting. Please continue to tentatively hold the April date. Currently, I only have one case that is pending for filing so we will probably bunch them up. So April (there will be) a meeting, March is cancelled. Smith: Okay. What's the consequence of delaying until you have numerous cases? Gonzalez: Very good question. If it's challenged, the witnesses could be hard to locate. There's just a longer time between the completion of the investigation and filing the charge so a Licensee could say `why did it take so long?' They could make that argument. We try and keep it within a reasonable time frame. Also, given that we just had deadlines due for more reports, there could be additional charges coming forward shortly that we have to investigate and file for. Smith: Okay. I guess my only thought is that if there's a situation that requires action, especially like adulterating liquor and things like that, you would want to be timely and not wait until there's a lot of (other things going on). Gonzalez: Right. X. Adjournment Smith: okay, I'm good. Do I have a motion to adjourn? Mukai: So move. Taniguchi: Second. Mr. Mukai moved to adjourn; seconded by Mr. Taniguchi. Smith: All those in favor say, "Aye." The Board Members voted "Aye." FEBRUARY 21, 2019 - LIQUOR ADJUDICATION BOARD MINUTES 26 Smith: Any opposition? There was no apposition from the Board Members. Smith: Motion carried. Meeting adjourned. The motion was carried unanimously. The meeting adjourned at 11:14 A. M. ald Takase Director FEBRUARY 21, 2019 - LIQUOR ADJUDICATION BOARD MINUTES 27