DECISION

A hearing was held before the Alcoholic Beverages Control Commission (the “Commission” or “ABCC”) to determine whether the licensee Cork’s Fine Wine & Liquors, LLC (“Cork’s” or “licensee”) violated 204 CMR 2.05(2) permitting an illegality on the licensed premises, to wit: 204 CMR 2.03 (3) no signs or other printed matter advertising any brand or kind of alcoholic beverages shall be displayed on the exterior or interior of any licensed premises wherein such beverages are not regularly and usually kept for sale.

Facts

The licensee is a holder of a wine and malt beverages “package store” license issued pursuant to G.L. c. 138, § 15. Cork’s license was approved by the ABCC on December 4, 2004.

On June 6, 2005 John Carey an ABCC investigator, as part of his usual business investigations, G.L. c. 138, § 63, went to the licensed establishment and noticed signage, which read Cork’s Fine Wine and Liquors. Investigator Carey then met with the local licensing board who informed him that the Chairman of the local board had sent the licensee a letter (Exhibit 2) asking Cork’s to review the enclosed information and “take any necessary actions you feel may be appropriate to resolve this issue.”

The licensee responded by letter (Exhibit 3) indicating that it is their position that “the use of the corporate name ‘Cork’s Fine Wine and Liquors’ … having only a ‘Wines [sic] and Malt Beverages’ license … is permissible under Massachusetts law and regulations.” The licensee articulated its reasoning that because Massachusetts law does not define liquor, the law allows the broader interpretation to mean any alcoholic beverage including beer and wine. The licensee further asserted that malt liquor, such as “Colt 45 Malt Liquor” is the same as malt beverage within the broad meaning of Supreme Judicial Court cases. Lastly the licensee argued that the use of the term liquor in its advertising does not offend CMR 204 CMR 2.03 because they do not sell distilled spirits.

Investigator Carey however, charged them with a violation of 204 CMR 2.05(2) to wit: CMR 204 CMR 2.03(3) “advertising any brand or kind of alcoholic beverages shall be displayed on the exterior or interior of any licensed premises wherein such beverages are not regularly and usually kept for sale.”

Discussion

204 C.M.R. 2.05 (2) provides, in pertinent part, that “[n]o licensee for the sale of alcoholic beverages shall permit any disorder, disturbance or illegality of any kind to the place in or on the licensed premises.” 204 C.M.R. 2.03 (3) provides that “[n]o signs or other printed matter advertising any brand or kind of alcoholic beverages shall be displayed on the exterior or interior of any licensed premises wherein such beverages are not regularly and usually kept for sale.”

General Laws chapter 138 defines four (4) terms as they are used throughout the chapter, “alcoholic beverages,”1 “liqueur or cordial,”2 “malt beverages,”3 and “wines.”4 General Laws chapter 138 does not define the term “liquor.” General Laws chapter 138, section 2 provides, in pertinent part, that “[n]o person shall manufacture, with intent to sell, sell or expose or keep for sale, store, transport, import or export alcoholic beverages or alcohol, except as authorized by this chapter.” Cork’s license authorizes “the sale of wines and malt beverages only.” M.G.L. c. 138, § 15.

The licensee argues that because the term “liquor” is not defined by Massachusetts’ statute, then Cork’s is free to use it generically in their advertisement to mean “alcoholic beverages.” The licensee’s position appears, at least superficially, to be bolstered by the absence of state law definition of “liquor” in General Laws Chapter 138. Yet, the Appeals Court has held that

[r]egulation of the liquor industry in Massachusetts is comprehensive and pervasive. See G.L. c. 138. "The powers of the States in dealing with the regulation of the sale of intoxicating liquors are very broad. What they may wholly prohibit, they may permit only on terms and conditions prescribed by the Legislature." Connolly v. Alcoholic Beverages Control Commn., 334 Mass. 613, 619, 138 N.E.2d 131 (1956). See Johnson v. Martignetti, 374 Mass. 784, 793, 375 N.E.2d 290 (1978). The Legislature has set out a broad prohibition in the first sentence of G.L. c. 138, § 2, as appearing in St.1943, c. 542, § 1, which provides, in material part: "No person shall ... sell or expose or keep for sale, store, transport ... alcoholic beverages or alcohol, except as authorized by this chapter " (emphasis supplied). The plaintiff's argument that what is not expressly prohibited is allowed is, in this context, fundamentally mistaken.

Cellarmaster Wines Of Massachusetts, Inc. v. Alcoholic Beverages Control Commission, 27 Mass.App.Ct. 25, 27-28, 534 N.E.2d 21, 23 (1989).

The Commission is not persuaded by the licensee’s argument since the Appeals Court expressly rejected as “fundamentally mistaken” a similarly structured argument.

The licensee next argues that because the term “liquor” is used in various provisions of chapter 138 and in a publication published5 by the Commission entitled “The Blue Book”, the term “liquor” is unconstitutionally vague. Although Cork’s did not cite any applicable legal authority to support that position, the licensee argues it should not be penalized because of this unconstitutional vagueness. The Commission is not persuaded by this argument.

The Supreme Judicial Court addressed the constitutional standard applied when a law is challenged as vague. In rejecting an argument that the suspension of a license was based on an unconstitutionally vague law, the Supreme Judicial Court held that

'[a] law is void for vagueness if persons "of common intelligence must necessarily guess at its meaning and differ as to its application." ' Caswell v. Licensing Comm'n for Brockton, 387 Mass. 864, 873, 444 N.E.2d 922 (1983), quoting Connally v. General Constr. Co., 269 U.S. 385, 391, 46 S.Ct. 126, 127, 70 L.Ed. 322 (1926). '... [S]tatutes that do not define or relate to criminal conduct need not be drawn as precisely as statutes that touch upon criminal acts.... [If] neither First Amendment freedoms nor criminal conduct are concerned ... we limit our vagueness analysis to whether [the statute or regulation] is unconstitutionally vague as applied in [the particular] case....' Caswell, supra. Aristocratic Restaurant of Mass., Inc. v. Alcoholic Beverages Control Comm'n (No. 1), 374 Mass. 547, 552 [374 N.E.2d 1181], appeal dismissed for want of a substantial Federal question, 439 U.S. 803 [99 S.Ct. 58, 58 L.Ed.2d 96] (1978)." Gurry v. Board of Pub. Accountancy, 394 Mass. 118, 127, 474 N.E.2d 1085 (1985). Because suspension of a … license is not penal or criminal in nature, id., we apply the less strict civil standard in our analysis of [a promulgated regulation.] LaPointe v. License Bd. of Worcester, 389 Mass. 454, 462, 451 N.E.2d 112 (1983), citing Caswell v. Licensing Comm'n for Brockton, supra.

Cherubino v. Board of Registration of Chiropractors, 403 Mass. 350, 356-357, 530 N.E.2d 151, 155-156 (1988).

Cork’s acknowledged to the local licensing authority in a letter dated April 26, 2005, (Exhibit 3), that “the dictionary defines liquor as distilled alcohol.” This stipulation by Cork’s comports with the rule of statutory construction set out in M.G.L. c. 4, § 7, clause the third.6 The Commission finds Cork’s stipulation to be reasonable and based on “common and approved usage.” Cork’s stipulation to the common and approved usage of the word “liquor” is also supported by the definition of the word “liquor” to mean, as a noun, “[a]n alcoholic beverage made by distillation rather than by fermentation,” The American Heritage Dictionary of the English Language, Fourth Edition, Houghton Mifflin Co. (2000). The wines and malt beverages license held by Cork’s limits the type of alcoholic beverages it may lawfully possess and sell to only alcoholic beverages that are produced by the process of fermentation, not distillation. Since the term “liquor” in its common usage is defined to be alcoholic beverages that Cork’s may not lawfully possess and sell under its license, Cork’s use of the term “liquor” displayed on signs or other printed matter results in the advertising on the exterior or interior of any licensed premises a brand or kind of alcoholic beverages, i.e., distilled spirits wherein such beverages are not regularly and usually kept for sale.

As advanced by the licensee, the term “liquor” is also used in various places within chapter 138 as indicated by Cork’s and also is used throughout the ABCC’s Blue Book. Upon review of the provisions cited by Cork’s, the meaning of the term “liquor” is a generic reference to all types of alcoholic beverages regulated by chapter 138, whether the product is an alcoholic beverage, a liqueur or cordial, a malt beverage, or a wine. The use of this broad reference by a licensee who holds a more limited authority raises compliance issues. These issues are not mitigated by the use of a disclaimer as proffered by the licensee.

This argument is contradicted by the licensee’s conduct in advertising specifically “Fine Wines” which they were licensed to sell “and Liquors” which they have seemingly placed in the purportedly legal definitional gymnastics of the licensing statute. By advertising “Fine Wines” they clearly gave notice to the public that fine wines were available. The only other alcoholic beverage that they could legally sell under their license is a malt beverage (e.g., beer). The licensee did not advertise fine wine and beer or malt beverages but attempted to be a beneficiary of the confusion created by the lack of clarity in using a term that is not defined by law but has a common and approved usage meaning “distilled spirits.” The licensee even admitted that customers would often come by and ask for distilled spirits. Cork’s witness testified that he would tell them he could not sell distilled spirits but had malt liquor available.

This evidence persuades the Commission that the licensee’s signs are in fact misleading and creating confusion in the minds of its patrons. 204 C.M.R. 2.03 seeks to promote true statements, prohibit misleading statements, eliminate consumer confusion (if not deception), as well as clarify, carry out, enforce and prevent violation of the chapter 138 and to insure the proper and orderly conduct of the licensed business as expressly authorized in M.G.L. c. 138, § 24.

The licensee further admitted that it sells “malt liquor.” The Massachusetts statute does not define the term “malt liquor” To be a “malt beverage” within the meaning of chapter 138, the alcohol content of the product may not exceed 12% of alcohol by weight. M.G.L. c. 138, § 1. The licensee failed to submit to the Commission any facts about the ingredients, process of manufacture, or final alcohol content of any product it believes is “malt liquor.” It is the experience of the Commission that all products identified as “malt liquor” being sold in Massachusetts fall within the alcohol content limitation of “malt beverages” as defined by General Laws chapter 138, § 1. The Commission presumes that Cork’s possesses and sells only those alcoholic beverages that it may lawfully sell under the terms of its license.7 Thus, the Commission is not persuaded by the licensee’s argument that it may sell “malt liquor” and thus may truthfully advertise that it sells “liquor.”

Last, the Commission notes that the licensee’s true name as filed with the Secretary of the Commonwealth is “Cork’s Fine Wine & Liquors, LLC.” Commission records show that the licensee has not filed any business certificate pursuant to M.G.L. c. 110, § 5. By regulation, the Commission requires “[e]very applicant for a license or permit required by the provisions of Section 5, Chapter 110, General Laws, to file a certificate stating the real name of a person conducting a business, shall file with his application a certified copy thereof.” 204 C.M.R. 2.01(5). General Laws chapter 110, section 6 provides, in pertinent part, that a limited liability company need not file a business certificate as required by M.G.L. c. 110, § 5 if that LLC is “doing business under its true name and which has registered or qualified with the office of the state secretary.”

The Supreme Judicial Court has held that

the designation 'Inc.' … is just as much a part of the … corporate name as the words China, clipper, or restaurant. It is as much a part of its name as is the middle name or initial of an individual, Commonwealth v. Snow, 269 Mass. 598, 600, 169 N.E. 542, 68 A.L.R. 920, and cases cited, and, as is said in Carney Hospital v. McDonald, 227 Mass. 231, 234, 116 N.E. 414, 415, 'It is plain that its name cannot be separated into component parts and remain the name conferred upon it.' See also Economy Food Products Co. v. Economy Grocery Stores Corp., 281 Mass. 57, 63, 183 N.E. 49.

China Clipper Restaurant v. Yue Joe, 312 Mass. 540, 45 N.E.2d 748 (1942).

Applying the reasoning of China Clipper Restaurant , the Commission rules that the use of a name in the conduct of business that is the same as the name of a limited liability company with the exception of the designation “LLC” is not conducting business in the true name of the limited liability company required in G.L. c. 110, § 6. Thus, the Commission finds and rules that because it omits the designation “LLC” in its advertising and signage, Cork’s is not conducting business in its true name; rather, with its signs or other printed matter displayed on the interior and exterior of the licensed premises Cork’s is advertising a kind of alcoholic beverages are not regularly and usually kept for sale contrary to the provisions of 204 C.M.R. 2.03(3).

Conclusion

The Commission finds that the licensee violated 204 CMR 2.05(2) permitting an illegality on the licensed premises, to wit: 204 CMR 2.03 (3) no signs or other printed matter advertising any brand or kind of alcoholic beverages shall be displayed on the exterior or interior of any licensed premises wherein such beverages are not regularly and usually kept for sale.

The Commission, therefore, suspends Cork’s license for 30 days and suspends the imposition of this suspension on the condition that within 45 days from the date of receipt of this decision, Cork’s submits to the Commission proof satisfactory to the Commission that Cork’s has taken corrective action to eliminate the advertising of any brand or kind of alcoholic beverages displayed on the exterior or interior of any licensed premises wherein such beverages are not regularly and usually kept for sale.

ALCOHOLIC BEVERAGES CONTROL COMMISSION

Eddie J. Jenkins, Chairman _______________________________________________

Suzanne Iannella, Commissioner __________________________________________
Dated at Boston, Massachusetts this 19th day of December 2005.

You have the right to appeal this decision to the Superior Court under the provisions of Chapter 30A of the Massachusetts General Laws within thirty days of receipt of this decision.