IN RE: B.P. GLOBAL FUNDS

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Supreme Court, Appellate Division, Fourth Department, New York.

IN RE: B.P. GLOBAL FUNDS, INC., Doing Business as the New Ozone, Petitioner, v. New York State Liquor Authority, Respondent.

1245

Decided: February 08, 2019

PRESENT: SMITH, J.P., CARNI, LINDLEY, DEJOSEPH, AND WINSLOW, JJ. JUSTIN S. WHITE, WILLIAMSVILLE, FOR PETITIONER. CHRISTOPHER R. RIANO, GENERAL COUNSEL, NEW YORK STATE LIQUOR AUTHORITY, NEW YORK CITY (JAIME C. GALLAGHER OF COUNSEL), FOR RESPONDENT.

MEMORANDUM AND ORDER

It is hereby ORDERED that the determination so appealed from is unanimously modified on the law and the petition is granted in part by vacating the penalty insofar as it cancelled petitioner's liquor license, and as modified the determination is confirmed without costs and the matter is remitted to respondent for further proceedings in accordance with the following memorandum: Petitioner commenced this CPLR article 78 proceeding, transferred to this Court pursuant to CPLR 7804(g), seeking to annul a determination of respondent that found petitioner in violation of various provisions of the Alcoholic Beverage Control Law and, among other penalties, cancelled petitioner's liquor license.  Contrary to petitioner's contention, when reviewing this administrative determination made after a hearing required by statute or law, the standard of review applied by this Court is whether the determination is supported by substantial evidence (cf. Matter of Pierino v. Brown, 281 A.D.2d 960, 960, 722 N.Y.S.2d 845 [4th Dept. 2001]; see generally Matter of Pell v. Board of Educ. of Union Free Sch. Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 N.Y.2d 222, 231, 356 N.Y.S.2d 833, 313 N.E.2d 321 [1974] ).  It is well settled that a “record contains substantial evidence to support an administrative determination when reasonable minds could adequately accept the conclusion or ultimate fact based on the relevant proof” (Matter of Bounds v. Village of Clifton Springs Zoning Bd. of Appeals, 137 A.D.3d 1759, 1760, 28 N.Y.S.3d 542 [4th Dept. 2016] [internal quotation marks omitted] ).  “[O]ften there is substantial evidence on both sides of an issue disputed before an administrative agency ․ Where substantial evidence exists to support a decision being reviewed by the courts, the determination must be sustained, irrespective of whether a similar quantum of evidence is available to support other varying conclusions” (Matter of Haug v. State Univ. of N.Y. at Potsdam, 32 N.Y.3d 1044, 1046, 87 N.Y.S.3d 146, 112 N.E.3d 323 [2018] [internal quotation marks omitted] ).  Thus, where there is conflicting evidence, the administrative agency has discretion to weigh the evidence and make a determination based thereon, and the courts will not reject a determination that is supported by substantial evidence (see Bounds, 137 A.D.3d at 1760, 28 N.Y.S.3d 542).

Here, contrary to petitioner's contention, substantial evidence supports respondent's determination that petitioner's employees violated Alcoholic Beverage Control Law § 106(15) by, inter alia, impeding respondent's investigation (see Matter of Surf City Enters. of Syracuse, Inc. v. New York State Liq. Auth., 96 A.D.3d 1458, 1459, 945 N.Y.S.2d 908 [4th Dept. 2012]; see generally 300 Gramatan Ave. Assoc. v. State Div. of Human Rights, 45 N.Y.2d 176, 180, 408 N.Y.S.2d 54, 379 N.E.2d 1183 [1978] ).  Petitioner's further contention that respondent acted irrationally in charging it with violating Alcoholic Beverage Control Law § 106(12) based on petitioner's failure to maintain employment and payroll records “is not properly before us because petitioner[ ] failed to raise it at the administrative level and thus failed to exhaust [its] administrative remedies with respect to” that contention (Matter of Michalak v. Zoning Bd. of Appeals of Town of Pomfret, 286 A.D.2d 906, 908, 731 N.Y.S.2d 129 [4th Dept. 2001] ).

We agree, however, with petitioner that the cancellation of its liquor license is a penalty “so disproportionate to the offense as to be shocking to one's sense of fairness” (Pell, 34 N.Y.2d at 237, 356 N.Y.S.2d 833, 313 N.E.2d 321).  Although petitioner's record indicates previous infractions, we conclude that, “[u]nder all the circumstances of this particular violation ․ the cancellation of petitioner's license was too severe a penalty” (Matter of Corey v. State Liq. Auth., 34 A.D.2d 1094, 1095, 312 N.Y.S.2d 829 [4th Dept. 1970]; see Matter of Star Enters. v. New York State Liq. Auth., 248 A.D.2d 623, 624, 669 N.Y.S.2d 924 [2d Dept. 1998]; see generally Matter of Shore Haven Lounge v. New York State Liq. Auth., 37 N.Y.2d 187, 190–191, 371 N.Y.S.2d 710, 332 N.E.2d 883 [1975] ).  We therefore modify the determination and grant the petition in part by vacating the penalty insofar as it cancelled petitioner's liquor license, and we remit the matter to respondent for imposition of an appropriate penalty less severe than cancellation.