1250 Broadway, 27th Floor New York, NY 10001


If you think landlord-tenant law is bad, trying getting a liquor license in the City of New York. The approval process is often riddled with an array of technical objections and vocal community opposition that could significantly impede or delay an establishment's opening.
If you don't want to take our word for it, just ask the owners of Ginx, Inc., doing business as "Lola." According to statute -- Alcohol Beverage Control Law section 64(7)(f) -- if an applicant seeking a liquor license is located within 500 feet of three or more preexisting licensed establishments, a license may not be given until such time as the Liquor Authority consults with the local community board (after a hearing and notice) and the Authority formally finds that the approval is in the "public interest."
Although the Liquor Authority substantially complied with the law (in that it conducted the required hearing, and issued a written decision reciting the positions presented by Lola and the local community board), the Authority's decision apparently omitted the reasons for granting Lola a license. In a lawsuit later filed with the New York County Supreme Court, the local community group challenged the legality of the license's grant -- based on the decision's error or omission -- and successfully persuaded a Supreme Court Judge to annul the approval.
On appeal, the Appellate Division, First Department, reversed, reiterating established precedent that administrative agencies are entitled to considerable deference and that a court should not substitute its own judgment for that of an agency unless there was no "rational basis" for the agency's decision, or the agency's conduct was "arbitrary and capricious."
In this particular instance, the appellate court was not persuaded that the Authority violated governing law in a significant way. As the court observed:

Here, the Authority conducted a hearing, and produced a five-page report leading to its determination.
What is missing from the Authority's decision is a specific expression of its reason or reasons for its finding that granting a liquor license is in the public interest. CPLR 7806, however, permits us to remit the matter to the Authority for further proceedings ....
Thus, we reverse the judgment, vacate the direction to the Authority to cancel the liquor license, and remit to the Authority, pursuant to CPLR 7806, directing it only to properly state its reasons for granting the liquor license.
Looks like Lola may not be jinxed after all!

For a copy of the Appellate Division's decision in Matter of Soho Alliance v. New York State Liquor Authority, please click on the following link: