Are You Breaking The Law By Selling Cups?

Yes, cups, innocuous plastic, Styrofoam, paper cups.  If you are licensed to sell or serve alcohol, it is illegal for you to sell for a nominal charge or give away cups to your customers to consume alcohol off premises. To use the statutory language, it is a violation for an establishment to provide a customer “go-cups” which D.C. Code §25-101 defines as a “drinking utensil” at “no charge or a nominal charge” for the purpose of “consuming an alcoholic beverage off the premises.”

Well, what does that mean? A corner store can’t sell packages of plastic cups to its customers? It might.

In the case of Sosnicks Liquor (Case No. 16 CMP 000695), the ABC Board considered the question of whether it was a violation of the “go-cup” restriction to sell a package of five (5) cups to a customer for $0.50.  The Board answered with a resounding ‘yes, it is a violation.’

Now before you start pulling your manufacturer packaged red Solo cups off the shelves for fear of prosecution, I think the Board’s decision in Sosnick’s gives owners a fair amount of wiggle room.

Let’s look at an easy case first.  ABRA sends in an undercover investigator or agent to pose as a customer, he buys a two pack of Bush Light 16 ouncers, pays for them, but before leaving, says to the clerk, “can I have a cup to drink these with?”  The clerk hands the undercover officer a Styrofoam coffee cup.  Busted. The establishment gets a citation, the Board holds a hearing, (which incidentally the store owner doesn’t even show up for. That’s bad, don’t do that), finds the store in violation of the “go-cup” law and tags it with a $500.00 fine and a strike against their allotment of offenses. Remember, ABC violations are progressive, so the more violations on your record, the stiffer the penalty.

This situation occurred in Bodega Incorporated t/a Cupboard 14 CMP 0038.  I call this an “easy case” because the undercover officer asked for “a cup to drink these with” and was given a single cup for free. This is a clear violation of all of the statutory criteria: (1) a drinking utensil, check; (2) at no charge, check; (3) for consuming the alcoholic beverage off premises – check – that was the whole purpose of the undercover investigator’s comment “…to drink these with,”  (sneaky, aren’t they?)

Well, what about a harder case? I mean store owners aren’t stupid (most of them anyway).They hear things in the community, get wise to ABRA’s compliance checks, and change their practices accordingly.

That brings us back to Sosnick’s. This particular establishment had been cited before for violation of the go-cup law for giving a single cup to an undercover officer. So, the owner learned from this mistake.  This time, when the undercover asked for a cup “to drink this with.” (again, sneaky) the clerk responded that he could not give the officer a single cup, but he could sell the officer a package of five (5) cups for $.50.  The undercover officer agreed, paid the $.50, at which point the clerk retrieved a homemade package of five (5) cups in a ziplock bag and gave it to him. Busted! Citation issued, hearing held, Board finds a violation and fines the owner $750.00.

However, this is not an open-and-shut case like Bodega Incorporated t/a Cupboard.  I think that there is a real question in Sosnick’s as to whether the store owner actually violated the law.  I mean obviously, the package of cups constituted a “drinking utensil” and based on the conversation between the undercover officer and clerk, the purpose of the cup was to consume the alcoholic beverage off premises.  But, is selling a homemade package of five (5) cups for $.50 a nominal cost?

While the Board found that it is, it made no specific factual findings or legal conclusions as to what constitutes “nominal” and why the homemade package in this case qualified.

The store owner was representing herself, and like many self-represented parties was having real trouble following the proceedings. She did not have the wherewithal to call this legal issue into question, so it was really not addressed by the Board in its decision.

A review of the transcript of the hearing, while not binding, gives us some sense of what exactly the Board, Attorney General, and Investigator consider to be a violation of the law.

Under questioning by the Assistant Attorney General, the Investigator testified that “based on [his] training and experience the packaging has to be from an approved manufacturer . . . its got to be prepackaged.” Moreover, one of the Board Members questioned the Investigator about the homemade “ziplock” packaging. Finally, in her closing argument, the AAG stated that the District believes that this constitutes a violation because repackaging in the manner that the store did, “treads the line of what would be legal and illegal.”

Now, the statute does not mention packaging, and in this case, there was no meaningful discussion of the operative term “nominal.” As such, I maintain that there was room here, to argue that the conduct, in this case, did not constitute a violation.

However, the lesson that store owners can take from Sosnick’s is that the Government cares about the packaging.  If you want to sell cups at your store, the best course of action is to sell them in the packaging, as they are shipped from the manufacturer, for a price that is at, near, or above the manufacturer’s suggested retail.

The second lesson that store owners can take from Sosnick’s is that DIY litigation is a terrible idea, especially when you are up against a seasoned prosecutor.  As she stated in her closing argument, while they [liquor store owners] may not understand the rules, they have an obligation to be informed of the rules…and ignorance of the law is not an excuse.”

So, get the information you need to make smart decisions for your business. Call or schedule an appointment today.