2023 Arizona Revised Statutes › Title 4 - Alcoholic Beverages › § 4-210 - Grounds for revocation, suspension and refusal to renew; notice; complaints; hearings; defense

4-210.
Grounds for revocation,  suspension and refusal to renew;  notice;  complaints;  hearings;  defense
A. After notice and hearing,  the director may suspend,  revoke or refuse to renew any license,  registration,  lease or permit issued pursuant to this chapter for any of the following reasons:
1. There occurs on the licensed premises repeated acts of violence.
2. The licensee,  registrant,  lessee or permittee fails to satisfactorily maintain the capability,  qualifications and reliability requirements of an applicant for a license,  registration,  lease or permit prescribed in section 4-202,  4-203,  4-203.06,  4-203.07 or 4-205.13.
3. The licensee,  registrant,  lessee,  permittee or controlling person knowingly files with the department an application or other document that contains material information that is false or misleading or while under oath knowingly gives testimony in an investigation or other proceeding under this title that is false or misleading.
4. The licensee,  registrant,  lessee,  permittee or controlling person is on the premises habitually intoxicated.
5. The licensed,  registered,  leased or permitted business is delinquent for more than one hundred twenty days in paying taxes,  penalties or interest in an amount that exceeds $250 to this state or to any political subdivision of this state.
6. The licensee or controlling person obtains,  assigns,  transfers or sells a spirituous liquor license without complying with this title or leases or subleases a license.
7. The licensee,  registrant,  lessee or permittee fails to keep for two years and make available to the department on reasonable request all invoices,  records,  bills or other papers and documents relating to the purchase,  sale and delivery of spirituous liquors and,  in the case of a restaurant or hotel-motel licensee,  all invoices,  records,  bills or other papers and documents relating to the purchase,  sale and delivery of food.
8. The licensee,  registrant,  lessee,  permittee or controlling person is convicted of a felony,  provided that for a conviction of a corporation to serve as a reason for any action by the director,  conduct that constitutes the corporate offense and was the basis for the felony conviction must have been engaged in,  authorized,  solicited,  commanded or recklessly tolerated by the directors of the corporation or by a high managerial agent acting within the scope of employment.
9. The licensee,  registrant,  lessee,  permittee or controlling person violates or fails to comply with this title,  any rule adopted pursuant to this title or any liquor law of this state or any other state.
10. The licensee,  registrant,  lessee or permittee fails to take reasonable steps to protect the safety of a customer of the licensee,  registrant,  lessee or permittee or any other person entering,  leaving or remaining on the licensed premises when the licensee knew or reasonably should have known of the danger to the person,  or the licensee fails to take reasonable steps to intervene by notifying law enforcement officials or otherwise to prevent or break up an act of violence occurring on the licensed premises or immediately adjacent to the premises when the licensee knew or reasonably should have known of the acts of violence. The duty to protect a customer or other person on the licensed premises does not limit the licensee from using,  as necessary,  reasonable intervention,  reasonable restraint or reasonable removal of a person from the premises to prevent that person from injuring other persons on the premises or damaging or disrupting the premises.
11. The licensee,  registrant,  lessee,  permittee or controlling person knowingly associates with a person who has engaged in racketeering,  as defined in section 13-2301,  or who has been convicted of a felony,  and the association is of a nature as to create a reasonable risk that the licensee,  registrant,  lessee or permittee will fail to conform to the requirements of this title or of any criminal statute of this state.
12. A licensee that is a liquor store as defined in section 46-297 violates the restrictions on use of automatic teller machines or point-of-sale terminals regarding electronic benefit transfer cards prescribed in section 4-242.01.
13. There occurs on the licensed premises a serious act of violence. For the purposes of this paragraph,  " serious act of violence"  means an act of violence in which a serious injury causes the death or critical injury of a person and the injuries would be obvious to a reasonable person.
14. The licensee fails to report a serious act of violence that occurs on the licensed premises. For the purposes of this paragraph,  " serious act of violence"  means an act of violence in which a serious injury causes the death or critical injury of a person and the injuries would be obvious to a reasonable person.
15. The licensee,  registrant,  lessee or permittee violates an order of the board.
B. For the purposes of:
1. Subsection A,  paragraph 8 of this section,  " high managerial agent"  means an officer of a corporation or any other agent of the corporation in a position of comparable authority with respect to the formulation of corporate policy.
2. Subsection A,  paragraphs 9 and 10 of this section,  acts or omissions of an employee of a licensee that violate this title or rules adopted pursuant to this title are deemed to be acts or omissions of the licensee. Acts or omissions by an employee or licensee committed during the time the licensed premises were operated pursuant to an interim permit or without a license may be charged as if they had been committed during the period the premises were duly licensed.
C. The director may suspend,  revoke or refuse to issue,  transfer or renew a license,  registration,  lease or permit under this section based solely on the unrelated conduct or fitness of any officer,  director,  managing agent or other controlling person if the controlling person retains any interest in or control of the licensee,  registrant,  lessee or permittee after sixty days following written notice to the licensee,  registrant,  lessee or permittee. If the controlling person holds stock in a corporate licensee,  registrant,  lessee or permittee or is a partner in a partnership licensee,  registrant,  lessee or permittee,  the controlling person may only divest himself of the controlling person's interest by transferring the interest to the existing stockholders or partners who must demonstrate to the department that they meet all the requirements for licensure,  registration,  leasing or permitting. For the purposes of this subsection,  the conduct or fitness of a controlling person is unrelated if it would not be attributable to the licensee,  registrant,  lessee or permittee.
D. If the director finds,  based on clear and convincing evidence in the record,  that a violation involves the use by the licensee,  registrant,  lessee or permittee of a drive-through or walk-up service window or other physical feature of the licensed premises that allows a customer to purchase spirituous liquor without leaving the customer's vehicle or,  with respect to a walk-up service window that prevents the licensee,  registrant,  lessee or permittee from fully observing the customer,  and that the use of that drive-through or walk-up service window or other physical feature caused the violation,  the director may suspend or terminate the licensee's,  registrant's,  lessee's or permittee's use of the drive-through or walk-up service window or other physical feature for the sale of spirituous liquor,  in addition to any other sanction.
E. The director may refuse to transfer any license,  registration,  lease or permit or issue a new license,  registration,  lease or permit at the same location if the director has filed a complaint against the license,  registration,  lease,  permit or location that has not been resolved alleging a violation of any of the grounds stated in subsection A of this section until the time the complaint has been finally adjudicated.
F. The director shall receive all complaints of alleged violations of this chapter and is responsible for investigating all allegations of a violation of,  or noncompliance with,  this title,  any rule adopted pursuant to this title or any condition imposed on the licensee,  registrant,  lessee or permittee by the license,  registration,  lease or permit. When the director receives three complaints from any law enforcement agency resulting from three separate incidents at a licensed,  leased or permitted establishment or by a registrant within a twelve-month period,  the director shall transmit a written report to the board setting forth the complaints,  the results of any investigation conducted by the law enforcement agency or the department relating to the complaints and a history of all prior complaints against the license,  registration,  lease or permit and their disposition. The board shall review the report and may direct the director to conduct further investigation of a complaint or to serve a licensee,  registrant,  lessee or permittee with a complaint and notice of a hearing pursuant to subsection G of this section.
G. On the director's initiation of an investigation or on the receipt of a complaint and an investigation of the complaint as deemed necessary,  the director may cause a complaint and notice of a hearing to be directed to the licensee,  registrant,  lessee or permittee that states the violations alleged against the licensee,  registrant,  lessee or permittee and directing the licensee,  registrant,  lessee or permittee,  within fifteen days after service of the complaint and notice of a hearing,  to appear by filing with the director an answer to the complaint. Failure of the licensee,  registrant,  lessee or permittee to answer may be deemed an admission by the licensee,  registrant,  lessee or permittee of commission of the act charged in the complaint. The director may then vacate the hearing and impose any sanction provided by this article. The director may waive any sanction for good cause shown,  including excusable neglect. With respect to any violation of this title or any rule adopted pursuant to this title that is based on the act or omission of a licensee's,  registrant's,  lessee's or permittee's employee,  the director shall consider evidence of mitigation presented by the licensee,  registrant,  lessee or permittee and established by a preponderance of the evidence that the employee acted intentionally and in violation of the express direction or policy adopted by the licensee,  registrant,  lessee or permittee and communicated to the employee and that the employee successfully completed training in a course approved by the director pursuant to section 4-112,  subsection G,  paragraph 2. The director may set the hearing before the director or an administrative law judge on any of the grounds stated in subsection A of this section. Instead of issuing a complaint,  the director may provide for informal disposition of the matter by consent agreement or may issue a written warning to the licensee,  registrant,  lessee or permittee. If a warning is issued,  the licensee,  registrant,  lessee or permittee may reply in writing and the director shall keep a record of the warning and the reply.
H. A hearing shall conform to the requirements of title 41,  chapter 6,  article 10. At the hearing an attorney or corporate officer or employee of a corporation may represent the corporation. The revoking,  suspending or refusing to renew a license,  registration,  lease or permit for unpaid taxes,  penalties or interest pursuant to subsection A,  paragraph 5 of this section is a contested case with the department of revenue pursuant to section 42-1251.01.
I. The expiration,  cancellation,  revocation,  reversion,  surrender,  acceptance of surrender or termination in any other manner of a license,  registration,  lease or permit does not prevent the initiation or completion of a disciplinary proceeding pursuant to this section against the licensee,  registrant,  lessee or permittee or license,  registration,  lease or permit. An order issued pursuant to a disciplinary proceeding against a license,  registration,  lease or permit is enforceable against other licenses,  registrations,  leases or permits or subsequent licenses,  registrations,  leases or permits in which the licensee,  registrant,  lessee,  permittee or controlling person of the license,  registration,  lease or permit has a controlling interest.
J. The department shall provide the same notice as is provided to the licensee,  registrant,  lessee or permittee to a lienholder,  which has provided a document under section 4-112,  subsection B,  paragraph 3,  of all disciplinary or compliance action with respect to a license,  registration,  lease or permit issued pursuant to this title. The state is not liable for damages for any failure to provide any notice pursuant to this subsection.
K. In any disciplinary action pursuant to this title,  a lienholder may participate in the determination of the action. The director shall consider mitigation on behalf of the lienholder if the lienholder proves all of the following by a preponderance of the evidence:
1. That the lienholder's interest is a bona fide security interest. For the purposes of this paragraph,  " bona fide security interest"  means the lienholder provides actual consideration to the licensee,  registrant,  lessee or permittee or the licensee's,  registrant's,  lessee's or permittee's predecessor in interest in exchange for the lienholder's interest. Bona fide security interest includes a lien taken by the seller of a license,  registration,  lease or permit as security for the seller's receipt of all or part of the purchase price of the license,  registration,  lease or permit.
2. That a statement of legal or equitable interest was filed with the department before the alleged conduct occurred that is the basis for the action against the license,  registration,  lease or permit.
3. That the lienholder took reasonable steps to correct the licensee's,  registrant's,  lessee's or permittee's prior actions,  if any,  or initiated an action pursuant to available contract rights against the licensee,  registrant,  lessee or permittee for the forfeiture of the license,  registration,  lease or permit after being provided with notice by the department of disciplinary action as provided in subsection J of this section.
4. That the lienholder was free of responsibility for the conduct that is the basis for the proposed revocation.
5. That the lienholder reasonably attempted to remain informed by the licensee,  registrant,  lessee or permittee about the business's conduct.
L. If the director decides not to revoke the license,  registration,  lease or permit based on the circumstances provided in subsection K of this section,  the director may issue an order requiring either,  or both,  of the following:
1. The forfeiture of all interest of the licensee,  registrant,  lessee or permittee in the license,  registration,  lease or permit.
2. The lienholder to pay any civil monetary penalty imposed on the licensee,  registrant,  lessee or permittee.
M. If any on-sale licensee proposes to provide large capacity entertainment events or sporting events with an attendance capacity exceeding a limit established by the director,  the director may request a security plan from the licensee that may include trained security officers,  lighting and other requirements. This subsection exclusively prescribes the security requirements for a licensee and does not create any civil liability for this state,  its agencies,  agents or employees or a person licensed under this title or agents or employees of a licensee.
N. The director may consider as a mitigating factor or defense to a complaint against a licensee for a violation of subsection A,  paragraph 10 or 13 of this section that the licensee acted reasonably,  responsibly and as expeditiously as possible by asking for intervention by a peace officer to prevent or to break up a riot,  a fight,  an altercation or tumultuous conduct.