Carlin Edwards Brown PLLC
Attorneys & Counselors at Law
 

MICHIGAN HOSPITALITY LAW NEWSLETTER

5th Anniversary Edition 

Summer 2011

In This Issue
Celebrating 5 Years
Andy Deloney
Teri Quimby
MLCC Report Filing
MLCC Quarterly Meeting
MI 'Tied-House' Law Changes

  Congratulations to

our Clients

 on their

License Transfers

&

Recent Openings


April 2011-

June 2011

 

Berlin Raceway

(Marne)

 

Club Kean Marina

(Detroit)

 

Cooks House

(Traverse City)

 

Crossroads Grill & Nightclub

(TawasCity)

 

Cuculi's Bar

(Channing)

 

Emagine Theater

(Royal Oak)

 

Knoll View Golf Course

(Au Gres)

 

Lake Course

(Gaylord)

 

Martin's Super Markets

(Stevensville)

 

McFadden's Restaurant & Saloon

(Grand Rapids)

 

Ninja Sushi

(West Bloomfield)

 

Olga's Kitchen

(Canton)

 

The Pyramid Scheme

(Grand Rapids)

 

Rock's Party Store

(Lansing)

 

Timber Wolf Turf

(Kalkaska)

 

Torino Espresso + Bar

(Ferndale)

 

Congratulations to Platinum Equity on their acquisition of the Palace, Detroit Energy Music Theater and Meadowbrook Music Theater!



 Upcoming Industry Events  



MRA Board Meeting

July 24, 25

Traverse City

www.mrapac.org

 

Michigan Distributors & Vendors Association

Annual Meeting

August 5-7

Boyne Mountain Resort, Boyne Falls

www.mdva.org

 

MLBA PAC golf outing

August 22, 9:30 a.m.

Mount Pleasant Country Club

www.mlba.org

 

Michigan Grocers Association

Fall Conference

September 11-13

Shanty Creek Resort, Bellaire

www.michigangrocers.org

 

MLBA Fall Convention

September 18-20

Park Place Hotel,

Traverse City

www.mlba.org

 

NRA PAC Progressive Dinner
 
September 26, 2011

5:00 p.m. - 10:00 p.m.

Ann Arbor, MI

www.mrapac.org


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Carlin Edwards Brown PLLC


 

John B. Carlin, Jr.

 (248) 816-3210

 

Scott D. Edwards

 (248) 816-3205

 

Michael J. Brown

 (517) 321-4616

 


  Carlin Edwards Brown PLLC 2011.

  All rights reserved. 

 

This newsletter provides general information and does not constitute legal advice in any way. 


 


 Find industry updates on our website and blog

www.cebhlaw.com


 

 

 

Carlin Edwards Brown Celebrates 5 Years!

Time flies when you're having fun!  Thanks to our many wonderful clients, and the fun associated with serving Michigan's hospitality industry, we are fast approaching the five year anniversary of our firm.  When we opened for business on August 1, 2006, some people may have wondered whether a law firm devoted almost exclusively to liquor licensing and regulation could survive.  Today, nearly five years later, Carlin Edwards Brown PLLC has more than survived as the legal team for literally hundreds of liquor license holders and major trade associations serving Michigan's hospitality industry.  The recent addition of Rick Perkins, former Director of Enforcement and Deputy Director of Licensing at MLCC, as a non-lawyer licensing consultant has added a whole new dimension to the services available to our clients.  Our fifth anniversary is a wonderful time to reflect on the short history of our firm, but also an opportunity to look forward to the next five years of helping our clients and the Michigan hospitality industry grow.  We are particularly excited to welcome in a new era at the MLCC, as detailed below, in introducing new MLCC Chairperson Andy Deloney and Administrative Commissioner Teri Quimby.  We thank all of our clients, large and small, for continuing to make our jobs fun each and every day. 

Andy Deloney Appointed MLCC Chairperson
Our industry here in the great State of Michigan should be delighted with Governor Rick Snyder's recent appointment of Andy Deloney as Chairman of the Michigan Liquor Control Commission.  We at Carlin Edwards Brown are certainly looking forward to his tenure as Chair of the Commission and are certain it will be a big plus for our industry.  

 

We have come to know Andy well as a result of John Carlin's longtime service on the Board of Directors of the Michigan Restaurant Association (MRA).  As Vice President of Public Affairs for the MRA, Andy was  extremely active in promoting legislation to benefit the food and beverage business in Michigan.  On many occasions, John and Andy discussed issues that affect licensing matters as well as the hearings and appeals process at the Commission and its effect on licensees.  John and Andy both served on a small MRA advisory group to make recommendations to  Governor Snyder on the rules and regulations of the Commission and possible changes to soften their impact on licensees.

 

We all look forward to Andy bringing his business background to use as he serves in this leadership position of an agency that significantly affects the restaurant industry in Michigan.  His previous tenure as Assistant Director of Michigan's arm of the National Federation of Independent Business (NFIB), which promotes the right to own, operate and grow an independent business, should also be a benefit to the Commission and its licensees.

 

We look forward to Andy's service as Chair of the MLCC and are confident he will be a very positive influence on our industry. 

 

Welcome aboard Andy!

Teri Quimby Appointed MLCC Administrative Commissioner

Attorney Teri Quimby of Brighton, Michigan, was appointed June 23, 2011 by Governor Rick Snyder to replace Pat Gagliardi for a four-year term expiring June 12, 2015.  Ms. Quimby is a graduate of Michigan State University's James Madison College (where she was a classmate of Michael Brown) and the Thomas M. Cooley Law School.  She recently worked as a self-employed attorney and certified civil mediator.  Before that, she served as the Deputy Director and Senior Legal Counsel for the Michigan House of Representatives Republican Policy office.  She currently serves on the State Bar of Michigan Character and Fitness Committee.  She will report to the MLCC on July 11, 2011.  Her appointment is subject to Senate confirmation.

Have you filed your annual MLCC report? 

The MLCC wants to know when you change any stockholders in your corporation, members in your limited liability company or partners in your partnership.   July 1 is the annual due date for filing your company's statement as to Stock Issuance/Membership Interest or Change of Interest in a Limited Partnership (Form LC-50-2).    There is no fee required when filing the Form LC-50-2 with the MLCC.  A blank Form LC-50-2 is provided by the MLCC when it issues your new license to you.  After that, you are on your own with completing and filing the form.  Avoid a possible violation by filing your annual statement with the MLCC.  Let us know if we can help.

Highlights of MLCC Quarterly Meeting

The MLCC recently conducted its quarterly public meeting on June 22, 2011 in its Southfield office.  Several pending legislative matters were reviewed with those in attendance, a number of which would impact various licensed businesses.  Other statistics were reviewed, most notably that MLCC violations for the months of February, March and April, 2011 are up 15% over last year.  Violation appeal hearings are up 75% during that same time.  Although total fines imposed by the MLCC are down by 16%, the number of license suspensions is up by 58%.  The MLCC reported that, compared to 2010, more licensees are now in compliance with the server training requirements imposed by MLCC.  Steve Robinson, MLCC Finance Division Director, reported the number of cases sold in the current fiscal year is higher by 111,695, resulting in increased revenue to the State of Michigan of $16.2 million.  This represents a 2.66% increase in revenue through the first eight months of the fiscal year.  Mr. Robinson also noted on-premise sales are down $4.7 million, while off-premise sales are up $20.9 million.  There has been a 4% drop in spirit sales to on-premise licensees during this eight-month period.  Sharon Martin, Director of Licensing, reported the MLCC has issued 5,519 new AM Sunday sales permits.  The MLCC has also issued 429 new beer and wine sampling permits and 39 catering permits under the law recently adopted.  Remarkably, the MLCC has issued 3,054 emergency suspension orders for failure to provide proof of financial responsibility so far in fiscal year 2011.  Ms. Martin also noted the MLCC has issued 2,631 special licenses to date.  Lastly, Ms. Martin reported the MLCC will soon update the State Class C and SDD license quotas based on 2010 census information.  Changes in the license quotas will be made public shortly.  Thus, we urge any of our clients looking to obtain a new Class C or SDD license to contact us immediately so we can file a license application in those areas of the state where the license quota may be increasing due to a population increase.  Many of the new quota licenses will be allocated on a "first come, first served" basis, so an early filing for these licenses is recommended.

Changes to Michigan's 'Tied-House' Law
by Rick Perkin, Licensing Consultant

Michigan utilizes a three-tier distribution system for the importation/manufacture, distribution and sale of beer and wine and a modified Authorized Distribution Agent system, where the MLCC acts as the spirit wholesaler, for the importation/manufacture, distribution and sale of spirits.  This system licenses participants in each of the three distribution tiers (suppliers, wholesalers and retailers).  Section 603 of the Liquor Control Code is the primary statute regulating the relationships between licensees operating on the different tiers.  Such statutes, commonly known as 'tied-house' laws, restrict ties between the three distribution tiers and have been a standard part of most regulatory structures since the end of Prohibition.  The Michigan Legislature recently amended Section 603 to further tighten the separation of the three-tiers by, among other things, expressly prohibiting suppliers, wholesalers and retailers from holding, directly or indirectly, a license in any of the other distribution tiers.  These changes have directly impacted existing wholesalers who previously were able to also act as suppliers.

  

While the recent changes to Michigan's tied-house law makes cross-ownership between the distribution tiers even more restrictive, all is not lost to existing and prospective licensees.   There are often ways to structure ownerships to allow for continued operation or business expansion by 'virtually' touching another distribution tier without violating MLCC law.  This same principle can be utilized for Michigan manufacturers such as Brewpubs and Micro Brewers desiring to expand their businesses.  Carlin Edwards Brown PLLC would welcome the opportunity to assist you in preserving or expanding your businesses while maintaining compliance with Michigan law.   Don't hesitate to contact our office to discuss legal alternatives to your business operation plans.