125 Bar Corp. v. State Liquor Authority

125 Bar Corporation (plaintiff) owned a bar in New York City. The bar was located on a main commercial street and was near a railroad station and a subway station. 125 Bar first obtained a state liquor license for the bar in April 1968, but the bar operated under different ownership before then. Between June 1966 (when the bar was owned by someone else) and 1967, the bar received four warning letters from the State Liquor Authority (authority) (defendant) regarding alleged actual or potential illegal conduct at the bar. The warning letters concerned, among other things, the bar’s employment of a convicted gambler (although there was no allegation that illegal gambling occurred at the bar), three prostitution solicitations at the bar, and one surreptitious narcotics sale. In addition, there was a prostitution solicitation that did not lead to a warning letter. The authority did not contend that 125 Bar was aware of the alleged misconduct when it occurred. After interviewing 125 Bar, the authority denied 125 Bar’s application to renew its liquor license based on the four warning letters and the additional incident. 125 Bar brought a petition in the supreme court against the authority pursuant to Civil Practice Law and Rules (CPLR) Article 78 seeking to overturn the authority’s decision. The supreme court transferred the petition to the appellate division, which confirmed the authority’s decision after determining all the issues pursuant to CPLR § 7804(g). 125 Bar appealed.