Three tablespoons of booze. That’s the law.
Distilleries with tasting rooms that operate under a Type-74 Craft Distillers license can only serve 1.5 ounces of liquor in a cocktail or in a tasting flight to a single customer, unless that person is attending a private event. That’s the license Blinking Owl Distillery in Santa Ana holds and that’s the law the California Department of Alcoholic Beverage Control says the tasting bar violated.
The “Blinking Owl 25-day suspension order follows a ruling that was made by an administrative law judge who heard from both ABC and representatives of the Blinking Owl,” reads a statement from ABC provided to the Register.
The distillery will be shut down for 25 days beginning Tuesday, Nov. 12, at what the owners say will be a loss of $50,000. And that really hurts because the tasting room is where Blinking Owl made 90 percent of its profits last year, according to Robin Christenson who co-owns the business with her husband Brian Christenson and their friend Kirsten Vangsness.
The distillery makes 3,000 cases a year of liquor, including gin, bourbon, vodka and aquavit.
Robin Christenson admits that her first violation was her fault. She was hosting a birthday party and invited a person who just happened to be alone at the bar into the group even though that person wasn’t part of the private event. That “customer” was an undercover ABC agent.
“I was being the ‘hostess with the mostess’ and it came back to bite me,” she said. “It was absolutely, totally illegal. I broke the law. My dad’s an FBI agent. He’s so ashamed,” she said.
So was she. Blinking Owl paid a $3,000 fine.
“But the other stuff, I’m like, no, I have the legal ability to do these things,” she said.
She’s talking about holding private events. And that’s where the law gets hazy because Christenson says there is no clear wording about what constitutes a private event and how guests should be seated.
When the tasting room opened, customers would come in for a drink, find out they couldn’t have another, leave, then call to set up a private event and return. The reservation could be as few as two people, and they would receive wristbands so that even if they were mixing with walk-ins, servers could tell who was allowed to have a second drink.
With those rules in place, Blinking Owl still got another violation.
The distillery said it followed the rules to the letter but ABC said it had not.
Blinking Owl argued that wristbands clearly put a “Scarlet Letter” on private party-goers making them stand out from the general public. ABC provided comments from the judge who heard the matter: “This argument fails because the Respondent permitted persons from the general public in the tasting room/Licensed Premises while other persons wearing wristbands were “deemed” private parties, with no separation among them.”
According to Blinking Owl’s website: “In October 2018 an undercover ABC trade enforcement officer, Agent Gray, called our distillery and put his name on the Private Event list for a party of two guests that day. Undercover Agent Gray and Agent Groff came at the time he requested, checked in with tasting room staff, received a wristband identifying him as ‘private.’ and sat down at our bar.
“After ordering a cocktail, another patron entered our tasting room and also sat down at the bar. This patron had not arranged a private event and was informed by our staff they would only be served the statutory limit of 1.5 ounces of spirit, which they understood and followed. At this point, Agent Gray and his guest ordered a second cocktail, drank it, paid his bill, and left our establishment without incident.”
However, a month later Agent Gray followed up. According to Blinking Owl, he met with the owners to explain that many craft distilleries are confused about the new license type. The distillery was told that, “Although the law does not state a private event requires ‘physical segregation or separation,’ this was an ‘obvious’ interpretation of the law, and wristbands were not sufficient.”
Regarding the second violation the judge ruled that Blinking Owl had created, “a reservation system to end-run the ABC Act’s limitation … to expand its operating privileges. There was nothing private about Agent Gray’s visit. The fact that he called ahead did nothing to create a private event or function, and he certainly was not attending anything that was not open to the general public.”
After that meeting, Blinking Owl eliminated the wristbands, decided to no longer take phone calls for private events, instead documenting everything by email. Christenson said the distillery invested thousands of dollars to create an area on the patio that could host events in compliance with this new interpretation of the law.
So the owners were surprised when in May, seven months after Agent Gray’s visit, the distillery received a letter from ABC stating they had committed two violations by serving both Agent Gray and Agent Groff in October 2018. The penalty would be a 25-day shutdown.
In levying the penalty the judge emphasized that this was a second offense, noting that Blinking Owl, “had received a prior verbal warning regarding a similar violation, had a prior similar disciplinary violation, for which it paid a fine.”
But Blinking Owl says the law still isn’t clear. For months its legal team tried to learn more about the details of the law and the various “interpretations,” flying to Sacramento and speaking with ABC officials in and out of ABC hearings.
Now Blinking Owl’s owners are tired of paying lawyers. “In light of the excessive cost of taking our case to a higher court, our team has decided to accept this punishment under great protest in lieu of pursuing further legal action,” reads a statement on the distillery’s website.
Christenson says the real problem with the law is no one will define it. “They won’t tell you how many people because they can’t, because it’s not in the law,” she said.
She says that different agents give different answers. “Kirsten, our business manager had a phone call with the head of trade enforcement, which is agent Lee Riegler. And she said, ‘Well, a small birthday party doesn’t count as an event.’ And Kirsten says, well is that five people, is that six people? Is that three people? And what about 10 people? And they can’t comment on a number.”
Another suggestion from ABC was for Blinking Owl to open a restaurant. “That really would solve the problem,” Christenson said.
That’s why Surf City Still Works has plans for a 25,000-square-foot new space in Huntington Beach that will include an eatery. Surf City also has had multiple violations according to ABC.
Blinking Owl will comply with the shut down but will continue manufacturing. Until the tasting room reopens, owners will organize a “Whiskey Rebellion Campaign,” encouraging fans to drink Blinking Owl at local bars and promoting sales at retailers. Its owners are also leading a charge to get customers to write to their representatives in Sacramento to get them to amend and clarify these laws.
“Shutting us down over 1.5 ounces of alcohol? 1.5 ounces of alcohol makes us lose business for 25 days? That’s an issue, ” Christenson said.
“We do need a larger change to the law,” she said. “We need a defined line in the sand. It’s like you’re going on a freeway and the law says ‘Don’t speed.’ But you have no posted speed signs and all you say is, ‘Well, it’s obvious if you’re speeding or not.’”
