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D.C. Bar Has Claim Against Liquor Board

WASHINGTON (CN) - A notorious bar in a trendy area of Washington D.C. has standing to bring its retaliation claim against the liquor board that tried to shut it down, a federal judge ruled.

BEG Investments, which oversees operation of the Twelve Restaurant and Lounge in the H Street corridor of Washington D.C., says the District of Columbia Alcoholic Beverage Control Board violated its First Amendment rights when it cancelled the establishment's liquor license, claiming it did so out of retaliation for the pursuit of legal action against the board.

The Twelve Restaurant and Lounge has been plagued with controversy over several stabbings that occurred at the establishment, and has a "long history of problems" with its neighbors, according to an open letter penned by Jay Williams, chair of the alcoholic beverage licensing committee for a commission that oversees policies and programs in the establishment's neighborhood.

After several violent incidents at the bar in 2011, the alcohol board renewed its liquor license, but required the bar to hire several D.C. police officers to patrol the nearby area.

BEG sued in 2013, alleging the patrol requirement was discriminatory and extortionate, and filed a supplemental complaint the next year. The D.C. district court dismissed all charges except BEG's claim of retaliation.

BEG missed two hearings related to two separate applications for a new liquor license, first in December, 2013 and again on April 21, 2014. After each missed hearing, the board gave the company 10 days to take action to reinstate the applications.

However, BEG decided not to try to reinstate the second application and instead launched a third application on April 28, 2014, according to this week's ruling.

Two days later, BEG filed an amended complaint in Federal Court. Some two weeks after that, the board ordered BEG to immediately stop selling alcoholic beverages, court records show.

In shutting down its liquor sales, the board cited BEG's failure to move to reinstate its second liquor license application, even though BEG had filed a third application, according to the ruling.

A week later, the board vacated its order, allowed BEG to resume operation, and ordered the Alcoholic Beverage Regulation Administration to process BEG's third renewal application, the 16-page opinion states.

Three days later, another stabbing occurred at the establishment, according to a local neighborhood blog.

The D.C. district court previously held that the retaliation claim against the defendants - Nicholas Alberti, Donald Brooks, Herman Jones, Calvin Nophlin, Mike Silverstein, Ruthanne Miller, Victor Rodriguez, and James Short, all current or former board members - could proceed.

The board members asked the court to dismiss BEG's claim on the grounds "that BEG's supplemental complaint fails to plausibly allege the causation element necessary to state a claim for First Amendment retaliation," and that BEG lacks a "basis for municipal liability," according to court records.

But U.S. District Judge Rudolph Contreras disagreed, noting in the opinion that a motion to dismiss does not address the potential success of the plaintiff's claim, only the issue of whether the claim is properly stated.

The board said the two weeks between its cease and desist order for the bar and restaurant and BEG's filing of its amended complaint "is too lengthy to plead a plausible causal connection," the ruling states.

The court disagreed, ruling that BEG has stated a plausible retaliation claim.

"Simply put, defendants' argument is contrary to this circuit's precedent," Contreras wrote in the Nov. 10 opinion, noting that the court had previously ruled that a time period of one month or less would suffice to raise a plausible inference of retaliation.

The alleged two-week period between BEG's lawsuit filing and the board's cancellation of its liquor license suggests a causal relationship, according to the ruling.

On the issue of municipal liability, the court rejected the board's argument that it was not the ultimate decision maker.

"To find municipal liability here it is sufficient that the board has final authority to decide whether to cancel, revoke or suspend a license in a particular," Contreras wrote. "It would contravene decades of [U.S.] Supreme Court precedent to hold otherwise."

The board further argued that a Washington regulation required it to allow BEG's expired liquor license to continue until the board reached a final decision on BEG's third application.

"This argument is unavailing as a factual matter," the judge wrote, noting that the board had rendered a final decision on May 1, 2014, when it dismissed BEG's application.

BEG Investments could not be reached for comment and the Alcoholic Beverage Regulation Administration did not immediately respond to an emailed request for comment.

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