In one case, the SLA denied one establishment, Mickey Rats, a liquor license due to its concern that the sole officer and stockholder was not the sole real party in interest and lacked adequate experience to manage a business licensed to serve alcohol.

The court overturned the SLA’s denial, finding that these reasons were based on pure speculation and conjecture and therefore do not constitute a rational basis for denial.  Moreover, the history of violations committed by the previous licensee was an insufficient basis for the denial of the liquor license application, especially since the principal had no ownership interest in the previous licensee and there was no reasonable factual basis to support a finding that he exercised managerial responsibilities with respect to that prior operation.

In short, although the SLA has the discretionary power to deny an application “for good cause shown” [ABC Law 64(1)], such power may not cross the line into speculation and conjecture.

Citation: In the Matter of Ha Ha Ha, Inc., d/b/a Mickey Rats v. New York State Liq. Auth., 262 A.D.2d 1008 (4th Dep’t 1999)