Prohibition

California Regulators Shut Down a Distillery for Serving Alcohol

Confusing regulations put well-run businesses at the mercy of bureaucratic brutes.

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Blinking Owl, a small craft distillery located in Santa Ana, Calif., outside Los Angeles, temporarily and non-voluntarily closed its doors last week. "We will be CLOSED the following Days: Sunday, November 10, 2019, to Saturday, December 7th, 2019, and Saturday, December 14th," a message posted atop the Blinking Owl website laments.

Further down the homepage, the distillery— which holds a California craft distiller's license, known as a Type 74 license in state regulatory parlance—goes into great detail about the saga behind the temporary closure, which appeared to result from little else than confusing regulations and inconsistent instructions from regulators.

"While Type 74 license states that distilleries can only serve up to 1.5 oz. of alcohol per person per day, we are allowed to have private events, in which the drink restriction is waived," Blinking Owl explains. "It is under this section of code which many small distilleries in the state have found a much-needed revenue source by hosting private events or functions. To that end, we segregated private events with wristbands, something we believed the public was accustomed to and well understood the meaning of, and we subsequently operated in a manner we understood to be in complete compliance."

That seems eminently reasonable. But what seems eminently reasonable to a business often strikes regulators—who are interpreting the same, oftentimes poorly worded regulations that businesses are, but with an eye to punishing scofflaws—as something entirely different. Just how the temporary closure came about demonstrates this fact.

Before making his first undercover visit, according to his account, ABC trade enforcement officer Eric Gray did not speak with anyone at Blinking Owl about being part of a private party. When he arrived at the distillery, he was served one drink and was told Blinking Owl could not serve him another legally. He paid and left.

Before his next visit, Agent Gray called Blinking Owl. He was told this met the requirements for being considered a private party. After arriving at the distillery, Blinking Owl confirmed Gray had called ahead to be placed on a private party guest list and was served a second drink.

It was this second visit that caused Agent Gray to conclude Blinking Owl had violated ABC rules, allegedly "by exceeding the amount of 1.5 ounces of distilled spirits that is permitted to be served per person per day by selling two separate cocktails to Department Agents that contained 1.5 ounce in each drink."

For this purported transgression, the state chose last week to punish Blinking Owl by forcing the distillery to close for 25 days.

"The fact [Blinking Owl] received prior warning and discipline and continued to circumvent and shirk its clear responsibilities is disconcerting," wrote administrative law judge D. Heubel in a disconcerting June 2019 order that was necessitated—if at all—only by the fact those "clear responsibilities" were never clear.

Where did Blinking Owl get the idea that a person could be served more than 1.5 ounces if they were to call ahead to be placed on some sort of private party guest list? It may have been from regulators themselves.

It turns out Blinking Owl had previously been cited a year earlier for serving more than 1.5 oz. to one undercover ABC Agent Plotnik. In his report, as evidence in support of his allegations, Plotnik noted he could not have been part of a private party because he had not "called ahead to be placed on a guest list" at the distillery.

I spoke this week by email with Brian Christenson, who—with his wife and a close friend—opened Blinking Owl in 2016.

A frustrated Christenson tells me he and his fellow owners have invested at least $3 million in the distillery. He says the state's "strong Prohibition hangover is pretty shocking in this day and age."

His customers agree.

"These laws largely serve no purpose other than to ensnare small business owners and produce fines for agencies that struggle to justify their own existence," Reason subscriber and Blinking Owl supporter Robbie Haglund, who alerted me to the distillery's regulatory woes, told me in an email this week.

Blinking Owl isn't alone in finding fault with the enforcement of California's craft distillery rules. At least one other California distiller I spoke with this week—who did not want me to use their name or that of their distillery for fear of reprisals from state alcohol regulators—say they've been targeted by state regulators in a similar fashion in recent years.

(I reached out to undercover state ABC trade enforcement officer Eric Gray this week by email to ask him about the seemingly subjective nature of the rules he's charged with enforcing—namely the criteria the state ABC uses to determine whether a distillery is holding a permissible private event and/or function or an impermissible one. Agent Gray did not reply.)

The fact regulators have targeted more than just Blinking Owl suggests an urgent need for regulatory reform.

"It is our hope that this campaign awakens lawmakers and state officials to realize the absurdity of inflicting a harsh, unjust punishment when it is obvious that we are chasing legal clarification on a vague, undefined section of the law that it is currently based in constant[ly] changing opinion," Christenson tells me.

In the end, Christenson just wants the state to treat Blinking Owl, its employees, and its customers fairly.

"Ultimately we want parity with the wine and beer industries," he tells me, since in California brewery and winery rules are friendlier for businesses and consumers alike. "But in the short term we would like the ability to use our tasting room privileges to serve more and sell more products direct to consumers to create more revenue to help us survive and thrive as a small California business."

I hope he gets his wish. So do others. Christenson tells me Blinking Owl customers and the general public have been incredibly supportive of the distillery. 

"The owners of Blinking Owl are some of the nicest, most generous, and honest people I have ever met," Robbie Haglund says. "They are the type of entrepreneurs we need in this country. They care about their business, their employees, their customers, and the community."

Christenson tells me he's spoken with state lawmakers, who he says have been receptive to his complaints and appear optimistic they can engineer a fix.

The will to reform the rules may just be there. As recently as last year, California lawmakers saw fit to ease some of the regulatory burden the state places on small craft distilleries.

Clearly, though, the state still has a long way to go before Blinking Owl and other craft distillers in California will feel like the state isn't rooting for them to fail.

NEXT: Today in Supreme Court History: November 23, 1804

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  1. Agent Gray did not reply.

    Because he was still recovering from being served excessive amounts of alcohol, DUH!

    1. Statist Reason shouldn’t be contacting the bad guys, protest them like the Harvard *Crimson* until they stop trying to be fair to the other side.

  2. “…Reason subscriber and Blinking Owl supporter Robbie Haglund, who alerted me to the distillery’s regulatory woes…”

    Too local.

    1. Alright, somebody’s gotta explain the too local meme to me. I hang around here quite a bit and still somehow missed the genesis of that one.

  3. Somebody, somewhere, is going to tell the ABC trade enforcement about this article, and Blinking Owl will be roadkill by Christmas.

  4. For this purported transgression, the state chose last week to punish Blinking Owl by forcing the distillery to close for 25 days.

    Nah. We stay open. See you in court.

  5. I feel safer now. Thank god someone’s willing to do the job of bridling capitalism.

    1. And the Demon Rum.

  6. Is entrapment even a thing anymore?

    1. By the way, I’m really jonesin’, I could go for some illegal drugs right about now. Please send them to me at this address:

      Totally not a narc
      DEA Headquarters
      Washington, DC

  7. OT – man claiming to be Chinese wants to defect to Australia, says China has espionage networks and agents of influence:

    https://www.theage.com.au/national/defecting-chinese-spy-offers-information-trove-to-australian-government-20191122-p53d1l.html

    1. Claiming to be Chinese *spy* – I’m sure he’s Chinese.

    2. Thank Eddy. Below is another article about the Commies in China and some propaganda and mind control techniques they use.

      The Art of Mind Control

  8. I’m thocked, thocked to find you sssshhherving alc…alca…booze in thish establithmunt!

  9. So how much, exactly, did the owner donate to democrats?
    Ah-ha!

    1. Not enough it seems….

  10. One thing is clear, agent Eric Gray is a sniveling statist bitch who chose to profit from harming his equals while eroding liberty.

  11. Please, let California secede.

    1. At least the coastal counties. We may have to put the rest of the state in quarantine for a while, but those people could be saved.

  12. I am making 10,000 Dollar at home own laptop .Just do work online 4 to 6 hour proparly . so i make my family happy and u can do

    …….. Read More

  13. What is the purpose of these regulations? Why shouldn’t Blinking Owl serve anyone whatever he or she wishes just like any other bar?

    1. 21st Amendment:
      Section 1
      The eighteenth article of amendment to the Constitution of the United States is hereby repealed.

      Democrats are Prohibitionists at heart. It’s all about what you CAN’T do with them.

      Democrats never liked the repeal of the 18th Amendment. It took away federal power and illustrated that you need Constitutional amendments to go after major rights like the right to consume whatever you want.

      1. Whether or not you are right about the general tendencies of Democrats, that still doesn’t explain the motivation for restricting distilleries in ways different from bars.

        1. Government Literally controlling the means of production as a Socialist goal.

          1. Again, you’re talking in generalities that do not answer the question.

  14. You should also post a photo of over-zealous, hall-monitor types in government with these articles. Eric Gray and his ilk deserve to be exposed to public ridicule if public funds are paying for their ridiculous, Soviet style interpretation of regulations.

  15. First of all, a blanket fuck off to anyone who wants to control what consenting adults sell to each other and choose to ingest.

    Next, a more specific (but still broad) fuck off to bureaucrats everywhere, especially those who invent byzantine regulations who then attempt to prosecute people who attempt to conform, even if they have to come up with meaningless and annoying processes.

    And finally, a personal fuck off to Agent Gray, who should either find honest, productive work or turn his wicked undercover skills against the California state government itself.

    1. How much undercover skills would he need.

      He could walk into the legislature with a bag with a dollar sign on it and say “who wants to support my bill?” all he’d have to show was that the bill didn’t benefit Republicans in any way.

      (No, Senator, I wasn’t saying *you* could be bribed, I was talking about your colleagues)

  16. >located in Santa Ana, Calif.

    Why do people do this to themselves? I want to feel sorry for Californians but at some point you kinda have to believe its their own fault for willfully opening a business in California. It’s like jumping in a pool and getting mad about being wet.

    1. Commifornians get their popular Socialist laws good and hard.

  17. OT: RBG is in the hospital…again.

    Justice Ruth Bader Ginsburg hospitalized for possible infection

    This after she was sick at home for over 3 days about two weeks ago.

    Politics aside, how crazy is this RBG that she thinks dying at work is okay? I hope RBG’s name is used as a rally cry to amend the US Constitution to set age limits for SCOTUS justices. There is no reason to be on the Supreme Court after 70 years old.

    1. On that note, I also think Breyer and Thomas should retire.

      1. No, Justice Holmes (who I don’t like but I admit his brilliance) died at 90.

        Medical science may make 70 obsolete as retirement age.

        Better to have a judicial counterpart to the 25th Amendment, providing that a judge’s colleagues, or a panel of physicians, could certify him/her disabled, subject to an appeal to Congress (to avoid any Deep-Statiness).

        “how crazy is this RBG that she thinks dying at work is okay?”

        If we *must* die (and I suppose one must), then why not die at work? John Quincy Adams died in the House (not his house, the House of Representatives).

        1. “February 21, 1848

          “On this date, Representative and former President John Quincy Adams of Massachusetts suffered a fatal stroke on the House Floor. During a debate on whether to refer a resolution to the Committee on Military Affairs, Representative Adams voted in the negative. A short time later he collapsed at his desk. Representative Washington Hunt of New York interrupted the debate to bring attention to the ailing Adams. Members moved the 80-year-old former President to the Rotunda for fresher air and then relocated him to the Speaker’s Room (the present day Lindy Claiborne Boggs Congressional Women’s Reading Room). Adams mustered the strength to thank the Officers of the House for their service. He then lapsed into a coma and died two days later. A funeral to celebrate the life of the great sage took place on February 26, 1848, in the House Chamber. Attended by political friends and foes, everyone sang the praises of Adams. Until arrangements could be made to move his remains to the family burial grounds in Quincy, Massachusetts, his body was laid to rest in Congressional Cemetery. A cenotaph marker remains in the cemetery to honor the former President.”

          1. I would make the argument that back in the days of the Founders, only White men ran government so there were simply less learned people to choose from. There were only 2.5 million people living in the 13 Colonies in 1776.

            Today, we have women in government and while modern medicine might keep people in a pickled state well into their 80’s, clearly cognitive degradation takes place as people reach their 60s, 70s and certainly 80s. By 80 years old, you can literally see thru their skin.

            Its fucking selfish as all Hell to purposely be at work when you die so some replacement government tool can never get your dead smell out.

      2. RBG I can understand: She is literally dying, and reports indicate she spends much of the time she’s nominally “working” asleep. She really ought to resign, she’s not actually performing the job she was hired for, she’s just a name for her interns to write on their own work product.

        But what’s your justification for Breyer and Thomas retiring? Neither of them are showing any signs of dementia. They’re still doing their work, even if you don’t agree with how they do it.

        1. Just age. By 75 these government workers should really be retiring.

          While dementia might not have afflicted them, I would find it hard to believe that both Thomas (71 years old) and Breyer (81 years old) dont have reduced mental faculties, especially Breyer. They cant remember cases like they used to and leaning a mot more on interns and judicial clerks.

          Additionally, they have been serving on the SCOTUS for over 20 years (Thomas 28 years and Breyer 25 years). Its time to go.

          Add in RBG and you see the pattern. These people think that the USA needs them and they are playing politics while trying to say that they are the “unbiased” Judicial Branch.

  18. If we *must* die (and I suppose one must), then why not die at work?

    I don’t want to die at work, but it would inconvenience the hell out of my boss…

    1. In response to Eddy.

  19. but of course they did, because if it breathes it must be regulated and taxed to near the point of death.

  20. Holy Fuck! It’s no wonder the states doesn’t have the resources to combat real crime. It’s too busy sending out undercover agents to fuck over citizens violating total bullshit fascist regulations.

    These regulations are total horseshit.

  21. California needs to be nuked from orbit. Its the only way to be sure.

  22. The People’s Republic of California is run by demagogues and kleptocrats who love nothing more than to crush individual rights in pursuit of increasing revenues to pay for unsustainable pension benefits they receive. California is on a slow decline to oblivion soon to be entirely peopled with illegal immigrants and government workers as the few sane folks left abandon the once great Golden State for better, greener pastures. AZ, NV, ID, WY, TX and TN here we come!

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