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Freud v. Davis

Decided: December 2, 1960.

DAVID FREUD AND PATRICK PITTALA, T/A AIRSHIP COCKTAIL LOUNGE, LICENSEES-APPELLANTS,
v.
WILLIAM HOWE DAVIS, DIRECTOR, DIVISION OF ALCOHOLIC BEVERAGE CONTROL, ETC., RESPONDENT



Goldmann, Foley and Labrecque. The opinion of the court was delivered by Goldmann, S.j.a.d.

Goldmann

This appeal by the holders of a plenary retail consumption liquor license seeks a reversal of an order entered by the Director of the Division of Alcoholic Beverage Control, suspending their license for 35 days. A consent order staying the suspension was entered by this court pending appeal.

The Division had charged appellants with violating Rules 1 and 24 of State Regulation No. 20. Rule 1 provides:

"No licensee shall sell, serve or deliver or allow, permit or suffer the sale, service or delivery of any alcoholic beverage, directly or indirectly * * * to any person actually or apparently intoxicated, or allow, permit or suffer the consumption of any alcoholic beverage by any such person in or upon the licensed premises."

And Rule 24 provides, in pertinent part:

"No licensee shall * * * allow, permit or suffer any actually or apparently intoxicated person to work in any capacity in or upon the licensed premises."

The licensees pleaded not guilty. After a full hearing, the Division hearer found that the licensees had permitted the sale or service of alcoholic beverages to an apparently intoxicated person, one Alverjous Johnson, and allowed him to work in and upon their licensed premises while apparently intoxicated, in violation of the quoted rules. He recommended a 35-day suspension.

The licensees filed written exceptions with the Director, arguing that the Division had failed to prove by a preponderance of the believable evidence that they had permitted the sale and service of alcoholic beverages to Johnson while he was apparently intoxicated, and that Johnson, who had accompanied the tavern pianist on his drums while the Division agents were present, was not working on the premises. They also contended the penalty was excessive. The Director concluded that the evidence clearly established that drinks were served to the drummer while he was apparently intoxicated, and that he was then working on the premises. He

found the licensees guilty as charged and imposed the 35-day suspension recommended by the hearer.

Appellants argue that the findings of the Director are not based on legally sufficient evidence in a substantial sense, and therefore the suspension order should be reversed.

This court held in Hornauer v. Division of Alcoholic Beverage Control , 40 N.J. Super. 501, 504 (1956), that the generally accepted gauge of administrative factual finality is whether the factual findings are supported by substantial evidence. Ordinarily, the court will not resolve conflicting evidence independently of the factual conclusion of the respondent agency. The conventional formula for judicial application of the substantial evidence rule is that there must be "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Universal Camera Corp. v. National Labor Relations Board , 340 U.S. 474, 477, 71 S. Ct. 456, 459, 95 L. Ed. 456 (1951). As the court said in that case, respondent is an agency "presumably equipped or informed by experience to deal with a specialized field of knowledge, whose findings within that field carried the authority of an expertness which courts do not possess and therefore must respect." And see New Jersey Bell Tel. Co. v. Communications Workers, etc. , 5 N.J. 354, 377-9 (1950). The question is: Could a reasonable man, acting reasonably, have reached the decision sought to be reviewed, from the evidence found in the entire record, including the inferences to be drawn therefrom? See Stason, "'Substantial Evidence' in Administrative Law," 89 U. Pa. L. Rev. 1026, 1038 (1941); Stern, "Review of Findings of Administrators, Judges and Juries: A Comparative Analysis," 58 Harv. L. Rev. 70, 89 (1944).

The choice of accepting or rejecting the testimony of witnesses rests with the administrative agency, and where such choice is reasonably made, it is conclusive on appeal. We canvass the record, not to balance the persuasiveness of the evidence on one side as against the other, but in ...


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