As a rule that requires a RFA, RAFA or JIS, this rule will be initially reviewed in the calendar year 2025, which is no later than the 3rd year after the year in which this rule is being adopted.

Since publication of a Notice of Proposed Rule Making in the September 8, 2021 State Register, three (3) written public comments were received from two (2) individuals regarding the Electronic Pleadings Rules Reform Package (the “Package”), with one individual revising his original concerns upon further inquiry and reflection. There were also public comments made orally at the Authority’s public meeting on November 10, 2021

PUBLIC COMMENTER ONE: The first individual expressed generalized concerns that adding email service of pleadings might cause a potential increase in licensees defaulting in their disciplinary cases. According to the commenter, some licensees may not check their electronic mail, or fail to provide a working electronic mail address to the Authority. The comments about these possibilities were not quantified in any way, nor were they supported by any analysis of the licensees or even a single, anecdotal instance in which a licensee’s business practices would make it difficult or impossible to provide an email address to the SLA and check that email address regularly. Nonetheless, this individual suggested amending the Package to require the Authority to serve a certified mail notice to any defaulting licensee in a disciplinary case at least ten (10) days before deeming the Licensee to be in default. The same individual suggested amending the package to require Notices of Pleadings served electronically to be copied to the attorney or representative of record from the original application or most recent renewal application.

After receiving initial comments, the SLA had the opportunity to clarify, at one of its public meetings, the context in which the Package was being proposed: the SLA’s computer systems were being modernized and re-designed to create more efficient processes for all interactions between applicants/licensees and the SLA, including having all licensees interact with the SLA through a single, dedicated business email address and through a portal that licensees could log into at any time to view the status of any licensing or disciplinary matters relating to their licenses.

After becoming aware of this context, this individual wrote an additional letter commenting on the proposed Rule changes. He indicated that he supported the concept of the online portal and any new mechanism that lowers processing times, improves efficiency and bypasses the postal system, but that he remain concerned for licensees and applicants who may lack technological savvy because they may still miss deadlines creating increased defaults in disciplinary cases.

AUTHORITY RESPONSE: The Authority disagrees with the contention that the Package should be rejected or amended as suggested. The Authority seeks to update its rules to correspond with technology improvements it has undertaken, at great expense, to modernize all of its processes and interactions with applicants and licensees. This technology update is long overdue. The rules are being changed to provide for service of the pleadings that commence administrative disciplinary proceedings via email, a process not dissimilar from updates made in criminal and civil courts in New York over the last 10 years. Computer-based service will make the pleadings process simpler and easier to process for Authority staff, will better ensure that licensees receive actual notice of such pleadings (given inconsistencies in mail delivery), and will facilitate the ease of responding to such pleadings. The rule changes will also serve to clarify that personal appearances by licensees at Authority offices are not a proper method of responding to such pleadings.

The service of pleading changes specifically are designed to increase the efficiency and speed in which disciplinary cases are resolved, a process the Authority undertakes to promote the health, welfare and safety of the people of New York. The sooner disciplinary cases can be addressed, the sooner law-breaking licensees can be assessed discipline and, thus, deterred from future misconduct – or in extreme cases, have their licenses cancelled or revoked.

The new computer regime at the Authority will require, ultimately, that anyone holding a liquor license will have one, dedicated email address to conduct all of its business with the Authority. While it is perhaps possible that some licensed businesses will have issues with such technology advances, the Authority views this as unlikely, given that most licensees already use computers to find wholesale prices for liquor and wine purchases and otherwise conduct business using email. The commenter’s generalized concerns about the risk of defaults arising from licensees not checking their email are unsupported and speculative. And importantly, the proposed changes will not eliminate the Authority’s option to serve notices of pleadings by mail – it merely adds email as and additional option for such service. Accordingly, if after the Rule is changed, the Authority does find defaults to be a problem with some percentage of licensees served by email, a percentage that exceeds the percentage of defaults the Authority currently has with its regular mail services, the Authority will then have the flexibility to consider an appropriate adjustment to its service practices, but do so at a time where the issues to be addressed are actual, and not generalized speculation.

PUBLIC COMMENTER TWO: The second individual also expressed concern about the possibility of defaults and suggested that the new email notification procedures be gradually phased in, stating that the existing service methods should continue while the electronic service method is introduced.

AUTHORITY RESPONSE: The Authority will be phasing in the email service process gradually, but does not agree to do so in the way this commenter suggests. Under the proposed technology changes, the Authority will not require all licensees to immediately provide designated email addresses or to otherwise be subject to email service of pleadings in disciplinary proceedings immediately. New licensees will come onto the Authority’s systems and will be providing a dedicated email for their businesses as a condition of licensing. Existing licensees will not be served with pleadings by email until after they renew their licenses. At the time of renewal, existing licensees will be required to provide a dedicated email address to apply for the renewal and, from that point forward, all business will be conducted through that email, including service of notices of pleadings. Thus, the Authority already plans to adopt a version of what Public Commenter Two suggests after the rule change is made and its new technology system is deployed.

COMMENTS AT THE AUTHORITY’S PUBLIC MEETING:

At the public meeting on November 10, 2021, the only comments critical of the proposed rule changes concerned the same issues raised in the written comments: the risk of possible defaults from the change to an email based service system. These generalized comments were similarly unsupported by any quantification, support, or even anecdotal examples of licensees who would be unable to check emails for notices of pleading.

AUTHORITY RESPONSE: For the reasons discussed above, the Authority disagrees that concerns about potential defaults should derail its effort to upgrade and update its technology and communications protocols with its licensees. The proposed rule changes are needed to accomplish that upgrade and update.