Archive for Tuesday, July 29, 2008

Appeals court frustrated by legal conflicts in Cork and Barrel case

The legal wrangling continues in a case involving efforts to revoke the liquor licenses of a Lawrence couple.

July 29, 2008, 12:42 p.m. Updated July 30, 2008, 12:09 a.m.


— The state on Tuesday urged an appellate court to uphold a ruling to revoke the liquor licenses of Dan and Jill Blomgren, who own Cork and Barrel stores in Lawrence.

But attorneys for the Blomgrens said the couple have been caught in an undeserved legal and bureaucratic morass that threatens their livelihood.

Judges on the Kansas Court of Appeals gave no indication on when a decision would be handed down.

In 2006, then-Douglas County Judge Steve Six found that the state's Alcoholic Beverage Control division was within its rights to revoke Dan Blomgren's license for the Cork and Barrel at 901 Miss. because of a hidden ownership scheme.

But Six found the state went too far in its efforts to punish Blomgren's wife, Jill, by revoking her license for the store at 2000 W. 23rd St.

The stores remain open as the appeals go through the courts.

On Tuesday, assistant attorney general Sarah Byrne urged the appellate court to uphold the decision by the ABC to revoke the liquor licenses.

"If revocation was unreasonable in this case, then licensees can act with impunity knowing that there is no real consequence for the illegal actions," Byrne said.

Byrne said Dan Blomgren tried to hide his ownership of Parkway Liquors to sidestep state law that prohibits people from having an ownership interest in more than one liquor store, with the exception that a married couple can own one each.

He placed ownership of the store in a friend's name but maintained control over the business, she said.

And Jill Blomgren conceded to having committed numerous violations at her store, including selling alcohol on credit, or giving it away, and delivering alcohol to unlicensed events, Byrne said.

But the Blomgrens' attorneys - Daniel Owen and Anthony Bonuchi - defended their clients, saying Dan Blomgren didn't have a concealed ownership in Parkway Liquors.

"He did not have any ownership in any other liquor store," Bonuchi said.

Much of the arguments dealt with procedural issues in the case over whether the Blomgrens had properly exhausted their administrative appeals before seeking court relief and whether the state had improperly called the ABC division's ruling a "final order."

"There's plenty of confusion here. Believe me, we know that," Chief Judge Gary Rulon said.


one2no 9 years, 11 months ago

Damn why you all got it out for Dan,is your liquor store suck.I mean who really cares how many liquor stores he has.I rember that Lucas had several stores in Kc.I thought we only cared how many Wal-Marts there were in Lawrence.For Gods sake I think everone and there brother mows grass I bet only a hand ful of those do anything right.

madameX 9 years, 11 months ago

Because it's liquor. There are stupid, pointless, outdated rules surrounding liquor sales in pretty much every state. It all boils down to someone wants to prevent everyone else from getting wasted. Message to them: Prohibition is OVER. Learn to deal.

not_dolph 9 years, 11 months ago

Sven...why do you even care. Do you even drink alcohol? Or are you too busy drinking bubble tea?

dweezil222 9 years, 11 months ago

Rich bastards? Got what's coming to them? How, in a state so thoroughly Republican capitalism could be subverted so easily is beyond me.

dweezil222 9 years, 11 months ago

Why, exactly, does the rule barring someone from owning more than one liquor store exist? Nothing like the government meddling with free trade for no apparent reason.

1Patriot 9 years, 11 months ago

justthefacts -- Isn't that pretty much the way the world works? If you have enough money you can buy your way out of or into anything? Heck, all they have to do is keep it in Appeals Court and keep their stores open raking in the cash. When they feel they've got enough or the courts get fed up, either they will close their stores and retire comfortably or the state will close their stores and they still get to retire comfortably. It's a win-win situation for them.

one2no 9 years, 11 months ago

Ok so Steve Six should just dump this mess.I think this is another great Doing of the Stupid Pkil Kline and the I got a tatoo on my booty Plaul Morrison.Dan is a Good guy and Jill is cool as well.None of these cases have turned out any all to well.That being Tillers case as well.I don't think that this sore brings in 40,000 a day.The AG's office has wasted alot of money the last few years with this kind of BS.

1Patriot 9 years, 11 months ago

I would not be surprised if they bring in more than $40,000 a day, not saying that is their profit, but only they know for sure. I'm sure the store on Iowa has well over one million in inventory.

justthefacts 9 years, 11 months ago

Regardless of whether the state law is silly or not (and I personally think it may be), it is the law. These owners are the only ones in the whole state to get away with it, and that is because they have the money ($40,000 per day receipts for one store alone) and thus clout to fight it every step of the way. As long as the law IS the law, shouldn't everyone who owns a liquor store have to play by the same rules? Or do we waive application of laws for rich people?

kugrad 9 years, 11 months ago

Bottom line: It appears that the owners were fully aware of the restrictions of the law. The quality or reasonableness of the law are not at question; the legality of their actions is. In my opinion, it is pretty obvious that they did not like the law and chose not to obey it. They participated in a scheme obviously designed to get around the law. I don't personally belive that they did not both know about it and feel there is no way they did not both profit from it. This is not the first time they ignored a law they did not like. Didn't they sell mixers and so forth at a store connected to the 23rd and Iowa Cork & Barrel? I could be wrong, but I think they got into legal trouble over that. They seem to feel that they can just break laws they don't like. What would happen if you or I did that? The one thing that does not seem to be in question here is whether or not they willingly and knowingly broke the law. It is unreasonble to suggest they did not both profit from the fake ownership scheme and to suggest they didn't both have knowledge of it. So, they both deserve to be punished in my opinion. They are very nice people, but, based on the LJW reports, it appears that they disregard Kansas law, however backwards it may be. White collar crime should have serious repercussions just like other crimes. People go to prison for far less than this.

guesswho 9 years, 11 months ago

Not that I agree with the law, but I think the intent is to protect small business owners - this way corporations cannot own a liquor store (and sell it cheaper). World Market had a sort of separate liquor store, separate entrances, etc (also that you cannot sell any non-liquor items such as corkscrews, lemons, etc in a liquor store). Costco in other states has a liquor area, but not Kansas.

moveforward 9 years, 11 months ago

Selling your business to your manager on paper... and then holding the note and providing mentoring and consulting services is a pretty standard exit strategy in small businesses. It provides a way to sell you biz, and protect or watch over than investment.Years ago a city commissioner did pretty much the same with his bars... and still participated in the liquor license process when he probably should have recused himself.

Fatty_McButterpants 9 years, 11 months ago

MadameX hit the nail on the head. The U.S., in general, has antiquated laws related to the distribution and consumption of alcoholic beverages. Many of them date back to Carrie Nation and her group of Bible-thumping zealots that wanted to force everyone else to live the way Carrie and her minions thought they should.Justthefacts - oftentimes, the only way to get a law overturned is by challenging it in court. Sometimes this is done on purpose, sometimes by accident. Either way, it shouldn't matter how much in daily revenue one store makes. Being rich is not a crime, just as being poor is not a crime.

justthefacts 9 years, 11 months ago

"Guess who" is correct with regard to why the Kansas laws are written the way they are. Kansas has always had rather restrictive liquor laws - it took long enough to get the OK for Sunday sales, and they still cannot sell it in grocery stores.The underlying intent and purpose of many of the current (but older) laws is indeed to give the mom & pop stores a fighting chance to survive. Kansas's love of under-dogs has led it to be protectionistic when it comes to allowing large monopolies to thrive. The fact that the C&B stores do so much business in the city (to the point that they literally can lock out a supplier they don't like by simply refusing to buy from them - resulting in it not being profitable for that entity to sell to anyone else in town, thus making that brand unavailable to anyone else - points to what type of situation the multiple store rule(s) are meant to prevent. Big stores often put little stores out of business. But like or hate the law, why should one owner get to break the law while other must obey it? Because they have more money. That's why.

penguin 9 years, 11 months ago

The belief that they are the only people in the state doing this is a huge joke. In a town I am quite familiar with (Hays) this is pretty common. I mean come on their are two Kaiser Liquor stores in the town (not exactly a franchise name). Also there are a couple of other liquor stores where kids or other relatives are the holders of the licenses. However it does appear according to the law that they can split two stores husband and wife or between family as long as no one person owns more than one store. And that must be what is happening here or ABC just does not care about these stores. This is in a town with only 7 liquor stores. I am sure that this is an issue that if you really looked into it would effect towns with 2 or more stores.I just would like to know why this law exists? At some point wouldn't the marketplace tell these people to stop opening liquor stores? In addition, there are already so many laws that limit where a store can be placed, when it can be opened, and on and we really need a regulation on how many stores a person can own?This ultimately sounds like one of those laws that ends up on a list of ridiculous laws of Kansas lists.

thomgreen 9 years, 11 months ago

"C&B is one of my have-to stops when in Lawrence::what a wine selection!! Seems if your not downtown wearing flip-flops, banging on a bongo drum and peddling pottery or yard art or hemp hats:..but instead have a thriving business, Lawrence liberal elites go up your backside with a microscope."The ABC isn't run by Lawrence liberal elites. This was an action taken on by the state, not local authorities. While I don't agree with bashing this couple because they make a good living, I do agree with the basic underlying feeling that is conveyed (a bit coarsely) by some of these posts. If you take a chance, open a business, make a success of the business, kudos to you. But on the flip side, if you take a chance, break the law, get caught, you have to deal with the consequences. Whether they deserve to get their livelihood taken away is a personal opinion. What actually happens should be taken care of by the courts, in a timely manner. I'm more annoyed that it has taken this long and there still is not a resolution. What a waste of time and money on all sides involved.

fu7il3 9 years, 11 months ago

Exactly, if they are so concerned with their livelihood, they know the ABC laws and apparently have been in violation of multiple ones.

justthefacts 9 years, 11 months ago

Quote: "The AG's office has wasted alot of money the last few years with this kind of BS."The ABC (alchohol beverage control) - not the AG - filed the charges and pursued this case. The ABC is a part of the Dpt. of Revenue, which is a cabinent level agency; the GOVERNOR appoints the Secretary of the Dpt. Revenue. The only connection this case has with the AG's office (regardless of who is in that office) is that the attorney who works for the ABC has been authorized to act as an Assistant AG (but then so are a lot of state lawyers working for an agency not controlled by the AG - it has to do with authority to represent the state in court). Let me repeat- the ABC (not the AG) is the agency/entity/group of people who have made all the decisions in the C&B case. The AG has been informed of what is going on, but the people running the show are controlled by the GOVERNOR! So for those who want to place "blame" for this case on the correct people, and want to exclude or absolve from guilt the owners of the TWO IN ONE CITY liquor stores, at least get your facts straight. P.S. if you know of other law breakers, by all means turn them in.

jonas 9 years, 11 months ago

Do what you want until you get caught and deal with the consequences, even if that is flooding the appeals process. My ex-girlfriend used to babysit for their kids, and they seemed like nice people, but they clearly and intentionally broke the law. Which is fine, it's a ridiculous law from a stupid and puritanical tradition, and so deserves to be broken. If they can get it overturned that would be wonderful, if they stall their case out long enough that's fine, but if they have to go to jail or close down or whatever the punishment ends up being, they'll have to deal with it.

rtwngr 9 years, 11 months ago

Why is making a profit, regardless of how much, a reason they should be punished. If the courts find that they broke the law that is one thing but some of you seem to think because they make a lot of money they deserve punishment. That has to be one of the most obtuse points ever made in one of these blogs.

justthefacts 9 years, 10 months ago

"Justthefacts - oftentimes, the only way to get a law overturned is by challenging it in court. Sometimes this is done on purpose, sometimes by accident. Either way, it shouldn't matter how much in daily revenue one store makes. Being rich is not a crime, just as being poor is not a crime."Overturning an unpopular (not illegal) law (a) is not undertaken by/through the courts (despite what Boston legal may lead people to believe) - only the entity that enacted the law (in this case the state legislature) can overturn an otherwise legal/lawful policy decision; (b) involves the lawbreakers willfully going to jail - by the hundreds - to make the point (think 60's civil rights movement or Ghandi or South Africa) - these people want to break the law and not suffer the consquences anyone else would suffer - that is thinking you are ABOVE the law; or (c) can best be addressed by persuading the lawmakers to change the laws. To those who think the family admitted to wrong doing but is simply saying "It is a stupid law whose time has come" I invite you to read all of their (lawyer's) pleadings. They have squirmed and wiggled and done summer saults to show why they complied (which they did not in the opinion of those who routinely enforce these laws). They may WISH that the laws did not exist, but they are not arguing that they violated the laws but "so what." They are arguing their dual ownership was "technically" ok.And I have absoutely NO problem with the American dream being acheived nor any envy or resentment of the rich. More power to those who achieve AND follow the rules! What I object to is unfairness in the legal system (or anywhere else). And imo it simply unfair that a business should violate a law - for years - (designed to protect mom and pop stores from unfair competition) and profit hugely from their violation. That and the fact that the C&B lawyers keep mistating the facts so often (read the pleadings if you want to get a whiff of how flexible some people's grasp of reality can be!)It is a shame all the money they made while in violation of the law cannot be siezed and re-distributed to (a) the taxpayers who have had to pay the legal bills to make them comply with the same laws everyone else is subject to or (b) all the mom and pop stores in town who lost business in part b/c they followed the rules and the money making machine did not!

justthefacts 9 years, 10 months ago

P.P.S. If they do get "their livelihood taken away" it would be their own fault for being greedy. Had they kept to running one HUGE store, they'd have still be quite well off. Feeling sorry for someone who has chosen to break this law (and their attempt to HIDE the true ownership of the 2nd store shows they were well aware of the laws - they tried SO hard to get around it....HINT: if you have to be super sneaky to do something, it's a bad idea every time) is akin to saying it's a shame to take a license to practice away from a doctor who didn't give cancer medicine to patients but charged them for it anyway! I realize there's no comparison to killing people versus violating a market-control law. But the principle is the same; violate the law = pay the price.

fu7il3 9 years, 10 months ago

If I understood the story correctly, they are actually accused of running 3 stores. The husband and wife each own one in their names, which is legal. The accusation is that they own Parkway as well and put it in a friends name to hide that fact.Which is even greedier yet. And shows they did know the rules because they knew well enough to put the first two stores under each of their names.

justthefacts 9 years, 10 months ago

P.S. The word on the street is that the Appeals court will get out of making a substantive decision by deciding the district court lacked jurisdiction in the first place. Thus affirming the ABC's decision (but not directly). Expect C&B to then ask the Ks. S.Ct. to hear the case (all the while running two stores at the same time, for a few more years)!

Commenting has been disabled for this item.