How the TABC Administrative Violation Process Works, and What SOAH’s Role Is

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A TABC violation case starts with an administrative notice in the business’s AIMS account and ends in one of three ways: a warning, a settlement, or a contested hearing. If the business does not settle, the case goes to the State Office of Administrative Hearings (SOAH), a separate state agency whose administrative law judge hears the evidence and writes a Proposal for Decision. TABC’s commissioners then issue the final order, and the business can appeal that order to a district court.

The notice and the deadline

When TABC finds a violation, it emails an administrative notice to the user designated “Primary” on the business’s AIMS account. According to TABC’s violations page, the business can then use AIMS to:

  • review the violation;
  • accept a settlement offer, if one is made;
  • reject the offer and request an administrative hearing; and
  • sign documents and pay any civil penalty.

The notice states how many days the business has to act. If it takes no action by that deadline, the case goes to TABC’s General Counsel’s Office to be set for a hearing. Keeping the Primary contact’s email current in AIMS is therefore part of protecting the permit.

Settlement

TABC may offer to resolve the violation without a hearing through a civil penalty, a temporary suspension or cancellation, or both. A business that accepts signs a settlement agreement, and TABC then issues a waiver order confirming the business gave up its right to a hearing and setting the penalty or suspension. The business can end settlement discussions any time before the agreement is final, and the case then goes to General Counsel for a hearing.

Some of the most serious cases are referred directly to TABC’s legal services division without a settlement offer.

The SOAH hearing

Section 5.43 of the Alcoholic Beverage Code designates SOAH to conduct the hearings the Code authorizes, and the case proceeds before a judge with written pleadings, opening statements, witnesses, and exhibits, without a jury. SOAH’s guide for parties in general hearings describes two features that shape the timeline:

  • Settlement and mediation. Settlement talks happen between the business and TABC; the judge does not take part. SOAH also offers mediation with a different judge, and a party that mediates without settling keeps its right to a hearing.
  • Proposal for Decision. After the hearing, the judge issues a written Proposal for Decision with findings of fact, conclusions of law, and a recommended decision, in most cases within 60 days after the record closes. Parties may file exceptions within 15 days after it issues, and replies within 15 days after that.

The final order and appeal

Under Sections 5.43(b) and 5.363(b), TABC’s commission makes the final decision in a contested case, and it may adopt, reject, or modify the Proposal for Decision. Section 11.67 governs the appeal of an order cancelling or suspending a permit or license:

  • the appeal goes to the district court of the county where the licensee resides, or where the owner of the property involved resides;
  • it must be filed within 30 days after the order becomes final and appealable;
  • the case is tried before a judge, without a jury, within 20 days after filing; and
  • the court reviews the order under the substantial evidence rule, which asks whether the record supports the commission’s decision rather than trying the case again.

Handling a notice when it arrives

Read the notice the day it arrives, note the deadline, and decide between the offered settlement and a hearing before that date passes. A business that wants a hearing should prepare as it would for a trial, with documents, witnesses, and, where the stakes warrant it, legal counsel familiar with TABC cases.

This article is general information about Texas alcoholic beverage law, not legal advice, and reading it does not create an attorney-client relationship. Statutes and TABC rules change; confirm current requirements with the Texas Alcoholic Beverage Commission, the relevant city or county, or a licensed Texas attorney before acting.

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