TITLE 3. ALCOHOLIC BEVERAGE AND CANNABIS CONTROL

VIRGINIA ALCOHOLIC BEVERAGE CONTROL AUTHORITY

Proposed Regulation

Title of Regulation: 3VAC5-10. Procedural Rules for the Conduct of Hearings Before the Board and Its Hearing Officers (amending 3VAC5-10-10 through 3VAC5-10-130, 3VAC5-10-150 through 3VAC5-10-450; adding 3VAC5-10-490; repealing 3VAC5-10-340).

Statutory Authority: §§ 4.1-103 and 4.1-111 of the Code of Virginia.

Public Hearing Information: No public hearing is currently scheduled.

Public Comment Deadline: October 11, 2024.

Agency Contact: LaTonya D. Hucks-Watkins, Senior Legal Counsel, Virginia Alcoholic Beverage Control Authority, 7450 Freight Way, Mechanicsville, VA 23116, telephone (804) 213-4698, FAX (804) 213-4574, or email latonya.hucks-watkins@virginiaabc.com.

Basis: Section 4.1-103 of the Code of Virginia provides that the Virginia Alcoholic Beverage Control Authority Board of Directors has the authority to adopt regulations and to do all acts necessary or advisable to carry out the purposes of Title 4.1 of the Code of Virginia. Section 4.1-111 of the Code of Virginia provides the board with the authority to adopt reasonable regulations that it deems necessary to carry out the provisions of Title 4.1 of the Code of Virginia and to amend or repeal such regulations.

Purpose: This regulation is essential to protect the health, safety, and welfare of citizens because the regulation provides guidance for administrative proceedings at the Virginia Alcoholic Beverage Control Authority (authority) that is impactful to the regulated licensees and the communities where licensees operate. This regulation provides guidance for how administrative proceedings will be conducted and provides essential information necessary to interested parties about how to exercise due process rights.

Substance: The proposed amendments (i) specify that only an interested party or the interested party's legal counsel can exercise the right of cross-examination; (ii) extend the timeframe in which an offer in compromise may be submitted; (iii) align the regulation with current procedures, authority, and terminology; and (iv) eliminate obsolete text.

Issues: The primary advantage to the public is that these changes bring additional clarity to the authority's procedural rules for hearings before the authority. The amendments also include information regarding mediations that is not currently included in the regulation. There are no disadvantages to the public. The advantages to the Commonwealth include clarifying the authority's procedural rules for hearings before the authority. There are no disadvantages to the Commonwealth. The same advantages that are outlined for the public and the Commonwealth represent the pertinent matters of interest to the regulated community, government officials, and the public.

Department of Planning and Budget's Economic Impact Analysis:

The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Code of Virginia and Executive Order 19. The analysis presented represents DPB's best estimate of the potential economic impacts as of the date of this analysis.¹

Summary of the Proposed Amendments to Regulation. The Virginia Alcoholic Beverage Control Authority Board of Directors (board) proposes amendments to the regulation to (i) specify that only interested parties or their legal counsel can exercise the right of cross-examination; (ii) extend the timeframe in which an offer in compromise may be submitted; (iii) align the regulation with current procedures, authority, and terminology; and (iv) eliminate obsolete text.

Background. Cross-examination: The current regulation refers to counsel, interested parties, and other representatives of such parties exercising the right of cross-examination. Until recently, non-attorney consultants have at times also done cross-examination.² On September 29, 2023, the Supreme Court of Virginia approved the Virginia State Bar Unauthorized Practice of Law Opinion 219 (UPL Opinion 219).³ UPL Opinion 219 states in part that non-lawyer members of a lay consulting firm may not represent licensees and licensee applicants in hearings before the board. Thus, the board proposes to amend the regulation to specify that only interested parties or their legal counsel can exercise the right of cross-examination.

Offers in Compromise: The current regulation states that "Offers in compromise may be submitted anytime following notice of a disciplinary proceeding and before the conclusion of an appeal hearing." The board proposes to amend that wording to "Offers in compromise may be submitted anytime following notice of a disciplinary proceeding and before the authority issues a final decision in an appeal." The current regulation also states that "Any such offer may not be accepted at the informal conference and no offer shall be submitted after the conclusion of the appeal hearing." The board proposes to eliminate that sentence.

Align with Current Procedures and Authority: The current regulation states that hearings may be conducted in person or by telephone. The board proposes to add that hearings may also be conducted virtually. According to the Virginia Alcoholic Beverage Control Authority (ABC) staff, hearings are already conducted virtually when all parties agree to that method. The board proposes to expand the list of items within the authority of administrative law judges by adding "Conduct mediation between interested parties" and "Require the designation of an interested person to act as a representative for proceedings involving groups of individuals present for the same purpose." Administrative law judges were given the authority for mediation by Chapter 698 of the 2017 Acts of Assembly.⁴ Another section of the regulation already allows the judges to require that an interested person be designated to act as a representative for proceedings involving groups of individuals present for the same purpose via text.⁵

Estimated Benefits and Costs. Since the approval of UPL Opinion 219, the administrative law judges have not permitted non-attorney consultants to conduct cross-examination.⁷ Thus, amending the regulation to specify that only interested parties or their legal counsel can exercise the right of cross-examination would not affect what occurs in practice, but it would improve clarity and reduce the possibility that readers of the regulation misunderstand what can occur in practice. Expanding the timeframe within which offers in compromise can be submitted and accepted is beneficial in that it increases the likelihood that a compromise suitable to all parties can be reached. The proposed amendments to reflect current procedures, authority, and terminology are beneficial in that the regulation would better reflect what occurs and can occur in practice.

Businesses and Other Entities Affected. The proposed amendments potentially affect ABC's approximate 20,892 licensees⁷ who manufacture, distribute, or sell and serve alcoholic beverages in the Commonwealth and other interested parties. The Code of Virginia requires DPB to assess whether an adverse impact may result from the proposed regulation.⁸ An adverse impact is indicated if there is any increase in net cost or reduction in net benefit for any entity, even if the benefits exceed the costs for all entities combined.⁹ None of the proposed amendments increase cost or reduce benefit. Thus, no adverse impact is indicated.

Small Businesses¹⁰ Affected.¹¹ The proposed amendments do not appear to adversely affect small businesses.

Localities¹² Affected.¹³ The proposed amendments neither disproportionally affect any particular localities, nor affect costs for local governments.

Projected Impact on Employment. The proposed amendments do not appear to affect total employment.

Effects on the Use and Value of Private Property. The proposed amendments do not substantively affect the use and value of private property. The proposed amendments do not affect real estate development costs.

_____________________________

¹Section 2.2-4007.04 of the Code of Virginia requires that such economic impact analyses determine the public benefits and costs of the proposed amendments. Further the analysis should include but not be limited to: (1) the projected number of businesses or other entities to whom the proposed regulatory action would apply, (2) the identity of any localities and types of businesses or other entities particularly affected, (3) the projected number of persons and employment positions to be affected, (4) the projected costs to affected businesses or entities to implement or comply with the regulation, and (5) the impact on the use and value of private property.

² Source: Virginia Alcoholic Beverage Control Authority.

³ See https://vsb.org/common/Uploaded files/UPLs/219.pdf.

⁴ See https://lis.virginia.gov/cgi-bin/legp604.exe?171+ful+CHAP0698.

⁵ Specifically, 3VAC5-10-90 C.

⁶ Source: ABC.

⁷ Data Source: ABC.

⁸ Pursuant to § 2.2-4007.04 D: In the event this economic impact analysis reveals that the proposed regulation would have an adverse economic impact on businesses or would impose a significant adverse economic impact on a locality, business, or entity particularly affected, the Department of Planning and Budget shall advise the Joint Commission on Administrative Rules, the House Committee on Appropriations, and the Senate Committee on Finance. Statute does not define "adverse impact," state whether only Virginia entities should be considered, nor indicate whether an adverse impact results from regulatory requirements mandated by legislation.

⁹ Statute does not define "adverse impact," state whether only Virginia entities should be considered, nor indicate whether an adverse impact results from regulatory requirements mandated by legislation. As a result, DPB has adopted a definition of adverse impact that assesses changes in net costs and benefits for each affected Virginia entity that directly results from discretionary changes to the regulation.

¹⁰ Pursuant to § 2.2-4007.04, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

¹¹ If the proposed regulatory action may have an adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include: (1) an identification and estimate of the number of small businesses subject to the proposed regulation, (2) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the proposed regulation, including the type of professional skills necessary for preparing required reports and other documents, (3) a statement of the probable effect of the proposed regulation on affected small businesses, and (4) a description of any less intrusive or less costly alternative methods of achieving the purpose of the proposed regulation. Additionally, pursuant to § 2.2-4007.1 of the Code of Virginia, if there is a finding that a proposed regulation may have an adverse impact on small business, the Joint Commission on Administrative Rules shall be notified.

¹² "Locality" can refer to either local governments or the locations in the Commonwealth where the activities relevant to the regulatory change are most likely to occur.

¹³ Section 2.2-4007.04 defines "particularly affected" as bearing disproportionate material impact.

Agency's Response to Economic Impact Analysis: The Virginia Alcoholic Beverage Control Authority concurs with the economic impact analysis prepared by the Department of Planning and Budget.

Summary:

The proposed amendments (i) specify that only an interested party or the interested party's legal counsel can exercise the right of cross-examination; (ii) extend the timeframe in which an offer in compromise may be submitted; (iii) align the regulation with current procedures, authority, and terminology; and (iv) eliminate obsolete text.

CHAPTER 10
PROCEDURAL RULES FOR THE CONDUCT OF HEARINGS BEFORE BEFORE THE BOARD VIRGINIA ALCOHOLIC BEVERAGE CONTROL AUTHORITY AND ITS HEARING OFFICERS ADMINISTRATIVE LAW JUDGES

Part I

Hearings Before Hearing Officers before Administrative Law Judges

3VAC5-10-10. Appearance.

A. Any interested party who would be aggrieved by a decision of the board Virginia Alcoholic Beverage Control Authority upon any application or in a disciplinary proceeding may appear and be heard in person, or by duly authorized representative, and produce under oath evidence relevant and material to the matters in issue. Upon due notice a hearing may be conducted by telephone as provided in Part IV (3VAC5-10-410 through 3VAC5-10-470) of this chapter. Hearings may also be conducted virtually.

B. The interested parties will be expected to appear or be represented at the place and on the date of hearing or on the dates to which the hearing may be continued.

C. If an interested party fails to appear at a hearing, the hearing officer administrative law judge may proceed in his the interested party's absence and render a decision.

3VAC5-10-20. Argument.

Oral or argument, written argument, or both, may be submitted to and limited by the hearing officer administrative law judge. Oral argument is to be included in the stenographic report of the hearing.

3VAC5-10-30. Attorneys; representation.

Any individual, partnership, association, or corporation who that is a licensee or applicant for any license or any interested party shall have the right to be represented by counsel at any board Virginia Alcoholic Beverage Control Authority hearing for which he the licensee or applicant has received notice. The licensee, applicant, or interested party shall not be required to be represented by counsel during such hearing. Any officer or director of a corporation may examine, cross-examine, and question witnesses, present evidence on behalf of the corporation, draw conclusions, and make arguments before the hearing officers administrative law judges.

3VAC5-10-40. Communications.

Communications regarding hearings before hearing officers administrative law judges upon licenses and applications for licenses should be addressed to the Chief Hearing Officer Clerk, Hearings and, Appeals, and Judicial Services Division.

3VAC5-10-50. Complaints.

The board Virginia Alcoholic Beverage Control Authority, in its discretion and for good cause shown, may arrange a hearing upon the complaint of any aggrieved party(s) party against the continuation of a license. The complaint shall be in writing directed to the Director, Chief of the Bureau of Law Enforcement Operations, setting forth the name and post office address of the person(s) person against whom the complaint is filed, together with a concise statement of all the facts necessary to an understanding of the grievance and a statement of the relief desired.

3VAC5-10-60. Continuances.

Motions to continue a hearing will be granted as in actions at law. Requests for continuances should be addressed to the Chief Hearing Officer Administrative Law Judge, Hearings and, Appeals, and Judicial Services Division, or the hearing officer administrative law judge who will preside over the hearing.

3VAC5-10-70. Decisions.

A. Initial decisions. The decision of the hearing officer administrative law judge shall be deemed the initial decision, shall be a part of the record, and shall include:

1. A statement of the hearing officer's administrative law judge's findings of fact and conclusions, as well as the reasons or bases therefor for the findings, upon all the material issues of fact, law, or discretion presented on the record; and

2. The appropriate rule, order, sanction, relief, or denial thereof as to each such issue.

B. Summary decisions. At the conclusion of a hearing, the hearing officer administrative law judge, in his the administrative law judge's discretion, may announce the initial decision to the interested parties.

C. Notice. At the conclusion of any hearing, the hearing officer administrative law judge shall advise interested parties that the initial decision will be reduced to writing and the notice of such decision, along with notice of the right to appeal to the board Virginia Alcoholic Beverage Control Authority (authority), will be mailed to them the interested party or their the interested party's representative and filed with the board authority in due course. (See 3VAC5-10-240 for Appeals).

D. Prompt filing. The initial decision shall be reduced to writing,; mailed to interested parties at the address on record with the board authority by certified mail, return receipt requested, and by regular mail,; and filed with the board authority as promptly as possible after the conclusion of the hearing or the expiration of the time allowed for the receipt of additional evidence.

E. Request for early or immediate decision. Where the initial decision is deemed to be acceptable, an interested party may file, either orally before the hearing officer administrative law judge or in writing, a waiver of his the interested party's right of appeal to the board authority and request early or immediate implementation of the initial decision. The board authority or hearing officer administrative law judge may grant the request for early or immediate implementation of the decision by causing issuance or surrender of the license and prompt entry of the appropriate order.

F. Timely review. The board authority shall review the initial decision and may render a proposed decision, which may adopt, modify, or reject the initial decision unless immediate implementation is ordered. In any event, the board authority shall issue notice of any proposed decision, along with notice of right to appeal, within the time provided for appeals as stated in 3VAC5-10-240.

3VAC5-10-80. Docket.

Cases will be placed upon the docket in the order in which they mature except that, for good cause shown or for reasons appearing to the board Virginia Alcoholic Beverage Control Authority or to the chief hearing officer chief administrative law judge, the order may be varied.

3VAC5-10-90. Evidence.

A. Generally. All relevant and material evidence shall be received, except that:

1. The rules relating to privileged communications and privileged topics shall be observed; and

2. Secondary evidence of the contents of a document shall be received only if the original is not readily available. In deciding whether a document is readily available, the hearing officer administrative law judge shall balance the importance of the evidence against the difficulty of obtaining it, and the more important the evidence, the more effort should be made to have the original document produced.

B. Cross-examination. Subject to the provisions of subsection A of this section, any interested party shall have the right to cross-examine adverse witnesses and any agent or subordinate of the board Virginia Alcoholic Beverage Control Authority (authority) whose report is in evidence and to submit rebuttal evidence, except that:

1. Where the interested party is represented by counsel, only counsel shall exercise the right of cross-examination;

2. Where there is more than one interested party, only counsel or other representatives of such parties the other interested parties shall exercise the right of cross-examination; and

3. Where there is more than one group of interested parties present for the same purpose, only counsel or other representative of such groups the interested party designated to represent each group shall exercise the right of cross-examination. If the hearing officer administrative law judge deems it necessary, in order to expedite the proceedings, a merger of such groups shall be arranged.

C. Cumulative testimony. The introduction of evidence which is cumulative, corroborative, or collateral evidence shall be avoided. The hearing officer administrative law judge may limit the testimony of any witness which that is judged to be cumulative, corroborative, or collateral; however, the interested party offering such testimony may make a short avowal of the testimony which that would be given and, if the witness asserts that such avowal is true, this avowal shall be made a part of the stenographic report.

D. Subpoenas, depositions, and request for admissions. Subpoenas, depositions de bene esse, and requests for admissions may be taken, directed, and issued in accordance with §§ § 2.2-4022 and subdivision 10 of § 4.1-103 10 and 9-6.14:13 of the Code of Virginia.

E. Stenographic report. All evidence, stipulations, and argument in the stenographic report which that are relevant to the matters in issue shall be deemed to have been introduced for the consideration of the board administrative law judge or the authority.

F. Stipulations. Insofar as possible, interested parties will be expected to stipulate as to any facts involved. Such stipulations shall be made a part of the stenographic report.

3VAC5-10-100. Hearings; penalty.

A. Hearings before the hearing officer administrative law judge shall be held, insofar as practicable, at the county seat of the county in which the establishment of the applicant or licensee is located, or, if the establishment is located within the corporate limits of any city, then in such city. However, if it is located in a county or city within a metropolitan area in which the board Virginia Alcoholic Beverage Control Authority maintains a hearing room in a district office, such hearings may be held in such hearing room. Notwithstanding the above this subsection, hearing officers administrative law judges may conduct hearings at locations convenient to the greatest numbers of persons in order to expedite the hearing process. Hearings may also be held via telephone or virtually.

B. At any hearing held by a hearing officer an administrative law judge, any person hindering the orderly conduct or decorum of the hearing shall be guilty of a violation of this regulation and shall be subject to the penalty prescribed by § 4.1-349 of the Code of Virginia.

3VAC5-10-110. Hearing officers Administrative law judges.

A. Hearing officers Administrative law judges are charged with the duty of conducting fair and impartial hearings and of maintaining order in a form and manner consistent with the dignity of the board Virginia Alcoholic Beverage Control Authority (authority).

B. Each hearing officer administrative law judge shall have authority, subject to the published rules of the board authority and within its powers, to:

1. Administer oaths and affirmations;

2. Issue subpoenas as authorized by law;

3. Rule upon offers of proof and receive relevant and material evidence;

4. Take or cause depositions and interrogatories to be taken, directed, and issued;

5. Examine witnesses and otherwise regulate the course of the hearing;

6. Hold conferences for the settlement or simplification of issues by consent of interested parties;

7. Dispose of procedural requests and similar matters;

8. Amend the issues or add new issues, provided the applicant or licensee expressly waives notice thereof. The waiver shall be made a part of the stenographic report of the hearing;

9. Submit initial decisions to the board authority and to other interested parties or their representatives; and

10. Take any other action authorized by the rules of the board authority;

11. Conduct mediation between interested parties; and

12. Require the designation of an interested person to act as a representative for proceedings involving groups of individuals present for the same purpose.

3VAC5-10-120. Interested parties.

As used in this chapter, "interested parties" shall mean the following persons:

1. The applicant;

2. The licensee;

3. Persons who would be aggrieved by a decision of the board Virginia Alcoholic Beverage Control Authority (authority); and

4. For purposes of appeal pursuant to 3VAC5-10-240, interested parties shall be only those persons who appeared at and asserted an interest in the hearing before a hearing officer an administrative law judge.

Where in this chapter reference is made to "licensee," the term likewise shall be applicable to a permittee (i.e. a person that holds or held a permit issued by the authority) or a designated manager to the extent that this chapter are is not inconsistent with the statutes and regulations relating to such persons.

3VAC5-10-130. Motions or requests.

Motions or requests for ruling made prior to the hearing before a hearing officer an administrative law judge shall be in writing,; addressed to the Chief Hearing Officer Administrative Law Judge, Hearings and, Appeals, and Judicial Services Division,; and shall state with reasonable certainty the ground therefor grounds for the motion or request for ruling. Argument upon such motions or requests will not be heard without special leave granted by the hearing officer administrative law judge who will preside over the hearing.

3VAC5-10-150. Consent settlement.

A. Generally. The board, Virginia Alcoholic Beverage Control Authority (authority) or its the authority's designee, may offer to resolve disciplinary cases when the nature of the proceeding and public interest permit. In appropriate cases, the board authority or its the authority's designee will extend an offer for a consent settlement to the licensee.

B. Who may accept. The licensee or his the licensee's attorney may accept an offer of consent settlement. If the licensee is a corporation, only an attorney or an officer, director, or majority stockholder of the corporation may accept an offer of consent settlement.

C. How to accept. The licensee shall return the properly executed consent order along with the payment in full of any monetary penalty no later than 21 calendar days from the date of mailing by the board authority. Failure to respond within the time period will result in a withdrawal of the offer by the agency and a formal hearing will be held on the date specified in the notice of hearing.

D. Effect of acceptance. Acceptance of the consent settlement offer shall constitute an admission of the alleged violation of the A.B.C. laws Alcoholic Beverage Control Act (§ 4.1-100 et seq. of the Code of Virginia) or authority regulations and will result in a waiver of the right to a formal hearing and the right to appeal or otherwise contest the charges. The offer of consent settlement is not negotiable; however, the licensee is not precluded from submitting an offer in compromise under 3VAC5-10-160.

E. Board Authority review. Prior to extending an offer of consent settlement to the licensee, the board authority or its the authority's designee may reject any proposed settlement which that is contrary to law or policy or which that, in its the authority's sole discretion, is not appropriate.

F. Record. Unaccepted offers of consent settlement will become a part of the record only after completion of the hearing process.

3VAC5-10-160. Offers in compromise and negotiations.

A. Following notice of a disciplinary proceeding, a licensee may be afforded opportunity for the submission of an offer in compromise in lieu of suspension or in addition thereto, or in lieu of revocation of his the license, where, in the discretion of the board Virginia Alcoholic Beverage Control Authority (authority), the nature of the proceeding and the public interest permit. Such offer should be addressed to the chief hearing officer administrative law judge. Acceptance of the offer in compromise shall constitute an admission of the alleged violation of the A.B.C. laws Alcoholic Beverage Control Act (§ 4.1-100 et seq. of the Code of Virginia) or authority regulations, and shall result in a waiver of the right to a formal hearing and the right to appeal or otherwise contest the charges. The reason for the acceptance of such an offer shall be made a part of the record of the proceeding. Unless good cause be is shown, continuances for purposes of considering an offer in compromise will not be granted. Offers in compromise may be submitted anytime following notice of a disciplinary proceeding and before the conclusion of an appeal hearing authority issues a final decision in an appeal. Any such offer may not be accepted at the informal conference and no offer shall be submitted after the conclusion of the appeal hearing. The board authority may waive any provision of this section for good cause shown.

B. Following notice of a disciplinary proceeding or objection from the authority to the issuance of a license, a licensee or applicant in conjunction with the authority may agree to a negotiated resolution in lieu of a suspension or in addition thereto, in lieu of revocation of the license, or in lieu of a denial of the application where, in the discretion of the authority, the nature of the proceeding and the public interest permit. Such negotiation shall be handled by the interested party and the authority. Acceptance of a negotiated resolution may constitute an admission of the alleged violation of the Alcoholic Beverage Control Act or authority regulations and shall result in a waiver of the right to a formal hearing and the right to appeal or otherwise contest the charges or objections. Unless good cause is shown, continuances for purposes of finalizing a negotiated resolution will not be granted. Negotiated resolutions may be submitted anytime following notice of a disciplinary proceeding or objections hearing and before the authority issues a final decision in an appeal.

3VAC5-10-170. Record.

A. The certified transcript of testimony, argument, and exhibits, together with all papers and requests filed in the proceeding, shall constitute the exclusive record of the initial decision.

B. Upon due application made to the chief hearing officer administrative law judge, copies of the record of a hearing shall be made available to parties entitled thereto at a fee established by the board Virginia Alcoholic Beverage Control Authority.

3VAC5-10-180. Rehearings.

A No rehearing before a hearing officer an administrative law judge shall not be held in any matter unless it be is affirmatively shown that relevant and material evidence, which ought to produce an opposite result on rehearing, is available,; is not merely cumulative, corroborative, or collateral,; and could not have been discovered before the original hearing by the use of ordinary diligence;, provided, that the board Virginia Alcoholic Beverage Control Authority, in its discretion, may cause a rehearing to be held before a hearing officer an administrative law judge in the absence of the foregoing conditions, as provided in 3VAC5-10-290.

3VAC5-10-190. Self-incrimination.

If any witness subpoenaed to appear on behalf of the board Virginia Alcoholic Beverage Control Authority (authority) shall testify in a hearing before a hearing officer an administrative law judge on complaints against a licensee as to any violation in which the witness, as a licensee or an applicant, has participated, such testimony shall not be used against him nor shall the board the witness. The authority shall take any no administrative action against him the witness for the offense to which he the witness testifies.

3VAC5-10-200. Subpoenas.

Upon request of any interested party, the chief hearing officer, administrative law judge or a hearing officer an administrative law judge is authorized to issue subpoenas requiring the attendance of witnesses and the production of records, memoranda, papers, and other documents at a hearing before a hearing officer an administrative law judge.

3VAC5-10-210. Witnesses.

A. Interested parties shall arrange to have their witnesses present at the time and place designated for the hearing.

B. Upon request of any party entitled to cross-examine witnesses, as set forth in 3VAC5-10-90 B, the hearing officer administrative law judge may separate the witnesses, including agents of the board Virginia Alcoholic Beverage Control Authority (authority).

C. A person subpoenaed as a witness to appear on behalf of the board authority shall be entitled to the same allowance for expenses as witnesses for the Commonwealth in criminal cases.

3VAC5-10-220. Pre-hearing conferences.

A. A pre-hearing conference will be conducted when an applicant for a license or a licensee who is the subject of a disciplinary proceeding does not waive its the right to such a conference. A waiver may be verbal or in writing. Unless the parties are advised otherwise, the agency Virginia Alcoholic Beverage Control Authority (authority) will automatically waive the pre-hearing conference when the applicant or licensee does so. When the applicant or licensee is offered a pre-hearing conference and fails to respond within 10 calendar days after the date of such offer, the pre-hearing conference will be deemed to be waived.

B. The pre-hearing conference will serve as a vehicle to acquaint the interested party, in a general way, with the nature of the charges or objections, and the evidence in support thereof and of the charges or objections, to hear any matters relevant thereto presented by the interested parties, and to explore whether (i) administrative proceedings or objections should be terminated or (ii) the case should proceed to formal hearing and stipulations can be reached. The conference will be open to the public, but participation will be limited to the interested parties, their the interested parties' attorneys-at-law or other qualified representatives, and designated board authority representatives. The pre-hearing conference may be held virtually or telephonically, by telephone and at least five days prior to the formal hearing. The conference may be held, when practical, at the county or city in which the establishment of the applicant or licensee is located. Reasonable notice of administrative charges or objections and the date, time, and place of the conference shall be given to the participants. The failure of the applicant or licensee to appear at a scheduled conference will be deemed a waiver of the pre-hearing conference. The pre-hearing conference will not be recorded. Sworn testimony will not be taken, nor will subpoenas be issued. Any initial decision will include a summary of the pre-hearing conference.

3VAC5-10-230. Agency Virginia Alcoholic Beverage Control Authority representation.

The Director, Chief of the Bureau of Law Enforcement Operations or his a designee may (i) represent the Bureau of Law Enforcement Operations before the board Virginia Alcoholic Beverage Control Authority (authority) or any hearing officer administrative law judge; (ii) petition the board authority for modification of the hearing officer's administrative law judge's decision; or (iii) request a ruling on other motions as may be necessary. This authority does not extend to complaints under the Franchise Acts.

Part II

Hearings Before before the Board Virginia Alcoholic Beverage Control Authority

3VAC5-10-240. Appeals.

A. An interested party may appeal to the board Virginia Alcoholic Beverage Control Authority (authority) an adverse initial decision, including the findings of fact and the conclusions, of a hearing officer an administrative law judge or a proposed decision, or any portion thereof of a proposed decision, of the board authority, provided a request therefor in writing identifying any alleged errors in the decision is received within 30 days after the date of mailing of the initial decision or the proposed decision, whichever is later.

B. At his option, an An interested party may submit written exceptions to the initial or proposed decision within the 30-day period and waive further hearing proceedings.

C. If an interested party fails to appear at a hearing, the board authority may proceed in his the interested party's absence and render a decision.

3VAC5-10-250. Attorneys; representation.

Any individual, partnership, association, or corporation who that is a licensee or applicant for any license or any interested party shall have the right to be represented by counsel at any board Virginia Alcoholic Beverage Control Authority (authority) hearing for which he the licensee, applicant, or interested party has received notice. The licensee, applicant, or interested party shall not be required to be represented by counsel during such hearing. Any officer or director of a corporation may examine, cross-examine, and question witnesses,; present evidence on behalf of the corporation,; draw conclusions; and make arguments before the board authority.

3VAC5-10-260. Communications.

Communications regarding appeal hearings upon licenses and applications for licenses should be addressed to the secretary to the board Chief Clerk of the Hearing, Appeals, and Judicial Services Division.

3VAC5-10-270. Continuances.

Continuances will be granted as in actions at law. Requests for continuances of appeal hearings should be addressed to the secretary to the board Chief Clerk of the Hearings, Appeals, and Judicial Services Division.

3VAC5-10-280. Decision of the board Virginia Alcoholic Beverage Control Authority.

The final decision of the board Virginia Alcoholic Beverage Control Authority, together with any written opinion, should be transmitted to each interested party or to his the interested party's representative.

3VAC5-10-300. Hearings.

Hearings before the board Virginia Alcoholic Beverage Control Authority or appeal panel in the absence of notice to the contrary will be held in the office of the board Virginia Alcoholic Beverage Control Authority, Virginia A.B.C. Building, 7450 Freight Way, Mechanicsville, Virginia 23116.

3VAC5-10-310. Motions or requests.

Motions or requests for rulings, made after a hearing before a hearing officer an administrative law judge and prior to an appeal hearing before the board, Virginia Alcoholic Beverage Control Authority (authority) shall be in writing, addressed to the secretary to the board, Chief Clerk of the Hearings, Appeals, and Judicial Services Division, and shall state with reasonable certainty the grounds therefor for the motion or request for ruling. Argument upon such motions or requests will not be heard without special leave granted by the board authority.

3VAC5-10-320. Notice of hearing.

Reasonable notice of the time and place of an appeal hearing shall be given to each interested party who appeared at the initial hearing or his the interested party's representative.

3VAC5-10-330. Record.

A. The record of the hearing before the hearing officer administrative law judge, including the initial decision, and the transcript of testimony, argument, and exhibits together with all papers and requests filed in the proceeding before the board, Virginia Alcoholic Beverage Control Authority (authority) shall constitute the exclusive record for the final decision of the board authority.

B. Upon due application made to the secretary to the board Chief Clerk of the Hearings, Appeals, and Judicial Services Division, copies of the record, including the decision of the board authority and any opinion setting forth the reasons for the decision, shall be made available to parties entitled thereto at a rate established by the board authority.

3VAC5-10-340. Rehearings and reconsideration. (Repealed.)

The board may, in its discretion for good cause shown, grant a rehearing or reconsideration on written petition of an interested party addressed to the Secretary to the Board and received within 30 days after the date of the final decision of the board. The petition shall contain a full and clear statement of the facts pertaining to the grievance, the grounds in support thereof, and a statement of the relief desired. The board may grant such at any time on its own initiative for good cause shown.

3VAC5-10-350. Scope of hearing.

A. Except as provided in 3VAC5-10-290, the appeal hearing shall be limited to the record made before the hearing officer administrative law judge.

B. The provisions of Part I (3VAC5-10-10 through 3VAC5-10-230) of this chapter shall be applicable to proceedings held under this part except to the extent such provisions are inconsistent herewith with this part.

3VAC5-10-360. Complaints.

Complaints shall be referred in writing to the secretary to the board Chief Clerk of the Hearings, Appeals, and Judicial Services Division.

3VAC5-10-370. Hearings.

Hearings will be conducted in accordance with the provisions of Part I (3VAC5-10-10 through 3VAC5-10-230) of this chapter (3VAC5-10-10 et seq.). Further, the board Virginia Alcoholic Beverage Control Authority (authority) and the hearing officers administrative law judges designated by it the authority may require an accounting to be submitted by each party in determining an award of costs and attorneys' attorney fees.

3VAC5-10-380. Appeals.

The decision of the hearing officer administrative law judge may be appealed to the board Virginia Alcoholic Beverage Control Authority as provided in 3VAC5-10-240. Appeals shall be conducted in accordance with the provisions of Part II (3VAC5-10-240 through 3VAC5-10-350) of this chapter (3VAC5-10-240 et seq.).

3VAC5-10-390. Hearings on notification of price increases.

Upon receipt from a winery, brewery, or wine or beer importer of a request for notice of a price increase less than 30 days in advance, a hearing will be scheduled before the board Virginia Alcoholic Beverage Control Authority (authority), not a hearing officer an administrative law judge, as soon as practicable with five days days' notice to all parties, which include, at a minimum, all the wholesalers selling the winery or brewery's product. There will be no continuances granted and the board authority must rule within 24 hours of the hearing.

3VAC5-10-400. Discovery, prehearing procedures and production at hearings; definitions.

The Rules of the Supreme Court of Virginia Parts One, One A, Two, Two A, Three, and Four shall apply in all proceedings under the Wine and Beer Franchise Acts, Chapters 4 (§ 4.1-400 et seq.) and 5 (§ 4.1-500 et seq.) of Title 4.1 of the Code of Virginia, including mediation and arbitration proceedings when necessary pursuant to §§ 4.1-409 and 4.1-508 of the Code of Virginia. Any references to a "court" contained in the rules shall be deemed to mean the hearing officer administrative law judge or officers of the board Virginia Alcoholic Beverage Control Authority conducting the proceeding.

No provision of this section shall affect the practice of taking evidence at a hearing, but such practice, including that of generally taking evidence ore tenus only at hearings before hearing officers administrative law judges, shall continue unaffected hereby.

3VAC5-10-410. Applicability.

The board Virginia Alcoholic Beverage Control Authority (authority) and its hearing officers administrative law judges may conduct hearings by telephone only when the applicant/licensee applicant or licensee expressly waives the in-person hearing. The board authority will determine whether or not certain hearings might practically be conducted by telephone. The provisions of Part I (3VAC5-10-10 et seq. through 3VAC5-10-230) of this chapter shall apply only to Part IV (3VAC5-10-410 et seq. through 3VAC5-10-470) of this chapter where applicable.

3VAC5-10-420. Appearance.

The interested parties will be expected to be available by telephone at the time set for the hearing and may produce, under oath, evidence relevant and material to the matters in issue. The board Virginia Alcoholic Beverage Control Authority will arrange for telephone conference calls at its expense.

3VAC5-10-430. Argument.

Oral or written argument may be submitted to and limited by the hearing officer administrative law judge. Oral argument is to be included in the stenographic report of the hearing. Written argument, if any, must be submitted to the hearing officer administrative law judge and other interested parties in advance of the hearing.

3VAC5-10-440. Documentary evidence.

Documentary evidence, which that an interested party desires to be considered by the hearing officer, administrative law judge must be submitted to the hearing officer administrative law judge and other interested parties in advance of the hearing.

3VAC5-10-450. Hearings.

A. Telephone hearings will usually originate from the central office of the board Virginia Alcoholic Beverage Control Authority in Richmond Mechanicsville, Virginia, but may originate from other locations. Interested parties An interested party may participate from the location of their the interested party's choice where a telephone is available. If an interested party is not available by telephone at the time set for the hearing, the hearing may be conducted in his the interested party's absence.

B. If at any time during a telephone hearing, the hearing officer administrative law judge determines that the issues are so complex that a fair and impartial hearing cannot be accomplished, the hearing officer administrative law judge shall adjourn the telephone hearing and reconvene an in-person hearing as soon as practicable.

3VAC5-10-490. Mediation.

A. Upon consent of all interested parties, the Virginia Alcoholic Beverage Control Authority (authority) may afford the parties an opportunity to resolve appropriate cases through mediation.

B. The mediations may be conducted by an administrative law judge of the authority.

C. If the mediation is unsuccessful, the matter may proceed to a formal hearing. The administrative law judge who conducted the mediation shall not preside over the formal hearing.