The First Department, over an extensive two-justice dissent, determined the evidence did not support the finding, by the New York State Liquor Authority, the licensee was aware of the presence of illegal drugs on the licensed premises. The decision is instructive about the “substantial evidence” standard of proof in administrative proceedings. The majority held the “substantial evidence” standard was not met:
The dissent points to the testimony of petitioner’s head of security that when security guards were on patrol they would sometimes have a staff member, who was not trained to pat people down, watch the door, as allowing an inference to be drawn that lax security measures led to the presence of drugs at the scene. This however, is purely speculative and not based on the record. The quantity of drugs recovered was very small. The uncontroverted police testimony was that the drugs could easily been have secreted on an individual. There was no evidence that the patrons entering the premises were not subjected to a patdown or that given the packaging, a patdown would have detected drugs. Substantial evidence, which has been characterized as a “minimal standard” or as comprising a “low threshold,” must consist of such relevant proof, within the whole record, “as a reasonable mind may accept as adequate to support a conclusion or ultimate fact” … , it does not, however, “rise from bare surmise, conjecture, speculation or rumor” … . Matter of Home Run KTV Inc. v New York State Liq. Auth., 2016 NY Slip Op 05834, 1st Dept 8-18-16
ADMINISTRATIVE LAW (FINDING THAT LIQUOR LICENSEE WAS AWARE OF THE PRESENCE OF DRUGS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE; RARE DISCUSSION OF THAT ADMINISTRATIVE PROCEEDING STANDARD OF PROOF)/EVIDENCE (ADMINISTRATIVE LAW, FINDING THAT LIQUOR LICENSEE WAS AWARE OF THE PRESENCE OF DRUGS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE; RARE DISCUSSION OF THAT ADMINISTRATIVE PROCEEDING STANDARD OF PROOF)/NYS LIQUOR AUTHORITY (ADMINISTRATIVE LAW, FINDING THAT LIQUOR LICENSEE WAS AWARE OF THE PRESENCE OF DRUGS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE; RARE DISCUSSION OF THAT ADMINISTRATIVE PROCEEDING STANDARD OF PROOF)/LIQUOR LICENSE (ADMINISTRATIVE LAW, FINDING THAT LIQUOR LICENSEE WAS AWARE OF THE PRESENCE OF DRUGS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE; RARE DISCUSSION OF THAT ADMINISTRATIVE PROCEEDING STANDARD OF PROOF)