Montgomery County officials have moved to suspend the liquor license of Studebaker's, a popular Rockville nightspot, forcing a legal confrontation this week in which Studebaker's will seek court permission to continue serving alcohol as the profitable holiday weekends approach.
Studebaker's obtained a temporary restraining order Saturday, allowing it to resume serving alcohol after a county official abruptly removed the nightclub's license from its wall about 4:30 p.m. Friday, according to one of Studebaker's attorneys, Barry Helfand.
Assistant County Attorney Anthony Ventre said yesterday the bar violated the terms of its license by failing to sell at least as much food as it did alcohol during a three-month period. He said he will ask the Circuit Court to vacate the restraining order and begin the two-month suspension.
Helfand said, meanwhile, he will ask the court to leave the license in place until it rules on an appeal of the suspension.
Studebaker's opened in July at the Congressional South Days Inn on Rockville Pike with the type of liquor license issued to bars that operate in hotels, according to William Meyers, another attorney for Studebaker's.
Meyers said the license requires Studebaker's to file monthly reports to county Board of License Commissioners, accounting for its food and alcohol sales. Ventre said the board can revoke or suspend a license if the holder violates the so-called 50-50 rule three months in a row, by making more money selling alcohol than it does selling food.
Meyers said Studebaker's considers nonalcoholic mixers in drinks to be food. If Studebaker's sells a rum and Coke for $3, he said, it adds $1.50 to the alcohol column and $1.50 to the food column.
The practice is common "in many places," said Lee K. Hall, a general partner of the Kentucky company that owns the Rockville Studebaker's franchise, one of 22 nationwide. "It's nothing we devised as a scam. Our registers are programmed that way."
Ventre called it "an unacceptable accounting procedure." He said the board, which summoned Studebaker's management to a Dec. 2 hearing, does not consider drink mixers to be food.
Helfand and Meyers criticized the board for moving against the bar moments after it opened for the evening on Friday. The county courthouse had closed. Meyers said he was unable to obtain an emergency injunction, and Studebaker's could sell no liquor, beer or wine that night.
Meyers said a board official told him at the Dec. 2 hearing that the board would not act without notifying Studebaker's, allowing enough time for lawyers to obtain an injunction before the next busy weekend night arrived.
Lyn Keller, an administrative aide to the board, referred all questions to the county attorney's office. Ventre said the board voted in private Wednesday to suspend the license, and gave its resolution to him for a legal review. He said he found the resolution in good order and sent it back to the board late Friday afternoon. Staff writer Beth Kaiman contributed to this report.