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Alcohol at Automated Checkout

Alcohol at Automated Checkout

If you’re like me, you love using the automated check out machine when making purchases at a store. You’re probably not like me in that you don’t notice signs and other postings related to the law, like this one that I saw the other day while shopping at Walmart. I can’t say that I’ve ever bought alcohol at an automated check out machine before, but I apparently couldn’t, even if I wanted to.

The law in question here is California Business and Professions Code section 23394.7, which states: “No privileges under an off-sale license shall be exercised by the licensee at any customer-operated checkout stand located on the licensee’s physical premises.” Section 23394.7 originally went in to effect on January 1, 2012, but was challenged in a lawsuit so implementation was delayed until October 18, 2013.

For the lawyers in the audience, the case in question is California Grocers Association v. Department of Alcoholic Beverage Control (2013) 219 Cal. App. 4th 1065.

I merely present this as an example of law in everyday life. A while ago, I did a similar post involving sales tax on cold versus hot Subway sandwiches in California. I don’t specialize or focus on alcohol-related law (or sandwich law… although that sounds awesome). From what I have read from others, Business and Professions Code section 23394.7 was opposed from the outset by grocery stores with automated check out machines — in the form of the California Grocer’s Association (CGA)– who wanted those machines used to the fullest. Simultaneously, the law was supported from the outset by, among others, unions representing retail clerks who would benefit from increased job responsibility.

One of the arguments the CGA made was regarding the term “customer-operated checkout stand.” The CGA’s argument was that if the automated check out machine software froze the machine out whenever alcohol was purchased and could only be unfrozen by a clerk who checked the customer’s identification, then that would no longer qualify as a “customer-operated checkout stand” within the meaning of Section 23394.7. This argument ultimately failed with the court — in this case the 3rd District of the California Court of Appeal.

This illustrates two recurring ideas in California law: (1) Terminology, and (2) Plain Meaning Interpretation.

When trying to determine if something is legal or not, a lawyer will often examine what the relevant law — be it a case, a statute, regulation, etc. — precisely means. This often involves examining definitions of the terms used, looking at how commas are placed, or looking at how words are arranged in order to see what words are modified by a particular adjective and what words aren’t.

In this case, what the CGA argued was what the precise definition of “customer-operated check out stand” was as envisioned by the California Legislature when authoring Section 23394.7. If a check out stand that froze whenever alcohol was purchased and could only be unfrozen after an employee manually checked the customer’s identification did not meet the Legislature’s definition of “customer-operated check out stand,” then those freeze-able machines would not violate Section 23394.7 and, thus, be legal.

This leads in to the second point illustrated by alcohol purchase at automated check out machines.

Plain-Meaning Interpretation
This idea of arguing what the governing law in a situation precisely means is so common that California court cases often resolve the question with Plain-Meaning Interpretation. In other words, when deciding what certain language means, courts will often look at what the words in question mean in every day use or what the words are generally understood to mean. Interpretations that require unusual definitions or extrinsic evidence are generally avoided.

In the case of alcohol at automated checkout machines, CGA had argued that “customer-operated” refers to the function performed at the checkout stand (i.e. a transitory condition) and not the stand itself (i.e. a permanent condition). Under CGA’s logic, therefore, the function of the checkout stand was no longer “customer-operated” once the stand froze and an employee was required to unfreeze it.

In deciding this question, the 3rd District Court of Appeal relied on the word “at” that comes before the words “customer-operated checkout stand” in Section 23394.7. As the court said:

“The ‘at’ refers to the checkout stand itself, and “customer-operated” modifies the term “checkout stand. The phrase ‘customer-operated checkout stand’ thus describes the kind of checkout stand at which the sale of alcoholic beverages is prohibited.”

The 3rd District Court of Appeal also relied on the legislative history of Section 23394.7, which I’m not going to go in to in this post as it’s complex enough it deserves its own post.




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Andy Chen

Andy I. Chen is a lawyer licensed to practice law in California and New York. Andy maintains offices in Los Altos, California and Modesto, California. Under the New York Court of Appeals' 2015 decision in Schoenefeld v. State of New York, Andy does not accept cases from those in New York state. He does, however, know many lawyers in New York state and would be happy to make a referral.

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