Cape city, carGO 'deliver' legal dispute over liquor license issue

The City of Cape Girardeau has taken carGO transportation service to court over the issue of whether a liquor license is required to deliver alcohol.

James Stapleton, co-founder of carGO and a major investor along with local businessman Jeff Maurer, doesn�t believe carGO needs a liquor license, and filed a motion to dismiss Tuesday in municipal court.

Stapleton equated his service with delivery of alcohol by companies such as Federal Express, UPS and the U.S. Postal Service, which, he said, deliver shipments of alcohol �countless times a day in Cape Girardeau.�

But city manager Scott Meyer said Tuesday those companies do not have mobile apps allowing customers to order alcohol directly through them.

�I don�t think they advertise delivery of liquor,� he said.

On the other hand, carGO does advertise such a service, Meyer said.

City officials said carGO needed a liquor license, but began making deliveries this spring without a license.

Stapleton said he was cited for not having a liquor license after one of his independent drivers delivered two bottles of alcohol, ordered by police chief Wes Blair, to a local hotel in May.

Two weeks later, the city cited Stapleton for delivering alcohol without a liquor license. Stapleton said the citation was issued after he had applied to the city for a liquor license, even though he didn�t think he needed one, and only days before carGO received the city license.

His attorney, Shannon Peters of the Husch Blackwell law firm in St. Louis, has filed a motion to dismiss the case.

In city court Tuesday, Stapleton, with Peters by his side, pleaded not guilty to the offense.

Judge Teresa Bright-Pearson set a hearing on the motion for 3 p.m. July 19.

Speaking of municipal cases in general, the judge told those in court charged with city violations that if found guilty they could be subject to fines of up to $500 and/or 90 days in jail.

In the dismissal motion, Stapleton�s attorney wrote, �Cape Girardeau�s effort to fit a square peg in a round hole for the purpose of punishing carGO�s innovative business model should be rejected by this court.�

According to the motion, the city code �contains no provisions that would put a reasonable business such as carGO or its agent Mr. Stapleton on notice that the conduct at issue would be sanctionable. As a result, the citation at issue and its corresponding punishment violate Mr. Stapleton�s right to due process of law, and must be dismissed,�

Stapleton said in advance of Tuesday�s court appearance the city ordinance is �outdated� and doesn�t reflect today�s on-demand delivery services.

City ordinance requires a liquor license to brew, sell to customers as a retailer or distribute alcohol as a wholesaler, he said.

�Everyone of those categories requires that the entity is selling the product,� Stapleton said. But carGO doesn�t fall into any of those categories, he said. �We are not selling alcohol.�

But Meyer, the city manager, said people are purchasing alcohol via the carGO mobile app as opposed to purchasing alcohol directly from the retailer.

Stapleton said carGO delivers alcohol from Mauer�s Rhodes 101 convenience stores and also from Primo Vino. He said carGO has an agreement with those two liquor retailers.

By clicking on the carGO mobile app, customers can order alcohol and have it delivered. The customers are buying the alcohol from the retailers, he said. Delivery cost is factored in the purchase price, he said.

The app doesn�t allow an individual to go to the alcohol menu unless he or she indicates an age of 21 or older.

Stapleton said only carGO drivers who are 21 years of age or older, deliver alcohol. The company requires its drivers to ask to speak to the person who ordered the alcohol upon delivery, check that person�s driver�s license and take a photo of the license. The photo is then stored in carGO�s database and attached to the receipt of the purchase as a way to ensure compliance, he said.

The drivers are not company employees, but rather independent contractors who use their own personal vehicles to transport people and deliver food and alcohol, he said.

�We require drivers to be trained and certified to deliver alcohol,� he said. �They complete the same training as servers and retail sellers have to go through.�

The goal, said Stapleton, is to help ensure the alcohol is delivered only to customers of legal age.

But Meyer said a liquor license was needed �because we have to hold somebody responsible� for ensuring alcohol regulations are followed.

Stapleton said carGO continued to deliver alcohol while awaiting a license, believing the city code does not require it.

He said carGO announced in February or March it planned to start delivering alcohol, after having attorneys do exhaustive research on state laws and local ordinances. Police subsequently notified Stapleton his company needed to have a liquor license.

Stapleton said he had several discussions with agents of the Missouri Division of Alcohol and Tobacco Control and answered follow-up questions.

In early April, carGO began delivering alcohol, Stapleton said.

The delivery service, however, has transported alcohol only 212 times since then, he said. By comparison, carGO, on average, makes more than 300 food deliveries a day, according to Stapleton.

In late April, Stapleton sent a letter to city attorney Eric Cunningham detailing the alcohol-delivery operation.

Stapleton wrote carGO hired the Blackwell law firm to study the issue: �After a comprehensive review of Missouri statutes, local ordinances, our unique business model, and our cautious approach to alcohol delivery, we were advised that our approach exhibits many best practices in compliance.�

He said he ultimately applied for the license �to try to get along and work with the city.� The company paid a $750 annual fee, the amount charged beer distributors and other liquor wholesalers, he said.

Stapleton said the situation underscores �it is harder to do business in Cape Girardeau than it has to be.�

mbliss@semissourian.com

(573) 388-3641