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25-P-304 Appeals Court
MONSIEUR TOUTON SELECTION OF MASSACHUSETTS, LTD. vs. ALCOHOLIC
BEVERAGES CONTROL COMMISSION.
No. 25-P-304.
Suffolk. January 12, 2026. - September 10, 2026.
Present: Walsh, Toone, & Tan, JJ.
Alcoholic Liquors, Alcoholic Beverages Control Commission,
Certificate of compliance, License, Revocation of license,
Supplier, Wholesaler. Statute, Construction.
Administrative Law, Agency's interpretation of statute.
Practice, Civil, Judgment on the pleadings. Words, "Shall
be cause for."
Civil action commenced in the Superior Court Department on May 19, 2023.
The case was heard by Rosemary Connolly, J., on motions for judgment on the pleadings.
Joshua M.D. Segal for the plaintiff.
David R. Marks, Assistant Attorney General, for the defendant.
TOONE, J. This case addresses whether, upon finding a
violation of G. L. c. 138, § 18B, the Alcoholic Beverages
Control Commission (commission) has discretion to impose a
2
sanction other than "the revocation of all certificates and
licenses held by the certificate holder and his immediate
family," G. L. c. 138, § 18B, third par. Since 1999, the
plaintiff, Monsieur Touton Selection of Massachusetts, Ltd.
(MTMA), has been licensed as a Massachusetts wholesaler of
alcoholic beverages pursuant to G. L. c. 138, § 18. MTMA is
wholly owned by Touton Holdings, Ltd. (Touton Holdings). Touton
Holdings also owns a New York corporation, Monsieur Touton
Selection, Ltd. (MTNY), which in 2018 was granted a certificate
of compliance as an out-of-State supplier of alcoholic beverages
into Massachusetts pursuant to G. L. c. 138, § 18B, first par.
Following an investigation, during which MTNY surrendered its
certificate, the commission found that the common ownership of
MTMA and MTNY violated the second paragraph of G. L. c. 138,
§ 18B, which provides that "[n]o person who holds a certificate
under this section shall hold or be granted a license" under
§ 18. The commission then determined that, under the third
paragraph of § 18B, it was "without discretion in this matter"
and required to revoke MTMA's wholesaler license. In an action
for judicial review pursuant to G. L. c. 30A, § 14, a judge of
the Superior Court upheld the commission's decision. Exercising
de novo review, we conclude that the statute grants the
commission authority to revoke certificates and licenses, but
does not mandate revocation in every instance. Accordingly, we
3
vacate the judgment entered in favor of the commission and
remand for further proceedings consistent with this opinion.
Background. 1. Statutory framework. Following the end of
Prohibition, the Legislature enacted the Liquor Control Act
(act), G. L. c. 138, as appearing in St. 1933, c. 376, § 2, and
established the commission. G. L. (Ter. Ed.) c. 6, § 43,
inserted by St. 1933, c. 120, § 2. See Craft Beer Guild, LLC v.
Alcoholic Beverages Control Comm'n, 481 Mass. 506, 513-514
(2019). The purpose of the act was to "generally govern[] the
distribution and sale of alcoholic beverages in the
Commonwealth," and it charged the commission with the "general
supervision of the conduct of the business of manufacturing,
importing, exporting, storing, transporting and selling
alcoholic beverages." Id. at 514, quoting G. L. c. 10, § 71.
By segregating licensees into three tiers --manufacturers/suppliers, wholesalers, and retailers -- and
giving the commission strict regulatory oversight, "the
Legislature sought to encourage temperance and combat the risk
that the multiple branches of liquor traffic would become
muddled due to collusion and corruption." Craft Beer Guild,
LLC, supra at 515. Under this three-tiered system, alcohol
products are initially sold by manufacturers or suppliers to
wholesalers, who then sell to retailers, who in turn sell to
4
consumers. Heublein, Inc. v. Capital Distrib. Co., 434 Mass.
698, 699 (2001), citing G. L. c. 138, §§ 12, 15, 18, 18B, 19.
In 1943, the Legislature recognized that "persons shipping
alcoholic beverages into [Massachusetts were] in no way subject
to State regulating authorities," House Report No. 1461, at 13
(1943), and enacted G. L. c. 138, § 18B, to bring out-of-State
suppliers into the three-tiered licensing scheme. See St. 1943,
c. 542, § 9; S&H Indep. Premium Brands E., LLC v. Alcoholic
Beverages Control Comm'n, 494 Mass. 464, 469 (2024).1 It did so
by assigning the commission "the authority to regulate the
Massachusetts activity of out-of-State manufacturers and
suppliers by issuance of an annual 'certificate of compliance'
and by requirement of a certificate holder's regular submission
of 'information concerning all shipments or sales of alcoholic
beverages' made by it to licensed wholesalers in the
Commonwealth." Anheuser-Busch, Inc. v. Alcoholic Beverages
Control Comm'n, 75 Mass. App. Ct. 203, 205-206 (2009), quoting
G. L. c. 138, § 18B, first par., inserted by St. 1943, c. 542,
§ 9. The Legislature required certificate holders to comply
with all pertinent provisions of G. L. c. 138 and "any rules or
The enactment of G. L. c. 138, § 18B, was among a host of
1
changes to the administration of the act proposed by a legislative commission. See St. 1943, c. 542; 1943 House Report No. 1461.
5
regulations made under authority contained therein which pertain
to a licensee of the same class, type or character, doing
business in this commonwealth under a license issued by the
commission," and authorized the commission to "suspend, cancel
or revoke any certificate issued hereunder for a violation of
the terms or conditions thereof." G. L. c. 138, § 18B, first
par., inserted by St. 1943, c. 542, § 9. See Anheuser-Busch,
Inc., supra at 206 n.5.
In 1971, the Legislature amended § 18B to advance the
policy of prohibiting "vertical integration of the manufacture
and distribution of alcoholic beverages in the Commonwealth."
Anheuser-Busch, Inc., 75 Mass. App. Ct. at 206, 208, discussing
St. 1971, c. 1022, § 1. As amended, the second paragraph of the
statute now provides that "[n]o person who holds a certificate
under this section shall hold or be granted a [wholesaler's]
license under section eighteen." G. L. c. 138, § 18B, second
par.2 The amendment prohibited not only vertical integration
through the dual licensing of a single person, but also its
achievement through family members by providing that "a person"
includes any member of the certificate holder's "immediate
General Laws c. 138, § 18, authorizes the commission to
2
"license wholesalers to purchase beverages from in-State or outof-State manufacturers or suppliers for resale to other wholesalers and to retailers." Anheuser-Busch, Inc., 75 Mass. App. Ct. at 206.
6
family" who "holds [a § 18B] certificate and [wholesaler]
license." G. L. c. 138, § 18B, second par. See Opinion of the
Justices to the House of Representatives, 368 Mass. 857, 859,
864-865 (1975) (analyzing related proposed legislation to amend
§ 18). Because "§ 18B certificate holders are treated like
manufacturers or suppliers in the three-tiered scheme," the
statute ensures that the same certificate holder or affiliated
licensee cannot control multiple tiers of alcohol distribution
as both (i) a manufacturer or supplier, and (ii) a wholesaler.
S&H Indep. Premium Brands E., LLC, 494 Mass. at 469. The 1971
amendment also added a third paragraph to § 18B, which provides
that "[v]iolation of the provisions of this section shall be
cause for the revocation of all certificates and licenses held
by the certificate holder and his immediate family." St. 1971,
c. 1022, § 1, codified as G. L. c. 138, § 18B, third par.3
2. Procedural history. Alleging that the joint ownership
of MTMA and MTNY by Touton Holdings violated G. L. c. 138,
§ 18B, the commission commenced its investigation in 2020. Soon
3 "Immediate family" is defined as a spouse, parent, child, brother, or sister. G. L. c. 138, § 18B, second par., inserted by St. 1971, c. 1022, § 1. The fourth paragraph of § 18B, also added by St. 1971, c. 1022, § 1, provides that, in the case of a corporate certificate holder or licensee, "any person or his immediate family who owns more than ten per cent of the stock of such corporation shall be deemed to be the certificate holder or licensee under this section." G. L. c. 138, § 18B, fourth par. See Anheuser-Busch, Inc., 75 Mass. App. Ct. at 206 & n.8.
7
after receiving notice of the investigation, MTNY surrendered
its § 18B certificate of compliance. MTMA then stipulated that
MTMA and MTNY were wholly owned by Touton Holdings in 2018 and
2019, during which time MTNY held a § 18B certificate and MTMA
held a § 18 wholesaler's license. After a hearing, the
commission issued a decision finding that MTMA had violated
§ 18B and revoking its § 18 wholesaler license. Citing our
decision in Griffin's Brant Rock Package Store, Inc. v.
Alcoholic Beverages Control Comm'n, 12 Mass. App. Ct. 768, 774
(1981) (Griffin's Brant Rock), the commission stated that, under
G. L. c. 138, § 18B, it was "without discretion in this matter
and must revoke [MTMA's] § 18 wholesaler license."
MTMA filed a complaint for judicial review pursuant to
G. L. c. 30A, § 14. It did not dispute that a violation of
§ 18B had occurred, but rather argued that the statute did not
mandate the revocation of its wholesaler's license as a
consequence. Both MTMA and the commission moved for judgment on
the pleadings. In a thoughtful decision, the judge denied
MTMA's motion and allowed the commission's. According to the
judge, the commission was "on solid legal ground" in
interpreting the third paragraph of § 18B as not granting the
commission "discretion as to the sanctions it must impose for a
violation." The judge concluded that the commission's
interpretation was reasonable and consistent with the "intent of
8
the statute" to "'counteract the tendency toward' the evil of
'tied houses,' . . . that is, the 'reciprocal relationship[s]
between saloon owners and manufacturers of alcoholic beverages
that existed before Prohibition,'" quoting Craft Beer Guild,
LLC, 481 Mass. at 514. The judge further stated that, "[e]ven
if [MTMA's] interpretation as to the relevant language is
reasonable, so too is the [commission's] interpretation, and as
such, the [commission's] interpretation, because it is
reasonable and consistent with the law, is entitled to
deference." MTMA appealed from the judgment. A second judge
stayed the revocation of MTMA's license pending resolution of
this appeal.
Discussion. 1. Standard of review. "We review the
allowance of a motion for judgment on the pleadings de novo."
Boston v. Conservation Comm'n of Quincy, 490 Mass. 342, 345
(2022), quoting Kraft Power Corp. v. Merrill, 464 Mass. 145, 147
(2013). We review the underlying agency decision "in accordance
with the standards set forth in G. L. c. 30A, § 14 (7)."
Commercial Wharf E. Condominium Ass'n v. Department of Envtl.
Protection, 99 Mass. App. Ct. 834, 840 (2021).
General Laws c. 30A, § 14 (7), sets forth the standards of
review for adjudicatory decisions by Massachusetts agencies.4 By
4 In both its substantive requirements and level of detail, this statute differs from the judicial review provision of the
9
its terms, the statute mandates a deferential standard of
judicial review for certain kinds of challenges to agency
action.5 Other challenges, however, present questions of law
that are subject to de novo review. Robinhood Fin. LLC v.
Secretary of the Commonwealth, 492 Mass. 696, 707 (2023), citing
Fournier v. Secretary of the Exec. Office of Health & Human
Servs., 488 Mass. 43, 50 (2021). Where an agency's decision
turns on the interpretation of a statute, it presents a question
of law that a court reviews de novo. See Arrowood Indem. Co. v.
Federal Administrative Procedure Act, 5 U.S.C. § 706, which the United States Supreme Court reinterpreted in Loper Bright Enters. v. Raimondo, 603 U.S. 369, 372, 411-413 (2024), overruling Chevron, U.S.A., Inc. v. National Resources Defense Council, Inc., 467 U.S. 837, 844 (1984). See M. E. Randazzo & J. R. Hitt, Massachusetts Administrative Law and Practice § 4.04[6] (2025).
5 Under subsection (g), for example, courts apply the arbitrary or capricious test in reviewing an agency's discretionary decisions -- those committed to the agency's judgment. G. L. c. 30A, § 14 (7) (g). See G. L. c. 30A, § 14 ("court shall give due weight . . . to the discretionary authority conferred upon" agency); Sierra Club v. Commissioner of the Dep't of Envtl. Mgt., 439 Mass. 738, 748-749 (2003). That is a deferential standard that "requires only that there be a rational basis for the decision" (citation omitted). Adams v. Superintendent, Dep't of State Police, 105 Mass. App. Ct. 611, 614 (2025). Under G. L. c. 30A, § 14 (7) (e), if a party challenges the factual basis for an agency's decision, the decision will be sustained if it is supported by substantial evidence, an inquiry that is limited to determining whether "there is such evidence as a reasonable mind might accept as adequate to support the agency's conclusion." Seagram Distillers Co. v. Alcoholic Beverages Control Comm'n, 401 Mass. 713, 721 (1988). See G. L. c. 30A, § 1 (6).
10
Workers' Compensation Trust Fund, 496 Mass. 222, 229 (2025).
Where the interpretation of the statute is erroneous, the
decision is "[b]ased upon an error of law" and may be set aside
or modified. G. L. c. 30A, § 14 (7) (c).
In determining whether there was error, G. L. c. 30A, § 14,
requires that courts "give due weight to the experience,
technical competence, and specialized knowledge of the agency."
Thus, even though "[t]he duty of statutory interpretation rests
ultimately with the courts" (citation omitted), Souza v.
Registrar of Motor Vehicles, 462 Mass. 227, 230 (2012), we give
deference to an agency's interpretation of a statute that is
"based in some way on [its] expertise or specialized knowledge,"
DeCosmo v. Blue Tarp Redev., LLC, 487 Mass. 690, 702 (2021).
See, e.g., NextEra Energy Resources, LLC v. Department of Pub.
Utils., 485 Mass. 595, 605 (2020); Springfield v. Department of
Telecomm. & Cable, 457 Mass. 562, 568 (2010). That is
particularly true "when the statute in question explicitly
grants broad rule-making authority to the agency, contains an
ambiguity or gap, or broadly sets out a legislative policy that
must be interpreted by the agency" (citations omitted). Souza,
supra at 229. See Middleborough v. Housing Appeals Comm., 449
Mass. 514, 523 (2007), citing Zoning Bd. of Appeals of Wellesley
v. Housing Appeals Comm., 385 Mass. 651, 654 (1982).
11
This case, however, concerns the meaning of a discrete
statutory term: whether the phrase "shall be cause for" in
G. L. c. 138, § 18B, third par., mandates, upon the finding of a
violation of that section, the revocation of all certificates
and licenses for all out-of-State certificate holders,
affiliated companies, and immediate family members or, instead,
authorizes the commission to exercise discretion in what
sanction it imposes. The phrase "shall be cause for" is used in
a variety of legal contexts,6 and it has no special meaning or
role to play in the three-tiered licensing scheme for alcoholic
beverages. Determining its meaning in § 18B does not require
the sort of technical competence or specialized knowledge held
by the commission. Nor does it involve the interpretation of a
legislative policy that is "only broadly set out in the
6 See, e.g., G. L. c. 21B, § 6, third par. (attempt to extend mining operations beyond boundaries in application "shall be cause for revocation of the coal mining license"); G. L. c. 140, § 122D (d) (failure to report change of address "shall be cause for revocation or suspension" of self-defense spray permit); G. L. c. 140, § 129B (e) (same for firearm identification card); G. L. c. 140, § 177A (8) (violation of section or G. L. c. 136 by person managing premises "shall be cause for the revocation of all licenses for automatic amusement devices kept or offered for operation on such premises"); G. L. c. 147, § 28, second par. (false statement by private detective regarding person in employ "shall be cause for revocation of his license"); G. L. c. 159B, § 10B (motor carrier's or interstate licensee's failure to keep full records of distinguishing plates "shall be cause for" revocation of such plates for temporarily leased motor vehicles).
12
governing statute" (citation omitted). Massachusetts Org. of
State Eng'rs & Scientists v. Labor Relations Comm'n, 389 Mass.
920, 924 (1983). Accordingly, we give only limited weight to
the commission's experience, technical competence, and
specialized knowledge in determining whether its decision was
based on an error of law. See Arrowood Indem. Co., 496 Mass. at
229-230; Van Munching Co. v. Alcoholic Beverages Control Comm'n,
41 Mass. App. Ct. 308, 310 (1996), citing G. L. c. 30A,
§ 14 (7).
2. Statutory interpretation. We interpret a statute
"according to the intent of the Legislature ascertained
from all its words construed by the ordinary and approved
usage of the language, considered in connection with the
cause of its enactment, the mischief or imperfection to be
remedied and the main object to be accomplished, to the end
that the purpose of its framers may be effectuated."
Arrowood Indem. Co., 496 Mass. at 230, quoting Vita v. New
England Baptist Hosp., 494 Mass. 824, 834 (2024). While we
begin with the statute's plain language, we do not read it in
isolation. S&H Indep. Premium Brands E., LLC, 494 Mass. at 467.
Rather, we focus on the "statutory scheme as a whole . . . so as
to produce an internal consistency within the statute."
Arrowood Indem. Co., supra, quoting Matter of the Estate of
Mason, 493 Mass. 148, 152 (2023).
Since the enactment of G. L. c. 138, the statutory scheme
has generally authorized, but not mandated, license revocation
13
for violations. The act initially described licenses as
"revocable at pleasure and without any assignment of reasons
therefor by the licensor." St. 1933, c. 376, § 2. The
Legislature soon imposed due process constraints, providing
that, after "hearing or opportunity therefor," the commission
"may . . . modify, suspend, revoke or cancel [the licensee's]
license . . . [w]henever, in the opinion of the commission, [the
licensee] fails to maintain compliance with the requirements of
this chapter, or any other reasonable requirements which it may
from time to time make" (emphasis added). St. 1934, c. 385,
§ 16. Since then, the commission has exercised "comprehensive
powers of supervision over licensees, including the power to
revoke, modify, or suspend licenses." Howard Johnson Co. v.
Alcoholic Beverages Control Comm'n, 24 Mass. App. Ct. 487, 491
(1987), citing G. L. c. 138, § 23. See G. L. c. 138, § 64; RK&E
Corp. v. Alcoholic Beverages Control Comm'n, 97 Mass. App. Ct.
337, 341-342 (2020) (discussing broad authority of commission to
revoke, suspend, and attach conditions to licenses following
suspension).
The Supreme Judicial Court's decision in Cleary v.
Cardullo's, Inc., 347 Mass. 337, 350 & n.13 (1964), leads us to
construe G. L. c. 138, § 18B, third par., as authorizing, but
not mandating, the revocation of all implicated certificates and
licenses in the event of a violation. The commission argues
14
that the explicitly discretionary language used in G. L. c. 138,
§ 23, fifth par., and other provisions show that the Legislature
"uses different words to grant . . . discretionary authority,"
whereas the plain meaning of "shall be cause for" in § 18B
precludes the exercise of discretion because it is "an
'axiomatic' rule of statutory construction that the use of the
word 'shall' in a statute imposes a mandatory obligation." See
Perez v. Department of State Police, 491 Mass. 474, 486 (2023),
quoting School Comm. of Greenfield v. Greenfield Educ. Ass'n,
385 Mass. 70, 81 (1982). In Cleary, however, the court ruled
that the phrase "shall be cause for" means that the particular
sanctions that follow are only authorized, not mandated.
Cleary, supra at 350. That case involved a section of G. L.
c. 138 (since superseded) that required a party seeking to
transfer a license to disclose "all persons who have a direct or
indirect beneficial interest in said license," and stated that
"[f]ailure to comply with . . . this paragraph shall be cause
for the suspension or revocation of such [a] license." Cleary,
supra at 350 n.13, quoting G. L. c. 138, § 23, as amended
through St. 1955, c. 652. The court determined that an
inaccurate disclosure did not preclude the grant of the transfer
because the provision "does not compel revocation or suspension
of such a license for noncompliance" but "merely authorizes such
action." Cleary, supra at 350.
15
We are not persuaded by the commission's argument that
Cleary involved "a procedural requirement, not a direct affront
to the regulatory scheme for alcohol as is the case here."
"[T]he language of the statute . . . is 'the principal source of
insight' into the intent of the Legislature" (citation omitted),
Commonwealth v. Rossetti, 489 Mass. 589, 593 (2022), and the
language of § 18B gives no hint that every violation must result
in the revocation of all certificates and licenses. To be sure,
§ 18B serves an important role in preventing vertical
integration of the manufacture and distribution of alcoholic
beverages in Massachusetts, Anheuser-Busch, Inc., 75 Mass. App.
Ct. at 208, and some violations of it may well be more of an
affront to the statutory scheme than the one at issue in Cleary.
But the commission cites nothing to show that the Legislature
intended that revocation must follow every violation --particularly where the statutory scheme does not mandate
revocation of licenses for other violations that implicate the
three-tiered system. See, e.g., G. L. c. 138, §§ 12, 15, 18,
19, 23.
In its decision, the commission relied on Griffin's Brant
Rock, 12 Mass. App. Ct. at 774, in concluding that § 18B
deprived it of discretionary authority and mandated revocation
of MTMA's wholesale license. That case, however, involved a
specific statutory directive. Seeking to revoke a party's
16
license for the violation of receiving credit from another
licensee, in violation of G. L. c. 138, § 25, first par, in that
case the commission argued that its authority under G. L.
c. 138, § 64, allowed it to revoke a license for "a violation of
any condition thereof." Griffin's Brant Rock, supra, quoting
G. L. c. 138, § 64, as appearing in St. 1934, c. 385, § 20. We
rejected that argument because the required sanctions for credit
violations are delineated in § 25 itself, which provides that,
if a licensee has violated or participated in a violation of
that section, "the commission shall suspend the license of the
licensee until full discharge of the indebtedness" and also
impose a fine. Griffin's Brant Rock, supra, quoting G. L.
c. 138, § 25, fifth par., as appearing in St. 1968, c. 574, § 1.
We concluded that "[t]he specific provisions of § 25 supersede
the general provisions which appear in § 64." Griffin's Brant
Rock, supra, citing Pereira v. New England LNG Co., 364 Mass.
109, 118 (1973).
No specific enforcement action is directed under G. L.
c. 138, § 18B. Rather, both its language and legislative
history reflect a decision by the Legislature in 1971 to expand
the commission's enforcement authority while preserving its
long-standing discretion. See Vita, 494 Mass. at 834. The
original bill stated that "the holding of any licenses in
violation of this provision shall act as a revocation of all
17
certificates and/or licenses held under [G. L. c. 138]"
(emphasis added). House Bill No. 745 (Jan. 1971). By replacing
"shall act as a revocation" with "shall be cause for the
revocation," the Legislature separated the determination of a
violation from the imposition of a sanction, leaving the choice
of sanctions to the commission's discretion. House Bill No.
5793 (June 14, 1971).
The same amendment substantially enlarged the commission's
enforcement authority. Although the commission previously had
authority under § 18B to "suspend, cancel or revoke any
certificate issued hereunder for a violation of the terms or
conditions thereof," G. L. c. 138, § 18B, first par., as amended
through St. 1970, c. 893, the new third paragraph expanded that
authority in three respects. First, it authorized revocation of
certificates and licenses as a sanction for any "[v]iolation,"
including the prohibition on vertical integration in the second
paragraph (also added in 1971). G. L. c. 138, § 18B, third
par., as amended by St. 1971, c. 1022, § 1. Second, it allowed
the commission to revoke "all certificates and licenses" held by
a certificate holder, including wholesaler's licenses under
§ 18. Id. Third, it allowed the commission to revoke
certificates and licenses held by the certificate holder's
"immediate family." Id.
18
Viewed in their totality, these changes enable the
commission not only to revoke all certificates and licenses for
those affiliated with a violation of § 18B, but also to order a
less severe sanction commensurate with the nature and scope of
the violation. For example, although many violations of § 18B
may be knowing, it is not implausible that a wholesaler licensed
under § 18 might be unaware that an affiliate or family member
is a § 18B certificate holder. In such circumstances, the
commission might determine that a suspension to allow for
divestiture, rather than revocation, is adequate to cure the
violation. Recognizing the commission's discretion to tailor
sanctions to violations reflects the understanding that license
revocation is a tool to advance the goals of industry regulation
and public safety, not punishment. See Luk v. Commonwealth, 421
Mass. 415, 427 (1995). We offer no opinion on how the
commission should exercise its discretion in this case on
remand.
Conclusion. For the foregoing reasons, the judgment is
vacated, and the matter is remanded to the Superior Court for
entry of a new judgment remanding the matter to the commission
for further proceedings consistent with this opinion.
So ordered.