T. J. Management operates Gabby's Saloon and Eatery in Minneapolis, Minnesota. In 1986, the Minneapolis City Council issued Gabby's a class B on-sale liquor license and annually renewed the license for 21 years without condition. Under its unconditional liquor license, Gabby's may stay open for business until 2 a.m. and maintain a maximum occupancy of 689 patrons. On August 7, 2006, a city council member e-mailed a number of city personnel, stating that she had received complaints about misconduct in the neighborhood surrounding Gabby's, that Gabby's violated its capacity limits, that its owners were regularly out of town, and that the neighborhood had "not had a homicide, yet [sic] but it is a recipe for one." Among the recipients were the city's deputy director for licensing and consumer services and the commander of the second police precinct, where Gabby's is located. At the deputy director's request, a city of Minneapolis license inspector conducted an inspection of Gabby's on the evening of September 30, 2006. Between the hours of 11:45 p.m. and 2:45 a.m., the inspector observed people littering, urinating in public, and yelling, and he heard vehicles with amplified music in the vicinity of Gabby's. The license inspector made no mention in his report of overcrowding or lack of appropriate management personnel. The commander of the second police precinct met with Gabby's owner Jeff Ormond on August 8, 2006, to discuss the neighborhood disruption issues that the commander believed were caused by Gabby's customers. On August 30, 2006, the council member, the precinct commander, the deputy director, and other city personnel convened to discuss conditions that could be placed on Gabby's liquor license to reduce disruptive activity in the neighborhood. At the hearing before the ALJ, the deputy director acknowledged that the proposed license conditions would require the voluntary cooperation of the owners of Gabby's and testified that the group discussed the challenges in trying to revoke the license if Gabby's refused to voluntarily agree to the license conditions. The deputy director also testified that despite the council member's complaint about overcrowding, he had determined that overcrowding was not an issue at Gabby's. On March 23, 2007, the Minneapolis City Council's Public Safety & Regulatory Services Committee recommended that the following adverse actions be taken against Gabby's: (1) a financial penalty of $25,000 be levied against Gabby's; (2) the occupancy limit of Gabby's be reduced to 400 customers at any given time; (3) Gabby's submit a comprehensive management plan to the city; (4) a properly trained manager or owner be on site during business hours; (5) Gabby's discontinue the sale of alcohol at 11:00 p.m.; (6) Gabby's agree to close at midnight every day of the week; (7) Gabby's increase the cover charge to at least $15; and (8) Gabby's eliminate free-drink events, such as "Ladies Night," and replace them with reduced- price drink specials. On March 31, 2007, two license inspectors conducted an inspection in response to neighborhood residents' complaints about noise and disturbances at Gabby's. Around 2 a.m., the inspectors videotaped the neighborhood surrounding Gabby's and recorded customers urinating in public; customers playing loud music in their cars; customers smoking in groups of 4-5 people around parked cars; a vehicle accident; cars "burning rubber"; police vehicle lights flashing in residential windows; and customers fighting. Gabby's challenged the adverse actions and argued that the scope of the Minneapolis law was limited solely to the license premises, including parking areas, and did not apply to off -premises activity. May Gabby's license be revoked for activities by its customers that occur outside Gabby's premises? Why or why not?
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