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As Madam’s Organ owner Bill ­Duggan prepared to welcome 2004 in his three-story Adams Morgan blues club, one unwanted guest was there to kill the mood. On Dec. 31, 2003, an Alcoholic Beverage Regulation Administration (ABRA) investigator visited the establishment and told Duggan to start giving patrons the boot: According to ABRA, only 99 people were allowed inside the club. Though the establishment’s fire-marshal-approved capacity is 393, the certificate of occupancy on Madam’s Organ’s restaurant license lists only 99 seats—and in ABRA’s version of musical chairs, everyone inside the club needed to find a seat. Duggan says he was forced to eject two-thirds of his patrons on the biggest night of the year and to refund the $70 to $105 cover charges to the partyers ABRA eighty-sixed.

Those ejections won’t be happening anymore. On June 12, the D.C. Court of Appeals reversed the board’s order, ruling that the number of seats on a restaurant license can’t limit the total number of patrons allowed in the joint. Now, nearly 300 more can legally enter the establishment to shoot pool, croon at karaoke, or sling back shots—as long as they’re standing up, of course.

The ruling could well overturn the way that the city handles pub crowds. The ABC Board no longer has say over the number of patrons allowed in a licensed establishment, an authority that it has asserted baldly in the past. Counting duties now shift to the fire marshal and the Department of Consumer and Regulatory Affairs. With the yearslong battle settled in court—the case arose from a May 2006 ABC Board ruling against Madam’s Organ—Duggan’s claiming victory over the body-counters. “I, for one, feel really fuckin’ good,” Duggan says. “But it costs me a lot of money to feel this good. I’d rather go to Disney World.”

How much money? Duggan says he’s spent nearly $25,000 in legal fees fighting the issue. That doesn’t include his lost revenue from ABRA ejections: He estimates that ABRA squeezed Madam’s Organ on the occupancy issue dozens of times between 2000 and 2006 in an attempt to remove the hundredth patron from his establishment. “We weren’t cited for it,” says Duggan. “They’d just come in, count, and say, ‘You’ll need them out.’” To Duggan, the money is just the beginning. “It’s the humiliation,” he says. “They make you feel like you’re operating an illegal club. You go away feeling dirty. You feel dirty from the process.”

For a neighborhood like Adams Morgan, the ruling keeps restaurant owners safe to operate as nightclubs, packing in a significantly higher occupancy than their actual restaurant license indicates. The loophole—a bar can apply as a restaurant with a seating occupancy of 99, then draw in additional, uncounted patrons to drink, dance, or shoot pool—might point to why Duggan had been willing to spend so much money to keep his seat count low. According to D.C. Code, an establishment holding a restaurant license must make 45 percent of its revenue from food sales—or bring in $2,000 per seat per year in food. For many Adams Morgan joints, where restaurants-by-day make a majority of their revenue at night, keeping the seat count low and the capacity high means staying in business.

Earlier this year, before the court’s ruling, Madam’s Organ applied for and was granted a tavern license, easing the establishment’s food requirement a bit—Madam’s tavern license has only a $1,300 per seat per year food sale requirement and no percentage requirement. Still, if Madam’s Organ were operating as a tavern at its full capacity, holding 393 seats instead of at its current 99, it likely wouldn’t be able to meet its quotas to continue operating.

ANC Commissioner Bryan Weaver says he’s torn on the issue of the patron surge. “I was a little shocked that the court decision came down so dramatically. It seems like such a gaping loophole in the system,” he says. “I’m happy about the case because it will be really beneficial for a lot of neighborhood establishments, but the problem will come when people want to game the system,” he adds. “This is D.C. This is not a pretty town. People will take advantage of it with a warehouse somewhere with a capacity of 1,000 people and seating of 25. At that point, you’ve shot the idea of what a restaurant is in the foot.”

Despite the sly maneuvering, says Weaver, “Nobody wants to see Madam’s Organ go away. Outside of Bill Duggan, it’s been a benefit to the neighborhood.”

An additional victory for area establishments can be found in a footnote of the court decision. The Court of Appeals writes that though D.C. Code allows the ABC Board to “fine, revoke, or suspend a license” when an establishment is found in violation, “[t]his provision appears to give the Board the authority to suspend or fine, but not both.” The board’s 2006 order that Madam’s Organ’s license be suspended for five days, and that it pay $500—and countless orders like it—“exceeded its authority,” the decision says. Now, the board has lost not only the jurisdiction over an establishment’s occupancy—it also can’t serve up double punishment for violations.

What the courts can undo, however, the legislative branch can often redo. Sure enough, the D.C. Council has already passed legislation to address the occupancy loophole. “The Omnibus Alcoholic Beverage Amendment Act of 2008,” introduced by Ward 1 Councilmember Jim Graham, would force an establishment applying for a license to detail the “size and design of the establishment” by including “both the number of seats (occupants) and the number of patrons permitted to be standing, both inside and on any sidewalk café or summer garden.” The bill has been OK’d by Mayor Adrian Fenty and awaits congressional review.

Madam’s Organ, though, is safe. “Since we opened 10 years ago, our operation hasn’t changed one iota,” says Duggan. Now, he’s just enjoying the victory. “I don’t like to fight,” Duggan says. “I like to play.”

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