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Bay Area restaurants institute penalties for brunch vomiters
(www.sfgate.com)
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Usually liquor licenses only get taken away due to constant problems with drunk driving, underage drinking, or rape. While vomiting indicates over serving, it is hard for bartenders to know if a patron is going to vomit or not and the typical action is to cut off alcohol to a patron that vomited.
However, I would agree that all you can drink is a recipe for over serving people.