SC Administrative Law Court Decisions

The South Carolina Department of Revenue (DOR) seeks a forty-five day suspension of a beer and wine permit held by The Pantry, Inc. (Pantry). The Pantry opposes DOR's position and asserts first that no violation occurred and second, even if a violation did occur, a forty-five day suspension is too severe. The Pantry's disagreement with DOR's determination places jurisdiction in the Administrative Law Judge Division (ALJD). S.C. Code Ann. § 61-2-260 (Supp. 1999); S.C. Code Ann. § 1-23-310 et. seq. (Rev. 1986 and Supp. 1999).

The hearing in this matter was held December 4, 2000 at the Edgar Brown Building, Columbia, South Carolina. Based upon the evidence and the argument presented, the Pantry's permit is suspended for forty-five days beginning January 8, 2001.

1. Did the Pantry violate the provisions of S.C. Code Ann. § 61-4-580 (Supp. 1999) and 23 S.C. Code Ann. Regs. 7-9 (B) (Supp. 1999) by selling to an underage individual ?

2. If the Pantry did commit such a violation, what is the proper penalty?

1. Findings of Fact

Based on a preponderance of the evidence, the following facts are found:

The Pantry's off-premises beer and wine permit is used at a business located at Hwy. 21 and Hwy. 601 in Lugoff, South Carolina. The location was investigated on March 27, 2000 by the Kershaw County Sheriff's Department by the use of an undercover cooperating individual (UCI) who was 19 at the time of the inspection. The UCI entered the Pantry's licensed premises and picked up a 24 ounce can of Budweiser beer and a pack of cigarettes. At the check out counter, the UCI placed the beer and cigarettes on the clerk's counter along with a twenty dollar bill.

Before completing the sale, the clerk relied upon the UCI's South Carolina driver's license. Prior to the sale, the clerk asked for and received the UCI's drivers license which the clerk both physically held and visually examined. The license showed a date of birth of November 21, 1980 and showed in distinctive lettering the phrase "UNDER 21 until 11-21-2001." The clerk used the driver's license to enter the UCI's birth date into the cash register by means of a key pad on the machine. The clerk then pressed a key on the machine signifying the purchaser wished to purchase cigarettes. Programming for the machine determined that the sale was proper. The clerk then pressed a key signifying the purchaser wished to also purchase beer. Again the machine determined the sale was proper.

Some machines used by the Pantry have had programming errors. Several upgrades in software have been made and some machines have been returned to the vendor for correction. While the machine appeared to be working properly on the afternoon in question, no dispute exists that the machine did not give a message prohibiting the sale of beer to the nineteen year old purchaser.

After keying the cash register information in and after receiving no prohibition message, the clerk returned the license to the UCI, took the twenty dollar bill, gave change from the twenty to the UCI, and presented the cigarettes and beer to the purchaser. The UCI left the premises with the purchased items and turned them over to officers of the Kershaw County Sheriff's Department who were waiting outside. The officers then entered the premises and issued a criminal violation for violating S.C. Code Ann. § 61-4-90 due to transferring beer to an underage individual. On May 8, 2000, the clerk entered a guilty plea to the criminal charge.

2. Conclusions of Law

Based on the foregoing Findings of Fact, I conclude the following as a matter of law:

The matter before me is a civil violation addressing the prohibition placed on a permit holder from knowingly selling beer to a person under twenty-one years of age. S.C. Code Ann. § 61-4-580; 23 S.C. Code Regs. 7-9(B). One violating these provisions creates a ground for the suspension of the holder's permit. Id. Here, no dispute exists on the age of the purchaser, i.e., nineteen. Rather, the issue is whether the sale was made knowingly.

"Knowingly" for purposes of § 61-4-580 is defined as follows:

Within the meaning of the term, "knowingly", as used in the statute, if the clerk knew that the [purchaser] was a minor or had such information, from his appearance or otherwise, as would lead a prudent man to believe that he was a minor, and if followed by inquiry must bring knowledge of that fact home to him, then the sale was made knowingly. Feldman v. S.C. Tax Comm'n, 203 S.C. 49, 26 S.E.2d 22 (1943).

The view of a prudent man is one that is "[p]articularly wise, judicious, careful, ..." Black's Law Dictionary 1226 (6th ed. 1990). However, even though Feldman uses the words "prudent man," dicta exists that implies the measuring language is a lower standard determined by the less restrictive "reasonable person." Daley v. Ward, 303 S.C. 81, 399 S.E.2d 13 (Ct. App. 1990). Thus, when adhering to the standard most favorable to the Pantry, in deciding if a sale has been made knowingly, the facts and circumstances surrounding the sale must be viewed from the perspective of a reasonable man.

The reasonable man standard requires the party to exercise that judgment required under all of the known circumstances surrounding the event with such judgment commiserate with the danger known or reasonably apprehended. Perry v. Carolina Theater, 180 S.C. 130, 185 S.E. 184 (1936). A danger that one would reasonably apprehend in circumstances involving a potential sale to a minor is that both the under-aged party and the public are likely to be harmed by sales of beer to individuals under twenty-one. See Norton v. Opening Break of Aiken, Inc. 313 S.C. 508, 443 S.E.2d 406 (Ct. App. 1994), aff'd on appeal 319 S.C. 469, 462 S.E.2d. 861; Whitlaw v. Kroger, 306 S.C. 51, 410 S.E.2d 251 (S.C. 1991). Accordingly, even the reasonable man standard requires that the seller comprehend the dangers associated with underage drinking before reaching a belief on the age of the purchaser.

Based on the objective information available on the afternoon of the sale, a reasonable person would have reached a belief that the UCI was under twenty-one. The clerk had before him a driver's license presenting the picture of a youthful individual whose appearance would have placed a reasonable person on notice that the license holder was not yet twenty-one. In addition, the UCI on the afternoon of the sale had a youthful appearance consistent with the picture on the driver's license. Further, no evidence establishes any physical alterations to the appearance of the UCI at the time of the sale so as to make the UCI appear older. Accordingly, under the rationale of Feldman, the characteristics of the UCI were such that a reasonable man would have believed the UCI was under twenty-one.

Thus, a belief that the purchaser was under twenty-one having been the reasonable conclusion, the second step of Feldman places upon the seller a duty to inquire. The purpose of the second step is to ensure that the belief (formed by objective information observed by a reasonable person) is tantamount to knowledge by imposing the most minimal duty of inquiry to confirm what the reasonable man's information has already established as a belief. Feldman teaches that where mere simple inquiry is all that is needed, such can be quickly accomplished before the sale is made and thus the belief can be converted to knowledge prior to consummating the sale.

Here, the belief that the UCI was under twenty-one was capable of confirmation by merely asking for age identification. That is in fact what happened in this case.

Before receiving the funds, the clerk asked for and received the UCI's drivers license. The clerk physically held and examined the license. The license showed a date of birth of November 21, 1980 and clearly showed -- in an express statement -- that the buyer was "UNDER 21 until 11-21- 2001." Clearly the clerk read the license since the clerk keyed the date of birth into the cash register. Despite the obvious information on the driver's license stating the buyer was under twenty-one, the clerk returned the license to the UCI, took the twenty dollar bill, gave change from the twenty to the UCI, and presented the beer to the UCI.

The clerk explains that the sale was made despite such information on the driver's license since the clerk chose to rely upon the cash register's conclusion that the buyer was at least twenty-one. Based on such reliance, the argument is that the sale was not made knowingly but instead was made by mistake.

In short, does relying upon a machine calculation that is contrary to a plain warning stated on a South Carolina driver's license present a basis for finding the sale is not "knowingly" made? I do not think so.

The issue of what information to rely upon at the inquiry stage is reached only after the first part of the Feldman test has been satisfied. In other words, a belief is already present that the buyer is not yet twenty-one. In light of that affirmative belief, before the seller can conclude the affirmative belief is incorrect, the seller must have reliable evidence supporting that conclusion.

Here, the clerk received a valid South Carolina driver's license plainly stating in bold red lettering that the holder of the license was not yet twenty-one. Given such a highly reliable statement, the fact that the cash register failed to prohibit the sale can not provide an adequate basis for satisfying the duty of inquiry. Rather, at a minimum, before disregarding the clear statement on the license, the cash register's conclusion should have led the seller to investigate the possibility of operator error or machine error. In addition, before disregarding the plain statement on the license, the seller had a continuing duty of inquiry as to the buyer's age.

Here, the clerk made no additional inquiry or investigation. A seller cannot avoid the "knowingly" standard by simply refusing to make adequate inquiry on the age of the purchaser and thereby claim lack of knowledge. 58 Am.Jur.2d Notice § 13 (1989) (a person has no right to shut his eyes to avoid information clearly before him). Rather than further inquiry, the clerk in this case disregarded the warning from the driver's license and choose to follow the machine calculation. I find that to do so without making any further inquiry is tantamount to making no meaningful inquiry. Such is especially true where the information that the person is not yet twenty-one is from a highly reliable source such as a valid driver's license. ⁽¹⁾ Accordingly, the Pantry made the sale with the knowledge that the purchaser was under twenty-one years of age.

1. Findings of Fact

The following Findings of Fact are entered:

The Pantry's policy is that its clerks must check for identification. Indeed, the Pantry has an extensive training and awareness program designed to prevent the sale of beer and wine to minors. In fact, the clerk on duty requested age identification. However, the clerk disregarded the information from a valid driver's license and instead chose to rely upon a machine.

Here, the evidence establishes that some machines used by the Pantry have had programming errors, upgrades in software have been made, and some machines have been returned to the vendor for correction. Thus, some history of improperly functioning machines exists.

Further, past actions of the Pantry's employees show repeated sales to underage persons. On March 5, 1998 and on June 20, 1998 sales were made to underage individuals. Those violations resulted in monetary fines. The current violation is the third in less than three years.

2. Conclusions of Law

Given that the sale in the instant case was made knowingly, the remaining decision is what penalty is proper. DOR seeks a forty-five day suspension.

In the final analysis, a decision of what monetary fine, or suspension, or revocation, or some combination, to impose is one the Administrative Law Judge, as the fact-finder, is empowered to determine from the totality of the facts presented. Walker v. South Carolina ABC Comm'n, 305 S.C. 209, 407 S.E.2d 633 (1991). Under the facts of this case, I conclude that a suspension of forty-five days is proper.

First, one must note that even a single sale of beer or wine to any person under twenty-one years of age can subject the permit holder to revocation. S.C. Code Ann. § 61-4-580 (Supp. 1999); 23 S.C. Code Ann. Regs. 7-9(B). Here, the instant violation is the third in less than three years. Such repetitive actions warrant a suspension.

Second, the Pantry argues the machine error is a mitigating circumstance which should forestall a suspension and warrant only a fine. Under the facts of this case, I cannot agree.

The fact of a machine error is not a sufficient reason to impose a fine rather than a suspension. Here, the machine error is not a significant mitigating factor since the machine reading should never have been a factor in the sale. In this case, the driver's license plainly notified the clerk the buyer was not yet twenty-one. Thus, no reliance upon the machine was needed; machines are no substitute for quality employees committed to complying with the law. In addition, a fine is not a proper penalty in this case. Prior violations have resulted in monetary fines and those fines have proven insufficient to prevent subsequent violations. Thus, a monetary fine for a third violation is not appropriate here. Accordingly, considering the case as a whole, a suspension of forty-five days is imposed.

Based upon the Findings of Fact and Conclusions of Law, it is hereby ordered:

The Pantry's permit is suspended for forty-five days beginning January 8, 2001.

AND IT IS SO ORDERED.

____________________________

RAY N. STEVENS

Administrative Law Judge

Dated: December 11, 2000

Columbia, South Carolina

1. The reliability of the information on the driver's license was all the more enhanced by the fact that the license bore the phrase "UNDER 21 until 11-21-2001." Obviously, an underage individual seeking to buy beer is not likely to present a fraudulent driver's license bearing such a phrase.