SC Administrative Law Court Decisions

This matter comes before me pursuant to S.C. Code Ann. § 61-2-260 (Supp. 2000) and S.C. Code Ann. §§ 1-23-310 et seq. (Rev. 1986 & Supp. 2000). The South Carolina Department of Revenue (Department) contends that Respondent Li'l Cricket Food Stores, Inc., d/b/a Li'l Cricket #315 (Respondent) permitted or knowingly allowed an underage person to purchase beer from Respondent's licensed establishment located at 1101 State Street, Cayce, South Carolina. Accordingly, the Department seeks to revoke Respondent's license for a violation of 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2000), as it contends that the alleged violation represents the fourth incident at this location since February 23, 2000.

After timely notice to the parties, a hearing was conducted on May 1, 2001, at the Administrative Law Judge Division, Columbia, South Carolina. Based upon testimony and the evidence presented, I find that the appropriate penalty in this case is a $1,000 fine and a 120-day suspension of Respondent's beer and wine permit.

Having carefully considered all testimony, exhibits, and arguments presented at the hearing of this matter, and taking into account the credibility and accuracy of the evidence, I make the following Findings of Fact by a preponderance of the evidence:

1. Respondent holds an off-premises beer and wine permit (#BG081818) for a convenience store located at 1101 State Street, Cayce, South Carolina.

2. On October 20, 2000, State Law Enforcement Division (SLED) Agent Connie Smith and an unidentified agent, with the assistance of Underage Cooperating Individual (UCI) David Jones, conducted a routine sting operation at the licensed premises.

3. Prior to the UCI entering the convenience store, Agent Smith searched him and determined that he had only a valid South Carolina Driver's License and $10 provided by SLED on his person. Shortly thereafter, the agents observed the UCI enter the convenience store.

4. The UCI entered the convenience store at approximately 6:50 p.m. and walked to the beer/wine cooler. He took a 24 oz. can of Bud Light from the cooler. The UCI proceeded to purchase the beer from Latoya Cunningham, who was employed by Respondent as a sales clerk on October 20, 2000. Ms. Cunningham requested the UCI's Driver's License, reviewed it, and then proceeded to complete the sale. The identification presented was the UCI's South Carolina Driver's License which indicated his birth date to be "8-18-1982." The license also conspicuously indicated the following in bold letters: "UNDER 21 until 08-18-2003." Nonetheless, Ms. Cunningham sold the beer to the UCI. The UCI exited the store and took the beer to the agents who were outside the premises. The UCI was eighteen years old at the time of the purchase.

5. The SLED agents and the UCI entered the location, approached Ms. Cunningham, and introduced themselves as SLED agents and a UCI.

6. On October 20, 2000, Respondent was issued a citation for violating 23 S.C. Code Ann. Regs. § 7-9(B) (Supp. 2000).

7. On February 2, 2000, the South Carolina Department of Revenue issued a notice to Respondent sustaining the violation and imposing a penalty of revocation as a result of this incident. Respondent has been cited for three violations of this nature within the last three years. Moreover, Respondent has three prior violations since February 23, 2000. Specifically, Respondent paid a $400 fine for a violation occurring on February 23, 2000, paid an $800 fine for a violation occurring on May 31, 2000, and consented to a 30-day suspension of its license for a violation occurring on June 12, 2000.

8. For the incident occurring on October 20, 2000, Ms. Cunningham was charged with a criminal violation of S.C. Code Ann. § 61-4-90 (Supp. 2000), for the transfer of beer to a person under the age of twenty-one. In a hearing before a magistrate, Ms. Cunningham pled guilty.

9. On the date of the hearing before this tribunal, the UCI's physical appearance accurately reflected his physical appearance on the night in question. Based on this tribunal's observation of the UCI at the hearing, the UCI appeared sufficiently youthful so as to merit an inquiry as to his correct age before allowing him to purchase alcohol.

10. Respondent does not deny that its employee made the sale of beer to the UCI. Moreover, Respondent immediately terminated Ms. Cunningham from its employ as a result of the sale in question. Further, Respondent takes full responsibility for the sale.

11. The Respondent has taken efforts to ensure that its employees are properly trained. In addition, Respondent initiated the purchase of new cash registers with built-in software capabilities ⁽¹⁾, which include scanning driver's licenses to automatically approve or deny a sale based on the prospective purchaser's age. This technology still requires the sales clerk to request the identification for scanning in the first instance. Further, the cash register can also be manually overridden by the clerk when the prospective purchaser is clearly substantially older than the legal age for purchasing alcohol. Nevertheless, its benefit is that it removes the potential for miscalculation of the age of a prospective purchaser by an otherwise conscientious sales clerk. Respondent has already invested $500,000 to purchase this new technology and intends to spend another $600,000 to complete its implementation of this technology in designated stores. The convenience store in question has recently been upgraded with this equipment.

III. CONCLUSIONS OF LAW

1. The Department is charged with the responsibility of administering and enforcing the laws and regulations governing alcoholic beverages, including beer and wine. S.C. Code Ann. § 61-2-20 (Supp. 2000). The Department alleges Respondent violated 23 S.C. Code Ann. Regs. § 7-9(B) (Supp. 2000) by permitting or knowingly allowing a minor to purchase beer from Respondent's licensed establishment.

2. Regulation 7-9(B) provides:

To permit or knowingly allow a person under twenty-one years of age to purchase or possess or consume beer and wine in or on a licensed establishment which holds a license or permit issued by the South Carolina Alcoholic Beverage Control Commission is prohibited and constitutes a violation against the license or permit. Such violation shall be sufficient cause to suspend or revoke the license or permit by the Alcoholic Beverage Control Commission.

23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2000) (emphasis added). To warrant a finding of a violation of Regulation 7-9(B), the Department must establish that either Respondent or Respondent's servant, agent or employee permitted or knowingly allowed a person under twenty-one years of age to purchase beer from Respondent's licensed establishment.

3. It is well established that, in interpreting a regulation, the sole function of this tribunal is to determine and give effect to the intention of the drafter, with reference to the meaning of the language used and the subject matter and purpose of the regulation. See State v. Ramsey, 311 S.C. 555, 430 S.E.2d 511 (1993). When the meaning of the language, the subject matter, and the purpose of the regulation are considered together, it becomes apparent that the drafters of 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2000) intended holders of beer and wine permits to be responsible for the actions and conduct of their agents or employees. See S.C. Code Ann. § 61-9-410 (Supp. 2000); 48 C.J.S. Intoxicating Liquors § 168 (1981). Otherwise, a permit holder that sells beer and wine through its sales clerks could always escape liability for such violations of the law. Thus, the sale of beer or wine to a minor is forbidden regardless of whether the sale is made by the permit holder or by an employee of the permit holder. 48 C.J.S. Intoxicating Liquors § 259 (1981). Such an interpretation is consonant with the public policy of preventing underage drinking. Ms. Cunningham was employed by Respondent at the time the sale was made; therefore, Respondent is liable for her actions.

4. In civil cases, generally, the burden of proof rests upon the party who asserts the affirmative of an issue. 29 Am. Jur. 2d. Evidence § 127 (2d ed. 1994); Alex Sanders et al., Trial Handbook for S.C. Lawyers § 9:3 Party With Burden, Civil Cases (2000). The Department is the party asserting the affirmative in this case; therefore, the Department must prove by a preponderance of the evidence that Respondent or Respondent's agent, servant, or employee permitted or knowingly allowed the UCI to purchase beer from the licensed establishment in violation of 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2000). ⁽²⁾

5. Respondent's employee, Ms. Cunningham, permitted or knowingly allowed the UCI to purchase beer from the licensed establishment. "To permit" means "[t]o consent to formally" or "[t]o give opportunity for" or "[t]o allow or admit of." Black's Law Dictionary 1160 (7th ed. 1999). This tribunal concludes that "to permit," according to its common meaning, clearly requires knowledge. A party manifests knowledge and consent to allowing a person under twenty-one years of age to purchase alcohol if, from the appearance of the person or otherwise, the party had sufficient information that would lead a prudent person to believe the person was under twenty-one, especially when a simple inquiry would have confirmed such fact. Feldman v. S.C. Tax Comm'n, 203 S.C. 49, 26 S.E.2d 22 (1943). The Feldman case delineated a two-part test for determining whether the required degree of knowledge is present:

1. Whether the Respondent knew that the UCI was under 21 years of age through independent knowledge, or

2. Had such information from the UCI's appearance or from other information

a. which would cause a prudent person to believe

the UCI was under 21 years of age, and

b. would cause the same prudent person to conduct an inquiry to ascertain the correct age.

6. In the case at hand, the Department offered testimony establishing that Ms. Cunningham had information that the UCI was under the age of twenty-one through the UCI's youthful appearance and Ms. Cunningham's inspection of the UCI's Driver's License. Even though Ms. Cunningham inquired, she, nonetheless, allowed the UCI to purchase the beer at the licensed premises of Respondent. ⁽³⁾ Ms. Cunningham had actual knowledge of the UCI's age once the UCI gave his Driver's License to her, which clearly indicated that the UCI was born August 18, 1982, and that he would be under the age of twenty-one until August 18, 2003. Accordingly, because Ms. Cunningham was an employee of Respondent at the time of the sale, Respondent is liable for a violation of 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2000).

7. The Department is authorized to revoke or suspend the beer and wine permit of any licensee for committing a violation of the laws pertaining to alcoholic beverages or any regulation promulgated by the Department. See S.C. Code Ann. §§ 61-4-270 & 61-4-590 (Supp. 2000). For example, the Department is authorized to revoke a licensee's permit for only a first violation. See S.C. Code Ann. §§ 61-4-270, 61-4-590 (Supp. 2000); 23 S.C. Code Ann. Regs. 7-9(B). Further, the Department may impose a monetary penalty as an alternative to revocation or suspension. S.C. Code Ann. § 61-4-250 (Supp. 2000).

8. Under S.C. Code Ann. § 61-4-250, a monetary penalty of $25 to $1,000 for any violation relating to retail beer and wine licenses may be imposed.

9. The Department's Revenue Procedure 95-7 sets forth penalty guidelines for violations of the Alcohol Beverage Control laws. For retail beer and wine licenses, Revenue Procedure 95-7 provides for a $400 fine for the first offense, an $800 fine for the second offense, a 45-day suspension of the license for the third offense, and revocation of the license for the fourth offense. This Revenue Procedure only provides guidance to the Department and does not constitute binding law on this Division. Cf. Home Health Serv. v. S.C. Tax Comm'n, 312 S.C. 324, 328, 440 S.E.2d 375, 378 (1994) and Ryder Truck Lines, Inc. v. U.S., 716 F.2d 1369 (11^th Cir. 1983).

10. Under the facts of this case, Respondent has undertaken notable measures to ensure that sales are not made to underage persons. Here, the facts warrant a suspension and fine in lieu of revocation of Respondent's permit, which is sought by the Department. It is a generally recognized principle of administrative law that the fact-finder has the authority to determine an appropriate administrative penalty, as established by the legislature, after the parties have had an opportunity for a hearing on the issues. See, e.g., Walker v. S.C. ABC Comm'n, 305 S.C. 209, 407 S.E.2d 633 (1991). Importantly, this tribunal notes that Respondent has taken remedial measures to ensure future compliance with the law, thereby warranting a less severe penalty than that sought to be imposed by the Department. For the reasons stated above, a fine of $1,000 against Respondent and a 120-day suspension of Respondent's license is appropriate.

11. Nevertheless, Respondent should be reminded that the purpose of the statutory prohibition against selling alcohol to underage individuals is to protect both the individuals and the public at large from the possible adverse consequences of such sales. The sale of alcohol to an underage individual is a serious offense and cannot be taken lightly. Further, a beer and wine permit is neither a contract nor a property right. It is a "mere [permit], issued or granted in the exercise of the police power of the state to do what otherwise would be unlawful to do; and to be enjoyed only so long as the restrictions and conditions governing [its] continuance are complied with." Feldman, 203 S.C. 49, 26 S.E.2d 22, 25 (1943). Accordingly, there are legal consequences for noncompliance with the alcoholic beverage laws. Consequently, Respondent should not expect such leniency for a subsequent violation at this location.

IV. ORDER

IT THEREFORE ORDERED that Petitioner's request that Respondent's license be revoked is denied. IT IS FURTHER ORDERED that Respondent shall remit $1,000 to the Petitioner within thirty (30) days of the date of this Order to satisfy the fine for violating 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2000). IT IS FURTHER ORDERED that the Department shall suspend Respondent's license for a period of 120 days.

AND IT IS SO ORDERED.

______________________________________

JOHN D. GEATHERS

Administrative Law Judge

May 18, 2001

Columbia, South Carolina

1. Eliminating the underage purchase of alcohol due to employee error is only one of the many benefits to the business that the built-in software offers. See Respondent's Exhibit 12.

2. The preponderance of the evidence is "[t]he greater weight of the evidence" or "superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other." Black's Law Dictionary 1201 (7th ed. 1999). "The preponderance of the evidence means such evidence as, when considered and compared with that opposed to it, has more convincing force and produces in the mind the belief that what is sought to be proved is more likely true than not true." Sanders, supra, § 9:5 Quantum of Evidence in Civil Cases (2000) (citing Frazier v. Frazier, 228 S.C. 149, 89 S.E.2d 225 (1955)).

3. "Knowingly" in this context means if the clerk "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 at 25 (citations omitted). See also Norris v. Greenville, S. & A. Ry. Co., 111 S.C. 322, 97 S.E. 848, 850 (1919) ("When a person has notice of such facts as are sufficient to put him upon inquiry, which, if pursued with due diligence, would lead to knowledge of other facts, he must be presumed to have knowledge of the undisclosed facts.").