SC Administrative Law Court Decisions

I. Statement of the Case

The South Carolina Department of Revenue (DOR) seeks a revocation of a beer and wine permit and a minibottle license held by The End Zone LLC (End Zone). The End Zone opposes DOR's position and asserts a revocation is improper since no violation of the beer and wine or liquor laws occurred. The End Zone's disagreement with DOR's determination places jurisdiction in the Administrative Law Court (ALC). S.C. Code Ann. § 61-2-260 (Supp. 2003); S.C. Code Ann. Sec. 1-23-310 et. seq. (Rev. 1986 and Supp. 2003).

Based upon the evidence and the arguments presented by the parties, The End Zone's beer and wine permit and its minibottle license are both suspended for 180 days.

II. Issues

1.Did the End Zone violate S.C. Code Ann. Section 61-4-580(4) (Supp. 2003) and, if so, does that violation warrant imposing a penalty on both the beer and wine permit and the minibottle license?

2.If a violation of S.C. Code Ann. Section 61-4-580(4) (Supp. 2003) is established so as to impose a penalty on both the beer and wine permit and the minibottle license, what penalty is proper?

III. Analysis

A. Violation

1. Findings of Fact

Based on the preponderance of the evidence, the following findings of fact are entered:

The End Zone is a sports bar located at 5140 A Ashley Phosphate Road, North Charleston, South Carolina where it utilizes a beer and wine permit and a minibottle license in a facility which houses over 8,000 square feet. On October 6, 2002, the End Zone allowed a popular rap artist to appear on its stage. The artist was accompanied by two female dancers. According to a video made during the early morning hours of October 6, 2002, the area immediately in front of the stage was crowded with patrons. Further, the video establishes that the two dancers accompanying the rap artist removed all of their clothing, exposing their genitalia to the patrons. Finally, the testimony establishes that the exposure of the female genitalia occurred while the rap show was in progress.

In addition, according to the testimony of an eye witness, someone from the stage asked for a volunteer from the audience to come onto the stage. The video tape shows a female being assisted to the stage. Upon reaching the stage, the two female dancers then fully undressed the volunteer so that the volunteer also exposed her genitals to the patrons. The two dancers assisted the volunteer by placing her in a reclining position on the stage while patrons crowded near the front of the stage. The two dancers then placed the neck of a beer bottle on and around the volunteer’s exposed genitals.

During the time the fully unclothed volunteer and the fully unclothed dancers were on the stage, at least three employees of the End Zone observed the activities. One employee, the sound man for the night, videoed the activities. At least two additional employees were on the stage as security guards, and they observed the volunteer and the two dancers in their fully unclothed state. None of the employees stopped the activities on the stage.

While the state of complete undress continued on the stage, at some location beyond the stage but within the facility, a "fight" occurred. Since the interior of the facility was dimly lit, an unnamed individual turned on the interior lights to more fully illuminate the area in an effort to end the fight. As a result, the facility was emptied, and the evening's performance ended.

2. Conclusions of Law

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

a. Beer and Wine Permit

The applicable beer and wine statute is as follows:

No holder of a permit authorizing the sale of beer or wine or a servant, agent, or employee of the permittee may knowingly commit any of the following acts upon the licensed premises covered by the holder's permit:

(4) permit lewd, immoral, or improper entertainment, conduct, or practices. This includes, but is not limited to, entertainment, conduct, or practices where a person is in a state of undress so as to expose the human male or female genitals, pubic area, or buttocks cavity with less than a full opaque covering.

S.C. Code Ann. Section 61-4-580(4) (Supp. 2003)

To prevail, DOR must establish that 1) "lewd, immoral, or improper entertainment, conduct, or practices," occurred on the premises of the End Zone, 2) that "a servant, agent, or employee" of the holder of the permit permitted the prohibited activity, and 3) that permitting the prohibited activity was done "knowingly." Under the facts of this case, each element is satisfied.

– Prohibited Activity –

"[L]ewd, immoral, or improper entertainment, conduct, or practices" is statutorily defined as including "entertainment, conduct, or practices where a person is in a state of undress so as to expose the human male or female genitals, . . . with less than a full opaque covering." S.C. Code Ann. § 61-4-580(4) (Supp. 2003). In the instant case, the entertainment on October 6, 2002 included two totally unclothed dancers on stage with those dancers participating as a part of the show. Their performances exposed their female genitalia to a significant number of patrons crowded around the stage. Thus, lewd, immoral, or improper entertainment, conduct, or practices occurred at the licensed premises on October 6, 2002.

– Persons Permitting the Prohibited Activity –

The prohibition is that "a servant, agent, or employee of the permittee" may not "permit lewd, immoral, or improper entertainment, conduct, or practices." (Emphasis added). Here, on October 6, 2002, several individuals were acting on behalf of the End Zone as "a servant, agent, or employee of the permittee" and those individuals permitted the prohibited activities.

The individuals acting on behalf of the End Zone on October 6, 2002 consisted of one individual who was compensated by the End Zone for operating the sound system for the rap show. In the facts of this case, that individual's duties required him to be on the stage since he needed to make an adjustment to the sound system. In addition, his duties authorized him to be on and around the stage so he could video tape the performances for later showing at the facility. In addition to the sound system individual, at least two other individuals were compensated by the End Zone as security guards. The security guards had the duty of maintaining crowd control for the End Zone and especially so on and around the stage. Therefore, several individuals on October 6, 2002 were acting either as "a servant, agent, or employee of the permittee."

Under the facts of this case, those individuals, while acting on behalf of the End Zone on October 6, 2002, permitted the prohibited activity. The meaning of "permit" must be taken in its common and ordinary sense. Santee Cooper Resort v. South Carolina Pub. Serv. Comm'n., 298 S.C. 179, 379 S.E.2d 119 (1989). The common meaning is "to make possible." Merriam-Webster Online, http://www.m-w.com/cgi-bin/dictionary, May 5, 2004. To the same effect see Black's Law Dictionary (7th ed. 1999) ("[t]o give opportunity for" or "[t]o allow or admit of.").

Here, several individuals acting on behalf of the End Zone “made possible” the prohibited activity since they were fully aware of what was taking place but took no steps to stop the actions of the performers. During the time period in which the prohibited activity occurred, the sound man for the night videoed the performances of the fully unclothed females. During the videoing, the sound man was on the stage and yet took no actions to stop the performance. Likewise, security guards were on the stage and in a position to view the fully unclothed females. Indeed, at least one guard is plainly visible in the video. He is shown observing the prohibited activity as it took place. He also took no steps to stop the performance. Accordingly, several individuals acting either as "a servant, agent, or employee of the permittee" permitted the prohibited activity.

– Knowingly –

Permitting the prohibited activity must be done “knowingly.” “Knowingly” means “[h]aving or showing awareness or understanding; well-informed” and “[d]eliberate; conscious.” Black's Law Dictionary (7th ed. 1999). It is beyond all doubt that the individuals acting on behalf of the permit holder knowingly permitted the prohibited activity. The sound man deliberately and consciously chose to video the activity and did so in a manner that showed he had full knowledge of the prohibited activity. Indeed, his knowledge of the prohibited nature of the activities is undeniable given his use of the zoom feature of the video camera to focus on the genitalia of the female volunteer after she was fully unclothed by the already fully unclothed female dancers. Likewise, a security guard is visible in the video with that individual being on the stage and observing all of the prohibited activity as it took place. That individual showed a full awareness and understanding of what was happening. Thus, the prohibited activity was knowingly permitted and a violation of S.C. Code Ann. Section 61-4-580(4) (Supp. 2003) occurred.

b. Minibottle License

Given that the End Zone violated S.C. Code Ann. Section 61-4-580(4) (Supp. 2003), DOR also seeks a revocation of the End Zone’s minibottle license under S.C. Code Ann. § 61-2-140(E) (Supp. 2003):

[T]he department may suspend or revoke all other licenses or permits held by the person if the suspended or revoked premises is within close proximity.

A minibottle license is within the meaning of the phrase “all other licenses or permits held” since a license separate from a beer and wine permit governs minibottles. See S.C. Code Ann. § 61-6-1800 (Supp. 2003) (a minibottle license is required to “allow the possession or consumption of alcoholic liquors upon the premises.”). Therefore, the End Zone’s minibottle license is within the coverage of the statute.

Further, that license may be suspended or revoked if the End Zone’s beer and wine permit has been suspended or revoked and the minibottle premises “is within close proximity” to the beer and wine premises. Here, the beer and wine permit is suspended. Further, the beer and wine premises and the minibottle premises are the same. Thus, the premises being the same, the minibottle license is utilized “within close proximity” of the suspended beer and wine premises. Accordingly, a suspension or revocation of the minibottle license is proper.

B. Penalty

1. Findings of Fact

Based on the preponderance of the evidence, the following findings of fact are entered:

The principal owner and operator of the End Zone is Michael Thomas. Thomas is a former officer with the North Charleston Police Department, as well as a former officer with the Dorchester County Sheriff’s Office. On the date and time of the prohibited activity, he was present at the End Zone but was not near the stage area. Rather, he was outside the building at the entrance to the facility checking patrons as they entered the premises. He was unaware that the prohibited activity was occurring and did not learn of it until the activity was over.

Further, Thomas had previously allowed this same rap artist to appear at the End Zone on a prior occasion. During that prior occasion, no incidents of unclothed performers or unclothed audience participation occurred.

2. Conclusions of Law

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

The ALJ as the fact-finder has the responsibility of determining the penalty for violations of the ABC laws. Walker v. S.C. Alcoholic Beverage Control Comm'n, 305 S.C. 209, 407 S.E.2d 633 (1991). In making that determination, the fact-finder must recognize that the major purpose of a civil penalty is deterrence. Midlands Utility Inc. v. S.C. Dep't of Health & Envtl. Control, 313 S.C. 210, 212, 437 S.E.2d 120, 121 (Ct. App. 1993). However, all circumstances and mitigating factors must be considered to arrive at a penalty appropriate to the violation.

In this case, the violation is extreme. It involved not only two paid performers for the rap artist but also involved participation from patrons in the audience. All activities were observed by at least three individuals who were acting as servants, agents, or employees of the permittee. None of the individuals took actions to stop the forbidden activity. Indeed, instead of stopping the activity, they recorded it on video. Accordingly, the violation here warrants a significant sanction seeking to deter such activity from happening again at the instant location and to deter any other locations tempted to violate the provision here under review.

While the violation is extreme, some factors militate against a revocation. In this case, the principal owner and operator of the End Zone is Michael Thomas, a former officer with the North Charleston Police Department, as well as a former officer with the Dorchester County Sheriff’s Office. At the time of violation, he was present at the End Zone but outside the building checking patrons as they entered the facility. Further, while other agents of the End Zone knew what was taking place on stage, Thomas was personally unaware that the prohibited activity was occurring and did not learn of it until the activity was over.

In addition, this same rap artist had appeared at the End Zone on a prior occasion. During that prior occasion, no incidents of unclothed performers or unclothed audience participation occurred. Thus, Thomas had no prior warning that a second performance would involve fully unclothed dancers and fully unclothed participants from the audience.

From these facts, what is plain is that Thomas and the End Zone failed to have employees or agents on the premises who were capable and willing to prevent the prohibited conduct. No effective system of instructions and commands to subordinates was in place to prevent the prohibited activity from occurring in the first place and, secondly, to stop the activity once it had begun.

Accordingly, considering all of the factors associated with the violation, a suspension of 180 days is proper for both the beer and wine permit and the minibottle license.

IV. Order

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

Both the beer and wine permit and the minibottle license in use at the End Zone, LLC at 5140 A Ashley Phosphate Road, North Charleston, South Carolina is suspended for 180 days with that time period commencing at 12:01 a.m., May 24, 2004.

AND IT IS SO ORDERED.

____________________________

RAY N. STEVENS

Administrative Law Judge

Dated: May 11, 2004

Columbia, South Carolina