South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
Greenville Fine Wine, Inc. d/b/a Total Wine vs. DOR

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioner:
Greenville Fine Wine, Inc. d/b/a Total Wine
1125 Woodruff Road, Store 300B, Greenville, SC

Respondent:
South Carolina Department of Revenue
 
DOCKET NUMBER:
04-ALJ-17-0241-CC

APPEARANCES:
Petitioner & Representatives:
Greenville Fine Wine, Inc. d/b/a Total Wine, 1125 Woodruff Road, Store 300B, Greenville, SC, Kenneth E. Allen, Esquire, James H. Harrison, Esquire

Respondent & Representative:
South Carolina Department of Revenue, Nicholas P. Sipe, Esquire
 

ORDERS:

FINAL ORDER AND DECISION

I. Introduction


Greenville Fine Wine, Inc. d/b/a Total Wine, 1125 Woodruff Road, Store 300B, Greenville, SC (Total Wine) seeks a retail liquor license. The South Carolina Department of Revenue (DOR) would have granted the license but for the protests filed by Thomas M. Smith and Sunil C. Fadia. Pursuant to S.C. Code Ann. § 61-6-185 (Supp. 2003) the filing of a protest requires a hearing with jurisdiction in the Administrative Law Court (ALC) under S.C. Code Ann. § 61-2-260 (Supp. 2003). The matter was heard in Greenville, South Carolina with Total Wine present and both protestants in attendance. DOR was not represented at the hearing since it had been previously excused on the ground that it had no additional evidence to offer other than the DOR case file. The DOR case file was received in evidence without objection.


II. Issue


In this matter, not all of the requirements for obtaining a retail liquor license are disputed. Rather, the only dispute is whether a sufficient number of licenses have already been issued in the community so as to warrant denying a retail liquor license to Total Wine.


III. Analysis


A. Findings of Fact


I find by a preponderance of the evidence the following facts:


Total Wine seeks to operate a retail liquor store at 1125 Woodruff Road, Suite 300B, Greenville South Carolina. However, retail liquor stores are already in the area. In fact, 9 stores are within an area covered by a radius of approximately 5 miles. As to these retail liquor stores, no evidence shows the existence of current adverse economic conditions.


The license sought will be utilized in a building yet to be constructed. However, when completed, the structure will be 25,000 square feet within a retail shopping plaza known as The Shops at Greenridge. The store will provide over 8,000 wines in addition to its retail liquor products. Within the plaza itself will be a wide range of retail outlets including Best Buy, Barnes and Noble, Lowes, and Dick’s Sporting Goods.


The overall area of the location does not present a clearly marked boundary that easily identifies or differentiates the region as a community. Rather, the area is a crossroads of commercial activity and transportation. For example, access to the shopping plaza is through Woodruff Road with feeder routes of I-385 and I-85. The per day vehicle count on Woodruff Road is approximately 31,000 with I-385 being 75,000 and I-85 being 85,000.


While the areas beyond the interstates are populated with numerous residential subdivisions, the immediate area around the proposed plaza is extensively commercial. For example, among others, the retail establishments of Kohl’s, Sam’s Club, and Staples are within the area. In addition, Greenville Mall and Haywood Mall are nearby with the Greenville Downtown Airport also being within the area. Overall, dynamic growth is occurring in both the residential and commercial sectors in and around the proposed location of Total Wine.


Total Wine seeks predominantly a wine clientele and intends to market to customers that are somewhat wine knowledgeable and who are typically more affluent and more educated. It will draw its clientele from an area beyond the immediate confines of the plaza and surrounding locations. Its marketing methods reach a regional audience encompassing both Greenville and Spartanburg.


B. Conclusions of Law


The issue here is whether Total Wine's request for a retail liquor license must be denied since a “sufficient number of licenses have already been issued in the . . . community.” S.C. Code Ann. § 61-6-910 (Supp. 2003). Unlike some states, South Carolina has not established a bright line test limiting the number of licenses in an area. Footnote Rather than specifics, S.C. Code Ann. § 61-6-910 (Supp. 2003) imposes a general requirement denying a retail liquor license when a “sufficient number of licenses” have already been issued for a community.


In applying such a general test, an identification of the community involved must be established and an identification of the relevant criteria for measuring when a sufficient number of retail liquor licenses has been granted must also be made. Because no published appellate decisions interpret § 61-6-910, the ALJ “must decide the case on the evidence presented, its interpretation of the law, and the application of the facts pertinent thereto.” Warren v. Board of Education, 41 Ohio Misc. 87, 322 N.E.2d 697 (Ohio Com.Pl. 1974) (dicta).


1. Community


In the instant case, the evidence does not clearly delineate the “community” involved. Rather, the area in which Total Wine will operate is without distinctive boundaries. For example, the evidence does not show a clearly marked boundary that easily identifies or differentiates the area. Rather, the site here under review is located near an interchange of two interstate highways and, on the whole, presents a location that is a crossroads of commercial and transportation activity. Indeed, Greenville Mall and Haywood Mall are nearby. Likewise, the Greenville Downtown Airport is in the area. Thus, rather than a specific community, the proposed license is in an area that is quite cosmopolitan and defies labeling as a precise community.


2. Criteria


However, even if a “community” could be identified, the evidence shows that granting Total Wine’s request will not create an excessive number of retail liquor licenses.


a. Related Statues


In determining the measure for “sufficient,” no single factor can be controlling since the General Assembly has not chosen a single-factor test for liquor licenses. Indeed, even in those instances where the General Assembly has provided a specific statutory listing of criteria for a liquor license, such criteria have not been considered exhaustive or even exclusive. On the contrary, even when a factor is omitted in one statute but included in another, the omitted factor can still be considered in granting or denying a license since a plain recognition exists that “there may be a number of variables inherent in any decision regarding the issuance of an alcoholic beverage license.” Schudel v. South Carolina Alcoholic Beverage Control Commission, 276 S.C. 138, 276 S.E.2d 308, 310 (1981).


Therefore, a reasonable starting point for identifying appropriate criteria is a review of similar statutes governing retail liquor licenses. Such a starting point is reasonable since, when interpreting a statute, sections of law which are part of the same general statutory law must be construed together. State v. Alls, 330 S.C. 528, 500 S.E.2d 781 (1998). Indeed, to find the meaning of a statute, courts should be mindful not to isolate the single statute under review but rather to construe the statute with regard for the whole system of law of which the statutes form a part. South Carolina Dept. of Transp. v. Faulkenberry, 337 S.C. 140, 522 S.E.2d 822 (Ct. App. 1999). One such related statute is S.C. Code Ann. § 61-6-170.


That section limits retail liquor licenses in a political subdivision if “the citizens who desire to purchase alcoholic liquors therein are more than adequately served because of (1) the number of existing retail stores, (2) the location of the stores within the subdivision, or (3) other reasons.” Thus, the sheer number of stores and the locations of those stores are relevant factors.


Other factors to consider can be inferred from the use of the word “sufficient” in § 61-6-910. “Sufficient” means “enough to meet the needs of a situation.” Merriam-Webster Collegiate Dictionary, www.m-w.com/cgi-bin/dictionary, September 23, 2004. Thus, consideration can be given to whether the existing retail liquor stores are adequate for the needs of the community. For example, in deciding whether the needs of a community have been met, other jurisdictions have considered “whether the clientele to be served [by the new license] is different from that served by the existing business.” Pennsylvania Liquor Control Board v. Spring Gulch, Inc., 87 Pa.Cmwlth. 395, 487 A.2d 472 (1985). Thus, a relevant factor is deciding whether the new license serves a clientele different from the existing licenses.


b. Applicable Criteria Applied


In reference to the number of existing retail stores and their locations, the protestants argue that adding new licenses when existing stores are already present will have an economic impact on the existing liquor stores in the area. While not controlling, I agree that economic impact is a relevant consideration in deciding a challenge based on an assertion that an excess number of retail liquor licenses exist. See Park Distributing Co. v. Delaware Liquor Com'n, 44 Del. 6, 54 A.2d 551(Del.Gen.Sess. 1947) (addressed concern that granting an additional liquor license would interject a license into an area where existing operators were in a state “of impending operation at a loss.”); Tobkes v. O'Connell, 272 A.D. 240, 70 N.Y.S.2d 494, 496 (1st Dep't 1947) (economics is a valid licensing factor since some licensing bodies have “found from past experience that licensees who attempt to operate with inadequate resources oftentimes succumb to the temptation of committing violations of the Alcoholic Beverage Control Law.”). Thus, the economic impact to the existing license holders in the area is a relevant consideration.


However, the decision of how much weight to give to the economic impact on existing retail stores must be made in light of the General Assembly's intent to provide for the protection and welfare of the people. Footnote Laws regulating liquor sales stem from an “exercise of the police power of the state to do what otherwise would be unlawful to do[.]” Feldman v. South Carolina Tax Commission, 203 S.C. 49, 26 S.E.2d 22 (1943). A law grounded in police powers is a law based on what the General Assembly "judges fit for the protection and welfare of its people . . . ." Merchants' & Planters' Bank v. Brigman, 106 S.C. 362, 91 S.E. 332 (1917). Thus, from an economic impact perspective, the most persuasive evidence is that which relates to how a debilitating loss of profits may contribute to violations of laws designed to protect the public welfare.


In reaching a conclusion in this case, it is important to note that the ALJ is a fact-finder. As the finder of fact, the ALJ must decide the case based on the evidence presented in the hearing and may not conduct its own independent investigation of the facts. E.g., People v. Hobley, 182 Ill.2d 404, 696 N.E.2d 313 (1998); see also Coleman v. C.I.R., T.C. Memo. 1963-19, 1963 WL 410 (Tax Ct. Jan 24, 1963) ("[W]hile we may sympathize with the petitioner we must decide the case on the evidence presented, which is wholly inadequate to support petitioner's claim here."). Based on the evidence presented here, the instant case looks to identifying the number of existing retail stores in the community, determining the location of the existing stores, assessing the economic impact the new license will have on existing stores, and deciding whether the clientele to be served by the new license is different from that already served by the existing license holders.


As to numbers, the evidence shows 9 retail liquor stores within an area covered by a radius of approximately 5 miles. While not a small number, a quantity of 9 in a five mile radius is not an excessive number for an area having the dynamic growth that is involved in this case. For example, the license will be utilized in a retail shopping plaza having an appeal to a regional area and will be within a building located on the grounds of a shopping plaza known as The Shops at Greenridge. The plaza will have a wide range of retail outlets including Best Buy, Barnes and Noble, Lowes, and Dick’s Sporting Goods. In addition, the area just beyond the plaza is an area with a high concentration of retail outlets such as Kohl’s, Sam’s Club, and Staples.


Considering location, here, the evidence shows that Total Wine draws its clientele from an area far in excess of the immediate confines of the plaza or surrounding locations. Rather, the marketing methods to be employed will be consistent with those employed in the company’s other stores in South Carolina. Such methods of permissible advertisements will address a regional area that will encompass virtually all of Greenville and Spartanburg. The ability to draw from such a large area is possible due to the store having approximately 25,000 square feet of space and providing over 8,000 wines. In addition, the store is readily accessible via I-385, I-85, and Woodruff Road with such routes having a per day vehicle count respectively of 75,000, 85,000, and 31,000.


And, certainly economic impact is relevant. However, the object of the law addressing an excessive number of retail liquor outlets in an area is not to protect profits of existing license holders. Rather, the object is to place significant scrutiny on applications that will add licenses in areas that have already begun approaching loss consequences. Such scrutiny is warranted since granting additional licenses may unwisely create a temptation for existing license holders to violate the law and thus place a danger to the public welfare. In the instant case, the evidence does not establish an economic impact to existing stores of such a degree that a danger to the public welfare is presented.


Here, the evidence does not establish that adverse economic conditions already exist in the retail liquor stores in the area. Further, the evidence shows that historically the opening of a Total Wine store does not cause existing retailers to leave the business. For example, store openings in Columbia and Charleston by Total Wine have not resulted in competitors closing their businesses in those cities.


Finally, a relevant factor is whether the clientele to be served by the new license will be different from that already being served by the existing license holders. Here, the evidence shows that Total Wine (as the name implies) seeks predominantly a wine clientele. Moreover, Total Wine intends to market to customers that are somewhat wine knowledgeable and who are typically more affluent and more educated. Thus, the new license seeks to serve a different clientele.


3. Conclusion


While many factors may be considered, the most significant factors for the instant case are identifying the number of existing retail stores in the community, determining the location of the existing stores, assessing the economic impact the new license will have on existing stores, and deciding whether the clientele to be served by the new license is different from that already served by the existing license holders. When considered as a whole, the evidence presented in this case weighs in favor of granting Total Wine's application.


IV. Order


The South Carolina Department of Revenue is directed to issue a retail liquor license to Greenville Fine Wine, Inc. d/b/a Total Wine, 1125 Woodruff Road, Store 300B, Greenville, South Carolina.



AND IT IS SO ORDERED

______________________

RAY N. STEVENS

Administrative Law Judge


Dated: September 27, 2004

Greenville, South Carolina


Brown Bldg.

 

 

 

 

 

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