This
matter comes before the Administrative Law Court (“ALC”) due to a violation of
23 S. C. Code Ann. Regs. 7-200.4 (Supp. 2006). South Carolina Law Enforcement
Division issued a citation to the Respondent, Sandy’s Lakeside Bar & Grill,
Inc. (Sandy’s) for “permitting the purchase of beer by a person under the age
of twenty-one.” The South Carolina Department of Revenue (Department) sought
revocation of Sandy’s permit to sell beer and wine for on-premises
consumption. Sandy’s appealed this decision on the grounds that the revocation
of the license was too strict of a punishment in light of the circumstances. A
hearing was held before this Court on August 23, 2007. After carefully
weighing all of the evidence, the Court finds that the Petitioner’s decision to
revoke the beer and wine license must be upheld.
FINDINGS
OF FACT
Having
observed the testimony of the witnesses and exhibits presented at the hearing
and closely passed upon their credibility, I make the following Findings of
Fact by a preponderance of evidence:
1. Sandy’s
Lakeside Bar & Grill, Inc. (“Sandy’s”) holds a permit issued by the South
Carolina Department of Revenue (“Department”) that allows it to sell beer and
wine for on premises consumption at the location 1011 Shirley Circle, Anderson,
South Carolina. The permit number is 32019241-PBW. Sandy’s held this permit
for this location on March 30th, 2006.
2. On
March 30, 2006, South Carolina Law Enforcement Division (“SLED”) agents, in
conjunction with an 18 year old underage confidential informant (UCI) entered
the location of the aforementioned address. The UCI ordered a beer from the
bartender on duty, Cynthia Platt. Ms. Platt requested identification from the
UCI. He presented his South Carolina Drivers License that showed his birth
date as “06-02-1987.” Ms. Platt subsequently sold the beer to the UCI.
3. Ms.
Platt was charged with transfer of beer to an individual under the age of 21.
Sandy’s was issued an administrative citation for knowingly permitting a person
under the age of 21 to purchase beer on the licensed premises, 23 S.C. Code
Ann. Regs. 200.4 (Supp. 2005).
4. Sandy’s
had three prior violations within a three year period at this specific
location; one violation was issued on March 9, 2004 for unlawful possession of
liquor on the premises; and the other two violations were issued on October 25,
2004 and January 11, 2006, respectively, for permitting games of chance on the
premises.
5.
Sandy’s admits that on March 30, 2006, it committed a violation of
Regulation 7-200.4 by permitting the UCI to purchase beer on the licensed
premises.
6.
The Department’s Regulatory Division issued Sandy’s an Initial Notice
of Intent to Revoke on April 18, 2006. The Department issued its Final Agency
Determination in this matter on August 17, 2006. Both the Initial Notice and
the Final Agency Determination were prepared and served in compliance with the
Revenue Procedures Act, S.C. Code Ann. §§ 12-60-10 et. seq. (Supp. 2005)
and Administrative Procedures Act, S.C. Code Ann. §§ 1-23-10, et. seq.
(Supp. 2005).
7. Sandy’s
submitted an untimely protest to the Department. On November 1, 2006, Judge
Ralph King Anderson, III, found “good cause” for such untimely protest and
remanded the matter to the Department for the issuance of a determination on
the merits of the violation, South Carolina Department of Revenue v. Sandy’s
Lakeside Bar & Grill, Inc., 06-ALJ-17-0731-CC.
8.
The Department executed a Final Agency Determination, which was mailed
to the Permitee on January 2, 2007. The Permitee timely requested a contested
case hearing before the ALC.
9. The
sole issue before the Court is whether the penalty of revocation is appropriate
for the Petitioner’s fourth violation of the statutes and regulations set forth
in S.C. Code Ann. § 61.
CONCLUSIONS
OF LAW
Based
upon the above findings of fact, I conclude the following as a matter of law:
1. S.C.
Code Ann. § 61-2-80 (Supp. 2005) grants the Department of Revenue the “sole
and exclusive authority to regulate the operation of all locations authorized
to sell beer, wine, or alcoholic liquors.”
2. In this instance, the revocation of the
Company’s permit is the appropriate penalty for a fourth violation of the
alcohol provisions by, “permitting purchase of beer by a person under the age
of twenty one.”
3. Regulation
7-200.4, which mirrors S.C. Code Ann. 61-4580(1), authorizes suspension
or revocation of the Petitioner’s permit for even a first violation of its
provisions. That regulation specifically states that:
To
permit or knowingly allow a person under twenty-one year of age to purchase or
possess or consume alcoholic liquors, beer or wine in or on a licensed place of
business which holds a license or permit issued by the Department 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
Department.
5. Petitioner committed three prior violations of Title 61
of the South Carolina Code of Laws within a three year period. Two of these
violations were for “permitting games of chance” in violation of S.C. Code
Ann. 61-4-580(3), which states that no
holder of a permit authorizing the sale of beer or wine or a servant, agent, or
employee of the permittee may knowingly:
permit gambling or games of chance except game promotions
including contests, games of chance, or sweepstakes in which the elements of
chance and prize are present and which comply with the following:(a) the game promotion is conducted or offered in
connection with the sale, promotion, or advertisement of a consumer product or
service, or to enhance the brand or image of a supplier of consumer products or
services;(b) no purchase
payment, entry fee, or proof of purchase is required as a condition of entering
the game promotion or receiving a prize; and(c)
all materials advertising the game promotion clearly disclose that no purchase
or payment is necessary to enter and provide details on the free method of
participation.
6. Petitioner’s third violation was for the
unlawful possession of liquor under S.C. Code Ann. 61-4-580(6) which prohibits
the sell, offer for sale, or possess any beverage or alcoholic liquors the sale
or possession of which is prohibited on the licensed premises under the law of
this State. The Petitioners violated this provision by having liquor on its
premises without a liquor license.
7. The Company paid fines for the first two
violations and served a suspension of 45 days for the third violation.
8. For fourth violations such as the one at issue,
it is the Department’s consistent administrative practice to impose revocation
of the beer and wine permit absent mitigating circumstances. See S.C. Revenue
Procedure 04-4. The construction of a statue by the agency charged with
executing it is entitled to the most respectful consideration and should not be
overturned without cogent reasons. Faile v. SC Employment Security Comm’n,
267 S.C. 536, 230 S.E.2d 219 (1976).
9. The Company had not offered any specific
mitigating circumstances of procedures and training in its place at the
location prior to the current violation.
10. The
revocation of the license after the fourth violation is not only authorized by
the regulations and statutes, but it is also a consistent administrative
practice of the Department after a fourth violation within a three year time
period. While it is true that all four violations were not for the sale of
liquor to minors, the four violations show a pattern of the Petitioners
inability to operate its establishment under the laws of this state. The Department submits that the Company’s inaction at the
time of the violation indicates its lack of concern for complying with the laws
of this state. I agree.
