SC Administrative Law Court Decisions

STATEMENT OF THE CASE

The above-captioned matter comes before this court pursuant to S.C. Code Ann. § 61-2-260 (Supp. 2007) and S.C. Code Ann. §§ 1-23-310 to -400 (2005 & Supp. 2007) for a contested case hearing. Petitioner Jay Shri Krishna, Inc., seeks a retail liquor store license for its liquor store, Harvard’s Liquor & Wine, located at 654 Fairview Road, Suite I, in Simpsonville, South Carolina. Respondent South Carolina Department of Revenue found that Petitioner met the statutory requirements for the issuance of a retail liquor store license, but denied Petitioner’s application because of protests filed by Jason T. Smith and Phillip and Roselind Young regarding the suitability of the proposed location. The Department would have granted the license but for these protests.

After timely notice to the parties and the protestants, a hearing was held on April 25, 2008, at the South Carolina Administrative Law Court in Columbia, South Carolina. Based upon the evidence presented concerning the suitability of the proposed location and upon the applicable law, I find that Petitioner’s application for a retail liquor license should be granted.

FINDINGS OF FACT

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. On November 16, 2007, Sunildatta C. Fadia submitted an application on behalf of Petitioner Jay Shri Krishna, Inc., to the Department for a retail liquor store license for Harvard’s Liquor & Wine store located at 654 Fairview Road, Suite I, in Simpsonville, South Carolina. This application and the Department’s file on the application are hereby incorporated into the record by reference.

2. Notice of Petitioner’s application was published once a week for three consecutive weeks in The Greenville News, a newspaper published and circulated in Greenville County, South Carolina, and proper notice of the application was posted at the proposed location for fifteen days.

3. Mr. Fadia is the sole owner of Jay Shri Krishna, Inc., a South Carolina corporation currently in good standing with the South Carolina Secretary of State.

4. Mr. Fadia is over twenty-one years of age, has no delinquent state or federal taxes, and is a legal resident of the United States and the State of South Carolina. Further, he resides and maintains his principal place of abode in South Carolina and has done so for at least thirty days prior to making his application for a retail liquor store license.

5. Mr. Fadia does not have a criminal record. No evidence in the record suggests that he has engaged in acts or conduct implying the absence of good moral character or that he is not of good repute. Nor does it appear that Mr. Fadia has had a liquor license revoked within the five years prior to the filing of his application for a retail liquor store license.

6. Petitioner’s liquor store is located in a strip mall at 654 Fairview Road in Simpsonville, South Carolina. Fairview Road is a four-lane road, and the area surrounding Petitioner’s store is zoned for commercial and residential use. The store is surrounded by several other commercial establishments, including another liquor store in a strip mall across the road. Adjacent to Petitioner’s store is a Burger King restaurant with an attached playground. The restaurant’s dining room and playground close at 10 p.m.

7. Mr. Fadia has operated another liquor store for the past five years, and there have been no license violations at that store.

8. Mr. Fadia’s wife will manage the store at the proposed location. The location’s operating hours will be 9:00 a.m. to 7:00 p.m. on Mondays through Saturdays.

9. Four other licensed retailers sell liquor or wine within 1.5 miles of the proposed location. Two of those retailers are represented by the protestants in this case. Protestants Philip and Roselind Young own Tiltie’s, which is located at 655F Fairview Road, directly across Fairview Road from the proposed location. Protestant Jason T. Smith owns Tropical Liquor & Wine located on Harrison Bridge Road, which intersects Fairview Road. The protestants maintain that the local market cannot support another liquor store in the area. They are concerned that the addition of Petitioner’s store to the area will cause business for the existing liquor stores to decline.

CONCLUSIONS OF LAW

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

1. Jurisdiction over this case is vested with the South Carolina Administrative Law Court pursuant to S.C. Code Ann. § 61-2-260 (Supp. 2007) and S.C. Code Ann. §§ 1-23-310 to -400 (2005 & Supp. 2007).

2. “[T]he issuance or granting of a license to sell beer or alcoholic beverages rests in the sound discretion of the body or official to whom the duty of issuing it is committed[.]” Palmer v. S.C. Alcoholic Beverage Control Comm’n, 282 S.C. 246, 248, 317 S.E.2d 476, 477 (Ct. App. 1984); see also Wall v. S.C. Alcoholic Beverage Control Comm’n, 269 S.C. 13, 235 S.E.2d 806 (1977).

3. S.C. Code Ann. §§ 61-6-110 and 61-6-120 (Supp. 2007) establish the basic criteria for determining eligibility for a retail liquor license. Additional requirements are set forth in S.C. Code Ann. §§ 61-6-130 to 61-6-190 (Supp. 2007).

4. The Department is prohibited from issuing a license to a retail liquor store if the store is located “within three hundred feet of any church, school, or playground situated within a municipality.” S.C. Code Ann. § 61-6-120(A) (Supp. 2007). These distances are measured from the nearest entrance to the place of business by following the shortest route of ordinary pedestrian or vehicular travel along the public thoroughfare to the nearest point of entrance to the grounds actually in use as a church, school, or playground, or grounds necessary for ingress or egress to such grounds from the public thoroughfare. 23 S.C. Code Ann. Regs. 7-303 (Supp. 2007).

5. In addition, S.C. Code Ann. § 61-6-910(2) (Supp. 2007) provides that an application for a license to sell alcoholic liquors must be denied if “the store or place of business to be occupied by the applicant is not a suitable place.”

6. Although “suitable place” is not statutorily defined, broad discretion is vested in the trier of fact to determine the fitness or suitability of a particular location for the requested license. See Fast Stops, Inc. v. Ingram, 276 S.C. 593, 281 S.E.2d 118 (1981).

7. The determination of suitability of location is not necessarily solely a function of geography. Rather, it involves an infinite variety of considerations related to the nature and operation of the proposed business and its impact on the community within which it is to be located. Kearney v. Allen, 287 S.C. 324, 338 S.E.2d 335 (1985); Schudel v. S.C. Alcoholic Beverage Control Comm’n, 276 S.C. 138, 276 S.E.2d 308 (1981).

8. Further, “a liquor license or permit may be properly refused on the ground that the location of the establishment would adversely affect the public interest, that the nature of the neighborhood and of the premises is such that the establishment would be detrimental to the welfare . . . of the inhabitants, or that the manner of conducting the establishment would not be conducive to the general welfare of the community.” 48 C.J.S. Intoxicating Liquors § 121, at 501 (1981).

9. However, without sufficient evidence of an adverse impact on the community, a license application must not be denied if the statutory criteria are satisfied. The fact that the issuance of a permit or license is protested is not a sufficient reason, by itself, to deny the application. See 48 C.J.S. Intoxicating Liquors § 119 (1981).

10. The denial of a license or permit on the ground of unsuitability of location is without evidentiary support when relevant testimony of those opposing the requested license or permit consists entirely of opinions, generalities, and conclusions not supported by the facts. Taylor v. Lewis, 261 S.C. 168, 198 S.E.2d 801 (1973); Smith v. Pratt, 258 S.C. 504, 189 S.E.2d 301 (1972).

11. In making a decision in this matter, this court is constrained by the record before it and by the applicable statutes, regulations, and case law. Here, Petitioner and Mr. Fadia meet all of the statutory criteria enacted by the South Carolina General Assembly for the issuance of a retail liquor store license, and there has not been a sufficient evidentiary showing that the proposed location is unsuitable for Petitioner’s store or that the issuance of the license in question would create problems in or have an adverse impact upon the surrounding community. While Petitioner’s store is adjacent to a playground attached to a Burger King restaurant, the prohibition against a licensed store being within three hundred feet of a playground, as set forth in S.C. Code Ann. § 61-6-120(A) (Supp. 2007), applies only to recreational places provided by the public or members of a community.

12. The essence of the Protestants’ testimony is that Petitioner will be in direct competition with their liquor stores for a market that is already on the decline and that the added competition would economically harm their respective businesses. They contend that S.C. Code Ann. § 61-6-170 (Supp. 2007) requires denial of the retail liquor license because there are already several other retail liquor stores within 1.5 miles of the proposed location. They further contend that the local market cannot support another liquor store.

Section 61-6-170 states the following:

The department may, in its discretion, limit the further issuance of retail dealer licenses in a political subdivision if it determines that 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.

Furthermore, S.C. Code Ann. § 61-6-910(3) (Supp. 2007) states the following:

The department must refuse to issue any license under this article or Article 7 of this chapter if the department is of the opinion that . . . a sufficient number of licenses have already been issued in the State, incorporated municipality, unincorporated community, or other community.

The cardinal rule of statutory interpretation is to ascertain and effectuate the intention of the Legislature. See, e.g., Floyd v. Nationwide Mut. Ins. Co., 367 S.C. 253, 260, 626 S.E.2d 6, 10 (2005). In enacting Sections 61-6-170 and 61-6-910, it was not the intent of the General Assembly to serve the specific purpose of ensuring the economic viability of existing licensed retailers. Rather, the General Assembly’s intent was to serve the purpose of safeguarding the public health, safety, and welfare.

It is generally recognized that an application for an alcoholic beverage license may be denied where the community in which the licensed premises are to be located is already adequately served by other licensed outlets for alcoholic beverages, particularly where the existing outlets have created significant problems in the surrounding community. While these oversaturation concerns can be raised by potential competitors of the applicant and while denials based on these concerns often have the secondary effect of reducing competition in the liquor business, the primary purpose of such regulations is not to insulate existing liquor licenses from competition, but to promote the public welfare by curbing the excessive retailing of liquor. Accordingly, economic concerns raised by a license applicant’s potential competitors, such as the financial investment a competitor has in his business and the possible economic loss he may suffer if the license is granted, are not relevant factors for consideration in determining whether the proposed location is a suitable place to be licensed. Moreover, any claims that an area is adequately served by other licensed outlets must be based upon concrete evidence of adverse consequences of oversaturation . . . .

John D. Geathers and Justin R. Werner, The Regulation of Alcoholic Beverages in South Carolina 195-196 (S.C. Bar CLE Div. 2007).

The Protestants did not provide any credible evidence to establish that the public health, safety, or welfare would be endangered or adversely affected by the issuance of a license for the proposed location. Accordingly, this court finds that Petitioner meets all the statutory requirements for a retail liquor license and authorizes the Department to issue the license to Petitioner for its location at 654 Fairview Road, Suite I, in Simpsonville, South Carolina.

ORDER

Based upon the Findings of Fact and Conclusions of Law stated above,

IT IS HEREBY ORDERED that the Department shall GRANT Petitioner’s application for a retail liquor store license for the premises located at 654 Fairview Road, Suite I, in Simpsonville, South Carolina.

AND IT IS SO ORDERED.

______________________________

May 27, 2008 JOHN D. GEATHERS

Columbia, South Carolina Administrative Law Judge

1205 Pendleton Street, Suite 224

Columbia, South Carolina 29201-3731