SC Administrative Law Court Decisions

STATEMENT OF THE CASE

This matter comes before the Administrative Law Court (ALC or Court) pursuant to S.C. Code Ann. § 12-60-460 (Supp. 2007). The South Carolina Department of Revenue (Department) seeks a revocation of Respondent’s beer and wine permit for its second violation of S.C. Code Ann. § 61-4-580(5) (Supp. 2007). After proper notice of the hearing was given to the Petitioner and the Respondent, a hearing was held before me on May 27, 2008, at the offices of the Administrative Law Court.

FINDINGS OF FACT

Having observed the witnesses and exhibits presented at the hearing and taking into consideration the burden of persuasion and the credibility of the witnesses, I make the following findings of fact by a preponderance of evidence:

Hudson’s Quick Mart (Hudson’s) is a convenience store located at 914 S. Fifth Street, Hartsville, South Carolina. Hudson’s holds a permit for the sale of beer and wine to be consumed off-premises. On July 31, 2007, Lunella Williams of the South Carolina Law Enforcement Division (SLED) was serving an order of suspension on Hudson’s for a February 2007 violation for having illegal games on the premises.[1] Upon entering the store, Agent Williams found that Hudson’s had acquired two more gaming devices since the previous machine was confiscated and placed them in a room in the back of store which was open to the public. After inspecting the machines, SLED determined that they contained illegal games and seized them. Specifically, the illegal games on machine one were Magic Balloons, Bonus Balloons, Balloon Show, Sweep 21 and Flip 21. The illegal games found on machine two were Sweep 21 and Flip 21.[2] After seizing the machines, Agent Williams brought them before Darlington County Magistrate James Thomas. Magistrate Thomas determined that the games were in fact illegal and ordered the machines destroyed.

Hudson’s has already served a ninety (90) day beer and wine permit suspension for a February 2007 violation, in which one machine with the illegal game Sure Shot was seized.

CONCLUSIONS OF LAW

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

1. S.C. Code Ann. § 1-23-600 (Supp. 2007) grants jurisdiction to the Court to hear contested cases under the Administrative Procedures Act. Specifically, S.C. Code Ann. § 61-2-260 (Supp. 2007) grants the ALC the authority to hear contested case hearings in matters governing alcoholic beverages, beer and wine.

2. Permits and licenses issued by this state for the sale of liquor, beer and wine are privileges to be used and enjoyed only so long as the holder complies with the restrictions and conditions governing them. See Feldman v. S.C. Tax Commission, 203 S.C. 49, 26 S.E.2d 22 (1943).

3. The Department seeks the revocation of Respondent’s beer and wine permit for violating S.C. Code Ann. § 61-4-580(5). Where the General Assembly authorizes a range of alternatives for an administratively imposed penalty, the administrative fact-finder may set the amount of the penalty after a hearing on the dispute. Walker v. South Carolina ABC Comm'n, 305 S.C. 209, 407 S.E.2d 633 (1991). To that end, an Administrative Law Judge must consider relevant evidence presented in mitigation. Mitigation is defined as a lessening to any extent, great or small. It may be anything between the limits of complete remission on one hand and a denial of any relief on the other. In a legal sense, it necessarily implies the exercise of the judgment of the court as to what is proper under the facts of the particular case. 58 C.J.S. Mitigation p. 834, 835 (1948).

Here, the Department, and therefore the ALC, has jurisdiction to “revoke or suspend permits authorizing the sale of beer or wine.” S.C. Code Ann. § 61-4-590 (Supp. 2007). Furthermore, in lieu of suspension or revocation, a beer and wine permittee may be fined not less than twenty five dollars nor more than one thousand dollars for an infraction against Title 61, Chapter 4 or “for a violation of any regulation pertaining to beer or wine and wine.” S.C. Code Ann § 61-4-250 (Supp. 2007).

In the present case, the Respondent violated the provisions of Section 61-4-580 by permitting an act “which constitutes a crime under the laws of this State.” S.C. Code Ann § 61-4-580(5) (Supp. 2007). More specifically, Respondent maintained machines on the premises “for the play of poker, blackjack, keno…” which are prohibited by law. S.C. Code Ann § 12-21-2710 (Supp. 2007). The Department seeks revocation of Respondent’s beer and wine permit for the second violation of S.C. Code Ann § 61-4-580. However, it is questionable as to whether the July 31, 2007 violation should be treated as a second violation for punitive purposes.

Though Respondent has already served a ninety-day suspension, the evidence indicates that he did not receive notice of that punishment until the date of the violation in this case. Furthermore, the penalty sought by the Department is far harsher than the penalties set forth in the Department’s Revenue Procedure 04-4, which was in effect when both violations occurred. Revenue Procedure 04-4 advises that the penalty for a 1^st offense against a beer and wine permit should be $500, 2^nd offense should be $1,000, 3^rd offense should be a 45 day suspension and 4^th offense should be revocation.[3] Therefore, Hudson’s ninety (90) day suspension for its first violation of permitting an illegal activity on the premises resulted in a penalty much stronger than the Revenue Procedure recommends. On the other hand, though the machines were confiscated by SLED as illegal, Respondent nevertheless again placed similar illegal games upon his premises.

ORDER

Based upon the foregoing Findings of Fact and Conclusions of Law,

IT IS HEREBY ORDERED that Respondent’s beer and wine permit be suspended for ninety (90) days beginning July 1, 2008.

AND IT IS SO ORDERED.

______________________________

Ralph King Anderson, III

Administrative Law Judge

June 3, 2008

Columbia, South Carolina