SC Administrative Law Court Decisions

STATEMENT OF THE CASE

This matter comes before this Court pursuant to S.C. Code Ann. § 61-2-260 (Supp. 2007), S.C. Code Ann. § 1-23-600(B) (Rev. 2005), and S.C. Code Ann. §§ 1-23-310 et seq. (Rev. 2005). Petitioner South Carolina Department of Revenue (Department) contends that Respondent The Pantry, Inc., d/b/a Kangaroo Express 340 (Respondent), knowingly allowed an underage cooperating individual (UCI) to purchase beer from its convenience store at 1530 Bypass NE, Greenwood, South Carolina, in violation of 23 S.C. Code Ann. Regs. 7-200.4 (Supp. 2007). For this third such violation in three years, the Department seeks to suspend Respondent’s off-premises beer and wine permit for a period of forty-five (45) days. In response, Respondent contends that the proposed penalty for the violation is excessive in light of its efforts to prevent such sales.

After timely notice to the parties, a hearing of this matter was held on April 17, 2008, at the South Carolina Administrative Law Court in Columbia, South Carolina. Based upon the testimony and exhibits presented at the hearing, I find that the appropriate penalty for Respondent’s violation is the imposition of a five hundred dollar ($500.00) fine upon Respondent and the suspension of Respondent’s off-premises beer and wine permit for its 1530 Bypass NE, Greenwood, South Carolina location for a period of fifteen (15) days.

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. The Pantry, Inc., d/b/a Kangaroo Express, owns and operates the convenience store, Kangaroo Express 340, located at 1530 Bypass NE, Greenwood, South Carolina.

2. On March 6, 2007, Teresa King, an employee of Respondent, allowed an eighteen-year-old Underage Cooperating Individual (UCI) working with the South Carolina Law Enforcement Division (SLED) to purchase beer at its location at 1530 Bypass NE, Greenwood, South Carolina. Ms. King completed the sale of the beer to the UCI after requesting identification and after examining the identification provided carefully. Ms. King failed to ask the UCI if he was over the age of twenty one and improperly calculated the UCI’s age. After the sale, Ms. King attempted to reclaim the beer but was rebuffed by SLED agents. The sale of the beer constituted a knowing violation of South Carolina law and it is Respondent’s third such violation within a three-year period for permitting the sale of beer and or wine to a person under 21 years of age, the first occurring on March 1, 2005; the second occurring on October 6, 2005; and the third (this offense) having occurred on March 6, 2007.

3. Respondent has made good-faith efforts to prevent the sale of beer and wine to underage individuals. For example, Respondent has strict policies and procedures concerning checking the identification and verifying the age of customers purchasing beer and/or wine (e.g., under company policy, cashiers must request proof of age from all customers appearing under the age of thirty-five (35) purchasing beer and/or wine; present location employs the Viage system which scans all identifications in order to verify age of customer).

4. Respondent has also strengthened its efforts to prevent underage sales by implementing its current policies and procedures regarding sales of beer and/or wine. These efforts include:

(1) training programs, including computer based training and other materials, regarding the prevention of underage sales (e.g., the company trains new employees thoroughly regarding the laws and company policies governing the sale of beer and/or wine and reiterates that training frequently); and,

(2) methods of monitoring whether its employees are complying with the laws and company policies related to the sale of beer and/or wine (e.g., employees participate in county sponsored classes conducted by SLED agents, employees required to sign daily commitment forms that serve to reaffirm employee’s understanding of age restricted policies).

These efforts are indicative of Respondent’s commitment to prevent the sale of beer and/or wine to underage individuals and are relevant for determining the appropriate penalty to be imposed in this matter.

CONCLUSIONS OF LAW

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

1. The Department is charged with the responsibility of administering and enforcing the laws and regulations governing beer and wine. S.C. Code Ann. § 61-2-20 (Supp. 2007).

2. S.C. Code Ann. Regulation 7-200.4 (Supp. 2007) prohibits holders of beer and wine permits from selling beer or wine to persons under twenty-one years of age. The regulation provides that:

To permit or knowingly allow a person under twenty-one years of age to purchase or possess or consume beer or wine in or on a licensed establishment 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.

23 S.C. Code Ann. Regs. 7-200.4 (Supp. 2007).

3. The Department has jurisdiction to revoke or suspend permits authorizing the sale of beer and wine. S.C. Code Ann. § 61-4-590 (Supp. 2007). Pursuant to such authority, the Department may suspend or revoke a beer and wine permit if the permittee has knowingly sold beer and/or wine to a person under twenty-one years of age. S.C. Code Ann. § 61-4-580(1) (Supp. 2007); 23 S.C. Code Ann. Regs. 7-200.4 (Supp. 2007); see also S.C. Code Ann. § 61-4-270 (Supp. 2007) (authorizing the Department to "revoke the permit of a person failing to comply with any requirements" in Chapter 4 of Title 61). Further, the Department may exercise this authority to suspend or revoke a permit for a first violation of the prohibition against selling beer and/or wine to minors. See S.C. Code Ann. §§ 61-4-270, 61-4-580, 61-4-590; 23 S.C. Code Ann. Regs. 7-200.4. In lieu of such suspension or revocation, the Department may also impose a monetary penalty upon a permittee for selling beer and/or wine to minors. S.C. Code Ann. § 61-4-250 (Supp. 2007). For retail beer and wine permittees, this monetary penalty must be no less than $25 and no greater than $1,000. Id.

4. The weight and credibility assigned to evidence presented at the hearing of a matter is within the province of the trier of fact. See S.C. Cable Television Ass'n v. S. Bell Tel. & Tel. Co., 308 S.C. 216, 222, 417 S.E.2d 586, 589 (1992); see also Doe v. Doe, 324 S.C. 492, 502, 478 S.E.2d 854, 859 (Ct. App. 1996) (holding that a trial judge, when acting as finder of fact, "has the authority to determine the weight and credibility of the evidence before him"). Furthermore, a trial judge who observes a witness is in the best position to judge the witness's demeanor and veracity and to evaluate the credibility of his testimony. See, e.g., Woodall v. Woodall, 322 S.C. 7, 10, 471 S.E.2d 154, 157 (1996); Wallace v. Milliken & Co., 300 S.C. 553, 556, 389 S.E.2d 448, 450 (Ct. App. 1990).

5. The facts in this case warrant a lesser penalty than that sought to be imposed by the Department. It is a generally recognized principle of administrative law that the fact finder has the authority to determine an appropriate administrative penalty, within the statutory limits established by the legislature, after the parties have had an opportunity for a hearing on the issues. See, e.g., Walker v. S.C. Alcoholic Beverage Control Comm'n, 305 S.C. 209, 407 S.E.2d 633 (1991). Further, in assessing a penalty, the finder of fact "should give effect to the major purpose of a civil penalty-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).

6. However, Respondent should be reminded that the purpose of the statutory prohibition against selling beer and/or wine to underage individuals is to protect both the underage individuals and the public at large from the possible adverse consequences of such sales. The sale of beer and/or wine to an underage individual is a serious offense and cannot be taken lightly. Further, it should be noted that a permit to sell beer and wine is neither a contract nor a property right. Rather, it is merely a permit to do what otherwise would be unlawful to do, and to be enjoyed only so long as the restrictions and conditions governing its continuance are complied with. Feldman v. S.C. Tax Comm'n, 203 S.C. 49, 26 S.E.2d 22 (1943). Accordingly, beyond satisfying the penalty imposed in this matter, Respondent is advised to make every effort to prevent such sales in the future, as the failure to do so may subject it to more severe penalties in the event of a future violation.

ORDER

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

IT IS HEREBY ORDERED that, for Respondent's third violation of 23 S.C. Code Ann. Regs. 7-200.4 (Supp. 2007) within three years, the Department shall SUSPEND Respondent The Pantry, Inc., d/b/a Kangaroo Express 340’s off-premises beer and wine permit (#32015029) for Kangaroo Express 340, 1530 Bypass NE, Greenwood, South Carolina, for a period of fifteen (15) days and shall IMPOSE upon Respondent a fine of five hundred dollars ($500.00).

IT IS FURTHER ORDERED that the suspension of Respondent’s beer and wine permit shall become effective fourteen (14) days from the date of this order.

AND IT IS SO ORDERED.

__________________________________

JOHN D. MCLEOD

Administrative Law Judge

June 19, 2008

Columbia, South Carolina