ORDERS:
FINAL ORDER AND DECISION
STATEMENT OF THE CASE
This matter comes before the Administrative Law Court (ALC or Court) pursuant to S.C. Code Ann. §§ 61-2-20 and 61-2-260 (Supp. 2003). The South Carolina Department of Revenue (Department) seeks a forty-five (45) day suspension of Respondent’s beer and wine permit for its third violation of 23 S.C. Code Ann. Regs. 7-200.4 (eff. 6/27/03). A hearing was held before me on July 26, 2005, at the offices of the Administrative Law Court in Columbia, South Carolina.
STIPULATIONS OF FACT
At the hearing into this matter and pursuant to ALC Rule 25(C) and Rule 43(k), SCRCP, the parties entered the following written stipulations of fact into the Record:
1. Rainwater Gas & Oil Company, Inc., (Rainwater) is the holder of an on-premise beer and wine permit, for the location at 102 Lamar Highway, in or near the town of Darlington, South Carolina.
2. That on Friday, August 6, 2004, at approximately 12:14 p.m., an Underage Confidential Informant (UCI) purchased one sealed 24-oz. can of Budweiser beer from Rainwater for One and 49/100 ($1.49) dollars.
3. That Rebecca Bruce was an employee and/or agent of Rainwater, and sold the beer in question to the UCI.
4. That the UCI is a black female and was 16 years of age at the time of purchase of the subject beer.
5. That the [sic] Rebecca Bruce did check the UCI's driver's license; said driver's license indicating that the UCI was born on July 30, 1988, and further, that the UCI was "Under 18 until 07-30-2006".
6. That a copy of the UCI's driver's license, attached hereto and incorporated by way of reference herein, is a true copy of the driver's license presented to Rebecca Bruce.
7. That Rainwater, by and through its employee, Rebecca Bruce, was put on notice of the UCI's tender age by virtue of the UCI's appearance and the information on the UCI's driver's license.
FINDINGS OF FACT
Having observed the witnesses and exhibits presented at the hearing and closely passed upon their credibility, taking into consideration the burden of persuasion by the parties, I make the following Findings of Fact by a preponderance of the evidence:
1. Notice of the time, date, place and subject matter of the hearing was given to the Petitioner and the Respondent.
2. Rainwater Gas and Oil Company, which has been in business since 1938, consists of eighteen (18) convenience stores in the Pee Dee region of South Carolina. Gary Blackman, Director of Operations for Rainwater, explained the business' format. He has been employed by Rainwater for twenty-one (21) years and has served as Director of Operations for the past fourteen (14) years. The business employs approximately one hundred sixty-five (165) employees, with two (2) district managers. Each store also has its own individual manager and, at most times, a supervisory employee on duty at each location.
The location of the store at issue in this case is in Darlington, South Carolina. This is the location's third violation in the past three (3) years. The first violation occurred on January 17, 2002 and resulted in the Respondent paying a $400.00 fine for that violation. The second violation took place on September 23, 2003 and resulted in Respondent paying a fine of $800.00 for that violation. At the time of this violation, Rebecca Bruce had been employed with Rainwater for eight (8) days. Subsequent to this sale, Ms. Bruce's employment with Rainwater was terminated.
Mitigation
It is the policy of Rainwater to abide by all State laws regarding the sale of alcohol, tobacco and lottery tickets to minors. In order to ensure compliance, new hires undergo extensive training upon initial hire, daily and monthly. Furthermore, this location is equipped with a "Ruby" computerized cash register system and it maintains calendars that show the date of birth the customer must meet to be able to purchase alcohol. Finally, Rainwater utilizes a "secret shopper" program where underaged individuals, employed by the company, attempt to purchase alcohol from its own stores.
Training
Mr. Blackman testified that new hires receive up to forty (40) hours of training before they are allowed to work the register on their own, with the last sixteen (16) hours of training with the manager of that particular location. The first day on the job, the new hire undergoes eight (8) hours of policy training on issues such as alcohol, tobacco and customer relations. During that first day, the employee also watches a video that gives instructions on alcohol sales. The employees are instructed that the only forms of identification that are acceptable are state issued driver's licenses, state issued picture ids and military ids.
After the employee completes his/her initial training, employees are instructed on alcohol issues daily as well as monthly. On a day-to-day basis, before an employee's shift begins, the store manager discusses the surveillance tapes from the day before with the employee and reviews the "Daily Alcohol, Tobacco and Lottery I.D. Policy Verification" form with the employee and has him/her sign it. This daily session with employees takes approximately five (5) to ten (10) minutes. Ms. Bruce signed the "Verification" on the date this violation occurred. The managers also hold meetings at the beginning of every month to review company policies and procedures.
Equipment
This store location has been equipped with a "Ruby" computerized cash register system for the past five (5) years that requires an employee to enter the date of birth of a purchaser who is buying alcohol or tobacco. However, the system can be overridden if an employee hits "enter" several times in a row. The location manager randomly reviews the surveillance tapes of the employees ringing up customers to verify that the system is being properly used. If an employee is observed overriding the Ruby system, corrective action is taken against that employee.
A changeable calendar is also situated at the register of each location which indicates the date of birth required for the purchase of alcohol.
Secret Shopper
Finally, the Respondent implemented a "secret shopper" program about three (3) years ago to test whether his employees are complying with the law prohibiting the sale to minors. If an employee improperly sells beer or wine to an underaged secret shopper, they are terminated. In fact, this store was tested only two (2) days prior to this violation and passed.
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. 2003) grants jurisdiction to the Court to hear contested cases under the Administrative Procedures Act. Specifically, S.C. Code Ann.
§ 61-2-260 (Supp. 2003) 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. Holders of beer and wine permits are forbidden from permitting “any act, the commission of which tends to create a public nuisance or which constitutes a crime. . . .” S.C. Code Ann. § 61-4-580(5) (Supp. 2003).
4. Permitting or knowingly allowing a person under the age of twenty-one (21) to purchase or possess beer upon the licensed premises is a violation against a license or a permit. Such a violation constitutes sufficient grounds for either suspension or revocation of the beer and wine permit. 23 S.C. Code Ann. Regs. 7-200.4 (eff. 6/27/03).
5. The permittee is responsible for all acts of his servants, agents, or employees and cannot seek to avoid the consequences of a violation for lack of personal knowledge. Following that principle, the South Carolina Supreme Court upheld a civil forfeiture of a corporation’s boat based upon an employee’s transporting drugs even though the corporation claimed the use of the boat to transport drugs was without its knowledge. South Carolina Law Enforcement Division v. The "Michael and Lance,” 281 S.C. 339, 315 S.E. 2d 171 (Ct. App. 1984). The Court held that “[a] principal is affected with constructive knowledge of all material facts of which its agent receives notice while acting within the scope of his authority.” Id. at 173, citing Crystal Ice Co. of Columbia, Inc. v. First Colonial Corp., 273 S.C. 306, 257 S.E. 2d 496 (1979). Likewise, the license holder is responsible for the actions and conduct of employees utilizing the permit upon the permitted premises. 48 C.J.S. Intoxicating Liquors § 259 (1981).
6. In this case, the Department seeks to impose a forty-five (45) day suspension of the Respondent’s beer and wine permit for a third violation of Regulation 7-200.4 within the past three (3) years. See Revenue Procedure 04-4.
7. Inherent in and fundamental to the powers of an Administrative Law Judge, as the trier of fact in contested cases under the Administrative Procedures Act, is the authority to decide the appropriate sanction when such is disputed. Walker v. South Carolina ABC Comm’n, 305 S.C. 209, 407 S.E. 2d 633 (1991). The Administrative Law Judge, as fact-finder, must impose a penalty based on the facts presented at the contested case hearing. 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).
In the present case, Respondent Rainwater clearly violated the provisions of Regulation 7-200.4 by permitting the purchase of alcohol by an individual under the age of twenty-one (21). Respondent Rainwater, however, did offer considerable mitigating evidence that employees are trained to check identification on an on-going basis and that Rainwater has implemented numerous measures to prevent and discourage violations from occurring. Nevertheless, I find that the seriousness of selling alcohol to minors warrants some sanction in this matter.
ORDER
Based upon the foregoing Findings of Fact and Conclusions of Law,
IT IS HEREBYORDERED that Respondent’s beer and wine permit be suspended for ten (10) days.
AND IT IS SO ORDERED.
__________________ ___ ______
Ralph King Anderson, III
Administrative Law Judge
August 2, 2005
Columbia, South Carolina
A copy of the UCI's picture, as of the date of the violation, is attached hereto and incorporated by way of reference herein.
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