SC Administrative Law Court Decisions

Is Spinx liable for a violation of S.C. Code Ann. 61‑4‑580(1) (Supp. 2004) which holds that "[n]o holder of a permit authorizing the sale of beer or wine or a servant, agent, or employee of the permittee may knowingly . . . sell beer or wine to a person under twenty-one years of age or for a violation of Regs. 7-200.4 which provides that "[t]o 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 [with s]uch violation . . . sufficient cause to suspend or revoke the license or permit by the Department."

 

III. Analysis

 

Sale to an Underage Person

 

DOR asserts that two sales to an underage individual occurred, and that each sale was made knowingly. DOR further argues that since each sale was the first such sale at each location within a three year period that a sanction of a $500 fine for each location is warranted.

 

Spinx disagrees and asserts that neither sale imposes a liability since Spinx cannot be held liable for the criminal acts of an employee acting outside the course and scope of employment. Further, Spinx argues that even if a violation occurred, the sanction of fines of $500 is not warranted.

 

A. Findings of Fact

 

Based on the preponderance of the evidence, the following findings of fact are entered:

 

Spinx 110 and Spinx 130 hold off-premises beer and wine permits. The permits are in use at Spinx 110’s and Spinx 130’s locations of 3000 Augusta Road, Greenville, SC 29605 and 1510 Woodruff Road, Greenville, SC 29605, respectively.

 

On June 15, 2004, an undercover cooperating individual (UCI) in the employment of SLED entered the location of Spinx 110. The UCI on June 15, 2004 was 18 years old (date of birth April 12, 1986) and was not disguised in any manner in an attempt to appear older. After entering the store, the UCI picked up a container of beer and brought the beer to the counter. The employee at the counter was an employee of Spinx 110. The employee asked for age verification and was presented with the UCI’s valid South Carolina driver’s license. After examining the license, the employee returned it to the UCI, took the UCI’s money, and delivered the beer to the UCI as part of the completed sale. After the sale, the UCI left the store with the purchased beer.

 

Similar circumstances occurred at Spinx 130. On June 16, 2004, the same UCI involved in the events of Spinx 110 entered the 1510 Woodruff Road location. The UCI was 18 years old and was not disguised in any manner in an attempt to appear older. After entering the store, the UCI picked up a container of beer and brought it to the counter. The employee at the counter was an employee of Spinx 130. The employee asked for age verification and was presented with the UCI’s valid South Carolina driver’s license. After examining the license, the employee returned it to the UCI, took the UCI’s money, and delivered the beer to the UCI as part of the completed sale. After the sale, the UCI left the store with the purchased beer.

 

In each case, after the purchase, an officer for SLED entered the store and explained that the employee had just performed an illegal act by making a transfer of beer to a person under the age of twenty‑one. A criminal citation was issued to each employee and a civil violation issued to Spinx as the permit holder for each store subsequently followed.

 

No other sales to individuals under the age of twenty‑one have occurred at these locations. Thus, the sales to the UCI on June 15, 2004 and on June 16, 2004 are the first violations at each location.

 

Spinx 110 and Spinx 130 have an exceptional record of training its employees on preventing sales to underage customers. Numerous programs and management reminders act as continual reinforcement to all employees not to sell to underage customers. Indeed, both of the clerks involved in this case had signed agreements stating that they would not sell to underage customers. Further, both clerks knew that making such sales would constitute acts outside the course and scope of their employment.

 

B. Conclusions of Law

 

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

 

1. Introduction

 

“No holder of a permit authorizing the sale of beer or wine or a servant, agent, or employee of the permittee may knowingly . . . sell beer or wine to a person under twenty-one years of age.” S.C. Code Ann. § 61‑4‑580(1) (Supp. 2004). To the same effect, see S.C. Code Ann. Regs. 7-200.4 (Supp. 2004). Further, the statute states that “[a] violation of any provision of this section is a ground for the revocation or suspension of the holder's permit.” Again, to the same effect, see S.C. Code Ann. Regs. 7-200.4 (Supp. 2004).

 

Here, Spinx does not challenge the position that two of his employees knowingly made sales to a person under 21 with those sales occurring on the premises of Spinx 110 and Spinx. In fact, Spinx admits the sales were made “knowingly.” See Respondent’s Post-Trial Brief p. 2 (“[T]his case is not about knowledge.”).

 

However, Spinx denies any liability flowing from the sales by arguing that “[t]his case is about the authority of a person employed who commits a criminal act that is outside the course and scope of that person’s employment.” ^[1] Respondent’s Post-Trial Brief p. 2. Accordingly, the issue here is whether Spinx, the permit holder, can be fined for an employee’s knowingly-made sale to an underage customer when the employee’s course and scope of employment did not include, allow, or authorize the sale of beer and wine to an individual under the age of twenty-one. Under existing law, I find and conclude Spinx is liable for such sales.

 

2. Liability of Permit Holder for Actions of Employees

 

A court has no authority to deviate from the plain language of a controlling statute. Anders v. South Carolina Parole and Community Corrections Bd., 279 S.C. 206, 209, 305 S.E.2d 229, 230 (1983) ("when the terms of the statute are clear and unambiguous, the Court must apply them according to the literal meaning."); Lindsay v. Main Ins. Co., 281 S.C. 331, 334, 315 S.E.2d 166, 168 (1984) ("There is no room for construction where the terms are clear."). Thus, finding the permit holder in this case liable for sanctions when an employee makes a sale to an underage individual follows and is required by the plain language of the controlling statute and regulation.

 

Here, S.C. Code Ann. § 61‑4‑580 (Supp. 2004) states that “[a] violation of any provision of this section is a ground for the revocation or suspension of the holder's permit.” Likewise, Regs. 7-200.4 provides that sales to underage individuals are “sufficient cause to suspend or revoke the license or permit by the Department.” ^[2] Further, the statute explains that the violation does not have to be committed by the permit holder. On the contrary, the statute explicitly imposes liability upon the permit holder even if the illegal sale is made by “a servant, agent, or employee of the permittee.” S.C. Code Ann. § 61‑4‑580(1) (Supp. 2004).

 

Accordingly, applying the plain language to the facts here shows that at the time of the sale each clerk occupied the position of an “employee” of Spinx. Thus, the employee’s actions result in liability to Spinx.

 

Spinx’s argument that each employee acted outside the scope of employment when making the illegal sale is unpersuasive. The statute looks to the status of the individual making the illegal sale and then uses that status to find liability in the permit holder. If the sale is made by an “employee,” the permit holder is liable. The mere fact that the employee acts outside the scope of employment in making a sale of beer does not transform the employee into a “non-employee.” Rather, a violation occurs and liability flows to the permit holder since the sale has been made by the permit holder’s employee.

 

In other contexts, such as theories of law sounding in tort or in contract or in agency, what legal ramifications may befall an employer from actions of an employee operating outside the scope of employment are matters left to those fields of law. However, for ABC law, the legal ramifications flowing from the illegal sale of beer and wine are matters left to the collective wisdom of the General Assembly, not to tort law, contract law, or agency law. Indeed, consistent with the highly regulated activity of selling alcohol, beer, and wine, the General Assembly has chosen to impose sanctions upon the permit holder for violations of the ABC laws even when the violations arise from actions of employees. To deviate from the plain dictates of the statute would require an amendment to existing law. Clearly, amendment existing law is within the province of the legislature, not this court.

 

 

3. Penalty Analysis

 

Given that the sale in the instant case was made knowingly, the remaining decision is what penalty is proper. DOR seeks a $500 fine for each illegal sale. Spinx disagrees.

 

In the final analysis, a decision to impose a sanction ranging from fine, or suspension, or revocation, or some combination, is one for the Administrative Law Judge as the fact‑finder with such a determination based on the totality of the facts presented. Walker v. South Carolina ABC Comm'n, 305 S.C. 209, 407 S.E.2d 633 (1991). Under the facts of this case, I conclude that a $250 fine for each violation is warranted for a total of $500.

 

Here, the instant violations are the first for each location. Further, Spinx has an admirable training program, an ownership and management staff dedicated to preventing underage sales, and a willingness to make corrective changes. Such attributes warrant a lesser fine.

 

IV. Order

 

Based upon the Findings of Fact and Conclusions of Law, it is hereby ordered:

 

Spinx 110 and Spinx 130 shall pay a total fine of $500 to the South Carolina Department of Revenue for the two violations of for selling beer to underage purchasers.

 

AND IT IS SO ORDERED.

____________________________

RAY N. STEVENS

Administrative Law Judge

 

Dated: August 5, 2005

Laurens, South Carolina