SC Administrative Law Court Decisions

STATEMENT OF THE CASE

This matter is 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 to impose a forty five (45) day suspension for Respondent's violation of 23 S.C. Code Ann. Regs. 7-200.4 (eff. June 27, 2003). A hearing was held before me on September 7, 2005 at the offices of the Administrative Law Court in Columbia, South Carolina.

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 party present, I make the following Findings of Fact by a preponderance of the evidence:

1. Respondent Hassan Mirza, d/b/a Fast Fuel No. 2, which is located at 3499 East River Street, Anderson, South Carolina (location) holds a permit (Permit No. 32030457-PBG) issued by the Department that permits it to sell beer and wine for off-premise consumption.

2. On December 7, 2004, South Carolina Law Enforcement Division (SLED) agents conducted an investigation of Respondent's business at the permitted location in conjunction with an underage cooperating individual (UCI) who was eighteen (18) years of age. The UCI was given $5.00 in state issued funds to make the alcohol purchase. When the UCI entered the location, he had only his state-issued (South Carolina) driver’s license and the $5.00 issued by the state. The UCI entered the location at the above-referenced address and purchased a 24 ounce can of Icehouse beer from the clerk on duty. The clerk, Becky Case, did not request identification from the UCI and permitted the UCI to purchase the beer.

3. Becky Case was charged with the transfer of a beer to an individual under the age of twenty-one (21). Additionally, Respondent was issued an administrative citation for permitting an under-aged person to purchase beer on a licensed premises, in violation of Regulation 7-200.4.

4. The Department issued its Final Determination in this matter on April 18, 2005, seeking to impose a forty five (45) day suspension against Respondent for its violation of Regulation 7-200.4.

5. Respondent has negotiated with Petitioner, and has agreed to a forty five (45) day suspension, so long as the suspension begins on or after October 15, 2005.

6. Respondent Hassan Mirza failed to appear at the hearing which began promptly at 10:00 a.m. on September 7, 2005.[1]

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 (2005) grants jurisdiction to the ALC 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 Comm’n, 203 S.C. 49, 26 S.E. 2d 22 (1943).

3. S.C. Code Ann. § 61-4-580(1) (Supp. 2003) provides:

No holder of a permit authorizing the sale of beer or wine or a servant, agent, or employee of the permittee may knowingly commit any of the following acts upon the licensed premises covered by the holder's permit:

(1) sell beer or wine to a person under twenty-one years of age;

....

A violation of any provision of this section is a ground for the revocation or suspension of the holder's permit.

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 (effective June 27, 2003).

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 Div. 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. 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.

7. In this case, the Department seeks to impose a forty five (45) day suspension against Respondent for its violation of Regulation 7-200.4. See S.C. Revenue Procedure 04-4. Through prior negotiations with Petitioner, Respondent consented to the suspension but requested the suspension not begin until October 15, 2005.

ORDER

IT IS HEREBY ORDERED Respondent must surrender his permit (Permit No. 32030457-PBG) to the Department on or before October 15, 2005 for his violation of Regulation 7-200.4. If the permit has not been surrendered by 5:00 p.m. on October 15, 2005, it is ORDERED that an agent of the South Carolina Law Enforcement Division physically confiscate the permit on October 15, 2005 or as soon thereafter as conveniently may be.

AND IT IS SO ORDERED.

__________________________________

JOHN D. MCLEOD

Administrative Law Judge

September 7, 2005

Columbia, South Carolina