ORDERS:
FINAL ORDER AND DECISION
STATEMENT
OF THE CASE
The
above-captioned cases come before this Court pursuant to S.C. Code Ann. §
61-2-260 (Supp. 2005), S.C. Code Ann. § 1-23-600(B) (Supp. 2005), and S.C. Code
Ann. §§ 1-23-310 et seq. (2005) for a contested case hearing. In these
matters, Petitioner South Carolina Department of Revenue (Department) contends
that Respondent Macia’s of Greenville, Inc. (Macia’s), has committed several
violations of its non-profit private club minibottle license and on-premises
beer and wine permit; as a result of these violations, the Department seeks to
revoke Respondent’s minibottle license and beer and wine permit and to impose
fines totaling $2500 upon Respondent. Respondent concedes that
the alleged violations did occur, but further contends that the proposed
penalties for the violations are excessive in light of the efforts it has taken
to address such violations.
After
timely notice to the parties, a hearing of these cases was held on January 5,
2006, at the South Carolina Administrative Law Court in Columbia, South
Carolina. Upon the motion of the
parties, these cases were consolidated for hearing under ALC Rule 19(D),
because the same or substantially similar evidence is relevant and material to
the matters at issue in each case. Based upon the evidence presented at the
hearing and upon the applicable law, I find that the appropriate penalty for
Respondent’s violations is a 120-day suspension of its permit and license and
the imposition of a $5500 fine upon Respondent.
STIPULATED
FACTS
Pursuant
to ALC Rule 25(C) and Rule 43(k), SCRCP, the parties submitted a Stipulation of
Facts to the Court in each of the above-captioned cases. These Stipulations
were marked as exhibits and are hereby incorporated into this Order by
reference. In the Stipulations, the parties describe the circumstances giving
rise to the violations in question and acknowledge both the current and prior
violations committed by Macia’s.
In
particular, the parties stipulate that, on Sunday, February 6, 2005, at
approximately 3:05 a.m., Chester Bragg, an agent with the South Carolina Law
Enforcement Division (SLED), entered Macia’s, a private club located at 3715
East North Street, Suite O, in Greenville, South Carolina, during an undercover
sting operation. After entering Macia’s, Agent Bragg purchased a mixed liquor
drink and a beer and consumed a small portion of each beverage on the
premises. Agent Bragg was not a member or a bona fide guest of a member of
Macia’s at the time he purchased the beverages, and he was not asked if he was
such a member or guest of a member upon entering Macia’s or at any time prior
to the purchase of the beverages. The parties agree that, as a result of this
incident, Macia’s committed three violations of the alcoholic beverage control
laws: (1) by allowing a non-member to consume liquor at a non-profit private
club in violation of 23 S.C. Code Ann. Regs. 7-401.4(J) (Supp. 2005); (2) by permitting
the consumption of liquor during restricted hours in violation of S.C. Code
Ann. § 61-6-1600(B) (Supp. 2005); and (3) by selling beer during restricted
hours in violation of 23 S.C. Code Ann. Regs. 7-702.1 (Supp. 2005). (Pet’r Ex.
#1, Docket No. 05-ALJ-17-0203-CC.)
The
parties further stipulate that, on Friday, April 29, 2005, at approximately
11:35 p.m., another SLED Agent, T.A. Casey, entered Macia’s during an
undercover operation, purchased a mixed liquor drink from the bartender, and
consumed a small portion of the drink on the licensed premises. Agent Casey
was not a member or a bona fide guest of a member of Macia’s at the time he
purchased the drink, and he was not asked if he was such a member or guest of a
member upon entering Macia’s or at any time prior to the purchase of the drink.
The parties agree that, as a result of this incident, Macia’s committed a
violation of 23 S.C. Code Ann. Regs. 7-401.4(J) (Supp. 2005) by allowing a
non-member to consume liquor at a non-profit private club. (Pet’r Ex. #3,
Docket No. 05-ALJ-17-0335-CC.)
Lastly,
the parties stipulated that the February 6, 2005 violations and the April 29,
2005 violation described above were, respectively, the third and fourth set of
violations committed by Macia’s within a three-year period. These prior
violations included an incident on July 11, 2004, in which Macia’s sold beer
and liquor during restricted hours and allowed a non-member to consume liquor
on the premises, and an incident on November 20, 2004, in which Macia’s again
sold liquor during restricted hours and allowed a non-member to consume liquor
on the premises.
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. At
the hearing of these cases, Larry Rodriguez, a co-founder and principal owner
of Macia’s, testified regarding his response to the violations at Macia’s. Mr.
Rodriguez testified that, during the nine-month period in which the four
violation incidents occurred, he was only partially involved in the daily
management of Macia’s and was only at Macia’s for a few hours per week, instead
spending much of his time managing the family Mexican restaurant. However,
since the string of violations occurred, Mr. Rodriguez has assumed full-time,
direct management responsibilities for Macia’s and placed his wife in charge of
managing the family restaurant. Mr. Rodriguez further testified that the
security firm employed by Macia’s at the time the violations occurred failed to
adequately check for identifications and memberships for the patrons entering
Macia’s. Mr. Rodriguez did not renew his contract with that firm and has since
directly hired a number of SLED-licensed security guards to work at Macia’s. In
short, Mr. Rodriguez testified that, as a result of his assumption of direct
management responsibility for Macia’s, the establishment will no longer suffer
from the lack of managerial control that led to the prior violations at the
club.
CONCLUSIONS
OF LAW
Based
upon the foregoing Stipulated Facts and 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 the manufacture and sale of alcoholic
beverages, including beer, wine, and alcoholic liquors. S.C. Code Ann. §
61-2-20 (Supp. 2005).
2. In
the case at hand, the Department contends that, as a result of the incidents on
February 6, 2005, and April 29, 2005, Respondent Macia’s has violated 23 S.C.
Code Ann. Regs. 7-702.1 (Supp. 2005) by selling beer after 2:00 a.m. on a
Sunday morning; has violated S.C. Code
Ann. § 61-6-1600(B) by selling and permitting the consumption of alcoholic
liquors after 2:00 a.m.; and has twice violated the terms of its license, as
set forth in 23 S.C. Code Ann. Regs. 7-401.4(J) (Supp. 2005), by permitting a
person who was neither a member nor a bona fide guest of a member to consume
alcoholic liquors on the licensed premises. The Department further contends
that, in addition to these violations, Macia’s had committed two sets of
similar violations in July and November 2004.
3. As
a penalty for the four instant violations, the Department seeks to impose fines
totaling $2500 upon Macia’s and to revoke both its on-premises beer and wine
permit and its non-profit private club minibottle license. Macia’s concedes
that it committed the violations alleged by the Department in the current
matter and the prior violations identified by the Department; however, Macia’s
contends that the penalties sought to be imposed by the Department are
excessive in light of its efforts to address the violations.
4. Under
the statutes and regulations governing the sale of alcoholic beverages, the
violations committed by Macia’s are sufficient to warrant the suspension or
revocation of both its beer and wine permit and its minibottle license. See S.C. Code Ann. § 61-6-1830 (Supp. 2005) (authorizing the suspension or
revocation of a minibottle license where the licensee has violated a provision
of the Alcoholic Beverage Control Act or any regulation promulgated pursuant to
the Act); 23 S.C. Code Ann. Regs. 7-702.1 (Supp. 2005) (providing that the
permit of a person who sells beer and wine during restricted hours is subject
to suspension or revocation); see also S.C. Code Ann. § 61-2-140(E)
(Supp. 2005) (providing that, where a person has a permit or license suspended
or revoked, the Department may suspend or revoke all other permits or licenses
held by the person for premises within close proximity to the premises where
the violation occurred). However, in lieu of suspension or revocation, a
monetary penalty may be imposed upon a permittee or licensee who has committed
a violation of the alcoholic beverage laws or regulations. See S.C.
Code Ann. § 61-4-250 (Supp. 2005) (monetary penalties for violations of beer
and wine permits); S.C. Code Ann. § 61-6-4270 (Supp. 2005) (monetary penalties
for violations of liquor licenses). These monetary penalties range between $25
and $1000 for retail beer and wine permittees and between $100 and $1500 for
retail liquor licensees. S.C. Code Ann. §§ 61-4-250(1), 61-6-4270(1).
5. 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).
6.
The facts in these cases 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).
Here, I find that the appropriate penalty for Macia’s violations is a 120-day
suspension of its permit and license and the imposition of the maximum monetary
penalty for its four violations.
7. However,
Respondent should be reminded that violations of the basic terms of its
alcoholic beverage permit and license are serious offenses that cannot be taken
lightly. Further, it should be noted that an alcoholic beverage permit or
license 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 violations 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 Stipulated Facts, Findings of Fact, and Conclusions of Law stated
above,
IT
IS HEREBY ORDERED that, for the violations committed by Respondent on
February 6, 2005, and April 29, 2005, the Department shall SUSPEND Respondent’s on-premises beer and wine permit and non-profit private club
minibottle license for its private club located at 3715 East North Street,
Suite O, in Greenville, South Carolina, for one hundred and twenty (120) days.
As a further penalty for the violations, the Department shall IMPOSE upon Respondent a fine of five thousand and five hundred dollars ($5500).
AND
IT IS SO ORDERED.
______________________________
JOHN D. GEATHERS
Administrative
Law Judge
1205 Pendleton
Street, Suite 224
Columbia, South
Carolina 29201-3731
February 21, 2006
Columbia, South Carolina
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