ORDERS:
FINAL ORDER AND DECISION
STATEMENT
OF THE CASE
This
matter comes before this Court pursuant to S.C. Code Ann. § 61-2-260 (Supp.
2004), S.C. Code Ann. § 1-23-600(B) (Supp. 2004), and S.C. Code Ann. §§
1-23-310 et seq. (2005). Petitioner South Carolina Department of Revenue
(Department) contends that Respondent Southern Convenience Stores, Inc., d/b/a
Southern Convenience 333, (Southern Convenience) knowingly allowed an underage
individual to purchase beer from its convenience store at 1791 Asheville
Highway in Spartanburg, South Carolina, in violation of 23 S.C. Code Ann.
Regs. 7-200.4 (Supp. 2004). For this third such violation in as many years, the
Department seeks to suspend Southern Convenience’s off-premises beer and wine
permit for the location in question for a period of forty-five days. In
response, Southern Convenience concedes that the alleged violation did occur,
but further 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 March 6,
2006, 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 Southern Convenience's violation is a fifteen-day
suspension of Southern Convenience's beer and wine permit and the imposition of
a $1000 fine upon Southern Convenience.
STIPULATED
FACTS
Pursuant
to ALC Rule 25(C) and Rule 43(k), SCRCP, the parties submitted a Stipulation of
Facts to the Court at the hearing of this matter. The Stipulation was marked as
Petitioner's Exhibit #1 and is hereby incorporated into this Order by
reference. In the seven items of the stipulation, the parties describe the
circumstances giving rise to the violation in question and acknowledge both the
current and prior violations committed by Southern Convenience.
Specifically,
the parties stipulated that on August 1, 2005, Shawn A. Howard, an employee of
Respondent Southern Convenience, allowed a nineteen-year-old Underage
Cooperating Individual (UCI) working with the South Carolina Law Enforcement
Division (SLED) to purchase beer at its location at 1791 Asheville Highway, Spartanburg , South Carolina. Mr. Howard completed the sale of the beer to the UCI without
requesting identification. Beyond describing the incident, the parties further
stipulated that the sale of the beer constituted a knowing violation of South Carolina law and that the violation was Southern Convenience's third such violation
within a three-year period.
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.
Southern Convenience Stores, Inc. owns and operates seventy three
convenience stores located in North Carolina and South Carolina. Thirty four
of the convenience stores are located in South Carolina.
2.
Southern Convenience has made good-faith efforts to prevent the sale of
alcoholic beverages to underage individuals. For example, Southern Convenience
sends its store managers and employees to training sessions concerning the
prevention of sales of alcohol to underage persons known as the Training
Intervention Program (TIPS). Seventeen middle managers employed by Southern
Convenience are certified trainers for TIPS. Ninety five percent of Southern
Convenience’s employees are TIPS trained. Southern Convenience believes that
the TIPS training program effectively addresses its problem with sales to
underage individuals.
3. Southern
Convenience has strengthened its efforts to prevent underage sales by
implementing its current policies and procedures regarding sales of alcoholic
beverages. These efforts include:
(1)
strict policies and procedures concerning checking the identification and
verifying the age of customers purchasing alcoholic beverages (e.g., under
company policy, cashiers must request proof of age from all customers
purchasing alcoholic beverages who appear under thirty five years of age and
any cashier that fails to check for such identification is terminated if the
sale leads to a violation);
(2)
technological safeguards against illegal alcohol sales (e.g., the company uses
a "legal age" cash register that requires the cashier to enter the
date of birth of the customer before completing a sale of alcohol and has
available to the cashier a “We I.D.” calendar to assist the cashier in
calculating legal age);
(3)
training programs regarding the prevention of underage sales (e.g., the company
trains new employees thoroughly regarding the laws and company policies
governing the sale of alcoholic beverages and reiterates that training frequently);
and,
(4)
methods of monitoring whether its employees are complying with the laws and
company policies related to the sale of alcoholic beverages (e.g., the company
operates a "secret shopper" program that checks its stores and the
company's managers review samples of the video surveillance of each cashier's
shift on a daily basis).
These
efforts are indicative of Southern Convenience's commitment to prevent the sale
of alcoholic beverages to underage individuals and are relevant for determining
the appropriate penalty to be imposed in this matter.
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 alcoholic beverages, including
beer and wine. S.C. Code Ann. § 61-2-20 (Supp. 2004).
2.
Regulation 7-200.4 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. 2004). Respondent Southern Convenience concedes and
stipulates that it committed a violation of Regulation 7-200.4 as alleged by
the Department.
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. 2004).
Pursuant to such authority, the Department may suspend or revoke a beer and
wine permit if the permittee has knowingly sold beer or wine to a person under
twenty-one years of age. S.C. Code Ann. § 61-4-580(1) (Supp. 2004); 23 S.C.
Code Ann. Regs. 7-200.4 (Supp. 2004); see also S.C. Code Ann. § 61-4-270
(Supp. 2004) (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 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 wine to minors. S.C. Code Ann. § 61-4-250 (Supp. 2004). For retail beer and
wine permittees, this monetary penalty must be no less than $25 and no greater
than $1,000. Id.
4.
S.C. Revenue Procedure 95-7 (1995) sets forth the Department's penalty
guidelines for violations of the alcoholic beverage control laws. For retail
beer and wine permits, Revenue Procedure 95-7 provides for a $400 fine for the
first violation by a permittee, an $800 fine for the second violation, a 45-day
suspension of the permit for the third violation, and revocation of the permit
for the fourth violation. However, this document does not set binding norms for
the Department, but rather only provides guidance to the Department in
assessing penalties for violations of the alcoholic beverage control laws. See Revenue Procedure 95-7, at ¶ 4 ("These are guidelines only and this
advisory opinion does not establish a binding norm."). As such, Revenue
Procedure 95-7 is not law and thus is not binding upon this Court. Cf. Home
Health Serv., Inc. v. S.C. Tax Comm'n, 312 S.C. 324, 328, 440 S.E.2d 375,
378 (1994) (holding that "whether a particular agency proceeding announces
a rule or a general policy statement depends upon whether the agency action
establishes a binding norm") (citing Ryder Truck Lines, Inc. v. United
States, 716 F.2d 1369 (11th Cir. 1983)).
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 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).
7.
However, Respondent should be reminded that the purpose of the
statutory prohibition against selling alcohol 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 alcohol 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
Stipulated Facts, 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. 2004) within three years, the Department shall SUSPEND Respondent's off-premises beer and wine permit for its convenience store at 1791 Asheville Highway in Spartanburg, South Carolina for fifteen (15) days and shall IMPOSE upon Respondent a fine of one thousand dollars ($1000.00).
AND
IT IS SO ORDERED.
__________________________________
JOHN D. MCLEOD
Administrative
Law Judge
March 8, 2006
Columbia, South Carolina |