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. 2005). The
South Carolina Department of Revenue (Department) seeks a 45 day suspension of
Respondent’s permit for its violation of 23 S.C. Code Ann. Regs. 7-200.4 (eff.
6/27/03). A hearing was held before me on April 25, 2006, 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), the parties entered the following
written stipulations of fact into the Record:
1. The Spinx
Company, Inc., (Spinx) is the holder of an on-premise beer and wine permit, for
the location at 94 Allen Street, Greenville, South Carolina.
2. That on
April 5, 2005, at approximately 3:44 p.m., an Underage Confidential Informant
(UCI) purchased one sealed 24 oz. can of Busch beer from Spinx.
3. That Najjel Dixon was an employee and/or agent of Spinx, and sold the beer in question to the UCI.
4. That the
UCI, Anthony Steven Tolbert, was an 18 year old black male at the time of the
purchase of the subject beer.
5. That Najjel Dixon requested identification from the UCI. The UCI presented his South Carolina
Driver’s license that showed he was 18 years of age, having been born on July
21, 1986.
6. That Spinx,
by and through its employee, Najjel Dixon, was put on notice of the UCI’s age
by virtue of the information on the UCI’s drivers license.
7. Najjel Dixon
permitted the UCI to purchase the beer notwithstanding the information produced
on his driver’s license. Najjel Dixon was charged with transfer of beer to an
individual under the age of twenty-one. Spinx was issued an administrative
citation for knowingly permitting an underage person to purchase beer on a
licensed premises pursuant to 23 S.C. Code Ann. Regulation 7-200.4.
8. Spinx has
committed three prior underage violations during a four year and three month
period. The first violation was committed on January 19, 2001. Spinx paid a
fine of $400 for this violation. The second violation was committed on
February 25, 2003. Spinx pad a fine of $800 for this violation. A third
violation was committed on November 19, 2003. The Department and Spinx entered
into an agreement on June 9, 2004 whereby Spinx served a 10 day suspension from
6/14/04 through 6/23/04 and paid a $2,500 fine. This fourth violation occurred
approximately 17 months after the last violation.
9. The Company
admits that it violated Regulation 7-200.4 on April 5, 2005 by “knowingly
permitting the purchase of beer by a person under the age of twenty-one”, when its
employee, Najjel Dixon, permitted an 18 year old UCI to purchase beer at the
aforesaid location.
10. The
Department issued its Final Department Determination regarding this violation
on October 3, 2005. Spinx timely requested a contested case hearing on this
matter.
11. Spinx admits
such violation and that the sole issue before this Court is the penalty to be
imposed for its violation of Regulation 7-200.4 on April 5, 2005.
12. The parties
request the Court take judicial notice of the fact that the Department’s
consistent administrative practice for the imposition of penalties for
violation of the alcohol statutes and regulations is set forth in S.C. Revenue
Procedure 04-04.
FINDINGS
OF FACT
Having observed the
witnesses and exhibits presented at the hearing and taking into consideration
the burden of persuasion and the credibility of the witnesses, I make the
following findings of fact by a preponderance of evidence:
1. Notice of
the time, date, place and subject matter of the hearing was given to the
Petitioner and the Respondent.
2. As of August
2004, Respondent implemented a six-step hiring process to curtail hiring
employees that are likely to sell alcohol to underage persons. The screening
process includes an application, phone screening, reference check, background
check, math test,
and interview. Furthermore, they conduct a personality test, otherwise known
as an ESQ, which appraises the risk of on the job delinquent behaviors. Once
the employee is hired, they go through a half-day orientation program, of which
1½ to 2 hours is devoted to age sensitive sales training.
Respondent has also
implemented other methods to prevent underage sales. A secret shopper program,
run by Greenville Family Partnership, conducts visits and reports their findings
to the manager. If the employee follows procedure, the store is given a green
card, and if they fail to follow procedure, they are given a red card and the
employee is suspended for a week without pay. They must then participate in
the training program again before they can come back to work. Furthermore, in
May of 2004, Spinx # 116 acquired a Telebucks Scanner. This scanner reads the
magnetic strip and/or the bar code on a driver’s license to determine the age
of holder. While it is possible to circumvent this machine by overriding it, if
the employee follows the procedure as they are instructed, a valid I.D. must be
swiped before an alcohol sale can be made. Management compares the number of
times the Telebucks machine is used to the number of alcohol sales on a weekly
basis to substantiate that the employees are consistently checking
identification and not overriding the I.D. system.
Additionally,
Respondent established an incentive program for managers and supervisors in
which they are encouraged to ensure that company policy regarding age sensitive
sales is followed. Under that program, the managers and supervisors receive
bonuses if a store follows the age sensitive sales policies and, conversely, are
financially penalized when a store fails to comply with Greenville Family
Partnership’s secret shopping or when SLED issues a citation.
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. 2005) grants jurisdiction to the Court to hear
contested cases under the Administrative Procedures Act. Specifically, S.C. Code
Ann. § 61-2-260 (Supp. 2005) 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 or knowingly allowing a
person under the age of twenty-one (21) to purchase or possess beer upon the
licensed premises. 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).
4. 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).
5. In
this case, the Department imposed 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. 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, the Respondent clearly violated the provisions of Regulation
7-200.4 by permitting the purchase of beer by an individual under the age of
twenty-one (21). Moreover, despite Respondents efforts to screen and train its
employees, those efforts did not prevent this violation from reoccurring.
Nevertheless, Respondent promptly terminated the offending employee.
Furthermore, since the past violation, Respondent has made extraordinary efforts
to hire employees that will not sell beer or wine to minors, intentionally or
negligently. Respondent has also made notable efforts to ensure that its
employees know the law and comply with its requirements.
ORDER
Based
upon the foregoing Findings of Fact and Conclusions of Law,
IT
IS HEREBY ORDERED that Respondent’s beer and wine permit be suspended for twenty-one
(21) days beginning June 4, 2006.
AND IT IS SO
ORDERED.
__________________________________
Ralph
King Anderson, III
Administrative
Law Judge
May 12, 2006
Columbia, South Carolina
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