South Carolina              
Administrative Law Court
Edgar A. Brown building 1205 Pendleton St., Suite 224 Columbia, SC 29201 Voice: (803) 734-0550

SC Administrative Law Court Decisions

CAPTION:
SCDOR vs. JC JAM, Inc., d/b/a Longbranch

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioner:
South Carolina Department of Revenue

Respondent:
JC JAM, Inc., d/b/a Longbranch
 
DOCKET NUMBER:
06-ALJ-17-0091-CC

APPEARANCES:
Harry Hancock, Esquire, For Petitioner

James H. Harrison, Esquire, For Respondent
 

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. 2004). The South Carolina Department of Revenue (Department) seeks revocation of the Respondent's sale and consumption license pursuant to S.C. Code Ann. Section 61-6-1830 (Supp. 2004). The Department also seeks revocation of the Respondent's beer and wine permit, pursuant to S.C. Code Ann. Section 61-2-140(E) (Supp. 2004) and a fine of Five Hundred Dollars ($500.00). A hearing was held before me on May 8, 2006 at the offices of the Administrative Law Court in Columbia, South Carolina. The Respondent, JC JAM, Inc., d/b/a Longbranch (JC JAM), is licensed to sell liquor in minibottles for on premises consumption under DOR license #32022590-PSC and licensed to sell beer and wine for on premises consumption under DOR permit #32022590-PBW. JC JAM is located at 761 Riverview Road, Rock Hill, South Carolina.

The Respondent is accused of permitting the sale and consumption of alcoholic liquors by a non-member on the premises of a private club/nonprofit organization. The Department contends that this is the Respondent's third violation in three years assessed against Respondent pursuant to S.C. Code Ann. Reg. 7-401.4(J).

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

1. Notice of the time, date, place and subject matter of the hearing was given to the Petitioner and the Respondent.

2. JC JAM, Inc., d/b/a Longbranch (JC JAM), is licensed to sell liquor in minibottles for on premises consumption under DOR license #32022590-PSC and licensed to sell beer and wine for on premises consumption under DOR permit #32022590-PBW. JC JAM is a nonprofit organization located at 761 Riverview Road, Rock Hill, South Carolina.

3. On or about July 7, 2005, Agents Jackson, Branham, Pope and Godfrey of the State Law Enforcement Division (SLED) conducted an undercover investigation at JC JAM. Agent Branham approached the bar and ordered a Crown Royal and Coke. Agent Branham was asked by the bartender, Patty Sanders, if she was a member. Upon answering “No” Agent Branham was asked to produce her driver’s license and was asked to fill out a guest card. After filling out the guest card, Agent Branham was served the Crown Royal and Coke, which was paid for with $6.50 in state issued funds. Agent Branham sat at a game table nearby where she consumed a small portion of the drink to ensure that the drink contained liquor. Agent Branham was approached by Mr. Murphy, who asked Agent Branham who she was with. Agent Branham told Mr. Murphy she was waiting on a friend and Mr. Murphy walked away. Agent Branham then called Agent Jackson on her mobile phone. Petitioner was issued a citation for allowing the consumption of liquor by a non-member on the licensed premises contrary to 23 S.C. Code Ann. Regs. 7-401.4(J) (Supp. 2004). While in the process of being issued the citation, Mr. Murphy snatched the guest card from the agents and refused to return the evidence until the agents threatened several times to place him under arrest. Conduct of this nature cannot be tolerated.

4. Ann Murphy is on the Board of Directors for JC JAM and is one of the founding members. Ann Murphy was under the mistaken belief that the use of guest cards in the manner JC JAM was using them was permissible and legal. Ann Murphy was not present when the citation for this violation was issued.

5. Patricia Sanders, the bartender on duty the day in question, was told by Byron Hager of Hager Motorsports that Agent Branham was his guest. Ms. Sanders gave Agent Branham a guest card to fill out reading “Guest of Hager Motorsports” based on Mr. Hager’s claim.

6. JC JAM now has two employees working the door to ensure the door is never left unmanned. The doorperson working the day this violation occurred was terminated for not following club policies. JC JAM has also implemented a guest register and has discontinued the use of the guest cards.

7. Under the circumstances of this case, I find that the evidence establishes a violation of 23 S.C. Code Ann. Regs. 7-401.4(J) (Supp. 2004) (consumption of liquor by a non-member) on or about July 7, 2005.

CONCLUSIONS OF LAW

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

1. The Department is vested with the authority to administer the provisions of Title 61 governing alcoholic beverages, beer and wine. S.C. Code Ann. § 61-2-20 (Supp. 2004). S.C. Code Ann. § 1-23-600 (1986 & Supp. 2004) grants jurisdiction to the Court to hear contested cases under the Administrative Procedures Act. Specifically, S.C. Code Ann. § 61-2-260 (Supp. 2004) grants the Court the authority to hear contested case hearings in matters governing alcoholic beverages, beer and wine.

2. Permits issued by this State for the sale of beer and wine and licenses issued by this State for the sale of liquor 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. JC JAM holds a sale and consumption license as a "nonprofit organization." A nonprofit private club minibottle license allows a nonprofit organization to sell alcoholic liquors in minibottles[1] to its members and guests of members, who may consume the liquor on the licensed premises between the hours of ten o'clock in the morning and two o'clock the following morning. S.C. Code Ann. § 61-6-1600(A) (Supp. 2004). Accordingly, the Department's regulations provide that, when a nonprofit organization operates under such a license, only bona fide members and bona fide guests of members of such organization may consume alcoholic beverages sold in sealed containers of two ounces or less upon the licensed premises. 23 S.C. Code Ann. Regs. 7-401.4(J) (Supp. 2004). These "bona fide guests" are defined by regulation as "those who accompany a member onto the premises or for whom the member has made prior arrangements with the management of the organization." 23 S.C. Code Ann. Regs. 7-401.4(K) (Supp. 2004). Here, the Respondent permitted Agent Branham, who was neither a "bona fide member" nor a "bona fide guest of a member," to consume an alcoholic beverage upon its premises in violation of Regulation 7-401.4(J). The Respondent admits that this violation occurred.

The Department argues that Respondent’s sale and consumption license should be revoked upon conviction of a third offense within three years. The Department also argues that Respondent's beer and wine permit should also be revoked in accordance with S.C. Code Ann. 61-2-140(E) (Supp. 2004). Finally, the Department seeks a $500.00 fine against the Respondent for this third violation.

Under the statutes and regulations governing the sale of alcoholic beverages, the violations committed by JC JAM 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. 2004) (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); see also S.C. Code Ann. § 61-2-140(E) (Supp. 2004) (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. 2004) (monetary penalties for violations of beer and wine permits); S.C. Code Ann. § 61-6-4270 (Supp. 2004) (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).

4. 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).

5. 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). Here, I find that the appropriate penalty for JC JAM’s third violation in a three year period is a 30-day suspension of its permit and license and the imposition of a Five Hundred Dollar ($500.00) fine.

6. However, Respondent should be reminded that violations of the basic terms of its beer and wine permit and liquor license are serious offenses that cannot be taken lightly. Further, it should be noted that a beer and wine permit or liquor 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 foregoing Findings of Fact and Conclusions of Law:

IT IS HEREBY ORDERED that for the violation committed by Respondent, JC JAM, Inc., d/b/a Longbranch, on July 7, 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 761 Riverview Road, Rock Hill, South Carolina for thirty (30) days beginning on Thursday, June 1, 2006 and ending on Friday, June 30, 2006 at 11:59 p.m. As a further penalty for the violations, the Department shall IMPOSE upon Respondent a fine of five hundred dollars ($500).

AND IT IS SO ORDERED.

___________________________

John D. McLeod

Administrative Law Judge

May 12, 2006

Columbia, South Carolina



[1] The 2005 amendment, in subsection (A) of S.C. Code Ann. § 61-6-1600 (Supp. 2005), substituted “by the drink” for “in minibottles”. Pursuant to Act No. 139 of 2005, the South Carolina General Assembly authorized the sale of liquor by the drink from regular liquor bottles, also known as "free pour" drinks. Therefore, as of January 1, 2006, it was no longer necessary to sell liquor drinks from minibottles, and all current minibottle licenses, including Respondent's license, became licenses to sell liquor by the drink. However, as the license held by Respondent was a minibottle license at the time of the events in question in this matter, this Order, for clarity purposes, will refer to Respondent's license as a minibottle license, even though that license now authorizes Respondent to sell free pour liquor drinks.


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