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 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
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