SC Administrative Law Court Decisions

STATEMENT OF THE CASE

This matter comes 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. Petitioner South Carolina Department of Revenue (Department) contends that Respondent Pagers Unlimited, Inc., knowingly permitted an underage individual to purchase beer from its convenience store, Dee Tee’s Quick Stop, at 727 North Church Street in Spartanburg, South Carolina, in violation of 23 S.C. Code Ann. Regs. 7-200.4 (Supp. 2005). For this third such violation in as many years, the Department seeks to suspend Respondent’s off-premises beer and wine permit for the location for a period of forty-five days. In response, Respondent 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 August 8, 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 Respondent’s violation is a fourteen-day suspension of its beer and wine permit and the imposition of a $1000 fine upon Respondent.

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. Respondent Pagers Unlimited, Inc., owns and operates a convenience store known as Dee Tee’s Quick Stop, located at 727 North Church Street in Spartanburg, South Carolina. Respondent holds a permit to sell beer and wine for off-premises consumption from its convenience store.

2. On November 17, 2005, at Respondent’s convenience store, Allen Kidd, an employee of Respondent Pagers Unlimited, sold a beer to a youthful-looking nineteen-year-old Underage Cooperating Individual (UCI), who was working with agents of the South Carolina Law Enforcement Division (SLED). Mr. Kidd did not request identification or other proof of age from the UCI prior to completing the sale of the beer. The Department contends—and Respondent concedes—that, as a result of this sale, Respondent, through its employee, Mr. Kidd, permitted the sale of beer to an underage individual in violation of 23 S.C. Code Ann. Regs. 7-200.4.

3. In addition to the instant violation, Respondent has committed two prior similar violations within the past three years. These violations include a violation committed on September 14, 2004, for which Respondent paid a $500 fine, and a violation committed on February 17, 2005, for which Respondent paid a $1000 fine.

4. Respondent has made good-faith efforts to prevent the sale of alcoholic beverages to underage individuals. It provides training on the sale of alcoholic beverages to its employees, both at the time of hire and in daily reminders, including training under a program offered by the Spartanburg County Sheriff’s Office, “Spartanburg’s BEST: Beverage Education & Server Training.” Respondent has also moved the store’s office to provide greater visibility of the check-out area and to ensure that a manager is watching the activity at the registers at all times. Further, Respondent has provided incentives to its employees to be vigilant with regard to sales of alcohol to underage individuals by providing a $25 bonus for catching an underage person attempting to purchase alcohol (the bonus escalates to $50 if the underage individual is working with law enforcement). While Respondent did not implement many of these prevention efforts until after the instant violation occurred, these actions are, nonetheless, indicative of Respondent’s good-faith and sincere efforts to prevent the sale of beer and wine to underage persons and are relevant to determining the appropriate penalty for Respondent’s violation.

CONCLUSIONS OF LAW

Based upon the foregoing 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. 2005).

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 year[s] of age to purchase or possess or consume alcoholic liquors, beer or wine in or on a licensed place of business 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. 2005). Respondent Pagers Unlimited concedes 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. 2005). 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. 2005); 23 S.C. Code Ann. Regs. 7-200.4 (Supp. 2005); see also S.C. Code Ann. § 61-4-270 (Supp. 2005) (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. 2005). 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 04-4 (2004) sets forth the Department’s penalty guidelines for violations of the alcoholic beverage control laws. For retail beer and wine permits, Revenue Procedure 04-4 provides for a $500 fine for the first violation by a permittee, a $1000 fine for the second violation, a forty-five-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 04-4, at 2 (“These are guidelines only and this advisory opinion does not establish a binding norm.”). As such, Revenue Procedure 04-4 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 Findings of Fact and Conclusions of Law stated above,

IT IS HEREBY ORDERED that, for Respondent’s third violation of its beer and wine permit within as many years, the Department shall SUSPEND Respondent’s off-premises beer and wine permit for its Dee Tee’s Quick Stop convenience store located at 727 North Church Street in Spartanburg, South Carolina, for a period of fourteen (14) days and IMPOSE a fine of $1000 upon Respondent.

AND IT IS SO ORDERED.

______________________________

JOHN D. GEATHERS

Administrative Law Judge

August 24, 2006

Columbia, South Carolina