SC Administrative Law Court Decisions

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

2. The Respondent, Marlboro Stations (Marlboro), is the holder of a beer and wine permit for a nonprofit organization and sale and consumption license of alcoholic liquors for its establishment located at 141 Marlboro Street, Aiken, South Carolina.

Sale and Consumption License

3. On June 14, 2001, agents of the South Carolina Law Enforcement Division (SLED) performed an undercover inspection of Marlboro. When Agent Green entered the location, the doorman asked if she was a member and Agent Green responded that she was not a member or the guest of a member. The doorman then charged her $8.00 to enter and stated that the charge was for a nonmember that evening. After entering Marlboro, Agent Green was allowed to purchase an alcoholic drink (a margarita).

The following evening, Agent Green returned to Marlboro. The doorman allowed her to purchase a membership for $5.00 that evening and immediately enter the nonprofit location. After entering, Agent Green was allowed to purchase an alcoholic drink (Bacardi Rum). Agent Green consumed a small portion of the drink and, upon exiting the location, turned over a sample of the drink to Agent Turner. Agent Turner issued a citation to Marlboro for “permitting consumption of liquor by a nonmember.”

Marlboro has two previous violations of the laws regulating its sale and consumption license as a nonprofit organization within three years of June 15, 2001. Both of those violations were for permitting consumption of liquor by a person who is neither a bona fide member or a bona fide guest of a member. Marlboro previously paid an $800.00 fine for the first violation and a $1,000.00 fine for the second violation. On May 3, 2002, the Department revoked Marlboro’s sale and consumption license for the June 15, 2001 violation, and imposed a $500.00 fine.

Beer and Wine Permit

4. On September 9, 2001, agents of SLED inspected the location. Nine individuals were in possession of and consuming beer in Marlboro at approximately 2:25 a.m.^[1] Marlboro was issued an administrative citation for “permitting a criminal act, possession of beer during restricted hours” in violation S.C. Code Ann. § 61-4-580 (Supp. 2001). Marlboro has one previous violation of the laws regulating its beer and wine permit within three years of September 9, 2001. That violation was also for permitting a person to possess beer or wine in an open container upon its premises during restricted hours. Marlboro paid a $400.00 fine for that violation. On May 3, 2002, the Department imposed an $800.00 fine for Marlboro’s violation on September 9, 2001.

Mitigating Evidence

5. Eric Kitchens, who now manages Marlboro, also operates three other on-premise businesses that sell beer, wine and alcohol. Two of the businesses are restaurants with on-premise beer and wine permits and sale and consumption licenses. The restaurants have been open three and five years, respectively. The other location is a night club which has been open for approximately nine years and holds both an on-premise beer and wine permit and a private sale and consumption license. Only one violation has occurred at any of these locations. That violation was the sale of alcohol to a nonmember at the club.

Additionally, after the first violation at Marlboro, Mr. Kitchens fired the doorman/bartender who permitted the violation. After the second violation, Mr. Kitchens again fired the doorman/bartender who permitted that violation. Mr. Kitchens contends that he has since learned that the problems at Marlboro were attributable to the manager that was operating the location. That manager has since been fired and there have been no violations during the eighteen months that the new manager has been operating Marlboro.

CONCLUSIONS OF LAW

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

General Conclusions

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. 2001). S.C. Code Ann. § 1-23-600 (1986 & Supp. 2001) grants jurisdiction to the Division to hear contested cases under the Administrative Procedures Act. Specifically, S.C. Code Ann. § 61-2-260 (Supp. 2001) grants the Division 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).

Beer and Wine Permit

3. A holder of a permit to sell beer or wine may not allow any act which constitutes a crime under the laws of this State. See S.C. Code Ann. § 61‑4‑580 (5) (Supp. 2001). “A person who drinks beer or wine or possesses beer or wine in an open container between the hours of twelve o'clock Saturday night and sunrise Monday morning at a place licensed to sell beer or wine is considered guilty of a misdemeanor. . . .” S.C. Code Ann. § 61‑4‑140 (Supp. 2001). Since the Respondent permitted that act to occur upon its premises, Marlboro violated Section 61-4-580.

A beer and wine permittee may be fined not less than twenty‑five dollars nor more than one thousand dollars for an infraction against the laws regulating the sale of beer and wine in lieu of suspension or revocation. S.C. Code Ann § 61-4-250 (Supp. 2001). The Respondent was previously fined $400.00 for its first violation.

Sale and Consumption License

4. The Department contends that a sale and consumption license must be revoked upon conviction of a third offense within three years. S.C. Code Ann. § 61-6-2600 (Supp. 2001) provides that “a person licensed to sell alcoholic liquors pursuant to the provisions of this article who . . . violates any . . . provision of this article must:

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(3) for a third offense within three years of the first offense be fined not less than five hundred dollars and have his license revoked permanently . . . .”

On the other hand, the Respondent contends that this tribunal has the discretion to impose a monetary penalty in lieu of revocation if it finds that the evidence supports that determination. S.C. Code Ann. § 61-6-4270 (Supp. 2001) sets forth:

For violations of Articles 3, 5, 7, and 13 of this chapter, or of Chapter 21 or 33 of Title 12, and for a violation of any regulation pertaining to alcoholic liquors, the department may, in its discretion, impose a monetary penalty upon the holder of a liquor license in lieu of suspension or revocation.

(Emphasis added).

The primary rule of statutory construction is to ascertain and give effect to the legislature's intent. Green v. Thornton, 265 S.C. 436, 219 S.E.2d 827 (1975). In ascertaining the legislature's intent, statutes that are part of the same act must be read together. Burns v. State Farm Mut. Auto. Ins. Co., 297 S.C. 520, 377 S.E.2d 569 (1989). Furthermore, “[e]ach part of a statute should be given effect and each word given its plain meaning if this can be accomplished by any reasonable construction.” Sea Island Scenic Parkway Coalition v. Beaufort County Bd. of Adjustments and Appeals, 316 S.C. 231, 236, 449 S.E. 2d 254, 257 (Ct. App. 1994). Moreover, this tribunal must reconcile conflicts if possible and is obligated to avoid a construction that would read a provision out of a statute. Steinke v. South Carolina Dept. of Labor, Licensing and Regulation, 336 S.C. 373, 520 S.E.2d 142 (1999); see also S.C. Code Ann. § 61-6-4000 (Supp. 2001) (providing that Article 13 of Title 61, which includes § 61-6-4270, is complementary to and not in conflict with existing laws governing the sale of “beer, wines, and other vinous, fermented, or malt liquors”).

Presuming that the application of the rules of statutory construction is warranted in this case, the most reasonable construction which gives effect to both Sections 61-6-2600 and 61-6-4270 is that this tribunal has discretion to impose a monetary penalty, whenever the provisions of Articles 3, 5, 7, and 13 of Title 61 set forth that the Department may revoke or suspend a license or permit held under those provisions. On the other hand, when a licensee commits a third offense within three years under Article 5, the license must be mandatorily revoked. Nevertheless, the most reasonable construction is not always applied in enforcement actions by the Department because if a penal statute is ambiguous, it is strictly construed against the State and any doubt must be resolved in favor of the Respondent. Gateway Enterprises, Inc. v. South Carolina Department of Revenue, 341 S.C. 103, 533 S.E.2d 896 (2000). However, in this case, I am not making any finding concerning the construction of these statutes because I find that Section 61-6-2600 is inapplicable to this case.

Section 61-6-2600 sets forth that a person who violates a “provision” of Article 5 must have their license revoked. However, the Respondent did not violate a provision of Article 5. Rather, the Respondent violated 23 S.C. Code Ann. Regs. 7‑17 (J) (Supp. 2001). S.C. Code Ann. § 61‑6‑1830 (Supp. 2001) sets forth the penalties for violation of the Department’s regulations. It provides that:

The department may suspend, revoke, or refuse to renew a license issued pursuant to subarticle 1 of this article upon finding that:

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(2) the applicant has violated since the issuance of the license any regulation.

(Emphasis added). If there is any ambiguity between Section 61-6-2600 and 61-6-1830, the interpretation of the meaning of those provisions must be strictly construed against the State and any doubt must be resolved in favor of the Respondent. Moreover, “[a] specific statutory provision prevails over a more general one.” Wooten ex rel. Wooten v. S.C. Dep't of Transp., 333 S.C. 464, 468, 511 S.E.2d 355, 357 (1999). Section 61-6-1830 expressly addresses the penalties for violations of the regulations by Article 5 licensees. Moreover, Section 61-6-4270 also specifically provides that a monetary penalty may be imposed in lieu of revocation for a violation of the Department’s regulations. Accordingly, both 61-6-4270 and 61-6-1830 contain permissive language to allow the Department to utilize discretion in its decision-making process to determine the appropriate penalty. Therefore, I find that the Department and consequently the Division possesses the discretion to impose a monetary penalty in lieu of revocation for a violation of Regulation 7-17 (J) by an Article 5 licensee.

Sanction

5. The Administrative Law Judge Division, as the trier of fact in contested cases under the Administrative Procedures Act, has the authority to establish the facts supporting the imposition of a penalty for a violation. Inherent in and fundamental to the quasi-judicial powers of an Administrative Law Judge 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). To that end, the 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 the 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). A legitimate as well as a significant consideration is whether the alleged mitigating factor demonstrates reasonable cause to reduce the penalty. Kroger Co. v. Department of Revenue, 673 N.E. 2d 710 (Ill. 1996).

I find that based upon the evidence submitted that the appropriate penalty in this case for the Respondent’s violation of Section 61-4-580 is the fine levied by the Department of $800.00. On the other hand, in light of the above analysis, I find that consideration of the mitigating evidence is justified in determining the appropriate sanction for the Respondent’s violation of Regulation 7‑17(J). I further find that in light of the fact the Respondent has only been monetarily fined for his previous two violations and has made efforts after each previous violation to insure that further violations do not occur, that a forty-five (45) day suspension of the Respondent’s license is the appropriate penalty for his violation of Regulation 7‑17 (J).

ORDER

Based upon the foregoing Findings of Fact and Conclusions of Law, IT IS HEREBY ORDERED that the Respondent’s sale and consumption license is suspended for forty-five (45) days and that the Respondent pay an $800.00 fine for violation of its beer and wine permit to the Department within thirty (30) days from the date of this Decision.

AND IT IS SO ORDERED.

___________________________

Ralph King Anderson, III

Administrative Law Judge

June 26, 2003

Columbia, South Carolina