ORDERS:
FINAL ORDER AND DECISION
STATEMENT OF THE CASE
This matter comes before me for a hearing pursuant to S.C. Code Ann. § 1-23-310 et seq. and S.C. Code Ann. § 61-2-260
(Supp. 1999). Respondent Blink, Inc., d/b/a Freaky Tiki Club (Respondent) holds a beer and wine permit at its club located
at 708A North Ocean Drive, Myrtle Beach, South Carolina. Petitioner South Carolina Department of Revenue (Department
or Petitioner) alleges that Respondent or its employees knowingly permitted the simple possession of marijuana at the
licensed premises at approximately 11:50 p.m. on July 3, 1999. Petitioner seeks a 45-day suspension of Respondent's beer
and wine permit for the alleged violation of S.C. Code Ann. § 61-4-580 (Supp. 1999), as this would be the third violation by
Respondent within three years.
After timely notice to the parties, a hearing was conducted at the Administrative Law Judge Division, Columbia, South
Carolina. Based upon the testimony and evidence presented, this tribunal concludes that Petitioner failed to prove, by a
preponderance of the evidence, that Respondent violated S.C. Code Ann. § 61-4-580(5) (Supp. 1999) on July 3, 1999, and
Petitioner's action to impose a 45-day suspension on Respondent's beer and wine permit is denied.
STIPULATED FACTS
At the hearing of this matter, the parties entered into the record the following stipulations:
1. Blink, Inc., d/b/a Freaky Tiki Club is located at 708A North Ocean Boulevard, Myrtle Beach, South Carolina.
2. Freaky Tiki Club operates under a beer and wine license (# BW161894) (expiration date 5/31/00).
3. Freaky Tiki Club was open for business on July 3, 1999.
4. On July 3, 1999, South Carolina Law Enforcement Division (SLED) agent Reid Creswell and Myrtle Beach police officer
A.G. Lever conducted an inspection of the Freaky Tiki Club.
5. As a result of the inspection, the SLED agent issued a violation report to Blink, Inc., for violating S.C. Code Ann. § 61-4-580(5), for permitting a criminal act on the premises.
6. The criminal act alleged was the simple possession of marijuana (S.C. Code Ann. § 44-53-370).
7. On December 8, 1999, the Department issued an Agency Notice of Intent To Suspend to Respondent.
8. On February 3, 2000, Respondent transmitted a protest of the Agency Initial Citation to the Department.
9. On February 23, 2000, Petitioner issued an Agency Final Determination to Respondent.
10. On March 22, 2000, Respondent requested a hearing before the Administrative Law Judge Division.
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 holds an on-premises beer and wine permit (#BW161894) for its location at 708A North Ocean Boulevard,
Myrtle Beach, South Carolina.
2. On July 3, 1999, at approximately 11:50 p.m., a SLED agent and a police officer of the Myrtle Beach Police Department
entered the Freaky Tiki Club for the purpose of conducting an inspection. They walked through a first set of doors and
entered a lobby, where a doorman was monitoring the entrance of customers into the club. The customers were waiting in
line to enter the club. The SLED agent and police officer walked ahead of the customers in the line and through a second set
of double doors into the club. At this point, they both immediately observed a strong odor of marijuana in the air.
3. The SLED agent and the police officer observed two persons at a table in a booth along a wall approximately 20 feet away
from the double doors. One of these individuals was passing a pipe to the other. The pipe contained at least some
marijuana. Within approximately 5 to 10 seconds of entering the club, the SLED agent and police officer approached these
individuals, and the police officer arrested them for possession of marijuana. Subsequently, at least one of the individuals
was convicted for the simple possession of marijuana.
4. There was a bartender attending a beer tub approximately 20 feet from the table at which the two individuals were in the
possession of the marijuana. She was selling beer to customers arriving at the club, receiving payments for the beer, and
making change for customers. The bartender did not smell marijuana at the club at the time in question. Instead, after
observing the arrest of the two persons, the bartender believed that the arrest concerned the possession of alcohol by a
minor.
5. Respondent employed approximately ten to fifteen bouncers to monitor the customers at the location at issue.
6. According to the SLED agent and officer, there were perhaps 500 to 700 customers at the licensed premises at
approximately 11:50 p.m. on July 3, 1999.
7. The policies of Respondent include that a bartender should report the use or possession of marijuana to a bouncer.
Respondent's policies also include the reporting of such acts to the Myrtle Beach Police Department. The police officer
testified at the hearing that Respondent has a good relationship with the Myrtle Beach Police Department and does, in fact,
report such acts.
8. The violation at issue would be Respondent's third violation, which would subject it to a 45-day suspension of its beer and
wine permit under the Department's written policies. See South Carolina Department of Revenue Procedure 95-7.
CONCLUSIONS OF LAW AND DISCUSSION
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. 1999). Furthermore, the Department is
authorized to revoke or suspend the beer and wine permit of any licensee for committing a violation of the law pertaining to
alcoholic beverages or any regulation promulgated by the Department. See S.C. Code Ann. §§ 61-4-270 & 61-4-590 (Supp.
1999). Here, the Department seeks a 45-day suspension of Respondent's beer and wine permit for permitting a criminal act,
the simple possession of marijuana. The pivotal issue in this case is whether Respondent or its servants, agents, or
employees knew whether an individual at the licensed premises was in possession of marijuana.
The Department alleges that Respondent, including any agent or employee, knew or should have known that a customer was
in possession of marijuana at its licensed premises at approximately 11:50 p.m. on July 3, 1999, thereby violating S.C. Code
Ann. § 61-4-580(5)(Supp. 1999). S.C. Code Ann. § 61-4-580(5) (Supp. 1999) provides:
No holder of a permit authorizing the sale of beer or wine or a servant, agent, or employee of the permittee may knowingly
commit any of the following acts upon the licensed premises covered by the holder's permit:
. . .
(5) permit any act, the commission of which tends to create a public nuisance or which constitutes a crime under the laws of
this State . . . .
Burden of Proof
In civil cases, generally, the burden of proof rests upon the party who asserts the affirmative of an issue. 29 AM. JUR.2d
Evidence § 127 (1994); 2 AM JUR.2d Administrative Law § 360 (1994); Alex Sanders, ET AL., South Carolina Trial
Handbook § 9:3 Party with Burden, Civil Cases (1999). The Department is the party asserting the affirmative
in this action; therefore, the Department must prove by a preponderance of the evidence that Respondent or
Respondent's agent, servant, or employee knew of an individual's possession of marijuana at the licensed
premises, thereby violating S.C. Code Ann. § 61-4-580(5) (Supp. 1999).(1)
Definition of Knowledge
To support a violation of S.C. Code Ann. § 61-4-580(5), the Department must establish that Respondent or its
employee had knowledge, either actual or constructive, of the illegal activity occurring on the licensed
premises. "Knowledge" is defined as an "awareness or understanding of a fact or circumstance." Black's Law
Dictionary 876 (7th ed. 1999). "Actual knowledge" is defined as "[d]irect and clear knowledge, as
distinguished from constructive knowledge" or "[k]nowledge of such information as would lead a
reasonable person to inquire further." Id. "Constructive knowledge" is defined as "[k]nowledge that one
using reasonable care or diligence should have, and therefore that is attributed by law to a given person."
Id.
It is well settled that a person's knowledge can be proven through circumstantial evidence(2)
or
manifestations of the individual. See Eason v. United States, 281 F.2d. 818 (9th Cir. 1960); State v. Attardo,
263 S.C. 546, 211 S.E.2d 868 (1975). In State v. Mollison, 319 S.C. 41, 459 S.E.2d 88 (Ct. App. 1995), a case
involving marijuana possession, the South Carolina Court of Appeals stated that: "the knowledge element
may be proved circumstantially by evidence of acts, declarations or conduct of the accused from which an
inference may be drawn that the accused knew of the existence of the prohibited substance."
Similarly, a Georgia appellate court decided that where intoxicating liquor was found in the accused's
restaurant, the accused's knowledge that such liquor was present was an indispensable element of a
provable case; such knowledge could be drawn from circumstances that reasonably induced the belief in its
existence, but such knowledge could not be inferred from suspicious circumstances alone. Kelly v. State, 91
Ga.App. 421, 85 S.E.2d 794 (1955) (prosecution for the unlawful possession of intoxicating liquor). The
Georgia court reasoned that while it was not necessary for the State to prove that the restaurant owner
actually saw the liquor, it was necessary to show facts and circumstances from which knowledge could
reasonably be inferred. The court emphasized the importance of such proof because a public place of
entertainment or restaurant, unlike a home, is an establishment where anyone who wishes may visit.
Analysis
In this case, based on the facts and evidence presented, I conclude that the Department failed to prove, by a
preponderance of the evidence, that Respondent (including its agents and employees) knew or should have
known that a customer possessed marijuana at its licensed premises. There is no evidence in the record of the
period of time that the customers at issue were smoking marijuana. The SLED agent and police officer
testified that they approached and arrested the customers within approximately five to ten seconds of
entering the club. There is no evidence that the smoking of marijuana took place for a long enough period of
time to charge Respondent or any of its employees or agents with either actual or constructive knowledge.
Furthermore, the two closest employees were the doorman and a bartender, and each was approximately
twenty feet from the criminal activity alleged. The doorman was monitoring the entrance of customers in a
lobby that was adjacent to the main area of the club; he stood on the other side of two double doors that
led to the main area of the club. The bartender was serving beer and receiving payments for beer at a beer
tub approximately twenty feet from the criminal activity alleged. The bartender testified that she did not
smell marijuana at the time in question. There was no evidence that the doorman smelled the marijuana on
the other side of the double doors. Also, there is no evidence in the record that the two individuals were
smoking marijuana long enough to suggest that the doorman or bartender should have detected and thus
known that they were smoking marijuana.
Likewise, there is no evidence that the smoking of marijuana occurred over a long enough period of time such
that the bouncers or other staff would have been aware that there was marijuana at the club. Respondent
employed approximately ten to fifteen bouncers who would roam the club. There was no evidence that
there were bouncers any closer to the criminal activity than the bartender or the doorman. Consequently,
there is no evidence that the bouncers knew or should have known of the possession of marijuana on the
night in question.
Finally, the SLED agent and police officer testified that there were perhaps 500 to 700 customers at the club
on the time of the arrest. The police officer further testified that there was a fog machine blowing and that
you could not actually see the marijuana smoke through the fog. These facts further support a finding
that there was no actual or constructive knowledge of the possession or smoking of marijuana at the club.
The uncontested testimony indicates that Respondent has policies in place under which employees report
such violations to management. The testimony also indicates that Respondent has, in fact, reported several
such violations over the years that it has operated. This tribunal has no reason to question the testimony in
this case that there was no knowledge of the possession or smoking of marijuana on the night in question.
In sum, the Department has not proven, by a preponderance of the evidence, that Respondent or its employees
or agents knew that an individual was in the possession of marijuana at the club or had sufficient
opportunity to discover it. "No set rule can very well be established to determine what constitutes a
sufficiency of facts to excite inquiry, and each case depends on its own facts and circumstances." 66 C.J.S.
Notice § 11, at 645 (1950). According to the facts presented to this tribunal, the circumstances of this case
were insufficient (1) to "lead a reasonable person to inquire further" of the possession of marijuana at the
licensed premises, or (2) to constitute "knowledge that one using reasonable care or diligence should have."
Black's Law Dictionary 876 (7th ed. 1999).
Considering the number of customers at the club, the atmosphere at the club, the short amount of time that
the SLED agent and police officer were at the licensed premises, and the lack of testimony to show
knowledge, I find that there was no knowledge, either actual or constructive, of the possession of
marijuana at the club on July 3, 1999. Therefore, the facts in this case do not warrant a finding of a
violation of S.C. Code Ann. § 61-4-580(5).
ORDER
The South Carolina Department of Revenue failed to prove, by a preponderance of the evidence, that
Respondent violated S.C. Code Ann. § 61-4-580(5) (Supp. 1999) on July 3, 1999.
IT IS THEREFORE ORDERED that the Department's request to impose a 45-day suspension of the beer and
wine permit (# BW161894) is hereby denied.
AND IT IS SO ORDERED.
_____________________________
John D. Geathers
Administrative Law Judge
July 7, 2000
Columbia, South Carolina
1. The preponderance of the evidence is "[t]he greater weight of the evidence" or "superior evidentiary weight that, though not sufficient to free
the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other."
BLACK'S LAW DICTIONARY 1201 (7th ed. 1999). "The preponderance of the evidence means such evidence as, when considered and
compared with that opposed to it, has more convincing force and produces in the mind the belief that what is sought to be proved is more likely
true than not true." Sanders, supra, § 9:5 Quantum of Evidence in Civil Cases (1999) (citing Frazier v. Frazier, 228 S.C. 149, 89 S.E.2d 225
(1955)).
2. Circumstantial evidence means:
. . . proof that does not actually assert or represent the proposition in question, but that asserts or describes something else, from which the trier of
fact may either (1) reasonably infer the truth of the proposition, in which case the evidence is not only relevant under [the rules of evidence] but is
sufficient as well, or (2) at least reasonably infer an increase in the probability that the proposition is in fact true, in which case the evidence is
relevant under [the rules of evidence] (assuming that the proposition is of consequence to the determination of the action) but may not be sufficient
by itself to create a question for the trier of fact to decide.
(footnotes omitted). Gastineau v. Murphy, 323 S.C. 168, 178-179, 473 S.E.2d 819, 826 (Ct. App. 1996) (quoting 29 Am. Jur. 2d Evidence § 313
(1994)). |