South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
SCDOR vs. Skybox II Social Club, Inc.

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
South Carolina Department of Revenue

Respondents:
Skybox II Social Club, Inc.
 
DOCKET NUMBER:
00-ALJ-17-0606-CC

APPEARANCES:
Petitioner & Representative: South Carolina Department of Revenue, Carol McMahan, Esq.

Respondents & Representative: Skybox II Social Club, Inc., Joseph Lyles, Esquire

Parties Present: All present
 

ORDERS:

FINAL ORDER AND DECISION

I. Statement of the Case



The South Carolina Department of Revenue (DOR) seeks fines totaling $1,600. Skybox II Social Club Inc. (Skybox II) opposes DOR's position and asserts no fines are due. Skybox II's disagreement with DOR's determination places jurisdiction in the Administrative Law Judge Division (ALJD). S.C. Code Ann. § 61-2-260 (Supp. 2000); S.C. Code Ann. Sec. 1-23-310 et. seq. (Rev. 1986 and Supp. 2000). The hearing in this matter was held January 22, 2001 at the Greenville Court House, Greenville, South Carolina. Based upon the evidence and the argument presented by the parties, Skybox II is liable for fines of $800. (1)



II. Issues



1. Did Skybox II violate S.C. Code Ann. § 61-6-1600 (Supp. 2000) and 23 S.C. Code Ann. Regs. 7-17(J) (Supp. 2000) by allowing an individual who was not a member of the private club nor a guest of a member to consume alcoholic beverages sold in sealed containers of two ounces or less upon the licensed premises, and if so what is the appropriate penalty?



2. Did Skybox II violate the provisions of S.C. Code Ann. § 61-4-580 (Supp. 2000) and 23 S.C. Code Ann. Regs. 7-9 (B) (Supp. 2000) by selling to an underage individual and if so what is the appropriate penalty?



III. Analysis



A. Sale to Non-Member



1. Positions of Parties



DOR argues that the private club of Skybox II sold liquor to an undercover agent who was neither a member nor the guest of a member. Skybox II argues that the SLED agent had become a guest of a member and therefore the sale was proper.



2. Findings of Fact



Based on the preponderance of the evidence, the following findings of fact are entered:



The location here under review, located at 815 Creekside Drive, Clemson, South Carolina, has not been in operation long and has not had any previous violations of alcohol laws. An inspection on July 20, 2000, brought several SLED Agents to the club to examine compliance with applicable alcohol laws.



On July 20, 2000 two SLED officers operating in an undercover capacity entered the licensed premises. No one accompanied the undercover officers onto the premises and no member made prior arrangements with the management to receive the individuals as guests. An employee at the entrance of the club asked if the agents were members. Upon learning the agents were not members, another employee of the club approached them and signed them in as guests. The undercover agents were then admitted.



After entering, one of the agents approached the bartender and ordered a drink consisting of a crown royal and coke. The bartender prepared the alcoholic beverage from a minibottle, served the drink to the SLED agent, and received from the agent funds for the drink. The officer then consumed a portion of the drink on the premises.



3. Conclusions of Law



A club such as Skybox II operating as a bona fide nonprofit organization may hold a minibottle license. S.C. Code Ann. § 61-6-1820 (Supp. 2000). In utilizing that license, however, the club may sell minibottles only to members or guests of members. S.C. Code Ann. § 61-6-1600 (Supp. 2000). Further, the licensed premises can be used to consume minibottles only by members and guests of members. 23 S.C. Code Ann. Regs. 7-17(J). Thus, the SLED Agent who purchased and consumed alcohol on the premises must have been either a member of the club or the guest of a member.



Nothing in the evidence establishes the agent was a member of the club. Rather, the evidence demonstrates the agent was not a member. Further, the agent did not qualify as a bona fide guest.



Bona fide guests are limited to those who either accompany a member onto the premises or those for whom the member has made prior arrangements with the management of the organization. 23 S.C. Code Ann. Regs. 7-17(K). Clearly, no one accompanied the undercover officers onto the premises and no prior arrangements had been made with the club's management. Accordingly, the agents were neither members nor guests of members.



Thus, Skybox II violated S.C. Code Ann. § 61-6-1600 (Supp. 2000) by selling to a person that was neither a member nor a guest of a member and violated 23 S.C. Code Ann. Regs. 7-17(J) by allowing a non-member or guest to consume minibottles on the licensed premises.



As to the penalty, DOR argues that the first violation warrants a $400 fine. Skybox II argues that the fine is too high since the club had only recently opened and misunderstood the laws governing guests.



While it is true the club had not been open long, it is also true that even a single violation is grounds for revocation or suspension. A nonprofit organization licensed to sell minibottles is subject to either a suspension or a revocation of a minibottle license if the license holder violates any provision of the Alcoholic Beverage Control Act (Act) or any regulation pertaining to that Act. S.C. Code Ann. § 61-6-1830 (Supp. 2000).



Here, a suspension or revocation was not sought and discretion exists to impose a monetary penalty in lieu of suspension or revocation. S.C. Code Ann. § 61-6-4270 (Supp. 2000). Where the General Assembly authorizes a range for an administratively imposed penalty, the administrative adjudicator sitting as the fact-finder may set the amount of the penalty after a hearing on the dispute. Walker v. South Carolina ABC Comm'n, 305 S.C. 209, 407 S.E.2d 633 (1991). Here the fine of $400 is proper for a first violation.



B. Sale to Underage Individual



1. Findings of Fact



Based on a preponderance of the evidence, the following facts are found:



An on-premises beer and wine permit is also in use at this location. During the SLED inspection an undercover cooperating individual (UCI), who was 18 at the time of the inspection, entered the location. The UCI was youthful looking in appearance. The UCI had on his person a valid South Carolina driver's license and funds with which to purchase a beer.



The employee at the door did not ask the UCI for any identification. Indeed, the UCI was signed in as a guest and admitted to the premises. After being admitted, the UCI approached the bar and asked the bartender for a Budweiser beer. The bartender gave the UCI a 12 ounce bottle of beer and did so without asking for any identification. The UCI paid for the beer, took it to a nearby table, and sat down.



2. Conclusions of Law



Based on the foregoing Findings of Fact, I conclude the following as a matter of law:



The matter before me is a civil violation addressing the prohibition placed on a permit holder from knowingly selling beer to a person under twenty-one years of age. S.C. Code Ann. § 61-4-580; 23 S.C. Code Ann. Regs. 7-9(B). One violating these provisions creates a ground for the suspension of the holder's permit. Id. Here, no dispute exists on the age of the purchaser, i.e., eighteen at the time of sale. Rather, the issue is whether the sale was made knowingly.



"Knowingly" for purposes of § 61-4-580 is defined as follows:



Within the meaning of the term, "knowingly", as used in the statute, if the clerk knew that the [purchaser] was a minor or had such information, from his appearance or otherwise, as would lead a prudent man to believe that he was a minor, and if followed by inquiry must bring knowledge of that fact home to him, then the sale was made knowingly.



Feldman v. S.C. Tax Comm'n, 203 S.C. 49, 26 S.E.2d 22 (1943). The view of a prudent man is one that is "[p]articularly wise, judicious, careful, ..." Black's Law Dictionary 1226 (6th ed. 1990). However, even though Feldman uses the words "prudent man," dicta exists that implies the measuring language is a lower standard determined by the less restrictive "reasonable person." Daley v. Ward, 303 S.C. 81, 399 S.E.2d 13 (Ct. App. 1990). Thus, when adhering to the standard most favorable to Skybox II, in deciding if a sale has been made knowingly, the facts and circumstances surrounding the sale must be viewed from the perspective of a reasonable man.



The reasonable man standard requires the party to exercise that judgment required under all of the known circumstances surrounding the event with such judgment commiserate with the danger known or reasonably apprehended. Perry v. Carolina Theater, 180 S.C. 130, 185 S.E. 184 (1936). A danger that one would reasonably apprehend in circumstances involving a potential sale to a minor is that both the under-aged party and the public are likely to be harmed by sales of beer to individuals under twenty-one. See Whitlaw v. Kroger, 306 S.C. 51, 410 S.E.2d 251 (S.C. 1991); Norton v. Opening Break of Aiken, Inc. 313 S.C. 508, 443 S.E.2d 406 (Ct. App. 1994), aff'd on appeal 319 S.C. 469, 462 S.E.2d. 861. Accordingly, even the reasonable man standard requires that the seller comprehend the dangers associated with underage drinking before reaching a belief on the age of the purchaser.



Based on the objective information available on the afternoon of the sale, a reasonable person would have reached a belief that the UCI was under twenty-one. The bartender could have asked for identification but did not do so. A seller cannot avoid the "knowingly" standard by simply refusing to make a decision on the age of the purchaser and thereby claim lack of knowledge. 58 Am. Jur.2d Notice § 13 (1989) (a person has no right to shut his eyes to avoid information clearly before him). Here, faced with a purchaser with a youthful appearance, the bartender had a duty to inquire as to age. Having failed to make such an inquiry, the sale was made with the knowledge that the purchaser was under twenty-one years of age.



Given the violation, the issue of what penalty to impose must be addressed. In the final analysis, a decision of what monetary fine, or suspension, or revocation, or some combination, to impose is one the Administrative Law Judge, as the fact-finder, is empowered to determine from the totality of the facts presented. Walker v. South Carolina ABC Comm'n, 305 S.C. 209, 407 S.E.2d 633 (1991). Under the facts of this case, I conclude that a $400 fine is proper.



Certainly it is true that even one sale of beer or wine to any person under twenty-one years of age can subject the permit holder to revocation. S.C. Code Ann. § 61-4-580 (Supp. 2000); 23 S.C. Code Ann. Regs. 7-9(B). However, the instant violation is the first sale to an underage party and the club had not been operating very long. Thus, this first offense is best met with a fine of $400.



IV. Order



Based upon the Findings of Fact and Conclusions of Law, it is hereby ordered:



Skybox II shall pay a fine of $800 to DOR and such fine shall be paid within fifteen days of the date of this order.







AND IT IS SO ORDERED.



____________________________

RAY N. STEVENS

Administrative Law Judge



Dated: February 7, 2001

Columbia, South Carolina

1. At the conclusion of DOR's case, Skybox II moved for an involuntary non-suit seeking to dismiss all issues. The motion was denied for the issues addressed in this order but was granted as to DOR's assertion of an $800 fine for violation of 23 S.C. Code Ann. Regs. 7-9(A) (Supp. 2000). Thus, the alleged violation of 7-9(A) is not addressed.


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