SC Administrative Law Court Decisions

This contested case comes before the South Carolina Administrative Law Judge Division pursuant to the Respondent's request for review of the Petitioner's Final Agency Determination. The Petitioner seeks a fine in the amount of $400.00 for a violation of 23 S.C. Code Ann. Regulation 7-9(A) (permitting the possession or consumption of liquor by a person under twenty-one). The Petitioner also seeks a fine in the amount of $800.00 for a second violation of 23 S.C. Code Ann. Regulation 7-9(B) (permitting the possession or consumption of beer by a person under twenty-one). A hearing was held in this case on April 23, 2001 at the Administrative Law Judge Division.

Having observed the testimony of the witnesses and exhibits presented at the hearing and closely passed upon their credibility, I make the following Findings of Fact by a preponderance of the evidence:

• Notice of the time, date, place, and subject matter of the hearing was provided to all parties in a timely manner.
• The Respondent operates an establishment known as Freaky Tiki, located at 708A North Ocean Boulevard, Myrtle Beach, Horry County, South Carolina.
• On June 3, 2000, at approximately 11:15 p.m., three officers of the South Carolina Law Enforcement Division (SLED) conducted an inspection of Freaky Tiki. Inside the establishment, the SLED officers observed two people, one consuming a mixed drink known as a Long Island Iced Tea, and the other consuming a draft beer. Upon inspection, the SLED officers determined that the individuals were under the age of twenty-one.
• After the agents determined the individuals were under the age of twenty-one, the subjects were issued Summons Tickets and transported to the Myrtle Beach Detention Center. Each of the individuals paid a fine of $112.00.
• The SLED agents also issued Administrative Violations against the Respondent for (1) permitting the possession/consumption of beer by a person under twenty-one, and (2) permitting the possession/consumption of liquor by a person under twenty-one. The Department of Revenue sustained these violations in its Final Agency Determination dated December 5, 2000.
• The Freaky Tiki is an "under twenty-one bar," that is, an establishment that caters to individuals between the ages of eighteen and twenty-one, as well as those over twenty-one. The bar has a capacity of 720 people.
• The Freaky Tiki has employed a number of measures to ensure that people under twenty-one are not served beer or liquor. The bar has different hand stamps for those over and under twenty-one. The bar has ten "floor walkers," or people who wander the floor of the bar looking for underage drinkers. The bar pays the floor walker $3.00 per underage person caught.

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

• S.C. Code Ann. § 1-23-600 (Supp. 2000) grants jurisdiction to the ALJD to hear contested cases under the Administrative Procedures Act. Specifically, S.C. Code Ann. § 61-2-260 (Supp. 2000) grants the ALJD the authority to hear contested case hearings in matters involving alcoholic beverages, beer and wine.
• In civil cases, generally, the burden of proof rests upon the party who asserts the affirmative of an issue. 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 case; therefore, the Department must prove by a preponderance of the evidence that Respondent violated (1) Reg. 7-9(A), by selling liquor to a person under the age of twenty-one; and (2) Reg. 7-9(b), by selling beer to a person under the age of twenty-one. See Anonymous v. State Bd. of Medical Examiners, 329 S.C. 371, 496 S.E.2d 17 (1998) (standard of proof in an administrative proceeding is preponderance of the evidence).
• 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. Southern Bell Telephone and Telegraph Co., 308 S.C. 216, 417 S.E.2d 586 (1992). Furthermore, a trial judge, who observes a witness is in the better position to judge the witness's demeanor and veracity and evaluate his testimony. See McAlister v. Patterson, 278 S.C. 481, 299 S.E.2d 322 (1982); Peay v. Peay, 260 S.C. 108, 194 S.E.2d 392 (1973); Mann v. Walker, 285 S.C. 194, 328 S.E.2d 659 (Ct. App. 1985); Marshall v. Marshall, 282 S.C. 534, 320 S.E.2d 44 (Ct. App. 1984).
• The Department of Revenue contends the Respondent violated 23 S.C. Code Ann. Reg. 7-9(A), which provides in pertinent part:

To permit or knowingly allow a person under twenty-one years of age to purchase or possess or consume alcoholic beverages in or upon a licensed establishment which holds a license issued by the South Carolina Alcoholic Beverage Commission for the sale and consumption of alcoholic beverages in sealed containers of two (2) ounces or less is prohibited and constitutes a violation of the license. Such violation shall be sufficient cause to suspend or revoke the license.

• The sale of the mixed drink to the underage patron was a violation of 23 S.C. Code Ann. Reg. 7-9(A).
• The Department of Revenue also contends the Respondent violated 23 S.C. Code Ann. Reg. 7-9(B) which provides:

To permit or knowingly allow a person under twenty-one years of age to purchase or possess or consume beer or wine in or on a licensed establishment which holds a license or permit issued by the [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].

• The sale of the beer to the underage patron was a violation of 23 S.C. Code Ann. Reg. 7-9(B).
• The Respondent first argues that it should not be held responsible for the violation because the Department cannot prove that it "knowingly " committed the violation. The Respondent argues that it could not have knowingly made the sale because it was unaware that an employee had sold the alcohol to the underage patron. The South Carolina Court of Appeals recently addressed this issue in Save More, Inc. v. S.C. Department of Revenue, Unpublished Opinion No. 2000-UP-318, Filed April 26, 2000. The Court held that "the knowledge test . . . includes not only actual knowledge of a fact, but also situations where a person has such information that would lead a prudent person to form a belief as to the fact, and if followed by proper inquiry would have disclosed its character." The Court further held that "the knowledge requirement is satisfied with either actual or constructive knowledge." I find that the Respondent had constructive knowledge of the underage patrons' ages.
• The Respondent also argues that the penalty imposed by the Department, a penalty of $1200.00, is excessive given the facts and circumstances of this case. Internal Department policies call for the imposition of this penalty. The amount of the penalty imposed is within the sound discretion of the Administrative Law Judge. Walker v. South Carolina ABC Comm'n, 305 S.C. 209, 407 S.E.2d 633 (1991). In the case at bar, the Respondent did demonstrate that it had taken steps to prevent sale of alcohol to underage people. I find that under the facts and circumstances of this case, a penalty of $1200.00 is excessive. I find that a monetary penalty of $200.00 is appropriate for the first violation of Reg. 7-9(A) and $400.00 for the second violation of Reg. 7-9(B).

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

ORDERED that the Respondent pay to the Department of Revenue a fine in the amount of Six Hundred ($600.00) Dollars within thirty days of the date of this Order;

AND IT IS SO ORDERED.

____________________________________ CAROLYN C. MATTHEWS

Administrative Law Judge

May 3, 2001

Columbia, South Carolina