SC Administrative Law Court Decisions

This matter comes before me pursuant to S.C. Code Ann. § 61-2-260 (Supp. 2000) and S.C. Code Ann. §§ 1-23-310 et seq. (Rev. 1986 and Supp. 2000). The South Carolina Department of Revenue (Department) contends that Respondent Hess Mart, Inc., d/b/a Hess Mart #40234 (Respondent) permitted or knowingly allowed an underage person to purchase beer from Respondent's licensed establishment located at 1208 Sunset Blvd., West Columbia, South Carolina. Accordingly, the Department seeks to impose a $400 fine against Respondent for this first violation of 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2000).

After timely notice to the parties, a hearing was conducted on May 2, 2001, at the Administrative Law Judge Division, Columbia, South Carolina. Based upon testimony and the evidence presented, the Department's request to fine Respondent $400 for violating 23 S.C. Code Ann. Regs. 7-9(B) is granted.

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 off-premises beer and wine permit (#32022563PB6) for the convenience store located at 1208 Sunset Blvd., West Columbia, South Carolina.

2. On January 3, 2001, State Law Enforcement Division (SLED) Agents Gary Reinhart and Jill Turner, with the assistance of Underage Cooperating Individual (UCI) Ashley Brunnemer, conducted a routine sting operation at the licensed premises.

3. Prior to the UCI entering the convenience store, Agent Turner searched the UCI and determined that she had only a valid South Carolina Driver's License and $4 provided by SLED on her person. Shortly thereafter, the agents observed the UCI entering the convenience store.

4. The UCI entered the convenience store at approximately 7:21 p.m. and walked back to the beer/wine cooler at the rear of the store. She took a 24 oz. can of Bud Light from the cooler. The UCI proceeded to purchase the beer from Stephanie Thompson, who was employed by Respondent as a sales clerk on January 3, 2001. Ms. Thompson requested the UCI's Driver's License, reviewed it, and then mumbled under her breath " '82." The UCI responded: "Yes, ma'am." She did not indicate verbally or through physical gesture or assertion that she was twenty-one years of age. The identification presented was the UCI's South Carolina Driver's License, which indicated her birth date to be "8-15-1982." The license also conspicuously indicated the following: "UNDER 21 until 08-15-2003." Nonetheless, Ms. Thompson placed the beer in a bag and completed the sale. The UCI exited the store and took the beer to the agents who were outside the premises. The UCI was eighteen years old at the time of the purchase.

5. Agents Reinhart and Turner and the UCI entered the location, approached Ms. Thompson, and introduced themselves as SLED agents and a UCI.

6. On January 3, 2001, Respondent was issued a citation for violating 23 S.C. Code Ann. Regs. § 7-9(B) (Supp. 2000).

7. For the incident occurring on January 3, 2001, Ms. Thompson was charged with a criminal violation of S.C. Code Ann. § 61-4-90 (Supp. 2000), for the transfer of beer to a person under the age of twenty-one. In a hearing before a magistrate, Ms. Thompson pled guilty.

9. On the date of the hearing before this tribunal, the UCI's physical appearance accurately reflected her physical appearance on the night in question. The UCI appeared sufficiently youthful to merit an inquiry as to her correct age before allowing her to purchase alcohol. Based on this tribunal's observation of the UCI at the hearing, a reasonable person would conclude that the UCI was under the age of twenty-one.

III. 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. 2000). The Department alleges Respondent violated 23 S.C. Code Ann. Regs. § 7-9(B)(Supp. 2000) by permitting or knowingly allowing a minor to purchase beer from Respondent's licensed establishment. Regulation 7-9(B) provides:To permit or knowingly allow a person under twenty-one years of age to purchase or possess or consume beer and wine in or on a licensed establishment which holds a license or permit issued by the South Carolina Alcoholic Beverage Control Commission 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 Alcoholic Beverage Control Commission.

23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2000) (emphasis added). To warrant a finding of a violation of 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2000), the Department must establish that either Respondent or Respondent's servant, agent or employee permitted or knowingly allowed a person under twenty-one years of age to purchase beer from Respondent's licensed establishment. It is well established that, in interpreting a regulation, the sole function of this tribunal is to determine and give effect to the intention of the drafter, with reference to the meaning of the language used and the subject matter and purpose of the regulation. See State v. Ramsey, 311 S.C. 555, 430 S.E.2d 511 (1993). When the meaning of the language, the subject matter, and the purpose of the regulation are considered together, it becomes apparent that the drafters of 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2000) intended beer and wine permit holders to be responsible for the actions and conduct of their agents or employees. See 48 C.J.S. Intoxicating Liquors § 168 (1981). Thus, the sale of beer or wine to a minor is forbidden irrespective of whether the sale is made by the permit holder or by an employee of the permit holder. 48 C.J.S. Intoxicating Liquors § 259 (1981). Such an interpretation is consonant with the public policy of preventing underage drinking. Ms. Thompson was employed by Respondent at the time the sale was made; therefore, Respondent is liable for her actions.

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 (2d ed. 1994); Alex Sanders et al., Trial Handbook for S.C. Lawyers § 9:3 Party With Burden, Civil Cases (2000). The Department is the party asserting the affirmative in this case; therefore, the Department must prove by a preponderance of the evidence that Respondent through its agent, servant, or employee permitted or knowingly allowed the UCI to purchase beer from the licensed establishment in violation of 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2000). ⁽¹⁾

In the case at hand, the Department offered testimony establishing that Ms. Thompson had information that the UCI was under the age of twenty-one through the UCI's youthful appearance and Ms. Thompson's inspection of the UCI's Driver's License. The UCI's appearance would cause a prudent person to believe the UCI was under twenty-one years of age, and would cause the same prudent person to conduct an inquiry to ascertain her correct age. The UCI's physical appearance at the hearing was the same as the night in question. Even though Ms. Thompson inquired, she, nonetheless, acquiesced by failing to prevent a person under twenty-one years of age from purchasing beer at the licensed premises of Respondent. ⁽²⁾ Ms. Thompson had actual information of the UCI's age once the UCI gave her the Driver's License, which clearly indicated that the UCI was born on August 15, 1982, and that she would be under the age of twenty-one until August 15, 2003. Accordingly, because Ms. Thompson was an employee of Respondent at the time of the sale, Respondent is liable for a violation of 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2000).

Respondent asserts that Ms. Thompson was induced by SLED into selling the beer to the UCI. The burden is upon the party claiming the defense of entrapment to prove he was induced, tricked, or incited to commit a crime which he would otherwise not have committed. State v. Johnson, 295 S.C. 215, 367 S.E.2d 700 (1988). "Inducement" may be defined as government conduct which creates a substantial risk that an undisposed person or otherwise law-abiding citizen would commit the offense. U.S. v. Ortiz, 804 F.2d 1161 (10th Cir. 1986). Proof of government inducement requires more than mere solicitation. U.S.. v. Prytz, 822 F. Supp. 311 (D.S.C. 1993), aff'd, 35 F.3d 557 (4th Cir. 1994), cert denied 514 U.S. 1003 (1995). Further, inducement will not be shown merely by evidence that the government agent initiated the contact with the Defendant or proposed the crime. Ortiz, 804 F.2d at 1165 (citing U.S. v. Andrews, 765 F.2d 1491, 1499 (11th Cir. 1985)). Rather, more is needed to show inducement, such as trickery by disguise. See U.S. v. Healy, 202 F. 349 (D. Mont. 1913), Voves v. U.S., 249 F. 191 (7th Cir. 1918).

In the case at hand, the UCI did not induce, trick or incite Ms. Thompson to sell her the beer. When Ms. Thompson seemingly inquired whether 1982 was the year of the UCI's birth, she responded, "Yes, ma'am." The UCI did not deceive Ms. Thompson in any way. Both the UCI's youthful appearance and Driver's License provided Ms. Thompson with all the information a reasonable person would need to conclude that the UCI was under the age of twenty-one. Furthermore, the UCI did not alter her appearance to appear older than her true age. For these reasons, Respondent has failed to prove the defense of entrapment.

The Respondent further questions the propriety of using UCIs. The use of UCIs in such sting operations is permissible. In 1993, the Attorney General reasoned that because the language of S.C. Code Ann. § [61-6-4070] (Supp. 2000) ⁽³⁾ does not specifically or in effect preclude the use of minors in sting operations, "it appears that law enforcement officers could utilize underage individuals to cause 'transfers' prohibited by S.C. Code Ann. § [61-6-4070]." 1993 Op. Att'y Gen. No. 93-94. In the case at hand, the SLED agents did nothing more than employ a person under the age of twenty-one to purchase a bottle of beer. The UCI did not induce, trick or incite Ms. Thompson to sell her the beer. Furthermore, the UCI did not alter her appearance to appear older than her true age. For these reasons, Respondent has failed to prove the defense of entrapment.

C. Res Judicata

Additionally, Respondent contends that the Department is precluded by the doctrine of res judicata from bringing this action. The doctrine of res judicata may not be used to preclude the litigation of an administrative violation of 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2000), where an employee of the licensed establishment was previously convicted on criminal charges for an unlawful transfer of beer to a minor in violation of S.C. Code Ann. § 61-4-90 (Supp. 2000). Under the doctrine of res judicata, a final judgement on the merits in a prior action precludes the parties from relitigating any issues actually litigated or those that might have been litigated in the first action. Foran v. USAA Casualty Ins. Co., 311 S.C. 189, 427 S.E.2d 918 (Ct. App. 1993). The defense of res judicata requires a showing of three essential elements: (1) the prior judgement must be final, valid and on the merits; (2) the parties in the subsequent action must be identical to those in the first; and (3) the second action must involve matters properly included in the first action. Owenby v. Owens Corning Fiberglass, 313 S.C. 181, 437 S.E.2d 130 (Ct. App. 1993). Here, the parties are not identical, and this case does not involve a matter which was included in the first action. Ms. Thompson was charged with a criminal violation of S.C. Code Ann. § 61-4-90 (Supp. 2000), transfer of beer to a person under the age of twenty-one. In a hearing before a magistrate court judge, Ms. Thompson pled guilty. The parties to the action in magistrate's court were the State of South Carolina and Ms. Thompson. In the case at hand, the parties are the South Carolina Department of Revenue and Hess Mart, Inc., d/b/a Hess Mart #40234. Therefore, the parties are not identical. Furthermore, the matter before this tribunal is an administrative violation against the licensee of the establishment where the UCI purchased the beer. The matter before the magistrate court involved a criminal violation against the sales clerk of the convenience store. For the foregoing reasons, this tribunal concludes that res judicata is not applicable to the case at hand.

D. Penalties

The Department is authorized to revoke or suspend the beer and wine permit of any licensee for committing a violation of the laws pertaining to alcoholic beverages or any regulation promulgated by the Department. See S.C. Code Ann. §§ 61-4-270 & 61-4-590 (Supp. 2000). For example, the Department is authorized to revoke a licensee's permit for only a first violation. See S.C. Code Ann. §§ 61-4-270, 61-4-590 (Supp. 2000); 23 S.C. Code Ann. Regs. 7-9(B). Further, the Department may impose a monetary penalty as an alternative to revocation or suspension. S.C. Code Ann. § 61-4-250 (Supp. 2000). Under S.C. Code Ann. § 61-4-250, a monetary penalty of $25 to $1,000 for any violation relating to retail beer and wine licenses may be imposed.

The Department's Revenue Procedure 95-7 sets forth penalty guidelines for violations of the Alcohol Beverage Control laws. For retail beer and wine licenses, Revenue Procedure 95-7 provides for a $400 fine for the first offense, an $800 fine for the second offense, a 45-day suspension of the license for the third offense, and revocation of the license for the fourth offense. This Revenue Procedure only provides guidance to the Department and does not constitute binding law on this Division. Cf. Home Health Serv. v. S.C. Tax Comm'n, 312 S.C. 324, 328, 440 S.E.2d 375, 378 (1994) and Ryder Truck Lines, Inc. v. U.S., 716 F.2d 1369 (11^th Cir. 1983).

E. Conclusion

In conclusion, the holder of a beer and wine permit is liable for the actions of its employees who sell alcohol to underage persons. Respondent's employee, Ms. Thompson, permitted or knowingly allowed the purchase of beer by a person under the age of twenty-one in violation of 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2000). Additionally, the defenses of entrapment and res judicata have not been proven.

The Department is authorized to revoke or suspend the beer and wine permit of any licensee for committing a violation of the laws pertaining to alcoholic beverages or of any regulation promulgated by the Department. See S.C. Code Ann. §§ 61-4-270 and 61-4-590 (Supp. 2000). Further, the Department may impose a monetary penalty as an alternative to revocation or suspension. S.C. Code Ann. § 61-4-250 (Supp. 2000). For the reasons stated above, a fine of $400 is appropriate.

IV. ORDER

IT THEREFORE ORDERED that Petitioner's request that Respondent be fined $400 for violating 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2000) is granted. Respondent shall remit $400 to the Department within thirty (30) days of the date of this Order to satisfy the fine.

AND IT IS SO ORDERED.

_________________________________

JOHN D. GEATHERS

Administrative Law Judge

May 21, 2001

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 (2000) (citing Frazier v. Frazier, 228 S.C. 149, 89 S.E.2d 225 (1955)).

2. "Knowingly" in this context means if the clerk "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 at 25 (citations omitted). See also Norris v. Greenville, S. & A. Ry. Co., 111 S.C. 322, 97 S.E. 848, 850 (1919) ("When a person has notice of such facts as are sufficient to put him upon inquiry, which, if pursued with due diligence, would lead to knowledge of other facts, he must be presumed to have knowledge of the undisclosed facts.").

3. The original statute referenced, S.C. Code Ann. § 61-13-287 was repealed by 1996 Act No. 415 § 5 (97). A new version of this provision now appears at S.C. Code Ann. § 61-6-4070 (Supp. 2000); for purposes of analysis, the language is substantially the same.