South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
SCDOR vs. Mir, Inc., d/b/a Alley Gator Sports Bar & Grill

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
South Carolina Department of Revenue

Respondents:
Mir, Inc., d/b/a Alley Gator Sports Bar & Grill
 
DOCKET NUMBER:
01-ALJ-17-0185-CC

APPEARANCES:
Carol I. McMahan, Esquire, for the Department

Mark S. Meglic, Esquire, for the Respondent
 

ORDERS:

FINAL ORDER AND DECISION

STATEMENT OF THE CASE

This matter comes before the Administrative Law Judge Division (ALJD or Division) pursuant to § 61-2-20 (Supp. 2000) (entitled "Administration and Enforcement"), § 61-6-1600 (Supp. 2000) (entitled "Nonprofit Organizations"), § 61-6-2600 (Supp. 2000) (entitled "Penalties") and 23 S.C. Code Ann. Regs. 7-17 (1976 & Supp. 2000) (entitled "Sale and Consumption at Nonprofit Organizations"). The Respondent, Mir, Inc., d/b/a Alley Gator Sports Bar & Grill (Alley Gator's), is the holder of license number 32022767 for the sale and consumption of alcoholic liquors at a private club. Alley Gator's is located at 115 Pelham Road, Greenville, South Carolina.

The Respondent is accused of permitting the sale and consumption of alcoholic liquors by a non-member on the premises of a private club/nonprofit organization. The Department contends that this is the Respondent's first violation and is seeking a fine in the amount of Four Hundred ($400.00) Dollars. A hearing was held into this matter at the offices of the Division on September 19, 2001.



FINDINGS OF FACT

Having observed the witnesses and exhibits presented at the hearing and closely passed upon their credibility, taking into consideration the burden of persuasion by the parties, I make the following Findings of Fact by a preponderance of the evidence:

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

2. Mir, Inc., d/b/a Alley Gator Sports Bar & Grill, is the holder of minibottle sale and consumption license number 32022767. Alley Gator's is a nonprofit organization.

3. On November 3, 2000, Agent William Looper of the State Law Enforcement Division (SLED) and Officer Diane Lancaster of the Greenville County Police Department were working undercover investigating bars in the Greenville area. As part of that investigation, they entered Alley Gator's where they encountered the establishment's doorman, Jay Foster, in the foyer. Foster asked Agent Looper and Officer Lancaster if they were members of Alley Gator's and both said that they were not. The doorman then asked Looper and Lancaster if they intended to drink or just eat - non-members are allowed into the location if they eat a meal and do not consume alcohol. Both specified that they did not intend to eat. (1)

After signing in as "guests" of Alley Gator's at Foster's direction, Looper and Lancaster were permitted to enter the bar area of the location where Looper ordered a mixed liquor drink. Shortly after his purchase of the mixed drink, Looper issued a citation to Mir, Inc., for permitting the consumption of liquor by a non-member, contrary to 23 S.C. Code Ann. Regs. 7-17(J) (Supp. 2000).

4. Rehan Mir, the owner of Alley Gator's and the principal in Mir, Inc., was on the premises when Agent Looper issued the citation for this violation. Mir set forth that he put considerable expense into Alley Gator's when he converted it to a private club. Also, he has changed his security policy to include at least two individuals at the front desk at all times with off-duty officers inside for extra security on his busiest nights. Furthermore, the location still utilizes the computer system in the front foyer to check and update membership information.

5. The Respondent contends that some confusion occurred at the front door when Agent Looper and Officer Lancaster entered the location. However, I find that the evidence did not support this contention as an excuse to negate this violation. Though the doorman may have inquired as to whether or not Agent Looper and Officer Lancaster were members and directed them to sign in as guests, Agent Looper was still permitted to enter the location and purchase alcohol even though he was not a member of Alley Gator's. Furthermore, the doorman had been working for Mir, Inc., for approximately four months and was the only individual working the door at the time of this incident. Even taking into account the possibility that some "confusion" occurred at the door, Looper nonetheless purchased the mixed drink in the bar of the location, an area he was not allowed into as a non-member. Therefore, under the circumstances of this case, I find that the evidence established a violation of 23 S.C. Code Ann. Regs. 7-17(J) (Supp. 2000) (consumption of liquor by a non-member) on November 3, 2000.



CONCLUSIONS OF LAW

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

1. S.C. Code Ann. § 1-23-600 (1986 & Supp. 2000) generally grants jurisdiction to the Administrative Law Judge Division to hear contested cases under the Administrative Procedures Act. Additionally, S.C. Code Ann. § 61-2-260 (Supp. 2000) grants the Administrative Law Judge Division the authority to hear contested case hearings in matters governing alcoholic beverages, beer and wine.

2. S.C. Code Ann. § 61-6-1600 (Supp. 2000), entitled "Nonprofit organizations," sets forth the following:

Nonprofit organizations which are licensed by the department under this article may sell alcoholic liquors in minibottles. Members or guests of members of these organizations may consume alcoholic liquors sold in minibottles upon the premises between the hours of ten o'clock in the morning and two o'clock the following morning.

3. Regulation 7-17(J) also provides that only bona fide members and bona fide guests of members of such organizations may consume alcoholic beverages sold in sealed containers of two ounces or less upon the licensed premises. 23 S.C. Code Ann. Regs. 7-17(J) (1976 and Supp. 2000). The regulation further defines a "bona fide guest" as "limited to those who accompany a member onto the premises or for whom the member has made prior arrangements with the management of the organization." 23 S.C. Code Ann. Regs. 7-17(K) (1976 and Supp. 2000).

4. 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).

5. S.C. Code § 61-6-2600 (Supp. 2000), entitled "Penalties," sets forth, in relevant part:

[A] person licensed to sell alcoholic liquors pursuant to the provisions of this article . . . who violates any other provision of this article must:



(1) for a first offense be fined not less than two hundred dollars nor more than five hundred dollars or have his license suspended for not more than thirty days, or both . . . .

(emphasis added). Under the Offenses and Penalty Guidelines in Revenue Procedure 95-7, the penalty for a first offense against a minibottle retail sale and consumption license is a fine of Four Hundred ($400.00) Dollars. This is the penalty the Department is seeking against the Respondent. Revenue Procedure 95-7 sets forth that it is only a guideline and "does not establish a binding norm." See S.C. Revenue Procedure 95-7.

The Administrative Law Judge Division has the authority to establish the imposition of a penalty for a violation. Inherent in and fundamental to the quasi-judicial powers of an Administrative Law Judge, as the trier of fact in contested cases under the Administrative Procedures Act, 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).

In the present case, the Respondent clearly violated the provisions of Regulation 7-17(J) by permitting the sale and consumption of alcoholic liquors by a non-member on the premises of a private club/nonprofit organization. As mitigation, the owner of the location, Rehan Mir, set forth that he has increased his security team to ensure that at least two individuals are at the front desk at all times with off-duty officers inside for extra security on his busiest nights. Furthermore, the location still relies upon a computer system in the front foyer to check and update membership information. I find that the appropriate penalty for this violation involving the Respondent's sale and consumption of alcoholic liquors license at a private club is a fine in the amount of Two Hundred ($200.00) Dollars.



ORDER

Based upon the foregoing Findings of Fact and Conclusions of Law:

IT IS HEREBY ORDERED that the Respondent, Mir, Inc., d/b/a Alley Gator Sports Bar & Grill, shall pay a fine to the Department in the amount of Two Hundred ($200.00) Dollars for this violation involving the Respondent's license number 32022767 for the sale and consumption of alcoholic liquors at a private club.

AND IT IS SO ORDERED.



_____________________________

Ralph King Anderson, III

Administrative Law Judge



November 20, 2001

Columbia, South Carolina

1. Alley Gator's is divided into two areas, the restaurant area and the bar area. A dance floor which is located behind the half wall at the doorman's desk separates the two areas. The foyer of the location is equipped with a computer that is used to check membership status and to update member information.


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