SC Administrative Law Court Decisions

This matter comes before the Administrative Law Judge Division (Division) pursuant to S.C. Code Ann. §§ 61-2-20 and 61-2-260 (Supp. 2000). The South Carolina Department of Revenue (Department) seeks a forty-five (45) day suspension of the Respondent's beer and wine permit for his third violation of 23 S.C. Code Ann. Regs. 7-9 (Supp. 2000) within the past three years. A hearing was held before me on July 12, 2001, at the offices of the Division in Columbia, South Carolina.

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. Jackie M. Jones holds off-premises beer and wine permit No. 32004243-PBG for Floyd's Self Serv (Floyd's). The store is located at Highways 1 and 245 in Leesville, South Carolina.

3. On January 22, 2001, an underage cooperating individual (UCI) entered Floyd's. The UCI carried only his identification and a five dollar bill into the store. The money was provided to the UCI by Agent K. Smith of the South Carolina State Law Enforcement Division. While inside the store, the UCI purchased a twenty-four (24) ounce "Bud Light" beer from David Julius, the clerk on duty. Mr. Julius did not request the UCI's identification, which stated the UCI's correct age. At the time of this violation, the UCI was eighteen (18) years old. This constituted a third violation against the Respondent's beer and wine permit within three years.

4. The Respondent testified that he advises his employees to check the identification of everyone purchasing beer and wine. Also, there is a note posted on the cash register. However, the Respondent has no policy concerning disciplinary action for any employee selling to a minor, he does not have a cash register that reminds the cashier to check the customer's birthday, and he does not require training of his employees in these areas. The Respondent further requests leniency on his suspension because he will be disproportionately impacted from larger businesses that are able to absorb the cost. Specifically, he contends that a forty-five (45) day suspension of his beer and wine permit would put him out of business.

5. This is the Respondent's third violation against his beer and wine permit within the past three years at this location. The Respondent previously committed the following violations against his beer and wine permit and received the following punishments:

a. Permitting the purchase of beer by an individual under the age of twenty-one (21) on May 8, 1998. The Respondent paid a $400.00 fine for that offense; and

b. Permitting the purchase of beer by an individual under the age of twenty-one (21) on May 12, 2000. The Respondent paid a $800.00 fine for that offense.

The Respondent again violated the provisions of 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2000) by permitting the purchase of beer by an individual under the age of twenty-one (21) on January 22, 2001.

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

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

2. 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).

3. Holders of beer and wine permits are forbidden from permitting "any act, the commission of which tends to create a public nuisance or which constitutes a crime . . . . " S.C. Code Ann. § 61-4-580(5) (Supp. 2000).

4. Permitting or knowingly allowing a person under the age of twenty-one (21) to purchase or possess beer upon the licensed premises is a violation against a license or a permit. Such a violation constitutes sufficient grounds for either suspension or revocation of the beer and wine permit. 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2000).

5. The permittee is responsible for all acts of his servants, agents, or employees and cannot seek to avoid the consequences of a violation for lack of personal knowledge. Following that principle, the South Carolina Supreme Court upheld a civil forfeiture of a corporation's boat based upon an employee's transporting drugs even though the corporation claimed the use of the boat to transport drugs was without its knowledge. South Carolina Law Enforcement Division v. The "Michael and Lance," 281 S.C. 339, 315 S.E. 2d 171 (S.C. App. 1984). The Court held that "[a] principal is affected with constructive knowledge of all material facts of which its agent receives notice while acting within the scope of his authority." Id. at 173, citing Crystal Ice Co. of Columbia, Inc. v. First Colonial Corp., 273 S.C. 306, 257 S.E. 2d 496 (1979). Likewise, the license holder is responsible for the actions and conduct of employees utilizing the permit upon the permitted premises. 48 C.J.S. Intoxicating Liquors § 259 (1981).

6. In this case, the Department imposed a forty-five (45) day suspension of the Respondent's beer and wine permit for this third violation of S.C. Code Ann. Regs. 7-9(B) (Supp. 2000) within the past three years. See Revenue Procedure 95-7.

7. Inherent in and fundamental to the 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). The Administrative Law Judge, as fact-finder, must impose a penalty based on the facts presented at the contested case hearing. To that end, an 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 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).

In the present case, the Respondent clearly violated the provisions of 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2000) by permitting the purchase of beer by an individual under the age of twenty-one (21). Although the Respondent argues that his employees are instructed to check identification, in the instant case, the Respondent's employee nevertheless did not ask for the UCI's identification and still sold beer to the minor. Furthermore, his remaining arguments are not persuasive mitigating circumstances. After two previous convictions for selling beer to minors, the Respondent simply did little, if anything, to ensure that his employees would not again sell beer or wine to minors.

Based upon the foregoing Findings of Fact and Conclusions of Law, IT IS HEREBY ORDERED that the Respondent's beer and wine permit be suspended for a period of forty-five (45) days.

AND IT IS SO ORDERED.

___________________________

Ralph King Anderson, III

Administrative Law Judge

July 24, 2001

Columbia, South Carolina