SC Administrative Law Court Decisions

These matters come 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 its third violation of 23 S.C. Code Ann. Regs. 7-9 (Supp. 2000). A hearing was held before me on November 20, 2001 at the offices of the Administrative Law Judge 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. The Pantry, Inc., holds off-premise beer and wine permit No. BG32015038-P7B-6 for The Pantry #880. The store is located at 1805 Savannah Highway, Charleston, South Carolina.

3. On May 3, 2001, an underage cooperating individual (UCI) entered The Pantry #880. The UCI carried only his identification and money into the store. While inside the store, the UCI purchased a twenty-four (24) ounce "Budweiser" beer from Ms. Potter, the clerk on duty. Ms. Potter requested to see and looked at the UCI's identification, which stated the UCI's correct age. However, she mistakenly interpreted his age from the identification and proceeded with the sale. At the time of this violation, the UCI was eighteen (18) years old and did not appear to be over the age of twenty-one (21). This constituted a third violation against the Respondent's beer and wine permit within three (3) years.

4. The Respondent 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 May 3, 2001. This is the Respondent's third violation against its beer and wine permit within the past three (3) years at this location. The Respondent previously committed the following violations and received the following punishments:

a. Permitting the purchase of beer by an individual under the age of twenty-one (21) on or about February 4, 2000. The Respondent paid an $800.00 fine for that offense; and

b. Permitting the purchase of beer by an individual under the age of twenty-one (21) on or about September 19, 1998. The Respondent paid a $400.00 fine for that offense.

5. The Respondent has a written policy of checking identification to which its employees must adhere. In that regard, employees are given "age-sensitive" tests when they are hired and once every month thereafter. The tests are designed to insure that The Pantry's employees are aware of the restriction of selling alcohol to under-aged individuals. Ms. Potter took that test and scored well. Also, The Pantry's employees are required to sign daily and monthly "commitment sheets" which list several attestations the employees are required to make to insure that no sales are made to under-aged individuals. The employees are informed that if they do not abide by those policies they could be terminated. In fact, Ms. Potter was terminated as a result of the sale in this case. However, there was no evidence that Ms. Potter signed her "commitment sheet" on the day the violation occurred.

Store #880 uses a register that requires the clerk to enter the birth date of the individual purchasing the alcohol. If the birth date entered reflects the individual is not old enough to purchase the alcohol, the register will stop the sale. The Pantry also utilizes a "hot list" to curtail violations at its stores. ⁽¹⁾ When stores are placed upon the "hot list," the District Manager sends in "secret shoppers" to detect violations and calls more frequently to remind the employees to check IDs to insure that no further violations occur. Store #880 was on The Pantry's "hot list" and, as such, the corporation was making extra efforts to prevent another violation at this store. ⁽²⁾

On the other hand, there was no evidence that The Pantry sent any "secret shoppers" to Store #880 to insure compliance with Regulation 7-9(B). Furthermore, the Store #880 was a very busy store in which the employees had numerous responsibilities. The number of responsibilities that existed for the clerks created a potential that a distracted employee may unlawfully sell beer to an under-aged individual.

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 a 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 employees are trained to check identification, that it utilizes a cash register to verify the purchasers age, and that Store #880 was placed upon the "hot list"to insure compliance with the law, the Respondent's employee still sold beer to a minor. Nevertheless, the efforts of this corporation in attempting to insure compliance with Regulation 7-9(B) and its prompt termination of the offending employee are proper factors of mitigation in this case.

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 twenty (20) days beginning April 1, 2002.

AND IT IS SO ORDERED.

___________________________

Ralph King Anderson, III

Administrative Law Judge

March 14, 2002

Columbia, South Carolina

1. Interestingly, to be placed on the "hot list," that location must be cited for at least two Department of Revenue violations and/or sting violations.

2. The Respondent also argued that it is difficult to attract good employees because they make only slightly above minimum wage. This argument, however, is a double-edged sword because the corporation itself chooses to pay only slightly above minimum wage. The corporation could alternatively choose to pay higher salaries in an effort to attract quality employees that would not violate the law.