South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
SCDOR vs. Rainwater Gas and Oil Company, Inc., d/b/a Sav Way Food Stores

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
South Carolina Department of Revenue

Respondents:
Rainwater Gas and Oil Company, Inc., d/b/a Sav Way Food Stores
 
DOCKET NUMBER:
02-ALJ-17-0240-CC

APPEARANCES:
Michael K. Kendree, Esquire
For Petitioner

James H. Harrison, Esquire
For Respondent
 

ORDERS:

FINAL ORDER AND DECISION

STATEMENT OF THE CASE

This matter comes before this tribunal pursuant to S.C. Code Ann. § 61-2-260 (Supp. 2001) and S.C. Code Ann. §§ 1-23-310 et seq. (1986 & Supp. 2001). The South Carolina Department of Revenue (Department) contends that Respondent Rainwater Gas and Oil Company, Inc., d/b/a Sav Way Food Stores (Sav Way) knowingly allowed an underage individual to purchase beer from Respondent's licensed premises located on Highway 501 in Conway, South Carolina, in violation of 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2001). For this fourth violation of Regulation 7-9(B) in three years, the Department seeks to suspend Respondent's off-premises beer and wine permit for forty-five days. (1) In response, Sav Way concedes that the alleged violation did occur, but further contends that the proposed penalty for the violation is excessive in light of its efforts to prevent such sales.

After timely notice to the parties, a hearing of this matter was held on October 15, 2002, at the Administrative Law Judge Division (ALJD) in Columbia, South Carolina. Based upon the testimony and evidence presented at the hearing, I find that the penalty sought by the Department for Respondent's violation-a 45-day suspension of Respondent's permit-is an appropriate penalty and should be sustained. Further, before resuming the sale of alcohol, Respondent, pursuant to its stipulation, shall request and submit the store manager or other person responsible for the employee training at the location in question to training from the South Carolina Law Enforcement Division (SLED) on how to prevent the sale of alcohol to underage individuals.

STIPULATION

At the hearing of this matter, Respondent stipulated that it violated 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2001), as alleged by the Department, when its clerk, Randy Atkins, knowingly permitted a nineteen-year-old SLED Underage Cooperating Individual (UCI) to purchase beer at its licensed premises on Highway 501 in Conway, South Carolina, on February 20, 2002.

FINDINGS OF FACT

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 Rainwater Gas and Oil Company, Inc., d/b/a Sav Way Food Stores, holds a permit authorizing it to sell beer and wine for off-premises consumption from its store located on Highway 501 in Conway, South Carolina. This permit is numbered BG124209 and was held by Sav Way on February 20, 2002.

2. On February 20, 2002, at the Highway 501 Sav Way, Sav Way's employee, Randy Atkins, permitted SLED's UCI to purchase a 24-ounce Bud Light beer.

3. Sav Way has committed three prior violations of Regulation 7-9(B) at this Highway 501 location by knowingly allowing underage individuals to purchase beer from the store. These prior violations occurred on December 3, 1999, August 17, 2000, and December 20, 2001. Respondent paid fines of $400 and $800, respectively, for the first two violations and had its permit suspended for ten days and paid a $2500 fine for the third violation.

CONCLUSIONS OF LAW

Based upon the foregoing Stipulation and Findings of Fact, I conclude the following as a matter of law:

1. 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. 2001).

2. Regulation 7-9(B) prohibits holders of beer and wine permits from selling beer or wine to persons under twenty-one years of age. The regulation provides that:

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 [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].



23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2001). Respondent Sav Way concedes and stipulates that it committed a violation of Regulation 7-9(B) as alleged by the Department.

3. The Department has jurisdiction to revoke or suspend permits authorizing the sale of beer and wine. S.C. Code Ann. § 61-4-590 (Supp. 2001). Pursuant to such authority, the Department may suspend or revoke a beer and wine permit if the permittee has knowingly sold beer or wine to a person under twenty-one years of age. S.C. Code Ann. § 61-4-580 (Supp. 2001); 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2001); see also S.C. Code Ann. § 61-4-270 (Supp. 2001) (authorizing the Department to "revoke the permit of a person failing to comply with any requirements" in Chapter 4 of Title 61). Further, the Department may exercise this authority to suspend or revoke a permit for a first violation of the prohibition against selling beer and wine to minors. See S.C. Code Ann. §§ 61-4-270, 61-4-580, 61-4-590; 23 S.C. Code Ann. Regs. 7-9(B). In lieu of such suspension or revocation, the Department may also impose a monetary penalty upon a permittee for selling beer and wine to minors. S.C. Code Ann. § 61-4-250 (Supp. 2001). For retail beer and wine permittees, this monetary penalty must be no less than $25 and no greater than $1,000. Id.

4. S.C. Revenue Procedure 95-7 (1995) sets forth the Department's penalty guidelines for violations of the alcoholic beverage control laws. For retail beer and wine permits, Revenue Procedure 95-7 provides for a $400 fine for the first violation by a permittee, an $800 fine for the second violation, a 45-day suspension of the permit for the third violation, and revocation of the permit for the fourth violation. However, this document does not set binding norms for the Department, but rather only provides guidance to the Department in assessing penalties for violations of the alcoholic beverage control laws. See Revenue Procedure 95-7, at ¶ 4 ("These are guidelines only and this advisory opinion does not establish a binding norm."). As such, Revenue Procedure 95-7 is not law and thus is not binding upon this Division. Cf. Home Health Serv., Inc. v. S.C. Tax Comm'n, 312 S.C. 324, 328, 440 S.E.2d 375, 378 (1994) (holding that "whether a particular agency proceeding announces a rule or a general policy statement depends upon whether the agency action establishes a binding norm") (citing Ryder Truck Lines, Inc. v. United States, 716 F.2d 1369 (11th Cir. 1983)).

5. 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. S. Bell Tel. & Tel. Co., 308 S.C. 216, 222, 417 S.E.2d 586, 589 (1992); see also Doe v. Doe, 324 S.C. 492, 502, 478 S.E.2d 854, 859 (Ct. App. 1996) (holding that a trial judge, when acting as finder of fact, "has the authority to determine the weight and credibility of the evidence before him"). Furthermore, a trial judge who observes a witness is in the best position to judge the witness's demeanor and veracity and to evaluate the credibility of his testimony. See, e.g., Woodall v. Woodall, 322 S.C. 7, 10, 471 S.E.2d 154, 157 (1996); Wallace v. Milliken & Co., 300 S.C. 553, 556, 389 S.E.2d 448, 450 (Ct. App. 1990).

6. It is a generally recognized principle of administrative law that the fact finder has the authority to determine an appropriate administrative penalty, within the statutory limits established by the legislature, after the parties have had an opportunity for a hearing on the issues. See, e.g., Walker v. S.C. Alcoholic Beverage Control Comm'n, 305 S.C. 209, 407 S.E.2d 633 (1991). Further, in assessing a penalty, the finder of fact "should give effect to the major purpose of a civil penalty-deterrence." Midlands Utility, Inc. v. S.C. Dep't of Health & Envtl. Control, 313 S.C. 210, 212, 437 S.E.2d 120, 121 (Ct. App. 1993).

7. Further, Respondent should be reminded that the purpose of the statutory prohibition against selling alcohol to underage individuals is to protect both the underage individuals and the public at large from the possible adverse consequences of such sales. The sale of alcohol to an underage individual is a serious offense and cannot be taken lightly. Further, a permit to sell beer and wine is neither a contract nor a property right. Rather, it is merely a permit to do what otherwise would be unlawful to do, and to be enjoyed only so long as the restrictions and conditions governing its continuance are complied with. Feldman v. S.C. Tax Comm'n, 203 S.C. 49, 26 S.E.2d 22 (1943). Accordingly, there are legal consequences for noncompliance with the alcoholic beverage laws of this State. Therefore, while this tribunal has not ordered the revocation of Respondent's permit, Respondent should not expect such leniency for a subsequent violation of those laws at this location.

ORDER

Based upon the Stipulation, Findings of Fact, and Conclusions of Law stated above,

IT IS HEREBY ORDERED that, for Respondent's fourth violation of 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2001) within three years, the Department shall suspend Respondent's beer and wine permit for its premises located on Highway 501 in Conway, South Carolina, for a period of forty-five (45) days.

IT IS FURTHER ORDERED that, prior to resuming the sale of alcoholic beverages at this location, Respondent must request and submit the store manager or other person responsible for employee training at the location to the training provided by SLED to retailers of alcoholic beverages on how to prevent sales to underage individuals.

AND IT IS SO ORDERED.





______________________________

JOHN D. GEATHERS

Administrative Law Judge

Post Office Box 11667

Columbia, South Carolina 29211-1667



October 28, 2002

Columbia, South Carolina

1. In its final agency determination and in the proceedings leading up to the hearing of this matter, the Department sought a forty-five day suspension of Respondent's permit under the mistaken belief that the instant violation was only the Respondent's third violation within three years. However, at the hearing, the Department moved to amend its Final Determination to reflect the fact that this violation is, in fact, Respondent's fourth violation within a three-year period. This motion was granted. Accordingly, the Department additionally requests that this tribunal impose a penalty in excess of the forty-five day suspension originally sought, up to and including revocation of the permit, as this tribunal deems appropriate for Respondent's fourth violation within three years.


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