ORDERS:
ORDER AND DECISION
STATEMENT OF THE CASE
This matter is before the Administrative Law Judge Division pursuant to the
administrative violations written against the club sale and consumption license and beer and wine
permit of the Respondent, Shelia Y. Luster, d/b/a Club 327, Inc. ("Respondent") at 3227 Augusta
Road, Greenville, Greenville County, South Carolina. The citation was issued to Ms. Luster for two
violations of S.C. Code Ann. § 61-5-110, a violation of 23 S.C. Code Reg. 7-17(J) and a violation
of 23 S.C. Code Reg. 7-13. For the alleged violations, the South Carolina Department of Revenue
and Taxation ("Department") seeks revocation of the Respondent's license for the sale and
consumption of liquor and the beer and wine permit.
A hearing was held on February 24, 1995 at the Spartanburg County Courthouse,
Spartanburg County, South Carolina. Notice of the time, date, place and nature of the hearing
was timely given to all parties.
I find the Respondent guilty of violating S.C. Code Ann. § 61-5-110, 23 S.C. Code Ann.
Regs. 7-17(J) and 7-13 and suspend the license for ninety (90) days from the date of this order,
assess a fine of $1,000.00 and place restrictions on both the license and permit.
EXHIBITS
Without objection, the Petitioner introduced into the record as evidence the following, which
by agreement of the parties, were returned to Petitioner and the State Law Enforcement Division
("SLED") for safekeeping:
1A & 1B. Two pasteboard boxes filled with empty mini-bottles.
2A, 2B, 2C Four pasteboard boxes filled with mini-bottles, the vast majority having broken
& 2D. seals.
3. One pasteboard box with four bottles of liquor therein, the seal broken on three
of them.
4. One pasteboard box filled with forty or more boxes of playing cards.
The parties stipulated all these items were taken from the location on the evening of
August 5, 1994 by SLED agents Jenkins, Pope and Feaster.
Without objection, Respondent introduced and placed into evidence the following 10 exhibits:
1. Sheet showing Advisory Board Members to Club 327.
2. Sheet showing new Rules and Regulations for members of Club 327.
3. Letter from City of Greenville to Petitioner.
4. Minutes of Advisory Board Meeting on February 7, 1995.
5. Letter to members of Club 327 dated January 9, 1995.
6-9. Minutes of various meetings of Club 327.
10. By-Laws of Club 327.
FINDINGS OF FACT
By a preponderance of the evidence, I make the following findings:
1. This Division has personal and subject matter jurisdiction.
2. Shelia Y. Luster holds a sale and consumption license and a beer and wine permit at
3227 Augusta Road, Greenville, South Carolina for a private club (Club 327) and non-profit
organization entitled Club 327, Inc.
3. Shelia Y. Luster and her mother, Delores Brooks, are the shareholders of Club 327,
Inc. and Delores Brooks is the owner of the building which is leased to Club 327.
4. Club 327 is a private club operated for the social and recreational purposes of its
members and their legitimate guests. It has a Constitution and a set of By-Laws which provide a
waiting period to become a member.
5. When the license and permit were applied for, the Respondent, her mother, Delores
Brooks, and King Whitner, (who had operated the predecessor club at the location for many years),
agreed Respondent would apply for the permit and license. They also agreed King Whitner would
operate the club and renumeration would only be paid for labor rendered at the club. Shortly
thereafter, in April or May 1994, there was an altercation between Delores Brooks and King Whitner.
Thereafter, Respondent and Delores Brooks essentially let Mr. Whitner operate the club exclusively,
receiving no compensation or income from its operation.
6. On August 5, 1994, at approximately 9:25 p.m., SLED agent Russell N. Feaster
entered the licensed premises, walked to the bar, ordered a mixed drink, watched it being prepared
from a mini-bottle, paid $4.25 and drank several sips from it. He was not a member of the club, was
not a guest of a member nor was asked if he would like to fill out an application for membership.
7. Shortly thereafter, SLED agent Guy Jenkins and SLED agent Pope, entered the club
and learned from communication with agent Feaster of his purchase of a mixed drink. Subsequently,
after much discussion with Shack Cobb who was a manager, they were allowed into a large room at
the rear of the location . There they found a felt-covered table with four chairs around it, playing
cards on top, an ashtray with a cigarette still burning and four liquor bottles (three of which were
opened). The also saw a surveillance monitor on the ceiling where one could observe activity/people
outside the door and saw a buzzer on the door. There were no poker chips or money on the table.
8. The SLED agents went to the club that evening after earlier that day receiving a
complaint from Lt. Blackburn of the Greenville Police Department.
9. The SLED agents stayed two and a half to three hours, called for and received backup
assistance from the City of Greenville police department. The agents seized two-hundred and forty-two (242) mini-bottles which were empty and three-hundred and fifty-two (352) filled mini-bottles
on the counter behind the bar which had their seals broken. They also seized liquor bottles and
playing cards listed as Exhibits 3 and 4.
10. No firearms were found at the location.
11. King Whitner, the manager and operator of the club, was at the club on the evening
of August 5, 1994.
12. Respondent and Delores Brooks denied knowledge of the "back room" and any
activity which may have occurred therein.
13. In November 1994, Respondent and Delores Brooks first learned of the August 5,
1994 citations, became actively involved and eventually took over its operation from Mr. Whitner in
December, 1994. They established an Advisory Committee to assist with club policy, met with ABC
officials to educate themselves in ABC laws and regulations, established dress codes, provided
security guards, raised minimum age of members and are presently in the process of tearing down the
"back room" wall to open up the entire club into one large room. They have addressed a violation
of a City of Greenville ordinance and subsequently received a business license from the city. (See
Respondent Exhibit #3.) Further, they are providing for cleaning of debris and litter outside the
location.
14. Ron Eberhardt, a member of the club's Advisory Board, is a computer designer for
Michelin Tire Corporation in Greenville and the owner of several other businesses. He testified he
has noticed a great change in the club in the last several months and invites friends and business
associates to visit the club as his guests.
15. Present hours of operation of Club 327 are 5:00 p.m. until 12:00 or 1:00 a.m. Monday
through Thursday and 5:00 p.m. until 2:00 a.m. Friday through Sunday.
16. Petitioner seeks revocation of Respondent's sale and consumption license and beer and
wine permit.
CONCLUSIONS OF LAW
Based upon the foregoing Findings of Fact, I conclude as a matter of law, the following:
1. Pursuant to S.C. Code Ann. § 61-5-55 (Supp. 1993) and Chapter 23 of Title I of the
1976 Code, as amended, the South Carolina Administrative Law Judge Division has jurisdiction in
this matter.
2. Club 327, Inc., operates as a non-profit organization with a limited membership (not
open to the general public). The club serves alcoholic beverages to its members and guests pursuant
to S.C. Code Ann. § 61-5-20(3) (Supp. 1993) and S.C. Code Ann. § 61-9-320 as the holder of a sale
and consumption license and a beer and wine permit. Respondent's By-Laws specify the procedure
for gaining membership to Club 327, Inc.
3. S.C. Code § 61-5-20 establishes when the consumption of alcoholic beverages is
lawful and, therefore, by the inverse, when it is not. Subsection (3) permits service by the kind of
nonprofit organization which the Respondent is licensed as. Only members and their guests are
permitted to consume alcoholic beverages on the premises.
4. S.C. Code § 61-5-190 grants to the Department of Revenue, previously the Alcoholic
Beverage Commission, the authority to "establish such conditions or restrictions which the
department in its discretion deems necessary..."
5. 23 S.C. Code Reg. 7-17(J) provides: "Only bona fide members and bona fide guests
of members of such organizations may consume alcoholic beverages sold in sealed containers of two
(2) ounces or less on the licensed premises."
6. 23 S.C. Code Reg. 7-13 provides that the holder of a license authorizing the sale and
consumption of alcoholic beverages in sealed containers of two(2) ounces or less shall destroy by
crushing, breaking or smashing at least once each business day, empty mini-bottles, mini-bottles
which have broken seals and mini-bottles which are partially empty.
7. S.C. Code Ann. § 61-5-110 provides penalties in the form of a fine, suspension or
revocation of the license of a person authorized to sell alcoholic beverages who displays mini-bottles
when the seals are broken or who violates any provision which involves the avoidance of taxes.
8. A violation by a licensee of any regulation or code section of the Alcoholic Beverage
Control Act is punishable by revocation or suspension of the license pursuant to S.C. Code Ann. §
61-5-60 (Supp. 1993).
9. S.C. Code Ann. § 61-5-120 provides for a penalty of twenty dollars per container on
any licensee of alcoholic liquors for a violation of any provision of Article I, Chapter 5 of Title 61 or
with the design of avoiding payment of any license taxes.
10. S.C. Code Ann. § 61-9-410 provides for the revocation or suspension of a beer and
wine permit where the holder sells, offers for sale or possesses any alcoholic liquor which is
prohibited on the licensed premises under South Carolina law.
11. Pursuant to S.C. Code Ann. § 61-1-80 (Supp. 1993), a monetary penalty may be
imposed as an alternative to revocation or suspension in all cases in which revocation or suspension
is authorized. Payment of the monetary fine may be suspended in the discretion of the court.
12. Permits and licenses issued by the State for sale of liquor, beer, and wine are
not rights or property, but are rather privileges granted in the exercise of the police power
of the State to be used and enjoyed only so long as the restrictions and conditions governing
them are complied with. As the tribunal authorized to grant the issuance of a permit is also
authorized, for cause, to revoke it, that tribunal is likewise authorized to place restrictions
or conditions on the permit or license. See Feldman v. South Carolina Tax Commission, 203
S.C. 49, 26 S.E. 2d 22 (1943).
13. 23 S.C. Code Ann. Regs. 7-88 (1976), authorizing the imposition of
restrictions to permits, provides:
Any stipulation and/or agreement which is voluntarily entered into by
an applicant in writing for a beer and wine permit between the applicant and
the South Carolina Alcoholic Beverage Control Commission, if accepted by
the Commission, will be incorporated into the basic requirements for the
enjoyment and privilege of obtaining and retaining the beer and wine permit
and which shall have the same effect as any and all laws and any and all other
regulations pertaining to the effective administration of beer and wine
permittees.
In the event that evidence is presented to this Commission that any part
of the stipulation or agreement is or has been knowingly broken by the
permittee will be a violation against the permit and shall constitute sufficient
grounds to suspend or revoke said beer and wine permit.
14. The "Government Restructuring Act of 1993" provides that all regulations
promulgated by the Alcoholic Beverage Commission effective on the date of the act remain in force
until modified or rescinded by the Department of Revenue or the State Law Enforcement Division
(SLED). 1993 Act No. 181 § 1604.
15. 23 S.C. Code Reg. 7-17(J) and Respondent's By-Laws were violated on August 5,
1994 when SLED agent Russell Feaster was allowed to enter the licensed premises and was served
an alcoholic beverage from a mini-bottle.
16. 23 S.C. Code Reg. 7-13 and S.C. Code Ann. § 61-5-110 were violated on August
5, 1994 by the inaction on the part of Respondent to destroy empty mini-bottles, mini-bottles with
broken seals and partially empty mini-bottles.
17. Both the testimony of the Respondent, her mother, Delores Brooks, and Ron
Eberhardt, are convincing of Respondent's intent and efforts to change this club into one which
operates in conformity with state laws and regulations. The attitude with which Respondent has
approached the City of Greenville licensing issue, created an Advisory Board and educated herself
with ABC laws, regulations and policies evince positive steps which must continue. Accordingly, it
is concluded that a suspension of the license and permit, not a revocation, is the appropriate penalty.
During the suspension period, the location's interior can be upgraded and the "rear wall removal"
completed. Further, a complete written ABC policy for training staff and operating the club can be
written and submitted to the Department.
18. Further it is concluded that the violation of S.C. Code Ann. § 61-5-110 (sealed
containers of two (2) ounces of liquor or less displayed with broken seals) is more appropriately a
violation of S.C. Code Ann. § 61-5-110(1) versus § 61-5-110 (4). However, even if it were a
violation of S.C. Code Ann. § 61-5-110(4), which mandates the revocation of the license, S.C. Code
Ann. § 61-1-80 authorizes as an alternative to revocation the imposition of a monetary penalty and/or
suspension. I find and conclude such is appropriate in this case.
19. Accordingly, I find and conclude that the Respondent will pay to the Department a
fine of $1,000.00, and further, the license and permit will be suspended for ninety (90) days from the
date of this Order. I find and conclude that various restrictions and conditions shall attach to the
club's license and permit as hereafter provided.
ORDER
Based upon the Findings of Fact and Conclusions of Law, Shelia Y. Luster, d/b/a
Club 327, violated 23 S.C. Code Regs. 7-17(J) and 7-13 and S.C. Code Ann. § 61-5-110 (1).
It is therefore
ORDERED that the sale and consumption license and beer and wine permit are
suspended for ninety (90) days from the date of this Order and,
IT IS FURTHER ORDERED that the Respondent, Shelia Y. Luster, shall pay to the South
Carolina Department of Revenue and Taxation a monetary penalty of $1,000.00 within ninety (90)
days of service of this Order by a SLED agent and,
IT IS FURTHER ORDERED that a SLED agent shall serve a copy of this Order on the
Respondent and take possession of the license and permit cited above. Respondent is ordered to post
a copy of this Order at a visible location at the licensed premises and cease and desist all liquor, beer
and wine sales during the suspension period and,
IT IS FURTHER ORDERED that the following restrictions and conditions shall attach to
the sale and consumption license and beer and wine permit with the Respondent signing an agreement
with the Department within ninety (90) days of receipt of this Order agreeing to be bound thereby:
1. Shelia Y. Luster, Club 327 and its employees shall prohibit loitering and the
consumption of liquor, beer and wine by its members/guests in the club
parking lot and exterior area of the location and shall strictly enforce the
prohibition.
2. No one under the age of twenty-five (25) years will be allowed to become a member
of the club.
3. An appropriate dress code will be immediately established and enforced.
4. No drugs or firearms will be allowed inside the club.
5. Additional security will be hired to ensure non-members are not allowed entrance to
the club.
6. The "back room" in the club will be incorporated into the main club area,
accomplished by removing the wall between the two rooms. This construction is to
be completed prior to the expiration of the ninety (90) day suspension.
7. Hours of operation of the club will be as follows: Monday through Thursday - 5:00
p.m. until 12:00 a.m. and Friday through Sunday 5:00 p.m. until 2:00 a.m.
8. Prepare and maintain at the location a written training policy for all staff on ABC rules
and regulations and provide a copy to the Department within ninety (90) days of the
date of this Order.
IT IS FURTHER ORDERED that a violation of any one of the above conditions is
considered a violation against the license or permit and may result in a fine, suspension, or
revocation.
AND IT IS SO ORDERED.
______________________________________
Marvin F. Kittrell
Chief Administrative Law Judge
Columbia, South Carolina
March 15, 1995 |
