ORDERS:
ORDER AND DECISION
This matter comes before me pursuant to a request for a hearing by Respondent after being
cited for an administrative violation against her sale and consumption license. The South Carolina
Department of Revenue and Taxation seeks a permanent revocation of Respondent's license for
violating 23 S.C. Code Ann. Regs. 7-17(J)(Supp. 1994). A hearing was held at the Administrative
Law Judge Division in Columbia, South Carolina, on May 4, 1995. I find Respondent violated
regulation 7-17(J) and suspend her sale and consumption license for 180 days from the suspension
she is currently serving.
DISCUSSION
Sheila Y. Luster holds a sale and consumption license for Club 327 (Club). That organization
is granted the privilege of selling alcohol as a non-profit organization pursuant to S.C. Code Ann.
§ 61-5-20(3) (Supp. 1994). The Club was originally formed by Respondent, Delores Brooks
(Respondent's mother), and King Whitner, who had previously operated the Club. Whitner was to
operate the Club with remuneration being paid to him for his labor rendered at the Club. However,
shortly after the Club began operation, there was an altercation between Respondent and Mr.
Whitner. Thereafter, Respondent and her mother essentially turned the operation of the Club
exclusively over to Mr. Whitner.
Though the Club is a private, non-profit organization it apparently never has been operated
in that manner. Respondent currently serves as president and her mother as vice-president of the
organization. However, neither has ever been elected to that position. In fact, there has never been
a meeting of the general membership to elect a Board of Directors or officers to run this organization.
Respondent stated that the reason this organization was founded was to sell alcohol on Sunday. That
reasoning is in direct contravention to the law of South Carolina.
While Mr. Whitner was running the Club on August 5, 1994, Sled agent Russell Feastor,
though not a member of the Club, was served alcohol in violation of South Carolina regulations and
the Club's by-laws. Furthermore, a search of the Club found that Respondent was failing to destroy
the mini-bottles as required by South Carolina law. See 23 S.C. Code Reg. 7-13 (Supp. 1994).
There was also evidence that gambling was occurring in the back room of the Club. The Respondent
initially learned of the first citations in November of 1994 and thereafter formed an advisory
committee in December of 1994 to assist her with Club policy and procedures. The Respondent and
her mother eventually took over complete operation of the Club in January, 1995.
After a hearing before the Administrative Law Judge Division, upon the above charges, Judge
Kittrell found Respondent violated regulations 7-17(J) and 7-13. He suspended the license and
permit of Respondent for ninety (90) days and ordered Respondent to pay a $1,000 fine. He further
placed restrictions on both Respondent's license and permit. Though Judge Kittrell found the
evidence warranted the revocation of the license, he further found that the efforts on the part of
Respondent "to change this Club into one which operates in conformity with state laws and
regulations" warranted the imposition of only a suspension of her license and permit. In this case,
the South Carolina Department of Revenue and Taxation again seeks a permanent revocation of
Respondent's license for violating 23 S.C. Code Ann. Regs. 7-17 (J) (Supp. 1994). The gravity of
the facts certainly warrant a revocation of the Respondent's license. However, since this violation
occurred shortly after the Respondent regained the operation of the Club and more importantly,
before sanctions were imposed by Judge Kittrell, I choose not to revoke Respondent's license.
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 or Protestants, I make
the following Findings of Fact by a preponderance of evidence:
1. The court has subject matter jurisdiction of this case.
2. Respondent holds a sale and consumption license for the Club a
private non-profit organization at 3227 Augusta Road, Greenville,
South Carolina.
3. Notice of the time, date, place and subject matter of the Hearing was
given to the Petitioner and Respondent.
4. The Club operates as a private, non-profit organization with a limited
membership. That organization holds a sale and consumption license
granted to non-profit organizations pursuant to S.C. Code Ann. § 61-5-20(3) (Supp. 1994).
5. Sled Agent Alex Underwood entered the Club on January 26, 1995.
Respondent's bartender, Cynthia Nanton, instructed Agent
Underwood to fill out a membership application and thereafter issued
him a membership card. Ms. Nanton then served Agent Underwood
an alcoholic beverage.
6. Respondent's by-laws require a twenty-four hour delay between an
application for membership and the beginning of the actual
membership in the Club. Therefore, Agent Underwood was neither
a member of the Club or properly accompanied by a member.
7. Agent Underwood consumed a portion of the alcoholic beverage
served to him and retained the remaining portion as evidence.
8. Respondent, Sheila Luster, d/b/a Club 327, has previously violated the
Alcohol Beverage and Control Act by permitting the consumption of
an alcoholic beverage by a non-member at her Club and by failing to
properly destroy mini-bottles. On March 15, 1995, Judge Marvin F.
Kittrell, ordered that Respondent's license and permit be suspended
for ninety (90) days and that she pay a $1,000 fine for the two above
violations.
9. Respondent's Club is not operating as a non-profit organization in
accordance with 23 S.C. Code Reg. 7-17 (Supp. 1994). Respondent
is currently president of the Club and her mother is vice-president.
However, neither individual has ever been elected to that position. In
fact, there has never been a meeting of the general membership in
order to elect either the Board of Directors or officers to run this
organization. Respondent further stated that she formed the Club to
sell alcohol on Sunday. These factors are wholly unacceptable if this
Club is to continue to operate. The members of this Club, through
the elected Board of Directors and offices, must begin running and
operating the Club.
10. The Respondent violated 23 S. C. Code Ann. Regs. 7-17 (J) (Supp.
1994) by permitting Agent Underwood to consume an alcoholic
beverage though he was not a member.
CONCLUSIONS OF LAW
Based upon the above Findings of Fact, I conclude as a matter of law, the following:
1. S.C. Code Ann. Section 61-1-55 (Supp. 1994) grants the
Administrative Law Judge Division the powers, duties and
responsibilities as Hearing Officer in contested matters governing
alcoholic beverages, beer and wine.
2. Permits and licenses issued by this state for the sale of liquor, beer and
wine are not property rights. They are, rather, privileges granted in
the exercise of the state's police power to be used and enjoyed only so
long as the holder complies with the restrictions and conditions
governing them. The Administrative Law Judge Division, being the
tribunal authorized to grant the issuance of a license, is likewise
authorized to place restrictions on or for cause to revoke or suspend
the license. See, Feldman v. S.C. Tax Com'n., 203 S. C. 49, 26 S E.
2d, 22 (1943). Furthermore, 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.
3. The Club operates as a non-profit organization with limited
membership pursuant to S.C. Code Ann. 61-5-20(3) (Supp. 1994).
Under that statute the organization is not open to the general public.
Only the members and guests of the Club may consume alcoholic
beverages upon the premises.
4. 23 S.C. Code Reg. 17-7 (J) provides : "Only bonified members and
bonified guests of members of such organizations may consume
alcoholic beverages sold in sealed containers of two ounces or less on
the licensed premises."
5. S.C. Code Ann. Section 61-5-190 (Supp. 1994)grants the Department
of Revenue the authority to "establish such conditions or restrictions
which the Department in its discretion deems necessary . . . ."
6. A violation of any of the regulations or code sections of the Alcohol
Beverage Control Act is punishable by either revocation or suspension
of the holder's license or permit. S. C. Code Ann. § 61-5-60 (Supp.
1994). Additionally, § 61-5-110 S.C. Code Ann. (Supp. 1994)
provides staggered penalties for those who violate provisions of the
Alcohol Beverage Control Act.
ORDER
Based upon the Findings of Fact and Conclusions of Law, it is hereby:
ORDERED, that the sale and consumption license held by Sheila J. Luster for the Club be
suspended for 180 days from June 22, 1995, which is the conclusion of the suspension ordered by
Judge Kittrell. This suspension shall be upon Respondent's sale and consumption license only and
shall not suspend her beer and wine permit. It is further ordered that Respondent pay a $500.00 fine.
If Respondent chooses to relinquish her non-profit sale and consumption license within 30 days
from the date of this Order, this fine shall be suspended.
IT IS FURTHER ORDERED that SLED agents currently in possession of Respondent's
sale and consumption license shall maintain possession of this license until the service of the 180 day
suspension. At the conclusion of the service of the 180 days suspension, the license shall be returned
to Respondent. Respondent and her employees are to cease and desist all sales of alcohol during this
suspension period.
IT IS FURTHER ORDERED that the Respondent shall sign an Agreement within 60 days
of the receipt of this Order that shall bind her to the following restrictions and conditions:
1. Respondent shall notify in writing each Club member of their right to
attend and vote on the Board of Directors at the Club's yearly June
meetings. Each member shall be fully informed of the provisions of
Article XII of the by-laws of the Club. The Department of Revenue
shall approve the sufficiency of the information before it is sent to the
members.
2. Respondent is to inform the Department of Revenue when the general
membership meets and votes on the officers and Board of Directors;
the names of the elected officers and Board of Directors; the names
of the employees of the organization; and the salaries of the
employees of the organization.
3. Respondent is to begin operating immediately as a non-profit
organization in accordance with 23 S. C. Code Reg. 7-17 (Supp.
1994). Specifically, the organization is to be run by a Board of
Directors who shall elect officers to run the organization. All of the
elected individuals of this organization are to be elected strictly in
accordance with Article XI of Respondent's by-laws. If Respondent
chooses not to run this organization in accordance with Reg. 7-17, her
license is to automatically revoked.
4. That all guests and members of the Club shall sign a register upon
entering the Club and be accompanied by a member at all times.
IT IS FURTHER ORDERED that a violation of any one of the above conditions is
considered a violation against the license and may result in a fine, suspension or revocation.
IT IS SO ORDERED.
______________________________
Ralph King Anderson, III
Administrative Law Judge
June 2, 1995
Columbia, South Carolina |
