SC Administrative Law Court Decisions

This matter comes before me pursuant to S.C. Code Ann. §§ 12-60-450 and 12-60-460 (Supp. 1997) and S.C. Code Ann. §§ 1-23-310, et seq. (Supp. 1997) upon request for a contested case hearing by Respondent. Respondent was cited with an administrative violation of 23 S.C. Code Ann. Regs. 7-9(B)(Supp. 1997) for allegedly permitting the purchase of beer on October 10, 1997, by a person under twenty-one years of age. The South Carolina Department of Revenue ("DOR") seeks revocation of the beer and wine permit for the alleged violation. A hearing was held before the Administrative Law Judge Division on July 8, 1998. Respondent admitted that the sale took place to an underage person, but offered evidence in mitigation in seeking a less severe sanction than revocation. I find that Respondent committed the violation and order the beer and wine permit for the subject location suspended for one hundred twenty (120) days.

Respondent admits his agent permitted the sale of beer on October 10, 1997, to a customer under the age of twenty-one. Accordingly, a violation of R. 7-9(B) occurred, and the issue in this matter is the appropriate penalty to be imposed. DOR seeks revocation of the permit, based upon the fact that this incident constitutes the fifth underage sales violation at the licensed location since August 4, 1995. Respondent has paid a total of $1,800 in fines and suffered a forty-five (45) day suspension for the four previous violations.

Respondent accepts responsibility for the violations, but offered evidence in mitigation to avoid revocation of the permit. Shatto and Scotchman have taken extensive steps to prohibit the sale of beer and wine to minors through training and supervision of employees. Scotchman has followed its company policy of terminating any employee who sells to a minor, including the clerk involved in the present incident. That company policy has not been enough, however, to prevent five sales to minors in less than three years at Scotchman #118. Respondent also successfully proved that the case at bar was the result of an honest mistake by the sales clerk and not an intentional violation of the law.

The only two things that keep this permit from being revoked are: (1) the present violation was obviously an unintentional sale to a minor; and (2) subsequent to the violation, Scotchman updated the computerized cash register system at Scotchman #118 to prevent future beer sales to minors to occur as a result of human error. By all accounts, the store clerk asked for identification from the purchaser and compared the proffered driver's license to an age chart behind the counter. Unfortunately, she misread the chart, looking at the minimum age for tobacco sales (18), rather than the minimum age for beer sales (21). The purchaser was eighteen years old. Had the new cash register been installed at the time of the incident, the computer would not have allowed the clerk to commit the calculation error.

For the foregoing reasons, Respondent deserves a severe sanction for committing this latest violation, especially in a such rapid succession. Because of the mitigating circumstances, however, revocation is not warranted. Because this last violation was obviously unintentional and future unintentional underage sales are much less likely to occur, Scotchman should not be required to surrender its permit permanently. Accordingly, the permit is suspended for one hundred twenty (120) days.

By a preponderance of the evidence, I find:

1. Notice of the time, date, place, and subject matter of the hearing was given to Respondent and DOR.

1. Respondent holds an off-premises beer and wine permit, permit number BG-946085, for a convenience store known as "Scotchman #118," located at 531 Highway 544, Conway, South Carolina.
2. On October 10, 1997, at approximately 10:40 p.m., employee Mary Lou Harvell was operating the cash register at the location.

4. On October 10, 1997, at approximately 10:40 p.m., SLED Agents Pamela Williamson and Rhett Holden visited the licensed location with an Underage Cooperating Individual (UCI).

5. At the time the UCI entered the store, the only items in her possession were her valid South Carolina driver's license and a small amount of cash.

6. The UCI entered the location and presented a 22 oz. Bottle of Icehouse Beer at the cash register for purchase.

8. Harvell asked for identification, and the UCI handed Harvell her valid South Carolina driver's license. Harvell looked at the license, compared it to an age chart she had behind the counter, and sold the beer to the UCI.

9. The licensed location has an age chart at the cash register to assist the cashier in determining whether a customer is old enough to purchase tobacco products and beer and wine.

10. The minimum age to purchase tobacco products is eighteen (18) years.

11. Harvell looked at the wrong age calendar in determining whether the UCI was of legal age to make her purchase.

12. The UCI exited the store and returned to the car where the SLED Agents took possession of the beer.

13. The SLED agents entered the location and issued a ticket to the employee and issued an administrative citation to Respondent.

14. Delina Bishop was the UCI and was born on April 26, 1979.

15. Bishop was 18 years old at the time of purchase on October 10, 1997.

1. Scotchman's management policy attempts to comply with the legal obligations to prevent violations of ABC laws and regulations by its employees.





2. As a part of Harvell's employment, Harvell signed and acknowledged reading Scotchman Stores Employees' Agreement of Understanding regarding responsible alcohol retailing.
3. Harvell's employment required that Harvell review and understand the "Techniques for Alcohol Management," a training program distributed by the National Association of Convenience Stores.
4. Harvell participated in Scotchman Stores' "New Employee Orientation" training session before her employment began.
5. Harvell's training session included awareness of the importance of compliance with laws governing the sale of beer and wine.
6. Scotchman Stores' written policy establishes that the consequences of selling alcohol to minors is the termination of the employee making the sale.
7. In this case, Scotchman Stores followed the company policy by terminating the employee charged with the violation.
8. On August 4, 1995, Shatto, through the actions of his agent or employee at Scotchman Store #118, permitted the purchase of beer by a person under twenty-one years of age and on October 16, 1995, paid a $400 fine for the violation.
9. On September 26, 1995, Shatto, through the actions of his agent or employee at Scotchman Store #118, permitted the purchase of beer by a person under twenty-one years of age and on October 31, 1995, paid a $1,000 fine for the violation.
10. On March 28, 1996, Shatto, through the actions of his agent or employee at Scotchman Store #118, permitted the purchase of beer by a person under twenty-one years of age and, after a contested case hearing before the ALJD, was subjected to a forty-five (45) day permit suspension beginning on October 28, 1996.
11. On February 26, 1997, Shatto through the actions of his agent or employee at Scotchman Store #118, permitted the purchase of beer by a person under twenty-one years of age and on October 16, 1995, paid a $400 fine for the violation.
12. Subsequent to the October 10, 1997 incident, Scotchman #118 has been renovated and new cash register equipment installed.



13. Scotchman #118 is now equipped with a cash register which requires the clerk to log in the date of birth of any person attempting to purchase beer, wine, or tobacco products, once one of those items is rung up on the register. The register's computer then computes the date of birth and will allow the sale only if the purchaser is of legal age.
14. The October 10, 1997 sale of beer by Harvell to the UCI was an honest mistake by Harvell caused by Harvell's error in using the age chart and miscalculating the UCI's age.
15. The installment and use of the new computerized cash register at the location should eliminate the opportunity for clerk error in calculating the age of buyers and greatly reduce the chance that future sales to underage individuals will occur.

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. §§ 12-60-450 and 12-60-460 (Supp. 1997) and S.C. Code Ann. §§ 1-23-310, et seq. (Supp. 1997), the South Carolina Administrative Law Judge Division has jurisdiction in this matter.
2. Beer and wine licenses are neither contracts nor property rights. They are mere permits, issued or granted in the exercise of the State's police power and to be enjoyed only so long as the restrictions and conditions governing their continuance are complied with. The same tribunal authorized to grant the issuance of a license is likewise authorized, for cause, to revoke it. Feldman v. South Carolina Tax Comm'n, 203 S.C. 49, 26 S.E.2d 22 (1943).
3. 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 1997) prohibits a licensee to permit or knowingly allow the purchase or possession of beer by a person under the age of twenty-one years on the licensed premises.
4. "Knowingly" includes not only actual knowledge of a fact, but also situations where a person has such information, or the circumstances are such, as would lead a prudent person to form a belief as to the fact, and if followed by inquiry would have disclosed its character. State v. Thompkins, 263 S.C. 472, 211 S.E.2d 549 (1975); Feldman, 203 S.C. 49, 26 S.E.2d 22 (1943); Daley v. Ward, 303 S.C. 81, 399 S.E.2d 13 (Ct. App. 1990).

5. A licensee may be held liable for violations of liquor statutes and regulations committed by his agent while pursuing the ordinary business entrusted to him, even though the violations are committed without the licensee's authority. 48 C.J.S. Intoxicating Liquors § 276 (1981).

1. Respondent permitted the purchase of beer by a person under the age of twenty-one on October 10, 1997, in violation of R. 7-9(B).
2. A permit violation constitutes grounds for suspension or revocation of the beer and wine permit. S.C. Code Ann. § 61-4-250 (Supp. 1997) authorizes the discretionary imposition of a monetary penalty as an alternative to the suspension or revocation of a license or permit.
3. The fact-finder in a case has the authority to impose a penalty consistent with the facts presented. Walker v. South Carolina ABC Comm'n, 305 S.C. 209, 407 S.E.2d 633 (1991).
4. Based upon the evidence presented, I conclude that a suspension of the permit for one hundred twenty (120) days is reasonable and proper in this case.

IT IS THEREFORE ORDERED that beer and wine permit BG-946085 held by Robert D. Shatto, d/b/a Scotchman #118, is suspended for one hundred twenty (120) days, said suspension to begin fifteen (15) days from the date of this order.

________________________________

STEPHEN P. BATES

ADMINISTRATIVE LAW JUDGE

July 16, 1998

Columbia, South Carolina