ORDERS:
ORDER
I. Statement of the Case
The South Carolina Department of Revenue and Taxation (DOR) received notice that the State
Law Enforcement Division (SLED) asserted that two violations of applicable regulations had been
committed by Louise Graham or her agent (Graham) as the operator of St. Mark's Society Club,
Fairfax, South Carolina. Based upon the asserted violations, DOR seeks to revoke Graham's sale
and consumption (mini-bottle) license and impose a $500 fine. DOR initially sought to revoke
Graham's beer and wine permit. At the hearing, however, DOR asserted it no longer sought the
revocation of the beer and wine permit but rather sought a monetary fine of $400. The matter is
now before me since Graham has challenged DOR's action by seeking a contested case hearing.
Jurisdiction is vested in the Administrative Law Judge Division pursuant to S. C. Code Ann.
§61-1-55 (Supp. 1994) with the hearing held under S. C. Code Ann. §§1-23-600(B) and
1-23-310 (Supp. 1994).
Any issues raised in the proceedings or hearing of this case but not addressed in this Order are
deemed denied. ALJD Rule 29(B). Further, the filing of a motion for reconsideration is not a
prerequisite to any party filing a notice of appeal of this Order. ALJD Rule 29(C).
II. Issues
1. Did Graham or her agent violate 23 S. C. Code Ann. Regs. 7-17(J) (1976) by permitting the
consumption of liquor by a non-member on or about January 28, 1995?
2. Did Graham or her agent violate 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 1994) on or about
January 28, 1995, by permitting or knowingly allowing a person under twenty-one years of age to
purchase a beer?
3. If there are violations, what is the appropriate penalty?
III. Analysis
A. Permitting The Consumption of Liquor by a Non-Member
1. Positions of Parties
DOR asserts a party who was a not a member, and who was not a bona fide guest of a member,
consumed alcoholic beverages upon the premises of St. Mark's Society Club. DOR asserts such
an occurrence is a violation of 23 S.C. Code Ann. Regs. 7-17(J) by permitting the consumption
of liquor by a non-member. Graham does not deny the event occurred but asserts the violation
was simply a mistake.
2. Findings of Fact
I find, by a preponderance of the evidence, the following facts:
1. On January 28, 1995, at approximately 10:30 p.m., SLED Special Agent Russell N. Feaster
entered St. Mark's Society Club in an undercover capacity.
2. The January 28, 1995, visit to the Club was Agent Feaster's first visit.
3. Special Agent Feaster was neither a member of the club nor a bona fide guest of a member of
the club.
4. Upon entering by the front door, no one stopped Agent Feaster nor was he asked any
questions.
5. Agent Feaster ordered, paid for, and received from the bartender an alcoholic drink consisting
of Crown Royal and Coke.
6. Special Agent Feaster observed the alcoholic drink being prepared and consumed a portion of
the drink on the premises.
7. Graham was in the back portion of the Club when Agent Feaster was being served.
8. Agent Feaster was asked no questions by the bartender.
3. Discussion
Graham admits an alcoholic drink was sold to Agent Feaster and admits that Agent Feaster is not
a member of the Club. She asserts that she was in the back of the Club and did not know that her
employee was selling to a non-member. The license holder is responsible for the actions and
conduct of her employees and must take steps to see that the licensed place of business is
conducted in a lawful manner. 48 C.J.S. Intoxicating Liquors §168 (1981). In the instant case,
the evidence demonstrates inadequate steps to conduct the business in a lawful manner. Club
employees asked no questions of Agent Feaster when he entered the premises or when he was
served by the bartender. No method of policing membership was produced in the hearing.
Accordingly, the mere fact that Graham was in the back of the Club is insufficient to dismiss the
conduct of Graham's employee.
4. Conclusions of Law
Based on the foregoing Findings of Fact and Discussion, I conclude the following as a matter of
law:
1. Members or guests of members of non-profit organizations may consume alcoholic liquors and
beverages sold in mini-bottles upon the licensed premises of the organization. S.C. Code Ann.
§61-5-20(3) (Supp. 1994).
2. All regulations promulgated by the Commission effective on the date of the Government
Restructuring Act of 1993 remain in force until modified or rescinded by the Department or the
State Law Enforcement Division. 1993 S.C. Acts 181 §1604.
3. Regulations of the former Alcoholic Beverage Control Commission require that only bona fide
members and bona fide guests of members of a nonprofit organization may consume alcoholic
beverages sold in sealed containers of two ounces or less upon the licensed premises. 23 S. C.
Code Ann. Regs. 7-17(J) (1976).
4. The license holder is responsible for the actions and conduct of her employees and must take
steps to see that the licensed place of business is conducted in a lawful manner. 48 C.J.S.
Intoxicating Liquors §168 (1981).
5. The license holder, Graham, through her employee, violated a regulation governing the sale of
alcohol by serving an alcoholic beverage to a non-member of the St. Mark's Society Club. 23 S.
C. Code Ann. Regs. 7-17(J) (1976).
B. Sale of Beer To A Minor
1. Positions of Parties
DOR asserts an eighteen-year-old was sold a can of beer by an employee of Graham's. DOR
asserts this occurrence is a violation of 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 1994). Graham
does not deny the event occurred but asserts the violation was simply a mistake.
2. Findings of Fact
I find, by a preponderance of the evidence, the following facts:
1. On January 28, 1995, at approximately 10:15 p.m., an individual operating as an undercover
agent for SLED entered St. Mark's Society Club.
2. The individual held a valid South Carolina driver's license showing the party's birth date.
3. The individual was eighteen years old.
4. The individual ordered, paid for, and received a sixteen ounce can of beer from an employee of
the Club.
5. Approximately ten minutes after the sale, SLED Special Agent Lonnie Roberts entered the
Club and observed the undercover agent with the beer.
6. Agent Roberts confronted the employee about the sale to the undercover agent.
7. The employee did not ask for identification nor ask any questions concerning the age of the
individual.
8. The individual was a youthful-looking eighteen year-old with no facial hair.
9. The individual had in his possession his driver's license which stated the individual's true date of
birth.
10. An employee of St. Mark's Society Club sold this individual a can of beer without asking any
questions about his age or date of birth, and without checking his identification.
3. Discussion
Graham does not deny the sale to an underage party. Again, she asserts she was in the back of
the Club and was unaware of the actions of her employee. Just as with the sale of the alcoholic
drink, the permit holder is responsible for the actions and conduct of her employees and must take
steps to see that the business is conducted in a lawful manner. 48 C.J.S. Intoxicating Liquors
§168 (1981). In the instant case the evidence demonstrates inadequate steps to conduct the
business in a lawful manner. This conclusion is even more compelling given the youthful looking
nature of the individual. Accordingly, the mere fact that Graham was in the back of the Club is
insufficient to dismiss the conduct of Graham's employee.
4. Conclusions of Law
Based on the foregoing Findings of Fact and Discussion, I conclude, the following as a matter of
law:
1. All regulations promulgated by the Commission (DOR) effective on the date of the
Government Restructuring Act of 1993 remain in force until modified or rescinded by the
Department or the State Law Enforcement Division. 1993 S.C. Acts 181, §1604.
2. A party holding a beer and wine permit commits a violation if the holder permits or knowingly
allows a person under twenty-one years of age to purchase beer in or on a licensed establishment.
S.C. Code Ann. Regs. 7-9(B) (Supp. 1994).
3. To permit means to allow, consent, let; to acquiesce, by failure to prevent, or to expressly
assent or agree to the doing of an act. Black's Law Dictionary (6th ed. 1990).
4. A party manifests consent and knowledge to allowing a person under twenty-one years of age
to purchase beer if, from the appearance of the person or otherwise, the party had sufficient
information that would lead a prudent man to believe the person was under twenty-one especially
where simple inquiry would have confirmed such fact. Feldman v. South Carolina Tax
Commission, 203 S.C. 49, 26 S.E. 2d 22 (1943).
5. The license holder is responsible for the actions and conduct of her employees and must take
steps to see that the licensed place of business is conducted in a lawful manner. 48 C.J.S.
Intoxicating Liquors §168 (1981).
6. A sale of beer to a minor is forbidden irrespective of whether the sale is made by the permit
holder or by an employee of the permit holder. 48 C.J.S. Intoxicating Liquors § 259 (1981).
7. The employee was deemed to have known the undercover agent was under the age of
twenty-one. Cf. Feldman v. South Carolina Tax Commission, supra.
8. A violation of S.C. Code Ann. Regs. 7-9(B) (Supp. 1994) occurred.
C. Revocations And Fine
1. Positions of Parties
DOR asserts Graham has committed three violations within three years as to those provisions of
the law dealing with the possession or consumption of alcoholic liquors. DOR asserts these
violations should result in a permanent revocation of her sale and consumption license and a $500
fine pursuant to S.C. Code Ann. §61-5-110 (Supp. 1994). Again, Graham does not deny the
violations occurred within a three year span, but asserts that permanent revocation is
unwarranted.
DOR argues S.C. Code Ann. Regs. 7-9(B) warrants that selling to an underage party provides
sufficient cause to impose a fine or revoke a beer and wine permit. Again, Graham does not deny
the violation occurred, but asserts that revocation is unwarranted.
2. Findings of Fact
I find, by a preponderance of the evidence, the following facts:
1. A violation for the unlawful possession of liquor was issued to Graham by DOR on August 1,
1992, and Graham paid a fine of $200 on September 18, 1992.
2. A violation for permitting the consumption of liquor by a non-member was issued to Graham
by DOR on August 27, 1994, and Graham paid a fine of $500 for the violation on November 14,
1994.
3. The current violation, permitting the consumption of liquor by a non-member, was issued on
January 28, 1995.
4. The current violation is the third violation of a liquor law within three years. The other two
violations occurred on August 1, 1992, and August 27, 1994, respectively.
5. Graham sold beer to an underage party.
3. Discussion
The penalty sought by DOR involves two statutory provisions. First, S.C. Code Ann.
§61-5-110(3) (Supp. 1994) governs the accumulation of three liquor law violations committed
within three years of the first violation. Second, selling beer to an underage party is governed by
S.C. Code Reg. 7-9(B). Here the mini-bottle license is properly revoked and a $500 fine is
imposed. It is noteworthy that the violation on August 27, 1994, was for permitting the
consumption of liquor by a non-member. This same offense is the basis for the current violation.
Such conduct demonstrates that the non-member offense is being repeated at this Club.
Accordingly, the permanent revocation and a $500 fine is proper.
According to DOR, the sale of beer to an underage party is the first violation of Graham's beer
and wine permit. Graham stated the employee made a mistake in judgment and implied the
conduct would not continue. In addition, DOR does not seek a revocation but rather seeks a
$400 fine. Accordingly, no revocation is imposed but rather a $400 fine is ordered.
4. Conclusions of Law
Based on the foregoing Findings of Fact and Discussion, I conclude, the following as a matter of
law:
1. The penalty for violating a provision of Article 1, Chapter 5, Title 61, or regulations
promulgated to enforce the provisions of that article is a $500 fine and a permanent revocation of
the license. S.C. Code Ann. §61-5-110 (3) (1976).
2. Graham violated S.C. Code Ann. §61-5-110(3) by committing three violations of Article 1,
Chapter 5, Title 61, or regulations to enforce that article within three years.
3. Selling to an underage party provides sufficient cause to revoke a beer and wine permit. S.C.
Code Ann. Regs. 7-9(B).
4. Graham violated S.C. Code Ann. Regs. 7-9(B) by selling beer to an underage party.
5. DOR may impose a monetary penalty as an alternative to revocation or suspension in all cases
where the department has the authority to suspend or revoke a license or permit, and DOR, in its
discretion, may also suspend payment of a monetary penalty. S.C. Code Ann. §61-1-80 (Supp.
1994).
6. The discretionary authority of DOR to impose a monetary penalty as an alternative to
revocation and to suspend payment of a monetary penalty is granted to an Administrative Law
Judge. S.C. Code Ann. §61-1-55 (Supp. 1993) [current version at S.C. Code Ann. §61-1-55
(Supp. 1994)].
7. Graham's sale and consumption (mini-bottle) license is to be permanently revoked and a $500
fine imposed.
8. Graham's beer and wine permit shall not be revoked but a fine of $400 shall be imposed.
IV. ORDER
DOR is ordered to permanently revoke Graham's sale and consumption (mini-bottle) license and
impose a $500 fine. Further, DOR is ordered to impose a $400 fine in relation to Graham's beer
and wine permit.
IT IS SO ORDERED.
____________________________
RAY N. STEVENS
Administrative Law Judge
This 31st day of August, 1995 |
