South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
SCDOR vs. Fountain of Luck, Inc., and A&E Distribution, Inc.

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
South Carolina Department of Revenue

Respondents:
Fountain of Luck, Inc., and A&E Distribution, Inc.
 
DOCKET NUMBER:
97-ALJ-17-0324-CC

APPEARANCES:
For the Petitioner: Carol I. McMahan, Esquire

For the Respondent A&E Distribution, Inc.: Elizabeth Crum, Esquire and Wayne Covert, Esquire

For Respondent Fountain of Luck: Richard Harpootlian (Frederick Harris counsel of record)
 

ORDERS:

ORDER DENYING STAY

This matter comes before me upon a Motion to Stay the effect of this Court's Final Order and Decision in the above-captioned matter pending judicial review, pursuant to S.C. Code Ann. § 1-23-380(A)(2) (Supp. 1997) and ALJD Rule 29(D), filed by Respondent A&E Distribution, Inc. At the motion hearing Respondent Fountain of Luck, Inc. joined in the motion. South Carolina Department of Revenue (hereinafter referred to as "DOR") opposes the stay motion. This Court's Final Order and Decision in the above-captioned matter was filed on December 31, 1997. To date, no petition for appeal to circuit court has been filed; however, Respondents inform the Court that they intend to appeal and that the time for appeal has not yet expired. In the Final Order and Decision in this video poker violation case filed December 31, 1997, retail operator Fountain of Luck, Inc. was found to have violated 27 S.C. Code Ann. Regs.

117-190 (Supp. 1996) and S.C. Code Ann. 12-21-2804 (Supp. 1996). The ten machine licenses were revoked, the operation of machines were prohibited in the subject game rooms for a period of six months, and a fine of $5,000 was imposed upon Fountain of Luck, Inc. Respondent A&E Distribution, Inc. was fined $2,500 for a violation of S.C. Code Ann. 12-21-2748 (Supp. 1996).

In the absence of a stay, Respondents claim that they will suffer irreparable harm through loss of revenue. Respondents also point to the potential for the South Carolina Supreme Court to decide material and novel issues in the case of Gateway Enterprises, Inc. v. DOR which may have an impact upon one or several issues in the present case.

DOR asserts that the effect of the Final Order and Decision in this matter does not prevent the machine owners from relicensing the machines and placing them in another location, nor does it prevent the retail operator from using the business premises for any purpose other than operation of Class III video game machines. Additionally, DOR maintains that the issuance of a stay would thwart its efforts to regulate the video gaming industry and enforce the gambling laws of this State.

Under the Administrative Procedures Act, the filing of a petition for judicial review of a final order of an administrative law judge does not stay the enforcement of the administrative decision. The administrative law judge or the reviewing court may grant a stay upon appropriate terms. Pursuant to ALJD Rule 29(D), at any time prior to the filing of a petition for judicial review a party may move this Court to stay a final order upon appropriate terms, and the administrative law judge has the authority to stay the effect of a final order which is subject to judicial review. The granting of a stay of execution is discretionary. Thompson v. Watts, 278 S.C. 230, 294 S.E.2d 245 (1982).

Respondents failed to offer compelling reasons for a stay of the administrative decision rendered in this matter. Because the potential loss of income alleged by Respondents during the pendency of an appeal of the final order in this matter does not outweigh the public harm of inconsistent and ineffective enforcement of the Video Game Machines Act and related regulations, a stay is not warranted. Feasible alternatives exist for Respondents to avoid or mitigate any lost revenue resulting from the enforcement of the December 31, 1997 Order. For the foregoing reasons, Respondents' Motion to Stay is denied.

AND IT IS SO ORDERED.

_____________________________

STEPHEN P. BATES

ADMINISTRATIVE LAW JUDGE

January 26, 1998

Columbia, South Carolina


Brown Bldg.

 

 

 

 

 

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