SC Administrative Law Court Decisions

This matter comes before me upon request for a hearing by the Respondent after being cited for violating S.C. Code Ann. § 12-21-2748 (Supp. 1996). The South Carolina Department of Revenue contends that the Respondent operated five devices described in Section 12-21-2720 without having attached to the machines information identifying the owner or operator of the machines as required by Section 12-21-2748. A Hearing was held at the Administrative Law Judge Division on February 4, 1998.

The Department of Revenue seeks to assess a fine of Twelve Thousand Five Hundred and no/100 ($12,500.00) Dollars against Respondent, claiming that each of the five separate player stations on the subject machine is required to have separate owner identification information affixed to them. The Court finds that Respondent violated S.C. Code § 12-21-2748 on November 22, 1996, by failing to attach information identifying the owner or operator of a multi-player station machine. However, since this provision does not require the attachment of owner or operator identification information to each separate player station of a multi-player station machine, the total fine for Respondent's violation is Two Thousand Five Hundred and no/100 ($2,500.00) Dollars.

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, I make the following findings of fact by a preponderance of the evidence:

1. Legal notice of the time, date, place and subject matter of the hearing was given to the Petitioner and the Respondent.

2. The Department's agents conducted an inspection at Spinner's, located at 6143 St. Andrews Road, Columbia, S.C., on November 22, 1996.

3. On the premises of Spinner's was a multi-player station blackjack machine consisting of a single video monitor with five separate player stations. Neither the monitor nor any separate player station of the multi-player station machine had attached to it information identifying the owner or operator of the machine.

4. Tim's Amusements, Inc. was the owner of the five player multi-player station blackjack machine.

5. The Respondent does not dispute that the blackjack machine failed to have displayed information identifying the owner or operator of the video screen or player stations. The Respondent contends that since the screen and stations are one machine, a multi-player station need have only one owner identification. Thus, according to Respondent, the Department of Revenue can only assess a maximum penalty of Two Thousand Five Hundred and no/100 ($2,500.00) Dollars for failing to attach sufficient information identifying the owner or operator of a multi-player station machine. The Department contends that since each station is a separate machine by definition, five violations of the Video Game Machines Act occurred, and that the fine of Twelve Thousand Five Hundred and no/100 ($12,500.00) Dollars against Respondent is therefore statutorily mandated.

1. The Administrative Law Judge Division has jurisdiction to hear this matter pursuant to S.C. Code § 12-4-30(D).

2. The Respondent violated S.C. Code Ann. § 12-21-2748 (Supp. 1996) by failing to attach information identifying the owner or operator of the multi-player station machine.

3. S.C. Code Ann. § 12-21-2748 (Supp. 1996) provides "any person who owns or operates devices described in § 12-21-2720 and § 12-21-2730 must have attached to the machine information identifying the owner or operator of the machine." The issue in this case is whether the five stations and video screen is a "machine," or whether each multi-player station is a "machine." "Machine" is defined as "an electronic video games machine that, upon insertion of cash, is available to play or simulate the play of games as authorized by the commission utilizing a video display and microprocessors in which the player may receive free games or credits that can be redeemed for cash." S.C. Code § 12-21-2772(5) (Supp. 1996).

4. The question of whether § 12-21-2748 requires separate owner identification information to be affixed to each separate player station on a multi-player station machine is an issue of first impression in this Court. Neither the Coin Operated Machines and Devices Act, S.C. Code § 12-21-2703 et seq., nor the Video Game Machines Act, S.C. Code § 12-21-2770 et seq. expressly states that each multi-player station must have affixed to it separate information identifying the owner and operator of such player station.

The legislative treatment of S.C. Code Ann. § 12-21-2720(C) (Supp. 1996) elucidates the legislative intent concerning this issue. The General Assembly amended Section 12-21-2720© effective July 1, 1995, and added the phrase, "[t]he owner or operator ... shall purchase a separate license for each such station and any such multi-player station counts as a machine when determining the number of machines authorized for licensure under Section 12-21-2804(A)." Therefore, the requirement that each separate player station be counted as a separate machine for determining the number of machines authorized for licensure under § 12-21-2804(A) was not enacted until the this amendment to § 12-21-2720(C). Prior to this 1995 amendment, multi-player station machines were treated as a single coin operated device for licensing purposes. See Department of Revenue v. Rosemary Coin Machines, Inc., 95-ALJ-17-0498-CC (December 27, 1995), aff'd, Court of Common Pleas, Richland County, Civil Action No. 96-CP-40-1219, May 28, 1997.

5. The 1995 amendment to § 12-21-2720(C) without amending § 12-21-2748 evidences the Legislature's intent that multi-player station machines continue to be treated as a single coin operated device under the Coin Operated Machines and Devices Act and the Video Game Machines Act except for licensing requirements and for determining the maximum number of machines that can be operated at a single place or premise under § 12-21-2804(A). See Berkebile v. SOuten, 311 S.C. 50, 426 S.E.2d 760 (1993) (a basic presumption exists that the legislature has knowledge of previous legislation when later statutes are enacted on a related subject).

6. The cardinal rule of statutory interpretation is to ascertain and effectuate the legislative intent wherever possible. Bankers Trust of South Carolina v. Bruce, 275 S.C. 35, 267 S.E.2d 424 (1980). "Full effect must be given to each section of a statute, giving words their plain meaning, and, in the absence of ambiguity, words must not be added or taken away." Hartford Accident and Indem. Co. v. Lindsay, 273 S.C. 79, 254 S.E.2d 301, 304 (S.C. 1979). Furthermore, the South Carolina courts have applied the legal maxim of expressio unius est exclusio alterius in construing the meaning of the legislature's intent. Home Building & Loan Ass'n v. City of Spartanburg, 185 S.C. 313, 194 S.E. 139 (1936). That well accepted canon of statutory construction means "the expression of one thing is the exclusion of another." Black's Law Dictionary 581 (6th ed. 1990). In other words, when certain persons or things are specified in a law, an intention to exclude all others may be inferred. Matthews v. Nelson, 303 S.C. 489, 401 S.E.2d 669, n.1 (1991).

Here, § 12-21-2720(C) explicitly states that each station of a multi-player station machine "counts as a machine when determining the number of machines authorized for licensure under Section 12-21-2804(A)." The Legislature did not expressly include the owner identification requirement in the amendment to § 12-21-2720(C) or amend § 12-21-2748 (the owner/operator identification requirement) to require that additional information be attached to each separate player station. Therefore, expressio unius est exclusio alterius supports the conclusion that § 12-21-2748 does not require the attachment of owner or operator identification information to each separate player station of a multi-player station machine.

Moreover, the purpose of requiring owner identification information to be affixed to coin operated devices is to enable agents to readily ascertain the identity of the owner or operator of such devices for inspection purposes. That purpose is satisfied by the attachment of information to a single location on the multi-player station machine.

7. In addition, the Court recognizes that the Department of Revenue seeks to impose a fine against Respondent of Twelve Thousand Five Hundred and no/100 ($12,500.00) Dollars pursuant to S.C. Code § 12-21-2738 for failure to attach to the multi-player station machine information identifying the owner or operator as required by § 12-21-2748. When read in pari materia, these two statutes are penal and, therefore, must be strictly construed against the State and all benefit of doubt must be given to the taxpayer. See State v. Blackmon, 304 S.C. 270, 403 S.E.2d 660 (1991); South Carolina National Bank v. South Carolina Tax Commission, 297 S.C. 279, 376 S.E.2d 512 (1989).

8. On November 22, 1996, § 12-21-2738 prescribed a penalty for violating § 12-21-2748 as Two Thousand Five Hundred and no/100 ($2,500.00) Dollars, no part of which may be suspended. Accordingly, the appropriate penalty for a single violation as found in this case is Two Thousand Five Hundred and no/100 ($2,500.00) Dollars.

Based upon the findings of fact and conclusions of law, it is hereby:

ORDERED that a fine of Two Thousand Five Hundred and no/100 ($2,500.00) Dollars is imposed upon the Respondent.

IT IS SO ORDERED.

Columbia, South Carolina

February 24, 1998