ORDERS:
FINAL DECISION
STATEMENT OF THE CASE
This is a case brought by the Respondent for a contested case hearing, pursuant to S.C. Code
Ann. §§ 1-23-310, et seq. and 12-4-30 (Supp. 1997). Respondent has appealed an administrative
citation issued by the South Carolina Department of Revenue ("Department") against it for a
violation of the South Carolina Video Game Machines Act. The Department issued an
administrative citation and Final Agency Determination finding that the Respondent had violated
the provisions of S. C. Code Ann. § 12-21-2748 by failing to have identification of itself as the
owner of a Class III video game machine licensed to it and operated by the Respondent in The Office
Lounge at 953 North Pleasantburg Drive, Greenville, South Carolina, on August 20, 1997.
A hearing on this matter was held on March 23, 1998 at the office of the Administrative Law
Judge Division ("ALJD"). Any issues raised in the proceedings or hearing of this case not addressed
in this Order are deemed denied. ALJD Rule 29(B).
ISSUES
1. Did the Respondent violate the owner identification requirement of S.C. Code Ann. §
12-21-2748 (Supp. 1997) by failing to have identification properly posted on a Class III video game
machine owned, licensed to, and operated by it?
2. If the Respondent did violate the statute, is the Two Thousand Five Hundred ($2,500.00)
Dollars penalty imposed by the Department under S.C. Code Ann. § 12-21-2738 appropriate?
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, I make the
following Findings of Fact by a preponderance of the evidence:
1. Notice of the time, date, place and subject matter of the hearing was timely given to the
Petitioner and the Respondent.
2. Collins Entertainment Corporation holds a South Carolina Class III Coin Operated Device
license for a video machine bearing license number 3925779. The machine upon which that license
was attached was operated at "The Office Lounge" at 953 North Pleasantburg Drive, Greenville,
South Carolina on August 20, 1997. The license expires on May 31, 1999.
3. On August 20, 1997, South Carolina Law Enforcement ("SLED") Special Agent James
R. Causey and SLED Lieutenant Don Evatt, both of the SLED Alcohol Enforcement Unit, conducted
an inspection of "The Office Lounge" located at 953 North Pleasantburg Drive in Greenville, South
Carolina. While inspecting the Class III video game machines at this location, Agent Causey noted
that one of the machines, bearing license number 3925779, did not have any owner identification
attached anywhere to the machine. After checking the front, rear, and both sides of the machine,
Agent Causey asked both Lieutenant Evatt and the manager of the location, Mr. Roy Gerold, to
recheck the machine to see if they could find any owner identification. Neither Lieutenant Evatt nor
Mr. Gerold could locate any owner identification on the machine.
4. Agent Causey prepared a Preliminary Findings Report at the location citing the
Respondent, who he presumed to be the owner of the machine, for violating Section 12-21-2748.
Agent Causey provided a copy of the Report to the manager of "The Office Lounge," Mr. Gerold on
August 20, 1997.
5. On the basis of Agent Causey's Preliminary Findings Report, the Department assessed a
penalty to the Respondent in the amount of Two Thousand Five Hundred ($2,500.00) Dollars under
Section 12-21-2738.
6. Respondent stipulated at the hearing on this matter that the machine in question did not
have proper owner identification posted on August 20, 1998. While admitting to having violated
Section 12-21-2748, Respondent asked the court to reduce the Two Thousand Five Hundred
($2,500.00) Dollars fine sought by the Department, claiming mitigating circumstances. Respondent
claimed that the machine in question previously had a proper owner identification and that such
identification had been removed by an unknown person. Further, that Respondent has made efforts
to decrease such tampering, subsequent to the date of the violation here, by placing such
identification behind plexiglass.
7. I find that the following previous Decisions of the ALJ Division are relevant for
consideration in this decision: 97-ALJ-17-0290-CC, 97-ALJ-17-0310-CC, 97-ALJ-17-0443-CC, 97-ALJ-17-0607-CC, and 97-ALJ-17-0611-CC. See, Freeman v. McBee, 280 S.C. 490, 313 S.E.2d
325 (Ct. App. 1984) ("A court can take judicial notice of its own records, files, and proceedings for
all proper purposes including facts established in its records"). The above Decisions show previous
violations of Section 12-21-2748 by the Respondent as found by this Court or admitted by the
Respondent in cases. The violations in all of these cases occurred prior to the date of the violation
at issue in this case. However, despite these previous violations, the method of owner identification
employed by the Respondent at the time of the violation at issue was by placement of a sticker on
the front of the machine. Further, while the Respondent was aware of problems with this method
of identification, in that the stickers were frequently removed by patrons or otherwise fell off the
machines, no action was taken by the Respondent to employ tamper-resistant or more permanent
methods of identification until late 1997. I find that a Two Thousand Five Hundred ($2,500.00 )
Dollars penalty is appropriate in this case.
CONCLUSIONS OF LAW
Based on the above Findings of Fact, I conclude as a matter of law the following:
1. The Administrative Law Judge Division has jurisdiction to hear this matter pursuant to
S.C. Code Ann. § 12-4-30(D) (Supp. 1997) and S.C. Code Ann. § 1-23-320 (Supp. 1997).
2. The Department contends that the Respondents violated S.C. Code Ann. § 12-21-2748
which provides that:
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 identification must be placed on an area of the machine
which is visible for inspection purposes. This identification is a condition precedent
before the machines may be operated on location. Failure to comply with this
requirement subjects the violator to the penalty and enforcement provisions of this
chapter and of Chapter 54 as applicable.
3. The Respondent Collins Entertainment Corporation is the licensee of the Class III video
machine which was located and operating in "The Office Lounge" at 953 North Pleasantburg Drive
in Greenville, South Carolina on August 20, 1998 bearing license number 3925779.
4. The Video Games Machine Act ("Act") which regulates video game machine activity in
South Carolina, was enacted in 1993 and became effective on July 1, 1993. The Act is codified at
S.C. Code Ann. §§ 12-21-2770, et seq. (Supp. 1997). The expressed purpose of the Act is to
regulate the video games machine industry in South Carolina.
5. The Respondent in this case violated S.C. Code Ann. § 12-21-2748 (Supp. 1997) by
operating a Class III video game machine on August 20, 1998 at the location without proper owner
identification.
6. The penalty to be imposed for a violation of § 12-21-2748 is provided for in S. C. Code
Ann. § 12-21-2738 (Supp. 1997) which provides in relevant part that:
If the violation under this section relates to a machine licensed
pursuant to Section 12-21-2720(A)(3), the applicable penalty amount
is two thousand five hundred dollars.
Under this statute, both the Department and the Administrative Law Judge Division may reduce the
amount of the fine to be imposed under Section 12-21-2738 for a violation of Section 12-21-2748
provided that the party found in violation of Section 12-21-2748 can show some extenuating
circumstance or "reason" for the violation. However, the Respondent failed to produce sufficient
evidence to warrant the reduction of this amount.
7. On August 20, 1997, the Respondent was operating a Class III video game machine in
violation of Section 12-21-2748. The Respondent had knowledge that its owner identification
stickers placed on the front of its machines, the method of identification employed by the
Respondent on the date in question, were subject to being lost or removed by patrons. Despite this
knowledge, Respondent either intentionally or negligently failed to take action to reduce such alleged
tampering or loss of identification from its machines until some time after the date of the violation
at issue in this case. I therefore conclude as a matter of law that the Respondent violated the "owner
identification" requirement of Section 12-21-2748 and that the appropriate penalty for such violation
is Two Thousand Five Hundred ($2,500.00) Dollars under Section 12-21-2738.
ORDER
Based upon the Findings of Fact and Conclusions of Law, it is hereby:
ORDERED that the Respondent pay a fine in the amount of Two Thousand Five Hundred
($2,500.00) Dollars.
_______________________________
Ralph K. Anderson, III
Administrative Law Judge
Columbia, South Carolina
April 20, 1998 |