South Carolina              
Administrative Law Court
Edgar A. Brown building 1205 Pendleton St., Suite 224 Columbia, SC 29201 Voice: (803) 734-0550

SC Administrative Law Court Decisions

CAPTION:
SCDOR vs. North Strand Optimist Club of North Myrtle Beach, Inc., et al

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
South Carolina Department of Revenue

Respondents:
North Strand Optimist Club of North Myrtle Beach, Inc., Julian Adams, James Virgil Poore, Brian Nesbitt, and Collins Entertainment Corporation
 
DOCKET NUMBER:
98-ALJ-17-0367-CC

APPEARANCES:
Petitioners & Representative: South Carolina Department of Revenue, Nicholas P. Sipe

Respondents & Representative: North Strand Optimist Club of North Myrtle Beach, Inc.,

Julian Adams, and Brian Nesbitt, James M. Griffin

James Virgil Poore, H. Fred K'lhn, Jr.

Collins Entertainment Corporation, James H. Harrison

Parties Present: All Parties
 

ORDERS:

FINAL ORDER AND DECISION

I. Statement of the Case

Based upon the posture of this case at the time of hearing, the South Carolina Department of Revenue (DOR) seeks the revocation of nine Class III licenses for video poker machines held by Collins Entertainment Corporation (Collins Entertainment) and Brian Nesbitt (Nesbitt); the levy of a fine of $5,000 each against North Strand Optimist Club of North Myrtle Beach (Optimist Club) and Julian Adams (Adams) as location operators; and the levy of a fine of $5,000 against Collins Entertainment as a machine owner. Further, DOR seeks a six month prohibition on the use of Class III machines at the offending location. Collins Entertainment , Nesbitt, Optimist Club and Adams,

DOR conceded that due to a failure of proof, it seeks no fine against the license holders of Nesbitt and James Virgil Poore (Poore). In addition, Poore consented to the revocation of his license (035175) in a letter from Poore's attorney dated July 23, 1998. Accordginly, only nine licenses remain in dispute. Further Poore's consent to revocation constitutes his appearance.



all oppose DOR's position. This disagreement places jurisdiction in the Administrative Law Judge Division (S.C. Code Ann. §§ 12-60-1310, 12-60-1320, 1-23-600 (Supp. 1997) and resulted in a hearing held on August 31, 1998. Based upon the evidence and the argument presented by the parties, the licenses for the five Class III machines in Everyday Bingo (3810746, 3810744, 035205, 3810745, and 3810743) and the licenses for five machines in Everyday Amusement C (3810751, 3810749, 035175,3810747, and 3810750) are revoked, a six month prohibition on the use ofthose machines is imposed beginning with the date of this order, a fine of $2,000 is imposed on Collins Entertainment, and a $4,000 fine is imposed on Adams.

II. Issues

1. Did Collins Entertainment, Optimist Club, Adams, or Nesbitt violate the single place or

premises requirement of S.C. Code Ann. § 12-21-2804(A) (Supp. 1997) and 27 S.C. Code

Ann. Regs. 117-190 (Supp. 1997) by failing to have a separate employee on the premises

during business hours or by failing to have a separate electric utility meter for each entity or

business?

2. If a violation occurred, are the licenses for machines held by Collins Entertainment and

Nesbitt subject to revocation despite any lack of intention or knowledge relative to the failure

to have at least one separate employee on the premises during business hours or failure to

have a separate electric utility meter for each entity or business?

3. If a violation occurred, are Collins Entertainment, Optimist Club, Adams or Nesbitt denied

the use of any Class III machines at the offending location for a period of six months from the

time the revocation becomes final or are these parties denied the privilege of using the nine

machines already in place for a period of six months from the time the revocation becomes

final?

4. If a violation occurred, what monetary fine, if any, should be imposed on Collins

Entertainment, Optimist Club, or Adams?

III. Analysis

A. Single Place or Premises

1. Positions of Parties

DOR asserts the game rooms identified as Everyday Bingo and Everyday Amusement C failed to have separate employees on their premises during business hours and failed to have operational, separate electric utility meters. Accordingly, DOR argues the single place or premises provision of S. C. Code Ann. § 12-21-2804 (Supp. 1997) was violated. Collins Entertainment, Optimist Club, Adams, and Nesbitt disagree.

2







They argue, as to Everyday Amusement C, two positions. First, the game room was closed and thus needed no employee on its premises. Second, even if the room was open, the employee was still "on the premises" when he properly left his post to enter the parking lot of the businesses in an effort to clear and direct traffic from a neighboring business whose patrons were attempting to park in the spaces reserved for Everyday Bingo and Everyday Amusement C.

As to Everyday Bingo, one argument is made. No employee was required in that room since SLED employees had previously advised them that a single employee within the four walls of the game room was not needed if the game room business could be operated by an employee located in a common area.

Finally, as to both rooms. The respondents all argue that the separate electric meters were in place. In their view, the only defect was that a malfunction had occurred in the device measuring the amount of electricity used.

2. Findings of Fact

Based on the preponderance of the evidence, the following findings of fact are entered:

A. General Background

Ofthe nine machines in dispute here at 541 Highway 17 North, North Myrtle Beach, South Carolina, Collins Entertainment holds licenses to eight of the machines. The other machine owner, Nesbitt, holds one license for a single machine housed in the game room identified as Everyday Bingo.2 The licenses are used in a North Myrtle Beach building configured as a mall-type structure housing four video game rooms. The two disputed game rooms have the following names and house the following machines:

Everyday Bingo 3810743, 3810744, 3810745, 3810746, and 035205 Everyday Amusement C 3810747, 3810749, 3810750, 3810751, and 0351753

On February 28, 1997, SLED conducted an inspection of the video game businesses at the North Myrtle Beach address. The inspection included walking into each area, listing the license numbers for machines located in the four game rooms, examining the business licenses, retail tax licenses, and utility meters for the location, and talking to an employee at the location.

2As previously noted, the tenth machine license for the two game rooms was held by Poore who has settled his dispute with DOR by consenting to a revocation of that license.

3The license number of 035175 is the revoked license previously held by Mr. Poore.

3





















As a result ofthe inspection, the SLED Agents issued a citation for a violation of S.C. Code Ann. § 12-21-2804(A) and 27 S.C. Code Ann. Regs. 117-190 (Supp. 1997) for the operation of more than five machines at a single place or premises.

B. Disputed Facts

No facts are in dispute concerning the presence of a local business license for the businesses involved in this case nor concerning the presence of the required retail sales tax licenses. Rather, this dispute concerns three disputed factors. First, was at least one separate employee on the premises of each of the game rooms during business hours. Second, did each entity or business have a separate and operational electric utility meter. Finally, did a SLED Agent advise the location operators that under some circumstances an employee in a common area was proper.

1. Employee On the Premises

The fact of whether employees were present within the four walls of the two game rooms is not significantly disputed: they were not. At the time of the inspection, no employee was in either Everyday Bingo or Everyday Amusement C. Rather the employee assigned to Everyday Bingo was in a common area and the employee assigned to Everyday Amusement C was in the parking lot attempting to control traffic and seeking to redirect vehicles that were improperly parked.

The factual dispute is whether Everyday Amusement C was closed or open. The location operators argue Everyday Amusement C was closed and that such a fact removed any obligation to have an employee on the premises. These facts are examined here.

a. Background Facts on Closed Premises

The normal practice at the location is that an employee who leaves a room must close the room by placing a chain across the entrance with a sign stating the room is closed. In this case, the employee assigned to Everyday Amusement C followed the normal practice when he left the premises to assist in the parking lot. A second employee verified that the chain closing Everyday Amusement C was in place at 4:00 p.m. Thus, at least as late as 4:00 p.m. on February 28, 1997, the entrance to Everyday Amusement C had a chain across it, the chain had a sign stating the room was closed, and the chain was placed there by an employee of Everyday Amusement C.

By 4:25 p.m., however, the status of the room was in question. At that time two SLED Agents issued a citation for failing to have an employee for the "open" room of Everyday Amusement C. The SLED Agents reached their conclusion after a physical inspection of the building.

Without announcing their identity, the two SLED Agents began their inspection by entering the location through the front door. Upon entering, the agents observed only three game rooms. Both agents entered the game room identified as Everyday Bingo (game room one on Exhibit 3), with both agents playing the machines in that game room for approximately ten minutes. After such play, one

4









of the SLED Agents then left Everyday Bingo to further investigate the building.

Upon further investigation, the SLED Agent discovered a fourth game room in the back left corner of the building identified as Everyday Amusement C (game room three on Exhibit 3). The SLED Agent entered the game room, played the machines in the room for approximately ten to fifteen minutes, and rejoined the first SLED Agent in Everyday Bingo.

Both SLED Agents presented their findings to Julian Adams III, the son of Julian Adams, and issued him a citation for failing to have an employee in Everyday Bingo (game room one on Exhibit 3) and Everyday Amusement C (game room three on Exhibit 3). Julian Adams m responded that Everyday Amusement C was closed and needed no employee. The SLED Agents explained that a chain was an insufficient means of closing the game room and further stated that no chain was in place.

b. Factual Conclusion On Closed Premises

Unfortunately, due to a camera malfunction, SLED was unable to present any pictures of the location at the time of the investigation and presented no photographs of the closed room in dispute. On the other hand, at all times during the inspection period, no employee recalls seeing anyone in Everyday Amusement C, whether SLED Agent or customer. The evidence is uncontradicted that no customers were in Everyday Amusement C at any time during the inspection. Likewise, the evidence is uncontradicted that the chain was in place immediately before the inspection. Under the facts proven in this case, the game room's business hours were not in progress at the time of the inspection and the game room was closed.

2. Electric Utility Meter

In order to qualify as a separate place or premises, a location must have a separate electric utility meter.

a. Background Facts As To Separate Utility Meter

At the time of the inspection, the SLED Agent identified several separate electric utility meters in a specified area of the building. No dispute exists that Everyday Bingo and Everyday Amusement C had identifiable utility meters. However, the dispute is whether the utility meters were functioning meters.

The inspection revealed that the electric meters for Everyday Bingo and Everyday Amusement C were not measuring the quantity of electricity used by each business. Rather, all electricity was being measured by a central meter. That central meter formed the basis for a single utility bill for all of the businesses housed at the North Myrtle Beach building involved in this case. Such businesses include the playing of Bingo as well as the playing of video poker in the various game rooms.

The game rooms have been in operation for several years and during that time the game room

5









operators never checked the meters. Accordingly, they were unaware that the meters did not measure separate usage. When the lack of separate measuring for each game room was presented to the location operators' attention by the SLED Agent inspection, an electrician was called. The electrician reconfigured the meters within a few hours and the meters now properly measure the electricity used by each game room.

b. Factual Conclusion As To Separate Utility Meter

On the inspection date, Everyday Bingo and Everyday Amusement C did not have a separate electric utility meter since the meters were not functioning. While each meter had electricity flowing through it, the purpose of the regulation is to require a utility meter that measures the electricity for a specific premises. The inability of the devices to measure the electrical usage of Everyday Bingo and Everyday Amusement C as separate entities establishes that no separate electric utility meters were in place for the two game rooms.

3. SLED Agent Statements

Prior to the inspection date, Adams had a conversation with an employee of SLED involving the legality of not placing a separate employee within a game room if the game room itself was actually a part of a larger area that did have an employee. The SLED Agent's statements in response to this issue were not reduced to writing, were not sanctioned by DOR, and the content of those statements have not been established.

3. Conclusions of Law

Based upon the above Findings of Fact, I conclude as a matter of law, the following:

A. Statutory and Regulatory Requirements for Single Place or Premises

For machines authorised under § 12-21-2720(A)(3), i.e. Class III machines, no person may maintain licenses or permits for more than five Class III machines at a single place or premises. S.C. Code Ann. § 12-21-2804 (Supp. 1997). While the statute does not explain what constitutes a single place or premises, a definition is supplied by Regulation 117-190.

Regulation 117-190 concentrates its analysis of a single place or premises by examining the physical characteristics of the structure enclosing the Class III machines and gives particular attention to exterior walls surrounding two or more video game areas. If at least two interior structures exist (i.e., each having a proper four wall configuration) and if Class III video games are located within each interior structure, then each interior structure is a video game area. Under such circumstances, the inquiry is whether each video game area is a single place or premises allowing five machines within each area.

A decision on whether each video game area is a single place or premises is reached by a facts and

6









circumstances methodology imposed by Regs. 117-190. Under the regulation, DOR "must review all the facts and circumstances to determine if each area in reality constitutes a single place or premise for video game machines." While a facts and circumstances review is normally very general, the regulation requires the existence of at least four facts. Indeed, a failure to meet any one of these criteria results in the video game area not being a separate place or premises. The four criteria are: (1) Does each entity or business have a separate electric utility meter? (2) Does each entity or business have at least one separate employee on the premises during business hours? (3) Does each entity or business have a separate local business license where required? (4) Does each entity or business have a separate state sales tax license?

B. Law Addressing Single Place or Premises

1. Employee On the Premises

DOR asserts two game rooms at the North Myrtle Beach location were without a separate employee on the premises as required by Regs. 117-190. However, in analysing whether Regs. 117-190 has been violated, a difference of opinion exists on whether the employee must be within the four walls of the area in question in order to meet the "on the premises" requirement.

a. Employee's Location

One view is that an employee is not considered to be "on the premises" when the employee is working outside the game room and when the Class III video game machines are operational and accessible to customers, i.e., an employee must be present in the room. (The four-walls position.) S.C. Dep't of Revenue and Taxation u Mickey Stacks, 95-ALJ-17-0742-CC (March 8, 1996). A contrary view is that the requirement is met even if the employee is outside the four walls so long as the employee's physical position enables the employee to observe the room and the employee is performing his job functions at the employee's location. (The within-view-of-the-four-walls position). South Carolina Department of Revenue v. Great Games, Inc., Docket No. 96-ALJ-17-0204-CC, (January 22, 1997). In a similar vein, a view exists that an employee's absence from the room is permissible if the absence is for a short period and the absence is for a justifiable reason, e.g., personal physical needs. (The short-legitimate-absence position). DOR v. Ace Music Company of Spartanburg, Inc., 97ALJ-17-0309-CC (October 19, 1997).

I agree with the four-walls position and respectfully disagree with both the within-view-of-the-fourwalls position and the short-legitimate-absence position. While at first blush it may seem reasonable to provide exceptions to the four-walls rule, closer analysis dictates otherwise.

First, relying upon the rules of statutory construction to justify exceptions to the plain language is unwarranted. The language "on the premises" is not ambiguous and must be taken in its literal and ordinary meaning. Lail v. Richland Wrecking Company, Inc., 280 S.C. 532, 313 S.E.2d 342 (Ct. App. 1984). To employ the rules of statutory construction to find that "on the premises" allows an employee to be "away from the premises" violates the principle that the rules of statutory construction

7









are provided to remove doubt but never to create doubt. See 73 Am Jur 2d Statutes § 146, citing Englewood Water Dist. v. Tate, 334 So 2d 626 (Flat App. 1976).

Here, the language of the statute and the regulation is clear. The statute and regulation allow no more than five machines in a single place or premises. Where, as is the case in this matter, at least two interior structures exist with machines inside those structures, each interior structure is a "video game area." None of the video game areas can acquire the status of a separate single place or premises unless an employee is "on the premises during business hours." The premises, upon which the employee must be "on," is the space identified as the "video game area. " An employee cannot be on the premises of an identified space if the employee is physically someplace else. Accordingly, once the employee physically leaves the space of the video game area, the employee is no longer "on the premises. "

Second, a court can not seek ways to rewrite statutes or regulations. To depart from the plainly expressed meaning causes the tribunal to legislate rather than interpret since "[t]he responsibility for the justice or wisdom of legislation rests with the Legislature, and it is the province of the courts to construe, not to make, the laws." Creech v. South Carolina Pub. Serv. Auth, 200 S.C. 127, 146, 20 S.E.2d 645, 652 (1942) (superseded on other grounds by S.C. Code Ann. § 5-7-30). In short, an ALJ cannot add conditions to the "on the premises" language of the regulation in an effort to provide exceptions that seek to improve upon what the General Assembly has plainly promulgated.

Finally, the purpose of the regulation under review dictates a holding that "on the premises" means exactly what it says. The purpose of the regulation is to provide a high degree of certainty to defining a separate place or premises. The very reason for the promulgation is that no statutory definition was provided.

In accordance with the purpose sought, the regulation adopts site specific criteria. Indeed, the regulation counts walls, limits openings in the walls, prevents access from one area to another, and even details that the walls must be one-hour firewalls. Given the regulations's site specific analysis, the most consistent view is that the plain language of "on the premises" limits the employee to the physical space ofthe four walls. On the contrary, inconsistency with the regulation results if "on the premises" requires examining whether the employee's line of sight covers more than one area or whether the reason the employee is away is a proper reason. In short, the regulation is site specific and requires that "on the premises" be within the four walls of the area under review.

In proving that no employee was on the premises, DOR bears the burden of proof. See 2 Am. Jur. 2d Administrative Law § 360 (1994) (burden of proof generally rests with the party who asserts the affirmative of an issue). Under the facts of this case, DOR has met that burden.

Here, Collins Entertainment holds eight licenses for Class III video game machines and Nesbitt holds one license. Those licenses are used in a video gaming business in a mall-type structure containing four video gaming rooms located at 541 Highway 17 North, North Myrtle Beach, South Carolina. Since neither Everyday Bingo nor Everyday Amusement C had an employee within their four walls,

8

a violation of S.C. Code Ann. § 12-21-2804(A) (Supp. 1997) occurred if the employee was absent during "business hours. " Regs. 117- 190.

b.Closed Business Hours

No dispute exists that Everyday Bingo was open. Further, the facts show that no employee was within the four walls of that game room. The fact that the employee of Everyday Bingo was away from the premises for a legitimate business reason (i.e., controlling traffic in the parking lot) does not remove the requirement that the employee must be physically on the premises of the game room in dispute. Thus, as to Everyday Bingo, a violation of S.C. Code Ann. § 12-21-2804(A) (Supp. 1997) occurred since no employee was on the premises during "business hours." Regs. 117- 190.

However, the issue is not as easily decided for Everyday Amusement C. DOR asserts that Everyday Amusement C did not have a separate employee on the premises "during business hours." Regs. 117190. However, the location operators assert no employee was required since Everyday Amusement C was closed, i.e. its "business hours" had ended.

Business hours begin at the moment a location opens for the transacting of its business. See Jolly v. Marion Nat Bank, 267 S.C. 681, 231 S.E.2d 206, (1976) (a shareholder's access to records during business hours is allowed as long as the access is for those hours of those days during which business could be transacted). However, deciding when business hours conclude is a factual issue based upon the totality of the circumstances for the time period in dispute. See Dym v. Merit 0~1 Corporation, 36 A.2d 276 (Cone. 1944) (even for a facility which appeared to be closed for the night, a weighing of the facts can find a facility open where no closed sign is conspicuously displayed at the entrance to the premises and where doors at the facility are unlocked.). In this case, considering the evidence as a whole, DOR has failed to carry its burden of persuasion, since the evidence demonstrates that Everyday Amusement C was closed at the time of the SLED Agents' inspection.

DOR bears the burden of proving the location's business hours were still on-going at the time of the inspection. See 2 Am. Jur. 2d Administrative Law § 360 (1994) (burden of proof generally rests with the party who asserts the affirmative of an issue). The testimony establishes that the employee placed the chain across the entrance closing the premises; the chain was in place just minutes before the SLED Agents entered the building, no one saw the SLED Agent playing the machines in Everyday Amusement C, and the manager on duty, contemporaneous with the citation, challenged the SLED Agent's position by asserting a chain barred entrance to the premises. Against such evidence, DOR must present by a preponderance of the evidence, persuasive proof that the room was open to customers. Having failed to produce photographs of the location at the time of the inspection, the evidence otherwise presented is insufficient to establish that Everyday Amusement C was open. Accordingly, no violation of the separate employee requirement occurred as to Everyday Amusement C.

2. Lack of Separate Utility Meters

9







Regulation 117-190 requires "each entity or business [to] have a separate electric utility meter." The purpose of such a requirement is to insure that the business under review is in fact a separate entity from other operations that may be in the same general area. See McMckel's, Inc. v. South Carolina Department of Revenue, 1998 WL 424201 (where the court explains that the four factors of Regs. 117-190 are "reasonably related to determining whether each entity operates as a separate place."). Under Regs. 117-190, in deciding whether a business operates as a separate place, the inquiry is whether the separate electric utility meter does in fact accomplish separateness.

Such an inquiry must consider whether the meter performs the function of recording usage. A failure of this function cannot be dismissed lightly. After all, by definition a meter is a device "designed . .

to indicate and record or regulate the amount or volume of something, such as a flow of gas or electric current."American Heritage Dictionary, Meter, p. 825 - 826 (1978). A failure to perform a specific function for which the device is designed is strong evidence that the device is in fact not within the meaning of a "separate electric utility meter." Indeed, a meter that fails to accurately measure the flow of electricity can set the preliminary basis for criminal wrongdoing. See S.C. Code Ann. § 16-13-385 (Supp. 1997) ("A meter found in a condition which would . . . cause the meter to inaccurately measure the use of electricity . . . is prima facie evidence that the person in whose name the meter was installed or the person for whose benefit electricity . . . was diverted caused the electricity, gas or water to be diverted from going through the meter or the meter to inaccurately measure the use of the electricity. . .")4

Under the facts of this case, on the inspection date, Everyday Bingo and Everyday Amusement C did not have a separate electric utility meter since the meters were not recording the separate usage of each game room. While each meter had electricity flowing through it, the purpose of the regulation is to require a utility meter that measures the electricity for a specific premises. The inability of the devices to measure the electrical usage of Everyday Bingo and Everyday Amusement C as separate entities establishes the fact that no separate electric utility meters were in place for the two game rooms. Accordingly, Everyday Bingo and Everyday Amusement C do not constitute separate places or premises.

3. Estoppel As To Employee On the Premises

The machine owners and the location operators argue DOR is estopped from issuing a citation for the lack of an employee on the premises of Everyday Bingo since Adams relied upon a SLED agent's statement. The statement allegedly involved the legality of not placing a separate employee within a game room if the game room itselfwas actually a part of a larger area that had an employee present. For two reasons, reliance upon the alleged SLED Agent statement is insufficient to estop DOR from enforcing the Video Game Machines Act. First, estoppel does not preclude the State from exercising police powers. Second, and in any event, no persuasive proof exists that DOR or SLED made a false

 

4No implication is made that criminal wrongdoing is at work in this case. Rather, the statute is cited as a means of emphasising the importance placed by the General Assembly on the need for a properly functioning utility meter.

10

representation to the location operators or machine owners.

Estoppel rarely presents a valid basis for defeating the State's exercise of its police powers. See Town of Sullivan's Island v. Byrum, 306 S.C. 539, 413 S.E.2d 325 (Ct. App.1992) (as a general rule, estoppel does not lie against the government to prevent the due exercise of its police power or to thwart the application of public policy). The foundation for freeing the State's police powers from estoppel is that, unlike private litigants, the State represents the public at large and "[t]he public cannot be estopped . . . by the unauthorised or erroneous conduct or statements of its officers or agents which have been relied on by a third party to his detriment." South Carolina Coastal Council v. Vogel, 292 S.C. 449, 453, 357 S.E.2d 187, 189 (Ct. App.1987). Notwithstanding estoppel principles, the public's need to exercise police powers is so compelling that even if the relied-upon employee's statement were to rise to the level of a contract, estoppel would still not bar the enforcement. Powell v. Board of Comirs of Police Ins. & Annuity Fund of State, 210 S.C. 136, 41 S.E.2d 780 (1947) (the "State cannot estop itself by grant or contract from the exercise of the police power.").

Here, the enforcement action in this case is an exercise of the State's police powers. See South Carolina Department o/Revenue v. Rosemary Coin Machines, Inc. 331 S.C. 234, 500 S.E.2d 176 (Ct. App. 1998) ("the State's regulation of coin-operated machines as listed in Section 12-212720(A)(3) . . . is pursuant to its police power."). Accordingly, DOR is not estopped from exercising its statutory authority notwithstanding contrary statements made by SLED agents.

Additionally, and in any event, estoppel has not been proven here.

The essential elements of an equitable estoppel as related to the party estopped are: (1) Conduct which amounts to a false representation or concealment of material facts, or, at least, which is calculated to convey the impression that the facts are otherwise than, and inconsistent with, those which the party subsequently attempts to assert; (2) intention, or at least expectation, that such conduct shall be acted upon by the other party; (3) knowledge, actual or constructive, of the real facts. As related to the party claiming the estoppel, they are: (1) Lack of knowledge and of the means of knowledge of the truth as to the facts in question; (2) reliance upon the conduct of the party estopped; and (3) action based thereon of such a character as to change his position prejudicially.

South Carolina Nat'l Bank, Greenville v. Hammond, 260 S.C. 622, 630, 198 S.E.2d 123, 128 (1973). Neither the machine owners nor the location operators have proven that DOR or SLED made a false representation. Indeed, the evidence fails to establish what, if anything, SLED or DOR falsely said. Accordingly, the elements of estoppel are not satisfied.

B. Revocation

Having found a violation of the single place or premises requirement, the eight licenses held by

1 1



CollinsEntertainment and the one held by Nesbitt are subject to revocation. S.C. Code Ann. § 12-21- 2804(A) (Supp. 1997). While not forcefully argued at the hearing, in a pre-hearing statement, the machine owners and the location operators argue the revocation cannot be imposed even if no employee was on the premises. That argument is incorrect and is addressed here.

1. Positions of Parties

The location operators and the machine owners argue that the revocation imposed by S.C. Code Ann. § 12-21-2804(A) is triggered only by the requirement that the primary and substantial portion ofthe establishment's gross proceeds must be from a source other than the Class III machines. Further, they argue that since that provision of the statute has been held unconstitutional, that portion of the statute may not be applied to them. Accordingly, they conclude the revocation is likewise not applicable. DOR disagrees.

2. Findings of Fact

Based on the preponderance of the evidence, the following findings of fact are entered:

On February 28, 1997, a violation of the single place or premises requirement occurred at the North Myrtle Beach location involved in this case. Of the machines found in violation, eight are owned by Collins Entertainment and one is owned by Nesbitt.

3. Conclusions of Law

Based upon the above Findings of Fact, I conclude as a matter of law, the following:

The machine owners and the location operators assert the revocation provision does not apply. Rather, they assert the revocation applies only to the requirement that the primary and substantial portion of the establishment's gross proceeds must be from a source other than the Class III machines. Such being the case, they further argue that the "gross proceeds" provision was declared unconstitutional by Reyelt v. South Carolina Tax Commission, 6:93- 1491-3 and 6:93-1493-3 (U. S. Dist. Ct., Greenville, S.C., Nov. 15, 1993) and therefore, the revocation cannot apply to them.

I disagree. The revocation is for "the licenses of machines located in an establishment which fails to meet the requirements of this section." S.C. Code Ann. § 12-21 -2804(A) (Supp.1997). The statute's use of the plural word "requirements" obviously means the licensee must meet more than one requirement and that the failure to satisfy any requirement invokes the revocation. See Emerson Elec. Ca v. Wasson, 287 S.C. 394, 339 S.E.2d 118 (1986) (the legislature's use of the plural "taxpayers" instead of "taxpayer" indicates more than one).

Here, at least two requirements are addressed in the subsection imposing the revocation. The first requirement is the single place or premises requirement. S.C. Code Ann. § 12-21-2804(A) (Supp.1997). The second requirement is the gross proceeds requirement. S.C. Code Ann. § 12-21

12

2804(A) (Supp. 1997). Thus, even treating the gross proceeds requirement as no longer a part of the law, a failure to satisfy the single place or premises requirement still triggers the revocation. Accordingly, Collins Entertainment's eight licenses and Nesbitt's one license for machines located in the game rooms identified as Everyday Bingo and Everyday Amusement C are revoked.

C. Six Month Prohibition

1. Positions of Parties

DOR asserts the statute requires a prohibition on the use of any Class III machines at the location for a period of six months from the time the revocation becomes final. The machine owners and the location operators argue that if a revocation is applied, no six month penalty should be imposed on the location, but only on the machines in use at the time of the violation.

2. Findings of Fact

Based on the preponderance of the evidence, the following findings of fact are entered:

Collins Entertainment placed several Class m machines in Everyday Bingo and Everyday Amusement C. Nesbitt placed one machine in a game room. At the time of the inspection on February 28, 1997, the appropriate retail licenses were issued by DOR pursuant to Chapter 36 of Title 12 of the S.C. Code. At the time of the inspection, the location was a licensed establishment.

Judicial notice is taken of the published decisions of the Administrative Law Judge Division and of the numerous instances in which DOR has argued before the Division that S.C. Code Ann. § 12-212804(A) imposes a six month prohibition on the use of any Class III machine at the offending location. However, judicial notice is also taken of the extensive opposition to DOR's view. In hearings before the Division, license holders routinely and repeatedly object to DOR's position.

3. Conclusions of Law

Based upon the above Findings of Fact, I conclude as a matter of law, the following:

A. Prohibition Applicable to Machines or to Locafio''

1. Introduction

The following language of § 12-21-2804 is in issue:

No license may be issued for a machine in an establishment in which a license has been revoked for a period of six months from the date of the revocation.

This language has produced two interpretations. DOR's interpretation is that once a license for a

'0 ~13

Class III machine in a location is revoked, the location is prohibited from having any Class Ill machines on its premises for a period of six months from the date of the revocation. This view is the "dead location" interpretation. The machine owners' and the location operators' interpretation is that once the location has a revocation of a Class III machine license, the machines within the establishment (but not the establishment itself) are prohibited from being re-licensed as Class III machines for a period of six months from the date of the revocation. This view is the "dead machines" interpretation. Considering the plain language of the statute and applying the legislative intent as gleaned from applicable factors, the six month prohibition applies to the machines involved and not to the location involved.

2. Legislative Intent

Courts do not legislate. Rather, when asked to interpret the meaning of a statute, the task is solely that of seeking to effectuate the legislature's intent. Laird v. Nationwide Ins. Co., 243 S.C. 388, 134 S.E.2d 206 (1964). In deciding legislative intent, the first and most basic inquiry is whether the language of the statute is plain and unambiguous and whether the statute conveys a clear and definite meaning. If the answer is yes, no occasion exists for employing rules of statutory interpretation, and the court has no right to look for or impose another meaning. Paschal v. State Election Comm'n, 317 S.C. 434, 454 S.E.2d 890 (1995).

However, where an ambiguity prevents the statute from conveying a clear and definite meaning, the court must find the legislative intent through statutory construction. See A bell v. Bell, 229 S.C. 1, 91 S.E.2d 548 (1956) ('taut where the language ofthe statute gives rise to doubt or uncertainty as to the legislative intent, the search for that intent may range beyond the borders of the statute itself; for it must be gathered from a reading of the statute as a whole in the light of the circumstances and conditions existing at the time of its enactment.") An ambiguity arises when the meaning of the language is doubtful or provides "doubleness of meaning." Chapman v. Metropolitan Life Ins. Co., 172 S.C. 250, 173 S.E. 801, 803 (1934); see also Southeastern Fire Ins. Cat v. S. C. Tax Comm 'n, 253 S.C. 407, 171 S.E.2d 355 (1969) (language is ambiguous when it is capable of being understood by reasonably well-informed persons in either of two or more senses.).

Here, I am not convinced that the language is devoid of a clear and definite meaning. A plain and unforced reading requires a dead machine result and does not support a dead location result. However, even if the statute creates an ambiguity, an inquiry into statutory construction still leads me to conclude that the legislature imposed a six month prohibition on the machines and not on the location.

a. Plain Meaning

The plain meaning of a statute is best determined by reading the statute as a whole so that phraseology of an isolated section is not controlling. City of Columbia u Niagara Fire Insurance Company, 249 S.C. 388, 154 S.E.2d 674 (1967). When read as a whole, S.C. Code Ann. § 12-212804(A) states that DOR is required to "revoke the licenses of machines located in an establishment which fails to meet

14



the requirements of [§ 12-21-2804]." Under that language, a failure to satisfy the single place or premises requirement causes a revocation of all of the machine licenses in the establishment that failed to meet the test. As a result ofthat violation, an establishment becomes filled with unlicensed machines.

In fact, that is precisely what has happened in this case. The ten machines effectively became unlicensed, and those unlicensed machines were incapable of being lawfully operated until new licenses were issued. See S.C Code Ann. § 12-21-2776 (Supp. 1997) (all machines must be licensed). This factual and legal background supplies the proper context for an unforced reading of the plain language of the six month prohibition.

Following the statutory language revoking the machine licenses in the offending establishment, the statute immediately and succinctly states "[n]o license may be issued for a machine in an establishment in which a license has been revoked for a period of six months from the date of the revocation." In other words, the specific machines that lost their licenses due to the revocation are prohibited from receiving a new machine license until a six month period has elapsed.

When relying upon the plain meaning of words in a statute, the words must be applied without resorting to a subtle or forced construction to limit or expand the statute's operation. Stephen v. Avins Constr. Co., 324 S.C. 334, 478 S.E.2d 74 (Ct. App. 1996). The interpretation expressed above provides a plain, unforced reading that answers an obvious need raised by the revocation language. Obviously, to make the revocation meaningful, a fixed period is needed. Otherwise, the owner would be able to acquire a new license the same day as the revocation and begin operating the same machine almost immediately. In my view, the six month period simply tells the owner that the machine is dead for six months and serves to give teeth to the revocation of the machine license.5

In contrast to the plain reading of the language that supports the dead machine interpretation, a reading giving a dead location requires a forced construction. For example, to impose a six month limitation on the location requires reading additional language into the statute so that the statute states "no license may be issued for a machine TO BE PLACED in an establishment in which a license has been revoked for a period of six months from the date of the revocation." (Capitalized words added). Obviously, a court may not add words to a statute but can only apply the statutory language given by the General Assembly. B - As v. Columbia Ry., Gas & Electric Co., 1 13 S.C. 99, 101 S.E. 285 (1919).



5Certainly, the dead machine view allows the location operator to buy or lease new machines, purchase new licenses and begin operation almost immediately at the same location. However, the machine revocation penalty is meaningful since the cost includes new licenses, new machines, and leaves old machines that are worthless for six months. The General Assembly provided this result and a court should not rewrite statutes to provide a "better" penalty since such matters rest solely within the wisdom of the General Assembly. Creech v. South Carolina Pub. Serv. Auth, 200 S.C. 127, 20 S.E.2d 645 (1942).

15

Accordingly, § 12-21-2804(A) imposes a six month prohibition on the issuance of licenses for those Class III machines that were in an establishment at the time a license for a machine in that establishment was revoked. No prohibition is imposed on the location itself.

b. Statutory Construction

While I believe a plain reading requires a dead machine interpretation, even if resort to statutory construction is required, such an inquiry does not support a dead location view.

A commonly applied rule of statutory construction is that where the same words are used in an enactment more than once, it is presumed the words have the same meaning throughout unless a different meaning is necessary to avoid an absurd result. Busby v. State Farm Mut. Auto. Ins. Co., 280 S.C. 330, 312 S.E.2d 716 (Ct. App. 1984). Likewise, when the legislative body defines a term, the use ofthat term in the enactment must be interpreted as having the defined meaning. Oldham v. Pace, 192 S.C. 271, 6 S.E.2d 270 (1939).

In the Video Game Machines Act (Act), Class III machines must be licensed under Article 19 before placement or operation on the premises of a 'licensed establishment. " S.C. Code Ann. § 12-21 -2778 (Supp. 1997). The legislature defined "licensed establishment" as an "establishment owned or managed by a person who is licensed pursuant to Article 19 of this chapter for the location of coinoperated nonpayout video machines with a free play feature." S.C. Code Ann. § 12-21-2772(4) (Supp. 1997). To impose a location penalty, the legislature could simply have stated the establishment may not be a licensed establishment for six months. No such statement was made.

Additionally, Article 20 imposes a further license beyond the establishment license required by Article 19. Specifically, Article 20 requires a location license since "[e]ach . . . licensed establishment must be licensed by [DOR] pursuant to Article 19 of this chapter and this article before a machine . . . is placed for public use in this State."6 S.C. Code Ann. § 12-21-2784 (Supp. 1997) (emphasis added). The location license of Article 20 is identified as an "establishment license for machine placement." S.C. Code Ann. § 12-21-2788 (Supp. 1997). In fact, DOR is required to revoke "an establishment license for machine placement" when the placement of machines does not meet "the provisions of Article 19 ofthis chapter and the [corresponding] rules and regulations promulgated by [DOR]." Id.; S.C. Code Ann. § 12-21-2786 (Supp. 1997). 7 Again, the General Assembly could have easily

 

6The additional license of Article 20 also applies to other entities; machine manufacturers, distributors, and operators must obtain the Article 20 license.

7The "establishment license for machine placement" as required by Article 20 is not the retail sales tax license of S.C. Code Ann. § 12-36-510 (Supp. 1997) required by S.C. Code Ann. § 12-21-2703 (Supp. 1997). The name "retail license" is well known by the legislature. Had the legislature meant "retail license" in § 12-21-2788 it would have used that name rather than the unusual name

16



penalized the location by revoking the establishment license for machine placement. Finally, the location may not house Class III machines "unless the location is licensed pursuant to the provisions of Chapter 36 of Title 12." S.C. Code Ann. § 12-21-2703 (Supp. 1997). Accordingly, at least three areas of location or establishment licenses are available for revocation, but § 12-21-2804(A) chooses to revoke only "licenses of machines."

These statutes demonstrate that the General Assembly was cognizant of the difference between a license for a machine and a license involving an establishment or location. In section 12-21-2804(A), the General Assembly provided for the revocation of the licenses for the machines and made no mention of revocation of an establishment license.

A common sense reading shows a symmetry exists between the revocation and the six month prohibition on re-licensing the affected machines, and further, that the symmetry is broken by the dead location view. No symmetry results from revoking a machine license and then concluding the location is penalized for six months. Had the General Assembly meant to revoke the establishment or location license it could have easily done so by specifying the revocation of a specific establishment license. Accordingly, the normal rules of statutory construction support the dead machine interpretation.

c. Deference To Agency

DOR argues its position should be followed since it is the agency charmed with administering the video games law. DOR believes the facts are well established that it has consistently applied its interpretation of S.C. Code Ann. § 12-21-2804(A) (Supp. 1997). Further, under such circumstances, DOR believes that its position is reasonable and should be accorded great deference. Finally, in deciding whether to deviate from DOR's position, DOR asserts compelling reasons must be established. In significant part, I disagree with DOR's analysis as it relates to the weight to be accorded that agency's interpretation of S.C. Code Ann. § 12-21-2804(A) (Supp. 1997).

i. Consistently Applied Position

No doubt exists that DOR has consistently applied its position. Judicial notice is taken of the published decisions of the Administrative Law Judge Division and of the numerous instances in which DOR has advanced its position in hearings before the Division. DOR has consistently viewed S.C. Code Ann. § 12-21-2804(A) as imposing a six month prohibition on the use of any Class III machine at the offending location.

However, judicial notice is also taken ofthe extensive opposition to DOR's view. In hearings before the Division, license holders routinely and repeatedly object to DOR's position. The validity of that position is now pending in the S.C. Supreme Court in the case of Gateway Enterprise, Inc. v. DOR. Thus, the position of DOR is not one which has found routine acceptance by the affected public. On



of "establishment license for machine placement." Rather, the Article 20 "establishment license" is the license required (albeit currently postponed in part until December 31, 1998) to assure Class III machines meet the technology demands of §§ 12-21-2782 and 1221 -2783. S. C. Code Ann. § 12-21 -2784 (Supp. 1997).

17

the contrary, DOR's position is far from a settled view.

ii. Deference To DOR's Position

The issue in interpreting a statute is what did the legislature intend. Laird u Nationwide Ins. Co., 243 S.C. 388, 134 S.E.2d 206 (1964). Depending upon the nature of the language under review, an agency's view may or may not be entitled to deference.

-- Plain Meaning

No deference to an agency's position is warranted where the language presents a clear meaning. Glens Falls Insurance Co. v. City Columbia, 242 S.C. 237, 130 S.E.2d 573 (1963) (no occasion arises for considering an agency's position where the language ofthe statute is plain and unambiguous and conveys a clear and definite meaning). Further, of particular significance to this case, the clear and definite meaning will always be applied despite an agency's contrary but consistently followed position. Davidson v. Eastern Fire & Cas. Ink Co., 245 S.C. 472, 141 S.E.2d 135 (1965) ("An uninsured motorist endorsement that contravenes the requirements of the statute is, to that extent, invalid, regardless of the Department's approval of it.").

Here, the statute in dispute is plain and unambiguous. The plain language of § 12-21-2804(A) imposes a six month prohibition on the issuance of licenses for those Class III machines that were in an establishment at the time a license for a machine in that establishment was revoked. Thus, having found that the plain meaning of the statute establishes legislative intent, no deference to DOR's position is required.

-- Ambiguous Meaning

However, even if an ambiguity were found in the statute, a resort to rules of construction supports the view that the revocation affects the machines but not the location. In examining the rules of statutory construction, deference to DOR's view is not a meaningful indicator of legislative intent when compared to other more significant indicators.

When required to apply the rules of construction, the construction of a statute by an agency charged with administering that statute is entitled to most respectful consideration. Stephenson Finance Co. v. South Carolina Tax Comm'n, 242 S.C. 98, 130 S.E.2d 72 (1963). More particularly, however, the degree of respect rises to one of "great weight" only if the agency position "has been acquiesced in by the [Legislature] for a long period of time." Etiwan Fertilizer Cat v. South Carolina Tax Comm'n, 217 S.C. 354, 60 S.E.2d 682 (1950).

Here, the Video Game Machines Act became effective July 1, 1993. Thus, even assuming DOR's position was announced, enforced or in some way made known to the Legislature Dom the first day the statute became effective, DOR's position is five years old. Such a time frame is far too short to amount to a showing of acquiescence "by the Legislature for a long period of time." Id. Hence, the

,,~

18

short period does not show strong evidence of acquiescence by the Legislature and does not allow "great weight" to be accorded to DOR's position. Such is especially so where the agency position is challenged repeatedly by the affected public. At best, only respectful consideration is due.

The Legislature is presumed to have knowledge of its own laws. See Ingram v. Bearden, 212 S.C. 399, 47 S.E.2d 833 (1948)(a machine was definitely outlawed by prior statute and the General Assembly was deemed to be aware ofthat fact). Respectful consideration to DOR's position (which consideration relies upon a presumption that the Legislature has knowledge of and gives tacit approval to the agency's actions) pales in comparison to the Legislature's presumptive knowledge of its own laws. The Legislature intentionally created licensed establishments and created machine licenses. Further, the Legislature defined licensed establishments and demonstrated it clearly knew the difference between machine licenses and establishment licenses. Thus, reliance upon the Legislature's knowledge of its own laws is a far superior indicator of legislative intent than reliance upon the respectful consideration of DOR's position.

iii. Compelling Reasons

While others may exist, at least two compelling reasons warrant deviating from DOR's view. First, DOR's position is inconsistent with the plain meaning of the statute such that reliance upon DOR's view places far too much weight on an administrative interpretation. See Stone Mfg. Cat v. South Carolina Employment Sea Comm'n, 219 S.C. 239, 64 S.E.2d 644 (1951) citing F. W. Woolworth Co. v. United States, 91 F.2d 973, 976 (2d. Cir. 1937) ("At most, administrative practice is a weight in the scale, to be considered, but not to be inevitably followed. * * * While we are of course bound to weigh seriously such rulings, they are never conclusive."). Second, a compelling reason to deviate from DOR's view is that following the position perpetuates an administrative error. Fennen v. South Carolina Tax Commission, 233 S.C. 43, 103 S.E.2d 424 (1958) (an interpretation presented by an administrative position is not so sacrosanct as to be beyond the correction of error; it need not perpetuate error). In short, sufficient and compelling reasons exist to deviate from DOR's position.

D. Amount of Penalty

1. Positions of Parties

DOR asserts that a fine of $5,000 is due from Collins Entertainment as the holder of eight machine licenses, and $5,000 each is due from the Optimist Club and Adams as the location operators. Collins Entertainment argues it is not liable for a penalty since as a machine owner it had no part in violating the single place or premises requirement. The Optimist Club argues it is not liable for a penalty since it was not an operator under any circumstances and had no involvement with the Class III machines. Finally, all parties argue the fines of $5,000 each is too severe.

In response to Collins Entertainment's argument, DOR asserts that a violation of S.C. Code Ann. § 12-21-2804 has been established and that a fine is imposed on the license holder. Further, the fine

19

is not dependent upon a showing of scienter or that knowledge of the violation was present in Collins Entertainment. As to the Optimist Club, DOR argues that the business retail license of the Optimist Club was shown to the SLED Agent as proof of a license for the operation of Everyday Bingo. Thus, DOR argues, the Optimist Club is liable as an operator of that room. Finally, DOR argues the penalties are not too severe given the circumstances of this case.

2. Findings of Fact

Based on the preponderance of the evidence, the following findings of fact are entered:

As the location operator, Adams' policy is that an employee must be assigned to a single game room. However, its policy also allows an employee to operate from a common area and still cover one game room if the common area is part of another business. Consistent with the stated policy, at the time of inspection on February 28, 1997, no employee was present in the game room known as Everyday Bingo. Further, Adam's policy expressed no on-going concern over identifying when a game room has a separately measured and separately identifiable source of electricity for each game room. Rather, even after operating for several years, Adams had never examined the utility meters to assure separate measurements.

As to Collins Entertainment, no dispute exists that no management control of any employee working for the Optimist Club or Adams was in Collins. Rather, the day-to-day management control over employees at the four game rooms was totally outside Collins Entertainment and was in Adams. However, despite a lack of daily control, Collins Entertainment regularly repaired the machines, serviced the machines on a weekly basis, and shared profits and losses with the location operators on a 60% to 40% ratio. Accordingly, actual maintenance and control of the licenses to the Class III machines is in Collins Entertainment.

The involvement of the Optimist Club in the location operation of Class III machines is non-existent. The Optimist Club is a charitable organisation sponsoring bingo games at the North Myrtle Beach location. The Optimist Club owned no Class III machines, serviced no machines, maintained no machines, had no employees involved with the ownership or operation of Class III machines, and received no profits or losses from the machines. Further, the retail sales license shown to the SLED Agent as the license associated with Everyday Bingo was incorrectly identified as that of the Optimist Club. Rather, the correct retailer for that game room was Adams. Accordingly, the Optimist Club had no involvement with the Class III machines at the North Myrtle Beach location.

3. Conclusions of Law

Based upon the above Findings of Fact, I conclude as a matter of law, the following:

A violation of section 12-21-2804(A) results in the imposition of a fine. S.C. Code Ann. § 12-212804(F) (Supp. 1997). The pertinent question is: a fine against whom?

20







A. Persons

The personliable for the fineis the 'person violating"section 12-21-2804(A). S.C. Code Ann. § 1221-2804(F) (Supp. 1997). For periods beginning after July 1, 1994 (obviously the case in this matter), the person violating § 12-21-2804(A) is the one who "maintain[s] any licenses or permits for more than five machines author~ed under Section 12-21-2720(A)(3) at a single place or premises.''8 S.C. Code Ann. §12-21-2804(A) (Supp. 1997). Persons maintain licenses for more than five machines if they "continue or preserve in or with; to carry on." Black's Law Dictionary 953 (6th ed. 1990). See also Merriam-Webster Or'Lir~e Dictionary, 1998 ("maintain" means "to continue or persevere in: carry on, keep up" or "to support or provide for.").9

Who is it that carries on the license in this case? Both Collins Entertainment and Adams. Both maintained the licenses for the eight machines owned by Collins. The joint "maintaining" is evident from the parties agreement to share in the profits or losses produced by the license. Indeed, that sharing is established by a contract in which the two parties agree on their respective duties in relation to the license. Collins Entertainment maintains and carries on the licenses by repairing the machines, making a weekly visit to assure the license is on a properly functioning machine, and, not insignificantly, provides the very license needed to operate the machines.

Likewise, Adams maintains the licenses as well. By contract, Adams shares in the maintenance of the licenses, since Adams receives profits and losses from the license and provides all of the operational environment for the machines: housing, seating and equipment for customers, required employees, adequate parking, etc. Duties performed by Adams are ones that Collins Entertainment would have had to perform itself, however, Collins Entertainment chose instead to have Adams maintain the license by performing tasks necessary to carry on the license. Accordingly, both Collins Entertainment and Adams maintained the licenses on the eight machines. As such, Collins, as one of the maintainers of the licenses, is liable for a fine. S.C. Code Ann. § 12-21-2804(F) (Supp. 1997).

B. Lack of Knowledge



8The actual language of the statute is that DOR may not "authorize to be maintained" any licenses or permits for more than five Class III machines at a single place or premises. Given such language, the clear intent is that if DOR is not authorized to allow one to maintain more than five

licenses, then the person who improperly maintains the excess number of licenses is the person

who violates the statute.

9In arriving at the meaning of words used in a statute, the primary rule is to ascertain and give effect to the legislature's intent or purpose as expressed in the statute. Green v. Thornton, 265 S.C. 436, 219 S.E.2d 827 (1975). The legislature's intent should be ascertained primarily from the plain language of the statute. 82 C.J.S. Statutes § 322 (b), at 571 (1953). Unless the statute requires a different interpretation, the words used must be given their ordinary meaning. Hughes v. Edwards, 265 S.C. 529, 220 S.E.2d 231 (1975).

21

For two reasons, the fact that Collins had no day-to-day control over the employees who left the premises of a game room or the fact that Collins lacked control over providing functioning electric utility meters does not remove the imposition of a fine. First, the General Assembly did not impose a duty of finding the violator had any degree of intention such as "knowingly," "intentionally" or "willfully." Instead of an intention to violate the law, all the statute demands is proof that a license is being maintained for more than five machines at a single place or premises. In fact, the General Assembly has demonstrated that when it wanted to impose scienter as a part of a violation it did so by specific language. See S.C. Code Ann. §12-21-2804(F) (upon a determination that a violation is wilful, criminal prosecution may be pursued). Second, since the statutory language does not impose knowledge as a requirement, none can be added. Accordingly, lack of knowledge or intention does not halt the imposition of a fine against Collins Entertainment.

C. Amount of Fine

Where the General Assembly authorises a range for an administratively-imposed penalty, the administrative adjudicator sitting as the fact-finder may set the amount of the penalty after a hearing on the dispute. Walker v. South Carolina ABC Comm 'n, 305 S.C. 209, 407 S.E.2d 633 (1991). When penalty disputes are part ofthe factual issues for decision, the fact-finder must receive evidence and make a determination on all such factual disputes arising from the contested case. S.C. Code Ann. § 1-23-350 (Rev. 1986).

Here, the evidence establishes that Adams and Collins Entertainment have violated section 12-212804(A). Between the two, Adams had the greater opportunity to prevent both the lapse of employees and the failure to have functioning electric meters. Accordingly, a fine of $4,000 is imposed on Adams and a fine of $2,000 is imposed on Collins. Since the Optimist Club had no involvement with the Class III machines, no fine is imposed upon it.

IV. Order

Based upon the Findings of Fact and Conclusions of Law, it is hereby ordered:

The licenses for the five Class III machines in Everyday Bingo (3810746, 3810744, 035205, 3810745, and 3810743) and the licenses for five machines in Everyday Amusement C (3810751, 3810749, 035175, 3810747, and 3810750) are revoked, a six month prohibition on the use of those machines is imposed beginning with the date of this order, a fine of $2,000 is imposed on Collins Entertainment, and a $4,000 fine is imposed on Adams.

22















AND IT lS SO ORDERED.







RAY N. STEVENS

Administrative Law Judge



Dated: September 15,1998

Columbia, South Carolina


Brown Bldg.

 

 

 

 

 

Copyright © 2022 South Carolina Administrative Law Court