ORDERS:
FINAL ORDER AND DECISION
STATEMENT OF THE CASE
This matter is before me pursuant to S.C. Code Ann. § 1-23-600 (Supp. 1998) upon Dan Booker's ("Petitioner") request for
a contested case hearing. Petitioner is appealing the Final Agency Determination issued by the Respondent South Carolina
Department of Revenue ("Department") on February 18, 1999.
Petitioner alleges in this action that the Department has engaged in selective enforcement of South Carolina Code Ann. § 61-4-580(3) (Supp. 1998) and seeks any of the following as relief from this court: 1) the Department of Revenue be ordered to
enforce § 61-4-580(3) as to all games of chance or 2) the Department of Revenue be ordered/restrained from selective
enforcement as to 'games of chance' pursuant to § 61-4-580(3) or 3) the Department of Revenue be ordered/restrained from
any enforcement as to any and all 'games of chance' pursuant to § 61-4-580(3).
In response, the Department contends that the Petitioner lacks standing to bring this action and, further, that this action is
barred by the doctrines of Res Judicata, Collateral Estoppel, and Judicial Estoppel on the basis of the previous proceeding
before, and Order of Circuit Court Judge Donald Beatty in, Treasured Arts, Inc. v. South Carolina Department of Revenue
and South Carolina Law Enforcement Division, 98-CP-40-2814 (September 29, 1998).
As agreed to by the parties herein, the above referenced Circuit Court action involving Treasured Arts and the Department
was filed by Treasured Arts in August of 1998 in response to the Department's notice of intent to begin enforcement of S.C.
Code Ann. § 61-4-580(3) (Supp. 1998) by denying beer and wine permit applications and renewals for locations which
allowed or operated gambling or games of chance on their premises. Treasured Arts filed the action based on its concern
that the Department's threatened enforcement would include locations licensed for the sale of beer and wine which sold
Treasured Arts' telephone/scratch-off cards.
Treasured Arts obtained a Preliminary Injunction on August 6, 1998 and petitioned the Circuit Court for a Declaratory
Judgement and permanent injunction to prohibit the Department from carrying out its threatened enforcement of § 61-4-580(3). A trial on the merits was held before Judge Beatty on September 21, 1998. In an Order issued September 29, 1998,
Judge Beatty denied Treasured Arts' petition in finding that the statute prohibited the sale of Treasured Arts' cards, and all
other "games of chance," at locations licensed for the sale of beer and wine. No motion for reconsideration or appeal of
Judge Beatty's Order was filed and it therefore became "final" on or about October 29, 1998.
The Petitioner now claims that while the Order of Judge Beatty prohibited the sale of any "games of chance" at locations
licensed for the sale of beer and wine, that the Department has failed to enforce the Order. Meanwhile, Treasured Arts, in
compliance with Judge Beatty's Order, has discontinued the sale of its cards in South Carolina. Petitioner, therefore,
requests that this Court take some action to require the Department to enforce § 61-4-580(3) against all locations licensed
for the sale of beer and wine in this state which sell any products with "games of chance," to include any promotional games
attached to such products.
ISSUES
1. Does the Petitioner have standing to bring this action?
2. If the Petitioner does have standing, is this action barred by the Doctrines of Collateral Estoppel, Res Judicata, and/or
Judicial Estoppel?
3. If this action is properly before this Court, can and should the Court Order the Department to enforce S.C. Code Ann. §
61-4-580(3) (Supp. 1998) against all beer and wine permitted locations which sell products with attached promotional games
under the Order of Circuit Court Judge Donald Beatty in the matter of Treasured Arts, Inc. v. S.C. Dept. of Revenue, 97-CP-42-02814, Sept. 29, 1998?
FINDINGS OF FACT
After consideration and review of all the evidence and testimony, by a preponderance of the evidence, I make the following
findings of fact:
1. Notice of the date, time, place and subject matter of the hearing was timely given to the Petitioner and the Respondents.
2. The Petitioner, Dan Booker, is a citizen of the State of South Carolina and the Vice-President and part owner of
Treasured Arts, Inc., a South Carolina corporation.
3. The Respondent South Carolina Department of Revenue is a governmental agency of the State of South Carolina and is
charged with, among other things, the regulation and licensing of the beer and wine and alcoholic beverages industry in this
state under the provisions of Title 61 of the South Carolina Code Annotated.
4. On September 29, 1998, Circuit Court Judge Donald Beatty issued an Order in the case of Treasured Arts, Inc. v. S. C.
Dept. of Revenue, 97-CP-42-2814. This action had been filed by Treasured Arts to seek an injunction to prohibit the
Department from enforcing S.C. Code Ann. § 61-4-580(3) (Supp. 1998) against locations with beer and wine permits which
sold Treasured Arts phone/scratch-off cards. In the Order, Judge Beatty found that Treasured Arts "scratch-off" games
constituted "games of chance" and that such were prohibited from being sold at locations with beer and wine permits under §
61-4-580(3). He further found that whether or not the games were "free", legal, or illegal was irrelevant.
5. As a result of Judge Beatty's Order, Treasured Arts pulled its products from stores in South Carolina and no longer sells
its telephone/scratch off cards in this state.
6. On or about October 1, 1998, the Director of the South Carolina Department of Revenue, Burnet Maybank, III, wrote a
letter to the South Carolina Merchants Association wherein he stated the Department's position that the products sold by
Treasured Arts differed significantly from "the normal grocery store promotion." Director Maybank further indicated that,
as this action had been filed by Treasured Arts and only dealt with their product, the Department did not intend to enforce §
61-4-580(3) against beer and wine permitees which sold products with "normal grocery store promotions" attached.
7. Neither Treasured Arts nor the Department sought or filed for reconsideration or for an appeal from the Order of Judge
Beatty.
8. Petitioner offered and introduced into evidence numerous products and advertisements in this matter which show or
contain promotional games or giveaways. As I find that the Petitioner does not have standing to bring this action, and as no
argument or authority was presented by the parties regarding the particulars of these "games," I decline to make a finding as
to whether these games or giveaways meet the legal definition of "games of chance" or "gambling" under South Carolina
law.
9. None of the stores, permit holders, or product manufacturers whom Petitioner alleges are violating the provisions of §
61-4-580(3) are parties to this action.
CONCLUSIONS OF LAW
1. Petitioner is a resident and citizen of South Carolina and, as such, may protest the application or renewal of any beer and
wine permit for any location in the county in which he resides under the provision of S. C. Code Ann. § 61-4-525 (Supp.
1998).
2. The Petitioner lacks proper standing to bring this action. While a citizen of this state, and part owner of a South Carolina
corporation, those facts alone are insufficient to confer on the Petitioner standing to challenge the Department's exercise of
its legitimate authority, conferred upon it by the Legislature, to license and regulate the sale of beer and wine in this state.
There is no provision in Title 61 of the South Carolina Code, or under the Administrative or Revenue Procedures Acts,
which confers standing on a citizen to challenge all beer and wine permits issued by the Department. Protests must be filed
on an individual, case by case basis.
3. The Petitioner lacks standing to challenge the Department's interpretation of § 61-4-580(3) or its granting of beer and
wine permits to a group as a whole. No justifiable controversy exists unless a party has standing to maintain such an action.
See, Lennon v. South Carolina Coastal Council, 330 S.C. 414, 498 S.E.2d 906 (Ct. App. 1998). "Standing is 'a personal
stake in the subject matter of a lawsuit.'" Newman v. Richland Co. Historic Preservation Comm'n, 325 S.C. 79, 480 S.E.2d
72, 73 (1997).
4.The Petitioner has no personal stake in this matter, in that he is not claiming that the Department should issue licenses to
locations which sell Treasured Arts products. Rather, the Petitioner asks the Court to prohibit the Department from issuing
licenses to locations which sell any of a myriad of products which he alleges to be "games of chance" under § 61-4-580(3).
"A plaintiff must allege an actual controversy in which he has a personal stake." Lennon at 416, 498 S.E.2d at 906. The
Petitioner is not asking the Court to review an action taken by the Department which has injured him in any way. Even if the
Department does begin denying beer and wine permits to every applicant in the state, that does not in any way benefit Mr.
Booker or Treasured Arts. The Petitioner is seeking to affect the granting of beer and wine licenses to a group of applicants
to which he has no personal interest. Under the facts presented in this case, the Petitioner lacks the personal stake necessary
to satisfy the standing requirement and, therefore, no justifiable controversy exists for this court to decide.
5. In order to entertain an action, a court must have jurisdiction both of the subject matter and of the person or party whose
rights are to be effected. Foster v. Nordman, 244 S.C. 485, 137 S.E.2d 600 (1964). Unless the real party in interest initiates
a suit and is before the court, the court is without jurisdiction. Ex parte Allstate Ins. Co., 248 S.C. 550, 151 S.E.2d 849
(1966). As none of the retailers and license holders whose rights would be affected by this action are properly before me,
this Court lacks the requisite personal jurisdiction necessary to decide the legality of the activities of those retailers and
license holders who are not parties to this action.
6. The Petitioner, and any other citizen of this state, may challenge beer and wine permit applications and renewals for
locations in their county of residence, or within five miles of their residence, under the provisions of S. C. Code Ann. § 61-4-525 (Supp. 1998). Petitioner may therefore challenge applications for businesses which he believes are selling products
which violate § 61-4-580(3). Both a forum and procedure for the Petitioner exist, but such protests must be made on an
individual basis.
ORDER
Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby
ORDERED, that the Petition in this matter be dismissed with prejudice because the Petitioner lacks the requisite standing
necessary to bring this action. Having found that the Petitioner lacks standing, I decline from ruling on the issues of estoppel
raised by the Department or to rule on the merits of the Petitioner's allegations.
IT IS SO ORDERED.
__________________________
Marvin F. Kittrell
Chief Administrative Law Judge
July 21, 1999
Columbia, South Carolina |
