South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

SCDOR vs. Li'l Cricket Food Stores, Inc.

South Carolina Department of Revenue

South Carolina Department of Revenue

Li'l Cricket Food Stores, Inc.

Petitioner & Representative: South Carolina Department of Revenue, Jeffrey M. Nelson, Esquire

Respondent & Representative: Li'l Cricket Food Stores, Inc., Dwight F. Drake, Esquire and Zoe Sanders Nettles, Esquire

Parties Present: Both parties



I. Statement of the Case

The South Carolina Department of Revenue (DOR) seeks a fine of $2,500 for a failure to have an owner identification on a Type III video game machine. Li'l Cricket Food Stores, Inc. (Li'l Cricket), the machine owner, opposes DOR's position and asserts no violation occurred since the required identification was on the machine. This disagreement places jurisdiction in the Administrative Law Judge Division. S.C. Code Ann. §§ 12-60-1310, 12-60-1320, 1-23-600 (Supp. 1999).

The hearing in this matter was held April 25, 2000 at the Edgar Brown Building, Columbia, South Carolina. Based upon the evidence and the argument presented, a fine of $2,500 is imposed.

II. Issue

Did Li'l Cricket's machines located at 2388 Otranto Road, Charleston, South Carolina have information attached identifying the owner or operator of the machines, and, if not, what is the applicable penalty?

III. Analysis

Owner Identification

1. Positions of Parties

DOR asserts the SLED Agent found no owner identification on the five machines in question. Thus, DOR argues that a violation occurred. DOR asserts that a penalty of $500 for each machine should be imposed resulting in a total fine of $2,500. Li'l Cricket argues no violation occurred since the license for the machine expresses the necessary information for owner identification and further argues that if a violation occurred, a fine of $2,500 is excessive.

2. Findings of Fact

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

State wide, Li'l Cricket holds approximately 700 licenses for Class III video game machines. In maintaining control over those machines, Li'l Cricket employs a policy designed to assure that its machines have the required owner identification. Indeed, upon acquiring a machine, the standard policy is that Li'l Cricket attaches its name to the machine as a means of identifying Li'l Cricket as the owner of the machine.

However, notwithstanding the policy, the current dispute involves five machines that did not have the normal Li'l Cricket owner identification. Rather, the five machines involved in this case had no information attached except that of the license required by DOR for utilizing Class III machines.

The five machines in dispute are located at 2388 Otranto Road, Charleston, South Carolina. On June 24, 1999, a SLED Agent conducted an inspection of the five machines seeking to determine whether an owner or operator identification was displayed on each of the machines. The Agent's investigation failed to find an owner or operator identification, but the SLED Agent found a Class III license on each machine and recorded the license number for each machine.

At the time of the inspection on June 24, 1999, the inspecting SLED Agent was aware of Li'l Cricket's normal practice of placing ownership identification on the machines. Not finding any owner identification fitting the normal practice, the Agent inquired of the clerk on duty and was told that the machines were owned by Li'l Cricket. The SLED Agent relied upon that information in issuing a citation concluding that Li'l Cricket violated S.C. Code Ann. § 12-21-2748 (Supp. 1999) by failing to affix an owner identification to the five Class III video game machines here in question.

Subsequent to the date of inspection but no later than July 29, 1999, DOR relied upon the license numbers recorded by the SLED Agent and was able to verify through records of DOR that Li'l Cricket was the owner of the five machines. Further, on October 1, 1999, DOR issued a Final Determination supporting its position and imposing a fine of $2,500. In reaching the penalty amount, DOR relied upon the fact that since beginning its operation of video poker machines, Li'l Cricket has had no other instance in which a machine it owned failed to have an identifying owner sticker.

3. Conclusions of Law

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

a. Introduction

Information identifying the owner or operator of a Class III machine must be attached to the machine. S.C. Code Ann. § 12-21-2748 (Supp. 1999). The issue here is whether the face of the biennial Type III license (which document was attached to the machine during the June 24, 1999 inspection) satisfies the requirement that the machine have attached "information identifying the owner or operator of the machine." I find the licenses before me fail to contain information identifying the owner or operator of the machines.

b. Statutory Construction

The statute under review, S.C. Code Ann. § 12-21-2748 (Supp. 1999), first imposes a duty and then establishes a penalty for failing to meet that duty. The penalty is "the penalty and enforcement provisions of [Chapter 21] and of Chapter 54 as applicable." No dispute is raised by either party on what penalty provisions of Chapter 21 or Chapter 54 are "applicable." Rather, the parties agree that S.C. Code Ann. § 12-21-2738 is the applicable penalty provision.

i. Duty Requirement

Under § 12-21-2748 (Supp. 1999) a duty to attach to the machine "information identifying the owner or operator of the machine" is imposed on the person who owns or operates a Class III machine. The plain language of the statute must be applied in a manner that neither limits nor expands the statute's operation. First Baptist Church of Mauldin v. City of Mauldin, 308 S.C. 226, 417 S.E.2d 592 (1992). I find that the language under review presents a plain and clear meaning that gives only one interpretation.

The plain language of the statute requires that the information attached to the machine must identify the owner. Here, the license numbers do not identify the owner. Rather, the license numbers merely present an inference that the identity of the owner of the machine can be subsequently discovered from a secondary source, presumably the location at which the license numbers are recorded. In other words, the license number on a machine establishes that an owner or operator exists but does not establish the identity of the owner or operator. See e.g. Kriner v. State, 699 N.E.2d 659 (1998) (where a serial number did not itself identify the name of the gun dealer selling the gun but instead provided only a trail for tracing the identity of the gun dealer); Center to Prevent Handgun Violence v. U.S. Dept. of Treasury, 981 F.Supp. 20 (D.D.C. 1997) (where disclosing gun serial numbers under a Freedom of Information Act request was not tantamount to revealing the identity of gun owners).

To read the statute to hold that the license number by itself is "information identifying the owner" requires an improper expansion of the statute beyond the plain and literal language employed. Indeed, to find that the license number alone is sufficient to satisfy the identity requirement requires rewriting the statute to read that the machine must present "information leading to the identity of the owner." Obviously, a court may not add words to a statute but can only apply the statutory language given by the General Assembly. Banks v. Columbia Ry., Gas & Electric Co., 113 S.C. 99, 101 S.E. 285 (1919).

Finally, even if the statute is considered a penal statute so as to require a reading "liberally in his favor" (see South Carolina Dept. of Revenue v. Collins Entertainment Corp., 2000 WL 419887 (S.C. Apr 17, 2000) (NO. 25110) citing State ex rel. Moody v. Stem, 213 S.C. 465, 50 S.E.2d 175 (1948)), I do not find that the requirement of a strict reading of § 12-21-2748 avoids the conclusion that the language under review is plain and unambiguous. See Southeastern Kusan, Inc. v. South Carolina Tax Com'n, 276 S.C. 487, 280 S.E.2d 57, 58 (1981) (where the court explained that the rule of strict construction simply means that constitutional and statutory language will not be strained or liberally construed and that a court will not search for an interpretation in favor of the party entitled to the strict reading "where the plain and unambiguous language leaves no room for construction."). Accordingly, having found the language to be clear, I find the plain language requires that the information on the machine must identify the owner. Here, no information on the machine identifies the owner. Thus a violation has been established.

ii. Penalty

In imposing a penalty, DOR's position is that this offense is the first offense and that an appropriate penalty is $500 for each of the five violations for a total of $2,500. While the language of S.C. Code Ann. § 12-21-2738 (Supp. 1999) states that a penalty of $2,500 is imposed for each violation, DOR has arrived at a lesser penalty by exercising its discretion to compromise any penalty imposed by title 12 of the South Carolina Code of Laws. S.C. Code Ann. § 12-4-320(3) (Supp. 1999). Further, DOR has made public its position of imposing a $500 penalty for a first violation by the issuance of Rev. Proc. 99-1 dated January 11, 1999. Considering the facts as a whole, a total penalty of $2,500 is warranted.

Here, the facts demonstrate that the current violation is the first by Li'l Cricket. Further, Li'l Cricket's standard operating procedure demonstrates it has a consistent practice of attaching owner identification stickers to its 700 machines. Thus, Li'l Cricket has shown a good faith attempt to comply with the law. Thus, on the whole, a fine of $2,500 is appropriate for the five violations established here.

IV. Order

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

Li'l Cricket shall pay a fine of $2,500 for violating S.C. Code Ann. § 12-21-2748 (Supp. 1999).




Administrative Law Judge

Dated: April 27, 2000

Columbia, South Carolina

Brown Bldg.






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