ORDERS:
FINAL ORDER AND DECISION
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).
AND IT IS SO ORDERED.
____________________________
RAY N. STEVENS
Administrative Law Judge
Dated: April 27, 2000
Columbia, South Carolina |
