ORDERS:
FINAL ORDER AND DECISION
STATEMENT OF THE CASE
This matter comes before me pursuant to S.C. Code Ann. § 61-2-260 (Supp. 2003) and S.C.
Code Ann. §§ 1-23-310 et seq. (1986 and Supp. 2003). The South Carolina Department of Revenue
(“Department”) seeks to impose a $400 fine on Respondent Oak Ridge, Inc., d/b/a Oak Ridge Food
Mart’s (“Respondent”) off-premises beer and wine permit for a violation of 23 S.C. Code Ann. Regs.
7-200.4 (Supp. 2003). Respondent stipulates that the violation occurred but requests mitigation of
the penalty sought by the Department. After timely notice to the parties, a hearing was conducted
on February 24, 2004, at the Administrative Law Judge Division (“ALJD”) in Columbia, South
Carolina. Based upon the testimony and evidence presented, I find that a $200 fine should be
assessed against Respondent’s permit for violating 23 S.C. Code Ann. Regs. 7-200.4 (Supp. 2003).
FINDINGS OF FACT
Having carefully considered all testimony, exhibits, and arguments presented at the hearing
of this matter, and taking into account the credibility and accuracy of the evidence, I make the
following findings of fact by a preponderance of the evidence:
1.Respondent holds a permit to sell beer and wine for off-premises consumption (Permit
No. 32019725-PBW) for its business located at 5290 Five Chop Road in Santee, South Carolina.
2.On August 19, 2003, the South Carolina Law Enforcement Division (“SLED”)
conducted a routine investigation of Respondent. SLED Agent Byron Williams provided $5.00 cash
to an Underage Cooperating Individual (“UCI”) who was nineteen years old at the time. The UCI
entered Respondent’s location and attempted to purchase a 24-ounce can of beer. The employee on
duty requested and examined the UCI’s South Carolina driver’s license, which showed the UCI to
be under the age of twenty-one. The employee nevertheless sold the beer to the UCI. The UCI
turned the beer over to Agent Williams, who then issued a citation to the employee for violation of
S.C. Code Ann. § 61-4-90 (Supp. 2003), “Transfer of Beer to a Person Under 21,” and an
Administrative Violation Report to the Respondent for violation of 23 S.C. Code Ann. Regs. 7-200.4
(Supp. 2003), “Permitting the Sale of Beer to a Person Under the Age of 21.”
3.Respondent admits that the afore-mentioned violation occurred.
4.Agent Williams has conducted several routine investigations of Respondent in the past,
and the August 19, 2003 investigation is the first one to result in a violation against Respondent’s
permit.
5.Harold McClain is the owner and president of Respondent. In an effort to prevent any
violations of the laws of this State regarding the sale of alcohol, Dr. McClain has implemented
policies and procedures at the subject location. Dr. McClain conducts a formal Liquor Liability
Training Program for all new employees of Respondent. In this training program, Dr. McClain
reviews the laws of this State regarding the sale of alcohol, provides training regarding the sale of
alcohol, and requires new employees to sign an Employee Liquor Liability Employment Agreement.
Further, Dr. McClain conducts follow-up meetings with Respondent’s employees throughout the
year, reviewing the laws and policies regarding the sale of alcohol and discussing any areas in which
the employees need to be more vigilant. Dr. McClain installed a cash register which requires
employees to enter the date of birth of anyone who attempts to purchase alcohol and then informs
employees whether or not the person whose date of birth was entered is over the age of twenty-one.
Dr. McClain is very conscientious about training his employees to ensure that they do not sell alcohol
in violation of this State’s alcohol laws. However, no matter the extent of Dr. McClain’s efforts,
there is room for human error and mistake. While Dr. McClain admits that the underlying violation
occurred, he believes that it was an unintentional mistake on the part of the employee involved. He
further feels that a $400 fine for a first violation is excessive, especially in light of the extent to which
he has implemented policies and procedures to ensure that neither Respondent nor any of
Respondent’s employees violate this State’s laws.
CONCLUSIONS OF LAW
Based upon the above-listed findings of fact, I conclude the following as a matter of law:
1.S.C. Code Ann. § 1-23-600 (Supp. 2003) grants jurisdiction to the ALJD to hear
contested cases under the Administrative Procedures Act. Specifically, S.C. Code Ann. § 61-2-260
(Supp. 2003) grants the ALJD the authority to hear contested case hearings in matters governing
alcoholic beverages, beer, and wine.
2.The Department is charged with the responsibility of administering and enforcing the
laws and regulations governing alcoholic beverages, including beer and wine. S.C. Code Ann. § 61-2-20 (Supp. 2003).
3.23 S.C. Code Ann. Regs. 7-200.4 (Supp. 2003) provides:
To permit or knowingly allow a person under twenty-one year of age to purchase or
possess or consume alcoholic liquors, beer or wine in or on a licensed place of
business which holds a license or permit issued by the Department is prohibited and
constitutes a violation against the license or permit. Such violation shall be sufficient
cause to suspend or revoke the license or permit by the Department.4.The Department has jurisdiction to revoke or suspend permits authorizing the sale of
beer or wine. S.C. Code Ann. § 61-4-590 (Supp. 2003). The Department may suspend or revoke
a beer and wine permit if the permittee has knowingly sold beer or wine to a person under the age of
twenty-one. S.C. Code Ann. §§ 61-4-270 and -580 (Supp. 2003); 23 S.C. Code Ann. Regs. 7-200.4
(Supp. 2003). The Department may exercise this authority to suspend or revoke a permit for a first
violation. See S.C. Code Ann. §§ 61-4-270, -580, and -590 (Supp. 2003); 23 S.C. Code Ann. Regs.
7-200.4 (Supp. 2003). In lieu of such suspension or revocation, the Department may, in its
discretion, impose a monetary penalty upon the holder of a beer or wine permit. S.C. Code Ann. §
61-4-250 (Supp. 2003). For retail beer and wine permittees, this monetary penalty must be no less
than $25 and no greater than $1,000. Id.
5.The Department’s Revenue Procedure 95-7 sets forth penalty guidelines for violations
of the statutes and regulations governing the sale, distribution, and possession of alcohol, beer, and
wine. For retail beer and wine permits, Revenue Procedure 95-7 provides for a $400 fine for the first
offense, an $800 fine for the second offense, a 45-day suspension of the permit for the third offense,
and revocation of the permit for the fourth offense. This Revenue Procedure only provides guidance
to the Department; it is not law and thus is not binding on the ALJD.
6.The Administrative Law Judge, as the finder of fact, is empowered to impose the
appropriate penalty based on the facts presented. Walker v. S.C. ABC Comm’n, 305 S.C. 209, 407
S.E.2d 633 (1991). In assessing a penalty, the finder of fact “should give effect to the major purpose
of a civil penalty - deterrence.” Midlands Util., Inc. v. S.C. Dep’t of Health & Envtl. Control, 313
S.C. 210, 212, 437 S.E.2d 120, 121 (Ct. App. 1993).
7.A permit to sell beer and wine is neither a contract nor a property right. Rather, it is
merely a permit to do what otherwise would be unlawful to do, and is to be enjoyed only so long as
the restrictions and conditions governing its continuance are complied with. Feldman v. S.C. Tax
Comm’n, 203 S.C. 49, 26 S.E.2d 22 (1943). Accordingly, there are legal consequences for a
permitee’s noncompliance with the alcoholic beverage laws of this State.
8.The purpose of the statutory prohibition against selling alcohol to underage individuals
is to protect both the underage individuals who purchase the alcohol and the public at large from the
possible adverse consequences of such purchases. Norton v. Opening Break of Aiken, Inc., 313 S.C.
508, 443 S.E.2d 406 (Ct. App. 1994), aff’d 319 S.C. 469, 462 S.E.2d 861 (1995); Whitlaw v. Kroger
Co., 306 S.C. 51, 410 S.E.2d 251 (1991). The sale of alcohol to an underage individual is a serious
offense and cannot be taken lightly.
9.Respondent violated 23 S.C. Code Ann. Regs. 7-200.4 (Supp. 2003) on August 19,
2004, when one of its employees sold a can of beer to a nineteen-year-old individual. This is the first
such violation against Respondent’s permit within the past three years.
10.Dr. McClain’s testimony was very impressive and persuasive in demonstrating the
extent to which Respondent tries to ensure that neither it nor its employees violate any of the laws
of this State regarding the sale of alcohol. Respondent has been the subject of numerous routine
investigations by SLED, and this is the first such investigation to result in a violation. Given these
circumstances, a mitigation of the penalty is warranted. However, the mitigating factors in this case
must be balanced against the purpose of the statutory prohibition against the sale of alcohol to minors
and the penalties that are assessed by the Department against permittees who violate the laws of this
State. Therefore, some penalty is in order.
11.For the reasons stated above, I find that mitigating circumstances exist in this case and
that the fine assessed against Respondent should be reduced to $200.
ORDER
Based upon the foregoing findings of fact and conclusions of law,
IT IS HEREBY ORDERED that Respondent be fined $200 for violating 23 S.C. Code Ann.
Regs. 7-200.4 (Supp. 2003);
AND IT IS SO ORDERED.
_________________________________
C. DUKES SCOTT
Administrative Law Judge
February 25, 2004
Columbia, South Carolina |
