ORDERS:
FINAL ORDER AND DECISION
STATEMENT OF THE CASE
This matter comes before this tribunal pursuant to S.C. Code Ann. § 61-2-260 (Supp. 2003)
and S.C. Code Ann. §§ 1-23-310 et seq. (1986 & Supp. 2003) for a contested case hearing. The
South Carolina Department of Revenue (Department) contends that Respondent Island Convenience
Stores, Inc., d/b/a Jim Bob’s (Jim Bob’s), permitted or knowingly allowed an underage person to
purchase beer from its licensed convenience store located at the corner of Highway 15 and Highway
301 in Summerton, South Carolina, in violation of 23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2002).
For this third violation of Regulation 7-9(B) in as many years, the Department seeks a forty-five-day
suspension of Respondent’s beer and wine permit.
After timely notice to the parties, a hearing of this matter was held on February 24, 2004, at
the Administrative Law Judge Division in Columbia, South Carolina. Based upon the evidence and
arguments presented by the parties and upon the applicable law, I find that Respondent did commit
a third violation of Regulation 7-9(B) within three years and that the appropriate penalty for
Respondent’s violation is a twenty-day suspension of Respondent’s permit and the imposition of a
$500 fine upon Respondent.
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 Island Convenience Stores, Inc. holds an off-premises beer and wine
permit, Permit No. 32003613-PBG, for its Jim Bob’s convenience store located at the corner of
Highway 15 and Highway 301 in Summerton, South Carolina.
2.On February 13, 2003, State Law Enforcement Division (SLED) Agents James
Michael Robinson and C.J. Carter, with the assistance of an Underage Cooperating Individual (UCI),
Ryan Wilson, conducted a routine sting operation of several businesses in Clarendon County,
including the Jim Bob’s convenience store. Prior to beginning the operation, the agents had the UCI
turn over any forms of identification other than his state-issued driver’s license and searched him to
confirm that he had no other identification or other items that might impact the investigation on his
person. At the time of the investigation, Ryan Wilson was fifteen years old.
3.In addition to this initial search, the SLED agents searched the UCI both prior to and
after entering each location to ensure that he had no identification other than his driver’s license in
his possession. Specifically, before entering Jim Bob’s, Agent Robinson searched the UCI and
determined that the only items in his possession were his valid South Carolina driver’s license and a
$10 bill provided to him by SLED for the attempted purchase of alcohol at the location. The UCI’s
driver’s license indicated that his date of birth was “09-20-1987" and further contained a notice in the
upper right-hand corner that the UCI was “UNDER 18 UNTIL 09-20-2005.”
4.After entering Jim Bob’s, the UCI selected a Natural Light beer from the cooler and
took the beer to the store’s sales counter. Before proceeding with the sale, Respondent’s cashier on
duty at the time, Yolanda Starks, requested identification from the UCI, at which time he produced
his valid driver’s license. Ms. Starks examined the license and completed the sale of the beer. Ms.
Starks did not ask the UCI what his age was, and the UCI did not suggest by any words or actions
that he was over the age of twenty-one. After purchasing the beer, the UCI exited the store and
turned the beer and his change over to the SLED agents.
5.Based upon this tribunal’s observation of the UCI at the hearing of this case, and upon
a photograph of the UCI taken on the day of the sting operation, I find that, on the night in question,
the UCI appeared sufficiently youthful such that a reasonable person would conclude that he was
under twenty-one years of age and would make an inquiry into his age before allowing him to
purchase alcohol.
6.After collecting evidence of the sale from the UCI,
the SLED agents entered Jim
Bob’s, identified themselves to the cashier, and informed her of the violation that had occurred.
Agent Robinson then issued a violation report to Respondent for the sale of beer to a person under
twenty-one years of age in violation of Regulation 7-9(B) and a criminal citation to Ms. Starks for
the transfer of beer to a person under the age of twenty-one in violation of S.C. Code Ann. § 61-4-90
(Supp. 2003). Ms. Starks was subsequently convicted of the criminal charge and was fined $50 for
the offense.
7.On June 25, 2003, the Department issued a Final Determination to Respondent, which
sustained the citation issued by the SLED agents against Respondent and sought a forty-five-day
suspension of Respondent’s beer and wine permit as a penalty for the violation. This violation is not
Respondent’s first violation of this nature. Respondent was also cited for selling beer to an underage
individual on April 17, 2000, and on January 22, 2002, for which it was fined $400 and $800,
respectively.
8.At the hearing of this case, Respondent offered significant evidence in mitigation of
the proposed penalty. Robert Patrick, the owner of Jim Bob’s, and Elise Solomon, the manager of
Jim Bob’s, described the efforts the store has taken to prevent sales of alcohol to underage
individuals. These efforts include implementing a strict identification-checking policy, which provides
for the termination of employees who violate the policy, providing employees with aids for checking
identification such as calendars, signs, and, most recently, “a point-of-sale” cash register system that
requires employees to enter a birthdate before completing a sale of alcohol, and training employees
on the alcohol-sales policies with personal on-the-job training, an instructional videotape with a test,
and a policy statement that the employees must read and sign. While Jim Bob’s began to explore
some of these options after its second violation, it was not until after the instant violation that many
of these measures, such as the instructional videotape and the point-of-sale cash register system, were
fully implemented. Yolanda Starks, the clerk responsible for the illegal sale, and Cynthia Dozier,
another employee on duty on the night in question, described the circumstances surrounding the
instant violation. They testified that, at the time the violation occurred, Ms. Dozier had gone into the
cooler to restock some merchandise, leaving Ms. Starks, who had only been employed at Jim Bob’s
for three days, alone at the cash register as the store became unusually crowded. Ms. Starks testified
that, under this pressure, she completed the sale of beer to the UCI without thoroughly checking his
identification, despite her training to the contrary. As a result of the illegal sale, Ms. Starks was
immediately terminated from her employment with Jim Bob’s.
CONCLUSIONS OF LAW
Based upon the foregoing Findings of Fact, I conclude the following as a matter of law:
1.The Department is charged with the responsibility of administering and enforcing the
laws and regulations governing the sale of alcoholic beverages, including beer and wine. S.C. Code
Ann. § 61-2-20 (Supp. 2003).
2.S.C. Code Ann. § 61-4-580(1) (Supp. 2003) prohibits holders of beer and wine
permits from selling beer or wine to persons under twenty-one years of age. This Section states:
No holder of a permit authorizing the sale of beer or wine or a servant, agent, or
employee of the permittee may knowingly commit any of the following acts upon the
licensed premises covered by the holder’s permit:
(1)sell beer or wine to a person under twenty-one years of age . . . .
Id. A violation of that provision is “a ground for the revocation or suspension of the holder’s
permit.” S.C. Code Ann. § 61-4-580 (Supp. 2003). Regulation 7-9(B) contains a similar prohibition
on the sale of beer or wine to minors:
To permit or knowingly allow a person under twenty-one years of age to purchase or
possess or consume beer or wine in or on a licensed establishment 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].
23 S.C. Code Ann. Regs. 7-9(B) (Supp. 2002).
Here, the Department alleges that Respondent,
through its employee, Yolanda Starks, knowingly allowed the UCI, a person under twenty-one years
of age, to purchase a beer at its Jim Bob’s convenience store in violation of Regulation 7-9(B).
3.Generally, in administrative proceedings, the burden of proof rests upon the party who
asserts the affirmative of the issue. Leventis v. S.C. Dep’t of Health & Envtl. Control, 340 S.C. 118,
132-33, 530 S.E.2d 643, 651 (Ct. App. 2000); 2 Am. Jur. 2d Administrative Law § 360 (1994); see
also Alex Sanders & John S. Nichols, Trial Handbook for South Carolina Lawyers § 9.3, at 366-69
(2d ed. 2001) (stating that the burden of proof in civil matters is generally upon the party asserting
the affirmative of an issue). More specifically, before the ALJD, “[i]n matters involving the
assessment of civil penalties, the imposition [of] sanctions, or the enforcement of administrative
orders, the agency shall have the burden of proof.” ALJD Rule 29(B). Therefore, in the case at
hand, the Department must prove by a preponderance of the evidence that Respondent, through its
employee, permitted or knowingly allowed the UCI to purchase a beer from its permitted premises.
See Anonymous v. State Bd. of Med. Exam’rs, 329 S.C. 371, 375, 496 S.E.2d 17, 19 (1998) (holding
that the standard of proof in an administrative proceeding is generally the preponderance of the
evidence).
4.The weight and credibility assigned to evidence presented at the hearing of a matter
is within the province of the trier of fact. See S.C. Cable Television Ass’n v. S. Bell Tel. & Tel. Co.,
308 S.C. 216, 222, 417 S.E.2d 586, 589 (1992); see also Doe v. Doe, 324 S.C. 492, 502, 478 S.E.2d
854, 859 (Ct. App. 1996) (holding that a trial judge, when acting as finder of fact, “has the authority
to determine the weight and credibility of the evidence before him”). Furthermore, a trial judge who
observes a witness is in the best position to judge the witness’s demeanor and veracity and to evaluate
the credibility of his testimony. See, e.g., Woodall v. Woodall, 322 S.C. 7, 10, 471 S.E.2d 154, 157
(1996); Wallace v. Milliken & Co., 300 S.C. 553, 556, 389 S.E.2d 448, 450 (Ct. App. 1990).
5.Under Section 61-4-580(1), a beer and wine permit may be suspended or revoked for
the sale of beer or wine to an underage individual knowingly made either by the permit holder or by
a servant, agent, or employee of the permittee upon the licensed premises. Such liability of permit
holders for sales of beer and wine made to underage individuals by their employees and agents should
also be read into Regulation 7-9(B). See S.C. Dep’t of Revenue v. Blackmon, Docket No. 01-ALJ-17-0225-CC, at 3 (S.C. Admin. Law Judge Div. Aug. 8, 2001) (holding that, under Regulation 7-9(B), “the sale of beer or wine to a minor is forbidden irrespective of whether the sale is made by the
permit holder or by an employee of the permit holder”). Therefore, pursuant to Section 61-4-580(1)
and Regulation 7-9(B), Respondent is responsible for the sale of beer made to the UCI by its
employee, Ms. Starks.
6.For a violation of Regulation 7-9(B) to lie, a permit holder or its agent must have
knowingly sold beer or wine to an underage individual. In the present case, the Department contends
that Ms. Starks had at least constructive knowledge that the UCI was under twenty-one years of age
when she sold the beer to the UCI.
7.In Feldman v. South Carolina Tax Commission, the South Carolina Supreme Court
set forth a test for determining whether a sales clerk has knowingly sold an alcoholic beverage to an
underage individual:
Within the meaning of the term, “knowingly,” as used in [the alcoholic beverage
laws], if the clerk knew that the [customer] was a minor or had such information,
from his appearance or otherwise, as would lead a prudent man to believe that he was
a minor, and if followed by inquiry must bring knowledge of that fact home to him,
then the sale was made knowingly.
Feldman v. S.C. Tax Comm’n, 203 S.C. 49, 56, 26 S.E.2d 22, 25 (1943); see also Norris v.
Greenville, Spartanburg & Anderson Ry. Co., 111 S.C. 322, 330, 97 S.E. 848, 850 (1919) (“When
a person has notice of such facts as are sufficient to put him upon inquiry, which, if pursued with due
diligence, would lead to knowledge of other facts, he must be presumed to have knowledge of the
undisclosed facts.”). Thus, if, when she sold the beer to the UCI, Ms. Starks either (1) had actual
knowledge that the UCI was under twenty-one years of age or (2) had constructive knowledge that
the UCI was underage because the UCI’s appearance would cause a prudent person to believe the
UCI was under twenty-one years of age and would lead such a prudent person to conduct an inquiry
to ascertain the age of the UCI, then Ms. Starks knowingly sold beer to a person under twenty-one
years of age.
8.In the case at hand, Ms. Starks had constructive, if not actual, knowledge that the UCI
was underage when she sold him the beer. Here, the UCI’s youthful appearance would cause a
prudent person to believe the UCI was under twenty-one years of age, and would cause the same
prudent person to conduct an inquiry to ascertain his age before selling alcohol to him. And, while
Ms. Starks began such an inquiry by requesting identification from the UCI, and in fact, had actual
information of the UCI’s correct age placed before her on the UCI’s driver’s license, she did not
follow that inquiry to its natural and reasonable conclusion by correctly ascertaining the UCI’s age
from the information on his license. Simply put, Ms. Starks failed to conduct an adequate inquiry into
the age of the UCI before selling him the beer. Therefore, given the youthful appearance of the
fifteen-year-old UCI and the actual information of the UCI’s age presented to the sales clerk,
Respondent’s clerk had constructive knowledge that the UCI was under twenty-one years of age
when she sold him a beer from Respondent’s convenience store. Accordingly, for this knowing sale
of beer to an underage individual, Respondent is liable for a violation of Regulation 7-9(B).
9.The Department has jurisdiction to revoke or suspend permits authorizing the sale of
beer and wine. S.C. Code Ann. § 61-4-590 (Supp. 2003). Pursuant to such authority, the
Department may suspend or revoke a beer and wine permit if the permittee has knowingly sold beer
or wine to a person under twenty-one years of age. S.C. Code Ann. § 61-4-580 (Supp. 2003); 23
S.C. Code Ann. Regs. 7-9(B) (Supp. 2002); see also S.C. Code Ann. § 61-4-270 (Supp. 2003)
(authorizing the Department to “revoke the permit of a person failing to comply with any
requirements” in Chapter 4 of Title 61). Further, the Department may exercise this authority to
suspend or revoke a permit for a first violation of the prohibition against selling beer and wine to
underage persons. See S.C. Code Ann. §§ 61-4-270, 61-4-580, 61-4-590; 23 S.C. Code Ann. Regs.
7-9(B). In lieu of such suspension or revocation, the Department may also impose a monetary
penalty upon a permittee for selling beer and wine to underage individuals. 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.
10.S.C. Revenue Procedure 95-7 (1995) sets forth the Department’s penalty guidelines
for violations of the alcoholic beverage control laws. For retail beer and wine permits, Revenue
Procedure 95-7 provides for a $400 fine for the first violation by a permittee, an $800 fine for the
second violation, a 45-day suspension of the permit for the third violation, and revocation of the
permit for the fourth violation. However, this document does not set binding norms for the
Department, but rather only provides guidance to the Department in assessing penalties for violations
of the alcoholic beverage control laws. See Revenue Procedure 95-7, at ¶ 4 (“These are guidelines
only and this advisory opinion does not establish a binding norm.”). As such, Revenue Procedure 95-7 is not law and thus is not binding upon this Division. Cf. Home Health Serv., Inc. v. S.C. Tax
Comm’n, 312 S.C. 324, 328, 440 S.E.2d 375, 378 (1994) (holding that “whether a particular agency
proceeding announces a rule or a general policy statement depends upon whether the agency action
establishes a binding norm”) (citing Ryder Truck Lines, Inc. v. United States, 716 F.2d 1369 (11th
Cir. 1983)).
11.The facts in this case warrant a lesser penalty than that sought to be imposed by the
Department. It is a generally recognized principle of administrative law that the fact finder has the
authority to determine an appropriate administrative penalty, within the statutory limits established
by the legislature, after the parties have had an opportunity for a hearing on the issues. See, e.g.,
Walker v. S.C. Alcoholic Beverage Control Comm’n, 305 S.C. 209, 407 S.E.2d 633 (1991). Further,
in assessing a penalty, the finder of fact “should give effect to the major purpose of a civil
penalty–deterrence.” Midlands Utility, Inc. v. S.C. Dep’t of Health & Envtl. Control, 313 S.C. 210,
212, 437 S.E.2d 120, 121 (Ct. App. 1993). In the case at hand, I find that, while the sale of alcohol
to an underage individual is a serious offense that cannot be taken lightly, and while Respondent’s
record of violations at this location is a cause for concern, the appropriate administrative penalty in
this case is a twenty-day suspension of Respondent’s permit and the imposition of a $500 fine upon
Respondent, rather than a forty-five-day suspension of Respondent’s permit.
ORDER
Based upon the Findings of Fact and Conclusions of Law stated above,
IT IS HEREBY ORDERED that the Department shall suspend Respondent’s beer and wine
permit numbered 32003613-PBG for the premises located at the corner of Highway 15 and Highway
301 in Summerton, South Carolina, for a period of twenty (20) days for Respondent’s third violation
of Regulation 7-9(B) within three years.
IT IS FURTHER ORDERED that, in addition to the suspension, the Department shall
collect a $500 fine from Respondent as a penalty for this violation. Respondent shall remit the fine
to the Department within thirty (30) days of the date of this Order.
AND IT IS SO ORDERED.
______________________________
JOHN D. GEATHERS
Administrative Law Judge
Post Office Box 11667
Columbia, South Carolina 29211-1667
March 19, 2004
Columbia, South Carolina |