South Carolina              
Administrative Law Court
Edgar A. Brown building 1205 Pendleton St., Suite 224 Columbia, SC 29201 Voice: (803) 734-0550

SC Administrative Law Court Decisions

CAPTION:
DOR vs. Island Convenience Stores, Inc., d/b/a Jim Bob’s

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioner:
South Carolina Department of Revenue

Respondent:
Island Convenience Stores, Inc., d/b/a Jim Bob’s
 
DOCKET NUMBER:
03-ALJ-17-0354-CC

APPEARANCES:
Carol I. McMahan, Esquire
For Petitioner

J. Calhoun Land, IV, Esquire
For Respondent
 

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, Footnote 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). Footnote 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


Brown Bldg.

 

 

 

 

 

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