SC Administrative Law Court Decisions

Johnnie Mae Hall, d/b/a JGW's Bar & Grill (JGW) filed an application with the South Carolina Department of Revenue (DOR) seeking an on-premises beer and wine permit and a sale and consumption (minibottle) license. The permit and license were opposed by citizens in the community who filed written protests with DOR asking that the permit and license be denied. In due course, DOR notified JGW that the permit and the license were being denied due to protests from the community.

In DOR's notice of denial to JGW, DOR advised that a contested case hearing was available before the Administrative Law Judge Division (ALJD) should JGW wish to challenge DOR's decision. The notice of denial did not advise JGW that a $70 filing fee would be due to the ALJD.

After receipt of DOR's notice of denial, JGW timely notified DOR within 30 days that JGW requested a contested case hearing before the ALJD. Upon receiving the request for a contested case, DOR timely submitted to the ALJD a Transmittal Form notifying the ALJD that a contested case hearing needed adjudication.

Shortly after receipt of the Transmittal Form, the Clerk's Office determined that JGW had not paid the $70 filing fee required by ALJD Rule 71. Accordingly, on February 28, 2002, the Clerk mailed written notice to JGW explaining that the $70 filing fee was not paid and requesting payment within ten days. No payment was received.

Due to the lack of payment, the Clerk's Office on April 19, 2002, notified JGW and DOR that the file was being returned unprocessed and that no judge would be assigned to hear the case. On April 29, 2002, JGW filed a Motion to Restore the matter to the docket and enclosed a $70 filing fee. The request to restore the matter to the docket resulted in a hearing on the motion on June 6, 2002.

The two issues presented here are whether the failure to pay the $70 fee presents a defect denying subject matter jurisdiction to the ALJD and, if not, do the circumstances of this case warrant reinstating the instant matter.

Act No. 66 (R147, H3687), Appropriations Bill, 2001-2002, Part 1B, Section 55.3 provides that "[e]ach request for a contested case hearing, . . . must be accompanied by a filing fee equal to that charged in circuit court for filing a summons and complain." See also ALJD Rule 71. The issue is whether a party who fails to pay the fee within the time period for requesting a contested case hearing from DOR has also failed to invoke the subject matter jurisdiction of the ALJD. I find that no jurisdictional defect resulted from the late payment of the filing fee in this case.

The means and method of invoking the ALJD's jurisdiction over a challenge to a DOR denial of a permit is fairly straightforward. First and foremost, the ALJD plainly has subject matter jurisdiction over contested case hearings involving challenges to DOR's denial of permits and licenses. See S.C. Code Ann. §§ 61-2-260 ("Contested case hearings arising under the provisions of this title must be heard by the administrative law judge division pursuant to the South Carolina Revenue Procedures Act and the Administrative Procedures Act."); 1-23-600(B) ("An administrative law judge of the division shall preside over all hearings of contested cases as defined in Section 1-23-310."). The ALJD's subject matter jurisdiction is invoked by the party's timely filing of a request with the affected agency for a contested case hearing with the filing for the contested case being complete at the time of mailing or hand delivery of the request to the agency. See ALJD Rule 11 ("... the request for a contested case hearing shall be filed with the affected agency within thirty (30) days after receipt of the agency decision unless otherwise provided by statute."); ALJD Rule 4 ("The date of filing is the date of delivery or the date of mailing.").

Upon filing with the agency, the litigant has the duty to provide to the ALJD "a copy of the request for a contested case hearing, accompanied by a filing fee as provided in Rule 71." ALJD Rule 11. Much like the party's Rule 11 duty of notification to the ALJD that a contested case has arisen, DOR likewise must notify the ALJD of the pending contested case. S.C. Code Ann. § 1-23-600(C) ("Departments shall notify the Administrative Law Judge Division of all pending contested cases."); ALJD Rule 12 ("The agency . . . receiving a notice of a contested case from a party shall notify the Division within five (5) working days of the receipt of the request for a contested case hearing by completing and forwarding to the Division a transmittal form."). Finally, after "receipt of the transmittal form and filing fee the case shall be assigned to an administrative law judge." ALJD Rule 13. Thus, having first filed with and having obtaining a contested case from the affected agency, the duty to pay the filing fee is a duty that arises after the contested case has been secured. Thus, a late payment is not a jurisdictional defect.

Indeed, established case law from other jurisdictions hold that the failure to timely pay the fee under such circumstances is not a jurisdiction defect.

[W]e note that a majority of courts in other jurisdictions, construing nearly identical rules governing the commencement of an action, have concluded that the filing fee requirement is not jurisdictional at the trial level. See, e.g., Burnett v. Perry Mfg., Inc., 151 F.R.D. 398, 401 (D.Kan.1993) ("[T]he greater weight of authority [among federal courts] indicates that the filing fee requirement is not jurisdictional."); see also Cintron v. Union Pac. R.R. Co., 813 F.2d 917, 920 (9th Cir.1987) (holding filing fee requirement not jurisdictional under Federal Rules of Civil Procedure); Rodgers v. Bowen, 790 F.2d 1550, 1551-52 (11th Cir.1986) (same); Wrenn v. Am. Cast Iron Pipe Co., 575 F.2d 544, 547 (5th Cir.1978) (same); Johnson v. Brown, 803 F.Supp. 1414, 1418- 19 (N.D.Ind.1992) (same); Bolduc v. United States, 189 F.Supp. 640, 641-42 (D.Me.1960) (same); Southeastern Pennsylvania Transp. Auth. v. DiAntonio, 152 Pa.Cmwlth. 237, 618 A.2d 1182, 1183-84 (1992) (holding filing fee requirement not jurisdictional under Pennsylvania law); Foley v. Foley, 147 Cal.App.2d 76, 304 P.2d 719, 719-20 (1956) (same under California law); 4 Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 1052, at 165 (2d ed.1987) (stating that "[f]iling a complaint requires nothing more than delivery to a court officer authorized to receive it").

Dipoma v. McPhie, 29 P.3d 1225 (Utah 2001).

Accordingly, JGW's late payment of the fee does not amount to a failure to invoke the ALJD's subject matter jurisdiction.

However, once the ALJD's jurisdiction is invoked, a party may find the case is subject to dismissal for failure to comply with required duties. For example, failure to proceed with a case either to prosecute or defend can result in a dismissal. ALJD Rule 23. Plainly, JGW had a duty to pay the $70 fee. See Act No. 66 (R147, H3687), Appropriations Bill, 2001-2002, Part 1B, Section 55.3; see also ALJD Rule 71. Thus, a failure to pay the fee is a failure to prosecute or defend the case and leaves the litigant subject to having his case dismissed. In fact, just such a basis existed in this case since JGW did not pay the filing fee and did not to respond to a request by the ALJD for payment of the filing fee.

Once having received notice that its case was being returned, JGW on April 29, 2002, presented to the ALJD a Motion to Restore. The motion was accompanied by the $70 filing fee which had not been paid originally. At the hearing on the motion, DOR explained that it did not oppose restoring the case. Further, DOR admitted that it did not follow the normal practice of notifying the applicant that a $70 fee was due to the ALJD. Thus, the applicant, who followed the instructions given by DOR, presents a mitigating circumstance for not paying the fee initially. Further, at the hearing, counsel for JGW asserted that counsel's failure to respond to the ALJD's request for the fee was an unintentional oversight due to inadvertence and a heavy case load. Further, counsel promptly requested reinstatement upon learning of the error.

Accordingly, considering the extenuating circumstances, the Motion to Restore is granted and, since the $70 filing fee has now been paid, no further fees are required. Within ten days of the date of this order, DOR shall submit to the Clerk of the ALJD a Transmittal Letter notifying the ALJD of the pending contested case being brought by JGW and such case shall proceed in accordance with the rules and practices of the ALJD.

AND IT IS SO ORDERED.

_________________________________

RAY N. STEVENS

Administrative Law Judge

Dated: June 13, 2002

Columbia, South Carolina