STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF ALCOHOLIC )

BEVERAGES AND TOBACCO, )

)

Petitioner, )

)

vs. ) Case No. 97-5002

)

KILLIAN’S ROCK CAFE, INC., )

d/b/a CLUB 1509, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing in this case was held on April 14-15 and May 20-21, 1998, by videoconference between Tallahassee and Tampa, Florida, before Carolyn S. Holifield, Administrative Law Judge, Division of Administrative Hearings.

APPEARANCES

For Petitioner: Thomas D. Winokur, Esquire

Department of Business

and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-1007

For Respondent: Richard W. Bisconti, Esquire

G. Michael Nelson, Esquire 3333 West Kennedy Boulevard Suite 103

Tampa, Florida 33611

STATEMENT OF THE ISSUES

The issues for determination are: (1) whether Respondent through its agents, servants, or employees, while on its licensed

premises, permitted patrons to unlawfully possess, sell, or deliver controlled substances in violation of Sections 561.29(1)(a) and 893.13(1)(a), Florida Statutes; (2) whether Respondent through its agents, servants, or employees, kept or maintained its licensed premises for the illegal keeping, selling, or delivery of controlled substances in violation of Section 893.13(7)(a)5., Florida Statutes; and (3) if yes, what action should be taken against Respondent's Alcoholic Beverage License No. 39-01181, Series 4-COP, issued by the State of Florida.

PRELIMINARY STATEMENT

On October 3, 1997, Petitioner, the Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco (Division), served Respondent, Killian's Rock Cafe Inc., d/b/a Club 1509, (Respondent, Club 1509 or licensed premises) with an Emergency Order of Suspension which suspended Respondent's alcoholic beverage license. At the same time, Respondent was served with a twenty-one count Notice To Show Cause that charged Respondent with twenty (20) counts of permitting patrons to unlawfully possess, sell, or deliver controlled substances on the licensed premises, in violation of Sections 561.29(1)(a), and 893.13(1)(a), Florida Statutes, and with one count of maintaining a nuisance on the licensed premises in violation of Section 893.13(7)(a)5., Florida Statutes.

Furthermore, the Notice proposed to suspend, revoke, and

otherwise discipline the Respondent and its licensee. Respondent contested the charges and requested a formal hearing. On

October 29, 1997, the Division forwarded the matter to the Division of Administrative Hearings to conduct the formal hearing.

The hearing was initially scheduled for March 9-10, 1998, but was continued pursuant to an Order issued on March 2, 1998, which granted Petitioner's Motion to Continue. Thereafter, the final hearing was conducted as noticed.

At the commencement of the hearing, Petitioner made an ore tenus motion to amend the Notice to Show Cause. Specifically, Petitioner requested that the term "Nexus" in Counts 4, 5, 6, 7, 8, and 10 be replaced with the legal name for the controlled substance provided in Section 893.03(1)(c)5., Florida Statutes, Petitioner also requested that Count 21 be amended to reflect that the correct statutory citation is Section 893.13(7)(a)5., Florida Statutes, rather than Section 893.13(2)(a)5., Florida Statutes. Petitioner's motion to amend the Notice to Show Cause was granted.

At hearing, Petitioner presented the testimony of eleven witnesses: Captain Bruce E. Ashley; Sergeant Tim Allen; Special Agents Deborah Caplinger, Elaine J. Pavan, and Patricia Thompson, of the Division; Sergeant Victor Gomez and Officers Mark J. Hamlin; Borthland Murray; Dwayne Johnson; Kevin Ahles; and Brent Holder of the Tampa Police Department. Petitioner's Exhibits 1

and 2 and 68 through 87 were received into evidence. At Petitioner's request, the undersigned took official recognition of Petitioner's Exhibit 1 and 2.

Respondent presented the testimony of eighteen witnesses: Officers Julio Martinez and Tad Moody of the Tampa Police Department; August Mauser, Professor, University of South Florida; John Graham, Deputy Sheriff; Larry Sheppard, M.D.; William Scheiper and Scott Sohl, managers of Club 1509; Kerry Myers, patron and occasional acting manager of Club 1509; Lauri Harn, Brian Morgan, Tracy Hoffman, and Jennifer Lee Rollins, employees of Club 1509; Linda Haber, Paul Haber, Ernest Ford, and Dr. Frederick McClimans, O.D., partners in Club 1509; Kenneth Sohl, former president, secretary, and treasurer of Club 1509; and Angel Alfonso, President, Professional, Inc., a responsible vending training company. Respondent's Exhibits 1 through 3 and

5 through 11 were received into evidence. The record was left open for the late filing of several of Respondent's exhibits. The late filed exhibits were filed on May 29, 1998.

The proceeding was recorded but, except for the testimony of Officer Kevin Ahles, was not transcribed. A transcript of this excerpt of the proceedings was filed on May 11, 1998. By agreement of the parties at the conclusion of the hearing, the time period for filing proposed recommended orders was more than ten days after the hearing, thereby by waiving the time constraint imposed by Rule 28-106.216, Florida Administrative

Code. The parties timely filed their proposed recommended orders under the extended time frame.

FINDINGS OF FACT

1. At all times relevant to this proceeding, Respondent was the holder of an Alcoholic Beverage License No. 39-01181, Series 4-COP, for the licensed premises doing business as Club 1509 and located at 1509 East 8th Avenue, Tampa, Hillsborough County, Florida.

2. At all times relevant to this proceeding, Kenneth M. Sohl was the president, secretary and treasurer of Killian's Rock Cafe, Inc., d/b/a Club 1509, and the holder of the above- referenced alcoholic beverage license.

3. In 1994, Kenneth M. Sohl, Dr. Frederick McClimans, D.O., and Ernest Haire, III, invested in a venture whereby an existing law office was converted into an upscale, rock-n-roll nightspot called Killian's Rock Cafe located at 1509 East 8th Avenue, Tampa, Florida. Mr. Kenneth Sohl was the managing partner because of his successful ownership and operation of another rock-n-roll club also named Killian's located in Tampa, but not in the Ybor City area.

4. After almost two years of operation, Killian's Rock Cafe was having a difficult time competing with the ever increasing number of establishments being opened in Ybor City. In October 1995, Mr. Sohl and Dr. McClimans took on new partners, Paul Haber, owner of a medical equipment company; Linda Haber, Paul

   Haber's wife; and Dr. Lawrence Perich, M.D. When the new partners became involved, it was with the idea of creating a more upscale club that which would appeal to a larger client base. At about this time, the rock-n-roll format ended, and Club 1509 opened.

5. After experimentation, Kenneth Sohl developed a musical format at Club 1509 which appealed to different types of clientele on different evenings. Wednesday nights were designated "International Night" and featured music from around the world. Every Thursday and Sunday night was called "Techno Night" and featured loud, fast music known as "Techno" or "House Mix." On Thursday evenings, a special music and light show produced by a company called MARZ was featured. The combination of "Techno" music and the special production by MARZ catered to a younger clientele and contributed to Thursdays being one of the more popular nights for the Club 1509. Friday evenings featured Salsa-type dance music and attracted a more Latin clientele who enjoyed that type of music. The Saturday evening format included varied music and was designed to attract an older, more upscale clientele.

6. The licensed premises is a 9,600 square-foot night club with two levels. On the first level, there are two large bars, one on the east side of the club and the other one on the west side. Also, on the first level is a smaller bar on the southwest side of the club. Between the two larger bars on the first level

   is a large dance floor with an elevated stage area immediately north of it. There are men's and women's rooms on the first floor north of and adjacent to the larger bars. A VIP room and smaller bar are located on the second level of the licensed premises. The upstairs also has a balcony which overlooks the dance floor and other portions of the first floor. There is also a men's and women's room on the second floor.

7. Prior to August 1, 1997, the Division received information from the Tampa Police Department concerning possible drug activity within the premises of Club 1509. Based on this information, the Division initiated an undercover investigation of Club 1509. Special Agents (Agents) Patricia Thompson and Deborah Caplinger were among those assigned to investigate Club 1509. Agents Thompson's and Caplinger's investigation spanned the period from August 2, 1997, through October 3, 1997, and ended when the Emergency Order of Suspension was served.

8. During the course of the undercover investigation, Agents Thompson and Caplinger participated in several transactions in which they purchased controlled substances at the licensed premises. The controlled substances purchased by the agents during the investigation of the licensed premises were various designer drugs, often referred to generally as "ecstasy." Specifically, the controlled substances purchased by the agents included MDMA, Nexus, and MDEA. The chemical names for the aforementioned drugs are: 3,4, Methylenedioxymethamphetamine

   (MDMA); 4-Bromo-2,5-dimethoxyphenethylamine (Nexus); and 3,4- Methylenedioxy-N-ethylamphetamine (MDEA). These designer drugs have risen in popularity in recent years and are becoming increasingly popular in Florida. During the course of the investigation, the agents also purchased the controlled substance, amphetamine.

9. On Saturday, August 2, 1997, and continuing into Sunday, August 3, 1997, Agents Caplinger and Thompson went to the licensed premises to begin the investigation. On that Saturday evening, at about 11:55 p.m., a patron known as Major Singh was standing at one of the three bars in the downstairs portion of the Club. While standing at the bar, Major Sigh asked Agents Caplinger and Thompson if they were having a good time. In response, Agent Caplinger told Major Singh that it would be better if she were "rolling." "Rolling" is a slang term that means feeling the effects of MDMA. Major Singh offered to obtain some MDMA for Agent Caplinger, and then left the bar area. Agent Caplinger then placed her purse on the counter, took cash out and openly counted it above bar level as if she were "paying for a drink." Major Singh returned, told Agent Caplinger that the price of the MDMA was $50.00. Major Singh then turned his back to the agents and put his right hand behind his back to receive

   $60.00 from Agent Caplinger. Major Singh left and returned a few minutes later. At that time, Major Singh placed two tablets into a napkin and then placed the napkin in Agent Caplinger's pants

   pocket. After putting the tablets in Agent Caplinger's pants pocket, Major Singh left again. Major Singh returned later and put Agent Caplinger's $10.00 change into her pocket. The substance purchased by Agent Caplinger on this occasion was MDMA.

10. On the evening of Thursday, August 7, 1997, and going into Friday, August 8, 1997, Agents Thompson and Caplinger returned to the licensed premises in their undercover capacity. At about 12:20 a.m., on August 8, 1998, two patrons approached Agent Thompson and introduced themselves as Tara and Carlos. Tara told Agent Thompson that a patron on the dance floor was "rolling." Agent Thompson asked Tara is she were "rolling," to which Tara replied, "Not yet." Shortly thereafter, Agent Thompson observed Tara taking money from Carlos, and then approaching another patron, Mary Vestil (Vestil). After a brief conversation, Vestil walked away from Tara and spoke to an unknown patron. Vestil handed this unknown patron something and the unknown patron handed Vestil something in return. Vestil then returned to Tara, and Tara returned to where Carlos and Agent Thompson were standing. Agent Thompson asked Tara if she could purchase "one." Tara initially told Agent Thompson that "it" would cost $10.00, but later told Agent Thompson that the cost would be $25.00. After settling on the price, Tara and Agent Thompson went to Vestil who was on the dance floor. Agent Thompson took $25.00 and fanned it in front of Vestil. Vestil directed Agent Thompson to "be careful," after which Agent

    Thompson apologized and moved the money closer to her body. Vestil indicated that her previous comment regarding being careful was made with regard to the pill which she was giving Agent Thompson in exchange for the $25.00. The substance purchased by Agent Thompson on this occasion was MDMA.

11. At about 12:30 a.m., on Friday, August 8, 1997, Agent Thompson approached Vestil on the dance floor again regarding the purchase of another tablet for her friend, Agent Caplinger.

    After noticing a patron, Smokie, observing them, Vestil asked the agents if Smokie was "cool." The agents asked Vestil why she was concerned that "Smokie" was a law enforcement officer. Vestil did not answer the question, but stated that she wanted to go to the restroom. Vestil then walked off the dance floor to an area adjacent thereto and gave Agent Caplinger a grayish brown tablet in exchange for $25.00. The substance purchased by Agent Caplinger on this occasion was MDMA.

12. On Thursday evening August 14, 1997, Agents Caplinger and Thompson and other law enforcement officers returned to the licensed premises to continue the investigation. On this date, the agents observed several patrons who appeared to be under the influence of a controlled substance. One patron was carried out of the premises by two other patrons. After the patrons walked outside the licensed premises to the front entrance, the off-duty uniformed police officers, posted outside the licensed premises

    and hired by Respondent, asked if the patron needed any assistance. The offer for assistance was declined.

13. On Saturday, August 16, 1997, Agents Caplinger and Thompson returned to the licensed premises to continue the investigation. The agents observed a patron, Sammy, giving other patrons what appeared to be small pill-sized objects. Based on her belief that the objects being distributed by Sammy were controlled substances, Agent Thompson then approached "Sammy" and asked if he had any "X," a slang term for MDMA shortened from the word "ecstasy." Sammy advised he did not.

14. Later on the evening o August 16, 1997, the agents approached Major Singh, who told them that he could get MDMA for them. After discussing the price of the MDMA, Agent Caplinger handed Major Singh $25.00 and Agent Thompson handed him $30.00. Major Singh then left the agents. When Major Singh returned later that evening, he told the agents that he was unable to find his drug supplier and returned the agents' money.

15. On Thursday evening, August 21, 1997, and continuing into Friday morning August 22, 1997, Agents Thompson and Caplinger and other law enforcement officers returned to the licensed premises in furtherance of the investigation. Several patrons on the licensed premises were engaged in what appeared to be drug activity. A female patron collected money from other patrons and approached another patron, John Robert Milam (Milam). The female patron gave Milam the money and Milam handed the

    female what appeared to be several pill-sized objects. The female then returned to her friends and handed them each a pill- sized object. This activity took place on or near the dance floor. There is no indication that the licensee, manager, or employee of the licensed premises saw this activity.

16. Later on Thursday, August 21, 1997, at about

    
    

    11:50 p.m., after they observed the transaction described in paragraph 15, Agents Thompson and Caplinger approached Milam on the dance floor. Agent Thompson asked Milam if he had any pills. Milam told Agent Thompson that he did have pills. After discussing the price of the pills, Agent Thompson handed Milam

    $50.00. In return Milam handed Agent Thompson two sand-speckled pills. Agent Thompson then gave one of the pills to Agent Caplinger. This entire transaction took place on the northwest corner of the dance floor. The substance purchased by Agent Thompson on this occasion was Nexus.

17. On Friday, August 22, 1997, at about 1:25 a.m., a patron, Peter Harrison (Harrison), approached Agent Thompson and asked her to dance. Agent Thompson declined. Harrison then asked if Agent Thompson was looking for pills, and indicated that he could provide them. Harrison then went to another patron, Douglas McDaniel (McDaniel), and after a short conversation with McDaniel, Harrison returned to Agent Thompson and advised her that two pills would cost $55.00. Both Agents Thompson and Caplinger took money from their persons and counted it. Agent

    Thompson took money from Agent Caplinger and handed $55.00 to Harrison. Harrison then motioned to McDaniel, and directed Agent Thompson to McDaniel, who was leaning against the small bar located on the lower level of the licensed premises. When Agent Thompson approached him, McDaniel asked Agent Thompson if she and her friend were cops. After Thompson said no, McDaniel gave a bottle cap to Thompson which contained two small clear capsules with white powder. The capsules purchased on this occasion were Nexus.

18. After Agent Thompson received the capsules purchased in the transaction described in paragraph 17, she openly handed one of these pills to Agent Caplinger while they both were at the bar. Even though a bartender was working behind the bar and another employee was working security in an area near the bar, there is no evidence that either of these employees observed Agent Thompson handing Agent Caplinger a pill.

19. On August 22, 1997, the agents observed several patrons approach another patron identified as Glenn David Hall, Jr. (Hall), and give him money in exchange for small objects that he retrieved from his pocket.

20. Later on Friday, August 22, 1997, at about 2:15 a.m., Agent Caplinger approached Hall by the caged area on the west side of the dance floor and asked him for some pills. Hall indicated that he did not know her and refused to sell any pills to Agent Caplinger. However, an unknown patron wearing a cap

    with the inscription "Quicksilver" (Quicksilver) who had received something from Hall earlier soon approached Agent Caplinger on the dance floor and asked if she wanted a pill. After negotiating the price, Agent Caplinger got $20.00 from Agent Thompson and gave Quicksilver $20.00 in exchange for one off- white pill. Quicksilver then gave the money to Hall. The substance purchased by Agent Caplinger on this occasion was Nexus.

21. Shortly after the transaction described in the paragraph 20, Agent Thompson approached Quicksilver on the dance floor and asked for a pill. Quicksilver told her that the pill would cost $20.00. Agent Thompson then gave Quicksilver the

    $20.00. Hall then took something out of his pocket and handed it to Quicksilver who then handed an off-white tablet to Agent Thompson. The substance purchased by Agent Thompson on this occasion was Nexus.

22. On Saturday, August 23, 1997, and continuing into Sunday, August 24, 1997, Agents Caplinger and Thompson returned to the licensed premises. On this date, Brian Morgan, an employee of Club 1509, approached Milam, and after a brief conversation, Morgan approached a group of patrons and introduced Milam to the group. Morgan eventually left the group, but Milam remained with the group. At about 12:10 a.m., on Sunday,

    August 24, 1997, Milam took something from his right front pants pocket. When Milam pulled his right hand from his pocket, his

    fist was closed and he appeared to transfer an object in his right hand to his cupped left hand. He then appeared to hand an object from his left hand to one of the patrons in the group.

23. At about 12:20 a.m., on Sunday, August 24, 1997, Agent Thompson approached Milam on the dance floor and asked if he had “anything” with him. Milam told Agent Thompson that he did, and they walked off the dance floor to Agent Caplinger. Agent Thompson gave Milam $50.00 which Milam placed in his left pants pocket. Next Milam placed his right hand in his front right pants pocket. When Milam pulled his hand out of his right pants pocket, his fist was closed. Milan opened the closed fist and released two pills into Agent Thompson’s hand. This transaction occurred between the dance floor area and the main entrance. The substance purchased by Agent Thompson on this occasion was Nexus.

24. On Sunday, August 24, 1998, at about 1:15 a.m., Agent Caplinger approached a patron, Greg, on the dance floor, near the men's restroom, and asked for Major Singh. Greg had been with Major Singh when the agents first met Singh on August 2, 1997. After a brief discussion about what drugs Greg could obtain and the price, Agent Caplinger agreed to purchase some "pure MDMA" from him. Greg then left the agents. While Greg was gone, Agent Caplinger counted out $60.00. When Greg returned, Agent Caplinger gave him the $60.00. Greg left Agent Caplinger again, and about fifteen minutes later, returned and gave Agent

    Caplinger two capsules. The substance purchased by Agent Caplinger on this occasion was MDMA.

25. Later on Sunday, August 24, 1997, at 2:20 a.m., that evening, Agent Thompson approached Greg on the dance floor near the casino table and asked him for another capsule. Greg told Agent Thompson that he did not have anymore of the MDMA capsules but he could get a pill that was another version of MDMA. After discussing price with Greg, Agents Thompson and Caplinger walked away from Greg to one of the bars, where Agent Caplinger handed Agent Thompson some cash. The agents then returned to Greg who was still on the dance floor, and Agent Thompson handed him

    $30.00. Greg left the agents on the dance floor, but returned about five minutes later. When he returned, Greg handed one sand-colored pill to Agent Caplinger. This transaction occurred on the edge of the dance floor. The substance purchased by the agents on this occasion was Nexus.

26. Agent Caplinger briefly held the pill at chest level with an open palm and showed it to Agent Thompson. The agents then walked to an area illuminated by a glass case, where Agent Caplinger again briefly held the pill out with an open palm and looked at it before handing the pill to Agent Thompson. Agent Caplinger held the pill in this open manner for only a few seconds.

27. In furtherance of the investigation, Agents Caplinger and Thompson went to the licensed premises on Thursday,

    August 28, 1997, and continuing through Friday, August 29, 1997.

    
    

    On Thursday, August 28, 1997, between 11:45 p.m. and 11:55 p.m., while in the licensed premises, Agents Thompson and Caplinger approached Major Singh as he stood at the north end of the club. Major Singh advised the agents that he had plenty of pills with him as well as the capsules that Agent Caplinger had purchased from Greg the week before. Agent Thompson told Major Singh that they wanted to purchase the capsules. After negotiating a price for the capsules, the agents began counting their money to pay for the capsules. While the agents were counting the money, Singh told them, "Not here, it's too open." Major Singh and the agents then went to the west end of the premises next to a bar area where there were approximately ten patrons and two bartenders. Major Singh then took two clear-coated capsules containing a white substance from his pocket and handed them to Agent Thompson. Agent Thompson then took out an undetermined amount of cash and counted out $25.00, while she handed it to Major Singh. Agent Caplinger then took out another $25.00 and handed it to Major Singh. The agents then walked over to the bar, where Agent Caplinger placed the capsule on a napkin on top of the bar. After about one minute, Agent Caplinger picked up the pill. Although a bartender was working at the bar when Agent Caplinger placed the capsule on the napkin at the bar, the bartender made no comment about the capsule. There is no

    indication that the bartender ever saw the capsule. The substance purchased by the agents on this occasion was MDMA.

28. On Friday, August 29, 1997, the agents noticed a patron, identified as Rory Lambert, exchanging money and small pill-sized objects with at least three patrons who approached him between the small bar and the entrance. Shortly thereafter, at about 12:40 a.m., Agent Caplinger approached Lambert and asked if he had any pills. Lambert advised he could get some pills and told Agent Caplinger the price of the pills. Agent Caplinger turned to Agent Thompson and asked for additional money. Agent Thompson then counted out the money to Agent Caplinger who then handed $50.00 to Lambert. A female patron handed something to Lambert, after which Lambert asked Agent Caplinger to hug him. Agent Caplinger complied with this instruction and hugged Lambert. As Agent Caplinger hugged him, Lambert pressed two pills in her hand. The substance purchased by Agent Caplinger on this occasion was MDEA.

29. Kenny Sohl was five to seven feet, when the hug between Agent Thompson and Lambert occurred, but there is no indication that he saw the transaction described in paragraph 28.

30. After purchasing the pill from Lambert as described in paragraph 28 above, Agent Caplinger approached the small bar and placed an order for a drink. While waiting for her order, Agent Caplinger held the pill in her open palm for between 15 and 20 seconds. At the time Agent Caplinger displayed the pill, there

    was a bartender working at the bar, and Kenneth Sohl was standing at the same bar approximately two to three feet from Agent Caplinger. There is no evidence that either the bartender or the Kenneth Sohl saw the pill in Agent Caplinger's hand or, that if they saw it, they could have recognized it as a controlled substance.

31. On Friday, August 29, 1997, between 2:10 a.m. and 2:20 a.m., Agents Caplinger and Thompson approached McDaniel, a

    patron that they had dealt with on August 22, 1997, while in the licensed premises. The agents asked McDaniel about purchasing MDMA capsules. When the agents approached McDaniel, he was standing near a lighted glass display case near the front of the club. After negotiating a price for the MDMA capsules, the agents counted and exchanged money. Agent Thompson then handed McDaniel $55.00. McDaniel left the area and returned several minutes later. When McDaniel returned, he asked Agent Thompson, "Are you positive you're not a cop?" In response, Agent Thompson told McDaniel that she was positive. McDaniel then handed Agent Thompson two clear capsules which contained an off-white substance. The substance purchased by the agents in this transaction contained MDMA.

32. On Thursday, September 4, 1997, Agents Caplinger and Thompson and other law enforcement officers returned to the licensed premises to continue the subject investigation. While

    at the licensed premises, the agents approached Lambert and asked if he had any pills. Lambert replied that he did not.

33. While at the licensed premises on September 4, 1997, Agent Caplinger spoke to three employees and indicated to them that she was “rolling” or asked if they were “rolling.” None of the employees made any comment or took any action about Agent Caplinger's references to rolling, nor did any of them inquire as to what she meant by "rolling." There is no indication that these employees heard Agent Caplinger when she used the term "rolling" or knew what the term meant.

34. During the course of this investigation, the term "rolling" was sometimes used by patrons in the club This term was known to the agents to be used to describe the effects of MDMA and other drugs. However, that term was unfamiliar to many of the employees of the licensed premises.

35. In furtherance of the investigation, Agents Caplinger and Thompson went to the licensed premises on Thursday, September 11, 1997, and continuing through Friday, September 12, 1997.

36. On Thursday, September 11, 1997, at about 11:00 p.m., Agent Thompson approached Milam at the dance floor and asked if he had "anything" tonight. Milam directed Agent Thompson to approach him when the club was "more crowded." Later that evening Milam approached Agent Thompson while she and Agent Caplinger were standing on the east side of the dance floor.

    Milam agreed to sell two pills for $50.00 to Agent Thompson. Once they agreed upon the price and quantity, Milam directed Agent Thompson to buy a drink at the bar then return and put the money on the caged dance platform that was next to where they were standing. Milam first placed the two pills on the cage.

    Agent Thompson then picked up the pills as Milam removed his hand. Agent Thompson then went to the bar. She later returned to Milam who was on the dance floor and placed $50.00 on the caged dance platform and put a bottled water on the corner of the money. Milam then picked up the money. The substance purchased by Agent Thompson on this occasion was MDMA.

37. Between 12:25 a.m. and 12:30 a.m. on September 12, 1997, Agents Thompson and Caplinger approached Major Singh at the north end of the premises approximately 15 feet from the front entrance. After Major Singh indicated that he had some capsules, Agent Thompson asked Agent Caplinger, in Major Singh's presence, if she wanted some MDMA. Agent Caplinger answered in the affirmative. Major Singh then walked onto the dance floor. Agents Caplinger and Thompson followed Major Singh onto the dance floor and asked if they could buy some MDMA. Agent Thompson then took out $25.00 and gave it to Agent Caplinger. Agent Caplinger also took out $25.00, and handed all of the money to Major Singh. After Major Singh received the money from Agent Caplinger, he took two pills out of a tube and handed them to Agent Caplinger.

    The substance purchased by Agent Caplinger on this occasion was MDMA.

38. On Friday, September 12, 1997, at 1:20 a.m., Agents Thompson and Caplinger approached Hall on the west side of the dance floor next to the cage. Agent Caplinger asked Hall if he "had anything." After the price and quantity of pills were negotiated, Thompson gave $40.00 to Hall. Hall then turned to an unknown male patron and asked the patron for "two." This unknown male patron reached in his pocket and gave something to Hall, who in turn gave two pills to Thompson. The agents then walked to a bar and while at the bar, Agent Thompson handed Agent Caplinger one of the pills she had received from Hall. Agent Caplinger placed the pill in her open palm and looked at it for approximately ten seconds before securing it on her person. The substance purchased by Agent Thompson on this occasion was MDMA.

39. A bartender was working at the bar when Agent Caplinger displayed the pill as described in paragraph 38. Also, a manager was in the nearby vicinity. However, there is no indication that either the manager or bartender observed this display.

40. On Friday, September 12, 1997, between 1:40 and 1:50 a.m., Agent Caplinger approached Manuel Marquez who was standing by a table where a white female was selling shirts, CD's, pipes, and other items. The agents approached Marquez because they had observed him that evening selling or giving pill-sized objects to other patrons. Agent Caplinger asked

    Marquez if she could get some pills. Marquez asked Agent Caplinger if she were a cop, to which she responded, "No." Agent Caplinger then agreed to purchase two pills for $60,00. Marquez left the area and while he was gone, Agent Thompson handed Agent Caplinger $60.00. The agents then counted the money. A few minutes later, Marquez returned and Agent Caplinger handed him the $60.00 in exchange for two pills. The substance purchased by Agent Caplinger on this occasion was MDMA.

41. On Saturday, September 13, 1997, and continuing into Sunday, September 14, 1997, Agents Thompson and Caplinger and other law enforcement officers returned to the licensed premises in furtherance of the subject investigation. Between 12:25 a.m. and 1:15 a.m., on Sunday, September 14, 1997, Agent Caplinger approached a patron, Greg, and asked him if he "had anything." Greg agreed to sell her one pill for $25.00. Agent Caplinger handed Greg $50.00, and Greg returned $25.00 change to her. Kenny Sohl was standing approximately two feet away during this exchange, but did not observe this exchange. Approximately twenty to fifty minutes later Greg returned and handed Agent Caplinger one pill. The substance purchased by Agent Caplinger on this occasion was amphetamine. This exchange took place approximately three feet away from where an employee positioned at the VIP stairs, but there is no indication that the employee observed Greg hand the pill to Agent Caplinger. After she received the pill from Greg, Agent Caplinger then went to a bar

    in the licensed premises and approached Agent Elaine Pavan, who was participating in the investigation. While at the bar, Agent Caplinger held the MDMA pill in her open palm. Agent Pavan then removed the pill from Agent Caplinger's hand and held the MDMA pill above and over the bar. Agents Caplinger and Pavan spoke openly about taking the pill while at the bar, before Agent Pavan returned the suspected pill to Agent Caplinger who placed the pill on the counter briefly before securing it on her person.

42. The agents' reason for displaying the pill as described in paragraph 41 was to see what action the bartender would take. However, the bartender said nothing and took no action and there is no indication that the bartender ever saw the pill or heard the comments made by the agents regarding the pill.

43. On Sunday, September 14, 1997, at 2:00 a.m., Agent Caplinger approached a patron, Hall, whom she had first met at the licensed premises on August 22, 1997. When Agent Caplinger approached Hall, he was sitting on an elevated floor just above the dance floor on the west side on the dance floor. Agent Caplinger asked Hall if he "had anything." After Hall and Agent Caplinger discussed the type of drugs that were available and the price, Agent Caplinger handed Hall $30.00. Hall then returned three dollars to Agent Caplinger and handed her a pill. The substance purchased by Agent Caplinger on this occasion was MDMA.

44. Later on Sunday, September 14, 1997, after the transaction described in paragraph 43, a patron, McDaniel,

    approached Agent Thompson. McDaniel was a patron with whom Agent Thompson had dealt on August 22, 1997, while she was on the licensed premises. When McDaniel approached Agent Thompson on September 14, 1997, he advised her that he could obtain MDMA for her. After Agent Thompson handed $40.00 to McDaniel, he told Agent Thompson that he would be right back. McDaniel came back ten minutes later, returned the $40.00 to Agent Thompson, and explained that he had been unable to find his supplier.

45. On or about Thursday, September 18, 1997, and continuing into Friday, September 19, 1997, Agents Thompson and Caplinger and other law enforcement officers returned to the licensed premises as part of the Division's investigation. On Friday, September 19, 1997, at about 12:30 a.m., Agents Thompson and Caplinger approached Milam on the dance floor and asked if he "had anything." After a brief discussion regarding availability and price, Thompson agreed to purchase two pills for $50.00. Milam directed Agent Thompson to go to the bar and get her money ready and then return. Agent Thompson went to the bar and took out a $50.00 bill. She returned to Milam, who was still on the dance floor, and handed him the $50.00 bill and he gave her two pills. The substance purchased by Agent Thompson on this occasion was amphetamine.

46. On Thursday, October 2, 1997, and continuing into Friday, October 3, 1997, Agents Thompson and Caplinger and other law enforcement officers returned to the licensed premises to

    continue the subject investigation. The investigation was expected to conclude this evening with the service of the Emergency Order of Suspension and the arrest of patrons who had sold controlled substances to the agents.

47. On Friday, October 3, 1997, between 12:01 a.m., and 12:05 a.m., before the Emergency Order of Suspension was served, Milam approached Agent Thompson and told her that he had "beans," a slang for MDMA. After a short discussion about price, Agent Thompson purchase one pill for $25.00. The Emergency Order of Suspension was served on Friday, October 3, 1997, but after this transaction.

48. During the two-month investigation of the licensed premises, Agents Caplinger and Thompson made purchases of MDMA, NEXUS, MDEA and amphetamine. These controlled substances were sold in the form or pills or capsules, and all were purchased from patrons in the licensed premises. The pills were the approximate size of an aspirin and the capsules were slightly larger than a Tylenol capsule. The agents purchased a total of twenty-eight pills and six capsules.

49. There was nothing suspicious about these transactions. In many instances, the transfers took only a few seconds. In some cases, the transactions were done in separate steps so that the exchange of money and drugs was not simultaneous. Most of the individuals selling controlled substances to the agents took steps to disguise the transactions. The drug transactions were

    not done in an open manner, but in a secretive manner so as to avoid detection. Also, the vast majority of the transactions took place at the time the licensed premises were very crowded. By virtue of the large crowd, loud music, and the dim lighting in the licensed premises, these transactions could easily go undetected. On Thursday nights, the MARZ light show produced strobe-type lighting on the dance floor, making it more difficult, if not impossible, to observe these transactions.

    Moreover, the size and form these controlled substances made it much easier for them to be handed to someone without being seen or causing suspicion.

50. The investigative reports of Agents Thompson and Caplinger reflect that they visited the licensed premises eleven times in an undercover capacity during the two-month investigation. Ten of those times they purchased controlled substances and one time they did not. Agents Caplinger and Thompson also visited the licensed premises undercover on a Wednesday night, a twelfth night, but did not include their activities of that evening in the investigative report. However, no purchases of controlled substances were made on that Wednesday night.

51. The agents visited the licensed premises six times beginning on a Thursday evening and continuing into a Friday morning, and four times on a Saturday evening continuing into a

    Sunday morning, and one Sunday evening going into a Monday morning.

52. The agents purchased controlled substances fifteen times on Thursday evenings and/or Friday mornings and six times on Saturday evenings going into Sunday mornings. No purchases were made nor attempted on Wednesday, Friday or Sunday nights. One transaction was completed in the morning hours of Friday, October 3, 1997, shortly before the execution of the Emergency Order of Suspension.

53. Thursday and Saturday nights were the busiest and most crowded nights at the licensed premises. Accordingly, on those nights it was easier for drug transactions to occur and to go undetected.

54. On Thursday evenings, patrons entered the club earlier in the night than on Saturday evenings. Often on Thursday evenings, there was a line of fifty to one hundred people waiting to go inside the licensed premises once it opened for business at 10:00 p.m. By 11:00 p.m. on Thursdays, there were usually 200 to

    300 people in the club. By 11:30 to midnight on Thursdays, the club often filled to four hundred patrons. On Thursdays, from midnight to closing, 3:00 a.m., the club was usually almost completely full to its 599 person capacity.

55. On Saturday evenings, it was not unusual for a crowd of

    
    

    200 to 300 to accumulate at the licensed premises between 11:30 p.m. to 12:00 a.m. Similar to Thursday evenings, often

    between midnight to 3:00 a.m. on Saturdays, the licensed premises remained almost full to its 599 person capacity.

56. On both Thursday and Saturday evenings, the music was played loudly from opening to closing without any breaks. Due to the typical capacity crowd at the licensed premises and the loud volume of the music on those evenings, communication between patrons would require speaking in above normal tones. It was not unusual for a person to have to cup his hands around the other's ear and yell to communicate at all.

57. The majority of the drug transactions occurred on the days and at the times the licensed premises was most crowded. Though crowded on both Thursday and Saturday evenings, the licensed premises got more crowded earlier on Thursdays. In fact, six of the eleven deals that occurred on Thursday and early Friday morning were between midnight and 1:00 a.m., and the remaining five transactions occurred between 1:20 and 2:20 a.m. On Saturday evenings, when the licensed premises got more crowded later than on Thursday evening, only one drug transaction occurred on the Saturday evening continuing into Sunday morning between 12:00 a.m. and 1:00 a.m. The other five transactions took place on the Sunday morning between 1: 15 a.m. and 2: 30 a.m.

58. Of the twenty-one purchases of controlled substances made by the agents, only four took place before midnight. Those

    four transactions were concealed or done in place or manner to avoid detection.

59. Of the other seventeen transactions, eleven were made on Thursday evenings continuing into Friday mornings, and six transactions occurred on Saturday evenings continuing into Sunday mornings. Except for the transaction that occurred on October 3, 1997, at 12:05 a.m., before the Emergency Order of Suspension was served, the transactions occurred between the hours of 12:20 a.m. and 2:20 p.m., when the club was most crowded.

60. There is no indication that drug sales were made on the less crowded Wednesday, Friday, and Sunday evenings. Moreover, there is no indication that drug transactions were conducted outside of the club where it was well lit or in the first entry way to the club.

61. For the vast majority of the sales, it was the two agents who picked the day, time, and location of the purchase and sale. In only two of the twenty sales did a patron actually approach either the agents and then consummate a deal. For the remaining eighteen charged sales, it was the agents who approached the suspected drug dealer, usually on or around a crowded dance floor when the club was near or at full capacity.

62. Officers Holder and Gomez of the Tampa Police Department were part of the team investigating the licensed premises. On some of the evenings that they were on the premises, they observed various types of "suspicious"

    transactions. In some cases, based on their observations, they gave Agents Thompson and/or Caplinger leads as to which patrons the agents should approach for prospective drug transactions.

63. The investigation did not yield any evidence that any owner, manager, or employee of the licensed premises saw any drug purchase or witnessed any drug use or drug possession. Neither was there any indication that the licensee, any manager, or employee of the licensed premises was involved in selling, keeping, or delivering controlled substances on the premises.

64. In Counts 1 through 20 of the Notice to Show Cause, ten different individual patrons were charged with selling controlled substances to Agents Thompson and Caplinger.

65. Agents Thompson and Caplinger visited the licensed premises six times in August of 1997. During that time, thirteen purchases were made from nine of the ten charged drug dealers. Those nine patrons were identified as: Major Singh, Mary Vestil, "Tara," John Milam, Peter Harrison, Glen Hall, Greg, Rory Lambert and Douglas McDaniel. These nine patrons were responsible for selling to Agents Thompson and Caplinger twenty of the twenty-one times.

66. Agents Thompson and Caplinger visited the licensed premises in an undercover capacity four evenings in September 1997. Seven drug purchases were made in September. With one exception, these drug transactions involved some of the individuals listed in paragraph 65. The only other person

    charged with selling controlled substances to agents in September 1997, was Manuel Marquez, who was responsible for one sale in the early morning hours of Sunday, September 12, 1997.

67. On any given Thursday and Saturday evening, there were twenty to twenty-five staff members working at the licensed premises. Outside the front entrance, there were usually two doormen. Sometimes the VIP room had a special outdoor entrance manned by another doorman. At the club entrance, there was a cashier and another employee, who greeted the patrons. On some occasions a woman staffer would sell beer out of a beer tub toward the front of the club. At each of the larger bars, there were two bartenders and the smaller downstairs bar had one bartender. Two to three bar backs would stock all bars during the evening. The upstairs VIP bar had one bartender earlier in the evening and would have two bartenders later in the evening as the crowd increased. The D.J. and lighting crew worked on the balcony of the second floor. Two managers would report to general manager, Scott Sohl, who would in turn report to his brother, the licensee, Kenneth Sohl. Both managers would frequent various areas of the club during the evening. Scott Sohl and Kenneth Sohl often worked in a second floor office. There were also security personnel at the bottom of the VIP stairs and at the bottom of the stairs to the stage.

68. In the early part of 1996, as the licensed premises became more popular, the licensee, Mr. Kenneth Sohl hired two

    uniformed, off-duty Tampa Police officers to maintain security outside of the premises. These officers worked on the two busiest nights, Thursdays and Saturdays, from approximately 11:30 p.m. to 3:30 a.m. On the nights that they were on duty, every hour to hour and a half, the officers usually walked

    through of the club to assist in maintaining overall security for the club.

69. Each manager, doorman, and security person was equipped with a walkie-talkie type radio to communicate with other staff members on duty at the licensed premises. Moreover, each bar was equipped with a radio for the same purpose.

70. The licensed premises was also equipped with video camera surveillance. Cameras were situated inside the front entrance capture views of individuals entering the licensed premises and patrons above and around each bar in the club.

    A TV monitor situated in the business office of the licensed premises was observed often by the general manager, Scott Sohl or the licensee, Kenneth Sohl. The monitor allowed management to view all areas where video cameras were situated, but did not necessarily allow concealed drug transactions to be seen. Also, the video cameras did not make a permanent record for later review.

71. The licensee, Kenneth Sohl, hired an outside company, Professional, Inc., a food and beverage consultant service, to provide Responsible Vending Training to managers and staff of the

    licensed premises pursuant to Section 561.705, Florida Statutes. Even though the Division does not currently certify responsible vendors, it did so until 1991, when the law changed and no longer required such certification. In 1990, and prior to the change in the law, the Division issued a letter to Angel Alfonso, owner of Professional, Inc., indicating that his company met the minimum standards set by the Bureau of Vending Training and was being added to the Division's clearinghouse for responsible vendors.

72. At the time of the subject investigation, all of the employees and managers of the licensed premises had received appropriate Responsible Vending Training. Most of the managers and employees had received this training as part of the regular Responsible Vending Training programs provided by Professional, Inc., pursuant to a contract with management of the licensed premises.

73. In January 1997 and May 1997, management of the licensed premises contracted with Mr. Alfonso of Professional Inc. to visit the licensed premises, in an undercover capacity, during business hours to assess whether employees were stealing and whether they were properly performing their responsibilities. During these visits, Mr. Alfonso did not observe any type of illegal drug activity.

74. There were two instances when the off-duty uniformed police officers hired by the licensee assisted in seizing controlled substances. First, in August 1997, a month before the

    investigation of the club began, staff of the licensed premises alerted police to a counterfeiter. Pursuant to that arrest, MDMA pills were seized from that person. Also, on August 29, 1997, one month into the subject investigation, Officer Julio Martinez of the Tampa Police Department, hired by Respondent as an off- duty officer, confronted a patron in line outside the club. This detention led to a seizure of fifty MDMA pills from that patron.

75. On another occasion during the investigation, Officer Martinez alerted the general manager, Scott Sohl, to a person that the Martinez suspected may have been involved in drug activity. Officer Martinez had seen this suspicious person while he was doing a walk through the club. Mr. Sohl immediately ejected the patron and told him that the club "does not need that kind of stuff around here."

76. Since Club 1509 opened in 1995, several employees were fired by the licensee, Kenneth Sohl, or by manager, Scott Sohl because of suspected drug use or involvement. These firings occurred from as much as a year before the investigation up to one month before the investigation.

77. Mr. Kenneth Sohl became involved in the bar business shortly after high school and has maintained an alcoholic beverage license on and off for the last 18 years. Immediately preceding his venture at 1509 8th Avenue in 1994, Kenneth Sohl owned and successfully operated a rock-n-roll club in Tampa for eight years. While operating that club, Kenneth Sohl never

    allowed the sale of drugs in his business and was never charged with any violations related to controlled substances. Prior to his involvement with the licensed premises, Kenneth Sohl had owned and operated approximately four other licensed premises without any such violations.

78. Thomas Graham is a six-year veteran of the Hillsborough County Sheriff's Office. Deputy Graham frequented the licensed premises on a regular basis, including Thursday and Saturday nights. During his visits there, Deputy Graham never observed illegal drug use or sales. Through his work, Deputy Graham had some knowledge of what MDMA was, but was unfamiliar with the "street names" for MDMA and its effects on individuals who used it. Deputy Graham has known Kenneth Sohl for at least six years, including much of the time when Kenneth Sohl owned another night club. During the time that Deputy Graham has known Kenneth Sohl, Mr. Sohl has never been involved in drugs and has always cooperated with law enforcement officials.

79. Dr. Augustus Mauser, a professor at the University of South Florida; Dr. Lawrence Shepherd, an emergency room physician; and Dr. Frederick McClimans, an orthopedic surgeon, frequented Club 1509 on Thursday evenings, but more often Saturdays, including the time of the investigation. Although they were usually at the licensed premises several hours, they never observed any drug use or drug transactions. Each of the individuals knew Kenneth Sohl and had they seen any suspicious

    activity they would have reported it to the licensee, or any manager nearby.

80. In his work as an emergency room physician, Dr. Shepard had experience dealing with and treating patients under the influence of MDMA. Based on his experience, Dr. Shepard indicated that it was not possible to simply look at a person in a club and determine that the individual was under the influence of the controlled substance.

81. Officers Holder and Gomez, who participated in the investigation of the licensed premises, acknowledged that MDMA use in the Tampa area is very new. Although these officers work in law enforcement, they only learned about MDMA within the last year or two.

82. Considering that designer drugs have only recently become popular in the Tampa area, it is not surprising that the licensee, managers, many employees and Mr. Alfonso were not very familiar with these drugs nor the common terms used and associated with their use.

83. During the course of the investigation none of the managers, bartenders, or employees ever saw any drug use or drug deliveries within the licensed premises, or any type of exchange of money for an object that might be an indication of a drug transaction. Had they seen such activities, they were trained to immediately report such activity to a manager or owner. Managers and employees of Club 1509 were aware that the club's policy was

    that any illegal drug use or activity would not be tolerated on the licensed premises, although this policy was not in writing.

84. Officer Kevin Ahles of the Tampa Police Department has been involved in narcotics investigations for eight years. On October 2, 1997, the night the Emergency Order of Suspension was to be served, Officer Ahles was in the licensed premises in an undercover capacity. Officer Ahles was in the licensed premises "for the couple hours prior to uniforms arriving." When asked what he observed that evening Officer Ahles stated, "To be honest with you, it looked fairly normal, just like any other club." Officer Ahles indicated that the patrons were drinking, dancing, and socializing. Even though Officer Ahles was specifically on the look-out for drug activity, he admitted that he saw "none" in the two hours that he was surveilling the licensed premises.

85. Shortly before or during the investigation of the licensed premises, Dave Mersky, the operator of the MARZ light show featured on Thursday nights, telephoned Captain Ashley of the Division and invited him to view his light show on any Thursday night. It is unclear why Mr. Mersky extended the invitation. However, according to Captain Ashley, Mr. Mersky believed that the Captain Ashley did not like him. Captain Ashley accepted Mr. Mersky's invitation and went to Club 1509 one Thursday evening to observe the light show, although the exact date is unknown. There is no indication that Captain Ashley

    observed any drug transactions on the Thursday evening that he visited the licensed premises.

86. One week before the execution of the Emergency Order of Suspension, the licensee, Kenneth Sohl, met with Special Agent George Miller of the Division. At that meeting, Kenneth Sohl expressed concern that the Division might not approve of the company that he was using to provide Responsible Vendor Training for managers and staff of Club 1509. Kenneth Sohl asked Agent Miller if that was the case and, if so, could Agent Miller recommend another company. In response to Kenneth Sohl's question, Agent Miller stated that he was prohibited from recommending any company. During this meeting, Mr. Kenneth Sohl also asked Agent Miller if there were any problems that he needed to address with regard to the licensed premises. Agent Miller answered this question in the negative. No time prior to the service of the Emergency Order of Suspension was the Respondent or any of the managers or staff informed of a drug problem in Club 1509.

87. The investigation did not reveal that any owner, manager, or employee was involved in drug activity. After an entire two month investigation, no owner, manager or employee was arrested for any illegal activity.

88. There is no credible evidence that any owner, manager or employee disregarded or ignored known drug use, possession or sales on the licensed premises.

89. The Responsible Vendor Training provided by Professional, Inc., substantially complied with the requirements of law. The training included among other things, a review of Responsible Vending Training and company policies and procedures, and a discussion of the use or trafficking of controlled substances.

90. Respondent did not have signs conspicuously posted in the licensed premises informing customers of the vendor's policy against serving alcoholic beverages to underage persons and informing customers that the purchase of alcoholic beverages by an underage person or the illegal use of or trafficking in controlled substances will result in ejection from the premises and prosecution.

91. Shortly after the service of the Emergency Order of Suspension, Respondent applied to put the subject license in an inactive status. Other business associates of Kenneth Sohl then placed another alcoholic beverage license on the premises, and the premises remains open to this day.

    CONCLUSIONS OF LAW

    
    

92. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of these proceedings. Section 120.57(1), Florida Statutes.

93. The Department is statutorily empowered to suspend or revoke a alcoholic beverage license, such as the one held by

    Respondent, based upon any of the grounds enumerated in Section 561.29(1), Florida Statutes.

94. Petitioner bears the burden of proof by clear and convincing evidence. Department of Banking and Finance v. Osborne Stern & Co., 670 So. 2d 932 (Fla. 1996). The nature of clear and convincing evidence has been described in Slomowitz vs. Walker, 429 So. 2d 797, at 800 (Fla. 4th DCA 1983), as follows:

    [C]lear and convincing evidence requires that the evidence must be found to be credible; that the facts to which the witnesses testified must be directly remembered; the testimony must be precise and explicit and the witness must be lacking in confusion as to the facts at issue. The evidence must be of such weight that it produces in the mind of the trier of fact a firm belief or conviction, without hesitancy, as to the truth of the allegations sought to be established.

95. Section 561.29, Fla. Statutes, reads in pertinent part:

    
    

    1. The division is given full power and authority to revoke or suspend the license of any person holding a license under the Beverage Law, when it is determined or found by the division upon sufficient cause appearing of:

       
       

       1. Violation by the licensee or his or its agents, officers, servants, or employees, on the licensed premises, or elsewhere while in the scope of employment, or any of the laws of this state or of the United States, . . . or permitting another on the licensed premises to violate any of the laws of this state or of the United States

          * * *

          
          

          (c) Maintaining a nuisance on the licensed premises.

96. Section 823.10, Florida Statutes, provides as

    
    

    follows with respect to places where illegal activity involving controlled substances takes place:

    Any store, shop, warehouse, dwelling house, building, vehicle, ship, boat, vessel, or aircraft, or any place whatever which is visited by persons for the purpose of unlawfully using any substance controlled under chapter 893 or any drugs as described in chapter 499, or which is used for the illegal keeping, selling, or delivering of the same, shall be deemed a public nuisance. No person shall keep or maintain such public nuisance or aid and abet another in keeping or maintaining such public nuisance.

97. Section 893.13(7)(a), Florida Statutes, reads in pertinent part:

    (7)(a) It is unlawful for any person:

    * * *

    5. To keep or maintain any store, shop, warehouse, dwelling, building, vehicle, boat, aircraft, or other structure or place which is resorted to by persons using controlled substances in violation of this chapter for the purpose of using these substances, or which is used for keeping or selling them in violation of this chapter.

98. Petitioner's Notice to Show Cause proceeds on two related but separate bases for imposition of discipline on Respondent. First, Petitioner alleges that Respondent violated Section 893.13(1)(a), Florida Statutes, by permitting patrons to sell and possess controlled substances on the licensed premises. The pills and capsules purchased by the agents which are the

    subject of this proceeding are controlled substances and come within the purview of Section 893.03, Florida Statutes.

    Specifically, the substances are defined as controlled substances by the following provisions: (1) MDMA, Section 893.03(1)(a)39., Florida Statutes; (2) Nexus, Section 893.03(1)(c)5., Florida Statutes; MDEA, Section 893.03(1)(c)25., Florida Statutes; and

    (3) amphetamine, Section 893.03(2)(c)2., Florida. Statutes.

    
    

99. Second, Petitioner alleges that Respondent violated Section 561.29(1)(c), Florida Statutes, by maintaining a nuisance on the premises; specifically, by maintaining a place which is visited by persons for the purpose of unlawfully using any substance controlled under Chapter 893, Florida Statutes, or which is used for the illegal keeping, selling, or delivering of the same, as stated in Section 823.10, Florida Statutes. Section 893.13(7)(a)5., Florida Statutes, makes conduct that is substantially the same as that spelled out in Section 823.10, Florida Statutes, a crime.

100. All of the substances purchased by Agents Thompson and Caplinger during the course of this investigation were controlled substances as defined in Section 893.03, Florida Statutes. It is a violation of state law to sell, use, deliver, or possess controlled substances. Section 893.13(1)(a), Fla. Statutes.

101. The holder of a liquor license is not an absolute insurer against violations of the law committed by his employees on his premises. However, when it is seen that the misconduct of

     a licensee's employees is continuing and persistent, the inference may be drawn that the licensee either fostered, condoned or negligently overlooked that misconduct. Pic N Save vs. Division of Alcoholic Beverages and Tobacco, 601 So. 2d 245, 251-252, (Fla. 1st DCA 1992). Nonetheless, before a license can be suspended or revoked for a violation of law on it premises, the licensee must be found to have been culpably responsible for such violation through or as a result of his own negligence, intentional wrongdoing, or lack of diligence.

102. In the instant case, there is no competent and substantial evidence that the licensee or any of his employees was involved in the sale, delivery, or possession of controlled substances. All of the drugs purchased by Agents Caplinger and Thompson while in the licensed premises were purchased from patrons in the club.

103. The record contains no evidence that Respondent, the licensee, or any manager or employee of the licensed premises had actual or constructive knowledge that controlled substances were being sold by patrons. There was no evidence that any owner, manager, or employee heard of, knew about, or ignored, the drug transactions of patrons on the licensed premises. Accordingly, it has not been established that the licensee fostered, condoned, or negligently overlooked the drug transactions of patrons on the licensed premises.

104. Prior to service of the Emergency Order of Suspension, neither law enforcement nor the Division notified Respondent or the staff that there were problems with drugs on the licensed premises.

105. The mere fact that drug transactions occur on the licensed premises does not require a conclusion that the licensee failed to exercise reasonable care or due diligence. Considering that Respondent had no notice that patrons were selling controlled substances on the premises, Respondent took reasonable precautions to prevent illegal activity. First, the evidence established that Respondent hired two off-duty uniformed policemen who worked at the licensed premises. Although the officers were assigned to the outside of the licensed premises, they routinely walked through the club. Second, Respondent's manager and a security employee walked through the premises routinely each evening. The manager and the security employee had walkie-talkies which were used to communicate with other employees throughout the licensed premises. Finally, Respondent hired a private company to conduct Responsible Vending Training for the managers and employees employed at the licensed premises.

106. Petitioner has failed to establish that Respondent, through its agents or employee, while on its licensed premises, permitted patrons to unlawfully possess, sell, or deliver controlled substances. The cases provided by Petitioner have been reviewed and considered, but have been determined to be

     factually distinguishable from the instant case. The facts in this case are more similar to those in Heifetz v. Department of Business Regulation, Division of Alcoholic Beverages and Tobacco,

     475 So.2d 1277 (Fla. 1st DCA 1985). In that case as in this one, the transactions took place in a "surreptitious manner, with drugs and money being exchanged with an intent to conceal that drug transactions were being consummated." Id at 1270.

107. Petitioner has not established that Respondent, through its agents, servants, or employees, kept or maintained its licensed premises for the illegal keeping, selling, or delivery of controlled substances.

108. For the reasons stated herein, Petitioner has failed to meet its burden in this case.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that Petitioner enter a final order dismissing the Administrative Action.

DONE AND ENTERED this 8th day of September, 1998, in Tallahassee, Leon County, Florida.

CAROLYN S. HOLIFIELD

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847

Filed with the Clerk of the Division of Administrative Hearings

this 8th day of September, 1998.

COPIES FURNISHED:

Thomas D. Winokur, Esquire Department of Business

and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-1007

Richard W. Bisconti, Esquire

G. Michael Nelson, Esquire 3333 West Kennedy Boulevard Suite 103

Tampa, Florida 33611

Lynda Goodgame, General Counsel Department of Business

and Professional Regulation 1940 North Monroe Street Northwood Centre

Tallahassee, Florida 32399-0792

Richard Boyd, Director Division of Alcoholic

Beverages and Tobacco Department of Business and

Professional Regulation 1940 North Monroe Street Northwood Centre

Tallahassee, Florida 32399-0792

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 97-005002

Orders for Case No: 97-005002