STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS )

REGULATION, DIVISION OF ) ALCOHOLIC BEVERAGES AND TOBACCO, )

)

Petitioner, )

)

vs. ) CASE NO. 84-2530

)

SURF ATTRACTIONS, INC., )

d/b/a ONE STOP FOOD, )

)

Respondent. )

)

RECOMMENDED ORDER APPEARANCES

For Petitioner: Louisa E. Hargrett, Esquire

Tallahassee, Florida

For Respondent: Jeffrey C. Bassett, Esquire

Panama City, Florida

The final hearing was held in this ease in Panama City on November 2, 1984.

The issue is whether alcoholic beverage license number 13-656, series 2-COP, held by respondent Surf Attractions, Inc. d/b/a One Stop Food (licensee) should be disciplined for alleged violations of the beverage laws. Petitioner Department of Business Regulation, Division of Alcoholic Beverages and Tobacco (Division) alleges in a one count Notice To Show Cause that the corporate treasurer of the licensee sold a case of beer to a person under the age of 19 in violation of Section 562.11, Florida Statutes (1983).

FINDINGS OF FACT 1/

1. At all times material, respondent Surf Attractions, Inc. d/b/a One Stop Food (licensee) held alcoholic beverage license number 13-656, series 2-COP, for the sale of alcoholic beverages at an establishment known as One Stop Food, located at 12526 West Highway 98-A, Panama City Beach, Florida.

   
   

2. On or about April 21, 198, two white males entered One Stop Food to buy a case of beer. One of the two, named Robert Galik, identified himself as Mark

   A. Huez.

   
   

3. In accordance with the licensee's policies, the cashier asked them to present a valid driver's license to substantiate that they were over 19 years- old. Neither had a valid driver's license, and the cashier referred the matter to Lawrence C. Presley, who was standing near the cashier. Presley is the licensee's treasurer and chief executive officer, being responsible for the day- to-day activities of One Stop Food.

4. Presley also asked Galik to show him a driver's license. Galik responded that the state of Missouri had taken his driver's license from him as a result of traffic infractions. Galik then showed Presley a Missouri uniform traffic ticket summons citing Mark Andrew Huez with a traffic infraction and indicating that Huez was over 19 years old, having been born on August 30, 1964. Presley declined to sell Galik the beer, telling Galik that the traffic ticket summons was not enough because it did not bear a picture. Galik then showed Presley a community center identification card in the name of Mark A. Huez, date of birth, August 30, 1984, and bearing Galik's picture. Presley accepted this identification together with the traffic ticket summons. Presley also accepted the identification in part because he thought Galik was believable and because it appeared that Galik could easily have been over 19 years old.

   
   

5. In fact, Galik was less than 19 years old, having been born on March 31, 1966.

   
   

6. The licensee has not previously been cited for any violations of the beverage laws. It has a reputation among local Division beverage agents for making a relatively good effort and generally doing a relatively good job of screening sales to avoid sales to minors. The licensee sells a large volume of beer, and many of its customers are college students on spring break. Many of these are minors who devise various schemes to persuade this licensee and others to sell them beer. Many are turned away as a result of the licensee's policies Presley personally had much experience dealing with the minors' various schemes. While drawing from this experience, Presley nonetheless erred in deciding to sell beer to Galik. When charged with an offense, Presley sought assistance and guidance from the Division in the adoption and implementation of sounder policies.

   
   

   CONCLUSIONS OF LAW

   
   

7. Section 561.29, Florida Statutes (1983), provides 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, of nay of the laws of this state or of the United States, or violation of any municipal or county regulation in regard to the hours of sale, service, or consumption of alcoholic beverages, or engaging in or permitting disorderly conduct on the licensed premises, or permitting another on the licensed premises to violate any of the laws of this state or of the United States; except that whether or not the licensee or his or its agents, officers, servants, or employees have been convicted in any criminal court of any violation as set forth in this paragraph shall not be considered in proceedings before

         the division for suspension or revocation of a license except as permitted by chapter 92 or the rules of evidence.

         . . . .

         1. The division may impose a civil penalty against a licensee for any violation mentioned in the Beverage Law, or any rule issued pursuant thereto, not to exceed $1,000 for violations arising out of a single transaction. If the licensee fails to pay the civil penalty, his license shall be suspended for such period of time as the division may specify. The funds so collected as civil penalties shall be deposited in the state General Revenue Fund.

         2. The division may compromise any alleged violations of the Beverage Law, by accepting from the licensee involved an amount not to exceed $1,000 for violations arising out of a single transaction. All funds so collected are to be deposited in the state General Revenue fund.

         3. The division may suspend the imposition of any penalty conditioned upon terms the division should in its discretion deem appropriate.

8. Section 562.11(1), Florida Statutes (1983), provides: (1)(a) It is unlawful for any person to

   sell, give, serve, or permit to be served alcoholic beverages to a person under 19 years of age or to permit a person under 19 years of age to consume said beverages on the licensed premises. Anyone convicted of violation of the provisions hereof shall be guilty of a misdemeanor of the second degree, punishable as provided in Section 775.082 or Section 775.083.

   1. A licensee who sells, gives, serves, or permits to be served any alcoholic beverage to a person under 19 years of age or permits a person under 19 years of age to consume any alcoholic beverage on the

      licensed premises shall have a complete defense to any civil action therefor, except for any administrative action by the division under

      the Beverage Law, if, at the time the alcoholic beverage was sold, given, served, or permitted to be served, the person falsely evidenced that he was of legal age to purchase or consume the alcoholic beverage and the appearance of the person was such that an ordinarily prudent person would believe him to be of legal age to purchase or consume the alcoholic beverage and if the licensee carefully checked one of the

      following forms of identification: the person's driver's license, an identification card issued under the provisions of Section 322.051, or the person's passport, and acted in good faith and in reliance upon the representation and appearance of the person in the belief that he was of legal age to purchase or consume the alcoholic beverage. Nothing herein shall negate any cause of action which arose prior to June 2, 1978.

      
      

9. Subparagraph (b) of Section 561.11(1), Florida Statutes (1983), was enacted by Chapter 78-134, Laws of Florida (1978). It provides the only complete legal defense to selling alcoholic beverages to a minor (although even that defense is not a complete defense in any administrative action by the Division under the beverage law.)

   
   

10. In this case, Presley sold alcoholic beverages to a minor and did not prove that he had a legal defense. Accordingly, Presley violated Section 562.11(1)(a), Florida Statutes (1983).

    
    

11. Since Presley violated Section 562.11(1)(a), Florida Statutes (1983), the licensee violated Section 561.29(11(a), Florida Statutes (1983). Since Presley is the corporate treasurer and chief executive officer of the licensee corporation (and not a mere employee), there is no need to prove more than one violation or to prove the separate and independent culpable responsibility of the licensee corporation for Presley's violation. Compare, e.g., the cases cited in Bach v. Florida State Board of Dentistry, 378 So. 2d 34 (Fla. 1st DCA 1979).

    
    

12. Although the licensee violated the law, the facts include some mitigating factors which should be taken into account in deciding the appropriate penalty. First, most of the licensee's policies for screening sales are sound and are enforced. Presley's mistake was exercising his discretion as chief executive officer to sell beer without proof of age set out in Section 562.11(11(b), Florida Statutes (1983). Second, only one sale is involved. Third, the licensee has a good reputation for making a relatively good effort and generally doing a relatively good job of preventing sales to minors.

Fourth, licensee has expressed a willingness to cooperate with the Division to improve its operations and policies in this area.

RECOMMENDATION

Based upon the foregoing Findings Of Fact and Conclusions Of Law, it is RECOMMENDED that:

Petitioner Department of Business Regulation, Division of Alcoholic Beverages and Tobacco, enter a final order holding respondent Surf Attractions, Inc. d/b/a One Stop Food guilty of violating Section 561.29(1)(a), Florida Statutes (1983), and imposing a civil penalty of $500.00, payment of $400.00 of which to be suspended upon the conditions: (1) that it does not again violate Section 562.11(1), Florida Statutes (1983); and (2) that it adopts and enforces a policy of requiring the proof of identification referred to in subparagraph

(b) of Section 562.11(1), Florida Statutes (1983), whenever it appears reasonably possible that a customer might be under the legal age.

RECOMMENDED this 12th day of December, 1984, in Tallahassee, Florida.

J. LAWRENCE JOHNSON Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904)488-9675

FILED with the Clerk of the Division of Administrative Hearings this 12th day of December, 1984.

ENDNOTE

1/ Petitioner submitted proposed findings of fact. The proposed findings of fact were reviewed, and the following Findings Of Fact attempt to rule, either directly or indirectly, on each proposed finding of fact. Proposed findings of fact which were approved and adopted are reflected in the following Findings Of Fact. Where proposed findings of fact are not reflected in the following Findings Of Fact and no direct ruling rejecting the proposed findings of fact is apparent, the proposed findings of fact have been rejected as either not being proved by competent substantial evidence, being cumulative, being subordinate or being irrelevant.

COPIES FURNISHED:

Louisa E. Hargrett, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301

Jeffrey C. Bassett, Esquire Post Office Box 1638

Panama City, Florida 32402

Fred Roche, Secretary

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Howard M. Rasmussen, Director Department of Business Regulation

Division of Alcoholic Beverages and Tobacco 725 South Bronough Street

Tallahassee, Florida 32301

=================================================================

AGENCY FINAL ORDER

=================================================================

DEPARTMENT OF BUSINESS REGULATION DIVISION OF ALCOHOLIC BEVERAGES AND TOBACCO

DEPARTMENT OF BUSINESS REGULATION, DIVISION OF ALCOHOLIC BEVERAGES AND TOBACCO,

Petitioner,

vs. CASE NO. 84-2530

SURF ATTRACTIONS, INC., d/b/a ONE STOP FOOD,

Respondent.

/

FINAL ORDER

COMES NOW the Director of the Division of Alcoholic Beverages and Tobacco after due consideration in the above- styled cause and enters this Final Order as follows:

1. The findings of fact contained in the Recommended Order of December 12, 1984, are hereby adopted.

   
   

2. The conclusions of law contained in the Recommended Order of December 12, 1984, are hereby adopted.

   
   

3. The recommended penalty of a civil penalty of Five Hundred Dollars ($500.00), payment of Four Hundred Dollars ($400.00) of which is to be suspended upon certain conditions, is rejected based upon the testimony of Lawrence C. Presley at pages 55-56 and 62-64 of the transcript.

   
   

4. After review of the entire record in this cause, it is hereby ORDERED that Respondent, Surf Attractions, Inc., d/b/a One Stop Food, pay a civil penalty of One Thousand Dollars ($1,000.00) within 30 days of the date of this Final Order.

DONE AND ORDERED this 7th day of February, 1985.

HOWARD M. RASMAUSSEN, DIRECTOR

Division of Alcoholic Beverages and Tobacco

725 South Bronough Street Tallahassee, Florida 32301

(904)488-7891

Copies furnished:

Louisa E. Hargrett Staff Attorney

Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301

Jeffrey C. Bassett Attorney at Law

209 East 4th Street Post Office Box 1638

Panama City, Florida 32402

Lawrence Johnston Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

This order may be appealed pursuant to Florida Statute 120.68 and the Florida Rules of Appellate Procedure within 30 days of the date of filing this Order.

================================================================= DISTRICT COURT OPINION

=================================================================

IN THE DISTRICT COURT OF APPEAL FIRST DISTRICT, STATE OF FLORIDA

SURF ATTRACTIONS, INC., d/b/a NOT FINAL UNTIL TIME EXPIRES

ONE STOP FOOD, TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED.

Appellant,

CASE NO. BF-197

v. DOAH CASE NO. 84-2530

DEPARTMENT OF BUSINESS REGULATION, DIVISION OF ALCOHOLIC BEVERAGES AND TOBACCO,

Appellee.

/

Opinion filed December 16, 1985.

Appeal from and order of the Department of Business Regulation, Division of Alcoholic Beverages and Tobacco. Jeffrey C. Bassett of Barron, Redding, Hughes, Fite, Bassett & Fensom, P.A., Panama City, for appellant. Louisa E. Hargrett, Staff Attorney, Tallahassee, for appellee.

BARFIELD, J.

Surf Attractions, Inc., (licensee) appeals from a final order of the Department of Business Regulation, Division of Alcoholic Beverages and Tobacco (agency). We reverse.

The licensee operates a convenience store on Panama City Beach and holds a beverage license issued by the agency. On April 21, 1984, beverage agents observed two young men exiting the licensee's store, carrying a case of beer which they had purchased. The young men were unable to provide appropriate proof of age and were arrested. The agency issued a show cause order expressing its intention to impose sanctions against the licensee and the licensee requested a formal hearing pursuant to Section 120.57(1), Florida Statutes (1983).

The evidence at hearing revealed that Lawrence Presley, the licensee's treasurer, approved the sale of beer based on the purchaser's use of a Missouri traffic ticket and a photo identification card from a community center. The hearing officer found that the sale violated section 562.11(1), Florida Statutes (1983) and that the licensee was therefore subject to sanctions under section 561.29(1) and (3). He concluded that since the violation was committed by a corporate officer, there was "no need to prove more than one violation or to prove the separate and independent culpable responsibility of the licensee corporation . . . ." The order recommended a $500 fine, with $400 of that to be suspended on conditions that there be no further violations and the licensee impose stricter controls on approval of identifications. The agency issued its final order which accepted the hearing officer's findings of fact and conclusions of law but which increased the penalty to a fine of $1,000.

Appellant argues on appeal that the agency erred in imposing a strict liability standard on the licensee in penalizing it pursuant to section 561.29(3). 1/ The appellant points to a long and well-established line of Florida cases, beginning with Cohen v. Schott, 48 So. 2d 154 (Fla. 1950), which holds that the agency must show a lack of due diligence on the part of a beverage licensee before sanctions may be imposed. See, e.g., Lash. Inc. v.

State, Department of Business Regulation, 411 So. 2d 276 (Fla. 3d DCA 1982); Golden Dolphin No. 2, Inc. v. State, Division of Alcoholic Beverages & Tobacco,

403 So. 2d 1372 (Fla. 5th DCA 1981); Woodbury v. State Beverage Department, 219 So. 2d 47 (Fla. 1st DCA 1969); Pauline v. Lee, 147 So. 2d 359 (Fla. 2d DCA 1962), cert. denied, 156 So. 2d 389 (Fla. 1963); Trader Jon, Inc. v. State Beverage Department, 119 So. 2d 735 (Fla. 1st DCA 1960).

The agency's response is that where, as here, the violation is committed by a corporate officer, there is no need to show negligence or lack of due diligence in the commission of the violation. Since we find no support for this proposition in the law of agency or the case law concerning beverage license penalties, nor do we find any logical force behind it, we reject it. It is true that where the violation is committed by employees, it may be necessary for the agency to show a series of violations to impute lack of due diligence to the

licensee. Golden Dolphin; Pauline. We find, however, that while sanctions may be imposed for a single violation by a corporate officer, the agency must still prove lack of due diligence by the officer. G & B, Inc. v. State, Department of Business Regulation, Division of Beverage, 362 So. 2d 959 (Fla. 1st DCA 1978); R & R Lounge v. Wynne, 286 So. 2d 13 (Fla. 1st DCA 1973).

A second issue which has concerned this court in reaching proper disposition of this appeal is whether the "due diligence" standard of Cohen v. Schott and its progency is applicable to imposition of fines by the agency under section 561.29(3). The statutes here in issue, sections 561.29(3) and 562.11(1)(a) appear to impose strict liability standards. Yet the Florida Supreme Court and the district courts, in numerous opinions, have interpreted section 561.29(1)(a), which authorizes the agency to suspend and revoke licenses and which also contains no requirement of mens rea or fault, to require a showing of lack of due diligence by the licensee. Is that interpretation properly extended to imposition of fines pursuant to section 561.29(3)? 2/ We believe that it is.

Foremost among our reasons for doing so is that the agency conceded the question at oral argument, seeking to rely on the argument regarding corporate officers which we have rejected above. Additionally, we find several other persuasive reasons for the interpretation we place on the statute.

First, such an interpretation is consistent with constitutional principles.

In Bach v. Florida State Board of Dentistry, 378 So. 2d 34, 36 (Fla. 1st DCA 1979), Judge Ervin suggested that the rationale of Cohen v. Schott was necessary to sustain section 561.29(1)(a) against constitutional attack. While the constitutionality of section 561.29(3) is not directly before us in this appeal, we find that due process considerations favor a requirement of "fault" by the violator. 3/

An additional reason for this interpretation, one advanced by the appellant, is that the term "violation" should be interpreted in a similar manner where it appears in both subsections (1)(a) and (3) of section 561.29. We agree. See 49 Fla. Jur. 2d, Statutes s. 133 (1984).

Another rationale for requiring a finding of lack of due diligence to support a fine is to provide some parameters for the exercise of the agency's prosecutorial discretion. The "track record" of the agency in this case and others brought to the attention of this court leaves much to be desired.

Village Saloon, Inc. v. Division of Alcoholic Beverages and Tobacco, 463 So. 2d 278, 283 (Fla. 1st DCA 1984). Our confidence in the agency's discretion was not bolstered by its counsel's admission at oral argument that it has a policy of not imposing sanctions against a licensee who sells to minors when the licensee checks one of the forms of identification enumerated in section 562.11(1)(b), Florida Statutes (1983), (providing a complete defense to civil actions but expressly not applicable to actions by the agency). The agency's adherence to such a policy without providing prior notice to licensees raises due process concerns and, of course, the likelihood that the agency stands in violation of Florida's Administrative Procedure Act. McDonald v. Department of Banking and Finance, 346 So. 2d 569 (Fla. 1st DCA 1977). Finally, we are persuaded of the correctness of our holding by opinions of this court which have applied, without discussion, the "lack of due diligence" standard to appeals from agency-imposed fines for violations of the beverage laws. Charlotte County Lodge v. State, Department of Business Regulations, Division of Alcoholic Beverages and Tobacco,

463 So. 2d 1208 (Fla. 1st DCA 1985); G & B, Inc.; R & R Lounge.

In summary, we find that the agency erred in adopting the hearing officer's conclusion of law that the licensee could be held strictly liable for a violation of the beverage laws. Accordingly, we reverse the order appealed and remand to the agency for further action under a correct interpretation of the law. s. 120.68(9)(b), Fla. Stat. (1983).

REVERSED.

JOANOS, J., CONCURS SPECIALLY WITH AN OPINION. ERVIN, J., DISSENTS WITH WRITTEN OPINION.

JOANOS, J., Concurring Specially.

I concur in the result reached by Judge Barfield's opinion in reversing the order appealed and remanding to the agency for further action under a correct interpretation of the law. Further, I concur in the opinion except with the expressed reasoning that the result is based partly upon a need to ". . . provide some parameters for the exercise of the agency's prosecutorial discretion" and the remarks concerning the "track record" of the agency in this case. I do not believe that it is necessary in the opinion to pass judgment on matters not before the court in the instant proceeding. I would, therefore, refrain from joinder in that portion of Judge Barfield's opinion.

ERVIN, J., Dissenting.

I respectfully dissent. Those cases imposing a requirement of a lack of due diligence on the Division of Alcoholic Beverages and Tobacco, as a condition to the imposition of disciplinary sanctions, e.g., Lash, Inc. v. State, Department of Business Regulation, 411 So. 2d 276 (Fla. 3d DCA 1982); Cohen v.

Schott, 48 So. 2d 154 (Fla. 1950); Trader Jon, Inc. v. State Beverage Department, 119 So. 2d 735 (Fla. 1st DCA 1960), involved only a construction of Section 561.29(1), Florida Statutes, giving the Division the general power to revoke or suspend a beverage license, due to violation of the laws of the state, the United States, or any municipal regulation by the licensee or his agents, officers, servants or employees, on the premises. The facts recited in those cases revealed no direct, personal involvement by the licensee in the particular violation, but rather related to the Division's attempt to impute negligence upon the licensee because of the active negligence of his employees. 4/ Significantly, none of the cases cited by the majority dealt with the effect of Section 562.11(1)(b), Florida Statutes (1983). Section 562.11(1) states:

(1)(a) It is unlawful for any person to sell, give, serve, or permit to be served alcoholic beverages to a person under 19 years of age or to permit a person under

19 years of age to consume said beverages on the licensed premises. Anyone convicted of violation of the provisions hereof shall be guilty of a misdemeanor of the second degree, punishable as provided in s. 775.082 or

s. 775.083.

(b) A licensee who sells, gives, serves, or permits to be served any alcoholic beverage to a person under 19 years of age or

(e.s.)

permits a person under 19 years of age to consume any alcoholic beverage on the licensed premises shall have a complete defense to any civil action therefor, except for any administrative action by the division under the Beverage Law, if, at the time the alcoholic beverage was sold, given, served, or permitted to be served, the person falsely evidenced that he was of legal age to purchase or consume the alcoholic beverage and the appearance of the person was such that an ordinarily prudent person would believe him to be of legal age to purchase or consume the alcoholic beverage and if the licensee carefully checked one of the following forms of identification: the person's driver's license, an identification card issued under the provisions of

s. 322.051, or the person s passport, and acted in good faith and in reliance upon the representation and appearance of the person in the belief that he was of legal age to purchase or consume the alcoholic beverage. Nothing herein shall negate any cause of action which arose prior to June 2, 1978.

Subparagraph (b) of section 562.11(1) was enacted by Chapter 78-134, Laws of Florida (1978). It clearly expresses the legislative intent to subject a licensee to administrative disciplinary sanctions, regardless of fault, upon his violation of the provisions of section 562.11(1). The evidence, as recited in the majority's opinion, establishes that Presley, the treasurer and chief corporate officer of the licensee, sold alcoholic beverages to a minor.

I fully agree with the conclusion of the hearing officer, accepted by the Division, that "there is no need to prove more than one violation or to prove the separate and independent culpable responsibility of the licensee corporation for Presley's violation." (e.s.) This conclusion, which places an elevated standard of care 9n the personal acts of corporate officers, is manifestly consistent with the law of corporations, which historically has recognized distinctions between those individuals who exercise management decisions on behalf of the corporation and those who do not. For example, all corporations act and contract through individuals, such as those holding corporate officers or agents appointed by such officers. Mease v. Warm Mineral Springs, Inc., 128 So. 2d 174 (Fla. 2d DCA 1961). A corporation's employee does not occupy a position of trust as does an officer, unless the employee also serves as his agent. Renpak, Inc. v. Oppenheimer, 104 So. 2d 642 (Fla. 2d DCA 1958). The officers and directors of a corporation are ordinarily regarded as acting in a quasi-fiduciary relationship to the corporation and are expected to exercise good faith in carrying out their corporate powers. Tampa Waterworks Co. v.

Wood, 97 Fla. 493, 121 So. 789 (1929). Indeed, if they violate this trust, they may be held personally liable for so doing. Flight Equipment & Engineering Corp. v. Shelton, 103 So. 2d 615 (Fla. 1958).

The legislative imposition of a strict liability standard in an administrative setting is analogous to the legislature's power to inflict

criminal punishment upon a wrongdoer for certain types of offenses, regardless of the presence of mens rea, on the theory that the commission of the act prohibited by the statute constitutes the crime, and motive and knowledge or ignorance of its criminal character are immaterial circumstances on the question of the defendant's guilt. Coleman v. State ex rel. Jackson, 140 Fla. 772, 193 So. 84 (1939). See also 14 Fla. Jur. 2d, Criminal Law s. 41 (1979). In my judgment, the legislature has clearly made a policy decision that a licensee may be subjected to administrative disciplinary sanctions, regardless of fault. I would therefore uphold the Division's interpretation that the statute's proscription against the licensee may be applied when the corporate officer commits the violation, even though he may exercise a good faith belief that the person to whom he sells alcohol is of legal drinking age.

I consider cases relating to disciplinary proceedings brought against licenses of thoroughbred horse trainers persuasive as to the result that should be reached here. In Division of Pari-Mutuel Wagering, Department of Business Regulation v. Caple, 362 So. 2d 1350 (Fla. 1978), the Florida Supreme Court had before it a question as to whether a thoroughbred horse trainer should be an absolute insurer of the condition of the horses placed in his charge regardless of the acts of third parties. The court, in upholding the Division's rule imposing strict liability on horse trainers, in the absence of the trainer's knowledge that any prohibited drugs had been used, observed:

As regards the proposition that due process invariably requires proof of guilty knowledge before punishment can be inflicted, that notion was long ago put to rest by the United States Supreme Court. See, e.g., United States v. Balint, 258 U.S. 250, 42 S.

Ct. 301, 66 L. Ed. 604 (1922); Shevlin-

Carpenter Co. v. Minnesota, 218 U.S. 57, 30 S. Ct. 663, 54 L. Ed. 930 (1910). It is

now well established that in areas of activity requiring strong police regulation to protect public interests, strict liability may be imposed upon persons "otherwise innocent but standing in responsible relation to a public danger." United States v.

Dotterweich, 320 U.S. 277, 281, 64 S.

Ct. 134, 88 L. Ed. 48 (1943). Horse racing is such an area of activity. Western Turf Association v. Greenberg, 204 U.S. 359, 27 S.

Ct. 384, 51 L. Ed. 520 (1907).

362 So. 2d at 1355 (emphasis supplied). In upholding the Division's rules, the court overruled its prior opinion in State ex rel. Paoli v. Baldwin, 159 Fla. 165, 31 So. 2d 627 (1947), and approved the following language stated in Fogt v. Ohio State Racing Commission, 3 Ohio App. 2d 423, 426, 210 N.E.2d 730, 733 (1965):

Horse racing, at its best, is difficult to control, and would be practically impossible to regulate if every governing rule and regulation was made dependent for validity upon the knowledge or motives of the person charged with a violation.

* * *

[W]hen viewed in the light of its overall purpose, the business to which it relates; and the potential evil which it is designed to prevent, we cannot say that the rule is unreasonable. Manifestly, it would be almost impossible to prove guilty knowledge or intent in cases of this kind, and the futility of prosecutions under a rule requiring probative evidence of guilty knowledge and intent would eventually leave the public interest and welfare to the mercy of the unscrupulous.

Id. at 1354. The Third District Court of Appeal in Solimena v. State, Department of Business Regulation, Division of Pari-Mutuel Wagering, 402 So. 2d 1240 (Fla. 3d DCA 1981), pet. rev. den., 412 So. 2d 470 (Fla. 1982), was confronted with an issue similar to that before the Florida Supreme Court in Caple, and reached an identical result, recognizing that the "absolute insurer rule reflects an appropriate legislative purpose: prevention of the influencing of race results by the use of drugs." 402 So. 2d at 1247.

A licensee's operation of a business involving the sale of intoxicating beverages is one which clearly affects the public health, morals, safety and welfare, and as such is subject to the police power of the state. The legislature has made a policy decision that if a licensee sells alcoholic beverages to a minor, such act may be a ground for disciplinary sanctions, notwithstanding the licensee's lack of knowledge or personal motives. The statute as such causes the licensee to become a virtual insurer against the proscribed conduct or condition stated in the statute. The Division, in a manner consistent with its regulatory duties, has interpreted the statute to apply to a licensee, acting in his individual capacity, or, if the licensee is a corporation, to the officers of the corporation who manage it. 5/ This interpretation in my judgment cannot be deemed to constitute an erroneous interpretation of the law, and a strict liability standard, as applied to such persons, is an appropriate exercise of the Division's delegated, disciplinary power. Because the disciplinary sanction imposed by the Division is entirely consistent with the statutory purpose, I would affirm.

ENDNOTES

1/ The hearing officer's order is not a model of clarity on this issue but it appears to impose strict liability on the licensee. The parties have so interpreted the order and we find no reason to do otherwise.

2/ As originally enacted, section 561.29 authorized the agency to suspend or revoke licenses for maintenance of a nuisance, etc. Section 561.53(1959) allowed the agency to compromise small claims for up to five dollars per violation.

This provision was repealed by the 1961 legislature in Florida Laws 61-397, which also added an earlier version of the provision now codified at section 561.29(3).

3/ But see Chicago, Burlington & Quincy R.R. v. United States, 220 U.S. 559, 31

S. Ct. 612, 55 L. Ed. 582 (1911), upholding the validity of fines imposed under a strict liability standard pursuant to the federal Safety Appliance Act.

4/ It should be observed that Florida's due diligence standard is apparently at variance with the rule recognized in the majority of jurisdictions, holding a licensee strictly liable for violations of the law resulting from his acts or those of his employees. See Annot., 3 A.L.R.2d 107, 108 (1949).

5/ I place little importance on the statement made by the Division's lawyer during oral argument that the Division also interprets section 562.11(1) as permitting a licensee to establish a good faith defense in an administrative proceeding if he complies with the forms of identification specified in the statute. No showing was made in the instant case that the licensee did so, moreover, a licensee is hardly in a position to complain if the agency places a construction on the statute which is to his benefit.

=================================================================

RECOMMENDED ORDER ON REMAND

=================================================================

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS )

REGULATION, DIVISION OF ) ALCOHOLIC BEVERAGES AND TOBACCO, )

)

Petitioner, )

)

vs. ) CASE NO. 84-2530

) SURF ATTRACTIONS, INC., d/b/a ) ONE STOP FOOD, )

)

Respondent. )

)

RECOMMENDED ORDER ON REMAND

A Recommended Order previously was entered in this case on December 12, 1984. Petitioner entered a Final Order on February 7, 1985. The Final Order adopted the Recommended Order in holding Respondent guilty of violating Sections 562.11(1) and 561.29(1)(a), Florida Statutes (1983).

Respondent appealed from the Final Order, and on December 16, 1985, the District Court of Appeal, First District of Florida, entered its Opinion reversing the Final Order and remanding to Petitioner "for further action under a correct interpretation of the law." The District Court held that a violation of Section 562.11(1), Florida Statutes (1983), cannot be established in an administrative proceeding unless it is proved that the violation was committed with negligence or lack of due diligence. 1/

Recently, by letter dated August 19, 1986, Petitioner again referred this case to the Division of Administrative Hearings and requested that the case be reopened for a determination whether Respondent (its corporate officer) was negligent or lacking in due diligence in connection with the sale of alcoholic beverages to a minor.

By letter dated August 21, 1986, Respondent objected to any further proceedings. Respondent contends: "It is therefore obvious . . . that there is no reason for another evidentiary hearing but rather a proper application of the law is all that is required. Under the facts . . . , there is no question that the case should be dismissed."

Both Petitioner and Respondent are correct in part and incorrect in part.

The issue on remand is a factual issue which is in dispute. It therefore is appropriate for referral to the Division of Administrative Hearings for determination by reopening this case. However, although the Recommended Order and the Final Order ultimately concluded as a matter of law that the issue was not relevant, both parties had an equal opportunity to litigate the issue in earlier proceedings. The evidence is complete on the issue, and there is no need for a further evidentiary hearing. See also, Henderson Signs vs.

Department of Transportation, 397 So. 2d 769 (Fla. 1st DCA 1980); Department of Transportation v. J.W.C. Company, Inc., 396 So. 2d 778 (Fla. 1st DCA 1981); Systems Management Associates, Inc. vs. Department of Health and Rehabilitative Services, 391 So. 2d 688 (Fla. 1st DCA 1980). The only unfinished business for the Hearing Officer is to add a finding whether Respondent (its corporate officer) was negligent or lacked due diligence, a finding thought to be unnecessary under the legal conclusions that had been reached in the Recommended Order.

ADDITIONAL FINDING OF FACT ON REMAND

Taking into consideration all of the evidence, including the evidence leading to the Findings Of Fact contained in paragraphs 4 and 6 of the Recommended Order entered in this case on December 12, 1984, Respondent (its corporate officer) was not negligent or lacking in due diligence in its efforts not to sell alcoholic beverages to minors, including Galik.

ADDITIONAL CONCLUSION OF LAW ON REMAND

The Opinion of the District Court of Appeal, First District of Florida on appeal from the Final Order entered in this case on February 7, 1985, is final and is the law of the case. Under the Opinion, a corporate licensee is not culpably responsible for criminal violations committed on its behalf by a corporate officer unless the corporate licensee (its corporate officer) was guilty of negligence or lack of due diligence in connection with the violation. Alternatively, 2/ an element of a violation of Section 562.11(1), Florida Statutes (1983), is the negligence or lack of due diligence of the alleged violator. In either case, since Petitioner did not prove that Respondent (its corporate officer) was negligent or lacking in due diligence, Petitioner did not prove a violation of Section 561.29(1)(a), Florida Statutes (1983).

RECOMMENDATION ON REMAND

Based upon the foregoing Additional Finding of Fact On Remand and Additional Conclusion Of Law On Remand, together with the Findings Of Fact and Conclusions Of Law in the Recommended Order entered December 12, 1984, as adopted by the Final Order entered February 7, 1985, and modified by the Opinion

of the District Court of Appeal, First District of Florida, it is RECOMMENDED that Petitioner, Department of Business Regulation, Division of Alcoholic Beverages and Tobacco, enter a Final Order On Remand dismissing the Notice To Show Cause In this case.

RECOMMENDED this 15th day of September, 1986, in Tallahassee, Florida.

J. LAWRENCE JOHNSON

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

FILED with the Clerk of the Division of Administrative Hearings this 15th day of September, 1986.

ENDNOTES

1/ As pointed out in the dissent, the Opinion does not clearly distinguish whether negligence or lack of due diligence is necessary to hold a corporate licensee vicariously liable under Section 561.29(1)(a), Florida Statutes (1983), for any statutory violation by a corporate officer or is necessary to hold anyone liable in an administrative proceeding for a violation of Section 562.11(1), Florida Statutes (1983). The majority opinion blurs those two separate legal propositions. See Additional Conclusions Of Law On Remand, below.

2/ See Footnote Number 1.

COPIES FURNISHED:

Howard M. Rasmussen, Director

Division of Alcoholic Beverages and Tobacco Department of Business Regulation

725 South Bronough Street Tallahassee, Florida 32301

Louisa E. Hargrett, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301

Jeffrey C. Bassett, Esquire Post Office Box 1368 Panama City, Florida 32402

James Kearney, Secretary Department of Business Regulation The Johns Building

725 South Bronough Street Tallahassee, Florida 32301

=================================================================

AGENCY FINAL ORDER ON REMAND

=================================================================

DEPARTMENT OF BUSINESS REGULATION DIVISION OF ALCOHOLIC BEVERAGES AND TOBACCO

DEPARTMENT OF BUSINESS REGULATION, DIVISION OF ALCOHOLIC BEVERAGES AND TOBACCO,

Petitioner,

vs. CASE NO. 41528-A

DOAH CASE NO. 84-2530

SURF ATTRACTIONS, INC., d/b/a ONE STOP FOOD,

Respondent.

/

FINAL ORDER ON REMAND

COMES NOW the Director of the Division of Alcoholic Beverages and Tobacco, and hereby enters this the Final Order of the Division in the above styled cause pursuant to authority vested by the Beverage Law and Chapter 120, Florida Statutes as follows:

FINDINGS OF FACT

Petitioner adopts the Additional Findings of Fact on Remand as set forth by the Hearing Officer in his Recommended Order on Remand dated September 15, 1986.

CONCLUSIONS OF LAW

Petitioner adopts the Additional Conclusion of Law on Remand as set forth by the Hearing Officer in his Recommended Order on Remand.

ORDER Based upon the foregoing Findings of Fact, Conclusions of Law and Recommended Order on Remand, it is hereby

ORDERED that the charges contained in the Notice to Show Cause dated May 10, 1984 be dismissed.

DONE AND ORDERED this 6th day of November, 1986.

HOWARD M. RASMUSSEN, DIRECTOR

Division of Alcoholic Beverages and Tobacco

725 South Bronough Street Tallahassee, Florida 32399-1020

Copies furnished:

Jeffrey C. Bassett, Esquire Post Office Box 1368 Panama City, Florida 32402

J. Lawrence Johnston Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

Louisa E. Hargrett, Esquire Staff Attorney

Department of Business Regulation

This Final Order may be appealed pursuant to Section 120.68, Florida Statutes, and Rule 9.110, Florida Rules of Appellate Procedure by filing a Notice of Appeal conforming to the requirements of Rule 9.110(d), Florida Rules of Appellate Procedure, both with the appropriate District Court of Appeal and with this agency within 30 days of rendition of this Order, accompanied by the appropriate filing fees.

Docket for Case No: 84-002530

Orders for Case No: 84-002530