The Issue The issues presented for resolution in this proceeding concern whether the Respondent's alcoholic beverage licensure should be subjected to disciplinary sanctions because of alleged misconduct involving the sale and use of controlled substances on a licensed premises, more specifically delineated in the Notice to Show Cause filed in this proceeding by Petitioner.
Findings Of Fact The Respondent, JIMMIE WILLIAMS, owns the club or tavern known as the "Copa Cabana", doing business at 2901 North Haynes Street, Pensacola, Florida. That establishment holds a Series 2-COP alcoholic beverage license number 27- 00239, authorizing the sale of beer and wine on the premises. The Respondent is the sole owner of the Copa Cabana. Burnett Patterson, at times pertinent hereto, during September 1988 through February 1989, was a patrol deputy with the Okaloosa County Sheriff's Department. While a deputy with that Department, he engaged in special drug investigations. During the course of this employment, he became involved in numerous undercover operations designed to curb traffic and use of controlled substances. He thus became familiar with the appearance, properties and paraphernalia associated with crack cocaine and marijuana. On September 2, 1988, he met with Law Enforcement Investigator, Paul Blackmon, of the DABT. Investigator Blackmon asked Deputy Patterson to assist in a drug investigation of the Copa Cabana. At approximately 8:00 p.m. on that date, Deputy Patterson entered the Copa Cabana licensed premises in an undercover capacity. While in the licensed premises, inside the Copa Cabana, he observed patrons of that establishment openly smoking marijuana and crack cocaine. He observed one black male patron walking around inside the licensed premises holding a piece of crack cocaine visibly in his front teeth in order to advertise it for sale. This activity was done in the presence of the licensee/Respondent, Jimmie Williams. The undercover agent further observed numerous persons selling marijuana and cocaine inside, as well as outside the licensed premises. These persons made no attempt to conceal their illegal actions. It has not been demonstrated who owned or controlled the grounds immediately outside the door of the licensed premises. On September 16, 1988, at approximately 8:15 p.m., Deputy Patterson again entered the licensed premised in an undercover capacity. Upon entering the licensed premises, he observed 15 to 20 patrons inside and observed the Respondent working at the bar. Deputy Patterson went to the restroom inside the Copa Cabana and observed two black males cutting crack cocaine into small pieces, mixing them with marijuana, and rolling the resulting material into cigarettes or "joints" for smoking. Deputy Patterson purchased one piece of crack cocaine for $20.00 from a patron known as William Barker while inside the restroom. While inside the licensed premises, Deputy Patterson observed patrons openly smoking crack cocaine and marijuana. He was approached by other patrons, who asked if he wanted to purchase controlled substances. The substance purchased was analyzed and tested positive for cocaine. On September 19, 1988, at approximately 7:40 p.m., Deputy Patterson again entered the licensed premises in an undercover capacity. Upon entering, he made contact with patron, Jerry Green, who was accompanied by a patron known as "Killer." Deputy Patterson purchased one "baggie" of marijuana for $10.00 from "Killer." This transaction, along with the open smoking of marijuana, took place in the presence of the Respondent. Deputy Patterson also observed numerous controlled substance transactions taking place outside and near the entrance of the licensed premises. The substance he purchased was analyzed and proved to be marijuana. On September 24, 1988, at approximately 3:30 p.m., Deputy Patterson again entered the license's premises. He observed several patrons entering and exiting the restroom area. He entered the restroom and made contact with patron, John Butler. John Butler asked Deputy Patterson what he was looking for, and the Deputy replied "crack." Deputy Patterson was sold one piece of crack cocaine by John Butler and another unknown patron for $20.00. Deputy Patterson observed several patrons entering the restroom and purchasing crack cocaine. Jimmie Williams was inside the licensed premises during the time Deputy Patterson was present and making these observations. Deputy Patterson further observed several narcotic transactions outside the front entrance of the licensed premised. The substance purchased by Deputy Patterson was analyzed and tested as positive for the presence of cocaine. On October 8, 1988, at approximately 4:10 p.m., Deputy Patterson again entered the licensed premises in an undercover capacity. Prior to entering, he was asked by several patrons loitering near the entrance of the Copa Cabana if he wanted to purchase controlled substances. Once inside the licensed premises, he entered the restroom, where he made contact with patron, Calvin Black. Deputy Patterson purchased one piece of crack cocaine from Calvin Black for $20.00. Deputy Patterson then departed the restroom and observed patrons openly smoking marijuana while playing pool. Deputy Patterson contacted patron, Terry Boutwell, by the pool table. Terry Boutwell sold Deputy Patterson one baggie of marijuana for $10.00 at that location. Upon leaving the building, Deputy Patterson was again approached by persons outside the entrance to the Copa Cabana and asked if he wanted to purchase controlled substances. During all of the aforementioned events, including the sale of marijuana and the smoking of marijuana in the vicinity of the pool table, the Respondent was inside the licensed premises. Both the substance purchased from Calvin Black and that purchased from' Terry Boutwell were subsequently analyzed and proved to be controlled substances. On January 28, 1989, at approximately 5:00 p.m, a confidential informant, Alonzo Blackman, was designated to conduct a controlled substance purchase inside the licensed premises from the licensee, Jimmie Williams. The confidential informant was given specific instructions to buy only from Williams. Prior to departing the Sheriff's Department, he was thoroughly searched. It was determined that he had no controlled substances or money on his person. He was provided with a concealed, wireless voice transmitter. He was also given $50.00 of the Sheriff's Department's money for the purpose of purchasing crack cocaine. Subsequently, the confidential informant departed the Sheriff's Department with Deputy Gwen Salter. The pair was followed and traced by Escambia County Sheriff's Deputy Mark Shaeffer. Deputy Shaeffer was equipped with a radio receiver and monitored transmissions emitted from Alonzo Blackman's transmitter. Deputy Shaeffer observed Alonzo Blackman park behind the Copa Cabana to the rear of the building on a back street and depart Deputy Salter's vehicle. He observed Alonzo Blackman walk through the wooded area behind the Copa Cabana and disappear around the side of the building, moving toward the front of the Copa Cabana building. After Alonzo Blackman was out of sight around the corner of the Copa Cabana building, Deputy Shaeffer could hear normal outdoor sounds, as well as Alonzo Blackman's footsteps through the transmitter. Shortly thereafter, he heard the sound of a juke box playing and loud voices consistent with the noises one would expect when a person entered a bar. Within two or three minutes thereafter, Deputy Schaeffer observed Alonzo Blackman come back in sight around the corner of the licensed premises and enter Deputy Salter's vehicle. Deputy Schaeffer followed the two back to the Sheriff's Department, keeping Alonzo Blackman in visual sight the entire time. When Alonzo Blackman and Deputy Salter returned to the Sheriff's Department, Alonzo Blackman presented Deputy Schaeffer with a slab of rock cocaine and no longer had the $50.00 given to him by the Sheriff's Department. Subsequently, the substance purchased was analyzed and tested positive for the presence of cocaine. The Petitioner adduced a hearsay statement from Deputy Schaeffer to the effect that Alonzo Blackman had told him that he had purchased the rock cocaine in question from the Respondent. That statement was not admitted into evidence since it was not corroborative hearsay for the purposes of Section 120.58, Florida Statutes. The hearsay statement concerning the alleged purchase from the Respondent is not corroborative of the testimony concerning the other independent events in question in this proceeding involving the sale and use of controlled substances on the licensed premises by others. The only testimony or evidence directly concerning the alleged purchase of cocaine from the Respondent was that related by confidential informant, Blackman, to Deputy Schaeffer. The only other evidence purporting to show that the Respondent sold a slab of rock cocaine was the testimony by Deputy Schaeffer revealing what he saw and heard over his radio receiver. All he saw was Alonzo Blackman passing around the side of the building aid later returning around the back corner of the building. He heard his footsteps as he passed around and presumably entered the building, judging from the change in sounds received. There was no evidence that any voices or other noises transmitted to Deputy Schaeffer's listening station consisted of the actual drug transaction and specifically that any of the voices or sounds he might have heard were those of the Respondent in conducting that transaction. Since Deputy Schaeffer's testimony, itself, does not implicate the Respondent in selling the drug, the hearsay statement of the confidential informant, Alonzo Blackman, who could not be located at the time of the hearing, cannot be admissible corroborative hearsay. Thus, it was not established that on this occasion, the slab of rock cocaine was actually purchased from the Respondent. On February 8, 1989, at approximately 5:00 p.m., Alonzo Blackman was again designated to conduct a controlled substance purchase inside the Copa Cabana from the Respondent. He was given the same specific instructions, and Deputy Schaeffer made the same visual and auditory observations as he had with regard to the alleged transaction of January 28, 989. The same factual findings apply, and are made, with regard to this transaction as were made above concerning the January 28, 1989 transaction. The alleged fact that the purchase was made from Jimmie Williams was again predicated on the hearsay statement of Blackman, which was not corroborative and was uncorroborated. It cannot be used to support a finding that the Respondent sold the cocaine in question. On February 7, 1989, at approximately 8:00 p.m., Escambia County Investigators, Tyron Wicks, Melvin Possey and J. Johnson, conducted a "routine drug sweep" of the Copa Cabana. This type of operation was a routine matter for Investigator Wicks in the six months prior to February 7, 1989. Upon entering the licensed premises, Investigator Wicks went directly to the men's restroom where he observed four patrons having a conversation while looking into a paper bag. Investigator Wicks seized the paper bag which contained nine plastic baggies of marijuana ready for distribution and charged him with possession of 20 grams of marijuana with the intent to distribute. Investigator Wicks is familiar with the smell of marijuana smoke; and during "drug sweeps" conducted in the licensed premises, estimated to be 20 or 30 such operations for the previous six months, he smelled such smoke in the licensed premises on a number of occasions. On these occasions, he had also found marijuana and crack and razor blades, as well as pipes and cans used for smoking crack, on the floor of the licensed premises. He has seen people buy drugs at the Copa Cabana while he has been present there with the Sheriff's Department Narcotics Unit during the years 1988 and 1989. Sergeant Bobby Jackson of the Narcotics Division of the Escambia County Sheriff's Department has bean a law enforcement officer for approximately 14 years. He is familiar with the smell and appearance of marijuana and crack cocaine. He has been involved in 20 to 30 raids at the licensed premises. On at least 15 occasions, officers in his party have found controlled substances. The Respondent was always present when these raids took place. On many of the raids, Sergeant Jackson smelled the odor of marijuana smoke in the licensed premises. He is certain that the Respondent was present on these occasions. During these raids, he has observed marijuana cigarette butts on the floor of the licensed premises and has often found people inside bagging marijuana. Prior to the suspension of the beverage license on February 10, 1989, Sergeant Jackson received quite a few complaints about the licensed premises; and each time he visited it, he would observe a great number of people standing around inside and outside the licensed premises. It has been quite different since the suspension of the license and the shutdown of operations at the Copa Cabana. Sergeant Jackson has received very few complaints since February 10, 1989. Sergeant Jackson, however, never received any complaints from the Respondent about drug use in the establishment. John Green is a black male, whose mother lives approximately a block from the licensed premises. He has been a friend of the Respondent for approximately 15 years. During the period of January and February of 1989, he patronized the licensed premises six days a week, every week. He would go there after work and stay until approximately 9:00 p.m. He states that he always saw the Respondent behind the bar. John Green stated that the bar was a self- service bar where patrons could get beer out of the cooler in front of the bar and pay for it at the counter. He maintained that he had never seen Deputy Patterson and that, in his opinion, marijuana smoke smells just like Kool cigarette smoke. He drinks beer every night, including the times when he patronized the Copa Cabana. He testified under oath that he had never seen anyone use drugs in the licensed premises and that on one occasion, however, he had thrown someone out of the licensed premises for using drugs. Dorothy Mouton lives approximately six miles from the Copa Cabana and works at Washington Junior High School in an administrative capacity. She knows the Respondent, who also works there as a coach. She, in the past, has stopped at the Copa Cabana to eat a snack and converse the During the period of August of 1988 to February of 1989, she went to the Copa Cabana every week. According to Ms. Mouton, the Respondent had a stool behind the bar and would get beer from the cooler for patrons who requested beer. She claimed that she was able, by her experience, to identify marijuana smoke and crack cocaine. She maintained that she never saw any drug of either sort in the licensed premises She also testified that it was her habit to depart the licensed premises every day between 6:00 p.m. and 6:30 p.m. Chris Dortch is a 27 year old black male who has known the Respondent for a long period of time. He helped the Respondent operate the Copa Cabana when he first established it. He lives approximately four blocks from the Copa Cabana. He goes to the licensed premises every day and sometimes stays until it closes. He has always observed the Respondent staying behind the bar counter while he is on duty. This witness also claimed under oath that he had never seen any cocaine or marijuana smoked in the licensed premises and had never smelled any marijuana smoke within the licensed premises. He testified that he saw police officers in the licensed premises at least ten times, but never observed any arrests. Elizabeth Freeman lives around the corner from the licensed premises and has lived there approximately four years. During the period of September of 1988 to February 10, 1989, she went to the club every day for about an hour where she would talk to Williams and play video games. She claimed that she observed Williams, on occasion, move from behind the counter into the public area of the tavern. She also testified that she has never seen any indications of drug use on the premises. Shirley Washington was in the habit of going to the club during the period of August of 1988 to February of 1989 at approximately 4:30 p.m. and generally would stay until closing, usually around 9:00 p.m. She was a member of a social group called "The Copa Cabana Queens." It was her habit, during this period of time, to drink four to five six-packs of beer each day. She is familiar with the smell of crack cocaine smoke and marijuana smoke. She testified that she had never observed any marijuana or crack cocaine within the licensed premises. She has been a friend of the Respondent for approximately 25 years. The Respondent is an instructor and coach with the Escambia County School Board. He has owned the Copa Cabana for 15 years. It is a recreation center, lounge, notion store and meeting place. He also has live entertainment and occasionally, a fashion show. His license authorizes him to sell and serve beer and wine. He is the only employee, but Ms. Washington minds the bar for him when he is temporarily away from it (in the restroom, etc.). He testified that he never observed Deputy Patterson until the day of the hearing. He testified that no drugs had ever been in the licensed premises and that he had never dealt in drugs. The testimony of Deputies Patterson and Schaeffer, Investigator Wicks, Sergeant Jackson, and Law Enforcement Investigator Ralph Kelly, to the effect that controlled substances were openly and notoriously used and sold on the premises in question, conflicts in a general sense with the testimony of Respondent's witnesses to the effect that they never saw any marijuana or crack cocaine on the premises or smelled any and so forth. This conflict in the testimony of the witnesses of the Petitioner and Respondent must be resolved by determining which are more credible. Determining the credibility of witnesses is an important and exclusive task of the fact finder Guidelines for resolving credibility issues are provided in Volume 24, Florida Jurisprudence 2nd, Sections 688-696, and grand jury instruction 2.04 on page 779 of West's Florida Criminal Laws and Rules (1989), which sets forth areas to consider in determining whether a witness is credible. Those areas include: whether the witness had an opportunity to observe and know the things about which he testifies' whether his memory seemed accurate; whether he was straight forward in his answers; whether he was interested in the result of the case at issue; whether it is consistent with other testimony and evidence adduced; and whether he has, at some different time, made an inconsistent statement from the testimony given before the court. Firstly, concerning the testimony of John Green, it can be seen that he testified to having patronized the establishment during the period of January and February of 1989 and purported never to have seen Deputy Patterson. This is not surprising since there was no testimony by the Deputy that he was in the licensed premises during those two months. Therefore, John Green would have had no opportunity to observe Deputy Patterson at the time he frequented the licensed the premises. John Green also testified that he drank beer in the licensed premises every night and, thus, could quite likely have suffered a diminution of his powers of observation as a result of drinking beer. Dorothy Mouton maintained that she went to the Copa Cabana every week during the period of August of 1988 to February of 1989. She stated that she went there between the time she got off work until 6:00 p.m. or 6:30 p.m. Her time in the licensed premises was, therefore, very limited; and everything alleged by the Petitioner's witnesses could easily have occurred without her being on the licensed premises to observe the alleged violations. Elizabeth Freeman stated that she went to the Copa Cabana for about an hour each day during the time alleged in the Notice to Show Cause. If her testimony that she saw no drugs used on the licensed premises is accepted as true that still does not resolve the problem that the amount of time that she spent on the licensed premises was quite limited. The violations testified to by the Petitioner's witnesses could have occurred during her absence from the licensed premises. Shirley Washington claimed that she was at the Copa Cabana every day from 4:30 p.m. to approximately 9:00 p.m. during the time pertinent to the charges in the Notice to Show Cause. She also testified that she would drink four to five six-packs of beer every day. That could easily diminish her powers of observation and, no doubt, did. None of the witnesses for the Respondent could describe the events of any particular day alleged in the Notice to Show Cause. Their testimony was rather of a very general nature and not date or time-specific. On the other hand, the Petitioner's witnesses were trained law enforcement officers and observers, who kept meticulous records of their participation in the events in question and who gave detailed testimony as to the time, date and circumstances of each event that took place on the licensed premises and later became the subject of the charges in the Notice to Show Cause. There is no evidence that any of the law enforcement officers were drinking or otherwise had impaired powers of observation during the pertinent times. The Respondent's witnesses' memories and resulting testimonies appeared very general at best. Concerning the issue of whether the witnesses might have some interest in how the case should be resolved, it should be pointed out that the Respondent's witnesses were all old friends of the Respondent. John Green has been a friend of the Respondent for 15 years. Dorothy Mouton is a co-worker of the Respondent's at Washington Junior High School and must be counted as a friend of the Respondent. Chris Dortch has apparently known the Respondent since he was a small child. Elizabeth Freeman has been his friend and customer for the past four years. Shirley Washington has been the Respondent's friend for 25 years. All of these people are not only friends of the Respondent, but apparently considered the Copa Cabana a sort of favorite resort or meeting place away from home and clearly wanted to continue the benefit of the close friendly relationship. The Petitioner's witnesses, on the other hand, were professional police officers, none of whom had any relationship with the Respondent or the Copa Cabana. There was no evidence that any of the officers were somehow targeting the Respondent for special prosecution efforts. It rather appears that the events which came to light, as described in their testimony and the Notice to Show Cause, were discovered through routine police operations. Further, Deputy Patterson testified concerning the issue of whether the Respondent exhibited proper diligence in supervising and maintaining surveillance over the licensed premises. He stated that when the Respondent sold' a beer, he would do so by receiving the money for the beer and then moving outside of the bar to the cooler, kept in the room near the bar, to obtain the beer and give it to the customer. The Respondent's witnesses, however, addressed this matter with differing testimony. John Green, stated that customers would get the beer themselves from the cooler and then go to the counter to pay for it. Dorothy Mouton stated that the Respondent would get the beer from the cooler himself, which required him to walk outside the area behind the bar into the area of the room, in which the bar was located, to the cooler, which would allow him to view the rear room and restroom area of the licensed premises. Chris Dortch testified that the Respondent stayed behind the counter during beer sales. Elizabeth Freeman stated that she had observed the Respondent move from behind the counter into the open area of the licensed premises in the act of getting a beer for a customer. Thus, the Respondent's witnesses' testimony as to this question was inconsistent in terms of rebutting the testimony of Deputy Patterson as to the manner in which beverages were sold by the Respondent, as that relates to the Respondent's physical position in the licensed premises and ability to see what activities transpired in the rear room, the area of the restroom entrance and the pool table. In any event, the foregoing analysis reveals that the testimony of the Petitioner's witnesses is more credible. It is concluded that that of the Respondent's witness, and the Respondent himself, show a lack of knowledge, clear memory, and consistency, at best, without reaching the question of whether any of the Respondent's witnesses deliberately falsified their testimony. Accordingly, the testimony of the Petitioner's witnesses, to the extent that it conflicts with that of the Respondent's witnesses, is accepted as more credible.
Recommendation Having considered the foregoing Findings of Fact and Conclusions of Law, the competent, credible evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED: That the Respondent, JIMMIE WILLIAMS, d/b/a Copa Cabana, be found guilty of the offenses set forth in Counts II and III of the Notice to Show Cause. It is further recommended that Count I of the Notice to Show Cause be dismissed. It is further recommended that the alcoholic beverage license held by the Respondent be revoked and that a civil penalty of $2,000.00 be assessed against the Respondent. DONE AND ENTERED this 26th day of January, 1990, in Tallahassee, Leon County, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of January, 1991. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 89-719 Petitioner's Proposed Findings of Fact 1.-6. Accepted. Accepted, but not as probative of the ultimate fact of the sale of rock cocaine by the Respondent, himself. Accepted, but not as probative of the ultimate fact of the sale of rock cocaine by the Respondent, himself. Accepted. Accepted. Accepted, but not as probative of any material issue presented for adjudication. 12.-16. Accepted, in that these proposed findings of fact describe the testimony of these witnesses. However, these witnesses have been determined to be not credible. 17. Accepted, to the extent that it is arc accurate description of the Respondent's testimony. Respondent's Proposed Findings of Fact 1.-4. Accepted. Accepted. Rejected, as subordinate to the Hearing Officer's findings of fact on the subject matter and as not Entirely in accordance with the clear and convincing evidence. 7.-9. Rejected, as subordinate to the Hearing Officer's findings of fact on the subject matter and hot in accordance with the clear and convincing evidence. Rejected, as not materially dispositive of the issues presented. Rejected, as subordinate to the Hearing Officer's findings of fact on the subject matter and not, itself, materially dispositive. Rejected, as not, .in itself, materially dispositive. Accepted, in part, but the evidence in this case does not delineate the extent of the premises owned or controlled by the Respondent, and to that extent, it is rejected. Rejected, as subordinate to tide Hearing Officer's findings of fact on the subject matter and as to it's purported material import. Rejected, as to its material import in relation to the remainder of Deputy Patterson's testimony. Rejected, as contrary to the clear and convincing evidence. Rejected, as subordinate to the Hearing Officer's findings of fact on the subject matter and not in accordance with the clear and convincing evidence. Rejected, as subordinate to the Hearing Officer's findings of fact on the subject matter. Rejected, as subordinate to the Hearing Officer's findings of fact on the subject matter and not being an accurate reflection of the overall sense of the witnesses' testimonies. Rejected, as subordinate to the Hearing Officer's findings of fact on the subject matter. Rejected, as being contrary to the greater weight of the clear and convincing evidence. Accepted, but not, itself, dispositive of material issues presented, except to the extent that it has not been proven that the Respondent, himself, offered any drugs for sale. Accepted. Rejected, as subordinate to the Hearing Officer's findings of fact on the subject matter and as not being, itself, dispositive of material issues presented. Rejected, as immaterial. Even if this is true, it does not overcome proof that the Copa Cabana club's operations constitute a nuisance. COPIES FURNISHED: Harry Hooper, Esq. Deputy General Counsel Department of Business Regulation 725 South Bronough Street Tallahassee, FL 32399-1007 Leo A. Thomas, Esq. Levin, Middlebrooks, Mabie, Thomas, Mayes & Mitchell, P.A. P.O. Box 12308 Pensacola, FL 32581 Leonard Ivey, Director Department Of Business Regulation The Johns Building 725 South Bronough Street Tallahassee, FL 32399-1000
Findings Of Fact Petitioner Eli Witt Company is a wholesale dealer in cigarettes in some eight states, including Florida. During the year 1976 and at the present time, Petitioner acts under the authorization of the Division of Alcoholic Beverages and Tobacco as an agent to buy or affix stamps pursuant to Section 210.05, Florida Statutes, and to collect and remit the cigarette tax to the Division after sale to various retailers in the State. Petitioner has some twenty-five branch offices located throughout the State who place orders for cigarettes with Petitioner on a daily basis. The cigarettes are invoiced by Petitioner to each branch and, upon arrival, the various branch offices affix the tax stamps upon the cigarette packages, primarily by means of a stamping machine. Each of Petitioner's stamping offices maintains its own records and files required reports, and is audited individually by employees of the Division. Each branch office is listed separately on a rider to the surety bond of Petitioner which is required under Chapter 210. Monthly checks are signed by each branch manager to remit tax collected to the Division. (Testimony of Hoyland) Since at least 1962, Petitioner had stamped cigarettes and collected cigarette taxes for the State of Florida. It had been allowed a discount as compensation for its services and expenses pursuant to Section 210.05 (3)(a), Florida Statutes, of 2.9 percent on the first two million cigarette packs stamped at each of its stamping locations. On March 1, 1976, the Division promulgated Rule 7A-10.25, Florida Administrative Code, which provided that a wholesaler who stamps cigarettes at more than one location would only be entitled to receive the maximum discount for a single agent doing business at a single location. Accordingly, although each of Petitioner's twenty-five stamping locations purchased more than two million stamps from the Division during the fiscal year July 1, 1976 through June 30, 1977, Petitioner retained the 2.9 percent discount as if it had done business at only one location. It filed a protest against the effect of the rule with the Division on July 1, 1976. A refund claim was filed with the State Comptroller on March 16, 1979, and denied on June 12, 1979. (Testimony of Hoyland, case pleadings, Exhibits 2- 3, 5) In 1977, the state legislature enacted Chapter 77-421, Laws of Florida, effective June 29, 1977, which provided in part in Section 8 thereof that: "Stamping locations approved by the division shall be responsible for computing the discount provided for each and every stamping location by ss. 210.05(3)(a), Florida Statutes . . ." The Division thereafter permitted discounts under the policy in effect prior to the promulgation of Rule 7A-10.25, but did not repeal the rule. On March 16, 1979, Petitioner requested the State Comptroller to refund the $64,800 paid under protest in fiscal year 1976-77 which represented the amount it could have retained as a discount if Rule 7A-10.25 had not been in effect. (Case pleadings, Exhibits 1, 4)
The Issue The issue is whether Respondent's permit as a retail tobacco dealer should be disciplined for the reasons set forth in an Administrative Complaint issued on May 6, 2014, by the Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco (Division).
Findings Of Fact Background Since 1998, Respondent has operated a business under the name of Thompson Cigars at 5401 Hangar Court, Tampa, Florida. It holds retail tobacco permit number 39-05470 Series RTPD (Permit), which authorizes the sale, at a retail level, of tobacco products, including cigarettes, cigars, and other tobacco products. See § 569.003(1)(a), Fla. Stat. It has no disciplinary history with the Division. Although the Permit authorizes the sale of cigarettes, Respondent sells only cigars and other tobacco products. The Division concedes there is no statutory or rule requirement that Respondent maintain records for the sale of cigars and other tobacco products to customers in Florida or out-of-state. Also, unlike cigarettes, there are no taxes on the sale of cigars. Except for periodic audits of purchase records to ensure that Respondent is purchasing products from a licensed wholesaler and paying taxes on those purchases, the Division conducts no other audits of its records. Cigars make up the bulk of Respondent's sales. Ninety- nine percent of sales are made through the internet, mail order catalogs, and telephone to customers in all 50 states. The remaining portion of its business consists of retail sales at two small retail locations in Tampa. Count I In September 2013, the Division was contacted by the Idaho State Tax Commission requesting that the Division obtain records of all sales by Respondent of tobacco products to Idaho residents from July 2008 through September 2013. Specifically, the Idaho State Tax Commission wanted the names, addresses, and permit numbers of all Idaho entities to whom Respondent sold or distributed tobacco products during that five-year time period, including copies of sales invoices for more than 70 individuals. According to a Division special agent, this was the first time the Tampa office had been asked to obtain records on behalf of another state. Chapter 210, Florida Statutes (2014), consists of two parts. Part I relates to taxes on cigarettes while part II relates to taxes on tobacco products other than cigarettes or cigars. Section 210.161, found in part I, authorizes the Division to examine the "books, records, and accounts of any permittee." Relying on section 210.161, and solely for the purpose of assisting the State of Idaho, on October 23, 2013, an agent presented Respondent's Director of Finance and Accounting, Darren Hurd, with a form entitled "Record of Inspection." The form directed Respondent to take the following action: You are required to provide records of all sales of tobacco products made to persons or business entities in Idaho for the period of July 1, 2008 until the present. The records must be produced to the Division no later than November 1, 2013. Please produce the requested records to C/O Special Agent Robert Jones [at the Tampa District Office]. Besides presenting the written form to Mr. Hurd, the agent explained to him why the request was made and the records that he should produce. The Record of Inspection is normally used by the Division in conjunction with a compliance audit. At hearing, the agent acknowledged this was not a compliance audit to determine if Respondent was operating pursuant to the law. Rather, the request was made to assist the State of Idaho. Florida Administrative Code Rule 61A-2.019, entitled Approved Forms, lists more than 200 approved forms used by the Division. The Record of Inspection is not on the list. Respondent contends the form is an agency statement of general applicability that requires the production of records for inspection. Because the form is not listed as an approved form in rule 61A-2.019, Respondent argues that the document is an unadopted rule that cannot be used in this case to compel production of the records. See § 120.57(1)(e), Fla. Stat. Assuming that the Division had authority to examine the records, the use of the form was unnecessary. This is because there is no statute or rule that prohibits the Division from orally requesting that records be produced for inspection. Therefore, reliance on the form was unnecessary, as is the resolution of the issue of whether the form is an unadopted rule. Upon advice of counsel, Mr. Hurd declined to produce any records citing privacy concerns for Respondent's out-of- state customers and the Division's lack of statutory authority to examine the records. Mr. Hurd noted that the sales records for customers contain personal information, including their name, address, birth date, telephone number, and credit card number. Besides the privacy issue, Mr. Hurd explained that over the last 17 years, the firm has sold tobacco products to literally "millions" of customers throughout the United States. There is no Division requirement that Respondent maintain records of these sales for state auditing purposes, and records are kept on an antiquated tape system that is periodically purged. Mr. Hurd added that even assuming the relevant tapes exist, it would be an "overwhelming" burden and take countless man hours for the small firm to manually restore backup tapes and attempt to extract records of retail sales (out of millions of customers) for a particular time period for one state. Respondent's bottom line is that the records do not exist, and even if they did, the Division lacks authority to request them. On the other hand, the Division maintains that if Respondent keeps records of sales for any purpose, even non- regulatory, it must make a search, no matter how extensive, to determine if the Idaho records exist. If they do, it must produce them; if they do not exist, the exercise in collegiality with Idaho ends.1/ When the records were not produced, the Division issued an Administrative Complaint charging Respondent with violating section 210.161. A Division witness admitted that the statute "is kind of vague" on whether the Division can legally demand the records, and to that end, one of the purposes of this proceeding is "to try to determine if" it has that authority. Thus, Count I essentially poses the question of exactly how broad the Division's inspection authority is. Count II While pursuing the records, the agent took steps to verify whether there is an issue regarding "an undisclosed interest in the ownership [of Respondent]," that is, to ascertain whether there are owners of the corporation that have not been disclosed to the Division. This is a routine verification made during enforcement investigations. As confirmed by the agent at hearing, the focus of this inquiry is on undisclosed corporate owners rather than corporate officers. To make this determination, the agent compared the officers, but not owners, listed in Respondent's 2013 Annual Report filed with the Division of Corporations with those names shown on its 1998 permit application. The Annual Report lists a corporation's officers, directors, and registered agent, but not its owners or shareholders. It named Carlo Franzblau, Alix Franzblau, R.M. Franzblau, Jo Z. Franzblau, and Colm Conway in the Officer/Director Detail section of the report. On the other hand, the 1998 permit application listed as owners Carlo Franzblau, Jo Franzblau, Robert Franzblau, and Alix [D]orr. R.M. Franzblau (listed in the Annual Report) and Robert Franzblau (listed in the permit application) are the same individuals. Alix Franzblau, a female, was married when the 1998 application was filed and used her married name "Dorr." She is now single and uses her maiden name, Franzblau. Mr. Conway has no direct or indirect financial interest in the corporation and is not involved in the decision-making process. He was listed in the Annual Report only because he currently serves as Respondent's vice president-finance and chief financial officer. In sum, Respondent is and always has been a family-owned corporation that disclosed all persons having a direct or indirect financial interest in the business. Count II alleges Respondent violated section 569.003(1)(b) by "fail[ing] to submit to the [Division] a sworn application" stating that Colm Conway and R.M. Franzblau had a direct or indirect financial interest in the corporation. Because it later learned that Robert Franzblau and R.M. Franzblau are the same individuals, the Division now contends that the omission of Mr. Conway's name is the only statutory violation. Section 569.003(1)(b) requires that a corporation applying for a new permit file a sworn application "set[ting] forth the names and addresses of the principal officers of the corporation." Because a new application is not at issue here, and the statute requires disclosure of the principal officers only, section 569.003 cannot support the charge. Assuming arguendo that it does, there has been no change in corporate owners since the 1998 application was filed. Finally, the Division admits that there is no rule or statute that specifically requires a corporate licensee to file the updated information referred to in Count II.2/
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Division of Alcoholic Beverages and Tobacco enter a final order dismissing the Administrative Complaint. DONE AND ENTERED this 29th day of May, 2015, in Tallahassee, Leon County, Florida. S R. ALEXANDER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 29th day of May, 2015.
The Issue The issue for consideration in this hearing was whether the Department of Environmental Regulation's Amended Rule 17-105, F.A.C, Smoking Policy, was properly implemented and is a proper exercise of delegated legislative authority.
Findings Of Fact At all times pertinent to the issues herein, the Petitioners were employees of the Department. Petitioner Huck was employed in the Tallahassee headquarters and the other Petitioners were employed elsewhere. GENESIS The Florida Legislature, in 1985, enacted Chapter 386, Part 11, Florida Statutes, The Florida Clean Indoor Air Act, (Act), under the authority of which, in February, 1986, the Department promulgated its own "Smoking Policy" incorporated in Rule 17-105, F.A.C.. This rule prohibited smoking in all Department facilities except in those areas specifically exempted as designated smoking areas. These included private office areas and employee lounge areas as well as the first floor cafeteria. Dale Twachtmann was appointed Secretary of the Department in January, 1987. At the very beginning of his incumbency, he became aware of the ongoing controversy over smoking within the Department and concluded that a management decision to put the matter to rest was called for. He determined, from the information made available to him, that even before his arrival, the headquarters building in Tallahassee had serious air handling problems due partially, at least, to activities that had previously been carried on in parts of the building. A previously operating print shop and laboratory were moved shortly after his arrival. He could not determine how much of the "bad" air was attributable to each program. THE RULEMAKING PROCESS Mr. Twachtmann also determined that smoking within the building was considered, by a significant number of employees, to be a part of the air problem second only in seriousness to the laboratory. When the lab was moved, those proponents of clean air struck upon smoking as their bete noire. No studies of air quality were done during Mr. Twachtmann's tenure, however, nor had anything been done to curb smoking except for the promulgation of the original Rule 17-105. The controversy over smoking within the building continued, however, culminating in the drafting and circulation, in December, 1988, by an employee, Mr. Billy Kahn, of a petition to totally ban smoking in the facility. This petition was signed by approximately 275 of the 500 to 600 employees in the Tallahassee office. Though the Secretary did not recognize all the names thereon, he did recognize enough to satisfy him of its validity, notwithstanding a few irregularities on it, and he was influenced by it to do something. It reinforced his own observations of the smoking situation gathered while going about the building. For example, though he never noticed smoke in the halls, nor did he ever see anyone smoking in open areas, he would find some heavy and unpleasant odors in some of the break rooms and the lunchroom where smoking was allowed. Mr. Twachtmann thereupon decided, as Department Secretary, to take action which would resolve the smoking issue once and for all. He decided to initiate the rulemaking process with a view toward, if and after all legal requirements were met, banning smoking completely in all Department facilities and vehicles. Part of the process, which called for workshops to advise all employees of the proposed action and to solicit employee input, included consideration of alternative solutions to banning smoking. The process also included consideration by the Secretary of the substantial information available on both sides of the issue which was provided to him by his staff and by experts whose opinions on the matter were solicited. Much of this information was presented by advocates of both positions at a series of senior staff meetings held in early 1990 at which the senior staff voted unanimously to proceed with rulemaking to amend the smoking policy in Rule 17-105 to ban smoking. At this point, no studies had been made of air quality within the Tallahassee headquarters building. Nonetheless, after the vote was taken to amend the rule, in May, 1990, Mr. Shearer prepared and dispatched a memorandum to Department staff, referring to the "decision" by the Secretary to ban smoking from the headquarters building. This memo solicited personnel participation in the rulemaking process and instructed anyone who had any input to coordinate it through their supervisors. The task of drafting the amended rule was given to Mr. Peyton, the chief administrator of the Department, who, in turn, delegated the task initially to his counsel, Ms. Costas. Mr. Peyton was not told, when assigned his task, that he could not change the substance of the existing rule. Because Mr. Peyton was not satisfied with the draft of the proposed amendment prepared by Ms. Costas, he reassigned the task to one of his deputies, a nonlawyer, Ms. Drew. He instructions to her were to cut it down and make it simple, but to reflect the Department policy to ban all smoking in Department facilities and vehicles. The latter was an afterthought subsequent to Mr. Peyton's receiving comments regarding the smell in the Department's vehicles. After the draft of the rule was prepared, workshops to address the proposed rule were scheduled, noticed in the Florida Administrative Weekly, (F.A.W.), and conducted in various locations throughout the state. The published notice indicated discussion would include the need, if any, for the rule, and the proposed terms thereof. Instructions governing the conduct of the workshops and the method of handling employee comments were disseminated by Ms. Costas to the Deputy Assistant Secretary in each district. Those employees who held opinions on the need for or terms of the proposed rule were to be instructed to forward their comments in writing to the Department headquarters in Tallahassee. Hearings were held throughout the state in late June and early July, 1990. The comments received by Mr. Peyton, who conducted the Tallahassee workshop, and those submitted from elsewhere within the Department, were consolidated and summarized by Ms. Costas and thereafter forwarded, through Peyton, to the Secretary. Comments in writing were received from members in the Central, Northeast and Northwest Districts and orally from the Southeast District. There is no record of any comments having been received from any other district. All comments received were forwarded to, discussed with, and considered by the Secretary personally. Consistent with appropriate rulemaking procedure, a hearing on the rule was scheduled to be held by the Secretary regardless of whether there was a request therefor or not. In the interim, on June 20, 1990, copies of the hearing notice, the rule, the economic impact statement and the Statement of Facts and Circumstances Justifying the Proposed Rule were sent to the required agencies for coordination. Thereafter, based on the input received from employees and other pertinent sources, the rule was changed and notice thereof appropriately published in the F.L.W.. The secretarial hearing was held as noticed and did not result in any input sufficient to cause delay in the process. On July 27, 1990, the rule was certified to the Secretary of State by Secretary Twachtmann. MATTERS RELATING TO THE NEED FOR THE RULE There has been and continues to be discourse in the medical and lay communities on the harmful effect of secondhand tobacco smoke. While few disagree that the direct inhalation of tobacco smoke by smokers has harmful effects on the health of those individuals, controversy is still rampant as to what effect, if any, the forced inhalation by nonsmokers of tobacco smoke generated by smokers in the area, has on the health of these passive exposees. It is well recognized that chemicals shown to be carcinogens are found in tobacco, (cigarette) smoke. Responsible medical studies have also shown a higher incidence of lung cancer in persons exposed to second hand cigarette smoke than in those who have routinely been free of it. A secondary effect is a higher incidence of pulmonary disease and a detriment to lung development. "Secondary smoke" is that smoke generated by burning tobacco between puffs and that smoke exhaled by smokers. There is substantial evidence that the inhalation of secondary smoke for 8 or 9 hours per day over time increases the risk of cancer in an individual so exposed since tobacco smoke contains known carcinogens. Dr. Dennis Williams, a cardiologist accepted by the parties as an expert in the effect of tobacco on human health, is not aware of any showing of increased danger there in the workplace as a result of secondary smoke. However, studies have conclusively shown such an increased danger in the home and to children. Increased levels of nicotine and cotenine have also been observed in the blood and urine of nonsmokers in a workplace where smoking is permitted. Cotenine is a known carcinogen and nicotine, while not, itself, a carcinogen, is an addictive substance. The tar from cigarette smoke contains thousands of cancer causing chemicals. Admittedly, some of these can be found in substances other than cigarette smoke. However, lung cancer is now the leading cause of death among men and women in the United States, and 90% of all lung cancer deaths are due to the use of cigarettes and other tobacco products. Considering all the above, Dr. Williams feels there is no reasonable alternative to concluding that secondary smoke creates a health hazard to the nonsmoker who is frequently exposed to it. It is so found. It is also found that limiting smoking to a closed room does not protect the nonsmoking worker. Smoke quickly diffuses, through the ventilating system, throughout the total air of the facility. Cigarette smoking is a major cause of indoor air pollution and constitutes a major exposure of the worker to a carcinogen. Nonsmokers in the workplace have been found to have metabolized nicotine and cotenine in their urine which could have come only from secondary smoke to which they have been exposed there. The 1986 Report of the Surgeon General of the United States on the Health Consequences of Involuntary Smoking supports the conclusions drawn by Dr. Williams both as to the adverse health effects of secondary smoke and the ineffectuality of artificial separation, within the same air space, of smokers and nonsmokers. This report, along with other supporting information, was considered by Mr. Peyton during the rulemaking process and reported to Secretary Twachtmann prior to final decision. SPECIFICS The poor quality of air in the Department's headquarters building in Tallahassee has been known for some time. Studies of the building's air quality in both 1987 and 1988, while not dealing with the issue of cigarette smoking, both recognized the problem and recommended solutions. The building's ventilation is accomplished through two air handlers on each floor which re- circulate heated or chilled air, depending on the season. Interior air lost through doors and exhaust fans is replenished by outside air brought in by the air handlers. Approximately 88% of the air in the building at any time, however, is re-circulated. In very cold weather, when the introduction of cold outside air must be restricted, that percentage is increased. Any tobacco smoke in the air is, therefore, re-circulated again and again on the floor where it originates. Consequently, regardless of physical separation, nonsmokers sharing a ventilation system with smokers will be exposed to their smoke. In order to reduce that risk, internal air would have to be expelled and more outside air brought in. This cannot be done without a major modification to the building structure and a replacement of the existing air handling system. This is neither reasonable nor economically feasible. In order to reduce the air pollution problems within the building, the Department relocated two of the major polluting functions; the laboratory and the print shop. All these factors were known to and considered by the Department during the rulemaking process. Previous efforts were also made to accommodate the desires of both smoking and nonsmoking employees. Until the adoption of the total ban, smoking was allowed in private offices, in the break room on the fourth floor, and in the employee deli on the first floor. Since smoke concentration in the deli was heavy, many nonsmoking employees found it either unpleasant or impossible to eat there. Consequently, business and the resultant income therefrom was lost. On the other hand, since the ban on smoking, many smokers who formerly patronized the facility during their breaks no longer use it, with a resultant loss of business and income. The use of private offices for smoking was equally unsuccessful since not only were nonsmokers put off from entering either for business or other purposes, but smoke and the smell of smoke escaped through the ventilation system and open doors, and the odor of smoke, so unpleasant to many, would linger in an office long after the occupant thereof was gone. Taken together, the information available on the subject indicated that the only way to safely allow smoking in the building was to limit it to an area that was independently ventilated. This would require an independent access to the outside for the exhaust of old air and the re-supply of fresh air. Only one area in the building ever had an independent air exhaust, and that system, formerly in the laboratory, has been removed and is now being used in the Jacksonville district office. The former lab space is now an open office. As was found previously, physical modification of a currently operational building to accommodate the desires of a portion of the employee force is neither required nor justified. The issue regarding vehicles is somewhat different. The Department operates a fleet of state-owned vehicles, access to which is available to all Department employees. These vehicles are not separated into groups reserved for smokers or nonsmokers. Department employees are sometimes required to travel in Departmental vehicles. Some trips are of several hours duration, and while so occupied, the employees are on Department business. The vehicles also may be used, under proper authorization, to carry individuals other than state employees. Nonsmoking passengers, whether employees or not, may be in the position of riding with another passenger who smokes or in a vehicle which has previously been occupied by a smoker. There have been complaints regarding both situations, with the latter relating primarily to the objectionable smell left in the vehicle by the former smoking occupant. Dr. Williams opined that occupying a vehicle with another, smoking, individual poses the same risk to the nonsmoker's health as does occupying a room with such an individual. However, the residual odor of smoke left in a vehicle by a previous smoking passenger, while offensive, normally is not harmful. It is so found. All these factors were considered by the Department during the rulemaking process. The Department has taken the position that when Departmental vehicles are occupied by its employees, the vehicles are the employees' assigned workplace and individuals are, therefore, afforded the protection of the Act. OPERATION AND EFFECT Penalties for violation of the rule are incorporated therein and provide for a fine of $100.00 for the first violation, and of $500.00 for each subsequent violation in addition to discipline in accordance with the provisions of Chapter 17-130, F.A.C., the Department's disciplinary rule. Those provisions for fine are taken directly from the terms of the Act, Section 386.208, Florida Statutes. The disciplinary rule previously mentioned, (Section 17- 130.300(7)(b)2, F.A.C.), makes it a violation to smoke in a restricted area, an area in which smoking is prohibited. Penalties are outlined in the rule for the various violations which might occur, and each employee is provided with a copy of that rule upon employment with the Department. The Department claims it incorporated the fine provisions of the Act into its amended rule to "reference those disciplinary actions what would be involved" as a result of a violation of the rule and that they are informative only and do not create any additional disciplinary rules. This may be so, but any provision for discipline of an employee for violation of the terms of an agency rule should be incorporated in the agency's employee discipline rule to which reference is made in the instant rule. OTHER PROBLEMS Petitioners have objected to the use of the term, "right" in the amended rule which refers to the objection of nonsmokers to the effects of having to work in closed areas with smokers. Petitioners urge that the Department has sought to create and utilize a new "constitutional" right and that such action is unlawful and unsupportable. A thorough review of all the evidence presented in relation to the promulgation of this rule and its predecessor 1986 rule clearly demonstrates that the use of the term, "right" was no more than an in-artful word choice and in no way dispositive of the smoking issue. To be sure, the Legislature has, by implementation of the Act, encumbered the freedom of the smoker to engage in his passion in a public place, absent an affirmative designation of a smoking area. The use of the term, "public", does not necessarily mean only open to the general public. A building is public if it is owned or operated by a governmental agency. Here, the Department's use of the word, "right", in its rule is no more than a recognition of the differences of opinion which separate the ranks of the smoker and nonsmoker and a recognition of the proposition that the interests of one are as important as are those of the other. The Petitioners have also argued that in its implementation of the amended rule, the Department has denied them due process, specifically referring to the May 8, 1990 memorandum, and the participation in the rulemaking process of Ms. Drew, who was a signatory to the anti-smoking Petition solicited and presented by Mr. Kahn. In his memo, Assistant Secretary Shearer indicated that, "...a decision ha[d] been made .... " to ban smoking, and Petitioners claim that that "decision" having been made, the entire subsequent rulemaking process was a sham. Again we see what appears to be, in light of all that followed, no more than in-artful phraseology to announce the recognition of a Departmental problem and the initiation of a process designed to correct that problem. Admittedly, the use of that phrase raises a spectre of improper influence and a closed mind on the part of the Department hierarchy. However, the testimony of the principals, Secretary Twachtmann and Assistant Secretary Shearer, as to their intent from the beginning of the process, and the uncontroverted testimony regarding the openness of the succeeding activity toward the ultimate determination of a need for and the drafting of the proposed rule, clearly dispels any shade of impropriety. The process was conducted in the open. Employee comment was solicited and several forums were employed in which these comments, pro or con, could be made known to the Secretary. Inquiry was solicited and none who now object to the rule either asked questions or made recorded comment at the time. Petitioners have not shown by any definitive evidence of record, that any interested party who wished to object was prevented from doing so or dissuaded from negative comment by fear of reprisal. To the contrary, the evidence clearly demonstrates that all required notices were published, and that management went far beyond that which was required to insure the opportunity for fair comment and to, as best as possible, guarantee the maximum available input to the Secretary before the final decision was made. As for the participation of Ms. Drew in the process, the evidence shows that she is Mr. Peyton's deputy. When Mr. Peyton received Ms. Costas' draft of the proposed amended rule and was dissatisfied with it, he requested Ms. Drew, with Ms. Costas, rework it. His guidelines were to cut excessive wordage and make it simple. The operating thesis was also simple and left little room for interpretation. There is little risk that Ms. Drew, or anyone else, could have, in this instance, gone beyond the basic instructional premise upon which she was to work because of her own feelings about the subject matter. The lines were simply drawn on this issue. There were those who favored allowing smoking and those who favored abolishing it. To claim that one who supported abolition could not, thereafter, work on a rule to bring about that end is unrealistic and inappropriate. Petitioners also claim that the Department failed to provide a statement of data and methodology with its Economic Impact Statement, (EIS). Review of the EIS filed with the Joint Administrative Procedures Committee, (Respondent's Exhibit K), reveals that it contains the required statement which appears to demonstrate that the agency's methodology for information collection was appropriate. There was no evidence presented by Petitioners to demonstrate to the contrary. Petitioners further claim that the Department was not the appropriate agency to take the action regarding smoking, assuming, arguendo, such action was appropriate. The Act, which formerly provided that the government entity "responsible for the management and maintenance" of a government building should "implement" the provisions of the Act, was amended in 1988 to require that agency only to report observed violations of the Act to the Department of Health and Rehabilitative Services. In this case, the management and maintenance of Departmental buildings is accomplished through contracts entered through leases on the buildings let through the Department of General Services, (DGS). Petitioners claim that as a result, the rule, if appropriate, should have been promulgated and implemented by DGS. Petitioners overlook the fact that the Department is ultimately responsible for the headquarters building and the activities therein, and is the major employer therein. Petitioners raise the issue that the Department should have, under the Act, designated a smoking area since it claims to be the agency charged with enforcing the Act. This claim presupposes that the Act requires a smoking area be designated in all buildings where smoking is otherwise regulated. Such is not the case. Section 386.202 specifically noted that the Act shall not be interpreted to require the designation of smoking areas. The Department has construed the Act to indicate that as the employer, it implements smoking policy in its facilities. This interpretation conforms to that of other state agencies, including the Department of Education, the Department of Transportation, and the Division of Administrative Hearings, all of which have implemented smoking policies in their facilities. The Department's interpretation appears to be correct, even though different agencies than those listed have provided for separate smoking areas.
The Issue The issue in this case is whether Petitioner, a licensed distributor of tobacco products, was required to pay an excise tax and surcharge, which the state levies on specified tobacco products, when it regularly brought into Florida shipments of a tobacco-containing product marketed as a cigar wrapper and known as a "blunt wrap."
Findings Of Fact At all relevant times, Petitioner Brandy's Products, Inc. ("Brandy's"), was a wholesale distributor that supplied more than 2,000 different products to retailers such as gas stations and convenience stores. Among these products were cigarettes, which Brandy's was authorized to sell pursuant to a valid, current permit, and other "tobacco products" besides cigarettes, in accordance with a separate distributor's license, numbered 66-00115. The state of Florida levies an excise tax and a surcharge upon tobacco products. A distributor becomes liable to pay these impositions, e.g., when it brings such goods into the state, or when it ships or transports tobacco products to retailers in the state. Respondent Department of Business and Professional Regulation ("Department" or "DBPR") is the state agency authorized to administer and enforce the laws relating to the taxation of cigarettes and other tobacco products. The following "tobacco products" are taxable under Florida law: loose tobacco suitable for smoking; snuff; snuff flour; cavendish; plug and twist tobacco; fine cuts and other chewing tobaccos; shorts; refuse scraps; clippings, cuttings, and sweepings of tobacco, and other kinds and forms of tobacco prepared in such manner as to be suitable for chewing; but "tobacco products" does not include cigarettes, as defined by s. 210.01(1), or cigars. § 210.25(11), Fla. Stat. (defining "tobacco products")(emphasis added). At all relevant times, Brandy's sold a product that is marketed as a cigar wrapper (or rolling paper) and known colloquially as a "blunt wrap." A blunt wrap looks like this1/ (except for the color, which in reality is a shade of brown): Tobacco is one of the raw materials used to manufacture the blunt wraps at issue, which consequently contain tobacco as an ingredient. The dispute at the heart of this case is whether blunt wraps fall within the definition of "tobacco products" set forth above, as the Department argues, which would make them taxable, or outside of that definition, as Brandy's maintains, which would place blunt wraps beyond the reach of the taxing statutes. The Department's position hardened in the first half of 2009 after a period of internal discussion triggered by Congress's enactment of legislation which expanded the Internal Revenue Code's definition of "roll-your-own tobacco" to include tobacco-based wrappers for cigarettes or cigars, thereby subjecting blunt wraps purchased after March 31, 2009, to taxation at the federal level.2/ Although the Florida Legislature had not similarly amended the relevant statutory definition of "tobacco products" (and has not done so as of this writing), the Department decided that blunt wraps are a form of "loose tobacco suitable for smoking" and thus taxable. The Department declared that July 1, 2009, would be the effective date of its new policy, and it began assessing the excise tax and surcharge on purchases of blunt wraps occurring from that day forward.3/ The Department did not adopt a rule reflecting its decision to treat blunt wraps as a taxable tobacco product, nor did the agency give any official notice to licensed distributors such as Brandy's that the state would start taxing blunt wraps on July 1, 2009. Brandy's had purchased blunt wraps for sale to customers in Florida for some years before July 1, 2009, but during that time had not, in connection with such transactions, remitted to the state any amounts for the excise tax and surcharge on tobacco products. This was because, until July 1, 2009, the Department had never applied the term "tobacco products" as defined in section 210.25(11), Florida Statutes, pursuant to an understanding that it includes blunt wraps. Brandy's, which was unaware of the Department's expansive reinterpretation of section 210.25(11) in 2009, continued doing business after July 1 of that year just as it had before that date. Consequently, Brandy's did not remit to the Department any amounts for the Florida excise tax and surcharge on tobacco products based on purchases of blunt wraps during the two-year assessment period at issue, from July 7, 2009, until August 2, 2011. DBPR routinely audits licensed distributors of tobacco products such as Brandy's. At regular, six-month intervals, an auditor conducts an on-site review of the licensee's books and records pertaining to taxable purchases, comparing the documents to the licensee's tax returns. During the assessment period, Brandy's never produced records showing purchases of blunt wraps because Brandy's reasonably believed such purchases remained nontaxable. The auditors never asked to see records relating to blunt wraps, which would have provided Brandy's some notice, at least, of the Department's new policy. The evidence does not support a finding that Brandy's knowingly withheld or concealed relevant information from the auditors. Unbeknownst to Brandy's, sometime in 2011 or 2012 the Department obtained records from an out-of-state company called National Honey Almond ("NHA"), a supplier of Brandy's. The NHA records included invoices showing the quantities and purchase prices of blunt wraps that NHA had delivered to Brandy's from July 2009 through September 2011. The state excise tax and surcharge had not been paid on these purchases. Using the NHA invoices, the Department calculated that sums totaling $15,911.60 in excise taxes and $38,187.72 in surcharges were due from Brandy's on its so-called "untaxed purchases" of blunt wraps from NHA. Together with interest ($12,358.98) and a penalty of $5,409.93, the Department figured that the total liability was $71,868.23. By letter dated March 1, 2013, the Department asked Brandy's to remit payment of this amount within 10 days after receiving the letter. This letter gave Brandy's its first notice that the Department considered blunt wraps to be a taxable tobacco product, but it failed to inform Brandy's that the assessment could be contested. Nevertheless, Brandy's promptly requested an "informal hearing" and tendered a token payment of $1,500 to show good faith. Following that, the Department——without first conducting a hearing——sent Brandy's a letter dated April 4, 2014, in which the Department's "final request" for payment of $70,368.23 was made. Once again, the Department neglected to advise Brandy's of its right to challenge the demand. Brandy's then filed a written protest of the assessment, by letter dated April 11, 2014. This led to an audit assessment conference on May 13, 2014, at which the Department stuck to its guns. On May 19, 2014, the Department issued its "Notice of Decision and Final Audit Assessment," which demanded that Brandy's pay $70,368.23 within 10 days. The Notice informed Brandy's of its right to request a judicial proceeding or administrative hearing to contest the assessment. Brandy's timely initiated this administrative proceeding.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation enter a final order setting aside the assessment against Brandy's for the excise taxes and surcharges on tobacco products that the Department alleged were due, together with interest and a penalty, on purchases of blunt wraps that Brandy's had made between July 7, 2009, and August 2, 2011. DONE AND ENTERED this 24th day of February, 2015, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 24th day of February, 2015.
Findings Of Fact At all times material to the allegations contained herein, Respondents held alcoholic beverage license No. 64-00029 for the Palatka Blue Diamond, located at 424 North 11th Street, Palatka, Florida. Alphonso S. Junious is a beverage investigator with the Fort Lauderdale office of the Division of Alcoholic Beverages and Tobacco and has been so since August 1971. [During that period of time, he has investigated seven cases for Petitioner which involved marijuana.] He has had considerable specialized training in drug identification, having been a drug and alcohol specialist while in the military, and since his discharge has taken several courses in drug identification and detection, including 80 hours training with the U.S. Drug Enforcement Agency. He is able to identify marijuana by sight and smell based not only on his formalized training and experience as an adult, but also from the fact that he used it when he was younger. On May 12, 1982, pursuant to instructions given him as a part of an investigation into Respondents' premises, he entered the Palatka Blue Diamond, went to the bar and ordered a beer. Leroy Lane and Queen Ester Simmons, whom he subsequently identified by name, were working behind the bar, selling drinks. While there, he noticed the smell of marijuana smoke and also saw people in the bar area making what appeared to him to be marijuana cigarettes. He identified them from the way they were rolled; a method consistent with what he recognized as hand-rolled marijuana cigarettes. The cigarettes were small and had crimped ends. The smokers utilizing these cigarettes were at the bar at the time in plain view of the bartenders, neither one of whom made any effort to stop this course of conduct. On May 14, 1982, he again went to the Palatka Blue Diamond and stood at the bar. The same two bartenders were there. He saw an unidentified black female sitting at the bar roll what appeared to him to be a marijuana cigarette. The paraphernalia with which she was making the cigarette was sitting out on top of the bar, and the bartenders were standing approximately 6 to 8 feet away. During the entire time he was there, he did not hear either bartender attempt to stop the young lady from making the cigarette. By the same token, he did not see her smoke it, either. He did, however, observe others smoking what appeared to be, and smelled to him like, marijuana while walking about the barroom and in the disco room. Some of these individuals could have been in view of the bartender, but the witness does not know if they were or if the bartenders in fact saw anything improper. Mr. Junious again was at the bar on May 16, 1982. At that time he observed a black male, subsequently identified to him as Luke Simmons, tending bar. Luke Simmons is Willie Lee Simmons, Jr., son of the licensee and Respondent Willie Lee Simmons. On this occasion, Officer Junious did not observe any marijuana being smoked, but he did observe Luke Simmons make sales of small manila envelopes to patrons at the bar. Junious could not hear the conversations regarding the sales and does not know what was in the envelopes sold to other people. However, somewhat later that day, he went over to Luke and asked Luke for a "nickel bag." In return, he was given a small manila envelope, folded and sealed at both ends, for which he paid $5. This bag closely resembled the bags he saw Luke Simmons sell to others. Junious did not look into the bag while on the premises, but it was subsequently turned over to the evidence custodian of the agency and thereafter properly identified as marijuana. Junious went back to the Palatka Blue Diamond on May 18, 1982, and again Luke Simmons was tending bar. Junious approached him and engaged him in general conversation. Again this evening, he saw several persons smoking what appeared to be hand-rolled marijuana cigarettes, and the smell of marijuana was prevalent both in the bar and in the disco room. Again, as in previous occasions, the individuals smoking these hand-rolled cigarettes were in plain view of the bartender had he looked, but Junious did not see or hear Luke Simmons attempt to stop any of this conduct. At approximately 9:30 that evening, Junious again approached Luke Simmons and asked for a "nickel bag" for which he paid Luke the sum of $5. In return, he got a similar manila envelope as on the previous occasion which was subsequently determined by the Florida Department of Law Enforcement crime lab in Jacksonville to contain marijuana. It was not until August 13, 1982, that Officer Junious went back to the Palatka Blue Diamond. When he entered on this occasion, he sat at the bar and ordered a beer. The bartender this time was a black female subsequently identified as Linda Simmons, who is not related to either Respondent. On this occasion, Linda Simmons was playing a card game which the witness called "Black Jack" with a black male at the bar. They appeared to be betting $1 per hand. Junious asked Linda if he could join the game and himself played two hands during which he bet on each hand and lost both times for a total of $2. Later that evening, he saw another black male subsequently identified as Rudy Swindler selling small manila envelopes similar to those he had purchased earlier in the year. He observed Linda in a conversation with Rudy and heard her try to convince him to give her three marijuana cigarettes. Rudy refused to do so, but offered to sell her a nickel bag. She did not offer to buy. Throughout this entire transaction between Swindler and Linda Simmons, at no time did Linda Simmons, acting in the capacity of an employee of the Respondent, make any effort to prevent Swindler from selling what both recognized as marijuana. Junious went back to the bar on August 26, 1982. When he entered this time, he immediately saw a black female identified as Marian MacRae and otherwise known as "Mulu," selling the similar type of manila envelope. Junious personally observed Mulu sell at least three while in the disco, but because of that location it is possible that the bartender, Linda Simmons, might not have seen her engaged in this type of conduct. This evening, Junious smelled what to him was marijuana pervading the establishment, but he cannot conclude that he actually saw anyone else smoking, selling, or in any way using that substance. When Officer Junious went into the bar again on September 3, 1982, he observed that the odor of marijuana was very heavy. Linda was the bartender along with Leroy Lane, and Junious saw people sitting at the bar smoking, as well as in other areas of the premises. The bartenders were between 4 and 6 feet away from people who were smoking. These cigarettes, smoked by these people sitting at the bar, were small, apparently hand-rolled, and twisted at the end; and Junious's training leads him to conclude that these cigarettes are usually marijuana. Another black female whose name is unknown came in and started tending bar. After this individual became the bartender, Officer Junious noticed an unidentified black male standing at the bar, selling the manila envelopes. This individual was close enough to Junious (directly opposite him) so that Junious could see what was going on. On this evening, he saw this individual make at least three sales of manila envelopes which he took from a cloth bag with a drawstrng. On this same date, there were at least five people selling these manila envelopes, including Marian MacRae, in the bar. Junious came back to the Palatka Blue Diamond on September 23, 1982. On this occasion, he did not observe anyone selling the manila envelopes, but he did see people sitting in the bar smoking what appeared to be, and smelled like marijuana. Linda Simmons and Leroy Lane were the bartenders that night, but it is quite possible that because of the fact that the smokers were in the disco, which was not readily observable from the bar, both Lane and Simmons might not have seen the smoking. However, in Junious's opinion, the smell of marijuana was so prevalent that it would have been difficult for them not to notice it. Junious again returned to the bar on September 24, 1982. As he walked up to the bar door from the outside, he saw a barbecue grill and a black male identified as "Short Man" tending the barbecue. Junious saw Short Man, otherwise identified as "Dunnell," selling the manila envelopes openly while working at the barbecue and while Junious was standing there talking to him. In fact, Junious himself bought a "nickel bag" from Dunnell, paying the $5. This bag was subsequently identified as containing marijuana. The barbecue was approximately 15 feet from the front door at the time that the sale was made. After leaving Dunnell, Junious went to his car and placed the manila envelope he had just bought inside. Then he went back to the Palatka Blue Diamond and, when he entered, he saw Marian MacRae again selling the manila envelopes both inside and outside the bar. While inside, she spent the majority of the time in the disco; and Junious later saw her seated with some other individuals smoking what appeared to be, and smelled like, marijuana. Junious noticed this when he passed her and went to sit at the next table to her, asking to buy from her a nickel bag. When he did this, she opened a black purse from which she took a small manila envelope, and he paid her the sum of $5. This envelope was subsequently identified as containing marijuana. When he came back into the bar after having put that manila envelope in the trunk of his car, he stood at the west end of the bar, from which he could see what was going on in the disco. He saw a black male, subsequently identified as "Quiller Elkins," shooting pool. This individual had a blue cloth bag with a drawstring in his pants pocket. When individuals would come up to him, he would take out the bag and make sales of small manila envelopes from it. Junious personally observed three of these sales being made before he went up to Elkins and commented on his pool skills. He also asked Elkins for a nickel bag, which he subsequently bought from Elkins for $5. This entire transaction was openly conducted, and Linda and Leroy were tending bar at the time. Because of the location of the pool table, he cannot be sure that this sale was observed. On October 15, 1982, Officer Junious went back to the Palatka Blue Diamond and found Linda Simmons and Leroy Lane again bartending. On this occasion, he observed the smoking by various people of what appeared to be, and smelled to be, marijuana, but saw no sales. The smokers were walking around inside and outside the bar, and others were inside the disco area. On no occasion did he see or hear the bartenders make any attempt to stop the patrons from smoking these cigarettes. When Junious went back to the Palatka Blue Diamond on October 22, 1982, Linda Simmons and Leroy Lane were again tending bar. On this occasion, Juniors did not see any sales of manila envelopes, but he saw people smoking what appeared to be, and smelled to be, marijuana; and again, as on previous occasions, in his opinion, the bartenders could see them smoking, but made no effort to stop them. His last visit to the Palatka Blue Diamond was on October 30, 1982, when again Linda Simmons and Leroy Lane were tending bar. On this occasion, he saw patrons smoking, but saw no sales. Again, as on previous occasions, he recognized the smell of the burning substance and the appearance of the cigarettes being smoked was that of the hand-rolled marijuana cigarette. On this occasion, while the bartenders could have seen what was going on, he does not know if, in fact, they did. In any case, no one in authority at the bar said anything about the smoking to any of the patrons. None of the cigarettes observed being smoked by Officer Junious nor the smoke, which he identified as marijuana smoke, was analyzed. However, the degree of expertise evidenced by Officer Junious, based on his experience and training, is sufficient to tip the evidentiary scale toward a finding that those hand-rolled cigarettes, which to him appeared to be marijuana cigarettes and to him smelled like marijuana cigarettes, were in fact marijuana cigarettes; and this finding is hereby made. With regard to the purchase from Quiller Elkins on September 24, 1982, Officer Junious does not know if anyone working for the Simmonses at that time saw him make that purchase or, even if they had seen the purchase made, that they would know what the purchase was. There is no evidence to establish that, in any case, Quiller Elkins was an employee of the Respondents. With regard to the purchase outside the establishment from the barbecue cook, Short Man, again Junious does not know if anyone in authority from inside the bar saw the sale being made or for that matter, if they had seen it, would know what was in the envelope. There is no evidence that Marian MacRae (Mulu) was an employee, and Officer Junious himself does not know whether she was or not. However, on the several occasions he was there, he never saw her tending bar or doing any other work there. He also cannot say that any employee of the establishment saw him make the buy from Mulu on August 26, at least. He also cannot state with any degree of certainty whether any of the employees saw him make the purchase from Rudy with regard to that purchase. This individual does not deny using marijuana with Officer Junious. While he does not recall the exact date, he states that Junious asked him if he, Rudy, knew where he could get any marijuana and he, Rudy, got it for him. They smoked it together on two separate occasions in Rudy's car. While Swindler's recitation that he smoked with Junious is somewhat suspect because of several inconsistencies, there is little doubt that he sold either directly or as an intermediary. In fact, Junious indicates Rudy was a connection with whom he, Junious, palled around while in Palatka on the investigation. He used Rudy to introduce him around in the neighborhood. Willie Lee Simmons, Sr., one of the Respondents and a longtime resident of Palatka, Florida, has been a co-owner of the Palatka Blue Diamond since 1970 or 1971, and he has had a state beverage license since that time. Though he is one of the owners of the establishment, he works there only on Sunday afternoons to tend bar, working from 5:30 in the evening until midnight for the last 7 or 8 years. During all this time, no one has ever approached him to buy marijuana; he does not smoke it himself; nor does he have any familiarity with it. He has seen people smoking there, but was under the impression that what was being smoked were cigarettes. He is in the migrant labor business, as well as a part-owner of the bar, and he recognizes many of his bar patrons as his employees in the field. These migrant workers, he says, often smoke a type of tobacco called "Bugle" tobacco, which they hand-roll into cigarettes. He feels these hand-rolled tobacco cigarettes could well be confused with marijuana cigarettes. Mr. Simmons contends he has a completely clean record in Putnam County and with the Division of Alcoholic Beverages and Tobacco. If he had had any knowledge that marijuana cigarettes were being smoked in his bar, he would have stopped it immediately, but he has never been given any indication that marijuana was a problem in his establishment. The police, who have been in his bar on many occasions, have never mentioned to him the smell of marijuana, nor have there ever been, to his knowledge, any marijuana arrests or searches conducted in his establishment prior to those set out in the Notice to Show Cause. Johnny Lee Simmons, the son of Willie Lee Simmons, is also a part- owner of the Palatka Blue Diamond. He works on Sundays during the day before his father comes on duty at night. He knows what marijuana is and has seen other people smoke it. He believes he could identify the smell of marijuana smoke. He admits that his patrons smoke in the bar. In fact, the bar sells cigarettes and cigars, as well as "Bugle" tobacco, a cheap, low-grade loose tobacco referred to by the other Mr. Simmons. On several occasions, he has stopped the smoking of what he thought was marijuana in the bar and found out that it was Bugle tobacco. When he does catch someone smoking marijuana, he immediately puts them out of the bar and, in fact, Mulu has been put out several times for trying to sell marijuana in the premises. To counter the threat of marijuana transfer, Leroy Lane was hired to keep out minors and drugs, and in this witness's opinion, has done a pretty good job of it. Mr. Simmons feels he has done a good job in exercising control over the place to keep narcotics out, but he admits that neither he nor anyone else is perfect. Sometimes he does not get it all. He contends he has contacted the police on several occasions to get help with drug traffic and gambling. He used to sell cards in the bar and has seen card games conducted there. However, when he reread the manual furnished by the Petitioner, which indicated that gambling is not appropriate or permitted, he immediately got rid of the cards; no longer sells them; and no longer permits card playing in the premises. His sister, the lady allegedly involved in the gambling transaction, is not a gambler. In his opinion, the card games she was in were probably friendly games engaged in to pass the time during the slack periods. To his recollection, the only gambling ever conducted in the Palatka Blue Diamond was carried on by old retired men who spent a lot of time there and who passed the time playing cards. These individuals got angry with him, he contends, when he stopped it The denial of the Simmonses that marijuana is frequently utilized in the Palatka Blue Diamond was supported by the testimony of John J. Melton, a Deputy sheriff with the Putnam County Sheriff's Office, who, himself, is familiar with both the appearance and the smell of marijuana and has made arrests for the possession of marijuana in the past. Officer Melton goes into the Palatka Blue Diamond frequently--three to four times a week--and has done so both on and off duty for the past three years. If he goes in while on duty, he is there for between 15 and 20 minutes; if off duty, for between three and four hours. In any case, he has never seen anyone selling the small manila envelopes when he was in there, nor has he ever seen any card playing or gambling going on. If he were to see anyone involved in any unlawful activity, he would arrest them if in uniform and on duty. If not, he would notify the manager. He does not believe that anyone would smoke in front of anyone who they knew to be a police officer. Palatka is a small town and, by his own admission, he and other police officers are well known to the general public both when in and out of uniform. Consequently, his testimony establishes only that no illegal activity went on while he was in there. These sentiments were echoed by Abraham Smith, a retired U.S. Customs agent who has a working familiarity with marijuana, its appearance, and its smell from his 32 years in Customs work. Since he moved to Palatka in May of 1982, he has been in the Palatka Blue Diamond three to four times a week for an hour or two at the time. He is familiar with the types of small manila envelopes used for the sale of small amounts of marijuana and has seen them many times, but never in the Palatka Blue Diamond. He has never smelled marijuana nor seen marijuana in that establishment. Harold Lightfoot, the salesman for the Eli Witt Tobacco Company who has been selling to the Palatka Blue Diamond for 15 years, including to the prior ownership, comes in once a week in the early afternoon. He also knows what marijuana is and can recognize the appearance and smell, but has never smelled the odor in the Palatka Blue Diamond nor ever seen any sales of manila envelopes while there. Another frequent patron is James Williams, Jr., a retired Army noncommissioned officer who has patronized the Palatka Blue Diamond daily since his retirement from the Army in June 1980. He usually goes in for several hours in midday and then for several hours in the evening. He is familiar with the appearance and smell of marijuana because of the training he received in the military and is also familiar with the small manila envelopes used in marijuana sales. To his knowledge, he has never smelled marijuana smoke in the Palatka Blue Diamond nor has he ever seen sales of small manila envelopes. Leroy Lane, the lead bartender at the Palatka Blue Diamond for the past six to nine years, lives upstairs from the bar and tends bar from early evening to closing. He has seen several marijuana cigarettes outside the bar. He is familiar with its appearance and its smell, and he has seen people in the bar start to smoke marijuana. When he observes it, he puts them out and, if they refuse to leave, calls the police. For the past three to four years, there have been signs on the wall prohibiting the use or sale of marijuana on the premises, placed there at the direction of the owners and, also at their direction, he patrols the bathrooms. Mr. Lane knows of Marian MacRae (Mulu) by reputation. At first he stated he would not know if he would recognize her if he saw her, but later indicated that she is outside the bar frequently. Because of her reputation, when she comes in the bar, he asks her to leave. He denies knowing Short Man and several other regular patrons by name because he does not ask customers their names nor does he ask them the stories of their lives. His credibility is not significant. Queen Esther Simmons, the wife of Johnny Simmons for 16 years, is also a bartender in the Palatka Blue Diamond. She swaps shifts with Linda Simmons, the sister of Johnny and the daughter of Willie Simmons. Queen Esther contends she has never seen marijuana nor has she seen any transfers of the envelopes in the bar. She claims she does not know what a marijuana cigarette is nor has anyone ever told her what they look like so she could keep them out. It is Leroy Lane's job to do that. However, never having seen nor smelled marijuana, if she smells what she thinks is marijuana, she calls out, "If anyone here is smoking marijuana, leave or I'll call the police." Queen Esther Simmons' credibility is totally lacking, and her testimony has no probative value whatsoever.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore, RECOMMENDED THAT: Respondents' alcoholic beverage license No. 64-00029 be revoked. RECOMMENDED this 19th day of June 1984, in Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 FILED with the Clerk of the Division of Administrative Hearings this 19th day of June 1984. COPIES FURNISHED: Louisa E. Hargrett, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Angus W. Harriett, Esquire 314 St. Johns Avenue Palatka, Florida 32077 Mr. Gary R. Rutledge Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Mr. Howard M. Rasmussen Director, Division of Alcoholic Beverages and Tobacco Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
Findings Of Fact At all times pertinent to these proceedings, Respondent, Daughtin J. Rhue, operated a business, J's Cut Rate Variety Center, in Fort Lauderdale, Florida, under a Series 2-APS beverage license, No. 16-731, issued by Petitioner. On May 26, 1983, Beverage Officer D'Ambrosia entered Respondent's place of business on a matter unrelated to the offenses charged here (nonpayment of Florida sales tax). While there, he noticed several packs of cigarettes on the shelf behind the counter which appeared to be nontaxed cigarettes. These cigarettes, which he knew to be untaxed because of the red meter stamp imprinted on the bottom of the packs (tax-paid cigarettes have a black metered stamp on the bottom of the pack), were mixed in with the tax-paid cigarettes offered for sale by Respondent. Mr. D'Ambrosia said nothing about this to Respondent at that time, but then conducted a search elsewhere in the store for other nontaxed cigarettes and could find none. When he came back to the counter again, he found that those packs which bore the red, nontaxed stamp had been reversed on the shelf so that the stamps were not facing outward as they had been previously. Along with Respondent, he examined all the cigarettes on the shelves and found 12 packs that bore the red, nontaxed stamp. There were 7 packs of Lark Lights 100s, 3 packs of Kool Super Lights, 1 pack of Benson & Hedges Menthol and 1 pack of Marlboro. The stamp these packs bore is issued only to the Indians, and cigarettes so marked and stamped are not for resale to non-Indian consumers. No other nontaxed cigarettes were found at that time either on the shelves or elsewhere in the store. However, review of the file on Respondent's license indicates that in April, 1979, Respondent was previously found to have 254 packs of untaxed cigarettes in his store for resale. Action was taken at that time pursuant to stipulation between the parties. Respondent admits the nontaxed cigarettes were on his shelves on May 26, 1983, but denies having known it prior to it being pointed out to him by the beverage agent. He contends that he orders all cigarettes for the store from only two vendors, Pueblo and Wholesale Plus, Inc., and that his employee picks them up from the wholesaler and stocks the shelves. Further, he denies purchasing or stocking the brands untaxed on his shelves. He also denies that the untaxed packs were touched during the visit by Mr. D'Ambrosia, indicating that they were not turned around as alleged. Notwithstanding Respondent's protestations, the untaxed cigarettes were, by his own admission, offered for sale on his shelves The dispute as to whether he knew the untaxed cigarettes were there is resolved against him. He states he worked there every day. It is unlikely he was not aware of their presence.
Recommendation Based on the foregoing, it is RECOMMENDED: That Respondent's alcoholic beverage license, Series 2-APS, No. 16-731, be suspended for thirty (30) days and that Respondent pay an administrative fine of $500. RECOMMENDED this 8th day of November, 1983, in Tallahassee, Florida. ARNOLD H. POLLOCK, 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 8th day of November, 1983. COPIES FURNISHED: John A. Boggs, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Mr. Daughtin J. Rhue 1415 N.W. Fifth Street Fort Lauderdale, Florida Mr. Gary Rutledge Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Mr. Howard M. Rasmussen Director, Division of Alcoholic Beverages and Tobacco Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
The Issue At issue in this proceeding is whether Respondent committed the offenses set forth in the Administrative action and, if so, what penalty should be imposed.
Findings Of Fact At all times material hereto, Respondent, Ramesh Gordon Kowlessar, held license number 16-12937, series 2APS, authorizing the sale of alcoholic beverages (beer and wine) for consumption off the premises known as K's American & West Indian Grocery & Food, located at 4486 West Hallandale Beach Boulevard, Pembroke Park, Florida (hereinafter "the licensed premises"). On March 25, 1997, Sergeant Carol Owsiany, an agent with the Division of Alcoholic Beverages and Tobacco, and Michael Kaufman, a special agent with the Division of Alcoholic Beverages and Tobacco, operating undercover, visited the licensed premises to investigate a complaint that Respondent was selling alcoholic beverages for consumption on the premises (a practice not permitted by Respondent's license). Sergeant Owsiany and Agent Kaufman entered the premises at or about 10:15 a.m., and were greeted by Respondent who, after assuring the agents that they could dine on the premises, seated them at the counter. Sergeant Owsiany ordered a meal of curry and rice, and Agent Kaufman requested beer with the meal. The Respondent directed Agent Kaufman to the beer cooler. Agent Kaufman selected two cans of "Budweiser" beer (an alcoholic beverage) from the cooler and returned to the counter, where he handed one beer to Sergeant Owsiany. The agents opened their respective beers, and consumed a portion of the beer while seated at the counter in the presence of Respondent. Following service of her meal, Sergeant Owsiany consumed a small portion of food, and requested that the remainder be packaged to go. The agents then proceeded to the check-out counter with the two open and partially consumed beers, as well as the packaged meal. At the counter, the agents observed 52 packages of unstamped, non-Florida-tax-paid cigarettes offered for sale. Sergeant Owsiany paid for her meal and the two beers, and the agents exited the building.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding Respondent guilty of the charges set forth in the Administrative Action; imposing a civil penalty in the total sum of $1,000 for such violations, subject to Respondent's option to substitute a period of suspension in lieu of all or a portion of the civil penalty; and, requiring Respondent to pay to the Department excise taxes in the sum of $17.63. DONE AND ENTERED this 22nd day of April, 1998, in Tallahassee, Leon County, Florida. WILLIAM J. KENDRICK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of April, 1998.
