STATE OF IOWA BEFORE THE DEPARTMENT OF COMMERCE ALCOHOLIC BEVERAGES DIVISION In the Matter of: DOCKET NO. D-2018-00017 Gabe s Oasis, LLC DIA NO. 18ABD0005 d/b/a Gabe s 330 East Washington Iowa City, Iowa 52245, PROPOSED DECISION Liquor License No: LC0038662 On January 24, 2018, the Iowa Alcoholic Beverages Division (division) issued an Order to Gabe s Oasis, LLC, d/b/a Gabe s (licensee), which required the licensee to pay a civil penalty of $500, pursuant to Iowa Code section 123.50 and based on the conviction of the licensee s employee for selling, giving or otherwise supplying an alcoholic beverage to a person knowing or failing to exercise reasonable care to ascertain whether the person was under legal age in violation of Iowa Code section 123.49(2)(h). The licensee filed a timely appeal. An appeal hearing was held before the undersigned administrative law judge on April 24, 2018. The licensee was represented by Scott Kading, who is the owner of Gabe s Oasis, LLC. The division was represented by Assistant Attorney General John Lundquist. THE RECORD The record includes Division Exhibits 1-5, Licensee Exhibit A, and the testimony of Karen Freund and Scott Kading. FINDINGS OF FACT Scott Kading is the 100% owner of Gabe s Oasis, LLC, d/b/a Gabe s (licensee), which holds Liquor License No. LC0038662. This liquor license allows licensee to sell liquors, wine, and beer to patrons by the individual drink for consumption on the premises. 1 (Division Exhibit 5; Testimony of Karen Freund) On December 14, 2017, licensee employed as a bartender, Adam Theodore Doscher. According to the Iowa City Police Department Complaint against Adam Theodore Doscher, the following incident took place and is described verbatim as follows: On December 14 th, 2017 at 2211 hours I was working in plain clothes with 2 underage females conducting alcohol compliance checks. I watched the 2 females 1 See Iowa Code 123.30(3)(c)(2017)
Page 2 (Exhibit 4) as they entered Gabe s bar at 330 East Washington Street. The 2 females walked up to the bar and purchased 2 alcoholic beverages from a male bartender in a hoodie and jeans. I then identified the bartender as Adam Doscher and informed him he had just sold alcohol to 2 underage females. Doscher immediately said, They had wristbands, didn t they? and I informed him they did not. Doscher went onto explain that the doorman should have placed x s on any underage patrons in the bar. Doscher said he recognized the females who I told him were underage and admitted he sold them 2 alcoholic drinks. He continued to express his frustration with the doorman not placing x s on their hands. I informed him we had come in the back door upstairs and that nobody was even at the door. I cited Doscher for Providing Alcohol to a Person Under 21. Adam Doscher was charged with providing alcohol to a person under legal age in violation of Iowa Code section 123.49(2)(h). Mr. Doscher pled guilty to this criminal charge on January 16, 2018 and was fined. (Testimony of Karen Freund; Division Exhibits 2, 3) On January 24, 2018, the division issued an Order imposing a $500 civil penalty, pursuant to Iowa Code section 123.50, on the licensee for a first conviction under Iowa Code section 123.49(2)(h) within a period of two years. The $500 civil penalty was based on Adam Doscher s January 16, 2018 conviction for selling or serving alcohol to an underage person. (Testimony of Karen Freund; Division Exhibit 1) On February 26, 2018, the licensee filed its Notice of Appeal. (Appeal) Karen Freund is an Executive Officer for the division. She reviewed the police and investigative reports and concluded there was probable cause to believe a violation of the liquor code had occurred. She tracked the citation in online court records to see if there was a conviction or dismissal of the charge. Freund subsequently learned that on January 16, 2018, Doscher pled guilty to serving alcohol to a person under the legal age. Once she determined there was a conviction for a violation of section 123.49(2)(h), she prepared an order and sent it out to the licensee. Freund determined there was not a prior violation in the past two years. As this was a first offense, a $500 civil penalty was imposed. Freund stated she checked online records prior to hearing and verified that the conviction still stands. Freund stated that although Doscher had been APACT trained, his training had lapsed and therefore no exception could be made for the licensee for this penalty under Iowa Code section 123.50(5). (Testimony of Karen Freund) Scott Kading testified at hearing, stating there were multiple entrances to the business and all employees are IPACT trained. He did not argue with the division s evidence but did state the police and the underage females snuck in, which was 100% trespassing. They went through a door that was an emergency exit only. Kading stated that door did not even have a handle on it. In order to conduct a compliance check they should have done what the general public would do and go through the front door. Kading asserted that they cannot sneak in the back door for compliance checks. He argued that there should
Page 3 be no penalty against Gabe s due to the way the compliance check was conducted. Kading acknowledged that Doscher was his employee who was working as a bartender that night, and that he was cited and convicted as a result of this incident. (Kading testimony) CONCLUSIONS OF LAW Iowa Code section 123.49(2)(h) provides, in relevant part: 2. A person or club holding a liquor control license or retail wine or beer permit under this chapter, and the person's or club's agents or employees, shall not do any of the following:... h. Sell, give, or otherwise supply any alcoholic beverage, wine or beer to any person, knowing or failing to exercise reasonable care to ascertain whether the person is under legal age, or permit any person, knowing or failing to exercise reasonable care to ascertain whether the person is under legal age, to consume any alcoholic beverage, wine, or beer. The Iowa Code defines legal age as twenty-one years of age or more. 2 In addition, the division s rules provide that the violation of Iowa Code chapter 123 by any employee, agent, or servant of a licensee or permittee shall be deemed to be the act of the licensee or permittee and shall subject the licensee to suspension or revocation. 3 Iowa Code section 123.50 provides, in relevant part: 123.50 Criminal and civil penalties.... 3. If any licensee, wine permittee, beer permittee, or employee of a licensee or permittee is convicted or found in violation of section 123.49, subsection 2, paragraph "h", the administrator or local authority shall, in addition to criminal penalties fixed for violations by this section, assess a civil penalty as follows: a. A first violation shall subject the licensee or permittee to a civil penalty in the amount of five hundred dollars. Failure to pay the civil penalty as ordered under section 123.39 shall result in automatic suspension of the license or permit for a period of fourteen days. 4 (emphasis added) 2 Iowa Code 123.3(24) (2017). 3 185 Iowa Administrative Code (IAC) 4.8. 4 Iowa Code 123.50(3) (2017)
Page 4 The use of the word shall in a statute imposes a duty. 5 The goal of statutory construction is to determine legislative intent. 6 Legislative intent is determined from the words chosen by the legislature, not what it should or might have said. 7 Absent a statutory definition or an established meaning in the law, words in the statute are given their ordinary and common meaning by considering the context in which they are used. 8 Under the guise of construction, an interpreting body may not extend, enlarge or otherwise change the meaning of a statute. 9 Iowa Code section 123.50(3) imposes a duty on the division to impose a civil penalty in the event of a conviction for a violation of section 123.49(2)(h). The division ascertained that Gabe s does not have a prior conviction within the two-year time period, therefore the statutory civil penalty to be imposed is $500.00. Mr. Kading argues that this penalty should not be imposed as the actions of the police officers and underage females circumvented the regular entrance to the establishment. Unfortunately, this argument does not avail Mr. Kading under these circumstances. The undeniable fact remains that Mr. Doscher was convicted of violating 123.49(2)(h) and therefore Gabe s was appropriately penalized according to Iowa Code section 123.50(3). 10 ORDER IT IS THEREFORE ORDERED that the January 24, 2018 Order imposing a $500 civil penalty, which was issued by the Alcoholic Beverages Division to Gabe s Oasis, LLC d/b/a Gabe s, is hereby AFFIRMED. The licensee shall pay the $500 civil penalty to the division within thirty (30) days of the date that this proposed decision becomes final. Pursuant to the administrative rules of the division, any adversely affected party may appeal a proposed decision to the Administrator of the Alcoholic Beverages Division within thirty (30) days after issuance of the proposed decision. In addition, the Administrator may initiate review of a proposed decision on the Administrator's own motion at any time within thirty (30) days following the issuance of a proposed decision. 185 Iowa Administrative Code (IAC) 10.27(1) and (2). Requests for review shall be sent to the Administrator of the Alcoholic Beverages Division, 1918 S.E. Hulsizer, Ankeny, IA 50021. Unless otherwise ordered, each appealing party may file exceptions and briefs within thirty (30) days of the notice of appeal or order for review. Within thirty (30) days thereafter, any party may file a responsive brief. The Administrator may shorten or extend the briefing period as appropriate. The Administrator may resolve the appeal on the briefs or provide an opportunity for oral 5 Iowa Code 4.1(30)(2017). 6 Auen v. Alcoholic Beverages Division, 679 NW2d 586, 590 (Iowa 2004). 7 8 9 10 See Randall s Intern. Inc. v. Hearing Bd. Of Iowa Beer & Liquor Control Dept., 429 N.W.2d 163, 165 (Iowa 1988) stating the statute is written so as to make the conviction of the licensee s employee the prohibited act upon which the principal s license revocation is based.)
Page 5 argument. 185 IAC 10.27(6). The administrator may affirm, reverse or modify the proposed decision. A party who is adversely affected by the proposed decision shall not be deemed to have exhausted administrative remedies unless the adversely affected party files a request for review of the proposed decision within the time provided and the Administrator has reviewed the proposed decision and has affirmed, reversed, or modified the proposed decision. Dated this 2nd day of May, 2018. Tricia A. Johnston Administrative Law Judge Iowa Department of Inspections and Appeals Division of Administrative Hearings Wallace State Office Building-Third Floor Des Moines, Iowa 50319 Scott Kading, Gabe s Oasis LLC (By Certified Mail, Mail & Email); Wendy Mayer, City of Iowa City (By Certified Mail, Mail & Email); John Lundquist, Assistant AG (By Email); Stephen Larson, ABD (By Email); Josh Happe, ABD (By Email); Karen Freund, ABD (By Email); Heather Schaffer, ABD (By Email); Tyler Ackerson, ABD (By Email); Lolani Lekkas, ABD (By Email)