STATE OF IOWA BEFORE THE DEPARTMENT OF COMMERCE ALCOHOLIC BEVERAGES DIVISION IN RE: ) ) DOCKET NO. A-2010-00052 MD Investments, LLC ) DIA NO. 10DOCBL107 d/b/a Legends American Grill ) 2902 South Center Street ) Marshalltown, Iowa 50158 ) PROPOSED DECISION ) [CORRECTED] 1 Liquor License No. LC-37054 ) On October 26, 2010, the City of Marshalltown (local authority) filed an amended administrative hearing complaint against MD Investments, LLC d/b/a Legends American Grill (licensee). The amended hearing complaint alleged that on or about September 4, 2010, an employee of the licensee sold alcohol products to a person under twenty-one years of age, in violation of Iowa Code section 123.49(2)(h). A telephone hearing was held before Administrative Law Judge Margaret LaMarche on November 29, 2010 at 9:00 a.m. City Attorney Curtis A. Ward appeared for the City of Marshalltown. The licensee was represented by attorney Kevin R. Hitchins. THE RECORD The record includes the Hearing Complaint, Amended Hearing Complaint, Notice of Hearing Before Administrator s Designee, the testimony of Marshalltown Police Officers Ryan Goecke, Dave Danielson, Kiel Stevenson, and underage participants AV and LA, and Local Authority Exhibits 1-6 ( Exhibit 6 was an audio WAV file) FINDINGS OF FACT On September 4, 2010, the Marshalltown Police Department conducted an alcohol compliance check to determine whether licensed liquor establishments in 1 This order corrects typographical errors in the Proposed Decision issued on December 20, 2010. The corrections are indicated in bold.
Page 2 Marshalltown would sell alcohol to underage persons. The compliance check was carried out in accordance with written procedures established by the police department. Approximately 70 licensed liquor establishments were visited during the compliance checks, and 7 establishments sold alcoholic beverages to the underage persons. (Testimony of Ryan Goecke, Kiel Stevenson; Local Authority Exhibit 1) An underage female (AV) and male (LA) agreed to participate in the compliance checks. AV was born on February 2, 1992 and was 18 years old on September 4, 2010. LA was born on May 1, 1991 and was 19 years old. Officer Kiel Stevenson verified their ages through Iowa Department of Transportation records and made photocopies of their driver s licenses. The driver s licenses were vertically formatted and provided the actual dates when AV and LA would turn 21. The underage persons were provided money to purchase beverages and instructed to provide their valid driver s licenses if asked for identification and not to lie about their ages. (Testimony of AV, LA, Ryan Goeke; Local Authority Exhibit 2) On September 4, 2010 at approximately 5:00 p.m., AV and LA entered Legends American Grill at 2902 South Center Street in Marshalltown, Iowa. LA was wearing a recording device, and there is an audio recording of their transaction inside the bar. (Local Authority Exhibit 6; Testimony of AV, LA) AV and LA sat down at the bar, and the bartender, who was later identified as Linda Propp, asked them what they wanted to drink. AV ordered a Smirnoff Ice, which is an alcoholic beverage, and LA ordered a Bud Light beer in a bottle. Ms. Propp asked both of them for identification. They gave Ms. Propp their driver s licenses, and she examined them. Ms. Propp commented that she had been asked for identification that weekend, and she hated to be ID d, even though she is not underage. After checking their identification, Linda Propp served AV and LA the alcoholic beverages that they ordered. (Testimony of LA, AV; Exhibit 6) LA then called the officers to alert them that they had been served, and Officers Dave Danielson and Kiel Stevenson entered the bar. Officer Stevenson escorted AV and LA out of the bar while Officer Danielson issued a citation to the bartender, Linda Propp. Ms. Propp told Officer Danielson that she believed that AV and LA were over the legal age because she thought that she had seen them
Page 3 inside the bar before. (Testimony of Dave Danielson; Kiel Stevenson, AV, LA; Local Authority Exhibit 5) Linda Propp has not been convicted of providing alcohol to a person under legal age. The criminal charge against her is still pending. The amended Hearing Complaint states that A copy of the criminal convictions is attached and incorporated herein. This was an error. (Testimony of Dave Danielson; Amended Hearing Complaint) CONCLUSIONS OF LAW Iowa Code section 123.49(2)(h)(2009) 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. Iowa Code section 123.3(19)(2009). 185 IAC 4.8 states that the violation of the Act (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 license to suspension or revocation. The burden of going forward with the evidence to establish a violation is on the party filing the hearing complaint, but the alcoholic beverages division places the burden of proving compliance with the statute on the licensee. See McCrea v. Iowa Department of Transportation, 336 NW2d 427 (Iowa 1983); Iowa Code section 17A.18(3)(2009).
Page 4 The preponderance of the evidence established that on September 4, 2010, the licensee s employee sold and served alcoholic beverages to an eighteen year old and a nineteen year old without exercising reasonable care to ascertain whether they were under the legal age. Although Ms. Propp asked the underage persons for their identification, she either did not examine the driver s licenses closely enough to determine their ages or else she sold to them despite the fact that they were underage. The licensee has violated Iowa Code section 123.49(2)(h). 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. Pursuant to Iowa Code sections 123.50(3)(a), the mandatory administrative sanction for a first offense sale to an underage person is a $500 civil penalty. A criminal conviction is not a prerequisite to suspension, revocation or imposition of a civil penalty. Iowa Code section 123.39(1)(c)(2009). ORDER IT IS THEREFORE ORDERED, pursuant to Iowa Code sections 123.50(3)(a) and 123.39(4), that for a first offense sale to underage persons occurring on September 4, 2010, MD Investments LLC, d/b/a Legends American Grill, Liquor License No. LC-37054, shall pay a civil penalty of five hundred dollars ($500) to the city of Marshalltown within thirty (30) days of the issuance of this proposed decision. Pursuant to the administrative rules of the division, any adversely affected party may appeal a proposed decision to the Administrator of the Alcoholic Beverages
Page 5 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 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 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 28th day of December, 2010. Margaret LaMarche Administrative Law Judge Iowa Department of Inspections and Appeals Division of Administrative Hearings Wallace State Office Building-Third Floor Des Moines, Iowa 50319 cc: See attached mailing list