7-11, Inc, etc v. VA Alcoholic Beverage Control Bd

• Court: Court of Appeals of Virginia
• Decided: June 3, 2003
• Docket: 2740024
• Status: Unpublished

Opinion

COURT OF APPEALS OF VIRGINIA

Present: Judges Bumgardner, Kelsey and Senior Judge Hodges

7-11, INC., STORE NO. 2585-32140 MEMORANDUM OPINION * v. Record No. 2740-02-4 PER CURIAM JUNE 3, 2003 VIRGINIA ALCOHOLIC BEVERAGE CONTROL BOARD

FROM THE CIRCUIT COURT OF STAFFORD COUNTY Ann Hunter Simpson, Judge

(P.H. Harrington, Jr., on brief), for appellant.

(Jerry W. Kilgore, Attorney General; Francis S. Ferguson, Deputy Attorney General, on brief), for appellee.

The Virginia Alcoholic Beverage Control Board (ABC) suspended

the alcoholic beverage license of 7-11, Inc., Store No. 2585-32140

(7-11). 7-11 appealed that decision to the circuit court, which

upheld ABC's determination. 7-11 now appeals to this Court,

arguing that (1) it was denied due process because ABC did not

grant it a full, fair and impartial hearing, and (2) ABC failed to

follow requisite procedures in conducting the hearing. Upon

reviewing the record and briefs of the parties, we conclude that

this appeal is without merit. Accordingly, we summarily affirm

the circuit court's decision. See Rule 5A:27.

* Pursuant to Code § 17.1-413, this opinion is not designated for publication. Standard of Review

This matter arises under the Virginia Administrative Process

Act, Code § 2.2-4000 et seq. Judicial review of an agency

decision is limited to the following inquiries:

1. Whether the agency acted in accordance with law;

2. Whether the agency made a procedural error which was not harmless error; and

3. Whether the agency had sufficient evidential support for its findings of fact.

Johnston-Willis v. Kenley, 6 Va. App. 231, 242, 369 S.E.2d 1, 7

(1988).

Under the Act,

"[t]he standard of review of an agency's factual findings on appeal to a circuit court is limited to determining whether substantial evidence in the agency record supports its decision." Avante at Lynchburg, Inc. v. Teefey, 28 Va. App. 156, 160, 502 S.E.2d 708, 710 (1998) (emphasis added). Under the "substantial evidence" standard, an agency's factual findings should be rejected "'only if, considering the record as a whole, a reasonable mind would necessarily come to a different conclusion.'" Tidewater Psychiatric Inst. v. Buttery, 8 Va. App. 380, 386, 382 S.E.2d 288, 291 (1989) (quoting Virginia Real Estate Comm'n v. Bias, 226 Va. 264, 269, 308 S.E.2d 123, 125 (1983)). "The phrase 'substantial evidence' refers to 'such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.'" Bias, 226 Va. at 269, 308 S.E.2d at 125 (citation omitted).

- 2 - Sentara Norfolk Gen. Hosp. v. State Health, 30 Va. App. 267,

279, 516 S.E.2d 690, 696 (1999), rev'd, 260 Va. 267, 534 S.E.2d

325 (2000).

Additionally, "the court must review the facts in the light

most favorable to sustaining the Board's action and 'take due

account of the presumption of official regularity, the

experience and specialized competence of the agency, and the

purposes of the basic law under which the agency has acted.'"

Bio-Medical Applications of Arlington, Inc. v. Kenley, 4

Va. App. 414, 427, 358 S.E.2d 722, 729 (1987) (quoting former

Code § 9-6.14:17).

However,

when deciding whether an agency has followed proper procedures or complied with statutory authority . . . , an inquiry into whether there is substantial evidence in the record to support findings of fact of an agency is wholly inappropriate. Indeed, even though an agency's findings of fact may be supported by substantial evidence in the record, it may be subject to reversal because the agency failed to observe required procedures or to comply with statutory authority. See, e.g., Atkinson v. Virginia Alcoholic Beverage Control Commission, 1 Va. App. 172, 336 S.E.2d 527 (1985). Thus, where the legal issues require a determination by the reviewing court whether an agency has, for example, accorded constitutional rights, failed to comply with statutory authority, or failed to observe required procedures, less deference is required and the reviewing courts should not abdicate their judicial

- 3 - function and merely rubber-stamp an agency determination.

Johnston-Willis, 6 Va. App. at 231, 369 S.E.2d at 7-8.

Background

On March 2, 2001, ABC Agent Brian McCarthy met with Daniel

Sullins, an eighteen-year-old male, for the purpose of

conducting an underage buying operation. McCarthy and Sullins

entered 7-11. Sullins attempted to purchase a can of beer. The

7-11 clerk asked for and obtained Sullins' valid Virginia

driver's license. She examined the license, then completed the

sale to Sullins.

Thereafter, ABC charged 7-11 with selling alcoholic

beverages to a person that it knew or had reason to know was

less than twenty-one, in violation of Code §§ 4.1-304 and

4.1-225(1)(c) and 3 VAC 5-50-10. In the proceeding before the

hearing officer, ABC called a single witness, Agent McCarthy.

He testified to the circumstances surrounding the underage

buying operation and to his observations at 7-11 the night of

the sale to Sullins. Despite being subpoenaed by ABC, neither

Sullins nor a deputy sheriff who was involved in the operation

was present at the hearing. 7-11 did not independently subpoena

Sullins or the deputy sheriff. 7-11 complained that it was

denied due process of law because it was unable to cross-examine

these individuals. The hearing officer rejected this complaint,

- 4 - found that a violation had occurred, and suspended 7-11's

license for twenty-five days.

7-11 appealed to the Board. At the hearing before the

Board, counsel for 7-11 stated: "Certainly, there's enough

evidence to convict and sustain the charge." The Board upheld

the hearing officer's decision.

7-11 then appealed to the circuit court. In its order

upholding the Board's decision, the court made the following

findings:

The court . . . finds that there was sufficient evidence on record to support the Board's decision, and that reasonable minds would come to the same conclusion based on the facts presented. The court further finds that the licensee relied on the Alcoholic Beverage Control Board's subpoena of the underage purchaser witness to its peril.

This court further finds that the Alcoholic Beverage Control Board, in rendering its decision, acted in accordance with applicable laws, rules and regulations; and further that the Board did not commit a procedural error.

The court's order also includes the following: "Counsel for

respondent [sic] stipulated the sufficiency of the evidence to

support the Board's factual finding."

Discussion

7-11's two questions presented are intertwined; therefore,

we will not attempt to separate our discussion of them.

Essentially, 7-11 argues that its due process rights were

- 5 - violated and that ABC failed to follow statutory and regulatory

procedures when 7-11 was denied an opportunity to cross-examine

Sullins and the deputy sheriff. We disagree.

7-11 contends the agency proceedings were "formal

proceedings" as contemplated by Code § 2.2-4020(C) instead of

informal proceedings contemplated by Code § 2.2-4019. For

purposes of this memorandum opinion, we accept this contention.

Code § 2.2-4020(C) provides in pertinent part that "the

parties shall be entitled . . . to conduct such

cross-examination as may elicit a full and fair disclosure of

the facts . . . ." The rules governing formal proceedings

mandate that parties "arrange to have their witnesses present"

at the hearing, ABC Rule of Practice 1.21(A), and that "any

interested party shall have the right to cross-examine adverse

witnesses and any agent or subordinate of the board whose report

is in evidence," ABC Rule of Practice 1.9(B).

ABC did not violate the statute or the Rules of Practice,

and likewise did not violate 7-11's right to due process. Code

§ 2.2-4020(C) also states that "[t]he burden of proof shall be

upon the proponent or applicant"; here, ABC. ABC carried its

burden through the testimony of Agent McCarthy. 7-11 had the

opportunity to fully cross-examine McCarthy. If ABC felt it

could carry its burden despite the absence of witnesses who

disobeyed a subpoena, it was entitled to do so. Nothing in the

Code or the Rules of Practice requires otherwise. As the

- 6 - circuit court noted, 7-11 relied to its detriment on ABC's

subpoenas of Sullins and the deputy sheriff and failed to obtain

its own subpoenas. Accordingly, we hold that "the agency acted

in accordance with law." Johnston-Willis, 6 Va. App. at 242,

369 S.E.2d at 7.

Moreover, even if the circuit court and the agency

committed error, in the context of this case that error was

harmless. 7-11 conceded before the Board and the circuit court

that the evidence was sufficient to find a violation. Thus,

7-11 concedes that ABC met the burden of proof required by Code

§ 2.2-4020(C), and the absence of Sullins and the deputy sheriff

could not affect the outcome of the case. As such, the agency

did not make "a procedural error which was not harmless error,"

and it "had sufficient evidential support for its findings of

fact." Johnston-Willis, 6 Va. App. at 242, 369 S.E.2d at 7.

For these reasons, we summarily affirm the decision of the

circuit court. See Rule 5A:27.

Affirmed.

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