VA Alcoholic Beverage Control Board v. Little & Tal ( 2003 )


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  •                    COURT OF APPEALS OF VIRGINIA
    Present: Judges Benton, Annunziata and Senior Judge Coleman
    Argued at Richmond, Virginia
    VIRGINIA ALCOHOLIC BEVERAGE
    CONTROL BOARD
    MEMORANDUM OPINION * BY
    v.   Record No. 1982-02-2                 JUDGE JAMES W. BENTON, JR.
    AUGUST 19, 2003
    LITTLE AND TALL, INC. t/a
    ICONS RESTAURANT AND FAHRENHEIT LOUNGE
    FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND
    Theodore J. Markow, Judge
    Francis S. Ferguson, Deputy Attorney General
    (Jerry W. Kilgore, Attorney General, on
    brief), for appellant.
    Paul T. Buckwalter, II, for appellee.
    The Virginia Alcoholic Beverage Control Board revoked the
    wine, beer, and mixed beverage licenses held by Little and Tall,
    Inc., trading as Icons Restaurant and Fahrenheit Lounge.     The
    Board determined that "the place occupied by the licensee has
    become a meeting place or rendezvous for illegal users of
    narcotics and/or habitual law violators, in violation of [Code
    §] 4.1-255 2.c."   On review, the trial judge found that the
    evidence in the record failed to satisfy the statutory elements
    of "meeting place or rendezvous" and, therefore, was insufficient
    to establish a violation of the statute.     The Board contends the
    trial judge erred in refusing to adopt the Board's interpretation
    * Pursuant to Code § 17.1-413, this opinion is not
    designated for publication.
    of the statutory terms "meeting place" and "rendezvous."    For the
    reasons that follow, we affirm the trial judge's order.
    I.
    At an administrative hearing convened to consider whether
    Fahrenheit has become a meeting place or rendezvous for illegal
    users of narcotics or habitual law violators in violation of Code
    § 4.1-225(2)(c), the evidence established that during an
    investigation of another licensee, the Board's investigative
    agents learned that a state police officer's informant said
    several clubs in the City of Richmond "were known for their drug
    use and drug dealers that went there and sold [drugs]."    After
    discussions with the informant, the Board's agents began
    investigating Fahrenheit, a licensee.    The investigation involved
    the use of several informants and undercover agents and resulted
    in an administrative hearing concerning five incidents.
    Agent Jama Smith testified that the first event occurred on
    September 13, 2000 after an informant purchased narcotics from
    John Cecil Whitehead at another establishment and delivered the
    narcotics to the agent.   According to Smith, the informant, who
    was identified only as "Baker" but was not at the hearing, said
    Whitehead was going to Fahrenheit, where "lots of people were
    waiting [for] him."   After Smith sent the informant to Fahrenheit
    with money, the informant "had a conversation" about narcotics
    with Whitehead inside Fahrenheit.     The informant left Fahrenheit
    with Whitehead, walked "approximately half a block away," and
    purchased narcotics from Whitehead in Whitehead's car.    Whitehead
    testified at the hearing that he did not recall the content of
    his conversation with the informant inside Fahrenheit, but that
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    they went to his car because it was too loud inside for him to
    hear.
    Another informant, Gentry, testified that he prearranged
    with Steve Drumm, a narcotics user and seller, to meet at
    Fahrenheit on November 1, 2000.    As Gentry exited his vehicle
    that evening to go to Fahrenheit, Drumm approached him on the
    street.    Gentry entered Drumm's vehicle and purchased a narcotic
    from Drumm.    Gentry did not enter Fahrenheit's premises on that
    occasion.
    Gentry also testified that on November 8, 2000 he approached
    Steven Figg inside Fahrenheit and mentioned he was trying to buy
    narcotics.    Figg said he had cocaine to sell and completed the
    transaction inside Fahrenheit.
    Detective Corrigan testified that he sent an informant into
    Fahrenheit on December 6, 2000.    He testified the informant said
    he purchased narcotics from a person identified as "Michael."
    Neither Corrigan nor any other agent observed the transaction.
    Gentry testified that on December 9, 2000, he purchased a
    "small amount" of narcotics from Adam Quaintance near the dance
    floor in Fahrenheit.    Quaintance testified and confirmed that he
    sold narcotics to Gentry but said the transaction occurred
    upstairs rather than on the dance floor.    Quaintance further
    testified that he sold narcotics every weekend at Fahrenheit for
    five to six months and that, although security personnel were
    generally "all over the place," they were not "upstairs" where he
    regularly sold narcotics.
    The hearing officer found "that [the] evidence establishe[d]
    reasonable cause to believe that on November 8      . . . ; on
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    December 6 . . . ; and on December 9 . . . ; illegal drugs were
    sold by persons to confidential informants inside Fa[h]renheit."
    He also found that two of the sellers, Whitehead and Quaintance,
    had engaged in illegal sales inside Fahrenheit and therefore
    qualify as "habitual law violators."   The hearing officer further
    found that the transactions on September 13 and November 1 did
    not support the Board's charge.   He reasoned that "simply
    arranging to meet at a licensed establishment as a rendezvous
    location" is "too tenuous a basis upon which to hold a licensee
    responsible" when the consummation of the drug purchase occurs
    off premises.   The hearing officer suspended Fahrenheit's wine
    and beer license for sixty days, or, alternatively, for forty-
    five days upon payment of a thousand dollar fine.   He imposed the
    same suspension for Fahrenheit's mixed beverage license.
    The Board's Enforcement Division requested a modification of
    the decision and asked the Board to revoke Fahrenheit's licenses.
    In a Special Notice of Proposed Decision, the Board indicated
    that the record contained evidence to substantiate the charge as
    to the September 13 and November 1 incidents.   In pertinent part,
    the notice indicated the following:
    The decision is being modified because (i)
    the September 13-14, 2000 drug transaction
    was initiated inside . . . Fahrenheit
    . . . ; (ii) the November 1, 2000 drug
    transaction would have taken place at
    Fahrenheit, which was the meeting place
    specified by the parties in this
    transaction, had they not met by chance in a
    parking lot near Fahrenheit; and (iii)
    revocation is the appropriate sanction for
    repeated drug transactions involving
    Schedule I and II substances at the licensed
    premises.
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    After hearing argument, the Board issued the following
    decision:
    Upon consideration of the record and
    counsel's arguments, the Board has
    reasonable cause to believe that the charge
    is substantiated, certain privileges of the
    license should be suspended with provision
    for payment of a civil penalty, the licensee
    should be placed on probation for three (3)
    years, and the initial decision should be
    modified and incorporated by reference as
    the final decision of the Board. While the
    Board is relying on all five incidents of
    drug activity to substantiate the charge, it
    also concludes that the three incidents
    originally substantiated by the Chief
    Hearing Officer, standing alone, are
    sufficient to substantiate the charge and to
    justify the Board's decision even without
    the two additional incidents upon which the
    Board is also relying in this matter,
    therefore;
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    IT IS ORDERED that the privileges of
    purchasing and selling alcoholic beverages
    granted by the license be, and the same are
    hereby, suspended for sixty . . . days,
    during which period such privileges shall
    not be exercised, the license otherwise
    remaining in force and effect; provided,
    however, that upon payment of a civil
    penalty in the sum of two thousand five
    hundred dollars . . . , the suspension shall
    be terminated at the end of thirty . . .
    days. Additionally, the licensee shall be
    placed on probation for three . . . years.
    II.
    On review, the circuit court judge ruled that the statutory
    terms "meeting place or rendezvous" necessarily "required
    prearrangement or predesignation."    The judge also held that the
    "usage of the term 'meeting place' in Virginia case law carries a
    necessary implication of predesignation."
    The judge found that the evidence in the administrative
    hearing record established that in three of the five incidents,
    "the government informant simply went to [Fahrenheit] and
    proceeded to buy illegal drugs" and that the record is devoid of
    evidence that the informant had previously arranged to meet with
    either an illegal user of narcotics or a habitual law violator.
    Thus, he held that those incidents do not satisfy the prearranged
    time and place requirement.   As for the remaining two incidents,
    he noted that one of the two persons involved was an informant
    and found that "one person cannot meet or rendezvous alone."   He
    ruled that "a government informant cannot provide an essential
    element of the charge" and, therefore, the evidence was
    insufficient to substantiate the statute's "two or more persons"
    requirement.
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    Relying upon the hearing officer's detailed findings of fact
    concerning Fahrenheit's extensive security precautions, the trial
    judge found that the administrative record contained no evidence
    that Fahrenheit either knew of the narcotics transactions or had
    information that would have put a reasonable person on notice of
    the transactions.   He also noted that the evidence at the
    administrative hearing proved Fahrenheit "had significant
    security in place and used reasonable efforts to prevent illegal
    conduct from occurring on its premises."   Upon his review of the
    evidence in the record, the trial judge concluded that "there is
    insufficient evidence in the record that five incidents relied
    upon by the Board satisfy the 'meeting place or rendezvous'
    element of Code § 4.1-225(2)c."
    III.
    Code § 4.1-225 provides as follows:
    The Board may suspend or revoke any license
    other than a brewery license, in which case
    the Board may impose penalties as provided
    in § 4.1-227, if it has reasonable cause to
    believe that:
    *     *     *      *    *     *       *
    2.   The place occupied by the licensee:
    *     *     *      *    *     *       *
    c. Has become a meeting place or rendezvous
    for illegal gambling, illegal users of
    narcotics, drunks, prostitutes, pimps,
    panderers or habitual law violators. The
    Board may consider the general reputation in
    the community of such establishment in
    addition to any other competent evidence in
    making such determination.
    The Board contends the trial judge erred by ruling he was
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    "not bound by the Board's interpretation of 'meeting place or
    rendezvous.'"    Although a long line of cases upholds the general
    rule that administrative agencies' determinations of matters
    within their specialized competence are entitled to great weight,
    see Commonwealth v. General Electric Company, 
    236 Va. 54
    , 64, 
    372 S.E.2d 599
    , 605 (1988); Winchester TV Cable Company v. State Tax
    Commissioner, 
    216 Va. 286
    , 290, 
    217 S.E.2d 885
    , 889 (1975); 1A
    Michie's Jurisprudence, Administrative Law, § 18 (1993), the
    Supreme Court has held, however, that "when, as here, the
    question involves a statutory interpretation issue, 'little
    deference is required to be accorded the agency decision' because
    the issue falls outside the agency's specialized competence . . .
    [and] pure statutory interpretation is the prerogative of the
    judiciary."     Sims Wholesale Co. v. Brown-Forman Corp., 
    251 Va. 398
    , 404, 
    468 S.E.2d 905
    , 908 (1996) (quoting Johnston-Willis,
    Ltd. v. Kenley, 
    6 Va. App. 231
    , 246, 
    369 S.E.2d 1
    , 9 (1988)).
    Thus, in Sims Wholesale, the Supreme Court "determine[d] the
    meaning of 'good cause' as used in the [Virginia Wine Franchise]
    Act."    251 Va. at 404, 
    468 S.E.2d at 908
    .   Although that Act is
    "a part of the Alcoholic Beverage Control Act," id. at 400, 
    468 S.E.2d at 906
    , the Court rejected the Board's contention that the
    courts are required to defer to the Board's interpretation of the
    statutory term.     Id. at 404, 
    468 S.E.2d at 908
    .   The Supreme
    Court rejected the Board's interpretation of "good cause,"
    rejected this Court's interpretation of "good cause," id. at 405,
    
    468 S.E.2d at 909
    , and determined the meaning of the term based
    upon the statutory purpose.     Id. at 405-06, 
    468 S.E.2d at 909
    .
    We are unpersuaded by the Board's argument that the issue in
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    this case is controlled by ABC Comm. v. York Street Inn, 
    220 Va. 310
    , 315, 
    257 S.E.2d 851
    , 855 (1979).    The crux of the issue in
    York Street was the construction of the definitions of "table"
    and "counter," which the Board had included in its regulations.
    As the Court noted, "[u]pon publication, [Board] regulations
    'necessary to carry out the purposes and provisions of' and 'not
    inconsistent with' the Alcoholic Beverage Control Act 'shall have
    the force and effect of law.'"   220 Va. at 314 n.2, 
    257 S.E.2d at
    854 n.2 (quoting former Code § 4-11(a)).   Thus, the Supreme Court
    held that it would give special weight to the construction of the
    definitions of "table" and "counter" because the Board, pursuant
    to statutory authorization, "ha[d] promulgated regulations
    prescribing certain standards for a licensee's equipment and
    furnishings."   220 Va. at 314, 
    257 S.E.2d at 854
    .   In the present
    case, however, as in Sims Wholesale, the issue is solely a matter
    of statutory interpretation of terms with no specialized
    connotation.    "The issue does not involve 'the substantiality of
    the evidentiary support for findings of fact, which requires a
    great deference because of the specialized competence of the
    agency."   251 Va. at 404, 
    468 S.E.2d at 908
    .   See also Yamaha
    Motor Corp. v. Quillian, 
    264 Va. 656
    , 665-66, 
    571 S.E.2d 122
    ,
    126-27 (2002) (reiterating that the Court's duty is to determine
    legislative intent from the words of the statute and the Court is
    not bound by the agency's interpretation of the statute).    The
    record does not indicate that the Board used its regulation or
    rule-making authority to attach any special significance to the
    terms "meeting place" or "rendezvous."   Hence, the trial judge
    correctly ruled that the Board's application of the terms is not
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    binding on the reviewing courts.
    The record establishes that the hearing officer found, in
    essence, that
    the place occupied by the licensee has
    become a meeting place or rendezvous for
    illegal users of narcotics and/or habitual
    law violators . . . [because] the evidence
    establishes reasonable cause to believe
    . . . illegal drugs were sold by persons to
    confidential informants inside Fahrenheit
    . . . [and] [t]wo of these drug dealers
    . . . also engaged in other sales of illegal
    drugs inside the licensed establishment.
    The Board expanded the scope of the statute to include a "drug
    transaction [that] was initiated inside . . . Fahrenheit" but
    consummated outside and a "drug transaction [that] would have
    taken place at Fahrenheit . . . had [the parties] not met by
    chance in a parking lot near Fahrenheit."
    The trial judge rejected the Board's conclusion that the
    statutory terms "meeting place" or "rendezvous" could be
    established by the mere showing that two people met at a place
    and there consummated a drug transaction.   In so doing, he relied
    upon the usual dictionary definitions of the words that require
    prearrangement or predesignation.   For example, the American
    Heritage Dictionary of the English Language 1477 (4th ed. 2000)
    defines rendezvous as: "1. A meeting at a prearranged time and
    place.   2. A prearranged meeting place, especially an assembly
    point for troops or ships.   3. A popular gathering place."
    Moreover, in view of the statutory language, the trial judge
    appropriately sought to define contextually the terms "meeting
    place" or "rendezvous."   We note that Webster's Third New
    International Dictionary 1922 (1993) similarly defines
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    "rendezvous," in the context of an establishment, as "a place
    appointed for assembling or meeting" and "a place to which people
    customarily come in numbers: a place of popular resort: HAUNT."
    In short, as the trial judge ruled, the element of prearrangement
    or predesignation necessarily exists to account for the presence
    of assembled persons.
    Indeed, Virginia courts have generally used the terms
    "rendezvous" and "meeting place" as if they require
    prearrangement or predesignation by the parties involved.    Minus
    a few exceptions, whenever our decisions use the word
    "rendezvous" as a noun, an element of predesignation for an
    assembly was evident.   See, e.g., Miller v. Commonwealth, 
    181 Va. 906
    , 907-08, 
    27 S.E.2d 57
    , 57 (1943) (noting that the
    "rendezvous" for "the gathering of . . . persons, young and old,
    who were on pleasure bent . . . were two night clubs").     Cf.
    Virginia R. Co. v. London, 
    148 Va. 699
    , 708, 
    139 S.E. 328
    , 330
    (1927) (noting "that the rear of [a] barn was a rendezvous for
    bootleggers and other disrepute persons who drank and smoked
    there").   Likewise, the element of predesignation for a gathering
    is implied in decisions using the word "meeting" and "place."
    See e.g. Roanoke City School Bd. v. Times World Corp., 
    226 Va. 185
    , 192, 
    307 S.E.2d 256
    , 259 (1983) (noting that "'[m]eeting' is
    defined . . . as 'an act or process of coming together . . . a
    gathering for business, social, or other purposes"); Thomas v.
    Commonwealth, 
    263 Va. 216
    , 222, 
    559 S.E.2d 652
    , 654 (2002)
    (parties agreed on an "arranged meeting place").
    Under accepted principles, in construing the terms in the
    Act, we must consider the words used, their relation to the
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    subject matter in which they are used, the purposes for which the
    act was intended, and such other sources, if any, as may throw
    light upon the intention of the legislation.     Miller v.
    Commonwealth, 
    172 Va. 639
    , 
    2 S.E.2d 343
     (1939).     Thus, we agree
    in substantial part with the trial judge's interpretation of the
    statutory terms.
    By referencing a reasonable cause to believe the
    establishment "[h]as become a meeting place or rendezvous" for
    illegal activities, the statute contemplates more than a private
    arrangement by two people to meet at a place and there secretly
    conduct a transaction.   Indeed, if it did not, no licensee using
    reasonable and prudent means could safely manage its business or
    protect against a violation.   The statute very obviously suggests
    a broader definition of the terms because it provides that "[t]he
    Board may consider the general reputation in the community of
    such establishment."   Code § 4.1-225(2)(c).   Read in its
    entirety, the statute prohibits a known usage of the
    establishment for the proscribed purposes.     Thus, we hold that to
    establish a violation of Code § 4.1-225(2)(c), the evidence must
    prove the establishment has become a place of gathering or
    assembly, whether by prearrangement or reputation, for persons
    engaged in the proscribed acts.   Accordingly, we hold, as did the
    trial judge, that in order to prove Fahrenheit violated Code
    § 4.1-225(2)(c), the evidence must further prove that two or more
    illegal users of narcotics or habitual law violators used it as a
    meeting place or rendezvous.   The rationale behind this rule is
    twofold.   First, it is impossible to meet or rendezvous alone.
    Second, the language of the statute demands it.    The statute
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    prohibits an establishment from becoming a meeting place or
    rendezvous for "illegal users" of narcotics or "habitual law
    violators."   Code § 4.1-225(2)(c) (emphasis added).
    Applying these principles to the present case, we hold that
    the trial judge did not err in concluding that the evidence in
    the record fails to substantiate the charge that Fahrenheit
    violated Code § 4.1-225(2)(c).   In three of the five incidents,
    it was not proved that the informants prearranged with the
    sellers to meet at Fahrenheit.   In those incidents, the
    government informant simply entered Fahrenheit and, during the
    evening, bought illegal drugs.   No evidence was offered to prove
    an illegal user of narcotics or a habitual law violator had
    previously arranged to meet with another illegal user of
    narcotics or habitual law violator.
    Likewise, the evidence failed to prove prearrangement in the
    incident involving Baker and Whitehead.   In that incident,
    Whitehead simply made a statement that he was going to
    Fahrenheit, and Smith testified at the hearing that "[t]here was
    no arrangement made between Mr. Baker and Mr. Whitehead that
    [they] would meet . . . at Fahrenheit's."   For the purpose of
    this opinion, however, because no evidence proved more than one
    illegal users of narcotics or habitual law violators had used
    Fahrenheit as a meeting place or rendezvous, it is irrelevant
    whether prearrangement occurred.   The incident involving Baker
    and Whitehead cannot substantiate the charge because, even though
    Whitehead was deemed to be a habitual law violator, no evidence
    establishes Baker as either an illegal user of narcotics or a
    habitual law violator.
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    In the incident involving Gentry and Drumm, the evidence
    established that they never entered Fahrenheit.   Code
    § 4.1-225(2)(c) prohibits an establishment from becoming a
    meeting place or rendezvous; it does not encompass the public
    area surrounding the establishment or Drumm's vehicle.    The
    express language of the section, no matter how strictly
    construed, cannot reach locations that are not described in the
    statute and are outside of the licensee's control.
    The Board's attempt to revoke Fahrenheit's licenses reflects
    the Board's intention to combat illegal drug activities in
    licensed establishments.   The General Assembly likewise shares
    that intention.    Consequently, in a recent amendment to Code
    § 4.1-225(2)(c), the General Assembly added language to prohibit
    a licensed establishment from becoming "a place where illegal
    drugs are regularly used or distributed."   2003 Va. Acts, ch.
    594.   "As a general rule, a presumption exists that a substantive
    change in law was intended by an amendment to an existing
    statute."    Commonwealth v. Bruhn, 
    264 Va. 597
    , 602, 
    570 S.E.2d 866
    , 869 (2002).   Furthermore, "we will assume that . . .
    amendments to the law are purposeful and not unnecessary or
    vain."    Cape Henry Towers, Inc. v. National Gypsum Co., 
    229 Va. 596
    , 600, 
    331 S.E.2d 476
    , 479 (1985).   Thus, we note that the
    additional language is not meant to be redundant.    This statutory
    change avoids the conclusion that the Board now must prove an
    element of prearrangement inherent in "meeting place" and
    "rendezvous" when drugs are "regularly used or distributed."      The
    version of the statute at issue in the present case, however,
    prohibited an establishment from becoming known in a generalized
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    way, connected with the concepts of "rendezvous" and "meeting
    place," a place where proscribed persons assembled.
    For these reasons, we affirm the trial judge's order.
    Affirmed.
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