7-11, Inc, etc v. VA Alcoholic Beverage Control Bd ( 2003 )

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).
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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
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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,
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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
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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
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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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