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Gina, Inc v. Ohio Liquor Control Commission

September 27, 2011


APPEAL from the Franklin County Court of Common Pleas. (C.P.C. No. 10CVF-11832)

The opinion of the court was delivered by: Bryant, P.J.

Cite as Gina, Inc. v. Ohio Liquor Control Comm.,



{¶1} Appellee-appellant, Ohio Liquor Control Commission ("commission"), appeals from a judgment of the Franklin County Court of Common Pleas reversing the commission's order that directed appellant-appellee, Gina, Inc. ("Gina"), to either serve a seven-day suspension of its liquor license or forfeit $700. The commission assigns a single error:

The Franklin County Common Pleas Court erred and abused its discretion when it held that the Ohio Liquor Control Commission's decision finding Gina, Inc., in violation of R.C. 4301.66 was not supported by reliable, probative and substantial evidence and was not in accordance with law.

Because the common pleas court abused its discretion in reversing the commission's order, we reverse.

I. Facts & Procedural History

{¶2} Gina, doing business as "Gina's Party Store," held class C1, C2 and D6 liquor licenses at all times relevant to this appeal. As a result of a March 16, 2010 warrantless administrative inspection of Gina's premises, the commission on June 11, 2010 mailed Gina a notice of hearing alleging that Gina's employee and permit holder, Maryrose Mbah, violated R.C. 4301.66 when she hindered or obstructed the agents from making an investigation, inspection, or search of the permit premises. Pursuant to the notice, the commission conducted a hearing on July 14, 2010, at which Gina stipulated to the facts underlying the violation as set forth in the commission's narrative report.

{¶3} As the report explains, the agents went to the permit premises on March 16 for three purposes: to inform the permit holder that the commission was terminating its agency contract with the store, to conduct an audit of the spirituous liquor inventory, and to conduct an administrative inspection of the permit premises based upon complaints. The agents arrived during normal business hours, identified themselves to the permit holder Mbah, and advised her that the agents would be conducting an administrative inspection of the premises.

{¶4} The agents initially identified a safe near a desk just inside the door to an open back room or storage area. The agents asked Mbah to open the safe, and she did.

The agents then located another safe further back in the storage area. When the agents inquired about the purpose of the second safe, Mbah informed the agents that money from the sale of the spirituous liquor was dropped into the safe. The agents asked Mbah to open the second safe, but Mbah ignored the agents' request. After the agents asked Mbah a second time to open the safe, "she became agitated and said she did not have to open the safe." At that point, agent-in-charge Brent Devery approached Mbah and asked her if she was going to open the safe. Mbah walked past Agent Devery into the back office area and quickly placed something in a handbag. Mbah returned to the door of the back office area where Agent Devery was standing, and she attempted to close the door on him, stating the agents already had been in the office and would need a warrant to go any further. When Agent Devery stuck his foot in the door, Mbah "continued to attempt to pull the door shut on [Agent] Devery's foot." After Agent Devery read Mbah the fine print on her liquor permit concerning liquor investigations, Mbah opened the second safe.

{¶5} At the July 14 hearing, Gina's counsel explained that on December 31, 2009, someone robbed Gina of about $30,000, the store's entire New Year's Eve sales. As a result, the permit holder had been short on deposits and was working with the former Superintendent of Liquor Control to pay the commission the money Gina owed to it. When the current Superintendent of Liquor Control assumed office, he conducted some internal audits and discovered Gina not only was short on deposits, but "the number was increasing," a factor that prompted the commission to terminate its agency contract with Gina.

{¶6} As to the alleged violation, Gina contended the agents exceeded the scope of a permissible warrantless administrative inspection when they demanded entry into the second safe, since they lacked a reasonable suspicion that a violation of the Liquor Control Act or commission rules would be found in the second safe. In response to that contention, Agent Moyer, one of the agents who assisted in the March 16 inspection, testified the commission "was missing over $50,000 in spirituous liquor or money" from Gina, so he and the other agents were looking for the $50,000. (Tr. 9-10, 16.) Agent Moyer asserted that when Mbah informed the agents some money from the sale of spirituous liquor was dropped into the second safe, the agents "had a reasonable suspicion that money was in the safe." (Tr. 10.) Agent Moyer further testified Mbah "hindered inspection of Agent Devery's when she shut the door on his foot." (Tr. 22.)

{¶7} On the evidence presented, the commission found Gina hindered or obstructed the agents' investigation in violation of R.C. 4301.66. The commission accordingly imposed a sanction. Gina timely appealed to the common pleas court.

{ΒΆ8} The common pleas court reversed the commission's order, finding reliable, probative, and substantial evidence did not support the order, and the order was not in accordance with law. The court rejected the commission's assertion that it had the requisite reasonable suspicion to enter the second safe because of Mbah's agitated, irrational, and uncooperative conduct, stating the commission "in bootstrap fashion" could not properly contend "Mbah's resistance to a warrantless search provided, at least in significant part, the basis to conclude that reasonable suspicion existed." (Tr. 8.) Instead, the court "found ...

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