VA Alcoholic Beverage Control Board v. Little & Tal

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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