with whom FABE, Justice, joins, dissenting.
The issue in this case can be understood by considering the following hypothetical. A young woman purchases cigarettes from a convenience store after showing the clerk an ID indicating that she is of legal age. In fact, the ID is a well-produced forgery and the young woman is one year under age. When caught smoking by a parent, she tells the parent where she bought the cigarettes and the parent reports her purchase to the police. The convenience store clerk is charged with the negligent sale of tobacco products to a minor. The clerk does not believe he was negligent but pleads no contest to the charge because the prosecutor has told him that his fine will be $300 and the clerk knows that it would cost him at least $1000 to hire a lawyer to defend the ease. Assuming that the clerk was not in fact negligent, does Alaska’s system of imposing sanctions on licensees call for licensee sanctions in these circumstances? Today’s opinion would answer yes because it concludes that actual negligence in making a sale to a minor on the part of a retail clerk is not a required condition of imposing sanctions on a licensee. I would answer the question in the negative because I think that actual negligence is a required condition to the imposition of licensee sanctions. Because of this I also conclude that the statute, AS 43.70.075(m)(l), that precludes a licensee from offering proof on the issue of clerk negligence, violates the licensee’s due process rights. My reasons for reaching these conclusions follow.
Preliminary Discussion
At the outset I note my agreement with today’s opinion on two points. First, tobacco is a hazardous and addictive substance that is properly regulated by the State. Consumption of tobacco, especially by minors, presents a substantial public health danger. Second, because tobacco use is a hazard and tobacco sales are regulated, sellers can be subjected to administrative sanctions on a strict liability basis.1 “Strict liability” here means without direct fault, including negligence, on the part of licensees and without vicarious fault based on the conduct of licensees’ employees while acting within the scope of their employment. “Vicarious fault” would include the negligence of a retail clerk who sells tobacco to a minor without taking reasonable steps to ascertain the age of the purchaser.
Even though the State could impose a system that dispenses with vicarious liability as a predicate to the imposition of sanctions against a licensee, this is not what AS 43.70.075 does. The statute requires — as to sales by clerks — that a clerk be convicted of specified offenses requiring at least negligence on the part of the clerk. The legislature did not contemplate that sanctions would be imposed against a licensee when a clerk acting while exercising reasonable care sells tobacco products to a minor. Thus, AS 43.70.075 is based on vicarious, not strict, liability.
*1208Due Process Requires a Hearing on Important Issues.
A tobacco endorsement is a valuable interest. Like liquor licenses and other types of business enterprise licenses, it is protected by the due process clauses of the Alaska and United States Constitutions.2 Due process of law entitles a holder of an endorsement permitting the sale of tobacco products to a meaningful hearing before the endorsement may be suspended.3
“[C]onsiderations of fundamental fairness” guide our determination of what constitutes a meaningful hearing.4 Until now we have not examined what makes a hearing meaningful in the context of a tobacco endorsement suspension proceeding. But we have spoken of the requirements of fundamental fairness in the context of driver’s license revocation proceedings. In that context we have held that in a revocation hearing a licensee must be given an opportunity to challenge “issues of ‘central importance’ to the revocation decision.” 5 In Javed v. Department of Public Safety, Division of Motor Vehicles, that meant that before a license could be revoked, the licensee who failed a breath test needed to be afforded an opportunity to present evidence that he had not been driving.6 The terms of the governing statute limited the hearing issues in Javed to whether the driver failed or refused to take the test and whether the arresting officer had reasonable grounds to believe that the licensee was driving at the time of intoxication.7 We stated: “It is hard to imagine an issue of more ‘central importance’ to a driver’s license revocation hearing than whether the person accused of DWI was driving a vehicle in the first place.”8 We therefore held that the statute in Javed, AS 28.15.166(g), was unconstitutional as applied because it did not permit that critical issue to be adjudicated.9
The issues of central importance to the suspension of a tobacco endorsement clearly include whether a sale to a minor took place and whether the clerk who made the sale was acting in the scope of his or her employment when the sale took place. These issues were uncontested in the present case, and they were decided against Godfrey by the hearing officer. The question is whether the employees’ negligence in making the sales was also an issue of central importance and thus an issue that Godfrey should have had the right to contest.
Godfrey Is Not Bound by the Clerks’ Convictions.
Before addressing that question, it is appropriate to establish at this point that God-frey cannot constitutionally be bound by the facts determined in the proceedings against the clerks. The hearing officer did not make any findings as to whether either of the clerks were negligent when they made the sales. Their convictions for the offense of negligent sale of tobacco products would preclude them from contesting their negligence in subsequent proceedings, unless the amount at stake in the prosecution of the negligent sale proceeding was so .limited in comparison to the amount at stake in a subsequent proceeding that it would be inappropriate to give binding effect to the former.10 *1209But the clerks’ convictions could not have preclusive effect on Godfrey because Godfrey was not a party to the proceedings against the clerks nor was he in privity with them.
A judgment against one party may not have preclusive effect against another party unless the other party can be said to be in privity with the party against whom the judgment runs. “It is a violation of due process for a judgment to be binding on a litigant who was not a party or a privy and therefore has never had an opportunity to be heard.”11 In Pennington v. Snow we observed that “before privity may be found to exist, the non-party must have notice.and an opportunity to be heard; the procedure must insure the protection of the rights and interests of the non-party, and he must in fact be adequately represented by the parties.”12 In formulating this standard we noted that “we are guided by the requirements of due process.”13 Here, Godfrey had neither notice nor an opportunity to be heard with respect to the prosecution of the citations against his employees. He thus did not have the opportunity to litigate whether the employees were negligent when they made the sales in question.14
Vicarious Fault — Employee Negligence — Is Required for Licensee Sanctions.
It is clear based on the text of AS 43.70.075(d) and (m)(l) that the legislature did not intend to condition the imposition of sanctions against a licensee only upon direct fault on the part of a licensee. A clerk’s act *1210may also cause a licensee to be sanctioned, but only when the clerk is convicted of a negligent sale while acting within the scope of his or her employment. Negligence, of course, is a required element of the offense of negligent sale, and a clerk’s conviction is a necessary predicate to the imposition of sanctions on the licensee. Thus, employing a literal reading of the relevant statutory sections, the legislature seems to have intended that there should be no sanctions against a licensee unless a clerk makes not only a sale to a minor, but a negligent sale to a minor. Use of a clerk’s conviction appears to be a shortcut method of proving both the fact of the sale and the clerk’s negligence. But the problem, as we have seen, is that this method of proof also shortcuts due process where the licensee has not had an opportunity to be heard on the underlying issues.
I believe that the legislature intended that there be no sanctions against a licensee without at least vicarious fault. In other words, no sanctions against a licensee were contemplated when a clerk makes a non-negligent sale to a minor. Three sources support this conclusion: (1) the text of the statutory system; (2) its legislative history; and (3) the State’s concession.
With respect to the text, as explained above, negligence is required for a clerk’s conviction, and no sanctions may be imposed against a licensee without a conviction.
With respect to legislative history, the debates concerning AS 43.70.075 focused on whether imposing vicarious liability on licensees — sanctioning licensees for an employee’s fault rather than the direct fault of a licensee — would be unfair to a licensee. The prevailing view was that imposing licensee sanctions where employees were at fault was acceptable — licensees could train employees to avoid mistakes.15 No legislator expressed the view that it would be fair to sanction a licensee when an employee was not at fault.
Concerning the State’s concession that vicarious fault in the form of clerk negligence is required, the concession is made explicitly in the caption to the State’s first argument. The caption reads, in relevant part, as follows; “AS 4-3.70.075, as a public welfare statute, is designed to hold employers liable for the acts of their employees who negligently sell to minors."16 The same concession is repeated in the body of the State’s brief: “The framework of [AS 43.70.075], which imposes vicarious liability on a retailer based on its employee’s illegal acts and for mandatory penalties, is consistent with how other *1211jurisdictions have regulated licensees who sell or distribute dangerous products.”17
Conclusion
For the above reasons, negligence on the part of a clerk is, in my view, an issue of central importance in licensee sanction proceedings and a licensee is entitled to a meaningful hearing on this issue. It follows that, to the extent that AS 43.70.075(m)(l) bars such a hearing, it violates a licensee’s due process rights.
. See State v. Hazelwood, 946 P.2d 875, 880-84 (Alaska 1997); Alesna v. LeGrue, 614 P.2d 1387, 1390-91 (Alaska 1980).
. See, e.g., Hilbers v. Municipality of Anchorage, 611 P.2d 31, 36 (Alaska 1980) (business license protected by due process); Herscher v. State, Dep’t of Commerce, 568 P.2d 996, 1002 (Alaska 1977) (hunting guide license); Frontier Saloon, Inc. v. Alcoholic Beverage Control Bd., 524 P.2d 657, 659-60 (Alaska 1974) (liquor license).
. See Rollins v. State, Dep't of Revenue, Alcoholic Beverage Control Bd., 991 P.2d 202, 211 (Alaska 1999).
. Thorne v. Dep’t of Pub. Safety, 774 P.2d 1326, 1329 (Alaska 1989).
. Javed v. Dep’t of Pub. Safety, Div. of Motor Vehicles, 921 P.2d 620, 623 (Alaska 1996) (quoting Thorne, 774 P.2d at 1331); see, e.g., Graham v. State, 633 P.2d 211, 216 n. 12 (Alaska 1981).
. 921 P.2d at 624.
. Id. at 623.
. Id.
. Id. at 624-25.
. See Restatement (Second) of Judgments § 28(5)(c) (1980); Pennington v. Snow, 471 P.2d 370, 378 (Alaska 1970):
[T]he amount at stake in the district court case was far less than amounts involved in the superior court action. If we were to hold the *1209findings of the district court conclusive in this case, we would in effect be binding the appellant to accept the consequences of a suit in which she had less time to prepare her case and less incentive to adjudicate all of the issues to the fullest extent.
(Footnote omitted.) Today’s opinion states that clerks accused of the violation of negligent sale of tobacco products to a minor have an “ample incentive to defend themselves” and “to require the state to prove both that the sale took place and that the clerk acted negligently.” Majority at 1205. This "ample incentive” language appears to be a reference to the use of a clerk's conviction in subsequent proceedings. Lack of an adequate incentive to obtain a full and fair adjudication in an initial action is a well recognized ground for refusing preclusive effect to the judgment in the initial action in a subsequent action: “The amount in controversy in the first action may have been so small in relation to the amount in controversy in the second that preclusion would be plainly unfair.” Restatement (Second) of Judgments § 28 cmt. j. If there were subsequent proceedings with serious consequences against clerks this exception would apply. Violations are non-criminal acts punishable only by a fine. They do not give rise to any legal disability and carry little, if any, public opprobrium. AS 11.76.100(f); AS 11.81.900(b)(63). Publicly funded counsel are not provided in prosecutions for violations. AS 11.81.900(b)(63)(B). The cost of hiring an attorney to defend such charges far exceeds the small fines associated with them — in this case, $200 for Ratzat and $300 for Laurenzana. In the present case, however, the only subsequent proceedings are against the licensee. The lack of an adequate incentive on the part of the clerks to defend themselves would also bar preclusive use of their convictions in a proceeding against the licensee, except that, for the reasons explained in the discussion that follows in the text of this dissent, the licensee cannot be bound by them because he was not a party to the prosecutions against the clerks and did not assume control of their defenses. See Restatement (Second) of Judgments § 39: "A person who is not a party to an action but who controls or substantially participates in the control of the presentation on behalf of a party is bound by the determination of issues decided as though he were a party.”
. Parklane Hosiery Co. v. Shore, 439 U.S. 322, 327 n. 7, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979).
. Pennington, 471 P.2d at 375-76.
. Id. at 375.
. To the extent that today's opinion suggests that the opportunity to be heard requirement is satisfied because a licensee has the opportunity to defend his clerk jn a violation proceeding, Majority at 1205, the court ignores a number of considerations. First, the licensee may not have notice of the charges. In this case the hearing officer found that Godfrey lacked notice of Lau-renzana's citation and court proceeding. The hearing officer did not make a finding either way with regard to Ratzat, though Godfrey claims he lacked notice of this proceeding as well. Second, the employee may not want to be defended. The employee may want to pay a small fine and put the matter to rest rather than be engaged in a potentially long adversarial proceeding. Third, even if the employee agreed to a licensee-sponsored defense, the licensee's interests may conflict with the employee's, rendering licensee control inappropriate. Finally, assuming that the licensee undertook a vigorous defense on behalf of his employee, this could radically alter what the legislature meant to be a brief and simple proceeding for a mere violation.
. The Slate characterizes the 1989 debates concerning the bill that became AS 43.70.075 as follows:
Some legislators expressed concern about the bill, observing that it could adversely affect a vendor’s license when in fact an employee was at fault. But other representatives pointed out that the suspension periods would work as an incentive to curtail the sale of tobacco to minors because vendors would be more likely to hire scrupulous employees and to educate them.
See An Act Relating to Tobacco and Products Containing Tobacco: Hearing on H.B. No. 141 Before the S. Comm, on Cmty. & Reg’l Affairs, 16th Leg., 1st Sess. (Alaska Apr. 27, 1989); Relating to Retail Sale of Tobacco, Tobacco Products, and Devices for Smoking Tobacco: Hearing on H.B. No. 141 Before the H. Comm, on Fin., 16th Leg., 1st Sess. (Alaska Apr. 7, 1989); An Act Relating to Retail Sale of Tobacco, Tobacco Products, and Devices for Smoking Tobacco: Hearing on H.B. No. 141 Before the H. Comm, on Fin., 16th Leg., 1st Sess. (Alaska Mar. 30, 1989); An Act Relating to Retail Sale of Tobacco, Tobacco Products, and Devices for Smoking Tobacco: Hearing on H.B. No. 141 Before the H. Comm, on the Judiciary, 16th Leg., 1st Sess. (Alaska Mar. 17, 1989). With respect to the 2001 amendments to AS 43.70.075, which increased sanctions and made them mandatory, the State characterized the debates as follows: "Representative Joe Hayes expressed concern that the suspension periods would essentially punish the business for the employee’s mistake. Representative Meyer responded that businesses are responsible for their employees and need to make sure that employees are adequately trained.” See An Act Relating to the Offense of Selling or Giving Tobacco to a Minor, to the Accounting of Fees from Business License Endorsements for Tobacco Products, to the Disclosure of Certain Confidential Cigarette and Tobacco Product Information, to Notification Regarding a Cigarette Manufacturer's Noncompliance with the Tobacco Product Master Settlement Agreement, to Business License Endorsements for Sale of Tobacco Products, to Citations and Penalties for Illegal Sales of Tobacco Products; and Providing for an Effective Date: Hearing on H.B. No. 228 Before the H. Comm, on Labor and Commerce, 22d Leg., 1st Sess. (Alaska Apr. 18, 2001).
. (Emphasis added.)
. (Emphasis added.) In its discussion of licensee sanctions in other jurisdictions, the State repeatedly adverts to the requirement of vicarious liability. It argues, "[c]riminal liability may be found against an accused although the accused is only vicariously liable for the act because such an act comes under the rubric of ‘public welfare offense.' ” (Emphasis added.) The State further observes that “there are numerous statutes involving licensing of sellers of alcoholic beverages, a similarly age-restricted product, which hold employers vicariously liable for their employees negligent or criminal conduct." (Emphasis added.) The State's brief features the following quotation from a California court:
It has long been recognized that statutory public welfare offenses such as here involved require neither guilty knowledge nor intent. Thus, although ordinarily an innocent employer cannot be held liable for this misconduct of an employee, such an employer will nonetheless be held accountable whenever the offense involved consists of a violation of a general public welfare regulation. (Emphasis added.)
The explanatory footnote accompanying this quotation in the State’s brief states:
Aantex Pest Control Co. v. Structural Pest Control Board, [108 Cal.App.3d 696] 166 Cal.Rptr. 763 (Cal.App.1980) (license revocation upheld based on employee’s negligent use of an exterminating agent, even though employer lacked knowledge of company’s possession of the chemical and of employee’s use of it); see also Camacho v. Youde, [95 Cal.App.3d 161,] 157 Cal.Rptr. 26, 28 (Cal.App.1979) (upholding 60-day license suspension based on an employee’s negligent conduct in applying pesticides; no due process violation because the objective of an administrative proceeding relating to a license suspension is to protect the public.)[.] (Emphasis added.)