04-002786 Department Of Business And Professional Regulation, Division Of Alcoholic Beverages And Tobacco, vs. Robert Joseph Molitor, D/B/A Oar House Bar And Liquors Status: Closed Recommended Order on Wednesday, November 23, 2005.

Summary: Respondent "refilled" liquor bottles and misrepresented the content of the brand(s) of liquors. Recommend suspension for 20 days and an administrative fine of $1,000.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF ALCOHOLIC BEVERAGES )

AND TOBACCO, )

)

Petitioner, )

)

vs. ) Case No. 04 - 2786

)

ROBERT JOSEPH MOLITOR, d/b/a )

OAR HOUSE BAR AND LIQUORS, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a final hearing was held in this case

on June 27 and 28, 2005, in Tampa, Florida, before Fred L.

Buckine, the designated Administrative Law Judge of the Division

of Administrative Hearings.

APPEARANCES

For Petitioner: Renee Alsobrook, Esquire

Sorin Ardelean, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

For Respondent: David J. Sockol, Esquire

Derek A. DiPasquale, Esquire

111 Second Avenue Northeast, Suite 1401

St. Petersburg, Florida 33701

STATEMENT OF THE ISSUE

There are two issues presented in this proceeding. One,

whether Respondent and/or its employees or agents possessed,

sold or served on its licensed premises alcoholic beverages

la beled as and represented to be a specific alcoholic

beverage(s), but the containers did not contain the alcoholic

beverage(s) as stated on the labels of the bottles

(misrepresentation), in violation of Section 562.061, Florida

Statutes (200 4 ). 1 Two, wheth er Respondent reused or refilled

with distilled spirituous liquors for the purpose of sale

bottle(s) or other containers which once contain ed spirituous

liquors , misrepresented or permit ted t o be misrepresented the

brand of distilled spirits being sold or offered for sale in or

from any bottle or containers for the purpose of sale in

violation of Section 565.11, Florida Statutes.

PRELIMINARY STATEMENT

This cause has a procedural history extending from

August 9, 2004 , until the final hearing on June 27 and 28, 2005.

On August 9, 2004, Petitioner, Department of Business and

Professional Regulation, Division of A lcoholic Beverages and

Tobacco , referred this cause ( o ne c ount Administrative Action

and R equest for Hearing) to the Division of Administrative

Hearin g s for assignment of an Administrative Law Judge.

By Notice of August 20, 2004, the final hearing was

scheduled for October 11, 2004.

On October 4, 2004, a motion to continue and place case in

abeyance was filed by Respondent. On October 5, 2004,

Responde nt filed an Amended Motion for Continuance and for

Extension to Respond to Petitioner's First Set of

Interrogatories .

On October 5, 2004, an Order was entered placing the case

in abeyance , with a written status report due not later than

January 5, 2005.

On January 4, 2005, Respondent filed a Motion to Resume

Proceeding. On January 14, 2005, Respondent's motion was

granted , and a Notice of Hearing by Video Teleconference,

scheduling the final hearing for February 28, 2005 , was entered.

On February 4, 2005 , and February 8, 2005 , Petitioner and

Respondent, respectively, filed Motions to Introduce Expert

Testimony by Telephone Conference. On February 8, 2005,

Respondent filed a Motion for Continuance of Proceedings for

60 Days to Complete Discovery.

On Februa ry 28, 2005, Order s were entered granting e xpert

testimony via telephon e conference and granting a continuance

and rescheduling the final hearing for April 28, 2005, in Tampa,

Florida.

On April 6, 2005, Petitioner filed a Motion to Amend

Administrative Act ion and the First Amended Administrative

Complaint , alleging violations of Sections 565.11 and 561.29,

Florida Statutes. The motion was granted by O rder of April 8,

2005.

On April 13, 2005, the parties filed a Joint Motion t o

Continue , and the O rder G rant ing C ontinuance and R e - scheduling

Hearing for May 18, 2005, was entered on April 14, 2005.

On May 6, 2005, Respondent filed a Motion to Compel and

Motion for Continuance , and Petitioner filed a Response to

Motion to Compel on May 10, 2005.

On May 13, 2005, an Order was entered granting a

continuance and rescheduling the f inal h earing for June 27

and 28, 2005.

On May 24, 25, and 27, 2005, Petitioner filed Notice s of

T aking D epositions, a Motion to Perpetuate Testimony , and a

Notice of Service of Respondent' s Amended Expert Disclosure.

On June 3, 2005, Respondent filed a Motion to Dismiss and

Relinquish Jurisdiction , and Petitioner filed Petitioner's

r esponse to Respondent's Motion to Dismiss and Relinquish

Jurisdiction on June 6, 2005.

On June 8, 2005, Petit ioner filed Petitioner's Motion in

Limine and Motion to Compel discovery.

On June 15, 2005, Petitioner filed 16 depositions taken of

Respondent's witnesses.

On June 20, 2005, Respondent's Motion in Limine to Exclude

Evidence , Testimony and Argument from an d regarding the Williams

Reagent [ Field ] Test, the Photographs of the L iquor B ottles and

the National Laboratory Testing Results [ Alcoholic ] Analysis was

filed , and Petitioner filed its o bjections on June 24, 2005.

At the hearing , Petitioner presented the testimony of three

witnesses : James Jagnathan, Ph.D., senior alcohol chemist at

the Alcohol and Tobacco Tax and Trade Bureau laboratory in

Ammendale, Maryland , and Lieutenant George Miller and Special

Agent Jim Dykes, both employees of Petitioner . Petiti oner

o ffered 11 exhibits. All exhibits were received in evidence.

Respondent presented the testimony of: Robert Jose ph

Molitor, licensee and owner of Oar House Bar and Liquors; John

Molitor, manager of Oar House Bar and Liquors and son of Robert

J oseph M olitor; Richard Wilson, part - time bartender for Oar

House Bar and Liquors ; Shana Clayton, an Oar House Bar and

Liquors customer; Jason Havens, an Oar House Bar and Liquors

customer; Brittian Thornton, part - time bartender a t Oar House

Bar and Liquors ; Toni Schemenauer, a part - time bartender and

a ssistant store manager of the adjoining Oar House Bar and

Liquors l iquor s tore ; and Irwin L. Adler, Ph.D., engineer.

R espondent's motion to qualify Dr. Adler as an expert in

chemical analysis of alcoholic beverages w as denied. Respondent

o ffered Exhibits A and B , which were both received in evidence.

At the end of the hearing , neither party ordered a transcript.

Respondent opted to delay incurring the expense of ordering a

transcript until after the filing of a pos t - hearing motion for

i nvoluntary d ismissal at the conclusion of Petitioner's case

(considered as motion for summary recommended order ) and a

r uling by the undersigned. On July 12, 2005, Respondent filed a

renewed Motion for Involuntary Dismissal at t he co nclusion of

all testimony.

On July 15, 2005, Petitioner filed a Notice of Substitution

and Appearance of Counsel and a response to Respondent's Motion

to Allow Oral Renewal of Motion for Involuntary Dismissal made

at the end of the Petitioner's Case .

On Au gust 12, 2005, a telephonic conference call on

Respondent's r enewal for i nvoluntary d ismissal at the end of

Petitioner's case and Petitioner's response thereto w as he l d ,

and Respondent's motion was denied. Respondent's ore tenus

motion for extension of ti me to file proposed recommended order

after delivery of transcript, due to scheduled court

appointments, was granted thereby waiving the time requirement

for submittal of this Recommend Order. See Fla. Admin. Code R.

28 - 106.216. The parties ' post - hearing submittals were due no

later than October 10, 2005. The two - volume Transcript of t he

June 27, 2005, hearing w as filed on August 24, 2005. The one -

volume Transcript of the June 28, 2005, hearing was filed on

August 30, 2005.

Petitioner filed a P roposed R ecommended O rder on October 4,

2005, and Respondent filed a P roposed R ecommended O rder on

October 12, 2005 ; both parties' proposals were given

consideration by the undersigned in preparation of this

Recommended Order.

FINDINGS OF FACT

Based upon observatio n of the witnesses and their demeanor

while testifying, depositions filed, documentary materials

received into evidence, stipulations by the parties , and

evidentiary rulings made pursuant to Section 120.57, Florida

Statutes, the following relevant, substan tial , an d material

facts are determined:

1. Petitioner, Department of Business and Professional

Regulations, by and through the Division of Alcoholic Beverages

and Tobacco (DABT) , is the state agency responsible for

supervision of the conduct, management, and operation of the

manufacturing, packaging, distribution, and sale within the

state of all alcoholic beverages and the enforcement of the

provisions of the Beverage Law , the T obacco L aw , and rules and

regulations of DABT in connection therewith. It is the express

legislative intent that the state retains primary regulatory

authority over the activities of licensees under the Beverage

Law within the power of the state and D ABT .

2. At all times material hereto, Respondent, Robert Joseph

Molitor, d/b/a O ar House Bar and Liquors (Oar House) , was the

licensee holder of license number 62 - 00683, Series 4 - COP, issued

by DABT, and owner of the licensed premises located at

4807 22nd Avenue , South, St. Petersburg, Florida 33711 - 2927.

This facility consists of a bar with an open doorway into the

adjoining liquor store. The Series 4 - COP license allows

Respondent to make sales of beer, wine , and liquors at the

liquor store adjoining the b ar for off - premises consumption and

allow s sales of beer, wine , and liquor fo r on - premises

consumption at the bar. John Molitor, son of Respondent, Robert

Joseph Molitor, at all time pertinent was the operational

manager of the Series 4 - COP licensed business premises.

3. Oar House and the owner of the licensed premises are

subjec t to the regulatory jurisdiction of DABT because of having

been issued license number 62 - 00683, Series 4 - COP, by DABT.

4. DABT received an unsolicited telephonic compliant from

Robert Boyle, a former Oar House bartender and customer.

M r . Boyle complain ed that Oar House was " refilling " brand - named

bottles of liquor with cheaper brands of liquor. Mr. Boyle also

mention ed that a green funnel, believed to have been used to

refill the liquor bottles, could be found in the storeroom

behind the bar at the lic ensed premises. Unsolicited telephonic

complaints from customers are but one source alerting DABT to

those bars where there are suspicions and questions regarding

liquors sold and served to its customers.

5. Having received a complaint that Oar House was

refilling liquor bottles , DABT initiated an investigation and on

July 24, 2003, DABT special agents, Jim Dykes and DiPietro (no

first name in the record) , entered the premises of Oar House.

During the July 24 th visit, the agents identified themselves to

John Molitor and requested he "stick around" for any questions

they might have upon completion of their investigation. John

Molitor ignored the agents' request and departed the premises

before the agents concluded their investigation. The agents

fo und a green funnel on the store room shelf behind the bar as

reported by Mr. Boyle. The agents photographed the green

funnel.

6. Agents Dykes and DiPietro observed and identified a

bottle of expensive liquor with a worn , stain ed label in a speed

rack behind the bar. The expensive liquor identified with the

worn label was (by brand name) Johnnie Walker Black Label Scotch

W hiskey (Johnnie Walker Whiskey) . The speed rack was located in

the middle of the bar for easy and equal access from either end

of the bar. T he brand labels on liquor bottles stored in speed

racks are visible from the customer side of the bar.

7. DABT A gents Dykes and DiPietro performed the Williams

Reagent Field Test on the seized bottle of Johnnie Walker

W hiskey. The Williams Reagent Field Test consists of comparing

the " color " of a suspect brand bottle of liquor to an original

unopened bottle of the same brand product taken from the

adjoining pac kage store. The " subject " bottle showed a visual

difference of color from the original same br and product.

Because the Williams Reagent F ield T est is not as reliable as

the chemical analysis testing processes , all suspect bottles of

alcohol tested using the Williams Reagent Field Test are

submi tted for additional chemical analysis testing. The ag ents

seized the suspect bottle of Johnnie Walker W hiskey and issued

to Respondent Evidence Receipt No. 53528.

8. For this suspected violation (refilling) , DABT issued a

Notice of Warning to Respondent dated July 24 , 2003.

9. Six days later, July 30, 20 03, DABT agents again

visited the Oar House b ar and again found Respondent in

possession of three liquor bottles suspected of containing

liquor different from the specific brand labeled. The three

suspect bottles of liquor were Chivas Regal Scotch Whiskey

(Chivas Regal Whiskey) , J & B Blended Whiskey (J & B Whiskey),

and Canadian Club Blended Whiskey (Canadian Whiskey) . The

William s Reagent Field Test performed on the three seized

bottles on July 30, 2003, showed a difference of color of the

suspect bottl es compared to the original unopened product s of

the same brand. The agents seized, co r ked , and photographed the

suspect bottles of liquors and issued Respondent Evidence

Receipts for the seized liquor.

10. The four bottles of liquor found on Respondent' s

licensed premises that were field - tested , seized, and

photographed were: (1) Johnnie Walker Whiskey ,

(2) Chivas Regal Whiskey , (3) J & B Whiskey , and (4) Canadian

Club Whiskey. Each of the above four bottles was taped, sealed,

and marked for identific ation, by initial s of the agent , in

preparation for shipping, testing , and chemical analysis by the

Department of Treasury, Bureau of Alcohol, Tobacco and Firearms

(BATF) , National Laboratory, in Ammendale, Maryland.

11. On or about November 3, 2003, BATF senior alcohol

analysis chemist, James Jagonathan, Ph.D., caused to be

performed , four alcohol chemical analysis tests on each of the

four suspect bottles of liquor (F indings o f F act 10) sent under

seal by DABT.

12. The four chemical alcohol analysis tes ts performed by

Dr. Jagonathan are standard tests approved by the Association of

Official Analytical Chemist s (AOAC) . These tests establish the

objective criteria for determination of whether an open bottle

of alcohol contains the requisite " qualitative " and " quantative "

brand alcohol and the amount of alcohol therein as stated on the

label, minus allowable lost. The four tests performed were:

(1) t he solids test , which measures the quantity of nonalcoholic

materials in the suspect bottle compared to th e permissible

quantity of nonalcoholic materials in the original manufactured

brand bottle ; (2) t he l ovibond test , which measures the

difference in the color of the alcohol in the suspect bottle

compared to the color of the alcohol in the original

manufact ured brand bottle and is performed by use of a color UV

Spectrometer; (3) The a lcohol - density meter test , which measures

the " volume " of alcohol in the suspect bottle compared to the

" permissible volume " of alcohol in the original manufactured

brand bottle ; and (4) t he f usel o ils test , which measures the

quantity of " fusel oils " in the suspect bottle compared to the

" permissible quantity of fusel oils " in the original

manufactured brand bottle . The fusel oils test is a

" comparative measurement " test , and t he comparison is made by

use of the Gas Chromatography meter. In each of the above test ,

objective predetermined deviation "allowance s " for losses due to

manufacturing and processing are permissible ( i.e. F indings of

F act 14, 17, 18, and 19).

13. There i s no legal requirement that DABT identify the

specific type/brand of alcohol ( " refilled " or added to the

original); identi f y the specific type or name of the solids

( " added " to the original); or provide explanation for alcoholic

" evaporation " resulting fro m exposure or open pourers found in a

suspect bottle(s).

14. Dr. Jagonathan informed DABT that two of the suspect

bottles (Sample No. 120030859 , J & B Whiskey, 50 ml,

40 percent by volume and Sample No. 120030862, Johnnie Walker

Whiskey, 750 ml, 40 perce nt by volume) were "refilled" with an

alcoholic product other than as listed on the respective labels.

The alcohol content of the " suspect " bottle of J & B Whiskey was

39.10 percent . The alcohol content of the original manufactured

J & B Whiskey product was 39.95 percent . This 0.85 percent

variation of alcohol content from the original manufactured

product conclusively demonstrated " refilling " with an alcoholic

product other than as listed on the respective label. The

alcohol content of the " suspect " bo ttle of Johnnie Walker

Wh iskey was 39.15 percent . The alcohol content of the original

manufactured bottle of Johnnie Walker W hiskey product was

39.90 percent . This 0.75 percent variation of alcohol content

from the original manufactured pro duct conclusi vely demonstrated

" refilling " with an alcoholic product other than as listed on

the respective label.

15. Dr. Jagonathan informed DABT that the suspect bottle

(Sample No. 3120030861 , Chivas Regal Whiskey , 50 ml , 40 percent

by volume) contained liquid othe r than the original product

( i.e. "probably refilled").

1 6 . Dr. Jagonathan advised DABT that the suspect bottle

(Sample No. 120030860 , Canadian Club Whiskey , 50 ml , 40 percent

by volume) was consistent with an original manufactured

authentic product.

17 . Dr. J agonathan gave uncontroverted testimony that

producers/distillers are required to have in sealed, unopened

bottles the alcohol content ( i.e. 40 percent ) stated on the

label, per volume. DABT acknowledg es that the escape of a

minuscule amount of alc ohol evaporation during the distilling

and bottling processes permits producers/distillers a

0.15 percent deviation from the 40 percent required alcohol

standard ( i.e. 40.15 percent high and 39.85 percent low are

permissible). Possession of bottles of an alcoholic beverage

with alcohol content above and/or below the permissible

0.15 percent deviations from the required 40 percent alcohol

content per volume is illegal.

1 8 . Regarding the lovibond (color ) test , Dr. Jagonathan

gave uncontroverted testimony that a 0.10 percent ( or - )

deviation from the normal color, as measured by color UV

Spectrometer, is allowed for loss during manufacturing,

distilling and bottling processes. As an example, with the

J & B Whiskey, the " suspect " bottle had a 7.7 percent lovibond

color test result, and the " original " product a 3.0 percent

lovibond color test result ( 7.7 percent - 3.0 percent =

4.7 percent ). The Johnnie Walk er Whiskey " suspect " bottle had a

2.8 percent lovibond color test result and the original a

10.9 percent lovibond color result( 10. 9 percent - 2.8 percent =

7.2 percent ).

1 9 . By testimony of an expert alcohol chemist of the

National Alcohol and Tobacco Tax and Trade Bureau (ATTB)

Laboratory in Ammendale, Maryland , based upon the accepted

methods of s tandard tests approved by the AOAC , the established

objective criteria for determining whether an open bottle of

alcohol contains the requisite qualitative and quantative brand

alcohol and amount of alcohol therein, minus allowable los s as

stated on the la bel , are determined by the four test s stated

above.

20 . DABT proved by clear and convincing evidence that the

J & B Whiskey ( S ample No. 120030859) and Johnnie Walker Whiskey

( S ample No. 120030862) were "refilled" with liquids other than

the original liqui d from the manufactures. The testing results

conclusively established that the alcoholic chemical contents of

the above samples tested were not the same as the content of

what an original product label would have been for each

respective sample.

2 1 . DABT , by uncontroverted clear and convincing evidence,

proved that Chivas Regal Whiskey ( S ample No. 120030861)

"probably" contained a refilled liquid other than the original

liquid sent from the manufactures. The test results

conclusively established that the chemical content of the sample

tested was not the same as the content of what an original

product would have been for this sample.

2 2. DABT, by uncontroverted clear and convincing evidence

proved that the Canadian Club Whiskey 's ( S ample

No. 120030860) l iquid contents were consist ent with and within

allowable deviation with the authentic product sent from the

manufacture r . The test result conclusively established that the

chemical content of the sample tested was the same as the

content of an original pr oduct.

2 3 . DABT proved clearly and convincingly that Respondent

possessed the three bottles herein above labeled as "authentic"

whiskey. Those three suspect ( i.e. "refilled") bottles seized

from Respondent's bar did not have the same chemical content as

Respondent's original whiskey of the same brand brought from

Respondent's adjoining liquor store.

2 4 . Respondent argues that the standard test s approved by

AOAC do not: (1 ) take into consideration or make allowance that

" explain " alcohol evaporation loss due to room (heat)

temperature and (2) make an allowance for alcoholic loss due to

length of time bottles were left with open pourers in the speed

rack . Also, the established objective criteria ( plus o r minus

0.15 percent) for determination of whether an open bottle of

alcohol contained the requisite qualitative and quantative brand

alcohol and amount of alcohol therein, minus allowable los s as

stated on the label are " arbitrary, " are each contrary to

existing case law establishing legal precedent and , th us , should

be disregarded for want of legal foundation. These arguments ,

contrary to law, are rejected.

2 5 . The opinion testimony of Respondent's witness,

Irwin L. Adler, Ph.D., engineer and professional wine taster,

who was not qualified as an expert i n chemical alcohol analysis,

was neither relevant nor material to the " refilling " issues in

this proceeding.

2 6 . DABT a gents seized four bottles from the licensed

premises that were sent to the A T T B's l aboratory for testing.

The results show that three o f the four bottles were materially

altered in some fashion that is inconsistent with the Florida

Beverage Law. Respondent was clearly negligent and did not

exercise a "reasonable standard of diligence" by allowing

materially altered refilled bottles of sc otch to be present

(sold) on his licensed premises. 2

2 7 . DABT proved by clear and convincing evidence that

Respondent, Robert Joseph Molitor, d/b/a Oar House Bar and

Liquors , holder of license number 62 - 00683, Series 4 - COP, and

owner of the licensed premi ses located at 4807 22nd Avenue ,

South, St. Petersburg, Florida 33711 - 2927, violated

Section 565.11, Florida Statutes , by and through Section 561.29,

Florida Statutes , as alleged in the Amended Administrative

Complaint, and is , therefore , subject to appro priate penalty.

CONCLUSIONS OF LAW

28. The Division of Administrative Hearings ha s

jurisdiction over the subject matter of this proceeding and the

parties thereto pursuant to Section 120.569 and Subsection

120.57(1), Florida Statutes (200 5 ).

29. DABT has the burden of proof to demonstrate by clear

and convincing evidence that Respondent, Robert Joseph Molitor,

d/b/a Oar House Bar and Liquors , licensee holder of license

number 62 - 00683, Series 4COP, and owner of the licensed premises

located at 4807 22nd A venue , South, St. Petersburg, Florida

33711 - 2927, violated Sections 561.29, 562.061 , and 565.11,

Florida Statutes, as alleged in the Amended Administrative

Complaint. Department of Banking and Finance, Division of

Securities and Investor Protection v. Osb orne Stern and Company ,

670 So. 2d 832 (Fla. 1996); Ferris v. Turlington , 510 So. 2d

292, 294 (Fla. 1987) ; and Pic N' Save Central Florida, Inc. v.

Department of Business and Professional Regulations, Division of

Alcoholic Beverages and Tobacco , 601 So. 2d 245, 249 (Fla. 1st

DCA 1992). In, Slomowitz v. Walker , 429 So. 2d 800 (Fla. 4th

DCA 1983), the c ourt provided guidance to the clear and

convincing evidence standard:

[C]lear and convincing evidence requires

that the evidence must be found to be

credible; the facts to which the witnesses

testify must e distinctly remembered, the

evidence must be precise and explicit and

the witnesses must be lacking in confusion

as to the facts in issue. The evidence must

be of such weight that is produces in the

mind of the trier of fact a firm belief or

conviction, without hesitancy, as to the

truth of the allegations sought to be

established.

30. D ABT is given broad power to supervise the

manufacturing, distributing , and sale of alcoholic beverages and

to enforce the provisions of the Beverage Law, Section 561.02,

Florida Statutes.

31. S ubs ection 561.29 (1)(a) , Florida Statutes, provides in

relevant part:

(1) The division is given full power and

authority to revoke or suspend the license

of any person holding a lice nse under the

Beverage Law, when it is determined or found

by the division upon sufficient cause

appearing of:

(a) Violation by the licensee or his or

her or its agents, officers, servants, or

employees, on the licensed premises, or

elsewhere while in the scope of employment,

of any of the laws of this state. . . .

32. Section 562.061, Florida Statutes, provides:

Misrepresentation of beverages sold on

licensed premises. It is unlawful for any

licensee, his or her agent or employee

knowingly to s ell or serve any beverage

represented or purporting to be an alcoholic

beverage which in fact is not such beverage.

It is further unlawful for any licensee

knowingly to keep or store on the licensed

premises any bottles which are filled or

contain liquid other than that stat ed on the

label of such bottle.

33. The above prohibit s an alcoholic beverage licensee

from offering for sale and/or the mere possession of mislabeled

alcoholic beverage containers. In the case sub judice ,

Respondent was in possessio n of three bottles which were

refilled or contained alcoholic liquid other than that stated on

the labels of such bottles.

34. The laboratory tests conducted by BATF on the spirits

seized from Respondent conclusively show that the product s

contained in t he bottles of J & B Blended Scotch Whiskey, Chivas

Regal Whiskey , and Johnnie Walker Whiskey, respectively, were

not what their label s identified them as being. As required,

DABT proved the contents of the "beverage represented or

purporting to be an alco holic beverage . . . is not such

beverage." § 562.061 , Fla. Stat.

35. In Department of Business Regulation , Division of

Alcoholic Beverages and Tobacco v. McGuire , DOAH Case No. 82 -

1150, 1982 WL 214863, 1 (Fla. Div. Admin. Hrgs. 1982), agents

found a num ber of bottles with worn stamps and labels on the

licensed premises. After positive field test s and seizure of

the suspect bottles , laboratory test s resulted in a conclusive

analysis of the chemical content to established that the

chemical contents of the suspect bottles were not the same as

the chemical content of the original labeled product for each

respective brand. The McGuire conclusion of law stated the

licensee is prohibited "from offering for sale or even

possessing mislabeled alcoholic beverage containers . . ." Id.

at 2. The issue in the present case is identical , and the

circumstances are strikingly similar to McGuire . The suspect

bottles in both had worn labels. The field tests in both were

positive. The independent professional laborator y test results

revealed specific discrepancy(s) (above or below the permissible

0.15 percent deviation from 40 percent alcohol per volume) in

the chemical content of the liquid content of the suspect

bottles when compared to the original product.

36. In t he case sub judice , like in McGuire , a liquid with

a different chemical content than an original product was on the

premises and served as the original contents. Whether the

suspect bottle was "watered down" or just "blended with another

brand of liquor," a liquid whose chemical content s is not within

the allowable range of 0.15 percent of the original product

convincingly demonstrate s it was not the same product as

labeled. Consequently, the undisputed evidence in this case

clearly and convincingly suppo rts the allegation made by

Petitioner that Respondent violated Section 562.061, Florida

Statutes, because the licensee had in his possession in his

licensed premises J & B Whiskey, Chivas Regal Whiskey , and

Johnnie Walker Whiskey purported to be whiskey of a certain

brand, when in fact the bottles contained a liquid that was

chemically different from the original J & B Whiskey, Chivas

Regal W hiskey , and Johnnie Walker Whiskey as described on the

label of each such bottle, respectively.

37. Section 565.11, Florida Statutes, provides as follows

in relevant part:

Any person who shall reuse or refill with

distilled spirituous liquors for the purpose

of sale a bottle or other container which

has once been used to contain spirituous

liquors, or any person who s hall willfully

misrepresent or permit to be misrepresented

the brand of distilled spirits being sold or

offered for sale in or from any bottles or

containers, shall be guilty of a misdemeanor

of the second degree, punishable as provided

in s. 775.082 or s. 775.083 and, when such

person is licensed under this law, be

subject to have his or her license revoked

by the division. Th e possession of such a

refilled or a mislabeled bottle or other

container of spirituous liquors shall be

prima facie evidence of th e violation of

this section.

In re: Bavosa License , No. 177, October sessions, 1961

(April 9, 1962), Court of Quarter Session of Pennsylvania,

Lackawanna County, 30 Pa. D. & C.2d 348, 1962 WL 7080

(Pa.Quar.Sess.). In Bavosa , an appeal was taken for th e Liquor

Control Board's suspension of appellant's hotel liquor license

for violation of section 491 of the Liquor Code , prohibiting the

adulteration or contamination of liquor or the refilling of

bottles. Appellants argued there, as does Respondent in th e

case sub judice , that bottles with lower proof w ere slow

sellers, were on the back bar, and were capped with open - ended

pouring sprouts for an extended period of time and that the

discrepancy in proof was due to evaporation created by

atmospheric conditi ons. In rejecting arguments of the

appellants, the court recited performance of the Williams

Reagent Field Test followed by the laboratory tests of (a) solid

contents and (b) proportionate percentage of total acids,

volatile acids, fixed acids , and esters (solids) supported its

upholding the suspension. At p. 250, the court held :

Each distiller uses his own formula in

determining the solid content and

proportionate percentage of acids and

esters, and then blends the whiskey to

maintain the uniformity of the formula so

that there is a minimum of variance in the

solid content and proportionate percentage

of acids and esters in his product, although

there is wide variance between his product

and the same proof whiskey blended by other

distilleries.

The labo ratory tests disclosed that three bottles contained such

wide variations in solid contents, total acids, volatile acids,

fixed acids and esters, as to establish that those bottles,

although containing the required proof, did not contain the

brand whiskey c alled for on the brand label. The condition of

three bottles was completely unaffected by evaporation and shows

the necessary presence of a human agency in bringing about this

change. In the case sub judice , the condition of three bottles

was unaffected by evaporation and proved the necessary presence

of a human agency in bringing about the change in content.

Second, the three bottles of adulterated whiskey in this case

w ere in the possession of Respondent. The latter fact is, in

itself, sufficient to s ustain a violation of the statute as

alleged in the Amend ed Administrative C omplaint.

38. The above Florida Beverage Law statute concerning

" refilling " runs parallel with the F ederal version that

prohibits similar activity. Compare 26 U.S.C.A., Section

5 301(c), and Section s 562.01 and 565.11, Florida Statute s .

39. The Internal Revenue Code, 26 U.S.C.A. Section

5301(c) , contains a similar provision dealing with the refilling

of liquor bottles. It provides in relevant part:

(c) Refilling of liquor bott les -- No

person who sells, or offers for sale,

distilled spirits, or agents of employee of

such person, shall -

(1) Place in any liquor bottle any

distilled spirits whatsoever other than

those contained in such bottle at the time

of tax determination unde r the provisions of

this chapter; or

(2) possess any liquor bottle in which

any distilled spirits have been placed in

violation of the provisions of

paragraph (1); or

(3) by the addition of any substance

whatsoever to any liquor bottle, in any

manne r alter or increase any portion of the

original contents contained in such bottle

at the time of tax determination under the

provisions of this chapter; or

(4) possess any liquor bottle, any

portion of the contents of which has been

altered or increased in violation of the

provisions of the paragraph (3); except that

the Secretary may by regulations authorize

the reuse of liquor bottles, under such

conditions as he may by regulations

prescribe. When used in this subsection the

term "liquor bottle" shall mean a liquor

bottle or other container which has been

used for the bottling of packaging of

distilled spirits under regulations issued

pursuant to subsection (a).

40. The purpose behind the F ederal regulation was to

protect and facilitate the collectio n of F ederal revenues. In

Stilinovic v. United States , 336 F.2d 863, 863 (8th Cir. 1964)

(constitutional challenge to 26 U.S.C.A. Section 5301(c)) , the

court held that Congress acted within its constitutional power

by facilitating the collection of revenu e. The majority held

that prevention of refilling or reusing bottles was necessary in

order to ensure the protection of revenue because of the

difficulty in determining whether tax was collected on the

contents of the bottle. I d . at 863. The excise tax laid on

spirits is a very important source o f revenue to the national

government , and , because of the importance of the revenue,

Congress enacted various laws in attempting to ensure

collection. United States v. Duffy , 282 F . Supp 777 (S.D.N.Y.

1968). In Duffy , the court, at 779, stated:

. . . By regulation, the Secretary requires

that the stamp be affixed when the bottle is

first filled or first imported. 26 C.F.R.

Sections 201.541, 251.56, 251.110. A

further important protection of the revenue

from s pirits is the provision (26 U.S.C.,

Section 5301(c)) making it a criminal

offens e for any seller of spirits to

" refill " a liquor bottle either with " any

distilled spirits whatsoever other than

those contained in such bottle at the time

of stamping " or "wit h any substance

whatsoever" or " in any manner " to " alter or

increase any portion of the original

contents contained in such bottle at the

time of stamping. " The importance of this

particular law to the revenue was emphasized

in Report No. 2090 of the Comm ittee on

Finance of the Senate as follows (3 U. S.

Code Cong. And Adm. News 1958, pp. 4562,

4563):

The prevention of the reuse of liquor

bottles or other authorized containers for

the packaging of any distilled spirits, or

of the alteration of the origina l contents

of liquor bottles or other authorized

containers which have been used for the

packaging of distilled spirits, is essential

for the protection of the revenue since it

is in most cases impossible, once the

container has been refilled or the origin al

contents thereof altered by the addition of

any substance (whether taxable of

nontaxable), to establish whether the tax on

the contents of such containers has been

lawfully determined.

* * *

The language of this subsection as contained

in the House bill and as restated by your

committee is intended to obviate any

question that its provisions are applicable,

whether or not the tax has been paid or

determined on the distilled spirits used in

refilling and whether or not the substance

used to alte r the original contents is

taxable un der the internal revenue laws.

41. Notwithstanding its earlier decision in United State s

v. Goldberg , 225 F.2d 180, at 188 (8th Cir. 1955), in its

subsequent Stilinovic decision the Eighth Circuit made clear the

burde n of proof holding that:

Each manufacturer of distilled spirits has a

formula. Through the various insignia

required to be shown on the bottle, placed

on the label, and on the revenue stamp,

authorized investigators are able to

ascertain with relative ea se and reasonable

certainty whether the distilled spirits in

the container are those described by the

various insignia. In the event the whiskey

in the container does not correspond with

that described and that on which the tax as

evidenced by the stamp w as paid, the burden

should not be upon the Government to assume

the almost insurmountable task of

determining the source of the whiskey added

to the containe r contrary to the

regulations.

42. The Federal case law construing Internal Revenue Code ,

26 U.S. C.A. Section 5301(c) , is persuasive and herein is used as

guidance when construing Chapters 561 thr o u gh 569 , Florida

Statutes, because Florida case law involving the provisions,

purposes , and evidentiary proof issues is rather scarce. 3 In

United States v. Milstead , 401 F.2d 51, 53 (7th Cir. 1968)

(appeal of a criminal conviction for possession of liquor

bottles containing distilled spirits other than those originally

contained in bottle at time of stamping in violation of

26 U.S.C.A. Section 530 1 (c)) , the court reviewed the operative

and pertinent provisions of Section 530 1 (c) and held:

. . . the only elements government was

required to prove was that defendant was a

retail " liquor dealer " who " possessed "

liquor bottles refilled with distilled

spirits th at were not in the bottles when

originally filled and stamped. Stated

another way, it does not matter who refilled

the bottles. The prosecution need only show

that they were " refilled and then found in

defendant's possession ."

43. Citing United States v. Wasik , F. Supp 280 (W. D. Pa.,

1964), at 281, ruling on element of possession: "It is within

the contemplation of the statute that the acts which make

defendant's possession illegal could have been performed by

someone else. The offense with which the y are charged is

possessing the bottles after they were refilled or the contents

altered . . ." . The Milstead court adopted and extended Wasik

to address identity of the perpetrators:

We agree with the government counsel that

the elements of defendant's offense, as

enumerated by Section 5301(c)(2), are that

defendant was a retail " liquor dealer " and

that he " possessed " liquor bottles refilled

with distilled spirits that were not in

those bottles when originally filled and

stamped, with " no proof required from the

government as to who might have refilled the

bottles . " We hold that the government met

its burden of pro of on that issue at the

trial. [ Emphasis added ]

44. In the case sub judice , the Department met its b urden

of proof on the issue of " Respon dent's possession of liquor

bottles refilled with distilled spirits that were not in

those bottles when originally filled and stamped, " in violation

of the Florida Statutes , as alleged in the Amended

Administrative Complaint.

Penalty

45. S ubs ection 561.2 9(1), Florida Statutes, provides:

(1) The division is given full power and

authority to revoke or suspend the license

of any person holding a license under the

Beverage Law, when it is determined or found

by the division upon sufficient cause

appearing of:

(a) Violation by the licensee or his or

her or its agents, officers, servants, or

employees, on the licensed premises, or

elsewhere while in the scope of employment,

of any of the laws of this state or of the

United States. . . .

(b) Violation by the licensee or, if a

corporation, by any officers thereof, of any

laws of this state or any state or territory

of the United States.

* * *

(e) Violation by the licensee, or, if a

corporation, by any officer or stockholder

thereof, of any rule or rules promulgated by

the division in accordance with the

provisions of this chapter or of any law

referred to in paragraph (a), or a violation

of any such rule or law by any agent,

servant, or employee of the licensee on the

licensed premises or i n the scope of such

employment.

46. S ubs ection 561.29(3) , Florida Statutes, provides:

The division may impose a civil penalty

against a licensee for any violation

mentioned in the Beverage Law, or any rule

issued pursuant thereto, not to exceed

$1,000 for violations arising out of a

single transaction. If the licensee fails

to pay the civil penalty, his or her license

shall be suspended for such period of time

as the division may specify. The funds so

collected as civil penalties shall be

deposited in the state General Revenue Fund.

Florida Administrative Code -- Penalty Guidelines

47. Florida Administrative Code Rule 61A - 2.002(11)

prescribes the penalty guidelines to be imposed upon an

alcoholic beverage licensee when violations are found to have

been committed. For a first - time violation of Section 565.11,

Florida Statutes, the R ule calls for $1,000.00 fine and a 20 - day

suspension.

Policy Considerations

48. The Beverage Law currently imposes a surcharge fee for

each ounce of liquor that is sold for consumption on the

licensed premises of vendors.

49. S ubs ection 561.501 (1) , Florida Statutes, provides

that:

Notwithstanding s. 561.50 or any other

provision of the Beverage Law, a surcharge

of 3.34 cents is imposed upon each ounce of

liquor and each 4 ounces of wine, a

surcharge of 2 cents is imposed on each 12

ounces of cider, and a surcharge of 1.34

cents is imposed on each 12 ounces of beer

sold at retail for consumption on premises

licensed by the division as an alcoholic

beverage vendor. However , the surcharges

imposed under this subsection need not be

paid upon such beverages when they are sold

by an organization that is licensed by the

division under s. 561.422 or s. 565.02 (4) as

an alcoholic beverage vendor and that is

determined by the Intern al Revenue Service

to be currently exempt from federal income

tax under s. 501(c)(3), (4), (5), (6), (7),

(8), or (19) of the Internal Revenue Code of

1986, as amended.

50. The cumulative effect of refilling has the potential

to equal an enormous amount of uncollected excise tax.

Refilling is not only unlawful, but is of significant

consequence if one considered the refilling occurring unabated

and unpunished in the thousands of licensed bars throughout the

state. In each instance that the alcohol is "r efilled" or

"watered down , " a few ounces of alcohol are sold without the

payment of surcharge tax.

51. Section 565.11, Florida Statutes, provides that the

mere possession of a refilled or mislabeled bottle of spirituous

liquor is considered prima facie ev idence of violation of the

refilling provision. This statute, by its prohibition of

refilling bottles by licensees, thus , serves to preclude

avoidance of tax liability, enhance revenue collection , and

protect the health of consumers.

RECOMMENDATION

Based upon the Findings of Fact and Conclusions of Law, it

is

RECOMMENDED that Petitioner, Department of Business and

Professional Regulation, Division of Alcoholic Beverages and

Tobacco, enter a final order:

1. Finding that Respondent, Robert Joseph Molitor ,

l icensee holder of license number 62 - 00683, Series 4 - COP , d/b/a

Oar House Bar and Liquors , located at 4807 22nd Avenue , South,

St. Petersburg, Florida 33711 - 2927, as a first - time offender,

violated Section s 562.061 and 565.11 , Florida Statutes, as

charged i n the A mended Administrative Complaint;

2. Impos ing an administrative penalty against Robert

Joseph Molitor, license e holder of license numbered 62 - 00683,

Series 4 - COP , and suspending his license numbered 62 - 00683,

Series 4 - COP, for a period of 20 consecu tive days; and

3. Impos ing a civil penalty against Robert Joseph Molitor ,

licensee holder of license numbered 62 - 00683, Series 4 - COP, of

an administrative fine in the amount of $1,000.00, payable to

the Department.

DONE AND ENTERED this 23rd day of Novemb er , 2005 , in

Tallahassee, Leon County, Florida.

S

FRED L. BUCKINE

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 S UNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 23rd day of November , 2005 .

ENDNOTES

1/ All references are to Florida Statutes 200 5 unless otherwise

indicated herein.

2/ See Lash, Inc. v. Dept' of Bus. & Prof'l Regulation, 411

So. 2d 276 (Fla. 3rd DCA 1982); Trader Jon, Inc. v. State

Beverage Dep't , 119 So. 2d 735, 739 - 40 (Fla. 1st DCA 1960).

3/ See Florida Tax Code 561.501 -- Under this code, each licensee

is require d to pay to the Division a surcharge tax on sale of

alcoholic beverages for consumption on the licensed premises.

COPIES FURNISHED :

Captain John Blair, District Supervisor

Department of Business and

Professional Regulation

1313 Tampa Street, Suite 909

Park Trammel Building, No. 702

Tampa, Florida 33602

David J. Sockol, Esquire

Derek A. DiPasquale, Esquire

111 Second Avenue , Northeast, Suite 1401

St. Petersburg, Florida 33701

Renee Alsobrook, Esquire

Sorin Ardelean, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

Jack Tuter, Director

Division of Alcoholic Beverages and Tobacco

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32 399 - 0792

Josefina Tamayo, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written e xceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the final order in this case.