Case Title: WCI, Inc. v. Ohio Liquor Control Comm.

Citation: 2008-Ohio-88

Docket Number: 20061360

State: ohio

Court: Ohio Supreme Court

Date: 2008-01-17T00:00:00Z

Document:
[Cite as WCI, Inc. v. Ohio Liquor Control Comm., 116 Ohio St.3d 547, 2008-Ohio-88.] 
 
 
WCI, INC., D.B.A. CHEEKS, APPELLEE, v. OHIO LIQUOR CONTROL 
COMMISSION, APPELLANT. 
[Cite as WCI, Inc. v. Ohio Liquor Control Comm., 
 116 Ohio St.3d 547, 2008-Ohio-88.] 
The Ohio Liquor Commission does not have authority under R.C. 4301.25(A)(1) 
to suspend or revoke a permit holder’s liquor permit when a former 
employee of the permit holder is convicted of a felony for an act 
committed while employed by the permit holder. 
(No. 2006-1360 — Submitted September 12, 2007 — Decided January 17, 2008.) 
APPEAL from the Court of Appeals for Franklin County,  
No. 05AP-896, 2006-Ohio-2751. 
__________________ 
SYLLABUS OF THE COURT 
The Ohio Liquor Control Commission does not have authority under R.C. 
4301.25(A)(1) to suspend or revoke a permit holder’s liquor permit 
when a former employee of the permit holder is convicted of a felony for 
an act committed while employed by the permit holder. 
__________________ 
 
O’CONNOR, J. 
{¶ 1} In this appeal we are asked to determine whether the Ohio Liquor 
Control Commission has authority under R.C. 4301.25(A)(1) to suspend a liquor 
permit when a former employee of the permit holder is convicted of a felony for 
an act committed while the former employee was employed by the permit holder.  
We hold that the statute does not authorize suspension of the permit under these 
circumstances. 
Relevant Background 
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{¶ 2} Appellee, WCI, Inc. (“WCI”), operates an adult nightclub in West 
Carrollton, Ohio.  On February 6 and February 13, 2003, detectives from the 
Montgomery County Sheriff’s Office were conducting undercover drug buys at 
the nightclub and made two separate purchases of cocaine from Brooke Orshoski, 
a dancer who was working at the club.  WCI fired Orshoski that same month.  
Orshoski was subsequently indicted, and she was convicted of felony drug 
trafficking on October 20, 2003. 
{¶ 3} On January 21, 2004, the Ohio Liquor Control Commission issued 
violation notices to WCI informing it that it was in violation of Ohio liquor laws, 
in part because of Orshoski’s felony conviction.  The commission subsequently 
issued a notice of hearing regarding Orshoski’s violation.  The hearing was held 
on May 19, 2004.  At the hearing, WCI’s manager testified that he terminated 
Orshoski before she was even indicted for the crime because he suspected that she 
was using or dealing drugs on the premises.  Nevertheless, the commission 
suspended WCI’s liquor permit for 30 days pursuant to R.C. 4301.25(A)(1), due 
to the commission’s interpretation that it is irrelevant for purposes of the statute 
whether or not the permit holder still employed the employee at the time of the 
conviction. 
{¶ 4} WCI appealed that order to the Franklin County Court of Common 
Pleas and obtained a stay of the suspension.  The trial court affirmed the 
commission’s order with respect to the suspension related to Orshoski’s 
conviction.  On appeal, the Tenth District Court of Appeals reversed the judgment 
and remanded the matter to the trial court with instructions that it order the 
commission to dismiss its case.  We accepted the commission’s discretionary 
appeal to determine whether a former employee’s conviction could be used to 
suspend a permit holder’s liquor license pursuant to R.C. 4301.25(A)(1). 
Analysis 
January Term, 2008 
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{¶ 5} The issue presented is whether the commission was authorized 
under R.C. 4301.25(A)(1) to suspend WCI’s liquor permit.  R.C. 4301.25(A) 
states:   
{¶ 6} “The liquor control commission may suspend or revoke any permit 
* * * for the following causes:  
{¶ 7} “(1) Conviction of * * * the holder's agent or employee * * * for a 
felony.”1 
{¶ 8} In this case, WCI fired Orshoski well before she was convicted in 
October 2003.  WCI contends that because Orshoski was not an employee at the 
time of her conviction, as contrasted with the time of the unlawful act underlying 
the conviction, the commission lacked authority under the statute to suspend 
WCI’s permit. 
{¶ 9} We agree with WCI and the opinion of the court of appeals in this 
case, which relies on Waterloo Inc. v. Ohio Liquor Control Comm., 10th Dist. No. 
02AP-1288, 2003-Ohio-3333, and Shotz Bar & Grill, Inc. v. Ohio Liquor Control 
Comm., 10th Dist. No. 02AP-1141, 2003-Ohio-2659 (Bowman, J., concurring).  
These opinions are grounded in the recognition that R.C. 4301.25(A)(1) is 
unambiguous and that under the plain meaning of the statute, the conviction must 
occur during the employee’s employment with the permit holder.2  See Waterloo 
at ¶ 10; Shotz Bar & Grill at ¶ 51 and 53.  By its plain terms, the statute does not 
address a conviction of a former employee of a permit holder. 
{¶ 10} The commission ignores the plain meaning of the statute and 
would have us hold that the statute means something other than what it says.  The 
                                                 
1.  This is the current version of R.C. 4301.25(A), which differs slightly from the version that was 
in effect at the time of the conviction in this case.  See Am.Sub.H.B. No. 402, 147 Ohio Laws, 
Part II, 3310, 3325.  The differences between the two versions are not substantive with respect to 
this case and do not alter our analysis herein. 
 
2.  The version of R.C. 4301.25(A)(1) in dispute in both Waterloo and Shotz Bar & Grill was the 
same as that at issue in this case.  
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commission’s position is predicated primarily on its belief that if the statute did 
require the convicted felon to be employed by the permit holder at the time of 
conviction, then permit holders would be able to allow their employees to engage 
in illegal activities but avoid license suspension by simply terminating the 
employees before they are convicted. 
{¶ 11} This interpretation is wrong for two reasons.  First, when a statute 
is unambiguous, we should not attempt to determine what the legislature intended, 
but should instead merely apply the law as written.  Provident Bank v. Wood 
(1973), 36 Ohio St.2d 101, 105-106, 65 O.O.2d 296, 304 N.E.2d 378.  And 
second, the commission’s fear that permit holders could avoid penalties by firing 
employees before they are convicted is unfounded. 
{¶ 12} Ohio Adm.Code 4301:1-1-52(B) prohibits a wide range of 
misconduct.  It provides: 
{¶ 13} “[N]o permit holder, his agent, or employee shall knowingly or 
willfully allow in and upon his licensed premises any persons to:  
{¶ 14} “(1) Engage in any disorderly activities;3 
{¶ 15} “(2) Appear in a state of nudity; 
{¶ 16} “(3) Engage in sexual activity as * * * defined in Chapter 2907 of 
the Revised Code; 
{¶ 17} “(4) Commit public indecency, as * * * defined in Chapter 2907 of 
the Revised Code; 
{¶ 18} “(5) Allow in, upon or about the licensed permit premises, or 
engage in or facilitate in, the possession, use, manufacture, transfer, or sale of any 
dangerous drug, controlled substance, narcotic, harmful intoxicant, counterfeit 
                                                                                                                                     
 
3.  “Disorderly activities” are defined by the regulation as acts that “harass, threaten or physically 
harm another person including threats or other menacing behavior, fighting, assaults and brawls or 
any violation as defined [in] section 2917.11 of the Revised Code [the statute that defines 
‘disorderly conduct’].”   
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controlled substance, drug, drug paraphernalia, or drug abuse instrument as * * * 
defined in Chapter 2925 of the Revised Code. 
{¶ 19} “(6) Solicit for value, or possess, buy, sell, use, alter or transfer, or 
allow to be solicited, possessed, bought, sold, used, altered, or transferred for 
value USDA food stamp coupons, electronic benefit transfer (EBT) cards, WIC 
program benefit vouchers, or other electronically transmitted benefits, in a manner 
not specifically authorized by the Food Stamp Act of 1977, or the Child Nutrition 
Act of 1966.  * * * 
{¶ 20} “(7) Obtain or exert control over property or services of another, 
with purpose to deprive the owner thereof, without the consent of the owner or 
person authorized to consent, or by deception, fraud or threat. Nor shall any 
permit holder, his agent, or employee, use the licensed permit premises to receive, 
retain, or dispose of property of another, knowing or having reasonable cause to 
believe such property has been obtained through the commission of a theft 
offense.” 
{¶ 21} Pursuant to this section, the triggering event for sanctions is not the 
employee’s conviction but the permit holder’s awareness of the employee’s illegal 
conduct.  Thus, the commission can punish a permit holder for its employee’s 
behavior, regardless of whether the employee works for the permit holder when 
he or she is convicted. 
{¶ 22} There must be a reason, therefore, why the commission may 
sanction a permit holder for both a conviction of an employee (R.C. 
4301.25(A)(1)) and the actions of an employee that underlie the conviction (Ohio 
Adm.Code 4301:1-1-52).  We maintain that Ohio Adm.Code 4301:1-1-52 is 
designed to prevent exactly what the commission in this case fears would result 
from the interpretation of R.C. 4301.25(A)(1) espoused in Waterloo and Shotz 
Bar & Grill: It prevents a permit holder from allowing criminal conduct by its 
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employees and then avoiding sanctions by firing the employees after they get 
caught but before they are convicted. 
{¶ 23} By their terms, the statute and the Administrative Code section 
take into account that a permit holder has no control over whether a former 
employee is convicted of illicit conduct in the permit holder’s establishment but 
does have control over the continued employment of its employees.  By 
sanctioning only those permit holders who fail to take remedial measures to 
ensure that the liquor establishment is not used for illicit behavior (by firing 
employees when it discovers that they are engaged in such behavior), R.C. 
4301.25(A)(1) and Ohio Adm.Code 4301:1-1-52 provide protection to innocent 
permit holders. 
{¶ 24} Although it is well settled that a liquor permit does not create a 
property right subject to traditional due process, State ex rel. Zugravu v. O’Brien 
(1935), 130 Ohio St. 23, 27, 3 O.O. 74, 196 N.E. 664, it would be unfair not to 
recognize that this particular permit holder terminated its employee upon learning 
of her criminal conduct—likely in an effort to protect its own interest as well as 
its patrons.  If we were to adopt the commission’s position, however, we would be 
placing the future of an establishment’s liquor permit in the hands of the 
employee and the employee’s defense counsel. 
{¶ 25} As explained above, the court of appeals’ interpretation of R.C. 
4301.25(A)(1) is faithful to the text and to the regulatory scheme as a whole.  
Moreover, unlike the commission’s interpretation, it does not require inserting 
words into the statute, which courts are forbidden to do.  Cleveland Elec. Illum. 
Co. v. Cleveland (1988), 37 Ohio St.3d 50, 524 N.E.2d 441, paragraph three of 
the syllabus. 
{¶ 26} Accordingly, we hold that the commission does not have authority 
under R.C. 4301.25(A)(1) to suspend or revoke a permit holder’s liquor permit 
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when a former employee of the permit holder is convicted of a felony for an act 
committed while employed by the permit holder. 
Judgment affirmed. 
 
MOYER, C.J., and LUNDBERG STRATTON and LANZINGER, JJ., concur. 
 
PFEIFER, O’DONNELL, and CUPP, JJ., dissent. 
__________________ 
 
CUPP, J., dissenting. 
{¶ 27} Because I believe that the Liquor Control Commission has 
authority under R.C. 4301.25(A)(1) to suspend a liquor permit when a former 
employee of the permit holder is convicted of a felony for an act committed by 
that employee while employed by the permit holder, I respectfully dissent. 
{¶ 28} In contrast to the majority, I find nothing in the statute that requires 
that the conviction occur during the offending employee’s employment.  “It is a 
basic presumption in statutory construction that the General Assembly is not 
presumed to do a vain or useless thing and that when language is inserted in a 
statute it is inserted to accomplish some definite purpose.”  State ex rel. Cleveland 
Elec. Illum. Co. v. Euclid (1959), 169 Ohio St. 476, 479, 8 O.O.2d 480, 159 
N.E.2d 756.  See also R.C. 1.47. 
{¶ 29} As the commission argued before this court, reading the statute to 
require that the conviction and employment must be concurrent will allow a 
permit holder to easily evade its responsibility to maintain a permit premises free 
of illegal employee activity.  A permit holder who knows of, or should know of, 
felonious employee conduct will now be able to allow the conduct to continue 
until the employee is caught.  Then, the permit holder can insulate itself from any 
consequences simply by firing the employee before he or she is convicted. Thus, 
the majority’s reading of the statute, in effect, divests the commission of its 
authority to proceed under R.C. 4301.25(A)(1) and renders the statute essentially 
meaningless. 
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{¶ 30} The majority contends that the Ohio Administrative Code prevents 
this type of mischief by permit holders.  According to the majority, the 
commission has authority under Ohio Adm.Code 4301:1-1-52(B) to suspend a 
permit even if the permit holder fires the offending employee prior to his or her 
conviction, because the “triggering event for sanctions” under that provision is the 
permit holder’s awareness of the conduct, not the conviction.  Majority Opinion at 
¶ 21.  However, the list of prohibited conduct contained in Ohio Adm.Code 
4301:1-1-52(B) is limited, and there are numerous felonies not covered by the 
administrative provision.  There are many situations in which the commission 
could, in fact, be stripped of its ability to act.  And although the commission could 
have elected to proceed in this case under the administrative regulation, it was not 
required to do so, because the conviction allowed it to proceed under R.C. 
4301.25. 
{¶ 31} The General Assembly’s decision to include a conviction 
requirement in R.C. 4301.25(A)(1) was not without purpose.  By requiring a 
conviction before the commission may take action against a permit holder, the 
statute protects the permit holder from losing its license without proof beyond a 
reasonable doubt that an employee or former employee actually committed the 
felonious act.  Additionally, the statute states that the commission “may suspend 
or revoke” the permit.  (Emphasis added.)  Thus, if the commission determines 
that the permit holder did not know or have reason to know of its employee’s 
illegal conduct, the commission is not required to suspend or revoke the holder’s 
permit. 
{¶ 32} I believe that the General Assembly gave statutory authorization 
for the commission to act against permit holders under circumstances similar to 
those in this case to further the public-policy goal of preventing felonious activity 
in liquor establishments.  Clearly the statute places a burden on the permit holder, 
who would be in the best position to prevent such activity.  It imperils the holder’s 
January Term, 2008 
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potential to sell liquor if the holder fails to take adequate preventive measures 
against felonious conduct by its employees and agents.  In this case, the cocaine 
sales that led to Orshoski’s felony conviction occurred inside the establishment 
and while Orshoski was working.  Thus, the resulting conviction falls squarely 
within the scope of R.C. 4301.25(A)(1).  Contrary to the majority’s conclusion, 
there is nothing in the language of R.C. 4301.25(A)(1) requiring the conviction to 
be contemporaneous with employment. 
{¶ 33} For the foregoing reasons, I respectfully dissent, and I would hold 
that the commission had authority under R.C. 4301.25(A)(1) to suspend WCI’s 
permit. 
 
PFEIFER and O’DONNELL, JJ., concur in the foregoing opinion. 
__________________ 
 
Buckley King, L.P.A., Chris O. Paparodis, and Gary A. Gillett, for 
appellees. 
 
Marc Dann, Attorney General, Elise Porter and Stephen P. Carney, Deputy 
Solicitors, Hilary R. Damaser, Assistant Solicitor, and Charles E. Febus, Assistant 
Attorney General, for appellant. 
______________________