Southland Entertainment, Inc. D/B/A Bed Niteclub & Lounge v. Louisiana Department of Revenue, Office of Alcohol and Tobacco Control

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

16-925

SOUTHLAND ENTERTAINMENT, INC. D/B/A BED
NITECLUB & LOUNGE

VERSUS

LOUISIANA DEPARTMENT OF REVENUE, OFFICE
OF ALCOHOL AND TOBACCO CONTROL

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APPEAL FROM THE
FIFTEENTH JUDICIAL DISTRICT COURT
PARISH OF LAFAYETTE, NO. C-2015-4942
HONORABLE KRISTIAN D. EARLES, DISTRICT JUDGE

**********
ELIZABETH A. PICKETT
JUDGE

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Court composed of Ulysses Gene Thibodeaux, Chief Judge, Sylvia R. Cooks,
Elizabeth A. Pickett, Billy H. Ezell, and Van H. Kyzar, Judges.

THIBODEAUX, Chief Judge, dissents and assigns written reasons.

COOKS, J., dissents for the reasons assigned by Thibodeaux, C.J., and also
assigns additional reasons.

AFFIRMED.

Marcus A. Allen, Sr.
251 La Rue France
Lafayette, LA 70508
Telephone: (337) 289-1762
COUNSEL FOR PLAINTIFF/APPELLANT:
Southland Entertainment, Inc. d/b/a BED Niteclub & Lounge

Brett A. Bonin
Lousiana Department of Revenue, Office of Alcohol and Tobacco Control
P.O. Box 66404
Baton Rouge, LA 70896
Telephone: (225) 925-4041
COUNSEL FOR DEFENDANT/APPELLEE:
Louisiana Department of Revenue, Office of Alcohol
and Tobacco Control

Jacqueline B. Wilson
Louisiana Department of Revenue, Office of Alcohol and Tobacco Control
8585 Archives Avenue, Suite 305
Baton Rouge, LA 70809
Telephone: (225) 925-4607
COUNSEL FOR DEFENDANT/APPELLEE:
Louisiana Department of Revenue, Office of Alcohol
and Tobacco Control

PICKETT, Judge.
The Commissioner of the Office of Alcohol and Tobacco Control, Louisiana

Department of Revenue (“ATC”) suspended the alcohol permit of the plaintiff,

Southland Entertainment, Inc. d/b/a BED Niteclub & Lounge (“Southland

Entertainment”), after finding that the business was in violation of La.R.S.

26:90(A)(11).1 Southland Entertainment appealed the Commissioner’s decision

pursuant to La.R.S. 26:303(A).2 After considering the testimony and other

evidence presented by the parties, the district court upheld the suspension of

Southland Entertainment’s liquor license and the imposition of a monetary fine.

On appeal, Southland Entertainment contends that the ATC failed to submit

sufficient evidence to support the penalties imposed upon it. For the following

reasons, we find the district court’s findings are supported by the record and affirm

its judgment.

FACTS AND PROCEDURAL HISTORY

Southland Entertainment is a dance and nightclub located in downtown

Lafayette. On May 4, 2015, Agent Tyrone Banks of the ATC received a telephone

complaint, alleging that Southland Entertainment may have violated La.R.S.

1
La.R.S. 26:90(A)(11) states:
No person holding a retail dealer’s permit and no agent, associate,
employee, representative, or servant of any such person shall do or permit any of
the following acts to be done on or about the licensed premises: . . . Illegally sell,
offer for sale, possess, or permit the consumption on or about the licensed premise
of any kind or type of narcotics or habit forming drugs.
2
La.R.S. 26:303(A) states:
Any party aggrieved by a decision of the commissioner to withhold,
suspend, or revoke a permit or of the local authorities to withhold a permit may,
within ten days of the notification of the decision, take a devolutive appeal to the
district court having jurisdiction of the applicant’s or permittee’s place of
business, proposed or actual, as the case may be. Such appeals shall be granted
by the clerk of court on written petition together with a bond for costs. The
appeals shall be tried de novo. Either party may amend and supplement his
pleadings and additional witnesses may be called and heard.

26:286(A)(11)3 by allowing controlled dangerous substances (“CDS”) on the

business premises. Mr. Reginald Mosley, the owner of Mosley Management,

LLC, reported the complaint. Pursuant to a Consent Agreement entered into

between ATC and Mr. Justin Lee, the owner of Southland Entertainment,

Mr. Mosley’s company was the exclusive security provider to Southland

Entertainment. Mr. Mosley met with Agent Banks and expressed his concern and

opinion that the ownership/management of Southland Entertainment was not fully

committed to preventing the possible use of CDS, specifically marijuana, on the

premises.

Following Mr. Mosley’s verbal complaint, Agent Banks initiated an

undercover law enforcement investigation in order to find activity to support

Mr. Mosley’s allegation of permitted use of CDS on the premises by the

ownership, management, or employees of Southland Entertainment. As part of the

investigation efforts, Agent Banks enlisted various police officers from the

University of Louisiana, Lafayette Metro Narcotics Task Force, as well as other

agents with the ATC, to conduct undercover surveillance at Southland

Entertainment during business hours on three nights in the summer of 2015. The

purpose of the surveillance was to look for any use of CDS on the premises and to

observe whether any of the ownership, management, security, or employees saw

and permitted the use of said illegal drugs. After each night’s undercover

surveillance, the officer and/or agent submitted a written report of their findings.

At the conclusion of the surveillance and investigation period, Agent Banks

submitted all of the undercover investigative reports to the ATC legal department

3
La.R.S. 26:286(A)(11) states:
No person holding a retail dealer’s permit and no servant, agent, or
employee of the permittee shall do any of the following acts upon the licensed
premises: . . . Illegally sell, offer for sale, possess, or permit the consumption on
or about the licensed premises of any kind or type of controlled dangerous
substances.
2

for review, whereupon the ATC issued an Administrative Citation to Southland

Entertainment for two counts of violating La.R.S. 26:90(A)(11). The case initially

went before the Commissioner of the ATC for an administrative hearing, after

which the Commissioner concluded that Southland Entertainment had violated

La.R.S. 26:90(A)(11). Southland Entertainment appealed the decision to the

district court as provided in La.R.S. 26:303(A). At the conclusion of the trial, the

district court upheld the suspension of Southland Entertainment’s liquor license

and monetary fine. Southland Entertainment appealed.

ISSUE

Southland Entertainment’s assignments of error require this court to

determine whether the district court erred in upholding the Commissioner’s

suspension of its liquor license based on the evidence presented by the ATC.

STANDARD OF REVIEW

To reverse a district court’s finding of fact, an appellate court must find from

the record that a reasonable factual basis does not exist for the finding and that the

finding is clearly wrong or manifestly erroneous. Mart v. Hill, 505 So.2d 1120

(La.1987). Pursuant to this standard of review, the appellate court does not

determine whether the district court was right or wrong, but whether its conclusion

was reasonable. Rosell v. ESCO, 549 So.2d 840 (La.1989); Stobart v. State,

Through Dep’t of Transp. & Dev., 617 So.2d 880 (La.1993).

LAW AND DISCUSSION

Consent Agreement

Southland Entertainment first argues that the district court erred in

upholding the Commissioner’s suspension of its liquor license for the breach of the

terms of the Consent Agreement. We find that the Consent Agreement is

independent of the violations on appeal before us and is irrelevant to the merits of

3

the case. The rulings of the Commissioner and the district court were not based on

the Consent Agreement, but on Southland Entertainment’s violation of La.R.S.

26:90(A)(11). Furthermore, the terms of the Consent Agreement had expired at

that time, and its stipulations are immaterial to the merits of this case.

Evidence at Trial

Southland Entertainment next asserts that the district court erred in granting

judgment in favor of the ATC in upholding the Commissioner’s suspension of the

alcohol permit based on the testimony of Agent Banks and Detective Kevin

Williams of the Lafayette Police Department. Louisiana Revised Statutes

26:90(A)(11) prohibits anyone holding a retail alcohol dealer’s permit, his agent,

employee, or representative from illegally possessing or permitting “the

consumption on or about the licensed premises of any kind or type of narcotics or

habit forming drugs.” Southland Entertainment contends that the facts, testimony,

and evidence submitted at trial do not support the law and ruling issued by the

district court.

Pursuant to La.R.S. 26:304, proceedings before the ATC are civil

proceedings. Unless otherwise provided by law, the burden of proof in all civil

matters is preponderance of the evidence. Talbot v. Talbot, 03-814 (La. 12/12/03),

864 So.2d 590. “Proof is sufficient to constitute a preponderance when the entirety

of the evidence, both direct and circumstantial, shows the fact sought to be proved

is more probable than not.” Hebert v. Rapides Parish Police Jury, 06-2001, p. 7

(La. 4/11/07), 974 So.2d 635, 642.

Detective Williams was the ATC’s sole witness on the issue of whether

Southland Entertainment violated La.R.S. 26:90(A)(11) before the district court.

Detective Williams related that he had been employed in corrections and law

enforcement since 2001, that he had been working for the Lafayette Police

4

Department for ten years, and that he had been working specifically in narcotics

for more than one year with the Metro Narcotics Task Force before he performed

the undercover surveillance at Southland Entertainment. Detective Williams

testified that although he had only been specifically assigned to narcotics for just

over one year, he had dealt with narcotics during his entire law enforcement career.

He further testified that he had been field certified annually in narcotics detection

for the identification of marijuana, cocaine, methamphetamines, and various other

drugs. When asked specifically about the detection and identification of

marijuana, Detective Williams explained that marijuana has a distinctive smell,

that different strains of marijuana smell differently, and that, based on his years of

experience, he can identify marijuana by smell.

Detective Williams initially outlined the manner in which the surveillance

was conducted at Southland Entertainment, noting that he and another officer

visited Southland Entertainment on three occasions, paid the admission fee,

purchased drinks and drank only portions of those drinks to avoid looking

suspicious, and observed the patrons and employees during those visits. He

reported seeing and smelling marijuana in use on two of the three evenings he

conducted surveillance at the club. With regard to the two evenings during which

he reported that marijuana was openly used in the club, he testified that nothing

was done to stop the drug use and that he had no doubt that illegal marijuana was

being used. With regard to the surveillance that he conducted on July 17, 2015,

Detective Williams explained that hydroponic marijuana, a type of marijuana that

is known to be used today, has a very strong odor, such that it can be smelled even

when it is not being burned. He further explained that when being burned, the

smell becomes more intense. Detective Williams testified that he smelled

hydroponic marijuana during the course of his investigation that evening.

5

Southland Entertainment urges that Detective Williams’ testimony was

insufficient to carry the ATC’s burden of proof. In State v. Friday, 10-2309

(La.App. 1 Cir. 6/17/11), 73 So.3d 913, writ denied, 11-1456 (La. 4/20/12), 85

So.3d 1258, the court addressed this issue by rejecting the defendant’s objection to

the district court’s acceptance of a police officer’s opinion testimony regarding the

typical behavior of a collector of child pornography because the officer had not

been tendered and accepted as an expert. In Friday, 73 So.3d at 922 (case citation

omitted), the court dismissed the defendant’s objection, explaining:

A law enforcement officer is permitted to express an opinion
regarding matters of personal knowledge gained through experience,
even if the witness is not first qualified as an expert. See La.Code
Evid. art. 701. The trial court is vested with much discretion in
determining which opinion testimony shall be received into evidence
as lay or expert testimony. Accordingly, while not tendered as an
expert, [the police officer’s] personal knowledge, training, and
experience in the field enabled him to give an opinion about what is
typical for a collector of child pornography.

In light of Detective Williams’ personal knowledge gained through his

experience and professional education as a law enforcement officer, Southland

Entertainment has failed to show that the district court abused its discretion in

accepting Detective Williams’ testimony that marijuana was in use on two of the

three occasions that he conducted undercover surveillance at its establishment.

Accordingly, we find no manifest error with the district court’s finding that

Southland Entertainment violated La.R.S. 26:90(A)(11).

DISPOSITION

For these reasons, the judgment of the district court is affirmed. All costs

are assessed to Southland Entertainment, Inc. d/b/a BED Niteclub & Lounge.

AFFIRMED.

6

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

16-925

SOUTHLAND ENTERTAINMENT, INC. D/B/A BED NITECLUB &
LOUNGE

VERSUS

LOUISIANA DEPARTMENT OF REVENUE, OFFICE OF ALCOHOL
AND TOBACCO CONTROL

THIBODEAUX, Chief Judge, dissenting.

The trial court erred in granting judgment in favor of the ATC in upholding

the Commissioner’s suspension of the alcohol permit based on the testimony of

Agents Banks and Williams. Louisiana Revised Statutes 26:90(A)(11) states that

“no person holding a retail dealer’s permit and no agent, associate, employee,

representative, or servant of any such person . . . shall illegally sell, offer for sale,

possess or permit the consumption on or about the licensed premises of any kind or

type of narcotics or habit forming drugs.” On appeal, Southland Entertainment

contends that the facts, testimony, and evidence submitted at trial did not support

the law and ruling issued by the district court. While I recognize the credibility

deference due to the trial court, I find that taken as a whole, the record does not

support the trial court’s stated reasons for judgment. There is no objective

evidence in the record to support the determination that patrons of Southland

Entertainment were smoking marijuana on the premises with impunity. The record

reflects only mere suspicions and subjective observations. Accordingly, my

review of the record indicates that the trial court was clearly wrong in finding that

Southland Entertainment violated La.R.S. 26:90(A)(11).

In Mart v. Hill, 505 So.2d 1120, 1127 (1987), the Louisiana Supreme Court

stated:

[I]f an appellate court concludes that the trial court’s factual findings
are clearly wrong, the mere fact that some record evidence appears
which would furnish a reasonable factual basis for the contested
findings does not require affirmance. Although appellate courts must
accord great weight to the factual findings of the trial judge, these
same courts have a duty to determine if the fact finder was justified in
his conclusions. An appellate court is not required, because of the
foregoing principles of appellate review, to affirm the trier of fact’s
refusal to accept as credible uncontradicted testimony or greatly
preponderant objectively-corroborated testimony where the record
indicates no sound reason for its rejection and where the factual
finding itself has been reached by overlooking applicable legal
principles.

At the conclusion of the surveillance and investigation period, Agent Banks

submitted all of the undercover investigative reports to the ATC legal department

for review. None of the written reports could substantiate through testing or

verification that actual marijuana use was occurring. The submitted reports

indicate that the officers and agents observed patrons of Southland Entertainment

smoking suspected marijuana. However, no marijuana was ever confiscated,

recovered, or field tested, and no patron was arrested for the use of an illegal drug.

“Certainly, the factfinder should be accorded great latitude and discretion, but

discretion must always be buttressed by sound judgment. It is not immutable.”

Butler v. Zapata Haynie Corp., 92-71 (La.App. 3 Cir. 2/23/94), 633 So.2d 1274,

1278. The trial court reached its determination that Southland Entertainment had

permitted the use of CDS by judging the case solely on the testimony of Agent

Banks and his fellow officers. The trial judge’s determination was not reasonable

nor is it legally sustainable.

In determining whether an accident did occur aboard a vessel, this Court in

Butler v. Zapata Haynie Corp., 92-71 (La.App. 3 Cir. 2/23/94), 633 So.2d 1274,

2

noted the need for documents, objective evidence, and objectively-corroborated

testimony, in order to support the credibility findings of the lower court. The trial

court rejected the testimony of the plaintiff and his witnesses, concluding that an

accident did not occur aboard the vessel. On appeal, this Court examined the

record as a whole, and found that it contained ample objective and documentary

evidence to sufficiently overcome the trial court’s credibility findings to support a

reversal. Such evidence included testimony that was supported by statements from

other crew members. The court found it important that these statements

corroborated the testimony of the plaintiff.

Comparatively, there is nothing in this case to corroborate the testimony of

Agents Banks and Agent Williams that patrons of Southland Entertainment were

smoking marijuana on the premises. For example, at trial Agent Williams was

asked:

Q: Do you have anything to suffice or sustain the fact that what you
saw these individuals smoking was, in fact, marijuana?

A: Just my experience.

Such subjective observations are insufficient to warrant a finding that Southland

Entertainment violated La.R.S. 26:90(A)(11). “Uncontroverted evidence should be

taken as true to establish a fact for which it is offered absent any circumstances in

the record casting suspicion as to the reliability of this evidence and sound reasons

for its rejection.” Guidry v. Lafayette Health Ventures, Inc., 15-307 (La.App. 3

Cir. 7/20/16), 203 So.3d 436, 440. The circumstances in this case casting

suspicion are that no arrests were made, no contraband was seized, and the State’s

main witness, a narcotics officer, only suspected the presence of marijuana. No

objective evidence was submitted to the court during the trial to prove that

3

Southland Entertainment permitted any controlled dangerous substance to be

consumed on the premises. Accordingly, the trial court was manifestly erroneous

in its findings, and the majority compounds that error in affirming

For the foregoing reasons, I respectfully dissent.

4

STATE OF LOUISIANA

COURT OF APPEAL, THIRD CIRCUIT

16-925

SOUTHLAND ENTERTAINMENT, INC. D/B/A BED NIGHTCLUB &
LOUNGE

VERSUS

LOUISIANA DEPARTMENT OF REVENUE, OFFIC OF ALCOHOL AND
TOBACCO CONTROL

COOKS, J., dissents for the reasons assigned by Thibodeaux, C.J., and also
assigns additional reasons.

I join Chief Judge Thibodeaux’s well-reasoned dissent and if only my pen

could scream—I ask with exclamation to follow: When has constitutional due

process rested on so little?!!! Can the government really take away a bar owner’s

ability to operate a club and earn a living just because an ATC agent “merely

suspects a patron is smoking marijuana in the place?” Wow!!