Can Texas's TABC presume a seller 'knowingly' sold alcohol to a minor just for not checking ID?

Plain-English summary

The Texas Alcoholic Beverage Commission wanted to make enforcement easier. Its plan: adopt a rule saying that if a license or permit holder sold alcohol to a minor and did not ask the buyer to show a Texas driver's license or a DPS identification card, the seller would be presumed to have known the buyer was a minor. That presumption, unless the seller rebutted it, would make out a prima facie violation of the statutes that let the commission cancel or suspend a license. The commission asked whether it could do this by rule.

The Attorney General said the rule would be invalid. The two statutes at issue, Alcoholic Beverage Code sections 106.13(a) and 61.71(a)(5), let the commission cancel or suspend a license only when the seller "knowingly" sold to a minor. Texas courts had already construed that word strictly. In the leading case, a court of appeals held that proof a seller "should have known" the buyer was a minor was not enough; the statute requires evidence of actual knowledge. Failing to check ID, the opinion reasoned, is not by itself evidence that the seller actually knew the buyer was underage, and calling the rule a "rebuttable presumption" did not fix the problem, because a seller's failure to disprove knowledge still would not supply the proof of actual knowledge that the statute demands.

The opinion added a structural point. The separate criminal statute, section 106.03, makes selling alcohol to a minor an offense but gives the seller an affirmative defense if the buyer displayed certain identification. Turning that criminal-side identification defense into a civil-side presumption of guilt, without the Legislature saying so, would be inconsistent. So the proposed rule could not stand.

Currency note

This opinion was issued in 1992. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. The Alcoholic Beverage Code's penalty, mental-state, and identification provisions have been amended since 1992, so confirm the current statutes before relying on this opinion.

Background and statutory framework

Two civil statutes anchored the analysis. Alcoholic Beverage Code section 106.13(a) lets the commission cancel or suspend a license or permit if, after notice and hearing, the holder "knowingly sold, served, dispensed, or delivered an alcoholic beverage to a minor." Section 61.71(a)(5) similarly lets the commission suspend a license if the licensee "knowingly sold ... beer to a minor." Section 5.31 gives the commission authority to prescribe rules necessary to carry out the code. The proposed rule would have presumed the "knowingly" element from a seller's failure to ask for a driver's license or DPS card.

The controlling construction of "knowingly" came from Texas Alcoholic Beverage Comm'n v. J. Square Enters., 650 S.W.2d 531 (Tex. App.-Dallas 1983, no writ). There, the commission had suspended a license (or imposed a civil penalty) after concluding the licensee's agent "either knew or should have known" of two minors who sent a surrogate to buy beer. Reviewing under the substantial evidence rule, the court of appeals upheld the trial court's finding that there was a complete lack of evidence the agent actually knew the minors were consuming alcohol on the premises. Citing the Penal Code definition that a person acts "knowingly" when aware of the nature of his conduct or that circumstances exist (Penal Code section 6.03), the court held that none of the authorities suggest "knowingly" could include "should have known."

The opinion read J. Square Enterprises to mean that actual knowledge that the seller is selling to a minor is required before the commission may cancel or suspend a license. The proposed rule, by contrast, would let the commission act on a mere showing that the seller (1) sold to a minor and (2) failed to ask for specified identification. That, the opinion concluded, is not itself evidence of actual knowledge, and labeling it a "rebuttable presumption" did not help: a seller's failure to rebut would not become the proof of actual knowledge the statutes require. The opinion cited supporting authority. Starr v. State, 734 S.W.2d 52, 53 (Tex. App.-Houston [1st Dist.] 1987, no writ), held that "knowingly" in the criminal provision requires proof the seller knew the buyer was a minor (though that may be inferred from circumstances), and that proof the defendant "should have known" the minor's age is insufficient even in a civil suit to revoke a license. Wishnow v. Texas Alcoholic Beverage Comm'n, 757 S.W.2d 404, 409 (Tex. App.-Houston [14th Dist.] 1988, writ denied), approved J. Square Enterprises because the statute affirmatively requires a showing of knowledge.

The opinion reinforced its conclusion with the structure of the criminal statute. Section 106.03, which makes selling alcohol to a minor a criminal offense, provides in subsection (b) that there is no offense if the minor displayed specified identification indicating he is not a minor. The opinion thought it would be inconsistent, without affirmative statutory authority, for the commission to take that criminal affirmative defense and convert it, in a civil proceeding under sections 106.13(a) and 61.71(a)(5), into a presumption that the seller had violated the statute. See Kelly v. Industrial Accident Bd., 358 S.W.2d 874 (Tex. Civ. App.-Austin 1962, writ ref'd). The opinion accordingly concluded the proposed rule would be invalid as inconsistent with the applicable statutes as interpreted by the courts.

Common questions

What did the TABC want its proposed rule to do?
It wanted a rule presuming that a seller who sold alcohol to a minor and did not ask for a Texas driver's license or DPS identification card had "knowingly" sold to a minor. Unless rebutted, that presumption would establish a prima facie violation supporting license suspension or cancellation.

Why did the Attorney General say the rule was invalid?
Because the statutes (sections 106.13(a) and 61.71(a)(5)) require the seller to have acted "knowingly," and Texas courts read that to require proof of actual knowledge. A failure to check ID is not, by itself, proof of actual knowledge, so the rule would let the commission act without the proof the statute demands.

Doesn't calling it a "rebuttable presumption" solve the problem?
The opinion said no. Even if a seller failed to rebut the presumption, that failure would still not supply evidence of the seller's actual knowledge, which is what the statutes require. The label did not change the substance.

What's the difference between the criminal and civil alcohol-to-minor rules here?
The criminal statute (section 106.03) makes the sale an offense but gives the seller an affirmative defense if the buyer showed proper identification. The civil statutes (sections 106.13(a) and 61.71(a)(5)) turn on whether the seller acted "knowingly." The opinion said the commission could not borrow the criminal identification defense and flip it into a civil presumption of guilt.

Could the commission ever prove a "knowing" sale to a minor?
Yes. The opinion did not bar the commission from proving actual knowledge; it barred presuming it from a failure to check ID. As the cases noted, knowledge can be inferred from the circumstances, but there must be evidence supporting actual knowledge, not just that the seller "should have known."

Citations

• Alcoholic Beverage Code §§ 106.13(a), 106.13(c), 61.71(a)(5), 61.71(a)(1), 5.31, 11.67, 106.03, 106.03(a), 106.03(b)
• Penal Code § 6.03, 6.03(d); Acts 1987, 70th Leg., ch. 582, § 1
• Texas Alcoholic Beverage Comm'n v. J. Square Enters., 650 S.W.2d 531 (Tex. App.-Dallas 1983, no writ)
• Starr v. State, 734 S.W.2d 52, 53 (Tex. App.-Houston [1st Dist.] 1987, no writ)
• Wishnow v. Texas Alcoholic Beverage Comm'n, 757 S.W.2d 404, 409 (Tex. App.-Houston [14th Dist.] 1988, writ denied)
• J. & J. Beverage Co. v. Texas Alcoholic Beverage Comm'n, 810 S.W.2d 859, 861 (Tex. App.-Dallas 1991, no writ)
• Kelly v. Industrial Accident Bd., 358 S.W.2d 874 (Tex. Civ. App.-Austin 1962, writ ref'd)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/dan-morales/dm-0115
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1992/dm0115.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

Office of the Attorney General
State of Texas

DAN MORALES
ATTORNEY GENERAL

May 4, 1992

Ms. Jeannene Fox
Acting Administrator
Texas Alcoholic Beverage Commission
P. O. Box 13127
Austin, Texas 78711-3127

Opinion No. DM-115

Re: Authority of the Alcoholic Beverage Commission to adopt a rule regarding the sale of alcohol to minors (RQ-264)

Dear Ms. Fox:

Alcoholic Beverage Code section 106.13(a) authorizes the Alcoholic Beverage Commission to cancel or suspend a license or permit to sell alcoholic beverages "if it is found, on notice and hearing, that the licensee or permittee knowingly sold, served, dispensed, or delivered an alcoholic beverage to a minor in violation of this code." (Emphasis added.) Section 61.71(a)(5) provides similarly that the commission may suspend a licensee's license if it is found that the licensee "knowingly sold . . . beer to a minor." (Emphasis added.) You ask whether the Texas Alcoholic Beverage Commission (hereinafter the commission) may provide by rule that if a licensee or permittee "sells alcohol to a minor and refuses to ask the minor to show proof of age by displaying an apparently valid Texas Driver's license or an identification card issued by the Texas Department of Public Safety, he is presumed to have done so with knowledge that the person is a minor." You say that "[t]his presumption unless rebutted by credible evidence [would establish] a prima facie case of a violation under § 61.71(a)(5) and § 106.13(a)." Section 5.31 of the code authorizes the commission to prescribe rules necessary to carry out the code's provisions.

In Texas Alcoholic Beverage Comm'n v. J. Square Enters., 650 S.W.2d 531 (Tex. App.-Dallas 1983, no writ) the court of appeals upheld a district court's reversal of a commission order suspending the license of, or alternatively imposing a monetary civil penalty[1] on, a licensee for selling or serving an alcoholic beverage to a minor. The commission in its order had concluded, under section 106.13, that although "the minors themselves did not buy the beer from the respondent but rather sent a surrogate to do the buying for them," the licensee's agent "either knew or should have known of the presence and activities of [the] two minors." Id. at 531 (emphasis added by the court). Noting that appeals from commission orders were "tested under the substantial evidence rule" and "[i]n practical result, it does not take much evidence to qualify as substantial," the appeals court nevertheless upheld the district court's finding "that there was a complete lack of evidence in the record from which one might reasonably infer that the agent for J. Square Enterprises actually knew that [the] minors were consuming alcohol on the premises." Id. at 532; see also Alco. Bev. Code § 11.67 (appeal of commission order is under substantial evidence rule). Citing inter alia the Penal Code definition (in section 6.03 of that code)[2] that a person acts "'knowingly'" "'when he is aware of the nature of his conduct or that the circumstances exist,'" the court concluded that none of the authorities "suggest that 'knowingly' could include 'should have known.'" 650 S.W.2d at 532. "A review of the hearing examiner's findings of fact reveals no findings from which we could reasonably infer actual knowledge on the part of the agent for J. Square Enterprises." Id.

We understand the J. Square Enterprises court's construction of the "knowingly" requirement of the applicable statutes to mean that evidence of the licensee's or permittee's actual knowledge that he is selling alcoholic beverages to a minor is required in order for the commission to cancel or suspend a license or permit thereunder. The proposed commission rule you ask about would, it appears, permit the commission to cancel or suspend a license or permit on the mere showing that the licensee or permittee 1) sold alcoholic beverages to a minor and 2) failed to ask for specified types of identification. We do not believe such evidence would, in itself, constitute evidence of "actual knowledge" on the part of the licensee or permittee that he was selling alcoholic beverages to a minor. Nor do we think the characterization of the rule as a "rebuttable presumption" saves it: the respondent licensee's or permittee's failure to rebut the rule's presumption (i.e., his failure to show that, notwithstanding his having neglected to obtain the requisite identification, he did not actually know the buyer was a minor) would not constitute the evidence of his "actual knowledge" which the statutes, per J. Square Enterprises, require. See also Starr v. State, 734 S.W.2d 52, 53 (Tex. App.-Houston [1st Dist.] 1987, no writ) ("knowingly" in criminal provision, section 106.03, making it an offense to "knowingly" sell to a minor, requires proof that seller knew buyer was a minor, although such knowledge may be inferred from circumstances; noting that "[p]roof that the defendant 'should have known' the minor's age is insufficient, even in a civil suit to revoke a liquor license" (citing J. Square Enterprises)); Wishnow v. Texas Alcoholic Beverage Comm'n, 757 S.W.2d 404, 409 (Tex. App.-Houston [14th Dist.] 1988, writ denied) (approving J. Square Enterprises because "the statute affirmatively requires a showing of knowledge and the Commission had made no such showing").

We note, in support of our conclusion, that section 106.03 of the Alcoholic Beverage Code, which makes it a criminal offense to sell alcoholic beverages to a minor,[3] provides in subsection (b) that there is no offense if the minor has displayed specified kinds of identification indicating he is not a minor. We think it would be inconsistent, without affirmative statutory authority, to conclude that the commission could, in a civil proceeding under sections 106.13(a) and 61.71(a)(5), transform what is an affirmative defense under the criminal provision[4] into a presumption that the licensee or permittee has violated the statute.

Consequently, it is our opinion that the proposed commission rule you ask about, which would establish a "rebuttable presumption" that a licensee or permittee had "knowingly" sold alcoholic beverages to a minor where it was shown that the seller had failed to request proper identification, would be invalid as inconsistent with the applicable statutory provisions as interpreted by the courts. See Kelly v. Industrial Accident Bd., 358 S.W.2d 874 (Tex. Civ. App.-Austin 1962, writ ref'd).

                             SUMMARY

        A proposed rule of the Alcoholic Beverage Commission which would establish a "rebuttable presumption" that a licensee or permittee had "knowingly" sold alcoholic beverages to a minor where it was shown that the seller had failed to request proper identification, would be invalid as inconsistent with the applicable statutory provisions as interpreted by the courts.

                                        DAN MORALES
                                        Attorney General of Texas

WILL PRYOR
First Assistant Attorney General

MARY KELLER
Deputy Assistant Attorney General

RENEA HICKS
Special Assistant Attorney General

MADELEINE B. JOHNSON
Chair, Opinion Committee

Prepared by William Walker
Assistant Attorney General

[1] Subsection (c) and (c)(1) of section 106.13 permits the commission to "assess a sanction the commission . . . finds just" if it is determined "that the violation could not reasonably have been prevented . . . by the exercise of due diligence." The J. Square Enterprises court noted that the commission had, in view of the circumstances of the alleged violation, ordered either "that the license of the respondent be suspended for a period of only three days or that the respondent pay a civil penalty in the amount of $450.00." 650 S.W.2d at 531.

[2] See also note 4.

[3] See infra note 4.

[4] In line with your question, we limit this opinion to the issue of the propriety of the proposed rule vis a vis proof of knowledge. We note that the criminal provision in section 106.03(a) was amended in 1987 to make it an offense to sell with criminal negligence an alcoholic beverage to a minor. Acts 1987, 70th Leg., ch. 582, § 1, at 2298. See also Penal Code § 6.03(d) (defining "criminal negligence"). However, the civil provisions governing permit and license cancellations and suspensions which you ask about, sections 61.71(a)(5) and 106.13(a), continue to use the word "knowingly." See in this regard J. & J. Beverage Co. v. Texas Alcoholic Beverage Comm'n, 810 S.W.2d 859, 861 (Tex. App.-Dallas 1991, no writ) (which held that under the specific provision of section 61.71(a)(5), the "knowingly" standard governs cancellation or suspension of license for selling beer to minors, but stated in dicta that section 61.71(a)(1), authorizing suspension or cancellation for violation of a provision of this code, in conjunction with section 106.13(a) permits "the cancellation or suspension of a retail dealer's license for selling with criminal negligence any alcoholic beverage except beer") (emphasis in original). The court did not allude to the specific provisions of section 106.13(a) for cancellation and suspension for "knowingly" selling, serving, etc., "alcoholic beverages" to a minor.