State v. Hy Vee Food Stores, Inc.
533 N.W.2d 147, 1995 WL 337440, 1995 S.D. LEXIS 64 (1995)
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Rule of Law:
A corporation can be held vicariously criminally liable for an employee's illegal sale of an alcoholic beverage to a minor. Imposing a criminal fine on the corporation for such a public welfare offense does not violate its substantive due process rights.
Facts:
- On March 19, 1993, Sioux Falls police conducted an undercover sting operation using a 19-year-old college student.
- The undercover agent entered a Hy Vee Food Stores, Inc. (Hy Vee) grocery store and brought a bottle of whiskey to the checkout counter.
- The cashier, who was too young to sell liquor, asked an older employee to scan the item.
- The older employee scanned the whiskey, and the cashier completed the transaction by taking the agent's money.
- Neither Hy Vee employee asked the 19-year-old for identification to verify his age.
- Hy Vee had a stated corporate policy prohibiting the sale of alcohol to minors and requiring employees to check identification.
Procedural Posture:
- Hy Vee Food Stores, Inc. was charged in magistrate court with selling an alcoholic beverage to a person under twenty-one.
- The magistrate court found Hy Vee guilty and imposed a $200 fine.
- Hy Vee appealed its conviction to the circuit court, challenging the statute's constitutionality.
- The circuit court affirmed the magistrate court's conviction.
- Hy Vee then appealed to the Supreme Court of South Dakota.
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Issue:
Does imposing vicarious criminal liability on a corporate alcohol licensee for an employee's illegal sale to a minor, resulting in a fine, violate the corporation's substantive due process rights under the state and federal constitutions?
Opinions:
Majority - Konenkamp, Justice
No. Imposing vicarious criminal liability on a corporate alcohol licensee for an employee's illegal sale to a minor, when the penalty is limited to a fine, does not violate the corporation's substantive due process rights. The court reasoned that legislatures can create public welfare statutes that impose criminal liability without requiring proof of intent (mens rea), especially for regulatory offenses with relatively small penalties. The court distinguished this case, involving a corporate defendant that can only be fined, from precedents where individual owners faced imprisonment, which would raise more serious due process concerns. It held that a corporation acts through its agents and cannot be insulated from liability by merely having a policy against the illegal conduct. Since the statute is rationally related to the legitimate government purpose of preventing underage drinking, and the penalty as applied to the corporation was only a fine, the law is constitutional.
Dissenting - Amundson, Justice
Yes. Imposing vicarious criminal liability on a corporation for an employee's unauthorized act violates substantive due process. The dissent argued that guilt is a personal and individual concept in criminal law, and branding a corporation as a criminal for an employee's mistake, without any showing of knowledge or authorization from the employer, is unjust. It contended that less onerous civil alternatives, such as fines or license suspension, are available and sufficient to address such violations without resorting to the social condemnation of a criminal conviction. The dissent emphasizes that using criminal sanctions in vicarious liability cases is unjustifiable when civil remedies can achieve the same regulatory goals.
Analysis:
This decision affirms the principle of corporate vicarious criminal liability for public welfare offenses in South Dakota, particularly in the highly regulated alcohol industry. It creates a key distinction between corporate defendants, who can only be fined, and individual defendants, who may face imprisonment, suggesting due process analysis is far more lenient for the former. The ruling places the burden of employee supervision and compliance squarely on corporate licensees, making internal policies insufficient as a legal defense. However, the court explicitly leaves open the question of whether a jail sentence for an individual owner under similar vicarious liability circumstances would be constitutional, signaling a potential limit to the doctrine.
