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THE STATE OF SOUTH CAROLINA

In The Supreme Court

Mike Steinke and Mary

Steinke, individually and

as personal

representatives of the

estate of Zachary

Steinke; and Linda Nash

Given, individually and

as personal

representative of the

estate of Michael Nash, Respondents,

v.

South Carolina

Department of Labor,

Licensing and

Regulation, Appellant.

Appeal From Horry County

A. Victor Rawl, Circuit Court Judge

Opinion No. 24999

Heard May 12, 1999 - Filed September 7, 1999

AFFIRMED IN PART; REVERSED IN PART

Andrew F. Lindemann, William H. Davidson, II, and

David L. Morrison of Davidson, Morrison and

Lindemann, P.A., Columbia, for appellant.

p.9

John Kassel and John Nichols of Suggs and Kelly,

P.A., Columbia, and B. Randall Dong of Simpson,

Dong and Wingate, L.L.C., Columbia, for

respondents.

WALLER, A.J.: Mike and Mary Steinke, the parents and personal

representatives of the estate of Zachary Steinke, and Linda Nash Given, the

mother and personal representative of the estate of Michael Nash

(Respondents), brought wrongful death actions against the South Carolina

Department of Labor, Licensing, and Regulation (Department). The jury

awarded the statutory beneficiaries of each teenager $1 million in actual

damages. Nash's award was reduced to $900,000 because the jury concluded

he was ten percent at fault.1

The trial judge denied Department's motions for a directed verdict,

a judgment notwithstanding the verdict, and a new trial. Department

appealed. The Court of Appeals certified this case to this Court because it

involves issues of significant public interest and legal principles of major

importance. See S.C. Code Ann. § 14-8-210(c) (Supp. 1998); Rule 204(b),

SCACR (formerly contained in Rule 214(b), SCACR)). We affirm in part and

reverse in part.

FACTS

Zachary Steinke, a 17-year-old bungee jumper, and Michael Nash,

a 19-year-old bungee jump master, died August 10, 1993, when the steel cage

in which they were riding fell 160 feet to the ground at Beach Bungee, an

attraction near Myrtle Beach. Zachary's parents saw the accident happen. His

mother, a registered nurse, and his father tried to save Zachary by performing

Beach Bungee, Carolina Lane Holding Co., and the owners of the two

companies in an action brought in federal district court. The Fourth Circuit

affirmed on the issue of the owners' individual liability, but remanded for the

district court to decide whether the verdict should be reduced in light of a recent

United States Supreme Court opinion. Steinke v. Beach Bungee, Inc., 105 F.3d

192 (4th Cir. 1997.)

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cardiopulmonary resuscitation upon him.

Beach Bungee's owners initially used a "crawlevator" to carry

bungee jumpers and sightseers to the top of a 160-foot metal arch. The

crawlevator was a chain-driven device that ran along the supports of the metal

arch. A steel cage attached to the crawlevator carried jumpers and spectators.

After a person jumped, the crawlevator lowered spectators and the suspended

jumper to the ground by slowly descending the arch. Although bungee jumping

was not regulated, Department considered the crawlevator a ride subject to

regulation under the South Carolina Amusement Rides Safety Code2 because

it carried spectators. Department issued a permit for the crawlevator in May

1993.

The crawlevator had persistent mechanical problems, sometimes

stalling or violently shaking passengers as the chain jerked along the track.

Beach Bungee owners took the crawlevator out of service in mid-July 1993.

They hired Marshall Beam, a local shrimp boat mechanic, to install an electric

winch and cable to lift the steel cage. Beam attached the winch to the base of

the arch, fashioned three pulleys to guide a single metal cable through the

structure of the metal arch, and connected the cable to the cage as it sat

beneath the center of the arch. Two stabilizing cables were attached to a static

line to prevent the cage from rotating or swaying, but they provided no actual

support for the cage. The winch could not be controlled from inside the cage.

The jump master used hand signals to tell the winch operator on the ground

when the cage was properly positioned for a jump. Operators also painted a

blue mark on the cable to identify the proper stopping point.

The accident occurred when the ride operator, owner Harold Morris,

became distracted during the three minutes or so it took the cage to travel to

the top of the arch. When Morris failed to stop the winch, it kept pulling the

three-eighths-inch cable after the cage jammed into the arch. Someone -

perhaps Zachary or Michael or spectators - cried, "Stop! Stop!" As horrified

onlookers watched, the single lifting cable snapped and the cage plummeted to

the ground. It was the sixth day the operators had used the winch and cable

system.

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Major defects in the system included the use of a single cable

without additional safety cables, incorrectly sized pulleys, a powerful winch

capable of snapping the single cable with relative ease, the lack of controls or

an emergency stop button inside the cage, and the lack of a device to shut off

the winch automatically when the cage reached the top of the arch.

Respondents alleged that Department failed to revoke or suspend

the license Department had issued, or adequately inspect or investigate the

crawlevator, after receiving troubling reports. Those reports were (1) a July 13,

1993, memorandum written by James Cates, a Department field supervisor; (2)

an August 5, 1993, telephone conversation between Henry J. McGinnis,

president of the Texas manufacturer of the arch and crawlevator, and Floyd

Padgett, director of Department's Office of Elevators and Amusement Rides;

and (3) an August 5, 1993, facsimile from McGinnis to Padgett.

Cates wrote the July 13, 1993, memo after Department received a

report of a malfunction of an electric winch at the ride. Emergency personnel

were called to the scene. No one was injured, but a jumper was suspended

upside down until repairs were made. Cates filed the memo away after

discussing the matter with Padgett. No Department official contacted the

Beach Bungee owners or visited the site because, Padgett testified, no one had

gotten hurt.

Arch maker McGinnis testified he telephoned Padgett on August 5,

1993. McGinnis told Padgett he had received a report that Beach Bungee may

have modified the crawlevator by installing a winch and cable to lift the cage.

That was not the system he had designed and McGinnis wanted to ensure any

changes had been inspected and approved by a licensed engineer. Beach

Bungee's owners and employees had refused to accept McGinnis's calls,

apparently due to the crawlevator's mechanical problems and the fact

McGinnis's company had not been fully paid. McGinnis, at Padgett's request,

outlined his concerns in a fax to Padgett the same day. He wrote that the ride

recently had "incurred some type of failure" and asked Department to

investigate the matter. Padgett assured him that Department would look into

it, McGinnis testified.

Padgett denied having a conversation on August 5 with McGinnis.

He testified he spoke with McGinnis on August 6 after receiving McGinnis's fax,

but denied McGinnis told him about the winch and cable system. Padgett did

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not perceive the situation as an emergency and saw no reason to work overtime

to follow up on the matter. Cates, however, testified the fax appeared to be

more serious than other routine government and manufacturer notices faxed

to the Columbia office during 1993.

Jerry Butler, a chief inspector with Department, instructed local

inspector Mitchell Ward to go by the Beach Bungee site, but "not to make a

special trip." Ward was not aware of the July 13 memo or the August 5 fax.

Ward testified he drove by the site at about 6:30 p.m. August 6, 1993, on his

way to a bowling date. He was traveling about 20 to 30 mph and did not stop

at the site. Ward saw the cage sitting on the ground, but did not see the

crawlevator. He did not believe the ride was operating. He passed by the ride

again at about 11 p.m. on his way home, but did not stop. In fact, operators

used the winch and cable system to carry forty-seven jumpers August 6,

including twenty jumpers between 6: 10 and 8:30 p.m.

The next afternoon, on a Saturday trip to the mall, Ward pulled his

car to the far side of the six-lane highway and observed the ride for about ten

minutes. Ward saw the cage on the ground and again noticed the crawlevator

was not attached to the track of the arch. He also saw the stabilizing cables and

was "stunned" to see a lifting cable attached to the top of the cage. Ward

assumed, however, that workers were using the cables to move the cage or

crawlevator, which he assumed was broken, during repairs.

Ward did not walk across the highway to get a closer look or speak

to the owners. He did not try to telephone the owners later. Ward drove by the

site a second time August 7 without stopping. Ward still believed the ride was

not operating, and reported that to Department officials in Columbia.

Operators used the winch and cable system to carry only five people August 7

due to inclement weather and mechanical problems.

Ward drove by the site on his way to and from work Monday,

August 9, 1993, and on his way to work Tuesday morning. He did not stop or

even attempt to observe the site as he passed. The fatal accident occurred

Tuesday evening.

Department officials Padgett, Butler, Cates, and Ward testified the

winch and cable system was dangerous, and acknowledged a failure could result

in multiple deaths. The system constituted a substantial modification of the

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licensed crawlevator. Padgett, Butler, and Ward testified Department officials

would have taken immediate steps to shut it down if they had known about it.

STANDARD OF REVIEW

In ruling on motions for directed verdict or judgment

notwithstanding the verdict, the trial court is required to view the evidence and

the inferences that reasonably can be drawn therefrom in the light most

favorable to the party opposing the motions. The trial court must deny the

motions when the evidence yields more than one inference or its inference is in

doubt. This Court will reverse the trial court only when there is no evidence to

support the ruling below. Creech v. South Carolina Wildlife and Marine

Resources Dep't, 328 S.C. 24,491 S.E.2d 571 (1997). This Court will not disturb

a trial court's decision granting or denying a new trial unless that decision is

wholly unsupported by the evidence or the court's conclusions of law have been

controlled by an error of law. South Carolina Dep't of Highways and Pub.

Transp. v. E.S.I. Investments, 332 S.C. 490, 505 S.E.2d 593 (1998); Craven v.

Cunningham, 292 S.C. 441, 357 S.E.2d 23 (1987).

ISSUES

1. Did the trial judge err in ruling that Department

owes a special or private duty to riders of a

licensed amusement ride, such that respondents

have a private cause of action against

Department?

2. Is Department immune from suit under various

exceptions to the waiver of immunity contained

in the Tort Claims Act?

3. Did the trial judge err in rejecting Department's

argument that Michael Nash assumed the risk of

his injuries and in giving an erroneous jury

charge on assumption of the risk?

4. Did the trial judge err in refusing to reduce the

verdict in accordance with the Legislature's 199 7

re-enactment of monetary limits in suits brought

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under the Tort Claims Act?

DISCUSSION

1. SPECIAL OR PRIVATE DUTY

Department argues the trial judge erred in rejecting its motions for

a directed verdict and judgment notwithstanding the verdict, in which it

asserted the Amusement Rides Safety Code gives rise only to a public duty. No

special or private duty exception to the public duty rule exists in this case;

therefore, Respondents had no private cause of action, Department contends.

We disagree.

In a negligence action, a plaintiff must show that the (1) defendant

owes a duty of care to the plaintiff, (2) defendant breached the duty by a

negligent act or omission, (3) defendant's breach was the actual and proximate

cause of the plaintiffs injury, and (4) plaintiff suffered an injury or damages.

Bishop v. South Carolina Dep't of Mental Health, 331 S.C. 79, 502 S.E.2d 78

(1998); Shipes v. Piggly Wiggly St. Andrews, Inc., 269 S.C. 479, 238 S.E.2d 167

(1977); W. Keeton, D. Dobbs, R. Keeton, and D. Owen, Prosser and Keeton on

the Law of Torts, 164-65 (1984). The court must determine, as a matter of law,

whether the law recognizes a particular duty. If there is no duty, then the

defendant in a negligence action is entitled to a directed verdict. Ellis v. Niles,

324 S.C. 223, 479 S.E.2d 47 (1996); Sharpe v. South Carolina Dep't of Mental

Health, 292 S.C. 11, 16, 354 S.E.2d 778, 781 (Ct. App. 1987) (Bell, J.,

concurring).

In Jensen v. Anderson County Dep't of Social Services, 304 S.C.

195, 403 S.E.2d 615 (1991), the Court explained the public duty rule and the

six-factor test for determining whether a governmental entity owes a special or

private duty to an injured plaintiff.3

Other courts disagree about the continued validity of the public duty rule in

light of the demise of absolute sovereign immunity and the advent of acts such

as the South Carolina Tort Claims Act. The Act declares that governmental

entities "are liable for their torts in the same manner and to the same extent as

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Generally, there is no common law duty to act. An

affirmative legal duty, however, may be created by

statute, contract relationship, status, property interest,

or some other special circumstance. Many statutes

impose a duty on public officials to perform certain

acts. Generally, however, such officials enjoy an

immunity from a private cause of action under the

public duty rule. This rule holds that public officials

are generally not liable to individuals for their

negligence in discharging public duties as the duty is

owed to the public at large rather than anyone

individually....

An exception to this general rule of non-liability exists

when a duty is owed to individuals rather than the

public only. Our Court of Appeals has developed a test

comprised of six elements to determine when such a

"special duty" exists:

(1) an essential purpose of the statute is to protect

against a particular kind of harm;

(2) the statute, either directly or indirectly, imposes on

a specific public officer a duty to guard against or not

cause that harm;

(3) the class of persons the statute intends to protect is

identifiable before the fact;

liability and damages, and exemptions from liability and damages, contained

herein." S.C. Code Ann. § 15-78-40 (Supp. 1998), See Leake v. Cain, 720 P.2d

152) 159 (Colo. 1986) (noting that while public duty doctrine may still be the

majority view, growing trend is to abandon it); Annot., 38 A.L.R.4th 1194 (1985)

(collecting numerous cases in which courts have applied or abandoned the

public duty doctrine). We do not address the continued validity of the public

duty rule because that issue is not before us.

p.14

(4) the plaintiff is a person within the protected class;

(5) the public officer knows or has reason to know the

likelihood of harm to members of the class if he fails to

do his duty; and

(6) the officer is given sufficient authority to act in the

circumstances or he undertakes to act in the exercise of

his office.

Jensen, 304 S.C. at 199-200,403 S.E.2d at 617 (citing Parker v. Brown, 195 S.C.

35, 10 S.E.2d 625 (1940)). The public duty rule is distinguishable from a

defense of immunity, which is an affirmative defense that must be pleaded and

can be waived. A defendant who pleads immunity conditionally admits the

plaintiff's case, but asserts immunity as a bar to liability. In contrast, the

public duty rule is a defense that denies an element of the plaintiffs cause of

action - the existence of a duty of care to the individual plaintiff. Wells v. City

of Lynchburg 331 S.C. 296, 307, 501 S.E.2d 746, 752 (Ct. App. 1998).

In Jensen, the Court determined that child abuse statutes imposed

a special duty on the local child protection agency and its social workers to

investigate and intervene in cases where child abuse has been reported. Thus,

a plaintiff may allege in a private cause of action that the agency failed to

properly investigate a report of child abuse. See also Bellamy v. Brown, 305

S.C. 291, 408 S.E.2d 219 (1991) (holding that dismissed official could not sue

government agency for breach of confidentiality under state Freedom of

Information Act because Act is intended to protect public from secret

government activity and did not create any special or private duty to

individuals); Wells v. City of Lynchburg, supra (holding plaintiff could not sue

city for failing to maintain fire hydrants because it was barred by a provision

of the Tort Claims Act and city owed duty only to public generally); Summers

v. Harrison Constr., 298 S.C. 451, 381 S.E.2d 493 (Ct. App.1989) (holding that

statute requiring county planning department to refuse to issue building

permits to unlicensed residential home builders created no special duty, such

that department could be held liable for damages on the ground it negligently

issued permit to builder); Rayfield v. South Carolina Dep't of Corrections, 297

S.C. 95, 374 S.E.2d 910 (Ct. App. 1988) (holding that statutes' assigning

responsibility for control of departments providing for keeping of records on

prisoners created duty owed by prison and parole officials to public generally,

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not a special duty owed to victims murdered by recently paroled prisoner in

random act of violence).

We hold that the trial judge correctly ruled respondents have a

private cause of action because the six-factor test from Jensen is met in this

case.

First, an essential purpose of the Amusement Rides Safety Code is

to protect against a particular kind of harm, i.e., harm caused by poorly

designed, constructed, or maintained amusement rides. "The purpose of this

chapter is to guard against personal injuries in the ... use of amusement

devices ... to persons employed at or attending ... amusement parks, and, in

the event of a personal injury, to ensure to the injured party the possibility of

financial recovery as against the owner.... It is the intent of this chapter that

amusement devices must be designed, constructed, assembled or disassembled,

maintained, and operated so as to prevent injuries." S.C. Code Ann. § 41-18-20

(Supp. 1998).

The dissent, focusing narrowly upon the language regarding

financial recovery against the owner and the necessity of liability insurance,

asserts the Legislature intended to prohibit recovery against Department. We

certainly agree that recovery against the owner is an important component of

the Act, but it is not the sole reason for its existence. As we explain further

below, a reading of the entire Act reveals the Legislature imposed numerous

specific and crucial duties upon Department in order to ensure the safety of

park visitors and workers.

Second, the Act directly imposes on Department a duty to guard

against or not cause harm to amusement park visitors and workers. "No

amusement device may be operated in the State without a permit issued" by an

appropriate Department official. S.C. Code Ann. § 41-18-50 (Supp. 1998).

Department must inspect an amusement device before issuing a permit. S.C.

Code Ann. § 41-18-70 (Supp. 1998). Department must re-inspect an

amusement device after the owner notifies it of a substantial modification to the

device. S.C. Code Ann. § 41-18-80(C) (Supp. 1998). Department's director and

his designees are "charged with the affirmative duty of administering and

enforcing" the Act. S.C. Code Ann. § 41-18-130 (Supp. 1998). Furthermore, the

Act, when read in its entirety, implicitly imposes upon Department an

affirmative duty to investigate promptly after receiving credible reports of

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suspected hazards. See Adams v. Texfi Industries, 320 S.C. 213,464 S.E.2d 109

(1995) (in construing a statute, the reviewing court looks to its language as a

whole in light of its manifest purpose).

. Third, the class of persons the Act intends to protect was

identifiable before the fact of the injury. To meet this factor, the class must be

readily identifiable in that it is distinguishable from the general public. See

Jensen, supra.

The Act's purpose is to prevent injuries to visitors and employees

at amusement parks and fairs. S.C. Code Ann. § 41-18-20. Those visitors and

employees usually would not constitute a readily identifiable class that is

distinguishable from the general public. In this case, however, Department had

received several credible reports indicating a particular amusement ride posed

a significant safety threat. Members of the larger class of visitors and

employees the Act is meant to protect - the riders and workers at a specific,

reportedly hazardous amusement ride - were readily identifiable before the fact

of the injury. Our reasoning is consistent with Jensen. supra, in which we

found that a member of the larger class of persons the child abuse statutes were

intended to protect - in that case, a single reported victim of abuse - was readily

identifiable before the fact of the injury. It is not always necessary, as

Department and the dissent contend, that members of the protected class

actually be known by name to the governmental entity before the fact of an

injury.

Fourth, the plaintiffs are within the protected class. Zachary was

a park visitor; Michael was employed by Beach Bungee, the owner of an

amusement device licensed by Department.

Fifth, Department knows or has reason to know the likelihood of

harm to members of the class if it fails to do its duty. Department officials

testified the winch and cable system was dangerous, and acknowledged a

failure could result in multiple deaths. They conceded the system constituted

a substantial modification of the licensed crawlevator. Department officials

further testified they would have taken immediate steps to shut it down if they

had known about it.

Sixth, Department has sufficient authority to act in the

circumstances. Department may revoke a permit after determining an

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amusement device is, among other things, "being operated without the

inspections required" or "being operated with a mechanical, electrical,

structural, design, or other defect which presents an excessive risk of injury to

passengers, bystanders, operators, or attendants." S.C. Code Ann. § 41-18

60(D)(1) and (3) (Supp. 1998). Department officials may enter unannounced

and inspect amusement devices at reasonable times and in a reasonable

manner. They also have the right to question any owner, manager, or employee

and to inspect, investigate, photograph, and sample all pertinent areas, and to

examine and copy all pertinent documents and records. S.C. Code Ann. § 41-18

80(E) (Supp. 1998). Department may impose civil penalties when an owner

fails to comply with the act. S.C. Code Ann. § 41-18-150 (Supp. 1998).

Department's reliance upon Adkins v. Varn, 312 S.C. 188, 439

S.E.2d 822 (1993), is misplaced. In that case, a thirteen-year-old girl was

fatally injured after vicious dogs chased her into a public street where she was

struck and killed by an automobile. Several local residents had complained

about the dogs to county animal control personnel. We affirmed the trial court's

ruling that the county animal control ordinance did not create a special duty of

care towards individual members of the general public. We found no legislative

intent to create a special duty because the terms of the ordinance were general

and did not identify a particular class of victims or a particular kind of harm.

In contrast, the analysis of those factors in this case, as well as the remainder

of the six-factor test, reveals the legislative intent to create a special duty.

2. EXCEPTIONS TO WAIVER OF IMMUNITY

Respondents alleged that Department, after receiving reports of

substantial modifications, was grossly negligent in failing to inspect or

investigate the amusement ride and in failing to suspend or revoke the

crawlevator license. Department contends the trial judge erred in rejecting its

directed verdict and post-trial motions in which it asserted immunity from suit

under several exceptions to the waiver of sovereign immunity contained in S.C.

Code Ann. § 15-78-60 (Supp. 1998). We disagree.

The South Carolina Tort Claims Act, which provides the exclusive

remedy in tort against Department, is a limited waiver of governmental

immunity. Moore v. Florence School Dist. No. 1, 314 S.C. 335, 444 S.E.2d 498

(1994); S.C. Code Ann. § 15-78-20(a) (Supp.1998). The Act provides that,

subject to limitation, a governmental entity is "liable for [its] torts in the same

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manner and to the same extent as a private individual under like

circumstances." Id.; S.C. Code Ann. § 15-78-40 (Supp-1993).

The burden of establishing a limitation upon liability or an

exception to the waiver of immunity under the Tort Claims Act is upon the

governmental entity asserting it as an affirmative defense. Strange v. South

Carolina Dep't of Highways and Pub. Transp., 314 S.C. 427, 445 S.E.2d 439

(1994). Provisions establishing limitations upon and exemptions from liability

of a governmental entity must be liberally construed in favor of limiting

liability. S.C. Code Ann. § 15-78-20(f) (Supp. 1998); Baker v. Sanders, 301 S.C.

170, 391 S.E.2d 229 (1990).

A. THE LICENSING POWERS EXCEPTION

Department contends it is immune from suit under Section 15-78

60(12). Under that section, a governmental entity is not liable for a loss

resulting from "licensing powers or functions, including, but not limited to, the

issuance, denial, suspension, renewal, or revocation of or failure to issue, deny,

suspend, renew, or revoke any permit, license, certificate, approval,

registration, order, or similar authority except when the power or function is

exercised in a grossly negligent manner." The trial judge instructed the jury on

this exception.

Department asserts the exception applies only to a licensee or

potential licensee, not to a third party allegedly injured by the government's

licensing decision. Nothing in the statutory language of the provision limits it

as Department suggests. A potential licensee, licensee, or an injured third

party may seek relief under the exception. See Parsons v. Uniroyal-Goodrich

Tire Corp., 313 S.C. 394, 438 S.E.2d 238 (1993) (in construing statute, words

must be given their plain and ordinary meaning without resorting to subtle or

forced construction to limit or expand statute's operation).

Department also argues it could not be grossly negligent because

it did not have any authority to license a bungee jumping operation in 1993.

See S.C. Code Ann. §§ 52-19-10 to -380 (Supp. 1998) (statutes regulating bungee

jumping effective in July 1994). We conclude the trial judge correctly reasoned

that respondents' action pertained to modifications of the crawlevator used to

carry bungee jumpers and spectators - which Department had licensed as an

amusement device - not to the actual jumps that were made.

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Department further argues there was no license for Department to

revoke because the licensed crawlevator was not in use when the accident

occurred. Accepting this argument would mean Department could avoid its

duty simply by claiming it was powerless in the face of an unauthorized and

unlicensed modification. That would subvert the clear purpose of the licensing

exception, which is to hold the governmental entity liable when it is grossly

negligent in failing to investigate whether it should suspend or revoke a license

after learning of potentially dangerous modifications to the subject of the

license. See Adams v. Texfi Industries, supra (in construing a statute, the

reviewing court looks to its language as a whole in light of its manifest purpose);

Resolution Trust Corp. v. Eagle Lake and Golf Condominiums, 310 S.C. 4732

427 S.E.2d 646 (1993) (purpose of the statute and public policy are aids in

construction of a statute).

Finally, Department argues that respondents Steinke are barred

by the doctrines of collateral estoppel and judicial estoppel from asserting the

winch and cable system was licensed by Department because they asserted it

was not licensed in a federal lawsuit against Beach Bungee's owners. See

Steinke v. Beach Bungee, Inc., 105 F.3d 192 (4th Cir. 1997) (discussing verdict

form in which the jury determined by special interrogatory that the winch and

cable system was operated without a license from Department).

The Steinke s' position in the two cases is consistent. In the federal

lawsuit, the Steinkes asserted and the jury found that the winch and cable

system was not licensed. In this case, the Steinkes asserted the crawlevator

was licensed, and Department was grossly negligent in failing to suspend or

revoke that license after learning the crawlevator may have been replaced by

the unlicensed winch and cable system.

We have defined gross negligence as "the failure to exercise slight

care. it We also have defined it as "the intentional, conscious failure to do

something which it is incumbent upon one to do or the doing of a thing

intentionally that one ought not to do." Gross negligence "is a relative term,

and means the absence of care that is necessary under the circumstances."

Hollins v. Richland County School Dist. One, 310 S.C. 486,490,427 S.E.2d 654,

656 (1993) (citations omitted). Under any of those definitions, the trial judge

properly denied Department's directed verdict and post-trial motions when the

facts are viewed in the light most favorable to respondents. The record shows

Department received three credible reports of a suspected problem or hazard

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at a licensed amusement device, yet Department gave the matter no more than

a cursory glance.

B. THE INSPECTION POWERS EXCEPTION

Department asserts that, regardless of the licensing powers

exception, it is immune pursuant to Section 15-78-60(13). Under that section,

a governmental entity is not liable for a loss resulting from "regulatory

inspection powers or functions, including failure to make an inspection, or

making an inadequate or negligent inspection, of any property to determine

whether the property complies or violates any law, regulation, code, or

ordinance or contains a hazard to health and safety." The trial judge instructed

the jury on this exception, which does not contain a gross negligence standard.

This Court and the Court of Appeals previously have recognized

that the correct approach, when a governmental entity asserts various

exceptions to the waiver of immunity, is to read exceptions that do not contain

the gross negligence . standard in light of exceptions that do contain the

standard. Duncan v. Hampton County School Dist. #2, Op. No. 2995 (S.C. Ct.

App. filed May 10, 1999) (Shearouse Adv. Sh. No. 17 at 61) (reading

discretionary immunity exception in light of exception to immunity in which

governmental entity exercises its duty in a grossly negligent manner, such that

discretionary immunity will not protect the government if it exercises that

discretion in a grossly negligent manner); Etheredge v. Richland School Dist.

1, 330 S.C. 447, 463; 499 S.E.2d 238) 246 (Ct. App. 1998) (when an action is

brought alleging gross negligence by a governmental entity pursuant to an

exception contained in Section 15-78-60, all other applicable exceptions must

be read in light of the exception containing the gross negligence standard), cert.

granted on other grounds, April 8, 1999. The principles expressed in Duncan

and Etheredge are drawn from Jackson v. South Carolina Dep't of Corrections,

301 S.C. 125, 390 S.E.2d 467 (Ct. App. 1989), aff d, 302 S.C. 519, 397 S.E.2d 377

(1990).

While provisions establishing limitations upon and exemptions from

liability of a governmental entity must be liberally construed to limit liability,

we also must presume in construing a statute that the Legislature did not

intend to perform a futile thing. See Gaffney v. Mallory, 186 S.C. 337, 195 S.E.

840 (1938). We are constrained to avoid a construction that would read a

provision out of a statute, and must reconcile conflicts if possible. Ballard v.

p.21

Ballard, 314 S.C. 40, 443 S.E.2d 802 (1994).

We hold the inspection powers exception must be read in

conjunction with the key exception at issue in this case, Section 15-78-60(12),

the licensing powers exception. Department must inspect an amusement device

before deciding whether to issue, suspend, or revoke a license. S.C. Code Ann.

§§ 41-18-70 and 41-18-80. Department also has an implicit duty to investigate

potentially hazardous substantial modifications when it learns of them. It

would make no sense to say Department may be found grossly negligent in a

licensing decision, yet allow Department to escape liability because the

inspection powers exception does not contain a gross negligence standard. The

logical way to read these closely related provisions when both are at issue is

that a governmental entity may be liable if it is grossly negligent in licensing

or inspecting a particular device or activity.

The dissent asserts that Duncan, Etheredge, and Jackson simply

stand for the proposition that a specific exception applies over a more general

one. We agree the three cases generally illustrate that proposition, although

none contains any language indicating that was the underlying rationale. The

circuit court and the parties certainly should focus their analysis and jury

instructions upon the most pertinent and specific exceptions that apply in a

given case. But to unduly emphasize the distinction between "specific" and

"general" exceptions ultimately could reduce defenses available to a

governmental entity if the court opted to charge only the most specific

exceptions. Accordingly, we conclude the better practice is to allow the

government to assert all relevant exceptions, and apply the gross negligence

standard to all when it is contained in one applicable exception. Our holding

is faithful to the legislative intent to limit liability and allow ample defenses,

while not allowing a governmental entity to eviscerate the impact of one

exception by asserting another.4

C. OTHER EXCEPTIONS

Department asserts it is immune pursuant to Section 15-78-60(5)

Etheredge and Jackson, and find it proper to discuss and clarify a significant

point of law previously addressed three times by the Court of Appeals.

p.22

(governmental entity is not liable for performing or failing to perform

discretionary acts); Section 15-78-60(4) (governmental entity is not liable for

adoption or enforcement, or failing to adopt or enforce, a law or regulation); and

Section 15-78-60(20) (governmental entity is not liable for loss resulting from

act or omission of person other than an employee, including but not limited to

the criminal actions of third persons). None of these exceptions contains a gross

negligence standard. The trial judge instructed the jury on discretionary

immunity, but ruled the other exceptions did not apply in this case.

To prevail under the discretionary immunity provision, the

governmental entity must show that when faced with alternatives, it actually

weighed competing considerations and made a conscious decision to act or not

to act, and that it used accepted professional standards appropriate to resolve

the issue before it. Strange v. South Carolina Dep't of Highways & Pub.

Transp., 314 S.C. 427, 445 S.E.2d 439 (1994); Niver v. South Carolina Dep't of

Highways & Pub. Transp., 302 S.C. 461, 395 S.E.2d 728 (Ct. App.1990). The

record contains scant evidence Department officials exercised their discretion.

Regardless, the jury considered the provision and rejected it.

An appellate court will not reverse the trial court's decision to strike

an insufficient or irrelevant allegation or defense unless the trial court abuses

its discretion. Mayes v. Paxton, 313 S.C. 109, 115, 437 S.E.2d 66, 70 (1993);

Williams v. South Carolina Nat'l Bank, 284 S.C. 346, 326 S.E.2d 187 (Ct. App.

1985). An abuse of discretion arises where the trial court was controlled by an

error of law or where its order is based on factual conclusions that are without

evidentiary support. Tri-County Ice and Fuel Co. v. Palmetto Ice Co., 303 S.C.

237, 242, 399 S.E.2d 779, 782 (1990). We conclude the trial judge did not abuse

his discretion because the enforcement of law and third party exceptions were

not directly at issue in this case.

Furthermore, the same reasoning explained above applies to all

three exceptions. It would make no sense to say Department may be found

grossly negligent in a licensing decision, yet allow Department to escape

liability under one of these exceptions. See Duncan v. Hampton County School

Dist. #2, supra; Etheredge v. Richland School Di~t. 1, supra; Jackson v. South

Carolina Dep't of Corrections, supra.

In sum, we recognize the trial court often faces Tort Claims Act

cases in which at least one of the asserted exceptions contains the gross

p.23

negligence standard while other asserted exceptions do not. We hold that when

an exception containing the gross negligence standard applies, that same

standard will be read into any other applicable exception. Otherwise, portions

of the Act would be a nullity, which the Legislature could not have intended.

In addition, we will overturn the trial court's refusal to charge irrelevant

exceptions only for an abuse of discretion.

3. ASSUMPTION OF THE RISK INSTRUCTION

Department argues the trial judge erred in rejecting its motion for

a judgment as a matter of law in the case of Michael Nash, the bungee jump

master, after the jury determined Nash assumed the risk of his injuries.

Department also asserts the judge erred in modifying the assumption of the risk

charge in light of a recent Court of Appeals opinion that was not law when

Nash's cause of action accrued.

The trial judge instructed the jury on the accepted definition of the

affirmative defense of assumption of the risk, i.e., that a plaintiff s conduct may

constitute implied assumption of the risk where it is shown that he understood

and appreciated a known danger created by the defendant, and then freely and

voluntarily exposed himself to it. Mayes v. Paxton, 313 S.C. at 116,437 S.E.2d

at 70. The judge also told the jury, over Department's objection, that "[e]ven if

you find that [Nash] assumed the risk in this case, [Nash] may still recover as

long as his assumption of the risk was not greater than the gross negligence of

the defendant." The jury had to balance any assumption of the risk by Nash

with any gross negligence by Department.

The judge drew the balancing instruction from Davenport v. Cotton

Hope Plantation Horizontal Property Regime, 325 S.C. 507, 482 S.E.2d 569 (Ct.

App. 1997) (deciding for first time in South Carolina that implied assumption

of risk is one facet of comparative negligence, not a complete defense to an

injured plaintiffs claim), aff'd as modified, 333 S.C. 71, 508 S.E.2d 565 (1998).5

The Court of Appeals decided Davenport I two months before respondents' trial.

The jury awarded Nash's statutory beneficiaries $1 million in actual

decision as Davenport II.

p.24

damages. The judge reduced the award to $900,000 after the jury, in a special

verdict form, determined Nash had assumed the risk of his injuries and was ten

percent at fault in the accident.

In South Carolina, the "general rule regarding retroactive

application of judicial decisions is that decisions creating new substantive rights

have prospective effect only, whereas decisions creating new remedies to

vindicate existing rights are applied retrospectively. Prospective application is

required when liability is created where formerly none existed." Davenport II,

333 S.C. at 87, 508 S.E.2d 574. In applying our general rule, this Court and the

Court of Appeals have made decisions fully retroactive,6 fully prospective,7 and

selectively prospective.8

391 S.E.2d 560 (1990) (retroactively applying prior decision that created no new

substantive right, but merely provided a method for determining whether

insurance policy should be reformed); Toth v. Square D Co., 298 S.C. 6, 377

S.E.2d 584 (1989) (retroactively applying prior decision that allowed evidence

of employee handbook provisions in an action against employer because the

decision merely created a new remedy to vindicate the existing right to bring

a breach of contract action).

7 Russo v. Sutton, 310 S.C. 200, 422 S.E.2d 750 (1992) (prospectively

abolishing the "heart balm" tort of alienation of affections); Boan v. Watson, 281

S.C. 516, 316 S.E.2d 401 (1984) (prospectively abolishing the dower rights of

widows whose husbands died after the filing of the opinion); Hyder v. Jones, 271

S.C. 85, 245 S.E.2d 123 (1978) (prospectively applying statute abrogating

parental immunity); Douglass v. Florence General Hospital, 273 S.C. 716, 259

S.E.2d 117 (1979) (prospectively applying judicial and statutory modification of

charitable immunity for hospitals); McCaskey v. Shaw, 295 S.C. 372, 368 S.E.2d

672 (Ct. App.1988) (prospectively applying Supreme Court case that first

recognized tort of negligent infliction of emotional distress).

8 A court uses selective or modified prospectivity when it applies a rule

to the case at bar and to all future cases. See McCall v. Batson, 285 S.C. 243)

329 S.E.2d 741 (1985) (prospectively abolishing sovereign immunity, except the

immunity did not apply in this case or in any case filed before July 1, 1986, in

which the government defendant had liability insurance coverage); Ludwick v.

This Minute of Carolina, 287 S.C. 219, 337 S.E.2d 213 (1985) (first recognizing

p.25

In Davenport II, we employed the third approach by concluding that

the revised view of assumption of the risk applied "to the instant case and to all

causes of action that arise or accrue after the date of this opinion. Thus, except

for this case, if a cause of action arose or accrued prior to our decision today, it

will be governed by the common law form of assumption of risk, if applicable,

as it existed under South Carolina case law before this opinion." Davenport II,

333 S.C. at 87, 508 S.E.2d at 574.

We adhere to the prospectivity rule announced in that case.

Accordingly, we hold that the trial judge's instructions drawn from Davenport

I improperly allowed the jury to consider Nash's assumption of the risk as part

of the comparative negligence analysis. Assumption of the risk constituted a

complete bar to recovery when Nash's cause of action accrued in 1993, and the

trial judge erred in applying the new principles retroactively. We reverse the

judgment for Nash's statutory beneficiaries and grant them a new trial.

Although the jury determined Nash had assumed ten percent of the risk, the

improper instructions undoubtedly affected the jury's deliberations and its

answers to questions posed in the special verdict form. Both parties are entitled

to a new trial with proper instructions on the law.9

4. RE-ENACTMENT OF MONETARY LIMITS

Department contends the trial judge erred in denying its motion for

a new trial nisi remittitur, in which it asked the judge to reduce the verdicts for

applying decision in this case and prospectively); Brown v. Anderson County

Hospital Ass'n, 268 S.C. 479, 234 S.E.2d 873 (1977) (modifying doctrine of

charitable immunity, such that charitable hospitals are liable for heedless and

reckless acts, and applying decision in this case and prospectively); McCormick

v. England, 328 S.C. 627, 494 S.E.2d 431 (Ct. App. 1997) (first recognizing the

common law tort of breach of a physician's duty of confidentiality, and applying

decision in this case and prospectively).

9 Nash's cause of action accrued 31/2years before the Court of Appeals

decided Davenport I. We are not confronted with a case in which the cause of

action accrued after Davenport I and before Davenport II, which would present

a different question.

p.26

Steinke and Nash to $250,000 each under the Tort Claims Act. Department

relies on a provision of the 1997 budget act. The provision re-enacted (or more

accurately, restated) the then-existing limits on liability found in S.C. Code

Ann. § 15-78-120 (Supp. 1998), and clarified "any ambiguity in the General

Assembly's intent that there remain reasonable limits upon recovery against

the government for tort actions." Act No. 155, 1997 Acts 1567. The provision

also increased the statutory limits. The higher limits took effect June 1, 1998,

and are not at issue in this case.

The provision states that, " [e]xcept where otherwise provided, this

section takes effect [June 14, 1997] and applies to claims or actions pending on

that date or thereafter filed, except where final judgment has been entered

before that date." Id. at 1571-72, 1611.

In focusing solely on whether the final judgment occurred before

June 14, 1997, both parties have overlooked a crucial threshold issue: May the

Legislature by a retroactive amendment overrule this Court's prior

interpretation of a statute? We conclude the Legislature may not.

In 1994, the Court held the Legislature impliedly had repealed two

subsections of the Tort Claims Act, which limit damages and call for

apportioned liability, by enacting inconsistent provisions in the Uniform

Contribution Among Tort-Feasors Act (Uniform Contribution Act), which call

for unlimited, pro rata liability. Southeastern Freight Lines v. City of

Hartsville, 313 S.C. 466, 443 S.E.2d 395 (1994). The Legislature quickly

responded by providing that the Uniform Contribution Act did not apply to

governmental entities and by reinstating the statutory limits, "except for causes

of action that have been filed in a court of competent jurisdiction before July 1,

1994." Act No. 497, 1994 Acts 5793 (effective July 1, 1994). Thus, any case filed

before July 1, 1994, is not subject to the $250,000 cap for individual claims

contained in the Tort Claims Act.10 Respondents filed their original complaint

473 S.E.2d 799 (1996) (holding that statutory limit in Tort Claims Act does not

apply to cases filed before July 1, 1994, even when there are no joint tortfeasors

with the governmental entity); Knoke v. South Carolina Dep't of Parks,

Recreation, and Tourism, 324 S.C. 136, 478 S.E.2d 256 (1996) (holding that

Southeastern Freight Lines and McClain apply to the $500,000 per occurrence

p.27

June 29, 1994 - two days before the reinstatement of the limits.

This issue implicates the doctrine of separation of powers. See S.C.

Const. art. 1, § 8. The Court has stated that

'construction of a statute is a judicial function and

responsibility. Subject to constitutional limitations,

the legislature has plenary power to amend a statute.

However, a judicial [interpretation] of a statute is

determinative of its meaning and effect, and any

subsequent legislative amendment to the contrary will

only be effective from the date of its enactment and

cannot be applied retroactively.

Lindsay v. Nat'l Old Line Ins. Co., 262 S.C. 6211 628-29) 207 S.E.2d 75, 78

(1974) (citation omitted).

The Court held that the Legislature's attempt to declare by a

retroactive amendment that insurance companies were entitled to certain

investment credits - after the Court had interpreted statutes to say the

companies were not entitled to the credits - violated the separation of the

legislative, executive, and judicial powers of government. Quoting the trial

court with approval, the Court recognized the Legislature essentially was

telling the Court, "We reverse." The Legislature, however, lacks such authority.

Lindsay, 262 S.C. at 628, 207 S.E.2d at 77-78.11

Transp., 326 S.C. 516, 485 S.E.2d 119 (Ct. App. 1997) (determining the

statutory limit was inapplicable in case filed before July 1, 1994), aff'd as

modified, 333 S.C. 464) 511 S.E.2d 355 (1999).

11 Accord McCutcheon v. Smith, 35 S.E.2d 144, 148 (Ga. 1945) (rejecting

as a violation of separation of powers an attempt by legislature to construe

legislatively an earlier act in a manner that conflicted with the judicially

determined meaning); Roth v. Yackley, 396 N.E.2d 520, 522 (Ill. 1979)

(legislature cannot overrule a decision of the supreme court by declaring that

an amendment applies retroactively to cases decided before the amendment's

effective date); Marine Power & Equipment Co. v. Washington State Human

p.28

We hold that this case, filed before the Legislature reinstated the

statutory caps, is controlled by the principles outlined in Lindsay, supra. The

Legislature may not retroactively overrule this Court's interpretation of the

statutes in Southeastern Freight Lines. The Legislature may, of course, do

what it did in 1994, which was to resolve the statutory conflict and reinstate the

statutory caps in future cases. We may resolve the issue on this ground even

though the parties and trial judge did not. See Weir v. Citicorp Nat'l Services,

Inc., 312 S.C. 511, 435 S.E.2d 864 (1993) ("[a] correct decision of the trial court

on the wrong ground will be affirmed on appeal'); Rule 220(c), SCACR

(appellate court may affirm judgment upon any ground appearing in the

record). It is unnecessary to address the parties' arguments about the 1997

provision because Lindsay is dispositive.

CONCLUSION

We affirm the trial judge's ruling that respondents have a private

cause of action under the Amusement Rides Safety Code. We affirm the judge's

rulings on the exceptions to the waiver of immunity under the Tort Claims Act,

and hold that when an applicable exception contains the gross negligence

standard, then any other relevant exception must be read in light of that

standard. We reverse Nash's judgment and grant the statutory beneficiaries

a new trial because the judge erroneously instructed the jury on the revised

view of assumption of the risk. Finally, we hold that neither respondent's

recovery is limited by the Tort Claims Act because this case was filed before the

Legislature reinstated the statutory caps. We find Department's remaining

arguments to be without merit.

AFFIRMED IN PART; REVERSED IN PART.

TOAL, A.C.J., and BURNETT, JJ., concur. MOORE, A.J.,

dissenting in a separate opinion. Acting Associate Justice

George T. Gregory, Jr., not participating.

under the guise of clarification, overrule by legislative enactment a prior

authoritative supreme court opinion construing a statute"); 16 C.J.S.

Constitutional Law §§ 115-116 (1984) ("legislature may enact a statute to

modify, for the future, the law as declared by decisions of the courts").

p.29

MOORE, A.J.: Because I disagree with the majority's holding that

respondents have a private cause of action under the South Carolina

Amusement Rides Safety Code, I respectfully dissent.

Under the public duty rule, public officials are generally not liable to

individuals for negligence in the discharge of their public duties unless there

exists a "special duty" to the plaintiff as an individual rather than simply to

the public at large. Jensen v. Anderson County Dep't of Soc. Serv., 304 S.C.

195, 403 S.E.2d 615 (1991). Where a duty is owed to the public only, a public

official is not liable to an individual who may have been incidentally injured

by the failure to perform it. Id.; Parker v. Brown, 195 S.C. 35, 10 S.E.2d 625

(1940).

As discussed in the majority opinion, we apply a six-factor test to

determine whether a "special duty" exists. One of these factors is that "the

class of persons the statute intends to protect is identifiable before the fact."

Jensen, 403 S.E.2d at 617 (emphasis added). There must be a "special

relationship" that exists between the public official and the plaintiff. Id.

The facts in Jensen are especially instructive since it is the only case

finding a special duty. In that case, we found a special relationship existed

between the Department of Social Services and a child who was the reported

victim of child abuse. After the report, no investigation was made and the

child died from subsequent abuse. We found a special relationship was

established when the child abuse was initially reported and this special

relationship therefore existed before the facts giving rise to the cause of

action in that case, i.e. the child's death from the subsequent abuse.

In this case, there is no evidence of any special relationship between

Department and respondents to distinguish respondents from members of

the general public. The South Carolina Amusement Safety Code applies to

protect all members of the general public. Respondents were not identifiable

members of a particular class before the facts giving rise to this cause of

action.

Further, as stated in Jensen, the six-factor, test for a special duty is a

means of determining legislative intent. 403 S.E.2d at 618. Accordingly, we

cannot overlook the legislative intent expressed in the statute itself. The

South Carolina Amusement Rides Safety Code expressly provides its

legislative intent is

p.30

to guard against personal injuries in the assembly, disassembly,

and use of amusement devices at carnivals, fairs, and

amusement parks to persons employed at or attending carnivals,

fairs, and amusement parks and, in the event of a personal

injury, to ensure to the injured party the possibility of financial

recovery as against the owner of the carnival, fair, or amusement

park where the injury occurred.

S.C. Code Ann. § 41-18-20 (Supp. 1998) (emphasis added). In furtherance of

this purpose, S.C. Code Ann. § 41-18-90 (Supp. 1998) requires the owner or

lessee of an amusement device to have liability insurance. These provisions

evidence no intent to make Department itself an insurer of the safety of

these devices.

In conclusion, I would reverse the denial of Department's motion for

judgment notwithstanding the verdict on the ground respondents have no

private cause of action under the South Carolina Amusement Rides Safety

Code.

Further, even if I were to concur in the result reached by the majority

in this case, I cannot agree with its analysis of the inspection powers

exception discussed in Part 2. The majority concludes under the Tort Claims

Act that where two exceptions to liability may apply, if one allows for

liability in cases of gross negligence, that same standard of liability must be

read into any other applicable exception as well. I completely disagree with

this analysis.

First, I note there is no need to reach this sweeping conclusion here

since the trial judge properly instructed the language of § 15-78-60(13),

which contains the inspection powers exception, and did not add a gross

negligence standard to it as Department complains.

Moreover, there is no reason to conclude that all applicable exceptions

to liability must be read together. The majority overstates the significance of

the Court of Appeals' decisions in Duncan, Etheredge, and Jackson. A

careful reading indicates these cases simply illustrate our recently stated

rule that a specific exception applies over a more general one. Wooten v.

South Carolina Dept. of Transportation, 333 S.C. 464, 511 S.E.2d 355 (1999).

In a situation such as this, however, where more than one equally specific

p.31

exception may apply, it is for the jury to determine which exception, if any,

applies under the facts of the case.1d

For instance, assuming a duty in this case, the jury could find no

liability from Department's failure to inspect under the inspection exception

as properly charged by the trial judge. On the other hand, under the

licensing exception, the jury could find Department liable because it was

grossly negligent in failing to revoke the permit for the crawlevator when it

had reason to believe the device was unsafe.2d

In light of the majority's concession that we must liberally construe the

Tort Claims Act in favor of limiting government liability, it is inconsistent to

conclude that a lesser degree of immunity must prevail when more than one

exception to liability may apply. To the contrary, under this rule of

construction, one would logically conclude such a merging of exceptions

would incorporate the greater immunity, not the lesser. In my view, such a

merging is unnecessary. There is no inconsistency in allowing the jury to

consider the specific exceptions individually.

(discretionary acts), 15-78-60(4) (adoption or enforcement of law or

regulation), and 15-78-60(20) (act or omission of person other than employee)

would fall under the general rule that a specific exception applies over a

more general one.

2d The Amusement Rides Safety Code allows for revocation of a permit if

Department "determine[s] that an amusement device is ... being I operated

with a mechanical, electrical, structural design, or other defect which

presents an excessive risk of serious injury to passengers, bystanders,

operators, or attendants. . . ." S.C. Code Ann. § 41-18-60(D)(3) (Supp. 1998).

This permit revocation power does not hinge exclusively on making an

official inspection.

p.32