Citizens Ass'n of Georgetown v. D.C. Alcoholic B. C. Bd., 5971.

• Decision Date: 22 March 1972
• Docket Number: No. 5971.,5971.
• Citation: 288 A.2d 666
• Parties: CITIZENS ASSOCIATION OF GEORGETOWN, INC., Petitioner, v. DISTRICT OF COLUMBIA ALCOHOLIC BEVERAGE CONTROL BOARD, Respondent.
• Court: D.C. Court of Appeals

288 A.2d 666

CITIZENS ASSOCIATION OF GEORGETOWN, INC., Petitioner, v. DISTRICT OF COLUMBIA ALCOHOLIC BEVERAGE CONTROL BOARD, Respondent.

No. 5971.

District of Columbia Court of Appeals.

Argued January 10, 1972.

Decided March 22, 1972.

COPYRIGHT MATERIAL OMITTED

Christopher W. Keller, with whom Courts Oulahan, Washington, D. C., was on the brief, for petitioner.

E. Calvin Golumbic, Asst. Corp. Counsel, with whom C. Francis Murphy, Corp. Counsel, and Richard W. Barton, Asst. Corp. Counsel, were on the brief, for respondent. Ted D. Kuemmerling, Asst. Corp. Counsel, also entered an appearance for respondent.

Before HOOD, Chief Judge, and GALLAGHER and PAIR, Associate Judges.

GALLAGHER, Associate Judge.

The Citizens Association of Georgetown, Inc. (hereinafter petitioner), petitions for review under D.C.Code 1967, § 1-1510 (Supp. IV, 1971) of an order of the District of Columbia Alcoholic Beverage Control Board (hereafter Board), granting a Retailers Class C liquor license (D.C.Code 1967, § 25-111 (Supp. IV, 1971)) to Sundown, Inc., t/a Chesapeake Inn, which proposes to operate a restaurant at 3040 M Street, N.W.

In reference to the denial of its pre-hearing motion for production of documents, petitioner complains it was thereby refused access to certain confidential reports in the Board's files made by the inspection staff relating to the moral character and fitness of the applicant for the license. Petitioner acknowledges it did not allege there is any such failing on the part of the applicant but says it could hardly do so without knowing what the Board's files contained. Finally, petitioner asserts there was no record support for the Board's finding with respect to fitness.

Under the Alcholic Beverage Control Act, the Board is required to "satisfy itself¹ . . . [t]hat the applicant . . . if a corporation, each of its principal officers and directors, is of good moral character and generally fit for the trust to be in him reposed." D.C.Code 1967, § 25-115(a) 1 (Supp. IV, 1971). (Emphasis supplied.) The Board has a public interest function to perform unlike that of a court in private civil litigation between two contesting parties where relevant and material allegations made by the plaintiff are taken as admitted if not contested. The Board made the finding here that the applicant (a corporation) met the moral fitness statutory requirement. But a review of the record discloses that no evidence was introduced upon which this finding could be based. During the hearing, the applicant did not address itself to this statutory standard.

It is true that petitioner admits its opposition to the license was based fundamentally upon its position that this area of the city (Georgetown) is already saturated with establishments having liquor licenses, with the attendant congestion, traffic and police problems flowing from this condition. Even so, having standing to contest issuance of a license as it does (Citizens Association of Georgetown v. Simonson, 131 U.S.App.D.C. 152, 403 F.2d 175 (1968), cert. denied, 394 U.S. 975, 89 S.Ct. 1454, 22 L.Ed.2d 755 (1969)), petitioner may properly contest the Board's actions in the matter of meeting its statutory obligations procedurally and substantively.

In announcing the Board's denial of petitioner's motion for production of documents, the Chairman stated:

Our investigator routinely interviews the principal officers of the Corporation and makes a report to the Board. I'm sure, as you're aware, the issue has been raised and it has been held that those are confidential information reports of the Board. I doubt that they are here because they are supposed to remain in the confidential file. (Emphasis supplied.)

It is reasonable to conclude from this statement that the Board has obtained, and routinely obtains, information by staff investigation which it considers in exercising its statutory function. It is also reasonable to expect that the Board members read these routine reports and, consequently, it can hardly be said the Board does not consider information in these reports. And if they consider such information we do not feel it can be said it may not have the impact of evidence. Yet this "confidential information" is not a matter of record in this proceeding and the public,² especially a protestant to the issuance of a license, is unaware of this information considered by the Board and has no opportunity to rebut it. It is not controlling here that the Board does not state in its findings that it placed reliance on such information.

Not only a Board finding of moral character and fitness, but any finding required by the statute (D.C.Code 1967, § 25-115 (Supp. IV, 1971)), must he based only upon evidence in the public record of the proceeding. Not only that, the participants in the proceeding must have an opportunity to address themselves to this evidence. Otherwise, the fundamentals of due process of law are denied. Furthermore, the District of Columbia Administrative Procedure Act (D.C.Code 1967, § 1-1501 (Supp. IV, 1971)), specifically provides that the record shall consist exclusively of the testimony and exhibits and all material facts officially noticed; and that no decision shall be issued "except upon consideration of such exclusive record" (§ 1-1509 (c)). It is "a fundamental principle of all adjudication, judicial and administrative alike, that the mind of the decider should not be swayed by materials which are not communicated to both parties and which they are not given an opportunity to controvert." Mazza v. Cavicchia, 15 N.J. 498, 516, 105 A.2d 545, 555 (1954); see Hot Shoppes, Inc. v. Clouser, 231 F.Supp. 825 (D.D.C.1964), aff'd, 120 U.S.App.D.C. 353, 346 F.2d 834 (1965). See also 1 F. Cooper, State Administrative Law 363-66 (1965).

Since the indication we must draw from the Chairman's statement is that the Board, or some of its members, obtained and considered, and may well have relied upon,³ information from staff investigative reports not made a matter of record in the proceeding we must remand for further proceedings. We do not hold that petitioner has established here that it is entitled to production of the documents but, upon remand, all information in those reports which is relevant and material to the statutory criteria for the issuance or denial of the license and which will be relied upon in any degree by the Board must be entered into the record of the proceedings. See 1 F. Cooper, State Administrative Law, supra at 363. We leave it to the Board to fashion an accceptable procedure,⁴ bearing in mind (a) the requirement that the participants must have the opportunity to rebut, and (b) the relative procedural informality of the administrative proceeding as contrasted with the technical rules of evidence in civil litigation.

Since we must remand, another issue raised by petitioner warrants comment. At the hearing, petitioner introduced evidence concerning the "surroundings"⁵ of the premises, during the course of which the Board terminated a particular line of examination concerning parking signs and traffic lanes with the comment that the testimony was unnecessary as the Board members would go to the area and view the surroundings. After the hearing had ended the Board members, as stated in its findings and conclusions, "personally visited the premises, parking lots and vicinity." This is the only reference to the viewing, which so far as it appears from the record was done in the absence of counsel.

This is improper procedure. It is permissible for the Board to conduct an inspection of the area and premises but it should be done before a hearing terminates and counsel are entitled to be present at the viewing. Hubbard v. Freeman, D.C. App., 193 A.2d 734, 736 (1963); 4 Wigmore, Evidence § 1169 (3d ed. 1940).⁶ "If there be facts . . . acquired by personal inspection . . . these should be revealed at the hearing so that opportunity may be afforded to meet them by evidence or argument." Hyman v. Coe; 102 F.Supp. 254, 257 (D.D.C.1952), cited in Hot Shoppes, Inc. v. Clouser, 231 F.Supp. 825 (D.D.C. 1964), aff'd 120 U.S.App.D.C. 353, 346 F.2d 834 (1965). (Emphasis added.) The knowledge gained from an inspection "cannot be made the basis, in whole or in for the award . . . unless there appears in the record the facts respecting the physical situation disclosed by the inspection." Giordano v. City Commission of Newark, 2 N.J. 585, 588-589, 67 A.2d 454, 455 (1949).

At the re-opened hearing, the Board should set forth the facts it considers to have been revealed as a result of the inspection. It should then give the applicant and petitioner the opportunity to address themselves to these facts by evidence or argument.⁷

As I read the concurring opinions, they relegate the duty of the Board to satisfy itself of the moral fitness of the applicant to a lesser importance in the proceeding than I think is required by law.⁸ Because "[o]ne of the fundamental reasons for the enactment of liquor license laws is to restrict the liquor traffic to persons of good moral character who may reasonably be expected to keep their business free from the greater vices which have impelled restrictive legislation on the question."⁹ (Emphasis supplied.) And "[u]nder statutory provisions that liquor licenses may be granted only to persons of good moral character or good reputation, an applicant must satisfy...