Panutat, LLC v. D.C. Alcoholic Beverage Control Bd., 12–AA–532.

• Decision Date: 19 September 2013
• Docket Number: No. 12–AA–532.,12–AA–532.
• Citation: 75 A.3d 269
• Parties: PANUTAT, LLC, Petitioner, v. DISTRICT OF COLUMBIA ALCOHOLIC BEVERAGE CONTROL BOARD, Respondent, and Chris Labas, Florence Harmon, Michael MacChiaroli, Julie Gess, Andrew Dinsmore, and Trevor Neve, Intervenors.
• Court: D.C. Court of Appeals

75 A.3d 269

PANUTAT, LLC, Petitioner,

v.DISTRICT OF COLUMBIA ALCOHOLIC BEVERAGE CONTROL BOARD, Respondent,andChris Labas, Florence Harmon, Michael MacChiaroli, Julie Gess, Andrew Dinsmore, and Trevor Neve, Intervenors.

No. 12–AA–532.

District of Columbia Court of Appeals.

Submitted May 14, 2013.

Decided Sept. 19, 2013.

Matthew August LeFande was on the brief for petitioner.

Irvin B. Nathan, Attorney General for the District of Columbia, Todd S. Kim, Solicitor General, Donna M. Murasky, Deputy Solicitor General, and Richard S. Love, Senior Assistant Attorney General, filed a statement in lieu of brief in support of respondent.

Cornish F. Hitchcock, Washington, DC, was on the brief for intervenors.

Before THOMPSON and McLEESE, Associate Judges, and BELSON, Senior Judge.

THOMPSON, Associate Judge:

This petition for review relates to an application by Petitioner Panutat, LLC (“Petitioner” or “Panutat”) for a Retailer's Class CN alcoholic beverage license for a nightclub (Sanctuary 21, hereafter “Sanctuary”) Panutat proposed to operate in the basement of 2131 K Street, N.W. (the “Sanctuary license”). A related petition for review was before this court previously, after the Alcoholic Beverage Control Board (the “Board”) had initially approved the Sanctuary license in an August 4, 2010, order and Intervenors Chris Labas et al. petitioned for review of that order. We resolved that earlier petition by granting the Board's Consent Motion to Remand, in which the Board requested that we remand the matter to enable it to “reconsider evidence” pertaining to the operations of Shadow Room, a nightclub already holding a CN license for its operation at 2131 K Street, N.W., and to reconsider its order granting the Sanctuary license.¹ Subsequently, after a September 28, 2011, hearing (the “remand hearing”), the Board issued a January 11, 2012, order (the “Order”) in which it reversed its August 4, 2010, order and denied the Sanctuary application. The Order stated that “[b]ased on the neighborhood's experience with Shadow Room, ... increasing the number of patrons at 2131 K Street, N.W., w[ould] adversely impact peace, order, and quiet and vehicular and pedestrian safety in the neighborhood.” Order at 12. In a March 28, 2012, order (the “Reconsideration Order”), the Board also denied Panutat's request for reconsideration. Panutat now challenges the Board's rulings, on several grounds.² For the reasons that follow, we affirm.

I. Standard of Review

“ ‘Under the general limited review that we undertake of any agency decision, we must affirm unless we conclude that the agency's ruling was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’ ” Recio v. District of Columbia Alcoholic Beverage Control Bd., 75 A.3d 134, 140–41, 2013 WL 4779719, at *5 (D.C.2013). “ ‘[W]here questions of law are concerned, we review the agency's rulings de novo because we are presumed to have the greater expertise when the agency's decision rests on a question of law, and we therefore remain the final authority on issues of statutory construction.’ ” Id. Nevertheless, “ ‘an agency's interpretation of its own regulations or of the statute which it administers is generally entitled to great deference from this court.’ ” Id.

“Unless the Board has committed an error of law, this court will overturn its decision only if it is unsupported by substantial evidence.” Tiger Wyk, Ltd. v. District of Columbia Alcoholic Beverage Control Bd., 825 A.2d 303, 307 (D.C.2003). “When there is substantial evidence in the record to support the Board's decision, we will not substitute our judgment for that of the Board, ‘even though there may also be substantial evidence to support a contrary decision....’ ” Aziken v. District of Columbia Alcoholic Beverage Control Bd., 29 A.3d 965, 972 (D.C.2011). Further, “[s]o long as the Board's final decision is based on substantial evidence, this court will not disturb it [,] ... regardless of whether the decision reverses or modifies an earlier Board ruling or announces a new one.” Tiger Wyk, 825 A.2d at 308.³

II. Analysis

A.

We begin by addressing Panutat's argument that the Board was without authority to “reverse an issue already decided and not preserved for appeal.” We note first that we do not agree with Panutat's “not preserved for appeal” premise. As the Board correctly stated in its Reconsideration Order, in their brief filed with this court before we granted the motion to remand, the Intervenors argued that the Board had “err[ed] as a matter of law” by “categorically refus[ing] to hear any evidence about operations of Shadow Room” during the original protest hearing held on April 28, 2010 (the “protest hearing”).⁴ Indeed, as the Board explained in its Reconsideration Order, it was in light of that argument that the Board “agreed to remand the case ‘to reconsider evidence of Shadow Room's operation....’ ” ⁵

Second, we reject Panutat's argument that the Board was without authority to “reverse an issue already decided.” The Board's initial ruling that information about Shadow Room was irrelevant, see note 4 supra, and its initial order granting the Sanctuary application were not irrevocable (and Panutat could not reasonably have relied on their being so), because the Intervenors timely petitioned for review by this court.⁶ Further, as we recognized in Tiger Wyk, “like any court, [the Board] has the power to reconsider any decision it makes, unless there is some statute or regulation that affirmatively forbids such action.” 825 A.2d at 308. Panutat has not identified any such statute or regulation, and we are not aware of any that precluded the Board from reversing its ruling. Upon reconsideration, the Board may “change any ruling.” Id.

While the Intervenors might have sought reconsideration by the Board pursuant to 23 DCMR § 1719.1 before seeking review by this court, the Board's regulations did not require them to take that intermediate step to obtain Board reconsideration. Quite the contrary, our case law reveals that, on a number of occasions, the Board has elected to reconsider a licensing decision after agreeing with a petitioner's assignment of error argued in a brief filed in this court, and this court has ordered a remand to the Board to permit it to reconsider its decision.⁷ Panutat has identified no reason why that procedural course should not have been available here, where (as explained in the Reconsideration Order), the Board determined, in light of the Intervenors' arguments to this court, that it had “wrongly agreed ... that ... evidence related to Shadow Room was irrelevant” to its consideration of the Sanctuary application and had therefore failed to consider “all relevant evidence of record.” ⁸

B.

In its next set of claims, Panutat asserts that the Board (1) improperly premised its denial of the Sanctuary application on “allegations of prior violations of another company [Shadow Room]” (2) without “evidence that the proposed establishment was responsible for, or would aggravate, existing noise conditions,” and (3) on the basis of “speculation as to the future effect of the proposed establishment upon peace, order and quiet of the area.” Panutat contends that the Board's initial ruling, in its August 4, 2010, order, was the legally correct one: that because Sanctuary had not yet opened, and therefore because none of the Shadow Room-related incidents about which the Intervenors presented evidence had a nexus to or could be attributed to Sanctuary, the incidents were not a proper basis for denying the Sanctuary application. We disagree.⁹

The governing statute provides that, in determining whether to grant an application for a liquor license, the Board must determine whether the applicant's establishment is “appropriate for the locality, section, or portion of the District where it is to be located,” a determination it is to make by considering “all relevant evidence of record, including ... [t]he “effect of the establishment on peace, order, and quiet, including the noise and litter provisions set forth in §§ 25–725 and 25–726,” and “[t]he effect of the establishment upon residential parking needs and vehicular and pedestrian safety[.]” D.C.Code § 25–313(b)(2)–(3). In the Order in issue here, the Board reasoned that evidence about Shadow Room's operations was relevant to these matters for two reasons: First, the Board reasoned that notwithstanding the fact that Shadow Room is a separate corporation (Acott Ventures, Inc., t/a Shadow Room), Shadow Room's and Sanctuary's overlapping ownership and their “shar[ing of] similar management” were relevant to whether the “ ‘new’ owner will operate the establishment without a detrimental impact on the neighborhood.” ¹⁰ Second, the Board reasoned that since Panutat proposed to operate Sanctuary at the same address where Shadow Room operates, evidence of Shadow Room's operations is relevant to whether “yet another establishment at the same location will exacerbate existing issues.” Far from rendering the Board's Order arbitrary or capricious, both rationales seem to us eminently reasonable (and, by contrast, the Board's previous decision to exclude as irrelevant some evidence about Shadow Room's operations seems, at the very least, “somewhat dubious.” Tiger Wyk, 825 A.2d at 308).

Nor, contrary to Panutat's argument, was the Order contrary to law for the reason that the record was devoid of “evidence that the proposed establishment was responsible for” the adverse effects on peace, order, and quiet described by the Intervenors' witnesses. As already noted, the Board must be satisfied that “the establishment is appropriate for the locality, section, or portion of the District where it is to be located [,]” D.C.Code § 25–313(a) (italics added), a determination it must make by considering “the effect of the establishment on peace, order, and quiet” and “upon residential parking needs and vehicular and pedestrian safety.” Id., §...