Roberson v. Bd. of Liquor License Comm'rs for Balt. City

• Decision Date: 15 May 2020
• Docket Number: No. 3334,3334
• Parties: CHRISTOPHER ROBERSON, ET AL v. BOARD OF LIQUOR LICENSE COMMISSIONERS FOR BALTIMORE CITY
• Court: Court of Special Appeals of Maryland

CHRISTOPHER ROBERSON, ET AL v. BOARD OF LIQUOR LICENSE COMMISSIONERS FOR BALTIMORE CITY

No. 3334

COURT OF SPECIAL APPEALS OF MARYLAND

September Term, 2018

May 15, 2020

Circuit Court for Baltimore City

Case No.: 24-C-18-003813

UNREPORTED

Fader, C.J., Beachley, Battaglia, Lynne, A. (Senior Judge, Specially Assigned), JJ.

Opinion by Battaglia, J.

Dissenting in Part Opinion by Fader, C.J.

*This is an unreported opinion, and it may not be cited in any paper, brief, motion, or other document filed in this Court or any other Maryland Court as either precedent within the rule of stare decisis or as persuasive authority. Md. Rule 1-104.

The appellants, Christopher Roberson, licensee, and Baltimore Little D's, LLC, trading as Little Darlings, a tavern and adult entertainment business formerly located at 403 East Baltimore Street in Baltimore, filed a petition for judicial review in the Circuit Court for Baltimore City, requesting that the decision of appellee, the Board of Liquor License Commissioners for Baltimore City, be vacated. The Board had determined that the appellants had violated Board Rule 4.01(a), which prohibits a licensee, or an employee or agent thereof, from selling or furnishing an alcoholic beverage to a minor, and Board Rule 3.05(a), which incorporates by reference the liquor license rules in the regulation of adult entertainment licenses; the Board imposed an administrative fee of $125.00, and suspended the liquor and adult entertainment licenses in issue until their transfer to another entity had been finalized. After a judicial review hearing, the Honorable John Nugent of the Circuit Court for Baltimore City affirmed the decision of the Board. Before us, the appellants posit the following question:

Did the Liquor Board err in finding the licensee guilty of violating Liquor Board Rule 4.01(a) Sales to Minors and Adult Entertainment Rule 3.05(a) Incorporation of Liquor Board Rules by Reference?

For the reasons that follow, we shall affirm.

LEGAL FRAMEWORK

The General Assembly has enacted a comprehensive statutory scheme governing the sale and distribution of alcoholic beverages in Maryland, the purpose of which is "[t]o obtain respect and obedience to law and to foster and promote temperance[.]" Maryland Code, (1957, 2016 Vol.), Section 1-201(a)(1)(i).¹ To that end, "the Comptroller, local licensing boards, liquor control boards, enforcement officers, and the judges of the courts of the State" are empowered to "carry out this policy in the public interest" by "administer[ing] and enforce[ing]" the laws enumerated in the Code. Section 1-201(a)(1)(ii). The Code also subjects a liquor license holder "to all penalties, conditions, and restrictions" provided by the statutory framework and requires that a licensee "assume all responsibilities as an individual[.]" Section 4-202(c). One such condition, of particular relevance to the instant matter, provides that, "[a] license holder or an employee of the license holder may not sell or provide alcoholic beverages to an individual under the age of 21 years old." Section 6-304.

Local licensing boards, such as that of Baltimore City, have adopted regulations and rules to carry out the provisions outlined in the Alcoholic Beverages Article. See Section 12-210(a) (stating that the Board of Liquor License Commissioners for Baltimore City "may adopt regulations to carry out this article."). Germane to the instant matter, the Board of Liquor License Commissioners for Baltimore City (Board), promulgated Rule 4.01(a), which states, that "[a] licensee or any employee or agent of the licensee may not sell or furnish any alcoholic beverages at any time to a person under 21 years of age for the underage person's own use or for the use of any other person." The Board also adopted Rule 3.05(a), which provides that, "[a]ll licensees that have been issued a liquor license and adult entertainment license shall abide by all rules and regulations listed in Chapter 3 and Chapter 4 of Liquor License Rules and Regulations in the operation of their adult entertainment license." The Board is empowered to "revoke or suspend a license" for "any reason to promote the peace or safety of the community in which the premises are located" or for "offenses as provided" by the Code. Section 4-604(a).

Section 4-905 mandates the scope of judicial review of the acts of a local licensing board, and, in pertinent part, provides:

(a) Presumption. - On the hearing of a petition under this subtitle, the court shall presume that the action of the local licensing board was proper and best served the public interest.

(b) Burden of proof. - A petitioner has the burden of proof to show that the decision of the local licensing board being reviewed was:

(1) against the public interest; and

(2)(i) not honestly and fairly arrived at;

(ii) arbitrary;

(iii) procured by fraud;

(iv) unsupported by substantial evidence;

(v) unreasonable;

(vi) beyond the powers of the board; or

(vii) illegal.

The Court of Appeals has recognized that, "it is always within our prerogative to determine whether an agency's conclusions of law are correct." Bd. of Liquor License Comm'rs for Balt. City v. Kougl, 451 Md. 507, 513-14 (2017) (quoting Adventist Health Care, Inc. v. Md. Health Care Comm'n, 392 Md. 103, 120-21 (2006)). In Kougl, the Court summarized the standard of review of a liquor board's legal conclusions, likening it to review of most other administrative agency decisions:

But "[e]ven with regard to some legal issues, a degree of deference should often be accorded the position of the administrative agency." Finucan v. Md. Bd. of Physician Quality Assurance, 380 Md. 577, 590, 846 A.2d 377 (2004) (citation omitted). Appellate courts should ordinarily give "considerable weight" to "an administrative agency's interpretation and application of the statute which the agency administers." Md. Aviation Admin. v. Noland, 386 Md. 556, 572, 873 A.2d 1145 (2005). In this regard, "the expertise of the agency in its own field of endeavor is entitled to judicial respect." Finucan, 380 Md. at 590, 846 A.2d 377 (citations omitted). An agency is granted further deference when it interprets a regulation it promulgated, rather than a statute enacted by the Legislature. Md. Comm'n on Human Relations v. Bethlehem Steel Corp., 295 Md. 586, 593, 457 A.2d 1146 (1983). "Because an agency is best able to discern its intent in promulgating a regulation, the agency's expertise is more pertinent to the interpretation of an agency's rule than to the interpretation of its governing statute." Id.

Id. at 514.

BACKGROUND

On May 24, 2018, the Board held a hearing with respect to the violations during which it entertained argument, received evidence and heard testimony from detectives from the Baltimore City Police Department; Thomas Akras, Deputy Executive Secretary of the Liquor Board for Baltimore City; Stephan Fogleman, counsel for the license transfer applicant, Don West Management Services, LLC; and Mr. Roberson. The evidence adduced included the following:

• Officers with the Baltimore City Police Department testified that, on April 19, 2018, a "server" at "the location, 403 East Baltimore Street, known as Little Darlings," sold beer to an individual under 21-years old.

• The officers, along with a liquor board agent, then entered the establishment to further investigate and noted that, at that time, "the liquor license was present . . . and it stated that the Licensee was Mr. Christopher Roberson." When asked by counsel for Mr. Roberson whether the license "was actually in the premises on the wall," the detective responded that the police report would not have contained Mr. Roberson's information had the license "not been there."

• The officers "just assumed that [the server] was a night manager or another person running the club, and that Mr. Roberson was still the Licensee of the establishment."²

• Mr. Roberson explained that, in August of 2017, he decided to shutter the tavern and adult entertainment business he operated at 403 East Baltimore Street. As such, he terminated his commercial lease and relinquished the premises to his landlord, BFC Realty, LLC.

• In consideration for early termination of the lease, Mr. Roberson gave his liquor and adult entertainment licenses to BFC Realty, LLC and assigned his landlord the right to transfer the licenses. BFC Realty, LLC, then, filed a substitute application with the Board, which, if approved, would have resulted in the issuance of a substitute license to BFC as a "secured creditor or something analogous to a secured creditor," and, thus, would have prohibited the operation of the license until a subsequent transfer was "approved from the secured creditor to the transferred creditor."³

• As part of the substitute application, Mr. Roberson submitted to the Board an Affidavit of Compliance,⁴ a Transfer Authorization, and Bill of Sale and Assignment Agreement.

• The Transfer Authorization, which had been signed by Mr. Roberson on August 21, 2017, stated that, he, as the holder "of a retail alcoholic beverages license No. LBD7 368 . . . do hereby request, consent to and authorize the Board of Liquor License Commissioners for Baltimore City to transfer said license and permits and all privileges thereunder to, BFC Realty, LLC[.]"

• The Bill of Sale and Assignment Agreement, signed in October of 2017, stated that, "[f]or the good and valuable consideration as set forth in the Contract . . . Seller does hereby grant, bargain, transfer, sell, assign, convey and deliver to Buyer[, BFC Realty, LLC,] . . . all of its rights, title and interest in and to the 7-day Class BD-7 Beer, Wine, and Liquor License issued for use at 403-05 Baltimore Street East[.]" It further provided that, "Seller for itself, its successors and assigns, hereby covenants and agrees that, at any time and from time to time upon the written request of Buyer, Seller will do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, all

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