Booze News: Distilled in Room 215

A blog about the Baltimore City Liquor Board

Rules and Regs Committee #9.

Written by Becky Witt

The ninth and final meeting of the Rules and Regulations Committee took place on October 19, 2015.

The committee first discussed a suggested rule on parties’ requests for reconsideration of a decision of the Board. There are no rules, currently, about reconsiderations; Mr. Victor Corbin and Ms. Becky Witt had suggested that this process should be better defined.

Rule 2.11 – Motions for Reconsideration. (a) Licensees desiring to request a Motion for Reconsideration from any order issued by the Board, may file such request with the Board, addressed to the Chairman for his/her reconsideration within thirty (30) days from the date the order was originally issued. (b) The Board shall not hear a Motion for Reconsideration if the licensee has previously filed an appeal of the Board’s decision with the Circuit Court of Baltimore City. (c) If while considering a licensee’s Motion for Reconsideration, the licensee chooses to file an appeal of the Board’s decision with the Circuit Court of Baltimore City, the Board shall consider the licensee’s Motion for Reconsideration moot and dismiss said motion.

Mr. Akras and others noted that, if a party requests reconsideration from the Board, that reconsideration request does not stop (or “toll”) the thirty day time period to file an appeal. A party may have to choose, then, between a reconsideration request and an appeal. Executive Secretary Michelle Bailey-Hedgepeth pointed out that the Board has to give ten days’ notice to all parties for a hearing, so that also complicates the timeline and makes it difficult for the Board to hold a reconsideration hearing within thirty days. The licensees’ attorneys then said that the time period could be shortened, because they can always file their appeals on the 30th day, if the Board is unable or unwilling to schedule a reconsideration hearing.

Mr. Akras stated that the Board doesn’t necessarily have to hear a reconsideration at a public hearing, if the hearing under reconsideration is a violation hearing. Under state law, if an agency is acting in a quasi-judiciary capacity, the agency is not legally required to make its decision in public. (This is what happened in the Bill’s Cafe case: the Board decided the violation hearing publicly, then reconsidered it privately.)

Minda Goldberg asked whether other parties of record besides licensees can request reconsideration. The licensees’ attorneys strongly opposed this suggestion. Mr. Melvin Kodenski said that community groups are being unreasonable and making his clients wait to meet with them, so now he’s telling his clients not to go to any community meetings. “What’s the point?” he asked. Mr. Hurdle then complained that community groups aren’t sending him copies of documents that they submit for the Liquor Board’s file.

Goldberg brought up the specific example of the Board dismissing a case immediately when the officer who wrote the report on the incident did not show up. Mr. Stanley Fine said that the Board cannot reschedule a hearing where this has occurred. Goldberg asked why, and several people in unison replied, “double jeopardy!” Goldberg said that Liquor Board hearings are not subject to the Constitutional rules about double jeoopardy, because they are not criminal trials. Kodenski responded, “the same rules apply.” Hurdle added that some allegations at the Liquor Board of violations of the rules could lead to criminal charges against the licensee, implying that double jeopardy would be relevant in that case.

The above analysis by the licensees’ attorneys and by the Liquor Board staff is incorrect. Under Johnson v. State, 95 Md. App. 561, an individual was convicted of driving under the influence of alcohol. His driver’s license was also suspended by the state in an administrative hearing. The Court of Special Appeals decided that this suspension of the individual’s license was not double punishment for the same offence, because driving on the roads of the state of Maryland is “not a right, but a privilege.” The Court said, “[w]hat MVA giveth, MVA may taketh away; but only for specific statutorily prescribed reasons and only in accordance with statutorily prescribed procedures and limitations,” quoting another case, and adding: “[R]evocation of privileges voluntarily granted is ‘characteristically free of the punitive criminal element.’” All of these arguments equally apply to liquor licenses: they are privileges, not rights, and their revocation or suspension is not considered punishment under the Constitution.

Sections (b) and (c) were removed from the rule; the time period for filing a motion for reconsideration was shortened to 15 days; the rule was left as a remedy available to only licensees, not community members.

Ms. Becky Witt suggested that there should be a limitation on the scope of a request for reconsideration, under Calvert County Planning Commission v. Howlin Realty Management, Inc., 364 Md. 301. The case says that “[a]n agency … may reconsider an action previously taken and come to a different conclusion upon a showing that the original action was the product of fraud, surprise, mistake, or inadvertence, or that some new or different factual situation exists that justifies the different conclusion. What is not permitted is a ‘mere change of mind’ on the part of the agency.” After some discussion, the committee decided to adopt the language into a subsection (b) of the rule, with Mr. Kodenski opposed, and Mr. Hurdle abstaining.

Rule 2.07 – Submission of Materials to the Board in Preparation for Public Hearings. (a) Evidentiary Documents: Any party shall submit any document, photo, video or any other piece of evidence for consideration by the Board not less than seventy two (72) hours before the date of the public hearing. Evidentiary items submitted afterward shall not be accepted or considered by the Board,unless presented in person by the individual who drafted or created the evidentiary document. (b) Postponement Requests:  Requests by any party to postpone a case to be heard before the Board shall be in writing and be received by the Board not less than seventy two (72) hours before the date of the public hearing. Requests submitted afterward shall be reviewed by the Executive Secretary and the Chairman to determine if there is good cause to allow for the postponement.

The committee then considered a rule that would require all parties to submit documents to the Board 48 hours before a hearing. The rule was adopted by the committee as drafted.

Becky Witt raised the issue that the 2014 reform bill required that, “to incorporate a change in the application document after the Board … has determined the application to be complete, the applicant shall submit the change to the Board not later than 15 days before the scheduled hearing.” This requirement would seem to be relevant to the new Rule 2.07, and it is not included anywhere in the proposed rules and regulations. In fact, the Board has not been enforcing this provision of state law. In the September 10 reconsideration for Langermanns on Light, for example, Mr. Kodenski submitted a significant amendment to his client’s application the day before the scheduled hearing, which the commissioners considered during their deliberations. Under this new section of Article 2B, however, either the Board should have postponed the hearing for 15 days or the commissioners should not have considered the amendment. Executive Secretary Michelle Bailey-Hedgepeth said that this rule is difficult for the Board to follow.

The committee then moved through the rules that they had submitted to the Attorney General’s office for review, mostly correcting punctuation and grammar.

Mr. Peter Kimos, licensee, asked Mr. Fine whether a rule should be added that would require all licensees to understand and read English. No one else on the committee supported this proposed rule. Mr. Kodenski said, “that’s the Donald Trump amendment.” Ms. Bailey-Hedgepeth noted that most licensees do provide their own interpreters at hearings. Mr. Kimos said that licensees are “dealing in a legal drug” and they should be able to understand English without an interpreter. They could kill someone by adding ammonia and bleach together, he said. The rest of the committee did not agree with this and moved on.

Minda Goldberg had submitted to the committee her own suggested draft of a rewrite of the BD-7 regulations in Rule 4.20; click here for the link to Ms. Goldberg’s proposed rule. Goldberg reiterated her opinion that the use of the word “habitually” in the following sentence was confusing and nonsensical: “A bar is defined as a counter, in whatever configuration (horseshoe, L-shaped, U-shaped, etc.), at which stools and/or chairs have been placed and from which alcoholic beverages are habitually served for on-premise consumption.” The Liquor Board interprets this sentence to mean that, as long as a patron could be buzzed into a locked area and could order a drink over a bar if he wanted to, the licensee is in compliance. Goldberg argued that that was an extremely low standard.

Michelle Bailey-Hedgepeth replied that the Liquor Board is allowed to define a BD-7 tavern license in its regulations. Baltimore City is the only jurisdiction with the BD-7 license, and there are no definitions of it in state law. She also said that the Liquor Board should be able to define what a “tavern” is, and that the term tavern does not really have any meaning to it, as applied to BD-7 licenses, because the license is being used in so many different ways throughout the city. The Board staff rejected the idea of using zoning restrictions to define a tavern, because the other counties throughout the state do not define taverns in their zoning ordinances; rather, they refer back to their liquor regulating authorities to define taverns.

Mr. Hurdle said that he liked the rule as it was, using the word habitually. Goldberg insisted that it was not an accurate word. Mr. Fine said that the issue is one of enforcement, not of rewriting rules. Bailey-Hedgepeth agreed and said that to change the rule to require “consistent and routine” bar service would be to put some licensees out of business. She pointed out that some delis have tavern licenses, but they only serve package goods, never over a bar. Bailey-Hedgepeth and Akras also objected to the requirement that licensees take down their plexiglass, because of the “situation” that licensees are in, in some neighborhoods.

The committee could not come to a majority position on how to define BD-7s. Four of nine committee members present voted to adopt Mr. Akras’s proposed rule.

“The Bucket List”

To conclude the meeting, the committee went through a list of legislative changes that had been proposed throughout the meetings and discussed which ones to forward to state legislators for the upcoming legislative session.

  • Article 2B section 10-503(d): 180 day transfer rule. Currently, there is no 180-day requirement for completion for a new Class B license, but there is a 180-day completion requirement for a transfer of any existing license, under Article 2B section 10-503(d). The Maryland Attorney General’s office recently issued an opinion on this provision, which required that the Board actually follow the requirement. The group suggested that there be an option for a hardship extension, like there is under Article 2B section 10-504(d) for businesses closed over 180 days.
  • Article 2B section 10-202(a)(1)(i)(1): The law currently requires the Liquor Board to publish notice of applications in three newspapers of general circulation in Baltimore City. The committee voted to recommend changing that requirement to one newspaper.
  • Article 2B section 9-101 – Baltimore City resident: The committee will recommend that the legislature remove the requirement that one of the licensees be a Baltimore City resident, changing the law to match Baltimore County’s, which only requires that one applicant be a resident of the state of Maryland. Mr. Fine explained that, for a large national chain, his clients have to hire someone to be a licensee, and they pay that person a fee “to do nothing.”
  • Article 2B section 10-104(d) – Character Witnesses: The committe voted to ask to remove the requirement that each application be signed by three character witnesses who own real estate and are registered voters of Baltimore City who sign on behalf of the applicants.
  • The committee voted to allow the Board to collect an annual fee for live entertainment and outdoor table service for BD-7 licenses, which they do not currently have the statutory authority to charge.
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