MBC Realty, LLC v. Mayor & City Council

²¹⁹ HARRELL, J. I. At the center of this dispute are three pieces of municipal legislation: one amending the text of an urban renewal plan; one a zoning ordinance text amendment permitting, with the grant of a conditional use, general outdoor advertising signs (billboards) on publicly-owned stadia or arenas in Baltimore City’s B-5 zone; and, the last granting such a conditional use for 14 billboards on the exterior of the First Mariner Arena (the “Arena”). A number of property owners adjacent to the Arena, aggrieved at the result of this legislative trifecta, sought to have the Circuit Court for Baltimore City invalidate the legislation. The Circuit Court, largely on procedural/jurisdictional grounds, rebuffed these efforts. We issued a writ of certiorari to consider what modalities of legal process may be available to obtain judicial scrutiny of these enactments by the Mayor and City Council.

Apropos of the legal analysis required in the present case, we recall words from an opinion in a predecessor land use case emanating from Baltimore City, “[ejngaging in this inquiry, we do not write on an entirely clean appellate slate.” Md. Overpak Corp. v. Mayor & City Council of Balt, 395 Md. 16, 21 , 909 A.2d 235, 238 (2006).

II

A. The Undisputed Facts Petitioners in this matter are MBC Realty, LLC, and various other landowners with interests in office and residential buildings in the downtown area of Baltimore surrounding the Arena. Respondents are the Mayor and City Council of Baltimore City (“the city” or “the City Council”), owner of the former Baltimore Civic Center Arena, now known as the First Mariner Arena, and businesses that operate the Arena and associated activities, Clear Channel Outdoor, Inc., Arena Ventures, LLC, and SMG, Inc. The seeds of the current dispute actually were sown with the introduction of Council Bill 99-0002 by the City Council ²²⁰ President and the twelve council members on 9 December 1999. Commonly called the Baltimore City “Billboard Moratorium,” enacted as Ordinance 00-0001, this legislation amounted to á prohibition on new billboards in the City. 1 The purpose of Ordinance 00-0001 was described as establishing a general prohibition on the issuance of permits and the construction of general advertising signs; providing standards for changes for nonconforming general advertising signs; providing that certain applications for new general advertising signs may not be granted; ... and generally relating to the regulation of general advertising signs. The Ordinance recited as justification for the prohibition that billboards “constitute a separate and distinct use of the land on which they are placed and affect the use of adjacent streets, sidewalks,” and other public spaces, that the “unregulated construction, placement, and display of signs constitute a public nuisance,” that the signs “endanger the public safety by distracting the attention of drivers from the roadway and may otherwise endanger the public health, safety, and welfare,” and that billboards could “result in harm to the welfare of the City by creating visible clutter and blight and by promoting a negative aesthetic impact....” Council Bill 99-0002 (1999).

Prior to enactment of the ban, billboards were permitted by the Zoning Article of the City Code with the grant of a conditional use, subject to some limitations, in certain business and industrial districts in the City. On 23 September 2002, the City Council President introduced Council Bill 02-0898, proposing to enact Ordinance 03-513, at the request of the “Administration (Baltimore Development Corporation 2 ).” The bill proposed to amend the text of the Urban Renewal Plan for the Market Center Area of ²²¹ Baltimore City to allow billboards approved by ordinance as a conditional use on publicly-owned stadia and arenas. On the same day, the City Council President introduced Council Bill 02-0899, to enact Ordinance 03-514, at the request of the “Administration (Baltimore Development Corporation).” This proposed bill would amend the text of the Baltimore City Code, Zoning Article, to authorize in the downtown Baltimore business district zoning classification “B-5,” in which the Arena is located, as a conditional use requiring approval by ordinance, billboards on publicly-owned stadia and arenas. Concluding the trifecta of legislative initiatives, that same day the City Council President introduced Council Bill 02-0900, to enact Ordinance 03-515, at the request of the “Administration (Baltimore Development Corporation).” This proposal would grant a conditional use for 14 billboards on the exterior of the Arena.

Concurrent with the introduction of the three bills, a statement of intent to seek a conditional use allowing billboards on the exterior of the Arena was executed by the City. 3 The three companion Council Bills were considered by the City Planning Commission, Department of Planning, on 9 January 2003. A memorandum, dated 9 January 2003, summarized that meeting. The Commission recommended that Council Bill 02-0900 be amended to include certain design standards and, as amended, recommended passage by the City Council. A Planning Commission Staff Report, also dated 9 January 2003, addressed the three bills and recommended their approval.

The Staff Report listed the applicants for the legislation and conditional use as “The Administration (Baltimore Development Corporation) and Ed Hale, First Mariner Arena.” In its “Conformity to Plans” section, the Staff Report stated, “City Council Bill # 02-0898 amended the Market Center Urban Renewal Plan, the comprehensive plan for this area. With the approval of this amendment, this project is in conformance with the comprehensive plan for this area.” In ²²² the “Analysis” section, the Staff Report noted, “[t]hese three bills work in concert to allow general advertising signs on the Baltimore Area [sic]. Ed Hale, owner of the Baltimore Blast [professional, indoor soccer team] and lead tenant in the Arena, is interested in providing general advertising on the exterior of the Arena.” Scant mention of the 2000 Citywide prohibition on new billboards appears in the Staff Report. What little reference there was, however, suggests the basis of a bargain with a component of a relevant political constituency for the exception proposed by the 2002 bills to the 2000 billboard ban: Subsequent to the introduction of [City Council Bill 02-0899], the Citizens Planning and Housing Association (CPHA), who played a lead role in establishing the prohibition on new general advertising signs, requested that the City require removal of other general advertising signs if these new signs are to be approved.

The goal is to insure that City Council Bill # 02-0899 is in keeping with the goals and objectives of the prohibition on new general advertising signs. The Staff Report recommended that the City Council follow this suggestion and demand removal of one existing sign elsewhere in the City for every sign approved for the Arena. This feature later was included in the enacted ordinances. On 19 February 2003, hearings before the Land Use and Planning Committee of the Baltimore City Council took place.

The record does not include transcripts from this hearing. The record does contain ten pages of testimony challenging the three bills as “such bad policy that there is virtually no chance that they could withstand a court challenge to their validity.” This testimony emanated from Petitioners and warned the City Council that passage of the bills would constitute illegal spot zoning, contract zoning, and conditional zoning. The testimony also asserted that passage of the bills would deny Petitioners equal protection of the laws. On 24 March 2003, the City Council adopted Ordinances OS-513 4 and 03-514. 5 It adopted Ordinance 03-515 6 on 7 April ²²³ 2003.

The Mayor signed the three Ordinances into law on 9 April 2003. The Ordinances work together to allow and approve as a conditional use billboards to be placed on the Arena. Ordinance 03-513 amended the text of the Urban Renewal Plan for Market Center to allow billboards on publicly-owned stadia or arenas if approved by ordinance as a conditional use. Ordinance 03-514 permits billboards on the Arena, if approved as a conditional use. 7 It requires removal of one billboard from elsewhere in the City for each such sign allowed on the Arena.

The Ordinance is codified at Baltimore City Code, Zoning Article, §§ 6-609, 14-349. Finally, Ordinance 03-515 approved, as a conditional use on a specific site, the erection of 14 billboards on the exterior of the Arena, if 14 billboards are removed by Clear Channel elsewhere in the City. B. The Procedural History Petitioners challenged the three Ordinances initially on 14 April 2003 by filing a Petition for Judicial Review, pursuant to Maryland Code, Article 66B, § 2.09(a), 8 in the Circuit Court for Baltimore City. The precise objects of disaffection appeared to be the text amendment to the Baltimore City Code, Zoning Article, allowing billboards as a conditional use for ²²⁴ stadia and arenas in the B-5 zone and the approval of the conditional use allowing signs on the Arena, both actions characterized by Petitioners as “zoning actions” under § 2.09(a).

Petitioners alleged that: the Ordinances were beyond the scope of authority granted to Baltimore City by the General Assembly; the Ordinances illegally established a conditional use through piecemeal zoning; the Ordinances violated the “change-mistake” requirement for a change made subsequent to a comprehensive zoning; the Ordinances constituted illegal spot zoning, conditional zoning, and contract zoning; the City’s actions were proprietary, rather than governmental (and thus subject to zoning regulation); and, finally, the Ordinances denied Petitioners the equal protection of the law under the Fourteenth Amendment to the United States Constitution. Respondents moved to dismiss the judicial review action, arguing that the Ordinances could not be challenged by way of judicial review because they were not “zoning actions” within the meaning of § 2.09(a). The Circuit Court, on 18 August 2003, agreed with Respondents and dismissed the judicial review action. That judgment was appealed.

While the appeal was pending before the Court of Special Appeals, Petitioners filed a Petition for Writ of Certiorari with this Court, which was denied. MBC Realty, LLC v. Baltimore, 380 Md. 618 , 846 A.2d 402 (2004). The Court of Special Appeals, in deciding the appeal, affirmed the Circuit Court. MBC Realty, LLC v. Mayor & City Council of Balt., 160 Md.App. 376 , 864 A.2d 218 (2004) (hereinafter MBC Realty I).

The intermediate appellate court principally relied on Board of County Commissioners of Carroll County v. Stephans, 286 Md. 384 , 408 A.2d 1017 (1979) in reaching that result. It concluded that the actions taken by the Mayor and City Council of Baltimore did not work a zoning reclassification such that a “zoning action” had occurred, as defined in Stephans. MBC Realty I, 160 Md.App. at 387-90 , 864 A.2d at 224-26 . Near the end of its opinion, the court stated that, at or about the same time that appellants filed a petition for judicial review in circuit court, they filed a separate suit in ²²⁵ circuit court, invoking the court’s general jurisdiction.

At the request of appellees, the case was removed to the United States District Court for the District of Maryland, based on an allegation that the ordinances violated the equal protection clause of the Fourteenth Amendment. Appellees filed a motion to stay and appellants filed a motion to remand. Both motions were denied, and no further proceedings have occurred. There is nothing, in this opinion that prevents appellants from pursuing the questions of illegality, not properly before us in this case, in the separate suit.

MBC Realty I, 160 Md.App. at 390 , 864 A.2d at 226 . Indeed, hedging their bets against the possibility that the City’s motion to dismiss the judicial review action might find favor, Petitioners had filed on 30 June 2003 a declaratory judgment action (alluded to by the Court of Special Appeals in MBC Realty I) under Maryland’s Declaratory Judgment Act, Maryland Code, Courts and Judicial Proceedings Article, §§ 3-401-3-415. Thus, Petitioners alternatively and concurrent with their judicial review action sought declaratory and injunctive relief from the Ordinances by invoking the Circuit Court’s general jurisdiction. They advanced in the declaratory/injunctive action essentially the same allegations of illegality previously advanced in the action for judicial review.

Respondents removed the declaratory/injunction action to the U.S. District Court for the District of Maryland on 5 August 2003. Shortly thereafter, Petitioners added to their declaratory/injunctive action an equal protection claim under State law and sought to remand all claims, save the federal constitutional claim, to the Circuit Court. The federal court, rather than ruling on the motion immediately, chose to await the outcome of MBC Realty I in the Court of Special Appeals. The parties stipulated to a stay of the federal proceedings to abide the outcome of MBC Realty I. On 12 January 2005, the federal court ruled on the matters before it.

It dismissed Petitioners’ federal equal protection claim, concluding that the factual averments in Petitioners’ ²²⁶ complaint did not support a claim upon which relief could be granted. The court remanded Petitioners’ state law claims to the Circuit Court, noting “[a]s complete diversity of citizenship is lacking in this case, I shall decline to exercise supplemental jurisdiction and shall dismiss without prejudice the remaining, state law claims.” MBC Realty, LLC v. Mayor & City Council of Balt., 351 F.Supp.2d 420, 425 (D.Md.2005). Returning to the Circuit Court, Petitioners amended their Declaratory Judgment Complaint, jettisoning the state equal protection claim, retaining their other claims, and asserting that Ordinance 03-513, the text amendment to the Urban Renewal Plan, and Ordinance 03-515, the grant of the conditional use for the Arena, were “legally meaningless” because Ordinance 03-514 was illegal and, if that assertion was meritorious, the other ordinances became ineffective insofar as Petitioners’ interests were concerned. Of course, at this point in time, the dismissal of Petitioners’ judicial review action had been litigated conclusively in MBC Realty I. Respondents sought dismissal of the amended complaint for declaratory and injunctive relief on the grounds that “[t]he complaint [did] not state a claim upon which declaratory relief [could] be granted because the exclusive means of challenging the legality of the Ordinances [was] via a section 2.09 petition for judicial review.” Respondents further reasoned that “[t]he decision in MBC Realty I precludes the state law claims because there can be no illegal piecemeal, spot, or contract zoning unless the Ordinances changed the zoning classification of the Arena, and the issue of whether these Ordinances constituted a zoning reclassification was fully and finally decided in favor of the City by [the] decision in MBC Realty The Circuit Court, on 3 August 2005, dismissed Petitioners’ Amended Complaint, with prejudice, based on Respondents’ arguments.

Petitioners appealed once more to the Court of Special Appeals. While that appeal was pending before the Court of Special Appeals, a panel of that court, in Armstrong v. Mayor & City Council of Balt, 169 Md.App. 655 , 906 A.2d 415 (2006), held ²²⁷ that an ordinance enacted by the Mayor and City Council of Baltimore granting a conditional use constituted a “zoning action” for the purposes of § 2.09(a). Soon thereafter, in Maryland Overpak, 395 Md. 16 , 909 A.2d 235 , we agreed with the analysis in Armstrong and articulated an analytical paradigm by which courts should determine whether a discrete action is reviewable under § 2.09(a) as a “zoning action.” Maryland Overpak and Armstrong had the effect of eviscerating the precedential weight of MBC Realty I. Unfortunately, Petitioners’ judicial review action in the present litigation continuum was long deceased. The Court of Special Appeals, in the appeal then before it, was placed in a unique and guilt-ridden situation.

In its unreported opinion (MBC Realty II), the conundrum was framed thusly: [w]e agree -with the circuit court and [Respondents] that section 2.09 provides the exclusive remedy for these illegal spot zoning challenges to the Ordinances, so that the circuit court did not have subject matter jurisdiction to entertain a declaratory judgment action limited to such challenges. Nevertheless, we also agree with [Petitioners] that our decision in MBC Realty I prevented them from challenging the Ordinances via a petition for judicial review under section 2.09(a)(l)(ii). The opinion explained that MBC Realty I rested on “a premise concerning the scope of section 2.09 that has been undermined by recent decisions of this Court and the Court of Appeals” (referring to Armstrong and Maryland Overpak). The intermediate appellate court, after recounting the facts and reasoning in Armstrong and Maryland Overpak , expressed its conviction that Petitioners were entitled to challenge Ordinance 03-515 in a judicial review action as a “zoning action” under § 2.09(a).

The court noted that in Maryland Overpak , where an amendment to a previously approved development plan for a planned unit development (PUD) zone in Baltimore City was found to constitute a “zoning action,” we analogized the process in Baltimore City by which a PUD is ²²⁸ approved initially or amended thereafter in a substantive way to that by which a conditional use is approved. The intermediate appellate court, focusing on that analogy, concluded in MBC Realty II that, “[although the Court of Appeals did not expressly address” in Maryland Overpak whether the grant of a conditional use constitutes a “zoning action” for the purpose of § 2.09(a), “the answer to that question is patent.” The Court of Special Appeals considered also whether a declaratory judgment action might be appropriate under the circumstances. The court stated, “[w] e agree with the circuit court and the City that the legislative history of section 2.09 shows that this statute was intended to create an exclusive remedy for appeals from zoning actions.... Thus, by the [circuit] court’s analysis, appellants were stuck in a Catch-22.” As a result, the court felt it just, under the circumstances, to sculpt special relief so that Petitioners might have their “day in court” on the merits of their allegations.

The Court of Special Appeals concluded it is ... justified to hold that the jurisdictional decision in MBC Realty I is not a bar to appellants’ present suit now proceeding as a section 2.09 appeal. It would be manifestly unfair to preclude appellants from pursuing such an appeal in this action, because that is precisely the type of action they timely filed in MBC Realty I. Relief from the judgment entered by the circuit court in this case, which explicitly enforces our nullified decision in MBC Realty I, is justified. In these circumstances, we shall exercise our discretionary authority to afford appellants an opportunity to have their “day in court.” ... Permitting appellants to amend their complaint in this action [for declaratory and injunctive relief] by changing the nature of the action to a petition for judicial review under section 2.09, will serve the interests of justice and will not require the City to defend any new claims____Accordingly, we shall vacate the judgment dismissing appellants’ declaratory judgment action with prejudice, and remand with instructions that appellants be given leave to amend their complaint to couch it as a petition for ²²⁹ judicial review in accordance with section 2.09 ..., and that such a petition shall be treated as timely filed ... on remand.

Thus, the court effectively directed that the clock should be turned backwards and, as if MBC Realty I had never occurred, Petitioners and Respondents start anew at the beginning with Petitioners legal challenges framed in a petition for judicial review action. Petitioners filed a Motion for Reconsideration, Clarification, or Other Relief as to MBC Realty II. Specifically, they contended that the court’s ruling was unclear as to whether their challenges to the three Ordinances now must proceed only as a § 2.09(a) judicial review action. Petitioners’ basis for their motion was that the analysis in the opinion focused exclusively on their challenges to Ordinance 03-515 in reaching the conclusion that their challenges were to a “zoning action,” for which a special statutory remedy—a judicial review action—was provided.

The motion was denied. We granted Petitioners’ petition for a writ of certiorari ( 400 Md. 647 , 929 A.2d 889 (2007)) to consider the following questions: 1) whether the Court of Special Appeals erred when it ruled, in MBC Realty II, that Article 66B, section 2.09(a) of the Maryland Code, provides the exclusive remedy and source of subject matter jurisdiction for legal challenges to the Ordinances so that the request for declaratory relief challenging the enactment of the conditional use text amendment (Ordinance 03-514) could not proceed, and 2) whether the trial court on remand could hear a challenge to the validity of a conditional use text amendment in a judicial review action.

III

For a time in the interminable life of this litigation, Petitioners maintained concurrent actions under perceived alternative jurisdictional options. They initially filed in the Circuit Court a petition for judicial review under Maryland Code, Article 66B, § 2.09(a), and later joined that, asserting essentially the same claims as in the judicial review action, with an action for ²³⁰ declaratory judgment/injunctive relief under the Maryland Declaratory Judgment Act, Maryland Code, Courts and Judicial Proceedings Article, § 3-401-3-415. See Armstrong, 169 Md.App. at 678 , 906 A.2d at 428 (“When uncertain, practitioners sometimes file two actions, one seeking statutory review and the other seeking non-statutory review, because if they file one action and are wrong, a court may not treat the action as if it had asserted the proper basis for review.”). 9 The Declaratory Judgment Act supplies jurisdiction for a circuit court to “declare rights, status, and other legal relations whether or not further relief is or could be claimed.” Maryland Code, Courts and Judicial Proceedings Article, § 3-403(a). Specifically, “[a]ny person ... whose rights ... are affected by a ... municipal ordinance ... may have determined any question of construction or validity arising under the ... ordinance ... and obtain a declaration of rights, status, or other legal relations under it.” Id. § 3-406.

A circuit court may grant declaratory relief if it will “terminate the uncertainty or controversy giving rise to the proceeding” where an actual or imminent controversy exists provided that no other statute provides a special form of remedy for a specific type of case. Id. § 3-409. In that case, “that statutory remedy shall be followed in lieu of a proceeding” under the Declaratory Judgment Act unless constitutional issues dictate that declaratory relief is appropriate before administrative relief is exhausted. Id.; see Anderson House, LLC v. Mayor & City Council of Rockville, 402 Md. 689, 703-13 , 939 A.2d 116, 125-30 (2008) (discussing alternate jurisdictional forms of action by which a plaintiff may seek judicial scrutiny of zoning actions and other types of land use actions, both quasi-judicial and legislative in nature); Sprenger v. Pub.

Serv. Comm’n, 400 Md. 1, 23-24 , 926 A.2d 238, 251 (2007) (“It is well settled ²³¹ in Maryland that when there is a special statutory remedy for a specific type of case and that remedy is intended to be exclusive or primary, a party may not circumvent those special statutory proceedings by a declaratory judgment action.”) (internal citations omitted); Tanner v. McKeldin, 202 Md. 569, 577 , 97 A.2d 449, 453 (1953) (“[WJhere a statute provides a special form of remedy, the plaintiff should use that form rather than some other, although a constitutional issue may be decided in a suit for an injunction or a declaratory judgment or decree before the time arrives for using the statutory remedy, provided that there is no danger of by-passing the administrative agency.”). In Baltimore City, a special statutory remedy exists for certain types of land use decisions under Maryland Code, Article 66B, § 2.09, “Appeals to courts.” Section 2.09(a) provides that “[a]n appeal to the Circuit Court of Baltimore City may be filed jointly or severally by any person ... aggrieved by ... a zoning action by the City Council.” 10 Maryland Overpak and Armstrong revisited and redirected the debate over what is a “zoning action” for purposes of § 2.09, supplying an analytical template for determining whether a discrete land use decision or action is a “zoning action.” As the Court of Special Appeals properly noted in MBC Realty II, we compared in Maryland Overpak the process by which a planned unit, development (PUD) Is granted or an Initial grant is substantially amended in Baltimore City to that by which the Mayor and City Council of Baltimore City grant a conditional use. Maryland Overpak, 395 Md. at 29-31 , 909 A.2d at ²³² 243-44.

The present case presents an opportunity to expand somewhat our analysis explained there. It appears that, in Baltimore City, conditional uses may be approved through two possible processes. The Baltimore City Code, Zoning Article, addresses conditional uses at Title 14, Conditional Uses, and Title 16, Legislative Authorizations and Amendments. Subtitle 1 of Title 14 supplies an overview and requirements for conditional uses generally.

Section 14-102 explains that conditional uses may be approved by either the Board of Municipal and Zoning Appeals of Baltimore City (the “Board”), by written findings of fact and conclusions of law, or the Mayor and City Council, by ordinance. 11 Whether it is the former or the latter path that a particular conditional use proposal must follow is determined by the regulations for each zoning district. For example, § 6-608 of the Baltimore City Zoning Article, applicable to the B-5 business district, specifies which conditional uses the Board must approve, and § 6-609 specifies which conditional uses the Mayor and City Council must approve. Requests for outdoor