Park v. Board of Liquor License Commissioners

KARWACKI, Judge. The central issue which we shall resolve in this case is whether a provision dealing with zoning in Baltimore City enacted as part of Chapter 24 of the Acts of 1992 was a public local law within the meaning of Art. XI-A, § 4 of the Maryland Constitution and therefore exclusively delegated to the legislative authority of the Mayor and City Council of Baltimore. I Petitioners are individuals who operate their businesses pursuant to a Class B-D-7 beer, wine, and liquor license issued' by the Board of Liquor License Commissioners for Baltimore City (“the Board”). Under a B-D-7 license, retail sale of beer, wine, and liquor was permitted for consumption on the premises or elsewhere from 6 a.m. until 2 a.m. seven days a week.

Many of these businessmen operate a seven-day ³⁷⁰ package goods store with no on-premises consumption facilities. Under Chapter 24 of the Acts of Maryland 1992 (“Chapter 24”), all B-D-7 licensees are required either to add on-premises consumption facilities to their operations or to obtain a Class A-2 license, newly created by Chapter 24. A Class A-2 licensee is restricted to retail sale of beer, wine, and liquor for off-premises consumption between 9 a.m. and midnight Monday through Saturday. Appellants challenge that provision of Chapter 24, codified as § 18A of Maryland Code (1957, 1990 Repl.Vol., 1993 Cum.Supp.), Article 2B, 1 which provides that a business operation conducted under an A-2 license shall be considered a tavern for zoning purposes.

Article 2B encompasses the regulatory scheme in Maryland for the sale of alcoholic beverages. Prior to the enactment of Ch. 197 of the Acts of 1965, the Board was authorized to issue eight classes of liquor licenses. Class A licenses were for six-day package goods stores with no on-premises consumption. Class B licenses permitted seven-day sales at restaurants with ancillary package goods sales, provided that the gross receipts of such restaurants were comprised of a minimum percentage of food' sales.

Class C licenses were for non-profit clubs. Class D licenses covered six-day taverns with on and off-premises consumption. Special Amusement licenses encompassed operations with live entertainment. Sales on steamboats, railroads and airplanes required Class E, F and G licenses, respectively.

Thus, prior to 1965, there was no provision for a license authorizing a seven-day dispensary making sales only for off-premises consumption. The Class B-D-7 liquor license was originally authorized by Ch. 197 of the Acts of 1965, codified as Article 2B, § 29A. As noted above, restaurants issued a Class B license were required to have a minimum percentage of food sales. Section 29A eliminated the food sales requirement and was designed to alleviate a problem for certain restaurant owners who were finding it increasingly difficult to meet the food sales quota. ³⁷¹ Md.Code (1957, 1990 Repl.Vol.), § 29A(1) provides, in pertinent part: “The Board ... may authorize the issuance of an additional license, to be known as a Class B-D-7 beer, wine and liquor license.

Such special license shall authorize the holder thereof to keep for sale and sell all alcoholic beverages at retail at the place therein described, for consumption on the premises or elsewhere, during the hours from 6 o’clock a.m. to 2 o’clock a.m. on the day following, seven days per week.” (emphasis added). Two principal types of establishments conducted business under the Class B-D-7 license. Some maintained a separate package goods store, department, or section, with a full service bar available elsewhere on the premises. Others operated solely as a seven-day package goods store with no facilities for on-premises consumption.

In its floor report, the House Economic Matters Committee, which had considered Senate Bill 346 proposing what ultimately was enacted as Chapter 24, explained the evolution of the B-D-7 package goods stores: “During the hearing on Senate Bill 346, witnesses explained that, after the turmoil of the 1968 riots that occurred in Baltimore City neighborhoods, some taverns closed off their bar areas and began to sell for off-premises consumption only. Subsequent owners continued that practice and began to sell grocery items as well. Package goods licensees complain that these B-D-7 licensees have an unfair advantage because they are permitted to be open for longer hours than other package goods stores. Community associations complain because the B-D-7 licensees attract customers who drink on the street corners during the long hours the stores are open.” Based on a survey it conducted, the Board determined that 40 of the 178 B-D-7 licensees had no facilities for on-premises consumption and were operating solely as seven-day package goods stores.

They were thus operated as if they held a Class A license, but for seven rather than for six days per week and ³⁷² for longer hours. 2 Much opposition was waged against those businesses which operated solely as package goods stores, and the Board received numerous complaints, including reports of loitering, public urination, littering, and disorderly conduct in the area surrounding those establishments. The Board thereafter decided to eliminate the off-premises seven-day B-D-7 operations. Prior to taking any action, however, the Board sought an opinion from the Attorney General. Analyzing the language in § 29A which authorized the sale of alcoholic beverages “for consumption on the premises or elsewhere,” the Attorney General advised that the statute was ambiguous and, in the absence of corrective legislation or regulation, the Board could not limit a B-D-7 licensee to any particular minimum level of on-premises operation. 76 Op.Att’y Gen. 101 (1991).

In the opinion of the Attorney General, the Legislature had used “or” as a careless substitute for “and.” Id. at 104. Consequently, the Board proposed corrective legislation to the General Assembly which, inter alia, changed the troublesome “or” to an “and.” The Board’s plan was composed of three parts. The first component was legislation to be passed by the General Assembly which would provide the statutory framework for the onetime conversion of a Class B-D-7 license to a new six-day Class A-2 license. The second component consisted of Board regulations to be adopted to implement the statutory changes.

The final component was the modification of the zoning laws of Baltimore City to permit the one-time conversion from a B-D-7 to an A-2 license. This third stage was a key element of the plan and called for an amendment to the Zoning Ordinance to be enacted by the Baltimore City Council. 3 ³⁷³ Bills were simultaneously drafted for introduction in the Legislature and the Baltimore City Council. By March of 1992, the City Council Bill still had not been introduced, and the Senate Economic and Environmental Affairs Committee amended the Senate Bill to add subsection (h) to the proposed § 18A.. Subsection (h) provided: “Notwithstanding the provisions of § 43[ 4 ] of this Article, for purposes of zoning in Baltimore City, the operation conducted by a holder of a Class A-2 beer, wine and liquor off-sale package goods license shall be considered to be that of a tavern.” The purpose of that amendment was to ensure that holders of B-D-7 licenses could obtain a Class A-2 beer, wine and liquor license without the risk of violating any non-conforming use permits or zoning requirements. 5 Preamble to Chapter 24.

Chapter 24 has three main provisions. First, § 29A(1) provides that holders of a seven-day B-D-7 license must sell alcoholic beverages “for consumption on the premises and elsewhere.” (emphasis added). • In light of the fact that a number of B-D-7 licensees do not have facilities for on-premises consumption, the Legislature next gave B-D-7 licensees a one-time option to apply for a newly created Class A-2 ³⁷⁴ six-day package goods license, to take effect May 1, 1993. § 29A(7). Alternatively, a licensee could elect to retain a BD-7 license, provided he had facilities for on-premises consumption. Finally, § 18A(h) provides that the operations of A-2 licensees shall be considered “taverns” for zoning purposes.

This section was designed to prevent any possibility that former B-D-7 licensees would be out of compliance with their non-conforming use permits solely because of their election to apply for an A-2 license. On August 13,1992, the Board promulgated Rule 5.03 which requires an operation under a B-D-7 license to be a “tavern.” The rule defines a “tavern” as “an establishment where alcoholic beverages are habitually sold for on-premises consumption.” Many of those opting to retain their B-D-7 status, therefore, would be required to make physical modifications to their existing facilities. Furthermore, under the rule, a tavern must have a bar or lounge, must make sales of packaged liquor over the bar rather than in a separate section or department, and must not sell “groceries, toiletries, household items and the like.” On January 4, 1993, Petitioners filed a complaint in the Circuit Court for Baltimore City seeking declaratory and injunctive relief. The complaint sought to have the newly enacted Chapter 24 declared unconstitutional and its enforcement enjoined.

On March 5,1993, Petitioners filed an application for ex parte injunction so that they would not have to make an election between the A-2 and the B-D-7 license before the issues in this case had been decided. The Board filed a motion for summary judgment on the same day. At a hearing on March 24, 1993, Petitioners’ application for ex parte injunction was treated as one for an interlocutory injunction and denied. 6 ³⁷⁵ On April 20, 1993, Petitioners filed a cross-motion for summary judgment, which the trial court denied. The court, however, granted the Board’s motion for summary judgment.

Petitioners timely noted an appeal to the Court of Special Appeals, and that court, in an unreported opinion dated July 14, 1994, affirmed the judgment of the Circuit Court in favor of the Board. The intermediate appellate court held that the statute was constitutional and that, even if it were unconstitutional, the offensive provision could have been severed from Chapter 24. We issued a writ of certiorari to review the constitutionality of § 18A(h) and its severability. II Petitioners contend that § 18A(h) violates Md. Const.

Art. XI-A, § 4 (“the Home Rule Amendment”) because it is a public local law concerning a subject area over which the Mayor and City Council of Baltimore has been granted express and exclusive legislative authority. Respondent maintains that, as § 18A(h) is an amendment to a public general law, it must also be a public general law. A public general law would not run afoul of the Home Rule Amendment, and Respondent therefore concludes that § 18A is valid. Petitioners also challenge the validity of Board Rule 5.03 as outside the scope of authority delegated to the Board by the General Assembly.

Finally, Petitioners argue that Chapter 24 is invalid because it violates the “one subject” prescription of Md. Const. Art. III, § 29 and denies Respondents due process. As a threshold issue, we must determine whether § 18A(h) is, in fact, a zoning provision. If the Legislature did not in any way effect a zoning change, the statute cannot violate the Home Rule Amendment.

Both the circuit court and the intermediate appellate court found that the Legislature did not intend to enact a zoning change. Petitioners argue that these decisions are in direct contravention of the plain meaning of the language used in the preamble to § 18A. The Board essentially argues that the term “zoning” as used in Article 2B, § 18A(h) does not mean zoning. We agree with ³⁷⁶ Petitioners that such an interpretation ignores the plain meaning of the statute.

It is clear that the intent of the Legislature was to mandate that the Zoning Administrator of Baltimore City include Class A-2 package goods stores within the definition of “tavern” for the purpose of enforcing the Baltimore City Zoning Ordinance. The Board’s original three-part plan also supports the fact that the zoning issue was always a major concern. The clear intent of the Legislature was to address the growing problems associated with seven-day package goods stores while protecting the interests of those B-D-7 licensees who had operated for many years in such a manner with the tacit approval of the Board. The Legislature knew that without § 18A(h), the B-D-7 package goods stores could be closed under Baltimore City zoning regulations.

Section (h) was added so that “no rezoning will be required in changing the license from a B-D-7 license to the A-2 license.” The intent of the Legislature to make a zoning change is also plain on the face of the statute, and we must give effect to that intent as expressed by the Legislature. Allied Vending, Inc. v. City of Bowie, 332 Md. 279, 306 , 631 A.2d 77, 90 (1993) (in interpreting a statute, the court must ascertain the intent of the legislature, and the primary source of that intent is the language of the statute). Ill The Home Rule Amendment, Md. Const. Art. XI-A, § 4, provides: “From and after the adoption of a charter under the provisions of this Article by the City of Baltimore or any County of this State, no public local law shall be enacted by the General Assembly for said City or County on any subject covered by the express powers granted as above provided.

Any law so drawn as to apply to two or more of the geographical subdivisions of this State shall not be deemed a Local Law within the meaning of this Act. The term ‘geographical sub-division’ herein used shall be taken ³⁷⁷ to mean the City of Baltimore or any of the Counties of this State.” (emphasis added). A conclusion that a statute violates the Home Rule Amendment requires two findings: (1) that the law in question is a public local law, as opposed to a public general law; and (2) that the law addresses a subject covered by the express powers granted to the particular geographical subdivision. See State’s Attorney v. Mayor & City Council, 274 Md. 597 , 337 A.2d 92 (1975).

A The Board argues that any amendment to a public general law is also a public general law. As Article 2B, as a whole, is a public general law, and Chapter 24 amended that law, the Board asserts that § 18A is also a public general law. Respondent cites State v. Petrushansky, 183 Md. 67 , 36 A.2d 533 (1944) for the proposition that all sections within Art. 2B are public general laws. Contending also that “the regulation of alcoholic beverages is clearly a matter of significant interest to the entire state,” it argues that § 18A concerns more than one geographic area and satisfies the definition of a public general law.

Petitioners respond that, because § 18A affects only Baltimore City, it is a public local law, citing State v. Stewart, 152 Md. 419 , 137 A. 39 (1927). Petrushansky involved an amendment to Article 2B which applied on a statewide basis. It prohibited the storage of alcoholic beverages by a licensee, except at certain designated storage facilities. There we were asked to determine whether the amendment prohibited a licensee from storing alcoholic beverages in his home for his personal use.

In deciding whether the Legislature intended the statute to apply to the alleged conduct, we stated that “[t]he proper rule of construction is that all parts of such an article of the Code as this is, must be read together as they form part of a general system.” Petrushansky, 183 Md. at 71 , 36 A.2d at 535 (citations omitted). We held that the purpose of Article 2B was to regulate the manufacture and sale of alcoholic beverages, which is conduct of an essentially commercial nature. Thus, the ³⁷⁸ amendment was not intended to apply to the conduct of the defendants, which was of a noncommercial nature. Whether the amendment was a public local law or a public general law was never at issue in