Patel v. Board of License Commissioners

Graeff, J. This case addresses the circumstances under which a person who holds a license to sell alcoholic beverages is deemed to be “aggrieved” by, and thereby have standing to challenge, a decision of a board of license commissioners to issue an ¹⁹⁷ alcoholic beverages license to a nearby business. Hiteshbhai Patel, appellant, holds a Class A beer and wine license for the use of Omkara, Inc., t/a Big Willey’s (“Big Willey’s”), a convenience store in Crisfield, Maryland. 1 He sought judicial review of the December 29, 2011, decision of the Board of License Commissioners for Somerset County (the “Board”), appellee, to issue the same type of license to Azaz Azam and another person for the use of Somers Cove Market, Inc. (“Somers Cove”), a nearby convenience store in Crisfield. The circuit court dismissed Mr. Patel’s petition for judicial review, finding that Mr. Patel did not have standing to challenge the Board’s issuance of the license to Somers Cove because he presented no evidence of a specific economic injury, and therefore, he was not aggrieved. The court then denied Mr. Patel’s motion for reconsideration.

On appeal, Mr. Patel presents the following two questions for our review, which we have rephrased slightly: 1. Did the circuit court commit an error of law by dismissing Mr. Patel’s petition on the ground that he did not have standing to challenge the Board’s decision? 2. Did the circuit court abuse its discretion in declining to reconsider its dismissal of Mr. Patel’s petition after Mr. Patel presented evidence that his sales had declined significantly following the Board’s issuance of the liquor license to Somers Cove? For the reasons set forth below, we answer the first question in the affirmative, and therefore, we shall vacate the judgment of the circuit court and remand for further proceedings. ¹⁹⁸ FACTUAL AND PROCEDURAL BACKGROUND On January 20, 2012, Mr. Patel filed a Petition for Judicial Review in the Circuit Court for Somerset County, arguing that the Board’s decision granting the license to Somers Cove should be reversed.

He asserted that, through his attorney, he had opposed the issuance of the license at the hearing before the Board, and therefore, he had standing to appeal. He argued that he was aggrieved by the order granting the license, noting the “absence of sufficient evidence that such a license was authorized under Article 2B, Section 9-220 or that the application and the procedure followed by the [B]oard and the applicant complied with Titles 9 and 10 of Article 2B, Annotated Code of Maryland.” 2 The court held a hearing on April 5, 2013. Given the Board’s concession that the record supplied was “not much,” the court decided to “remand this matter for a rehearing.” 3 On April 10, 2013, the court issued an order remanding the matter to the Board “for the purposes of conducting a new hearing and preparing an adequate record upon which this [c]ourt may decide this matter.” The court noted that the record that had been transmitted failed “to contain sufficient information upon which to determine whether the alcoholic beverage license was properly issued.” The Board proceedings were to be conducted de novo, but upon completion of the second hearing, the matter was to resume before the circuit court “as if the new record to be filed were the original record.” The Board was directed to file a new transcript and record “within 60 days of the date of the hearing.” ¹⁹⁹ The Board considered the issuance of a liquor license to Mr. Azam on August 21, 2013, and September 18, 2013. In subsequently issuing its decision, the Board noted that the “issue before the Board concerns the 300 foot setback from the church property.” Finding that the distance between the church and the market was 305 feet, the Board determined “that there was no reason to deny a license for the use of Somers Cove” and the alcoholic beverage license issued to Somers Cove was valid.

On December 31, 2014, Mr. Patel filed a memorandum of law in support of his petition for judicial review. He asserted that the Board erred in approving the license because, among other reasons: (1) Somers Cove was within 300 feet of a church; (2) legislation enacted in 2013 did not authorize the issuance of a license to Somers Cove despite its proximity to a church; (3) the Board failed to consider the effect of the issuance of the license on existing licenses; and (4) issuing the license was against the public interest. Mr. Patel also asserted that the Board’s issuance of a license to Somers Cove should be summarily reversed due to its failure to include Mr. Patel’s evidence in the record. 4 On April 24, 2015, after a hearing, the circuit court issued an order stating that it was “impracticable to determine the questions presented to it, without additional evidence.” The court directed the parties to present evidence at a subsequent hearing on several questions, including whether Mr. Patel had ²⁰⁰ standing to challenge the decision of the Board or whether that “procedural hurdle” had been waived. Mr. Patel and Mr. Azam filed supplemental memoranda in response to the court’s order.

With respect to standing, Mr. Patel cited Maryland Code (2011 Repl. Vol.), Art. 2B § 16-101(b)(l)(i), which provides that “[a]ny alcoholic beverages licensee that holds a license issued by the local licensing board” may appeal a decision of the Board to the circuit court. Mr. Azam did not address the standing issue, addressing instead issues relating to the merits of the Board’s decision, including: (1) whether the 300-foot requirement applied; and (2) whether the record was sufficient to demonstrate that the Board considered the public interest. The Board did not file a memorandum.

On July 30, 2015, the court held a hearing. At the start of the hearing, Mr. Patel’s counsel stated that he would be calling two witnesses on the issue of standing. Counsel for the Board responded: Your Honor, before we [get] to that on the standing issue I think we might not even have to go there quite frankly. My research and what [counsel for Mr. Patel] has said on the standing issue and after discussions with Co-counsel, not to give anything away, but I tend to agree.

You know, [the cases cited by Mr. Patel] I think are pretty good, but if he wants to go ahead put the testimony on we’ll let him do that, but, you know, I couldn’t find anything contrary to the case that [counsel for Mr. Patel] found. Mr. Patel then presented the testimony of Dale McGinnis, Clerk for the Board. Ms. McGinnis testified that Mr. Patel held an alcoholic beverage license in Somerset County. His initial license was issued on May 1, 2007, and a new license had been issued each subsequent year through 2015.

Mr. Patel testified that he held an alcoholic beverage license since 2007, and he had appeared, “either personally or through [attorneys,” at all of the hearings held by the Board regarding whether Mr. Azam should be issued a license. Mr. Patel ²⁰¹ opposed the issuance of a license to Mr. Azam, stating that his business was “within a mile or two miles” of Somerset Cove. Counsel then presented argument. With respect to the standing issue, counsel for Mr. Patel noted that the Board had conceded that Mr. Patel had standing.

The court, however, noted the statutory requirement that a person appealing the Board’s decision must be aggrieved by the decision. In that regard, the court asked whether there had been “any evidence or testimony that [Mr. Patel] was aggrieved.” Counsel responded that Mr. Patel was “another alcoholic beverage licensee that does not wish to have competition.” Counsel stated that “one of the duties that the Board has in determining to issue a license is” determining the “impact it’s going to have on other licensees in the community.” He argued that Mr. Patel was aggrieved in having a second licensee in the same geographical area, which “absolutely affected his business.” Counsel pointed out that there “is a large population in the Crisfield Housing Authority that seeks to purchase alcoholic beverages,” and prior to the issuance of a license to Somers Cove, Mr. Patel’s business was the closest license holder to that population. In response, counsel for the Board stated that Mr. Patel’s position on standing was correct, but in response to the court’s question, “there has been [no] evidence presented by Mr. Patel that he was in any way harmed by the opening of Somers Cove market or the granting of the liquor license. ... [N]o testimony at all that anybody had been aggrieved.” He noted that Mr. Patel’s “main reason” for opposing the license to Somers Cove was that he did not “want any other competition,” but “it’s up to the Board in their discretion to give these licenses. ... And obviously the Board did not hear anything at that hearing to make them deny the license.” Counsel for the Board stated that “all these years later it still boils down to the original issues as to the distance involved.

And clearly I think that issue has been settled.” Counsel for Mr. Patel replied that the petition for judicial review addressed not just the 300 foot distance requirement, ²⁰² but also that the procedure followed by the Board did not comply with the law. With respect to the court’s question regarding whether Mr. Patel was aggrieved, counsel stated: “First of all aggrieved does not mean damaged. Aggrieved mean[s] dissatisfied with, unhappy with the decision of something.” On August 12, 2015, the circuit court issued a memorandum opinion addressing whether Mr. Patel had standing to challenge the Board’s issuance of the liquor license to Somers Cove under Art. 2B, § 16-101. The court focused on whether there was sufficient evidence that Mr. Patel had been “aggrieved” by the Board’s decision.

Concluding that Mr. Patel was not aggrieved, and therefore, he did not have standing to appeal, the court stated: [T]he current case law does not clearly state the criteria that a third party licensee must meet in order to be aggrieved. ... Black’s Law Dictionary ... defined an aggrieved party as a “party whose personal pecuniary, or property rights have been adversely affected by another person’s actions or by a court’s decree or judgment.”... Accordingly, the [cjourt finds, as a matter of law, that in order to be aggrieved, under [Art. 2B § 16-101], and, therefore, have standing to challenge the decision of the Board, a licensee must demonstrate a specific injury to the licensee’s pecuniary interest or property rights. The court compared the situation in this case with “similar, yet distinguishable, situations involving real property.” It stated that, “in zoning and land use cases,” “any third party who owns property within two hundred (200) to one thousand (1000) feet of a rezoned property is deemed to be prima facially aggrieved” by a zoning decision, but “all other third party property owners are deemed to own property that is far removed, and these third party property owners must demonstrate an injury to their personal property rights.” Analogizing the principles set forth in those cases to the present case, the court stated: ²⁰³ Petitioner’s package store is over one mile from the location of the package store operated by Azaz Azam; the individual whose liquor license Petitioner is attempting to challenge.

By way of analogy, since Petitioner would normally have to prove some kind of specific injury in order to have standing in a zoning case, Petitioner certainly needs to prove some kind of specific injury to have standing in this case. Additionally, the [c]ourt also notes that in the statute protecting a property owner’s rights to merchantable timber also uses the term aggrieved in [a] manner synonymous with a specific economic injury. “Any person ... who ... wrongfully .,, enters upon lands .., of another ... in order to ... destroy ,.. any merchantable ... timber on the land is liable to the party injured or aggrieved in an amount triple the value of the trees ... destroyed, plus ... costs[.]” [Md. Code (2012 Repl. Vol.) § 5-409(a) of the Natural Resources Article]. Accordingly, it appears that, generally speaking, parties initiating litigation involving State regulation or protection of land, be it to use real property to sell liquor, to be zoned commercial or noncommercial, or to grow merchantable timber, must demonstrate a specific economic injury in order to be considered aggrieved.

Finally, the General Assembly’s broadening of the concept of standing in its environmental permitting legislation, further bolsters the [cjourt’s finding that, in order to be aggrieved, a party must suffer a specific injury to that party’s pecuniary interest or property rights. In 2009, the General Assembly passed legislation that granted standing to challenge a permitting decision of the Maryland Department of the [E]nvironment [ (“MDE”) ] to ‘any person that: (i) Meets the threshold standing requirements under federal law; and (ii) 1. Is the applicant; or 2. Participated in a public participation process[.]” [Md. Code (2013 Repl.

Vol.) § 5-204 of the Environment Article]. “Prior to this enactment, standing to challenge permitting decisions by the [MDE] was limited to a person who was ‘aggrieved’ by the agency’s action, namely ‘one whose personal or property rights ²⁰⁴ [were] adversely affected by the decision.’ ”... Accordingly, if the General Assembly had intended to expand standing to challenge a decision of a local licensing board to members of the public that had not suffered a specific injury to his or her pecuniary interest or property rights, then the General Assembly would have removed the section requiring that a protestant be aggrieved by the local licensing board’s decision. The court noted that it had specifically asked counsel for Mr. Patel “to state where in the record Petitioner demonstrated that [he] had been aggrieved.” The court continued: Petitioner’s counsel indicated a number of plausible explanations for how Petitioner’s rights were harmed including: the possibility that if the Board issued too many liquor licenses it could inadvertently saturate the market to the detriment of all current licensees. Nevertheless, Petitioner has not provided, in the record before this [c]ourt, any evidence to indicate that this plausible scenario has actually come to pass.

Furthermore, Petitioner has not provided evidence, of any kind, to indicate that Petitioner has suffered other economic injury. Accordingly, the [c]ourt finds, in light of the fact that Petitioner has not offered any actual evidence to indicate an injury, that no reasoning mind could have reached the conclusion that Petitioner has demonstrated a specific injury to Petitioner’s pecuniary interest or property rights, and that, therefore, Petitioner does not have standing to challenge the decision of the Board. On September 11, 2015, Mr. Patel filed a Motion to Reconsider, asking the court to reconsider its decision for three reasons: (1) the Board conceded that he had standing to appeal and he had no notice that the court was considering “grafting a financial requirement onto the statutory requirements for standing,” so he did not present any such evidence; (2) the court erred as a matter of law in concluding that, to be “aggrieved,” a petitioner must demonstrate actual financial harm; and (3) even if actual economic damages must be shown to establish standing, his tax returns, submitted with the motion, clearly demonstrated that his business “suffered sub ²⁰⁵ stantially following” the issuance of a liquor license to Somers Cove. 5 The court denied the motion, and appellant filed his appeal to this Court. STANDARD OF REVIEW As this Court recently explained in State v. Phillips, 210 Md.App. 239, 257 , 63 A.3d 51 (2013), ‘“standing is a threshold issue; a party may proceed only if [he or she] demonstrates that he has a real and justiciable interest that is capable of being resolved through litigation.’ ” (quoting Norman v. Borison, 192 Md.App. 405, 420 , 994 A.2d 1019 (2010)). “A party’s standing to appeal either to this Court or to a circuit court from the decision of [an administrative agency] is a question of law, which we decide de novo” Superior Outdoor Signs, Inc. v. Eller Media Co., 150 Md.App. 479, 494 , 822 A.2d 478 (2003).

DISCUSSION Mr. Patel contends that the circuit court, in requiring him to show “actual pecuniary loss” to establish standing to appeal, applied “an incorrect legal standard.” He argues that alcoholic beverage licensees are “presumptively aggrieved” by the issuance of an alcoholic beverage license to a nearby competitor. He asserts that the record here shows that he was “aggrieved” and had standing to challenge the Board’s decision, and the circuit court erred in dismissing his petition for judicial review without reaching the merits of the appeal. The Board did not file a brief or participate in the proceedings in this Court. 6 ²⁰⁶ Article 2B § 16—101(b)(1) addresses who is authorized to appeal “a decision of a local licensing board to the circuit court of the county.” The statute lists the following three categories of persons authorized to appeal: (i) Any alcoholic beverages licensee that holds a license issued by the local licensing board; (ii) An applicant for an alcoholic beverages license that is the subject of the decision by the local licensing board; and (iii) Any group of not less than 10 persons who are residents or real estate owners in the precinct or voting district in which the licensed place of business is located or proposed to be located. There is no question that Mr. Patel qualifies under the first category; he is a person who holds an alcoholic beverages license issued by the Board.

The statute, however, sets forth two additional requirements to be entitled to appeal. The person appealing must pay to the Board an appeal fee, and, as relevant to this case: (3) A licensee ... that appeals a decision of a local licensing board under paragraph (1) of this subsection, must be aggrieved by the decision of the board and must have appeared at the hearing of the board either in person, by a representative, or by the submission of a written document that was introduced at the hearing. Here, the only issue presented on appeal