Pridgeon v. Board of License Commissioners

²³¹ MURPHY, J. This appeal from the Circuit Court for Prince George’s County presents the question of whether that county’s Board of License Commissioners (the Board) erroneously refused to renew a liquor license on the ground that the Board (in the words of appellants’ brief) “ignored the withdrawal of the protest by the sole Protest Group and[,] contrary to its practices and policies, conducted the protest hearing while taking testimony from politicians and persons who otherwise have no standing to protest the Appellants’ application for renewal of the alcoholic beverage license.” For the reasons that follow, we hold that the Board’s decision was not erroneous. We shall therefore affirm the judgment of the Circuit Court. Background In a letter dated February 26, 2006 and signed by its president, the Hillside Civic Association of Capitol Heights, Maryland, advised the Board that the association “wishes to protest to the renewal of liquor license for Senate Liquor Store located at 5000 Marlboro Pike, Capitol Heights, Maryland.” Attached to that letter was an “opposition to the renewal of the liquor license for Senate Liquors” signed by twelve persons, including the Civic Associations’ president, who signed this document in her individual capacity. In a six page ruling dated May 24, 2006, the Board (1) refused to renew the Class B +, Beer, Wine & Liquor license that had been issued to appellant Frank Pridgeon, Sr., for the use of a corporation operating the Senate Inn, and (2) ordered that the proprietors of the Senate Inn “cease the sale and service of alcoholic beverages as of 12:00 midnight, May 31, 2006.” The Board’s ruling included the following findings and conclusions: The Board finds that a valid protest of the renewal of this license was timely and legally filed by ten or more citizens. ²³² Prior to the hearing the licensees came to an agreement with a local citizens’ association that, in return for certain operating concessions, that particular association would not oppose the renewal of the license.

During the hearing the licensee argued that this agreement made the protest moot. The Board finds that the matter of renewal is controlled by Article 2B, Section 10-302(g)(2) of that statute states unequivocally that “... If a protest is filed the license shall not be renewed without a hearing before the Board of License Commissioners.” The Board finds that this proceeding is not one between two private parties who can settle the matter before a disinterested magistrate. The Board is not a disinterested party.

It is charged with the responsibility of regulating the sale of alcoholic beverages. This license is not one, which is controlled in any way by the protesting parties. They cannot issue, suspend or revoke a license. That function is reserved to the Board.

The Board finds that once a legitimate protest is filed it must conduct a hearing on the question of renewal. While conducting the hearing in this matter the Board received evidence from a number of persons who opposed the renewal. The Board finds and concludes that the agreement between the licensees and the citizens association does not preclude the Board from holding a hearing and making an independent finding on the question of renewal. Appellants’ PETITION FOR JUDICIAL REVIEW of the Board’s decision included the folio-wing assertions: 1.

On or about February 27, 2006, Hillside Civic Association submitted a letter to [the Board] protesting Senate Inn Restaurant and Liquors’ (“Senate Inn”) Application for Renewal of its Class B +, BWL License. 2. Up to the protest hearing scheduled for May 10, 2006, the [appellants’] counsel and [ ] counsel to Hillside Civic Association negotiated, prepared and obtained signatures to a Voluntary Agreement____The Voluntary Agreement was signed by [appellants] and the President of Hillside Civic Association. ²³³ 3. Prior to the protest hearing scheduled on May 10, 2006, the parties submitted and filed the Voluntary Agreement with [the Board]. 4. In spite of the Voluntary Agreement, [the Board] held a hearing without Hillside Civic Association’s protest. 8.

With the submission of the Voluntary Agreement and the lack of [a] protestant, [the Board] should have accepted Senate Inn’s Application for Renewal. 9. With the submission of the Voluntary Agreement and withdrawal of Hillside Civic Association’s protest, there cannot be a protest hearing and [the Board] should not have proceeded with the protest hearing. 10. Furthermore, [the Board] failed to follow its own rules and procedures in conducting the protest hearing. The circuit court affirmed the ruling of the Board in an eleven page OPINION that included the following analysis: On appeal the Appellants do not contest the Board’s findings of fact, its reasoning, or its ultimate conclusions of law.

They do, however, challenge the Board’s power to conduct a full protest hearing once all duly lodged protests have been withdrawn. Md. Ann.Code of 1957, Art 2B § 10-302(g) provides: (1) A protest against the renewal of a license may be filed with the Prince George’s County Board of License Commissioners. (2) If a protest is filed, the license shall not be renewed without a hearing before the Prince George’s County Board of License Commissioners. (3) All protests shall be filed with the Board no later than March 1 of the year in which the license expires.

(4) The protest shall: (i) Be signed by not less than 10 residents, commercial tenants who are not holders of or applicants for any license issued under this article, or real estate owners in ²³⁴ the immediate vicinity in which the licensed place of business is located; (ii) Be instituted by the Board of License Commissioners on its own initiative; or (iii) Be instituted by the municipality in which the licensed place of business is located subsequent to a public hearing being held by that municipality concerning the license renewal protest. (5) The Board of License Commissioners shall hold a hearing on the protest as in the case of an original application. Discussion This case appears to be one of first impression. It involves the general question regarding the effect of the Protest Group’s withdrawal of its protest — whether the protest hearing was rendered moot by the withdrawal, or whether there remained viable issues for the Board’s consideration even after Senate Inn and the Protest Group resolved their dispute.

This, in turn, involves a question of standing — whether on the evening of the protest hearing, the Protest Group was the only entity with standing to challenge the renewal of the license. It also involves a question of due process — whether the Board’s entertaining challenges from others outside the Protest Group put Senate Inn in a position where it had to argue a case without proper notice. Under the plain language of the statute, it would have been error for the Board not to conduct a full protest hearing once a protest had been filed. “If a protest is filed, the license shall not be renewed without a hearing before the Board of License Commissioners.” § 10-302(g)(2). However, as Appellants point out, the law does not address the effect of the withdrawal of the protest by the sole protestant. ²³⁵ In determining the effect of the withdrawal of a protest, it is important to keep in mind that the question of renewal is not a matter between the licensee and the protestant.

It is a matter between the licensee and the Board, which, in order to issue or renew a license, must, inter alia, determine that the licensee and the licensed premises meet certain requirements. See § 10-202(a)(2). Once a protest hearing is instituted, the Board must evaluate the licensee and licensed premises in light of these requirements, and if the requirements are not met, no action by the protestant can serve to waive them. A protest filed under § 10-302(g)(1) serves as a signal to the Board that the licensed establishment may not be meeting the standards set under § 10-202(a)(2).

At that point, the Board is required to look into any possible problems that would require the denial of a renewal. This is done through a hearing, “as in the case of an original application.” § 10—302(g)(5). The filing of a protest does not confer any special standing upon the protestant; its effect is solely on the Board, which is then required to make an inquiry by way of hearing. In sum, once the protest was filed, the Board was compelled to make further inquiry into the renewal of Senate Inn’s license and the withdrawal of the specific protest was a circumstance that did not compel a cessation of Board examination of the application for renewal.

Like any protestant under § 10—302(g) (4), the Protest Group was