Thana v. Board of License Commissioners , 226 Md. App. 555 ( 2016 )

REPORTED
IN THE COURT OF SPECIAL APPEALS
OF MARYLAND
No. 1981
September Term, 2014
______________________________________
SUTASINEE THANA, et al.
v.
BOARD OF LICENSE COMMISSIONERS
FOR CHARLES COUNTY
______________________________________
Berger,
Nazarian,
Zarnoch, Robert A.,
(Retired, Specially Assigned),
JJ.
______________________________________
Opinion by Zarnoch, J.
______________________________________
Filed: January 29, 2016
In this appeal of a decision of the Circuit Court for Charles County, a liquor
licensee seeks to raise a First Amendment challenge to a “consent order” of a county
liquor board that prevented the establishment from offering “go-go entertainment.” In
musical terms, this case, at first glance, may look like The Miracles’ 1965 hit, “Going to
a Go Go” meets 1984’s “Footloose.”1 Ultimately, we conclude that, because of waiver
and preservation problems, the appropriate tune is the Grass Roots’ 1967 hit, “Things I
Should Have Said.”
This case revolves around go-go, but not the go-go that Smokey Robinson and the
Miracles sang about in 1965. Go-go music—an offshoot of funk—originated in
Washington, D.C., in the 1970s, and is characterized by a syncopated drum beat and call
and response.2
1
In the 1984 film, “Footloose,” which was remade in 2011, the municipal council
of the mythical town of Bomont banned dancing and rock music.
2
In the words of Kip Lornell and Charles C. Stephenson, Jr., “Go-Go is more than
music. It’s a complex expression of cultural values masquerading in the guise of party
music in our nation’s capital.” The Beat!: Go-go Music from Washington, D. C. 15 (rev.
ed. 2009). At the hearing before the liquor board, counsel for the licensee provided the
following definition of go-go music:
Go-go is a sub-genre associated with funk that originated in the
Washington, D.C. area during the mid 1960s and late 1970s. . . . . It remains
primarily popular in the area as a uniquely regional musical style. A great
number of bands contributed to the early revolution of the genre, but the
Young Senators, Black Heat, notably, singer-guitarist Chuck Brown and
The Soul Searchers are credited with having developed most of the
hallmarks of the style.
Inspired by artists such as the groups formerly mentioned, go-go is a
blend of funk, rhythm and blues, and early hip-hop with a focus on lo-fi
percussion instruments and funk-style jamming in place of dance tracks,
(Continued…)
In 2012, appellants Thai Seafood & Grill, Inc., trading as Thai Palace, a restaurant
and bar in Waldorf, Sutasinee Thana, and Michael J. Lohman (“Thai Palace” or
“licensee”), proposed and consented to restrictions on the use of promoters and on
providing go-go entertainment in exchange for the ability to present live entertainment at
the restaurant as reflected in a consent agreement with appellee, the Board of License
Commissioners for Charles County (the “Board”). Soon after, the Charles County
Sheriff’s Office received information that Thai Palace was using promoters and playing
go-go music. The Board brought an enforcement proceeding against Thai Palace, and
after a hearing, found that it had violated the consent order. Thai Palace raised no
constitutional objection at this time. The Board revoked Thai Palace’s liquor license and
its ability to host live entertainment.
Thai Palace petitioned the Circuit Court for Charles County to review the Board’s
decision, arguing, inter alia, for the first time that the restrictions in the second consent
order violated the due process and equal protection clauses of the Fourteen Amendment
to the U.S. Constitution. After a hearing held on June 23, 2014, the circuit court denied
Thai Palace’s petition in part in an order and memorandum opinion entered on October
(…continued)
although some sampling is used. As such, it is primarily a dance hall music
with an emphasis on live audience call and response. Go-go rhythms are
also incorporated into street percussion.
In technical terms, go-go’s essential beat is characterized by a
syncopated dotted rhythm that consists of a series of quarter and eighth
notes (quarter, eighth, quarter (space/held briefly), quarter, eighth, quarter) .
. . which is underscored most dramatically by the bass drum and snare drum
and the hi-hat, [and] is ornamented by the other percussion instruments,
especially by the congo drums, timbales and hand-held cowbells.
2
15, 2014.3 Thai Palace then appealed to this Court. Now for the first time on appeal, the
licensee raises a First Amendment challenge to the 2012 consent order. Thai Palace now
presents the following questions for our review, which we have consolidated and
rephrased:
I. Whether this Court should dismiss the appeal as moot because the consent
order at issue expired on January 12, 2015, prior to oral argument?
II. Whether substantial evidence supported the Board’s finding that Thai Palace
used promoters who maintained control over the entertainment provided on
site?
III. Whether Thai Palace preserved its First Amendment argument and whether it
waived its right to raise constitutional issues when it entered into the consent
agreement with the Board? And, if the issue is preserved and not waived,
whether a liquor board violates a licensee’s free speech rights under the First
Amendment of the United States Constitution and the doctrine of
unconstitutional conditions when it conditions certain benefits of a liquor
license upon the business not providing a certain type of music?
We hold that the case is not moot, but that the licensee’s constitutional claim is not
properly before us. Thus, we affirm the circuit court and the decision of the Board.
BACKGROUND
It is helpful to provide some background from the record on the incidents that
occurred prior to the proceedings at issue here and the interactions between Thai Palace,
the Waldorf community, and the Board. From 2006 through 2008, police responded to
numerous reports of fights, disorderly behavior, controlled-dangerous substance
3
In holding against the Board in part, the court found that the Board did not make
the requisite findings that a violation of a 2009 consent order occurred and found that the
Board had not given proper notice of its intent to revoke Thai Palace’s liquor license.
3
violations, and concealed weapon violations at the location of the licensee’s restaurant.
In 2007, these incidents resulted in 35 adult arrests and 35 juvenile arrests. That year,
Thai Palace’s alcoholic beverage license was revoked after it hosted entertainment that
featured nudity—a violation of the Alcoholic Beverages Article, Article 2B of the
Maryland Code (1957, 2011 Repl. Vol.).4 From 2007 to 2009, after the liquor license
was revoked, Thai Palace held regular go-go events hosted by promoters. During this
time period, the Charles County Sheriff’s Office received numerous calls reporting
criminal activity, including fights, disorderly behavior, and controlled-dangerous
substance violations.
On August 13, 2009, the Board held a hearing in which it considered Thai Palace’s
application for a Class B, beer, wine, and whiskey, liquor license.5 Following the
hearing, on November 12, 2009, the Board issued a consent order (the “first consent
4
Parts of this provision were struck down as constitutionally overbroad. See
Legend Night Club v. Miller, 637 F.3d 291, 302 (4th Cir. 2011) (concluding that Article
2B § 10-405 was unconstitutionally overbroad because it prohibited a substantial amount
of expression that is protected by the First Amendment and was not readily susceptible to
a limiting construction). In 2012, the General Assembly amended § 10-405 to bar
enforcement against a licensee operating “a theater, concert hall, art center, museum, or
similar establishment that is primarily devoted to the arts or theatrical performances; and .
. . [t]he performances express matters of serious literary, artistic, scientific, or political
value.” Chapter 697, Laws of 2012.
5
In prior proceedings before the Board, the agent for Thai Palace was Mr. Sam
Thana. Starting in 2009, Mr. Thana’s wife, Mrs. Sutasinee Thana, was the agent for Thai
Palace and held the liquor license on its behalf. Mrs. Thana was the president of Thai
Palace and owned 80% of its stock at the time of the 2009 hearing. Although there was
some confusion about changes in ownership of Thai Palace during the proceedings, it
appears that the appellant Thai Palace is the same corporation whose liquor license was
revoked in 2007.
4
order”) in which it imposed several conditions on the restaurant, including the condition
that “there shall be no entertainment other than dinner music from either a radio and/or
t.v. and that there will be no other source of entertainment without prior written approval
of the Board. . .” The order provided that it “shall remain in effect until changed by the
Board of License Commissioners[.]”
The first consent order remained in effect for two years without incident. In 2011,
Thai Palace requested that the Board rescind the earlier consent order to allow the
restaurant to once again provide live entertainment. The licensee assured the Board that
it would “maintain control over arranging . . . entertainment and [would] not use an
outside promoter to do so”, and that it would not “offer any ‘go-go’ type entertainment.”
Following a hearing on December 11, 2011, the Board issued a second consent order on
January 12, 2012, modifying the conditions imposed on the restaurant. Under the second
consent order, Thai Palace was “authorized to offer additional entertainment in the
licensed premises to include instrumental and acoustical music; Karaoke; DJ music and
dancing[.]” However, the order restricted Thai Palace from allowing “an outside
promoter to maintain control of any entertainment” and from offering any “‘go-go’
entertainment[.]” These provisions were obviously a response to the police involvement
at the establishment from 2007 to 2009 and were designed to limit the size and unruliness
of the crowds in and around Thai Palace.
The order was also to “remain in effect for a period of three years from the
effective date of this order and shall act as an endorsement on the alcoholic beverage
license issued to the licensees for the same three year period[.]” It further provided that,
5
“upon the expiration of three years from the effective date of this order, . . . this Order
shall expire and be null and void and of no further effect.” The order was signed for the
Board by a Charles County assistant county attorney and by the chairman of the Board of
License Commissions for Charles County, and “[a]pproved and [c]onsented to” by
Sutasinee C. Thana, Michael J. Lohman, and their attorney, David J. Martinez, for Thai
Palace.
A year after the issuance of the second consent order, the Charles County Sheriff’s
Office sent a memorandum to the Board, detailing several violations of the second
consent order. On June 20, 2013, the Board issued a show cause order to Thai Palace that
alleged that the restaurant hosted numerous events that were advertised by promoters and
that featured go-go music.
The Board held a hearing on December 12, 2013, to review the alleged violations
of the second consent order. The Board’s attorney called Master Corporal Judith
Thompson of the Alcohol Enforcement Unit at the Charles County Sheriff’s Office.
Officer Thompson provided the details of her investigation, which commenced in
February 2012. She described flyers and Facebook posts that advertised purported go-go
bands at the restaurant. Several of these advertisements contained names of promoters
and used the words “promoted by,” described in further detail below. The Board’s
attorney then called Officers Curtis and Chandler, also with the Charles County Sheriff’s
Office, both of whom worked security for Thai Palace as second jobs. They each
testified that they observed go-go music playing at Thai Palace on several occasions
while they were working.
6
Officer Curtis stated that she observed go-go music on two occasions while the
second consent order was in effect. When asked how she knew that it was go-go music,
she stated “Just from my generation, growing up. Going to school, I know what go-go
music is. . . . [from] personal experience.” She described go-go music as “go-go music is
a — to me is people — a lot of bass, drums, talking — you know, kind of screaming
somewhat into the music, very fast beat. . . . It’s hard to explain.” She also commented
on the difference between go-go and rhythm and blues as: “Go-go has — it’s pretty much
the same beat. Whatever song is played, it’s the same beat, same fast-paced beat. R&B
is different beats, different sounds, different words, everything is different.”
Officer Chandler stated that she observed go-go bands playing at Thai Palace
about five or six times, but could not recall the dates. She knew that it was go-go music
from personal experience, and when asked to define go-go music, Chandler stated “It’s
just a different sound, a different beat. I really can’t explain what it is.”
The Board’s attorney then rested its case and counsel for Thai Palace called Mrs.
Thana to testify. When questioned about promoters and how Thai Palace chose and
booked entertainment, Mrs. Thana testified that she made appointments to meet with the
bands and told them of the restrictions on playing go-go music.6 Mrs. Thana stated that
she made the final decision as to whom was allowed to perform at Thai Palace and that
bands must receive approval from her before printing flyers. Mrs. Thana testified that
6
She recounted that many of the bands felt that this policy unfairly discriminated
against go-go music while allowing other music, such as Thai and Latin tunes, to be
played.
7
she approved the flyers that had been introduced as exhibits, with the exception of one
flyer, which she said was printed without her permission.
Mrs. Thana stated that she allowed a DJ who was scheduled to play music to book
VIP tables for patrons in advance. She also approved an advertisement with the DJ’s
telephone number, advising patrons to call the DJ to book a VIP table. Mrs. Thana
maintained that she communicated with each band manager, but, when pressed by a
member of the Board, she could not remember the names of specific band managers.
Regarding payment, Mrs. Thana reported that she paid in cash or made checks out to the
band leader and the name of the performer. Mrs. Thana stated that she made the final
decision on hiring entertainment, but that her daughter and husband would help if there
was a language barrier. Samantha Thana, Mrs. Thana’s daughter, testified and
corroborated her mother’s testimony.
Thai Palace presented its closing argument and asked the Board to credit the
testimony of Mrs. Thana that she did not allow outside promoters to maintain control of
the entertainment and did not allow bands to play go-go music at the restaurant. Notably,
Thai Palace did not argue that the second consent order, or any potential enforcement
based on it, violated its constitutional rights.
At the conclusion of the hearing, the Board found that Thai Palace violated the
second consent order and voted to revoke all consent. In a decision and order dated
January 9, 2014, the Board concluded:
That from February 2012 through April 20, 2013, Sutasinee Thana,
Michael James Lohman, Thai Seafood and Grill, Inc., or their agents and
employees, allowed numerous outside promoters to maintain control of the
8
entertainment at Thai Palace in violation of the modified Consent Order
dated January 12, 2012; and . . .
That from February 2012 through April 20, 2013, Sutasinee Thana,
Michael James Lohman, Thai Seafood and Grill, Inc., or their agents and
employees, hosted numerous events that included “go go” entertainment in
violation of the modified Consent Order dated January 12, 2012.
The order revoked the first and second consent orders as well as Thai Palace’s Class-B
alcoholic beverage license.
On February 6, 2014, Thai Palace petitioned for judicial review of the Board’s
decision pursuant to Maryland Rule 7-201 et seq. Before the circuit court, the licensee
argued: 1) that the findings by the Board that Thai Palace had allowed promoters to
maintain control of entertainment and play go-go music were not supported by substantial
evidence; 2) that the restriction on having go-go entertainment placed on its license was a
violation of Article 24 of the Maryland Declaration of Rights and the Equal Protection
and Due Process Clauses of the 14th Amendment to the United States Constitution; and 3)
that the decision of the Board to revoke the alcoholic beverage license for violations of
the 2012 consent order was beyond the power of the Board because there were no
allegations that Thai Palace had violated the alcoholic beverage laws or regulations of
Charles County, nor was there an allegation that Thai Palace had violated any other
provision of Article 2B for which revocation of a license is a penalty.
The Board countered that its findings were supported by substantial evidence; that
Thai Palace was barred from contesting the constitutionality of the consent order because
it had agreed to the restrictions on go-go entertainment; and that the Board had authority
9
to revoke Thai Palace’s license because the license was predicated on compliance with
the second consent order.
At a hearing held before the circuit court on June 23, 2014, Thai Palace did not
expand on its constitutional claims. It maintained its argument that the language of the
second consent order violated equal protection because “it was discriminatory as opposed
to all types of music” and due process “because there was no ascertainable standard for
[the music’s] inclusion or exclusion, and was therefore unconstitutionally vague.”
The circuit court issued an order and memorandum opinion on October 16, 2014,
in which it concluded that substantial evidence was presented at the hearing to sustain the
Board’s findings. The court agreed with the Board that Thai Palace waived any
constitutional challenge to the prohibition on go-go music because Thai Palace proposed
and consented to the restriction and would have had to appeal the restriction at the time it
was imposed to obtain judicial review. The court did, however, hold that the Board was
not authorized to revoke the liquor license, because it was not conditioned on Thai
Palace’s compliance with the terms of the second consent order and the hearing did not
otherwise meet the procedural requirements for revoking a liquor license under Article
2B § 10-403(a)(1). The court remanded the case to the Board for further proceedings to
determine whether the liquor license should be revoked. Thai Palace filed its appeal to
10
this Court on November 13, 2014.7 The Board did not cross-appeal the circuit court’s
order.
DISCUSSION
I. Mootness
As an initial matter, the Board argues that this appeal should be dismissed as moot
because the second consent order expired by its own terms on January 12, 2015, three
years from the date of its issue. Thai Palace responds that this appeal is not moot because
it could have collateral estoppel implications for its federal case, currently on appeal in
the U.S. Court of Appeals for the Fourth Circuit. Thai Palace also argues that, if
affirmed, the Board could consider the violation in subsequent proceedings to impose
greater penalties.
“A case is moot when there is no longer any existing controversy between the
parties at the time that the case is before the court, or when the court can no longer
7
In addition to the state court proceedings here, on November 5, 2014, Thai
Palace filed a complaint in the U.S. District Court for the District of Maryland, alleging
that the restriction on go-go entertainment in the second consent order violated its First
Amendment rights to free speech and requested a declaratory judgment finding that the
condition and the revocation of the consent order based upon the Board’s finding ran
afoul of the First Amendment. Thana v. Bd. of License Com’rs for Charles County, Md.,
104 F. Supp. 3d 711 (D. Md. 2015). The district court, in a memorandum opinion issued
on May 14, 2015, granted the Board’s motion to dismiss for lack of subject matter
jurisdiction under the Rooker–Feldman doctrine, which precludes federal appellate
jurisdiction over state court judgments. See Rooker v. Fidelity Trust Co., 263 U.S. 413,
416 (1923); D.C. Court of Appeals v. Feldman, 460 U.S. 462, 482 (1983) (“[A] United
States District Court has no authority to review final judgments of a state court in judicial
proceedings. Review of such judgments may be had only in [the Supreme] Court”). Thai
Palace appealed this decision to the U.S. Court of Appeals for the Fourth Circuit, which
has not scheduled oral argument as of the date of this decision.
11
fashion an effective remedy.” Green v. Nassif, 401 Md. 649, 654 (2007) (quoting In re
Kaela C., 394 Md. 432, 452 (2006)) (Internal quotation marks omitted). “Where,
however, it seems apparent that a party may suffer collateral consequences from a trial
court’s judgment [or administrative decision], the case is not moot.” In re Kaela C., 394
Md. at 453 (citing Toler v. Motor Vehicle Admin., 373 Md. 214, 219 (2003)); see Toler,
373 Md. at 219 (holding that the potential for enhanced penalties for future violations
kept a case from becoming moot); see also Case of Seila’s Liquor License, 190 A. 203,
205 (Pa. Super. Ct. 1937) (The collateral consequences, in the form of increased
penalties, “of a violation of the liquor laws prevent the questions [on appeal] from
becoming moot at the expiration of the term of a license”).
“‘Unlike the Article III constitutional constraints on the federal courts, . . .
[Maryland’s] mootness doctrine is based entirely on prudential considerations’ that do
not constitutionally bar us from reaching the merits of a moot action.” Comptroller of the
Treasury v. Zorzit, 221 Md. App. 274, 291-92 (2015) (quoting Carroll Cnty. Ethics
Comm'n v. Lennon, 119 Md. App. 49, 57 (1998)). However, even under the more
stringent federal case or controversy requirement, a licensee who asserts an intent to
continue to operate under the terms of a valid license will be deemed to have satisfied the
requirement for setting forth an existing controversy between the parties. See Clark v.
City of Lakewood, 259 F.3d 996, 1012 (9th Cir. 2001) (holding that case was not moot
where adult business stated intention to reopen his business if ordinance were enjoined);
Dolls, Inc. v. City of Coralville, Iowa, 425 F. Supp. 2d 958, 986 (S.D. Iowa 2006) (Case
not moot where adult business currently asserted an intent to reopen, even though it had
12
not applied for, nor been denied zoning permit); cf. City News & Novelty, Inc. v. City of
Waukesha, 531 U.S. 278, 285 (2001) (holding that no controversy existed where party
had exited the adult business and asserted no plan to reenter).
In the present case if the Board prevails, it could use the existence of the violations
against Thai Palace in future proceedings. At oral argument, Thai Palace expressed its
intention to petition the Board again to allow the restaurant to provide live entertainment.
Therefore, because the outcome of these proceedings will affect the licensee’s future
treatment by the Board, we hold that the case is not moot, and we deny the Board’s
motion to dismiss.
II. Restriction on the Use of Promoters
A key issue here is whether substantial evidence existed to support the decision of
the Board. Thai Palace argues that substantial evidence did not exist to support the
Board’s findings that Thai Palace violated the second consent order by allowing
promoters to maintain control of the entertainment. Thai Palace does not contest the
sufficiency of evidence to support a finding that it provided go-go entertainment;
however, it does challenge the constitutionality of the restrictions on go-go entertainment
in the second consent order. We discuss these arguments below.
Our review of the Board’s decision is the same as that of the circuit court:
[T]he action of the local licensing board shall be presumed by the court to
be proper and to best serve the public interest. The burden of proof shall be
upon the petitioner to show that the decision complained of was against the
public interest and that the local licensing board’s discretion in rendering its
decision was not honestly and fairly exercised, or that such decision was
arbitrary, or procured by fraud, or unsupported by any substantial evidence,
or was unreasonable, or that such decision was beyond the powers of the
13
local licensing board, and was illegal. The case shall be heard by the court
without the intervention of a jury.
Art. 2B, § 16-101(e)(1)(i). Thus, our review of the decision of the Board is similar to
our review of decisions of other administrative agencies—in short, if the Board’s
decision was supported by substantial evidence, and if it committed no error of law, we
must affirm. Paek v. Prince George's County Bd. of License Com’rs, 381 Md. 583, 590
(2004).
Substantial evidence is “such relevant evidence as a reasonable mind might accept
as adequate to support a conclusion.” Blackburn v. Board of Liquor License Comm‘rs for
Baltimore City, 130 Md. App. 614, 634 (2000) (quoting Bulluck v. Pelham Wood
Apartments, 283 Md. 505, 512 (1973)). Reviewing courts assume the capability of the
board members “who are familiar with the matter in dispute and informed by training and
experience to pass upon the questions of fact presented to them”; therefore, the courts
will “not substitute their own judgments for the findings of administrative officials” State
Ctr., LLC v. Lexington Charles Ltd. P'ship, 438 Md. 451, 568 (2014) (quoting
Coddington v. Helbig, 195 Md. 330, 337 (1950)).
The second consent order states that Thai Palace “shall not allow an outside
promoter to maintain control of any entertainment.” An “outside promoter” is a party
unaffiliated with Thai Palace who encourages or promotes the entertainment.
“Promoter,” Black’s Law Dictionary (10th ed. 2014). The phrase, “maintain control”
means to “exercise power or influence over” something. “Control,” Black’s Law
Dictionary (10th ed. 2014). Accordingly, in this context, the second consent order
14
prohibits third parties from influencing or exercising power over the advertising,
marketing, and performing of entertainment at Thai Palace.
At the December 12, 2013 hearing, Officer Thompson testified that she observed
advertisements that represented that the entertainment was organized by a third party
promoter:
[THOMPSON]: I had received information from our intelligence unit in
reference to an event that was scheduled for February 4th, and the
advertisement . . . basically that said that they were going to have a
performance and that there were several names of promoters that were on
the advertisement. And it was the intelligence’s understanding from, I
guess, a conversation that I had previously had from them — or with them
in which Thai was not allowed to have — I understood that Thai was not
allowed to have outside promoters. So, they sent me this Internet ad that
they found.
* * *
[W]e were able to establish that the person who had the Internet flyer
posted on their Facebook page was a Mr. Mark Twain Green. Eventually
we were able to establish the name of Mark Twain Green. In any case,
Twain Green, from the information I received from intelligence, had some
connection or there appeared to be some connection between him and 27
Entertainment, which is one of the promoters that is listed on the flyer. The
flyer was powered by Boss Entertainment, Everyday Entertainment and 27
Entertainment. Mr. Twain Green is known as a local music promoter.
The advertisements were introduced into evidence, and Thai Palace did not rebut
Officer Thompson’s testimony. The officer also testified that she observed printed flyers
in Thai Palace during the time that the second consent order was in effect. The flyers
advertised musical performances and other live entertainment at Thai Palace and included
text that indicated the use of promoters: “This event is brought to you by On Fire
Productions/J&J Productions/Kenya White Productions! Smitty Productions/R.E.D.
15
Productions/Swagg Entertainment” “Corporate Affairs Presents,” “No Question Band Ent
Presents,” and “Through Rock Promotions.” Mrs. Thana testified that she made the
decisions regarding what entertainment was offered at the restaurant and approved the
flyers, even though the flyers were drafted by individuals not employed by Thai Palace.
Thai Palace challenges the Board’s reliance on these flyers and Internet
advertisements of events. Specifically, the licensee argues that the Board had evidence
through Mrs. Thana’s testimony that “she [made] all of the decisions regarding
entertainment at Thai Palace, and that she was involved in the selection process and
approved or declined to approve each flyer and/or advertisement, and otherwise
maintained control of the entertainment at Thai Palace.”
Nonetheless, the second consent order broadly prohibits third parties from
exercising control over the entertainment advertising and presentation at Thai Palace.
The Board received testimony of witnesses who reported that they observed go-go
entertainment at Thai Palace on multiple occasions, in contradiction to Mrs. Thana’s
insistence that go-go music was not performed. From this testimony, the Board was
allowed to draw an inference that Mrs. Thana’s testimony was not credible and that Thai
Palace was not in control of the entertainment. The clear implication of the content of the
advertisements—which used language such as “This event is brought to you by [third
party promoter]”—was that some third party was promoting and supplying the
entertainment at Thai Palace. The Board was not required to disregard this evidence and
instead credit Mrs. Thana’s contrary testimony. Finally, the advertisements and Mrs.
Thana stated that patrons could book “VIP” tables by calling the bands or promoters. In
16
our view, a reasoning mind could have concluded that the licensee had violated the
consent order’s prohibition on the use of promoters. Thus, we hold that substantial
evidence supported the decision of the Board and, therefore, affirm the circuit court on
this issue.
III. Constitutional Issues
Thai Palace also contends that the restriction on go-go entertainment violates the
First Amendment.8 The Board’s response is two-fold. First, the Board argues that Thai
Palace may not argue this constitutional claim because it was not raised at the hearing
before the Board. Second, the Board contends that Thai Palace waived any constitutional
challenge to the language in the second consent order when it proposed and consented to
the order and did not seek immediate judicial review of the terms of the agreement.
Generally, a government cannot condition a benefit on a basis that infringes
constitutionally protected interests, “especially [one’s] interest in freedom of speech.”
Perry v. Sindermann, 408 U.S. 593, 597 (1972). The Supreme Court has routinely
invalidated conditions that restricted individual rights generally and First Amendment
rights in particular. See, e.g., Perry, 408 U.S. at 597-98 (holding that employment at a
public university may not be predicated on the university’s disagreement with the
employee’s exercise of First and Fourteenth Amendment rights). Although the Board
8
In a footnote, Thai Palace argues for the first time that the second consent order’s
restriction on using promoters violates its First Amendment right of association. Thai
Palace provides no argument and cites to no authority in support of this unpreserved
contention. Therefore, we will not consider it.
17
and the licensee may consent to reasonable restrictions, the Court of Appeals has not
resolved whether “the [liquor board] may use its power to grant or transfer a license to try
to coerce the acceptance of restrictions by the prospective licensee or [whether] all
restrictions agreed to by licensees are valid.” Bd. of Liquor License Com’rs for Baltimore
City v. Fells Point Café, Inc., 344 Md. 120, 141 (1996). The present context concerns
the grant of a benefit—the liquor license—and involves a government body as a party to
the consent agreement—a situation that requires consideration of interests not present in
agreements between private parties.9
9
In their article, Rethinking Free Speech and Civil Liability, Daniel J. Solove and
Neil M. Richards note:
At the doctrinal level, the consensual waiver [of constitutional
rights] approach’s focus on autonomy fails to explain the problem of
unconstitutional conditions. For instance, suppose the government offered
to pay citizens $100 in exchange for not criticizing government policies.
From a pure autonomy approach, those who accepted such a deal would
have freely bargained away their First Amendment rights to criticize the
government. But from the perspective of the social interest in free speech, a
valuable source of potential criticism of the government would have been
bought up by the government in such a way as to skew, distort, and stifle
public discourse. Recognizing this problem, the Supreme Court has held in
a series of cases that the government may not condition certain waivers of
constitutional rights on the receipt of benefits. The unconstitutional
conditions doctrine has been criticized for being inconsistent and
incoherent, but it clearly reflects that even “consensual” waivers of
constitutional rights can threaten the First Amendment and trigger
heightened scrutiny.
109 Colum. L. Rev. 1650, 1678 (2009); see also Jason Mazzone, The Waiver Paradox,
97 Northwestern U. L. Rev. 801, 848 (2003) (contrasting the Supreme Court’s
willingness to allow waiver of constitutional rights in the criminal plea bargain context
with the Court’s skepticism of governmental conditions on the exercise of First
Amendment rights).
18
Music and live musical entertainment fall within the “wide range of expression
that has long been held to be within the protections of the First and Fourteenth
Amendments.” Schad v. Borough of Mount Ephraim, 452 U.S. 61, 65 (1981); see Ward v.
Rock Against Racism, 491 U.S. 781, 790 (1989) (“Music, as a form of expression and
communication, is protected under the First Amendment”). Thus, a restriction on a
specific type of music is, on its face, a content-based restriction on First Amendment
expression and presumptively unconstitutional. See Torries v. Hebert, 111 F. Supp. 2d
806, 818-19 (W.D. La. 2000) (holding that prosecution of a skating rink for contributing
to the delinquency of a minor by playing “gangster rap” was content-based discrimination
violative of the First Amendment); see also DA Mortg., Inc. v. City of Miami Beach, 486
F.3d 1254, 1266 (11th Cir. 2007) (suggesting that laws that “distinguish, for example,
between excessively loud singing, thunderous classical music recordings, reverberating
bass beats” would be considered content-based).
Conditioning liquor licenses on an agreement with a putative licensee that it
refrain from playing a particular type of music or, more generally, suggesting to potential
licensees that they should forbear from certain forms of expressive conduct in exchange
for a license may be unconstitutional. See, e.g., G & V Lounge, Inc. v. Michigan Liquor
Control Comm'n, 23 F.3d 1071, 1077 (6th Cir. 1994) (holding an agreement conditioning
a liquor license on a restriction on topless dancing was unenforceable under the
unconstitutional conditions doctrine). Alternatively, an agreement may avoid First
Amendment challenge by focusing on content-neutral conditions, such as time, place, and
manner restrictions, which have consistently been held to withstand intermediate judicial
19
scrutiny. See, e.g., Ward v. Rock Against Racism, 491 U.S. 781, 803 (1989); Piscatelli v.
Bd. of Liquor License Com’rs, 378 Md. 623, 643 (2003). In conditioning licenses on
content-neutral bases such as requirements to provide extra police or security during live
entertainment events, restrictions on decibel level, and limitations on attendance or
crowd-size, liquor boards would not run afoul of the First Amendment.10
For example in BEG Investments, LLC v. Alberti, 85 F. Supp. 3d 13 (D.D.C.
2015), when faced with incidents of violence in areas surrounding a nightclub that
featured mostly R&B, Hip-Hop, and go-go music—a situation reminiscent of Thai Palace
in 2008—the D.C. Alcohol Beverage Control Board imposed content-neutral conditions
that withstood court scrutiny. The board in that case conditioned the renewal of the night
club’s liquor license on the requirement that the night club hire a Metropolitan Police
Department reimbursable detail “whenever the establishment provides any DJs or live
music as entertainment at the establishment.”11 Id. at 20. The nightclub challenged the
restriction as content-based; however, the district court determined that:
the condition itself does not reflect[] that the Board imposed any
restrictions whatsoever on the content or genre of music that Plaintiff may
play while maintaining its liquor license. According to the Board's order,
Plaintiff was required to hire a reimbursable detail only if it elected to
provide certain forms of live entertainment—a DJ or live music—
regardless of whether the music played was go-go or gospel.
10
Unquestioned in this case is a liquor board’s authority to prevent a licensee from
offering live musical entertainment.
11
A reimbursable detail comprises “MPD officers [who] patrol the surrounding
area of an establishment for the purpose of maintaining public safety.” BEG Investments,
85 F. Supp. 3d at 20.
20
Id. at 36. Furthermore, the Alcohol Beverage Control Board’s explanation for its
imposition of the condition was content-neutral—it was designed to alleviate “negative
impacts on the neighborhood” and was in response to “concerns regarding the
establishment’s effect on peace, order, and quiet” after “a number of violent incidents . . .
[had] occurred at the establishment.” Id. The court held that there was “no question that
the reimbursable detail condition is facially content-neutral, impacting indirectly only the
‘time, place or manner of expression,’ purportedly for the purpose of ameliorating the
establishment’s negative effects on the surrounding neighborhood.” Id.
As shown by these cases, it may be risky for a liquor board to adopt, as an
affirmative policy, restrictions on certain forms of dancing or musical entertainment.
However, the First Amendment issue has been waived and is not preserved for our
review.
“Ordinarily, the appellate court will not decide any other issue unless it plainly
appears by the record to have been raised in or decided by the trial court.” Md. Rule 8-
131(a). This proposition holds for appeals from administrative agencies, such as the
Board, Motor Vehicle Admin. v. Shepard, 399 Md. 241, 260 (2007) (It is a settled
principle of Maryland administrative law that, in an action for judicial review of an
adjudicatory administrative agency decision, the reviewing courts should decline to
consider ‘an issue not raised before the agency), and applies to equally constitutional
issues where the litigant is not challenging the constitutionality of statute in its entirety,
Yim, LLC v. Tuzeer, 211 Md. App. 1, 49 (2013) (Citations omitted) (“[E]ven
21
constitutional issues ‘must be pursued and exhausted’ before the relevant administrative
agency ‘before resort[ing] to the courts’”); Ins. Com'r of State of Md. v. Equitable Life
Assur. Soc. of U.S., 339 Md. 596, 622 (1995).
Thai Palace does not argue that it raised any constitutional issues during the
Board’s enforcement proceeding. It does, however, contend that by raising due process
and equal protection defenses before the circuit court, it preserved its First Amendment
arguments for review in this Court. We disagree—Thai Palace would have had to raise
these claims before the Board to preserve them for our review. Pelham Wood
Apartments, 283 Md. at 518; Yim, LLC, 211 Md. App. at 49. Moreover, even if we were
to acknowledge Appellants’ arguments in the circuit court, we would not construe its due
process and equal protection claims—each with legal standards that differ from a First
Amendment analysis—to be enough to preserve a First Amendment claim made for the
first time on appeal to this Court.12 We conclude that Thai Palace failed to preserve its
First Amendment argument.
Moreover, licensee is precluded from challenging the terms of the consent order
because the licensee proposed the contested terms and because it failed to appeal the
allegedly unconstitutional condition at the time it was included in the court order. Fells
Point Café, 344 Md. at 141 (holding that “when a licensee agrees to reasonable
12
Thai Palace argued before the circuit court that, “One, [the consent order] was
discriminatory as opposed to all types of music. And, two, that as, as to go-go music, it
failed on the due process ground because there was no ascertainable standard for
inclusion or exclusion, and was therefore unconstitutionally vague.” The licensee is no
longer pursuing these due process and equal protection arguments before this Court.
22
restrictions in order to obtain a license that clearly would not otherwise be granted, the
licensee will be estopped from later arguing that the Board had no power to place such a
restriction on the license”). Although Thai Palace argues that the Board would not
modify its liquor license unless it agreed to the restriction on go-go entertainment, the
record does not reveal any statements made by the Board on this point, and the document
containing these restrictions was submitted by the licensee’s attorney. Further, the record
reflects that the licensee did not appeal the legality of the second consent order after it
was issued. See Fells Point Café, 344 Md. at 137 (“If a licensee feels aggrieved by the
conditions sought to be placed on his or her license, he or she should seek judicial review
at the time the conditions are imposed”).
In the instant case, where the licensee proposed the restrictions and did not seek
judicial review until after enforcement, and where the licensee did not raise this issue
before the Board or before the circuit court, we will not decide the First Amendment
question. For the above reasons, we affirm the circuit court.
JUDGMENT OF THE CIRCUIT
COURT FOR CHARLES COUNTY
AFFIRMED. COSTS TO BE PAID
BY APPELLANT.
23