Bd. of Liquor Lic. Comm'rs v. Kougl

The Board of Liquor License Commissioners for Baltimore City v. Steven Kougl, et al.,
No. 43, September Term, 2016, Opinion by Adkins, J.
ADMINISTRATIVE LAW — LIQUOR BOARD REGULATIONS — STRICT
LIABILITY OFFENSES: The Rules and Regulations for the Board of Liquor License
Commissioners for Baltimore City impose strict liability on licensees for conduct violating
Rules 4.17(a) and (b), which regulate sexual conduct and obscenity on a licensee’s
premises, and Rule 4.18, which prohibits illegal activity on a licensee’s premises.
Circuit Court for Baltimore City
Case No.: 24-C-14-004279
Argued: December 6, 2016
IN THE COURT OF APPEALS
OF MARYLAND
No. 43
September Term, 2016
THE BOARD OF LIQUOR LICENSE
COMMISSIONERS FOR BALTIMORE CITY
v.
STEVEN KOUGL, et al.
Barbera, C.J.
Greene
Adkins
McDonald
Hotten
Getty
Raker, Irma S. (Senior Judge,
Specially Assigned),
JJ.
Opinion by Adkins, J.
Filed: February 17, 2017
The Board of Liquor License Commissioners for Baltimore City (“the Liquor
Board”) charged Respondent Steven Kougl and his company, Kougl, Inc., with violating
provisions of the Rules and Regulations for the Board of Liquor License Commissioners
for Baltimore City (“the Liquor Board Rules” or “the Rules”) that regulate sexual conduct
and prohibit illegal activity on a licensee’s premises. The Liquor Board found that Kougl
violated these Rules and ordered a 30-day suspension of his liquor license. Kougl argues
that the Rules require actual or constructive knowledge on the part of the licensee, and,
therefore, he did not violate them when his employee solicited prostitution and exposed
her breasts without his knowledge. We hold that the Liquor Board Rules at issue impose
strict liability on licensees for prohibited conduct that occurs on their premises.
FACTS AND LEGAL PROCEEDINGS
In April 2013, Detective Fletcher Jackson of the Baltimore City Police
Department’s Special Enforcement Section, Vice Division, conducted an undercover
investigation at Club Harem (“the Club”), an adult entertainment establishment1 owned by
Respondent Steven Kougl.2 During his investigation, one of the Club’s employees,
Jamaica Brickhouse, approached Detective Jackson and engaged him in conversation.
After introducing herself, Brickhouse exposed her breasts to Detective Jackson and invited
1
We use the term “adult entertainment establishment” for description only.
Whether Kougl held an adult entertainment license at the time of the violations is not at
issue in this case.
2
Steven Kougl owns Kougl, Inc., also a party to this action, which does business
under the Club Harem name. Both Kougl and Kougl, Inc. are licensed by the Board of
Liquor License Commissioners for Baltimore City (“the Liquor Board”). As used in this
opinion, “Kougl” refers to both Steven Kougl and his company, Kougl, Inc.
him to touch them. He complied. Detective Jackson then asked Brickhouse if her breasts
“tast[ed] as good as they look[ed].” At this point, Brickhouse proposed a lap dance or
going to “the VIP” where they could “do whatever” so he could “find out.” Detective
Jackson asked if “whatever” meant sexual intercourse, and Brickhouse confirmed that it
did. She also clarified that it would cost $170 for the VIP room plus a tip for her services.
Detective Jackson offered a $100 tip, and Brickhouse accepted. But no money was
exchanged because Brickhouse went on stage to perform and Detective Jackson left the
Club. She was charged with prostitution about eight months later.3
In July 2014, approximately 15 months after the incident, the Liquor Board charged
Kougl with violations of three Liquor Board Rules. Specifically, it charged him with
violations of: (1) Rule 4.17(a), which prohibits the solicitation of prostitution on a
licensee’s premises; (2) Rule 4.17(b), which prohibits indecent exposure on a licensee’s
premises; and (3) Rule 4.18, which prohibits the violation of federal, state, and local laws
on a licensee’s premises.4 After a hearing on July 17, 2014, the Liquor Board found that
Kougl violated all three Rules and imposed a 30-day suspension of his liquor license.5
3
The State nolle prossed these charges on January 6, 2014.
4
At this time, the Liquor Board also charged Kougl with a violation of Rule 4.17(a)
of the Rules and Regulations for the Board of Liquor License Commissioners for Baltimore
City (“the Liquor Board Rules” or “the Rules”) for an incident that occurred on November
11, 2013. At the July 2014 hearing, however, the Liquor Board declined to pursue this
charge.
5
For each of the charges, Kougl was found guilty by a 2-1 vote. The Liquor Board’s
then-Chairman Thomas Ward and Commissioner Harvey E. Jones voted guilty on all three
charges. Commissioner Dana P. Moore voted not guilty.
2
Kougl petitioned for judicial review of the decision in the Circuit Court for Baltimore City.
The Circuit Court affirmed.
Kougl appealed to the Court of Special Appeals. He argued that because he had no
knowledge of Brickhouse’s prohibited activity, he had not violated Rules 4.17(a), 4.17(b),
or 4.18.6 He claimed that the Rules do not impose strict liability. In a published opinion,
the court reversed. It held that the plain meaning of the words “suffer,” “permit,” and
“allow,” as used in Rules 4.17 and 4.18 “necessarily require that some level of knowledge
by the licensee must be established by the evidence.” Kougl v. Bd. of Liquor License
Comm’rs for Balt. City, 228 Md. App. 314, 330 (2016) (citation and internal quotation
marks omitted). The court further held that this knowledge requirement may be satisfied
by evidence of actual or constructive knowledge. Id. at 331. In defining actual knowledge,
the intermediate appellate court explained that there are two types: (1) “actual awareness
or an actual belief that a fact exists” and (2) “deliberate ignorance” or “willful blindness.”
Id. (citation omitted). Because there was no evidence of Kougl’s actual or constructive
knowledge of Brickhouse’s conduct, the court concluded that the Liquor Board erred in
finding him guilty of violating the Rules at issue.
The Liquor Board noted a timely appeal. We granted certiorari to consider the
following question:
6
Kougl also argued that the Liquor Board’s decision was not supported by sufficient
findings of fact and conclusions of law to permit judicial review. Kougl v. Bd. of Liquor
License Comm’rs for Balt. City, 228 Md. App. 314, 320 (2016). The Court of Special
Appeals disagreed. Id. at 324. Neither party has appealed this portion of the court’s
decision.
3
Did the Liquor Board correctly interpret its [R]ules to impose
upon licensees strict liability for sexual display, performance,
or illegal activity conducted on licensed premises, where the
pertinent portions of the [R]ules contain no language limiting
a licensee’s responsibility to situations where the licensee has
actual or constructive knowledge of the offending conduct?
Because we answer this question in the affirmative, we shall reverse the judgment
of the Court of Special Appeals.
STANDARD OF REVIEW
By statute, the General Assembly authorized local liquor boards to promulgate
regulations advancing Maryland Code (1957, 2016 Repl. Vol.), § 1-201 of the Alcoholic
Beverages Article (“AB”), which aims “[t]o obtain respect and obedience to law and to
foster and promote temperance” in furtherance of “the protection, health, welfare, and
safety of the people of the State.” AB § 1-201(a)(1)(i)–(ii), (a)(3). The statute specifically
authorizes the Liquor Board to “adopt regulations to carry out this article.” Md. Code
(1957, 2016 Repl. Vol.), AB § 12-210(a). In 1998, the Liquor Board promulgated revised
Liquor Board Rules. We are tasked with reviewing its interpretation of these regulations.
In Maryland, judicial review of an administrative agency action “is limited to
determining if there is substantial evidence in the record as a whole to support the agency’s
findings and conclusions, and to determine if the administrative decision is premised upon
an erroneous conclusion of law.” United Parcel Serv., Inc. v. People’s Counsel for Balt.
Cty., 336 Md. 569, 577 (1994). Although judicial review of an agency’s factual findings
is “quite narrow,” “it is always within our prerogative to determine whether an agency’s
conclusions of law are correct.” Adventist Health Care, Inc. v. Md. Health Care Comm’n,
4
392 Md. 103, 120–21 (2006) (citations and internal quotation marks omitted). If an
agency’s conclusion is based on an error of law, it will not be upheld. Hoyle v. Bd. of
Liquor License Comm’rs for Balt. City, 115 Md. App. 124, 129 (1997).
But “[e]ven with regard to some legal issues, a degree of deference should often be
accorded the position of the administrative agency.” Finucan v. Md. Bd. of Physician
Quality Assurance, 380 Md. 577, 590 (2004) (citation omitted). Appellate courts should
ordinarily give “considerable weight” to “an administrative agency’s interpretation and
application of the statute which the agency administers.” Md. Aviation Admin. v. Noland,
386 Md. 556, 572 (2005). In this regard, “the expertise of the agency in its own field of
endeavor is entitled to judicial respect.” Finucan, 380 Md. at 590 (citations omitted). An
agency is granted further deference when it interprets a regulation it promulgated, rather
than a statute enacted by the Legislature. Md. Comm’n on Human Relations v. Bethlehem
Steel Corp., 295 Md. 586, 593 (1983). “Because an agency is best able to discern its intent
in promulgating a regulation, the agency’s expertise is more pertinent to the interpretation
of an agency’s rule than to the interpretation of its governing statute.” Id.DISCUSSION
The Liquor Board argues that Liquor Board Rules 4.17(a), 4.17(b), and 4.18 impose
strict liability on licensees for violations that occur on licensed premises. Therefore, it
maintains, Kougl violated the Rules regardless of whether he had actual or constructive
knowledge of his employee’s conduct. The Liquor Board contends that the plain language
meaning of “permit,” “suffer,” and “allow” do not require knowledge. Furthermore, the
Liquor Board argues that the use of “knowingly” in only one provision of the Rules shows
5
that it did not intend to impose a knowledge requirement in the other provisions. Lastly,
the Liquor Board urges us to apply the three-factor test from Dawkins v. State, 313 Md.
638 (1988), to conclude that because the Liquor Board did not designate a mental state
requirement in the language of the Rules, they impose strict liability.
Kougl contends that a licensee must have actual or constructive knowledge of the
conduct at issue to violate the Rules. In other words, he maintains that the Rules require
the Liquor Board to show that the licensee either knew or reasonably should have known
about the goings-on to breach the regulations. He argues that the words “permit,” “suffer,”
and “allow” require a licensee to have knowledge of the offending conduct. Thus, he
contends, the Liquor Board was required to show that he knew or should have known about
his employee’s actions to find a violation of the Rules and suspend his liquor license.7
Plain Language Meaning
Although we accord an agency considerable deference in interpreting its own
regulations, we review its conclusions of law for error by applying our well-settled
principles of statutory interpretation. Hranicka v. Chesapeake Surgical, Ltd., 443 Md. 289,
297–98 (2015) (citation omitted). Therefore, we begin by analyzing whether the plain
language of the Rules supports imposing strict liability. Like a statute, a regulation’s plain
7
During oral argument, through counsel, Kougl also argued that only statutes and
regulations concerning minors, such as the Liquor Board Rule at issue in Hoyle v. Board
of Liquor License Commissioners for Baltimore City, 115 Md. App. 124 (1997), impose
strict liability. We have acknowledged that “[l]egislators generally have broader discretion
in enacting laws to promote the health and welfare of children than they have for adults.”
Owens v. State, 352 Md. 663, 681 (1999). But we have never held that strict liability
applies only to regulations seeking to protect minors, and we decline to do so here.
6
language is “the best evidence of its own meaning.” Total Audio-Visual Sys., Inc. v. Dep’t
of Labor, Licensing & Regulation, 360 Md. 387, 395 (2000) (citations omitted). When
interpreting the regulation, “it is proper to consult a dictionary or dictionaries for a term’s
ordinary and popular meaning.” Chow v. State, 393 Md. 431, 445 (2006) (citations
omitted). “[W]hen the language is clear and unambiguous, our inquiry ordinarily ends
there.” Christopher v. Montgomery Cty. Dep’t of Health & Human Servs., 381 Md. 188,
209 (2004) (alteration in original) (citation omitted). We conduct this plain language
inquiry within the context of the regulatory scheme, and “our approach is a
commonsensical one designed to effectuate the purpose, aim, or policy of the enacting
body.” Id. (citation and internal quotation marks omitted).
Liquor Board Rule 4.17 governs sexual conduct and obscenity on licensed
premises.8 Sections (a) and (b) of the Rule provide:
(a) No licensee shall permit or suffer his premises to be
used for the purpose of any sexual activity, nor shall any
licensee permit or suffer any employee, patron or frequenter
to solicit any person for prostitution or other immoral purposes.
8
Effective January 1, 2016, Rule 4.17 was revised and renumbered. Sections (a)
and (b) of the current version, now numbered Rule 4.15, provide:
(a) A licensee may not permit the licensed premises to
be used for any sexual activity. A licensee, any employee,
patron or frequenter may not solicit any person for prostitution
or other immoral purposes.
(b) A licensee may not permit a person to appear in an
act or other performance with breasts or the lower torso
uncovered. A licensee may not knowingly permit the licensed
premises to be used for the conduct, exhibition, or any
unlawful performance.
7
(b) No licensee shall permit or suffer any person to
appear in any act or other performance with breasts or the
lower torso uncovered; nor shall any licensee knowingly
permit or suffer his premises to be used for the conduct,
exhibition or performance of an obscene act or other
performance.
(Emphasis added.) The Liquor Board found that Kougl “permit[ted] or suffer[ed] [an]
employee . . . to solicit [a] person for prostitution” in violation of Rule 4.17(a). It also
found that Kougl “permit[ted] or suffer[ed] [a] person to appear in [an] act or other
performance with breasts . . . uncovered” in violation of Rule 4.17(b).9 Kougl argues that
because he was not aware of his employee’s conduct, he did not “permit” or “suffer” her
actions. In other words, he contends that Rule 4.17 includes an actual or constructive
knowledge requirement. We disagree.
Black’s Law Dictionary (Black’s) provides three definitions for “permit”: (1) “[t]o
consent to formally”; (2) “[t]o give opportunity for”; and (3) “[t]o allow or admit of.”
Permit, Black’s Law Dictionary (10th ed. 2014). To consent to something formally, the
actor certainly must know about the approved activity. But the second definition—“[t]o
give opportunity for”—does not require the actor’s knowledge of the conduct at issue.
Black’s provides as an example, “[L]ax security permitted the escape.” Just as lax security
could permit an escape without knowledge that it is happening, licensees can permit
prohibited conduct without knowledge of the offending behavior. Similarly, the third
9
The Liquor Board maintains that Kougl’s employee appeared in a “performance”
under Rule 4.17(b) when she exposed her breasts to Detective Jackson. Kougl does not
challenge this interpretation of the Rule.
8
definition does not require knowledge on the part of the actor because, as discussed below,
a licensee can “allow” prohibited conduct without knowledge that it is occurring.
To choose the appropriate definition, we look to the agency’s interpretation of its
own regulation. Md. Transp. Auth. v. King, 369 Md. 274, 288–89 (2002) (citations
omitted). We give deference to an agency’s interpretation “unless it is plainly erroneous
or inconsistent with the regulation.” Id. (citations and internal quotation marks omitted);
see also Md. Comm’n on Human Relations, 295 Md. at 593 (“the agency’s construction of
its rule is entitled to weight”). Because neither is the case here, we hold that a licensee can
unknowingly “permit” conduct prohibited by Rules 4.17(a) and (b).
Black’s defines “suffer” as “[t]o allow or permit (an act, etc.).” Suffer, Black’s Law
Dictionary. As established above, “permit” does not require knowledge, and—as discussed
below—neither does “allow.” Black’s provides “to suffer a default” as an example of how
“suffer” is used. Id. A loan enters default when the borrower fails to make payments,
regardless of whether the borrower was aware of the obligation to pay. Accordingly, by its
plain meaning, “suffer” does not impose a knowledge requirement on Rules 4.17(a) or (b).
Moreover, other states interpreting the words “permit” and “suffer” in liquor board
regulations have concluded that they impose strict liability. See, e.g., Div. of Alcoholic
Beverage Control v. Maynards Inc., 927 A.2d 525, 538 (N.J. 2007) (“It has long been the
law in New Jersey that, in the context of the regulation of alcoholic beverages, the word
suffer . . . imposes responsibility on a licensee, regardless of knowledge . . . .” (emphasis
in original) (citation and internal quotation marks omitted)); City of West Allis v. Megna,
133 N.W.2d 252, 253 (Wis. 1965) (regulation that provide[d] “no keeper of a tavern . . .
9
shall . . . suffer or permit” anyone under 21 to enter the licensed premises impose[d] strict
liability).10
The Liquor Board found that Kougl also violated Rule 4.18, which prohibits illegal
conduct on a licensee’s premises.11 The Rule provides:
No licensee shall commit or allow the commission on
his premises of any act which shall be contrary to any federal,
state or local statute, law or ordinance or against the public
peace, safety, health, welfare, quiet or morals.
(Emphasis added.) Similar to his argument regarding Rules 4.17(a) and (b), Kougl argues
that “allow” requires actual or constructive knowledge. The plain meaning of the word
proves otherwise. The first definition in Black’s for “allow” includes “[t]o put no obstacle
in the way of” and “to suffer to exist or occur.” Allow, Black’s Law Dictionary. These
definitions do not contain a knowledge requirement. A licensee could both “put no obstacle
in the way of” illegal conduct and not realize it is happening.
10
We are aware that some courts have found that “suffer” and “permit” require
knowledge on the part of the licensee. See, e.g., Leake v. Sarafan, 315 N.E.2d 796, 797
(N.Y. 1974) (knowledge required to find that licensee suffered or permitted gambling on
licensed premises); Full Moon Saloon, Inc. v. City of Loveland, 111 P.3d 568, 570 (Colo.
App. 2005) (“The word ‘permit’ connotes affirmative or knowing conduct.”). We disagree
with these courts.
11
Effective January 1, 2016, Rule 4.18 was revised and renumbered. The current
Rule, which is now numbered Rule 4.16, provides:
A licensee may not commit or allow the commission on
the licensed premises of an act that is contrary to any federal,
State or local statute, law or ordinance or that is against the
public peace, safety, health, welfare, quiet, or morals.
10
Black’s also defines “allow” as “[t]o give consent to; to approve” and “[t]o grant
permission,” which require the actor’s knowledge. But, as discussed above, our task is not
to determine whether any possible definition includes a knowledge requirement. Rather,
it is to determine whether the Liquor Board’s interpretation of its Rules is legally correct.
See Adventist Health Care, 392 Md. at 120–21 (citations omitted) (Courts review an
agency’s conclusions of law de novo.). Because an accepted definition of “allow” does not
require knowledge—and we grant the Liquor Board’s interpretation some deference—we
hold that Rule 4.18 imposes strict liability.
The Liquor Board also argues that in the absence of other language designating a
mental state requirement, the use of the term “knowingly” in the second part of Rule
4.17(b) suggests the agency intended those Rules that do not include the term to impose
strict liability. In response, Kougl contends that “knowingly” was included in the second
phrase of 4.17(b) by “happenstance.” We agree with the Liquor Board.
The Court of Special Appeals analyzed a Liquor Board Rule with a similar structure
to Rule 4.17(b) in Hoyle v. Board of Liquor License Commissioners for Baltimore City,
115 Md. App. 124 (1997). It concluded that the Liquor Board Rule prohibiting the sale of
alcohol to minors imposed strict liability on licensees. Id. at 130. Rule 4.01(a) provided:
(a) No licensee shall sell or furnish alcoholic beverages
to any person under twenty-one (21) years of age or to any
person with the knowledge that such person is purchasing or
acquiring such beverages for consumption by any person under
twenty-one (21) years of age.
(Emphasis added.) Comparing the Rule’s two phrases, the court explained that as opposed
to the second phrase—the prohibition on selling alcohol to someone buying it for a minor—
11
the first phrase—the prohibition on selling alcohol to anyone under twenty-one—“stands
alone, unmodified by express terms.” Id. at 130. Emphasizing that the agency interpreted
this regulation to impose strict liability, the court concluded that “the intent of the [Liquor]
Board was to make those licensees who furnish alcoholic beverages to anyone under the
age of twenty-one strictly liable for the offense.” Id.
Additionally, in State of Maryland Central Collection Unit v. Jordan, 405 Md. 420(2008), we held that a statute requiring vehicle owners to maintain car insurance imposed
strict liability due, in part, to the Legislature’s use of “knowingly” elsewhere in the
statutory scheme. Id. at 431–32. The statute at issue was “silent as to whether knowledge
or intent is a required element for a violation thereof.” Id. at 430. Although we
acknowledged that the “absence of such language in a statute . . . does not necessarily make
it a strict liability offense,” we reasoned that because the Legislature articulated a mental
state requirement for other provisions within the statutory scheme, it intentionally omitted
one from the provision at issue. Id. at 430–32 (citing Staples v. United States, 511 U.S.
600, 619 (1994)) (additional citations omitted). We explained, “The Legislature’s
omission of a mens rea requirement in [this provision] . . . leads us to conclude that the
Legislature deliberately chose not to make knowledge an element of the offense of
maintaining the required security on an automobile.” Id. at 431–32; see also Outmezguine
v. State, 335 Md. 20, 43 (1994) (When the surrounding provisions contained a knowledge
requirement, the “conspicuous absence” of such a requirement in the offense of
photographing a minor engaged in sexual activity revealed an intent to impose strict
liability.); Garnett v. State, 332 Md. 571, 585–86 (1993) (Omitting “knows or should
12
reasonably know” from the statutory rape provision, but including it in surrounding
provisions, “indicates that the Legislature aimed to make statutory rape with underage
persons a more severe prohibition based on strict criminal liability.”).
When interpreting a regulation, we must read each provision in the context of the
regulatory scheme to ensure that “no word, clause, sentence, or phrase is rendered
surplusage, superfluous, meaningless, or nugatory.” In re Kaela C., 394 Md. 432, 467
(2006) (citation omitted). An interpretation of the Rules that requires the licensee to act
with actual or constructive knowledge would render superfluous the word “knowingly” in
Rule 4.17(b). Thus, we conclude that Rules 4.17(a), 4.17(b), and 4.18 do not include a
knowledge requirement—they impose strict liability.
The plain language meaning of the Rules comports with the purpose of Maryland’s
liquor regulations, which seek to ensure respect and obedience for the law. AB § 1-
201(a)(1)(i). Additionally, a liquor license is a privilege, and the Liquor Board has the
power to circumscribe that privilege as “deemed necessary to prevent [its] abuse.”
Piscatelli v. Bd. of Liquor License Comm’rs, 378 Md. 623, 639 (2003) (quoting Dundalk
Liquor Co. v. Tawes, 201 Md. 58, 65 (1953)); AB § 12-2101(a). We agree with the New
Jersey Supreme Court that “acceptance of the privileges and benefits of a liquor license in
this State carries with it the burden that licensees are held to an exacting standard of
conduct.” Maynards, 927 A.2d at 539. Moreover, as the Wisconsin Supreme Court has
recognized, being subject to strict liability is “a price that the [licensee] pays for the
privilege of becoming licensed.” City of West Allis, 133 N.W.2d at 254.
13
Dawkins Factors
In addition to its plain meaning arguments, the Liquor Board contends that the Rules
are “public welfare offenses” under the three-factor analysis applied in Dawkins v. State,
313 Md. 638 (1988). Thus, it argues, the Rules appropriately impose strict liability on
licensees to further their regulatory purpose. In response, Kougl points to State v.
McCallum, 321 Md. 451 (1991), where this Court held that a criminal statute prohibiting
driving on a suspended license did not satisfy the Dawkins factors and therefore required
actual or constructive knowledge on the part of the driver. He urges us to adopt the
definition of knowledge from Judge Chasanow’s concurring opinion, which includes
“willful blindness.”12
In Morissette v. United States, 342 U.S. 246 (1952), the Supreme Court defined
“public welfare offenses” as “regulations which heighten the duties of those in control of
particular industries, trades, properties or activities that affect public health, safety or
welfare.” Id. at 254. It distinguished “public welfare offenses” from traditional common-
law, criminal offenses:
These cases do not fit neatly into any of such accepted
classifications of common-law offenses, such as those against
the state, the person, property, or public morals. Many of these
offenses are not in the nature of positive aggressions or
invasions, with which the common law so often dealt, but are
in the nature of neglect where the law requires care, or inaction
12
In his State v. McCallum, 321 Md. 451 (1991), concurring opinion, Judge
Chasanow explained that actual knowledge includes “deliberate ignorance” or “willful
blindness,” which “exists where a person believes that it is probable that something is a
fact, but deliberately shuts his or her eyes or avoids making reasonable inquiry with a
conscious purpose to avoid learning the truth.” Id. at 458 (Chasanow, J., concurring)
(citations omitted).
14
where it imposes a duty. Many violations of such regulations
result in no direct or immediate injury to person or property but
merely create the danger or probability of it which the law
seeks to minimize.
Id. at 255–56. The Supreme Court explained that “lawmakers . . . have sought to make
such regulations more effective by invoking criminal sanctions to be applied by the familiar
technique of criminal prosecutions and convictions.” Id. at 254–55 (footnote omitted).
Furthermore, courts have allowed legislatures to forego the traditional mental state
requirement for criminal acts and impose strict liability for these offenses. Id. at 258–59.
In Dawkins v. State, we analyzed three factors to determine whether statutes
prohibiting the possession of a controlled dangerous substance and the possession of drug
paraphernalia constituted “public welfare offenses.” We held that the statutes did not
constitute “public welfare offenses” and declined to impose strict liability. Dawkins, 313
Md. at 651–52. Relying on Morissette, we explained that strict liability “public welfare
offenses” often have the following characteristics: (1) they are “regulatory in nature”; (2)
they involve light fines or penalties; and (3) “regardless of the defendant’s state of mind,
the defendant is generally in a position to prevent the violation from occurring.” Id. at
644–45 (citing Morissette, 342 U.S. at 256) (additional citations omitted). But this three-
factor inquiry is not applicable in this case.
Recognizing that criminal liability generally requires criminal intent, the Dawkins
Court analyzed whether it was appropriate for a criminal statute to impose strict liability.
Id. at 643 (“At common law, a crime occurred only upon the concurrence of the
individual’s act and his guilty state of mind.”). We have explained, “The requirement that
15
an accused have acted with a culpable mental state is an axiom of criminal jurisprudence.”
Garnett, 332 Md. at 578–80 (describing scholars’ rejection of strict criminal liability).
Therefore, we are “reluctant to read into criminal statutes an intent of the [L]egislature to
forego a mens rea requirement.” Owens v. State, 352 Md. 663, 671 (1999). Consequently,
we apply the Dawkins factors to criminal statutes to determine whether “the Legislature
intended to eliminate the requirement of mens rea and create a strict liability public welfare
offense.” McCallum, 321 Md. at 456; see also Lowery v. State, 430 Md. 477, 501–03
(2013) (applying Dawkins analysis to criminal prohibition on hydraulic clam dredging in
a protected area).
Because the Liquor Board Rules are civil regulations, however, there is no
presumption against strict liability. See Mesbahi v. Md. State Bd. of Physicians, 201 Md.
App. 315, 339 (2011) (When interpreting civil regulatory statutes, “[t]he presumption
against strict liability offenses in criminal law is irrelevant.”); Council on Am.-Islamic
Relations Action Network, Inc. v. Gaubatz, 123 F. Supp. 3d 83, 87 (D.D.C. 2015) (declining
to impose criminal law’s presumption against strict liability to civil provisions of the D.C.
Wiretap Act); Long v. Hammond, 596 S.E.2d 839, 845–46 (N.C. Ct. App. 2004) (rejecting
argument that presumption against strict liability applies to civil aspect of state licensing
requirements for ERISA certified health plans). Therefore, we do not need to apply the
Dawkins analysis to determine whether the presumption has been overcome. Because we
decline to apply the Dawkins factors to the Liquor Board Rules at issue, the Court’s
reasoning in McCallum is not analogous to this case.
16
CONCLUSION
Liquor Board Rules 4.17(a) and (b), and 4.18 impose strict liability on licensees for
offending conduct that occurs on their premises. Therefore, the Liquor Board was not
required to show that Kougl knew or should have known about his employee’s actions to
find a violation of the Rules and impose a sanction. Accordingly, we reverse the judgment
of the Court of Special Appeals.
JUDGMENT OF THE COURT OF
SPECIAL APPEALS REVERSED. COSTS
TO BE PAID BY RESPONDENT.
17