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Chase v. District of Columbia Alcoholic Beverage Control Bd.

July 20, 1995

EDITH B. CHASE, ET AL., PETITIONERS,
v.
DISTRICT OF COLUMBIA ALCOHOLIC BEVERAGE CONTROL BOARD, RESPONDENT, H.H. LEONARDS ASSOCIATES, INTERVENOR.



On Petition for Review of an Order of the District of Columbia Alcoholic Beverage Control Board.

Before Schwelb and King, Associate Judges, and Kern, Senior Judge.

The opinion of the court was delivered by: Schwelb

SCHWELB, Associate Judge: On December 22, 1993, following a public hearing, the District of Columbia Beverage Control Board granted the application of H.H. Leonards, Inc., trading as H.H. Leonards Associates (HHLA), for a Class CX retailer's license for a "club" at "The Mansion," a century-old four-story townhouse located at 2020 O Street, N.W., in a residential neighborhood in Washington, D.C. Petitioners, a group of neighbors and a condominium owners' association, have asked this court to set aside the Board's decision. They contend, inter alia, that the license application was filed less than three months after the club came into existence, in violation of D.C. Code § 25-111 (a)(7)(G) (1991). *fn1 We agree and reverse.

I.

HHLA was organized in August, 1990 as an unincorporated non-profit membership association. In or about 1992, petitioner Susan Menzer, a Justice Department attorney who lived in the area, became concerned because, among other things, valet parking aides at The Mansion closed off the street to her home following an event at the establishment. She also testified that, on days following such events, she would find empty glasses in her garden. She began to investigate, and learned that although alcoholic beverages were served at 2020 O Street, N.W., no liquor license had been issued to anyone at that address. Ms. Menzer complained to the Board, but she was referred to the Metropolitan Police Department because the Board lacked jurisdiction over unlicensed retailers. The police ultimately visited The Mansion and brought the complaint to the attention of HHLA.

Upon learning of the problem, the officers of HHLA voted to incorporate as a non-profit corporation and to apply for a retailer's license. On December 8, 1993, a certificate of incorporation was issued to HHLA. On January 13, 1993, H.H. Leonards, Inc., which represented itself to be "trading as" HHLA, applied to the Board for a license for a "club."

Ms. Menzer and the other petitioners filed submissions with the Board in which they opposed the application on a number of grounds. They contended, inter alia, that the application was invalid under D.C. Code § 25-111 because the "club" seeking a license was not established in time. The Board held extensive public hearings in June and July, 1993, with respect to HHLA's application.

On December 22, 1993, the Board issued its "Findings of Fact, Conclusions of Law, and Order." With respect to the issue addressed in this opinion, the Board held as follows:

Section 11 of the Act, D.C. Code § 25-111(a)(7)(G)(ii) (1991), provides that no Class "CX" license shall be issued for a club that has not been established for three (3) months immediately prior to applying for the license. Section 3(g) of the Act, D.C. Code § 25-103(7) (1991), defines a club as a non-profit corporation but does not specify the length of time a club must be incorporated prior to applying for the license. The legislative history of the Act evidences an intent on the part of the Congress, when adopting the requirement that clubs be in existence for at least a three (3) month period before application for a license, to ensure that only bona fide clubs, as opposed to establishments existing only to serve liquor by the drink, would be licensed. 78 Congressional Record, 268-289, 695-698, 770-776.

Applicant was incorporated as a non-profit corporation in December, 1992, less than three (3) months prior to applying for licensure. However, the Applicant's club was established as a non-profit membership organization in 1990, more than two (2) years prior to its application for licensure. The Board concludes as a matter of law that Applicant's establishment is a legitimate club, existing for purposes greater than the sale of liquor by the drink, that was established more than three (3) months prior to the date of its application for licensure. *fn2

The Board ordered that a retailer's license be issued for the premises. This petition for review followed.

II.

In 1934, Congress enacted legislation which repealed most of the provisions of the National Prohibition Act and created a comprehensive regulatory regime for the manufacture, sale and possession of alcoholic beverages in the District of Columbia. See Act of January 24, 1934, 48 Stat. 319, now codified as D.C. Code §§ 25-101 et seq. The Act deals explicitly with the circumstances under which a private club may obtain a retailer's license, and provides that "no license shall be issued for a club that has not been established for at least 3 months immediately prior to applying for the license." D.C. Code § 25-111 (a)(7)(G)(ii). The Act further provides that "the word 'club' means a corporation for the promotion of some common object (not including corporations organized for any commercial or business purpose, the object of which is money profit) . . . ." D.C. Code § 25-103 (7).

HHLA became a corporation on December 8, 1992, approximately five weeks (and thus less than three months) before it applied for a retailer's license. It was not a corporation three months prior to the filing of the application. A club is, by statutory definition, a corporation. Thus, according to the unambiguous terms of the statute, HHLA could not have been established as a club for ...


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