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Dupont Circle Citizens Association v. District Of Columbia Alchoholic Beverage Control Board

January 25, 2001

DUPONT CIRCLE CITIZENS ASSOCIATION, ET AL., PETITIONERS,
v.
DISTRICT OF COLUMBIA ALCOHOLIC BEVERAGE CONTROL BOARD, RESPONDENT, H.H. LEONARDS ASSOCIATES, INTERVENOR.



Before Wagner, Chief Judge, and Farrell and Ruiz, Associate Judges.

The opinion of the court was delivered by: Farrell, Associate Judge

Petition for Review of a Decision of the District of Columbia Alcoholic Beverage Control Board

Argued October 12, 2000

This petition for review challenges the decision of the District of Columbia Alcoholic Beverage Control Board (the Board) awarding a Retailer's License Class C/X (Club) to intervenor, H.H. Leonards Associates (HHLA). Petitioners *fn1 attack the Board's decision on a variety of substantive and procedural grounds, but primarily argue that the Board misunderstood its statutory obligation by failing to examine whether HHLA currently operates as a for-profit corporation, an inquiry petitioners believe mandated by D.C. Code § 25-103 (7) (1996) (defining "club" to exclude for-profit organizations); and that the Board similarly erred in finding that HHLA met additional licensure requirements of the Club Exception Act, D.C. Code § 25-116 (a). We affirm.

I.

HHLA first applied to the Board in 1993 for a Class C/X retailer's license for a "club" at The Mansions, a townhouse located at 2020 O Street, N.W., in a neighborhood zoned for residential use. The Board granted the license, but that decision was reversed by this court on the ground that HHLA had not been incorporated for three months before filing its application, as required by statute. See Chase v. District of Columbia Alcoholic Beverage Control Bd., 669 A.2d 1264 (D.C. 1995). While that appeal was pending, the Council of the District of Columbia enacted D.C. Law 10-122, which amended D.C. Code § 25-116 (a) so as to preclude issuance of new ABC licenses in areas zoned for residential use. However, in December 1996 the Council enacted D.C. Law 11-258 (effective April 15, 1997), known by shorthand as the Club Exception Act, which provided a six-month "window" for pre-existing private clubs located within residentially-zoned districts to apply for licensure, despite any moratorium on issuance of new licenses. *fn2 See D.C. Code § 25-116 (a) (March 2000 Supp.).

As authorized by D.C. Law 11-258, HHLA filed a new application for a Class C/X Club license in July 1997. After protests were filed, the Board held hearings and, in July 1998, issued findings of fact, conclusions of law, and an order granting HHLA's application with conditions. This petition for review followed.

II.

D.C. Code § 25-116 (a), as amended in 1997, provides in relevant part:

Notwithstanding any moratorium on license issuance declared by the Alcohol Beverage Control Board, a club that meets the requirements of § 25-103 (7) with a valid business license as of January 1, 1996, is located in a residential district, has been established at its existing location for at least 3 years prior to January 1, 1996, and has no outstanding debt to the federal or District of Columbia governments, shall be permitted to apply for a retailers license Class C/X for a period of time not to exceed 6 months after April 12, 1997. The Board, after determining that the requirements of § 25-115 have been met, may issue a retailer's license Class C/X to a club in a residential district notwithstanding any moratorium on license issuance.

Petitioners first contend that in deciding whether HHLA "[met] the requirements of § 25-103 (7)," the Board failed to inquire whether it was currently operating as a nonprofit corporation. Section 25-107 (7) defines a "club" in part to mean "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)." Petitioners argue that under this definition it is not enough for the corporation to be "organized" - in the sense of established or registered, for taxation or other purposes - as a nonprofit organization, but in addition it must be conducted as one, so that the Board was required "to assess HHLA's current, day-to-day operations to determine if it continued to operate as a true nonprofit" (Br. for Pet. at 24). The Board disagreed, and we do also.

There is no dispute that HHLA was and remains "organized" as a nonprofit corporation. An Internal Revenue Service document in the record setting forth HHLA's tax-exempt status confirms that fact. As we explained in Chase, 669 A.2d at 1265, "HHLA was organized in August, 1990 as an unincorporated non-profit membership association," which later "voted to incorporate as a non-profit corporation." In Washington Press Club v. District of Columbia Alcoholic Beverage Control Bd., 476 A.2d 1107 (D.C. 1984), we recognized that § 25-103 (7)'s requirement of nonprofit status is an "organizational" standard, id. at 1108; it focuses on how the corporation is organized and for what purpose, and as such sets forth "an easily administrable standard." Id. at 1110. By contrast, when the Council meant the Board to look beyond organizational purpose to actual conduct, it made that intention clear. D.C. Code § 25- 111 (a)(12) permits a corporation to obtain a so-called "consumption license for a club" provided (inter alia) it is not a "corporation[] organized or conducted . . . for money profit" (emphasis added).

In denying petitioner's request that it assess HHLA's conformity in practice to its nonprofit status, the Board relied correctly on our decision in Kopff v. District of Columbia Alcoholic Beverage Control Bd., 413 A.2d 152 (D.C. 1980). There, despite the fact that the intervenor had been issued a certificate of occupancy by another government agency, the petitioners asked the Board to hear evidence that the certificate should not have been issued because of alleged fire safety conditions. We sustained the Board's exclusion of that evidence, stating:

If the Board had gone behind the certificate of occupancy to ascertain whether or not it was properly issued, the Board would have been acting in effect as a court of appeals over other coordinate administrative departments. The Board has neither the jurisdiction nor the expertise to review compliance with safety requirements in such a manner. The correct avenue for pursuing any alleged violation of ...


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