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Gallothom, Inc. v. Dist. of Columbia Alcoholic Beverage Control Board

March 20, 2003

GALLOTHOM, INC., PETITIONER,
v.
DISTRICT OF COLUMBIA ALCOHOLIC BEVERAGE CONTROL BOARD, RESPONDENT.
RUTH GOODWIN, INTERVENOR.



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

Before Wagner, Chief Judge, and Schwelb and Washington, Associate Judges.

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

Argued April 11, 2001

On March 8, 2000, the Alcoholic Beverage Control Board (Board) issued a final order denying petitioner, Gallothom, Inc. (Gallothom), a renewal of a liquor license for the Isle Restaurant. On appeal, petitioner alleges that: 1) the doctrines of res judicata and collateral estoppel bar the Board from not renewing its liquor license; 2) the Board violated Gallothom's due process rights by issuing a final decision after a hearing where none of the members of the Board who signed the decision was present; and 3) a new hearing should be ordered because the Board did not issue the final decision within 120 days. We disagree with the petitioner and affirm the agency's ruling.

I.

The Isle Restaurant (Isle), owned by Gallothom, has held a class "C" liquor license since 1971. In January 1989, Gallothom applied for and received a class "CN" license from the Board for Isle because the restaurant allowed nude dancing. In December 1998, Gallothom filed an application to renew its liquor license, after which Advisory Neighborhood Commission (ANC) Representative Ruth Young Goodwin and ANC Chairperson Joseph Bowser filed a timely protest pursuant to D.C. Code § 25-315 (a) (2001). The protest alleged that Isle adversely affected the peace, order and quiet of the neighborhood, residential parking, vehicular and pedestrian safety, and real property values in the neighborhood. Protest hearings were held on March 17, 1999 and May 19, 1999. On October 6, 1999, the Board issued a proposed order, as opposed to a final order, pursuant to D.C. Code § 2-509 (2001) denying renewal of the license. Gallothom filed an exception to the Board's proposed order to which the protestants filed a reply. A hearing on Gallothom's exceptions to the proposed order was held before the Board on January 19, 2000. The Board then issued a final order on March 8, 2000, concluding that Isle adversely affected the peace, order, and quiet of the neighborhood and denying Gallothom's request to renew its liquor license. Gallothom now seeks review of this decision.

II.

A. Res judicata

Gallothom argues that the doctrines of res judicata and collateral estoppel, absent new facts or circumstances, preclude the Board from not renewing its license because the license had been renewed in the past. "Res judicata bars a claim based on the same factual transaction and the same parties if an action was brought or could have been brought in a forum that has rendered a final decision on the merits." Herbin v. Hoeffel, 806 A.2d 186, 193 (D.C. 2002) (citation omitted). While "[c]ollateral estoppel, or issue preclusion, renders conclusive in the same or a subsequent action determination of an issue of fact or law when (1) the issue is actually litigated and (2) determined by a valid, final judgment on the merits; (3) after a full and fair opportunity for litigation by the parties or their privies; (4) under circumstances where the determination was essential to the judgment, and not merely dictum." Davis v. Davis, 663 A.2d 499, 501 (D.C. 1995) (citation omitted).

This court has held that the doctrines of res judicata and collateral estoppel apply in administrative cases only "when the agency is acting in a judicial capacity, resolving disputed issues of fact properly before it which the parties have an adequate opportunity to litigate." Oubre v. District of Columbia, 630 A.2d 699, 703 (D.C. 1993) (citing William J. Davis, Inc. v. Young, 412 A.2d 1187, 1194 (D.C. 1980)). Thus, "[t]he threshold inquiry is whether the earlier proceeding, is the essential equivalent of a judicial proceeding." Id. at 703. However, the application of res judicata in administrative decisions "is not encrusted with the rigid finality that characterizes the precept in judicial proceedings," id. at 703-04 (quoting Grose v. Cohen, 406 F.2d 823, 825 (4th Cir. 1969)) and there may be practical reasons to refuse to apply the doctrines. Id. Furthermore, "an administrative agency decision, issued pursuant to a statute, cannot have preclusive effect when [the legislature], either expressly or impliedly, indicate[s] that it intended otherwise." Texas Inst. Inc. v. Cypress Semiconductor Corp., 90 F.3d 1558, 1568 (Fed. Cir. 1996), cert. denied, 520 U.S. 1228 (1997) (citing Astoria Fed. Sav. & Loan Ass'n v. Solimino, 501 U.S. 104, 110 (1991)).

Gallothom contends that since past Boards have concluded that Isle was appropriate for the neighborhood and that there was not a problem with littering, loitering, public urination, parking, or criminal activity, these prior decisions prevent the Board from reviewing the same factors in ruling on its renewal application. We disagree. This claim is not precluded under a theory of either res judicata or collateral estoppel because the legislature clearly intended that each renewal of a liquor license is a new factual transaction, separate and distinct from both the original transaction of acquiring the license and prior renewals of the license.

The Board has the statutory authority to issue a liquor license for a two-year period, after which the license can be renewed. D.C. Code § 25-104 (b) (2001). Before renewing the license, however, the statute requires the Board to make new findings, separate and apart from any prior findings, that the establishment "is appropriate for the locality, section, or portion of the District where it is to be located." D.C. Code § 25-313 (a) (2001). The statute on its face explicitly provides for a new finding and it is clear that prior adjudications are subject to modification and reexamination. To conclude otherwise would lead to an absurd result because the factors impacting the renewal of a license are based on events subsequent to an establishment's last hearing. Furthermore, our conclusion comports with the clear legislative intent of the statute. By providing for renewal of the license and a protest hearing every two years, the legislature intended to give the public the opportunity to challenge the renewal of an alcohol license. See Report of the D.C. Council Comm. on Consumer and Reg. Affairs on Bill 6-504, District of Columbia Alcoholic Beverage Control Act Reform Amendment Act of 1986 (Nov. 12, 1986), at 2.

B. Due Process

Gallothom asserts that its due process rights were violated because: 1) a proposed decision was issued even though all the members of the Board were not present during the evidentiary hearings; and, 2) a final decision was issued even though the members of the Board viewed different evidentiary hearings. Gallothom contends that since the members of the Board were not present at the same hearing, they were unable to ...


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