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Chipotle defeats Moe’s in Md. high court, can open in Annapolis

Maryland’s top court Tuesday cleared the way for Chipotle Mexican Grill to open a location near the Annapolis waterfront.

The door at a Chipotle Mexican Grill in Robinson Township, Pa. (Gene J. Puskar/AP File photo)

The door at a Chipotle Mexican Grill in Robinson Township, Pa. (Gene J. Puskar/AP File photo)

In a unanimous decision, the Court of Appeals said the restaurant’s competitor, Moe’s Southwest Grill, lacked standing to challenge a zoning board’s decision permitting Chipotle’s entry into the capital city’s dockside market just 425 feet away from a Moe’s eatery. Such zoning challenges are reserved for “persons aggrieved” by a board’s decision, generally those whose land adjoins or abuts the subject property, and not for mere competitors, the high court said in essentially restoring an Anne Arundel County Circuit Court decision.

“The circuit court determined that Moe’s property was not within direct view of Chipotle’s,” Judge Lynne A. Battaglia wrote for the Court of Appeals. “The motivator driving Moe’s to protest the rezoning was, as found by the circuit court judge, ‘simply a matter of competition.’ It is clear however, that, a person is not aggrieved for standing purposes when his sole interest in challenging a zoning decision is to stave off competition with his established business.”

Alan J. Hyatt, Chipotle’s lead appellate attorney, hailed the high court’s decision in a case that arose in 2012.

Moe’s “was not a party that was aggrieved,” said Hyatt, of Hyatt & Weber P.A. in Annapolis.

“That was the simple explanation for a four-year ordeal,” he added. “There was no basis for the appeal other than [Moe’s] wanted to stave off competition, and they have been successful at doing that for these past several years.”

Question of standing

Moe’s, an Atlanta-based chain, had been operating a restaurant at 122 Dock St. in Annapolis for about six years when Chipotle applied to the city’s Department of Planning and Zoning in August 2012 for permission to open an eatery at 36 Market Space.

The department recommended in September 2012 that the Board of Appeals approve Chipotle’s application, which the panel did after holding a public hearing.

Moe’s appealed the approval in Anne Arundel County Circuit Court within 30 days, as required by Maryland’s procedural rules.

But Moe’s right to do business in Maryland was under suspension at the time by the State Department of Assessments and Taxation for failure to make proper filings and pay fees. The suspension was not lifted until the filings were made and fees paid on Sept. 24, 2013 — more than four months after the 30-day deadline for filing an appeal.

Denver-based Chipotle challenged Moe’s appeal, arguing the restaurant lacked standing because it had filed while under SDAT suspension and was neither an aggrieved party nor a payer of property tax, as it was a Dock Street tenant.

The circuit court agreed with Chipotle that Moe’s lacked standing because it was not a taxpayer and the petition was brought to prevent competition.

The intermediate Court of Special Appeals upheld the dismissal of Moe’s challenge but on grounds the circuit court did not address: Moe’s lack of standing based on its filing of the zoning challenge while under SDAT suspension.

The high court, in its 7-0 decision Tuesday, overturned the Court of Special Appeals’ decision and held that Moe’s could in fact “maintain” its challenge under state law because the company subsequently submitted the proper filings and paid the fees.

However, the Court of Appeals ultimately held that Moe’s was not legally aggrieved by the board’s approval of Chipotle’s application.

Moe’s attorney, Sean T. Morris, said he was “gratified” that the high court found the restaurant could maintain its challenge but added he “would have liked the case to have been sent back” to the circuit court for an initial determination of whether Moe’s was aggrieved by the zoning board’s decision.

The circuit court is “the more appropriate court to make the factual findings on aggrievement,” said Morris, a Bethesda solo practitioner.

But the Court of Appeals is “the highest court in the state,” he added. “We have to abide by that.”

Battaglia, a retired judge, participated in the case by special assignment.

The Court of Appeals issued its decision in A Guy Named Moe LLC T/A Moe’s Southwest Grill v. Chipotle Mexican Grill of Colorado LLC, No. 56, September Term 2015.