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Court revives funk-playing Md. restaurant’s First Amendment lawsuit

A federal appeals court Tuesday revived Thai Palace’s lawsuit alleging that the Charles County liquor board violated the Waldorf restaurant’s First Amendment rights by withdrawing its alcohol license after it played funk music in violation of an agreement with the regulatory panel.

In its 3-0 decision, the 4th U.S. Circuit Court of Appeals reversed a federal judge’s dismissal of Thai Palace’s constitutional challenge as having already been essentially litigated unsuccessfully in Maryland state courts.

The 4th Circuit held the constitutional challenge to the board withdrawal could proceed before a federal judge because it was independent of the state litigation, which was a procedural challenge to an administrative act.

But Thai Palace’s victory could be short-lived.

The appellate court said a U.S. District Court judge could still conclude upon reviewing the case that the constitutional claim was in fact “precluded” under Maryland law by the state court decisions upholding the board’s decision.

The issue before the 4th Circuit concerned the application of the Supreme Court’s Rooker-Feldman doctrine under which federal district courts must generally yield to final state court decisions in cases involving the same parties and issues, lest the district court act as an extra appellate tribunal for the state.

In its published ruling, the 4th Circuit held that the doctrine applies to lawsuits brought in state court, not administrative decisions that are appealed to state court. The 4th Circuit added that Thai Palace’s First Amendment claim was independent of its administrative challenge and was brought while that claim was pending in state court, not after it had been decided.

“In the circumstances of this case, we conclude that this federal action is a concurrent, independent action supported by original jurisdiction conferred by Congress on federal district courts, even though the complaint in the action includes claims and legal arguments similar to or the same as those made in the state proceedings, and that therefore it is not barred by the Rooker-Feldman doctrine,” Judge Paul V. Niemeyer wrote in the 4th Circuit’s opinion.

“The state proceeding in this case was an agency-initiated proceeding, in which limited and deferential review was afforded,” Niemeyer added in sending the case back to U.S. District Court. “This [federal-court] action, on the other hand, was commenced … to challenge the constitutionality of the board’s actions under the First Amendment, and the district court possessed original subject matter jurisdiction over such an action under [federal law].”

Kevin B. Karpinski, the board’s attorney, said the 4th Circuit construed the doctrine “very narrowly.” When the case returns to the district court, Karpinski said he will argue that Thai Palace’s constitutional claim has been precluded by the state court rulings.

Karpinski is with Karpinski, Colaresi & Karp P.A. in Baltimore.

Thai Palace’s attorney, Charles G. Byrd Jr., did not return telephone messages Tuesday seeking comment on the decision. Byrd is with Alston & Byrd in Baltimore.

Thai Palace has had a checkered history with the Charles County board.

In 2007, the panel stripped the restaurant of its liquor license for hosting entertainment that featured nudity, according to the 4th Circuit’s opinion.

The board reissued the license two years later on the condition that Thai Palace be a “family restaurant” without live entertainment.

With the restaurant still wanting to provide live – but tamer – entertainment, the board later said Thai Palace could offer instrumental and acoustical music, Karaoke, disc-jockey music and dancing but could not hold “teenager only” events or “go-go entertainment,” referring to the subgenre of funk music.

Thai Palace agreed to the conditions in January 2012 but then contracted with several go-go bands to perform at the restaurant, the opinion stated.

The board moved to revoke the restaurant’s liquor license and did so after holding an evidentiary hearing.

Thai Palace appealed the board’s decision without success to Charles County Circuit Court and the Court of Special Appeals. The state’s top court, the Maryland Court of Appeals, declined to hear the case.

Meanwhile, Thai Palace had filed suit against the board in U.S. District Court in Greenbelt, alleging a violation of its First Amendment rights to free speech and expression. But U.S. District Judge Paul W. Grimm dismissed the claim, saying it was barred by the Rooker-Feldman Doctrine because Maryland courts had already ruled against the restaurant.

Thai Palace then sought review by the 4th Circuit.

Chief Judge William B. Traxler Jr. and Barbara Milano Keenan joined Niemeyer’s opinion in Thai Seafood & Grill Inc., trading as Thai Palace et al. v. Board of License Commissioners for Charles County, Md., No. 15-1660.