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Law Digest — 4th US Circuit, Md. Court of Appeals — March 31, 2022

U.S. Court of Appeals for the 4th Circuit

Constitutional; religious zoning regulations: Where a church was aware of zoning restrictions when it purchased property, it could not have had a reasonable expectation of religious land use, dooming its claim under the Religious Land Use and Institutionalized Persons Act, or RLUIPA. And because the land use restrictions were rationally related to the government’s interest in protecting the region’s watershed, the church’s free exercise claim was rejected. Canaan Christian Church v. Montgomery County Maryland, Case No. 20-2185 (filed March 22, 2022).

Maryland Court of Appeals

Administrative; successor beer manufacturer: Where Blue Ribbon LLC purchased Pabst Brewing Company, but neither Blue Ribbon nor its shareholder held any right to sell, distribute or import any of the Pabst beer brands in Maryland, Blue Ribbon was not a “successor beer manufacturer” under Maryland’s Successor Manufacturers Law. Pabst Brewing Company v. Frederick P. Winner Ltd., No. 8, Sept. Term, 2021 (filed March 25, 2022).

Arbitration; statute of limitations: Where the parties agreed to arbitrate any disputes, the expiration of the statute of limitations did not extinguish a party’s right to arbitrate. The history and text of § 5-101 of the Courts Article confirm that it does not apply to the remedy for enforcing the contractual right to arbitrate. Park Plus, Inc. v. Palisades of Towson, LLC and Encore Development Corp., No. 7, Sept. Term, 2021 (filed March 25, 2022).

Criminal; inconsistent verdicts: Where a jury’s verdicts were factually inconsistent, but not legally inconsistent, the circuit court did not err in accepting the jury’s verdicts. Williams v. State, No. 37, Sept. Term, 2021 (filed March 25, 2022).

Evidence; regulatory violation: Where the Code of Maryland Regulations requires an individual who is to be given a breath test to be observed for at least 20 minutes before the sample is taken, an alleged lack of compliance with this requirement goes to the weight to be afforded breath test results by the trier of fact, not to their admissibility. Dejarnette v. State, No. 41, Sept. Term, 2021 (filed March 25, 2022).

U.S. Court of Appeals for the 4th Circuit

Constitutional

Religious zoning regulations

BOTTOM LINE: Where a church was aware of zoning restrictions when it purchased property, it could not have had a reasonable expectation of religious land use, dooming its claim under the Religious Land Use and Institutionalized Persons Act, or RLUIPA. And because the land use restrictions were rationally related to the government’s interest in protecting the region’s watershed, the church’s free exercise claim was rejected.

CASE: Canaan Christian Church v. Montgomery County Maryland, Case No. 20-2185 (filed March 22, 2022) (Judges King, THACKER) (Judge Richardson, concurs).

FACTS: In this case, the court addresses whether Montgomery County, its council and its chief executive complied with the Religious Land Use and Institutionalized Persons Act, or RLUIPA, and the Free Exercise Clause of the First Amendment when it denied water and sewer category change requests, or WSCCRs,  submitted on behalf of Canaan Christian Church, when Canaan sought to purchase and develop five neighboring pieces of land from the landowners. The district court denied appellants’ motion for summary judgment and granted summary judgment to appellees.

LAW: The court utilizes a two-step analysis to determine whether or not a substantial burden is imposed: (1) whether the impediment to the organization’s religious practice is substantial and (2) whether the government or the religious organization is responsible for the impediment.

There is undisputed evidence of an unmet religious need. The burdens described by appellants are an overcrowded facility, the need for multiple services to accommodate the number of members and a lack of space for programs. And it is uncontested that if Canaan wishes to build a church of this size with public sewer access, it would need to find a different property.

However, appellants have not presented evidence that the restriction on religious use is absolute. To the contrary, the county indicated during and after its review of the Canaan WSCCRs that alternatives might have been more successful. Nonetheless, appellants argue the restriction on religious use in this case is absolute despite the fact that the county considered and approved a smaller facility serviced by septic on the property. The fact that there are practical and legal restrictions preventing a larger development on the property does not amount to a RLUIPA substantial burden violation. Therefore, appellants do not demonstrate that they satisfy the first step in the analysis.

Appellants also cannot demonstrate they had a reasonable expectation of religious land use. Because appellants knowingly entered into a contingent sale agreement for property that was expressly excluded from receiving public sewer access under the master plan, they could not have had a reasonable expectation of the county approving their WSCCRs for public sewer access.

The Eleventh Circuit has held that “[a] plaintiff bringing an as-applied Equal Terms challenge must present evidence that a similarly situated nonreligious comparator received differential treatment under the challenged regulation.” This “similarly situated nonreligious comparator” analysis has been favored by several other circuits, “with most holding that a comparator for an equal terms claim must be similarly situated with regard to the regulation at issue.” The court finds this reasoning persuasive.

Appellants fail to identify a comparator subject to the BCNP that was treated more favorably than Canaan. The history of denied or deferred WSCCRs for both religious and secular developments on the property demonstrate the county’s consistency in applying the master plan when reviewing applications for water and sewer extensions.

The BCNP is facially neutral and generally applicable, and appellants fail to offer evidence that the county had a discriminatory motive that would trigger strict scrutiny. Therefore, rational basis is the appropriate level of review here. Appellants have not shown that BCNP is not rationally related to a legitimate governmental interest. To the contrary, as the district court concluded, the county’s plan to protect the “sensitive” “tributary headwaters, which originate in the [property]” is a legitimate interest and the BCNP furthers that interest by restricting development to prevent damage to the watershed. Thus, the county’s actions withstand rational basis review.

Affirmed.

CONCUR: I write separately for two reasons. First, to point out a few minor concerns with the majority’s reading of the Equal Terms provision of the RIULPA. Second, to expand on Judge Thacker’s Free Exercise analysis because I believe there is a complication that makes this a closer question than it may at first seem. Neither difference changes my view of the outcome, and I agree that all of Canaan’s claims were properly dismissed.

Maryland Court of Appeals

Administrative

Successor beer manufacturer

BOTTOM LINE: Where Blue Ribbon LLC purchased Pabst Brewing Company, but neither Blue Ribbon nor its shareholder held any right to sell, distribute or import any of the Pabst beer brands in Maryland, Blue Ribbon was not a “successor beer manufacturer” under Maryland’s Successor Manufacturers Law.

CASE: Pabst Brewing Company v. Frederick P. Winner Ltd., No. 8, Sept. Term, 2021 (filed March 25, 2022) (Judges Getty, McDonald, Watts, Hotten, Booth, BIRAN, Wilner).

FACTS: Under Maryland’s Successor Manufacturers Law, or SML, a beer manufacturer generally may not terminate or refuse to renew a contract with a distributor without cause. An exception exists where a “successor beer manufacturer” inherits a contract between a beer brand’s previous manufacturer and the brand’s distributor. In that scenario, the successor beer manufacturer may elect to terminate the contract without cause, in which case the distributor is entitled to receive the fair market value of the terminated distribution rights.

In 1994, Pabst Brewing Company began a contractual relationship with Frederick P. Winner Ltd. under which Winner and its predecessor entity distributed Pabst beer brands in Maryland. In 2014, Blue Ribbon LLC purchased 100 percent of the stock of Pabst’s parent entity. In 2015, Pabst terminated its contract with Winner. Pabst claimed that Winner’s termination was permitted under the SML.

Winner disputed that contention, and sued Pabst. The circuit court agreed with Pabst that Blue Ribbon was a successor beer manufacturer under the SML, and that Blue Ribbon therefore was permitted to cause Pabst to terminate its contract with Winner without cause. The Court of Special Appeals disagreed with the circuit court’s reading of the SML.

LAW:  The SML provides that a “‘[s]uccessor beer manufacturer’ includes a person or license holder who replaces a beer manufacturer with the right to sell, distribute, or import a brand of beer.” Winner argues that the plain language of the SML requires the replacement of an existing beer manufacturer by another as the holder of the state-issued license or permit that allows the beer manufacturer to sell, distribute or import a brand of beer in Maryland. Pabst disagrees, contending that the SML plainly encompasses the situation where a change of corporate control of a beer manufacturer occurs, but where no entity replaces the beer manufacturer as the holder of a state-issued license or permit with respect to a beer brand. We agree with Winner.

The key phrases in § 5-201(a)(5) are “replaces a beer manufacturer” and “with the right to sell, distribute, or import a brand of beer.” The verb “replace” means “to take the place of especially as a substitute or successor[,]” or “to put something new in the place of.” Thus, the plain language of § 5-201(a)(5) contemplates that a “successor beer manufacturer” takes the place of an existing “beer manufacturer.” And the legislative history of the SML confirms Winner’s interpretation of the statutory language.

Pabst makes several arguments in support of an alternative interpretation of the meaning of a “successor beer manufacturer” that turns on a person’s or entity’s control of a license or permit holder. None are persuasive. Rather, adopting Pabst’s interpretation of the SML would lead to confusion and would be inconsistent with settled principles of corporate law. These consequences further convince us that Winner’s interpretation of the SML is consistent with legislative intent.

Here, Mr. Kashper – the majority owner of Blue Ribbon – caused Blue Ribbon to purchase 100 percent of Pabst Holdings, which in turn owns the membership interests in Pabst. However, Mr. Kashper does not personally own Pabst’s assets, nor does he personally hold any right to sell, distribute or import any of the Pabst beer brands in Maryland. The same is true for Blue Ribbon. Both before and after the sale of Pabst Holdings from PCH to Blue Ribbon, Pabst was a distinct legal entity, separate from its shareholders.

It follows that neither Mr. Kashper nor Blue Ribbon qualifies as a successor beer manufacturer under the SML. Because they were not “successor beer manufacturers,” Mr. Kashper and Blue Ribbon lacked the right to terminate Pabst’s agreement under the SML. As such, the Maryland Beer Franchise Fair Dealing Act prohibited Pabst from terminating its agreement with Winner without good cause.

The circuit court granted summary judgment to Pabst based on the incorrect premise that Blue Ribbon “replaced the Old Pabst Brewing Company” and, therefore, qualified as a successor beer manufacturer under the SML. Accordingly, the Court of Special Appeals correctly reversed the circuit court’s judgment and remanded the case to the circuit court for further proceedings consistent with its opinion.

Judgment of the Court of Special Appeals affirmed.

Arbitration

Statute of limitations

BOTTOM LINE: Where the parties agreed to arbitrate any disputes, the expiration of the statute of limitations did not extinguish a party’s right to arbitrate. The history and text of § 5-101 of the Courts Article confirm that it does not apply to the remedy for enforcing the contractual right to arbitrate.

CASE: Park Plus, Inc. v. Palisades of Towson, LLC and Encore Development Corp., No. 7, Sept. Term, 2021 (filed March 25, 2022) (Judges Getty, Watts, Hotten, Booth, Biran, GOULD, Raker).

FACTS: In March 2009, Park Plus Inc. on the one hand and Palisades of Towson LLC and Encore Development Corp. on the other hand, executed a contract requiring Park Plus to “furnish and install” an electro-mechanical parking system in a luxury apartment building owned by Palisades in Towson, Maryland. The contract included a one-year warranty period and contained an arbitration clause.

Tenants began using the parking system in October 2010. Problems arose immediately. In September 2014, Palisades sent a written arbitration demand to Park Plus. As required by the contract, Palisades then submitted its claims to the project’s architect, who declined to participate. Within 30 days of the architect’s refusal, Palisades again issued a written arbitration demand to Park Plus. Park Plus showed a willingness to arbitrate, but Palisades filed a petition to compel arbitration in the circuit court. That petition was later dismissed without prejudice for lack of service.

After more delays, the parties agreed to appoint retired judge as their arbitrator. More delays ensued. Ultimately, in February 2016, Palisades filed its second petition in the circuit court, seeking an order enforcing the arbitration agreement. Park Plus maintained that the three-year statute of limitations provided under § 5-101 of the Courts Article applied, so that the petition was untimely. The circuit court disagreed.

The arbitrator awarded $3,178,800.64 to Palisades and $365,677.69 to Park Plus on its counterclaim. The parties ultimately entered into a consent order under which an arbitration award in favor of Palisades in the net amount of $2,813,122.95 was confirmed, and a stay of entry of the judgment on the award was entered, pending this appeal. The Court of Special Appeals affirmed the circuit court’s order compelling arbitration.

LAW:  As Park Plus sees it, if the contract is silent on the subject, the statute of limitations under CJ § 5-101 steps into the void and extinguishes the right to arbitrate just as a contractual limitation provision would. This proposition rests on a misunderstanding about the legal effect of statutes of limitations. Statutes of limitations have historically been considered procedural, not substantive defenses, and are generally understood to extinguish the remedy for enforcing a right, not the right itself.

So, if Park Plus and Palisades had not included the arbitration provision in the contract, then Palisades could have filed a complaint seeking monetary damages in the circuit court instead of a petition to compel arbitration. In that scenario, the statute of limitations could have extinguished the remedy of a circuit court action, resulting in its dismissal.

But because the parties did include an arbitration provision and given the limited nature of our role, the only substantive right we are concerned with here is the contractual right to arbitrate. Based on our traditional understanding of statutes of limitations, the expiration of the statute of limitations did not extinguish Palisades’ right to arbitrate. The history and text of CJ § 5-101 confirm that it does not apply to the remedy for enforcing the contractual right to arbitrate.

Park Plus argues if we don’t apply the statute of limitations to a petition to compel arbitration, we would be re-writing the parties’ agreement to include a statute of limitations waiver where none exists and to delete the contract’s choice of law provision requiring application of Maryland law. We disagree. When Park Plus and Palisades executed the contract with a binding arbitration clause, they agreed to the limitations imposed by Maryland law on the nature and scope of the court’s involvement over arbitrable disputes.

When faced with a petition to compel arbitration, the court’s only function is to decide whether an agreement to arbitrate the dispute exists, and, if so, to enforce it with an order compelling arbitration. Also, CJ § 5-101 applies only to civil actions at law, therefore it does not apply to petitions to compel arbitration. Thus, our holding honors the parties’ agreement and applies Maryland law precisely as the General Assembly intended.

Park Plus contends that the circuit court’s decision presented the arbitrator with “confusing guidance” that created the “impression that the [circuit court] had decided any substantive statute-of limitations issue.” As a result, Park Plus maintains that the arbitrator manifestly disregarded Maryland law or erred by refusing to consider Park Plus’s statute of limitations defense. Park Plus also asserts other defects in the proceedings before the arbitrator, as well as in the circuit court’s ultimate confirmation of the arbitrator’s award. None of those issues, however, are properly before us as this matter comes to us on an appeal from the order compelling arbitration.

Judgment of the Court of Special Appeals affirmed.

Criminal

Inconsistent verdicts

BOTTOM LINE: Where a jury’s verdicts were factually inconsistent, but not legally inconsistent, the circuit court did not err in accepting the jury’s verdicts.

CASE: Williams v. State, No. 37, Sept. Term, 2021 (filed March 25, 2022) (Judges

Getty, WATTS, Hotten, Biran, Wilner) (Judges McDonald and Booth, concur).

FACTS: The state charged Nicholas Jabbar Williams with first-degree premeditated murder of Cameron Marcel Townsend; use of a firearm in the commission of a crime of violence (murder); first-degree assault of Townsend; use of a firearm in the commission of a crime of violence (first-degree assault); possession of a regulated firearm while under the age of 21 and wearing, carrying or transporting a handgun in a vehicle. The jury found Williams guilty of second-degree murder and possession of a regulated firearm while under the age of 21 and not guilty of first-degree assault and use of firearm in the commission of a crime of violence (second-degree murder).

Williams’s counsel objected on the ground that the guilty verdict as to second-degree murder was legally inconsistent with the not-guilty verdict as to first-degree assault. The circuit court accepted the jury’s verdicts.

Williams then filed a motion for a new trial, contending that statements made by jurors after the jury had been dismissed indicated that the jury misinterpreted the jury instructions on second-degree murder and other matters. Williams attached to the motion an affidavit signed by one of the jurors in this case. The circuit court granted the state’s motion to strike, sealed the affidavit and denied the motion for a new trial.

The Court of Special Appeals ordered a limited remand to the circuit court with instruction to determine whether a firearms examiner’s report was admissible under Rochkind v. Stevenson, 471 Md. 1 (2020).

LAW:  We conclude that the guilty verdict as to second-degree murder is not legally inconsistent with the not-guilty verdicts as to first-degree assault and use of a firearm in the commission of a crime of violence because the jury instructions on the offenses at issue were correct and neither of the offenses at issue of which Williams was acquitted is a lesser-included offense of second-degree murder.

It is undisputed that the jury instructions accurately conveyed the elements of all three of the relevant offenses. The next step is to compare the elements of the offenses and resolve the question of whether, under the required evidence test, the offense of first-degree assault, where the modality of the commission of the offense is the use of a firearm, or use of a firearm in the commission of a crime of violence is a lesser-included offense of second-degree murder. The answer is no.

It is accurate that the verdicts in this case are factually inconsistent—but that circumstance does not warrant reversal and instead reflects the role of the jury as the sole arbiter of factual disputes in a criminal jury trial. The verdicts may represent nothing more than compromise or leniency.

We are aware that Williams has contended that information provided by some of the jurors indicated that the jury misinterpreted the jury instructions on second-degree murder and other matters—i.e., that the reason for the factual inconsistency was a failure to follow the instructions. As explained below, however, we will not invade the province of the jury by inquiring into its deliberations to ascertain the reason for a factual inconsistency that is permissible under our case law.

Finally, Williams is mistaken in contending that the rule of lenity weighs in favor of vacating the conviction for second-degree murder. The rule of lenity is a potential ground on which an appellate court may vacate a sentence, not a possible basis for an appellate court to reverse or vacate a conviction—let alone to determine that verdicts are legally inconsistent.

The circuit court correctly granted the motion to strike statements by jurors referenced in the motion for a new trial and that the circuit court did not abuse its discretion in denying the motion for a new trial. None of the information attributed to the jurors involved allegations of racial bias or discrimination or the existence of external influences on the jury. The post hoc information from jurors was clearly barred from being received by the circuit court under both the no-impeachment rule and the plain language of Maryland Rule 5-606(b)(1) and (2).

Williams contends that the evidence is insufficient to support the convictions for second-degree murder and possession of a regulated firearm while under the age of 21. Viewing the evidence in the light most favorable to the state, we conclude that the evidence is sufficient to support the challenged convictions.

Judgment of the Court of Special Appeals affirmed.

CONCUR: I would forgo the exercise of classifying allegedly inconsistent verdicts into abstract categories such as “legally inconsistent”, “factually inconsistent” or another category with some similar label. Rather, I would apply to that issue the analysis that the plurality opinion in State v. Stewart, 464 Md. 296 (2019), set forth – that is, “whether the jury verdict on its face indicates that the jury failed to follow the trial court’s proper instructions on the law governing the charged offenses.”

Evidence

Regulatory violation

BOTTOM LINE: Where the Code of Maryland Regulations requires an individual who is to be given a breath test to be observed for at least 20 minutes before the sample is taken, an alleged lack of compliance with this requirement goes to the weight to be afforded breath test results by the trier of fact, not to their admissibility.

CASE: Dejarnette v. State, No. 41, Sept. Term, 2021 (filed March 25, 2022) (Judges Getty, McDonald, WATTS, Hotten, Booth, Biran).

FACTS: In Maryland, when a law enforcement officer has reason to believe that the driver of a motor vehicle is under the influence of alcohol, the officer may ask the driver to take a breath test. There are regulations governing the procedures for administering a breath test for alcohol. Among other things, Code of Maryland Regulations, or COMAR, 10.35.02.08G provides that an individual who is to be given a breath test must be observed for at least 20 minutes before the sample is taken.

In this case, the state charged Alexander Dejarnette with four counts related to driving under the influence of alcohol. Prior to trial, Dejarnette filed a motion in limine to exclude the results of a breath test, arguing that the 20-minute observation period had not been complied with. The circuit court denied the motion. Dejarnette appealed, contending that the circuit court erred in admitting the results of the breath test. The Court of Special Appeals held that the circuit court did not err and affirmed the circuit court’s judgment.

LAW: Exclusion of breath test results is tied to compliance with statutory requirements, not regulatory requirements. The statutes, and in particular CJ § 10-309(a)(1)(ii), the provision which sets forth the exclusionary rule, make no reference whatsoever to COMAR regulations or any compliance with them. Nothing in the statutory scheme indicates that the breath test results are not admissible for lack of strict compliance with the regulations.

In fact, nothing in any of the statutes in subtitle three includes a requirement of strict compliance with COMAR regulations for admissibility of breath test results or a requirement of a 20-minute observation period prior to the administration of a breath test. This is telling because the statutes demonstrate that the General Assembly knows how to impose, and has imposed, a time requirement related to the admissibility of breath test results.

By its plain language, the exclusionary rule set forth in CJ § 10-309(a)(1)(ii) does not operate to exclude evidence of a breath test that may have been obtained contrary to the provisions of the COMAR regulations. We decline to read into CJ § 10-309(a)(1)(ii) the requirement that breath test results are not admissible if obtained contrary to the provisions of COMAR regulations. Where neither the controlling statutes nor the relevant COMAR regulation contains an exclusionary rule and where the Fourth Amendment exclusionary rule is not applicable, there is no general exclusionary rule in Maryland that would provide for the suppression of evidence in a criminal case for a violation of the Maryland laws that are at issue in this matter.

Given the absence of an applicable exclusionary rule, we, like the Court of Special Appeals, hold that an alleged lack of compliance with the 20-minute observation period set forth in COMAR 10.35.02.08G goes to the weight to be afforded breath test results by the trier of fact, not to their admissibility. We are unpersuaded by Dejarnette’s argument that the breath test results were inadmissible under Maryland Rule 5-403 due to a risk of unfair prejudice. We are also not convinced that case law from other jurisdictions relied on by Dejarnette compels a contrary result.

Because we hold that alleged noncompliance with the 20-minute observation period goes to the weight of the evidence rather than to the admissibility of breath test results and Dejarnette has raised no meaningful allegation as to any irregularity having occurred during the observation period, we need not necessarily address whether the record in this case demonstrates that the officers complied with the observation period. Even so, we conclude that the record supports a finding that the officers complied with the 20-minute observation period. And, we determine that the circuit court found on the record that the officers complied with the requirements of the applicable COMAR regulation.

Judgment of the Court of Special Appeals affirmed.