Barbera, C.J., Greene, Adkins, McDonald, Hotten, Getty,
Raker, Irma S. (Senior Judge, Specially Assigned), JJ.
Board of Liquor License Commissioners for Baltimore City
("the Liquor Board") charged Respondent Steven
Kougl and his company, Kougl, Inc., with violating provisions
of the Rules and Regulations for the Board of Liquor License
Commissioners for Baltimore City ("the Liquor Board
Rules" or "the Rules") that regulate sexual
conduct and prohibit illegal activity on a licensee's
premises. The Liquor Board found that Kougl violated these
Rules and ordered a 30-day suspension of his liquor license.
Kougl argues that the Rules require actual or constructive
knowledge on the part of the licensee, and, therefore, he did
not violate them when his employee solicited prostitution and
exposed her breasts without his knowledge. We hold that the
Liquor Board Rules at issue impose strict liability on
licensees for prohibited conduct that occurs on their
AND LEGAL PROCEEDINGS
April 2013, Detective Fletcher Jackson of the Baltimore City
Police Department's Special Enforcement Section, Vice
Division, conducted an undercover investigation at Club Harem
("the Club"), an adult entertainment
establishment owned by Respondent Steven
Kougl. During his investigation, one of the
Club's employees, Jamaica Brickhouse, approached
Detective Jackson and engaged him in conversation. After
introducing herself, Brickhouse exposed her breasts to
Detective Jackson and invited him to touch them. He complied.
Detective Jackson then asked Brickhouse if her breasts
"tast[ed] as good as they look[ed]." At this point,
Brickhouse proposed a lap dance or going to "the
VIP" where they could "do whatever" so he
could "find out." Detective Jackson asked if
"whatever" meant sexual intercourse, and Brickhouse
confirmed that it did. She also clarified that it would cost
$170 for the VIP room plus a tip for her services. Detective
Jackson offered a $100 tip, and Brickhouse accepted. But no
money was exchanged because Brickhouse went on stage to
perform and Detective Jackson left the Club. She was charged
with prostitution about eight months later.
2014, approximately 15 months after the incident, the Liquor
Board charged Kougl with violations of three Liquor Board
Rules. Specifically, it charged him with violations of: (1)
Rule 4.17(a), which prohibits the solicitation of
prostitution on a licensee's premises; (2) Rule 4.17(b),
which prohibits indecent exposure on a licensee's
premises; and (3) Rule 4.18, which prohibits the violation of
federal, state, and local laws on a licensee's
premises. After a hearing on July 17, 2014, the
Liquor Board found that Kougl violated all three Rules and
imposed a 30-day suspension of his liquor
license. Kougl petitioned for judicial review of
the decision in the Circuit Court for Baltimore City. The
Circuit Court affirmed.
appealed to the Court of Special Appeals. He argued that
because he had no knowledge of Brickhouse's prohibited
activity, he had not violated Rules 4.17(a), 4.17(b), or
4.18. He claimed that the Rules do not impose
strict liability. In a published opinion, the court reversed.
It held that the plain meaning of the words "suffer,
" "permit, " and "allow, " as used
in Rules 4.17 and 4.18 "necessarily require that some
level of knowledge by the licensee must be established by the
evidence." Kougl v. Bd. of Liquor License
Comm'rs for Balt. City, 228 Md.App. 314, 330 (2016)
(citation and internal quotation marks omitted). The court
further held that this knowledge requirement may be satisfied
by evidence of actual or constructive knowledge. Id.
at 331. In defining actual knowledge, the intermediate
appellate court explained that there are two types: (1)
"actual awareness or an actual belief that a fact
exists" and (2) "deliberate ignorance" or
"willful blindness." Id. (citation
omitted). Because there was no evidence of Kougl's actual
or constructive knowledge of Brickhouse's conduct, the
court concluded that the Liquor Board erred in finding him
guilty of violating the Rules at issue.
Liquor Board noted a timely appeal. We granted
certiorari to consider the following question:
Did the Liquor Board correctly interpret its [R]ules to
impose upon licensees strict liability for sexual display,
performance, or illegal activity conducted on licensed
premises, where the pertinent portions of the [R]ules contain
no language limiting a licensee's responsibility to
situations where the licensee has actual or constructive
knowledge of the offending conduct?
we answer this question in the affirmative, we shall reverse
the judgment of the Court of Special Appeals.
statute, the General Assembly authorized local liquor boards
to promulgate regulations advancing Maryland Code (1957, 2016
Repl. Vol.), § 1-201 of the Alcoholic Beverages Article
("AB"), which aims "[t]o obtain respect and
obedience to law and to foster and promote temperance"
in furtherance of "the protection, health, welfare, and
safety of the people of the State." AB §
1-201(a)(1)(i)-(ii), (a)(3). The statute specifically
authorizes the Liquor Board to "adopt regulations to
carry out this article." Md. Code (1957, 2016 Repl.
Vol.), AB § 12-210(a). In 1998, the Liquor Board
promulgated revised Liquor Board Rules. We are tasked with
reviewing its interpretation of these regulations.
Maryland, judicial review of an administrative agency action
"is limited to determining if there is substantial
evidence in the record as a whole to support the agency's
findings and conclusions, and to determine if the
administrative decision is premised upon an erroneous
conclusion of law." United Parcel Serv., Inc. v.
People's Counsel for Balt. Cty., 336 Md. 569, 577
(1994). Although judicial review of an agency's factual
findings is "quite narrow, " "it is always
within our prerogative to determine whether an agency's
conclusions of law are correct." Adventist Health
Care, Inc. v. Md. Health Care Comm'n, 392 Md. 103,
120-21 (2006) (citations and internal quotation marks
omitted). If an agency's conclusion is based on an error
of law, it will not be upheld. Hoyle v. Bd. of Liquor
License Comm'rs for Balt. City, 115 Md.App. 124, 129
"[e]ven with regard to some legal issues, a degree of
deference should often be accorded the position of the
administrative agency." Finucan v. Md. Bd. of
Physician Quality Assurance, 380 Md. 577, 590 (2004)
(citation omitted). Appellate courts should ordinarily give
"considerable weight" to "an administrative
agency's interpretation and application of the statute
which the agency administers." Md. Aviation Admin.
v. Noland, 386 Md. 556, 572 (2005). In this regard,
"the expertise of the agency in its own field of
endeavor is entitled to judicial respect."
Finucan, 380 Md. at 590 (citations omitted). An
agency is granted further deference when it interprets a
regulation it promulgated, rather than a statute enacted by
the Legislature. Md. Comm'n on Human Relations v.
Bethlehem Steel Corp., 295 Md. 586, 593 (1983).
"Because an agency is best able to discern its intent in
promulgating a regulation, the agency's expertise is more
pertinent to the interpretation of an agency's rule than
to the interpretation of its governing statute."
Liquor Board argues that Liquor Board Rules 4.17(a), 4.17(b),
and 4.18 impose strict liability on licensees for violations
that occur on licensed premises. Therefore, it maintains,
Kougl violated the Rules regardless of whether he had actual
or constructive knowledge of his employee's conduct. The
Liquor Board contends that the plain language meaning of
"permit, " "suffer, " and
"allow" do not require knowledge. Furthermore, the
Liquor Board argues that the use of "knowingly" in
only one provision of the Rules shows that it did not intend
to impose a knowledge requirement in the other provisions.
Lastly, the Liquor Board urges us to apply the three-factor
test from Dawkins v. State, 313 Md. 638 (1988), to
conclude that because the Liquor Board did not designate a
mental state requirement in the language of the Rules, they
impose strict liability.
contends that a licensee must have actual or constructive
knowledge of the conduct at issue to violate the Rules. In
other words, he maintains that the Rules require the Liquor
Board to show that the licensee either knew or reasonably
should have known about the goings-on to breach the
regulations. He argues that the words "permit, "
"suffer, " and "allow" require a licensee
to have knowledge of the offending conduct. Thus, he
contends, the Liquor Board was required to show that he knew
or should have known about his employee's actions to find
a violation of the Rules and suspend his liquor
we accord an agency considerable deference in interpreting
its own regulations, we review its conclusions of law for
error by applying our well-settled principles of statutory
interpretation. Hranicka v. Chesapeake Surgical,
Ltd., 443 Md. 289, 297-98 (2015) (citation omitted).
Therefore, we begin by analyzing whether the plain language
of the Rules supports imposing strict liability. Like a
statute, a regulation's plain language is "the best
evidence of its own meaning." Total Audio-Visual
Sys., Inc. v. Dep'tof Labor, Licensing &
Regulation, 360 Md. 387, 395 (2000) (citations omitted).
When interpreting the regulation, "it is proper to
consult a dictionary or dictionaries for a term's
ordinary and popular meaning." Chow v. State,
393 Md. 431, 445 (2006) (citations omitted). "[W]hen the
language is clear and unambiguous, our inquiry ordinarily
ends there." Christopher v. Montgomery Cty.
Dep't of Health & Human Servs., 381 Md. 188, 209
(2004) (alteration in original) (citation omitted). We
conduct this plain ...