Dakrish, LLC T/A Vineyards Elite v. Ran Raich (Ct. of Special Appeals)

Filed: November 30, 2012.

Opinion by Judge Kathryn Grill Graeff.

Held: A party to a liquor board decision in circuit court has standing to appeal that court's decision to the Court of Special Appeals.  The review of a liquor board's decision by the Court of Special Appeals is limited to determining whether substantial evidence in the record as a whole supports the board's findings.  

 

Facts: The Baltimore County Liquor Board  ("Board") denied Applicant’s liquor license application. The Board reached their decison after hearing from several experts that presented conflicting testimony on the demand for the store, it's geographic location, proximity to other stores, and other factors.  The Applicant petitioned the Circuit Court for review, which reversed the Board's denial. The Circuit Court found “the Board’s decision was flawed because it failed to balance appropriate factors to be considered by the Board pursuant to Maryland Code (2011 Repl. Vol.) Art. 2B § 10-202(a)(2)(i), and gave undue weight to the potential for impact on existing licensees”  and remanded the case to the Board with instructions to issue a liquor license. 

 

Appellant, appearing at the Board hearing through one of its licensees in opposition to Applicant’s petition for a license, appealed to the Court of Special Appeals ("Court").  The Court addressed whether appellant had standing to bring suit and whether the Board had to consider all of the factors enumerated in the liquor licensing statute in reaching a decision to deny an application.

Analysis:  Applicant first argued Appellant lacked standing to seek judicial review of the Board’s decision as it was not an aggrieved party. The Court agreed that a person appealing to the circuit court must be aggrieved but found that appellant had the right to appeal pursuant to Md. Ann. Code art. 2B, § 16-101(f) as it was a party of record to the Circuit Court case.

The Court then addressed whether the Board was required to consider each of the enumerated factors of the liquor licensing statute.  Using United Steelworkers of America v. Bethlehem Steel Corporation, 298 Md. 665 (1984), Applicant contended that the Board here did not make adequate findings on the record with respect to each of the applicable factors to support its denial of the license application.  The Court noted the liquor licensing statute does not require that the Board set forth specific findings of fact and conclusions of law.  Instead, the Court stated its role is limited to "determining whether there is substantial evidence in the record as a whole to support the Board's conclusion."  The Court found such evidence to exist and supported the Board’s decision.

The full opinion is available in PDF.

Custom Direct, LLC v. Wynwyn, Inc. (Maryland U.S.D.C.)

Filed: May 4, 2010.

Opinion by: Judge Richard D. Bennett.

Held: Reaffirming that a plaintiff who is a business competitor of a defendant is not a "consumer" with standing to bring a claim under the Maryland Deceptive Trade Practices Act, Md. Code Ann., Comm. Law § 13-301, et seq. ("MDTPA") and holding that the maintenance of a passive Internet website that merely makes information available to viewers located in Maryland who may be interested in it is insufficient to establish personal jurisdiction over a non-resident defendant.

Facts:

Plaintiff is one of the top manufacturers and suppliers of business and personal checks in the United States. After Defendant’s contract to perform Internet marketing for Plaintiff expired, Plaintiff alleges, Defendant continued to use Plaintiff’s trademarks to attract customers to Plaintiff’s competitors. Accordingly, Plaintiff sued Defendant for trademark and copyright infringement under the Lanham Act and the Maryland Deceptive Trade Practices Act and for unfair competition under common law.

Plaintiff also brought claims against a co-defendant, who is a full-time college student, living in Minnesota, who is not an employee of Defendant, and who has never resided in Maryland. This Co-Defendant after the contract expired maintained a website that offers products that compete with Plaintiff. While under contract with Plaintiff, Co-Defendant directed from his website potential customers navigating on the web (including those residing in Maryland) to the Plaintiff’s website and he received referral fees for any successful transactions between Plaintiff and a referred internet user. The Co-Defendant did not sell anything to Maryland residents.

Analysis:

Initially, the Court determined that Plaintiff was not entitled to recover statutory copyright damages, enhanced or punitive damages and attorneys’ fees under the Copyright Act because Plaintiff’s copyright registration did not predate the date of first infringement.

Next, the Court held that Plaintiff lacked standing to bring a claim under the MDTPA. In particular, the Court reaffirmed the holding in Penn-Plax, Inc. v. Schultz, Inc., 988 F. Supp. 906 (D. Md. 1997), which rejected the argument made by the Plaintiff that the MDTPA’s definition of “person” gives corporate plaintiffs standing to sue under the MDTPA. Because the statute expressly limits standing to consumers, the MDTPA claim was dismissed.

The Court also dismissed all claims against the Co-Defendant for lack of personal jurisdiction. The Court held to exercise personal jurisdiction over a non-resident: two conditions had to be satisfied: (1) jurisdiction must be authorized under the State’s long-arm statute, and (2) the exercise of jurisdiction must comport with due process. In order to comport with due process, a non-resident Defendant must have sufficient “minimum contacts” with the forum state so that it “does not offend traditional notions of fair play and substantial justice” before a MD has personal jurisdiction over a non-resident.

To support jurisdiction, Plaintiff had to show that the Co-Defendant: “'(1) direct[ed] electronic activity into the State, (2) with the manifested intent of engaging in business or other interactions within the State, and (3) that activity create[d], in a person within the State, a potential cause of action cognizable in the State's courts.'” (quoting ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707, 714 (4th Cir. 2002)). Passive internet activity, which does little more than make information available to those who are interested in it, does not satisfy the first or second elements of the ALS Scan test.

Applying this rule, the Court found no evidence that the Co-Defendant’s website targeted customers in Maryland, or that it was anything but passive in nature. Because any commissions the Co-defendant made arose from a consumer purchasing goods from the Plaintiff after linking from the Defendant’s site to Plaintiff’s, the Defendant was doing nothing more than making information available to persons interested in it. The Co-Defendant had no active or direct relationships with any of Plaintiff's purchasers and had even signed an agreement with the Plaintiff that prohibited the Co-Defendant from engaging in any active relationship or exchanging information with visitors to the Co-defendant site. As a result, the Co-Defendant’s electronic "contacts" with Md residents were insufficient to support personal jurisdiction over the Co-Defendant in Maryland.

The full opinion is available in PDF.