Posted by: Patricia Salkin | August 28, 2009

Video Lottery Facility Licenses Would Not be Issued by Commission Where Local Zoning Would Not Permit Such Use

On December 19, 2008, the Video Lottery Facility Location Commission issued a “Request for Proposals for Video Operation Licenses” and established February 2, 2009 as the submission deadline. The Location Commission responded to questions from potential applicants for licenses and in particular responded to the question “[i]f an Applicant is awarded a license and then cannot get zoning for the property through no fault of the Applicant, will the Initial License Fee be refunded?” The Commission responded that it “may consider such requests under extraordinary circumstances, in the Location Commission’s discretion.”

Laurel Racing Association submitted its application to the Commission for a video lottery operation license for Anne Arundel County on February 2, 2009. Although required pursuant to § 3.10.1 of the Request for Proposals entitled “License and Application Fees,” Laurel Racing Association did not include the initial license fee. After the February 2, 2009 submission deadline, Laurel Racing contacted the Location Commission’s “Procurement Officer” to request direction on how to submit the initial license fee. The Officer responded that the deadline had passed. On February 12, 2009, the Location Commission rejected Laurel Racing Association’s bid on the ground that it had failed to submit the initial fee. Laurel Racing filed a complaint against the Location Commission in the Circuit Court of Anne Arundel County seeking declaratory judgment and injunctive relief. The court denied Laurel Racing’s request for preliminary and permanent injunction and granted the State’s motion for summary judgment. Laurel Racing then filed a notice of appeal and a petition for writ of certiorari in the Court of Appeals of Maryland.

The issue on appeal is whether primary or exclusive jurisdiction over the dispute lies with the Board of Contract Appeals, and whether the Laurel Racing Association was required to exhaust its administrative remedy before the Board of Contract Appeals. The Court holds that Laurel Racing Association failed to exhaust the statutorily prescribed administrative remedy and its judicial action should have been dismissed. With respect to the zoning question, the court stated that if Anne Arundel County refuses to change the zoning in the authorized location in order to permit video lottery terminals, there would be no reason for the Location Commission to issue a license.

Laurel Racing Association, Inc. v. Video Lottery Facility Location Comm’n, 2009 WL 2136320 (Md. 7/20/2009).

The opinion can be accessed at:

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