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The knowledge requirement implicit in the terms "suffer," "permit," and "allow" can be satisfied by proof of either actual or constructive knowledge on the part of a liquor licensee. Actual knowledge is, of course, actual awareness of the prohibited activity. Actual knowledge also includes the concept of "deliberate ignorance" or "willful blindness."
Appellant, Steven Kougl, was the owner of Club Harem, a Baltimore tavern and adult entertainment business, and was also a holder of a a liquor license for that location issued by appellee, the Board of Liquor License Commissioners for Baltimore City ("the Liquor Board"). The Liquor Board charged Kougl with violating three Liquor Board Rules related to solicitation of prostitution, indecent exposure, and violation of public morals, all occurring at Club Harem, when an employee exposed herself to an undercover police officer and then solicited sexual intercourse from the same officer. The Liquor Board found Kougl guilty of all three violations and ordered that his liquor license be suspended for one month. Kougl filed for judicial review in the Circuit Court for Baltimore City, which affirmed the decision of the Liquor Board.
Under the circumstances, was it proper to suspend the appellant’s liquor license?
The court held that the circuit court erred in upholding an order by a city board of liquor license commissioners suspending the appellant’s liquor license for a month because the board erred in interpreting the words "suffer," "permit," and "allow" in three board rules—related to solicitation of prostitution, indecent exposure, and violation of public morals—to impose a strict liability standard on the appellant after an employee exposed herself to an undercover police officer and then solicited sexual intercourse from the same officer where the plain meaning of the words "suffer," "permit," and "allow" necessarily required some level of knowledge by the licensee and there was no evidence that the licensee had actual or constructive knowledge of the employee's prohibited activity.