SHE ENTERPRISES, INC. vs. STATE BUILDING CODE APPEALS BOARD & another. [Note 1]

ARMSTRONG, J. The plaintiff, doing business in Worcester under the name "Blue Max Casino," appealed under G. L. c. 30A, Section 14, from a decision of the State Building Code Appeals Board (board). [Note 2] The board's decision had affirmed a determination by Worcester's commissioner of code inspection (building inspector) that the Blue Max Casino was operating in violation of the State Building Code (Code) until such time as it should apply for and be granted a certificate for change of use and occupancy, which was required (the building inspector ruled) because the plaintiff had changed the use of the premises from "restaurant" to "nightclub." The plaintiff maintains that it has not changed its use of the premises, that the portions of the Code relied on by the building inspector are unconstitutionally vague, and that the building inspector's enforcement ruling was an unlawful retaliation against the plaintiff for the form of entertainment provided in the Blue Max Casino, namely, nude dancing. A judge sitting by statutory authority in the Superior Court affirmed the board's decision, following the recommendation of a special master, and the plaintiff appealed.

Procedurally the case was complicated in the Superior Court by the plaintiff's submission of a mass of extra-record material bearing, its counsel argued, on the question of discriminatory or retaliatory enforcement. He asked the court to make findings on this aspect of the case under the authority of G. L. c. 30A, Section 14(6), as amended by St. 1976, c. 411, Sections 1 & 2. The plaintiff relies heavily in this court on what it terms a "finding" by the special master that "[i]t would be naive to believe that the local Board [presumably meaning the building inspector,

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no local board having acted in the matter] acted other than in response to local reaction to what some consider to be entertainment of an immoral nature."

Section 14(6) does not authorize a reviewing judge to consider extra-record evidence and make findings. It authorizes a judge, upon a showing that evidence not offered before the agency is material to the issues in the case and that there was good reason for the failure to present it to the agency, to "order that the additional evidence be taken before the agency," which "may modify its findings and decision by reason of such additional evidence." As a general rule it may be said that a court reviewing an administrative decision under Section 14 has authority to hear evidence and make findings only in cases where that is necessary to establish procedural irregularities not disclosed in the agency record. Section 14(5). See Conley v. Division of Employment Security, 340 Mass. 315, 318 & n.5 (1960); Duato v. Commissioner of Pub. Welfare, 359 Mass. 635, 639 (1971). In this case no undisclosed procedural irregularity is alleged. Compare Marmer v. Board of Registration of Chiropractors, 2 Mass. App. Ct. 162, 168 (1974). Accordingly we disregard the additional extra-record material submitted to the judge as well as the observations of the special master. We confine our review to the record of proceedings before the board.

That record shows a total failure by the plaintiff to make, before the board, the requisite showing that the building code "enforcement system had a discriminatory effect or that it was motivated by a discriminatory purpose." Wayte v. United States, 470 U.S. 598, 608 (1985), and cases cited. True, the plaintiff listed discriminatory enforcement as one of several grounds it alleged for reversal of the building inspector's ruling. Sustaining the ground, however, required an evidentiary showing, as to which the burden was on the plaintiff. Ibid. See also Commonwealth v. King, 374 Mass. 5, 22 (1977). "Except for jurisdictional claims based upon constitutional challenges to an agency's enabling legislation, litigants involved in adjudicatory proceedings should raise all claims before the agency, including those which are constitutionally based." Gurry

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v. Board of Pub. Accountancy, 394 Mass. 118, 126 (1985). "The general rule is that it is too late to raise a claim before a reviewing court if the point ha[s] not been raised before the administrative agency." M. H. Gordon & Son v. Alcoholic Beverages Control Commn., 386 Mass. 64, 68 (1982), citing Charron's Case, 331 Mass. 519, 523 (1954). Norway Cafe, Inc. v. Alcoholic Beverages Control Commn., 7 Mass. App. Ct. 37, 39-40 (1979).

There are exceptions to that principle. One arises when the agency takes the position that it will not consider or rule on the claim. M. H. Gordon & Son v. Alcoholic Beverages Control Commn., 386 Mass. at 69. Gurry v. Board of Pub. Accountancy, 394 Mass. at 126. That is what the plaintiff says happened in this case. To support that position, he cites two pages of the administrative transcript, both of which were omitted from the appendix. See Kunen v. First Agricultural Natl. Bank, 6 Mass. App. Ct. 684, 687-691 (1978); Iverson v. Board of Appeals of Dedham, 14 Mass. App. Ct. 951, 951-952 (1982); Telecon, Inc. v. Emerson-Swan, Inc., 17 Mass. App. Ct. 671, 673 (1984). To guard against the possibility of mere inadvertence, we exercised our discretion to examine the original record in the Superior Court.

The missing pages contain a statement by the chairman of the board's three-member hearing panel [Note 3] which, read out of context, would appear to say that the board was unwilling to consider any issue other than whether there had been a change of use of the casino premises. The context sheds a different light on the statement. Counsel for the plaintiff had presented the plaintiff's case primarily by unsworn statements of counsel, together with documentary evidence. At the crucial point he was offering to the board a copy of a letter by the building inspector to the Worcester Telegram & Gazette. Objection was made to the newspaper copy. It was noticed that the newspaper copy differed from the typewritten copy. The typewritten copy

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was indistinct in some places. The letter dealt not only with building code problems but also zoning violations and violations of another local ordinance. The chairman ruled that the newspaper copy would not be accepted. Plaintiff's counsel started to speak, and the city solicitor objected to the board's receiving the unsworn statements of the plaintiff's counsel in place of testimony and also objected to his raising of extraneous issues. At this point the chairman stated: "The issue before us, as I see it right now, and you may correct me or expand it as you wish, is that there is an argument as to whether or not there was a change in use and occupancy. Fundamentally, that's the only matter that this board is willing to consider. Is that agreeable? Does anybody see it any differently than that?" The plaintiff's counsel responded, "I don't because . . . ." The chairman interjected: "We have no say on zoning or local ordinance type regulations . . . [b]ut where with respect to the Code . . . [i]f indeed someone of the group here can prove there was indeed a change in use and occupancy, that's first-class evidence of what . . . we have to decide this case on. Now, unless you have more to substantiate your case -- I think you told us the story. You have the right to rebut." The plaintiff's counsel responded, "All right." Then the chairman turned to the city solicitor, who put in his case through the building inspector. At no point in the hearing was the question of discriminatory enforcement expressly raised or excluded.

In context we read the chairman's statement simply to say that the board would hear only the question arising under the Code, not those arising under the zoning ordinance or other local ordinances. If plaintiff's counsel interpreted the statement more restrictively, it was his duty to respond to the chairman's request that any differing view be made known. Instead, he expressed his assent. At no point did he ask the board to receive evidence bearing on discriminatory enforcement. There is no suggestion that he had witnesses who were prepared to testify on the question or that he was otherwise prepared to carry the plaintiff's burden. As in Fanion v. Director of the Div. of Employment Security, 391 Mass. 848, 851-852 (1984), the plaintiff "has not shown that `there was good reason for failure

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to present [the evidence] in the proceeding before the agency.' G. L. c. 30A, Section 14(6)."

On the single issue that was fully litigated at the agency level, the board's decision must stand. It was uncontested, and the board found, that the premises occupied by the Blue Max Casino were previously run as a French restaurant called "Gerbe de Ble," which was certified under the code as a restaurant under the F3 use group. [Note 4] The Blue Max Casino began operation in early 1976 as an Italian restaurant. Modest physical alterations were made, which (a building inspector told the proprietor) did not call for a building permit. The original certificate of inspection and occupancy classified the use as "lounge/restaurant," which would be an F3 use. At least one and perhaps two later certificates of inspection and occupancy referred to the use classification as "F2/club," which would mean "nightclub," a use falling in the F2 use group (see note 4, supra). The different classification reflected a changed emphasis in the use of the premises from the 1976 Italian restaurant with a full menu and incidental entertainment, to the 1978 establishment featuring a very limited menu (pizza and sandwiches) and "continuous . . . entertainment" ("The Home of Nude Entertainment in Worcester County").

The plaintiff does not contest the board's interpretation of its own regulations (i.e., the State Building Code [Note 5]) as requiring

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the issuance of a building permit, or permit for change of use and occupancy, before a building may lawfully be issued a certificate of occupancy for a use, such as nightclub, which falls in a different use category from an earlier use, such as a restaurant. [Note 6] Rather, it challenges as impermissibly vague the distinction between "restaurant" and "nightclub," a vagueness said to be constitutionally invidious because it arms the enforcement official with an unreviewable discretion to discriminate against entertainment of the type offered by the plaintiff. While such entertainment has been held to be a constitutionally protected exercise of free expression, Schad v. Mt. Ephraim, 452 U.S. 61, 66 (1981); Commonwealth v. Sees, 374 Mass. 532, 537 (1978), the Code provisions in question are not shown to affect the plaintiff's ability to offer entertainment of that type but merely require that, if the use is changed to nightclub, the public safety regulations applicable to such a change of use be adhered to. Compare Faith Assembly of God v. State Bldg. Code Commn., 11 Mass. App. Ct. 333, 335-337 (1981). Moreover, the Code's distinction between "nightclubs" and "restaurants other than nightclubs" is not, we think, one that an average layman would find difficult to apply, [Note 7] Caswell v. Licensing Commn. for Brockton, 381 Mass. 873 (1983), and not at all difficult in the instance of the Blue Max Casino. Compare Aristocratic Restaurant, Inc. v. Alcoholic Beverages Control Commn. (No. 1), 374 Mass. 547, 552-553 (1978). It is well known that nightclubs present special public safety

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problems. See, e.g., Commonwealth v. Welansky, 316 Mass. 383 (1944).

The distinction drawn by the board between a restaurant offering occasional, or incidental, entertainment, where the primary emphasis is on serving food, and a nightclub, where food is served but the primary emphasis is on entertainment, comports with common usage and is a reasonable interpretation of the Code. An agency's reasonable interpretation of its own regulations, particularly if consistently applied, is entitled to respect in the courts. Finkelstein v. Board of Registration in Optometry, 370 Mass. 476, 478 (1976). Purity Supreme, Inc. v. Attorney Gen., 380 Mass. 762, 782 (1980). Morin v. Commissioner of Pub. Welfare, 16 Mass. App. Ct. 20, 24 (1983). Cliff House Nursing Home, Inc. v. Department of Pub. Health, 18 Mass. App. Ct. 112, 115 (1984). Morales v. Commissioner of Pub. Welfare, 18 Mass. App. Ct. 239, 244 (1984).

There is no merit to the plaintiff's other contentions. If, as the building inspector concedes, his department erred in issuing a certificate of occupancy for nightclub (F2) use without having first required the plaintiff to apply for a permit for change of use, that error does not estop the building inspector from requiring compliance with the relevant Code provisions at this time. Outdoor Advertising Bd. v. Sun Oil Co., 8 Mass. App. Ct. 872, 873 (1979). We note, in this connection, that the record does not disclose any reason why the plaintiff would be denied the requisite permit. Indeed, the board found that "[s]tructurally [the premises] would meet the requirements of the [C]ode for either the F2 or F3 (nightclub or restaurant) use," reflecting the position of the building inspector, who told the board that he was not aware of anything "in the Building Code . . . that would stop [the required] [p]ermit from being issued."

Judgment affirmed.