source: Caselaw Access Project

author: BERGER, J.

license: Public Domain

text:
    130 A.3d 1085
    Albert OLIVEIRA, et al. v. Jay SUGARMAN, et al.
    No. 1980,
    Sept. Term, 2014.
    Court of Special Appeals of Maryland.
    Jan. 28, 2016.

      Adam M. Apton (Donald J. Enright, Nicholas I. Porritt, Alexander A. Krot III, Levi & Korsinsky, LLP, on the brief) Washington, D.C., for Appellant.
    Daniel J. Leffell (Daniel J. Kramer, Jesse S. Crew, Paul, Weiss, Rifkind, Wharton & Garrison LLP, New York, NY. Craig A. Benson, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Washington, D.C.) Stephen A. Radin (Joseph S. Aller-hand, Weil, Gotshal & Manges LLP, New York, NY. G. Stewart Webb, Jr., Venable, LLP, Baltimore, MD.), all on the briefs, for Appellee.
    Panel: KEHOE, BERGER, RAYMOND G. THIEME, JR. (Retired, Specially Assigned), JJ.
   BERGER, J.

This appeal arises from an order of the Circuit Court for Baltimore City dismissing various claims filed by Albert F. Oliveira and Lena M. Oliveira, Trustees for the Oliveira Family Trust, appellants (“the Shareholders”), for failure to state a claim. Nominal Defendant-Appellee iStar Financial Inc. (“iStar”) is a registered Maryland corporation headquartered in New York. Defendants-Appellees include current and former members of the iStar Board of Directors as well as current and former members of iStar’s senior management. Jay Sugarman is the Chairman and Chief Executive Officer of iStar and also serves on iStar’s Board of Directors. Robert W. Holman, Jr., John G. McDonald, Dale Anne Reiss, and Barry Ridings are current members of the iStar Board of Directors. Glen August, George R. Puskar, and Jeffrey A. Weber are former members of the iStar Board of Directors. Nina B. Matis, R. Michael Dorsch, Michelle M. MacKay, Barbara Rubin, and David DiStaso are current and former iStar executives.

On appeal, the Shareholders presented several issues for our review, which we have consolidated and rephrased for clarity and brevity:

1. Whether the circuit court erred by granting the Appel-lees’ motion to dismiss the Shareholders’ derivative claims.
2. Whether the circuit court erred by dismissing the Shareholders’ claims which were styled as “direct” claims.

For the reasons explained herein, we shall affirm.

FACTUAL AND PROCEDURAL BACKGROUND

A. The 2008 Awards and 2009 Plan

The alleged wrongdoing in this case centers upon iStar’s 2011 modification of restricted stock unit performance awards granted to iStar executives in 2008 (the “2008 Awards”). The 2008 Awards, as originally issued, provided certain employees cash or iStar stock if certain conditions were met. The terms of the 2008 Awards provided that the awards would vest if iStar’s stock achieved any one of three average closing price targets over twenty consecutive trading days. The targets were a price of $4 per share by December 19, 2009, $7 per share by December 19, 2010, or $10 per share before December 19, 2011. The total award represented 10,164,000 restricted stock units (“RSUs”).

At the time the 2008 Awards were granted, iStar did not have sufficient authorized shares of stock to pay the awards in iStar stock. For this reason, in 2009, iStar sought and obtained shareholder approval of a new Long-Term Incentive Plan (the “2009 Plan”), which increased the number of shares that could be issued for incentive compensation, allowing for issuance of up to 8,000,000 shares of common stock. The terms of the 2008 Awards permitted the awards to be settled in either cash or iStar shares. The awards were to be settled in shares if the anticipated 2009 Plan was approved by shareholders the following year, or alternatively, if the 2009 Plan was not approved by shareholders, in cash.

In April 2009, iStar filed a Schedule 14A Proxy Statement (“the Proxy Statement”) with the United States Security and Exchange Commission. The Proxy Statement included language explaining that “the ongoing financial crisis and its negative impact on our business and financial results have resulted in a sharp decline in [iStar’s] share price” which “has led to a more rapid depletion of shares under the 2006 Plan than we had anticipated in 2006,” resulting in “virtually no remaining shares available under the 2006 Plan.” The Proxy Statement explained that shareholder approval of the 2009 Plan would “ensure that we will have a sufficient number of shares to settle the performance-based awards made in December 2008 using shares of common stock rather than cash.” The Proxy Statement further explained that “[i]f the 2009 Plan is not approved by shareholders,” the 2008 Awards “will be settled in cash rather than in common stock.” The Proxy Statement included language noting that approval of the 2009 Plan would “ensure, for federal tax purposes, the deductibility of compensation recognized by certain participants in the 2009 Plan which may otherwise be limited by Section 162(m) of the Internal Revenue Code.” A copy of the 2009 Plan was attached to the Proxy Statement. The 2009 Plan was approved by a shareholder vote in May 2009.

iStar did not achieve the $4 per share target for twenty consecutive trading days by the December 19, 2009 deadline set forth in the 2008 Awards. iStar’s stock price also failed to meet the December 19, 2010 deadline. iStar reached the $7 per share target for twenty consecutive days on December 30, 2010, eight trading days after the December 19, 2010 deadline.

Following the near miss of the 2010 target, iStar undertook a six-month process to consider modification of the 2008 Awards. The Board sought to reach a balance “between rewarding management’s exceptional performance, as reflected by the 300% rise in the market value of iStar stock, and enforcing the terms of the 2008 Awards in light of the near miss of the $7 price target.” After four Board meetings and eleven Compensation Committee meetings, as well as discussions with legal, accounting, and compensation advisors, iStar’s Board of Directors modified the 2008 Awards in July 2011 (“the 2011 Modification”). The 2011 Modification converted the 2008 Awards from performance-based to service-based awards. The Modification reduced the amount of the award by 25% and required specific years of service. Pursuant to the 2011 Modification, employees would receive the reduced award in three installments on January 1 of 2012, 2013, and 2014, as long as the employee remained employed by iStar on the vesting dates. According to iStar, the 2011 Modification addressed concerns that key employees would leave iStar for better paying opportunities with competitors and hedge funds if the 2008 Awards resulted in no compensation despite the 300% rise in iStar’s stock price. The Board considered forfeiting the 2008 Awards and issuing new awards, but this option was rejected due to the accounting expense associated with issuing new awards.

B. The Demand and iStar’s Response

In letters dated May 23, 2013 and July 30, 2013, the Shareholders demanded that iStar’s Board of Directors “investigate and institute claims on behalf of [iStar] ... against responsible persons” relating to the 2011 Modification. The Shareholders demanded that the Board of Directors “[r]escind all the shares that were issued under the 2009 Plan to settle the 2008 Awards” or, alternatively, “seek any other appropriate relief on behalf of [iStar] for damages sustained ... as a result of the Board’s misconduct.” The demand further sought to “enjoin [iStar] from issuing any more shares under the 2009 Plan to settle the 2008 Awards” and demanded that the Board of Directors adopt internal procedures to “prevent a recurrence of the wrongdoing described” in the demand letter.

On June 28, 2013, the Board formed a committee (“the Committee”) to investigate the allegations in the demand letter and make a recommendation to the Board concerning the demand. The Committee consisted of a single member, Barry W. Ridings, who was an outside, non-management director who joined the Board in August 2011, after the occurrence of the alleged wrongdoing that was the subject of the demand. Mr. Ridings is the Vice Chairman of Investment Banking at Lazard Freres & Co. LLC (“Lazard”). Lazard had formerly performed restructuring work for iStar in 2010 and early 2011, before Mr. Ridings joined the Board, but had no continuing business relationship with iStar. According to iStar, Mr. Ridings had no business, personal, social, or other relationships with any member of the Board apart from his service on the Board. The Committee retained outside counsel, Joseph S. Allerhand and Stephen A. Radin of Weil, Gotshal & Manges LLP (‘Weil” or “Counsel”) to assist with the investigation of the content of the Shareholder’s demand letter. Weil does not currently represent and has never in the past represented iStar or any of its Board members.

The Committee and Counsel met eight times between July and October 2013, reviewed relevant documents, and conducted multiple interviews. Counsel interviewed three members of iStar management, including Mr. Sugarman, three of iStar’s outside, non-management directors, and representatives of Kirkland & Ellis LLP, counsel to the iStar Board’s compensation committee, Clifford Chance LLP, iStar’s corporate and disclosure counsel, and TowersWatson, an outside consultant to the compensation committee. Following the investigation, on October 23, 2013, the Committee made a presentation to the Board, recommending that the Board refuse the Shareholders’ demand. The Board asked Counsel to draft a letter for the Board’s consideration, explaining the Board’s reasons for refusing the demand.

On November 6, 2013, a draft letter was circulated to the Board. The Board met on November 11, 2013 and, after discussing the draft letter, unanimously determined that pursuing the litigation demanded by the Shareholders would not serve the best interests of iStar and its shareholders. Accordingly, the Board unanimously voted to refuse the demand and directed Counsel to send the letter which had been drafted on the Board’s behalf to the Shareholders.

The Board’s 10-page letter to the Shareholders explained in detail the reasons supporting the Board’s conclusion that the litigation demanded by the Shareholders would be detrimental to the best interests of iStar and its shareholders. Although we do not set forth the letter in full, we summarize several of the reasons set forth by the Board: The Board summarized its position by explaining that it saw “no upside — and much downside — to the action and lawsuit proposed in the Demand. iStar would probably lose, suffer substantial harm, and pay both sides’ attorneys’ fees.”

• The Board believed that iStar would lose — and incur attorney’s fees pursuing a losing lawsuit — if it were to seek to litigate the claims alleged in the Shareholders’ demand.
• The Board believed that any effort to rescind or stop issuing shares under the 2009 Plan to settle the modified 2008 Awards or to rescind the modified 2008 Awards would harm iStar and its shareholders.
• The Board believed that failure to honor the modified 2008 Awards would create serious morale and retention problems and potentially lead to the departure of key members of management.
• The Board believed that the modified awards appropriately rewarded exceptional performance, were necessary to motivate and ensure retention of key personnel, and secured an additional three years of service for a 25% reduction in the original amount of the 2008 Awards.
• The Board believed that failure to honor the modified 2008 Awards would likely embroil iStar in litigation with key members of management, which the key members of management would likely win.
• The Board believed that, even if iStar won in pursuing the claims raised in the Shareholders’ demand, there might be no damages because the cost of new grants would exceed the cost of the modified 2008 Awards. The Board explained that the modified 2008 awards saved iStar tens of millions of dollars that would need to be expensed for new awards.

C. Circuit Court Proceedings

On March 7, 2014, the Shareholders filed the complaint giving rise to the instant litigation. Counts I, II, and III are alleged derivatively. Counts I and III allege that iStar directors Sugarman, August, Holman, McDonald, Puskar, Rid-ings, Weber, Josephs, and Reiss breached their fiduciary duties and wasted corporate assets by approving the 2011 Modification. Count II alleges unjust enrichment on the part of the recipients of the awards: Sugarman, DiStaso, Dorsch, MacKay, Matis, and Rubin. Counts IV and V are styled as direct claims. Count IV alleges breach of contract by iStar and the iStar directors named as defendants, and Count V alleges promissory estoppel.

Appellees moved to dismiss the Shareholders’ complaint on May 12, 2014. The Appellees contended that all of the claims asserted by the Shareholders were derivative, rather than direct. Appellees further maintained that the Shareholders failed to plead facts sufficient to overcome the presumption that the directors of iStar acted in the best interests of the company, and as such, the Board was entitled to the protection of the business judgment rule. In the alternative, Appellees asserted that even if the court were to reach the merits of the Shareholder’s claims, the Shareholders failed to state a claim for breach of fiduciary duty, waste of corporate assets, unjust enrichment, breach of contract, or promissory estoppel. Following a hearing, the circuit court issued a comprehensive memorandum and order dismissing the Shareholders’ complaint in its entirety.

This timely appeal followed.

STANDARD OF REVIEW

We review a circuit court’s dismissal of a complaint for failure to state a claim de novo. Shenker v. Laureate Educ., Inc., 411 Md. 317, 334, 983 A.2d 408 (2009) (“We review the grant of a motion to dismiss as a question of law.”); Boland v. Boland, 194 Md.App. 477, 496, 5 A.3d 106 (2010) (“The standard for a circuit court to apply in deciding whether to grant a motion to terminate litigation in a demand refused derivative action is a pure question of law.”), rev’d on other grounds, 423 Md. 296, 31 A.3d 529 (2011).

DISCUSSION

I. The Shareholders’ Derivative Claims and the Board’s Demand Refusal

The parties disagree sharply with respect to the proper analysis to be applied by a reviewing court when considering a board of director’s decision in response to a shareholder’s demand. Before turning our attention to the specific demand refusal at issue in the instant appeal, we briefly summarize the nature of a shareholder derivative claim and the judicial review applicable to such cases.

The default level of judicial scrutiny applied to review of corporate decisions is the “deferential business judgment rule, which insulates ‘the business decisions made by the director from judicial reviewf.]’ ” Boland v. Boland, 423 Md. 296, 328, 31 A.3d 529 (2011) (quoting Shenker, supra, 411 Md. at 344, 983 A.2d 408). The business judgment rule has been described as follows:

“It is a presumption that in making a business decision the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the company. Absent an abuse of discretion, that judgment will be respected by the courts. The burden is on the party challenging the decision to establish facts rebutting the presumption.”

Id. (quoting Aronson v. Lewis, 473 A.2d 805, 812 (Del.1984) (citations omitted), overruled on other grounds by Brehm v. Eisner, 746 A.2d 244 (Del.2000)). The business judgment rule “insulates ‘the business decisions made by the directors] from judicial review.’ ” Id. (quoting Shenker, supra, 411 Md. at 344, 983 A.2d 408).

The shareholder derivative action is “a justifiable, but limited, intrusion upon the general authority of the directors to manage the business affairs of the corporation.” Werbowsky v. Collomb, 362 Md. 581, 602, 766 A.2d 123 (2001). The Court of Appeals has explained:

As an exception to the general rule that “the business and affairs of a corporation are managed under the direction of its board of directors[,]” the derivative action is an “extraordinary equitable device to enable shareholders to enforce a corporate right” in certain circumstances. [Werbowsky, supra, 362 Md.] at 598-99, 766 A.2d at 133. “The purpose of the derivative action is to place in the hands of the individual shareholder a means to protect the interests of the corporation from the misfeasance and malfeasance of faithless directors and managers.” Shenker, 411 Md. at 342, 983 A.2d at 423 (quotation marks and citations omitted). Despite the role given the shareholder, the “corporation is the real party in interest and ... [t]he substantive claim belongs to the corporation[.]” Werbowsky, 362 Md. at 599-600, 766 A.2d at 133 (quoting 13 William Meade Fletcher, et al, Cyclopedia of the Law of Private Corporations, § 5941.10 (1995 Rev. Vol.)). The derivative suit thus balances the interests of the shareholders with those of the corporation and its directors.

Boland v. Boland, 423 Md. 296, 327-28, 31 A.3d 529 (2011).

A shareholder derivative action begins with a demand on the board. Derivative plaintiffs — here, the Shareholders— are required to “at the outset, seek a corporate decision on whether to maintain a lawsuit, a prerequisite known as the ‘demand requirement.’ ” Id. at 330, 31 A.3d 529. The Court of Appeals has emphasized that “[t]he demand requirement is important,” Werbowsky, supra, 362 Md. at 618, 766 A.2d 123 (emphasis in original), explaining:

Directors are presumed to act properly and in the best interest of the corporation. They enjoy the benefit and protection of the business judgment rule, and their control of corporate affairs should not be impinged based on nonspecific or speculative allegations of wrongdoing. Nor should they, or the corporation, be put unnecessarily at risk by minority shareholders bent simply on mischief, who file derivative actions not to correct abuse as much to coerce nuisance settlements.

Id. at 618-19, 766 A.2d 123.

After receiving a demand from a plaintiff, a board of directors is required to render a decision as to whether the case should proceed. As James J. Hanks explained in his learned treatise, Maryland Corporation Law, directors may “after due inquiry, ... reply to a derivative demand by denying it, letting the stockholder sue and ... defending their action under the good faith/reasonable belief/ordinary prudence standards of [the business judgment rule].” James J. Hanks, Maryland Corporation Law § 7.21[c], p. 276.38 (1995 & 2014 Supp.). When determining whether to pursue the demanded litigation, “a corporation’s board of directors must conduct an investigation into the allegations in the demand and determine whether pursuing the demanded litigation is in the best interests of the corporation. If the corporation, after investigation, fails to take the action requested by the shareholder, the shareholder may bring a ‘demand refused’ action.” Boland, supra, 423 Md. at 330, 31 A.3d 529 (quoting Shenker, supra, 411 Md. at 344, 983 A.2d 408). This is the stage at which the instant case comes before us on appeal.

“Judicial review of a demand refusal is subject to the business judgment rule, and the court considering a demand refused action limits its review to whether the board acted independently, in good faith, and within ‘the realm of sound business judgment.’ ” Id. (internal quotation and citation omitted). The parties disagree, however, as to how the business judgment rule should be applied to the Board’s decision to accept or refuse the Shareholders’ demand. The Shareholders’ position is that, pursuant to Boland, supra, the Board’s decision to refuse the demand is not entitled to a presumption that it was made in good faith and followed reasonable procedures. Instead, the Shareholders maintain that the Board is required to present evidence that it acted in good faith and with reasonable procedures, and the Shareholders are entitled to take discovery regarding these issues. The Appellees’ position is that the Board’s decision to refuse the Shareholders’ demand is entitled to the presumption of business judgment. As we shall explain, we agree with the Appellees.

The Shareholders assert that their position is supported by the decision of the Court of Appeals in Boland, supra, 423 Md. 296, 31 A.3d 529. In Boland, the Court of Appeals addressed a demand refusal by a special litigation committee (“SLC”). An SLC is a vehicle employed by a board of directors when there is not a quorum of disinterested directors to respond to a shareholder’s demand. Id. at 332, 31 A.3d 529. See also Agostino v. Hicks, 845 A.2d 1110, 1116 (Del.Ch.2004) (“Even if attempting to obtain the action that the plaintiff desires from the board of directors would be futile because a majority of the directors suffer some disabling interest, the board may appoint a special litigation committee of disinterested directors that may recommend dismissal of the derivative action after a reasonable investigation.”) (citing Zapata Corp. v. Maldonado, 430 A.2d 779, 785 (Del.1981)). An SLC is “composed of independent, disinterested directors, either inside the corporation or specially appointed from outside the corporation” and “is vested with the authority to render a corporate decision.” Boland, 423 Md. at 332, 31 A.3d 529. “By isolating the tainted directors and delegating the corporation’s decision-making ability to an independent committee, the directors may be able to insulate themselves from a derivative lawsuit. In general, the use of SLCs has spread and is now widely recognized, and it is not disputed that an SLC may recommend termination of a derivative lawsuit.” Id.

In Boland, the Court of Appeals differentiated between judicial review of a board of director’s demand refusal and judicial review of an SLC’s demand refusal. The Court reaffirmed the general rule that the business judgment rule applies to a board of director’s decision to refuse a shareholder’s demand. Id. at 330, 31 A.3d 529. The Court explained, however, that an SLC’s demand refusal is an exception to the general rule. Id. at 296, 31 A.3d 529. The Court held that the SLC’s “substantive conclusions are entitled to judicial deference, provided the SLC was independent, acted in good faith, and made a reasonable investigation and principled, factually supported conclusions.” Id. The Court emphasized, however, that the SLC is “entitled to no presumption regarding the above requirements.” Id.

The Shareholders assert that the Boland standard — which grants no presumption of independence, good faith, or with respect to the reasonableness of the investigation of the demand — applies to all decisions regarding a shareholder demand, not only to decisions rendered by an SLC. In our view, this is an unreasonable interpretation of Boland. Unlike in Boland, in the present case, there was no SLC utilized. Director Ridings was selected to investigate the Shareholders’ demand, but he was not “vested with the authority to render a corporate decision,” which is a requirement for an SLC. Id. at 332, 31 A.3d 529. Furthermore, the actual decision to refuse the Shareholders’ demand was undertaken by the iStar Board of Directors as a whole.

Critically, the iStar Board of Directors consisted of a majority of disinterested and independent directors. It is logical for different standards to apply to judicial review decisions made by a board comprised of a majority of disinterested and independent directors and decisions made by an SLC. An SLC is only formed when a board as a whole lacks disinterestedness and independence. Stricter scrutiny of the corporate decision is appropriate in such situations. Accordingly, the Court of Appeals in Boland concluded that, when reviewing a decision of an SLC, the corporation is required to present “some evidence that the SLC followed reasonable procedures and that no substantial business or personal relationships impugned the SLC’s independence and good faith.” Id. at 340-41, 31 A.3d 529.

In this case, the Shareholders’ demand was refused by iStar’s majority-disinterested and majority-independent Board of Directors rather than by an SLC. Accordingly, the business judgment rule, and not the Boland exception, applies to our review.

II. Whether the Business Judgment Rule Has Been Overcome

Having determined that the business judgment rule is the appropriate framework for our analysis of the Board’s decision, we consider whether the business judgment rule has been overcome. As discussed supra, the business judgment rule “is a presumption that in making a business decision the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the company.” Boland, supra, 423 Md. at 328, 31 A.3d 529 (internal quotation and citation omitted). “The burden is on the party challenging the decision to establish facts rebutting the presumption.” Id. As we shall explain, the Shareholders have not alleged facts sufficient to overcome the presumption of the business judgment rule.

A. Allegations regarding the Board’s disinterestedness and independence

We first address the Shareholders’ assertion that iStar’s Board of Directors was somehow tainted because a majority of the Board at the time of the demand made the decision to amend the 2008 Awards. Only a single member of the iStar Board — Jay Sugarman — is alleged to have received the 2008 Awards. The remaining five members of the Board were nothing more than outside, non-management directors of iStar and did not receive any of the 2008 Awards. It is well established that members of a board of directors do not lack disinterestedness “simply because a majority of the directors approved or participated in some way in the challenged transaction or decision.” Werbowsky, supra, 362 Md. at 618, 766 A.2d 123. See also Brehm, supra, 746 A.2d 244, 257 n. 34 (Del.2000) (“It is no answer to say that demand is necessarily futile because ... [the directors] approved the underlying transaction.”). Accordingly, we are unpersuaded by the Shareholders’ assertion that the Board’s decision was tainted by virtue of the Board’s approval of the challenged action.

The Shareholders’ allegations with respect to the Board’s investigation of the Shareholders’ demand are similarly without merit. The Shareholders assert that the Committee’s investigation of the Shareholders’ demand was rife with improper procedure. The Shareholders argue that Committee member Ridings lacked sufficient corporate experience to make a proper recommendation to the Board and that Ridings was not sufficiently disinterested. Both contentions are baseless. Ridings has forty years of business experience, including service on the boards of several public companies, including the American Stock Exchange. Furthermore, Ridings hired highly respected and experienced legal counsel to assist him and conducted multiple interviews. As the Supreme Court of Delaware has explained, “there is obviously no prescribed procedure that a board must follow” when responding to a demand. Levine v. Smith, 591 A.2d 194, 214 (Del.1991) overruled on other grounds by Brehm, supra, 746 A.2d 244. The Shareholders’ bald allegations of impropriety are plainly insufficient to overcome the presumption of the business judgment rule.

We further reject the Shareholders’ contention that Ridings was interested or lacked independence. Ridings joined the Board after the challenged conduct and had no business, personal, social, or other relationships with any other member of the Board. Although Ridings’s employer, Lazard, performed banking services for iStar in 2010 and 2011, Lazard has no ongoing business relationship with iStar. Furthermore, “[a]llegations of mere personal friendship or a mere outside business relationship, standing alone, are insufficient to raise a reasonable doubt about a director’s independence.” Beam ex rel. Martha Stewart Living Omnimedia, Inc. v. Stewart, 845 A.2d 1040, 1050 (Del.2004).

The Shareholders’ contention that Ridings lacks independence because he is compensated for his service as a Director is similarly unfounded. See Werbowsky, supra, 362 Md. at 618, 766 A.2d 123 (explaining that directors being “paid well for their services as directors” does not establish lack of independence); Calma on Behalf of Citrix Sys., Inc. v. Tem-pleton, 114 A.3d 563, 576 (Del.Ch.2015) (“[Directors are generally not considered interested ... simply because [they] receive compensation from the company.”) (internal quotation and citation omitted). The Shareholders further contend that Ridings lacks independence because he is a named defendant in this lawsuit. This assertion is contrary to established law. See, e.g., Brehm, supra, 746 A.2d at 257 (“It is no answer to say that demand is necessarily futile because ... the directors would have to sue themselves, thereby placing the conduct of the litigation in hostile hands ....”) (internal quotation omitted). Accordingly, we reject the Shareholders’ contentions that Ridings was interested or lacked independence.

B. Allegations that the Board acted in contravention of the authority given by shareholders

The Shareholders further contend that the Board’s refusal of the Shareholders’ demand cannot be a reasonable exercise of business judgment because the modification of the performance criteria in the 2008 Awards was a violation of the 2009 Plan. First, we note that the circuit court considered this issue and concluded that “[t]he 2009 Plan supported] the Board’s authority to make” the 2011 Modification. We embrace the circuit court’s cogent analysis on this issue, adopting it as our own. We agree with the circuit court that “Section 3 of the 2009 Plan allows the Board in its discretion’ to ‘(i) authorize the granting of the Awards to Eligible Persons; and (ii) to determine the eligibility of Eligible Persons to receive an award.’ ” We further agree with the circuit court that “Section 19 of the 2009 Plan authorizes the Board to ‘take any other actions and make any other determinations that it deems necessary or appropriate in connection with the Plan.’ ” Moreover, as the circuit court observed, “Section 13 of the 2009 Plan provides that the Board, ‘with respect to any grant, may exercise its discretion hereunder at the time of the Award or thereafter.’ ”

Turning to the Shareholders’ assertion that the 2009 Plan prohibited the Board from taking any actions that would interfere with iStar’s ability to claim deductions under Section 162(m) of the Internal Revenue Code, we observe that Section 10 of the 2009 Plan provides that “[t]he Committee, in its discretion, may in the case of Awards ... intended to qualify for an exception from the limitation imposed by Section 162(m) ... (i) establish one or more performance goals” which must be satisfied prior to vesting. (Emphasis added.) We agree with the circuit court that “[t]his language is clearly discretionary.” Moreover, the Shareholders do not cite any provision of the 2009 Plan in support of their assertion that the plan did not permit iStar’s Board to modify awards after the awards were granted.

Furthermore, even if we were to assume arguendo that the Shareholders are correct that the 2011 Modification was improper, the Board would still be permitted to exercise its business judgment in determining whether pursuing the Shareholders’ requested litigation was in the best interests of iStar. In the letter explaining why the Board elected to refuse the Shareholder’s demand, the Board explained that even if iStar were to succeed in pursuing the claims raised in the Shareholders’ demand, there might be no damages because the cost of new grants would exceed the cost of the modified 2008 Awards. The Board further explained that the modified 2008 awards saved iStar tens of millions of dollars that would need to be expensed for new awards. Accordingly, the Board’s decision to refuse the Shareholders’ demand was a proper exercise of business judgment, even if we were to assume arguendo that the 2011 Modification was improper, because any remedy would be detrimental to the best interests of the corporation.

C. Allegations that the circuit court improperly considered the substance of the demand letter

The Shareholders aver that the circuit court erred by considering numerous facts not contained within the complaint. The source of the allegedly inappropriately considered facts is the Board’s letter refusing the Shareholders’ demand, which was attached to the Shareholders’ complaint. The Shareholders maintain that if the circuit court needed to make factual determinations in order to support the dismissal of the complaint, it should have converted the motion to dismiss to a motion for summary judgment and permitted discovery. We are unpersuaded.

Maryland appellate courts have not directly addressed this issue, but Delaware courts are clear that statements contained in a letter refusing demand “must [be] presume[d] ... to be true absent a particularized allegation rebutting th[e] statement.” Scattered Corp. v. Chicago Stock Exch., Inc., 701 A.2d 70, 76 n. 24 (Del.1997), overruled on other grounds by Brehm, supra, 746 A.2d 244. Furthermore, as discussed supra, pursuant to the business judgment rule, the Board’s investigation is presumptively reasonable. See, e.g., Bender v. Schwartz, 172 Md.App. 648, 675, 917 A.2d 142 (2007) (commenting on “the presumption that [a board of directors’] investigation [of a demand] was reasonable and its conclusion within the realm of sound business judgment”).

The Shareholders urge that, pursuant to Boland, no such presumption of reasonableness applies to a board’s investigation of a demand, and accordingly, no such presumption of truth should apply to statements contained in a demand refusal letter. As we have explained, see supra Part I., the Boland exception does not apply here because the demand was refused by iStar’s majority-disinterested and majority-independent Board of Directors. Further, the decision to refuse the demand was not undertaken by an SLC. As such, the demand refusal is subject to the protections of the business judgment rule. The application of the business judgment rule to a demand refusal logically includes a presumption that statements within a board’s demand refusal letter are true. Accordingly, we expressly adopt the approach of the Delaware courts, and hold that statements contained in a letter refusing demand, when the demand was refused by a board consisting of majority-disinterested and majority-independent directors, are presumptively true absent a particularized allegation rebutting a specific statement.

The Shareholders have not pled any allegations that factually contradict the contents of the demand letter. Rather, the Shareholders and the Board characterize certain facts differently. For example, the Shareholders argue that Ridings was insufficiently experienced and failed to conduct a sufficient number of interviews. The Board responds that Ridings had sufficient experience and that the interviews which were conducted were appropriate. Absent a particularized allegation rebutting a particular statement in the Board’s letter, the content of the letter is presumed to be true. Accordingly, we reject the Shareholders’ assertion that the circuit court improperly considered various facts found within the Board’s letter.

We are further unpersuaded by the Shareholders’ assertion that discovery should have been permitted on the issue of whether the Board’s refusal of the demand was proper. Pursuant to the Shareholders’ argument, the demand requirement would cease to have meaning. A shareholder could evade a motion to dismiss by making a demand, waiting for it to be refused, and then seeking discovery on the demand refusal process. As the Supreme Court of Delaware has recognized, permitting discovery in this context “would be a complete abrogation of the principles underlying the” demand requirement, which is “a recognition of the board’s duty to manage the business and affairs of the corporation.” Levine, supra, 591 A.2d at 210. See also Lemer v. Prince, 119 A.D.3d 122, 128, 987 N.Y.S.2d 19 (N.Y.App.Div.2014) (“Were Delaware law to permit discovery in a demand-refused derivative action, it would essentially obviate the directors’ authority to decide, under the business judgment rule, whether litigation was in the corporation’s best interests — the very reason underlying the demand requirement.”). Consequently, we hold that the Shareholders were not improperly denied discovery.

Having determined that the Shareholders failed to overcome the presumption of the business judgment rule, we hold that the circuit did not err by granting the Appellees’ motion to dismiss the Shareholders’ derivative claims. We next turn our attention to the claims styled as “direct” claims.

III. The Shareholders’ Purportedly Direct Claims

In addition to the derivative claims addressed supra, the Shareholders assert two claims styled as direct claims: Count IV, which alleges breach of contract by iStar and the iStar directors named as defendants, and Count V, which alleges promissory estoppel. The Appellees maintain that although Counts IV and V are styled as direct claims, they are actually derivative claims, and thus are subject to dismissal for the reasons discussed in Part II. As we shall explain, we agree with the Appellees.

We have explained that “[w]hether a claim is derivative or direct is not a function of the label the plaintiff gives it.” Paskowitz v. Wohlstadter, 151 Md.App. 1, 10, 822 A.2d 1272, 1277 (2003) (citing Moran v. Household International, Inc., 490 A.2d 1059, 1069-70 (Del.Ch.1985), aff'd, 500 A.2d 1346 (Del.1985); Elster v. American Airlines, Inc., 100 A.2d 219, 223 (Del.Ch.1953) (quoting Selman v. Allen, 121 N.Y.S.2d 142, 146 (1953))). “Rather, the nature of the action is determined from the body of the complaint.” Id. (citing Moran, supra, 490 A.2d at 1070).

A shareholder may sue directly rather than derivatively only when the “shareholder suffers the harm directly or a duty is owed directly to the shareholder.” Shenker, supra, 411 Md. 317, 345, 983 A.2d 408 (2009). See also Bontempo v. Lare, 217 Md.App. 81, 113, 90 A.3d 559 aff'd, 444 Md. 344, 119 A.3d 791 (2015) (“To maintain a direct action, the shareholder must allege that he has suffered an injury that is separate and distinct from any injury suffered either directly by the corporation or derivatively by the stockholder because of the injury to the corporation.”) (internal quotation and citation omitted).

The Court of Appeals has explained:

In contrast to a derivative action, a shareholder may bring a direct action, either individually or as a representative of a class, against alleged corporate wrongdoers when the shareholder suffers the harm directly or a duty is owed directly to the shareholder, though such harm also may be a violation of a duty owing to the corporation. Matthews v. Headley Chocolate Co., 130 Md. 523, 536, 100 A. 645, 650 (1917) (noting that shareholders may sue directly where “they have suffered some peculiar injury independent of what the company has suffered”); Waller v. Waller, 187 Md. [185] at 192, 49 A.2d [449] at 453 [ (1946) ]; Bender, 172 Md.App. at 665-66, 917 A.2d at 152; Danielewicz[ v. Arnold ], 137 Md.App. [601,] 618 [769 A.2d 274 (2001) ]. Cases where direct harm is suffered by shareholders include, for example, actions to enforce a shareholder’s right to vote or right to inspect corporate records. That the plaintiff suffered his or her injury in common with all other shareholders is not determinative of whether the injury suffered is direct or indirect. See Tooley v. Donaldson, Lufkin & Jenrette, Inc., 845 A.2d 1031, 1033 (Del.2004) (noting that the issue of whether a claim should be brought derivatively or directly turns on considerations of who suffered the alleged harm and who would receive the benefit of any recovery); Strougo v. Bassini, 282 F.3d 162, 171 (2d Cir.2002) (applying Maryland law) (noting that, in Maryland, where shareholders suffer an injury distinct from that of the corporation, rather than deriving from an injury to the business or property of the corporation, “the corporation lacks standing to sue, and Maryland’s ‘distinct injury’ rule allows shareholders access to the courts to seek compensation directly”). Where the rights attendant to stock ownership are adversely affected, shareholders generally are entitled to sue directly, and any monetary relief granted goes to the shareholder. Mona [v. Mona Elec. Group., Inc.,], 176 Md.App. [672], 697 [934 A.2d 450 (2007)]; see also 13 William Meade Fletcher, Cyclopedia of the Law of Private Corporations § 5939 (2004 Rev. Vol.). If the plaintiff demonstrates that he or she has suffered the alleged injury directly, he or she need not make demand on the corporate board of directors or prove futility of demand, and the business judgment rule does not apply.

Shenker, supra, 411 Md. at 345, 983 A.2d 408.

Having set forth the relevant analytical framework, we look to the injuries allegedly suffered by the Shareholders. With respect to Count IV, the Shareholders allege that “[t]he Company’s and the Director Defendants’ breach of contract has harmed the [Shareholders] by causing the Company to incur millions of dollars in compensation and tax liability.” With respect to Count V, the Shareholders allege that “the Director Defendants’ failure to honor the promises that induced [the Shareholders’] approval of the 2009 Plan, [the Shareholders] were deprived of their right to vote with regard to the modification of the 2008 Awards and the Company has been forced to incur millions of dollars in compensation and tax liability.” Moreover, the Prayer for Relief seeks recovery for “damages sustained by the Company.” Simply put, assuming arguendo that iStar wrongfully paid compensation, the entity that was harmed through the payment of improper compensation was iStar, not iStar’s shareholders. Accordingly, any claims could only be pursued properly as derivative rather than direct claims. See Feldman v. Cutaia, 951 A.2d 727, 733 (Del.2008) (holding that where “the damages allegedly flowing from the purportedly direct claim ... are exactly the same as those suffered by the corporation in the underlying derivative claim ... the injury alleged ... is properly regarded as injury to the corporation and not to the [shareholders]”); In re Triarc Companies, Inc., 791 A.2d 872, 878 (Del.Ch.2001) (“[W]hatever injury [the shareholder] suffered as a result of the payment of additional elements of compensation to [executives] gave rise to a derivative, not an individual, claim.”).

Furthermore, in our view, the Shareholders’ reliance upon Shenker, supra, 411 Md. 317, 983 A.2d 408, is misplaced. The Shareholders emphasize that in Shenker, the Court of Appeals commented that a direct claim may be brought when a duty is owed directly to a shareholder. 411 Md. at 345, 983 A.2d 408. First, we note that Shenker was a very fact-specific decision based upon a cash-out merger transaction. Shenker involved the unique context of a situation in which corporate directors were exercising “non-managerial duties ... such as negotiating the price that shareholders will receive for their shares in a cash-out merger transactions, after the decision to sell the corporation already ha[d] been made.” 411 Md. at 328, 983 A.2d 408. Indeed, we have emphasized “that Shenker has a narrow application in the corporate context.” George Wasserman & Janice Wasserman Goldsten Family LLC v. Kay, 197 Md.App. 586, 620, 14 A.3d 1193 (2011). Moreover, we observe that in Shenker, the Court of Appeals emphasized that

the injury alleged, namely, a lesser value that shareholders received for their shares in the cash-out merger, is an injury suffered solely by the shareholders and not by [the corporation] as a corporate entity. Such an injury, if suffered, is a direct one, separate from any injury suffered by the corporation, thus allowing [the shareholders] to proceed with their direct action against [the board of directors]. A higher or lower price received by shareholders for their shares in the cash-out merger in no way implicated [the corporation’s] interests and causes no harm to the corporation.

411 Md. at 346-47, 983 A.2d 408. Unlike Shenker, the injury alleged by the Shareholders is suffered by iStar as a corporate entity.

Because the Shareholders suffered no injury separate from the alleged injury to iStar, any claim properly belongs to the corporation and can only be pursued by the corporation. Accordingly, the breach of contract and promissory estoppel claims are derivative rather than direct, and were properly subject to dismissal for the reasons discussed in Part II.

Alternatively, assuming arguendo the Shareholders could pursue the breach of contract and promissory estoppel claims directly, in our view, there is no merit to either claim. The Shareholders assert that the 2009 Plan constitutes a contract between the Board and the iStar shareholders. The Shareholders maintain that a contract was formed through the Proxy Statement’s proposal of the 2009 Plan and the 2009 Plan’s subsequent approval by shareholders. We disagree.

“The elements of a contract are offer, acceptance, and consideration.” B-Line Med., LLC v. Interactive Digital Solutions, Inc., 209 Md.App. 22, 46, 57 A.3d 1041 (2012). The Shareholders point to no language in the Proxy Statement or the 2009 Plan which would constitute an offer. Absent any offer, there can be no contract. In support of their claim that a contract was created between the Board and the Shareholders, the Shareholders cite two unreported Delaware opinions: UniSuper Ltd. v. News Corp., C.A. No. 1699-N, 2005 WL 3529317 (Del.Ch. Dec. 20, 2005), and Sanders v. Wang, C.A. No. 16640, 1999 WL 1044880 (Del.Ch. Nov. 8, 1999). This Court will not consider unreported opinions for their substance. Maryland Rule 1-104 explicitly provides that “[a]n unreported opinion ... is neither precedent within the rule of stare decisis nor persuasive authority.” Indeed, we have commented that our prohibition on the citation of unreported opinions applies even when the jurisdiction in which the unreported opinion was decided permits the citation of unreported opinions. Kendall v. Howard County, 204 Md.App. 440, 445 n. 1, 41 A.3d 727 aff'd, 431 Md. 590, 66 A.3d 684 (2013) (“Under Rule 32.1(a) of the Federal Rules of Appellate Procedure, after January 1, 2007, a United States Court of Appeals may not prohibit a party from citing an unpublished opinion of a federal court for its persuasive value or any other reason. However, it is the policy of this Court in its opinions not to cite for persuasive value any unreported federal or state court opinion.”) (emphasis added). Because the Shareholders have not alleged facts and cited to relevant authority which would support a finding of the existence of a contract, the breach of contract claim must fail.

We are similarly unpersuaded by the Shareholders’ promissory estoppel claim. A promissory estoppel claim requires that the following four elements be satisfied: (1) a clear and definite promise; (2) where the promisor has a reasonable expectation that the offer will induce action or forbearance on the part of the promisee; (3) which does induce actual and reasonable action or forbearance by the promisee; and (4) causes a detriment which can only be avoided by the enforcement of the promise. Pavel Enterprises, Inc. v. A.S. Johnson Co., 342 Md. 143, 166, 674 A.2d 521 (1996). The Court of Chancery of Delaware has explained that descriptive statements in proxy disclosure statements do not amount to a promise for purposes of promissory estoppel. Territory of U.S. Virgin Islands v. Goldman, Sachs & Co., 937 A.2d 760, 805 (Del.Ch.2007) aff'd, 956 A.2d 32 (Del.2008). Furthermore, the fourth element of promissory estoppel cannot be established based upon the Shareholders’ complaint. The Shareholders have not identified any detriment which can only be avoided by the enforcement of the 2009 Plan. Indeed, even if the 2009 Plan had failed to obtain shareholder approval, the 2008 Awards would have been settled in cash. Accordingly, the Shareholders have failed to state a valid claim for promissory estoppel.

In conclusion, the Shareholders have failed to surmount the presumption of the business judgment rule. In failing to do so, they have failed to state a claim upon which relief may be granted. Moreover, the remaining breach of contract and promissory estoppel claims are derivative rather than direct, and are properly subject to dismissal. Alternatively, the Shareholders have failed to state a claim for breach of contract or promissory estoppel. Accordingly, we hold that the circuit court properly granted the Appellees’ motion to dismiss.

JUDGMENT OF THE CIRCUIT COURT FOR BALTIMORE CITY AFFIRMED. COSTS TO BE PAID BY APPELLANTS.

      . The company is now known as iStar Inc.

      . We shall refer to iStar and the Directors collectively as "Appellees.”

      . If the December 19, 2009 goal was attained, the awards would vest in three equal installments. If the 2009 goal was not attained but the December 19, 2010 goal was attained, the awards would vest in two equal installments. If neither the 2009 nor 2010 goals were attained, but the December 19, 2011 goal was attained, the awards would vest in a single installment.

      . The "2006 Plan” referred to a previous long-term incentive plan, which had been adopted in 2006 and made available a maximum of 4,550,000 shares of common stock for awards.

      . Section 162(m) of the Internal Revenue Code provides that, in certain circumstances, compensation in excess of $1 million to an employee in a year is not deductible by the employer, but contains an exception for the deduction of certain performance-based compensation. IRC § 162(m)(1).

      . iStar's stock price reached $4 per share in March 2010.

      . The existing awards had been largely expensed.

      . The Shareholders' May 23, 2013 letter acknowledged that “the Board certainly had authority to modify the terms of the 2008 Awards, as compensation decisions are entitled to protection of the business judgment rule.”

      . The challenged action was the creation of additional stock units through the 2009 Plan. The Shareholders did not challenge the 2008 Awards themselves and, as discussed supra in footnote 8, had even acknowledged in a May 23, 2013 that "the Board certainly had authority to modify the terms of the 2008 Awards, as compensation decisions are entitled to protection of the business judgment rule.” The Proxy Statement explained that if the 2009 Plan was not approved by shareholders, the 2008 Awards would be settled in cash rather than stock. Accordingly, even if the Shareholders succeeded in invalidating the 2009 Plan, iStar would incur costs associated with replacement executive awards.

      . Maryland courts often look to Delaware law for guidance on issues of corporate law. See Shenkner, supra, 411 Md. at 338 n. 14, 983 A.2d 408 (“This Court has noted the respect properly accorded Delaware decisions on corporate law' ordinarily in our jurisprudence.”) (quoting Werbowsky v. Collomb, 362 Md. 581, 618, 766 A.2d 123 (2001)).

      . The Shareholders assert that demand is excused when the majority of a board of directors is conflicted. This is a misstatement of the law. It is well established that an interested board of directors can utilize an SLC to respond to a shareholder demand and avoid the demand being excused entirely. Werbowsky, supra, 362 Md. at 619, 766 A.2d 123 ("[E]ven interested, non-independent directors ... may choose to seek the advice of a special litigation committee of independent directors, which has become a common practice.”). Indeed, demand is excused only in very extreme circumstances. See id. at 620, 766 A.2d 123 (explaining that demand futility is “a very limited exception, to be applied only when the allegations or evidence clearly demonstrate, in a very particular manner, either that (1) a demand, or a delay in awaiting a response to a demand, would cause irreparable harm to the corporation, or (2) a majority of the directors are so personally and directly conflicted or committed to the decision in dispute that they cannot reasonably be expected to respond to a demand in good faith and within the ambit of the business judgment rule.”) (emphasis added).

      . As an alternative argument, the Appellees assert that the facts stated in the letter are considered to be part of the complaint pursuant to Md. Rule 2-303(d), which provides that "[a] copy of any written instrument that is an exhibit to a pleading is a part thereof for all purposes.” The Shareholders respond that the complaint did not adopt or incorporate all of the factual assertions contained in the letter as true, and that the letter was attached solely for the purpose of alleging rejection of the demand and demonstrating the procedural history. We need not address this issue in light of our adoption of the holding of the Delaware courts that statements contained in the letter refusing demand are presumed to be true absent a particularized allegation rebutting the statement.

      . Although the Shareholders include a reference to impaired voting rights in Count V of the complaint, absent is any explanation of how the 2011 Modification actually interfered with Shareholder voting rights. Furthermore, because the Shareholders have not alleged any individual economic harm, the "claim for actual damages, if there is one, belongs to the corporation and can only be pursued by the corporation, directly or derivatively.” In re J.P. Morgan Chase & Co. S’holder Litig., 906 A.2d 808, 826 (Del.Ch.2005) aff'd, 906 A.2d 766 (Del.2006).


author: ROBERT A. ZARNOCH, J.

text:
    130 A.3d 1103
    Sutasinee THANA, et al. v. BOARD OF LICENSE COMMISSIONERS FOR CHARLES COUNTY.
    No. 1981,
    Sept. Term, 2014.
    Court of Special Appeals of Maryland.
    Jan. 29, 2016.

      Charles G. Byrd, Jr. (Alston & Boyd, on the brief) Baltimore, MD, for Appellant.
    Matthew P. Clagett (Office of the County Attorney for Charles County, on the brief) LaPlata, MD, for Appellee.
    Panel: BERGER, NAZARIAN and ROBERT A. ZARNOCH (Retired, Specially Assigned), JJ.
   ROBERT A. ZARNOCH, J.

(Retired, Specially Assigned).

In this appeal of a decision of the Circuit Court for Charles County, a liquor licensee seeks to raise a First Amendment challenge to a “consent order” of a county liquor board that prevented the establishment from offering “go-go entertainment.” In musical terms, this case, at first glance, may look like The Miracles’ 1965 hit, “Going to a Go Go” meets 1984’s “Footloose.” Ultimately, we conclude that, because of waiver and preservation problems, the appropriate tune is the Grass Roots’ 1967 hit, “Things I Should Have Said.”

This case revolves around go-go, but not the go-go that Smokey Robinson and the Miracles sang about in 1965. Go-go music — an offshoot of funk — originated in Washington, D.C., in the 1970s, and is characterized by a syncopated drum beat and call and response.

In 2012, appellants Thai Seafood & Grill, Inc., trading as Thai Palace, a restaurant and bar in Waldorf, Sutasinee Thana, and Michael J. Lohman (“Thai Palace” or “licensee”), proposed and consented to restrictions on the use of promoters and on providing go-go entertainment in exchange for the ability to present live entertainment at the restaurant as reflected in a consent agreement with appellee, the Board of License Commissioners for Charles County (the “Board”). Soon after, the Charles County Sheriffs Office received information that Thai Palace was using promoters and playing go-go music. The Board brought an enforcement proceeding against Thai Palace, and after a hearing, found that it had violated the consent order. Thai Palace raised no constitutional objection at this time. The Board revoked Thai Palace’s liquor license and its ability to host live entertainment.

Thai Palace petitioned the Circuit Court for Charles County to review the Board’s decision, arguing, inter alia, for the first time that the restrictions in the second consent order violated the due process and equal protection clauses of the Fourteen Amendment to the U.S. Constitution. After a hearing held on June 28, 2014, the circuit court denied Thai Palace’s petition in part in an order and memorandum opinion entered on October 15, 2014. Thai Palace then appealed to this Court. Now for the first time on appeal, the licensee raises a First Amendment challenge to the 2012 consent order. Thai Palace now presents the following questions for our review, which we have consolidated and rephrased:

I. Whether this Court should dismiss the appeal as moot because the consent order at issue expired on January-12, 2015, prior to oral argument?
II. Whether substantial evidence supported the Board’s finding that Thai Palace used promoters who maintained control over the entertainment provided on site?
III. Whether Thai Palace preserved its First Amendment argument and whether it waived its right to raise constitutional issues when it entered into the consent agreement with the Board? And, if the issue is preserved and not waived, whether a liquor board violates a licensee’s free speech rights under the First Amendment of the United States Constitution and the doctrine of unconstitutional conditions when it conditions certain benefits of a liquor license upon the business not providing a certain type of music?

We hold that the case is not moot, but that the licensee’s constitutional claim is not properly before us. Thus, we affirm the circuit court and the decision of the Board.

BACKGROUND

It is helpful to provide some background from the record on the incidents that occurred prior to the proceedings at issue here and the interactions between Thai Palace, the Waldorf community, and the Board. From 2006 through 2008, police responded to numerous reports of fights, disorderly behavior, controlled-dangerous substance violations, and concealed weapon violations at the location of the licensee’s restaurant. In 2007, these incidents resulted in 35 adult arrests and 35 juvenile arrests. That year, Thai Palace’s alcoholic beverage license was revoked after it hosted entertainment that featured nudity — a violation of the Alcoholic Beverages Article, Article 2B of the Maryland Code (1957, 2011 Repl.Vol.). From 2007 to 2009, after the liquor license was revoked, Thai Palace held regular go-go events hosted by promoters. During this time period, the Charles County Sheriffs Office received numerous calls reporting criminal activity, including fights, disorderly behavior, and controlled-dangerous substance violations.

On August 13, 2009, the Board held a hearing in which it considered Thai Palace’s application for a Class B, beer, wine, and whiskey, liquor license. Following the hearing, on November 12, 2009, the Board issued a consent order (the “first consent order”) in which it imposed several conditions on the restaurant, including the condition that “there shall be no entertainment other than dinner music from either a radio and/or t.v. and that there will be no other source of entertainment without prior written approval of the Board ...” The order provided that it “shall remain in effect until changed by the Board of License Commissioners[.]”

The first consent order remained in effect for two years without incident. In 2011, Thai Palace requested that the Board rescind the earlier consent order to allow the restaurant to once again provide live entertainment. The licensee assured the Board that it would “maintain control over arranging ... entertainment and [would] not use an outside promoter to do so”, and that it would not “offer any ‘go-go’ type entertainment.” Following a hearing on December 11, 2011, the Board issued a second consent order on January 12, 2012, modifying the conditions imposed on the restaurant. Under the second consent order, Thai Palace was “authorized to offer additional entertainment in the licensed premises to include instrumental and acoustical music; Karaoke; DJ music and dancing[.]” However, the order restricted Thai Palace from allowing “an outside promoter to maintain control of any entertainment” and from offering any “ ‘go-go’ entertainment^]” These provisions were obviously a response to the police involvement at the establishment from 2007 to 2009 and were designed to limit the size and unruliness of the crowds in and around Thai Palace.

The order was also to “remain in effect for a period of three years from the effective date of this order and shall act as an endorsement on the alcoholic beverage license issued to the licensees for the same three year period[.]” It further provided that, “upon the expiration of three years from the effective date of this order, ... this Order shall expire and be null and void and of no further effect.” The order was signed for the Board by a Charles County assistant county attorney and by the chairman of the Board of License Commissions for Charles County, and “[a]pproved and [consented to” by Suta-sinee C. Thana, Michael J. Lohman, and their attorney, David J. Martinez, for Thai Palace.

A year after the issuance of the second consent order, the Charles County Sheriffs Office sent a memorandum to the Board, detailing several violations of the second consent order. On June 20, 2013, the Board issued a show cause order to Thai Palace that alleged that the restaurant hosted numerous events that were advertised by promoters and that featured go-go music.

The Board held a hearing on December 12, 2013, to review the alleged violations of the second consent order. The Board’s attorney called Master Corporal Judith Thompson of the Alcohol Enforcement Unit at the Charles County Sheriffs Office. Officer Thompson provided the details of her investigation, which commenced in February 2012. She described flyers and Facebook posts that advertised purported go-go bands at the restaurant. Several of these advertisements contained names of promoters and used the words “promoted by,” described in further detail below. The Board’s attorney then called Officers Curtis and Chandler, also with the Charles County Sheriffs Office, both of whom worked security for Thai Palace as second jobs. They each testified that they observed go-go music playing at Thai Palace on several occasions while they were working.

Officer Curtis stated that she observed go-go music on two occasions while the second consent order was in effect. When asked how she knew that it was go-go music, she stated “Just from my generation, growing up. Going to school, I know what go-go music is____ [from] personal experience.” She described go-go music as “go-go music is a — to me is people— a lot of bass, drums, talking — you know, kind of screaming somewhat into the music, very fast beat.... It’s hard to explain.” She also commented on the difference between go-go and rhythm and blues as: “Go-go has — it’s pretty much the same beat. Whatever song is played, it’s the same beat, same fast-paced beat. R & B is different beats, different sounds, different words, everything is different.”

Officer Chandler stated that she observed go-go bands playing at Thai Palace about five or six times, but could not recall the dates. She knew that it was go-go music from personal experience, and when asked to define go-go music, Chandler stated “It’s just a different sound, a different beat. I really can’t explain what it is.”

The Board’s attorney then rested its case and counsel for Thai Palace called Mrs. Thana to testify. When questioned about promoters and how Thai Palace chose and booked entertainment, Mrs. Thana testified that she made appointments to meet with the bands and told them of the restrictions on playing go-go music. Mrs. Thana stated that she made the final decision as to whom was allowed to perform at Thai Palace and that bands must receive approval from her before printing flyers. Mrs. Thana testified that she approved the flyers that had been introduced as exhibits, with the exception of one flyer, which she said was printed without her permission.

Mrs. Thana stated that she allowed a DJ who was scheduled to play music to book VIP tables for patrons in advance. She also approved an advertisement with the DJ’s telephone number, advising patrons to call the D J to book a VIP table. Mrs. Thana maintained that she communicated with each band manager, but, when pressed by a member of the Board, she could not remember the names of specific band managers. Regarding payment, Mrs. Thana reported that she paid in cash or made checks out to the band leader and the name of the performer. Mrs. Thana stated that she made the final decision on hiring entertainment, but that her daughter and husband would help if there was a language barrier. Samantha Thana, Mrs. Thana’s daughter, testified and corroborated her mother’s testimony.

Thai Palace presented its closing argument and asked the Board to credit the testimony of Mrs. Thana that she did not allow outside promoters to maintain control of the entertainment and did not allow bands to play go-go music at the restaurant. Notably, Thai Palace did not argue that the second consent order, or any potential enforcement based on it, violated its constitutional rights.

At the conclusion of the hearing, the Board found that Thai Palace violated the second consent order and voted to revoke all consent. In a decision and order dated January 9, 2014, the Board concluded:

That from February 2012 through April 20, 2013, Suta-sinee Thana, Michael James Lohman, Thai Seafood and Grill, Inc., or their agents and employees, allowed numerous outside promoters to maintain control of the entertainment at Thai Palace in violation of the modified Consent Order dated January 12, 2012; and ...
That from February 2012 through April 20, 2013, Suta-sinee Thana, Michael James Lohman, Thai Seafood and Grill, Inc., or their agents and employees, hosted numerous events that included “go go” entertainment in violation of the modified Consent Order dated January 12, 2012.

The order revoked the first and second consent orders as well as Thai Palace’s Class-B alcoholic beverage license.

On February 6, 2014, Thai Palace petitioned for judicial review of the Board’s decision pursuant to Maryland Rule 7-201 et seq. Before the circuit court, the licensee argued: 1) that the findings by the Board that Thai Palace had allowed promoters to maintain control of entertainment and play go-go music were not supported by substantial evidence; 2) that the restriction on having go-go entertainment placed on its license was a violation of Article 24 of the Maryland Declaration of Rights and the Equal Protection and Due Process Clauses of the 14th Amendment to the United States Constitution; and 3) that the decision of the Board to revoke the alcoholic beverage license for violations of the 2012 consent order was beyond the power of the Board because there were no allegations that Thai Palace had violated the alcoholic beverage laws or regulations of Charles County, nor was there an allegation that Thai Palace had violated any other provision of Article 2B for which revocation of a license is a penalty.

The Board countered that its findings were supported by substantial evidence; that Thai Palace was barred from contesting the constitutionality of the consent order because it had agreed to the restrictions on go-go entertainment; and that the Board had authority to revoke Thai Palace’s license because the license was predicated on compliance with the second consent order.

At a hearing held before the circuit court on June 23, 2014, Thai Palace did not expand on its constitutional claims. It maintained its argument that the language of the second consent order violated equal protection because “it was discriminatory as opposed to all types of music” and due process “because there was no ascertainable standard for [the music’s] inclusion or exclusion, and was therefore unconstitutionally vague.”

The circuit court issued an order and memorandum opinion on October 16, 2014, in which it concluded that substantial evidence was presented at the hearing to sustain the Board’s findings. The court agreed with the Board that Thai Palace waived any constitutional challenge to the prohibition on go-go music because Thai Palace proposed and consented to the restriction and would have had to appeal the restriction at the time it was imposed to obtain judicial review. The court did, however, hold that the Board was not authorized to revoke the liquor license, because it was not conditioned on Thai Palace’s compliance with the terms of the second consent order and the hearing did not otherwise meet the procedural requirements for revoking a liquor license under Article 2B § 10-403(a)(1). The court remanded the case to the Board for further proceedings to determine whether the liquor license should be revoked. Thai Palace filed its appeal to this Court on November 13, 2014. The Board did not cross-appeal the circuit court’s order.

DISCUSSION

I. Mootness

As an initial matter, the Board argues that this appeal should be dismissed as moot because the second consent order expired by its own terms on January 12, 2015, three years from the date of its issue. Thai Palace responds that this appeal is not moot because it could have collateral estoppel implications for its federal case, currently on appeal in the U.S. Court of Appeals for the Fourth Circuit. Thai Palace also argues that, if affirmed, the Board could consider the violation in subsequent proceedings to impose greater penalties.

“A case is moot when there is no longer any existing controversy between the parties at the time that the case is before the court, or when the court can no longer fashion an effective remedy.” Green v. Nassif, 401 Md. 649, 654, 934 A.2d 22 (2007) (quoting In re Kaela C., 394 Md. 432, 452, 906 A.2d 915 (2006)) (Internal quotation marks omitted). “Where, however, it seems apparent that a party may suffer collateral consequences from a trial court’s judgment [or administrative decision], the case is not moot.” In re Kaela C., 394 Md. at 453, 906 A.2d 915 (citing Toler v. Motor Vehicle Admin., 373 Md. 214, 219, 817 A.2d 229 (2003)); see Toler, 373 Md. at 219, 817 A.2d 229 (holding that the potential for enhanced penalties for future violations kept a case from becoming moot); see also Case of Seila’s Liquor License, 124 Pa.Super. 519, 190 A. 203, 205 (1937) (The collateral consequences, in the form of increased penalties, “of a violation of the liquor laws prevent the questions [on appeal] from becoming moot at the expiration of the term of a license”).

“ ‘Unlike the Article III constitutional constraints on the federal courts, ... [Maryland’s] mootness doctrine is based entirely on prudential considerations’ that do not constitutionally bar us from reaching the merits of a moot action.” Comptroller of the Treasury v. Zorzit, 221 Md.App. 274, 291-92, 108 A.3d 581 (2015) (quoting Carroll Cnty. Ethics Comm’n v. Lennon, 119 Md.App. 49, 57, 703 A.2d 1338 (1998)). However, even under the more stringent federal case or controversy requirement, a licensee who asserts an intent to continue to operate under the terms of a valid license will be deemed to have satisfied the requirement for setting forth an existing controversy between the parties. See Clark v. City of Lakewood, 259 F.3d 996, 1012 (9th Cir.2001) (holding that case was not moot where adult business stated intention to reopen his business if ordinance were enjoined); Dolls, Inc. v. City of Coralville, Iowa, 425 F.Supp.2d 958, 986 (S.D.Iowa 2006) (Case not moot where adult business currently asserted an intent to reopen, even though it had not applied for, nor been denied zoning permit); cf. City News & Novelty, Inc. v. City of Waukesha, 531 U.S. 278, 285, 121 S.Ct. 743, 148 L.Ed.2d 757 (2001) (holding that no controversy existed where party had exited the adult business and asserted no plan to reenter).

In the present case if the Board prevails, it could use the existence of the violations against Thai Palace in future proceedings. At oral argument, Thai Palace expressed its intention to petition the Board again to allow the restaurant to provide live entertainment. Therefore, because the outcome of these proceedings will affect the licensee’s future treatment by the Board, we hold that the case is not moot, and we deny the Board’s motion to dismiss.

II. Restriction on the Use of Promoters

A key issue here is whether substantial evidence existed to support the decision of the Board. Thai Palace argues that substantial evidence did not exist to support the Board’s findings that Thai Palace violated the second consent order by allowing promoters to maintain control of the entertainment. Thai Palace does not contest the sufficiency of evidence to support a finding that it provided go-go entertainment; however, it does challenge the constitutionality of the restrictions on go-go entertainment in the second consent order. We discuss these arguments below.

Our review of the Board’s decision is the same as that of the circuit court:

[T]he action of the local licensing board shall be presumed by the court to be proper and to best serve the public interest. The burden of proof shall be upon the petitioner to show that the decision complained of was against the public interest and that the local licensing board’s discretion in rendering its decision was not honestly and fairly exercised, or that such decision was arbitrary, or procured by fraud, or unsupported by any substantial evidence, or was unreasonable, or that such decision was beyond the powers of the local licensing board, and was illegal. The case shall be heard by the court without the intervention of a jury.

Art. 2B, § 16-101(e)(1)(i). Thus, our review of the decision of the Board is similar to our review of decisions of other administrative agencies — in short, if the Board’s decision was supported by substantial evidence, and if it committed no error of law, we must affirm. Paek v. Prince George’s County Bd. of License Com’rs, 381 Md. 583, 590, 851 A.2d 540 (2004).

Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Blackburn v. Board of Liquor License Comm’rs for Baltimore City, 130 Md.App. 614, 634, 747 A.2d 725 (2000) (quoting Bulluck v. Pelham Wood Apartments, 283 Md. 505, 512, 390 A.2d 1119 (1973)). Reviewing courts assume the capability of the board members “who are familiar with the matter in dispute and informed by training and experience to pass upon the questions of fact presented to them”; therefore, the courts will “not substitute their own judgments for the findings of administrative officials” State Ctr., LLC v. Lexing ton Charles Ltd. P’ship, 438 Md. 451, 568, 92 A.3d 400 (2014) (quoting Coddington v. Helbig, 195 Md. 330, 337, 73 A.2d 454 (1950)).

The second consent order states that Thai Palace “shall not allow an outside promoter to maintain control of any entertainment.” An “outside promoter” is a party unaffiliated with Thai Palace who encourages or promotes the entertainment. “Promoter,” Black’s Law Dictionary (10th ed.2014). The phrase, “maintain control” means to “exercise power or influence over” something. “Control,” Black’s Law Dictionary (10th ed.2014). Accordingly, in this context, the second consent order prohibits third parties from influencing or exercising power over the advertising, marketing, and performing of entertainment at Thai Palace.

At the December 12, 2013 hearing, Officer Thompson testified that she observed advertisements that represented that the entertainment was organized by a third party promoter:

[THOMPSON]: I had received information from our intelligence unit in reference to an event that was scheduled for February 4th, and the advertisement ... basically that said that they were going to have a performance and that there were several names of promoters that were on the advertisement. And it was the intelligence’s understanding from, I guess, a conversation that I had previously had from them — or with them in which Thai was not allowed to have — I understood that Thai was not allowed to have outside promoters. So, they sent me this Internet ad that they found.
[W]e were able to establish that the person who had the Internet flyer posted on their Facebook page was a Mr. Mark Twain Green. Eventually we were able to establish the name of Mark Twain Green. In any case, Twain Green, from the information I received from intelligence, had some connection or there appeared to be some connection between him and 27 Entertainment, which is one of the promoters that is listed on the flyer. The flyer was powered by Boss Entertainment, Everyday Entertainment and 27 Entertainment. Mr. Twain Green is known as a local music promoter.

The advertisements were introduced into evidence, and Thai Palace did not rebut Officer Thompson’s testimony. The officer also testified that she observed printed flyers in Thai Palace during the time that the second consent order was in effect. The flyers advertised musical performances and other live entertainment at Thai Palace and included text that indicated the use of promoters: “This event is brought to you by On Fire Productions/J & J Productions/Kenya White Productions! Smitty Productions/R.E.D. Productions/Swagg Entertainment” “Corporate Affairs Presents,” “No Question Band Ent Presents,” and “Through Rock Promotions.” Mrs. Thana testified that she made the decisions regarding what entertainment was offered at the restaurant and approved the flyers, even though the flyers were drafted by individuals not employed by Thai Palace.

Thai Palace challenges the Board’s reliance on these flyers and Internet advertisements of events. Specifically, the licensee argues that the Board had evidence through Mrs. Thana’s testimony that “she [made] all of the decisions regarding entertainment at Thai Palace, and that she was involved in the selection process and approved or declined to approve each flyer and/or advertisement, and otherwise maintained control of the entertainment at Thai Palace.”

Nonetheless, the second consent order broadly prohibits third parties from exercising control over the entertainment advertising and presentation at Thai Palace. The Board received testimony of witnesses who reported that they observed go-go entertainment at Thai Palace on multiple occasions, in contradiction to Mrs. Thana’s insistence that go-go music was not performed. From this testimony, the Board was allowed to draw an inference that Mrs. Thana’s testimony was not credible and that Thai Palace was not in control of the entertainment. The clear implication of the content of the advertisements — which used language such as “This event is brought to you by [third party promoter]” — was that some third party was promoting and supplying the entertainment at Thai Palace. The Board was not required to disregard this evidence and instead credit Mrs. Thana’s contrary testimony. Finally, the advertisements and Mrs. Thana stated that patrons could book “VIP” tables by calling the bands or promoters. In our view, a reasoning mind could have concluded that the licensee had violated the consent order’s prohibition on the use of promoters. Thus, we hold that substantial evidence supported the decision of the Board and, therefore, affirm the circuit court on this issue.

III. Constitutional Issues

Thai Palace also contends that the restriction on go-go entertainment violates the First Amendment. The Board’s response is two-fold. First, the Board argues that Thai Palace may not argue this constitutional claim because it was not raised at the hearing before the Board. Second, the Board contends that Thai Palace waived any constitutional challenge to the language in the second consent order when it proposed and consented to the order and did not seek immediate judicial review of the terms of the agreement.

Generally, a government cannot condition a benefit on a basis that infringes constitutionally protected interests, “especially [one’s] interest in freedom of speech.” Perry v. Sindermann, 408 U.S. 593, 597, 92 S.Ct. 2694, 33 L.Ed.2d 570 (1972). The Supreme Court has routinely invalidated conditions that restricted individual rights generally and First Amendment rights in particular. See, e.g., Perry, 408 U.S. at 597-98, 92 S.Ct. 2694 (holding that employment at a public university may not be predicated on the university’s disagreement with the employee’s exercise of First and Fourteenth Amendment rights). Although the Board and the licensee may consent to reasonable restrictions, the Court of Appeals has not resolved whether “the [liquor board] may use its power to grant or transfer a license to try to coerce the acceptance of restrictions by the prospective licensee or [whether] all restrictions agreed to by licensees are valid.” Bd. of Liquor License Com’rs for Baltimore City v. Fells Point Café, Inc., 344 Md. 120, 141, 685 A.2d 772 (1996). The present context concerns the grant of a benefit — the liquor license — and involves a government body as a party to the consent agreement — a situation that requires consideration of interests not present in agreements between private parties.

Music and live musical entertainment fall within the “wide range of expression that has long been held to be within the protections of the First and Fourteenth Amendments.” Schad v. Borough of Mount Ephraim, 452 U.S. 61, 65, 101 S.Ct. 2176, 68 L.Ed.2d 671 (1981); see Ward v. Rock Against Racism, 491 U.S. 781, 790, 109 S.Ct. 2746, 105 L.Ed.2d 661 (1989) (“Music, as a form of expression and communication, is protected under the First Amendment”). Thus, a restriction on a specific type of music is, on its face, a content-based restriction on First Amendment expression and presumptively unconstitutional. See Torries v. Hebert, 111 F.Supp.2d 806, 818-19 (W.D.La.2000) (holding that prosecution of a skating rink for contributing to the delinquency of a minor by playing “gangster rap” was content-based discrimination violative of the First Amendment); see also DA Mortg., Inc. v. City of Miami Beach, 486 F.3d 1254, 1266 (11th Cir.2007) (suggesting that laws that “distinguish, for example, between excessively loud singing, thunderous classical music recordings, reverberating bass beats” would be considered content-based).

Conditioning liquor licenses on an agreement with a putative licensee that it refrain from playing a particular type of music or, more generally, suggesting to potential licensees that they should forbear from certain forms of expressive conduct in exchange for a license may be unconstitutional. See, e.g., G & V Lounge, Inc. v. Michigan Liquor Control Comm’n, 23 F.3d 1071, 1077 (6th Cir.1994) (holding an agreement conditioning a liquor license on a restriction on topless dancing was unenforceable under the unconstitutional conditions doctrine). Alternatively, an agreement may avoid First Amendment challenge by focusing on content-neutral conditions, such as time, place, and manner restrictions, which have consistently been held to withstand intermediate judicial scrutiny. See, e.g., Ward v. Rock Against Racism, 491 U.S. 781, 803, 109 S.Ct. 2746, 105 L.Ed.2d 661 (1989); Piscatelli v. Bd. of Liquor License Com’rs, 378 Md. 623, 643, 837 A.2d 931 (2003). In conditioning licenses on content-neutral bases such as requirements to provide extra police or security during live entertainment events, restrictions on decibel level, and limitations on attendance or crowd-size, liquor boards would not run afoul of the First Amendment.

For example in BEG Investments, LLC v. Alberti, 85 F.Supp.3d 13 (D.D.C.2015), when faced with incidents of violence in areas surrounding a nightclub that featured mostly R & B, Hip-Hop, and go-go music — a situation reminiscent of Thai Palace in 2008 — the D.C. Alcohol Beverage Control Board imposed content-neutral conditions that withstood court scrutiny. The board in that case conditioned the renewal of the night club’s liquor license on the requirement that the night club hire a Metropolitan Police Department reimbursable detail “whenever the establishment provides any DJs or live music as entertainment at the establishment.” Id. at 20. The nightclub challenged the restriction as content-based; however, the district court determined that:

the condition itself does not reflect[] that the Board imposed any restrictions whatsoever on the content or genre of music that Plaintiff may play while maintaining its liquor license. According to the Board’s order, Plaintiff was required to hire a reimbursable detail only if it elected to provide certain forms of live entertainment — a DJ or live music — regardless of whether the music played was go-go or gospel.

Id. at 36. Furthermore, the Alcohol Beverage Control Board’s explanation for its imposition of the condition was content-neutral — it was designed to alleviate “negative impacts on the neighborhood” and was in response to “concerns regarding the establishment’s effect on peace, order, and quiet” after “a number of violent incidents ... [had] occurred at the establishment.” Id. The court held that there was “no question that the reimbursable detail condition is facially content-neutral, impacting indirectly only the ‘time, place or manner of expression,’ purportedly for the purpose of ameliorating the establishment’s negative effects on the surrounding neighborhood.” Id.

As shown by these cases, it may be risky for a liquor board to adopt, as an affirmative policy, restrictions on certain forms of dancing or musical entertainment. However, the First Amendment issue has been waived and is not preserved for our review.

“Ordinarily, the appellate court will not decide any other issue unless it plainly appears by the record to have been raised in or decided by the trial court.” Md. Rule 8-131(a). This proposition holds for appeals from administrative agencies, such as the Board, Motor Vehicle Admin. v. Shepard, 399 Md. 241, 260, 923 A.2d 100 (2007) (It is a settled principle of Maryland administrative law that, in an action for judicial review of an adjudicatory administrative agency decision, the reviewing courts should decline to consider ‘an issue not raised before the agency’), and applies to equally constitutional issues where the litigant is not challenging the constitutionality of statute in its entirety, Yim, LLC v. Tuzeer, 211 Md.App. 1, 49, 63 A.3d 1078 (2013) (Citations omitted) (“[E]ven constitutional issues ‘must be pursued and exhausted’ before the relevant administrative agency ‘before resortpng] to the courts’ ”); Ins. Com’r of State of Md. v. Equitable Life Assur. Soc. of U.S., 339 Md. 596, 622, 664 A.2d 862 (1995).

Thai Palace does not argue that it raised any constitutional issues during the Board’s enforcement proceeding. It does, however, contend that by raising due process and equal protection defenses before the circuit court, it preserved its First Amendment arguments for review in this Court. We disagree — Thai Palace would have had to raise these claims before the Board to preserve them for our review. Pelham Wood Apartments, 283 Md. at 518, 390 A.2d 1119; Yim, LLC, 211 Md.App. at 49, 63 A.3d 1078. Moreover, even if we were to acknowledge Appellants’ arguments in the circuit court, we would not construe its due process and equal protection claims — each with legal standards that differ from a First Amendment analysis — to be enough to preserve a First Amendment claim made for the first time on appeal to this Court. We conclude that Thai Palace failed to preserve its First Amendment argument.

Moreover, licensee is precluded from challenging the terms of the consent order because the licensee proposed the contested terms and because it failed to appeal the allegedly unconstitutional condition at the time it was included in the court order. Fells Point Café, 344 Md. at 141, 685 A.2d 772 (holding that “when a licensee agrees to reasonable restrictions in order to obtain a license that clearly would not otherwise be granted, the licensee will be estopped from later arguing that the Board had no power to place such a restriction on the license”). Although Thai Palace argues that the Board would not modify its: liquor license unless it agreed to the restriction on go-go entertainment, the record does not reveal any statements made by the Board on this point, and the document containing these restrictions was submitted by the licensee’s attorney. Further, the record reflects that the licensee did not appeal the legality of the second consent order after it was issued. See Fells Point Café, 344 Md. at 137, 685 A.2d 772 (“If a licensee feels aggrieved by the conditions sought to be placed on his or her license, he or she should seek judicial review at the time the conditions are imposed”).

In the instant case, where the licensee proposed the restrictions and did not seek judicial review until after enforcement, and where the licensee did not raise this issue before the Board or before the circuit court, we will not decide the First Amendment question. For the above reasons, we affirm the circuit court.

JUDGMENT OF THE CIRCUIT COURT FOR CHARLES COUNTY AFFIRMED. COSTS TO BE PAID BY APPELLANT.

      . In the 1984 film, "Footloose,” which was remade in 2011, the municipal council of the mythical town of Bomont banned dancing and rock music.

      . In the words of Kip Lornell and Charles C. Stephenson, Jr., "Go-Go is more than music. It’s a complex expression of cultural values masquerading in the guise of party music in our nation’s capital.” The Beat!: Go-go Music from Washington, D.C. 15 (rev. ed.2009). At the hearing before the liquor board, counsel for the licensee provided the following definition of go-go music:
      Go-go is a sub-genre associated with funk that originated in the Washington, D.C. area during the mid 1960s and late 1970s.... It remains primarily popular in the area as a uniquely regional musical style. A great number of bands contributed to the early revolution of the genre, but the Young Senators, Black Heat, notably, singer-guitarist Chuck Brown and The Soul Searchers are credited with having developed most of the hallmarks of the style.
      Inspired by artists such as the groups formerly mentioned, go-go is a blend of funk, rhythm and blues, and early hip-hop with a focus on lo-fi percussion instruments and funk-style jamming in place of dance tracks, although some sampling is used. As such, it is primarily a dance hall music with an emphasis on live audience call and response. Go-go rhythms are also incorporated into street percussion.
      In technical terms, go-go's essential beat is characterized by a syncopated dotted rhythm that consists of a series of quarter and eighth notes (quarter, eighth, quarter (space/held briefly), quarter, eighth, quarter) ... which is underscored most dramatically by the bass drum and snare drum and the hi-hat, [and] is ornamented by the other percussion instruments, especially by the congo drums, tim-bales and hand-held cowbells.

      . In holding against the Board in part, the court found that the Board did not make the requisite findings that a violation of a 2009 consent order occurred and found that the Board had not given proper notice of its intent to revoke Thai Palace’s liquor license.

      . Parts of this provision were struck down as unconstitutionally over-broad. See Legend Night Club v. Miller, 637 F.3d 291, 302 (4th Cir.2011) (concluding that Article 2B § 10-405 was unconstitutionally overbroad because it prohibited a substantial amount of expression that is protected by the First Amendment and was not readily susceptible to a limiting construction). In 2012, the General Assembly amended § 10-405 to bar enforcement against a licensee operating "a theater, concert hall, art center, museum, or similar establishment that is primarily devoted to the arts or theatrical performances; and ... [t]he performances express matters of serious literary, artistic, scientific, or political value.” Chapter 697, Laws of 2012.

      . In prior proceedings before the Board, the agent for Thai Palace was Mr. Sam Thana. Starting in 2009, Mr. Thana’s wife, Mrs. Sutasinee Thana, was the agent for Thai Palace and held the liquor license on its behalf. Mrs. Thana was the president of Thai Palace and owned 80% of its stock at the time of the 2009 hearing. Although there was some confusion about changes in ownership of Thai Palace during the proceedings, it appears that the appellant Thai Palace is the same corporation whose liquor license was revoked in 2007.

      . She recounted that many of the bands felt that this policy unfairly discriminated against go-go music while allowing other music, such as Thai and Latin tunes, to be played.

      . In addition to the state court proceedings here, on November 5, 2014, Thai Palace filed a complaint in the U.S. District Court for the District of Maryland, alleging that the restriction on go-go entertainment in the second consent order violated its First Amendment rights to free speech and requested a declaratory judgment finding that the condition and the revocation of the consent order based upon the Board’s finding ran afoul of the First Amendment. Thana v. Bd. of License Com'rs for Charles County, Md., 104 F.Supp.3d 711 (D.Md.2015). The district court, in a memorandum opinion issued on May 14, 2015, granted the Board’s motion to dismiss for lack of subject matter jurisdiction under the Rooker-Feldman doctrine, which precludes federal appellate jurisdiction over state court judgments. See Rooker v. Fidelity Trust Co., 263 U.S. 413, 416, 44 S.Ct. 149, 68 L.Ed. 362 (1923); D.C. Court of Appeals v. Feldman, 460 U.S. 462, 482, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983) ("[A] United States District Court has no authority to review final judgments of a state court in judicial proceedings. Review of such judgments may be had only in [the Supreme] Court”). Thai Palace appealed this decision to the U.S. Court of Appeals for the Fourth Circuit, which has not scheduled oral argument as of the date of this decision.

      . In a footnote, Thai Palace argues for the first time that the second consent order’s restriction on using promoters violates its First Amendment right of association. Thai Palace provides no argument and cites to no authority in support of this unpreserved contention. Therefore, we will not consider it.

      . In their article, Rethinking Free Speech and Civil Liability, Daniel J. Solove and Neil M. Richards note:
      At the doctrinal level, the consensual waiver [of constitutional rights] approach's focus on autonomy fails to explain the problem of unconstitutional conditions. For instance, suppose the government offered to pay citizens $100 in exchange for not criticizing government policies. From a pure autonomy approach, those who accepted such a deal would have freely bargained away their First Amendment rights to criticize the government. But from the perspective of the social interest in free speech, a valuable source of potential criticism of the government would have been bought up by the government in such a way as to skew, distort, and stifle public discourse. Recognizing this problem, the Supreme Court has held in a series of cases that the government may not condition certain waivers of constitutional rights on the receipt of benefits. The unconstitutional conditions doctrine has been criticized for being inconsistent and incoherent, but it clearly reflects that even "consensual” waivers of constitutional rights can threaten the First Amendment and trigger heightened scrutiny.
      109 Colum. L.Rev. 1650, 1678 (2009); see also Jason Mazzone, The Waiver Paradox, 97 Northwestern U.L.Rev. 801, 848 (2003) (contrasting the Supreme Court’s willingness to allow waiver of constitutional rights in the criminal plea bargain context with the Court’s skepticism of governmental conditions on the exercise of First Amendment rights).

      . Unquestioned in this case is a liquor board’s authority to prevent a licensee from offering live musical entertainment.

      . A reimbursable detail comprises “MPD officers [who] patrol the surrounding area of an establishment for the purpose of maintaining public safety.” BEG Investments, 85 F.Supp.3d at 20.

      . Thai Palace argued before the circuit court that, "One, [the consent order] was discriminatory as opposed to all types of music. And, two, that as, as to go-go music, it failed on the due process ground because there was no ascertainable standard for inclusion or exclusion, and was therefore unconstitutionally vague.” The licensee is no longer pursuing these due process and equal protection arguments before this Court.