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Jakanna Woodworks Inc. v. Montgomery County2/13/1997
Opinion by Chasanow, J.
The issue in this case is whether Chapter 30-10 of the Montgomery County Code, which requires merchants to obtain a license before advertising a "closing-out sale," impermissibly infringes upon the constitutional rights of merchants to engage in truthful and non-misleading commercial speech, both because Chapter 30-10 is not narrowly tailored to advance directly a substantial government interest and because it constitutes a prior restraint on speech. For the reasons set forth below, we hold that Chapter 30-10 does impermissibly impinge upon truthful and non-misleading commercial speech and that it is unconstitutional.
I.
Petitioner is a small, family-owned furniture store. The store has been in operation for fifteen years in Rockville, Maryland. In April 1995, Petitioner's proprietors, Morton Jacobs and his wife, Anna Wheeler, decided to look for a larger store with additional space in which to display furniture and to store inventory. The proprietors found a suitable space across the street from the Rockville store and entered into a lease in May of 1995.
In order to minimize inventory damage and moving costs, Jacobs decided to attempt to sell all of his old inventory before the move and to order all new inventory for the new store. A successful sale of the old inventory would require advertisement, and Jacobs decided to place an advertisement in the MONTGOMERY GAZETTE. The advertisement, which appeared on May 17, 1995, read:
"PUBLIC NOTICE
FURNITURE LIQUIDATION
One of the metro area's largest wood furniture specialty stores is selling off their entire store and warehouse inventory[.] Every Floor Sample and Every Item In Stock Must Be Sold!
SELLING OUT TO THE BARE WALLS
NOTHING HELD BACK!"
The advertisement went on to list the store's address, its hours of operation, and the prices of some of the furnishings that would be available for purchase. It is undisputed that the address, hours, and prices listed in the advertisement were truthful.
Unbeknownst to Jacobs, by using the word "liquidation" in the advertisement, and perhaps based on the advertisement's content, he had advertised a "closing-out sale" in violation of Chapter 30-10 of the Montgomery County Code.
"'Closing-out sale' includes any sale advertised, represented or held under the designation of 'going out of business,' 'discontinuance of business,' 'selling out,' 'liquidation,' 'lost our lease,' 'must vacate,' 'forced out,' 'removal' or any similar designation but does not include the closing out of an item of merchandise."
MONTGOMERY COUNTY CODE, § 30-10(a)(2)(1994). Chapter 30-10 prohibits any person from advertising a "closing-out sale" without first obtaining a license from the Director of the Office of Consumer Affairs ("Director"). MONTGOMERY COUNTY CODE, § 30-10(b)(1). To receive such a license, one must file an application under oath and pay an application fee. MONTGOMERY COUNTY CODE, § 30-10(b)(2),(3). The application, which must be filed no later than 14 days before the opening date of the sale, must contain
"all relevant facts relating to the sale, including:
(A) the first and last dates of the proposed sale;
(B) the date when the owner of the business intends to stop the operations of the business at the location or locations listed in the application;
(C) a complete inventory of the merchandise to be sold;
(D) a list of all persons with an ownership interest in the business if the business does not have publicly-traded shares;
(E) the text of all
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