License appeals get no easier after court ruling

I wish I could tell you that my forecast for Pennsylvania liquor license appeals contained some good news for 2015. But there remains no positive news to be found.

First, my annual survey of Commonwealth Court rulings on licensee appeals of Pennsylvania Liquor Control Board renewal denials showed a near unanimous siding by the court with the PLCB. Indeed, out of more than 50 appeals of liquor license renewal denials that made their way to Commonwealth Court in 2014, licensees came away with only one win.

What is more, in an unpublished case, Commonwealth Court revealed a troubling expansion of the duties of Pennsylvania establishments to police, control and protect their patrons on and off the licensed premises.

Previously, licensees were held responsible for what occurred within their establishment, on their grounds and in the immediate vicinity of their business. In a new case, however, a drive-by shooting occurred several blocks away. Worse, it was never established that the shooter was ever inside the licensed establishment or on the licensee's grounds. Yet none of this stopped the court from upholding the PLCB's license renewal denial of a 1,300-seat music venue in the Lehigh Valley.

The following case involving a key decision governing the mechanics of PLCB appeals shows that the process will get no easier for licensees.

Opinions matter

When the PLCB denies an establishment's liquor license, it has long been the agency's custom not to issue a written opinion until the licensee's appeal is filed. This refusal to issue a written opinion prior to appeal has always seemed like a Catch-22, since to frame an appeal a licensee has a vested interest in receiving the PLCB's written reasons, along with the hearing examiner's report on the case.

Section 464 of the Pennsylvania Liquor Code, however, states that the PLCB, in denying an establishment's liquor license renewal, shall provide a short, written opinion laying out the reasons for the renewal denial.

Last year a licensee in the western part of the state, Arena Beverage Corp., decided to test this long-murky area of the code (Commonwealth Court case 1960 C.D. 2013), arguing it was entitled to receive the PLCB opinion prior to filing an appeal.

High stakes

When an establishment's license is up for renewal, one of the Bureau of Licensing's first moves is to contact local police to check for any sign that the licensee is running a nuisance bar.

At a hearing before an examiner, a licensee has the opportunity to make his or her case for renewal. The examiner then writes a report and makes a recommendation to the PLCB's three-member board, which meets publicly two Wednesdays a month. It's during these meetings, typically with little or no discussion, that the board decides whether to renew an establishment's license.

If the renewal is denied, the licensee must file an appeal by the Friday following the vote. The quick appeal is necessary to stay the board's decision and allow the establishment to remain open while the legal case plays out.

Given the stakes involved and the tight timetable, it seems reasonable that the board would have to state the reasons for the denial prior to the licensee filing an appeal.

An uphill battle

If you were hoping for a feel-good ending here, you haven't been keeping up with the pro-PLCB leanings of our Commonwealth Court, which overturned an Allegheny County Common Pleas Court's ruling in favor of Arena Beverage.

In the court's eyes, the mere fact that the PLCB issues the opinions at all is more than enough to comply with Section 464.

Bottom line: Challenging the PLCB and its license renewal denials will get no easier for licensees. Indeed, the winds of Commonwealth Court have been blowing against licensees for some time now.

In my legal practice focusing on liquor license law at Scaringi Law P.C., I counsel my clients that the best defense is a good offense. That means mounting an effective appeal. It also means working with my clients to ensure they are complying with all PLCB statutes so they can avoid a denial in the first place.

All my legal research tells me that neither the PLCB nor Commonwealth Court is becoming any friendlier toward licensees - which is why establishments must be proactive and guard against potential problems.

To learn more about how Scaringi Law attorney Frank C. Sluzis can help you, call him toll-free at 877-LAW-2555 or email him at info@scaringilaw.com