MFW Wine Co. v. Pa. Liquor Control Bd.

CourtCommonwealth Court of Pennsylvania
Citation231 A.3d 50
Docket NumberNo. 251 M.D. 2020,251 M.D. 2020
Parties MFW WINE CO., LLC, A6 Wine Company, and GECC2 LLC d/b/a/ Bloomsday Cafe, Petitioners v. PENNSYLVANIA LIQUOR CONTROL BOARD, Respondent
Decision Date01 May 2020

231 A.3d 50

MFW WINE CO., LLC, A6 Wine Company, and GECC2 LLC d/b/a/ Bloomsday Cafe, Petitioners
v.
PENNSYLVANIA LIQUOR CONTROL BOARD, Respondent

No. 251 M.D. 2020

Commonwealth Court of Pennsylvania.

Heard: April 28, 2020
Decided: May 1, 2020
Publication Ordered May 7, 2020


John Papianou and Joseph E. Samuel, Jr., Philadelphia, for Petitioners.

Rodrigo J. Diaz, Chief Counsel, Robert W. McAteer, Deputy Chief Counsel, Jason M. Worley, Deputy Chief Counsel, and Matthew A. Thren, Assistant Counsel, Harrisburg, for Respondent.

BEFORE: HONORABLE P. KEVIN BROBSON, Judge

OPINION BY JUDGE BROBSON

231 A.3d 52

Petitioners MFW Wine Co., LLC (MFW), A6 Wine Company (A6), and GECC2 LLC d/b/a/ Bloomsday Cafe (Bloomsday) (collectively, Petitioners) initiated this action against Respondent Pennsylvania Liquor Control Board (PLCB) in this Court's original jurisdiction, seeking to enforce what Petitioners claim is a statutory right to the direct shipment of special order liquor or alcohol to customers from licensed importers or licensed vendors.1 Petitioners also filed an Emergency Motion for Peremptory Judgment in Mandamus and Special Injunctive and Declaratory Relief (Application).2 At this Court's direction, PLCB filed a comprehensive answer to the Application.

This Court conducted a remote video hearing on April 28, 2020, by Cisco WebEx®. The parties filed a Joint Stipulation of Facts, which the Court made part of the hearing record. Both parties presented testimonial and documentary evidence. The Application is now ripe for the Court's disposition. The Court is satisfied, upon consideration of the parties’ written and oral arguments and the evidence adduced during the hearing, that the Application can be resolved based on the undisputed material facts of record and the governing law.

Act 39 of 2016 (Act 39)3 made sweeping changes to the Pennsylvania Liquor Code.4 Prior to the passage of Act 39, those wishing "to purchase a class, variety or brand of liquor or alcohol not currently available from" PLCB could place a "special order" for the item. Section 305(a) of the Liquor Code, 47 P.S. § 3-305(a). The customer, however, was required to pick up the special order at a PLCB store, allowing PLCB to impose a handling fee on the special order, just as it imposes a handling fee on all alcohol that it sells at its stores.

Relevant here is Section 3 of Act 39, which, inter alia , amended Section 305(a) of the Liquor Code, 47 P.S. § 3-305(a), to include the following new provision relating to special orders:

A licensed importer or a licensed vendor may place special orders on behalf of customers and may deliver the orders to customers. The orders do not need to come to rest at a store, but delivery may not occur until payment for the order has been forwarded to the board and the board has authorized the delivery of the order. A handling fee may not be assessed by the board on an order delivered directly to a customer. Liability for special orders that do not come to rest at a store, shall, until the order is delivered to the customer, remain with the licensed importer or licensed vendor that placed the order on behalf of the customer. The board shall, by January 1, 2017, implement a procedure for processing special orders which do not come to rest at a store. The board may continue to accept special orders at its
231 A.3d 53
stores even after the procedure is implemented.

(Emphasis added.) This provision became effective on August 8, 2016.

On July 13, 2016, prior to the effective date of the above special orders amendment to the Liquor Code, the General Assembly passed and the Governor signed Act 85 of 2016 (Act 85),5 which included omnibus amendments to the Fiscal Code6 for the stated intent of implementing the 2016-2017 Commonwealth budget. Section 20 of Act 85 added, inter alia , Section 1799.2-E to the Fiscal Code, 72 P.S. § 1799.2-E, which provides:

Notwithstanding the provisions of section 305 of the act of April 12, 1951 (P.L. 90, No. 21), known as the Liquor Code, the Pennsylvania Liquor Control Board may implement a procedure for processing special orders which do not come to rest at a store by June 1, 2017 .

(Emphasis added.) This addition became immediately effective.

It is undisputed that PLCB has never implemented a procedure for the direct shipment of special orders to customers—not prior to January 1, 2017, not prior to June 1, 2017, not even prior to the hearing on Petitioners’ Application. As a result, PLCB has prevented licensed importers and licensed vendors from directly shipping special orders to their customers. Stated otherwise, PLCB has prevented customers from receiving direct shipments of special orders, thereby maintaining the pre-Act 39 regime that requires customers to pick up all special orders at a PLCB store (and pay the corresponding handling fee).

PLCB maintains that it had no mandatory duty to allow these direct shipments under Act 39 in light of Act 85, which PLCB interprets as placing within PLCB the discretion to allow such direct shipments only if and when PLCB decides to implement a processing procedure. Under PLCB's interpretation of Act 85, the June 1, 2017 date provided in the law was merely advisory, in light of the General Assembly's use of the word "may" in the provision. 72 P.S. § 1799.2-E. Although PLCB points to no other law that authorizes it to enact procedures for direct shipment of special orders after June 1, 2017, inherent in PLCB's construction of Act 85 is its view that it alone can decide if and when to allow the direct shipment of special orders to customers that Act 39 authorizes.

Petitioners, by contrast, contend that Act 39 expressly authorizes the direct shipment of special orders from licensed vendors and importers to their customers in the Commonwealth as an alternative to PLCB store pickup. The Board's role under Act 39 is to facilitate this statutorily authorized sale and direct shipment by receiving payment for the order and authorizing delivery to the customer. To ensure this happens, Act 39 requires PLCB to implement a procedure to process these orders. Petitioners offer a far more narrow interpretation of Section 1799.2-E of the Fiscal Code. While PLCB contends that Section 1799.2-E effectively eliminated the option of direct shipment of special orders to customers unless and until PLCB decides to implement the program, Petitioners argue that the Fiscal Code amendment merely extended the compliance date by which PLCB must implement a processing procedure from January 1, 2017, to June 1, 2017. In other words, under Section 1799.2-E of the...

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