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

• Citation: 276 A.3d 1225
• Decision Date: 27 May 2022
• Docket Number: 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
• Court: Commonwealth Court of Pennsylvania

276 A.3d 1225

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.

Argued November 17, 2021

Decided May 27, 2022

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

Brian J. Slipakoff, Philadelphia, for Respondent.

BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge¹ , HONORABLE PATRICIA A. McCULLOUGH, Judge, HONORABLE ANNE E. COVEY, Judge, HONORABLE MICHAEL H. WOJCIK, Judge, HONORABLE CHRISTINE FIZZANO CANNON, Judge

OPINION BY JUDGE COVEY

Before this Court is MFW Wine Co., LLC's (MFW), A6 Wine Company's (A6), and GECC2 LLC d/b/a Bloomsday Café’s (Bloomsday Café) (collectively, Petitioners) Application for Relief Seeking Damages, Costs, Interest and Attorneys’ Fees (Damages Application) from the Pennsylvania Liquor Control Board (PLCB).² On May 1, 2020, this Court granted peremptory judgment in mandamus and summary declaratory relief in Petitioners’ favor and against the PLCB because the PLCB failed to carry out the General Assembly's directive to permit properly licensed companies to sell and deliver special orders (SOs) directly to their customers without added handling fees.³

Background

Before June 8, 2016, SO customers, like Bloomsday Café, that wished to purchase a class, variety, or brand of liquor or alcohol not then available from a PLCB Fine Wine and Good Spirits store (PLCB Store) could place SOs for the items with licensed importers or vendors, like MFW or A6. However, the licensed importers or vendors were required to deliver the SOs to PLCB Stores, where the customers had to pick them up. The PLCB charged the customers handling fees for each bottle purchased in this process.

On June 8, 2016, by enacting Section 3 of Act 39,⁴ the General Assembly amended Section 305(a) of the Liquor Code⁵ to provide that SOs may be delivered from a licensed importer or vendor directly to a customer. Section 3 of Act 39 also states that the PLCB may not assess a handling fee on [SOs], and that "[t]he [PLCB] shall , by January 1, 2017, implement a procedure for processing [SOs] ...." (Emphasis added.) Further, on July 13, 2016, the General Assembly passed an omnibus amendment to implement the Commonwealth's 2016-2017 budget (Section 20 of Act 85 of 2016⁶ ), which added Section 1799.2-E to The Fiscal Code,⁷ and therein provided that "the [PLCB] may implement a procedure for processing [SOs] ... by June 1, 2017." (Emphasis added.) The PLCB took the position that implementing an SO processing procedure was discretionary, and the June 1, 2017 date was merely advisory. As a result, to date, the PLCB has not implemented an SO processing procedure, thereby preventing licensed importers and vendors from directly shipping SOs to their customers, and the PLCB continues to assess handling fees on all SOs.

On March 6, 2020, Pennsylvania Governor Tom Wolf (Governor Wolf) issued a Proclamation of Disaster Emergency (Proclamation) in response to the COVID-19 pandemic. See Wolf v. Scarnati , ––– Pa. ––––, 233 A.3d 679 (2020) ; see also "Process to Reopen Pennsylvania."⁸ On March 16, 2020, the PLCB announced the indefinite closure of the PLCB Stores and licensee service centers effective March 17, 2020, to reduce the spread of COVID-19.⁹ On March 18, 2020, the PLCB, with Governor Wolf's authorization, mandated that all retail licensees, clubs, permittees, and producers cease sales of food and alcohol until further notice.¹⁰

On April 15, 2020, MFW and A6 filed a petition for review in this Court's original jurisdiction seeking to enforce their statutory right to direct ship SOs from licensed importers and/or vendors to customers.¹¹ On April 16, 2020, MFW filed an emergency motion for peremptory judgment in mandamus, and special injunctive and declaratory relief (Motion), and requested an expedited hearing.¹²

On April 22, 2020, MFW and A6 filed an amended petition for review (Amended Petition), adding Bloomsday Café as a Petitioner. Also on April 22, 2020, the PLCB re-opened its SO program to allow retail licensees with wine expanded permits (i.e., those permitted to sell wine to-go) to pick up SOs from designated PLCB Stores beginning April 24, 2020.¹³ On April 28, 2020, this Court conducted a hearing on the Motion.

On May 1, 2020, the Court granted summary relief in Petitioners’ favor with respect to Amended Petition Count III (Declaratory Judgment), and declared that Section 305(a) of the Liquor Code, as amended , (1) prohibits the PLCB from charging a handling fee on SOs delivered directly to customers, and (2) requires the PLCB to implement a procedure to process SO direct shipments. With respect to Amended Petition Count I (Mandamus), the Court granted summary relief in Petitioners’ favor and issued a writ of mandamus: (1) directing the PLCB to allow licensed vendors and licensed importers to ship SOs directly to customers; and (2) directing the PLCB to implement a procedure for processing SO direct shipments. The Court denied the Motion in all other respects (Count II (Injunctive Relief)). See MFW Wine Co., LLC v. Pa. Liquor Control Bd ., 231 A.3d 50 (Pa. Cmwlth. 2020) ( MFW I ) (Brobson, J., single judge op.), aff'd per curiam , ––– Pa. ––––, 247 A.3d 1008 (2021).

Notably, this Court concluded that "[t]he intent of the General Assembly in Act 39 is clear and unambiguous." MFW I , 231 A.3d at 54. The Court explained:

Section 305(a) of the Liquor Code and Section 1799.2-E of [T]he Fiscal Code are in pari materia . With respect to [SOs], the Act 39 amendments to Section 305(a) of the Liquor Code did the following: (a) expressly authorized licensed vendors and importers to ship [SOs] directly to their customers; (b) directed that payment for such orders be made to [the] PLCB; (c) required PLCB authorization prior to shipment; (d) prohibited [the] PLCB from charging a handling fee for [SOs] directly shipped to customers; (e) placed liability for all [SOs] directly shipped to customers on the licensed vendor or importer until delivery to the customer; (f) required [the] PLCB to implement a procedure for processing [SOs] for direct shipment to customers by January 1, 2017; and (g) allowed [the] PLCB to continue to process [SOs] at its stores. The only effect Section 1799.2-E of [T]he Fiscal Code had on Section 305(a) of the Liquor Code was to allow [the] PLCB to implement the procedures it is required to implement under Section 305(a) [of the Liquor Code] by June 1, 2017, instead of January 1, 2017.

MFW I , 231 A.3d at 55-56 (footnote omitted). Accordingly, this Court declared: "As the Court finds the language of the statutes unambiguous, it affords no deference to [the] PLCB's proffered construction. Seeton v. Pa. Game Comm'n , 594 Pa. 563, 937 A.2d 1028, 1037 (2007) (‘While an agency's interpretation of an ambiguous statute it is charged with enforcing is entitled to deference, courts’ deference never comes into play when the statute is clear.’)." MFW I , 231 A.3d at 57 n.12.

Specifically relative to Mandamus, this Court ruled:

[A]ll of the elements for issuance of a writ of mandamus are present. Mandamus is appropriate where, as is the case here, an agency is operating under a "mistaken view of the law that it has discretion to act when it actually does not." Weaver v. Pa. Bd. of Prob. [& ] Parole , 688 A.2d 766, 776 (Pa. Cmwlth. 1997) (en banc ) (citing C [n ]ty. of Alleghenyv. [Commonwealth ], 507 Pa. 360, 490 A.2d 402 (Pa. 1985) ); see also A.S. v. Pa. State Police , 636 Pa. 403, 143 A.3d 896 (Pa. 2016) (affirming award of mandamus based on judicial construction of ambiguous statute). Section 305(a) of the Liquor Code, properly construed, imposes a mandatory duty on [the] PLCB to accept and process [SOs] for direct shipment to customers. It further imposes a mandatory duty on [the] PLCB to implement a procedure for doing so. [The] PLCB has yet to comply with these mandatory duties, depriving licensed vendors, licensed importers, and customers of their statutory right to direct shipment of [SOs] permitted under Section 305(a) of the Liquor Code.

MFW I , 231 A.3d at 57.

This Court further declared:

[T]he Court recognizes that the time established by the General Assembly for [the] PLCB to implement a direct shipment [SO] process has long passed. Nonetheless, based on the credible evidence adduced during the hearing, the Court is satisfied that implementing a new process for the direct shipment of [SOs] authorized by Act 39 is neither as simple as Petitioners suggest nor as complicated (or expensive) as [the] PLCB would have the Court believe. [The] PLCB must be afforded a reasonable amount of time to implement thoughtfully a process, perhaps even an interim one as Petitioners’ counsel suggested during the hearing, to provide licensed vendors, licensed importers, and customers a[n] [SO] direct shipment alternative. The Court is confident that [the] PLCB has the resources and ingenuity to do so without unreasonable delay.

In not setting a deadline for [the] PLCB to act, the Court's restraint is also based in part on [the] PLCB's recent decision to re-open [SO] pick[-]up at designated PLCB facilities, which [the] PLCB suspended when it closed all PLCB [S]tores in response to the COVID-19 pandemic and executive action by [Governor Wolf]. The absence of a direct shipment option for [SOs], coupled with the closure of all PLCB [S]tores, had an obvious impact on Petitioners - which, through their unrebutted testimony at the hearing, established that their businesses rely on the sale, purchase, and delivery of [SO] wines in Pennsylvania. The fact that Petitioners now have some way of selling, ordering, processing, and fulfilling [SOs] through [the] PLCB, though not all of what Act 39 promised, is an improvement over the recent circumstances that prompted them to initiate this lawsuit.

For these reasons, the Court will not, at this time , endeavor to set a date by which time [the] PLCB must comply

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