Pennsylvania Liquor Control Bd. v. GMR Restaurants of Pennsylvania, Inc.

• Decision Date: 29 January 1997
• Citation: 689 A.2d 323
• Parties: PENNSYLVANIA LIQUOR CONTROL BOARD, Appellant, v. GMR RESTAURANTS OF PENNSYLVANIA, INC.
• Court: Pennsylvania Commonwealth Court

Page 323

689 A.2d 323

PENNSYLVANIA LIQUOR CONTROL BOARD, Appellant, v. GMR RESTAURANTS OF PENNSYLVANIA, INC.

Commonwealth Court of Pennsylvania.

Argued Oct. 7, 1996.

Decided Jan. 29, 1997.

Robin Coward, Assistant Counsel, Conshohocken, for appellant.

Mark F. Flaherty, Pittsburgh, for appellee.

Before DOYLE and SMITH, JJ., and LORD, Senior Judge.

SMITH, Judge.

The Liquor Control Board (Board) appeals from an order of the Court of Common Pleas of Bucks County (trial court) that reversed the Board's decision to deny in part a restaurant liquor license application filed by GMR Restaurants of Pennsylvania, Inc. (GMR). The Board questions whether the trial court committed an error of law and/or abuse of discretion by substituting its discretion for that of the Board in granting GMR's restaurant liquor license application in full for two separate and distinct restaurant operations, and whether the Board committed an error of law and/or abuse of its discretion by refusing to grant GMR's application for a proposed secondary service area, where it fails to comport with the underlying requirements of the Liquor Code, Act of April 12, 1951, P.L. 90, as amended, 47 P.S. §§ 1-101--8-803.

I

GMR submitted an application for double transfer of a restaurant liquor license (person-to-person and place-to-place) in January 1995. The premises proposed to be licensed included one building to operate as "The Olive Garden Italian Restaurant" (The Olive Garden) and another building located 207 feet away to operate as the "Red Lobster" restaurant (Red Lobster). The area in the midst of the two buildings was designated as a shared parking lot. GMR designated The Olive Garden as the primary service area and the Red Lobster as the secondary service area. On June 28, 1995, the Board approved the liquor license transfer application for the primary service area only and, thereafter, denied GMR's separate application for licensure of the secondary service area, submitted by GMR at the direction of the Board. The Board considered, among other things, the quota system that is a part of the regulatory scheme, allowing for limits on the number of restaurant liquor licenses issued in each municipality, see Section 461 of the Liquor Code, 47 P.S. § 4-461, and the Board concluded that the secondary service area would operate as a second primary service area in contravention of requirements of the Liquor Code.

GMR appealed to the trial court, which, after a trial de novo, reversed the Board's decision. The trial court ordered the Board to approve GMR's original license application for the entire premises, including both restaurants, and to approve, as well, GMR's subsequent application for the secondary area. The court determined that GMR met the standards for a secondary service area as set forth in Section 406.1 of the Liquor Code, added by Section 3 of the Act of December 17, 1982, P.L. 1390, 47 P.S. § 4-406.1, and that the Board lacked the discretion to refuse its approval of the application on the ground that the proposed operation would circumvent the Liquor Code's quota provision for liquor licenses. Where the trial court hears a liquor license matter de novo, this Court's scope of review is limited to determining whether substantial evidence exists to support the trial court's findings of fact or whether the trial court committed an error of law or abused its discretion. Slovak-American Citizens Club of Oakview v. Pennsylvania Liquor Control Board, 120 Pa.Cmwlth. 528, 549 A.2d 251 (1988).

The Board contends that Section 406.1 of the Liquor Code must be interpreted in a manner consistent with the general purpose of the Liquor Code, which is to restrain or discourage the sale of liquor. See, e.g., Pennsylvania Liquor Control Board v. Backer, 113 Pa.Cmwlth. 373, 537 A.2d 100 (1988). Citing Ulana, Ltd. v. Pennsylvania Liquor Control Board, 86 Pa.Cmwlth. 345, 484 A.2d 859 (1984), the Board notes that Section 404, 47 P.S. § 4-404, confers authority in the Board to refuse a license application if licensure would be detrimental to the health, welfare, peace and morals of the neighborhood within a 500-foot radius or if the premises otherwise fail to meet all of the requirements of the Liquor Code. The Board further notes that in the past GMR has submitted separate, individual license applications in which GMR represented the two restaurant operations as separate and distinct entities, thereby necessitating independent licensing consideration. ¹

GMR maintains that the trial court's decision should be affirmed because the Board has previously granted secondary service area applications in instances similar to the facts in this case, and, therefore, the Board did not possess the discretion to refuse GMR's secondary service area application. The Court is not persuaded by GMR's position in this context because past approvals of other applications have no precedential value before this Court in its review of Board denials of liquor license applications, particularly where the previously approved licenses are not before the Court for review. Pittsburgh Stadium Concessions, Inc. v. Pennsylvania Liquor Control Board, 674 A.2d 334 (Pa.Cmwlth.), appeal denied, --- Pa. ----, 686 A.2d 1314 (1996).

II

As to the Board's authority to approve applications for secondary service area, Section 406.1 of the Liquor Code provides in relevant part:

Upon application of any restaurant, hotel, club, any stadium ... or municipal golf course liquor licensee, and payment of the appropriate fee, the board may approve a secondary service area by extending the licensed premises to include one additional permanent structure with dimensions of at least one hundred seventy-five square feet, enclosed on three sides and having adequate seating. Such secondary service area must be located on property having a minimum area of one (1) acre, and must be on land which is immediate, abutting, adjacent or contiguous to the licensed premises with no intervening public thoroughfare.... There shall be no requirement that the secondary service area be physically connected to the original licensed premises.

Neither Section 406.1 nor any other provision of the Liquor Code provides an adequate definition for a secondary service area.

In ascertaining legislative intent under these...