Barry's Public House v. PA Liquor Control Board (Majority Opinion)
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IN THE COMMONWEALTH COURT OF PENNSYLVANIA Barry's Public House, Petitioner v. Pennsylvania Liquor Control Board, Respondent BEFORE: : : : : : : : No. 1458 C.D. 2007 Submitted: January 25, 2008 HONORABLE DORIS A. SMITH-RIBNER, Judge HONORABLE ROBERT SIMPSON, Judge HONORABLE JIM FLAHERTY, Senior Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE SMITH-RIBNER FILED: March 26, 2008 Barry's Public House petitions for review of the Pennsylvania Liquor Control Board's (Board) order approving an application by JMQ-1 Incorporated (JMQ-1), trading as Lazy Nicks, for a double transfer (ownership and location) of a restaurant liquor license. Barry's Public House questions whether the Board abused its discretion in approving JMQ-1's application, and it argues that the Board disregarded relevant, uncontroverted evidence, which established that approval of the application would adversely affect the health, welfare, peace and morals of the neighborhood within 500 feet of the proposed establishment, and that the Board's decision is not based on substantial evidence and constitutes an error of law. In August 2006 JMQ-1 filed an application seeking a double transfer of a restaurant liquor license held by Rosa Villa Café, Inc. at 106 - 108 East General Robinson Street, Pittsburgh to JMQ-1's premises at 1021 East Carson Street in Pittsburgh. There currently are three licensed establishments within 200 feet of the proposed establishment. Thomas Barry, who owns The Pipes Are Calling, Inc., t/a Barry's Public House, a licensed establishment within 200 feet of JMQ-1's premises, filed a protest against the application. Barry is an attorney and president of the Southside Bar and Restaurant Association. Richard Phillips and twenty-eight other residents within 500 feet of the proposed establishment also filed protests. On November 30, 2006, a hearing examiner held a hearing to take testimony on whether other licensed establishments existed within 200 feet of the proposed establishment and whether approval of the application would pose an adverse effect on the health, welfare, peace and morals of the neighborhood within a radius of 500 feet of the proposed establishment.1 James Quinn, the owner of JMQ-1, proposed to renovate a three-story brick building and to operate a full-service, upscale restaurant with a seating capacity of 40 on the 1500-square-foot first floor of the building with no dance floor, live music or karaoke. The basement will be used for storage, and there will be three-bedroom apartments on the second and third floors. Quinn will purchase another property to provide parking spaces for employees. The proposed establishment will have one doorman at all times and two doormen on weekends. Quinn testified that his clientele would be from East Carson Street and that the proposed establishment would have no detrimental effect on the neighborhood. Phillips testified that the neighborhood became rowdy on Friday and Saturday nights after The Halo Bar opened in the area and that another licensed establishment in the neighborhood would increase traffic congestion and parking 1 The hearing examiner also took testimony as to whether the transferor failed to obtain a tax clearance from the Department of Revenue; whether Phillips' petition to intervene was served on JMQ-1; whether Phillips had standing to file a protest as an individual who would be directly aggrieved by the approval or as a resident within 500 feet of the proposed establishment; and whether the 28 residents who filed the protests resided within 500 feet. Barry's Public House does not challenge the Board's determinations that Phillips, Barry and five residents had standing to file the protests and that the transferor's tax clearance was obtained in February 2007. 2 problems. He had no specific evidence regarding any adverse effects from the proposed establishment. Barry stated that 18 new liquor licenses had been issued for the Southside corridor since 2000, that there were currently 88 to 110 licensees in the area, that only metered parking is available along the street and that JMQ-1's premises had no trash containment area. Barry did not oppose another type of business on the premises, such as an art gallery, and he did not oppose the application based on increased competition that might hurt his business. Ted Moses, who resided 20 feet from JMQ-1's premises, obtained 28 signatures opposing the application. He testified that there had been an increase in serious crime on the Southside in the past three years, that arrests for drunk driving doubled from 2004 to 2005, that there were constant fights on weekend nights in the area, that the parking deficit had increased and that JMQ-1 had no place on the sidewalks to put its garbage. He claimed a direct correlation between the increase in crime and the increased number of licensed establishments, and he indicated that JMQ-1's establishment would attract more undesirable people to the area to the detriment of the neighborhood. On May 8, 2007, the Board and Quinn entered into a Conditional Licensing Agreement (CLA) in an attempt to "assuage" the concerns raised by the objectors. Board's Opinion, Findings of Fact No. 72. Under the CLA, JMQ-1 is required to comply with the Responsible Alcohol Management provisions of the Liquor Code, Act of April 12, 1951, P.L. 90, as amended, 47 P.S. §§1-101 - 101001, including new employee orientation, alcohol service personnel training, manager/owner training, a display of responsible alcohol service signage and a certification compliance inspection by a Board representative. The CLA required JMQ-1 to employ at least one doorman/security 3 guard, clothed so as to make them readily apparent, daily from 8:00 p.m. to closing and to employ a second doorman/security guard on Fridays, Saturdays and Sundays from 10:00 p.m. to closing. They must patrol the premises and its immediate area at least once per hour and report any unlawful activities to the police and periodically monitor the outside of the premises for trash, which must be removed and disposed of every evening at closing. JMQ-1 is prohibited from permitting live music performances on the premises and from designating a dance floor inside the premises. The Board approved the application on May 23, 2007, finding that approval would not adversely affect the health, welfare, peace and morals of the neighborhood within 500 feet of the proposed licensed premises.2 Barry's Public House argues that the Board abused its discretion in approving JMQ-1's application. It maintains that the Board disregarded relevant, competent and uncontroverted evidence establishing the over-saturation of licensed establishments in the area and an adverse effect of the proposed license transfer on the health, welfare, peace and morals of the neighborhood within a radius of 500 feet and that the Board's decision is not based on substantial evidence in the record and constitutes an error of law. Barry's Public House estimates that there is one licensed establishment for every 122 residents in the Southside area under the 2000 2 Barry's Public House initially appealed the Board's decision to the Court of Common Pleas of Allegheny County, which transferred the appeal to this Court. Section 464 of the Liquor Code, 47 P.S. §4-464, permits appeals by an applicant aggrieved by the Board's refusal to issue a license or to renew or transfer a license, or by any church, hospital, charitable institution, school or public playground located within 300 feet of the proposed premises aggrieved by the Board's grant of such license or transfer "to the court of common pleas of the county in which the premises ¦ applied for is located." Under Sections 763(a) and 933(a)(1)(v) of the Judicial Code, as amended, 42 Pa. C.S. §§763(a) and 933(a)(1)(v), this Court has exclusive jurisdiction over appeals by others aggrieved by the Board's grant of a license or a transfer. Player's Bench, Inc. v. Pennsylvania Liquor Control Board, 751 A.2d 1221 (Pa. Cmwlth. 2000). 4 census, and it asserts that the proposed transfer would exacerbate the problems existing in the area. Moreover, the Liquor Code is intended to regulate and restrain the sale of liquor, and it should be liberally construed to effectuate its purpose of protecting public health, welfare, peace and morals. Hyland Enters., Inc. v. Pennsylvania Liquor Control Board, 631 A.2d 789 (Pa. Cmwlth. 1993). The Board argues that an application may not be denied based on the mere speculation of perceived harms and that the record amply supports the Board's decision.3 Under Section 404 of the Liquor Code, 47 P.S. §4-404, the Board "may, in its discretion, grant or refuse [a] new license, transfer or extension if [a] place proposed to be licensed is within three hundred feet of any church, hospital, charitable institution, school, or public playground" or "within two hundred feet of any other premises which is licensed by the board ¦." The Board "shall refuse any application for a new license, the transfer of any license to a new location or the extension of an existing license ¦ if, in the board's opinion, such new license, transfer or extension would be detrimental to the welfare, health, peace and morals of the inhabitants of the neighborhood within a radius of five hundred feet of the place proposed to be licensed ¦." As the Court observed in K & K Enters., Inc. v. Pennsylvania Liquor Control Board, 602 A.2d 476, 480 (Pa. Cmwlth. 1992): The legislature has established the principle that a 3 In an appeal from a state agency's adjudication, the Court's review is limited to determining whether constitutional rights were violated, an error of law was committed, necessary findings of fact are supported by substantial evidence. William Penn School District v. Department of Education, Division of Food and Nutrition, 902 A.2d 583 (Pa. Cmwlth. 2006). The Court may not substitute its discretion for that of the Board; rather, it is to determine whether the Board abused its administrative discretion. Appeal of Irene's Cafe, Inc., 404 A.2d 707 (Pa. Cmwlth. 1979). The Court may not disturb the Board's proper exercise of its discretion. West Reading Tavern, Inc. v. Pennsylvania Liquor Control Board, 710 A.2d 648 (Pa. Cmwlth. 1998). 5 licensed establishment is not ordinarily detrimental to the welfare, health and morals of the inhabitants of the neighborhood. Furthermore, a transfer of a liquor license will be detrimental to a community only in cases where the nature of the neighborhood and the nature of the place to be licensed are such that the issuance would be detrimental. Thus the objectors' testimony that merely conveyed "general fears regarding the transfer of the license to the proposed facility" without providing specific details of the nature of the applicant's restaurant cannot constitute substantial evidence of the proposed transfer's detrimental effect on the neighborhood. Id. In Boston Concessions Group, Inc. v. Logan Township Board of Supervisors, 815 A.2d 8, 13 (Pa. Cmwlth. 2002), the Court held that testimony regarding a saturation of drinking establishments and concern that the proposed license transfer would increase traffic hazards, parking problems and so forth and would cause possible devaluation of existing liquor licenses "was at most, general and speculative" and failed to show that the transfer would in fact be detrimental to the welfare, health and morals of the neighborhood. See also SSEN, Inc. v. Borough Council of Eddystone, 810 A.2d 200, 208 (Pa. Cmwlth. 2002) (holding that testimony regarding increased traffic hazards, parking problems, trash and drunk driving from a license transfer "was, at most, general and speculative" and insufficient to support finding that it would adversely affect borough or residents); In re 23rd St., Inc., 517 A.2d 581, 582 (Pa. Cmwlth. 1986) (stating that "perceived threat" that service and consumption of alcohol could harm quiet residential character of neighborhood did not support an adverse effect of the license transfer). JMQ-1's property is zoned commercial and previously was used for commercial purposes. The Board's licensing analyst testified that the neighborhood within a radius of 500 feet of the proposed establishment is fifty 6 percent commercial and fifty percent residential. JMQ-1's owner testified that the parking problems would not be any worse with the proposed establishment because any business on his premises, whether a restaurant/bar, an office or any other business, would have parking problems in light of "the nature of the neighborhood." N.T., p. 117. Contrary to Barry's Public House's assertions, the Board did consider the objectors' testimony. Barry conceded that he did not know of the proposed establishment's owner or specific details of the operation. N.T., pp. 71 - 72. The objectors' testimony regarding saturation of liquor licenses and possible increase in traffic congestion, parking and trash problems, arrests and other criminal activities is too general and speculative. They presented no evidence to establish a direct relationship between adding the proposed establishment and the alleged increase in neighborhood problems. Their concerns and fears thus do not satisfy their burden of proving detrimental effect from the license transfer on the welfare, health, peace and morals of the residents of the neighborhood within 500 feet of the proposed establishment. K & K Enters.; Boston Concessions; SSEN; In re 23rd St. The Board and JMQ-1 entered into the CLA to address the objectors' concerns, and the Board's approval is subject to JMQ-1's compliance with detailed conditions set forth in the CLA. Section 404 of the Liquor Code provides: The board may enter into an agreement with the applicant concerning additional restrictions on the license in question. ¦ [S]uch agreement shall be binding on the applicant. Failure by the applicant to adhere to the agreement will be sufficient cause to form the basis for a citation ¦ and for the nonrenewal of the license ¦. [T]hose restrictions shall be binding on subsequent holders of the license until the license is transferred to a new location or until the board enters into a subsequent agreement removing those restrictions. 7 Because the Board had the authority to enter into the CLA to impose restrictions upon JMQ-1's license, the CLA cannot be viewed as the Board's acknowledgment that the objectors' testimony was credible, as they suggest. Nor is it inconsistent with the Board's finding that approval of the application will have no detrimental effect on the neighborhood. From its review, the Court concludes that the Board's approval of the application is supported by substantial evidence in the record, and because it committed neither an abuse of discretion nor an error of law, the Court affirms. DORIS A. SMITH-RIBNER, Judge 8 IN THE COMMONWEALTH COURT OF PENNSYLVANIA Barry's Public House, Petitioner v. Pennsylvania Liquor Control Board, Respondent : : : : : : : No. 1458 C.D. 2007 ORDER AND NOW, this 26th day of March, 2008, the Court affirms the order of the Pennsylvania Liquor Control Board. DORIS A. SMITH-RIBNER, Judge
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