ALTOONA, Pa. -- Pennsylvania alcohol regulators improperly licensed a restaurant located in the same building as a convenience store to sell beer for takeout purposes only, a state appeals court ruled Friday, said an Associated Press report.
Commonwealth Court said a "retail dispenser" license that the Pennsylvania Liquor Control Board (PLCB) issued to the Sheetz Inc. storewhich the company calls a convenience restaurantin Altoona requires beer to be consumed on the premises. Sheetz, however, had no intention of allowing customers to drink in its stores.[image-nocss]
"An entity that is licensed for on-premises consumption is given the additional benefit of selling beverages for off-premises consumption," wrote Judge Robert Simpson for the majority in the 4 to 3 decision. He said state law "makes the right to conduct sales for off-premises consumption secondary to the primary purpose of selling malt or brewed beverages for on-premises consumption at the eating place."
In the dissent, Judge Renee Cohn Jubelirer said Sheetz should not be required to use the retail dispenser license to its fullest extent, just as stores that are allowed to sell beer until 2 a.m. may close earlier if they wish. "The PLCB notes that it has never required any of its licensees to utilize their individual licenses and permits to the fullest extent, and it provides numerous examples," she wrote.
Beer sales, which started February 1, continued at the store early Friday, Mike Cortez, Sheetz's vice president and general counsel, told AP. "What I have to do is take a look at the decision to figure out what we're going to be doing from here on out," he said. No decision about an appeal has been made, he said.
The store has since ceased sales, posting this notice on its beer coolers: Sorry we are temporarily unable to sell malt beverages due to the Commonwealth Court of Pa.'s ruling as of 2/23/07.
Bob Hoffman, a lawyer for the 410-member Malt Beverage Distributors Association (MBDA) of Pennsylvaniawhich sued to challenge the licensesaid the association was concerned that Sheetz was essentially operating as a beer distributor. "It will mean that within a matter of days, when they sort it out, that Sheetz will have to stop selling beer, at least until they figure out a way to comply with what the court has required," Hoffman said.
Along with posting the notice, Sheetz issued the following statement regarding the ruling:
"Unfortunately for our customerswe must suspend the sale of malt beverages at our Convenience Restaurant in Altoona, Pennsylvania due to a challenge by the [MBDA]. The Commonwealth Court today ruled that the [PLCB] should not have approved the transfer of the liquor license.
In our three-year journey to sell beer to our customers in Pennsylvania, this is yet another set back in our effort to provide the freedom to purchase alcoholic beverages in a convenience setting.
Sadly, this decision highlights the complexity of the Commonwealth's current liquor laws and the need for court intervention just to interpret them. We are exploring all options and intend to cooperate in every way possible with the PLCB.
It is our intent to get back into the beer business in Pennsylvania as soon as possible. The legal issues involved here are numerous and complicated, and until further analysis is conducted, we are unable to state our plan of action at this time.
The Court's ruling hinges on our previous decision not to allow on-premise consumption. Moving forward with our legal options, we will consider allowing on-premise consumption if it enables us to obtain a malt beverage license."
The court case has fueled speculation about a potential expansion of retail beer sales in the state, including proposals to allow the sale of six-packs of beer at cafes adjacent to supermarkets.
"This is all part of the battle [over] how beer is going to be sold in Pennsylvania," Hoffman said of the court ruling.
Cortez said it was possible that Sheetz might allow beer drinking inside the restaurant as a way to continue takeout sales. "If the state of Pennsylvania says we have to, then we'd have to reconsider and think about what makes sense," he said.
But concerning that possibility, Mary Lou Hogan, executive secretary of the MBDA, told The Altoona Mirror, Our position is that Sheetz doesn't have a license.
The legal wrangling is over the wording of Section 102 of the Pennsylvania Liquor Code, said The Mirror. Sheetz does not meet the legal standard of a retail dispenser, which must sell alcohol for on-premises consumption, Simpson wrote for the majority.
The MBDA contends that its interpretation of the law is consistent with the established beer distribution system, in which distributors are granted the market niche of selling to consumers in bulk for home use. Failure to enforce the on-premises sales requirement effectively turns Sheetz into a beer distributor without the restrictions of a beer distributor license.
It is sufficient for current purposes to observe a potential consequence of the PLCB's interpretation is a significant transformation of the character of outlets for the sale of malt or brewed beverages, to include grocery stores, convenience stores and other commercial establishments with some small area for eating. While such a transformation may be in the public interest, it should be based on legislative intent rather than on a strained administrative reading of statutory language, Simpson wrote.
The three-judge minority, led by Cohn Jubelirer, said the majority's reading of the plain language adds nonexistent requirements to the statute and is read out of context with other provisions of the Liquor Code.
The plain meaning of this language is simply one who has permission to sell beverages for on-site consumption [by license], and may [by privilege] sell in limited quantities per person for off-site consumption. The majority, however, appears to read a must sell for on-site consumption' requirement into the language of Section 102 that is simply not there, Cohn Jubelirer wrote. The majority does this without citation to statutory authority or precedent.
Click here to view the ruling.
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