Liquor Licensees: What Happens When You Receive a Non-Renewal Letter from the Pennsylvania Liquor Control Board?

As the owner of a hotel, restaurant, club or eating place liquor license, your license must be renewed by the Pennsylvania Liquor Control Board (PLCB) every two years. Within 60 days before your license is set to expire, you must apply for a renewal of the license. The PLCB has the authority to refuse to approve a license renewal application, even if your business has met the state tax requirements. An application for license renewal can be denied based on the Board’s discretion and one violation is enough to support that decision regardless of when it occurred. The vast majority of licenses are routinely renewed, however, there are certain violations and nuisance issues of which the PLCB is concerned and may use to support a non-renewal action.

The Pennsylvania State Police Bureau of Liquor Control Enforcement (BLCE) will examine a business for any violations of the Liquor Code or regulations promulgated by the PLCB. The BLCE will also examine whether there has been criminal activity by the licensee, its officers, directions, shareholders, members, partners, servants, agents, or employees. Furthermore, the BLCE will look to see if there has been illegal activity occurring on or about the licensed premises or in areas under the licensee’s control. Finally, the PLCB will examine if there are any outstanding community complaints.

Additionally, the BLCE will examine your business for any outstanding non-compliance issues. These issues will typically be: 1) the licensee’s failure to have the tax clearances from the PA Department of Revenue and/or the PA Department of Labor and Industry; 2) and/or any premises issues as with the lack of a health license, insufficient number of tables and chairs, or food.

Upon receiving notice of an upcoming renewal, the local police will examine any locations and check with their own records to determine if there was any criminal activity or potential Code violations. If a BLCE examiner will be reviewing the premises, they will be given the relevant records by the local police. However, the only reports that may be viewed by the examiner are reports related to the operation of the business. Although the location may have been used as a reference for unrelated criminal activity in the area, those types of reports will be unavailable to a BLCE examiner. The examiner will only review reports related to the operation of the business and that took place at any location controlled by the business.

When reviewing these reports to make a recommendation on renewal, the examiner will look for two things. First, they will look to see if there were two or more “major” citations within the previous renewal period. These major infractions are typically for serving Visibly Intoxicated Persons, drug violations, gambling violations, and selling to minors. Additionally, these major violations will typically carry between a $1,000 to $5,000 fine. As discussed above, the examiners will also be looking to see if there is a significant amount of police activity on the premises. They will examine the reports as discussed above to decide on whether there is an excessive amount of police activity at the premises.

If the BLCE examiner finds there were two or more major violations, or an excessive amount of police activity on the premises, they will file an objection letter to the renewal. Additionally, you will be given provisional authority to operate the business while the objection is heard by the PLCB. When an objection is filed by an examiner, generally a hearing will be held to adjudicate the matter so that a recommendation can be made to the PLCB. These hearings can be scheduled either by the Board on its own motion or at the request of the licensee. It is important to note that the licensee has only 20 days after the notice of non-renewal to request a hearing. Failure to request the hearing means that the Board objection will become final, and there is no right of appeal from such a situation.

Hearings on issues related to liquor licenses, and the businesses which hold them, are held before a Board hearing examiner acting as judge. At the hearing, the BLCE Examiner will present its reasoning for the non-renewal of the license. They will present all relevant evidence to support the non-renewal and may provide witness testimony as well. After the BLCE Examiner has presented its case, I will have the opportunity to present evidence against the Board’s claims and offer witness testimony to support our case as well. For example, if the BLCE Examiner’s objection alleges criminal conduct, I will have the opportunity to present evidence that corrective action was taken. If appropriate, and if you feel comfortable with it, you may provide witness testimony as well. Testifying in any legal proceeding can be a daunting task, so if you decide to testify at the hearing, I will make sure that you are prepared and ready to testify. After both sides have presented evidence and testimony, the hearing examiner will make a report to the PLCB and include a recommendation on the issues. Ultimately, the PLCB is not bound by the decision of the hearing examiner, but they will take the recommendation into consideration when coming to a final decision.

If the PLCB rules against the business, the PLCB will issue a ruling simply stating whether the renewal will be granted. In the event of a non-renewal, we may appeal the decision to the County Court of Common Pleas for the county in which the business is located. This appeal must be filed within twenty days of the PLBC’s final decision. The appeal to the County Court of Common Pleas is “De Novo,” meaning the Court of Common Pleas will hear the entire case as if the case before the ALJ at the PLCB did not occur, unless the non-renewal action was initiated because of the licensee’s failure to obtain tax clearance from the Department of Revenue and/or the Department of Labor and Industry. The Court of Common Pleas reviewing a Board decision not to renew a liquor license may sustain, alter, modify, or amend the Board’s order even when it is based upon the same evidence presented before the Board.

Either party may appeal the Court of Common Pleas decision to the Commonwealth Court of Pennsylvania within thirty days of that decision. The Commonwealth Court’s review in a liquor license renewal case is limited to a determination of whether the trial court’s (i.e., the County Court of Common Pleas) findings of fact are supported by substantial evidence, whether it abused its discretion, or whether it committed an error of law.

If you have any questions or concerns about a non-renewal letter or action taken against your liquor license, please do not hesitate to contact Attorney Marc A. Scaringi at 717-657-7770.

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