Log Cabin Property, LP, individually and on behalf of all those similarly situated, Petitioner v. Pennsylvania Liquor Control Board, Respondent
No. 292 M.D. 2020
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
May 27, 2022
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge; HONORABLE PATRICIA A. McCULLOUGH, Judge; HONORABLE ANNE E. COVEY, Judge; HONORABLE MICHAEL H. WOJCIK, Judge; HONORABLE CHRISTINE FIZZANO CANNON, Judge
Argued: November 17, 2021
OPINION BY JUDGE COVEY
FILED: May
Before this Court is the Pennsylvania Liquor Control Board’s (PLCB)2 Preliminary Objection to the petition for review in the nature of a class action complaint (Complaint) Log Cabin Property, LP filed, individually and on behalf of all those similarly situated (Log Cabin) against the PLCB, in connection with this Court’s May 1, 2020 Order in MFW Wine Co., LLC v. Pennsylvania Liquor Control Board, 231 A.3d 50 (Pa. Cmwlth. 2020) (MFW I) (Brobson, J., single judge op.), aff’d per curiam, 247 A.3d 1008 (Pa. 2021). In MFW I, this Court granted peremptory judgment in mandamus and summary declaratory relief in favor of MFW Wine Co., LLC (MFW), A6 Wine Company (A6), and GECC2 LLC d/b/a1
Bloomsday Café (Bloomsday Café) (collectively, MFW I Petitioners), related to the PLCB’s failure 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 a handling fee for each bottle purchased in this process.
On June 8, 2016, by enacting Section 3 of
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, 233 A.3d 679 (Pa. 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, in MFW I, 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, in MFW I, MFW filed an emergency motion for peremptory judgment in mandamus,
and special injunctive and declaratory relief (MFW I Motion), and requested an expedited hearing.12
On April 22, 2020, the PLCB re-opened its SO program to allow retail licensees
On May 1, 2020, relative to the MFW I Motion, the Court granted summary relief in the MFW I Petitioners’ favor with respect to amended petition Count III (Declaratory Judgment), and declared that
Specifically relative to the MFW I 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 Allegheny v. [Commonwealth], 490 A.2d 402 (Pa. 1985)); see also A.S. v. Pa. State Police, 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 underSection 305(a) of the Liquor Code .
This Court added:
[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 [MFW I] 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 implementthoughtfully 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 - who, 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 with this Court’s Order.14
MFW I, 231 A.3d at 57-58 (footnote omitted).
On May 6, 2020, Log Cabin filed the Complaint in the instant action, therein alleging that it and those similarly situated have been unlawfully compelled to pick up and pay a handling fee to the PLCB on every bottle of SO liquor or wine
it purchased since June 1, 2017 (allowing the PLCB to collect millions of dollars in handling fees) and, pursuant to
On May 27, 2020,15 in MFW I, the PLCB appealed to the Pennsylvania Supreme
On March 25, 2021, the Pennsylvania Supreme Court issued a Per Curiam Order (without an opinion) affirming this Court’s May 1, 2020 Order in MFW I. On April 15, 2021, the parties in this case filed a joint stipulation to lift the stay. On April 28, 2021, this Court lifted the stay and issued a scheduling order.
On May 25, 2021, the MFW I Petitioners filed an Application for Relief Seeking Damages, Costs, Interest and Attorneys’ Fees (MFW I Damages Application), which the PLCB opposed.
On May 28, 2021, the PLCB filed the Preliminary Objection and its supporting brief, arguing that Log Cabin failed to state a viable cause of action because: (1) the PLCB is entitled to sovereign immunity and cannot be held liable for damages under
within the meaning of
On June 28, 2021, Log Cabin filed its response to the Preliminary Objection and its opposing brief, therein arguing: (1) sovereign immunity does not apply; (2) the PLCB is a “person” under
By September 15, 2021 Order, this Court directed that the PLCB’s Preliminary Objection in this matter shall be listed for argument seriately with the MFW I Damages Application.16 Therein, the Court limited argument on the MFW I Damages Application to: (1) whether Petitioners may recover mandamus damages from the PLCB; and (2) whether the PLCB is a “person” under
Discussion
The PLCB objects to Log Cabin’s Complaint pursuant to Pennsylvania Rule of Civil Procedure (Rule) 1028(4), on the basis that it fails to state a legally sufficient cause of action for damages.
In ruling on preliminary objections, we must accept as true all well-pleaded material allegations in the petition for review [in the nature of a complaint], as well as all inferences reasonably deduced therefrom. The Court need not accept as true conclusions of law, unwarranted inferences from facts, argumentative allegations, or expressions of opinion. In order to sustain preliminary objections, it must appear with certainty that the law will not permit recovery, and any doubt should be resolved by a refusal to sustain them. A preliminary objection in the nature of a demurrer admits every well-pleaded fact in the [petition for review in the nature of a] complaint and all inferences reasonably deducible therefrom. It tests the legal sufficiency of the challenged pleadings and will be sustained only in cases where the pleader has clearly failed to state a claim for which relief can be granted. When ruling on a demurrer, a court must confine its analysis to the [petition for review in the nature of a] complaint.
Torres v. Beard, 997 A.2d 1242, 1245 (Pa. Cmwlth. 2010) (emphasis added; citations omitted). “‘[C]ourts reviewing preliminary objections may not only consider the facts pled in the complaint, but also any documents or exhibits attached to it.’ Allen v. Dep’t of Corr., 103 A.3d 365, 369 (Pa. Cmwlth. 2014).” Foxe v. Pa. Dep’t of Corr., 214 A.3d 308, 311 n.1 (Pa. Cmwlth. 2019).
(1) Sovereign Immunity
The PLCB first argues in support of its demurrer that Log Cabin’s claim is barred by sovereign immunity.18 Specifically, the PLCB asserts that there is no
specific waiver of sovereign immunity which operates to allow Log Cabin’s claim and, although actions to restrain state officials from performing affirmative acts are not within the rule of immunity, suits to obtain money damages are, and Log Cabin’s tag-along claim is the latter.
Log Cabin responds that the PLCB is not entitled to sovereign immunity in this case because: (1) the PLCB acted outside the scope of its duties; (2) sovereign immunity does not apply to
Log Cabin seeks damages from the PLCB pursuant to
“Generally, the Commonwealth and its agencies, officials and employees acting within the scope of their duties are immune from suits for damages.”19 Stackhouse v. Pa. State Police, 892 A.2d 54, 58 (Pa. Cmwlth. 2006);
see also article I, section 11 of the Pennsylvania Constitution,
Although the Pennsylvania Supreme Court abolished the sovereign immunity doctrine on July 14, 1978 in Mayle v. Pennsylvania Department of Highways, 388 A.2d 709 (Pa. 1978), “the General Assembly enacted [Section 2310 (]Act 152[),] which reinstated the doctrine of sovereign immunity in September 1978[.]” Kapil v. Ass’n of Pa. State Coll. & Univ. Faculties, 470 A.2d 482, 484 (Pa. 1983). Therein, the General Assembly specified:
Pursuant to section 11 of [a]rticle [I] of the Constitution of Pennsylvania, it is hereby declared to be the intent of the General Assembly that the Commonwealth, and its officials and employees acting within the scope of their duties, shall continue to enjoy sovereign immunity and official immunity and remain immune from suit except as the General Assembly shall specifically waive the immunity. When the General Assembly specifically waives sovereign immunity, a claim against the Commonwealth and its officials and employees shall be brought only in such manner and in such courts and in such
cases as directed by the provisions of Title 42 (relating to judiciary and judicial procedure) or 62 (relating to procurement) unless otherwise specifically authorized by statute.
Moreover, since 1976 (four years before Act 152 was passed),
This Court acknowledges that, in Chapter 85 of the Judicial Code, the act commonly referred to as the Sovereign Immunity Act,22 the General Assembly has waived immunity to allow “Commonwealth parties” to be sued for damages arising from the negligent acts,
However, after Act 152 was passed, in Bullock v. Horn, 720 A.2d 1079 (Pa. Cmwlth. 1998), wherein the Department of Corrections (DOC) similarly argued that it enjoyed immunity because the petitioners’ action was not one of
Th[o]se immunity exceptions only apply to actions “against Commonwealth parties, for damages arising out of a negligent act” and are not applicable in the present factual situation.
42 Pa.C.S. § 8522(a) . Moreover, immunity was not intended as a shield for Commonwealth officials against alleged violations of constitutional and/or statutory rights.
Bullock, 720 A.2d at 1081-82 (emphasis added).
Moreover, Act 152 limited sovereign immunity to “the Commonwealth, and its officials and employees acting within the scope of their duties[.]”
The PLCB contends that the General Assembly declared in
The PLCB also asserts this Court’s decision is bound by the Pennsylvania Supreme Court’s holding that “[s]uits which seek to compel affirmative action on the part of state officials or to obtain money damages . . . are within the rule of immunity[.]” Phila. Life Ins. Co. v. Commonwealth, 190 A.2d 111, 114 (Pa. 1963). However, that case did not involve a mandamus claim or
Based on the foregoing, and in light of this Court’s ruling in MFW I that the PLCB violated a clear statutory mandate, Log Cabin’s claim is not barred by sovereign immunity.
(2) Person Defined
The PLCB also argues that, even if this Court determines that the PLCB is not entitled to sovereign immunity, as an agency of the Commonwealth, the PLCB is not a person under
Neither
enacted on or after September 1, 1937, unless the context clearly indicates otherwise[.]” Id. (emphasis added). Therefore, the Commonwealth is not a
Importantly,
[T]he Commonwealth government and its various agencies and officers are separate entities and [] ‘the Commonwealth of Pennsylvania, itself . . . is clearly not a Commonwealth agency[.] . . .’ Bonsavage v. Borough of Warrior Run, 676 A.2d 1330, 1331 (Pa. Cmwlth. 1996) (emphasis in original)[;] see also Tork-Hiis v. Commonwealth, . . . 735 A.2d 1256 ([Pa.] 1999).
Finn, 990 A.2d at 105 (emphasis added).
The Finn Court reasoned:
The Commonwealth comprises three branches of government, each divided into many independent subparts. The essence of an action in mandamus is that a specific actor has a non-discretionary duty to perform a particular act. A request that the Commonwealth be ordered to do something begs the question which of the many actors comprising state government is to be held
accountable. Since merely naming the Commonwealth is insufficient to state a claim against a Commonwealth party, [see] Tork-Hiis, it would seem self-evident that if a specific state party can be identified as having a mandatory or ministerial duty, that party must be the named defendant, both in order to make out a cause of action in mandamus and to effectuate enforcement of any ensuing order.
Finn, 990 A.2d a 106. Applying the Finn Court’s logic here, it is reasonable to conclude that the General Assembly intended, by excluding the Commonwealth from the definition of person in
The PLCB cites Commonwealth v. Runion, 662 A.2d 617 (Pa. 1995), to support its position.26 However, Runion is
435 (Pa. 2016). Second, the Runion Court construed a penal statute, which must be strictly construed, see
Moreover, the context of
of the Judicial Code)] whenever a public agency[’s]”29 “failure to perform legally mandated ministerial duties results from an erroneous interpretation of the law.” Stoner v. Twp. of Lower Merion, 587 A.2d 879, 885 (Pa. Cmwlth. 1991) (emphasis added).
Notably, at the time
Finally, based on the fact that the purpose of
Accordingly, this Court holds that, in the context presented here, the PLCB is a person subject to
(3) Mandamus Damages
The PLCB argues that, even if it is liable for mandamus damages under
Log Cabin responds that, although it did not formally style its Complaint as one in the nature of mandamus, it clearly alleges that the PLCB has “failed or refused to perform a duty required by law,” as required by
has not implemented
Pursuant to
However,
[i]f statutory language is “clear and free from all ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit.” [SCA] § 1921(b). Thus, when the words of a statute have a plain and unambiguous meaning, it is this meaning which is the paramount indicator of legislative intent.
McKelvey v. Pa. Dep’t of Health, 255 A.3d 385, 398 (Pa. Cmwlth. 2021).
This Court acknowledges that the General Assembly in
the General Assembly could have, but did not (as it has done in other circumstances), refer to “any person aggrieved.” Further, Pennsylvania courts that have considered mandamus damages have generally done so in the context of a request by the successful mandamus petitioner for damages. That, alone, is not a sufficient basis for this Court to conclude that a request by Log Cabin or other PLCB licensees under the circumstances presented here are not valid. This case presents a relatively unique situation in which the PLCB’s conduct has harmed and will continue to harm hundreds of PLCB licensed entities.
Finally, the MFW I Court declared, and the Pennsylvania Supreme Court affirmed the ruling, that the PLCB’s failure to comply with its duty to implement an SO procedure has “depriv[ed (and continues to deprive)] licensed vendors, licensed importers [(including, but not limited to, MFW and A6)], and customers [(which naturally include Bloomsday Café and Log Cabin, and others similarly situated)] of their statutory right to direct shipment of [SOs] permitted under
whether Log Cabin can claim damages from the PLCB in this case is not clear and free from doubt.
Because the PLCB is clearly liable to licensed vendors, importers, and licensees for provable mandamus damages under
Conclusion
“[A]ccept[ing] as true all well-pleaded material allegations in the [Complaint and the documents attached thereto], as well as all inferences reasonably deduced therefrom[,]” and resolving any doubt in favor of overruling the preliminary objection, as we must, because it does not “appear with certainty that . . . [Log Cabin has failed to state a viable cause of action for damages against the PLCB],” Torres, 997 A.2d at 1245 (emphasis added), the PLCB’s Preliminary Objection is overruled.
ANNE E. COVEY, Judge
O R D E R
AND NOW, this 27th day of May, 2022, the Pennsylvania Liquor Control Board’s (PLCB) Preliminary Objection to the petition for review in the nature of a class action complaint (Complaint) filed by Log Cabin Property, LP, individually and on behalf of all those similarly situated, is OVERRULED. The PLCB is directed to file an answer to the Complaint within 30 days of the date of this Order.
The PLCB’s Application for Post-Submission Communication is DENIED.
ANNE E. COVEY, Judge
DISSENTING OPINION BY JUDGE WOJCIK
FILED: May 27, 2022
I dissent. For the reasons set forth in my Dissenting Opinion filed in MFW Wine Co., LLC v. Pennsylvania Liquor Control Board (Pa. Cmwlth., No. 251 M.D. 2020, filed May 27, 2022), I do not agree that the Pennsylvania Liquor Control Board (PLCB) is a “person” subject to damages under
MICHAEL H. WOJCIK, Judge
President Judge Cohn Jubelirer joins in this dissent.
Notes
PLCB Appl. to Stay Log Cabin’s Complaint at 5 n.2. However, at the November 17, 2021 oral argument before this Court, the PLCB admitted that it has not implemented a direct SO delivery procedure, or offered an interim SO solution. Although the PLCB’s counsel (Counsel) referenced the PLCB’s intended roll-out of a new Enterprise Resource Planning System that will include changes to the PLCB’s SO process, he did not represent what the changes would be, and he declared that the earliest the purported roll-out will occur is July 2022.Notwithstanding its disagreement with, and appeal of, the Court’s May 1, 2020 Order, the PLCB continues to take steps to implement the Court’s directive that the PLCB implement a procedure for processing direct shipments within a reasonable time period. The PLCB will continue to do so during the pendency of the MFW [I] appeal and, thus, the pendency of the requested stay.
Counsel suggested that, because the Court did not set a specific date for the PLCB’s compliance with the May 1, 2020 Order in MFW I, it has not violated that Order, and whether the July 2022 roll-out is an unreasonable delay is a question for a contempt proceeding. When this Court asked why the PLCB has not simply stopped charging the SO handling fee pending the roll-out, Counsel represented that it cannot do so. When asked what would happen if licensees refused to pay the handling fees, Counsel declared that the PLCB would not release the SOs to them.
[U]nder
Rule 1030(a) . . . , all affirmative defenses, including immunity from suit, shall be pled in a responsive pleading under the heading of “New Matter.”Pa.R.C[iv].P. [] 1030(a) ; see Madden v. Jeffes, 482 A.2d 1162, 1164 n.2 ([Pa. Cmwlth.] 1984) (noting that [Rule] 1030 “requires that an immunity claim be pleaded as an affirmative defense in a responsive pleading under new matter”). However, in Stackhouse v. Pennsylvania State Police, 892 A.2d 54
Whenever a statute purports to be a revision of all statutes upon a particular subject, or sets up a general or exclusive system covering the entire subject matter of a former statute and is intended as a substitute for such former statute, such statute shall be construed to supply and therefore to repeal all former statutes upon the same subject.