O.D.'s Plantation, Inc. v. PLCB ( 2018 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
O.D.’s Plantation, Inc., :
:
Appellant :
: No. 1151 C.D. 2017
v. : Submitted: August 3, 2018
:
Pennsylvania Liquor Control Board :
BEFORE: HONORABLE P. KEVIN BROBSON, Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE JAMES GARDNER COLINS, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
SENIOR JUDGE COLINS FILED: December 28, 2018
This is an appeal from an order of the Court of Common Pleas of
Dauphin County (trial court) denying the appeal of O.D.’s Plantation, Inc. (Licensee)
from a decision of the Pennsylvania Liquor Control Board (PLCB) refusing
Licensee’s renewal application for Restaurant Liquor License No. R-17606 for its
bar located at 1601 Sycamore Street, Harrisburg, Pennsylvania (the Licensed
Premises). For the reasons set forth below, we affirm the trial court.
When Licensee sought renewal of its liquor license in 2014, the PLCB’s
Bureau of Licensing (Bureau) granted the renewal, but notified Licensee that it was
concerned about incidents involving the Licensed Premises. (Trial Court Op. at 2;
Bureau Ex. 5, Reproduced Record (R.R.) at 290a-291a.) The Bureau advised
Licensee:
However, the decision to renew your license does not diminish
the serious nature of the allegations of fights, assaults, public
drunkenness, drugs and disorderly operations reported by the
Harrisburg Police Department during the time period March
2012 to present.
This letter serves as a warning that you, as a licensee, must take
affirmative steps to prevent violations of the Liquor Code and/or
prevent employees and patrons from engaging in illegal activities
in and around your premises through increased cooperation with
the Harrisburg Police Department and the Bureau of Liquor
Control Enforcement of the Pennsylvania State Police in order to
retain your licensing privilege. Failure to do so could result in
further action against your licensed business.
(Bureau Ex. 5, R.R. at 290a.)
Licensee filed a renewal application with the PLCB for its restaurant
liquor license for the renewal period from March 1, 2016 through February 28, 2018.
On February 19, 2016, the Bureau timely notified Licensee that it objected to the
renewal based on Licensee’s history of nine adjudicated citations for violation of the
Liquor Code,1 five incidents involving police action at or near the Licensed Premises
between March 2014 and February 2016 that included “drugs, weapons, minors, and
disorderly operations,” and on the grounds that Licensee’s manager and one of its
officers were no longer reputable. (Bureau Ex. 2, R.R. at 281a-282a.) On April 28,
2016, the Bureau sent Licensee amended objections to the renewal stating the same
objections as the February 19, 2016 notification, describing the incidents involving
police action as six incidents between March 2014 and April 2016 that included
“drugs, weapons, minors, disorderly operations and a shooting,” and stating
additional objections that Licensee had failed to report a change in officers within
15 days in violation of PLCB regulation 40 Pa. Code § 5.91 and that Licensee and
1
Act of April 12, 1951, P.L. 90, as amended, 47 P.S. §§ 1-101 – 10-1001.
2
its listed officers were not the only entities with a pecuniary interest in the license.
(Bureau Ex. 3, R.R. at 284a-286a.)
A hearing on Licensee’s renewal application was held on August 3,
2016. At the hearing, the Bureau introduced into evidence nine adjudicated citations
against Licensee between 1998 and 2012 for violation of the Liquor Code and called
five Harrisburg police officers to testify to incidents at the Licensed Premises on
October 9, 2014, January 30, 2015, April 2, 2015, September 11, 2015, and April
10, 2016. Licensee called two witnesses, Lue Ethel Croom, the executrix of the
estate of Licensee’s deceased owner, Otis D. Powell; and John Washington,
Licensee’s manager.
The nine citations included citations in 2012 and 2011 for failure to
maintain complete and truthful records; 2011, 2010, and 2004 citations for paying
for malt or brewed beverages with checks returned for insufficient funds; and 2011,
2001, and 1998 citations for furnishing alcoholic beverages to minors. (Trial Court
Op. at 3-5, 12; Bureau Ex. 6) Licensee did not dispute the accuracy of this citation
history. Ms. Croom testified that she oversees Licensee’s operations and has been
overseeing its operations since Otis D. Powell suffered a stroke in 2012. (PLCB
Hearing Testimony (H.T.) at 107-09, 111-12, R.R. at 182a-184a, 186a-187a.) On
cross-examination, however, she admitted that she had been involved in Licensee’s
operations, including writing checks and paying its bills, for 30 years. (Id. at 120,
R.R. at 195a.) The evidence showed that Otis D. Powell was the president and sole
shareholder of Licensee, that he died on November 13, 2015, two days after Ms.
Croom filed the renewal application on his behalf under his power of attorney, and
that Otis D. Powell’s will bequeathed his ownership of Licensee to Ms. Croom. (Id.
at 106-07, R.R. at 181a-182a; Bureau Ex. 1, R.R. at 278a-279a; Bureau Ex. 7, R.R.
3
at 293a; Licensee Ex. 1, R.R. at 780a; Licensee Ex. 2, R.R. at 781a-786a.) Licensee
did not report the change in officers or ownership to the PLCB. (Trial Court Op. at
12; PLCB Op. at 110; R.R. at 921a.)
The police officers testified that the following incidents occurred at the
Licensed Premises:
On October 9, 2014, police officers found bundles of heroin and
cocaine, individual packages of marijuana, and a stolen, loaded handgun in trashcans
inside the Licensed Premises. (PLCB H.T. at 13-24, R.R. at 88a-99a.) The recording
from Licensee’s video surveillance cameras showed that four men who were in the
Licensed Premises threw the drugs and gun in the trashcans just before police
entered. (Id. at 18-23, 30-33, R.R. at 93a-98a, 105a-108a.) Police also found in the
jacket of one of these men two ounces of cocaine, an individual package of another
illegal drug known as MDMA, two digital scales, and $905 in cash, and found three
individual packages of marijuana and $390 in cash on one of the other three men.
(Id. at 21-24, R.R. at 96a-99a.)
On January 30, 2015, police arrested a woman who had gone into the
Licensed Premises and was found, when she left, to have in her possession a crack
pipe that had been used. (PLCB H.T. at 44-55, R.R. at 119a-130a.)
On April 2, 2015, police officers found an underage individual in the
Licensed Premises at the bar with a beer and found on him a stolen, loaded handgun,
a baggie of crack cocaine, and 91 packets of heroin. (PLCB H.T. at 58-65, R.R. at
133a-140a.)
On September 11, 2015, a shooting occurred outside the Licensed
Premises. (PLCB H.T. at 68-78, R.R. at 143a-153a.) The incident began as an
argument inside the Licensed Premises, and the participants began waving guns in
4
the vestibule of the Licensed Premises before leaving the building a minute or less
before the shooting. (Id. at 73-89, R.R. at 148a-164a.)
On April 10, 2016, a crowd gathered outside the Licensed Premises at
closing time and it appeared that a fight was beginning to start, but a police officer
successfully dispersed the crowd by activating his siren and lights. (PLCB H.T. at
90-97, R.R. at 165a-172a.)
The officers testified that Ms. Croom cooperated with their
investigations by providing video recordings of the October 9, 2014 and September
11, 2015 incidents. (PLCB H.T. at 16-18, 28, 33, 80-81, R.R. at 91a-93a, 103a,
108a, 155a-156a.) The officer who investigated the September 11, 2015 shooting,
however, testified that Licensee’s security guard was not fully cooperative with
police. (Id. at 73-74, R.R. at 148a-149a.)
Ms. Croom and Mr. Washington testified that since 2012 or 2013,
Licensee has had a security guard on duty on Thursdays through Sundays, from 9:00
p.m. to 2:00 a.m., who screens patrons with a metal detecting wand. (PLCB H.T. at
119, 124-25, 133-34, 171-72, 178, R.R. at 194a, 199a-200a, 208a-209a, 246a-247a,
253a.) Licensee also maintained a list of patrons who were barred from its premises.
(Id. at 112-13, 132-33, 147-48, R.R. at 187a-188a, 207a-208a, 222a-223a.) Ms.
Croom was aware of the October 9, 2014, April 2, 2015, and September 11, 2015
incidents. (Id. at 16-17, 80-81, 123-24, 175-78, 183-84, R.R. at 91a-92a, 155a-156a,
198a-199a, 250a-253a, 258a-259a.) All three of these incidents occurred after 9:00
p.m. on a night when security was on duty. (Id. at 13-14, 59, 68, 69, R.R. at 88a-
89a, 134a, 143a, 144a.) Licensee, however, made no changes to its security
procedures in response to the incidents. (Id. at 124, 162-65, 169-72, 178-79, 184,
193-96, R.R. at 199a, 237a-240a, 244a-247a, 253a-254a, 259a, 268a-271a.)
5
Licensee did not add the patrons arrested in the incidents to its barred patrons list
until 2016. (Id. at 165-66, 173-74, R.R. at 240a-241a, 248a-249a.) Licensee also
did not take any disciplinary action against any employees in response to those
incidents; the security guard who was working when the incidents occurred
remained employed by Licensee until 2016, when he was discharged for failure to
show up for work. (Id. at 120-21, 123-24, 157, R.R. at 195a-196a, 198a-199a, 232a.)
Ms. Croom and Mr. Washington testified that Licensee maintains a logbook of
incidents, including identification card checks for underage drinking, but did not
produce this incident log at the renewal hearing. (Id. at 119, 130-32, 159-60, 190-
93, R.R. at 194a, 205a-207a, 234a-235a, 265a-268a.) Mr. Washington admitted that
although he is Licensee’s manager, he works only day hours and is not regularly
present at the Licensed Premises in the evening. (Id. at 127-28, 155-56, R.R. at
202a-203a, 230a-231a.)
Based upon its review of the record from the hearing, the PLCB refused
the renewal application. Licensee then appealed to the trial court. A de novo hearing
was held on June 7, 2017, at which the PLCB moved the administrative record into
evidence. (Trial Court H.T. at 3, 31, R.R. at 956a, 984a.) At this hearing, Licensee
called only three witnesses: two individuals that it had recently hired who had no
knowledge of the incidents or of security measures implemented by Licensee prior
to the 2016 license renewal administrative hearing and the individual who the PLCB
had alleged was a non-reputable officer of Licensee, who testified that he had not
been an officer of Licensee for 15 years. (Id. at 29-42, R.R. at 982a-995a.) On July
18, 2017, the trial court affirmed the PLCB’s order. The trial court concluded that
the renewal was properly denied based both on Licensee’s citation and violation
history and on the incidents of illegal activity involving the Licensed Premises and
6
Licensee’s failure to take corrective measures following these incidents. (Trial
Court Order at 1-2; Trial Court Op. at 11-13.) The instant appeal followed.2
Renewal of a liquor license is not automatic. Jim Jay Enterprises, Inc.
v. Pennsylvania Liquor Control Board, 91 A.3d 274, 283 (Pa. Cmwlth. 2014); Paey
Associates, Inc. v. Pennsylvania Liquor Control Board, 78 A.3d 1187, 1197 (Pa.
Cmwlth. 2013); First Ward Republican Club of Philadelphia v. Pennsylvania Liquor
Control Board, 11 A.3d 38, 43 (Pa. Cmwlth. 2010). Section 470(a.1) of the Liquor
Code,3 provides that the PLCB may, in its discretion, refuse to renew a liquor license
for any of the following grounds:
(1) if the licensee, its shareholders, directors, officers, association
members, servants, agents or employes have violated any of the
laws of this Commonwealth or any of the regulations of the
board;
(2) if the licensee, its shareholders, directors, officers, association
members, servants, agents or employes have one or more
adjudicated citations under this or any other license issued by the
board or were involved in a license whose renewal was objected
to by the Bureau of Licensing under this section; [or]
* * *
(4) due to the manner in which this or another licensed premises
was operated while the licensee, its shareholders, directors,
officers, association members, servants, agents, or employes
were involved with that license. When considering the manner in
which this or another licensed premises was being operated, the
board may consider activity that occurred on or about the
licensed premises or in areas under the licensee’s control if the
2
Our review in a liquor license renewal case is limited to determining whether the trial court’s
findings of fact are supported by substantial evidence or whether the trial court abused its
discretion or committed an error of law. St. Nicholas Greek Catholic Russian Aid Society v.
Pennsylvania Liquor Control Board, 41 A.3d 953, 954 n.1 (Pa. Cmwlth. 2012).
3
Added by the Act of December 21, 1998, P.L. 1202.
7
activity occurred when the premises was open for operation and
if there was a relationship between the activity outside the
premises and the manner in which the licensed premises was
operated. The board may take into consideration whether any
substantial steps were taken to address the activity occurring on
or about the premises.
47 P.S. § 4-470(a.1).
Violations of the Liquor Code or PLCB regulations by the licensee and
adjudicated citations can be sufficient grounds for denying renewal of a liquor
license, even if they predate the most recent renewal period. 47 P.S. § 4-470(a.1)(1),
(2); Jim Jay Enterprises, Inc., 91 A.3d at 283; Paey Associates, Inc., 78 A.3d at
1200-01; St. Nicholas Greek Catholic Russian Aid Society v. Pennsylvania Liquor
Control Board, 41 A.3d 953, 959-60 (Pa. Cmwlth. 2012). A licensee is strictly liable
for violations of the Liquor Code and PLCB regulations and may lose its license on
that basis without proof that it had knowledge of the statutory or regulatory
violations. Pennsylvania Liquor Control Board v. TLK, Inc., 544 A.2d 931, 932-33
(Pa. 1988); Paey Associates, Inc., 78 A.3d at 1193, 1198.
Here, the evidence showed and the trial court found that Licensee had
nine adjudicated citations, including bad check and recordkeeping violations in
2004, 2010, 2011 and 2012. (Trial Court Op. at 3-5, 12.) Although the last
adjudicated citation was in 2012, the trial court found that Ms. Croom, who was
responsible for Licensee’s operations at the time of the renewal application and was
to become Licensee’s sole owner, was involved in running Licensee and paying its
bills at the time of the bad check and recordkeeping violations, that no substantial
actions were taken by Licensee to cure those operational deficiencies, and that there
was a further violation in 2015 of PLCB regulation 40 Pa. Code § 5.91 of failure to
report the change in Licensee’s officers after Otis D. Powell’s death. (Trial Court
8
Op. at 12.) These findings and conclusions by trial court are sufficient to sustain the
denial of Licensee’s renewal application. Paey Associates, Inc., 78 A.3d at 1200-01(single past adjudicated citation sufficient to support affirmance of non-renewal);
Pennsylvania Liquor Control Board v. Northwoods Tavern, Inc., (Pa. Cmwlth., No.
1156 C.D. 2012, filed January 8, 2013), slip op. at 2, 10-13 (history of citations
sufficient for non-renewal even though almost all were before the last renewal
period).4 Indeed, there was also evidence in the record of two other recent or
continuing violations of the Liquor Code and PLCB regulations, an additional
incident of furnishing alcohol to a minor in 2015 and continued failure in 2016 to
report a change in officers with respect to an individual who had been removed as
an officer in 2002. (PLCB H.T. at 59-62, R.R. at 134a-137a; Trial Court H.T. at 29-
31, R.R. at 982a-984a; PLCB Op. at 113, R.R. at 924a.)
Licensee does not dispute the adjudicated citations or the 2015 violation
of PLCB regulation 40 Pa. Code § 5.91, but contends that the trial court erred in
basing its decision on these violations because Licensee allegedly took substantial
remedial measures. We do not agree. A trial court has discretion to order license
renewal despite Liquor Code violations and adjudications on the ground that the
licensee has taken substantial steps to prevent future violations. Goodfellas, Inc. v.
Pennsylvania Liquor Control Board, 921 A.2d 559, 566 (Pa. Cmwlth. 2007); U.S.A.
Deli, Inc. v. Pennsylvania Liquor Control Board, 909 A.2d 24, 28 (Pa. Cmwlth.
2006). Licensee, however, did not show that it took steps to remedy the violations
and conditions at issue. Most of the corrective steps that Licensee asserts that it took
4
Northwoods Tavern, Inc. and Crocodile Rock Corp. v. Pennsylvania Liquor Control Board, (Pa.
Cmwlth., No. 35 C.D. 2013, filed May 12, 2014), and White House Café, Inc. v. Pennsylvania
Liquor Control Board, (Pa. Cmwlth., No. 850 C.D. 2011, filed April 23, 2012), discussed below,
are unreported decisions. These decisions are therefore not binding precedent, but are considered
by the Court for their persuasive value. 210 Pa. Code § 69.414(a).
9
concern security at the Licensed Premises, not violations of the Liquor Code or the
conditions on which the citations were based. (Appellant’s Br. at 35-38.) The only
evidence of remedying the bad check and recordkeeping violations on which the trial
court based its decision consisted of Ms. Croom’s conclusory testimony that the
recordkeeping violations have been “rectified” and that there have been no further
bad checks. (Appellant’s Br. at 38-39; PLCB H.T. at 113-14, R.R. at 188a-189a.)
The trial court was not required to find that this testimony was credible or that it
showed that Licensee had taken substantial steps to prevent future violations.
Moreover, the trial court also found that the incidents of illegal activity
at the Licensed Premises were sufficient to warrant denial of the license renewal.
(Trial Court Op. at 12-13; Trial Court Order at 2.) The PLCB may refuse to renew
a license where the licensee knows or should have known of criminal activities at its
premises and fails to take substantial affirmative steps to prevent such activities. 47
P.S. § 4-470(a.1)(4); Jim Jay Enterprises, Inc., 91 A.3d at 284; Paey Associates,
Inc., 78 A.3d at 1198; In re License Renewal Application of Quippan Club, 806 A.2d
491, 495-47 (Pa. Cmwlth. 2002). “There is no magic number or type of incident or
span of time” that is required for the denial of renewal on this basis. Paey Associates,
Inc., 78 A.3d at 1199. Even a small number of incidents can constitute sufficient
grounds for refusing renewal of a liquor license if the incidents are serious crimes
and the licensee has actual knowledge of at least some of the serious incidents.
Quippan Club, 806 A.2d at 495-47 (six incidents in 20-month period, three of which
involved fights, were sufficient to deny license renewal); Crocodile Rock Corp. v.
Pennsylvania Liquor Control Board, (Pa. Cmwlth., No. 35 C.D. 2013, filed May 12,
2014), slip op. at 5-7, 17-22 (two assaults involving patrons and one shooting outside
the premises in a 13-month period); Northwoods Tavern, Inc., slip op. at 3-4, 15-22
10
(two assaults involving patrons, one of which involved a firearm and a knife, and
two drug buys in licensee’s parking lot in an 11-month period, even though the
licensee did not know of the drug buys); White House Café, Inc. v. Pennsylvania
Liquor Control Board, (Pa. Cmwlth., No. 850 C.D. 2011, filed April 23, 2012), slip
op. at 3, 12-19 (three assaults involving weapons and serious injury or death in a
two-year and four-month period).
Here, the evidence showed that there were five incidents in an 18-
month period after Licensee’s last renewal, and that three of these, the October 9,
2014, April 2, 2015, and September 11, 2015 incidents, involved serious criminal
offenses. In two of those incidents, illegal, loaded guns, large quantities of drugs,
and drugs packaged for sale were found on the Licensed Premises. The third serious
incident was a shooting following an argument between patrons in the Licensed
Premises and the brandishing of guns inside Licensee’s building.
Licensee argues that the incidents do not support the refusal of its
renewal application because there was not a relationship between the incidents and
the manner in which the Licensed Premises were operated. This argument likewise
fails. Incidents occurring inside the premises or which began inside the premises
that involve the licensee’s patrons are causally linked to the operation of the
licensee’s business and may be grounds for denying renewal of a liquor license
without any further showing of a relationship to the licensee’s operations. Paey
Associates, Inc., 78 A.3d at 1198-1200; St. Nicholas Greek Catholic Russian Aid
Society, 41 A.3d at 960; In re License Renewal Application of Quippan Club, 806
A.2d at 496. The October 9, 2014 and April 2, 2015 incidents both occurred inside
the Licensed Premises. In the October 9, 2014 incident, individuals in the Licensed
Premises used the premises for disposal of drugs, including cocaine and heroin, and
11
a loaded, stolen firearm. In the April 2, 2015 incident, a patron brought a baggie of
crack cocaine, 91 packets of heroin, and a loaded, stolen firearm to the Licensed
Premises. The September 11, 2015 shooting involved Licensee’s patrons, and
although it occurred just outside the Licensed Premises, it began as an argument
between armed patrons inside the Licensed Premises. All of these incidents were
therefore sufficiently related to the manner in which the Licensed Premises were
operated to deny liquor license renewal under Section 470(a.1)(4) of the Liquor
Code.
Licensee also argues that it was not proved that it knew or should have
known of the illegal activity and that the evidence showed it took substantial
remedial measures. Both of these arguments are contrary to the record in this case.
There was ample evidence that Licensee had actual knowledge of the October 9,
2014, April 2, 2015, and September 11, 2015 incidents. Licensee’s witnesses
admitted that Ms. Croom was told of the October 9, 2014 and April 2, 2015 gun and
drug arrests. (PLCB H.T. at 122-24, 175-78, 183-84, R.R. at 197a-199a, 250a-253a,
258a-259a.) In addition, the police officers testified that they called Ms. Croom
concerning the October 9, 2014 and September 11, 2015 incidents, that she provided
videotape of both of those incidents, that an officer interviewed Licensee’s security
guard concerning the September 11, 2015 shooting, and that the security guard was
aware of the shooting. (Id. at 16-17, 73-77, 80-81, R.R. at 91a-92a, 148a-152a, 155a-
156a.)
The record is equally clear that Licensee failed to take timely corrective
measures in response to these incidents. The remedial security measures that
Licensee contends that it undertook to prevent illegal activities by patrons consisted
of video surveillance cameras, employment of a security guard who screened patrons
12
with a metal detecting wand, signage, exterior lighting, an incident logbook, and a
barred patrons list. (Appellant’s Br. at 35-38.) All of these measures predated the
incidents at issue here. Licensee’s witnesses testified that the video surveillance
cameras and lighting were installed before 2010, that it had a security guard who
screened patrons with the wand since 2012 or 2013, that the signs have been posted
at the Licensed Premises since before the October 9, 2014 incident, that the Licensee
had a barred patrons list since at least 2010, and that the logbook was already in use
before the October 9, 2014 incident. (PLCB H.T. at 124, 162-65, 169, 175-79, R.R.
at 199a, 237a-240a, 244a, 250a-254a.) Licensee’s witnesses admitted that Licensee
made no changes to its security procedures or operations in response to the incidents
and that no disciplinary action was taken against any employee. (Id. at 122-24, 171-
72, 177, 183-84, 193-96, R.R. at 197a-199a, 246a-247a, 252a, 258a-259a, 268a-
271a.) Indeed, Licensee did not even add the names of the individuals who were
arrested to its barred patrons list until 2016, after the Bureau objected to the license
renewal. (Id. at 165-66, 173-74, R.R. at 240a-241a, 248a-249a.) The trial court’s
determination that Licensee took no substantial affirmative steps to prevent future
illegal activity is therefore supported by the evidence.
We find no abuse of the discretion of the trial court in upholding the
PLCB’s denial of renewal here and no error of law or lack of support for its findings.
Accordingly, we affirm the trial court.
______________________________________
JAMES GARDNER COLINS, Senior Judge
13
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
O.D.’s Plantation, Inc., :
:
Appellant :
: No. 1151 C.D. 2017
v. :
:
Pennsylvania Liquor Control Board :
ORDER
AND NOW, this 28th day of December, 2018, the order of the Court of
Common Pleas of Dauphin County in the above matter is AFFIRMED.
______________________________________
JAMES GARDNER COLINS, Senior Judge