MFW Wine Co., LLC v. PA LCB ( 2022 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
MFW Wine Co., LLC, A6 Wine :
Company, and GECC2 LLC d/b/a :
Bloomsday Cafe, :
Petitioners :
:
v. :
:
Pennsylvania Liquor Control Board, : No. 251 M.D. 2020
Respondent : Argued: November 17, 2021
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge1
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
OPINION BY
JUDGE COVEY FILED: May 27, 2022
Before this Court is MFW Wine Co., LLC’s (MFW), A6 Wine
Company’s (A6), and GECC2 LLC d/b/a Bloomsday Café’s (Bloomsday Café)
(collectively, Petitioners) Application for Relief Seeking Damages, Costs, Interest
and Attorneys’ Fees (Damages Application) from the Pennsylvania Liquor Control
Board (PLCB).2 On May 1, 2020, this Court granted peremptory judgment in
mandamus and summary declaratory relief in Petitioners’ favor and against the
PLCB because the PLCB failed to carry out the General Assembly’s directive to
1
This case was assigned to the opinion writer before January 7, 2022, when Judge Cohn
Jubelirer became President Judge.
2
“The PLCB regulates the distribution of beverage alcohol in Pennsylvania, operates [580
Fine W]ine and [Good S]pirits stores statewide, and licenses 20,000 alcohol producers, retailers,
and handlers.” www.media.pa.gov/pages/liquor-control-board-details.aspx?newsid=566 (last
visited May 26, 2022).
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 handling fees for
each bottle purchased in this process.
On June 8, 2016, by enacting Section 3 of Act 39,4 the General
Assembly amended Section 305(a) of the Liquor Code5 to provide that SOs may be
delivered from a licensed importer or vendor directly to a customer. Section 3 of
Act 39 also states that the PLCB may not assess a handling fee on [SOs], and that
“[t]he [PLCB] shall, by January 1, 2017, implement a procedure for processing
[SOs] . . . .” (Emphasis added.) Further, on July 13, 2016, the General Assembly
passed an omnibus amendment to implement the Commonwealth’s 2016-2017
budget (Section 20 of Act 85 of 20166), which added Section 1799.2-E to The Fiscal
Code,7 and therein provided that “the [PLCB] may implement a procedure for
processing [SOs] . . . by June 1, 2017.” (Emphasis added.) The PLCB took the
position that implementing an SO processing procedure was discretionary, and the
3
SO customers are largely PLCB licensees (i.e., establishments authorized to sell alcohol).
4
Act of June 8, 2016, P.L. 273.
5
Act of April 12, 1951, P.L. 90, as amended, 47 P.S. § 3-305(a).
6
Act of July 13, 2016, P.L. 664.
7
Act of April 9, 1929, P.L. 343, as amended, added by Section 20 of the Act of July 13,
2016, P.L. 664, 72 P.S. § 1799.2-E (PLCB Procedure).
2
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, 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, MFW
filed an emergency motion for peremptory judgment in mandamus, and special
injunctive and declaratory relief (Motion), and requested an expedited hearing.12
8
See www.governor.pa.gov/process-to-reopen-pennsylvania/last updated Nov. 19, 2020
(last visited May 26, 2022). On March 19, 2020, Governor Wolf issued an Executive Order that
compelled the closure of the physical operations of all non-life sustaining Commonwealth of
Pennsylvania businesses. See id. On June 3, 2020, Governor Wolf renewed the Proclamation for
an additional 90 days. Governor Wolf renewed the Proclamation several times thereafter. See id.9
See www.media.pa.gov/pages/liquor-control-board-details.aspx?newsid=562 (last
visited May 26, 2022).
10
See www.media.pa.gov/pages/liquor-control-board-details.aspx?newsid=563 (last
visited May 26, 2022).
11
Petitioners explain that they did not initiate this action before Governor Wolf closed the
PLCB Stores because it was not until their Pennsylvania revenue dropped to $0 that they had the
economic motivation to lead the charge. See Damages Appl. at 14-15.
12
“Consistent with the applicable rules of appellate procedure, the Court [] treated Petitioners’
[M]otion as an application for special and summary relief. See Pa.R.A.P. 123, 1532.” MFW Wine
3
On April 22, 2020, MFW and A6 filed an amended petition for review
(Amended Petition), adding Bloomsday Café as a Petitioner. Also on April 22,
2020, the PLCB re-opened its SO program to allow retail licensees with wine
expanded permits (i.e., those permitted to sell wine to-go) to pick up SOs from
designated PLCB Stores beginning April 24, 2020.13 On April 28, 2020, this Court
conducted a hearing on the Motion.
On May 1, 2020, the Court granted summary relief in Petitioners’ favor
with respect to Amended Petition Count III (Declaratory Judgment), and declared
that Section 305(a) of the Liquor Code, as amended, (1) prohibits the PLCB from
charging a handling fee on SOs delivered directly to customers, and (2) requires the
PLCB to implement a procedure to process SO direct shipments. With respect to
Amended Petition Count I (Mandamus), the Court granted summary relief in
Petitioners’ favor and issued a writ of mandamus: (1) directing the PLCB to allow
licensed vendors and licensed importers to ship SOs directly to customers; and (2)
directing the PLCB to implement a procedure for processing SO direct shipments.
The Court denied the Motion in all other respects (Count II (Injunctive Relief)). See
MFW Wine Co., LLC v. Pa. Liquor Control Bd., 231 A.3d 50 (Pa. Cmwlth. 2020)
(MFW I) (Brobson, J., single judge op.), aff’d per curiam, 247 A.3d 1008 (Pa. 2021).
Co., LLC v. Pa. Liquor Control Bd., 231 A.3d 50, 52 n.2 (Pa. Cmwlth. 2020) (MFW I) (Brobson,
J., single judge op.), aff’d per curiam, 247 A.3d 1008 (Pa. 2021).
13
See www.media.pa.gov/pages/liquor-control-board-details.aspx?newsid=566 (last
visited May 26, 2022). Thereafter, the PLCB progressively expanded its access to the PLCB Stores
to retail customers and licensees. See www.media.pa.gov/pages/liquor-control-board-
details.aspx?newsid=569 (last visited May 26, 2022). On May 1, 2020, the PLCB announced that
it would resume fulfillment of retail licensees’ wine and spirits orders through the PLCB Stores
and licensee service centers. See id. By the end of June 2020, 559 PLCB Stores and all 13 of the
PLCB’s licensee service centers were open with limited in-store public access. See
www.lcb.pa.gov/About-Us/News-and-Reports/Documents/PLCB%20FY%202019-
2020%20Annual%20Report.pdf (last visited May 26, 2022) at 25.
4
Notably, this Court concluded that “[t]he intent of the General
Assembly in Act 39 is clear and unambiguous.” MFW I, 231 A.3d at 54. The Court
explained:
Section 305(a) of the Liquor Code and Section 1799.2-E
of [T]he Fiscal Code are in pari materia. With respect to
[SOs], the Act 39 amendments to Section 305(a) of the
Liquor Code did the following: (a) expressly authorized
licensed vendors and importers to ship [SOs] directly to
their customers; (b) directed that payment for such orders
be made to [the] PLCB; (c) required PLCB authorization
prior to shipment; (d) prohibited [the] PLCB from
charging a handling fee for [SOs] directly shipped to
customers; (e) placed liability for all [SOs] directly
shipped to customers on the licensed vendor or importer
until delivery to the customer; (f) required [the] PLCB to
implement a procedure for processing [SOs] for direct
shipment to customers by January 1, 2017; and (g) allowed
[the] PLCB to continue to process [SOs] at its stores. The
only effect Section 1799.2-E of [T]he Fiscal Code had on
Section 305(a) of the Liquor Code was to allow [the]
PLCB to implement the procedures it is required to
implement under Section 305(a) [of the Liquor Code] by
June 1, 2017, instead of January 1, 2017.
MFW I, 231 A.3d at 55-56 (footnote omitted). Accordingly, this Court declared:
“As the Court finds the language of the statutes unambiguous, it affords no deference
to [the] PLCB’s proffered construction. Seeton v. Pa. Game Comm’n, 937 A.2d
1028, 1037 (Pa. 2007) (‘While an agency’s interpretation of an ambiguous statute it
is charged with enforcing is entitled to deference, courts’ deference never comes into
play when the statute is clear.’).” MFW I, 231 A.3d at 57 n.12.
Specifically relative to 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
5
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 under Section 305(a) of the Liquor Code.
MFW I, 231 A.3d at 57.
This Court further declared:
[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 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 implement thoughtfully 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 - which, through their unrebutted testimony at
the hearing, established that their businesses rely on the
sale, purchase, and delivery of [SO] wines in
6
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). The Court added: “The Court will
not rule at this time on Petitioners’ request for monetary damages under [Section
8303 of the Judicial Code,] 42 Pa.C.S. § 8303, costs, and attorneys’ fees. To the
extent Petitioners wish to pursue such additional relief, they may do so by separate
application.” MFW I, 231 A.3d at 57 (footnote omitted).
14
In Log Cabin Property, L.P. v. Pennsylvania Liquor Control Board (Pa. Cmwlth. No.
292 M.D. 2020, filed May 27, 2022) (Log Cabin), the PLCB represented:
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.
Log Cabin, 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.
Counsel suggested that, because the Court did not set a specific date for the PLCB’s
compliance with the May 1, 2020 Order, 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.
7
On May 27, 2020,15 the PLCB appealed to the Pennsylvania Supreme
Court (30 MAP 2020) which, on March 25, 2021, issued a Per Curiam Order
(without an opinion) affirming this Court’s May 1, 2020 Order.
On May 25, 2021, Petitioners filed the Damages Application. The
PLCB filed an answer to the Damages Application on June 11, 2021. By September
15, 2021 Order, this Court directed that the Damages Application shall be listed for
argument seriately with the PLCB’s Preliminary Objection filed in Log Cabin
Property, L.P. v. Pennsylvania Liquor Control Board (Pa. Cmwlth. No. 292 M.D.
2020, filed May 27, 2022) (Log Cabin).16 This Court limited argument on the
Damages Application to: (1) whether the PLCB is a “person” under Section 8303 of
the Judicial Code; and (2) whether Petitioners may recover mandamus damages from
the PLCB. See September 15, 2021 Order.17
Discussion
Section 8303 of the Judicial Code specifies that “[a] person who is
adjudged in an action in the nature of mandamus to have failed or refused without
lawful justification to perform a duty required by law shall be liable in damages to
15
On May 7, 2020, Petitioners filed an application for relief seeking leave to amend their
Amended Complaint (Amendment Application) to allow Bloomsday Café to plead allegations in
support of a class action and state its claim for mandamus damages on a class-wide basis. The
PLCB filed an answer in opposition to the Amendment Application on May 26, 2020. However,
because the PLCB filed a notice of appeal to the Pennsylvania Supreme Court and, after its ruling,
Petitioners filed the instant Damages Application, this Court has not yet ruled on the Amendment
Application.
16
The allegations in Log Cabin are interrelated with those raised herein. On May 6, 2020,
Log Cabin filed an application to consolidate these matters. By June 4, 2020 Order, this Court
denied the request without prejudice pending a similar application having been filed in this case.
To date, Log Cabin has not filed a new consolidation application in Log Cabin, nor has a similar
application been filed in this case.
17
On April 8, 2022, the PLCB filed an Application for Post-Submission Communication.
On April 13, 2022, Petitioners filed an answer in opposition to the Application for Post-Submission
Communication.
8
the person aggrieved by such failure or refusal.” 42 Pa.C.S. § 8303 (emphasis
added).
(1) Person Defined
The PLCB argues that, as a Commonwealth agency,18 the PLCB is not
a person under Section 8303 of the Judicial Code because the definition of person
in Section 1991 of the Statutory Construction Act of 1972 (SCA), 1 Pa.C.S. § 1991,
excludes Commonwealth government entities. Petitioners respond that the PLCB is
a person under Section 8303 of the Judicial Code because the current definition of
person in the SCA does not exclude the Commonwealth and its agencies.
Neither Section 8303 of the Judicial Code, nor Section 102 of the
Judicial Code, 42 Pa.C.S. § 102 (definitions), define person. This Court has held
that “[w]hen a term is not defined in a statute, we resort to the definitions provided
in [S]ection 1991 of the [SCA.]” Muscarella v. Commonwealth, 87 A.3d 966, 974
(Pa. Cmwlth. 2014). Section 1991 of the SCA defines person to “[i]nclude[] a
corporation, partnership, limited liability company, business trust, other association,
government entity (other than the Commonwealth), estate, trust, foundation or
natural person.” 1 Pa.C.S. § 1991 (emphasis added). Section 1991 of the SCA
specifies that the definitions supplied therein apply “when used in any statute finally
enacted on or after September 1, 1937, unless the context clearly indicates
otherwise[.]” Id. (emphasis added). Therefore, the Commonwealth is not a
“person,” as that term is defined in Section 1991 of the SCA, unless the context in
which the term appears clearly indicates otherwise.
18
Section 102 of the Commonwealth Attorneys Act lists the PLCB among the
Commonwealth’s independent agencies. See Act of October 15, 1980, P.L. 950, as amended, 71
P.S. § 732-102.
9
Importantly, Section 1991 of the SCA’s definition of person excludes
only “the Commonwealth.” 1 Pa.C.S. § 1991. The term Commonwealth, as used
therein could have, but does not, expressly include Commonwealth agencies, nor
does it use the broader term “Commonwealth party,” as used in Section 8501 of what
is commonly known as the Sovereign Immunity Act.19 42 Pa.C.S. § 8501. Rather,
Section 1991 of the SCA defines Commonwealth merely as “[t]he Commonwealth
of Pennsylvania.” Id. Neither the SCA, nor Section 102 of the Judicial Code, define
“Commonwealth of Pennsylvania.”20 Moreover, this Court has stated:
[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)[;] [s]ee also Tork-Hiis v.
Commonwealth, . . . 735 A.2d 1256 ([Pa.] 1999).
Finn v. Rendell, 990 A.2d 100, 105 (Pa. Cmwlth. 2010) (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
19
“Commonwealth party” is defined in Section 8501 of the Sovereign Immunity Act as
“[a] Commonwealth agency and any employee thereof, but only with respect to an act within the
scope of his office or employment.” 42 Pa.C.S. § 8501.
20
Although Section 102 of the Judicial Code’s definition of Commonwealth government
includes executive and independent “agencies of the Commonwealth[,]” 42 Pa.C.S. § 102 (see also
“Commonwealth agency” definition), if this Court is bound solely by Section 1991 of the SCA’s
definition, as the PLCB asserts, then Section 102 of the Judicial Code definitions are inapplicable.
10
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 Section 1991 of the SCA, that the Commonwealth
itself could not be liable for mandamus damages under Section 8303 of the Judicial
Code, but individual agencies could be so liable.
The PLCB cites Commonwealth v. Runion, 662 A.2d 617 (Pa. 1995),
to support its position.21 However, Runion is inapposite. First, the General
Assembly legislatively superseded Runion.22 See Commonwealth v. Veon, 150 A.3d
21The Runion Court reversed the trial court’s order that directed the defendant to pay
restitution to the Department of Public Welfare (DPW) pursuant to Section 1106 of the Crimes
Code, 18 Pa.C.S. § 1106, because only victims were entitled to restitution. At that time, Section
1106(h) of the Crimes Code defined victim as “‘[a]ny person, except an offender, who suffered
injuries to his person or property as a direct result of the crime.’ 18 Pa.C.S. § 1106(h).” Runion,
662 A.2d at 619 (emphasis added). Relying on the SCA’s definition of person, the Runion Court
held that, since DPW is “a Commonwealth entity,” id. at 621, which was excluded from the SCA’s
definition of person, the Court stated it was constrained to conclude that DPW could not be a
victim to whom restitution was due under Section 1106(h) of the Crimes Code, 18 Pa.C.S. §
1106(h). The Runion Court acknowledged that, although defining the term victim to include
government agencies would favor the restitution statute’s rehabilitative purpose, “it [wa]s for the
legislature, and not for th[e Supreme] Court, to expand the meaning of the term ‘victim’ under
[Section] 1106 [of the Crimes Code] so as to include governmental agencies . . . .” Id. at 621.
22
Effective on July 2, 1995, two weeks before the Supreme Court decided Runion on July
18, 1995, the General Assembly amended Section 1106 of the Crimes Code to add “[a]ny other
government agency which has provided reimbursement to the victim as a result of the defendant’s
criminal conduct” to the list of entities to whom the courts may order mandatory restitution.
Section 1106(c)(1)(ii) of the Crimes Code, 18 Pa.C.S. § 1106(c)(1)(ii) (emphasis added); see also
Section 1 of the Act of May 3, 1995, P.L. 999 (Spec. Sess. No. 1). In 2009, the Pennsylvania
Supreme Court ruled, based on the legislative history of Section 1106 of the Crimes Code, the
General Assembly’s revisions, and the purpose of the restitution statute, that government agencies
that paid money on a victim’s behalf were also entitled to restitution. See Commonwealth v.
Brown, 981 A.2d 893 (Pa. 2009). On October 24, 2018, the General Assembly amended the term
victim to specifically include “an affected government agency[,]” and defined “affected
government agency” to include “the Commonwealth,” 18 Pa.C.S. § 1106(h) (emphasis added); see
also Section 1 of the Act of October 24, 2018, P.L. 891, so there is no longer any doubt that the
11
435 (Pa. 2016). Second, the Runion Court construed a penal statute, which must be
strictly construed, see Section 1928(b)(1) of the SCA, 1 Pa.C.S. § 1928(b)(1),
whereas Section 8303 of the Judicial Code is to be “liberally construed to effect [its]
object[] and to promote justice.” Section 1928(c) of the SCA, 1 Pa.C.S. § 1928(c).
Third, Runion did not involve the situation where, as here, a Commonwealth
agency’s conduct was contrary to and, in fact, defiant of, a statutory mandate. And,
fourth, the Runion Court concluded that “[t]he definition of ‘person’ as found in the
[SCA] was amended in 1992, in part, to exclude government entities of the
Commonwealth,” Runion, 662 A.2d at 621 n.4, when the definition amendment
actually added government entit[ies]” as persons, while simultaneously excluding
“the Commonwealth” from the definition, as discussed supra. 1 Pa.C.S. § 1991; see
also Section 2 of the Act of December 18, 1992, P.L. 1333.
Moreover, the context of Section 8303 of the Judicial Code, effective
June 27, 1978, clearly intends that mandamus damages may be assessed against a
Commonwealth agency, just as the now-repealed Mandamus Act of 1893
(Mandamus Act)23 did. Section 16 of the Mandamus Act24 “provide[d,] in pertinent
part: ‘If a verdict is found for plaintiff and judgment is entered thereon, or if a
judgment is given for him upon a demurrer, . . . he shall recover his damages and
costs.’ The [Mandamus A]ct [wa]s substantially reenacted at 42 Pa.C.S.[] § 8303
(1980 pamphlet).” City of Pittsburgh v. Pa. Dep’t of Transp., 416 A.2d 461, 463 n.3
(Pa. 1980). This Court has since ruled: “There is no doubt that mandamus damages
are available under [Section 8303 of the Judicial Code] whenever a public
Commonwealth and its agencies are included among the parties for whom Pennsylvania courts
may order to receive restitution. Notably, the General Assembly has not modified the definition
of person in Section 1991 of the SCA to exclude Commonwealth agencies.
23
Act of June 8, 1893, P.L. 345, as amended, formerly 12 P.S. §§ 1911-2002, repealed by
the Act of April 28, 1978, P.L. 202.
24
12 P.S. § 1919 (repealed).
12
agency[’s]”25 “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 Section 8303 of the Judicial Code was enacted,
Section 1991 of the SCA defined person as “a corporation, partnership, and
association, as well as a natural person[,]” see Warner-CCC Inc. v. City of Altoona,
374 A.2d 987, 988 (Pa. Cmwlth. 1977), thereby exposing the Commonwealth and
its agencies to liability under Section 8303 of the Judicial Code, until the General
Assembly excluded the Commonwealth in 1992. There is no indication that the
General Assembly intended, by amending the SCA’s definition of person in 1992,
to immunize Commonwealth agencies from mandamus damages.
Finally, based on the fact that the purpose of Section 8303 of the
Judicial Code is to authorize mandamus damages against government actors that fail
to perform their statutorily mandated duties, Pennsylvania courts have allowed
mandamus damages to be assessed against Commonwealth agencies thereunder. See
Richard Allen Preparatory Charter Sch. v. Dep’t of Educ., 161 A.3d 415 (Pa.
Cmwlth. 2017) (en banc), aff’d, 185 A.3d 984 (Pa. 2018); see also KIPP Phila.
Charter Sch. v. Dep’t of Educ., 161 A.3d 430 (Pa. Cmwlth. 2017) (en banc), aff’d
sub nom. Richard Allen Preparatory Charter Sch. v. Dep’t of Educ., 185 A.3d 984(Pa. 2018).
Accordingly, this Court holds that, in the context presented here, the
PLCB is a person subject to Section 8303 of the Judicial Code.
25
Although the term public agency is not specifically defined in the Judicial Code, as stated
previously, Section 102 of the Judicial Code defines government agency to include “[a]ny
Commonwealth agency or any political subdivision or municipal or other local authority, or any
officer or agency of any such political subdivision or local authority.” 42 Pa.C.S. § 102.
13
(2) Mandamus Damages
Petitioners also argue that they are entitled to costs and damages under
Section 8303 of the Judicial Code, plus associated interest and attorneys’ fees.26 The
PLCB responds that, although MFW is entitled to its taxable costs, Petitioners are
not entitled to damages or related interest because the PLCB has sovereign
immunity, and Petitioners are not entitled to attorneys’ fees under the circumstances
of this case. In the alternative, the PLCB requests that, if this Court determines that
Petitioners are entitled to damages, interest, and/or attorneys’ fees, that the Court
allow discovery and/or conduct a hearing for Petitioners to prove them.
Costs
Regarding costs, Section 1726(a) of the Judicial Code provides, in
relevant part:
(2) The prevailing party should recover his costs from
the unsuccessful litigant except where the:
(i) Costs relate to the existence, possession or
disposition of a fund and the costs should be borne
by the fund.
(ii) Question involved is a public question or
where the applicable law is uncertain and the
purpose of the litigants is primarily to clarify the
law.
(iii) Application of the rule would work substantial
injustice.
26
Petitioners claim MFW’s taxable costs of $946.26, $102,291.49 in damages
($100,867.69 in MFW lost profits + $1,423.80 in A6 lost profits = $102,291.49), plus $6,194.27
in interest on their costs and damages ($946.26 MFW costs + $102,291,49 damages =
$103,237.75) calculated at 6% per annum, for a total of $109,432.02. Petitioners also seek to
recover $310,821.50 in attorneys’ fees.
14
(3) The imposition of actual costs or a multiple thereof
may be used as a penalty for violation of general rules or
rules of court.
42 Pa.C.S. § 1726(a) (emphasis added). This Court has specifically ruled that “the
General Assembly provide[s] for the assessment of costs against the Commonwealth
under [Section] 1726 [of the Judicial Code,]” when the Commonwealth and/or its
agency is the unsuccessful litigant. Inmates of B-Block v. Jeffes, 483 A.2d 569, 571
(Pa. Cmwlth. 1984). Moreover, “sovereign immunity does not preclude an
assessment of costs against the Commonwealth where the underlying suit was not
barred . . . .” Id. at 572.
Where, as here, there is no fund to bear Petitioners’ costs, the
applicable law is certain, and application of the rule will not work a substantial
injustice, Petitioners are entitled to recover allowable litigation costs from the PLCB.
Accordingly, the parties agree that the PLCB owes MFW $946.26 in taxable costs
pursuant to Section 1726(a)(2) of the Judicial Code.
However, the parties disagree regarding whether Petitioners are also
entitled to damages, interest, and attorney’s fees.
Damages
Petitioners also seek damages from the PLCB arising from their
successful mandamus action.27 See Amended Pet. at 14. The PLCB responds that
sovereign immunity protects it from having to pay Petitioners damages related to
their mandamus action.
27
Petitioners specifically claim that they “are entitled to recover $102,291.49 in damages
they suffered as a result of the PLCB’s failure to implement a procedure for direct delivery of
[SOs].” Damages Appl. at 4. “MFW estimates that it lost $109,131.72 in gross sales during the
state store closure period of March 16 to May 1, 2020.” Id. “A6 estimates that it lost $14,238.00
in gross sales during the state closure period.” Id. at 5.
15
Pursuant to Section 8303 of the Judicial Code, a party, including the
PLCB, adjudged in a mandamus action “to have failed or refused without lawful
justification to perform a duty required by law shall be liable in damages to the
person aggrieved by such failure or refusal.” 42 Pa.C.S. § 8303. “Damages are
generally appropriate when a defendant fails to perform a ministerial duty, even
when such failure results from an erroneous legal interpretation.” Maurice A.
Nernberg & Assocs. v. Coyne, 920 A.2d 967, 970 (Pa. Cmwlth. 2007); see also
Stoner. Moreover, “the law is clear that sovereign immunity does not bar mandamus
actions. See Banfield v. Cortes, 922 A.2d 36, 43 (Pa. Cmwlth. 2007) (quoting Maute
v. Frank, . . . 657 A.2d 985, 986 ([Pa. Super.] 1995) (‘Actions in mandamus are not
subject to the defense of sovereign immunity.’).” Brimmeier v. Pa. Tpk. Comm’n,
147 A.3d 954, 961 (Pa. Cmwlth. 2016), aff’d, 161 A.3d 253 (Pa. 2017); see also
Temple Univ. v. Dep’t of Pub. Welfare, 521 A.2d 986 (Pa. Cmwlth. 1987).
In addition, this Court has explained:
Damages recoverable in mandamus are those incidental to
the specific relief being sought. For example, where
mandamus is issued to compel the reinstatement of a
public employee in employment, the damages have
regularly been confined to those arising from the absence
of employment over the period, i.e., the loss of salary or
net loss of income.
Stoner, 587 A.2d at 885 (citation omitted). “The damages must be clearly related to
the defendant’s failure to perform a mandatory ministerial function.” Sch. Dist. of
Pittsburgh v. City of Pittsburgh, 352 A.2d 223, 229 (Pa. Cmwlth. 1976). “In Stoner,
this [C]ourt held that [] mandamus damages . . . do not include ‘consequential
damages or damages arising in connection with transactions or potential transactions
with other parties.’ Id. at 885.” Soni Props., LLC v. City of Reading (Pa. Cmwlth.
16
No. 2559 C.D. 2009, filed May 28, 2010), slip op. at 8.28 “Black’s Law Dictionary
. . . defines [consequential damages] as ‘losses that do not flow directly and
immediately from an injurious act, but that result indirectly from the act.’” Safe Auto
Ins. Co. v. Berlin, 991 A.2d 327, 333 n.2 (Pa. Super. 2010).
The determination of damages is a factual question
to be decided by the fact-finder. The fact-finder
must assess the testimony, by weighing the
evidence and determining its credibility, and by
accepting or rejecting the estimates of the damages
given by the witnesses. Although the fact-finder
may not render a verdict based on sheer conjecture
or guesswork, it may use a measure of speculation
in estimating damages. The fact-finder may make
a just and reasonable estimate of the damage based
on relevant data, and in such circumstances may
act on probable, inferential, as well as direct and
positive proof.
Judge Tech. Servs., Inc. v. Clancy, 813 A.2d 879, 885 (Pa.
Super. 2002) (citation omitted).
Discover Bank v. Booker, 259 A.3d 493, 497 (Pa. Super. 2021).
In the instant matter, Petitioners’ damages consist of lost profits, which
are often consequential damages. However,
[l]ost profits . . . are not the only form of consequential
damages and not all lost profits constitute consequential
damages. Certain lost profits can in fact be “direct”
damages. A good example is a construction contract. If a
property owner wrongfully terminates a construction
contract with the contractor, the direct damages that
naturally arise from that wrongful termination are the
“profits necessarily inherent in the contract,” i.e., the “net
profit to which the contractor would have been entitled had
full performance of the contract been permitted.”
Similarly, if a breach foreseeably and naturally
28
This Court acknowledges that its unreported memorandum opinions may only be cited
“for [their] persuasive value, but not as binding precedent.” Section 414(a) of the Commonwealth
Court’s Internal Operating Procedures, 210 Pa. Code § 69.414(a).
17
deprives the non-breaching party of profits that would
have been earned in the ordinary course of business
and not under special circumstances, those lost profits
may also constitute direct damages rather than
consequential damages.
Glenn D. West, Sara G. Duran, Reassessing the “Consequences” of Consequential
Damage Waivers in Acquisition Agreements, 63 Bus. Law. 777, 792 (2008)
(emphasis added; footnotes omitted). Therefore, “[l]ost profits, though often
consequential, can come in the form of direct damages. . . . [W]hether lost profits
are direct or consequential damages turns on the nature of the . . . circumstances.”
Cindy Saiter, Sameer Hashmi, Consequential Damages or Direct Damages-What
Difference Does It Make in the Realm of Lost Profits?, 38 Corp. Couns. Rev. 63, 69
(2019). “‘There is no bright-line rule that lost profits always constitute
consequential damages.’” Id. at 70. Accordingly, whether Petitioners’ damages are
“incidental to the specific relief being sought,” id., is a matter for Petitioners to
prove.
The general rule of law applicable for loss of
profits in both contract and tort actions allows such
damages where (1) there is evidence to establish
them with reasonable certainty, (2) there is
evidence to show that they were the proximate
consequence of the wrong; and, in the contract
actions, that they were reasonably foreseeable.
Birth C[tr.] v. St. Paul Co., Inc., . . . 787 A.2d 376, 387-88
n.5 ([Pa.] 2001) (quoting Delahanty v. First P[a.] Bank,
N.A., 464 A.2d 1243, 1258 ([Pa. Super.] 1983)).
Co. Image Knitware, Ltd. v. Mothers Work, Inc., 909 A.2d 324, 336 (Pa. Super.
2006) (emphasis added). Accordingly, Section 8303 of the Judicial Code allows
Petitioners to recover damages to the extent Petitioners can prove them.
18
Interest
As successful mandamus plaintiffs, Petitioners may be entitled to
interest on their costs and damages at a legal rate of 6% per annum. See Section 202
of the Act of January 30, 1974, P.L. 13 (Act 6), as amended, 41 P.S. § 202.29
Generally, “the Commonwealth is not liable to pay interest unless
bound to do so by statute or by contract of its executive officers[,]” Indep. Oil & Gas
Ass’n of Pa. v. Pa. Pub. Util. Comm’n, 804 A.2d 693, 704 (Pa. Cmwlth. 2002), and
“interest is . . . allowed only when payment has been withheld after the duty of a
party to discharge the debt has become fixed.” Id.; see also Twp. of Marple v.
Weidman, 613 A.2d 94, 95 (Pa. Cmwlth. 1992) (“This Court has held that a
mandamus action can include an award of interest against the Commonwealth when
the Auditor General, even in good faith, delays payments.”); Temple Univ.
However, this Court has also ruled that “[i]f no obligation arises under either statute
or contract, we must next determine whether [the Commonwealth agency] is under
an independent obligation, by virtue of the common law of this Commonwealth, to
pay [] interest[.]” Braig v. Pa. State Emps.’ Ret. Bd., 682 A.2d 881, 885 (Pa.
Cmwlth. 1996).
The Pennsylvania Superior Court has held:
The safest and fairest way for a court to decide questions
pertaining to interest is according to a plain and simple
consideration of justice and fair dealing. Since plaintiffs
29
Section 202 of Act 6 provides:
Reference in any law or document enacted or executed heretofore or
hereafter to “legal rate of interest” and reference in any document to
an obligation to pay a sum of money “with interest” without
specification of the applicable rate shall be construed to refer to the
rate of interest of six per cent per annum.
41 P.S. § 202.
19
are entitled to damages from defendants . . . and because
it was found as a fact that defendants’ dilatory tactics
caused financial harm to plaintiffs[,] we also find that
plaintiffs are entitled to interest for deprivation of their
money . . . .
Remic v. Berlin, 426 A.2d 153, 154 (Pa. Super. 1981) (citation omitted). Thus, if
Petitioners can prove that the PLCB’s delay in establishing the SO program caused
Petitioners financial harm, they would be entitled to interest on their costs and
damages, the amount of which would be fixed based on Petitioners’ damages.
Attorneys’ Fees
MFW and A6 request that this Court grant their request for
$310,821.50, which represents their combined attorneys’ fees from the moment they
engaged counsel through the filing of the Damages Application.30 The PLCB retorts
that Petitioners are not entitled to attorneys’ fees merely because the PLCB advanced
an argument that was ultimately unsuccessful; this Court is not authorized to award
attorneys’ fees pursuant to Pennsylvania Rule of Appellate Procedure (Rule) 2744;
Section 2503 of the Judicial Code, 42 Pa.C.S. § 2503, does not apply here because
the PLCB did not engage in vexatious conduct, and its defense was not arbitrary,
vexatious, or in bad faith.
“Damages under Section 8303 [of the Judicial Code] do[] not
encompass an award for reasonable counsel fees[.]” Maurice A. Nernberg &
Assocs., 920 A.2d at 970 n.5. However, regarding attorneys’ fees, “Pennsylvania
law embodies the American [R]ule,” Doctor’s Choice Physical Med. & Rehab. Ctr.,
P.C. v. Travelers Pers. Ins. Co., 128 A.3d 1183, 1189 (Pa. 2015), which “states that
a litigant cannot recover counsel fees from an adverse party unless there is express
statutory authorization, a clear agreement of the parties or some other established
30
Petitioners represent that the time spent by counsel solely on Bloomsday Café’s behalf
has been removed from Petitioners’ attorneys’ fees calculation. See Damages Appl. at 16 n.7.
20
exception.” Mosaica Acad. Charter Sch. v. Dep’t of Educ., 813 A.2d 813, 822 (Pa.
2002). Because the parties do not agree, this Court must determine whether there is
express statutory authorization or another established exception that would allow the
imposition of attorneys’ fees in this case.
“In Pennsylvania, the American Rule is embodied in [Section
1726(a)(1) of the Judicial Code,] 42 Pa.C.S. § 1726(a)(1)[.]” Mosaica Acad. Charter
Sch., 813 A.2d at 822. Section 1726(a)(1) of the Judicial Code declares:
“Attorney[]s[’] fees are not an item of taxable costs except to the extent authorized
by [S]ection 2503 [of the Judicial Code, 42 Pa.C.S. § 2503] (relating to right of
participants to receive counsel fees).” 42 Pa.C.S. § 1726(a)(1); see also Twp. of
Marple, 613 A.2d at 95 (“[A]ny claim for counsel fees by a successful plaintiff in a
mandamus action should be awarded only after a consideration of the factors set
forth in [S]ection 2503 [of the Judicial Code].”).
Section 2503 of the Judicial Code specifies, in pertinent part:
The following participants shall be entitled to a reasonable
counsel fee as part of the taxable costs of the matter:
....
(7) Any participant who is awarded counsel fees as a
sanction against another participant for dilatory,
obdurate or vexatious conduct during the pendency of
a matter.
....
(9) Any participant who is awarded counsel fees because
the conduct of another party in commencing the matter
or otherwise was arbitrary, vexatious or in bad faith.
42 Pa.C.S. § 2503 (emphasis added). “[A]n award for counsel fees under Section
2503 [of the Judicial Code] is meant to compensate the innocent litigant for costs
caused by the actions of the opposing party.” Maurice A. Nernberg & Assocs., 920
21
A.2d at 972. Specifically, under Section 2503(7) and (9) of the Judicial Code,
“attorney[]s[’] fees may be appropriate for misconduct occurring in commencement
of or during the pendency of statutory appeals.” Dep’t of Transp., Bureau of Driver
Licensing v. Smith, 602 A.2d 499, 504 (Pa. Cmwlth. 1992).
This Court has further interpreted that
[t]he phrase ‘or otherwise’ in [Section 2503(9) of the
Judicial Code] refers to misconduct in the raising of
defenses, and cannot be construed to refer to the
[Commonwealth agency’s] action before the
commencement of the case in court. Smith.
Norris v. Commonwealth, 634 A.2d 673, 676 (Pa. Cmwlth. 1993) (emphasis added).
Accordingly, “[Section 2503 of the Judicial Code], by its very terms, is a ‘taxable
costs’ provision, thereby relating to the conduct of a party at some point during the
litigation process.”31 Bucks Cnty. Servs., Inc. v. Phila. Parking Auth., 71 A.3d 379,
393 (Pa. Cmwlth. 2013).
This Court acknowledges that Rule 2744 also provides:
In addition to other costs allowable by general rule or Act
of Assembly, an appellate court may award as further costs
damages as may be just, including
(1) a reasonable counsel fee and
(2) damages for delay at the rate of 6% per annum in
addition to legal interest,
if it determines that an appeal is frivolous[32] or taken
solely for delay or that the conduct of the participant
against whom costs are to be imposed is dilatory, obdurate
or vexatious. The appellate court may remand the case to
31
The term “litigation” is defined as “[t]he process of carrying on a lawsuit.” Black’s Law
Dictionary 1017 (9th ed. 2009).
32
A frivolous appeal under Rule 2744 is one that has no basis in law or fact. See Schultz
v. Schultz, 184 A.3d 168 (Pa. Super. 2018).
22
the trial court to determine the amount of damages
authorized by this [R]ule.
Pa.R.A.P. 2744. However, because Rule 2744 addresses appeals, and this matter is
before the Court in its original jurisdiction, Petitioners are not entitled to attorney’s
fees thereunder.
Notably, neither Rule 2744 nor the Judicial Code specifically define
“dilatory, obdurate or vexatious conduct[.]” See 42 Pa.C.S. §§ 102, 2503; see also
Pa.R.A.P. 2744. Section 1903(a) of the SCA provides that when words in a statute
are undefined, they must be accorded “their common and approved usage[.]” 1
Pa.C.S. § 1903(a). “Where a court needs to define an undefined term, it may consult
definitions in statutes, regulations or the dictionary for guidance, although such
definitions are not controlling.” Adams Outdoor Adver., LP v. Zoning Hearing Bd.
of Smithfield Twp., 909 A.2d 469, 483 (Pa. Cmwlth. 2006). Black’s Law Dictionary
1701 (9th ed. 2009) defines vexatious conduct to be “without reasonable or
probable cause or excuse; harassing; annoying.” (Emphasis added.)
According to the Pennsylvania Superior Court,
[g]enerally speaking, ‘obdurate’ conduct may be defined
in this context as ‘stubbornly persistent in wrongdoing.’
[Webster’s Ninth New Collegiate Dictionary] 815 (1987).
Conduct is ‘dilatory’ where the record demonstrates that
counsel displayed a lack of diligence that delayed
proceedings unnecessarily and caused additional legal
work. See Gertz v. Temple Univ., . . . 661 A.2d 13, 17 n.2
([Pa. Super.] 1995). Although disposition of claims under
[Section 2503(7) of the Judicial Code] generally requires
an evidentiary hearing, no hearing is necessary where the
facts are undisputed.
In re Est. of Burger, 852 A.2d 385, 391 (Pa. Super. 2004) (emphasis added), aff’d,
898 A.2d 547 (Pa. 2006).
In addition, although the Judicial Code does not define “arbitrary,” the
Pennsylvania Supreme Court has ruled that “[a]n opponent’s conduct has been
23
deemed to be ‘arbitrary’ within the meaning of the statute if such conduct is based
on random or convenient selection or choice rather than on reason or nature.”
Thunberg v. Strause, 682 A.2d 295, 299 (Pa. 1996) (emphasis added). The term
“bad faith” used in Section 2503(9) of the Judicial Code means “fraud, dishonesty
or corruption.” Pa. State Police, Bureau of Liquor Control Enf’t v. Benny Enters.,
669 A.2d 1018, 1022 (Pa. Cmwlth. 1995) (emphasis added).
Importantly, this Court en banc has previously ordered a
Commonwealth agency - the Pennsylvania Department of Education (Department)
- to pay attorneys’ fees relative to a mandamus action, on the basis that the
Department’s refusal to withhold funds or conduct a hearing as statutorily mandated,
was arbitrary, dilatory, and obdurate. See Richard Allen Preparatory Charter Sch.;
see also KIPP Phila. Charter Sch. Accordingly, Petitioners would be entitled to
attorneys’ fees if the PLCB’s conduct during the pendency of the litigation (or its
appeal to the Pennsylvania Supreme Court) was without reasonable cause,
stubbornly persistent in wrongdoing, and/or caused unnecessary delay, or its defense
had no reasonable basis (i.e., no basis in law or fact).
This Court, having determined that the PLCB had a clear and
unambiguous statutory duty to implement a procedure to process direct shipment
SOs by June 1, 2017, see MFW I, and, given that this Court issued MFW I in May
2020, and the Pennsylvania Supreme Court affirmed that decision in March 2021,
yet the PLCB has not yet fulfilled that duty, concludes that the PLCB’s initial
inaction was, at the very least, arbitrary, and its ongoing refusal to implement a
procedure to process direct shipment SOs and continuing to assess handling fees is
dilatory and obdurate. Accordingly, MFW and A6 are entitled to attorneys’ fees
from the PLCB related to their mandamus action.
Therefore, the PLCB is liable for Petitioners’ costs. The PLCB is also
liable for Petitioners’ damages to the extent Petitioners can prove them, plus
24
associated interest on their costs and damages, and MFW and A6 are entitled to
attorneys’ fees.
Conclusion
Based on the foregoing, Petitioners’ Damages Application is granted.
However, the PLCB is hereby permitted to undertake discovery and/or request a
hearing limited to Petitioners’ damages and interest, and MFW’s and A6’s attorneys’
fees.
_________________________________
ANNE E. COVEY, Judge
25
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
MFW Wine Co., LLC, A6 Wine :
Company, and GECC2 LLC d/b/a :
Bloomsday Cafe, :
Petitioners :
:
v. :
:
Pennsylvania Liquor Control Board, : No. 251 M.D. 2020
Respondent :
ORDER
AND NOW, this 27th day of May, 2022, MFW Wine Co., LLC’s, A6
Wine Company’s, and GECC2 LLC d/b/a Bloomsday Café’s (collectively,
Petitioners) Application for Relief Seeking Damages, Costs, Interest and Attorneys’
Fees is GRANTED.
The Pennsylvania Liquor Control Board (PLCB) has 20 days from the
date of this Order to file an Application with this Court to request a hearing on
Petitioners’ damages. The PLCB shall serve discovery request(s), if any, related to
the issue of Petitioners’ damages 20 days from the date of this Order and all
discovery shall be completed within 60 days of the date of this Order.
The PLCB’s Application for Post-Submission Communication is
DENIED.
_________________________________
ANNE E. COVEY, Judge
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
MFW Wine Co., LLC, A6 Wine :
Company, and GECC2 LLC :
d/b/a Bloomsday Cafe, :
:
Petitioners :
:
v. : No. 251 M.D. 2020
: Argued: November 17, 2021
Pennsylvania Liquor Control Board, :
:
Respondent :
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
DISSENTING OPINION
BY JUDGE WOJCIK FILED: May 27, 2022
I dissent. I do not agree that the Pennsylvania Liquor Control Board
(PLCB) is a “person” subject to damages under Section 8303 of the Judicial Code,
42 Pa. C.S. §8303 (Section 8303). Therefore, I would deny the Application for
Relief Seeking Damages, Costs, Interest, and Attorneys’ Fees (Damages
Application) filed by MFW Wine Co., LLC, A6 Wine Company, and GECC2 LLC
d/b/a/ Bloomsday Café (collectively, Petitioners) against Respondent Pennsylvania
Liquor Control Board (PLCB).
Section 8303 of the Judicial Code provides: “A person who is adjudged
in an action in the nature of mandamus to have failed or refused without lawful
justification to perform a duty required by law shall be liable in damages to the
person aggrieved by such failure or refusal.” 42 Pa. C.S. §8303 (emphasis added).
Although the Judicial Code does not define “person,” Section 1991 of the Statutory
Construction Act of 1972 (SCA), 1 Pa. C.S. §1991, creates a default definition for
the term “person” that excludes “the Commonwealth.” Specifically, Section 1991
of the SCA provides:
The following words and phrases, when used in any statute
finally enacted on or after September 1, 1937, unless the
context clearly indicates otherwise, shall have the
meanings given to them in this section:
***
“Person.” Includes a corporation, partnership, limited
liability company, business trust, other association,
government entity (other than the Commonwealth), estate,
trust, foundation or natural person.
1 Pa. C.S. §1991 (emphasis added). Section 1991 of the SCA defines “the
Commonwealth” as “[t]he Commonwealth of Pennsylvania.” Id.
As our Supreme Court has explained, the conditional language in the
definition section means that “the General Assembly contemplated that there might
be instances in the [relevant statute] where a term defined in [the definition section]
has a meaning that differs from the definition given it, and directed that attention be
paid to what surrounds the term in order to determine whether or not the [definition
section’s] definition applies.” Pennsylvania Associated Builders and Contractors,
Inc. v. Department of General Services, 932 A.2d 1271, 1279 (Pa. 2007) (emphasis
added).1
1
We have previously declined to rigidly apply the SCA’s default definitions where the
context indicated otherwise. See Fox Chapel Area School District v. Dunlap, 417 A.2d 1329, 1330
(Footnote continued on next page…)
MHW-2
Petitioners assert that Section 8303 only shields “the Commonwealth”
itself from monetary damages incidental to a mandamus action and does not extend
to Commonwealth parties or agencies. The PLCB counters that the term
“Commonwealth” may be fairly construed as referring to Commonwealth entities or
parties, including agencies like the PLCB. Because the meaning of this term is
crucial to the provision, and it is susceptible of two reasonable constructions, it is
ambiguous. See A.S. v. Pennsylvania State Police, 143 A.3d 896, 905-06 (Pa. 2016)
(“A statute is ambiguous when there are at least two reasonable interpretations of
the text.”); Nardone v. Department of Transportation, Bureau of Driver Licensing,
130 A.3d 738, 743 (Pa. 2015) (“[A] statute is ambiguous where different
interpretations of statutory language are plausible.”). Accordingly, I enlist principles
of statutory interpretation to aid my construction.
“The polestar in our quest is to ascertain and effectuate the intent of the
General Assembly.” Woodford v. Insurance Department, 243 A.3d 60, 73 (Pa.
2020) (citing 1 Pa. C.S. §1921(a)). In ascertaining legislative intent, the provision
at issue is to be read “together and in conjunction” with the remaining statutory
language, “and construed with reference to the entire statute.” Allstate Life
Insurance Co. v. Commonwealth, 52 A.3d 1077, 1080 (Pa. 2012). When a term is
ambiguous, Courts may consider the following factors in determining the General
Assembly’s intent:
(1) The occasion and necessity for the statute.
(Pa. Cmwlth. 1980) (declining to apply default definition of “year” in public school context);
Warner-CCC Inc. v. City of Altoona, 374 A.2d 987, 988-89 (Pa. Cmwlth. 1977) (declining to apply
default definition of “person” where the context intended to be limited to natural persons); see also
Habecker v. Nationwide Insurance Co., 445 A.2d 1222, 1227 (Pa. Super. 1982) (declining to apply
default definition of “year” in context of “aggregate period of one year”).
MHW-3
(2) The circumstances under which it was enacted.
(3) The mischief to be remedied.
(4) The object to be attained.
(5) The former law, if any, including other statutes upon
the same or similar subjects.
(6) The consequences of a particular interpretation.
(7) The contemporaneous legislative history.
(8) Legislative and administrative interpretations of such
statute.
1 Pa. C.S. §1921(c). In addition, “when a court of last resort has construed the
language used in a statute, the General Assembly in subsequent statutes on the same
subject matter intends the same construction to be placed upon such language.”
1 Pa. C.S. §1922(4) (emphasis added); accord Pennsylvania State Police, Bureau of
Liquor Control Enforcement v. Jet-Set Restaurant, LLC, 191 A.3d 817, 823 (Pa.
2018).
In order to ascertain the General Assembly’s intent behind Section 8303
and the meaning of the exclusion of “the Commonwealth” from the definition of
“person,” a review of the doctrine of sovereign immunity and its history is required.
The doctrine of sovereign immunity is deeply rooted in our Commonwealth. Dorsey
v. Redman, 96 A.3d 332, 340 (Pa. 2014). Our Constitution provides that “[s]uits
may be brought against the Commonwealth in such manner, in such courts and in
such cases as the Legislature may by law direct.” Pa. Const. art. I, §11. The doctrine
of sovereign immunity developed as a common law doctrine. Dorsey, 96 A.3d at
340. The underlying purpose behind sovereign immunity has always been “to
protect the fiscal security of the government by shielding the Commonwealth and its
MHW-4
agents” from financial liability. Id. (emphasis added). Suits that sought “to compel
affirmative action on the part of state officials or to obtain money damages or to
recover property from the Commonwealth” fell within the rule of immunity, whereas
suits which simply sought “to restrain state officials from performing affirmative
acts” did not. Philadelphia Life Insurance Co. v. Commonwealth, 190 A.2d 111,
114 (Pa. 1963); see Land Holding Corp. v. Board of Finance & Revenue, 130 A.2d
700, 703 (Pa. 1957) (“The right to sue the Commonwealth for the recovery of money
or taxes alleged to have been erroneously paid to it exists only by the grace of the
Legislature.”).
In Mayle v. Pennsylvania Department of Highways, 388 A.2d 709, 716
(Pa. 1978), our Supreme Court examined the constitutional basis for immunity and
determined that the Pennsylvania Constitution is “neutral” because it “neither
requires nor prohibits sovereign immunity.” Accord Dorsey, 96 A.3d at 340. Rather,
it “vests authority in the General Assembly to determine the matters in which the
government shall be immune.” Id.; see Mayle, 388 A.2d at 717 (“[T]he Framers of
1790 intended to allow the Legislature, if it desired, to choose cases in which the
Commonwealth should be immune, but did not intend to grant constitutional
immunity to the Commonwealth.”). Because sovereign immunity was a common
law precept developed by the judiciary, the Supreme Court saw fit to “abolish the
doctrine of sovereign immunity and overrule all inconsistent cases.” Mayle, 388
A.2d at 720; see Dorsey, 96 A.3d at 340 (recognizing the abolition of sovereign
immunity in Mayle). As a result, the breadth of sovereign immunity was a matter
for legislative, rather than judicial, determination. See Dorsey, 96 A.3d at 340;
Mayle, 388 A.2d at 717.
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In response, “[t]he General Assembly was swift to react restoring
sovereign immunity” by codifying the preexisting immunity scheme that the
Supreme Court in Mayle had abolished. Dorsey, 96 A.3d at 340. The General
Assembly specifically reaffirmed the historical concept of sovereign immunity by
enacting 1 Pa. C.S. §2310. See Bonsavage v. Borough of Warrior Run, 676 A.2d
1330 (Pa. Cmwlth. 1996). The General Assembly declared 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.” 1 Pa. C.S. §2310 (emphasis added). “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) . . . .” Id. (emphasis added).
Title 42 includes Sections 8521 through 8527 of the Judicial Code,
commonly referred to as the Sovereign Immunity Act, 42 Pa. C.S. §§8521-8527.
Section 8522 of the Judicial Code specifically waives sovereign immunity as a bar
to all tort actions against “Commonwealth parties” for damages arising out of a
negligent act where damages would be recoverable under common law or statute, in
10 enumerated exceptions. 42 Pa. C.S. §8522(b). Of the enumerated exceptions,
the General Assembly specifically waived the defense of sovereign immunity with
regard to the sale of liquor at Pennsylvania liquor stores by employees of the PLCB,
long recognized as a Commonwealth party. 42 Pa. C.S. §8522(b)(7). Negligence
actions under Section 8522 are in the nature of a trespass in that they seek monetary
damages as redress for an unlawful injury. Fawber v. Cohen, 532 A.2d 429, 432
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(Pa. 1987). There is no dispute that Petitioners’ claim here does not fit within the
waiver of immunity contained in Section 8522, because they do not allege any
“negligent act” falling within any of the enumerated exceptions to immunity.
However, Title 42 also includes Section 8303 as well as the Declaratory
Judgments Act, 42 Pa. C.S. §§7531-7541. “[T]he law is clear that sovereign
immunity does not bar either mandamus or declaratory judgment actions.”
Brimmeier v. Pennsylvania Turnpike Commission, 147 A.3d 954, 961 (Pa. Cmwlth.
2016), aff’d, 161 A.3d 253 (Pa. 2017). “Mandamus will only lie to compel official
performance of a ministerial act or mandatory duty where there is a clear legal right
in the [petitioner], a corresponding duty in the [respondent], and a lack of any other
adequate and appropriate remedy at law.” Delaware River Port Authority v.
Thornburgh, 493 A.2d 1351, 1355 (Pa. Cmwlth. 1985).
In order to maintain a mandamus action against the Commonwealth, a
party must name the specific Commonwealth agency, officer or employee from
which relief is sought. See Finn v. Rendell, 990 A.2d 100, 105-06 (Pa. Cmwlth.
2010). In Finn, we recognized that the Commonwealth and its various agencies and
officers are separate entities and that the Commonwealth of Pennsylvania, itself, is
not a Commonwealth agency. Finn, 990 A.2d at 105 (citing Tork–Hiis v.
Commonwealth, 735 A.2d 1256, 1257 (Pa. 1999); Bonsavage, 676 A.2d at 1331). It
is the very “nature of the Commonwealth as an entity separate from its agencies and
officers” that makes mandamus actions against the Commonwealth itself “a practical
impossibility.” Id. We explained:
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.
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Since merely naming the Commonwealth is insufficient to
state a claim against a Commonwealth party, 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.
Id. at 106 (emphasis added).
When the logic of Finn is applied in the context of Section 8303, only
a “person” who is “adjudged in an action in the nature of mandamus to have failed
or refused without lawful justification to perform a duty required by law shall be
liable in damages to the person aggrieved by such failure or refusal.”
42 Pa. C.S. §8303. According to Finn, the Commonwealth itself is not that “person”
for all intents and purposes. Rather, it is the various state actors acting on behalf of
the Commonwealth that “have failed or refused without lawful justification to
perform a duty required by law.” See 42 Pa. C.S. §8303; Finn, 990 A.2d at 105-06.
Therefore, within the context of Section 8303, “the Commonwealth” is broader than
just the Commonwealth itself and extends to the specific state party having a
mandatory or ministerial duty and against whom special mandamus relief was
obtained. Such an interpretation is consistent with the canons of statutory
construction and the longstanding principle that suits that seek to obtain money
damages from Commonwealth parties are within the rule of immunity, unless
specifically waived. It is also consistent with the Supreme Court’s interpretation of
“person” in Commonwealth v. Runion, 662 A.2d 617, 618 (Pa. 1995).
In Runion, our Supreme Court examined whether Section 1991’s
definition of a “person” and whether the exclusion of “the Commonwealth”
extended to “governmental agencies” of the Commonwealth within the context of
Section 1106 of the Crimes Code, 18 Pa. C.S. §1106. At issue in Runion was
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whether the Department of Public Welfare2 (DPW), a Commonwealth agency, could
be considered a “victim” under Section 1106 of the Crimes Code so as to be entitled
to restitution from an offender. Runion, 662 A.2d at 618. Section 1106(a) of the
Crimes Code authorized restitution for “victims.” 18 Pa. C.S. §1106(a). Section
1106(h) of the Crimes Code defined “victim” as “[a]ny person, except an offender,
who suffered injuries to his person or property as a direct result of the crime.”
18 Pa. C.S. §1106(h). The Crimes Code did not define “person.” See id.
Applying Section 1991 of the SCA’s default definition of “person,” the
Supreme Court determined that DPW was not a “person.” Runion, 662 A.2d at 619.
The Supreme Court opined that “governmental agencies of this Commonwealth are
excluded from the definition of ‘person’ where the legislature has not otherwise
spoken.” 662 A.2d at 619 (emphasis added) (citing 1 Pa. C.S. §1991). The Supreme
Court explained that although a contrary interpretation would favor public policy of
rehabilitation of an offender through restitution, “such a reading would not be
consistent with our rules requiring strict interpretation of penal provisions . . . .” Id.
Thus, the Supreme Court concluded that because DPW, “as a Commonwealth
entity,” was “expressly excluded from the definition of ‘person’” under the SCA, it
could not be considered as a “victim” and was not entitled to restitution from the
offender. Id. at 621 (emphasis added).
Runion is instructive here. Because only a “person” may be liable for
mandamus damages under Section 8303’s clear terms, “governmental agencies of
this Commonwealth” are not so liable. Id. The PLCB is a governmental agency of
the Commonwealth protected by sovereign immunity. Garrettson v.
2
The “Department of Public Welfare” was redesignated as the “Department of Human
Services” in 2014. See Section 103 of Human Services Code, Act of June 13, 1967, P.L. 31, as
amended, added by the Act of September 24, 2014, P.L. 2458, 62 P.S. §103.
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Commonwealth, 405 A.2d 1146, 1148 (Pa. Cmwlth. 1979). Therefore, for purposes
of Section 8303, the PLCB is not a “person” liable for mandamus damages.
Although the General Assembly legislatively superseded Runion by
revising Section 1106 of the Crimes Code, it did so strategically by extracting the
term “person” from the definition of “victim” in the Crimes Code and by specifically
entitling the government agencies and insurance companies to seek restitution where
either has provided compensation to the victim of a crime. Although the General
Assembly has amended Section 1991 of the SCA, it has not altered Section 1991’s
default definition of “person” or “Commonwealth.” See 1 Pa. C.S. §1922(4); Jet-
Set Restaurant, LLC, 191 A.3d at 823; see also Buehl v. Horn, 728 A.2d 973, 980
(Pa. Cmwlth. 1999) (“The General Assembly is presumed to concur with the
interpretation placed upon a statute if it does not amend the statute within a
reasonable time.”).
As the Majority opinion points out, Runion also involved the
interpretation of “person” in a penal statute. According to the tenets of statutory
construction, penal statutes must be “strictly construed.” 1 Pa. C.S. §1928(b)(1).
Generally, statutes that are not in derogation of the common law and that do not fall
within one of the eight enumerated classifications requiring strict construction under
Section 1928(b) of the SCA must “be liberally construed to effect their objects and
to promote justice.” 1 Pa. C.S. §1928(c).
However, there is another fundamental tenet of statutory construction
that must be applied here. Namely, “statutes in derogation of sovereignty should be
construed strictly in favor of the sovereign.” Clipper Pipe & Service, Inc. v. Ohio
Casualty Insurance Co., 115 A.3d 1278, 1282 (Pa. 2015); see Brimmeier, 147 A.3d
at 961 (“Because immunity is the rule, we must narrowly construe any exceptions
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thereto.”). Because the definition of a “person” within Section 8303 implicates the
Commonwealth’s liability to monetary damages, it must be strictly construed in
favor of the sovereign. See Clipper Pipe & Service, Inc., 115 A.3d at 1282;
Brimmeier, 147 A.3d at 961.
Although mandamus actions are permitted against the Commonwealth
and its parties, the General Assembly has not “specifically waived” sovereign
immunity with regard to monetary damages in connection thereto as it has done
elsewhere. See, e.g., 42 Pa. C.S. §8522. Rather, it has merely excluded “the
Commonwealth” from the definition of “person.” As illustrated above in Runion,
Section 1991 of the SCA’s definition of “person” is a default definition available for
use in a wide variety of statutory contexts in which the term “person” is not defined
and has no particular connection to immunity statutes. Within the context of Section
8303, and absent an express waiver of immunity, it is far more logical that the
General Assembly intended to shield the Commonwealth generally, including the
actual Commonwealth parties defending the mandamus actions from liability from
monetary damages, not just the Commonwealth itself.
While I join in the Majority’s admonition of PLCB’s conduct and
recognize the inequity of Petitioners’ position, the monetary relief that Petitioners
seek is simply not available against the Commonwealth. As our Supreme Court has
opined:
Understandably, some immunity applications may be
distasteful to those who may discern government
wrongdoing, or at least unremediated collateral injury to
private concerns resulting from governmental policy
changes. In light of the constitutional basis for the General
Assembly’s allocation of immunity, however, the area
implicates the separation of powers among the branches of
government also crafted by the framers. Thus, in absence
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of constitutional infirmity, courts are not free to
circumvent the Legislature’s statutory immunity
directives pertaining to the sovereign.
Scientific Games International, Inc. v. Department of Revenue, 66 A.3d 740, 755
(Pa. 2013) (footnote omitted).
In short, because the PLCB is part of “the Commonwealth” and is not
a “person,” it is not liable for damages under Section 8303. For these reasons, unlike
the Majority, I would deny the Petitioners’ Damages Application.
MICHAEL H. WOJCIK, Judge
President Judge Cohn Jubelirer joins in this dissent.
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