In Weis Mkts., Inc. v. Lancaster Twp., 248 A.3d 622 (Pa. Cmwlth. 2021), Pennsylvania’s Commonwealth Court decided that a municipality’s discretion to deny an intermunicipal liquor license transfer application is not unlimited and must be supported by substantial evidence.
FACTS
Weis Markets, Inc. submitted an application to Lancaster Township (Lancaster County) for the transfer of a liquor license. A public hearing was scheduled and occurred. At the hearing, Weis Markets presented information, through its attorney, about the company’s reputation in the community, its support for local charities, and its responsible alcohol management program.
During the hearing, one of the Township supervisors noted nearby businesses with liquor licenses, including a Ruby Tuesday restaurant and a House of Pasta that directly abutted Weis Markets’ parking lot. The supervisor questioned the necessity for Weis Markets’ request for another liquor license, given its proximity to nearby licensed establishments. One member of the public spoke in favor of the license transfer, pointing out the convenience of avoiding “an extra stop” by picking up a bottle of wine while at the grocery store. No member of the public opposed the transfer.
The township supervisors unanimously voted to deny the transfer application. The Township later issued a written adjudication explaining their decision, in which they listed nearby businesses with liquor licenses and stated that the Transfer was denied because it would have a negative impact on the health, welfare, peace, and morals of Township residents but did not offer evidence at the public hearing to support this finding.
WHAT DOES THE LIQUOR CODE SAY?
Section 461(b.3) of the Liquor Code provides that an intermunicipal transfer of a liquor license “must first be approved by the governing body of the receiving municipality when the total number of existing restaurant liquor licenses and eating place retail dispenser licenses in the receiving municipality equal or exceed one license per three thousand inhabitants.”
Also, Section 461(b.3) of the Liquor Code provides that a municipality “may” approve an application for an intermunicipal license transfer. This section imposes no express limitation on a municipality’s exercise of its discretion in granting or denying approval of a transfer.
WHAT DID THE COURT DECIDE?
The court found that the township’s denial of a liquor license transfer request was not supported by substantial evidence. The township denied the transfer based on its conclusion that it would adversely affect the health, welfare, peace, and morals of the township’s residents. However, the court held that granting a liquor license is not inherently detrimental to a community’s health, welfare, peace, and morals. Rather, specific, objective evidence from a municipality is required to support a finding that a liquor license transfer will have a detrimental effect on the community.
The court also noted that although Section 404(a) of the Liquor Code allows the Pennsylvania Liquor Control Board (PLCB) to consider whether other licensed businesses are within 200 feet of a proposed transferee business, there is no parallel provision where a municipality is considering an intermunicipal license transfer request.
The court further found that the Township had not provided any specific evidence to support its denial of the transfer, while the applicant had presented substantial evidence that the transfer would not adversely affect the health, welfare, peace, and morals of the Township or its residents.
- Standard for Abuse of Discretion
The Township argued that it had unfettered discretion to deny the transfer even if there was no evidence to support the denial. However, the court held that the Township’s discretion is not unfettered and that the absence of substantial evidence does not end the inquiry.
The court found that an abuse of discretion in relation to a license transfer request consists of a misapplication of the law, a manifestly unreasonable exercise of judgment, or a decision resulting from partiality, prejudice, bias, or ill-will. The burden of proof is on the party asserting the abuse of discretion.
The court also found that the legislature did not give municipalities unfettered discretion to deny intermunicipal license transfers. It noted that despite the absence of express limiting language in Section 461(b.3), the legislature could not have intended to confer unfettered discretion on municipalities to deny intermunicipal license transfers. Thus, although broad, municipalities’ discretion in making such transfer decisions is not unlimited.
The court determined that there are limits on the discretion conferred on the Township in Section 461(b.3) of the Liquor Code, which requires support by record evidence. In Weis Market’s case, since the Township voted to deny the license transfer because it would “adversely affect the health, welfare, peace, and morals of the Township and its residents”, the record evidence in that case needed to show that the requested transfer would have an adverse effect on the Township and its residents.
WHY DOES THIS DECISION MATTER?
The court’s decision provides guidance for municipalities on the limits of their discretion in making intermunicipal license transfer decisions. The court’s ruling requires record evidence to support a denial of an intermunicipal liquor license transfer, and it is not enough for a township to simply assert that the transfer would adversely affect the community.
