The Current State of Intermunicipal Liquor License Transfers

In the past we have reported on the process for transferring liquor licenses. Since 2000, the Pennsylvania Liquor Control Board (“LCB”) has permitted Restaurant (“R”) licenses and Eating Place (“E”) licenses to be transferred outside of the municipality where they are located to another municipality within the same county so long as that “receiving municipality” allows the service of alcohol; this is called an intermunicipal transfer. If the receiving municipality exceeds its quota of 3,000 inhabitants per license, then the receiving municipality’s governing body is required to hold a public hearing to solicit comments from the public. Up until, 2006 the Liquor Code stated that the receiving municipality’s governing body was required to approve the application to allow the transfer of the license into the municipality unless it found that in doing so the welfare, health, peace and morals of the municipality or its residents would be adversely affected. The Liquor Code stated that a decision by the governing body of the municipality to deny the request could be appealed to the Court of Common Pleas in the county in which the municipality is located. However, in 2006 the Legislature amended the law to completely remove the obligation of the municipality to accept the transfer. In fact, the amended law states that the governing body’s decision to deny an intermunicipal transfer may not be appealed. The question of whether the State Legislature can make such a decision un-appealable is itself now being appealed.

Since the Liquor Code was amended in 2006, there have been at least two differing opinions by two different county courts as to whether a municipality may deny an application for an intermunicipal transfer. In 2013, the Incorporated Town of Bloomsburg in Columbia County Pennsylvania denied a transfer request. The applicant appealed that denial to the Court of Common Pleas, where the judge opined that the applicant was entitled to an appeal in spite of the Liquor Code’s express statements to the contrary. In that case, the applicant argued that under Pennsylvania agency law and a prior case involving the LCB the municipality was required to receive the license. Ultimately, the Court agreed with the applicant and ordered Bloomsburg to accept the license transfer. Earlier this year in Penn Township, Chester County, the Board of Supervisors denied an applicant’s transfer request. The denial was appealed to the Court of Common Pleas, where the Judge ruled that the matter was not ready for appeal and that the applicant needed to complete the application to the LCB and have it denied by the LCB before the matter could be decided by the Court of Common Pleas. That decision has since been appealed to the Commonwealth Court, where it remains pending.

The issue of whether an applicant can appeal the final denial of a municipality in a liquor license transfer matter has vexed people in the liquor license business since the amendment to the Liquor Code in 2006. This office will continue to monitor this issue so as to better advise our liquor license clients on intermunicipal transfers. Should you have any question concerning intermunicipal transfers or any liquor license questions please contact our office.
– J. Ken Butera

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