Sale of alcohol is regulated by both the federal government and the Commonwealth. The agency that regulates and controls the sale of alcohol in Pennsylvania is the Liquor Control Board (LCB). Before a restaurant, bar, deli, brewery, hotel or similar establishment can legally sell alcohol in Pennsylvania, it must obtain a proper liquor license from the LCB. Getting a license to sell alcohol can be a time-consuming and expensive process. Indeed, the cost of some licenses in Pennsylvania can be in excess of $200,000, and that does not include transfer costs. All municipalities are at their quota and transferring a license from another neighboring community in the same county is not always an option. Once an establishment is licensed, its license must be renewed annually.
With a liquor license comes great responsibility for the establishment owner/licensee. The laws and regulations governing licensed restaurants are wide-ranging. Licensees are subject to regular inspections by the State Police to check for compliance with the Liquor Code. These inspections are almost always unannounced and can happen anytime the establishment is or can be open. Should an investigator find a violation of one of the many laws or regulations governing licensed establishments, the State Police Enforcement Bureau can and usually will issue a citation to the licensee. Citations can be issued for any number or reasons but most commonly result from: sales of alcohol to patrons who are under the influence of alcohol or are underage; loud music escaping the premises; writing checks to distributors of alcoholic beverages without sufficient funds; and illegal activity involving drugs or weapons inside the establishment and allowing patrons to smoke in areas not set aside for that purpose. Citations can also be issued for activity that occurs outside the licensee’s premises or control, such as fights or arrests, for drugs or weapons.
A sufficient number of citations can result in the suspension or even revocation of the license. When a citation is issued, the licensee has the right to a hearing before an LCB Administrative Law Judge (ALJ). This takes the form of a simple trial whereby the licensee is entitled to have an attorney present. At the hearing the Enforcement Bureau puts on its case producing evidence of the violation, which can then be challenged by the licensee. The ALJ will make a determination about whether a violation occurred and what if any disciplinary action is required. Penalties are based on the nature of the infraction(s), and the licensee’s history. Penalties can range from a nominal fine to a total revocation of the license. ALJ determinations are appealable to the Court of Common Pleas in the county in which the establishment exists.
When a citation is received by the licensee, it is typically accompanied by a form called an “Admission, Waiver and Authorization.” Signature of this form is effectively a plea of “guilty” to the charge(s) in the citation and usually will avoid the need for the hearing before the ALJ. Often the counsel for the Enforcement Bureau will make a recommendation to the ALJ such as a fine or suspension in exchange for the licensee’s signature. Many licensees will gladly exchange the uncertainty and stress of a hearing for a known fine or penalty; in a very high percentage of citations the State’s evidence is clear, leaving no other option. However, executing the “Admission, Waiver and Authorization” form comes with its own set of risks and should be seriously considered before signing. First, the recommendation made by the Enforcement Bureau’s counsel does not have to be accepted by the ALJ (though it almost always is); second, by signing the “Admission, Waiver and Authorization”, a licensee waives his or her right to an appeal; thus, should the ALJ impose a sentence exceeding the recommendation of the Enforcement Bureau’s counsel, the licensee does not have a right to an appeal. Finally, the LCB has a long memory and may revoke a license if it has too many admitted or adjudicated violations on it regardless of how long ago they occurred.
It is important that a licensee consider the consequences of admitting to a violation even if it seems to be a minor infraction. Advice of legal counsel is strongly recommended. Liquor licenses are expensive, and the loss of a license usually spells the end of the business that owned the license. Citations, even minor ones, must be taken seriously. Should you receive a citation or notice of a possible citation, contact our office to see how we might help.
— J.Ken Butera