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Malt Bev. Distribs. Ass'n v. Pa. Liquor Control Bd.

Commonwealth Court of Pennsylvania

July 31, 2015

Malt Beverage Distributors Association, Gabler's Beverage Distributor, Inc. and PKD, Inc., Petitioners
v.
Pennsylvania Liquor Control Board, Respondent

Argued June 15, 2015

Appealed from No. 13-9164. State Agency: Pennsylvania Liquor Control Board.

Matthew H. Haverstick, Philadelphia, for petitioners.

Rodrigo J. Diaz, Executive Deputy Chief Counsel, Harrisburg, for respondent.

Stanley Wolowski, Pittsburgh, for intervenors Ohio Springs, Inc. and SHEETZ.

BEFORE: HONORABLE MARY HANNAH LEAVITT, Judge, HONORABLE PATRICIA A. McCULLOUGH, Judge, HONORABLE ANNE E. COVEY, Judge. Judge Brobson did not participate in this decision.

OPINION

PATRICIA A. McCULLOUGH, J.

Malt Beverage Distributors Association (MBDA), Gabler's Beverage Distributor, Inc. (Gabler's), and PKD, Inc., (collectively, Petitioners) petition for review of the

Page 1154

July 17, 2014 order of the Pennsylvania Liquor Control Board (Board), which approved Ohio Springs, Inc.'s t/a Sheetz (Applicant) application for intermunicipal double transfer of Restaurant Liquor License No. R-19377 (License).

Facts/Procedural History

On July 30, 2012, Applicant filed a prior approval application for intermunicipal double transfer[1] of the License from Ruby Tuesday to Applicant's restaurant located at 359 East King Street, Shippensburg, Pennsylvania under section 404 of the Liquor Code (Code).[2] Applicant's proposed licensed restaurant presently includes: a 32'x18' serving area that will accommodate 38 patrons; 2 serving areas, 80'x37' and 10'x6', with no seating for patrons; 2 kitchen areas measuring 30'x23' and 58'x12'; a 9'x10' office area; and 7 storage areas, ranging from 22'x38' to 7'x7'. (Board's Findings of Fact Nos. 1, 3.)

At the same site, Sheetz, Inc., operates a convenience store and fuel pumps. Both the restaurant and the convenience store/fuel station operate under the trade name " Sheetz Convenience Store." (Reproduced Record (R.R.) at 111a-12a.)

On July 17, 2012, the Borough of Shippensburg (Borough) adopted Resolution No. 12-015, approving the proposed intermunicipal transfer of the License into the Borough. The Board's Bureau of Licensing informed Applicant that a hearing would be held regarding the application on March 18-19, 2014. (Board's Findings of Fact Nos. 8-9.)

At the hearing,[3] Timothy Lamark (Lamark), a Board licensing supervisor, testified that the property at 359 East King Street has been subdivided into two condominium units with two separate lease agreements. Lamark stated that there is a four-foot opening in a wall that connects the proposed licensed restaurant to the unlicensed convenience store but that the submitted site plan does not distinguish them and refers to the entire premises as Sheetz Store #70.[4] He testified that 359 East King Street is the same address for both premises. (R.R. at 54a, 58a, 63a, 65a.)

Lamark further testified that liquid fuels are sold at the unlicensed premises. Lamark stated that the distance between the restaurant and the fuel pumps is 80 feet, which includes a speed bump, a tapered curb, a front concrete area, a patio area, and a parking lot. Lamark stated that the restaurant has no outdoor serving area, but there is an outdoor eating area that restaurant patrons may use. (R.R. at 54a, 60a-61a, 64a, 67a.)

John Campbell (Campbell), the regional director of operations for Sheetz, Inc., testified that there are two separate businesses at the 359 East King Street location, a convenience store and a restaurant. Campbell stated that Applicant operates the restaurant, and Sheetz, Inc., operates

Page 1155

the convenience store and fuel pumps. He said that Applicant does not own the property and that there are two separate lease agreements; one for the location of the convenience store and one for the location of the restaurant. Campbell stated that the restaurant would be separated from the convenience store by an eight-foot-high wall with a four-foot-wide opening. Campbell acknowledged that the restaurant, the convenience store, and the fuel pumps are all operating under the trade name " Sheetz Convenience Store." (R.R. at 111a-12a, 124a.)

Campbell testified that the restaurant has its own entrance and a dining area that seats 37 patrons. He said that Applicant is prepared to increase its staff and have signs indicating the separate entities of the restaurant and the convenience store so that merchandise will not be intermingled. Campbell noted that a steel fence and a sidewalk further separate the restaurant from the fuel pumps. Campbell stated that customers will only be able to purchase fuel by credit and debit cards at the fuel pumps; they will not be able to purchase fuel at the convenience store or at the restaurant. (R.R. at 113a, 120a, 134a-35a, 140a.)

John Kuchar, Sheetz, Inc.'s real estate counsel, testified that the property containing the restaurant and the convenience store has been separated into two condominium units, with Unit 1 having an address of 354 East King Street and Unit 2 having an address of 359 East King Street. (R.R. at 190a.) The lease agreements support the testimony that the restaurant has a 354 East King Street address and the convenience store has a 359 East King Street address, (R.R. at 290a, 303a), but Applicant's transfer application lists only the 359 East King Street address. (R.R. at 1a.)

Stephen Gabler (Gabler), owner of Gabler's, testified that his beverage distributorship is approximately four and a half blocks from the Sheetz Convenience Store. He stated that he is concerned that the sale of beer at a convenience store that sells liquid fuels would provide an unfair advantage to Applicant. Gabler acknowledged that he would not have a reason to object if Applicant was not selling liquid fuels on the premises. (R.R. at 212a-13a.) Patrick Diehl, owner and president of PKD, Inc., his beer distributorship, testified that PKD, Inc., is approximately four blocks from the Sheetz Convenience Store. He stated that he objected to the License transfer because Applicant will sell liquid fuels and alcohol on the same property. (R.R. at 224a.)

Mark Tanczos (Tanczos), president of MBDA, testified that MBDA is a trade association for Pennsylvania's beer distributors, of which Gabler's and PKD, Inc., are members. Tanczos stated that MBDA is objecting to the License transfer because Applicant will be selling liquid fuels and alcohol on the same property. He said that a chain, such as Sheetz, is able to purchase mainstream ...


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