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Pa. Supreme Court upholds ruling that the PLCB illegally restricted wine shipping

Pa. Supreme Court agrees that PLCB did ‘self-govern’ wine distribution to retailers and restaurants

State courts have ruled that the PLCB can no longer require restaurants and retailers to pick up wines that state stores don't carry at outlets like this one at Broad Street and Washington Avenue in South Philadelphia.
State courts have ruled that the PLCB can no longer require restaurants and retailers to pick up wines that state stores don't carry at outlets like this one at Broad Street and Washington Avenue in South Philadelphia.Read moreChris Brennan

The Pennsylvania Supreme Court on Thursday upheld a lower-court ruling that the Pennsylvania Liquor Control Board has been violating a 2016 law by prohibiting wine dealers from shipping wines directly to retailers and restaurants that sell wine for take out.

The Supreme Court ruling shows that “the PLCB is not above the law and they cannot self-govern,” said Jason M. Malumed, an operating partner with MFW Wine Co. of New York and one of the plaintiffs in a 2020 lawsuit that led to Thursday’s affirmation of a Commonwealth Court decision.

“The PLCB just became aware of the decision issued this morning, and we will not offer comment until we can take the time to evaluate the decision and its impacts to our operation,” said Elizabeth Brassell, the agency’s director of policy and communications.

The wines in question are those that the state’s monopoly wine and liquor distributor does not carry in its stores. Such wines have to be special-ordered by restaurants that want to offer bottles that consumers can’t find around the corner at a state store. The special-order system also applies to spirits, and can be used by consumers who order items not available in state stores.

Instead of following the 2016 law, which required the PLCB to establish a system for direct-shipment of wine to retailers and restaurants, the PLCB continued requiring restaurateurs and retailers to pick up their orders at state stores. Under both systems, the orders would be placed and paid for through the PLCB website.

The PLCB’s recalcitrance caused a headache for retailers during the early days of the coronavirus pandemic last year when state stores were completely closed. That meant anyone trying to sell wine to go — a lifeline for many restaurants and bars during the pandemic — had no access to their preferred wines for about five weeks.

Last April, MFW and another wine dealer, A6 Wine, represented by John G. Papianou and other lawyers at Montgomery McCracken Walker & Rhoads LLP, asked Commonwealth Court for emergency relief that would force the liquor control board to “implement a procedure for direct delivery of wine,” as required by the 2016 law that also allowed supermarkets to start selling wine.

The wine dealers were later joined by Bloomsday Cafe, a restaurant in Philadelphia.

Judge Kevin P. Brobson ruled in favor of the wine dealers and Bloomsday on May 1. Two weeks later the three-member liquor control board voted to appeal to the top state court.

In a related case, Bloomsday and a Lancaster County restaurant are seeking class-action status for a Commonwealth Court lawsuit that would force the PLCB to repay millions in fees it collected from restaurants during the last four years on grounds that it improperly blocked them from obtaining wines directly from distributors.

That lawsuit has been on hold, pending the outcome of the PLCB’s Supreme Court appeal.

Zach Morris, co-owner of Bloomsday, said it felt good for “team small business and consumers” to have a victory at the Supreme Court.