           IN THE COMMONWEALTH COURT OF PENNSYLVANIA


Marc Benner, Daniel Coyle, and     :
Robert Smith,                      :
                 Petitioners       :
                                   :
     v.                            : No. 1189 C.D. 2018
                                   : ARGUED: June 3, 2019
Pennsylvania Liquor Control Board, :
                 Respondent        :


BEFORE:        HONORABLE MARY HANNAH LEAVITT, President Judge
               HONORABLE ROBERT SIMPSON, Judge
               HONORABLE ELLEN CEISLER, Judge


OPINION NOT REPORTED

MEMORANDUM OPINION
BY JUDGE CEISLER                                                    FILED: July 12, 2019

       Marc Benner (Benner), Daniel Coyle (Coyle), and Robert Smith (Smith)
(collectively “Neighbors”) petition for review from an August 1, 2018 order of the
Pennsylvania Liquor Control Board (PLCB).                   The PLCB denied Neighbors’
application to intervene in the person-to-person transfer1 of a liquor license to be
held by an establishment located near their residences. Neighbors argue that the
PLCB erred in denying intervenor status and granting the license transfer as it




       1
          A person-to-person license transfer is one in which the license transfers to a new person
or entity for use at the same location. 40 Pa. Code § 7.2.
violated the Liquor Code2 and the terms of a conditional licensing agreement (CLA)3
between the previous license holder and the PLCB. Neighbors also contend the
Hearing Examiner improperly precluded them from offering evidence at the hearing.
After thorough review, we affirm.
                                         I. Background
       In July 2017, S. 19th Business Ventures, LLC (Applicant), through its sole
member and owner, Joseph Mitchell (Mitchell), filed with the PLCB an application
for a transfer of Restaurant Liquor License R-3706 (License) for premises located at
38-40 South 19th Street, Philadelphia (Premises). Certified Record (C.R.), Item No.
1. At the time the application was filed, the license was held by P&S South 19th
Ltd. for an establishment at the same location. Reproduced Record (R.R.) at 61a,
111a. The License was subject to a CLA executed as a result of several citations for
violations of the Liquor Code, including sale of alcohol to minors.4 Id. at 61a-62a.
Neighbors filed protests to the license transfer application on the basis of “an
overabundance of liquor licenses” in close proximity to their places of residence.
C.R., Item Nos. 2-3.
       A hearing was held in June 2018 to address the objections to the proposed
license transfer. C.R., Item No. 9. Neighbors were notified prior to the hearing that
the license transfer was considered a person-to-person transfer. C.R., Item No. 11.


       2
           Act of April 12, 1951, P.L. 90, as amended, 47 P.S. §§ 1-101 – 10-1001.

       3
          A CLA is an agreement between the PLCB and an applicant that places additional
restrictions on the license in question. Section 470(a) of the Liquor Code, 47 P.S. § 4-470(a).
Such an agreement is binding on the applicant. Id.

       4
          Section 493(1) of the Liquor Code, 47 P.S. § 4-493(1), in pertinent part, forbids a licensee
to sell or allow the sale of liquor or malt or brewed beverages to a minor.



                                                  2
The Hearing Examiner indicated he would accept only testimony relevant to the
reputation of the proposed Applicant.5 Id.
       Neighbors filed petitions to intervene, alleging the bar previously located on
the Premises was a nuisance that negatively impacted the quality of their lives. Id.,
Item No. 12.       Neighbors expressed concern that Applicant’s operation of the
Premises would continue the nuisance. They pointed out that the building in which
the Premises was located was owned by Peter Antipas (Antipas), president of P&S
South 19th Ltd., the entity that operated the previous nuisance establishment. Id.
Neighbors further alleged that Applicant was “known for poor business practices”
that threatened Neighbors’ well-being. Id.
       The petitions to intervene were accepted conditionally and Neighbors
attended the hearing.6 C.R., Item No. 13. They were advised that the evidence would
be limited to the objections asserted in their petition, i.e., (1) Applicant’s alleged
failure to file an affidavit attesting that upon approval of the license transfer, Mitchell
would resign his other employment and devote full time to the Premises, and (2)
Neighbors’ contention that they would be directly aggrieved by the license transfer.
Id. Neighbors did not challenge these evidentiary limitations prior to the hearing.
       At the hearing, Benner testified in support of the petitions to intervene.
Mitchell testified in rebuttal of Benner’s testimony.                 Counsel for Applicant
submitted an affidavit stating that if and when the PLCB granted the license transfer,




       5
         As discussed below, in assessing a person-to-person license transfer application, only the
applicant’s reputation and compliance with Liquor Code requirements are relevant.

       6
          There is some dispute whether Coyle and Smith attended the hearing. That issue,
however, is not material to our decision. For purposes of this opinion, we accept their assertion
that they were present.


                                                3
Mitchell would resign his current position and devote his full time and attention to
the Premises. Notes of Testimony, 6/19/18 (N.T.), Ex. A1.
       Benner testified that he resided in the William Penn House in Philadelphia,
Pennsylvania, which is in close proximity to the Premises. N.T. at 11. Over
objection, the Hearing Examiner allowed Benner to testify regarding “problems”
with the bar previously located on the Premises, to the extent it touched on Mitchell’s
reputation.     Id. at 17, 19.       However, Benner offered no testimony regarding
Mitchell’s reputation. Neighbors’ counsel merely placed an objection on the record
to the Hearing Examiner’s preclusion of testimony concerning Mitchell’s
relationship with Antipas and the alleged history of a prior nuisance establishment
located on the Premises.
       Neighbors’ counsel also argued that the CLA between P&S South 19th Ltd.
and the PLCB was relevant to Mitchell’s reputation, alleging Mitchell had managed
another licensed property owned by Antipas which had incurred citations for Liquor
Code violations. Id. at 21. Neighbors’ counsel further asserted that transfer of the
License to Mitchell would violate the CLA, which prohibited transfer of the License
to any entity with a direct or indirect connection to Antipas.7 Id. at 22.
       The Hearing Examiner expressly limited Mitchell’s rebuttal evidence to the
issue of his reputation. The Hearing Examiner precluded evidence that the License
transfer constituted a bona fide purchase under the CLA. The Hearing Examiner
deemed that a matter for the PLCB’s determination. Id. at 28.
       Mitchell testified he had never held a license issued by the PLCB. Id. at 26.
As of the hearing date, Mitchell was the manager of the Level Room, a nightclub

       7
         Paragraph 7(c) of the CLA provides in pertinent part that the License shall be transferred
to a bona fide purchaser that has no “direct or indirect connection to P&S South, [or] its current or
former officers.” Reproduced Record (R.R.) at 113a.


                                                 4
owned by Antipas and licensed to sell liquor by the PLCB. Id. at 26-27. The Level
Room had not been cited for any violations of the Liquor Code during the
approximately eight years Mitchell managed that establishment. Id. at 26, 36.
      Mitchell admitted he was arrested for driving under the influence (DUI)
approximately 22 years earlier, when he was 19 years old. Id. at 29. He stated it
was the only time he was ever arrested and he believed the charge had since been
expunged. Id.
      The Hearing Examiner found the affidavit filed by Mitchell satisfied the
requirements of Section 5.23(a) of the PLCB regulations that the manager of a
licensed business must devote full time and attention to the licensed business. C.R.,
Item No. 17, at 6. The Hearing Examiner further found Neighbors failed to meet
their burden to show they would be aggrieved by the license transfer. Id. at 7. The
Hearing Examiner explained Neighbors, through Benner, offered “not a scintilla” of
evidence that either the Premises or Mitchell had a poor reputation, or that Neighbors
would suffer a legally cognizable injury should the license transfer be granted. Id.
As Benner’s testimony failed to establish any such injury, and Coyle and Smith
offered no evidence, the Hearing Examiner deemed all of them unqualified as
intervenors. Accordingly, the Hearing Examiner recommended the PLCB grant the
application for license transfer. Id.
      The PLCB approved the license transfer application in August 2018. C.R.,
Item No. 18. In its supporting opinion, the PLCB found Applicant’s initial failure
to submit an affidavit attesting that Mitchell would resign from his employment upon
approval of the application and devote full time to the licensed Premises was cured
by the submission of the required affidavit at the hearing. C.R., Item No. 21, at 9.
The PLCB noted that an application involving a “person-to-person” license transfer,



                                          5
unlike a transfer to a new location or an application for a new license, may be refused
only if the applicant is not a person of good repute,8 or if other statutory requirements
are not met. C.R., Item No. 21, at 7.
       As Neighbors failed to show they would be aggrieved by the license transfer
based on the reputation of Mitchell or Applicant, the PLCB agreed with the Hearing
Examiner that Neighbors lacked standing to intervene in the license transfer
application proceedings. Id. at 11-12. The PLCB further found that Mitchell was
an individual of good repute as required by the relevant provisions of the Liquor
Code and was therefore entitled to the license transfer. Id. at 12.
       This appeal followed.9 Applicant has intervened on appeal and opposes
Neighbors’ arguments.
                                            II. Issues
       Neighbors argue the PLCB erred in concluding they lacked standing to
intervene in the license transfer application proceedings. They contend the Hearing
Examiner erred in precluding the submission of relevant evidence and testimony at
the hearing. Further, Neighbors assert the license transfer approval violated the CLA
and the Liquor Code.


       8
          Pursuant to Section 1.5(a) of the PLCB regulations, when determining whether an
applicant is reputable, the PLCB may consider criminal convictions, an applicant’s licensing
history, and any other factors the PLCB deems relevant. 40 Pa. Code § 1.5(a).

       9
          Our scope of review of the PLCB’s decision is limited to determining whether
constitutional rights were violated, whether the PLCB committed an error of law, whether the
practices and procedures of the PLCB were violated, and whether necessary findings of fact were
supported by substantial evidence. Water St. Beverage LTD. v. Pa. Liquor Control Bd., 84 A.3d
786 (Pa. Cmwlth. 2014). A decision to grant or deny a petition to intervene is within the sound
discretion of the agency involved, and a decision on intervention will not be disturbed unless there
has been a manifest abuse of discretion. Id.



                                                 6
                                        III. Discussion
                A. Standing to Intervene and Preclusion of Evidence
                                 1. Neighbors’ Arguments
       Neighbors argue the PLCB erred in determining that they lacked standing to
intervene.    This argument is intertwined with their assertion that the Hearing
Examiner improperly limited the scope of testimony at the hearing. Neighbors
maintain they should have been permitted to present evidence that they were
negatively impacted by the previous establishment located on the Premises.10
       Neighbors further contend the Hearing Examiner should have admitted
testimony regarding the relationship between Antipas and Mitchell. Neighbors
assert the license transfer is a sham. Antipas continues to own the real estate on
which the Premises is located. Neighbors contend Antipas will retain control over
the License by transferring it to Mitchell, an individual Antipas can control as a
former employee, and the Premises will continue to operate as a nuisance
establishment. Neighbors further assert the CLA between Antipas and the PLCB
should have been admitted as evidence at the hearing because its terms were violated
by the license transfer and that fact bears on Mitchell’s reputation.
       As to Coyle and Smith, Neighbors argue the PLCB erred in finding they
lacked standing to intervene because they did not present evidence at the hearing.
They assert Neighbors’ counsel elected to not have them testify because the Hearing
Examiner incorrectly prohibited evidence concerning the subject matter of the



       10
           Neighbors also suggested that they had standing to intervene in the license transfer
proceeding because they live within 500 feet of the Premises. The proximity of Neighbors’
residences to the Premises might be relevant if location of the licensed premises was at issue. See
40 Pa. Code § 17.11(a). Here, however, this section is not applicable, as the license transfer at
issue is person-to-person.


                                                7
testimony they planned to offer, i.e., the prior establishment’s nuisance status and its
impact on their lives.
                               2. PLCB’s Arguments
      The PLCB responds that the purpose of the hearing was limited to (1) whether
Applicant failed to submit an affidavit attesting that Mitchell would resign his
current employment upon approval of the license transfer and devote full time to the
licensed premises, and (2) whether Neighbors would be directly aggrieved by the
license transfer, based on the reputation of Applicant. The PLCB observes that
Neighbors never objected to the scope of the hearing prior to its commencement,
and asserts they should not be permitted to raise those objections for the first time
on appeal. Further, under Section 17.13(e) of the PLCB regulations, if a party fails
to appear or testify at a scheduled hearing, the reasons for his or her protest may be
removed from the PLCB’s consideration. 40 Pa. Code § 17.13(e). The PLCB
maintains Coyle and Smith failed to present any testimony that they were aggrieved
by the license transfer application.
                             3. Applicant’s Arguments
      Applicant, as intervenor on appeal, contends the only issue before the Hearing
Examiner was whether Neighbors could show they were directly aggrieved by the
license transfer based on the reputation of Mitchell. As Neighbors presented no
testimony relating to Mitchell’s character or reputation, they were properly denied
intervenor status.
                                       4. Analysis
      In a person-to-person liquor license transfer, the PLCB has no discretion to
deny the license transfer application if the proposed new licensee meets all
requirements of the Liquor Code. Arrington v. Pa. Liquor Control Bd., 667 A.2d



                                           8
439, 442 (Pa. Cmwlth. 1995). Upon receipt of the license transfer application and
fees, the PLCB is obliged to issue a license if it is satisfied the statements in the
application are truthful and certain enumerated conditions are established, including
the requirement that an applicant be of good repute. St. Rd. Bar & Grille, Inc. v. Pa.
Liquor Control Bd., 876 A.2d 346 (Pa. 2005). The determination of good repute is
a matter vested in the discretion of the PLCB. Id. Here, therefore, the PLCB was
constrained to grant Applicant’s license transfer application absent a showing that
Applicant or Mitchell suffered from ill repute or that Applicant failed to meet the
requirements of the Liquor Code.
      Regarding intervention in the application process, “a person seeking to
intervene must have a substantial interest, that is, some interest other than the
abstract interest of all citizens in having others comply with the law.” Water St.
Beverage, LTD. v. Pa. Liquor Control Bd., 84 A.3d 786, 792-93 (Pa. Cmwlth. 2014).
The interest must be direct, and the person claiming to be aggrieved must show the
matter of which he or she complains caused harm to that interest. Id. at 793. The
interest must be immediate and not a remote consequence. Id. Notably, an assertion
of potential future harm is not sufficient. Tacony Civic Ass’n v. Pa. Liquor Control
Bd., 668 A.2d 584, 589 (Pa. Cmwlth. 1995).
       Neighbors were entitled to intervene in the license transfer only upon a
showing they would suffer immediate harm to their interests because of the
reputation of Applicant or Mitchell or because the requirements for issuance of a
license under the Liquor Code had not been met. Neither Coyle nor Smith testified
at the hearing. Section 17.12(e) of the PLCB regulations, 40 Pa. Code § 17.12(e),
provides that a party’s reasons for intervention may be removed from the PLCB’s




                                          9
consideration for failure to appear or testify. Therefore, we discern no error in the
PLCB’s denial of their petitions to intervene.
      Neighbors also argue Benner should have been permitted to testify that he was
negatively impacted by the previous establishment on the Premises. We discern no
merit in this argument.
      This Court addressed a similar circumstance in Burns v. Rebels, Inc., 779 A.2d
1245 (Pa. Cmwlth. 2001). Although Burns is distinguishable in part, this Court’s
reasoning in that case is instructive here.
      The petitioners in Burns appealed a PLCB decision approving a person-to-
person transfer of a liquor license. The petitioners asserted they had a direct interest
in the license transfer proceeding and would be aggrieved by PLCB action because
the health, welfare, peace, and morals of the surrounding neighborhood would be
adversely affected by approval of the license transfer. Id. Like Neighbors here, the
petitioners specifically alleged the transfer was not a bona fide purchase, but rather
an attempt to keep the bar in the prior licensee’s control and erase the bar’s history
as a nuisance establishment. Id. The petitioners also expressed concern that the
prior licensee would continue his involvement in the operation of the bar. Id.
      The PLCB denied intervenor status to the petitioners on the basis their
concerns related to the community in general. Id. at 1248. The PLCB explained it
could only reject a person-to-person license transfer if it determined the applicant
was not of good repute. Id.
      This Court disagreed because a principal issue in the petition to intervene was
whether the transfer was merely an attempt to “fraudulently erase [the bar’s] citation
history and to avoid further scrutiny” as a nuisance bar. Id. at 1250. Accordingly,




                                          10
this Court determined the petitioners had standing to intervene in the license transfer
application.11 Id.
       A critical difference between the petitions filed here and those filed in Burns
is that the petitioners in Burns asserted in their petitions to intervene that the license
transfer was a sham transaction. Here, by contrast, the petitions to intervene alleged
only that (1) the bar previously located on the Premises was a nuisance establishment
that negatively impacted Neighbors’ lives; (2) Antipas, the owner of that bar,
continues to own the building in which the Premises is located; and (3) Applicant is
known for having “poor business practices.” C.R., Item No. 12. Neighbors never
suggested in their petitions to intervene that the transfer was not a bona fide
purchase, nor did they allege Antipas would control the Premises on the basis of a
prior relationship with Mitchell. Neighbors made no mention of the CLA between
P&S South and the PLCB. Although Neighbors argue on appeal that Antipas’s prior
establishment is relevant to Mitchell’s reputation and future management of the
Premises based on his status as a former employee of Antipas, they did not raise this
issue in their petitions to intervene. It was only during Benner’s hearing testimony
that Neighbors’ counsel first attempted to expand the bases for Neighbors’
objections to the license transfer to include whether Mitchell was a bona fide
purchaser or whether the license transfer was a sham.12


       11
           However, this Court nevertheless affirmed the PLCB’s decision to grant the license
transfer, in part because the PLCB had the authority to take future action if the bar was operated
in a manner constituting a nuisance. Burns v. Rebels, Inc., 779 A.2d 1245, 1251 (Pa. Cmwlth.
2001).

       12
          Even had Neighbors been permitted to explore this line of questioning, evidence of a
relationship between Antipas and Mitchell would not have provided Neighbors the smoking gun
they sought. Mitchell presented unrefuted testimony that he previously managed a bar owned by
Antipas for approximately eight years with no Liquor Code violations.


                                               11
      As these issues were not pleaded in the petitions, evidence at the hearing was
properly limited to Mitchell’s resignation of his employment and whether Neighbors
would be directly aggrieved by the license transfer, “based on the reputation of the
Applicant or [Mitchell].” C.R., Item No. 13 (emphasis added). Indeed, Neighbors’
counsel acknowledged at the outset of the hearing that the issue was one “of
reputation, which is the basis for [Neighbors’] objection.” N.T., 6/19/18, at 9. As
such, the Hearing Examiner properly limited the evidence to Mitchell’s reputation.
All of Neighbors’ other objections were waived.
      With regard to Mitchell’s reputation, the Hearing Examiner correctly found
Neighbors failed to submit evidence that Mitchell was held in disrepute. The only
criminal behavior reflected in the record is a decades-old DUI conviction when
Mitchell was a teenager, which was presumed expunged. Neighbors likewise
presented no evidence that Mitchell engaged in bad business practices. Moreover,
Mitchell’s reputation could not have been sullied by his purported violation of the
CLA, because at the time of the hearing, transfer of the License had not yet been
approved. Thus, neither Applicant nor Mitchell was bound by the terms of the CLA.
      As the PLCB found, Neighbors have identified only potential harm which
might arise following the license transfer. That potential harm, predicated on
Neighbors’ assumption that a future violation of the CLA between Applicant and the
PLCB would occur, is speculative at best. Such speculative harm is insufficient
under our prior decisions. Tacony Civic Ass’n. Accordingly, the PLCB did not
manifestly abuse its discretion in denying the petitions to intervene. Water St.
Beverage.




                                        12
                      B. Alleged CLA and Liquor Code Violations
                              1. Neighbors’ Arguments
      Next, Neighbors argue the PLCB erred in approving the license transfer
application because the transfer violated the CLA and, consequently, the Liquor
Code. Neighbors contend the CLA requires the License may only be transferred to
a bona fide purchaser with no direct or indirect connection to Antipas. Mitchell
formerly managed a bar owned by Antipas, and Neighbors insist that connection
prohibits him from holding the License, by the express terms of the CLA. Section
404 of the Liquor Code provides in pertinent part that the restrictions included in a
CLA are binding on subsequent holders of the license unless rescinded by the PLCB.
47 P.S. § 4-404. As the PLCB has not rescinded any provisions of the CLA,
Neighbors assert the license transfer constitutes a violation thereof and a violation
of Section 404 of the Liquor Code.
                                2. PLCB’s Arguments
      The PLCB responds that the CLA was not part of the certified record, as it
was not submitted into evidence at the hearing. Inclusion in the reproduced record
filed with this Court does not make the CLA part of the certified record. As a result,
for the purposes of appellate review, the CLA does not exist.
      Moreover, the CLA is not governed by Section 404 of the Liquor Code, but
rather, by Section 470 of the Liquor Code,13 which provides that a CLA is binding
on the applicant, and failure to comply with its terms may support a citation and
nonrenewal of the license. Further, regardless of which section of the Liquor Code
controls the CLA, the PLCB maintains that no provision in the Liquor Code grants
a third party the authority to mandate enforcement of a CLA’s provisions.


      13
           47 P.S. § 4-470.


                                         13
                             3. Applicant’s Arguments
      Applicant asserts that enforcement of the terms of the CLA in conjunction
with a person-to-person transfer of the License is within the sole purview of the
PLCB, not a petitioner appealing to this Court, and Neighbors have no standing to
challenge the PLCB’s enforcement of the CLA. Applicant also agrees with the
PLCB that the CLA was not part of the certified record filed with this Court, as the
CLA was not an issue before the Hearing Examiner. Neighbors’ mere attachment
of the CLA to their appellate brief cannot make it part of the record.
                                     4. Analysis
      The PLCB and Applicant are correct that an appellate court is limited to
considering those facts that have been duly certified in the record on appeal. B.K. v.
Dep’t of Pub. Welfare, 36 A.3d 649, 657 (Pa. Cmwlth. 2012). A document that is
attached to a brief as part of the reproduced record may not be considered by this
Court when it is not part of the certified record. Id.
      Neighbors attempted unsuccessfully to introduce the CLA in evidence at the
hearing, in an effort to establish that, due to Mitchell’s status as an employee of
Antipas, transfer of the License to Applicant would violate the CLA. A knowing
violation of the CLA by Mitchell, they reasoned, cast aspersions on his character.
However, as discussed above, the License had not yet transferred. Thus, Mitchell
was not bound by the terms of the CLA and lacked the capacity to violate its terms.
      The Hearing Examiner correctly determined that the CLA was outside the
scope of the objections lodged before him. As the CLA was not made a part of the
certified record filed with this Court, we cannot consider it. Further, a CLA is a
contract between the licensee and the PLCB. Derry St. Pub, Inc. v. Pa. State Police,
Bureau of Liquor Control Enf’t, 111 A.3d 1240, 1253 (Pa. Cmwlth. 2015).



                                          14
Neighbors have cited no legal authority that would permit a third party to enforce
the terms of a CLA.
                                  IV. Conclusion
      The Hearing Examiner appropriately limited testimony to that which
implicated the reputations of Applicant and Mitchell. Neighbors failed to establish
they would be aggrieved by the license transfer on the basis of those reputations.
While we can appreciate Neighbors’ concern about living in close proximity to a
potential nuisance bar, they have not identified any immediate harm which would
befall them should the license transfer; they have merely alleged potential harm. For
these reasons, we affirm the PLCB.




                                       __________________________________
                                       ELLEN CEISLER, Judge




                                         15
         IN THE COMMONWEALTH COURT OF PENNSYLVANIA


Marc Benner, Daniel Coyle, and     :
Robert Smith,                      :
                 Petitioners       :
                                   :
     v.                            : No. 1189 C.D. 2018
                                   :
Pennsylvania Liquor Control Board, :
                 Respondent        :


                                 ORDER


     AND NOW, this 12th day of July, 2019, the August 1, 2018 order of the
Pennsylvania Liquor Control Board is AFFIRMED.




                                  __________________________________
                                  ELLEN CEISLER, Judge
