The Pennsylvania Liquor Control Board must allow for direct deliveries of specialty wines, a judge has ruled following the Commonwealth Court's first hearing livestreamed online.

Commonwealth Court Judge P. Kevin Brobson ruled Friday in MFW Wine v. Pennsylvania Liquor Control Board that the agency failed to properly implement changes to the liquor code that allowed specialty wine sellers to distribute products directly to customers, rather than routing them first through the liquor board's facilities.

The demand for direct delivery was heightened for wine sellers and restaurants after Pennsylvania Gov. Tom Wolf mandated all nonessential businesses closed to help stem the spread of the coronavirus, and shuttered all state-owned liquor purveyors.

The dispute centered on 2016 changes to the Liquor Code and the Fiscal Code, that, along with allowing direct distribution of specialty wines, made it so the agency would not be collecting handling fees on those deliveries anymore. The changes, however, gave different dates regarding when the agency needed to implement the changes.

Although the agency argued that the use of "may" in the Fiscal Code changes indicated the new rules outlined in the Liquor Code were optional, Brobson disagreed with that stance.

"PLCB's erroneous construction is driven not by what the statutes, read in pari materia, provide, but what the agency wishes they provided—i.e., discretion to PLCB to prohibit or indefinitely delay implementation of the direct shipment of special orders to customers," Brobson said. "Although PLCB has discretion on what procedure it adopts to implement these transactions, it does not have the discretion to prevent them."

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Brobson, however, did not give the agency a strict deadline to comply, saying that the changes would be complex and the liquor board's recent decision to reopen some facilities capable of handling specialty wine deliveries alleviated many of the immediate issues the plaintiffs raised in their complaint.

"PLCB must be afforded a reasonable amount of time to implement thoughtfully a process, perhaps even an interim one as petitioners' counsel suggested during the hearing, to provide licensed vendors, licensed importers, and customers a special order direct shipment alternative," he said. "The court is confident that PLCB has the resources and ingenuity to do so without unreasonable delay."

According to Brobson, the changes at issue were made to the Liquor Code in July 2016, and gave the liquor board until Jan. 1, 2017, to comply. However, changes made to the Fiscal Code shortly after said the agency "may" make the changes by June 1, 2017. The board never implemented the new procedures.

Although the liquor board was supposed to make the changes more than three years ago, no lawsuits had been filed over the discrepancy.

The plaintiffs, which consist of two wine sellers and a Philadelphia-area restaurant, said Wolf's order effectively zeroed out their businesses, since sellers had no way to deliver products and the restaurants had no access. During an evidentiary hearing Tuesday that was livestreamed on Youtube, Zach Morris, owner of Bloomsday Cafe, said the move led him to lay off all 40 of his employees.

The hearing was the first that an appellate court in Pennsylvania has livestreamed.

In his ruling Friday, Brobson said that despite the differences in the Liquor and Fiscal codes, when read together, the Fiscal Code changes clearly only extended the deadline and did not give the agency a choice about whether or not to make the changes.

"It does not authorize PLCB to prevent by it inaction the will of the general assembly to allow special order direct shipments," he said.

PLCB attorney Robert McAteer and Montgomery McCracken Walker & Rhoads attorney John Papianou, who represented the plaintiffs, each did not return a call seeking comment.

A spokesman for the PLCB said the agency is reviewing the opinion.