1400 NORTH THIRD STREET ENTERPRISES, + IN THE COURT OF COMMON PLEAS INC.,, DAUPHIN COUNTY, PENNSYLVANIA. Appellant ve : NO, 2016 CV 03828 MP CITY OF HARRISBURG, LICENSE AND TAX CIVIL ACTION — LAW “ APPEAL BOARD, Appellee MEORANDUM and ORDER BOE LOCAL AGENCY APPEAL Before the Court is Appellant's appeal of The City of Harrisburg, License and Tax Appeal Board non-renewal of Appellant's Business Privilege and Mercantile License Number 29834-9, Appellant, 1400 North Third Street Enterprises, inc. operates a bar known as “Third Street Café.” The City of Harrisburg has filed a complete certified record of the local agency proceedings, and, therefore the record before the Court is complete. Section 754 of the Local Agency Law, 2 Pa.C'S. §754 governs this Court's disposition of this appeal, That section provides, in pertinent part: (b) Complete record.—in the event a full and complete record of the proceedings before the local agency was made, the court shall hear the appeal without a jury on the record certified by ‘the agency. After hearing the court shall affirm the adjudication unless it shall find that the adjudication is in violation of the constitutional rights of the appellant, or is not in accordance with the law, or that the provisions of Subchapter B of Chapter 5 (relating to practice and procedure of local agencies) have been violated in the proceedings before the agency, or that any finding of fact made by the agency and necessary to support its adjudication is not supported by substantial evidence. If the adjudication is not 4affirmed, the court may enter any order authorized by 42 PaCS. § 706 (relating to disposition of appeals). 2PaCs. § 754. The License and Tax Appeal Board’s decision not to renew Third Street Café’s business privilege and mercantile license was based on a notice received from the City of Harrisburg stating that Licensee consented to or allowed behavior that constitutes a crime under Federal, State or Local Laws, including, but not limited to, drug trafficking. or drug possession. Licensee allowed any manner or form of public nuisance. City’s Notice of Non-renewal, 12/28/15; § 109 of the Business Privilege and Mercantile Tax. Regulations. This Court finds that License and Tax Appeal Board erred as a matter of law by not determining that the procedure established in 47 P.S. §6-611 pre-empts the City of Harrisburg’s non-renewal of Appellant's Business Privilege and Mercantile License and that the decision by the License and Tax Appeal Board was not supported by substantial evidence. Accordingly, the decision of License and Tax Appeal Board Is reversed and the City of Harrisburg is ordered to issue Appellant 2 2016 Business License MPTION ‘The Liquor Code provides a procedure to address nuisance bars pursuant to 47 P.S. §6- 611 which states in part: (b) An action to enjoin any nuisance defined in this act may be brought in the name of the Commonwealth of Pennsylvania by the Attorney General, by the Pennsylvania State Police through its aoeBureau of Liquor Control Enforcement, by the municipality wherein the establishment is located, by the district attorney of the proper county or by a person who resides or has a place of business within five hundred feet of the location of alleged nuisance. Such action shall be brought and tried as an action in equity and may be brought in any court having jurisdiction to hear and determine equity cases within the county in which the offense occurs. If it is made to appear, by affidavit or otherwise, to the satisfaction of the court that such nuisance exists, a temporary writ of injunction shall forthwith issue, restraining the defendant from conducting or permitting the continuance of such nuisance until the conclusion of the proceedings. (c}_ Upon the decree of the court ordering such nuisance to be abated, the court may, upon property cause shown, order the ... building, structure, ... or place shall not be occupied or used for one year thereafter... The Pennsylvania Supreme Court in Commonwealth v. Wilsbach Distributors 513 Pa. 215, 519 A.2d 397 (Pa. 1986}, analyzed whether the City of Harrisburg’s Business Privilege and Mercantile Tax was pre-empted by the Pennsylvania Liquor Code. The Court held: We conclude that the [Pennsylvania] Legislature has adopted a scheme of regulations so pervasive over the entire alcoholic beverage industry, that it has. “pre-empted the field” to the exclusion of all interference from subordinate legislative bodies. Such pre-emption by the Legislature bars local legislative contro! by regulation or taxation. in the Commonwealth is exclusively within the discretion of the Board. The only concessions to municipalities is their right to exclude any or all classes, of licenses (i.e. dry municipalities), 47 P.S. § 4.472, and to exercise appropriate zoning controls. Wilsbach, at 402. * Concurring opinion by Chief Justice Nix and the dissenting Opinions discuss whether a tax can be imposed under the Enabling Act; however, a feir reading of the concurring and dissenting opinions demonstrates that a local legislative body cannot “regulate” the alcoholic beverage industry. It is one ‘thing to impose a tax yet quite another to regulate by denying a business license based on certain conduct ‘of the alcohol selling business. See also Wissinoming Bottling Co, v, School Dist., 654 A.2d 208 (Pa. ‘myth, 1994).The License and Tax Appeal Board Decision while referencing the Wilsbach case rejected the Pennsylvania Supreme Court decision in Wilsbach by holding that the Business and Mercantile Business Tax regulates certain conduct of businesses to minimize crime and has nothing to do with the sale of alcohol. The Appeal Board Decision references a 1994 Amendment to the Liquor Code, §4-493.1 that provides: {a) And nothing in this Act shall be construed to pre-empt the right of any municipality to regulate zoning and enforce any other local ordinances and codes dealing with health and welfare issues. That general language does not reverse a specific holding of the Pennsylvania Supreme Court. in 1998, 4 years after the above referenced Amendment to the Liquor Code, the Commonwealth Court in the City of Philadelphia v. Tax Review Bd. of the City of Philadelphia, 713 A.2d 718 (Pa. Cmwith. 1998), specifically rejected the argument that the validity of Wilsbach had been cast into doubt by the 1994 Amendment to the Liquor Code. An action pursuant to 47 P.S. 6.611 is the exclusive remedy to attempt to temporality close down, regulate or sanction a liquor establishment. DESCISION NOT SUPPORTED BY SUBSTANTIAL EVIDENCE To establish that the Third Street Café consented to and/or allowed behavior that constituted a crime or allowed any kind manner of public nuisance, the City of Harrisburg, Introduced ten (10) incidents through ten (10} police reports covering a time frame from March 2014 through December 2015. The City argues that these 10 incidents demonstrate that the Third Street Café is a “magnet” for crime. Whether the Third Street Café is a “magnet” for criminal behavior is not the test this court must follow as established by the ordinance the City enacted. instead, the decision below with the License Tax Appeal Tax Court must be supported 4-by substantial evidence that the Third Street Café “consented to or allowed behavior that, constitutes a crime ... and/or allowed any kind of manner of public nuisance.” March 18", 2014 Police Report ‘An individual by the name of Frank Lane told the police that on the evening of March 18, 2014, while drinking at Third Street Café, he had $1,231.00 of cash in his pocket and later noticed that the money was gone. He surmised that a female distracted him while a male took the money out of his pocket. There was no suggestion in the police report or the testimony that the owner or the empolyees of the Third Street Café participated or were even aware of the alleged theft had occurred March 20, 2014 Police Report This report indicates that an individual was in a car across from the Third Street Café; when the police ran the plates and discovered he had an outstanding warrant from Williamsport for allegedly selling CD’s and DVD's. There was no testimony this individual was in the Third Street Café or if the employees or owners were involved or were aware that he was across the street with these outstanding warrants. While this incident was in the vicinity of the Third Street Café, it does not seem to be connected to the establishment. April 2"4, 2014 Police Report This report involved a drug investigation where the police were conducting a drug buy with a confidential informant at the Laurel Towers around 2"¢ and Verbeke Streets. The participants began the buy at that location and ended up in the 1400 block of North Third Street near the Third Street Café and the Tap Room Bar where the arrest was made. At no time did the participants come in or out of the Third Street Café.August 26, 2014 Police Report An individual by the name of Dale White was arrested on the 1400 block of Third Street for an outstanding summary warrant. There was no testimony that Mr. White was In the Third Street Café. Again, the incident was in the vicinity of the Cat , but not connected to the establishment. August 27%, 2014 Police Report This report involved the police with a use of a confidential informant conducting a drug buy, concerning individuals going into and coming out of the Tap Room Bar, a bar adjacent to the Third Street Café. The individual that was arrested as a result of this drug investigation was an employee at the Tap Room Bar. This incident appears to be related to the Tap Room Bar, which has since closed. September 2"4, 2014 Police Report This police report involves the arrest of a Mr. Tumor, an employee of the Tap Room Bar, from the police report concerning the investigation involving the August 27, 2014 police report. November 5", 2014 Police Report This report involved a fight inside the Third Street Café between 2 females. Later ‘the victim contacted the police claiming her necklace was missing and her belief that the individual she had the altercation with had taken the necklace. It appears from the report and testimony these two individuals were familiar with each other and had on-going issues. There was no testimony that any employee or owner of the Third Street Café had any knowledge of the incident before, during or after it occurred.March 6", 2015 Police Report This report and testimony by Detective Heffner established that an individual was lying directly outside the front door of the Third Street Café. The victim had obliviously been assaulted, however nothing else was established about the incident. The victim did not know where he was assaulted, whether it was in the Third Street Café, on the street or elsewhere. No other testimony was given about this incident. There was no testimony that any of the employees or the owner of the Third Street Café were involved or had knowledge of the incident. Without knowing the individual or individuals that committed the assault, itis unclear how, or if at all, the Third Street Café is related to this incident. May 18%, 2015 Police Report |n an alley that runs behind the Third Street Café and the Tap Room Bar, a female assault victim was discovered. A witness saw a male assaulting the female, The witness also indicated that prior to the assault the women had spit on the male and kicked him and the assault occurred when the male retaliated. There was no testimony that either the female victim or the male that assaulted her were ever in the Third Street Café. In fact, the victim stated she was hanging around and inside the Tap Room Bar. The male that committed the assault was arrested. May 20", 2015 Police Report This report establishes that the police were working with a confidential informant for a drug buy/bust. The confidential informant went into the Third Street Café and came out with an individual who subsequently purchased drugs from the confidential informant in the confidential informant’s vehicle. There was no testimony that there were drugs sold in the bar or that any employee or owner of the Third Street Café knew the transa aetook place or even that the individual in the bar was a drug user. While this incident involves patrons of the Third Street Café, there is no allegation that the empolyees or ‘owners of the Café had any involvement or knowledge of the drug transaction and the participants left the Third Street Café to consummate the drug transaction. December 15, 2015 Police Report The details of the incident were captured on the video security system the Third Street Café had in place. There were three or four camera angles inside and outside of the Third Street Café. What can be determined from the video is that the incident happened ‘on December 15, 2015, a Tuesday, shortly after 9:00 p.m. The video was provided to the police the next day by the employees of the Café. The video shows that a Glen Walker, Il came into the bar and walked to the back of the bar to meet his father Glen Walker, Jr They were in the bar less than two minutes. They exited the bar and stood out front, Glen Walker, Jr, and another individual engaged in a physical altercation outside the bar at Which time there was an exchange of gun fire between Glenn Walker, iil and unidentified individual, Within seconds of the shooting, a nearby police vehicle was on the scene and Pursuing the individual involved. Mr. Walker, Ill was charged with carrying a firearm without a license and recklessly endangering. There was no testimony that the employees or owners of the Third Street Café were in any way involved with this particular incident. The City argued that Mr. Walker, Ill came into the Bar and having not ordered a drink, was not asked to leave. As noted above, Mr. Walker was only in the Bar for less than ‘two minutes. The City also argues that the empolyees-did not call 911 after the shooting ‘occurred. The video clearly shows, however, that the police were in the vicinity when the shooting occurred and were there within seconds, giSummary of Police Reports The City of Harrisburg argues that the 10 incidents reflected in the police reports demonstrate the Third Street Café is a “magnet” for crime, as well as a “nuisance bar”. The Court must analysis this case based on the City Ordinance involved and local agency law. The Ordinance contains language that the City of Harrisburg inserted when they passed the Ordinance. The Ordinance does not contain language that the City can deny a business license for a liquor establishment that is a "magnet” or a “nuisance bar”. Instead, there must be substantial evidence that the employees or owner of the Third Street Café have “consented or allowed a crime.” and/or “allowed any manner of public nuisance”. Of the 10 police reports cited, which span a time. period of over 21 months, only two of the incidents involved actually took place inside the Third Street Café, While it is certainly reasonable for the City to argue that, if the Third Street Café was not there or the business closed, some of these crimes near the Third Street Café may not have occurred. It is argued that the Third Street Café is located in a high crime area and could attract those who have the propensity to commit crime. However, itis quite a different matter to conclude the employees or owners consented to or allowed criminal behavior because of that. {tis also worth noting the Third Street Café has taken significant measures in response to the criminal behavior in the vicinity. They have added security cameras with recording capability, additional and brighter lighting, signs barring certain individuals who previously caused trouble, and increased security on Thursdays, Fridays and Saturdays, They have even offered the Harrisburg Police Department to have access to the camera feeds, real time.Also, Ellis Roy, a retired Lieutenant of the Harrisburg Police Department has been employed by the owners of the Third Street Case since 2011, and continues to be involved in security matters, In addition to the changes referenced above, Mr. Roy testified that the Café has taken steps not to attract young people, such as eliminating the use of a DJ and closing early, to reduce potential problems. Mr. Roy also testified that the neighborhood has improved since the Tap Room Bar closed. Accordingly, this Court finds that none of the above incidents individually or collectively establish that the owners of the Third Street Café consented to or allowed criminal activity to occur. To the contrary, the owners of Third Street Café have done everything they can to prevent crime from occuring at or near their establishment, and have even actively assisted the police in making arrests. In addition, this Court finds that the owners of the Third Street Café did not allow any manner of public nuisance to occur at the Third Street Café, The record does not support the Board’s finding, and the Board erred as a matter of law. Consequently, we vacate the Board Order upholding the City’s decision not to renew the Café’s License. While we have concluded that Appellant did not violate City Ordinance §109, we conclude the only approach the city has to enjoin the Third Street Café from operation as a “nuisance bar” is under §611 of the Liquor Cade, 47 P.S. §6-611. While Third Street Café ‘may not be able to control the conduct of their patrons, they may be responsible under §611 for the conduct of the patrons that the establishment attracts. And if the conduct of those patrons disturbs the peace and quiet of this residential area and affronts the ies of the those endeavoring to maintain a decent, clean, and wholesome ~10-environment in which to live and rear their families, then the operation of the bar may be sanctioned pursuant to §611 There have been several cases which set forth the requirements for determining whether a bar is a nuisance under §611. In Commonwealth v. Graver, 334 A.2d 667 (Pa. 1975), the Commonwealth sought to enjoin the operation of a bar located in Lancaster County. Writing for the Supreme Court, Justice Nix explained "where the evidence is clear...that there was a causal relationship between the deplorable situation outside the premises and what went on inside the bar[,]" the court must grant an injunction. Id. at 669-70. He continued, “moreover, testimony concerning conduct by bar patrons in the area of the bar who are attracted to the area by the manner of operation of the bar is competent evidence to support an injunction as a nuisance in law and in fact.” Id at 670. Ina similar case, Commonwealth v. Sal-Mar Amusements, Inc, 630 A.2d 1269 (Pa. ‘Super 1993), the Dauphin County DA brought an action in equity against Vanity, a bar in Harrisburg, seeking suspension of its operation. The DA’s Office cited the high volume of calls received by police regarding the loud disruptive conduct outside the bar as well a traffic, noise, littering, loitering, drinking, fighting and criminal conduct which took place outside the bar. The trial court agreed,? and enjoined operation of the bar for one year. On appeal, the Superior Court, explained that, in determining whether a bar is a nuisance, the lower court may consider “violations of the crimes code,” as well as activities outside the bar as long as the conduct “‘s in the immediate vicinity of the bar and there is a causal relationship between what occurs inside and outside the premises.” Id, at 1273. In The trial court decision in the 1992 action was written by the Honorable John C. Dowling, -14-affirming the trial court’s determination, the Superior Court cited drug sales by persons with access to private areas of the bar and in view of bar employees, the high volume of police calls involving the bar, the loud and disruptive behavior of the bars patrons, and the traffic, noise, litter, ete which stemmed from the bar's operation. The facts of the instant case may be more similar to those in Graver and Sal-Mar. Thus, this Court believes that the concerns of the City and the local residents would be better addressed in an action brought pursuant to §6-611. This Court, however, expresses no opinion as to whether there is sufficient evidence to ultimately be successful as a § 6 611 action Appellant raises a number of additional issues in support of their appeal. Appellant, argues constitutional and hearsay issues, and a conflict of interest by one of the board members. They also allege unequal treatment by the City, pointing to other bars within Harrisburg which are prone to criminal incidents of a more serious nature and on a more frequent basis. Appellant has asserted that they have invested approximately $400,000 in their establishment since 2011. Before the government can essentially deprive an individual of their property right, a fair and transparent hearing must occur. In light of our decision, however, itis unnecessary to address these significant issues. CONCLUSION This Court finds the City’s nonrenewal of Appellant's Business and Mercantile License is preempted by 47 P.S. § 6-611. Further, assuming arguendo the City’s action is not preempted by, § 6-611, we find that the above-mentioned incidents were not “consented to or allowed” by the Third Street Café. In fact, the owners of the Café have gone above and beyond in an attempt to work with the city in trying to eliminate the type -12-of activity which the city now complains. Accordingly, we grant the Third Street Café’s appeal and reject the City’s nonrenewal of the Café’s Business Privilege and Mercantile License. We hold § 6-611 is the exclusive means for an action such as this one. Accordingly, the following order is appropriate: -13-1400 NORTH THIRD STREET : IN THE COURT OF COMMON PLEAS ENTERPRISES, INC., : DAUPHIN COUNTY, PENNSYLVANIA, Appellant : v. : NO. 2016 CV 03828 MP CITY OF HARRISBURG, LICENSE AND TAX APPEAL BOARD, : CIVIL ACTION- LAW Appellee ORDER 1, 8 AND NOW, this_// day of Fly 2016, upon consideration of Appellant’s Appeal, ‘motions filed by each party, and having held a hearing on the matter, ITIS HEREBY ORDERED AND DECREED that Appellant's appeal is GRANTED, and the decision of the Harrisburg License and Tax Appeal Board upholding the nonrenewal of Appellant's Business and Mercantile License is VACATED. BY THE COURT: Distribution on the following page:Distribution: Christopher F. Wilson, Esquire, 2215 Forest Hills Drive ~ Suite 37, Harrisburg, PA 17112 (Counsel for Plaintiff - via facsimile - 717-541-1527 and U.S. Mail) Neil Grover, Esquire, 10 North 2" Street, Harrisburg, PA 17101 (Counsel for Defendant - via facsimile ~ 717-255-3056 and U.S, Mail) Steven A. Stine, Esquire, 23 Waverly Drive, Hummelstown, PA 17037 (via facsimile — 717-583- 2943 and U.S. Mail) Steven A. Stine, Esquire, Harrisburg License and Tax Appeal Board, 10 North 2" Street Harrisburg, PA 17101 Lili Hagenbuch, Esquire, Deputy Court Administrator (Civil)