IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Domusimplicis, LLC :

:

v. : No. 1930 C.D. 2017

: Argued: November 13, 2018

Pennsylvania Liquor Control Board, :

Appellant :

BEFORE: HONORABLE ROBERT SIMPSON, Judge

HONORABLE ELLEN CEISLER, Judge

HONORABLE DAN PELLEGRINI, Senior Judge1

OPINION 

BY JUDGE SIMPSON FILED: January 14, 2019

Before us is the appeal filed by the Pennsylvania Liquor Control Board 

(PLCB) to the order of the Court of Common Pleas of Chester County (trial court),2

reversing the decision of the PLCB denying an Economic Development (ED) 

Restaurant Liquor License (ED License) to Domusimplicis, LLC (Licensee) for its 

restaurant in West Chester Borough (Borough). The PLCB argues issuance of the ED 

License violates the county quota scheme under Section 461(b.1) of the Liquor Code,

3

47 P.S. §4-461(b.1), because Licensee did not satisfy criteria for the ED exception set 

forth in its regulations. The PLCB also asserts the trial court erred in failing to defer 

to its narrow interpretation of the regulatory criteria. Upon review, we affirm. 

I. Background

Licensee applied for an ED License for its restaurant iPasta, located at 

134 E. Gay Street in the Borough in Chester County (Premises). iPasta is a fine-

 

1 This case was decided before Senior Judge Pellegrini’s service on the court ended on 

December 31, 2018.

2 The Honorable Ronald C. Nagle, Senior Judge, presided. 

3 Act of April 12, 1951, P.L. 90, as amended, 47 P.S. §§1-101–10-1001. Section 461(b.1) 

of the Liquor Code was added by Section 9 of the Act of December 20, 2000, P.L. 992. 
2

dining restaurant seating 34 patrons serving home-cooked Italian cuisine in a 

principally commercial area. Licensee sought an ED License to increase its income 

and to add economic benefit to the community with increased clientele. 

Following a notice and public hearing, the Borough Council adopted 

Resolution 12-2015 conditionally approving4 Licensee’s application for an ED 

License. Reproduced Record (R.R.) at 142a-44a. Resolution 12-2015 evinced 

Council’s conclusion that its approval would promote economic development in the 

Borough by “provid[ing] employment and attract[ing] customers and patrons to other 

restaurants in the Borough.” Id. at 143a. Having satisfied the municipal approval

prerequisite for an ED license under 40 Pa. Code §3.101(a)(3), Licensee filed its 

application with the PLCB on November 2, 2015, and paid the licensing fees. 

Initially, the PLCB raised 10 objections to the application.5 Pursuant to 

Section 464 of the Liquor Code,6 47 P.S. §4-464, the PLCB’s Bureau of Licensing 

ordered a hearing on the objections. 

 

4The conditions were: no carry-out beer; close by midnight; at least one Responsible Alcohol 

Management Program certified employee; and availability of food for sale while serving alcohol. 

5 The 10 objections are summarized as follows:

1) Premises is located within 200 feet of other licensees.

2) Exhaustion of reasonable means to find a suitable license in the quota scheme.

3) Question as to applicant’s financial responsibility.

4) Failure to provide source of funds.

5) Failure to submit financial disclosure affidavit.

6) Failure to provide composition of property owner.

7) Failure to submit application addendum.

8) Failure to submit photographs of proposed members and manager.

9) Failure to submit interior/exterior photographs of Premises.

10) Question as to adverse effect on neighborhood.

6 Act of April 12, 1951, P.L. 90, as amended, 47 P.S. §§1-101–10-1001.
3

The PLCB hearing examiner conducted two hearings. The second 

hearing was necessary because the PLCB added an objection to the application as to 

whether Licensee exhausted reasonable means to find a suitable license “in 

accordance with Section 3.105 of the [PLCB’s] regulations.” Hr’g Tr., 9/29/16, Ex. 

B-8. Counsel for Licensee, a liquor license attorney who served as Licensee’s 

agent in attempting to procure a license (Agent), testified at both hearings. iPasta’s 

owner (Owner), for whom English is a second language, also testified at both 

hearings. The hearing examiner recommended issuing the ED License. Nonetheless, 

the PLCB refused the application and denied the ED License.

On June 23, 2017, the PLCB issued an opinion supporting its denial. 

The PLCB noted that half of the objections raised were moot because Licensee 

submitted the requisite information. Bd. Op., 6/23/17, at 16. Specifically, it noted

Licensee submitted the requisite information as to financial resources and 

disclosures, owner composition and the addendum to the license application. 

Based on the remaining objections, the PLCB denied the ED License. 

It emphasized that five other licensed establishments are located within 200 feet of 

the Premises, and that Licensee failed to exhaust reasonable means to find a suitable 

license within the quota scheme as required by 40 Pa. Code §3.105. The PLCB also 

concluded the approval of the ED License would adversely affect the community. 

The trial court accepted the record of the administrative proceedings, 

and it conducted a de novo trial where Owner and Agent testified on July 11, 2017.

Notably, Agent did not represent Licensee during the de novo trial. 
4

Agent described his efforts to secure a restaurant license. He testified 

regarding his attempts to discern whether any non-active licenses were available for 

purchase, and whether licenses placed on the safekeeping and storage lists were 

available. Agent explained his familiarity with the process of obtaining a liquor 

license and his placement of other Borough licenses in safekeeping, which were not 

for sale. He testified about his contacts with licensees by telephone and letter 

inquiring as to the availability of a license. He contacted approximately 170 out of 

192 licensees by letter or telephone, or both. He acknowledged he did not extend any 

offers to purchase a license on Licensee’s behalf. He also testified as to the costs of 

obtaining a non-ED license, that ranged from $375,000 (outside the Borough) to about 

$500,000 in the Borough. Tr. Ct., Slip Op., 11/16/17, Finding of Fact (F.F.) No. 7. 

He explained the Borough was not allowing transfers of restaurant “R” licenses from 

outside the Borough given the large number of currently licensed restaurants and bars.

Owner testified the costs of non-ED licenses rendered that option 

infeasible. He also testified as to the financial benefit for iPasta and the community.

Ultimately, the trial court sustained Licensee’s appeal, directing issuance 

of the ED License. The trial court found Licensee submitted the requisite photographs 

to the PLCB three times. Thus, it discerned no merit in the PLCB’s objections based 

on their non-submission. The trial court also found there was no evidence supporting 

the PLCB’s conclusion that issuing the ED License would adversely affect the 

community. As to the two remaining objections (location within 200 feet of other 

licensees, and failure to exhaust reasonable means to find a license under the quota 

scheme), the trial court found Licensee met the criteria for an ED License. The trial 
5

court credited Agent’s testimony about his efforts to find an available license. It 

found “financial inability” motivated Licensee’s efforts to procure an ED License. 

F.F. No. 8. Issuing the license would increase iPasta’s income, allow employment 

expansion, and benefit the community with increased clientele. F.F. No. 14. 

The PLCB appealed the trial court’s order to this Court. In its Pa. 

R.A.P. 1925(a) opinion, the trial court noted the PLCB assigned three errors: (1) an 

error of law or abuse of discretion that Licensee exhausted reasonable means to 

acquire a license within the county quota scheme; (2) an error in requiring the PLCB 

to show that granting the license adversely affects the neighborhood; and (3) an error 

of law in not deferring to its narrow interpretation of the ED exception as “limited 

to those areas suffering economic hardship.” Certified Record (C.R.), Item No. 16. 

As to the third issue, the trial court advised that the PLCB opinion did not refer to an 

economic hardship criterion, and that no argument was raised during the hearing or in 

post-trial briefs placing such a limitation on the ED exception, resulting in waiver. 

After briefing and argument, this matter is ready for disposition. 

II. Discussion

On appeal,7the PLCB argues that the trial court erred in determining 

Licensee exhausted reasonable means of finding a suitable license within the quota 

scheme. It also asserts the trial court erred by requiring the PLCB to prove that the 

 

7 Where a trial court heard a liquor license matter de novo, our review is limited to 

determining whether there is substantial evidence to support the trial court’s findings or whether 

the trial court committed an error of law or abused its discretion. K & K Enters., Inc. v. Pa. Liquor 

Control Bd., 602 A.2d 476 (Pa. Cmwlth. 1992). 
6

granting of a license adversely affected the neighborhood when it refused the license 

based on proximity to other licensees. In addition, the PLCB contended the trial 

court owed deference to its interpretation of the ED exception as limited “to those 

areas suffering economic hardship.” Appellant’s Br. at 4. 

Licensee responds that the trial court’s findings are supported by 

substantial evidence. It argues the trial court did not abuse its discretion when it 

determined Licensee met the criteria for an ED License, including showing an 

exhaustion of reasonable efforts to obtain a non-ED license. It emphasizes that the 

trial court did not err in applying the ED criteria because the PLCB did not raise the 

issue of economic hardship before filing its Rule 1925(b) Statement, resulting in 

waiver. 

A. Legal Framework

Section 461(a) of the Liquor Code, 47 P.S. §4-461(a), restricts the 

number of permitted licenses based on a municipality’s population. The quota of 

licenses in Chester County is 166; the County exceeds its license quota in that there 

are 192 restaurant liquor licenses and 9 malt beverage licenses that count against this 

quota. 

However, relevant here, Section 461(b.1) of the Liquor Code allows an 

exception to the quota for restaurants, in the interest of economic development.8 

This is conditioned upon an applicant showing that it exhausted reasonable means 

for obtaining a suitable license in the county in which the municipality is located. 

 

8 An economic development license is not transferable to another licensee. 
7

Pursuant to Section 464 of the Liquor Code, 47 P.S. §4-464, a trial court 

conducts de novo review. Becker’s Café, Inc. v. Pa. Liquor Control Bd., 67 A.3d 

885 (Pa. Cmwlth. 2013). As such, it may “‘sustain or over-rule the action of the 

[PLCB] and either order or deny the issuance of a new license ....’” Id. at 894

(citation omitted). “A de novo review ‘contemplates an independent evaluation of

the evidence.’” Irem Temple AAONMS v. Pa. Liquor Control Bd., 87 A.3d 983, 

996 n.6 (Pa. Cmwlth. 2014) (citations omitted). “In conducting a de novo review, 

however, the trial court is not restricted to reviewing the established record and may 

hear new evidence and make independent findings of fact and conclusions of law.” 

Id. 

Regardless of whether substantial evidence supports the PLCB’s 

findings, the trial court may reverse a PLCB decision to deny a license provided its 

own findings are supported by substantial evidence in the record as a whole. 

I.B.P.O.E. of W. Mount Vernon Lodge 151 v. Pa. Liquor Control Bd., 969 A.2d 642 

(Pa. Cmwlth. 2009). Indeed, in exercising its statutory discretion, the trial court may 

reverse the PLCB based on identical findings and even when the evidence it hears is 

substantially the same as the evidence presented to the PLCB. Pa. Liquor Control 

Bd. v. Craft Am. Home, 718 A.2d 276 (Pa. 1998). 

B. Objections

The PLCB raised three substantive objections to issuance of the ED

License on appeal: (1) location of the Premises within 200 feet of other licensees; 

(2) failure to show reasonable efforts to obtain a license within the quota scheme; 

and (3) adverse effects on the neighborhood. 
8

1. 200-foot Proximity

There is no dispute that the Premises are located within 200 feet of five 

other licensees. Section 404 of the Liquor Code gives the PLCB the discretion to 

refuse a new license application for an establishment that is within 200 feet of any 

other licensed premises. However, and relevant here, an application is not

automatically disqualified based on its proximity to other licensees. Chadds Ford 

Tavern, Inc. v. Pa. Liquor Control Bd., 736 A.2d 70 (Pa. Cmwlth. 1999) (granting 

license despite location within 200 feet of other licensees). It is a matter of 

discretion.

Notably, the PLCB does not explain how the trial court abused its 

discretion when it issued the ED License here. Accordingly, this Court discerns no 

abuse of discretion by the trial court in refusing to deny the ED License based on its 

proximity to other licensees. 

2. Exhaustion of Reasonable Means

Licensee was required to exhaust its options for obtaining a restaurant 

“R” license within the existing county quota before applying for an ED license. 

Section 3.105 of the PLCB’s regulations sets forth the mandatory criteria for an ED 

license, specifying evidence that establishes the exhaustion of reasonable means 

requirement. 40 Pa. Code §3.105.

Section 3.105(e) provides that an applicant “shall provide evidence at 

the administrative hearing” to establish the exhaustion requirement, including the 

number of contacts with existing licensees about the availability of licenses for 
9

purchase. Specifically, an applicant must show that it contacted equal to or greater 

than 50% of the existing suitable licensees. 40 Pa. Code §3.105(e)(1)(ii). An 

applicant must also show it offered to purchase licenses that are in safekeeping at 

the time the application is filed, including offered and requested amounts. In 

addition, an applicant must provide evidence as to why it is not economically 

feasible to purchase an existing license, including its financial resources. 

Relevant here, the regulation states that evidence of the exhaustion 

criterion “includes ... [a] written estimation, with supporting documentation, of the 

expected economic benefits to the municipality if the application is granted.” 40 Pa. 

Code §3.105(e)(4) (emphasis added). 

The PLCB maintains the regulation requires an ED License applicant 

to submit the written estimate of the benefit of the application at the administrative 

hearing. The only documentary evidence that Licensee submitted during the 

administrative hearing regarding the expected economic benefits to the Borough was 

Resolution 12-2015 of Borough Council approving its request for an ED License. 

However, Licensee presented a written estimate of the economic benefits of issuing 

an ED License to the trial court. Because Licensee did not present the economic 

impact document to the PLCB’s hearing examiner during the administrative

proceedings, the PLCB asserts Licensee did not meet this regulatory requirement.

In support, the PLCB cites Allison v. Pennsylvania Liquor Control 

Board, 131 A.3d 1075 (Pa. Cmwlth. 2016). There, the PLCB opposed renewal of a 

license based on criminal incidents and citations. During a de novo trial, the court 
10

accepted testimony regarding events that transpired after the administrative hearing, 

as well as subsequent remedial measures the licensee undertook in response to the 

citations. The lower court reversed the PLCB, and it renewed the license. This Court 

remanded to the lower court because it was not clear how the subsequent remedial 

measures and testimony regarding reduced noise affected the trial court’s disposition. 

Because the nonrenewal was based on certain citations and measures, evidence of 

continuing improvements could not form the basis for the trial court’s decision.

This case is distinguishable because it involves the application process. 

The evidence the trial court considered regarding the economic impact buttressed 

earlier testimony before the PLCB during the administrative proceeding, and the 

determination by the Borough that the ED License would benefit the community. 

The evidence did not concern events that transpired after the hearing as in Allison.

Significantly, a trial court is not limited to the record created before the 

PLCB, and may accept additional evidence. Irem Temple AAONMS. The trial 

court accepted additional evidence documenting revenue and expenses, as well as 

economic projections of the impact on the Borough. 

The regulation does not require monetary estimates of the economic 

impact on the community. Resolution 12-2015 memorializes the Borough’s 

estimation that issuing the ED License to Licensee would economically benefit the 

community. 
11

The PLCB also contends the trial court’s determination that Licensee 

met the exhaustion requirement is not supported by substantial evidence because 

Agent’s testimony about his efforts was vague and undocumented. We disagree.

Unlike the PLCB, the trial court credited Agent’s testimony regarding 

his numerous telephone calls and more than 100 form letters sent to existing 

licensees inquiring about the availability of their licenses for sale. Specifically, 

Agent testified as to his personal knowledge of the Borough non-ED licenses kept 

in safekeeping,9 and that the licenses were not available for sale. Based on Agent’s 

testimony, the trial court found that non-ED licenses in safekeeping were not 

available for sale. Tr. Ct., Slip Op., 11/16/17, F.F. No. 5. In these unique 

circumstances, an offer was unnecessary as Agent, who placed two licenses in 

safekeeping, knew the licenses were not available for sale to Licensee regardless of 

price. 

Agent also testified as to the going rate for such licenses based on his 

experience as a liquor license attorney. He advised Licensee of the approximate cost 

of licenses in the Borough and outside the Borough. Indeed, the PLCB found that 

licenses in the Borough cost an average of $500,000, and this finding is undisputed. 

F.F. No. 7. Agent also contacted a liquor license company regarding availability of 

licenses for sale. Because Agent received no replies to his inquiries of interest as to 

licenses for sale outside the Borough, there was no reason to specify the price 

Licensee was willing to offer. F.F. No. 9. The trial court determined these efforts 

met the exhaustion of reasonable means criterion.

 

9 Licenses in safekeeping are held for the benefit of the licensees that cease operations for 

15 consecutive days or more, and are available when operations resume. See 40 Pa. Code §7.31. 
12

The regulation does not require written documentation of the efforts an 

applicant or its agent undertook in assessing availability of licenses for sale, or 

approximate fees charged for such licenses. It requires evidence. Agent’s credited 

testimony, supported by the admission of his form letter to licensees inquiring as to 

availability of licenses for sale, is sufficient evidence here. R.R. at 89a, 188a-99a.

3. Evidence of Adverse Effects

Next, we consider whether the trial court erred in determining the 

record lacked evidence to prove that the granting of the ED License would adversely 

affect the health, welfare, peace and morals of the community. The PLCB contends 

the trial court erred because it placed the burden of proof on the PLCB. 

However, the PLCB’s license refusal grounds must be supported by 

substantial evidence. “Substantial evidence is such relevant evidence as a reasonable 

mind might accept as adequate to support a conclusion.” In re License Renewal 

Application of Quippan Club License #C-4110 LID #1889, 806 A.2d 491, 495 n.5

(Pa. Cmwlth. 2002). 

Here, the record is devoid of any evidence as to alleged adverse effects 

on the community. As a consequence, that basis for refusing the ED License was 

unsupported, and the trial court was correct in rejecting it. See, e.g., VRAJ, Inc. v. 

Pa. Liquor Control Bd. (Pa. Cmwlth., No. 2592 C.D. 2015, filed November 30, 

2016), 2016 WL 6994969 (unreported) (reversing trial court because substantial 

evidence did not establish adverse effects on community); In re 23rd St., Inc., 517 

A.2d 581 (Pa. Cmwlth. 1986) (same).
13

Further, the PLCB did not make any findings as to the adverse effects 

issuing an ED License to iPasta would have on the community. Instead, the PLCB 

assumed an adverse effect because the makeup of the neighborhood is 50% 

residential, and it is already served by five other licensees in the area. However, the 

mere presence of a licensee “is not ordinarily detrimental to the welfare, health and 

morals of the inhabitants of the neighborhood.” 23rd St., 517 A.2d at 582.

The PLCB argues the trial court nonetheless erred in granting the ED 

License because the location of the Premises within 200 feet of other licensed 

premises is alone sufficient grounds to refuse the license. However, as discussed 

above, this proximity does not require refusal of a license. Chadds Ford Tavern.

Additionally, the PLCB’s regulations authorize the Borough to 

determine the economic impact on the community at the outset. See 40 Pa. Code 

§3.101(a)(3) (issuance of a license when municipality approved issuance for the 

purpose of local economic development). Section 3.102 requires a municipality to 

refuse a request for an ED license when approval “would adversely affect the 

welfare, health, peace and morals of the municipality or its residents.” 40 Pa. Code 

§3.102(b)(3). Here, the Borough Council held a hearing, after which it approved the 

ED License by Resolution. Contrary to the PLCB’s contentions, this indicates that 

there is no adverse effect upon the Borough.

In sum, based on the administrative record and the de novo trial, the 

trial court found that Licensee met the “reasonable efforts” criterion. 40 Pa. Code 

§3.105(e). It also found the record contained no evidence to support a denial based 
14

on adverse effects on the community. Despite the proximity to other licensees, the 

trial court exercised its discretion to grant the ED License.

C. Waiver/Economic Hardship

The PLCB maintains the trial court erred as a matter of law in failing 

to defer to its narrow construction of the ED exception to the quota system. The 

PLCB contends that its construction was squarely before the trial court, and the trial 

court erred in rejecting that construction when it is entitled to administrative 

deference as to its construction of the Liquor Code and the regulations thereunder. 

It also asserts the economic hardship argument was sufficiently developed in the 

administrative and trial court proceedings to enable appellate review. As a result, 

the PLCB argues the trial court’s determination that it waived this argument must be 

rejected, and its license denial must be reinstated. 

Section 703(a) of the Administrative Agency Law states that a party 

“may not raise upon appeal any other question not raised before the agency.” 2 Pa. 

C.S. §703(a). Similarly, Pennsylvania Rule of Appellate Procedure 1551(a) states 

that “[n]o question shall be heard or considered by the court which was not raised 

before the government unit.” Pa. R.A.P. 1551(a). Accordingly, an issue not raised 

before the PLCB will not be considered by this Court on appeal.

Relevant here, before filing its Rule 1925(b) Statement, the PLCB did 

not use the term “economic hardship” in reference to the ED exception in this matter. 

P.S. Hysong v. Lewicki, 931 A.2d 63 (Pa. Cmwlth. 2007) (issues not raised in posttrial motions shall not be considered). The term does not appear in the Liquor Code 
15

or in the regulation outlining the criteria for an ED license, 40 Pa. Code §3.105. 

Further, there is no indication on the record that the PLCB was applying an “economic 

hardship” criterion to ED licensees generally or to Licensee. Also, the PLCB’s 

opinion makes no reference to the term “economic hardship.” See R.R. at 15a-42a.

This appears to be a new criterion developed by the PLCB after the de 

novo trial and the trial court’s adverse decision. As a result, this argument is waived. 

New Oxford Social & Athletic Club v. Pa. State Police, Bureau of Liquor Control 

Enforcement, 151 A.3d 286, 290 (Pa. Cmwlth. 2016) (“[T]he trial court’s review is

de novo, but only as to those issues properly preserved by appeal.”); Manayunk Dev. 

Corp. v. Pa. Liquor Control Bd., 699 A.2d 1373 (Pa. Cmwlth. 1997). 

Regardless of waiver, this Court is unpersuaded that the PLCB may

engraft an “economic hardship” criterion onto the Liquor Code or its regulations. This 

limitation amounts to a new requirement, not a construction of existing terms. As 

such, the PLCB may not impose it on licensees or prospective licensees without notice 

to enable prospective licensees to meet this criterion. Moreover, there is evidence that 

the PLCB granted an ED license to a café located near iPasta just seven months before. 

R.R. at 199a; 256a-57a. Agent shepherded that licensee through the process as well. 

Thus, the PLCB did not apply the same criteria to other licensees.

III. Conclusion

For the foregoing reasons, we affirm the trial court’s order.

 

ROBERT SIMPSON, Judge
IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Domusimplicis, LLC :

:

v. : No. 1930 C.D. 2017

:

Pennsylvania Liquor Control Board, :

Appellant :

O R D E R

AND NOW, this 14th day of January, 2019, the order of the Court of 

Common Pleas of Chester County is AFFIRMED.

 

ROBERT SIMPSON, Judge