Opinion ID: 765006
Heading Depth: 2
Heading Rank: 4

Heading: Policy Issues: Were the Plaintiffs the Intended Beneficiaries of the Liquor Code?

Text: 116 The plaintiffs also contend that proximate causation is present in a civil RICO case where the alleged racketeering conduct effects violations of a regulatory regime designed to protect the plaintiffs. See, e.g., Rodriguez v. McKinney, 878 F. Supp. 744, 747-49 (E.D. Pa. 1995); Trautz v. Weisman, 819 F. Supp. 282, 287 (S.D.N.Y. 1993); see also In re Orthopedic Bone Screw Prods. Liab. Litig., 159 F.3d 817, 826-27 (3d Cir. 1998) (recognizing a similar principle in the context of state common-law fraud claims). Although this may be a valid principle, we find it inapposite in the present case, as the condition of its application is not present here. 117 The purpose of the Pennsylvania Liquor Code is to promote temperance, not to protect small-business owners or ensure competition among beer retailers: 118 The provisions of [the Liquor Code] are intended to create a system for distribution that shall include the fixing of prices for liquor and alcohol and controls placed on prices for malt and brewed beverages, and each of which shall be construed as integral to the preservation of the system, without which system the Commonwealth's control of the sale of liquor and alcohol and malt and brewed beverages and the Commonwealth's promotion of its policy of temperance and responsible conduct with respect to alcoholic beverages would not be possible. 119 Pa. Stat. Ann. tit. 47, § 1-104(d) (West 1997) (emphasis added); see also § 1-104(a) (This act shall be deemed an exercise of the police power of the Commonwealth for the protection of the public welfare, health, peace and morals of the people of the Commonwealth and to prohibit forever the open saloon . . . .); Altshuler v. Pennsylvania Liquor Control Bd., 729 A.2d 1272, No. 2126 (Pa. Commw. Ct. May 13, 1999) (The purpose of the Liquor Code is not to promote the sale of liquor, rather it is to regulate and restrain the sale of liquor.). At least one court has recognized that the Liquor Code was, in fact, not at all intended to protect the economic interests of liquor retailers. See Lancaster County Tavern Assn. v. Pennsylvania Liquor Control Bd., 14 Pa. D. & C.3d 381 (Lancaster Cty. C.P. Ct. 1980). 120 The plaintiffs submit that even if the purpose of the Liquor Code is not to protect retailers like themselves, the effect of the Code, and one of the goals of the LCB in enforcing it, is to protect retailers and competition. But although the LCB's efforts to enforce the Code may have resulted largely in a predominance of beer retailers similar to the plaintiffs, that does not render large-scale stores like the Beer World stores automatically illegal. Accordingly, we do not think that the principle of Rodriguez, were we to adopt it, would compel a finding of proximate causation. We will therefore affirm the District Court's grant of summary judgment on the plaintiffs' RICO claim. 121 For the foregoing reasons, the judgment of the District Court will be reversed to the extent that it granted summary judgment to the defendants on the plaintiffs' antitrust claims, but affirmed in all other respects, and the case will be remanded to the District Court for further proceedings in accordance with this opinion.