Court Opinion

ID: 4950659
Source: CourtListenerOpinion
Date Created: 2021-09-24 12:58:51.195657+00
Date Added: 2024-06-11T08:15:20.152670
License: Public Domain

FRIEDMAN, Judge,
dissenting.
I respectfully dissent because I cannot agree that, under the facts of this case, Licensee “knew or should have known” about the illegal activities.
The Liquor Code provides that a license may be suspended or revoked and fines imposed for a violation of the Liquor Code or for other sufficient cause. Section 471 of the Liquor Code, Act of April 12, 1951, P.L. 90, as amended, 47 P.S. § 4-471. Violations of criminal laws1 other than the Liquor Code *1167can constitute other sufficient cause. Pennsylvania Liquor Control Board v. TLK, Inc., 518 Pa. 500, 544 A.2d 931 (1988). The Pennsylvania Supreme Court, in TLK, Inc., stated that it would not
apply the rigid standard of strict liability [applicable to violations of the liquor laws and regulations] when the subject conduct does not violate the liquor laws, but instead involves conduct prohibited by the Crimes Code, the Controlled Substance, Drug, Device and Cosmetic Act, or other penal legislation. In the latter cases, some element of scienter on the part of the licensee is required to endanger the liquor license.
Id. at 504, 544 A.2d at 933. The Court identified two principles which “go hand in hand” to determine the “quantum of guilty knowledge or intent [which] will justify proceedings against a liquor license”: (1) whether the licensee “knew or should have known of the illegal activities by an employee or patron”; and (2) whether the licensee took “substantial affirmative steps to guard against a known pattern of illegal activities.” Id. at 504-05, 544 A.2d at 933. In TLK, Inc., the Court applied these principles to the facts and determined that license revocation was proper. These same principles apply to this case; however, I believe that under the circumstances here, the license suspension was not warranted.
Here, there is no evidence that Licensee knew of the undercover agent’s drug dealings in the bar, nor of any other drug activities on the property. In fact, the Administrative Law Judges believed Mr. Nott’s2 testimony that he had no idea drug activity was occurring. (Adjudication at 13.) Thus, the license suspension and fine were imposed for Licensee’s lack of action during the period when Licensee had no actual knowledge of the illegal activities on the assumption that Mr. Nott “should have known” of these activities, many of which were completed outside in the parking lot, or even in another city. In TLK Inc., the court concluded that the licensee should have known of the drug trafficking at the establishment because of the pervasive nature of the illegal activity. There, the undercover agent not only purchased drugs himself, but “observed drug sales between patrons, sales of stolen goods, the use of drugs in the bathroom, and a drug sale take place in the presence of the bartender.” Id. at 506, 544 A.2d at 934. By contrast, in this case, all of the drug buys were initiated by and involved the undercover agent; there are no findings of other drug buys initiated or completed on the property.3
Here, the record and the findings simply do not support a conclusion that there was a discernible pattern of drug activity of which Licensee should have been aware. By analogy to tort law,4 a licensee should be held to the same standard as a reasonably prudent and intelligent person in his situation. The standard is one of reasonableness.5 The un*1168dercover agent is trained to recognize signs of drug activity and to gather information for a conviction;6 a licensee is not so trained. Without training, Licensee should not be expected to have recognized that this undercover agent was engaged in drug activity. In my opinion, this was not a discernible pattern of drug activity. Furthermore, the evidence shows that once Mr. Nott knew of the violations, he took extraordinary steps to stop it.
I would reverse and, accordingly, I dissent.

. Here, Licensee's liquor license was suspended and a fine imposed because of drug activity relat*1167ed to the property, apparently in violation of The Controlled Substance, Drug, Device and Cosmetic Act (Act), Act of April 14, 1972, P.L. 233, as amended, 35 P.S. §§ 780-101-780-144. There is no finding that Licensee or an authorized agent was convicted of violating this Act.

. Can, Inc. is the licensee. Mr. Ronald P. Nott, "a stockholder, officer, director and manager of Licensee,” was on the property during much of the investigation. (ALJs’ Findings of Fact, No. 46.)

. The only finding possibly indicating other drug activity, also involves the undercover agent's perceptions: She "noticed an excessive amount of activity of patrons using the restrooms and, within seconds, coming right back out. Such behavior is one activity that suggests unlawful drug transaction. Other activity that may be indicative of unlawful drug transactions also occurred at the licensed premises such as: frequent phone calls; leaving the premises and returning minutes later; [and] conversations concerning drugs.” (ALJs’ Findings of Fact, No. 47.) (Emphasis added.)

. With regard to the “should have known” standard, the Black’s Law Dictionary definition refers to the Restatement of Torts:
Should know. The words "should know" are used throughout the Restatement of Torts to denote the fact that a person of reasonable prudence and intelligence or of the superior intelligence of the actor would ascertain the fact in question in the performance of his duty to another, or would govern his conduct upon the assumption that such fact exists. Restatement, Second, Torts, § 12.
Black’s Law Dictionary 785 (5th ed. 1979).

. See Commonwealth v. $2,523.48 U.S. Currency, - Pa. -, 649 A.2d 658 (1994) (a parallel situation, involving the innocent owner defense *1168to a forfeiture action, in which the Supreme Court held: property owners are not required to perform heroic, vigilante or police actions in order to stop drug activity on their property; a property owner is not an adjunct of the law enforcement community; the standard is one of reasonableness).

. Presumably, the undercover agent is also trained to make buys in a somewhat surreptitious manner so as not to arouse the suspicions of her sources.