Court Opinion

ID: 9752738
Source: CourtListenerOpinion
Date Created: 2023-08-28 18:31:34.1349+00
Date Added: 2024-06-11T09:46:41.445033
License: Public Domain

HUTCHINSON, Justice,
dissenting.
I dissent. The majority has succinctly summarized the tortured procedural history of this case with one significant *20omission: appellants never appealed from the order.of the Board dated August 29, 1979, reinstating the original suspension order of October 19, 1973. Rather, they chose to wait until the Court of Common Pleas held the Board in contempt for failing to enforce the reinstated suspension order.
Appellants have not themselves been held in contempt. The party in contempt has not appealed the contempt order, but instead has reinstated the suspension order.1 To permit appellants to challenge a contempt order not directed against them would open the door to interlocutory appeals by any party to litigation who fancied himself affected by an order of a trial court issued, in the course of litigation before it, to enforce its jurisdiction or process.2
Although a contempt order is a final, appealable order vis-a-vis the party held in contempt, it is not final and appealable by other participants in the litigation. Appellants, as parties-aggrieved by the agency’s order, could have attacked that order directly.3 They have not done so. Ap*21pellants should not now be conceded standing to assert the rights of the Board and thereby indirectly achieve the defeat of the legislative policies embodied in the Liquor Code.
Having concluded that the appellants have no standing to raise the contempt issue, we need not consider the issue decided by the majority: viz. whether the Board had the power to amend its suspension order without court approval following affirmance of the suspension order by the Court of Common Pleas.
Since the majority chose to reach the issue, I am constrained to express my disapproval of the result. The majority opinion effectively insulates from judicial review the question of whether the Board, in agreeing to modify its suspension order, upheld the strong statutory policy against a single person’s control of more than one distributor’s license.
This case arose from a management contract between licensees Elemar, Inc., Garrett Hill Beverage Company, Inc. and Rail Splitter, Inc. and General Programming, Inc., wherein General Programming permitted licensees to use the name “Thrifty Beverage” and to perform certain management services in exchange for a commission or fee based on licensees’ gross sales of beer, soda and other merchandise. The contracts in question each gave General Programming substantial control over the operation of licensees’ distributorships, including a right to control the alienation of the licensed corporation. Moreover, a separate contract between licensees and Judy Joe Consultants, Inc. provided for Judy Joe to perform many of the same services performed *22by General Programming.4 During an audit period, General Programming received $17,823.46 from Elemar for its management services while Judy Joe received $5,600.00. The combined total payments for management services paid by Elemar was 3.47 percent of its gross sales of $674,376.93. With respect to Garrett, General Programming received $26,036.91 and Judy Joe received $9,533.26. Garrett’s payment to General Programming alone constituted 4.71 percent of its gross sales whereas the contract called for a payment of only 4 percent. Since Rail Splitter was only in business for two months at the time of the audit, detailed figures were not available regarding payments from it. However, similar management contracts were in existence between Rail Splitter and General Programming and Rail Splitter and Judy Joe.
Based on the above facts, the Board concluded the management contracts were a sham and a method of exercising possessory and proprietary interests in licensees’ businesses in violation of Section 438(b) of the Liquor Code.5 Consequently, on August 25,1972, the Board suspended appellants’ licenses for twenty-one days and thereafter until persons other than the licensees had been divested of all interests in the licensed premises. On October 19, 1973, the Court of Common Pleas affirmed.
The licensees then appealed to the Commonwealth Court. While the matter was pending in the Commonwealth Court, the Board, the licensees, General Programming and Judy Joe entered into a Stipulation and Agreement dated August 19, 1974, whereby the three licensees would withdraw their appeals and, the consulting agreements would be redrafted, purportedly in conformity to the Common Pleas Court’s order of October 19, 1973. Thereafter, the licensees and the *23Board filed a separate stipulation, dated August 19, 1974, with the Commonwealth Court withdrawing the three appeals, stipulating to a remand of the case to the Court of Common Pleas and further stipulating that the Court of Common Pleas remand the case to the Pennsylvania Liquor Control Board. Neither stipulation was ever approved by the Commonwealth Court or by the Court of Common Pleas.
An unsigned revised “agreement” was submitted with the stipulation filed with the Commonwealth Court. While several of the incidents of ownership were omitted from the revised agreement, it provided an unstated percentage fee would still be charged for management services. The draft agreement did not include the amount of the percentage fee. Thus, it would appear that General Programming remains free to skim all of the profits of the licensees in violation of Section 438(b). There is no evidence that even if the revised agreement were executed the percentage fee would be submitted to the Board for approval. Moreover, there is no evidence the original agreement was, in fact, cancelled or the revised agreement was executed.
Whether the changes in ownership set forth in the stipulation accepted by the Board accomplish a complete divestiture of any outside interests is the only significant issue on the merits in this case. The strong policy of this Commonwealth is the prevention of interlocking ownership, disguised interests or silent partners in business entities involved in the sale of alcoholic beverages. That policy is specifically designed to ensure competitive marketing in the distribution of malt or brewed beverages and to prevent the control of those businesses by persons who have demonstrated they are likely to conduct their affairs without regard for the law.6 *24For persons seeking effective control of more than one distributorship, the question of whether they suffer a twenty-one day suspension or a $1,000.00 fine is insignificant so long as they can continue to control the licensee. This issue is not addressed by the majority and, indeed, was not argued or briefed. It was lost in the procedural labyrinth of this case.
While the Board may, as the majority holds, have discretion to modify the penalty for violations of Section 438(b) following an affirmance by the Court of Common Pleas, it does not have discretion to alter the measures necessary to bring a licensee into compliance with Section 438(b) once a violation has been found by the Board and affirmed by the *25Court of Common Pleas. The Court of Common Pleas held, as did the Board, that General Programming and Judy Joe must divest all interests in the licensed premises in order to comply with Section 438(b). The divestiture order was not part of the penalty imposed upon the licensees for violation of Section 438(b); rather the order reflected the holding of the Court of Common Pleas that the relationship between General Programming, Judy Joe and the licensees was a method whereby nonlicensees exercised possessory and proprietary interests in licensees’ businesses in violation of the statute. The Board does not have jurisdiction to ignore the holding of the Court of Common Pleas on this important question of law.
If the merits are to be reached, I would grant reargument and direct the parties to address this issue so that we can determine whether the modified order of the Board adequately safeguards the Commonwealth’s interest in preventing monopolies in the sale of alcoholic beverages or their infiltration and control by persons who have not subjected themselves to the Board for investigation and approval as persons who meet the statutory requirements for a license. To the extent necessary, I would also set forth understandable guidelines for the Board to follow in exercising the discretion it has been granted for the purpose of carrying out this legislative policy.

. The contempt proceedings were initiated in the Court of Common Pleas by the Pennsylvania Tavern Association (Association) and P.U.B.L.I.C., who are not parties to the license suspension proceedings, in order to force the Board to enforce the October 19, 1973 suspension order. The efforts by the Association and P.U.B.L.I.C. to obtain a contempt order followed this Court’s reversal of an order of the Commonwealth Court which granted a writ of mandamus requiring the Board to enforce its suspension order. See Pennsylvania Tavern Association v. Commonwealth, Liquor Control Board, 472 Pa. 567, 372 A.2d 1187 (1977). In connection with our per curiam opinion dismissing the mandamus action, three justices joined in suggesting that the Association and P.U.B.L.I.C. had an adequate remedy by way of a petition to the Court of Common Pleas to enforce its order sustaining the license suspension imposed by the Board. Id., 472 Pa. at 571-72, 372 A.2d at 1189.

. See Pugar v. Greco, 483 Pa. 68, 394 A.2d 542 (1978). It cannot be said that the contempt order against the Board effectively put appellant out of court with respect to the license suspension. See infra n.3.

. Such a direct attack could have been made by an appeal from the Common Pleas order of September 25, 1979, dismissing petitioners’ request for de novo review of the Board’s August 29, 1979 order reinstating the suspensions. This would have raised the issue of the Common Pleas Court’s jurisdiction as well as the issue of res judicata *21on which the lower court relied. It should be noted that this request for review was opposed by the Board. Neither here, nor in the Commonwealth Court, have appellants directly appealed from the Common Pleas Court’s denial of their petition for review of the suspension. The only matter before the Commonwealth Court and this Court was the contempt. The order of this Court staying the suspension was ancillary to the attack on the contempt, which I would find these appellants have no standing to raise.

. Both the Judy Joe and General Programming contracts provided the license or the corporate stock or any part thereof could not be transferred without offering the same to, or receiving the consent of, the respective contractors.

. Section 438(b) of the Act of April 12, 1951, P.L. 90, 47 P.S. § 4-438(b) provides “no person shall possess or be issued more than one distributor’s license.”

. See 47 P.S. § 4-436:
Application for distributors’, importing distributors’ and retail dispensers’ licenses, or for the transfer of an existing license to another premises not then licensed, shall contain or have attached thereto the following information and statements:
(a) The name and residence of the applicant and how long he has resided there, and if an association, partnership or corporation, the residences of the members, officers and directors for the period of two years next preceding the date of such application.
*24(c) Place of birth of applicant, and if a naturalized citizen, where and when naturalized, and if a corporation organized or registered under the laws of the Commonwealth, when and where incorporated, with the names and addresses of each officer and director, all of whom shall be citizens of the United States; if the application is for a distributor’s or importing distributor’s license and the applicant therefor is a corporation, the application shall also contain a statement of facts showing the qualifications of the corporation, as hereinbefore required, together with the names and addresses of all stockholders.
(d) Name of owner of premises and his residence.
(e) That the applicant is not, or in case of a partnership or association, that the members or partners are not, and in the case of a corporation, that the officers and directors are not, in any manner pecuniarily interested, either directly or indirectly, in the profits of any other class of business regulated under this article, except as hereinafter permitted.
(f) That the applicant is the only person in any manner pecuniarily interested in the business so asked to be licensed, and that no other person shall be in any manner pecuniarily interested therein during the continuance of the license, except as hereinafter permitted.
(g) Whether applicant, or in case of a partnership or association, any member or partner thereof, or in case of a corporation, any officer or director thereof, has during the three years immediately preceding the date of said application had a license for the sale of malt or brewed beverages or spirituous and vinous liquors revoked, or has during the same period been convicted of any criminal offense, and if so, a detailed history thereof.
and 47 P.S. § 4-437(c):
(c) Licenses shall be granted by the board only to reputable individuals or to associations, partnerships and corporations whose members or officers and directors are reputable individuals.