Pennsylvania Liquor Control Board to Face Unprecedented Mandamus Damages Claim
July 8, 2024
Types : Press Releases
PHILADELPHIA, PA (July 8, 2024) – On July 2, 2024, the Pennsylvania Supreme Court unanimously held that sovereign immunity does not bar claims for mandamus damages against Commonwealth Agencies that commit clear violations of law. The decision is an extraordinary victory for citizens and businesses throughout the Commonwealth as it provides a clear message to Commonwealth Agencies that commit unlawful acts and seek to capitalize financially on their unlawful behavior: you cannot hide behind legal doctrines when you persist in violating the law.
The claims arise out of the Pennsylvania Liquor Control Board’s failure to implement a procedure for the direct delivery of special-order wine and liquor by June 1, 2017. In MFW Wine Co., et al. v. PLCB, 251 M.D. 2020, a team of Montgomery McCracken lawyers led by John G. Papianou brought an emergency petition against the PLCB demanding that it implement the procedure as required by law. Petitioners prevailed in the Pennsylvania Commonwealth Court after a full-day evidentiary hearing. The Pennsylvania Supreme Court affirmed the Commonwealth Court’s decision in a unanimous per curiam opinion.
Following the Supreme Court’s affirmance, petitioners submitted an application for damages and for the recovery of attorneys’ fees due. In addition, the Montgomery McCracken team brought a separate class action in Log Cabin Property, LP v. PLCB, 292 M.D. 2020, for the recovery of millions of dollars in handling fees that the PLCB unlawfully charged.
The PLCB objected to petitioners’ application for damages and for the recovery of handling fees, arguing that sovereign immunity precluded any award of money damages. The Commonwealth Court rejected the PLCB’s argument that sovereign immunity applies. “Where an agency acts outside the scope of the powers granted,” the Commonwealth Court wrote, “the immunity is lost.” In addition, the Commonwealth Court found the PLCB’s conduct over the course of the litigation to be so vexatious, dilatory, and obdurate that it ordered the PLCB to pay petitioners’ attorneys’ fees.
The PLCB appealed the Commonwealth Court’s decision to the Supreme Court. In a lengthy decision penned by Justice Donohue, all five Justices concluded that “sovereign immunity does not bar mandamus damages,” paving the way for petitioners to recover the damages they suffered at the hands of the PLCB. In addition, the Supreme Court affirmed the Commonwealth Court’s decision that sovereign immunity does not bar an award of sanctions. “As we have determined that mandamus damages under Section 8303 are not barred by sovereign immunity, this defense to the claim of attorneys’ fees lacks merit.”
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