The PLCB Vs. Everyone
September 24, 2024
Main Line Tonight
Types : In the News
The PLCB Is One Of The Most Powerful Agencies In PA. Should It Be?
This would be a David and Goliath story … if David was armed with a finely aged Cabernet instead of a slingshot. In this case, the Goliath is the Pennsylvania Liquor Control Board, which many hospitality professionals believe is an labyrinthine organization with power that is both unchecked and unnecessary.
The David is actually Jason – Jason Malumed, a mostly mild mannered, Main Line Millennial who grew up in Villanova and lives in Bryn Mawr. Malumed, a partner in MFW Wine Co., sells wine – “special order” wine, to use the PLCB’s exact term – to bars and restaurants. When Act 39 was passed in 2016, Malumed thought that the PLCB’s authoritarian control of his business would be lifted.
Act 39 allowed wine distributors to sell and deliver directly to restaurants, creating a wholesale tier that was privatized. “And, if we did that, the PLCB was not allowed to collect a handling fee on the wine,” Malumed said. “It was hailed as the largest modernization of the liquor code since Prohibition.”
Seeing the huge amounts of income that bars and restaurants were losing in 2020 because of the PLCB’s inaction convinced Malumed to take action. He turned to class action attorney John G. Papianou, a partner at Montgomery McCracken Walker & Rhoads. “According to Act 39, the PLCB should have created a direct delivery system to restaurants. There was no question about it,” Papianou said. “The PLCB was supposed to do this and didn’t.”
But a strongly worded letter wasn’t going to get it done. It would take legal action – maybe a lot of it. Papianou was up for it and, on behalf of MFW, filed a petition on April 15, 2020. “I said, ‘Let’s fight the PLCB,’” he remembered. “I wasn’t exactly sure how the PLCB would respond. But I was astonished at how intransigent the agency is. It was very disappointing.”
Within months, Pennsylvania’s Commonwealth Court ruled in favor of Malumed and MFW Wine Co. The court found that the PLCB had failed to implement the direct delivery system as required by law, and its inaction had caused real harm to wine distributors and restaurants alike. Instead of complying, the PLCB appealed the decision to the Pennsylvania Supreme Court.
The legal battle stretched on for years, winding its way through multiple courtrooms and legal filings. “It was so frustrating and it didn’t have to be this way,” Papianou said. “A 9th grader with basic coding knowledge could’ve implemented the system. So, it wasn’t that the PLCB couldn’t create the system. It was that they didn’t want to.”