IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Louis A. DeNaples, :

Petitioner :

: v. : No. 2074 C.D. 2015 : Argued: September 14, 2016 Pennsylvania Gaming : Control Board, :

Respondent :
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge

HONORABLE ROBERT SIMPSON, Judge HONORABLE P. KEVIN BROBSON, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE ANNE E. COVEY, Judge HONORABLE JULIA K. HEARTHWAY, Judge HONORABLE JOSEPH M. COSGROVE, Judge

OPINION BY PRESIDENT JU DGE LEAVITT FILED: December 2 , 2016

Louis A. DeNaples petitions for review of an adjudication of the Pennsylvania Gaming Control Board (Board) that denied DeNaples’ request to modify two prior o rders of the Board . DeNaples argues that these orders have prevented him and his companies from doing business with the Mount Airy Casino
Resort

. DeNaples challenges the procedures by which the Board voted to deny his requested relief ; the Board’s interpretation of its prior orders ; and the propriety of
the Board’s prohibitions on his ability to do business in the gaming industry. We
affirm. Background

In 2007, the Gaming Board issued a Category 2 Slot Machine License

to Mount Airy #1, LLC, d/b/a Mount Airy Casino Resort (Mount Airy) and a2

Principal License to DeNaples, the sole owner of Mount Airy

. In 2008, the Board’s Bureau of Investigation s and Enforcement (Bureau) 1 accused DeNaples of making false statements to the Bureau d uring its background investigation on the license application s

. When DeNaples was arrested and charged with perjury, the Board suspended DeNaples ’ Principal License. In addition, the Board forb a d e DeNaples from receiving compensation, consideration, or distribution of funds related to Mount Airy or from exercis ing any control over Mount Airy . With Board approval, Mount Airy appointed a trustee to oversee the casino’s operations

.

In 2009, the Dauphin County District Attorney withdrew the perjury charge against DeNaples. The Board conditionally lifted its suspensi on of DeNaples’ Principal License, but it continued to restrict his involvement in Mount Airy’s operation s . Mount Airy filed a petition with the Board, seeking, among other things, to vacate the Board’s previous o rders. On September 23, 2009, the
Board g ranted Mt. Airy’s petition , but it imposed certain conditions to limit DeNaples’ interest in, and control of, Mount Airy. Conditi on 13 of the o rder, for example, provide d :

That Louis A. DeNaples may not receive, directly or indirectly, any remuneration, cash, or property distributions, from the Grantor II Trust of Lisa A. DeNaples, Mount Airy #1, LLC or Mount Airy Holdco, LLC, other than principal payments and interest payments from the various loans made to the Grantor II Trust of Lisa A. DeNaples.

1 The Bureau of Investigation s and Enforcement is an independent bureau within the Board, responsible , in part, for investigating and reviewing applicants and their applications for licenses, permits, or registrations. 4 Pa. C.S. § 1517(a).3

Cer tified Record (C.R.) Item 1, Exhibit C, at 4 ; Reproduced Record at 58a (R.R. __)

. In 2011, the Court of Common Pleas of Dauphin County expunged DeNaples’ arrest record and ordered that “no one, including law enforcement, state licensing authorities, o r other government officials, is permitted access to [DeNaples’ expunged records ] ....” C.R. Item 1, Exhibit F, at 1 ; R.R. 67a

. Following the expungement, Mount Airy filed a petition seeking, inter alia , an amendment to the Board’s September 23, 2009
, Order to lift all restrictions on DeNaples. On June 13, 2012, the Board denied Mount Airy’s request , stating that the restrictions in the September 23, 2009
, Order remain ed in place. The Board’s
order also allowed DeNaples’ Principal License to expire and his renewal application to be withdrawn without prejudice. Nevertheless, t he Board imposed
conditions similar to those that had appeared in its September 23, 2009
, Order. For example, Condition 5 in the June 13, 2012
, Order provides as follows :

The Childre n’s Trusts, Mount Airy #1, LLC (“Mount Airy”) or Mount Airy Holdco, LLC [] (“Holdco”) may not provide Louis A. DeNaples, directly or indirectly, any remuneration, cash or property distributions from any of the Children’s Trusts, Mount Airy or Holdco without prior Board approval.

C.R. Item 1, Exhibit I, at 2 ; R.R. 162a . Mount Airy petition ed the Board for a
declar ation that its June 13, 2012, Order did not prohibit Mount Airy from contracting with a business in which DeNaples ha d an ownership interest. The Board did not act upon that petition.

Mount Airy then petition ed the Board to modify its September 23,
2009
, and June 13, 2012
, O rders to allow Mount Airy to contract with a business in which DeNaples ha d an ownership interes t. A public hearing was held . The4

petition was tabled for a period of 90 days for the Office of Enforcement Counsel 2 and DeNaples to meet and discuss the scope of any background investigation required. When n o agreement was reached, the Board denied Mou nt Airy’s petition without prejudice.

On February 2, 2015, DeNaples petition ed the Board to modify its September 23, 2009
, and June 13, 2012
, Orders to remove all conditions that prevent him and his companies from doing business with Mount Airy. In t his petition, DeNaples assert ed, among other things, that the Board was prohibited
from investigat ing his 2008 perjury charge because the Dauphin County Court of
Common Pleas had expunged those arrest records . DeNaples also asserted that the
Board’s continuin g imposition of restrictions on him and his companies violated his state and federal constitutional rights. The Board had no reasonable basis to treat him and his companies differently than other gaming service providers. Finally, DeNaples alleged that t he Board’s position that he was unfit to do business with Mount Airy was discriminatory and unsupported by the record. The Office of
Enforcement Counsel filed an “Answer, Objection and New Matter
, ” to which DeNaples filed a response.

A public hearing was held. The Board voted four to three in favor of granting DeNaples relief. The Board, nevertheless, denied DeNaples’ petition
because there was not a qualified majority vote in his favor

. 3 The three dissenting

2 The Office of Enforcement Counsel is established within the Bureau and act s as the prosecutor in all noncriminal enforcement actions initiated by the Bureau. 4 Pa. C.S. § 1517(a.2).
3 By way of background, Section 1201(b) of the Pennsylvania Race Horse Development and Gaming Act (Gaming Act) provides that the Board “shall consist of the following members: (1) Three members appo inted by the Governor. (2) One member appointed by each of the following: (i) The President pro tempore of the Senate. (ii) The Minority Leader of the Senate. (iii) The Speaker of the House of Representatives. (iv) The Minority Leader of the House of (Footnote continued on the next page . . . )5

Board members filed an a djudication explain ing their votes. They opined that a full vetting would be required before the Board could lift the restrictions it had imposed on DeNaples because his conduct in the perjury case involved potential untruthfulness to the Board. Although the Dauphin County District Attorney decided to not pursue criminal charges against DeNaples, and the related record

was expunged, it did not follow that the alleged mis conduct did not occur. The dissenting members found that the expungement orders did not p rohibit either the
Bureau or the Office of Enforcement Counsel from inquir ing into DeNaples’ history. DeNaples had never explained the circumstances underlying his perjury charge. The Board further explained that i nformation available online could serve as an independent basis for inquiry. T he Board concluded that it had a reasonable basis to treat DeNaples differently than other gaming service providers by full y vetting him. DeNaples filed two petitions for reconsideration, in which he argued
that the Board erred in requiring a qualified majority vote to grant his petition

. Alternatively, he argued that the qualified majority vote rule is unconstitutional. The Board did not act on DeNaples’ petitions. DeNaples now petitions for this
Court’s review

. 4

(continued . . . ) Representatives.” 4 Pa. C.S. §1201(b). The Gaming Act further provides that a qualified majority vote consists of at least one gubernatorial appointee and the four legislative appointees. 4 Pa. C.S. §1201(f). Section 1201(f) is discussed in greater det ail later in this opinion.
4 Our review of the Board decision is to determin e whether the Board: “ (1) erred as a matter of law; or (2) acted arbitrarily and in capricious disregard of the evidence. ” Philadelphia Entertainment and Development Partners, L.P. v. Pennsylvania Gaming Control Board , 34 A.3d 261, 267 (Pa. Cmwlth. 2011).6 Appeal In his petition for review , DeNaples raises six issues, which we
combine into three for clarity . First, he argues that the Board erred in requiring a qualified majority of its members to act favorably on his petition. Alternatively, DeNaples co ntends that the qualified majority vote rule is unconstitutional. Second, DeNaples argues that the Board erred in finding that the September 23,
2009
, and June 13, 2012
, Orders prohibit Mount Airy from contracting with a
business in which he has an owners hip interest. Third, DeNaples asserts that the
Board erred in holding that it can subject him to a full vetting to become a gaming service provider of Mount Airy. We address these issues seriatim

. I. In his first issue, DeNaples argues that the Board erred in requiring a qualified majority vote to grant his petition to modify the Board’s September 23, 2009, and June 13, 2012, Orders . DeNaples asserts that a qualified majority vote applies only to matters involving “gaming licens es or orders or acts made by one or more members of the Board,” which does not include a petition to modify a
Board o rder. Petitioner ’s Brief at 63. DeNaples notes that when issuing the September 23, 2009
, and June 13, 2012
, Orders, the Board employed a simple majority vote. It follows that a modification of th o se o rders should likewise require no more than a simple majority vote. Even so, DeNaples argues that the qualified majority vote rule is unconstitutional
, facially and as applied to his petition.
The Board counters that all of its actions require a qualified majority
vote, except for imposition of a sanction in an enforcement

- type action

. A petition7

to modify a Board o rder does not meet this exception

. The Board also rejects DeNaples’ claim th at it used a simple majority vote when it issu ed the September 23, 2009
, and June 13, 2012
, Orders ; rather, it used the qualified majority vote. Finally, t he Board argues that this Court lacks jurisdiction to hear DeNaples’
constitutional challenges to the qualified majority vote rule because the Pennsylvania Supreme Court has exclusive jurisdiction over those claim s

.

T he Pennsylvania Race Horse Development and Gaming Act (Gaming Act) , 4 Pa. C.S. §§1101

- 1904, require s a qualified majority vote for

certa in Board actions. Section 1201(f) of the Gaming Act provides :

(f) Qualified majority vote.

-- (1) Except as permitted in paragraphs (2) and (3), any action, including, but not limited to , the approval, issuance, denial or conditioning of any license by th e board under this part or the making of any order or the ratification of any permissible act done or order made by one or more of the members, shall require a qualified majority vote consisting of at least one gubernatorial appointee and the four legislat ive appointees. (2) Any action to suspend or revoke, not renew, void or require forfeiture of a license or permit issued under this part, to impose any administrative fine or penalty under this part or to issue cease and desist orders or similar enforceme nt actions shall require a majority vote of all the members appointed to the board. (3) Notwithstanding any other provision of this part or 65 Pa. C.S. § 1103(j) (relating to restricted activities), a member shall disclose the nature of h is disqualifying interest, disqualify himself and abstain from voting in a hearing or proceeding under this part in which his objectivity, impartiality, integrity or independence of judgment may be reasonably questioned, as provided in8 subsection (h)(6) or section 1202.1(c)(3) (relating to code of conduct). If a legislative appointee has disqualified himself, the qualified majority shall consist of all of the remaining legislative appointees and at least two gubernatorial appointees.

4 P a. C.S. § 1201(f) ( emphasis added ). The Board has promulgated similar regulations regarding participation in meetings and voting. See 58 Pa. Code §403a.2. We agree with the Board that it properly applied a qualified majority

vote to decide DeNaples ’ petition. All actions of the Board, except those specifically enumerated, require a qualified majority vote. 4 Pa. C.S. § 1201(f)(1).
The enumerated actions subject to a simple majority vote under Section 1201(f) (2), such as suspension, revocation, or forfeiture of a license, are all administrative sanctions. DeNaples’ petition to modify the Board ’s o rders is not one of those
enumerated actions. We reject DeNaples ’ contrary argument

. By including the phrase “ including, but not limited to ” in Section 1201(f) (1) , the legislature intended that the qualified majority vote rule app l y to not just the specific actions
identified in that subsection. 4 Pa. C.S. §1201(f)(1). Stated otherwise, an action that is not specifically listed under Section 1201(f)(1) may nonetheless require a qualified majority vote, so long as it is not an enumerated exception in Section 1201(f)(2). T he Board did not err in applying a qualified majority vote to DeNaples’ petition.

We also agree with the Board that this Court does n ot have jurisdiction to hear DeNaples’ constitutional challenge to the qualified majority
vote rule. Section 1904 of the Gaming Act , 4 Pa. C.S. § 1904, provides :

The Pennsylvania Supreme Court shall have exclusive jurisdiction to hear any challenge to or to render a declaratory9 judgment concerning the constitutionality of this part

. [ 5 ] The Supreme Court is authorized to take such action as it deems appropriate, consistent with the Supreme Court retaining jurisdiction over such a matter, to find facts or to expedite a final judgment in connection with such a challenge or request for declaratory relief.

4 Pa. C.S. § 1904 (emphasis added). DeNaples’ challenge to the qualified majority
vote rule in Section 1201(f) of the Gaming Act , 4 Pa. C.S. § 1201(f), fa lls squarely
within the Supreme Court’s exclusive jurisdiction. This Court, accordingly, has no jurisdiction to consider that claim.
II.

DeNaples argues, next, that the Board erred in finding that its September 23, 2009
, and June 13, 2012
, Orders prohibit Mount Airy from contracting with a business in which DeNaples has an ownership interest. DeNaples construes the se o rders to prohibit him from receiving compensation from Mount Airy, but not to prohibit Mount Airy from contracting with his businesses. DeNaples also argues that the Board, through its broader interpretation
of the two o rders, effectively adjudicated him and his companies as “ Proh ibited Gaming Service Providers” 6 without following the established regulations and procedures fo r making such a designation . As a result, his due process rights were violated. Even assuming that the Board can interpret its own orders in this way
, DeNaples argues that the language of the two o rders was ambiguous and, thus, deprived him of adequate notice. The Board responds that DeNaples waived any

5 “[T]his part” refers to the entire Gaming Act, codified in Part II of Title 4 of the Pennsylvania Consolidated Statutes, 4 Pa. C.S. §§ 1101

- 1904.

6 See Section 1317.2(g) of the Gaming Act, 4 Pa. C.S. §1317.2(g), discussed in greater detail infra

.10

claim regarding the language of the September 23, 2009
, and June 13, 2012
, Orders by failing to raise it before the Board. In any case, t he Board argues that it
did not treat DeNaples or his bu sinesses as de facto p rohibited g aming s ervice

p roviders because it never identified any of these businesses as having violated the Board’s regulations.

Initially, we consider whether DeNaples’ claims regarding the Board’s September 23, 2009, and June 13 , 2012, Orders are ripe for review. 7 A court of law lacks “the ability to grant any relief that is merely advisory, one that does not involve any case or controversy.” Brown v. Pennsylvania Liquor Control
Board , 673 A.2d 21, 23 (Pa. Cmwlth. 1996). State d otherwise, an action “may not be employed to determine rights in anticipation of events which may never occur ... or as a medium for the rendition of an advisory opinion which may prove to be purely academic.” Id . An issue that “may” a r ise in the future “is not considered ‘ripe’ for judicial interpretation.” Id

. (citation omitted). As this Court observed in
Texa s Keystone Inc. v. Department of Conservation and Natural Resources , 851
A.2d 228 , 239 (Pa. Cmwlth. 2004) (citations omitted) , ripeness “arises out of a judicial concern not to become involved in abstract disagreements of administrative policies.... It has been defined as the presence of an actual controversy.... It insists on a concrete context, where there is a final agency action
so that the cour t can properly exercise their function.”

Whether the Board has interpreted its September 23, 2009
, and June 13, 2012
, Orders as prohibiting Mount Airy from contracting with DeNaples’

7 The Board does not raise the issue of ripeness. However, because ripeness is a jurisdictional issue, we may raise it sua sponte

. Texas Keystone, Inc. v. Department of Conservati on and Natural Resources , 851 A.2d 228 , 239 n.17 (Pa. Cmwlth. 2004).11

bu sinesses is unclear. The Board did not make that determination in the final o rder
that has been appeal ed in this case

. As DeNaples concedes, the only issue on which the Board voted was whether the restrictions imposed on Mount Airy by the September 23, 2009
, and June 13, 2012
, Orders should be lifted. Petitioner ’s Brie f
at 40. DeNaples did not question, and the Board did not consider, whether th o se restrictions applied to his busines ses

. DeNaples essentially asks this Court to interpret the language of the two Orders as authorizing Mount Airy to contract with
his bus inesses before the Board has had an opportunity to m ak e that determination.
Until the Board acts , t here is no controversy for this Court to review.

DeNaples also argues that the Board ’s interpretation of these orders
has effectively made him and his businesses p rohibited g aming s ervice p roviders
without follow ing the statutory procedures applicable thereto . Section 1317.2(g) (2) of the Gaming Act provides: “[t]he b oard shall ... [d]evelop and maintain a list of prohibited gaming service pr oviders. An applicant for a slot machine license or a slot machine licensee may not enter into an agreement or engage in business with a gaming service provider listed on the prohibited gaming service provider list.” 4 Pa. C.S. §1317.2(g) (2)

. The Board’ s regulation provides the criteria for placement on the prohibited gaming service provide r list:

(c) The Board may place a person on the prohibited gaming service providers list if: (1) The gaming service provider has failed to comply with this chapter. ( 2) The gaming service provider has failed to cooperate with Board staff in its review and investigation of the gaming service provider ’ s application.12 (3) The gaming service provider ’ s application for certification or registration has been denied or withdra wn with prejudice or the gaming service provider has had its gaming service provider certification or registration suspended or revoked. (4) The gaming service provider has failed to provide information to a slot machine applicant or licensee that is neces sary for the slot machine applicant or licensee to comply with this chapter.

58 Pa. Code §437a.8(c). In short , the Board has authority to name an individual or
business
, that has violated the regulation, as a p rohibited g aming s ervice p rovider
and prohibi t that provider from contracting with a slot machine licensee.

Here, the Board voted to deny DeNaples’ petition to modify its two prior Orders , thereby leaving in place the restrictions imposed on Mount Airy. However, t he Board did not prohibit DeNaples or his businesses from contracting
with other slot machine licensees. Nor did the Board find that either DeNaples or
his businesses had violated the regulation or place either one on the p rohibited

g aming s ervice p rovider l ist. As the dissenting members stated in the a djudication: “[n]o one on this Board has concluded that DeNaples has done anything improper.... Indeed, Chief Enforcement Counsel ... has repeatedly stated that his only desire is to clarify the record in an earlier investigation of DeNaples... .”
Board A djudication, 9/24/2015, at 12; C.R. Item 15, at 12. Because t he Board has

not place d DeNaples or his businesses on the p rohibited g aming s ervice p rovider list, we conclude that DeNaples’ claim is not ripe for review.
III. Finally, DeNaples argu es that the Board erred in finding that he should be subject to a full vetting to become a gaming service provider of Mount Airy. DeNaples argues that he should not be subject to any background13

investigation because he intends to do less than $100,000 of business with Mount Airy. 8 He asserts that the decision to impose a full vetting on him is discriminatory, lacks reasonable basis, and violates his constitutional rights. DeNaples further argues that because the Bureau and the Office of Enforcement
Coun sel are bound by the Dauphin County court’s order expunging the records of DeNaples’ arrest for perjury in 2008 , they cannot consider his arrest record or any information about his arrest that was independently discovered. DeNaples asks
this Court to orde r the Board to “preclude [the Bureau/Office of Enforcement Counsel] from accessing and/or using any of these expunged record s against [ him ] in any form of vetting or background investigation.” Petitioner’s Brief at 56. The
Board counters that DeNaples’ challenge to the scope of his background investigation is not ripe for this Court’s review. We agree.

8 Section 437a.1 of the Board’s regulation provides, in relevant part: (a) Except as provided in § 437a.10 (relating to emergency gaming service provider), a gaming service provider or person seeking to conduct business with a slot machine applicant or licensee shall apply to the Board for registration if: (1) The total dollar amount of the goods or services to be provided to a single slot machine applicant or licensee or to multiple slot

ma chine applicants or licensees will be or is anticipated to be equal to or greater than $100,000 but less than or equal to $500,000 within a consecutive 12

- month period. * * * (i ) A gaming service provider of a slot machine applicant or licensee whose

co mpensation does not exceed the monetary thresholds contained in this section

... may be required to be registered or certified if the Board determines that registration or certification is necessary to protect the integrity of gaming. 58 Pa. Code § 437a.1. D eNaples argues that he need not be subject to any background investigation because the Board never determined in his case that registration or certification was required to protect the integrity of gaming. Petitioner’s Brief at 46.14 In the a djudication, t he dissenting Board members suggested that the
Bureau do a full vetting on DeNaples before the restrictions on Mount Airy can

eve r be lifted. However, t he only issue before the Board, as noted earlier, was whether to grant DeNaples’ petition to lift the restrictions imposed on Mount Airy by the September 23, 2009
, and June 13, 2012
, Orders. When he filed this petition, DeNaples ha d not been subject to vetting by the Bureau; in fact, he has not been

vett ed since 2006 . There is simply no final agency action on the vetting issue for
this Court to review. Although DeNaples may disagree with the dissenting Board members’ suggestion t hat he be fully vetted, t his Court will not “become involved in abstract disagreements of administrative policies.” Texas Keystone , 851 A.2d at
239. D etermining the scope of DeNaples ’ background investigation at this juncture would be an improper advisor y opinion.
Conclusion
For all of these reasons , we affirm the Board’s September 2, 2015
,

o rder.

_________________________________________________ MARY HANNAH LEAVITT, President JudgeIN THE COMMONWEALTH COURT OF PENNSYLVANIA

Louis A. DeNaples, :

Petitioner :

: v. : No. 2074 C.D. 2015
: Pennsylvania Gaming : Control Board, :

Respondent :

O R D E R

AND NOW, this 2 nd day of December , 2016, the order of the Pennsylvania Gaming Control Board dated September 2 4 , 2015, in the above

captioned matter is hereby AFFIRMED.

_____________ _

_________________________ MARY HANNAH LEAVITT, President Judge