Opinion ID: 3189627
Heading Depth: 3
Heading Rank: 1

Heading: Appeal of SugarHouse at 175 EM 2014, J-59-2015

Text: 17 This rule provides in relevant part: (a) Appellate jurisdiction petition for review proceedings. A party to a proceeding before a government unit that resulted in a quasijudicial order may intervene as of right in a proceeding under this chapter relating to such order by filing a notice of intervention (with proof of service on all parties to the matter) with the prothonotary of the appellate court within 30 days after notice of the filing of the petition for review. Pa.R.A.P. 1531. [J-59-2015 and J-60-2015] - 13 In its first issue, SugarHouse claims that the Board’s decision to deny it leave to intervene in this proceeding on issues other than market saturation constituted an error of law and an abuse of discretion.18 SugarHouse argues that it had the requisite direct, 18 Stadium argues that this issue is waived since SugarHouse did not appeal the Board’s order as a collateral order at the time of its entry. Specifically, Stadium contends that the order of the Board denying the intervention of SugarHouse as to “issues of compliance with Sections 1304 and 1330” was a collateral order since it meets all three criteria established by Rule of Appellate Procedure 313(b) which define such an order: (1) it is “separable from and collateral to the main cause of action”; (2) it involves a right “too important to be denied review;” and (3) the question presented is such that if review is “postponed until final judgment” in the case, the claim will be “irreparably lost.” Stadium Brief (J-59-2015) at 8 (quoting Pa.R.A.P. 313(b)). Stadium reasons that, because the order limiting SugarHouse’s intervention was collateral, under our Court’s decision of In re Barnes Foundation, 871 A.2d 792 (Pa. 2005) (holding that individuals denied intervention in Orphan’s Court proceeding regarding restructuring of a charitable trust could not appeal from final order approving the restructuring, but, rather, were required to appeal from order denying intervention, as their lack of party status deprived them of standing to appeal), it was immediately appealable within 30 days of the date of its entry, and SugarHouse’s failure to take an appeal within that time period deprived our Court of jurisdiction to presently consider its appeal. SugarHouse responds that there is no provision of the Gaming Act which allows for a collateral appeal arising out of licensing proceedings. SugarHouse argues that Section 1204 of the Gaming Act governing appeals from license application proceedings before the Gaming Board permits only an appeal from a “final order,” in what SugarHouse contends was a deliberate restriction on appellate review in order to further the legislative objective of providing a streamlined appeals process for review of licensing decisions. SugarHouse Reply Brief at 23 (quoting 4 Pa.C.S. § 1204). Additionally, SugarHouse maintains that, because the Gaming Board’s order granted it limited intervention, it was not subject to immediate review, citing as support the decision of the United States Supreme Court in Stringfellow v. Concerned Neighbors in Action, 480 U.S. 370 (1987) (order granting limited intervention, and placing conditions on scope of intervention, was reviewable in an appeal from the final judgment; hence, interlocutory review was not permitted under the collateral order doctrine). SugarHouse contends that Barnes does not compel a different result, as that case involved an appeal from a court of common pleas decision, and the appellant in that case was denied intervention completely. Given that this matter is not a civil proceeding, as in Barnes, where intervention is governed by our rules of civil procedure, but, instead, intervention in this matter was sought under the Board’s unique procedural rules, and since the Board has taken no (continuedR) [J-59-2015 and J-60-2015] - 14 substantial, and immediate interest justifying its intervention, based on its averment that it would be harmed by the alleged unfair economic advantage in the competitive Philadelphia gaming market that Stadium would have gained by being awarded a license without complying with the licensure requirements of the Gaming Act. SugarHouse contends that the Board erred in determining that its interests could be adequately represented by the OEC since that entity had already submitted a suitability report prior to SugarHouse’s filing of its petition to intervene indicating that Stadium met the statutory requirements for licensure, and it refused to take a position before the Board regarding whether Stadium’s ownership structure was in compliance with Section 1330 of the Gaming Act. SugarHouse maintains that had it been given the opportunity to intervene it would have vigorously pressed arguments regarding this issue and would have reminded “the Board of its responsibility to examine carefully the issues raised by the joint ownership of Parx and Stadium.” SugarHouse Brief (J-59-2015) at 57. The Board responds that intervention is not a matter of right, but an exercise of discretion on its part, and intervention is limited under its regulations to only those circumstances in which a party has a direct, substantial, and immediate interest in the licensing proceeding. The Board argues that SugarHouse did not have an interest with respect to issues concerning Stadium’s compliance with Sections 1304 and 1330 of the Gaming Act which was any different than any other citizen who seeks to ensure compliance with the law; thus, in the Board’s view, SugarHouse did not have standing to assert these issues before the Board. In any event, according to the Board, SugarHouse’s claim essentially boils down to an allegation that the OEC did not present (Rcontinued) position on this issue, we will assume, arguendo, that this question is reviewable in this appeal from the Board’s final judgment. [J-59-2015 and J-60-2015] - 15 the issues in the way that SugarHouse would have done, had it been granted intervenor status, and this averment was not a basis for it to be granted intervention. The Board emphasizes that it granted SugarHouse intervention on the issue of market saturation because that issue affected its direct pecuniary interest due to the fact that the entity which was awarded the license would be a competitor of SugarHouse, and no other party had such a similar interest. However, the issues of each applicant’s comportment with the statutory eligibility criteria were “exactly the interest[s] that OEC, as well as every other competing applicant/party, had in this matter.” Board Brief (J-592015) at 25. The Board stresses that OEC did fulfill its responsibility to enforce the licensing requirements of the Gaming Act in that it investigated and reviewed the background of each applicant and made specific recommendations regarding each. The Board rejects SugarHouse’s argument that because the chief counsel for the OEC took no formal position before the Board challenging the licensing structure of Stadium, the Board did not consider that issue carefully. The Board points out that, in arriving at its decision, it examined the evidentiary record fully, as was its responsibility under the Gaming Act, and, moreover, the competing license applicants — which had substantial, direct and immediate interests in ensuring that the Board considered the licensing criteria of the Gaming Act — did present arguments on this question and reminded the Board of its duty to consider all of the relevant statutory factors. Our review of Board decisions is circumscribed by Section 1204 of the Gaming Act which mandates that our Court: shall affirm all final orders, determinations or decisions of the board involving the approval, issuance, denial or conditioning of a slot machine license or the award, denial or conditioning of a table game operation certificate unless it shall find that the board committed an error of law or that the order, determination or decision of the board was arbitrary and there was a capricious disregard of the evidence. [J-59-2015 and J-60-2015] - 16 4 Pa.C.S. § 1204. Thus, “this Court’s review of Board decisions is limited to determining whether the Board: (1) erred as a matter of law; or (2) acted arbitrarily and in capricious disregard of the evidence.” Greenwood Gaming & Entertainment, Inc. v. Pennsylvania Gaming Control Bd., 15 A.3d 884, 886-87 (Pa. 2011). A capricious disregard will be found whenever an administrative agency engages in a “willful and deliberate disregard of competent testimony and relevant evidence which one of ordinary intelligence could not possibly have avoided in reaching a result.” Id. However, “under the capricious disregard standard, the agency's determination is given great deference, and relief will be rarely warranted.” Riverwalk Casino, LP v. Pennsylvania Gaming Control Bd., 926 A.2d 926, 929 (Pa. 2007). In applying this standard “an appellate tribunal is not to substitute its judgment for that of the lower tribunal and the standard is not to be applied in such a manner as would intrude upon the agency's factfinding role and discretionary decision-making authority.” Id. at 930 (internal quotation marks omitted). As the Board has noted, an entity seeking intervention in slot machine licensing hearings does not have an automatic right under the Gaming Act to do so; rather, the decision to grant or deny intervention “is within the sole discretion of the Board.” 58 Pa. Code § 441a.7(z). Intervention is restricted to only those persons who have “an interest in the proceeding which is substantial, direct and immediate,” and, then, only when “the interest is not adequately represented in a licensing hearing.” Id. § 441a.7(z)(2). Our Court has described the essential requirements for a party’s interest to be considered substantial, direct, and immediate as follows: A party has a substantial interest in the outcome of litigation if his interest surpasses that of all citizens in procuring obedience to the law. The interest is direct if there is a causal connection between the asserted violation and the harm complained of; it is immediate if that causal connection is not remote or speculative. [J-59-2015 and J-60-2015] - 17 Johnson v. American Standard, 8 A.3d 318, 329 (Pa. 2010) (quoting Fumo v. City of Philadelphia, 972 A.2d 487, 496 (Pa. 2009)). Inasmuch as SugarHouse was a casino operator in Philadelphia at the time of these licensing proceedings and, as such, it would suffer financial detriment by the improper granting of a license to a competing casino within the City of Philadelphia, we agree with its contention that it had a substantial, direct, and immediate interest in the outcome of the licensing proceedings which was greater than the general interest possessed by all persons in ensuring compliance with the law. However, we discern no error of law, or arbitrary or capricious disregard of competent evidence in the Board’s determination that SugarHouse’s interests in ensuring that the successful applicant would meet all of the statutory requirements set forth in the Gaming Act for the award of the license were adequately represented during the licensing hearings. The extensive evidentiary record in this matter, and the Board’s comprehensive Adjudication, indicates that the Board carefully considered the question of whether Stadium’s ownership structure violated Section 1304(a) and 1330 of the Gaming Act based on the evidence presented to it by OEC and other parties on this question. Indeed, the matter of Stadium’s ownership structure, as presented in its original application, was specifically discussed at its licensing hearing, which prompted Stadium to present a revised ownership structure to the Board after the hearing. Adjudication at 11. SugarHouse does not identify any evidence on these questions which it was precluded from presenting to the Board during the hearings which was not otherwise considered by the Board in arriving at its decision.19 Moreover, as evident from the record and its Adjudication, the extensive factual and legal arguments with 19 In its Petition to Intervene, SugarHouse sought to conduct discovery on this issue, but this request was denied, Adjudication at 28 n.19, and it does not challenge this denial in the present appeal. [J-59-2015 and J-60-2015] - 18 respect to these questions were vigorously pursued before the Board by the other applicants, and continue to be pursued by Market East in this appeal; thus, we find no merit in SugarHouse’s assertion that allowing it to present arguments to the Board was somehow necessary in order to remind the Board of the need for it to consider these questions. Consequently, we see no basis to disturb the Board’s decision to limit SugarHouse’s participation in the licensing proceedings before it to the issue of market saturation.20 See, e.g., West Chester Area School District v. Collegium Charter School, 812 A.2d 1172, 1187 (Pa. 2002) (finding no abuse of discretion whenever the putative intervenor would not have presented additional evidence or arguments before the administrative tribunal, and its interests were represented by a party to the proceedings before the tribunal). Given this conclusion that SugarHouse’s intervention in the licensing proceedings was properly limited to the question of market saturation under the Board’s rules, we do not address SugarHouse’s remaining issues presented in its appeal. That is, with respect to these issues, it was not granted leave to intervene in the proceedings below, did not participate as a party in the licensing hearings with respect to those issues, and so will not be heard now.21 See 58 Pa. Code § 494a.11(a) (specifying that “[a] party may appeal final orders of the Board” (emphasis added)); Society Hill Civic 20 Notably, SugarHouse has abandoned the issue of market saturation in the present appeal. SugarHouse Brief (J-59-2015) at 2-3. As a result, we do not consider this question. Pa.R.A.P. 2119; Wirth v. Commonwealth, 95 A.3d 822, 837 (Pa. 2014). In addition, as no other party to this appeal raises this issue, we will not consider the arguments related to it raised in the amicus briefs of Delaware County and Chester Downs’ Casino. 21 We leave for another day consideration of the breadth of an intervenor’s right to be heard before this Court on issues for which it was erroneously denied intervention before the Board. [J-59-2015 and J-60-2015] - 19 Association v. Pennsylvania Gaming Control Board, 928 A.2d 175, 183 (Pa. 2007) (no standing to appeal from a decision of the Gaming Board by persons who were not parties below, or granted leave to intervene); cf. Appeal of Municipality of Penn Hills, 546 A.2d 50 (Pa. 1988) (recognizing the right of an administrative tribunal to limit intervention through its rules of procedure, and that scope of party’s intervention before the administrative tribunal is determinative of its rights to pursue issues on appeal). Nevertheless, we note that we have carefully reviewed SugarHouse’s arguments concerning these issues and have determined that they are duplicative of the arguments raised by Market East, which we address below in our discussion of its appeal.