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MAN O' WAR RACING ASSOCIATION v. STATE HORSE RACING COMMISSION (02/19/69)

decided: February 19, 1969.

MAN O' WAR RACING ASSOCIATION, INC., APPELLANT,
v.
STATE HORSE RACING COMMISSION



Appeals from order of State Horse Racing Commission, in case of Man O' War Racing Association, Inc. v. State Horse Racing Commission et al.

COUNSEL

Gordon W. Gerber, with him Raymond W. Midgett, Jr., John C. Newcomb, David J. Rachofsky, John T. Macartney, and Dechert, Price & Rhoads, for Man O' War Racing Association, Inc., appellant.

William F. Martson, Assistant Attorney General, with him Joseph P. Work, Deputy Attorney General, and William C. Sennett, Attorney General, for State Horse Racing Commission and the Commissioners, appellees.

Arlin M. Adams, with him Ralph S. Snyder, Bernard J. Smolens, and Schnader, Harrison, Segal & Lewis, for Continental Thoroughbred Racing Association, appellee.

Samuel E. Dennis, with him Richard R. Block, and Meltzer & Schiffrin, for Eagle Downs Race Track, Inc., appellee.

Gilbert Nurick, with him John J. Shumaker, David E. Lehman, and Shumaker, Williams & Placey, and McNees, Wallace & Nurick, for Pennsylvania National Turf Club, Inc., appellee.

Robert E. Woodside, with him Louis G. Feldmann, and Woodside & Woodside, and Feldmann & Ciotola, for Shamrock Racing Association, Inc., appellee.

Bell, C. J., Jones, Cohen, Eagen, O'Brien, Roberts and Pomeroy, JJ. Opinion by Mr. Justice Roberts. Mr. Justice Eagen concurs in the result. Concurring and Dissenting Opinion by Mr. Justice Pomeroy. Dissenting Opinion by Mr. Justice Cohen.

Author: Roberts

[ 433 Pa. Page 436]

The Pennsylvania Legislature enacted December 11, 1967, P. L. 707, a bill to authorize the conduct of thoroughbred horse racing with pari-mutuel wagering in the Commonwealth. In addition the legislation provided that an independent State Horse Racing Commission would be established and permitted to grant up to four licenses renewable annually for the conduct of horse race meetings for a maximum of 100 racing days each. Needless to say, the passage of the act provoked more than a little interest among various groups across the length and breadth of the Commonwealth; the Commission soon found itself in a position where it had to choose from among fifteen serious applicants.*fn1 It chose four, namely, The Continental Thoroughbred Racing Association, Inc., Eagle Downs Race Track, Inc., Pennsylvania National Turf Club, Inc. and the Shamrock Racing Association, Inc. It is these awards and the Commission's decision-making process which are raised as bases for Man O' War Racing Association's instant appeals; named as appellees are the four successful applicants, the Racing Commission and the individual members and chairman of the Commission, Member A. Marlyn Moyer, Member Thomas A. Livingston and Chairman Roy Wilkinson, Jr.

Before addressing ourselves to the issues raised by the appellant, since motions to quash have been filed in all of the appeals raising important questions about the relationship between decisions of administrative

[ 433 Pa. Page 437]

    agencies and review by our Court, we shall first pass on the merits of these motions. Basically the issues raised may be grouped into two categories -- whether an appeal lies from the decision of the Racing Commission and whether the appellant has standing to challenge the decision even if an appeal lies.

Appealability

The law in this Commonwealth is quite clear on the right to appeal from decisions of administrative bodies when the legislation does not explicitly provide for such a right. If an appeal is prohibited by an act, or the decision of an agency is described as final or conclusive, an appeal may be taken to the courts in the nature of narrow certiorari. In this type of appeal our inquiry is limited to questions of jurisdiction, the regularity of the proceedings, and constitutional issues. Keystone Raceway Corp. v. State Harness Racing Commission, 405 Pa. 1, 173 A.2d 97 (1961); Delaware County National Bank v. Campbell, 378 Pa. 311, 106 A.2d 416 (1954). On the other hand, if the legislation is silent as to the right of appeal or does not say that the decision of the administrative agency shall be non-appealable an appeal may be taken in the nature of broad certiorari. In these cases "the court may consider the record, including the testimony, to determine whether the findings are supported by competent evidence and to correct any conclusions of law erroneously made." Delaware County National Bank v. Campbell, 378 Pa. at 317-18, 106 A.2d at 419; Keystone Raceway Corp. v. State Harness Racing Commission, 405 Pa. at 6, 173 A.2d at 99; Ritter Finance Co., Inc. v. Myers, 401 Pa. 467, 165 A.2d 246 (1960).

In the legislation before us, Act of December 11, 1967, P. L. 707, 15 P.S. §§ 2651-75, there is no provision

[ 433 Pa. Page 438]

    for an appeal nor any section which would prohibit an appeal after the granting of a license.*fn2 Therefore, it follows that an appeal may be taken in the nature of a broad certiorari. The next question is whether this appeal will lie. The precondition to our review by certiorari was only recently reiterated in the Keystone Raceway case: "[F]or an appeal by certiorari to lie the order or action of the agency, board or commission must be judicial in nature." (Emphasis supplied.) 405 Pa. at 6, 173 A.2d at 100; Delaware County National Bank, supra. However the cases have not been either clear or consistent in their determination of what factors should be considered in deciding whether an action is judicial. Compare Delaware County National Bank v. Campbell, supra, with Ritter Finance Co. v. Myers, supra. See Newport Township School District v. State Tax Equalization Board, 366 Pa. 603, 609, 79 A.2d 641, 644 (1951).

Without entering into a lengthy and perhaps fruitless discussion over this question, it seems safe to say that regardless of which standard or standards are employed to determine whether an action or order is judicial, the grant by State Horse Racing Commission clearly is. First, the decision making power of the

[ 433 Pa. Page 439]

Commission and the manner in which it functions indicate judicial characteristics. Section 7 of the Horse Racing Act provides that "If, in the judgment of the State Horse Racing Commission, the public interest, convenience or necessity will be served thereby and a proper case for the issuance of such license is shown consistent with the purposes of this act and the best interests of racing generally, it may grant such a license . . . ." (Emphasis supplied.) Thus the Commission must judge the merits of each applicant in terms of complicated and multi-faceted statutory standards. This determination represents much more of an adjudicative process or judicial decision than that required in issuing, for example, occupational licenses, where the only determination is whether the applicant meets specific minimum standards. Further, the act itself contemplates that the Commission will be making determinations essentially judicial in character in light of the judgment which the Legislature committed to its Commission. In § 20 of Act of December 11, 1967, P. L. 707, the Commission is instructed that "it shall have the power to administer oaths and examine witnesses, and may issue subpoenas to compel attendance of witnesses, and the production of all material and relevant reports, books, papers, documents, correspondence and other evidence," in conjunction with its hearing power.*fn3

Second, the decisions made by the State Horse Racing Commission are so fraught with the public interest that an appeal must lie. See Ritter Finance Co. v. Myers, 401 Pa. at 475, 165 A.2d at 250. Appellants correctly point to the magnitude of the tax revenues to be raised,*fn4 the enormous amounts of money which

[ 433 Pa. Page 440]

    will be wagered at Pennsylvania tracks, the importance of responsible supervision of legalized gambling and the importance of the proper introduction of thoroughbred racing as a sport in the Commonwealth, to demonstrate the public interest implications of a decision by the Commission. Appellees respond to this persuasive argument with the notion that "the prior illegality of the type of business at issue makes it obvious that there can be no strong public policy requiring appellate review." In our view this is simply a non sequiter; factors other than the prior legality of an enterprise must determine whether the public has an important stake in such an undertaking. In fact, it is just those activities which at one time were illegal and which have been made legal in order to add revenue to the public coffers which tend to be more infected with the public interest.

Third, and finally, some courts have considered whether the action "substantially affects property rights" to determine if the action is judicial. See, e.g., Delaware County National Bank v. Campbell, 378 Pa. at 321, 106 A.2d at 421 (1954). To demonstrate that no such property rights are affected here appellees cite many cases which declare that liquor or horse racing licenses are privileges granted by the Legislature and thus do not represent property rights. See, e.g., Tahiti Bar, Inc. Liquor License Case, 395 Pa. 355, 150 A.2d 112 (1959); Fink v. Cole, 1 N.Y. 2d 48, 133 N.E. 2d 691 (1956); Rhode Island State Fair Assoc. v. Racing and Athletics Hearing Board, 80 R.I. 486, 98 A.

[ 433 Pa. Page 4412]

    d 821 (1953). In the technical sense this argument may be valid. One cannot have a property right in something which is being granted as a matter of legislative grace and one's current property rights are in no way affected by the grant of such a privilege to another.

However, to take such a narrow view of the licensing process herein involved not only yields an incongruous result, but also flies in the face of the test: does the decision "substantially affect property rights?" Indeed it must. That which is being granted is a very valuable privilege, even though it calls for a substantial investment. In addition, those who have sought a grant have expended large sums of money both for the application fee ($1,000) and in the preparation of the extensive application.*fn5 In a real sense the ultimate decision of the Commission in each instance involves large sums of money -- both private investment and public revenues. It is our view that the ...


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