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YOUNG J. LEE v. COMMONWEALTH PENNSYLVANIA (12/23/83)

decided: December 23, 1983.

YOUNG J. LEE, INC., T/A HITES FRIENDLY DRUG STORE, APPELLEE,
v.
COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF REVENUE, BUREAU OF STATE LOTTERIES, APPELLANT



COUNSEL

Nancy A. Patterson, Robert L. Liken, W. Michael Trant, Philadelphia, for appellant.

Samuel P. Kamin, Pittsburgh, for appellee.

Roberts, C.j., and Larsen, Flaherty, McDermott, Hutchinson and Zappala, JJ. Roberts, C.j., files a concurring opinion in which Larsen, J., joins. McDermott, J., files a concurring and dissenting opinion. Nix, J., did not participate in the consideration or decision in this case.

Author: Hutchinson

[ 504 Pa. Page 370]

OPINION OF THE COURT

The Department of Revenue (hereinafter "Department") has appealed from an order of the Commonwealth

[ 504 Pa. Page 371]

Court staying its revocation of appellee's lottery license. The Department of Revenue revoked appellee, Young J. Lee, Inc.'s, lottery license without a post-termination hearing. Because appellee raises a substantial constitutional question on the merits and there is no adequate remedy at law, Commonwealth Court, not the Board of Claims, had jurisdiction of appellee's case. However, since appellee failed to establish irreparable harm, which is required to obtain a stay, Pennsylvania Public Utility Commission v. Process Gas, 502 Pa. 805, 467 A.2d 805 (1983), we reverse Commonwealth Court and dissolve the stay.

On August 8, 1978, the Department gave appellee a license to sell lottery tickets. The Department granted the license under a contract in which appellee agreed to comply with all the terms of the State Lottery Law, 72 P.S. § 3761-1 et seq.*fn1

On December 7, 1981, Young Lee, appellee's president, pleaded guilty to ten counts of theft by deception in violation of § 3922 of the Crimes Code, 18 Pa.C.S.A. § 3922. According to the charges, on numerous separate occasions appellee had substituted generic drugs for those carrying brand names. The Department regarded appellee's guilty plea as conclusively establishing violation of the State Lottery Law and, on a breach of contract claim, exercised its discretion to revoke appellee's lottery license by letter dated June 24, 1982, effective July 6, 1982, without a hearing. The Department relied on § 3761-7(b)(3) of the State Lottery Law which provides as follows:

The secretary may refuse to issue a license pursuant to this section, or may suspend or revoke a license so issued if it [sic] shall find that the applicant or licensee: . . . (3) Has been found guilty of any fraud or misrepresentation in any connection.

72 P.S. § 3761-7(b)(3).

Appellee filed a petition for review and a motion to stay the Department's revocation in Commonwealth Court.

[ 504 Pa. Page 372]

Claiming that the revocation of its license was violative of due process because it occurred without a hearing, appellee sought injunctive relief. The Department filed a motion to quash, which was denied. The Department then filed a petition for reconsideration which was also denied. On December 3, 1982, Commonwealth Court ordered the Department to reinstate appellee's lottery license. The Department now appeals that decision.

Initially we note that appellee correctly asked the Commonwealth Court, under its exclusive appellate jurisdiction over final orders of government agencies, 42 Pa.C.S. § 763(a), to review the Department's revocation of its license as well as the Department's refusal to provide a hearing on the matter. However, Commonwealth Court incorrectly determined that appellee's application for a stay pending its review is within Commonwealth Court's original jurisdiction. 42 Pa.C.S. § 761. A stay, like a supersedeas, is an auxiliary process designed to supersede or hold in abeyance the enforcement of the judgment of an inferior tribunal. See Conston v. New Amsterdam Casualty Co., 366 Pa. 219, 77 A.2d 603 (1951). Thus, such applications for relief will not generally be entertained until after a notice of appeal or petition for review has been filed. Pa.R.A.P. 1702(a). In any case, any order granting a stay or supersedeas prior to an appeal will be vacated if no timely appeal or petition for review is filed. Pa.R.A.P. 1702(b). Moreover, an application for a stay pending action on a petition for review initially "shall ordinarily be made to the government unit." Pa.R.A.P. 1781. Thus, an application for a stay pending review pursuant to the Rules of Appellate Procedure is within the appellate, not the original, jurisdiction of Commonwealth Court.*fn2

[ 504 Pa. Page 373]

Since the application for a stay is within the appellate rather than the original jurisdiction of Commonwealth Court, the Department does not have an appeal as of right to this Court. The Department asserts that this Court has jurisdiction of its appeal under Pa.R.A.P. 311(a)(4). Rule 311(a)(4) provides for an interlocutory appeal as of right from "an order granting continuing, modifying, refusing or dissolving injunctions, or refusing to modify or dissolve injunctions." As a practical matter, this Court cannot interpret Rule 311(a)(4) to also permit interlocutory appeals of right from the grant or denial of a stay or supersedeas by Commonwealth Court.

However, since Judge Blatt determined that her interlocutory order granting a stay involved a controlling question of law as to which there is a substantial ground for difference of opinion, this Court in its discretion may permit the appeal from such interlocutory order. 42 Pa.C.S. § 702(b). We will do so in this case.

The Department argues that the Board of Claims has exclusive jurisdiction over all claims involving contracts with the Commonwealth under 72 P.S. § 4651-1, et seq.*fn3 Because the instant matter involved a contract between appellee and the Commonwealth, the Department concludes that the Commonwealth Court lacked subject matter jurisdiction. Appellee acknowledges that the Board of Claims has exclusive jurisdiction over contractual disputes with the Commonwealth. It contends, however, that its claim challenges the Department's power to revoke a license without a pre-revocation hearing under § 3761-7(b) of the State Lottery Law. Such constitutional claims, appellee concludes, cannot be addressed by the Board of Claims and are, consequently, properly raised before Commonwealth Court.

This Court has consistently held that the exclusive forum and remedy for all claims of $300.00 or more arising out of contracts with the Commonwealth is an action in the Board of Claims for monetary damages. Act of May 20,

[ 504 Pa. Page 3741978]

, P.L. 1104, No. 260, § 3, 72 P.S. § 4651-4. See Ezy Parks v. Larson, 499 Pa. 615, 454 A.2d 928 (1983) (collecting cases). However, in Ezy Parks we posited a constitutional limitation on the Board of Claims' jurisdiction, a limitation which is inherent because ...


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