The opinion of the court was delivered by: Hon. John E. Jones III
THE BACKGROUND OF THIS ORDER IS AS FOLLOWS
Currently pending before the Court are two motions to dismiss the amended complaint of Plaintiff Keystone Redevelopment Partners, LLC ("Keystone"). Both motions to dismiss (collectively, "the Motions"), filed by Intervenor/Defendant HSP Gaming L.P. ("HSP") and the Board Defendants respectively,*fn1 were filed on March 27, 2009. (Doc. 51) (the "HSP Motion"); (Doc. 53) (the "Board Motion"). For the following reasons, we shall grant in part and deny in part the Motions.
On December 18, 2008, Plaintiff Keystone initiated the instant action by filing a complaint against numerous members, past and present, of the PGCB. (Doc. 1). On January 9, 2009, HSP lodged a motion to intervene pursuant to Federal Rule of Civil Procedure 24, (Doc. 10), which we granted by way of our February 18, 2008 Order, (Doc. 37). On March 18, 2009, Keystone filed an amended complaint. (Doc. 46). On March 27, 2009 the HSP and Board Motions were filed accompanied by supporting briefs. (Docs. 51-54). On April 28, 2009 Keystone filed a joint brief in opposition to both motions. (Doc. 61). On May 11, 2009, both HSP and the Board Defendants filed reply briefs. (Docs. 62, 63). On May 22, 2009, after receiving permission from the Court, Keystone filed a sur- reply brief addressing the Board Defendants' reply brief. (Doc. 67). Accordingly, having been fully briefed, the Motions are ripe for disposition.
In considering a motion to dismiss pursuant to Rule 12(b)(6), courts "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)).
A Rule 12(b)(6) motion tests the sufficiency of the complaint against the pleading requirements of Rule 8(a). Rule 8(a)(2) requires that a complaint contain a short and plain statement of the claim showing that the pleader is entitled to relief, "in order to give the defendant fair notice of what the claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. A plaintiff must make "a 'showing' rather than a blanket assertion of an entitlement to relief," and "without some factual allegation in the complaint, a claimant cannot satisfy the requirement that he or she provide not only 'fair notice,' but also the 'grounds' on which the claim rests." Phillips, 515 F.3d at 232 (citing Twombly, 550 U.S. at 555 n.3). "[A] complaint must allege facts suggestive of [the proscribed] conduct," and the "[f]actual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555, 563 n.8. Therefore, "stating a claim requires a complaint with enough factual matter (taken as true) to suggest the required element." Phillips, 515 F.3d at 234 (quoting Twombly, 550 U.S. at 555 n. 3).
On the other hand, "a complaint may not be dismissed merely because it appears unlikely that the plaintiff can prove those facts or will ultimately prevail on the merits." Id. at 231(citing Twombly, 550 U.S. 554-56, 563 n.8). Rule 8 "does not impose a probability requirement at the pleading stage, but instead simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element." Id. at 234.
In resolving a motion to dismiss, the court may consider "matters of public record, orders, exhibits attached to the complaint, and items appearing in the record of the case." Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1385 n. 2 (3d Cir. 1994).
III. FACTUAL BACKGROUND*fn2
Pennsylvania's Race Horse Development and Gaming Act, 4 Pa.C.S. §§ 1101 et seq. (the "Gaming Act"), authorized five stand-alone slot machine facilities in the Commonwealth, with two such facilities to be specifically located in Philadelphia. 4 Pa.C.S. § 1304(b). In December 2005, Keystone was one of five entities*fn3 that submitted applications for the Philadelphia slot machine licenses. The PGCB held hearings related to the applications, (see Amend. Compl. ¶ 19), and received evidence comparing an applicant to its competitors, as authorized by 58 Pa. Code § 441a.7.(n). On December 20, 2006, after having considered the proposals, presentations, and evidence proffered by all applicants, the PGCB rendered its decision, and on February 1, 2007 it issued an Adjudication and Order (the "Adjudication") memorializing the reasons therefor.
In the Adjudication, the PCGB noted that while a Keystone affiliate, Trump Entertainment Resorts, owned several casinos in Atlantic City, "neither HSP nor [PEDP had] ties to any casino properties in Atlantic City, New Jersey." (Adjudication, Rec. Doc. 11-3 at p. 100). Such an affiliation was an important consideration for the PGCB in light of New Jersey's much lower tax rates on gaming revenues. (Adjudication, Doc. 11-3, pp. 99-100).*fn4 To this end, the PGCB explained that "if a casino operator in Philadelphia also owned a casino in Atlantic City," there was the potential for "that operator [to] use the Philadelphia market to gain patrons who would then be diverted to the Atlantic City property through promotional marketing in order to gain advantage of the lower tax rate for the casino in Atlantic City. In [doing so], the operator will obtain more profit from the same dollar gambled in Atlantic City than it will in Pennsylvania because of the much higher tax rate which the operator must pay here." (Adjudication, Rec. Doc. 11-3 at pp. 99-100).
While the PGCB purportedly considered a multitude of factors in rendering its decision, an affiliation with an Atlantic City casino was one such factor that was construed negatively against an applicant.*fn5 (Id. 100). Specifically, the PGCB stated:
While the Board believes that each applicant desires to make a profit in Philadelphia if granted a license, the Board also is cognizant of its duty to license casinos in Philadelphia which are in the best interests of the Commonwealth and Philadelphia. The Board finds it credible that owners of casinos in both locations may attempt to use the Philadelphia property as a gambling-incubator to gain new customers who will then be lured to its Atlantic City properties where it can earn a much larger profit on every dollar gambled. Likewise, the Board finds applicants without Atlantic City connections are more strongly motivated to compete directly against the Atlantic City competition because they have no interest in diverting patrons to the casino which has a better tax structure for the casino. Additionally, evidence has been introduced that the Trump Entertainment properties in Atlantic City have undergone bankruptcy reorganizations in order to rebuild and revitalize them. The Board believes this further supports its decision to choose other applicants who do not have other facilities so close to Philadelphia which may lure patrons to Atlantic City to assist in the rebuilding and revitalization of properties there. Therefore, the Board finds that licensing casinos in Philadelphia which do not have common ownership with Atlantic City facilities are more likely to further the interests of the Commonwealth and the public which stands to benefit through increased revenues obtained by the Pennsylvania properties.
Id. 100-01. Ultimately, the PGCB voted unanimously to approve the license applications of PEDP.*fn6 (Amend. Compl. ¶ 17). In doing so, the Board unanimously voted to deny the Category 2 license applications of Keystone, Riverwalk, and Pinnacle.
Despite the fact that § 1204 of the Gaming Act provided the right of direct appeal to the Pennsylvania Supreme Court, 4 Pa.C.S. § 1204, Keystone elected not to appeal the PGCB's licensing decision. Riverwalk, however, did lodge such an appeal, which was ultimately denied by the Pennsylvania Supreme Court on July 17, 2007. See Riverwalk Casino, LP v. Pennsylvania Gaming Control Bd., 926 A.2d 926 (Pa. 2007).*fn7
In lieu of exercising its right of appeal or intervening in Riverwalk's appeal, Keystone elected to challenge the PGCB's licensing decision by instituting the instant federal lawsuit on December 18, 2008.*fn8 As aforestated, it filed an amended complaint on March 18, 2009, which contains the following counts: (i) Count I--violation of the Commerce Clause asserted against the Former Board Defendants; (ii) Count II--violation of the Commerce Clause asserted against Current Board Defendants; (iii) Count III--violation of the Equal Protection Clause asserted against Former Board Defendants; (iv) Count IV--violation of the Equal Protection Clause asserted against Current Board Defendants; and (v) Count V--violations of the First Amendment Right to Petition and Equal Protection Clause asserted against Current Board Defendants.*fn9 (See Amend. Compl. ¶¶ 50-85). Keystone seeks monetary, injunctive, and declaratory relief related to these claims, as well as attorney's fees and expenses. (See id.).*fn10
Both the HSP Motion and the Board Motion argue that the amended complaint should be dismissed based on certain threshold considerations. The Board Motion additionally argues for dismissal based on Keystone's failure to allege a claim upon which relief can be granted. We will address the arguments propounded under both categories in turn.
A. Threshold Considerations
The threshold matters that we must address include issues involving abstention; jurisdiction, ripeness, and justiciability; res judicata and collateral estoppel; waiver of claims; and absolute and qualified immunity. We address these issues ad seriatim.
The Board Defendants assert that abstention is appropriate under the dictates of R.R. Comm'n of Texas v. Pullman, 312 U.S. 496 (1941). As the Third Circuit has explained, "the Pullman doctrine authorizes federal court abstention when a constitutional challenge is intertwined with an ambiguous issue of state law and a likelihood exists, therefore, that clarification of the state law issue will substantially affect the constitutional inquiry." Afran v. McGreevey, 115 Fed. Appx. 539, 542 (3d Cir. 2004) (citing id.). The application of Pullman abstention is a two-step process. First, the court must find that the following three factors are satisfied: "(i) Uncertain issues of state law underlying the federal constitutional claims brought in federal court; (ii) State law issues amenable to a state court interpretation that would obviate the need for, or substantially narrow, the scope of the adjudication of the constitutional claims; [and] (iii) A federal court's erroneous construction of state law would be disruptive of important state policies." Afran, 115 Fed. Appx. at 542 (citations omitted). Second, if all of these factors are present in the case, the court "must then make a discretionary determination as to whether abstention is in fact appropriate under the circumstances of the particular case, based on the weight of these criteria and other relevant factors." Id. (quoting Chez Sez II Corp. v. Twp. of Union, 945 F.2d 628, 631 (3d Cir. 1991)).*fn11
In light of this standard, the Third Circuit Court of Appeals has held, "If the state statute in question, although never interpreted by a state tribunal, is not fairly subject to an interpretation which will render unnecessary or substantially modify the federal constitutional question, it is the duty of the federal court to exercise its properly invoked jurisdiction." Id. at 543. In the case at bar, we do not believe that the Gaming Act is reasonably susceptible to an interpretation that would obviate or substantially modify the Equal Protection and Commerce Clause issues raised by Keystone, and the Board Defendants have failed to proffer such an interpretation.*fn12 Consequently, we decline to invoke Pullman abstention with regard to Plaintiff's Equal Protection and Commerce Clause claims insofar as they are based upon the PGCB's licensing decision. We deny the Board Motion to this extent.
However, for the following reasons, we do believe that Plaintiff's § 1308(c) claim should be dismissed on Pullman grounds.*fn13 Important to this conclusion is our cognizance of the disagreement between Keystone and the Board Defendants related to the proper interpretation of the provision. The Plaintiff asserts that § 1308 (c) applies in a way that "unconstitutionally conditions consideration for a license on an applicant's waiver of rights protected by the First and Fourteenth Amendments," "unconstitutionally deters entities from exercising their rights to access the courts and to petition for redress for [the PCGB's] violations of law," and that "unconstitutionally discriminates against and denies applicants the equal protection of the law by excluding from consideration for a license those applicants that are exercising the constitutional right to seek redress for [the PGCB's] violations of law." (Amend Compl. ¶¶ 81-83). Accordingly, Keystone avers that as a result of the instant litigation, the PGCB will invoke § 1308(c) in denying its petition to re-open the licensing process.
To the contrary, the Board Defendants assert that § 1308(c) applies in a situation where an entity is appealing a prior licensing decision and, while the appeal is pending, files another application. In such a circumstances, § 1308(c) merely precludes the PGCB from considering the new application while the appeal related to the old application is pending. The Board Defendants assert that such a provision is necessitated by the goals and objectives of the Gaming Act. Specifically, they assert that the provision promotes the following policies: (i) preventing monopolization of Category 2 licences; and (ii) honoring the numerosity restriction on license ownership. Accordingly, the Board Defendants conclude that the restriction in § 1308(c) in no way inhibits an applicant's access to the court but instead serves to impose restrictions designed to promote the interests and policies advanced by the Gaming Act.
This disagreement over the proper interpretation of § 1308(c), certainly highlights the fact that there are uncertain issues of state law involved in this case. Furthermore, these uncertain issues form the basis of the claims contained in Count V of the amended complaint. Additionally, were the Board Defendant's interpretation accurate, the Plaintiff's First Amendment and Equal Protection claims related to § 1308 (c) might be rendered moot or, in the least, may be substantially altered. This issue is amenable to and appropriate for state court interpretation, and is fraught with the peril of misinterpretation by this Court that might disrupt Pennsylvania's licensing policies. Consequently, the three factors of the first step of the Pullman analysis are satisfied with respect to Keystone's challenge to § 1308 (c). We believe that the discretionary factors weigh in favor of abstention particularly because there is no obvious prejudice that would be inflicted upon Keystone by any delay occasioned by our abstention. Accordingly, we will grant the Board's Motion to the extent it seeks dismissal of Count V of the amended complaint on Pullman grounds.
In addition to Pullman abstention, both HSP and the Board Defendants urge us to dismiss Counts II and V of the complaint in toto pursuant to the abstention doctrine enunciated in Burford v. Sun Oil Co., 319 U.S. 315 (1943). The Board Defendants also ask this Court to invoke Burford abstention as the basis for dismissing Counts I and III insofar as they request equitable relief.
The Burford Court held that federal courts should abstain from questions of state law that are of local concern and within the special competence of local courts. See generally id. Burford abstention is designed to prevent federal courts from interfering with "a state's efforts to regulate areas of law in which state interests predominate and in which adequate and timely state review of the regulatory scheme is available." Chiropractic America v. Lavecchia, 180 F.3d 99, 104 (3d Cir. 1999) (citing Burford, 319 U.S. at 332-34). Accordingly, Burford abstention is a two-step process. First, a court must determine whether timely and adequate state law review is available. Matusow v. Trans-County Title Agency, LLC, 545 F.3d 241, 247 (3d Cir. 2008) (quoting Riley v. Simmons, 45 F.3d 764, 771 (3d Cir. 1995)). Second, the court must determine "(i) whether the particular regulatory scheme involves a matter of substantial public concern; (ii) whether it is the sort of complex technical regulatory scheme to which the Burford abstention doctrine usually is applied; and (iii) whether federal review of a party's claims would interfere with the state's efforts to establish and maintain a coherent regulatory policy." Hi-Tech Trans., LLC v. New Jersey, 382 F.3d 295, 304 (3d Cir. 2004) (quoting Chiropractic America, 180 F.3d at 105).
We do not believe that Keystone's opposition brief takes issue with the first step of the Burford abstention analysis. Nonetheless, we note that § 1204 of the Gaming Act provides licensing applicants with a direct right of appeal to the Pennsylvania Supreme Court for any final order, determination, or decision of the PGCB involving the approval, issuance, denial or conditioning of slot machine license. 4 Pa.C.S. § 1204. Accordingly, even if Keystone had challenged the first step of the Burford abstention analysis, we would hold that that step has been satisfied.
With regard to the second step, Keystone concedes that the Gaming Act is of substantial public concern, (Doc. 61 p. 85), and so the first factor of the second step is satisfied. After examining the Gaming Act, we are of the opinion that it exemplifies the type of complex, technical, and intertwined regulatory scheme to which Burford abstention is customarily applied.*fn14 Accordingly, we address the third factor, which will require us to determine whether, in light of the nature of Keystone's claims, federal intervention will likely disrupt Pennsylvania's efforts to maintain a coherent regulatory policy related to Category 2 licensing determinations. See Chiropractic, 180 F.3d at 107 (addressing the nature of plaintiff's claims in order to determine whether federal intervention would interfere with a state's regulatory scheme).
Both HSP and the Board Defendants cite to Chiropractic as a basis for applying Burford abstention in this case. In Chiropractic, a case involving New Jersey's no-fault automobile insurance law, the Third Circuit upheld the decision of the district court to abstain on Burford grounds. In concluding that abstention was appropriate, the Third Circuit noted that federal intervention would prevent New Jersey from maintaining a coherent regulatory policy because resolution of the issues would require "an analysis of whether the challenged regulations . . . are consistent with the Legislature's attempt . . . to reform New Jersey's comprehensive no-fault insurance law . . . ," which would ultimately turn upon an assessment of the rationality of the basis for the regulations, which would involve an examination of the administrative procedure and the substantive result of the state regulatory scheme." Id.
As we explain in more detail in our discussion of whether Keystone has stated a claim upon which relief can be granted, infra § IV(B), neither Keystone's Equal Protection Clause claim nor its Commerce Clause claim would necessarily require us to examine the relatedness between the Gaming Act and the interests that it purportedly advances.*fn15 This conclusion is based upon our understanding that Keystone challenges the way in which the PGCB applied the Gaming Act to applicants with Atlantic City affiliations. Keystone does not challenge the content of the Gaming Act nor the policies*fn16 that motivated its ratification. It merely challenges how the PGCB applied the Gaming Act in an attempt to advance those policies. Such a challenge does not warrant Burford abstention. See Heritage Farms, Inc. v. Solebury Twp., 671 F.2d 743, 747-48 (3d Cir. 1982) (refusing to apply Burford abstention in a case involving land use issues because inter alia, the plaintiff was not attacking the municipal planning code but the conduct of the township board in applying it unconstitutionally).*fn17 Accordingly, we shall deny the instant Motions insofar as they request that we abstain from the Equal Protection and Commerce Clause causes of action related to the PGCB's licensing decision on Burford grounds.
Finally, the Board Defendants suggest that we should abstain pursuant to the dictates of Brillhart v. Excess Ins. Co., 316 U.S. 491 (1942). Brillhart was a case between insurance carriers involving the Declaratory Judgment Act, 28 U.S.C. § 2201.*fn18 The Brillhart Court emphasized that the jurisdiction conferred by the Declaratory Judgment Act was discretionary in nature, meaning that federal courts were not compelled to exercise the same. Id. at 494.
The factors considered by the Court in exercising its discretion include, but are not limited to: (i) whether declaratory relief would clarify and settle the legal relations in issue; (ii) the convenience of the parties; (iii) the public interest in a settlement of the uncertainty of obligation, (iv) the availability and relative convenience of other remedies; and (v) whether the declaratory judgment act is being used for "procedural fencing," "forum shopping," or as a means to provide another forum in a "race" for res judicata.
Dish Network Corp. v. TiVo, Inc., 604 F.Supp.2d 719, 723 (D. Del. 2009) (quoting Terra Nova Ins. Co. v. 900 Bar, Inc., 887 F.2d 1213, 1224 (3d Cir. 1989)). Another relevant consideration is the "the existence of a state court proceeding involving the same issues and parties." Nat'l R.R. Passenger ...