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Yocum v. Commonwealth

Supreme Court of Pennsylvania

May 25, 2017

SUSAN A. YOCUM, Petitioner

          ARGUED: April 5, 2016




         We consider the petition for review filed by Susan A. Yocum, Esquire, in this Court's original jurisdiction pursuant to the Pennsylvania Race Horse Development and Gaming Act, 4 Pa.C.S. §§1101-1904 (the Gaming Act). Petitioner challenges as unconstitutional certain restrictions imposed upon attorneys who are employed by the Pennsylvania Gaming Control Board (Board), and seeks declaratory and injunctive relief. The Board filed preliminary objections, asserting petitioner lacks standing to pursue her claim, her claim is not yet ripe, and in any event, her claim fails on the merits. We overrule the Board's preliminary objections as to standing and ripeness, but nevertheless conclude petitioner is not entitled to relief on the merits as the restrictions included in the Gaming Act are constitutionally sound.[1]

         Petitioner is an attorney employed by the Board. At all relevant times, the Gaming Act has set forth various requirements and restrictions applicable to Board members and certain other persons employed by and associated with the Board. When petitioner was first hired in 2008, the Gaming Act prohibited Board employees from soliciting, recommending or accepting employment with a licensed gaming facility for a period of two years after termination of employment with the Board.[2] The Gaming Act also restricted Board employees from accepting employment with an applicant, licensed entity, affiliate, intermediary subsidiary or holding company of an applicant or licensed entity for one year after termination, and appearing before the Board in any hearing or proceeding for two years after termination.[3] In 2010, the Act was amended to, inter alia, specifically identify the executive director, bureau directors and attorneys as types of employees prohibited from appearing before the Board for two years after termination, and also to extend the general one-year prohibition on accepting employment with a licensed gaming entity or an affiliate, intermediary, subsidiary or holding company of an applicant or licensed entity to two years after termination. 4 Pa.C.S. §1201(h)(13) (as amended 2010). Specifically, Section 1201(h) currently provides in pertinent part as follows:

(h) Qualifications and restrictions.--
(8) No member, employee or independent contractor of the board may directly or indirectly solicit, request, suggest or recommend to any applicant, licensed entity, or an affiliate, intermediary, subsidiary or holding company thereof or to any principal, employee, independent contractor or agent thereof, the appointment or employment of any person in any capacity by the applicant, licensed entity, or an affiliate, intermediary, subsidiary or holding company thereof for a period of two years from the termination of term of office, employment or contract with the board.
(13) The following shall apply to an employee of the board whose duties substantially involve licensing, enforcement, development of law, promulgation of regulations or development of policy, relating to gaming under this part or who has other discretionary authority which may affect or influence the outcome of an action, proceeding or decision under this part, including the executive director, bureau directors and attorneys:
(i) The individual may not, for a period of two years following termination of employment, accept employment with or be retained by an applicant or a licensed entity or by an affiliate, intermediary, subsidiary or holding company of an applicant or a licensed entity.
(ii) The individual may not, for a period of two years following termination of employment, appear before the board in a hearing or proceeding or participate in activity on behalf of any applicant, licensee, permittee or licensed entity or on behalf of an affiliate, intermediary, subsidiary or holding company of any applicant, licensee, permittee or licensed entity.
(iii) An applicant or a licensed entity or an affiliate, intermediary, subsidiary or holding company of an applicant or a licensed entity may not, until the expiration of two years following termination of employment, employ or retain the individual. Violation of this subparagraph shall result in termination of the individual's employment and subject the violator to section 1518(c) (relating to prohibited acts; penalties).
(iv) A prospective employee who, upon employment, would be subject to this paragraph must, as a condition of employment, sign an affidavit that the prospective employee will not violate subparagraph (i) or (ii). If the prospective employee fails to sign the affidavit, the board shall rescind any offer of employment and shall not employ the individual.

4 Pa.C.S. §1201(h)(8) and (13) (emphases added). Petitioner - who holds the position of Assistant Chief Counsel III - is subject to the restrictions identified in Section 1201(h)(8) and (13). See 4 Pa.C.S. §1201(h)(14.1); Petition for Review, Exhibit B.

         Petitioner, who now wishes to seek and accept new employment as an attorney representing gaming clients, filed this petition for review requesting: (1) a declaration the restrictions of Section 1208(h) violate Article V, Section 10 of the Pennsylvania Constitution, [4] which vests in this Court the exclusive authority to govern the practice of law; and (2) a permanent injunction against the enforcement of the challenged restrictions. Specifically, petitioner alleges that, "[a]s a current Gaming Board attorney, [she] desires to seek and accept employment as an attorney representing gaming clients." Amended Petition for Review at ¶6. She states she is currently "faced with two equally unappealing and untenable options to leave the employ of the Gaming Board." Id. at ¶8.

Option one is to test the Gaming Act's employment provisions by violating them, actively seeking a legal position with a licensee, affiliate or law firm that represents licensees or affiliates knowing that if Petitioner accepted a position and left the Gaming Board, the licensee or affiliate could be subject to administrative penalties, Petitioner's position, by statute, would be terminated and Petitioner could be subject to sanction for breach of fiduciary duty to clients for placing Petitioner's interests before her client's interests. Thus, Petitioner would be risking harm to her reputation and her ability to continue practicing law in the Commonwealth and the licensees and affiliates would be risking administrative penalty.
The other option for Petitioner is to forgo the practice of law in her area of expertise, or with any law firm that represents any licensees or their affiliates.

Id. at ¶¶9, 12 (citations omitted).

         The Board filed preliminary objections to the petition for review, pursuant to Pa.R.C.P. 1028(a)(4), alleging insufficiency of the pleading in various respects. The Board claims (1) petitioner lacks standing to challenge so-called "post-employment" restrictions of the Act, [5] as she is still employed by the Board, and has not yet been aggrieved by their enforcement against her; (2) petitioner's claims are not yet ripe because she is still an employee of the Board and enforcement of post-employment restrictions against her is hypothetical and speculative; (3) petitioner's request for pre-enforcement review is premature; (4) the Rules of Professional Conduct allow protections against conflicts of interest as provided in the Act; and (5) the Act's post-employment restrictions do not violate the separation of powers as circumscribed in Article V, Section 10(c).

         A preliminary objection to the legal sufficiency of a pleading (a demurrer) raises questions of law, and a court must decide whether it is clear from the well-pleaded facts and reasonable inferences from those facts that the claimant has not established a right to relief. Bilt-Rite Contractors, Inc. v. The Architectural Studio, 866 A.2d 270, 272 (Pa. 2005), citing Estate of Witthoeft v. Kiskaddon, 733 A.2d 623, 624, n.1 (Pa. 1999) (in determining preliminary objections in nature of demurrer, all material facts set forth in the pleading, and all inferences therefrom, are accepted as true). Preliminary objections in the nature of a demurrer should be sustained only in cases that clearly and without a doubt fail to state a claim for which relief may be granted. Id. at 274, quoting MacElree v. Phila. Newspapers, Inc., 674 A.2d 1050, 1056 (Pa. 1996).

         I. Standing and Ripeness

         We first consider the Board's objections based on standing and ripeness. We note there is "considerable overlap" between the two doctrines, especially where the objecting party's claim that the matter is not justiciable is "focused on arguments that the interest asserted by the petitioner is speculative, not concrete, or would require the court to offer an advisory opinion." Robinson Twp. v. Commonwealth, 83 A.3d 901, 917 (Pa. 2013), citing Rendell v. Pa. State Ethics Comm'n., 983 A.2d 708, 718 (Pa. 2009).

Generally, the doctrine of standing is an inquiry into whether the petitioner filing suit has demonstrated aggrievement, by establishing "a substantial, direct and immediate interest in the outcome of the litigation." … In this sense, a challenge that a petitioner's interest in the outcome of the litigation is hypothetical may be pled either as determinative of standing or restyled as a ripeness concern although the allegations are essentially the same. Standing and ripeness are distinct concepts insofar as ripeness also reflects the separate concern that relevant facts are not sufficiently developed to permit judicial resolution of the dispute.

Id. (internal citations omitted). However, we have further observed that "pure questions of law, " such as those presented by petitioner in this case, "do not suffer generally from development defects and are particularly well-suited for pre-enforcement review." Id., citing Rendell, 983 A.2d at 718 n.13.

         Taking the Board's objections in order, we first consider whether petitioner has standing to bring her action challenging the restrictions of Section 1201(h), which the Board argues are post-employment restrictions, and as petitioner is still employed by the Board, she has not yet been aggrieved by their enforcement against her. The Board further argues petitioner knew about the post-employment rules when she took the position and did not challenge them until now; the Board claims this circumstance belies petitioner's claim her harm is "immediate." See Brief for Respondent at 12-13. Petitioner, however, argues the plain language of Section 1201(h)(8) - stating no employee of the Board "may directly or indirectly solicit, request, suggest or recommend" to any gaming entity the employment of any person for a period of two years from the termination of the person's employment by the Board - binds current as well as former employees, and thus presents a direct, immediate and substantial impediment to her stated objective: to seek and accept employment in the private sector, in her chosen profession, in her particular area of expertise, i.e., the gaming industry. See Brief for Petitioner at 10-14. Petitioner claims the restriction prevents her from looking for a job with a prospective employer, let alone accepting a position for two years after she leaves the Board. See id. She argues the General Assembly's omission of the word "former" from the statute's description of affected Board employees means the provision applies to her right now, and she is thus presently aggrieved, notwithstanding the Board's reference to the statutes as "post-employment" restrictions.

         We have described the requirements for standing as follows:

In seeking judicial resolution of a controversy, a party must establish as a threshold matter that he has standing to maintain the action. In Pennsylvania, the requirement of standing is prudential in nature. . . .[T]he core concept of standing is that a person who is not adversely affected in any way by the matter he seeks to challenge is not aggrieved thereby and has no standing to obtain a judicial resolution of his challenge.

Fumo v. City of Phila., 972 A.2d 487, 496 (Pa. 2009) (internal citations and quotation marks omitted). "An individual can demonstrate that he has been aggrieved if he can establish that he has a substantial, direct and immediate interest in the outcome of the litigation." Id., citing In re Hickson, 821 A.2d 1238, 1243 (Pa. 2003). Moreover, one has a substantial interest in the outcome of litigation if her interest surpasses that "of all citizens in procuring obedience to the law." Id., quoting Hickson, 821 A.2d at 1243. One has a direct interest in litigation "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." Id., quoting City of Phila. v. Commonwealth, 838 A.2d 566, 577 (Pa. 2003).

         As stated, petitioner is still employed by the Board as an attorney, and it is undisputed she is included among the employees restricted by the terms of the statute. We acknowledge the two-year period of restriction does not begin until after petitioner's employment with the Board is terminated, but we also note the rule's prohibition of petitioner's ability to legally seek employment in the gaming field before she actually leaves her job and becomes a former employee. Section 1201(h)(8) specifically prohibits petitioner, as an "employee of the Board, " from soliciting, requesting, suggesting, or recommending employment with any applicant, licensed entity or an affiliate, intermediary, subsidiary or holding company. Petitioner alleges in her petition her "desire to pursue employment opportunities and to render professional legal services to clients outside the Gaming Board." Petition for Review at ¶23. Petitioner further avers she has been informed by persons and law firms who associate and represent gaming entities that the employment restrictions in the Gaming Act will inhibit her ability to seek and obtain employment with those potential employers, and the employment restrictions have a chilling effect on potential employers' willingness to hire a person in petitioner's position. Id. at ¶¶ 31-33.

         Petitioner relies on Robinson, where this Court considered a physician's challenge to statutory restrictions (Act 13) regarding obtaining and sharing information with other physicians about chemicals used in fracking operations. The physician alleged the restrictions improperly impeded his ability to diagnose and treat his patients by forcing him to choose between complying with the mandatory provisions of the statute and adhering to his ethical and legal duties to report findings in medical records and make those records available to patients and other medical professionals. Robinson, 83 A.3d at 923-24. Although the Commonwealth argued he did not have standing until he actually requested information restricted by the statute and that information was not supplied at all, or was supplied with restrictions interfering with his ability to provide proper medical care, or indicated the chemicals posed a public health hazard, this Court nonetheless held the physician's interest in the outcome of the litigation regarding constitutionality of the provisions was "neither remote nor speculative." Id. The Court recognized "the untenable and objectionable position in which Act 13" placed him:

choosing between violating a Section 3222.1(b) confidentiality agreement and violating his legal and ethical obligations to treat a patient by accepted standards, or not taking a case and refusing a patient medical care. … Our existing jurisprudence permits pre-enforcement review of statutory provisions in cases in which petitioners must choose between equally unappealing options and where the third option, here refusing to provide medical services to a patient, is equally undesirable.

Id. at 924. Petitioner argues she similarly "must choose between equally unappealing options and where the third option . . . is equally undesirable." Brief for Petitioner at 17, citing Robinson, 83 A.3d at 924.

         Petitioner also relies on Shaulis v. Pennsylvania. State Ethics Commission, 833 A.2d 123, 129 (Pa. 2003). Shaulis, an attorney with the Pennsylvania Department of Revenue, questioned provisions of the State Ethics Act which ostensibly applied to limit her activities as an attorney after her public employment ended.[6] The provision stated: "No former public official or public employee shall represent a person, with promised or actual compensation, on any matter before the governmental body with which he has been associated for one year after he leaves that body." 65 Pa.C.S. §1103(g). After the State Ethics Commission confirmed Section 1103(g) applied to limit Shaulis's ability to practice in the relevant tribunals, this Court determined she was aggrieved because "if she took the actions therein proscribed, she would expose herself to the exact ethical investigation that she was attempting to forestall by seeking the advice of the Commission in the first place." Shaulis, 833 A.2d at 691. Petitioner claims this matter is similar to the pre-enforcement review in Shaulis, where the Court recognized as untenable the attorney's choices to either "violate the law and risk an ethics investigation or forgo practicing in Shaulis'[s] area of expertise." Brief for Petitioner at 18, citing Shaulis, 833 A.2d 130. Petitioner claims she likewise faces objectionable options to: (1) forego practicing law in her area of expertise; or (2) test the law by violating it and seeking employment as an attorney directly representing gaming entities, or with a law firm representing gaming entities as clients, with adverse consequences to both a potential future employer and petitioner herself. See Brief for Petitioner at 18; see also, e.g. Petition for Review at ¶¶ 31-33 (averring chilling effect of restrictions upon potential employers).

         The Board argues petitioner is in a different position than the plaintiffs in either Robinson or Shaulis, and that those decisions do not confer standing upon her here. The Board avers that the choices the physician in Robinson faced are not "even closely analogous" to the choices petitioner claims to be facing. Brief for Respondent at 16.

         Considering the facts alleged by petitioner, all taken as true, we conclude she is in the position that if she took the actions proscribed by Sections 1201(h)(8) and (13) and tried to obtain new employment in Pennsylvania's gaming industry, she would be in violation of the Act, exposing herself - and her potential employer - to adverse consequences, including damage to her reputation, and potentially instigating the loss of her new employer's gaming license. See 4 Pa.C.S. §1201(h)(13). Under the circumstances, we conclude petitioner has standing to challenge the constitutionality of the Gaming Act's employment restrictions.

         We next consider the Board's preliminary objection alleging the matter is not yet ripe and petitioner's challenge is premature. The Board argues "declaratory relief is only appropriate where there is an actual controversy" and the "hypothetical future occurrence" of petitioner's departure from Board employment is speculative and not yet a proper subject for this Court's consideration. Brief for Respondent at 13-14. The Board asserts it is unknown how long petitioner will stay in her current job, and by the time she leaves that job the statute might be amended, or the subsequent employment petitioner might secure may not even be as an attorney or within the scope of ...

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