Harrop v. R.I. Div. of Lotteries

Decision Date05 December 2019
Docket NumberC.A. No. PC-2019-5273
PartiesDANIEL S. HARROP, Plaintiff, v. THE RHODE ISLAND DIVISION OF LOTTERIES; by and through Gerry S. Aubin, in his official capacity as Director; THE RHODE ISLAND DEPARTMENT OF REVENUE, by and through Marc A. Furcolo, in his official capacity as Acting Director; UTGR, INC. d/b/a TWIN RIVER; TWIN RIVER-TIVERTON, LLC d/b/a TIVERTON CASINO HOTEL; IGT NV, PLC; THE TOWN OF LINCOLN, and THE TOWN OF TIVERTON Defendants.
CourtRhode Island Superior Court

DECISION

STERN, J.

The Rhode Island Department of Revenue, the State Lottery Division of the State of Rhode Island Department of Revenue (collectively, State Defendants), UTGR, Inc. d/b/a Twin River, and Twin River-Tiverton, LLC d/b/a Tiverton Casino Hotel (collectively, Defendants), joined by IGT NV, PLC, have moved for an order dismissing Daniel S. Harrop's (Plaintiff) Fourth Amended Complaint (Complaint). The Plaintiff has objected and seeks a declaratory judgment that the implementation of sports wagering and online sports wagering without approval from Rhode Island voters violates the Rhode Island Constitution.

IFacts and Travel

Plaintiff filed the instant action on May 1, 2019 alleging that the enactment of sports wagering and online/mobile sports wagering violated article 6, section 22 of the Rhode Island Constitution. See generally Third Am. Compl. Counts I, II, and III. On September 8, 2019, this Court issued a bench decision granting the Defendants' Motion to Dismiss for Lack of Standing and entered an Order to that effect on September 16, 2019. However, on September 12, 2019, the Plaintiff filed a Motion to Amend Complaint for a fourth time, and the Court granted leave to amend. In the Fourth Amended Complaint, Plaintiff added allegations that he placed a sports wager at Twin River-Tiverton in December 2018 on the New England Patriots and lost the wager. See Compl. ¶¶ 8-10.

Now, Defendants move to dismiss the Complaint, claiming Plaintiff still lacks standing to challenge the enactment of sports wagering. Plaintiff asserts that he has standing to challenge the enactment of sports wagering because he placed a sports wager that was authorized pursuant to an unconstitutional statute and suffered economic harm thereby.

IIStandard of Review

In an action brought pursuant to G.L. 1956 §§ 9-30-1 et seq., the Uniform Declaratory Judgements Act, the Superior Court "lacks jurisdiction to adjudicate claims . . . in the absence of an actual justiciable controversy," which includes "a plaintiff who has standing to pursue the action." Bowen v. Mollis, 945 A.2d 314, 317 (R.I. 2008) (internal citations omitted). As such, "[w]hen confronted with a request for declaratory relief, the first order of business for the trial justice is to determine whether a party has standing to sue." Id.

When, as here, a plaintiff's standing to pursue the action is challenged,

"the focal point shifts to the claimant, not the claim, and a court must determine if the plaintiff 'whose standing is challenged is a proper party to request an adjudication of a particular issue and not whether the issue itself is justiciable' or, indeed, whether or not it should be litigated." McKenna v. Williams, 874 A.2d 217, 226 (R.I. 2005) (quoting Flast v. Cohen, 392 U.S. 83, 99-100 (1968)).

Plaintiff has the burden to establish standing. See Blackstone Valley Chamber of Commerce v. Public Utilities Commission, 452 A.2d 931, 934 (R.I. 1982) ("One who seeks review has the burden of setting the judicial machinery in motion by establishing that he is aggrieved and has a right to redress. . . .").

IIIAnalysis

"The requirement of justiciability is one of the most basic limitations on the power of this Court to review and issue rulings." Haviland v. Simmons, 45 A.3d 1246, 1256 (R.I. 2012) (quoting State v. Beechum, 933 A.2d 687, 689 (R.I. 2007)). "For a claim to be justiciable, two elemental components must be present: (1) a plaintiff with the requisite standing and (2) 'some legal hypothesis which will entitle the plaintiff to real and articulable relief.'" N & M Properties, LLC v. Town of West Warwick ex rel. Moore, 964 A.2d 1141, 1145 (R.I. 2009) (quoting Bowen, 945 A.2d at 317).

AStanding
Injury in Fact

In Rhode Island Ophthalmological Society v. Cannon, our Supreme Court adopted the first prong of the Data Processing test for standing, whereby a plaintiff has standing when he orshe "'alleges that the challenged action has caused him [or her] injury in fact, economic or otherwise. . . .'" 113 R.I. 16, 22, 317 A.2d 124, 128 (1974) (quoting Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 153 (1970)) (Data Processing). Our Supreme Court has repeatedly defined injury in fact as "an invasion of a legally protected interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical." See e.g., Key v. Brown University, 163 A.3d 1162, 1169 (R.I. 2017).

Defendants argue that Plaintiff has not suffered a legal injury because he was not denied any legal right. Instead, Defendants assert that the Plaintiff exercised a legal right by going to Twin River-Tiverton and placing a sports wager. Defendants further argue that merely losing money on a sports wager does not amount to legal injury. Plaintiff contends he has suffered a legal injury in the form of money placed on the sports wager and lost.

aLegally Protected Interest

The first component of the "injury in fact" test is the "invasion of a legally protected interest. . . ." See Narragansett Indian Tribe v. State, 81 A.3d 1106, 1110 (R.I. 2014) (quoting Pontbriand v. Sundlun, 699 A.2d 856, 862 (R.I. 1997)). What constitutes a legally protected interest has not been defined by our Supreme Court or the Supreme Court of the United States. However, the United States Court of Appeals for the Third Circuit, in Cottrell v. Alcon Laboratories, recently undertook an extensive discussion of what the term "legally protected interest" means for the standing analysis, which this Court finds instructive as our Supreme Court has explicitly adopted the "injury in fact" requirement of standing.1 874 F.3d 154 (3d Cir. 2017), cert. denied sub nom. Alcon Laboratories, Inc. v. Cottrell, 138 S. Ct. 2029 (2018); seealso Gustavsen v. Alcon Laboratories, Inc., 903 F.3d 1, 9 (1st Cir. 2018) (citing approvingly to the Third Circuit's analysis).

First, the Third Circuit found that "whether a plaintiff has alleged an invasion of a ' legally protected interest' does not hinge on whether the conduct alleged to violate a statute does, as a matter of law, violate the statute." Cottrell, 874 F.3d at 164. Here, Defendants argue that this Court must presume constitutional the challenged statute which authorizes sports wagering and that Plaintiff is estopped from challenging the constitutionality of the statute because he benefited from it by engaging in sports wagering. Specifically, counsel for Defendant Rhode Island Department of Revenue stated during oral argument that Plaintiff has "no cause of action because of the estoppel, and it's for that reason the motion to dismiss has to be granted." Hr'g Tr. 17:8-10, Oct. 25, 2019. However, the Defendants are conflating a motion to dismiss for failure to state a claim and a motion to dismiss for lack of standing. The Defendants have moved this Court for an order dismissing Plaintiff's claim for lack of standing, and this Court cannot grant relief that the Defendants did not request. See Nye v. Brousseau, 992 A.2d 1002, 1011 (R.I. 2010).2

Moreover, our Supreme Court has explicitly mandated that the standing analysis focuses on "the claimant, not the claim. . . ." McKenna, 874 A.2d at 226. Therefore, whether Plaintiff has alleged an invasion of a legally protected interest does not hinge on a presumption that the statute authorizing sports wagering is constitutional. See Cottrell, 874 F.3d at 164. For purposes of the instant motion, the Court will not presume the statute constitutional and will not engage in an analysis as to whether the Plaintiff has failed to state a claim upon which relief can be granted due to estoppel.

Second, the Third Circuit found that "financial or economic interests are 'legally protected interests' for purposes of the standing doctrine." Id. Accordingly, "[m]onetary harm is a classic form of injury-in-fact," and standing normally exists to claim damages. Danvers Motor Co., Inc. v. Ford Motor Co., 432 F.3d 286, 293 (3d Cir. 2005). Moreover, for economic injury under the standing doctrine, "[t]he line is not between a substantial injury and an insubstantial injury. The line is between injury and no injury." Pontbriand, 699 A.2d at 862. As such, even "[a] dollar of economic harm is still an injury-in-fact for standing purposes." Carpenters Industrial Council v. Zinke, 854 F.3d 1, 5 (D.C. Cir. 2017). Here, the Plaintiff alleges that heplaced a sports wager and lost. Compl. ¶¶ 9-10. Accordingly, Plaintiff seeks damages in the form of the "return of money lost by Plaintiff." Id. at 23. Because Plaintiff suffered monetary harm—regardless of the amount of money lost3he has alleged a legally protected interest.4

"Third, legally protected interests may arise from the Constitution, from common law, or solely by virtue of statutes creating legal rights, the invasion of which creates standing." Cottrell, 874 F.3d at 164 (internal quotations omitted). However, "[t]he mere existence of a statute, which may or may not ever be applied to plaintiffs, is not sufficient to" confer standing. Stoianoff v. Montana, 695 F.2d 1214, 1223 (9th Cir. 1983) (analyzing Article III standing). Thus, a plaintiff may have standing to challenge a constitutional violation where he or she was harmed, rather than presenting generalized claims about the impairment of abstract interests. See Bowen, 945 A.2d at 317 (holding that plaintiff's interest in a declaratory judgment as to whether proposed constitutional amendments were properly...

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