Keystone Redev. Partners LLC v. Decker
| Decision Date | 07 January 2011 |
| Docket Number | No. 10-1054,10-1054 |
| Parties | KEYSTONE REDEVELOPMENT PARTNERS, LLC v. THOMAS DECKER, MARY DIGIACOMO COLINS; RAYMOND S. ANGELI, JEFFREY W. COY, JOSEPH W. MARSHALL, III, KENNETH T. MCCABE, and SANFORD RIVERS, all named in their individual capacities as members of the Pennsylvania Gaming Control Board in December, 2006; and GREGORY C. FAJT; RAYMOND S. ANGELI; JEFFREY W. COY; JAMES B. GINTY; KENNETH T. MCCABE; SANFORD RIVERS and GARY A. SOJKA, all named in their official capacities as current members of the Pennsylvania Gaming Control Board v. HSP GAMING, L.P. (Intervenor in District Court) Thomas Decker, Mary DiGiacomo Colins, Raymond S. Angeli, Jeffrey W. Coy, Joseph W. Marshall III, Kenneth T. McCabe and Sanford Rivers, Appellants |
| Court | U.S. Court of Appeals — Third Circuit |
PRECEDENTIAL
On Appeal from the United States District Court
for the Middle District of Pennsylvania(Civil Action No. 08-CV-2265)
Argued
November 16, 2010
Before: AMBRO, FISHER, and GARTH, Circuit Judges
David R. Overstreet, Esq. (Argued)
John P. Krill, Jr., Esq.
Abram D. Burnett, III, Esq.
Anthony R. Holtzman, Esq.
K&L Gates LLP
Counsel for Appellee
James J. Kutz, Esq.
Barbara A. Zemlock, Esq.
John W. Dornberger, Esq.
Post & Schell, P.C.
R. Douglas Sherman, Esq.
Pennsylvania Gaming Control Board
Ralph G. Wellington, Esq. (Argued)
Nancy Winkleman, Esq.
Joseph Anclien, Esq.
Joseph J. Langkamer, Esq.
Schnader Harrison Segal & Lewis, LLP
Counsel for Appellants
William H. Lamb, Esq.
Scot R. Withers, Esq.
Lamb McErlane, PC
Stephen A. Cozen, Esq.
F. Warren Jacoby, Esq.
Jennifer M. McHugh, Esq.
Cozen O'Connor
Thomas E. Groshens, Esq. (Argued)
Richard A. Sprague, Esq.
Thomas A. Sprague, Esq.
Charles J. Hardy, Esq.
Sprague & Sprague
Wellington Building.
Counsel for Intervenor-Appellant HSP Gaming, L.P.
Barbara Adams, Esq.
Gregory Dunlap, Esq.
Counsel for Amicus Edward G. Rendell, Governor of Pennsylvania
In this appeal, we consider whether the former members of the Pennsylvania Gaming Control Board are immune from suits brought against them in their individual capacities based on their decisions to grant gaming licenses to certain applicants other than appellee Keystone Redevelopment Partners, LLC (Keystone). We conclude that they are entitled to absolute, quasi-judicial immunity. Accordingly, we will reverse the decision of the District Court.
In 2004, the Pennsylvania General Assembly enacted the Pennsylvania Race Horse and Gaming Act, 4 Pa. Cons. Stat. §§ 1101-1906, which created the Pennsylvania Gaming Control Board ("Gaming Board" or "Board") to license a limited number of gaming entities within the Commonwealth. 4 Pa. Cons. Stat. §§ 1201, 1202. The Gaming Board is comprised of seven voting members, 1 three of whom are appointed by the Governor and four of whom are appointed by four different members of the General Assembly. Id. § 1201(b). The voting members serve fixed terms of office-three years for gubernatorial appointees, two years for legislative appointees--and may only be removed for "misconduct in office, willful neglect of duty or conductevidencing unfitness for office or incompetence," or a conviction for certain criminal offenses. Id. § 1201(b.1), (d). They are prohibited from political activity and from making or soliciting political contributions. Id. § 1202.1(c)(5).
The Gaming Board's procedure for considering license applications is governed by express statutory and regulatory guidelines, which include the following:
• Before conducting a licensing hearing, the Board must hold at least one public input hearing at which witnesses may testify and the opportunity for public comment is afforded. Id. § 1205(b).
• A licensing hearing is held for each of the applicants. The Board must give notice of the hearing to the parties, 2 Pa. Cons. Stat. § 504, and make a schedule of the hearings available to the public, 58 Pa. Code § 441a.7(a).
• The Bureau of Investigations and Enforcement (BIE), an agency created by, but independent from, the Board, 4 Pa. Cons. Stat. § 1202(b)(25), performs background checks on each applicant and delivers a report to the Board "relating to the applicant's suitability for licensure," id. § 1517(a.1)(2).
• A member of the Board must "[d]isclose and recuse himself from any hearing or other proceeding in which the member's objectivity, impartiality, integrity or independence of judgment may be reasonably questioned due to the member's relationship or association with a party connected to any hearing or proceeding or a person appearing before the board." 4 Pa. Cons. Stat. § 1202.1(c)(3). In addition, no member may engage in ex parte communication regarding a pending matter. Id. § 1202.1(c.1). However, § 1202.1(e) defines "ex parte communication" to exclude "off-the-record communications by or between a member or hearing officer of the board... prior to the beginning of the proceeding solely for the purpose of seeking clarification or correction to evidentiary materials intended for use in the proceedings," as well as "communications between the board or a member and the office of chief counsel" of the BIE.
• At least thirty days before the initial license hearing, each applicant must file with the Board, and serve on all other applicants for the same license, "a memorandum identifying all evidence it intends to use in support of its presentation before the Board," 58 Pa. Code § 441a.7(i), including any materials about which an expert witness will testify, id. § 441a.7(i)(4). Evidence that has not been identified in that manner may only be admitted later: 1) in response to a request from the Board, id. § 441a.7(m)(1); 2) "if the issue could not have been reasonably anticipated by the applicant," id. § 441a.7(m)(2); or 3) to "present evidence which sets forth a comparison between the applicant and other applicants within the same category with respect to the standards and criteria" for receiving a license, id. § 441a.7 (n).
• Although there is no opportunity to cross-examine competitors' witnesses, an applicant may raise objections to competitors' hearings, id. § 441a.7(t), and, after filing notice with the Board and on the competitors, present evidence comparing its application to those of competitors, id. § 441a.7(n). In addition, after submitting their applications, applicants are given the opportunity to make final oral remarks before the Board, id. § 441a.7(w), and file a post-hearing brief addressing competitors' applications for the license, id. § 441a.7(u).
• The Board must grant licenses to the applicants who best demonstrate, by clear and convincing evidence, their suitability for licensure based on certain enumerated factors, id. § 441a.7(d), which relate generally to: (a) the location and quality of the proposed facility; (b) the potential for economic development and new job creation, especially for Pennsylvania residents; (c) a plan for diversity in employment and contracting, (d) the history of the applicant in developing tourism facilities, meeting commitments to local agencies and community-based organizations, dealing with its employees, and complying with the law; and (e) the degree to which potential adverse effects on the public resulting from the project will be mitigated. 4 Pa. Cons. Stat. § 1325(c).
In December 2005, appellee Keystone was one of five entities to apply for one of two Category 2 slot-machine licenses available for the City of Philadelphia. After holding public and licensing hearings for each applicant, at a December 20, 2006, public meeting, the Gaming Board unanimously voted to grant licenses to Foxwoods and to intervenor HSP Gaming, and to deny the other three entities' applications, including Keystone's. The Board detailed its factual findings and offered the reasons for its votes in a 113-page written decision.
In discussing one of the multiple factors weighing against Keystone's application, the Board explained as follows:
The evidentiary record establishes that Keystone's parent company, Trump Resorts, owns three Atlantic City casinos.... [Competitors] HSP/Sugarhouse, Riverwalk and Philadelphia Entertainment/Foxwoods do not own or control any Atlantic City properties. The Board has considered the fact of competing Atlantic City properties as a negative factor for licensure in Philadelphia. While the Board believes that each applicant desires to make a profit inPhiladelphia 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 higher profit on every dollar gambled [due to the lower tax rate]. 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...
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