PNGI Charles Town Gaming, LLC v. W. Va. Racing Comm'n

• Decision Date: 30 October 2014
• Docket Number: No. 13–1325.,13–1325.
• Citation: 765 S.E.2d 241,234 W.Va. 352
• Court: West Virginia Supreme Court
• Parties: PNGI CHARLES TOWN GAMING, LLC, d/b/a Hollywood Casino at Charles Town Races, Plaintiff Below, Petitioner v. WEST VIRGINIA RACING COMMISSION, Defendant Below, Respondent.

234 W.Va. 352

765 S.E.2d 241

PNGI CHARLES TOWN GAMING, LLC, d/b/a Hollywood Casino at Charles Town Races, Plaintiff Below, Petitioner

v.WEST VIRGINIA RACING COMMISSION, Defendant Below, Respondent.

No. 13–1325.

Supreme Court of Appeals of West Virginia.

Submitted Oct. 1, 2014.

Decided Oct. 30, 2014.

Stuart A. McMillan, Bowles Rice LLP, Charleston, WV, Brian M. Peterson, Bowles Rice LLP, Martinsburg, WV, for the Petitioner.

Patrick Morrisey, Attorney General, Kelli D. Talbott, Senior Deputy Attorney General, David A. Stackpole, Assistant Attorney General, Charleston, WV, for the Respondent.

Opinion

DAVIS, Chief Justice:

Petitioner, PNGI Charles Town Gaming, LLC, d/b/a Hollywood Casino at Charles Town Races (hereinafter “PNGI”), appeals a decision of the Circuit Court of Kanawha County that granted summary judgment to the respondent, the West Virginia Racing Commission (hereinafter “the Racing Commission”), and upheld two administrative rules promulgated by the Racing Commission without legislative approval. The two rules relate to the Racing Commission's review of a racing association's ejection of a permit holder from its premises. PNGI argues that the circuit court erred in finding the two rules, one placing the burden of proof on the racing association and the other granting the Racing Commission the power to grant a stay of an ejection pending review, were procedural, and, therefore, did not require legislative approval. We find no error in the circuit court's rulings. Therefore, we affirm.

I.FACTUAL AND PROCEDURAL HISTORY

This Court's decision in PNGI Charles Town Gaming, LLC v. Reynolds, 229 W.Va. 123, 727 S.E.2d 799 (2011), clarified that permit holders¹ ejected from a racing association had the right to appeal their ejections to the Racing Commission: “[a]n ejection of a permit holder by either a racing association or the stewards is subject to review by the West Virginia Racing Commission as set forth in West Virginia Code § 19–23–6 (2007 & Supp.2011) and West Virginia Code of State Rules § [178–1–6.1].”² Syl. pt. 3, Reynolds, 229 W.Va. 123, 727 S.E.2d 799.

Following the Reynolds decision, the Racing Commission revised its procedural rules to add new rules governing its review of permit holder ejections. Two of the new rules adopted by the Racing Commission are the subject of this appeal. One of the rules herein challenged states:

In any hearing on an appeal by a permit holder of an ejection by an association, the association shall have the burden of proving by a preponderance of the evidence that the permit holder acted improperly or engaged in behavior that is otherwise objectionable pursuant to 178 CSR 1, § 6.2. or 178 CSR 2, § 6.2.

178 W. Va.C.S.R. 6 § 4.7.d.³ The other challenged rule provides, in part:

A permit holder who has been ejected by an association may apply for a stay to the Racing Commission or to the member of the Racing Commission designated to rule upon stay requests.

178 W. Va.C.S.R. 6 § 4.3.a.

On January 19, 2012, the Racing Commission published its proposed amendments to 178 W. Va.C.S.R. 6, which included earlier versions of the above quoted rules, for public comment. During the comment period, PNGI suggested that the rules altered existing substantive law and, thus, required legislative approval. The Racing Commission disagreed, finding the rules were merely procedural.⁴

On March 22, 2012, the Racing Commission filed with the Secretary of State its newly modified procedural rules.⁵ Thereafter, the Racing Commission began issuing notices of appeal for racing association ejections under the new rules. Before the first hearing, PNGI filed a petition in the Circuit Court of Kanawha County seeking a writ of prohibition and declaratory judgment arguing that the rules had not been properly promulgated under the West Virginia Administrative Procedures Act. PNGI sought to prohibit the Racing Commission from conducting hearings under the new rules and further sought a declaration that the burden of proof rule and the stay rule were unlawful. PNGI also sought a stay of all ejection appeals pending the circuit court's decision of the matter. The Racing Commission filed a memorandum in opposition. The circuit court denied PNGI's requested stay and dismissed the entire case from its docket based upon its conclusion that the action was premature.

PNGI then filed a motion to alter or amend, and the Racing Commission responded in opposition to the motion. Following a hearing on February 27, 2013, the circuit court reinstated PNGI's declaratory judgment claim. The circuit court ordered the parties to file cross-motions for summary judgment. On November 14, 2013, the circuit court entered its final order granting summary judgment to the Racing Commission. The circuit court found the challenged rules were procedural rather than legislative and, therefore, were properly adopted without the need for legislative approval. The circuit court also concluded that the Racing Commission possessed inherent authority to issue a stay of a racetrack's ejection decision. It is from this order that PNGI now appeals.

II.STANDARD OF REVIEW

The instant case is before this Court on appeal from a circuit court order granting summary judgment. It has been well established that “[a] circuit court's entry of summary judgment is reviewed de novo. ” Syl. pt. 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994). In conducting our plenary review, we are mindful that “[a] motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law.” Syl. pt. 3, Aetna Cas. & Sur. Co. v. Federal Ins. Co. of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963). With these standards in mind, we will consider the issues raised.

III.DISCUSSION

The Racing Commission has promulgated a set of procedural rules to specify “the procedure for hearings conducted before the Boards of Stewards, the Boards of Judges and the West Virginia Racing Commission.” 178 W. Va.C.S.R. 6 § 1.1.⁶ These rules are located in Series 6 of Title 178 of the West Virginia Code of State Regulations (178 W. Va.C.S.R. 6). In response to this Court's decision in Reynolds, which recognized that West Virginia law provided an ejected permit holder with the right to have the Racing Commission review his or her ejection by a racing association, the Racing Commission revised Series 6 of Title 178 to establish the procedure by which such ejection appeals would be heard. In the instant appeal, PNGI challenges two of these newly adopted amendments: the rule establishing the burden of proof for ejections by a racing association, 178 W. Va.C.S.R. 6 § 4. 7.d., and the rule allowing the Racing Commission to grant a stay of a permit holder's ejection by a racing association pending review, 178 W. Va.C.S.R. 6 § 4.3. We consider each of these rules in turn.

A. Burden of Proof Rule

The burden of proof rule challenged by PNGI provides that,

[i]n any hearing on an appeal by a permit holder of an ejection by an association, the association shall have the burden of proving by a preponderance of the evidence that the permit holder acted improperly or engaged in behavior that is otherwise objectionable pursuant to 178 CSR 1, § 6.2. or 178 CSR 2, § 6.2.

178 W. Va.C.S.R. 6 § 4.7.d.

PNGI argues that the circuit court erred in concluding that the foregoing rule regarding the burden of proof is a procedural rule that may be adopted by an administrative agency without legislative approval rather than a legislative rule that requires legislative approval in order to be valid.

We begin our analysis by examining The West Virginia Administrative Procedures Act (hereinafter “the Act”). In conducting this analysis, we are mindful that “[w]hen a statute is clear and unambiguous and the legislative intent is plain, the statute should not be interpreted by the courts, and in such case it is the duty of the courts not to construe but to apply the statute.” Syl. pt. 5, State v. General Daniel Morgan Post No. 548, Veterans of Foreign Wars, 144 W.Va. 137, 107 S.E.2d 353 (1959). The Act “establishes ... procedures for rule making” by administrative agencies in this State. W. Va.Code § 29A–1–1 (1982) (Repl.Vol.2012). Pursuant to the Act, the term “rule”

includes every regulation, standard or statement of policy or interpretation of general application and future effect, including the amendment or repeal thereof, affecting private rights, privileges or interests, or the procedures available to the public, adopted by an agency to implement, extend, apply, interpret or make specific the law enforced or administered by it or to govern its organization or procedure, but does not include regulations relating solely to the internal management of the agency, nor regulations of which notice is customarily given to the public by markers or signs, nor mere instructions. Every rule shall be classified as “legislative rule,” “interpretive rule” or “procedural rule,” all as defined in this section, and shall be effective only as provided in this chapter [.]

W. Va.Code § 29A–1–2(I) (1982) (Repl.Vol.2012). Relevant to our analysis, the Act elaborates on the term “rule” by setting out definitions for the terms “legislative rule” and “procedural rule.” Thus, we next will consider each type of rule.

1. The Burden of Proof Rule Is Not a Legislative Rule. The term “legislative rule” is defined by the Act as

every rule, as defined in subsection (I) of this section, proposed or promulgated by an agency pursuant to this chapter. Legislative rule includes every rule which, when promulgated after or pursuant to authorization of the Legislature, has (1) the force of law, or (2) supplies a basis for the imposition of civil or criminal liability, or (3) grants or denies a specific benefit. Every rule which, when effective, is determinative on any issue affecting private rights, privileges or interests is a legislative rule. Unless

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