State Through Dept. of Public Safety and Corrections, Office of State Police, Riverboat Gaming Div. v. Louisiana Riverboat Gaming Com'n and Horseshoe Entertainment

• Court: Louisiana Supreme Court
• Citation: State Through Dept. of Public Safety and Corrections, Office of State Police, Riverboat Gaming Div. v. Louisiana Riverboat Gaming Com'n and Horseshoe Entertainment, 655 So.2d 292 (La. 1995)
• Decision Date: 22 May 1995
• Parties: 94-1872 La

Page 292

655 So.2d 292

94-1872 La. 5/22/95

STATE of Louisiana, through the DEPARTMENT OF PUBLIC SAFETY AND CORRECTIONS, OFFICE OF STATE POLICE, RIVERBOAT GAMING DIVISION v. LOUISIANA RIVERBOAT GAMING COMMISSION AND HORSESHOE ENTERTAINMENT, a Louisiana Limited Partnership.

Nos. 94-C-1872, 94-C-1914.

Supreme Court of Louisiana.

May 22, 1995.

Robert E. Piper, Jr., Shreveport, Dodson & Vidrine, Richard J. Dodson, Baton Rouge, Gold, Weems, Bruser, Sues & Rundell, Camille F. Gravel, Jr., Alexandria, Poynter, Mannear & Colomb (A Professional Law Corp.), W. Steven Mannear, Baton Rouge, Henry E. Braden, IV, New Orleans, for applicant.

Stephen A. Quidd, Howard P. Elliott, Jr., Jenifer Schaye, Hon. Richard P. Ieyoub, Sean Ashley Jackson, Larry Bankston, Baton Rouge, for defendant.

James D. Hall, Bossier City, for amicus curiae Bossier City.

[94-1872 La. 1] KIMBALL, Justice. ^*

We granted certiorari in this case to decide whether the Gaming Enforcement Division of the Louisiana State Police (the Division) has the right to seek judicial review of a decision of the Louisiana Riverboat Gaming Commission (the Commission) under La.R.S. 4:548.

FACTS AND PROCEDURAL HISTORY

On March 29, 1993, Horseshoe Entertainment (Horseshoe), a Louisiana limited partnership, filed an application with the Division requesting a license to conduct gaming activities on a riverboat. On November 22, 1993, the Division conducted a hearing to determine whether to grant Horseshoe's application. By letter dated November 24, 1993, the Division informed Horseshoe that its application had been denied. The Division based its denial on the fact that Horseshoe's parent corporation had recently been fined $1,000,000.00 by the Nevada Gaming Board for administrative violations relating to noncompliance with financial reporting [94-1872 La. 2] requirements and because certain Horseshoe shareholders or officers had filed inaccurate or incomplete tax returns or had failed to submit payments to the Internal Revenue Service.

Pursuant to La.R.S. 4:547, Horseshoe appealed the Division's denial of its application to the Commission. The record was lodged with the Commission, and both Horseshoe and the Division filed briefs with the Commission. The Commission held a hearing on January 28, 1994 and heard arguments from both Horseshoe and the Division. After the hearing, the Commission unanimously reversed the Division's decision and ordered the Division to issue Horseshoe a license subject to certain conditions. ¹

On February 8, 1994, the Division sought judicial review of the Commission's decision in the Nineteenth Judicial District Court. The appeal, allotted to Judge Michael McDonald, named both the Commission and Horseshoe as defendants. The Division alleged that irregularities in the licensing process had invalidated the Commission's decision. ² Principally, the Division criticized the Commission's decision to issue a certificate of preliminary approval to Horseshoe before the Division had ruled on Horseshoe's application. The Division asserted that the Commission's role in the application process is limited to hearing appeals after the Division denies a license and that by issuing the preliminary certificate, the Commission had taken an active role in the [94-1872 La. 3] application process by attempting to control which applicant the Division would ultimately license. Further, the Division insisted the Commission could not make an unbiased decision in the Horseshoe appeal because the Commission had already issued Horseshoe a preliminary certificate of approval. The Division requested that the court grant the petition for judicial review, reverse the decision of the Commission, and deny the license.

In connection with its petition, the Division requested a stay of the Commission's decision. Judge McDonald granted the stay on February 8, 1994. Meanwhile, the Attorney General's office, on behalf of the Commission, filed a motion to dismiss the Division's appeal, asserting that under the Louisiana Constitution or applicable statutes only the Attorney General or his duly authorized designee may represent the State of Louisiana in a court of law. The Attorney General submitted that because the Division's attorney was not authorized by the Attorney General to file the appeal on behalf of the state, the suit was improperly filed.

On February 9, 1994, Judge McDonald vacated the stay order. The following day, he dismissed the Division's appeal on his own motion, holding that the Division was not a "person" who could seek judicial review of a decision of the Commission. Judge McDonald reasoned that allowing the Division to appeal a decision of its reviewing body would create a ludicrous result, analogous to allowing a district court to appeal an unfavorable decision of an appellate court to this court. He also dismissed the Division's action on the basis that it had been improperly filed because the Attorney General was the proper party to represent the State of Louisiana in the lawsuit, not the Division. Judge McDonald denied the Division's motion for reconsideration and motion for a new trial on February 23, 1994.

By letter dated February 22, 1994, the Division informed Horseshoe that it had been ordered by the Commission to issue Horseshoe a license to conduct gaming activities on a riverboat and that it was issuing the license subject to seven conditions which the Commission had stipulated in its decision. See supra at note [94-1872 La. 4] 1.

On that same date, two appeals challenging the Commission's action were filed in the Nineteenth Judicial District Court. The Division filed the first appeal ³, naming only Horseshoe as a defendant. Mr. Larry Bankston, a member of the Louisiana State Senate, filed the second appeal in his individual capacity, alleging that as a citizen of this state and a member of the legislature, he was "adversely affected" by the Commission's decision reversing the Division. Pursuant to a motion filed by Horseshoe, the two cases were consolidated in Division "D" of the Nineteenth Judicial District Court and assigned to Judge Janice Clark.

On March 1, 1994, the Commission filed a petition, seeking to intervene in the proceedings. Horseshoe and the Commission then filed exceptions of res judicata, prescription, no cause of action and no right of action directed toward the Division's petition. Horseshoe also filed an exception of lack of procedural capacity against the Division. Moreover, Horseshoe and the Commission filed exceptions of no right of action, no cause of action, and prescription against Bankston's petition.

Judge Clark conducted a hearing on the foregoing exceptions on March 4, 1994. After the hearing, she: (1) denied the Commission's petition of intervention; (2) denied Horseshoe's exceptions of prescription; (3) granted Horseshoe's exception of res judicata, thereby dismissing the Division's appeal; and (4) concluding that Bankston did not have a right to appeal the Commission's decision, sustained Horseshoe's exception of no right of action, thereby dismissing Bankston's appeal.

The parties filed numerous appeals in the Louisiana First Circuit Court of Appeal in response to the rulings by Judges [94-1872 La. 5] McDonald and Clark: (1) the Division appealed Judge McDonald's ruling that it did not have a right to seek judicial review of the Commission's action and Judge Clark's dismissal of its second appeal pursuant to the exception of res judicata; (2) Bankston appealed Judge Clark's decision to dismiss his suit on the exception of no right of action; and (3) Horseshoe appealed Judge Clark's denial of its prescription exceptions. See State v. Louisiana Riverboat Gaming Com'n, 94-0702, 94-0730, 94-0735 (La.App. 1st Cir. 6/17/94), 640 So.2d 1368.

On appeal, the first circuit reversed the rulings which had dismissed the suits on the basis of no right of action and res judicata but affirmed the trial court decision overruling the exceptions of prescription.

Concluding that the Division has the power to appeal adverse decisions of the Commission, the court of appeal employed several modes of analysis. First, the court reasoned the Division has the right to appeal adverse Commission decisions because the term "person" as defined in the Riverboat Gaming Act supersedes the definition of "person" in the Administrative Procedure Act, La.R.S. 49:951 (the APA). Second, the court of appeal found that the Riverboat Gaming Act was created, in part, to foster public confidence in the licensing process and that denying the Division the right to obtain an independent judicial review of the Commission's action would undermine public confidence in the licensing process. The court of appeal reasoned that it would be inconsistent for the legislature to bar the Division from challenging Commission licensing decisions because the division can challenge the Commission's rules and regulations by bringing an action for declaratory judgment. Next, the court of appeal considered the fact that the Commission had afforded the Division the status of a "party" in Horseshoe's appeal before the Commission but had taken an inconsistent position on appeal by arguing the Division is not a person entitled to judicial review of adverse Commission decisions. The court then analyzed the roles of the parties in this case and reasoned that a regulatory agency, under [94-1872 La. 6] the facts of this case, would have access to judicial review, and therefore no justification existed to deny the Division the right to appeal. Finally, the court of appeal reasoned that denying the Division the right to seek judicial review would minimize the Division's role in the licensing process and would be contrary to the objectives of the law. The court reasoned that granting the Division the right to seek review, on the other hand, would preserve the Division's role in the licensing scheme, protect public safety and welfare, and foster public confidence in the...