Bedford Downs Management Corp. v. State Harness Racing Commission

1063 ¶ Finally, leaves Subparagraph 3.18.3 against

no doubt Architect’s claim

Contractor must fail. ex- provision This

pressly obligation limits Contractor’s

Architect and states that it not ex- shall liability

tend to Architect’s aris- for claims “(1)

ing preparation approval from or maps, drawings, opinions, reports, sur-

veys, Change Orders, designs specifica- or

tions, giving of or the failure to

give direction or General instructions.” ¶

Conditions, (R. 137a). 3.18.3 We con-

clude that all of the School District’s against

claims Architect are barred

provision. reasons, For all the foregoing

we conclude that pre- Architect has not a viable claim

sented for indemnification

against Contractor arising from this case.

¶ 22 Order Affirmed.7

BEDFORD DOWNS MANAGEMENT

CORPORATION, Petitioner

v.

STATE HARNESS RACING

COMMISSION,

Respondent Downs, LP, Petitioner

v. Racing Commission,

State Harness

Respondent.

Commonwealth Court Pennsylvania.

Argued April 2006.

Decided June affirming applicable. 7. We note that we are a basis Cra General Conditions See court, Co., upon by that relied other than the trial ley v. State Farm and Cas. 895 A.2d analysis premise which conducted its (Pa.2006). on the Paragraph Supplementary 1.9 of the amended, as

cember P.L. 325.205(b), than states that no more P.S. corporations five shall licensed Commission to horse race conduct harness pari-mutuel For meetings wagering. years, many two licenses were available issuance, interest but there was no 60.) However, (Adjud. pros- them. gam- pect permitting of a law slot machine ing in the at racetracks stirred interest 62.) 2003, the (Adjud. In licenses. at a license to Chester Commission issued Downs, more which left one license the Re- could issue under Commission 60.) (Adjud. form Act. at 27, 2002, filed On December Stabile, Harrisburg, peti- P. for Victor a for “Application with the Commission an tioner, Management Bedford Downs Cor- to a Harness Race License Conduct Horse poration. Wagering.” Meeting Pari-Mutuel 1.) 2003, 3, Finio, Fact, (Findings April of No. On Harrisburg, peti- Michael A. for tioner, Downs, new State- Commission announced a Valley View LP. 2003, 3, Policy, May ment of effective Counsel, Jorge Har- Augusto, M. Asst. applied to and new license pending risburg, respondent, State Harness 2.) Fact, applications. (Findings of No. Racing Commission. Policy that the The of declared Statement COLINS, Judge, BEFORE: President applicants Commission treat for the would PELLEGRINI, McGINLEY, Judge, remaining comparative group; as a license FRIEDMAN, Judge, Judge, however, the not be Commission would LEADBETTER, SIMPSON, Judge, despite to license obligated LEAVITT, Judge, Judge. and (Adjud. fact that a license was available. 49.) at BY Judge OPINION FRIEDMAN. 2003, May published In the Commission Management Corpora- Downs Bedford Pennsylvania Bulletin estab- notice (Bedford) Downs,

tion and sixty-day application peri- license lishing View) LP, (Valley petition for review of the 22, 24, 2003, May July od to from 2005, 3, order of the State Har- November 4.) Fact, (Findings of On No. June (Commission), Racing ness Commission License “Application filed for a of applications both them which denied Meeting to a Harness Horse Race Conduct remaining to conduct har- the sole license (Findings Wagering.” with Pari-Mutuel pari- at which meetings ness horse race 5.) Fact, of No. re- wagering permitted. mutuel With application, spect the denial Bedford’s 5, 2004, of Penn- July the Governor On affirm the we vacate and remand. We Pennsylvania sylvania signed into law denial of application. Act Development Gaming and Race Horse 205(b) (Act 71), §§ 4 Pa. 1101-1904. Under Race Indus- C.S. Section Horse (Reform Act), has person approved who been try Act Act of De- Act Reform by the conduct harness would be inconvenient for owners and meetings pari-mutuel horse race wa- public being prevent would from able gering may (Ad- apply Pennsylvania horses, have see and access to the Gaming (4) (Gaming 67); Control Board jud. Control topography at and of the Board) operate for a ma- slot prevent having separate gate land would facility. chines at a licensed racetrack track, on the of the entrance backside 1302(a)(3); 51). (Adjud. 66). Pa.C.S. at (Conclusions Law, (Adjud. No. 14.) Hearings held on applications, were and, on November after consider- appli- Bedford’s Commission denied ing evidence, the Commission denied grandfa- cation because: the deceased applications both ther Bedford’s owners principal had so, doing Bedford. In reputed organized conducted business with integrity suitability considered the cri- figures through crime companies he teria in Act 71 in addition to criteria owned, 77); (Adjud. at the deceased set forth in the Reform Act.1The Commis- grandfather acquired most land explained sion obviously, slot machine upon plans which Bedford to build its facil- gaming driving was the force for the inter- ity companies attempting while his to were and, license, est in the last available al- money by reputed earn dealing orga- though the empowered not (3) 81); figures, (Adjud. nized crime at and 71, to issue a gaming license under Act the “highly a although presented Bedford con- successful applicant would have meet to by Lynch, fident” letter2 issued Merrill the requirements of Act 71 in order to adequate fi- appeared establish (Ad- operate slot machines at racetracks. project, the letter did nancing for the not 62.)

jud. at borrower; identify required the the letter

The Commission denied View’s “highly more conditions than View’s letter; as not consistent best with the confident” and letter was is- the (1) sued, interests of racing because: its in plan part, substantial based on the patrons have and Capri horsemen share one original involvement of Isle of Casi- (Isle main safe, (Adjud. nos, entrance not would be of Capri) Inc. and CIBC World 64, (2) 66); at tight (CIBC),3 track and radius Markets rather than Merrill increased would banking Lynch’s not be safe for of own extensive review the Bed- horses, (3) (Adjud. 65-66); at plan project for a or of the ford individuals involved 71-72). paddock on track project, (Adjud. the backside of the the Bedford at 1310(a) 1310(a). provides, perti- 1.Section of Act 71 Pa.C.S. part, nent as follows: provid- “highly 2. A confident” a letter letter is Every application for a slot machine license information, by exhibiting ed a financial institution its con- shall include such documenta- may ability financing tion the required and assurances as fidence in to raise for a 1564a.) (R.R. convincing establish clear and evidence specific project. II at character, applicant's good honesty and include, integrity. Information shall with- CIBC, United States arm of Securities limitation, pertaining out information Commerce, Imperial Canadian Bank of has habits, character, family, reputation, crimi- gaming active financier to indus- been an activities, background, history nal business nearly twenty years try has worked for and business, professional financial and affairs (R.R. Capri past. of II at with Isle associates, personal covering and at least 1561a.) ten-year period immediately preceding filing application. date (1) (Conclusions 16, 18-19; Law, necessary R.R. not because: Nos. the Commis- 1594a.) 1561a, denying Valley II at sion’s vote View’s unanimous; thus, application was 1, 2005, On Bedford filed a December allegedly vote biased member did petition for reconsideration with the Com- result; al- determine (R.R. 114a-64a.) I De- mission. at On deny legedly biased also voted member 2005, cember View filed an in- (Bedford’s application. Bedford’s license complete copy petition hearing for (d).) ¶¶9, 12(b), response, On March (R.R. 2407a- reconsideration. Ill at denying court an order issued 66a.) 9, 2005, Valley On December application. now ad- We in support petition. filed exhibits of its for re- petitions merits of the dress the (R.R. 2467a.) Ill at In its petition view.4 reconsideration, inter alleged,

alia, process it was due denied before Legal I. Framework tribunal, impartial asserting for the first that two time Bedford witnesses were Policy Statement of Commission’s “business associates” of member states that the Commission will consider (R.R. 2419a-20a.) Ill at Commission. “comparatively as of a applications part group,” and “after consider- consideration and Val- On December applica- of all ... comparison ation and ley petitions View filed with this review tions, may avail- [the Commission] 265a; I court. R.R. Ill at who, applicants able to those licenses letters, In separate each December dated judgment in the sole of the [Commis- 12, 2005, the Bed- informed interest, sion], public will the best serve Valley ford and View because each necessity.” Pa.Code convenience and 7 petition had filed a for with review this 133.4(A) (G). § & court, longer juris- the Commission no had for petitions diction over the reconsidera- Act The Reform authorizes the Commis- 265a; I at tion. R.R. Ill at if, judgment, a in sion license its public interest, “the or neces- convenience 17, 2006, February Valley On sity a case for proper will be served and for special View filed an relief ” the of the license is issuance shown.... court, seeking with an remand order 209(a) Act, 4 of Reform P.S. Section the ing for recon the case 325.209(a). “may § re- The Commission sideration, specifically regard Val it fuse to a if grant” determines ley allegation that of View’s one that: members of Commission was biased (1) officer, director, or Valley response, Any In member

against View. corporation applying a of argued that remand this issue was stockholder agency’s adjudi- v. State Board scope 4. Our of of an duties or functions. Slawek review of Licensure, determining Education and 526 Pa. cation is limited to whether con- Medical violated, (1991). agency rights A.2d 362 An abuses stitutional were whether the 586 conclusion, if, reaching adjudication in it is with the law its discretion in accordance law, necessary misapplies findings fact are overrides or or exercises and whether of unreasonable, judgment manifestly or supported by that is evidence. Section substantial Law, partiality, prejudice, Agency 2 of bias or ill- 704 Pa. is result of the Administrative will, by adjudication evidence record. agency’s § An as shown or the C.S. Racing Horse represents Man O’War v. State in the law if Association accordance with Commission, flagrant Racing 433 Pa. 250 A.2d of or a manifest and abuse discretion (1969). arbitrary agency’s 172 purely of the execution

1069 any track, for a license or of corporation grounds together and race with a owns stock in profits, plan plans or shares in of the track and buildings, or of all ” participates management seating stands and other of the structures.... Act, Section 227 of affairs of the the Reform P.S. applicant, or which leases § Finally, 325.227. in considering appli- applicant the track where it shall cation, the Commission shall consider “the operate: racing generally.” best interests of Pa. (i) has been in- convicted of a crime Code 185.16. volving turpitude; moral (ii) has engaged bookmaking or II. View—No. 2447 C.D. 2005 other of illegal gambling; forms A. Commission’s Issues (iii) has guilty any been found addressing Before issues raised fraud or misrepresentation in connection brief, in its we shall address racing breeding; or the Commission’s contention that (iv) guilty any has been violation or preserve View did not all of those issues. attempt law, any to violate or regu- rule any lation of racing jurisdiction, Objections 1. Failure to Set Forth which suspension racing might from argues Commission first imposed jurisdiction; in such or quash Valley this court should peti (v) rule, any has violated regulation any tion for preserve review for failure to [Commission], or order of the appellate issues for review. The Commis (2)The experience, character or fitness sion contends that: failed any officer, petition director or stockholder to set forth review of the corporations general objections is such that statement of to the the participation order; person horse Commission’s November racing or merely related in- copy activities would be attached a interest, consistent with public sixty-page petition con- for reconsideration necessity venience or petition alleged with the best for review and of racing. fully interests If the the Commission erred [C]ommis- “as more set B,”5 sion (Valley peti determines that the interest of forth in Exhibit View’s ¶¶ review, 6-7); stockholder prac referred to in this tion for this para- 1513(d). graph or in paragraph tice Pa. R.A.P. is insufficient violates We are to adversely persuaded. affect not pari- conduct of racing by mutuel horse corporation Although might preferable it for a in provisions accordance with the of petitioner general forth a set statement act, this may disre- [Commission] objections petition within the for review gard the in determining interest wheth- itself, appellate procedure the rules of are to grant er or not a license to cor- liberally just to be construed to secure a poration .... every determination of matter to which 209(e) 105(a). Act, Thus, they Section of the Reform 4 Pa. R.AP. apply. P.S. we 325.209(e). addition, § In quash Valley petition the Commission will not for View’s may ap- Valley not issue a until it set simply has review because View proved in proposed objections “the location of forth its an attachment. [the] fact, Valley incorrectly 5. We note that View identi- in it is Exhibit A. when, petition fied its for review B as Exhibit 1070 states, tribunal, Valley View impartial

2.Denial of Reconsideration Valley the issue raised in “This is Valley in its brief that View asserts 17, 2006, February Application reconsid denying the Commission erred 3, of March by denied Order which was However, jurisdiction. lack of eration for 11.) (Valley Inas- 2006.” View’s brief points out Valley View’s much as this court denied review of petition not filed a for has View create a record for remand to request 12, 2005, of reconsid the December denial bias, there is no allegation regarding 1512(a)(1).6 under Pa. R.A.P. eration respect for this court review with record Thus, is denial of reconsideration not Thus, shall not consider to the issue. we agree. this before court. We properly further. the matter may party court has held that This or agency an from administrative appeal Downs 4.Chester a decision denying reconsideration of der v. State Civil agency. Muehleisen Valley View asserts its brief that 95, Commission, 66 Pa.Cmwlth. Service the Com process due when it was denied (1982), Pa. 461 aff'd, A.2d 867 procedures did not utilize the same mission (1983). the Com respect With A.2d 615 considering applications mission, regulation at 58 Pa.Code However, the and Chester Downs. 185.85(a) right gives any party record lacks contends that the Commission denying a Commission order appeal from pertaining to Chester any evidence Here, reconsideration. because thus, possible proceedings; Downs the Com appeal did not file an from matter. We this court to review the of re December denial mission’s required This court is review agree. consideration, may not chal Valley View quasi-judicial order the Commission’s the denial of reconsideration. lenge Com the record made before the based on 1551(a). Absent Pa. R.A.P. mission. See 3.Biased Commissioner to the Chester Downs pertaining a record that it asserts in its brief this it is not court proceedings, possible impartial process due before was denied of the Chester appellate to conduct review the members of tribunal because one of process Downs due issue.7 against the Commission was biased However, the contends View. 5.Notice addressed very this is the deny- order court in its March Valley in its brief that View asserts special Valley application View’s ing the Com process it denied due when not that the matter should relief and giving without awarded no license mission agree. further. considered We inter would that notice the Statement literally portion that pret in its brief Valley argues After View Policy indicating that the Commission an hearing before that it was denied denied, Cmwlth.), appeal Pa. 864 1512(a)(1) petition 581 that a R.A.P. states 6. Pa. (2004), quasi-judicial shall be that it was of a order court stated for review A.2d 1206 this thirty entry the or- days Racing within after Commis- filed Horse not error for State der. group apply comparative re- its sion to new granted were not policy to licenses that view note, however, that, Pittsburgh Pali- 7. We published the time the commission at the Park, Pennsylvania v. State Horse LLC sades policy. (Pa. Commission, Racing A.2d 62 (Val- obligation had no Valley issue license. its brief that failed to chal- View 18.) ley However, thus, View’s brief at lenge comparative process; Valley Commission contends that View did agree. issue is waived. We Commission, not raise this issue before the Except apply situations that do not and, thus, under Pa. R.A.P. it is here, appellate an court will not consider a agree. waived. do not We question that was not raised before the 1551(a)(3) Pa. R.A.P. states no 1551(a). government unit. Pa. R.A.P. question shall be by appel- considered Valley in its View asserts brief late court which was not raised before the raised the unknown standards unit, government except questions which petition (Valley reconsideration. the court is satisfied could not 20.) However, View’s brief at 17 n. diligence exercise of due have been raised court has stated that when issues are government before the unit. Until raised for the first in a time reconsidera- denying issued its order both request, tion agency after the has issued applications, Valley View could not have adjudication, it cannot be regarded as known that the Commission would not raising the issues while the matter was anyone. award license to Because agency. before the Hospital v. Frankford View could have raised notice as an Department Welfare, Public 77 Pa. determined, issue until the result was (1983). Thus, Cmwlth. 466 A.2d 260 matter is not waived. the issue is waived.8 Nevertheless, the Commission’s Remaining B. View’s Issues Policy Statement of requires “Ap that the plication Notice” indicate that the Commis Suitability Corporation of Parent sion is “not obligated any to issue argues that the record lacks despite availability of a license.” 7 Pa. support substantial evidence to the Com- 138.4(4). addition, § Code In the notice implicit finding mission’s because Commission, must indicate after Racing the Indiana Commission had disci- considering comparing applications all plined Valley parent corporation, View’s in a group, “may consideration issue” an corporation is not suitable to hold a 133.4(G). available license. 7 Pa.Code However, license. the Commission did not Therefore, the Commission’s Statement of reject Valley for that Policy gave clear notice to reason. The Commission stated that “this that the Commission might not issue significant issue would have been a stum- license. block, bling if the Commission had not Policy 6. Statement of rejected Valley grounds.” View on other 70) added). (Adjud. Thus, (emphasis we Valley View asserts in its brief that shall not discuss the matter further. comparative process set forth in the Policy Statement of denied 2. One Main Entrance due process grant because the decision to deny Valley a license was on next argues based unknown View that the standards. The Commission contends in sup- record lacks substantial evidence to law, Valley particularly 8. Even if View had not waived the dards set forth in the wheth- issue, applied by we that note the standard er the issuance of a license would be in the the Commission in this case was un- not racing. best interests of applied known. The Commission the stan- (2) racing, har- promote to grandstands; conclusion that one port the Commission’s bring need to horses closer to and horsemen is ness tracks patrons main entrance that Valley and harness track racing. patrons; a not in the best interests of can grandstand next paddock has a to the contends evidence presented View that (R.R. 1257a, that, II at purpose. if con- achieve that is to show the Commission 1456a-57a.) 1294a, 1263a, 1452a, sharing a main cerned about horsemen accepted testimony, patrons, Valley View could Commission entrance to constitutes evidence horsemen which substantial separate a entrance for build (See support the Commission’s conclusion adjacent to the R.R. main entrance. 3103a.) in the best However, paddock would not be reaching Ill at in backside conclusion, racing. simply consid- interests Commission it, not which is proposal ered before 5.Separate Entrance Backside of discretion.9 abuse does Valley argues that the record View Banking and 3.Track Radius support to not contain substantial evidence to- Valley also that the record that the argues View conclusion Commission’s support prevents having sepa- to pography, lacks substantial evidence entrance, proposed that the in the best Commission’s conclusion rate backside is not banking racing. track radius contends tight and increased interests of View racing. Valley that it not in the best to show presented interests that it evidence has not track to adjust asserts that View the backside of the View could any requirement track radius determined final accommodate reasonable However, and that can accommo- grade Valley View entrance. backside any grade simply propos- date reasonable radius considered the Commission However, might to require. Commission it. The failure al before Commission’s again, simply adjustments considered speculate regarding proposal might The Commission the backside is before it. make to by failing abuse its did not discretion an abuse of discretion. not grade a track consider radius and II. 2441 C.D. 2005 Bedford —No. had yet not determined. A. The Deceased Grandfather 4.Backside Paddock Bedford that the Commis argues argues that the rec denying Bed- in sion abused discretion support ord lacks substantial evidence that the de grounds ford’s pro that the the Commission’s conclusion principals grandfather of Bedford’s ceased paddock is not the best posed backside crime reputed organized did business racing. disagree. interests We companies through family-owned figures paddock proposed an indoor agree. that still exist. We grandstand bring to the order next grant a may refuse to patrons. closer II The Commission the horses to the fit- experience, if character or Bedford’s witnesses testified officer, or stockhold- currently, tracks do not ness of director that: harness participation er that his or her integrated that are into is such paddocks have comparison a true had there would have been We note al- if applicants proposals proposals. revise their lowed facilities, the other reflect the best features of 1073 racing ing money by dealing reputed or related would be to earn with horse activities public inconsistent with the interest or organized figures. agree. crime We racing.10 with the best interests of P.S. ap- concluded that the The Commission 325.209(e). § grandfather The deceased is orga- pearance of a connection between officer, not an director or stockholder of ground upon nized and the crime Thus, statutory Bedford. there is no basis facility Bedford intends to construct the is considering previous whether his busi- inconsistent with the best interests of rac- dealings reputed organized ness with 16.) (Conclusions Law, ing. No. How- figures crime are consistent inconsistent ever, above, indicated the law is con- as racing. with the best interests of possible cerned influence with adverse 209(e) Notably, under section of the Re- people might upon have the lawful Act, form may disregard the Commission pari-mutuel racing. conduct of horse It is stockholder’s conviction of a crime involv- ground upon absurd believe moral ing turpitude, illegal gambling, racing facility which the is built will induce more, fraud in connection racing, racing Bedford to violate the laws. if the stockholder’s interest is insufficient adversely corporation’s affect the lawful Financing C. of pari-mutuel racing. conduct horse 209(e). argues although Bedford If P.S. the statute allows the “present Commission found that Bedford disregard Commission to such actions as long appears adequate financing” as the ed what to be adversely stockholder cannot 71), (Adjud. influence the pari-mutuel project,12 lawful conduct of for the the Com racing, horse it manifestly is unreasonable improperly mission raised concerns about deny past a license based on ability actions project. Bedford’s to finance the who, person deceased obviously, can agree. We have no effect on a corporation’s conduct pari-mutuel racing.11 horse Identity of Borrower

B. The Ground expressed The Commission concern that Lynch “highly the Merrill confident” letter argues the Commission identity indicated that “the of the Borrow- abused its discretion in denying applica- (R.R. presently er is undetermined.” tion because the Commission believed the 811a.) However, specifies I at the letter grandfather acquired deceased most of the upon plans land which Bedford that the term “Borrower” refers to Bed- build its facility his companies attempt- operating subsidiary while were ford or an or affiliate expe- racing pari-mutuel wagering, 10. The Commission concluded that the horse rience, officer, character and fitness of each gaming at license to offer slot machine director and shareholder of Bedford is such licenses, proposed facility. statutes participation that his or her would be consis- governing agencies separate are and the public tent with the interest and with best distinct. (Conclusions Law, racing. interests of No. 15.) that Bedford 12.The Commission determined appears adequate financing to have based on 11. To the that the relied extent Lynch, a letter issued to Bedford Merrill considering grand- on Act 71 in the deceased Lynch "highly that Merrill which states dealings, father’s business ability the debt confident” of its to underwrite authority erred. The Commission has no financing project. I at for Bedford’s applied act Act under 71. Bedford to the Commission for a license to conduct harness 810a.) project, in the (R.R. involved the individuals I at The individ- of Bedford. However, its letter. that: not have issued explained the letter would ual who drafted to (1) evidence pro- a deal varies lacks substantial the structure of the record (2) finding will create of con- ject; company a support sometimes the Commission’s split in order to subsidiary corporations cern. track from the horse operations casino is that Isle undisputed The evidence (3) to just wanted operations; “[w]e and involvement ended their Capri and CIBC encapsulate each would have a letter which of a dis- because project in the Bedford (R.R. II at options.” one of those different management philosophy, over agreement 2281a.) words, the failure of the In other longer “highly no not because they were “Borrower” identify precise letter to ability finance the in their to confident” ability to obtain no effect on Bedford’s has into a mem- had entered project. Bedford financing. understanding with Isle of Ca- orandum

2. Conditions re- Capri contacted CIBC pri, and Isle (R.R. 1573a-75a, II at financing. garding concern expressed also The Commission 1604a-05a.) “highly a confi- CIBC issued Mer- financing letter from that Bedford’s in the “experience on its than letter based rill more conditions dent” Lynch contained However, market, understanding of the financing gaming letter. findings comfort any not make and its project, did Downs Bedford (R.R. to the conditions that II at respect Capri.”13 of fact with ... with Isle of on Bedford in the Lynch imposed 1565a.) However, in further Capri, Merrill Isle of Thus, finding no that Bed- there is Bedford, letter. Bedford wanted negotiations to meet of the be unable ford will for all Capri “brand” adopt the Isle on finding, some based conditions. Absent i.e., man- Capri Isle of operations, allow record, in the evidence 2148a-49a.) substantial (R.R. II at age operations. all im- the conditions cannot meet Bedford negotiations when Capri ended Isle Lynch, there can be no by Merrill posed only would clear that Bedford it became ability Bedford’s reason for concern about machine manage slot Capri Isle of allow on those con- project finance the based (R.R. 2149a, II at operations. ditions. Capri Isle of negotiations When Capri and CIBC 3. Isle of offer of failed, pursued previous by Inno- letter made “highly confident” expressed con-

Finally, the Commission (Innovation Capi- Holding letter, Capital vation Lynch that Merrill based cern tal), consulting busi- gaming transaction confi- high level of part, substantial (R.R. II Lynch. Merrill ness with ties to Capri Lynch had with Isle of dence Merrill 2120a-21a.) 2102a-04a, 2092a, 2099a, CIBC, review of the not on its own and then contacted Merrill Capital Innovation involved project or the individuals (R.R. II at financing. Lynch regarding that: implication is The project. 2227a-28a.) 2120a-21a, Presi- The Vice Capri of Isle of CIBC departure Group of and Leisure concerns; Gaming if Mer- dent financing due to as follows: Lynch testified project and Merrill reviewed the Lynch rill had testified, and then highly letterfs] confident we issued Managing CIBC Director of confident, raising financ- highly we say we're successful [were] "When we 1561a, 1593a.) get done or we fully this deal ing.” intend II at long if for a time be in this business wouldn’t background he Capital]. type and what of checks [Innovation We met with We phone lawyers, done, had on the had we had because there are different ... all three of the shareholders of And he background levels of checks. [Bedford], siblings.... the three We done, my years six of had based project. had received discussed We sector, gaming in the experience Capi- some information from Innovation checks as a type background same tal_We pro- had also received their I have background full check that would jections.... We took a look at done. uses, sources and and we talked about (R.R. then, Clearly, II at Merrill project. We talked about the situa- Lynch simply rely previous on the did Capri. gained tion with Isle of a lot We Capri of Isle of and CIBC. involvement Capri of confidence that Isle of ... had deal, project willing Lynch been to do this had struc- Merrill reviewed already, tured a deal and that had project CIBC the individuals involved be- previously highly issued a confident let- issuing “highly confident” letter. fore project. ter That a lot gave for us Therefore, we conclude that the Commis- of comfort. in questioning, sion abused its discretion reason, “highly confi- without valid Capital. We also knew Innovation And Lynch. dent” letter issued Merrill firm. Capital reputable Innovation was a And I’ve worked with before. [them] Accordingly, we vacate Commis- [they bringing And so a deal to were] 3, 2005, sion’s November order to the ex- [they me. It was evident that were] application, it denied Bedford’s tent presenting [they] me a project to the and we remand this case Commis- appropriate knew would be our firm. appli- of Bedford’s sion reconsideration Having question said we wanted light foregoing discussion. cation budget. them about the We wanted November We affirm the Commission’s question project. them about the We 2005, order to the extent that it denied question wanted to mar- them about the application. ket. Group We received the Innovation study. market reviewed that. And We

that substantiated the financials. We ORDER management. had talked with June, 2006, NOW, day this 19th AND We also wanted to make sure that the Racing Harness the order State family, whom we did not know as a Commission, dated November firm, appropriate doing busi- extent that it de- hereby affirmed background ness with. So we asked for application nied the license I did speak checks.... investi- Downs, LP. To the extent that the Novem- nothing that would gators and found appli- ber order denied the license give pause me to do business with them. Management Bedford Downs cation of 2227a-29a.) 2212a, Questioned II at (Bedford), the order is vacat- Corporation checks, background further about the ed, is remanded for reconsid- and this case Lynch Merrill witness testified: accor- eration of Bedford’s up I called the individual and asked foregoing opinion. dance with the specifically them what had he done and relinquished. looked into Jurisdiction types things what he had vague standard necessity, arguably BY President OPINION DISSENTING arbitrary leads to the kind of decision Judge COLINS. respect to Val- making that occurred with from the decision respectfully I dissent ley application. license View’s vacate Valley Downs and would as to Further, and remanding one matter by remand, agree I applications. and both creating is the the other this Court not Harness Downs that the with is, the defacto, awarding impression that respect Racing decision with Commission’s racing license. final harness fifth and impermissibly was application to its license final of the fifth and possession the Since track and facilities standards based on predicate to the racing harness license is The applicant. known to the Commis- the rami- gaming a casino license award of is of the View’s license sion’s denial goes actions well fication of this Court’s ap- and acceptance inconsistent with its Licensing deci- beyond a mere remand. track at the Ches- of the same size proval controversy instant sions such as the Downs, and its characterization of Val- ter exclusively to the Boards left should be track as inconsistent ley View’s 5/8-mile Legisla- the created and Commissions racing and as the best interests of with of such licenses. ture for the award impression an unsafe for horses creates in- matters with I remand both would making arbitrary capricious decision remedy that structions pretextual findings. on Com- based in the errors that resulted previous handling applications cre- mission’s both applicants, for both process denial of due impropriety. appearance an ates appro- with hearings be held and that new pro- due procedural and substantive priate Downs filed its At the time cess. two licenses were available application, including Chester applicants, with five joins in this dissent. Judge McGINLEY Downs, Bedford Downs. including but not AND DISSENTING CONCURRING ruled on the Chester The Commission BY Judge OPINION SIMPSON. months after it application Downs seven majority to the other I the well-written comparison agree filed without involving policy opinion as to the issues applicants, then issued pending However, respectful- I application. process View’s changing the review statement to vacate and ly dissent from the decision subjecting Valley the effect of View’s of Bed- further consideration remand for competition pending that application. For the reasons ford’s includ- comparison applicants, with other follow, I affirm the Commission would Downs, yet to file which had ing Bedford applications. both li- remaining for the one application, potential the influence of 209(a) cense. Given Race Horse Indus- of the Section inure to the gaming (Reform Act), license would Act P.S. try Reform licensee, deni- the Commission’s 325.209(a),1 pertinent part: successful in provides to be appears “If, appropriate al of judgment interest, in commission, set forth conven- public less on the criteria based subjec- and a necessity on its own will be served Reform Act and more ience or of the license will case for the issuance applicant(s) proper of which tive evaluation may convenience, shown, commission interest, appropriate public best serve amended. P.L. as 1. Act of December the license.” clauses Several other MILLS, CRAFTEX INC. make it of this Section of the Reform Act PA, OF Petitioner may consider clear relation to public’s only interest not v. officers, directors or stockholders AP COMPENSATION WORKERS’ corporate any applicant, but also rela- (MARKOW PEAL BOARD itself, corporation tion Section ICZ), Respondent. 209(a), firm, and to associa- person, tion, corporation appli- or other than Pennsylvania. Court of Commonwealth partic- cant will profits share Argued April 2006. ipate management. Section 209(e)(3). Decided June commendably After a evalua- extensive

tion, relevant concluded

part as follows: appearance mere of connection and

involvement Ambrosia Con- Coal (and family-owned

struction Co. other

companies) organized crime

ownership ground upon which project

Bedford intends to construct negatively in- upon racing

reflects

dustry and is therefore inconsistent with best interests of racing. Law,

Conclusion of No. 16. The detailed supporting

discussion this conclusion takes

up pages several of the Commission’s deci- Adjudication

sion. Commission at 75-82.

I discern no error the Commission’s

common sense conclusion. It well

within Commission’s discretion broad upon conclude issuance of a license long, un- embraces history

resolved of land involvement owner reputed figures crime not serve does public interest.

Case Details

Case Name: Bedford Downs Management Corp. v. State Harness Racing Commission

Court Name: Commonwealth Court of Pennsylvania

Date Published: Jun 19, 2006

Citation: 901 A.2d 1063

Court Abbreviation: Pa. Commw. Ct.