Lead Opinion
OPINION OF THE COURT
Thе Department of Revenue (hereinafter “Department”) has appealed from an order of the Commonwealth
On August 8, 1978, the Department gave appellee a license to sell lottery tickets. The Department granted the license under a contract in which appellee agreed to comply with all the terms of the State Lottery Law, 72 P.S. § 3761-1 et seq.
On December 7, 1981, Young Lee, appellee’s president, pleaded guilty to ten counts of theft by deception in violation of § 3922 of the Crimеs Code, 18 Pa.C.S.A. § 3922. According to the charges, on numerous separate occasions appellee had substituted generic drugs for those carrying brand names. The Department regarded appellee’s guilty plea as conclusively establishing violation of the State Lottery Law and, on a breach of contract claim, exercised its discretion to revoke appellee’s lottery license by letter dated June 24, 1982, effective July 6, 1982, without a hearing. The Department relied on § 3761-7(b)(3) of the State Lottery Law which provides as follows:
The secretary may refuse to issue a license pursuant to this section, or may suspend or revoke a license so issued if it [sic] shall find that the applicant or licensee: ... (3) Has been found guilty of any fraud or misrepresentation in any connection.
72 P.S. § 3761-7(b)(3).
Appellee filed a petition for review and a motion to stay the Department’s revocation in Commonwealth Court.
Initially we note that appellee correctly asked the Commonwealth Court, under its exclusive appellate jurisdiction over final orders of government agencies, 42 Pa.C.S. § 763(a), to review the Department’s revoсation of its license as well as the Department’s refusal to provide a hearing on the matter. However, Commonwealth Court incorrectly determined that appellee’s application for a stay pending its review is within Commonwealth Court’s original jurisdiction. 42 Pa.C.S. § 761. A stay, like a supersedeas, is an auxiliary process designed to supersede or hold in abeyance the enforcement of the judgment of an inferior tribunal. See Conston v. New Amsterdam Casualty Co.,
However, since Judge Blatt determined that her interlocutory order granting a stay involved a controlling question of law as to which there is a substantial ground for difference of opinion, this Court in its discretion may permit the appeal from such interlocutory order. 42 Pa.C.S. § 702(b). We will do so in this case.
The Department argues that the Board of Claims has exclusive jurisdiction over all claims involving contracts with the Commonwealth under 72 P.S. § 4651-1, et seq.
This Court has consistently held that the exclusive forum and remedy for all claims of $300.00 or more arising out of contracts with the Commonwealth is an action in the Board of Claims for monetary damages. Act of May 20,
Of course, we do not intimate that the legislature can deprive equity of jurisdiction and limit the remedy to only monetary damages in all cases, including those where a fundamental constitutional right for which such damages would be inadequate was irreparably threatened. We simply follow Emergency Medical Services [Council of Northeastern Pa., Inc. v. Dept. of Health,499 Pa. 1 ,451 A.2d 206 ] and Clark v. Pennsylvania State Police [496 Pa. 310 ,436 A.2d 1383 ] in holding that the opportunity to obtain monetary relief in the Board of Claims for interference with their contract right is adequate.
Ezy Parks,
If a person is to be afforded a meaningful opportunity to assert a claim that the Commonwealth has violated fundаmental constitutional rights, the Commonwealth Court must have jurisdiction, in reviewing agencies decisions, to determine whether such a constitutional claim is substantial and whether the legal remedy for damages before the Board of Claims is adequate. Cf. Shenango Valley Osteopathic Hospital v. Department of Health,
Thus, while we need not decide the merits of the constitutional question raised by appellee we must initially
In Greco v. Commonwealth, C.A. 80-1817 (W.D.Pa. April 21, 1981) (memorandum opinion), the United States District Court considered the Department of Revenue’s motion to dismiss a licensee’s complaint claiming a due process violation because the Department failed to provide a pre-suspen
The Court has carefully examined the State Lottery Law and has determined that there is no provision for notice or a hearing prior to the suspension of a lottery sales license. 72 P.S. § 3671-7(b). The minimum requirements of due process under the United States Constitution are notice of the basis of governmental action and an opportunity to be heard. Wolff v. McDonnell,418 U.S. 539 [94 S.Ct. 2963 ,41 L.Ed.2d 935 ] (1974). The record reveals that the plaintiff was afforded neither notice or a hearing prior to the suspension, and eventual revocation, of his license.
The lack of notice and prior hearing, however, are of no constitutional moment unless a legitimate, protected, property right has been infringed. Board of Regents v. Roth,408 U.S. 564 , 570 [92 S.Ct. 2701 , 2705,33 L.Ed.2d 548 ] (1972). Describing the nature of such a property interest, the Court stated in Board of Regents v. Roth that, “[t]o have a property interest in a benefit, a person must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must instead have a legitimate claim of entitlement to it.” Id. at 577 [92 S.Ct. at 2709 ].
While the deprivation of property rights without prior notice and hearing has occasionally been upheld by the Supreme Court, the preference is clearly in favor of such prior hearing in the absence of extenuating private or public interests of overriding significance. Fitzgerald v. Mountain Laurel Racing, Inc.,464 F.Supp. 263 (W.D.Pa. 1979). Whether a licensed lottery sales agent has a protected property interest in the continued sale of lottery tickets, and whether such a property interest requires a pre-revocation notice and opportunity for a hearing are questions which go to the substantivе merits of the plaintiff’s claim.
Subsequently, on June 14, 1983, in Greco, on defendant Department’s motion for summary judgment, the United States District Court dismissed plaintiff’s complaint, holding that the property interest in a license to sell lottery tickets did not require the Commonwealth to hold a predetermination hearing before it suspended plaintiff’s license. The District Court held that a hearing six weeks after the suspension and the Commonwealth’s filing of an extensive report before formal revocation satisfied plaintiff’s due process rights. Greco, like Eisenberg, supra, which the District Court cited with approval, involved a temрorary pre-hearing suspension, not a final revocation. The District Court’s holding in Greco is consistent with United States Supreme Court authority establishing the “ordinary principle that something less than an evidentiary hearing is required before adverse administrative action, so long as prompt post-deprivation review is available for correction of administrative error.” See Mackey v. Montrym, supra.
In the case before us the Department of Revenue advised appellee by letter of July 8, 1982 that its license had been revoked effective July 19, 1982 and that that letter constituted а “final” determination by the Bureau of State Lotteries. Thereafter, the Department denied appellee’s subsequent request for a hearing. Thus, in the present case, unlike Greco, appellee’s license was finally revoked without providing appellee with the opportunity to be heard either before or after the revocation.
With respect to the requirement that the legal remedy before the Board of Claims must be inadequate before the Commonwealth Court has jurisdiction, the adequacy of a licensee’s remedy in the Board of Claims for rеvocation of a license for an indefinite term is doubtful. That Board has jurisdiction only of claims arising under “contracts” and then only to award money damages.
In the procedural posture of an appeal from the grant of a stay, the constitutional question is not ripe for our decision. Indeed, Commonwealth Court did not answer the constitutional question. It merely determined appellee’s arguments had arguable merit.
It does not follow, however, that because Commonwealth Court had jurisdiction to hear appellee’s constitutional claim, that it must a fortiori grant a stay. Thus, we must review Commonwealth Court’s grant of a stay to determine first whether it applied the proper standard for a stay and, second, considering the proper standard, whether Commonwealth Court abused its discretion when it granted one to appellee.
In granting a stay in this case Commonwealth Court erroneously followed Allets, Inc. v. Penn Township Board of Supervisors,
(1) if the appeal appears to present a question which is meritorious, not frivolous;
(2) if any detriment to interested рarties resulting from a stay would be less than the harm resulting from a denial of it; and
(3) if the public interest would not be adversely affected by a stay.
This standard is incorrect. It is not enough to present an issue which is not frivolous. We now require a person seeking a stay to make a strong showing that he is likely to prevail on the merits as well as to show irreparable harm and that the stay will not substantially harm other interested parties or the public interest. See Pennsylvania Public Utility Commission v. Process Gas Consumers Group,
Appellee has not shown irreparable harm. Its license could have been suspended without a hearing. See Greco v. Commonwealth, supra. Damage suffered as a result of an excessive temporary suspension is measurable in monetary terms unless the suspension is so inordinately long as to amount to a revocation. Appellee’s right tо prior hearing applies only to revocation and the denial of such hearing can be reviewed only in Commonwealth Court.
Notes
. Act of August 26, 1971, P.L. 351, No. 91, § 1 et seq.
. An application for a stay or supersedeas is not under 42 Pa.C.S. § 761(c) which gives the Commonwealth Court original jurisdiction of cases involving mandamus and prohibition to a government unit "where such relief is ancillary to matters within its appellate jurisdiction,____’’
. Act of October 5, 1978, P.L. 1104, No. 260, §3, as amended.
. This inquiry is necessary not only to determine initially whether Commonwealth Court has jurisdiction of the matter but also to determine whether it abused its discretion in granting a stay. See infra p. 379.
. It is significant to note that the State Lottery Law does not mandate revocation of appellee’s license. Rather, the Secretary of Revenue “may suspend or revoke a license ... if it shall find the applicant or licensee (1) has been convicted of a crime involving moral turpitude. ...”
. While it is arguable that no hearing is required following revocation of license pursuant to a statute which mandates revocation upon the license holder’s conviction of a crime, see generally Anno.: Revocation of Liquor License — Hearing, 35 ALR2d 1082 (1954), that is not the case here. The pertinent provision of the State Lottery Law permits suspension upon conviction of a crime only aftеr an exercise of discretion by the Secretary.
. Disputes arising between lottery licensees and the Bureau over relative obligations may be contractual in nature. In Transamerica Insurance Co. v. Judie, Inc.,
. Under the full test set forth in Pennsylvania Public Utility Commission v. Process Gas Consumers Group, the grant of a stay is warranted only if:
1. The petitioner makes a strong showing that he is likely to prevail on the merits.
2. The petitioner has shown that without the requested relief, he will suffer irreparable injury.
3. The issuance of a stay will not substantially harm other interested parties in the proceedings.
4. The issuance of a stay will not adversely affect the public interest.
Id.
. Wе note that appellee has retained its license up to this point under the stay. Thus, if Commonwealth Court or the Department act promptly to afford appellee a departmental hearing the temporary pre-hearing deprivation may not be unreasonably long and so tantamount to revocation.
Concurrence Opinion
concurring.
Although I agree with the majority that this Court is without direct appellate jurisdiction in this case, I do not agree with the reasoning employed by the majority in reaching this conclusion. In seeking judicial review of the determination оf the Department of Revenue to revoke appellee’s lottery license, appellee properly exercised its right to appeal to the Commonwealth Court from an “adjudication” of an administrative agency. See 42 Pa.C.S. § 702. Contrary to the view of the majority, the right to appeal from an administrative adjudication is not dependent upon a showing that a “substantial constitutional question” is present, any more than is a party’s right to appeal to an appellate court from a determination of a сourt of common pleas. Rather, under the express terms of section 702, that right is absolute.
As to the stay of the revocation of appellee’s lottery license, I would treat the Department of Revenue’s notice
Accordingly, I concur only in the result.
Of course, when, in conjunction with an appeal under section 702, a party seeks a stay of an administrative agency’s order, the substantiality of the question presented may become relevant because the appellant must demonstrate likelihood of success on the merits to be entitled to the stay. See Pa. Public Utility Commission v. Process Gas,
Concurrence Opinion
concurring and dissenting.
As the majority correctly notes, an application for a stay is ancillary to an appeal. See Pa.R.A.P. 1702; 1781. Consequently, the validity of any such application necessarily depends upon whether the court to which the underlying appeal has been taken, has jurisdiction of the subject matter.
On the other hand, a request for a preliminary injunction is an original action which, in the situation where the party sought to be enjoined is the Commonwealth, is an action fаlling within the original jurisdiction of the Commonwealth Court. See 42 Pa.C.S. § 761(a).
Thus, the threshold question in this case is whether the Commonwealth Court had the subject matter jurisdiction to entertain appellee’s petition for review from the department’s decision to revoke its license. I think not.
It is unquestioned that the basis, for appellee’s claimed property right was a contract entered into between itself and the Commonwealth. See Transamerica Ins. Co. v. Judie, Inc.,
If, as appellee further argues, it was entitled to have its breach claim resolved prior to a revocation, the corporation would have the option of going to the Commonwealth Court to seek a preliminary injunction against any intervening action sought to be taken by the Department.
I see no constitutional problems with proceeding in this manner, since appellee would be granted its opportunity to be heard, in a forum empowered to grant an adequate remedy, i.e., monetary damages.
Although one may criticize this perceived splitting of the cause of action, such criticism should not be directed here.
Furthermore, despite the labels attached to this application by the parties below,
I would treat this case as a direct appeal from an original action for preliminary injunctive relief commenced in the Commonwealth Court. However, since our decision in Pennsylvania Public Utility Commission v. Process Gas,
Finally, I would emphasize that the question of whether due process requires hearings prior to suspension and/or revocation, remains for the Commonwealth Court, as does the questiоn as to whether the license at issue is or is not a property right. See Majority Opinion at 380.
. Act of August 26, 1971, P.L. 351, No. 91, § 1 et seq.
. Act of October 5, 1978, P.L. 1104, No. 260 § 3 as amended.
. From an adverse determination on the merits by the Board the appellee would still retain its constitutionally guaranteed right of appeal to the Commonwealth Court. See 2 Pa.C.S. § 701 et seq.; 42 Pa.C.S. § 763.
. The majority’s decision seems to dictatе the anomalous result of requiring the department to develop and implement hearing procedures, where they have not previously been required, while the legislatively created Board of Claims will sit idle, wasting its acquired expertise.
. I wish to emphasize that the statutory scheme set up by the legislature seems quite adequate, and I in no way intend my comments as critical of the system they have devised.
. We are clearly not bound by the labels which the parties affix to their filings. See Pomerantz v. Goldstein,
. In this regard the majority correctly notes that "appellee sought injunctive relief.” Majority Opinion at 372.