Harness Racing Commission’s Denial of Intervention “Clearly Unreasonable”

Finding “clearly unreasonable” the Pennsylvania State Harness Racing Commission’s denial of flat track Philadelphia Park’s motion to intervene in harness track Harrah’s Chester’s telephone account wagering application, the en banc Commonwealth Court reversed the denial of intervention and also (in order to “right the wrong”) vacated the Commission’s order allowing Harrah’s Chester to commence operations of the new remote wagering system. Bensalem Racing Association, Inc.v. Pennsylvania State Harness Racing Commission, _A.3d ___(Pa. Cmwlth. 2011) (en banc) 1053 and 2710 C.D. 2010,
filed March 21, 2011) (Brobson, J.).

Philadelphia Park, a racetrack and casino in northern metropolitan Philadelphia, has operated a Commission-approved remote account wagering system for many years, consistent with a statute and Commission regulations that require such a system to be operated on site by employees of the racetrack.  The statute gives a  licensee the exclusive right to operate account wagering within its primary market area (a thirty-five mile radius around the track) unless another licensee is located within the market area, in which case both share the exclusive right in the overlapping area.  Harrah’s Chester, a 2003 harness track licensee, is located in southern metropolitan Philadelphia, such that its primary market area for account wagering purposes overlaps significantly with Philadelphia Park’s.  In 2010, Harrah’s applied for authority to conduct account wagering.  Philadelphia Park moved to intervene and protested, alleging that Harrah’s proposed plan, which essentially outsourced operation of the account wagering system to an out of state vendor, violated the statute and if approved would create unfair competition with Philadelphia Park, which operates a system that complies with the statute and regulations.   The Commission, without conducting a hearing, denied Philadelphia Park’s motion to intervene and granted Harrah’s application.

Defending its denial of intervention, the Commission argued that Philadelphia Park was not entitled to intervene because the harm it alleged was purely “future” harm that was too remote and speculative as of the time of the application, in that Philadelphia Park was not suffering any present harm.  The court rejected the claim out of hand, observing that intervention under Pennsylvania’s General Rules of Administrative Practice and Procedure (GRAPP) necessarily is sought before final administrative action is taken, and thus the only possible test for intervention must be whether the intervener’s interest may be affected, not whether it presently is affected.  In so ruling, the court thoroughly reviewed Pennsylvania precedent relating to intervention and standing under GRAPP, as well as the more onerous common law tests for standing to sue and standing to appeal, and reversed the Commission’s decision as to intervention, while also vacating the underlying grant of Harrah’s application.

A link to the Commonwealth Court’s opinion can be found here: http://www.aopc.org/OpPosting/Cwealth/out/1053CD10_3-21-11.pdf