Summary
recognizing due process violation when commission ordered owner to return prize money without notice and a hearing
Summary of this case from Castanon v. CatheyOpinion
Argued March 10, 1989.
May 10, 1989.
State Horse Racing Commission — Disqualification of race winner — Scope of appellate review — Violation of constitutional rights — Error of law — Findings of fact — Substantial evidence — Reconsideration — Regulations.
1. Review by the Commonwealth Court of Pennsylvania of a decision of the State Horse Racing Commission is to determine whether constitutional rights were violated, an error of law was committed or findings of fact were unsupported by substantial evidence. [698]
2. A horse race winner whose purse is subject to challenge and repayment before the State Horse Racing Commission has a property right affected by the decision and must be provided with an opportunity to be heard. [698-9]
3. An order issued after reconsideration of a matter by the State Horse Racing Commission is null and void when reconsideration should not have been granted because of a substantial failure of the petitioning party to comply with administrative rules applicable to reconsideration petitions. [700-1]
Argued March 10, 1989, before Judges COLINS and SMITH, and Senior Judge KALISH, sitting as a panel of three.
Appeal No. 1731 C.D. 1988, from the Order of the State Horse Racing Commission, in the case of In Re: George McCullough, No. 85-060PP, dated June 15, 1988.
Request to disqualify first place finisher of horse race denied by Board of Stewards at Philadelphia Park. Protestant appealed to the State Horse Racing Commission. Appeal denied. Board affirmed. Request for reconsideration filed. Commission disqualified winner and ordered horse owner to return purse to bookkeeper at Philadelphia Park. Owners appealed to the Commonwealth Court of Pennsylvania. Held: Appeal dismissed. Original order of Commission reinstated.
Bernard L. Siegel, Of Counsel: Stanford Shmukler, for petitioners.
Randall N. Sears, Assistant Counsel, with him, John B. Hannum, Jr., Chief Counsel, for respondent.
Robert and Rhona Goldstein, d/b/a Scarlett Farm (petitioners) petition for review of an order of the State Horse Racing Commission (Commission) which ordered petitioners to return the purse won by their horse "Crown's Revenge" to the horseman's bookkeeper at Philadelphia Park.
On December 19, 1985, petitioners' horse finished first in the Seventh Race at Philadelphia Park. At the conclusion of this race, George McCullough, the owner of the second place finisher, "Oxford Star" filed a protest with the Stewards requesting that petitioners' horse be disqualified for a false start and that his horse be declared the winner. The Stewards disallowed this protest and the order of finish was permitted to stand. On December 26, 1985, petitioners received $7,200.00 as the winning purse.
On March 19, 1987, the Commission denied McCullough's initial appeal and affirmed the Stewards' decision. Petitioners, however, received a letter from the Director of Enforcement advising them that on May 20, 1987, as a result of McCullough's petition for reconsideration, their horse had been disqualified and that the $7,200.00 purse from the December 19, 1985, race was to be returned to the horseman's bookkeeper at Philadelphia Park within ten days. The Commission ordered the purse returned based on a finding that petitioners' horse broke early and, therefore, was a non-starter and should have been disqualified which would have rendered petitioners' horse ineligible for any purse money.
Petitioners' counsel then contacted the Commission requesting to see the documents concerning this matter. However, the petitioners were never granted access to the full record until after their appeal was filed with this Court and the record was submitted by the Commission. The Commission did, however, grant petitioners permission to address the Commission in an executive session to determine whether their horse qualified as a starter as defined in 58 Pa. Code § 161.3. The Commission, on June 15, 1988, refused to change its May 20, 1987, decision disqualifying petitioners' horse and ordering the purse refunded. This appeal followed.
Preliminarily, we note that our scope of review is limited to a determination of whether an error of law was committed, constitutional rights were violated, or the findings of fact are unsupported by substantial evidence. Delaney v. Pennsylvania State Horse Racing Commission, 112 Pa. Commw. 407, 535 A.2d 719 (1988); Frizalone v. Pennsylvania State Harness Racing Commission, 112 Pa. Commw. 285, 535 A.2d 288 (1987).
Petitioners first argue that the Commission's action ordering the purse refunded was a violation of due process because they were never given notice or an opportunity to be heard. Moreover, since the Stewards declared the race official and distributed the purse, their right to the money was fixed and vested. Therefore, they should have been entitled to be present at the hearing at which the Commission decided that their horse was not a starter and, thus, not entitled to the winning purse.
The Administrative Rules governing the Commission define adjudication as any final order, decree, decision, determination, or ruling by the Commission affecting the rights, privileges, immunities, or obligations of any licensee. 58 Pa. Code § 165.171(a) (emphasis added). "The essential elements of due process required in the context of administrative action when a property right is involved are 'notice of government action and an opportunity to be heard to challenge that action.' " Luzzi v. State Horse Racing Commission, 120 Pa. Commw. 215, 222, 548 A.2d 659, 662 (1988) (quoting Barasch v. Pennsylvania Public Utility Commission, 119 Pa. Commw. 81, 101, 546 A.2d 1296, 1305 (1988)) (footnote omitted). Clearly, the Commission's decision ordering petitioners to refund the purse affects petitioners' property rights. Thus, pursuant to Section 504 of the Administrative Agency Law, 2 Pa. C. S. § 504, which states: "[n]o adjudication of a Commonwealth agency shall be valid as to any party unless he shall have been afforded reasonable notice of a hearing and an opportunity to be heard . . .," the petitioners should have been given notice and an opportunity to attend this hearing.
The Commission, at oral argument, conceded the fact that the petitioners were indeed denied their due process rights by not being informed of the reconsideration hearing. The Commission said it is willing, upon remand, to conduct a hearing which would satisfy all due process requirements. The Commission is to be lauded for being forthright with the Court in acknowledging its error. Nevertheless, we are constrained to reverse the Commission, because McCullough's initial protest, petition for reconsideration and the Commission's subsequent granting of the same were untimely and not filed in accordance with the Rules of Racing, 58 Pa. Code § 163.1-163.538.
McCullough's protest concerning the petitioners' horse was not lodged until after the results of the race were declared "official." 58 Pa. Code § 163.281(f) states, "[t]o merit consideration, a protest against a horse based on a happening in a race must be made to the Stewards before the placing of the horses for that race has been officially confirmed." The notes of testimony from the November 24, 1986, hearing reflect that McCullough's protest was not lodged until after the official sign was posted.
Petitioners further argue that McCullough's appeal to the Commission was not filed within forty-eight (48) hours of the Stewards' declaration of the official results of the race as required by 58 Pa. Code § 165.179(7). The Commission, however, stated the filing on December 23, 1985, was timely because this was the first business day after the race in question that the Commission's Harrisburg office was open. The record is unclear as to whether the Commission's office at Philadelphia Park was open during the 48-hour period following the race. However, resolution of this issue is immaterial to the disposition of this appeal. Assuming arguendo the appeal of the Stewards' decision was timely filed, the petitioners still must prevail, as the petition for reconsideration was improperly granted.
The Administrative Rule at 58 Pa. Code § 165.183(q) concerning a petition for reconsideration states:
Any petition for rehearing, reconsideration, or modification of any Commission order or adjudication shall be in writing setting forth in numbered paragraphs the findings or orders of the Commission that may be involved, the points relied upon by the petitioner, appropriate record references, and specific request for the changes or modifications desired. If further evidence or testimony is desired or contemplated, the nature and purpose of the same must be briefly stated. (Emphasis added.)
A review of the record reveals that this section was not complied with, yet the Commission granted reconsideration at the oral request of McCullough's counsel. A regulation has the same legal force and effect as a statute. Commonwealth v. A.J. Wood Research Co. of Pennsylvania, 60 Pa. Commw. 225, 431 A.2d 367 (1981). While the Commission is given great deference in the interpretation of its own regulations, it is no more free to violate its regulations than are persons sought to be regulated. Delaney, 112 Pa. Commw. at 412, 535 A.2d at 722. Since Section 165.183(q) was not complied with, the Commission was not justified in reconsidering its March 19, 1987, decision.
Therefore, since the Commission did not adhere to the prescribed dictates of its own regulations concerning the granting of a petition for reconsideration, its action ordering the purse refunded was a nullity. No timely appeal of record was filed from the March 19, 1987 order of the Commission.
Accordingly, we dismiss this appeal, as it is from a null and void order.
See generally, Monsour Medical Center v. Department of Public Welfare, 111 Pa. Commw. 359, 533 A.2d 1114 (1987).
ORDER
AND NOW, this 10th day of May, 1989, Petitioners' Petition for Review in the above-captioned matter is dismissed as an appeal from a null and void order. The order of the Commission dated March 19, 1987 is reinstated.