Depaul v. Com.

969 A.2d 536

Peter DePAUL, Petitioner v. COMMONWEALTH of Pennsylvania and the Pennsylvania Gaming Control Board, Respondents.

No. 194 EM 2007

Supreme Court of Pennsylvania.

Argued May 13, 2008.

Decided April 30, 2009.

David James Porter, John Robert Leathers, Thomas L. Van Kirk, Thomas Patrick Manning, Howard D. Scher and Landon Young Jones, III Buchanan Ingersoll & Rooney, P.C., Pittsburgh, for Peter DePaul.

Calvin Royer Koons, Thomas W. Corbett, Jr., Office of Attorney general, for Com.

Francis T. Donaghue, Gaming Control Board, Calvin Royer Koons, Office of Attorney General, for Pennsylvania Gaming Control Board.

CASTILLE, C.J., SAYLOR, EAKIN, BAER, TODD, McCAFFERY, JJ.

OPINION

Chief Justice CASTILLE.

Petitioner, Peter DePaul, has filed a verified petition in the nature of a complaint seeking declaratory judgment and injunctive relief, challenging the constitutionality of Section 1513 of the Pennsylvania Race Horse Development and Gaming Act, 4 Pa.C.S. § 1513 ("Gaming Act").¹ Section 1513 imposes upon a class of individuals affiliated with licensed gaming in Pennsylvania an absolute ban on political contributions to any candidate for public office in the Commonwealth, to any political party committee in the Commonwealth, or to any group or association organized in support of a candidate in the Commonwealth. DePaul claims that the ban is unconstitutional, both facially and as applied to him, because it is an overly broad and unlawfully discriminatory infringement of the rights to free expression and association guaranteed by Article I, Sections 7, 20, and 26 of the Pennsylvania Constitution. For the reasons that follow, we agree with DePaul's essential premise. Accordingly, we hold that Section 1513 is unconstitutional under Article I, Section 7, to the extent that it prohibits political contributions of any amount by specified individuals involved in the gaming industry, and we enjoin the enforcement of this unconstitutional provision.²

Since December of 2005, DePaul has held a 13.63% ownership interest in Washington Philadelphia Investors, LP, which, in turn, holds a 70% ownership interest in Philadelphia Entertainment and Development Partners ("PEDP"), owners of the planned "Foxwoods" Casino.³ DePaul states that he holds a 9.54% indirect ownership interest in PEDP.⁴ On December 20, 2006, the Gaming Control Board approved PEDP's application for a Category 2 slot machine license in Philadelphia and issued its formal Order and Adjudication on the Philadelphia slot machine licenses on February 1, 2007. Following an appeal by an unsuccessful candidate challenging the Board's licensing decision, this Court affirmed the Board's Order and Adjudication on July 17, 2007. Riverwalk Casino v. Pa. Gaming Control Bd., 592 Pa. 505, 926 A.2d 926 (2007).

Concurrently with PEDP's application for a Category 2 slot machine license, DePaul applied to the Board for a gaming license as a "key employee qualifier" of PEDP. Thereafter, and effective November 1, 2006, the Gaming Act was amended, and the term "key employee qualifier" was replaced with the term "principal."⁵ It is undisputed that DePaul qualifies as a principal under the Gaming Act. Section 1513(a) of the Act, which is entitled "Political influence," among other things, absolutely "prohibit[s]" principals, along with other classes of individuals involved in the gaming business, from "contributing any money or in-kind contribution to a candidate for nomination or election to any public office in this Commonwealth, or to any political party committee or other political committee in this Commonwealth or to any group, committee or association organized in support of a candidate, political party committee or other political committee in this Commonwealth." 4 Pa.C.S. § 1513(a) (emphasis added).⁶ DePaul's constitutional challenge focuses on this broad prohibition.

During his entire adult life, DePaul asserts that he has actively supported candidates for public office in Pennsylvania, from governor to township supervisor, who, in his opinion, would serve the best interests of the Commonwealth. DePaul asserts that between January 13, 2006 and April 21, 2006, while PEDP's and his own license applications were pending, he was unaware that Section 1513's absolute ban applied to individuals who held any ownership interest, even an indirect ownership interest, in a slots license applicant such as PEDP. Thus, during that time period, DePaul made 21 political contributions totaling $31,745, including donations to State Representatives John Taylor and George Kenney, Jr., the Republican Committees for Bucks and Montgomery Counties, Montgomery County District Attorney Bruce Castor, Jr., and Philadelphia Register of Wills Ronald Donatucci.

On May 9, 2006, DePaul first learned that Section 1513's ban applied to applicants for key employee qualifier licenses and individuals who own indirect ownership interests in license applicants. DePaul promptly contacted the candidates and organizations to rescind his contributions and reported making the contributions and their rescission to the Gaming Control Board. On June 15, 2006, DePaul received an inquiry from the Board's Bureau of Investigations and Enforcement ("BIE").⁷ DePaul responded on June 21, 2006, informing BIE that all contributions had been refunded to him. BIE and DePaul then entered into negotiations regarding a consent decree. On December 4, 2006, the Board approved a consent decree entered into by DePaul, PEDP and the Board. The consent decree provided that, based upon DePaul's apparent violation of Section 1513(a)'s total ban on contributions, DePaul and PEDP would each pay $100,000 to the Commonwealth. The decree also set forth procedures and requirements designed to ensure DePaul's and PEDP's future compliance with Section 1513.

Due to DePaul's continued desire to make political contributions and attend political events such as dinners, receptions and candidate meetings, all of which require a purchased ticket to attend, he filed a verified petition seeking a declaration that Section 1513 is unconstitutional under the Pennsylvania Constitution because it violates his inherent rights of political expression and association, and requesting an order enjoining the enforcement of Section 1513. As noted, this Court possesses exclusive jurisdiction over this constitutional challenge to a provision of the Gaming Act pursuant to 4 Pa.C.S. § 1904.

Broadly stated, Count I of DePaul's verified petition contends that political contributions represent speech and association protected by Article I, Sections 7 and 20 of the Pennsylvania Constitution, which, he states, provide broader protections for freedom of speech and association than do their counterparts in the United States Constitution. In support of this contention, DePaul cites to Pap's A.M. v. City of Erie, 571 Pa. 375, 812 A.2d 591, 605 (2002) ("Pap's II") (Article I, Section 7 provides broader protection for freedom of expression than First Amendment of federal constitution), and Commonwealth v. Tate, 495 Pa. 158, 432 A.2d 1382, 1387 (1981) (state constitutional rights may be more expansive than federal counterparts). DePaul claims that, in order to pass constitutional muster, an absolute ban on political contributions must be "narrowly tailored" and must serve a compelling government interest, citing Commonwealth v. Wadzinski, 492 Pa. 35, 422 A.2d 124, 130 (1980), a First Amendment case in which this Court applied strict scrutiny. DePaul submits that Section 1513's ban does not pass this test.

Regarding the specifics of Section 1513's ban, DePaul notes that Section 1102 of the Gaming Act reflects a legislative intent to "prevent the actual or appearance of corruption that may result from large campaign contributions," and emphasizes the word "large." Section 1513, however, bans all contributions, regardless of amount, thereby depriving a potential contributor of his freedom of political association. DePaul further claims that Section 1513 is overly broad because it prohibits contributions to candidates for office even where there is no connection between the candidate and licensed gaming. DePaul cites as an example of the disconnection his contribution to a candidate for the Philadelphia Register of Wills, which he characterizes as "a political office without the least remote connection to the regulation of licensed gambling in the Commonwealth." Verified Petition, ¶ 41. DePaul also contends that the General Assembly imposed Section 1513's ban without a scintilla of evidence suggesting a connection in Pennsylvania between licensed gaming, contributions to political candidates, and political corruption. Therefore, in DePaul's view, the Legislature failed to identify any compelling governmental interest that would support Section 1513's invasive limitation on constitutional rights of free speech and political association.

In Count II of the petition, DePaul claims that Section 1513 violates Article I, Section 26 of the Pennsylvania Constitution, which establishes prohibitions on unlawful or baseless discrimination against persons in their exercise of civil rights. DePaul contends that Section 1513 unlawfully and irrationally discriminates against persons having a broad range of associations to licensed gaming, denying them the right to participate in the political process. The outright ban, he alleges, will not enhance the comprehensive regulatory safeguards built into the Gaming Act and is inconsistent with the federal and state commitment to permit all persons to participate actively in the democratic process.⁸

Turning to the current briefing, we begin with DePaul's claim that Section 1513 violates Article I, Section 7 of our Constitution, which provides:

The printing press shall be free to every person who may undertake to examine the proceedings of the Legislature or any branch of government, and no law shall ever be made to restrain the right thereof....