POM of PA, LLC v. PSP, Bureau of Liquor Control Enforcement

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
POM of Pennsylvania, LLC, :
Petitioner :
: No. 503 M.D. 2018
v. :
: Argued: May 8, 2019
Pennsylvania State Police, Bureau of :
Liquor Control Enforcement, :
Respondent :
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge
HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE ROBERT SIMPSON, Judge1
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE McCULLOUGH FILED: November 20, 2019
Before this Court is the Pennsylvania State Police, Bureau of Liquor
Control Enforcement’s (PSP) application for summary relief in the nature of a partial
judgment on the pleadings with respect to the PSP’s counterclaim to the petition for
review in the nature of a complaint seeking a declaratory judgment and injunctive
relief, filed in this Court’s original jurisdiction by POM of Pennsylvania, LLC (POM).
This case is a companion to, and is controlled by our disposition in, POM of
1
This matter was assigned to this panel before September 1, 2019, when Judge Simpson
assumed the status of senior judge.
Pennsylvania, LLC v. Department of Revenue, and City of Philadelphia (Pa. Cmwlth.,
No. 418 M.D. 2018, filed November 20, 2019) (POM I).
On July 20, 2018, POM filed in this Court’s original jurisdiction a petition
for review seeking a declaratory judgment and injunctive relief, naming as respondent
the PSP. According to POM’s petition for review, POM distributes software for “a
skill-based video game machine, called the Pennsylvania SkillTM Amusement Device
402.49 PEN” (POM Game) throughout Pennsylvania. (Petition ¶1.) The POM Game
is primarily located in taverns, restaurants and social clubs that serve alcohol under
license from the Pennsylvania Liquor Control Board. (Petition ¶11.) The POM Game
is a coin-operated video machine that offers several games including a tic-tac-toe style
puzzle, a potentially unlockable bonus session, and a “Follow Me TM colored dot-
matching second phase of game play.” (Petition ¶¶12-13.) If a player is ultimately
successful playing the POM Game he or she is awarded with a combined total of 105%
of the original amount spent to play. (Petition ¶27.) POM asserts that the POM Game
is not an illegal gambling device under Pennsylvania criminal law, but rather, that it is
a legal game of skill. (Petition ¶28.)
POM avers that on December 21, 2017, and January 4, 2018, the PSP sent
letters to certain liquor licensees in the Commonwealth in which it threatened criminal
and/or administrative sanctions against any liquor licensee in possession of a skill
game. (Petition ¶29.) POM also alleges that high-ranking PSP officials have advised
various persons throughout the Commonwealth, including customers and potential
customers in public forums, that all skill games are illegal. (Petition ¶30.) POM further
asserts that the PSP has advised legislators that games of skill, including the POM
Game, are illegal. (Petition ¶31.) Moreover, POM alleges that in the months prior to
its filing the petition for review, PSP agents visited users of the POM Game and
threatened to seize their POM Games and suspend or revoke their Liquor Control
Board-issued liquor licenses. (Petition ¶32.) POM avers that on July 11, 2018, PSP
2
seized five POM Games, as well as currency and other property, from a location in
Fairless Hills, Bucks County, Pennsylvania. (Petition ¶33.)
POM maintains that the POM Game is not an illegal game of chance under
the relevant statute of the Pennsylvania Crimes Code governing illegal gambling
devices. (Petition ¶¶35-36.) POM also alleges that in In re Pace-O-Matic, Inc.
Equipment, Terminal I.D. No. 142613 (C.P. Beaver, No. M.D. 965-2013, filed
December 23, 2014), the Court of Common Pleas of Beaver County determined that a
similar POM game was a game in which skill predominated and, thus, not a gambling
device per se under Pennsylvania law.2, 3 (Petition ¶45.) Consequently, POM requests
that this Court enter a declaratory judgment in its favor and (1) declare that the POM
Game is a legal device under Pennsylvania law; (2) declare that the PSP lacks the power
and authority to seize or threaten to seize POM Games or initiate administrative or
criminal proceedings regarding POM Games; (3) permanently enjoin the PSP from
seizing or threatening to seize POM Games and/or initiating administrative or criminal
proceedings regarding POM Games; and (4) grant any other relief deemed appropriate.
2
In Pace-O-Matic, agents of the Pennsylvania Bureau of Liquor Control Enforcement seized
coin-operated video devices from a social club. Id., slip op. at 1-2. Like the POM Game at issue, the
devices contained tic-tac-toe style puzzles that were played for money and offered rewards and dot-
matching bonus games. Id., slip op. at 2-4. The court of common pleas concluded that a machine is
a gambling device per se where three elements are present: (1) consideration; (2) a result determined
by chance, instead of skill; and (3) a reward. Id., slip op. at 5. Because the court of common pleas
determined that the outcome of both the tic-tac-toe and bonus games was determined predominantly
by skill, rather than chance, it held that the Commonwealth failed to prove that the seized devices
were gambling devices per se. Id., slip op. at 10-12.
3
Additionally, POM alleges that after the Beaver County decision, the District Attorney for
Centre County issued a letter stating that, in light of the decision, her office would not confiscate
POM machines. Similarly, POM avers that the District Attorney for Lancaster County issued a letter
stating that for the reasons set forth in the Beaver County decision, the POM machine was not
considered a game of chance under Pennsylvania gaming laws. (Petition ¶46.)
3
(Petition ¶62.) POM also requests that we enter a preliminary injunction enjoining the
PSP from (1) seizing or threatening to seize POM Games; (2) initiating administrative
or criminal proceedings regarding the POM Game; and (3) arresting or prosecuting
persons in connection with operation of the POM Game. Id.
The PSP filed an answer, new matter, and counterclaim in response to
POM’s petition for review. In its counterclaim, the PSP alleges that the POM Game is
considered a slot machine under section 1103 of the Pennsylvania Race Horse
Development and Gaming Act (Gaming Act), 4 Pa.C.S. §1103. (Counterclaim ¶18.)
The PSP also avers that the POM Game has not been inspected or certified by the
Pennsylvania Gaming Control Board (Gaming Control Board) and that POM has been
acting in violation of the Gaming Act.4 (Counterclaim ¶¶20-21.) The PSP also
maintains that POM is a manufacturer of slot machines under section 1103 of the
Gaming Act, 4 Pa.C.S. §1103, and that it has violated the Gaming Act by
manufacturing slot machines without a manufacturer’s license. (Counterclaim ¶¶25-
27, 29-30.) Similarly, the PSP contends that POM is a supplier of slot machines under
the Gaming Act and that POM has violated the Gaming Act by distributing slot
machines without a supplier license. (Counterclaim ¶¶37-40, 42.)
The PSP seeks a declaration that (1) the Gaming Act regulates the
manufacture, possession, and operation of slot machines; (2) the Gaming Act and its
regulations prohibit any person from possessing a slot machine unless lawfully
manufactured by a licensed manufacturer; (3) the Gaming Act prohibits the possession
and operation of any slot machines unless on the premises of a licensed casino facility;
(4) the POM Game is an illegal gambling device under the Gaming Act; (5) the POM
Game is a slot machine under the Gaming Act and subject to a daily tax of 34% of its
revenue; and (6) POM is a manufacturer and/or supplier of slot machines and is
4
4 Pa.C.S. §§1101-1904.
4
required to obtain a license from the Gaming Control Board. (Counterclaim ¶49.) The
PSP also requests that POM be ordered to remove its machines from all Pennsylvania
establishments and cease further sale and distribution of its machines within
Pennsylvania unless and until POM obtains the proper licenses from the Gaming
Control Board. (Counterclaim ¶50.) While the PSP repeatedly argues that the POM
Games are subject to the Gaming Act and the authority of the Gaming Control Board,
the Gaming Control Board has not sought to intervene in this matter.
POM filed a reply to the PSP’s new matter and counterclaim. Thereafter,
the PSP filed an application for summary relief in the nature of a motion for partial
judgment on the pleadings with respect to its counterclaim.
The PSP raises the following issues in its application for summary relief
in the nature of a motion for judgment on the pleadings:5 (1) The POM Game is a slot
machine under the Gaming Act; (2) POM is a manufacturer and/or a supplier of slot
machines under the Gaming Act; and (3) POM is acting in violation of the Gaming
Act.
The arguments advanced by the PSP and POM in this matter are identical
to those set forth and disposed of by this Court in POM I. In that case, we concluded
5
Rule 1532(b) of the Pennsylvania Rules of Appellate Procedure, which is titled “Summary
relief,” provides that “[a]t any time after the filing of a petition for review in an appellate or original
jurisdiction matter the court may on application enter judgment if the right of the applicant thereto is
clear.” Pa.R.A.P. 1532(b). “A motion for judgment on the pleadings is in the nature of a demurrer”;
thus, “all of the opposing party’s allegations are viewed as true and only those facts which have been
specifically admitted by him may be considered against him.” Trib Total Media, Inc. v. Highlands
School District, 3 A.3d 695, 698 n.2 (Pa. Cmwlth. 2010).
In reviewing a motion for judgment on the pleadings we “may only consider the pleadings
themselves and any documents properly attached thereto.” Id. The motion should only be granted
“when the pleadings show there is no genuine issue of material fact and the moving party is entitled
to judgment as a matter of law.” Id. Further, “the party moving for judgment on the pleadings must
admit the truth of all the allegations of his adversary and the untruth of any of his own allegations that
have been denied by the opposing party.” Pfister v. City of Philadelphia, 963 A.2d 593, 597 (Pa.
Cmwlth. 2009). Where “material issues of fact are in dispute, judgment on the pleadings cannot be
entered.” Id.5
that because the plain language of the Gaming Act indicates that the General Assembly
did not intend for the Act to regulate unlicensed slot machines and/or supplant the
Crimes Code’s regulation of the same, the POM Game is not subject to the Gaming
Act. Accordingly, for the reasons articulated in POM I, we deny the PSP’s application
for summary relief in the nature of a motion for partial judgment on the pleadings.
However, for the same reasons discussed in POM I, our denial of the PSP’s application
does not decide the separate question of whether the POM Game is an illegal gambling
device under the Crimes Code, which both parties appear to acknowledge requires
discovery in order to resolve.
________________________________
PATRICIA A. McCULLOUGH, Judge
Judge Cohn Jubelirer dissents.
Judge Brobson did not participate in this decision.
Judge Covey concurs in the result only.
6
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
POM of Pennsylvania, LLC, :
Petitioner :
: No. 503 M.D. 2018
v. :
:
Pennsylvania State Police, Bureau of :
Liquor Control Enforcement, :
Respondent :
ORDER
AND NOW, this 20th day of November, 2019, the Pennsylvania State
Police, Bureau of Liquor Control Enforcement’s (PSP) application for summary
relief in the nature of a motion for partial judgment on the pleadings, with respect to
the PSP’s counterclaim, is denied.
________________________________
PATRICIA A. McCULLOUGH, Judge