City Files for Reargument in SugarHouse Case

The City of Philadelphia asked the Pennsylvania Supreme Court today to re-hear arguments in a recently decided case that ruled the city has power to convey state owned riparian lands beneath the Delaware River.

The petition claims the court ruled in favor of HSP Gaming on an issue that wasn’t included in oral arguments and in which no evidence was presented.

The court, in HSP Gaming v. City of Philadelphia, had ruled a 1907 law transferred the power to issue licenses for use of the land to the city. It ruled former Mayor John F. Street’s administration had the right to issue a license to HSP Gaming for the building of SugarHouse Casino and ruled Mayor Michael Nutter’s administration did not have the power to revoke that license because the casino owner’s relied on it.

In its application for re-argument, the city said that while it disagreed with the court’s finding that the power granted to the city in 1907 remained with the city, it respected the court’s thoughtful, lengthy analysis on that point.

The city instead argued that there was no evidence to prove HSP Gaming had an entitlement to or reliance on the license issued by the Street administration.

The court’s conclusion that HSP Gaming detrimentally relied on the license ignores the facts, the city argued, that there was no hearing or fact finding to provide evidence of its reliance and that a license issued in error is always revocable. The city also argued that a license granted by the state to use lands held in trust by the state for the public is inherently revocable.

“The General Assembly’s mandate to establish casino gaming throughout this commonwealth as expeditiously as possible should not mean that normal rules requiring parties to prove their cases by a preponderance of the evidence subject to cross-examination are simply to be discarded,” the petition argued. “Nor does it mean that century old case law is simply to be ignored; nor does it justify a radical rewriting of property and public lands law.”

In asking for re-argument, the city said the issue of its ability to revoke the license was “expressly excluded from the oral argument.”

The application was filed by City Solicitor Shelley R. Smith, law department attorney Mark R. Zecca and Pepper Hamilton attorneys Amy Ginensky, A. Michael Pratt, Robin P. Sumner and David V. Dzara.

~Gina Passarella, Senior Staff Reporter

SugarHouse Wins Supreme Court Appeal Over Riparian Lands

Just a day after Foxwoods Casino said it would consider moving its site from the Delaware River to another location in the city, SugarHouse Casino won a significant victory in its battled to build along the river.

The Pennsylvania Supreme Court ruled today that the city of Philadelphia had the right to give SugarHouse Casino a license to build on state-owned riparian lands beneath the Delaware River but ruled the subsequent revocation of that license by a new administration was invalid.

The opinion, written by Chief Justice Ronald D. Castille, is a win for HSP Gaming, the parent company of SugarHouse, which has won every case it brought to the Supreme Court.

The city, under the new administration of Mayor Michael Nutter, had changed its position on whether it could issue a license for the use of state-owned lands and argued it shouldn’t have had that right. Alternatively, it argued that even if it had the right, subsequent legislation signed into law in February by Gov. Edward G. Rendell, clarified the issue and made the revocation legit, according to the opinion.

SugarHouse had argued a 1907 law transferred power to control the lands along the Delaware River to the city of Philadelphia and nothing has since changed that ruling.

“In this case, the plain and unambiguous language of Act 321 [of 1907] makes clear that the General Assembly delegated power to the City to issue submerged lands licenses,” Castille wrote. “Moreover, it is equally clear, by application of fundamental precepts of statutory construction, that no intervening act removed that power, nor did the General Assembly’s recent expression during the pendency of this litigation operate to undo the authority the City enjoyed when it acted in November of 2007.”

The court said the Dam Safety Act of 1978, which repealed parts of the 1907 Act 321, did not specifically take away the transference of power to the city. It also found the city doesn’t have unlimited power to revoke licenses that were granted appropriately.

“We recognize that there has been a change in the executive office in Philadelphia; but the view of the current director of commerce for the City does not affect or undermine the legitimate exercise of the authority reposed in the former director of commerce,” Castille said.

He was joined by Justices J. Michael Eakin, Max Baer and Debra Todd. Justices Thomas G. Saylor and Seamus P. McCaffery each wrote their own dissenting opinions. Justice Jane Cutler Greenspan did not participate in the consideration or decision in the case.

Saylor argued in his dissent that the Dam Safety Act repealed the 1907 law that granted licensing power to the state. He also argued the act never intended for the riparian lands to be used for anything other than wharves, piers or similar harbor structures.

McCaffery said in his dissent that only the state could issues licenses to build on riparian lands and that the city’s revocation was appropriate given it never had the right to issue the license in the first place.

For a more detailed analysis of the court’s decision in HSP Gaming v. City of Philadelphia, look to The Legal’s Web site Monday.

~Gina Passarella, Senior Staff Reporter