For failure to observe the doctrine of hierarchy of courts and meet the requirements for judicial review, the Court has denied a petition challenging the validity of the rules issued by the Philippine Amusement and Gaming Corporation (PAGCOR) governing Philippine Offshore Gaming Operations (POGO).

In a Decision penned by Associate Justice Jhosep Y. Lopez, the Supreme Court En Banc denied the consolidated petitions for prohibition and/or certiorari filed by Jovencio H. Evangelista (Evangelista); Union for National Development and Good Governance-Philippines Chairperson Miguel Daniel C. Cruz (Cruz), and the Anti-Trapo Movement of the Philippines, Inc. (collectively, petitioners).

The petitions assail the constitutionality of the Rules and Regulations for POGO (RR-POGO) approved by the Board of Directors of PAGCOR, pursuant to PAGCOR’s power under Section 8 of Presidential Decree No. 1869 to promulgate rules and regulations relevant to the registration of persons engaged in gambling.

The RR-POGO outlines the procedure for the licensing, accreditation, and registration of offshore gaming operators, offshore gaming agents, and other auxiliary service providers.

Petitioners argue that the RR-POGO is unconstitutional because PAGCOR has no authority to operate and regulate online or offshore gaming operations. They pray that the RR-POGO be struck down as unconstitutional, and that PAGCOR be permanently enjoined from implementing its provisions.

The Court ruled that the petitions must be denied for violating the doctrine of hierarchy of courts.

The doctrine of hierarchy of courts mandates that recourse must first be made to the lower-ranked court exercising concurrent jurisdiction with a higher court. The doctrine is meant to guarantee the Court’s status as the court of last resort so it can “satisfactorily perform the functions assigned to it by the fundamental charter and immemorial tradition.”

The Court added that giving due course to all petitions where original jurisdiction over the matter is shared with lower courts will unnecessarily clog the Court’s docket and exhaust resources that may be better utilized to resolve more pressing concerns.

Nevertheless, direct recourse to the Court has been allowed in certain instances such as when: (1) there are genuine issues of constitutionality that must be addressed at the most immediate time; (2)  the issues involved are of transcendental importance; (3) the case is of first impression; (4) the constitutional issues raised are better decided by the Court; (5) the time element present in the case cannot be ignored; (6) the petition reviews the act of a constitutional organ; (7) petitioners rightly claim that they had no other plain, speedy, and adequate remedy in the ordinary course of law; and (8) the petition includes questions that are dictated by public welfare and the advancement of public policy, or demanded by the broader interest of justice, or the orders complained for were found to be patent nullities, or the appeal was considered as clearly an inappropriate remedy.

In the present case, petitioners justify their direct recourse to the Court on the contention that the issues involved are of transcendental importance.

However, the Court found that petitioners failed to show exceptionally compelling reasons to justify deviating from the doctrine of hierarchy of courts.

It held that petitioners were not able to clearly explain why preventing PAGCOR from regulating and requiring the registration of offshore gaming operations is of transcendental importance. “Questions on the validity and constitutionality of the RR-POGO, to be sure, may have well been passed upon by the Court of Appeals, which similarly has jurisdiction over the subject matter and whose writs are likewise nationwide in scope,” said the Court.

The petition also failed to sufficiently establish the following elements of judicial review: (1) there is an actual case or controversy calling for the exercise of judicial power; (2) the person challenging the act must have standing to challenge; he or she must have a personal and substantial interest in the case such that he or she has sustained, or will sustain, direct injury as a result of this enforcement; (3) the question on constitutionality must be raised at the earliest possible opportunity; and (4) the issue of constitutionality must be the very lis mota of the case.

The Court found that the petition did not meet the first and second elements.

The first element, the requirement of an actual case or controversy, prevents academic exercises from the Court and the issuance of decisions with no practical use or value. Thus, the constitutionality of a statute will be passed upon by the Court “only if and to the extent that, it is directly and necessarily involved in a justiciable controversy and is essential to the protection of the rights of the parties concerned.”

Petitioners, however, failed to allege, must less show, how they will be adversely affected by the issuance of the RR-POGO. They failed to specify which of their legal and constitutional rights are supposedly infringed by the regulation of offshore gaming operations by PAGCOR, the Court held.

Where the constitutionality of a law is being assailed, more than the passage or effectivity of the law, the petitioners must assert a specific and concrete legal claim, or show the law’s direct adverse effect on them, said the Court. It stressed that without a definite showing of any clear right of petitioners supposedly violated by the issuance and implementation of the RR-POGO, there is no actual case or controversy for the Court to resolve.

The second element of legal standing refers to “personal and substantial interest in a case such that the party has sustained or will sustain direct injury as a result of the governmental act that is being challenged.”

Thus, a party assailing the constitutionality of a governmental act must prove the following: (1) the suing party has personally suffered some actual or threatened injury because of the allegedly illegal conduct of the government; (2) the injury is fairly traceable to the challenged action; and (3) the injury is likely to be redressed by the remedy being sought.

Petitioners Evangelista and Cruz argue that they have standing as taxpayers to question the constitutionality of the RR-POGO since the implementation of the RR-POGO will entail unnecessary expenses for the government.

However, they have not shown any direct and personal interest in the enforcement of the RR-POGO. There is no indication that they have sustained or are in imminent danger of sustaining some direct injury as a result of its implementation, the Court found.

“All told, in view of petitioners’ failure to observe the doctrine of hierarchy of courts and sufficiently establish the elements of judicial review, this Court shall refrain from discussing the constitutionality and legality of the RR-POGO,” the Court concluded.

With regard to their prayer for the issuance of a temporary restraining order (TRO) and/or writ of preliminary injunction, the Court found that petitioners failed to show that there was an invasion of a clear material and substantial right, or an urgent and paramount necessity to prevent serious damage. Consequently, their prayer for the issuance of a TRO and/or writ of preliminary injunction was also denied. (Courtesy of the Supreme Court Public Information Office)

FULL TEXT of G.R. Nos. 228234, 228315, and 230080, Evangelista v. PAGCOR, Cruz v. PAGCOR, Anti-Trapo Movement v. PAGCOR (April 25, 2023) at: https://sc.judiciary.gov.ph/228234-228315-230080-jovencio-h-evangelista-vs-philippine-amusement-and-gaming-corporation-pagcor-andrea-d-domingo-alfredo-c-lim-carmen-n-pedrosa-reynaldo-e-concordia-and-gabriel-s-claud/

Full text of the Separate Concurring Opinion of Acting Chief Justice Marvic M.V.F. Leonen at: https://sc.judiciary.gov.ph/228234-228315-230080-separate-concurring-opinion-saj-marvic-m-v-f-leonen/