David Donk and Michael Larocca, Todd Pletcher and Mark Hennig, Plaintiffs-Appellees-Cross-Appellants v. Deborah Miller, Individually and in Her Capacity as the Director of the Division of Pari-Mutuel Wagering of the Department of Business and Professional Wagering of the State of Florida and Michael Taggart, Individually and in His Capacity as the Hearing Officer of the Division of Pari-Mutuel Wagering of the Department of Business and Professional Wagering of the State of Florida, Michael Hoblock, Individually and in His Capacity as the Chairman of the New York State Racing and Wagering Board, Defendant-Appellant-Cross-Appellee

Citations: 365 F.3d 159; 2004 U.S. App. LEXIS 7946Docket: 02-9358

Court: Court of Appeals for the Second Circuit; April 22, 2004; Federal Appellate Court

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David Donk and Michael Larocca, horse trainers, along with Todd Pletcher and Mark Hennig, sought legal action against Deborah Miller and Michael Taggart, Florida officials, and Michael Hoblock, chairman of the New York State Racing and Wagering Board, after the Board announced reciprocal suspensions due to their prior suspensions in Florida for drug violations. The plaintiffs challenged these suspensions in the United States District Court for the Southern District of New York, claiming due process violations and seeking injunctive relief and monetary damages. The district court ruled partially in favor of the plaintiffs, finding that their due process rights were violated and dismissing damage claims against Hoblock due to qualified immunity. The court permanently enjoined Hoblock from acting against the plaintiffs based on the Florida suspensions.

Upon appeal, the Second Circuit Court concluded that there was no due process violation since the plaintiffs had an opportunity to contest their suspensions before the Board. As a result, the court found the appeal regarding qualified immunity moot and determined that the district court's permanent injunction was an abuse of discretion, requiring it to be vacated. The background established that the Florida Division of Pari-Mutuel Wagering suspended the plaintiffs after their horses tested positive for drug use, a decision not disputed by the plaintiffs.

The trainer of record is strictly liable for the condition of the horses or greyhounds entered for racing. On May 19, 1999, Belmont Park stewards were informed of the plaintiffs' suspensions by the Florida Division of Pari-Mutuel Wagering (FDPW) and subsequently notified the Board, which began reciprocal suspension proceedings in New York. The plaintiffs were informed that their horses would be ineligible to race unless the Florida suspensions were stayed. At a Board meeting, the plaintiffs requested to present their case, which the Board allowed, resulting in a temporary permission for their already entered horses to race until May 22, 1999, unless the Florida suspensions were stayed. The Board upheld the suspensions but granted a brief stay to mitigate harm to the public and because of the potential for resolution in Florida.

The plaintiffs then filed a lawsuit against Hoblock for damages and an injunction against reciprocal discipline, also naming two FDPW officials. Claims against the Florida defendants were settled pre-judgment. On May 26, 1999, a district court issued a preliminary injunction against enforcing the Florida suspensions, effectively preventing New York from honoring them. On July 2, 2001, the court granted partial summary judgment, ruling that Hoblock violated the plaintiffs' due process rights but was protected by qualified immunity. The court reaffirmed parts of this ruling in March 2002 and issued a final judgment on August 27, 2002, permanently enjoining Hoblock from taking action based on the Florida suspensions. The court denied Hoblock's motions for reconsideration. 

The findings conclude that the plaintiffs received due process at the Board meeting, rendering the qualified immunity issue moot, and state that the injunction must be vacated. The Court will review the district court's summary judgment de novo, assessing material facts and the application of law.

Due process requires flexible procedural protections tailored to specific situations, emphasizing the necessity for notice and an opportunity to contest the case against an individual, as established in various Supreme Court cases. A horse trainer has a property interest in their professional license, which cannot be suspended without due process under the Fourteenth Amendment. In Barry v. Barchi, the Court ruled that a pre-suspension hearing is not required if there is probable cause for the suspension, as the state has a strong interest in maintaining the integrity of racing. In Barchi’s case, probable cause was supported by drug testing results. However, in the current situation, the suspensions imposed by the Board were reciprocal and executed without verifying probable cause or due process from the Florida proceedings. The Board’s decision relied on a regulation stating that a trainer suspended in one jurisdiction cannot train or ride during their suspension, without considering whether the trainers had violated any relevant laws.

The court did not determine if an automatic reciprocal suspension in New York without a hearing would be constitutionally valid. The plaintiffs were given a hearing opportunity prior to their suspensions, which led to a brief stay allowing their horses to race, followed by a district court injunction shortly after the stay expired. Although plaintiffs claimed a violation of due process under state law, the court found no persuasive argument to extend these state requirements to the federal Due Process Clause. The plaintiffs suffered no material injury since their horses were not barred from racing, making the appeal regarding due process moot.

The review of the permanent injunction imposed by the district court is evaluated for abuse of discretion but questions of mootness are reviewed de novo. The injunction was based on a finding that Hoblock violated plaintiffs' due process rights, but since the court ruled that the process was sufficient, the rationale for the injunction is absent. Additionally, the Florida defendants have lifted the plaintiffs' suspensions and dismissed all related complaints, rendering the injunction unnecessary. Hoblock confirmed that there is no possibility of reciprocal action based on the prior Florida suspensions.

Consequently, the district court’s imposition of the permanent injunction was deemed an abuse of discretion and must be vacated. The judgment is reversed and remanded with instructions to dismiss the plaintiffs' complaint and vacate the permanent injunction. A concurring opinion noted that had the Florida suspensions not been lifted, a different conclusion might have been reached regarding the necessity of the injunction against reciprocal suspensions in New York.