William Fitzgerald v. Mountain Laurel Racing, Inc., Kenneth Marshall and John Knight, Presiding Judge

ROSENN, and Before ADAMS Circuit LACEY, Judge.* Judges, District THE OPINION OF COURT ROSENN, Judge. Circuit required plunge appeal We are in this again murky once into the waters of the underlying a civil state action doctrine brought action U.S.C. Specifically, 1983.1 we asked to de- are § heavily state termine whether the act of a racing regulated private harness association expelling and driver licensed trainer hearing, on the its track without a a state ground the driver has violated rule, is racing harness commission state ac- 1983 suit. purposes tion for of a section * Lacey, subjected, any Honorable B. Frederick United States causes to be citizen deprivation Unit- Judge Jersey, any District the District of New ed States ... sitting by designation. rights, privileges, secured or immunities laws, liable to the Constitution and party shall be provides: “Every person law, 1. 42 equity, U.S.C. injured § suit an action at who, any regulation under color of . . proper proceeding or other for redress.” , subjects, . . Racing like Moun- racing. ness associations state ac- concluded that district court li- employ officials privately Laurel preliminary tain granted present

tion was Racing Com- to enforce censed the State the association from injunction enjoining racetracks. mission Rules at access to its racetrack. the driver denying defray notably, the associations Most Inc., Racing, Laurel v. Mountain judges who oversee the salaries of 1979). (W.D.Pa. agree We F.Supp. 263 secre- races and the conduct of the the order of the district and affirm administrative performs certain tary who injunction. granting preliminary Racing duties, by the specifically fixed establishing Commission, including the I. Pennsylvania State for horses.3 standards Inc., Appellant Commission, Rules and Harness Laurel”) Pennsylva- is a (“Mountain pre- Rule Regulations, § profit for a corporation operated nia Racing charged by the Com- siding judge is Pennsylvania Harness by the State licensed enforcing rules with the task mission Commission”) (“Racing Racing Commission Commission, super- regulations of the racing in the Common- to conduct harness officials, race licensed vising all other Laurel, in order to con- wealth. records to the Commis- rendering daily races, The Meadows leases duct harness and conduct of of the activities sion Track, facility owned near privately Race a Id., Rule 10. meetings. § race Washington, Pennsylvania. is a licensed Appellee William states, racing, as it is in most is a Harness driver. At the racing trainer and harness Pennsyl- stringently regulated business season, racing Fitz- beginning of the 1978 private racing A association en- vania. his care to gerald had nine horses under gaged pari-mutuel wagering, like Moun- train and drive at the Meadows. Laurel, by tain be licensed must State privately which it policy by Laurel has a before it conduct harness races. The space free stall at the provide contracts to officers, and even the stockholders of a long as the track to trainers and drivers private racing subject are to association managed in races and are horses are run approval. Commission The State derives contract. according the terms of the substantial tax revenues from harness rac- ap- must be first agreement” “stall This ing, collecting percentage a of the track’s Racing before it proved by the Commission wagering income.2 The racing association. may be used Further, directly all of individuals agreement the stall key provision in engaged racing in harness li- are state Mountain Laurel reserves clause which trainers, Drivers, grooms agree- censed. and own- right to revoke the the unrestricted Racing ers of trainer a 72 upon giving horses must be licensed the owner or ment The they may pursue premises.4 Commission before har- to vacate the hour notice provides part: agreement argument 4. The stall in relevant We were informed at oral financially participates by providing State also reserves the unrestrict- [Mountain Laurel] e., “breakage,” funds for the i. the State track’s deny any space, right to revoke ed stall split and the track the difference be- any permit, owner or and/or to have computer tween the and the actual set odds any using any space other stall or trainer pay-off mathematical the bettors. The State vacate the same at the Meadows facilities Pennsylvania provides also funds for the Sire horses, equipment and/or all to remove Stakes races conducted at various racetracks. Meadows, premises personnel from the another, any assigned bam or from one racing pays Although association reason, at the discretion time and for they racing judges, are not the salaries of the Laurel], re- within 72 hours after [Mountain ordinary employees of association in- an ceiving Lau- notice to vacate from [Mountain perform they apparently duties sense because . rel]. Racing only for the Harness Commission. however, secretary, appears per- racing The for both the Com- form some functions private track. mission and the denying him access to the defendants reserv- agreement also contains clauses the com- The court treated reject entry the Meadows. Laurel’s ing Mountain temporary re- plaint request as a for a con- individuals eject from the Meadows 65(b) straining order under Fed.R.Civ.P. by it.5 sidered undesirable injunction under Fed.R. preliminary and a Mountain Laurel entered Fitzgerald and 65(a). issuance of a The court denied Civ.P. racing the 1978 into a stall August restraining order on temporary 1978, Fitzgerald was season. In March of 28, 1978, August hearing was 1978. On racing judges for “incon- suspended by the injunc- preliminary held on the motion for driving,” an offense under Rule sistent Mountain Laurel moved at which time tion Rules & § ground, complaint on the to dismiss Regulations.6 gist of the offense alia, prerequisite that the state action inter per- best giving that the driver is not 1983 action maintenance of a section possible, which detracts from the formance lacking. race. quality of the that its deci- Mountain Laurel contended sus- August order to vacate 72-hour sion to exercise the pected Fitzgerald again engaging in in- purely private was a in the stall 19, 1978, driving. August consistent On The dis- of state involvement. act devoid management met with Mountain Laurel’s finding a judge disagreed, sufficient trict secretary presiding rac- and the connection between the State’s involvement ing judge. officials confirmed challenged in harness and the con- management’s impression that finding duct to warrant a of state action driv- engaging was indeed in inconsistent Metropolitan under Jackson v. Edison Com- to exercise ing. Mountain Laurel decided 345, 449, pany, 419 95 42 L.Ed.2d U.S. S.Ct. in the stall option its 72-hour to vacate granted 477 The district court Fitz- Fitzgerald and notified to re- gerald’s preliminary injunction motion for a track. The deci- move his horses from the 31, 1978, August enjoining Mountain option conveyed sion to exercise the denying Fitzgerald right from “the Laurel presence day later in the horses, horses, horses, to stall drive train Marshall, racing judges Kenneth by of the and make other use of the facilities.” racing secretary. Laurel thereafter filed a motion Mountain Fitzgerald instituted a lawsuit under 42 procedures under the disciplinary to invoke 24, 1978, August 1983 on against U.S.C. Racing § Regulations Rules and Com- Laurel, Marshall, Kenneth the mission, Fitzgerald a proposing to afford racing secretary, Knight, track and John court de- hearing thereunder. The district presiding judge, alleging 7, the track that the September 1978. nied motion on this process defendants had denied him appeals from both the is- injunction law in violation of the fourteenth preliminary amend- of the suance Fitzgerald sought to invoke ment. immediate as well of its motion the denial procedures.7 permanent injunctive relief to restrain Commission being (2) provides: raced in an inconsistent manner 5. The stall prior pattern compared to an established right [Mountain reserves the Laurel] 1121 judges performances, and the believe that reject any entry. fraud, impose they may forthwith is no there refuse admit- [Mountain Laurel] H penalty. anyone eject tance or to from the Meadows considered undesirable it. jurisdiction appeal over the This has injunc- granting preliminary the order Pennsylvania State Commis- Harness 1292(a)(1). Juris- § virtue of 28 U.S.C. tion sion, 18, (1977), Regulations Rule 5§ Rules and to invoke over the denial of the motion diction Racing Driving: Unsatisfactory Fraudulent or proper procedures is (c) In the event 1292(a)(1) because the motion § 28 U.S.C. (1) unsatisfactory A drive is due to careless- injunc- sought preliminary modification of the indifference, ness or tion. publicly owned and operated taurant in a II. The test garage. parking state subsidized outset, presented are with the At the we simply that when in Burton was announced controversy possibility that is now pri- clearly has not directed State moot. return to the Mead- did but where vate act of discrimination injunction grant ows after the and he rela- private enterprise “symbiotic” has a continued to train and race horses there State, state action is tionship until the close of the season in No- present. The Court held: time, Fitzgerald vember 1978. At that vol- untarily left the track and there is no indi- has so far insinuated itself cation that he has returned. interdependence with position into a recog- it must be [the restaurant] dispute We believe between in the chal- joint participant nized as a parties preliminary is still alive. The which, account, on that lenged activity, injunction issued the district court was to have been so cannot be considered not limited of the 1978 duration “purely private” as to fall without the protective aegis season. Under the scope of the Fourteenth Amendment. injunction, Fitzgerald could return to the 725, Court, Id. at at 862. The Meadows at time and demand that S.Ct. however, “[o]nly by sifting cautioned that permit him train and weighing race horses It an facts and circumstances can the accepted legal there. principle controversy pri- that a is not moot nonobvious involvement of the State in signifi- when “capable repetition, yet it is vate conduct be attributed its true evad review.” Southern Pacific Terminal Co. at 860. cance.” Id. ICC, 498, 514-15, S.Ct. symbiotic Burton limits of the rela- (1911); 55 L.Ed. 310 Moreland v. W. P. explored in tionship subsequently test were L., I. (3d 1978). A. 572 F.2d 123 n.1 Cir. Irvis, Lodge Moose No. 107 v. 407 U.S. In the present were we to dismiss this (1972), 32 L.Ed.2d appeal as moot and should re which the no state action Court found turn to the Meadows to train and race present by private in racial discrimination horses, the controversy would be revived regulated by Pennsylvania Liquor club and Mountain Laurel would have to seek Control Board. The Court noted that the believe, therefore, review de novo. We relationship symbiotic between state and “capable repetition, yet case fits the private found in Burton was enterprise evading exception review” to the mootness lacking in this case inasmuch as the Moose Accordingly, proceed doctrine. we to the Lodge private operating was a in social club merits appeal. of this 175, private building. a Id. at S.Ct. Despite pervasive regula- nature of the III. private Liquor tions of clubs the State The core of this lawsuit is whether or not Board, Control the Court held that “[h]ow- Laurel’s eviction of type regulation may ever detailed this be from the Meadows constituted state action particulars, in some it cannot be said to jurisdictional to sufficient establish a basis any way encourage foster or racial discrimi- for a section 1983 suit. The answer to this make the nation. Nor can it be said to question precise turns on the nature of the partner realistic sense a State relationship State’s to Mountain Laurel in joint even venturer in the club’s enter- a the factual context of this case. 176-77, prise.” at Id. at 92 S.Ct. 1973. The starting point Our analysis for an of state Lodge Moose case therefore stands for the action Wilmington is Burton v. Parking heavy regulation Au- state principle basic thority, 365 private necessarily give U.S. 6 L.Ed.2d entity does not (1961). There, relationship the Court found state symbiotic rise to a Burton so as present action in a racial finding discrimination to warrant a of state action “within case brought against privately Equal owned res- the ambit of the Protection Clause of may It be that Fourteenth Amendment.” Id. at the absence of an inextricably-linked relationship be- S.Ct. at 1973. private entity tween the state and a does Court, however, Supreme The continued the “close nexus” test of Jackson come explore relationship between exten- play. enterprise into private Where a sively regulated private enterprises state stands, operations, in its as a veritable allegedly and the commissionof unconstitu- state, partner with the then it seems Metropoli- tional acts them in Jackson v. proper enterprise subject hold such Co., tan Edison S.Ct. requirements the same constitutional 42 L.Ed.2d 447 That case involved a which the state is accountable. But the heavily regulated privately but owned utili- may per- situation be otherwise where no ty company, which discontinued service to a state-private vasive relationship exists. hearing customer without a after she failed arrangement, For without such an there her pay utility bills. The termination of holding would be no basis for hearing service without a did not constitute strictures, entity to constitutional unless state action in violation of the fourteenth closely the state is involved in very amendment. The Court held that “the in- activity challenged by litigant. quiry must be whether there is a sufficient- Thus, possible it is symbiotic that a ly close nexus between the State and the relationship between state and en challenged regulated action of entity so action, terprise give could rise to state or in fairly that the action of the latter be relationship, the absence of such a treated as that of the itself.” Id. at might action still if found “the state is 351, 95 at 453. The further S.Ct. held closely very activity involved in the chal that: lenged.” Id. Approval by utility a state commissionof request regu- such a from a [termination] IV. utility, lated where the commission has key facts of this case involve put weight not its own on the side of the the narrow circumstances under which proposed it, practice by ordering does not right expel exercised its practice transmute a initiated the util- Fitzgerald under the terms of the stall ity approved by the commission into agreement. impetus “state action.” expulsion came from Mountain Laurel’s re Id. at 456. The “close suspicion newed engag posits nexus” test of Jackson that the State driving,” in “inconsistent a violation of intimately must be involved in the chal- Racing CommissionRules for which he had lenged private conduct before that conduct recently disciplined been by the Commis becomes attributable to the pur- State for sion. It undisputed prior is to exercis poses of a section 1983 action alleging a ing agreement, its under the stall violation of the Due Process Clause of the management met with Mountain Laurel’s fourteenth amendment. presiding racing judge racing the secre

There question was some after Jackson allegations tary who confirmed the of in whether nexus” test of the “close that deci- Fitzgerald. driving against consistent sion totally superseded “symbiotic the rela- possessed Plainly, racing judges the dele tionship” test of Burton. This Circuit con- gated authority from the Commonwealth of cluded that is still Judge Burton viable.8 Pennsylvania discipline Fitzgerald for in to University Adams in Braden v. following hearing Pitts- driving consistent a un 948, (Braden II), (1977) burgh 552 F.2d 958 Racing der the Rules. Yet no (footnote omitted) explained: suspend Fitzgerald decision to was made at Jackson, Supreme supra, Wilmington Parking Authority, 8. The in 419 in Burton v. 447, 856, (1961)” U.S. at 42 L.Ed.2d also 365 U.S. 6 L.Ed.2d 45 S.Ct. symbiotic relationship presented seemingly discussed “the it left intact. depends meeting strongly racing with the Mountain Laurel on a Mountain Laurel’s meeting Rather, Hecht, officials. from ema- Fifth F.2d Circuit Fulton decision to nated Mountain Laurel’s evict denied, (5th Cir.), cert. option to vacate in under the the (1977) for the 52 L.Ed.2d agreement. The decision evict Fitz- proposition symbiotic relationship that no gerald him by was communicated to the private exists between and a rac the State racing allegedly acting secretary, solely in ing rejected case association. That the con his capacity representative manage- as a symbiotic relationship tention that a existed ment, presence racing judges. private Florida and between the State of a predicate These crucial the provide facts dog racing extensive despite reg club state Supreme which we must apply Court’s ulation, dog sharing racing revenues pronouncements on state action to deter- auditing state of the racetrack books. The present. mine if state action is was, kennel like club in Fulton Fitzgerald vigorously asserts that Laurel, corporation. private a The club re very interrelationship the State with pri- booking dog fused to renew a contract of a vate racing associations “sym- constitutes a racer, under who then sued section 1983 to relationship” biotic like that involved in enjoin that act. The Fifth Circuit held: Burton protective and affords him the em- racing industry brace of the dog fourteenth amendment. We think the can be Al- though is a corpo- analogized public utility to the situation. ration, Fitzgerald points Pennsylvania’s very nature of Because of the the indus- regulation racing extensive operations regulated try, protect it must be requiring management that track and rac- public. though regulation Even ing participants Furthermore, be licensed. extensive, cannot, might it in real- Pennsylvania its through Commis- sense, partner a istic make State in delegates sion significant authority to rac- the endeavors of the Kennel Club. who, although privately officials em- (emphasis original). Id. at 542 ployed association, racing neverthe- less have emphasized broad authorization from the The Fifth that the ken- Circuit State to enforce Commission Rules. public property nel club was not a lessee Pennsylvania also has substantial finan- accruing and that benefits the financial racing cial interest in harness inasmuch as automatically pri- not State did convert it collects tax revenues vate acts into action. Id. 542—43. Fitzgerald accordingly associations. con- essentially cludes that harness agree We with Fifth Circuit that joint venture state and en- between relationship heavily regu the State’s terprise Pennsylvania and that a Burton racing industry lated is not sufficient to symbiotic present. relationship establish symbiotic relationship responds by analogizing agree Burton. we Although with the dis heavily harness business trict court in case that the State’s regulated Lodge businesses Moose and relationship with Mountain Laurel is “de Jackson in which no state action was found. cidedly symbiotic” more than the State’s Like Lodge Moose No. Mountain Lau- relationship public utility in Jack entity rel is a privately operating owned on son, relationship we do not is one think private property. Heavy regulation by the joint which makes the venturer Racing Commission, Liquor like the Control with We cannot say Mountain Laurel. that Board in Moose and the Public Lodge Utili- every act of Laurel is an act of Mountain ty Jackson, is Commissionin insufficient to reject Fitzgerald’s the State. We therefore establish a symbiotic relationship between claim under Burton. of state action the State and Mountain Laurel under Bur- however, inquiry, our This does not end ton regulation pervasive unless the is so as Judge because stated in Braden to make as Adams joint Mountain Laurel’s activities a II, venture with the may State. there be a close nexus between the

597 expel thority Fitzgerald any suf- for reason challenged private the action State and finding warrant action agreement. ficient to a of state under the of the stall terms Jackson, symbiotic even if a in inde- posits under Burton Mountain Laurel essence two relationship pendent, spheres disciplinary is absent. We must therefore of concurrent analysis and authority Fitzgerald. turn our toward the nature over individuals like hand, delegates pow- the extent of State’s involvement the On the one State expulsion of the stall racing impose ers to officials to sanctions on agreement. with comport drivers who do not Commis- Rules; hand, private a sion on the other presence establish of To the state possesses racing association common law Jackson, Fitzgerald action under show must expel any or property rights to exclude sufficiently a close nexus between the key undesirable. The individual it considers racing in participation State’s harness provide must a difference is State Laurel’s act expelling of him so hearing with the of comporting strictures Laurel’s “may fairly that Mountain act of the Due Process Clause fourteenth treated that of the State itself.” Jack amendment; private a association is under son, supra, U.S. at at 453. no such compulsion. key issue under Jackson is whether the private There can be little doubt that a in participated challenged State conduct racing association like Mountain Laurel “putting by weight” itself its behind the possess private property rights.9 does Mar- challenged activity. Without such intimate Club, Jockey tin v. Monmouth Park act, by the private involvement State in the aff’d, (D.N.J.1956), F.Supp. 439 F.2d there is an insufficient nexus between (track (3d 1957) Cir. exclude a licensed private activity finding warrant racing track). jockey from at the state action. is that position property Laurel’s its vigorously asserts that enough are broad to sanction exclu- expelling Fitzgerald its act of solely derived though even sion of it was from property rights its common law as a Racing violation of Commission Rules expel Fitzgerald lessor to under the terms triggered rights. exercise of those Such agreement. the stall had facts, however, ig- interpretation an of the suspected been of violating Racing Commis- pervasive presence authority nores the prohibiting driving. sion Rules participating in Fitzgerald’s of the State Management’s suspi- confirmation of this summary expulsion. meeting cion at a racing State officials specifically court found: district not, expelling Fitzgerald before does it as- serts, transmute a [Pjlaintiff suspended act into state for and evicted action because it had independent violating Pennsyl- au- a rule allegedly fact, Pennsylvania’s legislation regulating Pennsylvania State abolished. Rockwell parimutuel thoroughbred racing Commission, Racing horse activi- Horse 15 Pa.Cmwlth. corporations engaged State Asserting ties and the A.2d therein, specifically provides any thoroughbred language associa- stat- horse “may tion Racing licensed refuse ute is similar to the Harness Act cited eject admission to and the enclosure district Pa.Stat.Ann. except person” (Purdon the race track . . . for Supp. 1978-79), Fitzger- 15 § tit. 2610.1 discriminatory racial or other Pa.Stat. reasons. argues property rights ald that common law 2662.1(b) (Purdon 1978-79). Supp. § Ann. tit. 15 persons harness associations to evict Relying statutory language empowering have been the decision in Rockwell. eroded State Horse Commission or helpful Fitzgerald only Rockwell deny eject any person association to whose private prop- extent that both statutes restrict presence judgment “in the sole erty rights by requiring hearing in the event Horse Commission” is deemed detri- employee of a con- an eviction licensed Pennsyl- racing, mental the best interests of racing. duct detrimental to the best interests of vania’s Commonwealth Court has held 2662.1(c); (Pur- tit. 15 2610.1 §§ Pa.Stat.Ann. right expel common law of a race track to 1978-79). Supp. don patron hearing without cause and without a Commission, rights property any Harness mon law to evict for

vania an State of agency Pennsyl- the Commonwealth of reason whatsoever an individual from its vania, specifi- track, the defendants were that this but in whatever state to cally authorized the enforce specifically were were linked exerted rule, this and that the asserted concur- of enforcement Commission private authority rent of basis neither Moreover, Rules. the court district found mitigates nor these attenuates facts. suspended that was because “de- he had violated fendants felt that Commis- F.Supp. at 268. 5(c)(2)dealing sion Rule with inconsist- § The district court further noted that F.Supp. ent at driving.” 268. The space rental stall was not a sequence of events is crucial. prerequisite driving and training Laurel’s eviction of came only Nonetheless, horses at Meadows.10 meeting after officials expelling Fitzger- Laurel’s act of allegations who confirmed the renewed space ald from the stall had the extreme Although driving. the racing barring any activity effect of him from at paid officials’ are salaries Mountain Lau- Thus, the district court track. found rel, undisputed rendering it is that in their Fitzgerald’s that eviction “went far beyond conduct, opinion Fitzgerald’s they were a simple space.” eviction from rented Id. acting pursuant delegated to their authority Indeed, gravamen com- from the State oversee the conduct of plaint not on the centers denial of stall Thus, argu- the races. Mountain Laurel’s space expulsion but the effect of the independent ment that two concurrent prevents training which him from and driv- spheres authority exist that it and acted Complaint at the horses Meadows. solely in private capacity, its breaks down argues Mountain Laurel that there is nei- light expulsion. in of the realities of the As allegation ther an nor an indication any noted, the district court al- defendants participated evidence that the directly State though claiming to have acted under a con- indirectly or in the demand that right stall, tractual to evict from the rented premises. leave the racetrack We disa- cited a Commission Rule violation when gree.11 they beyond simple acted and “went far findings of the district court mani- space.” Id. The eviction from rented fest a Pennsylvania’s close nexus between empowered by association was not the rule regulating interest harness and enforce the statute to CommissionRules. evicting Fitzger- Mountain Laurel’s act of delegated ald authority under the to Racing protests Mountain Laurel officials sufficient to establish authority had no presence enforce the of state action under terms of Jackson. stall and that possess the State did indeed com- not management’s could race at wanting Drivers horses the track with- for reasons of entering agreement. out into him off the track? parties district court observed that “[t]he I A. No. think while we were at agreed space . that of stall . rental was day meeting morning that certain- prerequisite driving training not a hors- ly regulations these rules and were discussed many es at the Meadows and that active driv- meeting, regula- in that these rules keep ers there and trainers their horses at stalls action, yes. tions had the basis of our not controlled Mountain Laurel.” you saying So that essence what are Q. (original F.Supp. emphasis). We find powers upon you is that because of conferred record, however, nothing support rules, you expel- or for violations were observation to trainers. ling him? Yes, A. sir. Marshall, 11. The cross-examination of Kenneth Honor, I MR. HERSHEY: Your don’t think racing secretary, supports finding question accurately that last reflects the wit- expelled district testimony. ness’ of a violation Commission rule: THE But his answer did. COURT: you expelling So that were not him for Q. Record at 109. person the reason he was a who was or rule undesirable statute but opinion “racing Their weight” by Fitzgerald. eviction.

“put its behind the argument the conduct judges” Mountain Laurel’s misses officials and presiding ensuing precipitated summary expul- of this case: the critical features the acting racing secretary, hardly and in the remote action racing judge sion. This is carefully capacities, participated presented in the Jackson. After their official circumstances,” weighing expel Fitzgerald.12 doing, “sifting so decision In facts and racing weight” Burton, “put supra, the officials their be- U.S. S.Ct. challenged expulsion by telling totality the of the circum- hind the we conclude that that Fitzgerald Laurel that was vio- Mountain Laurel’s stances demonstrate by approving Fitzgerald fairly Rules and must be con- lating Commission eviction of ensuing expulsion. disciplinary act of the the sidered as the State. Jackson, perceive the Public Commis- the Fifth Utility In We do not Circuit’s in the to be a holding sion’s role termination of electrical in Fulton inconsistent with to the that it nexus in simply finding service of a close this case. Fulton, approved general practice authorizing had a the court declined to find a close Metropolitan under Edison’s nexus in kennel club’s refusal termination the to renew booking general dog tariff. U.S. at the racer’s contract because way regulates booking was no other evidence of Com- 449. There the State in no con- participation in the mission termination tracts and because the racer failed to show indirectly plaintiff’s directly electrical service. Su- “that the state either preme appropriately concluded that the decision not to his participated in renew relationship By contrast, in of the Commission F.2d at 543. contract.” 545 challenged Pennsylvania approve act was too remote to transmute this must utilized,13 act into In the agreement state action. stall before it case, however, present did more Fitzgerald and has shown that the merely adopt than regulation prohibiting management’s in participated officials deci- driving. Thus, of the Rac- expel Officials sion him. has personally actively par- convincing Commission and partici- made out a case state ticipated specific in the challenged challenged conduct pation activity. in the judge’s agreement by proval 12. The dissent characterizes the and stall secretary’s activities as “consultations.” We insufficient itself Commission is to establish considerably believe conduct amounted to We do not disa- close nexus Jackson. more than mere n. 11 consultations. See su- gree point. agree on this We if the State’s Furthermore, Marshall, pra. Kenneth the rac- ap- pro participation limited forma were ing secretary, admitted on direct examination conceivably proval agreement, there of the stall that told he that: nexus under would be no close Jackson. How- Knight myself presiding judge] ever, Mr. and and considerably [the there is more here to consti- management day had in the met earlier tute state action. upon and that based three one incidents be- distinguishes The dissent this case from Pub ing year penalty happened that earlier Pollak, lic Utilities Commission which, secondly, and two cases in our (1952) 96 L.Ed. 1068 in which the opinion, racing judges, officials and seemed District of Columbia Public Utilities Commis to be a reoccurrence of inconsistent specific approval playing sion’s programs of radio management expressed had a concern privately operated owned and and felt it was their detrimental to busi- streetcars and buses was held to be sufficient ness; therefore, requested had that I governmental action to allow first fifth pass along the information to Mr. brought. to be at 462. amendment claims But Id. they going were to invoke their here, Poliak, perhaps more than in prerogative Paragraph as in 7 of the stall directly participated in the contract. meeting through conduct officials’ (emphasis supplied). at 121-22 Record activity management and in the their upon approv- dissent 13. The focuses the State’s expel. emphasize decision to participation We that it is al of as the critical issue challenged activity which at 605 under the close nexus test. Dissent ri. action, establishing the critical factor approve general 4. The State does terms of approval and not the mere state of the stall the stall before it can be used. The agreement. dissent, however, pro ap- asserts forma emphasize every participating in reaching We wish to that not decision to ex- pel. analogies, a like In terms of the no private act of association dissent’s possessing authority delegated will be to be official state considered participated management con- with in the deci- expresses state The dissent action. process discharge employee sional to potential over for siderable concern restrictions misconduct in of state violation law. We private management’s ability expel to perceive question no aof close nexus be- employee. fire an undesirable It illustrates private tween state and action when the examples this concern with two of exten- private activity, totally independent businesses, sively regulated the one a com- participation, official state results in the discharging mercial bank an officer mis- discharge of person for violation of state funds, application statutory viola- of bank law.15 tion, a gambling and the other casino dis- charging employee an for misconduct. In V. instance, employer

each has acted after present, Once is state action the re presumably conversations with inves- state quirements process of due must be met tigators. interprets holding The dissent our notwithstanding private the concurrence of requiring such an act be considered action. When the two coalesce because of However, state action. the facts and the power public partici the exercise of the examples issue in the differ from the pation by private State with enter present case. prise challenged activity, the result conceivably may ant conduct must be characterized as state expel private property have an requiring process. action individual like it sus because requisite Even if the state action is pects a of Commission which violation Rules present jurisdictionally Fitzger anchor renders such an individual an undesirable injunctive relief, ald’s section 1983claim for participant in the track’s races. We hold we still must consider whether the district today when the officials it is state properly granted that relief. In order delegated authority with state enforce injunction, preliminary to issue a the court regulations participate laws or man weigh must consider and whether: agement process to expel in the decisional (1) plaintiff The suffer irreparable will for a violation of a Rule State Commission harm if granted. relief is not requisite is the establ nexus under Jackson (2) The will be sup ished.14 The is defendant if essence state harmed action granted. is plied relief judge presiding meeting with secretary’s management (3) public The generally will be harmed analyze Fitzgerald’s officially granted. conduct and if relief implicated 14. The district court also found state action that state action is when state offi- present delegation authority regulated extensively industry in the State’s to to par- cials in an security guards power private hire “put weight” who have ticipate and their behind the chal- at the enforce the criminal laws of the State private private lenged act. Had Mountain Laurel acted F.Supp. We note tracks. 464 at 268. independently without the officials hav- open by question expressly that this the United recent Bros., was left expulsion, participated in the our decision Supreme in its most States conceivably might have been different. Had an action, Flagg pronouncement on state Liquor official of the State Control Board in Brooks, 149, 163-64, Inc. v. Lodge officially participated Moose pulsion in the ex- 56 L.Ed.2d 185 Because Irvis, reasons, patron, for racial record does reveal that not Utility or had a member of the Public Commis- ejected by security guard, and be- participated sion in Jackson in the termination already cause we present, have found state action service, might of electrical courts have express opinion on we need no requisite found the close connection between Flagg issue reserved in Bros. Hence, action. we do not perceive any flowing dire anomalies from our 15. concerned that our decision dissent is holding today. produces policy We results. do undesirable holding. holding not so view means our Our (4) likely prevail Krause, F.Supp. on See Whetzler v. aff’d, the merits of his claim. (E.D.Pa.1976), (3d 549 F.2d 797 1977). agree Cir. We also this record Delaware River Port Auth. v. Transameri grave reveals no evidence of harm to Moun Inc., Transport, can Trailer 501 F.2d public resulting tain Laurel or the (3d 1974). 919 — 20 Cir. The district court continued activities resolved these factors in plain favor of the factor, track. The fourth likelihood tiff preliminary injunction. and issued the merits,16 of success on (1) Fitzgerald The court found: is more trouble will suffer irreparable requires inquiry harm because the some and into whether nature of har an ness is such adequate remedy Fitzgerald properly that no established a case of exists compensate at law to him for deprivation right losses his unconstitutional of reputation income and sustained procedural process from an under the four due suspension. (2) unlawful There is no evi teenth amendment. dence that Mountain Laurel will be ad Mountain Laurel contends that versely Fitzgerald affected if is allowed to Fitzgerald deprivation pro can show no of racing. (3) continue There is no evidence process cedural due because he failed to public similarly

that will adversely exhaust administrative remedies available (4) Fitzgerald affected. established a case to him.17 The district court held that no deprivation process of of due under the exhaustion of administrative remedies is re fourteenth amendment. quired in section 1983 ex suits. U. S. rel. agree We with the district court Lightcap, Ricketts v. 567 F.2d Fitzgerald has possibili established the (3d 1977). F.Supp. Cir. 268-69. ty irreparable injury of “to his business and Mountain Laurel relies on a footnote in reputation” alleged from an violation of a Lightcap acknowledging a line of cases Commission implying Rule holding dishonest dep- that where the claims preliminary injunction. warrant a The property process rivation of without due Fitzgerald’s record reveals that income was law, processes he open must first use state large part directly related to his ability alleged deprivation. to him to redress the to race at the Meadows. The eviction had Id. at 1232 n. 5. Laurel’s reliance the effect of denying right pur him the misplaced on this footnote is for two rea- sue his license to drive and train horses. In First, significantly sons. the district court Burson, 535, 539, Bell v. 402 U.S. found that liberty it was inter- 1586, 1589, (1971), 29 L.Ed.2d 90 the Su subject depri- est that was to constitutional preme Court stated: Second, Lightcap expressly vation. de- issued,

Once licenses are . . . their qualified clined to consider whether a ex- possession may continued become essen- adopted haustion rule should be in this Cir- pursuit tial in the of a alleged deprivation livelihood. cuit in cases of prop- Sus- pension of issued licenses ... in- erty process without due of law. Id. adjudicates volves state action that im- jurisdiction at 1231-32. When federal portant interests of the ground licensees. In invoked under section 1983 on the such cases the violations, licenses are not to be plain- taken fourteenth amendment a away procedural without that process due required tiff is not to first exhaust his required by the Fourteenth Amendment. Thompson, remedies elsewhere.18 Steffel v. (Pur- Because we affirm the district court’s find- sion under Pa.Stat.Ann. tit. don 2610.1 § action, jurisdictional impedi- 1978-79). Supp. of state Fitzger- ments raised Mountain Laurel to appeal 18. Even if an under Commission ald’s success on the merits of his section 1983 evict, rules was available from the decision rejected. claim are now question remedy there is a serious whether the Specifically, argues adequate. Supreme would have been complaint held, context, although could have filed a has in another Racing deprivation process magis- Rule filed an 3§ Commission Rules or that a terial level is not at the due appeal constitutionally acceptable to the Harness Commis- 472-73, and other racetracks believe, 23 8. We under Commission Rule (1974); § L.Ed.2d 505 Hochman v. Board of however, dissent misreads this Newark, Education of 534 F.2d City of person Rule which “Whenever 1976). states: (3d Cir. association, the by an excluded from a track We must then consider whether notified. The Commis- Commission shall be adequately demonstrated notify all other associa- sion in turn shall procedural process likelihood of viola Pennsylvania tions Commonwealth court, just tion. The district as we have Trotting United States may notify noted, liberty found that had a dissent asserts Association.” reputation interest employment pro his there is no indication that Mountain Laurel tected the Due Process Clause of the report Fitzgerald’s report did or intended addition, fourteenth amendment. Moun However, expulsion to the Commission. tain officially recognized Laurel had Fitz required report, to so Laurel was gerald’s status as a state licensed trainer it was reasonable for and we believe that allowing perform driver him to the district to assume that such these activities at the track. His summary report purposes For would be made. expulsion significantly altered a “status preliminary injunction, Fitzger- we believe law,” previously recognized by state Paul v. a ald has established with reasonable likeli- Davis, 711, 1155, 1165, 424 U.S. 96 S.Ct. reputation.19 an business injury hood to his 47 (1976), L.Ed.2d 405 and denied him the proceeded to consider district court earning We, a opportunity of livelihood. proc- was due Fitzgerald whether accorded therefore, Fitzgerald agree cog has a he was not. It ess and concluded that noted Supreme nizable under the liberty interest process requires pre- a generally that due in liberty Court’s definition of Paul v. Da extenuating suspension hearing some unless vis, supra, Regents Roth, of Board v. public overriding sig- interest 408 U.S. 92 33 L.Ed.2d S.Ct. 548 justify postponement. nificance exists to (1972). Connecticut, 371, 377, 401 Boddie v. U.S. Judge expresses Adams concern whether 28 L.Ed.2d The dis- S.Ct. Fitzgerald’s liberty implicated interest in Fitzger- trict court that because concluded stigma this case. He whether a doubts will given pre-eviction ald was a neither hear- Fitzgerald’s be reputa- post-eviction attached to business ing, hearing, nor afforded a tion because Mountain Laurel’s procedural process rights decision to his were vio- expel Thus, him need not be Fitzgerald communicated to the lated.20 showed a likeli- impartial adjudica- hearing Fitzgerald because the an State offers reason to demand a desired gations unless appeal reputation tion on an and trial de in novo for the to vindicate his alle- county driving. court. The “entitled to a We believe judge hearing deprives neutral and in detached the first in- that the him denial of a Village Monroeville, stance.” U.S. (1972). opportunity deny charges Ward v. 409 267 he and that 57, 61-62, 80, 84, injury 93 S.Ct. 34 L.Ed.2d sufficiently has to his business shown reputation preliminary injunctive to warrant relief. complaint 19. The dissent also avers allege sufficiently damage Fitzger- does not expelled Fitzgerald from the track on reputation. 19, 1978, August gust ald’s Dissent at 610. hearing. We believe without a On Au- complaint light viewed in restraining when temporary applied he adequately Fitzgerald pleads most favorable to order which was denied. The district court fixed a nary liberty interest. concern is that application hearing prelimi- on the for a deprive Mountain Laurel’s actions him of his August injunction Although on eleven “right broadly to earn his livelihood.” When expulsion, days elapsed post- had since the no construed, liberty implicates it his interests. hearing proffered termination gerald. Only had been to Fitz- j| Complaint 27. preliminary injunction after the Finally, stigma granted the dissent that no had been offer of Mountain Laurel make an contends did Fitzgerald post-termination hearing. can attach because has not denied some form of against charges unacceptable the truth of the leveled him. The district court found that offer However, be little there would Dissent at 610. for reasons infra. discussed injunction district court issued the Once of his consti- the merits hood of success on Fitzgerald’s ex- prohibiting in- on preliminary August to warrant tutional claim filed a motion Laurel pulsion, Mountain junctive relief. procedures September 1 to invoke Fitzger analysis of The district court’s Reg- Rules Racing Commission Harness may have process claim procedural due ald’s essence, Laurel Mountain ulations.22 opinion was time its at the been accurate incon- charge of bring proposed then However, we must reevaluate delivered. racing judges, driving before sistent analysis light United States de- hearing, would and a after notice who Barry recent decision Supreme Court’s Rac- had violated Fitzgerald cide whether - Barchi, -, Rules. (1979). In that the Court L.Ed.2d Laurel’s opposed harness train suspended held that a get not entitled to a that he could constitutionally ground was not on the er motion hearing, although prompt judges who pre-suspension hearing the same a fair before hearing was constitutional deci- post-suspension Mountain Laurel’s participated in had Due Process ly under the Clause required proposed that him. sion to evict - U.S. at the fourteenth amendment. pro- commence instead -, question then is to 2642. The Racing Com- Rule 26 of the ceedings under hearing would type what complaint with the by filing a mission Rules analysis Bar entitled under the Court’s would then The Commission Commission. chi. hearing determine notice and after violated Commis- Fitzgerald had whether given Fitzgerald was no Unquestionably, Lau- hearing, Mountain At this sion Rules. would un- pre-eviction hearing, but Barchi be witnesses and would judges rel’s jeopardizing integrity der circumstances Fitzgerald’s rights. adjudicate would not now make such a denial consti- sport of the denying Moun- agreed, The district Assuming arguendo tutionally permissible. motion, prejudice without Laurel’s but tain preserving that the State’s interest Rule procedures under to its institution of integrity sport required not reach the district court did 26.23 The then suspension,21 immediate the sole issue adequacy of the of the constitutional issue Fitzgerald is whether was afforded a post-suspension hear- Racing Commission’s hearing. Barchi indi- prompt post-eviction ing procedures themselves. post-suspension hearing must cates that a proceed delay: without Mountain Laurel claims that the dis imposed, suspension Once has been to invoke denial of the motion trict court’s speedy in a resolution of

trainer’s interest procedures before Racing Commission controversy paramount becomes of discretion. It ar judges was an abuse or no little . . We also discern would have received gues Fitzgerald that interest, suggest- has and who would judges process before the due none, delay going appreciable ed in an as capacity in their acting solely now be hearing. with full forward complains Laurel state officials. Fitzger gave district court’s action post- Fitzgerald prompt was offered no Id. track, inas- status at the preferred ald a hearing at the time of his eviction. eviction case, Judge “I that to follow present posture stated: feel need 23. Diamond In the of this we you driving procedure [Mountain Laurel] which not decide whether transpired prescribe has Pennsylvania poses now after all that risk to the such serious mockery public what has tran- integrity make a and the inter- would of harness spired.” justify suspension was Record at 27. The district court without a est to immediate constitutionality of hearing. with the also concerned having judge, racing judges prosecutor, act as constitutionality jury, but because so in order to avoid 22. Mountain Laurel did procedures was not injunc- possible preliminary conflict with the attacked, directly this issue. not reach it did tion. requisite state Having concluded that the suspended Fitzgerald much as could not be present, suit was for a section 1983 alleged viola- action racing judges for the the essential Fitzgerald has met and that driving. tions of inconsistent preliminary of a requirements for issuance perceive We no abuse of discretion district injunction, judgment possible very district court’s order. It is against ap- court is affirmed. Costs taxed Fitzgerald that could not have received an pellant. impartial hearing before Mountain Laurel’s judges participation after their in the deci- ADAMS, Judge, dissenting. Circuit hand, sion to evict him. On the other a horse trainer Fitzgerald, William open district court left an untrammeled av- agreement was at-will stall driver whose hearing impartial enue for an tri- before Racing, Inc. terminated Mountain pre- under Rule 26. The bunal incidental driving he was horses because it believed Fitzgerald by ferred status afforded has racing inconsistently,1 that had been only district court’s order was due to Moun- under 42 brought this suit U.S.C. § tain inability Laurel’s to afford him an im- prevail under this civil statute. To partial hearing long only would last Fitzgerald enactment must demonstrate hearing as such a was denied. We there- defendants, under color of state that deny- fore affirm the district court’s order law, right. deprived him of a constitutional ing prej- Mountain Laurel’s motion without majority court and now a district procedures udice to it to initiate under Rule agreed this Court have the termination of the stall Thus, say we cannot termed, properly under the circumstances prompt post-suspension afforded the hear- They of this “state action.”2 have envisioned Barchi. This is say not to also decided that the failure of Mountain that had Mountain Laurel a hearing offered provide Fitzger- Laurel and its officials to hearing Rule would not have hearing ald with a in connection with the requirements satisfied the of Barchi. We termination of the stall amounts need not reach that issue on the record deprivation liberty to a without of his due before us. We hold process violation. of law—a constitutional has adequately shown likelihood of success majority definitively, does not address procedural process however, on his claim to merit problems some of the inherent in the preliminary injunction.24 issuance of the injunction the preliminary itself. For the impression Rather, gerald driving inconsistently. 24. The dissent is under the had been preliminary injunction requires complaint the issuance of the avers that Mountain Laurel acted agreement Fitzgerald a stall seasons, “solely allegation inconsistency for future due to the of of though rights even under the stall App. the three horses.” 9a. The distinction agreement 1978; were limited to that it extends driving” “driving between “inconsistent in- beyond period necessary preserve of time throughout consistent horses” has been blurred quo unduly the status ante and burdens Moun- litigation. “driving charge this The of incon- by “forcing permit tain Laurel to issue a [it] only performance sistent horses” refers to the person legal right whom it otherwise has the contrast, the In of horses. “inconsistent driv- grant- refuse.” Dissent at 611. The order ing” implies degree improper some motive or of however, injunction, the is drawn much part lackadaisical behavior on the of the driver. narrowly more as to time and is limited to a Because claims that Mountain period “pending the final determination of this suspected “driving Laurel him of action or until further order of this court horses,” opinion proceeds this on that basis. . .” Until the final determination of the rights parties proceeding, of the in this requirement 2. The “under color of law” of state adjudicated court has not the the future essentially section 1983 has been treated as stall, and also to train or drive congruent requirement with the “state action” horses or to make other use of Mountain Lau- See, g., of the fourteenth amendment. e. Bra rel’s facilities. University 948, Pittsburgh, den v. 552 F.2d (3d 1977) (en banc) (listing 955 n.34 Cir. au allege 1. did not that Mountain Lau- thorities). rel the stall terminated because Fitz-

605 Pennsylvania privately and its ist between opinion, respect- this I reasons set forth in racetracks. licensed fully dissent. Although majority declares that I. with Mountain Laurel state’s connections majority’s description of this case as The symbiotic” than was “decidedly more are

requiring yet “plunge another public relationship utility to the the state’s state action murky into the waters of the Co., Edison Metropolitan in Jackson Few, any, if quite apt. doctrine” is 345, 449, (1974), 42 L.Ed.2d 477 95 S.Ct. U.S. pronouncements on Supreme recent Court interdependence the claimed it decides that uncriticized; and, subject gone have if symbiotic to meet the rela is not sufficient prece- differ about which the commentators say,” majori cannot tionship test. “We defend, which to there is dents to assail and concludes, every act of Mountain “that ty regarding the lack of a unanimity virtual Majority is an act State.” pauci- The state action doctrine.3 coherent position This opinion, supra, at 596. ac principles any adju- makes ty of consistent Ap cords with that taken difficult, particularly dication in this area in Fulton v. peals for the Fifth Circuit when, here, the evidence adduced as is true Hecht, Cir.), denied, (5th cert. 545 F.2d 540 reasonably lends itself in the district 1682, 52 L.Ed.2d 379 430 U.S. S.Ct. interpretations. varying (1977). Although question is a close demonstrates, majority opinion As the one, persuaded by majority’s rea I am approaches two different action relationship exists soning symbiotic that no First, question might applied be here. it here.4 regulation might argued that state its decision on majority predicates The perva- is so Pennsylvania harness the “close nexus” test approach, the second sive, relationship and the between Com- Co., Metropolitan Edison of Jackson v. monwealth and the racetracks so (1974). 42 L.Ed.2d U.S. S.Ct. interdependent, the acts of the track primarily I proposition that It is from this inseparable govern- acts of the are from the majority. diverge from the Wilmington Parking ment. Burton v. See Jackson, Court, Supreme assessing Authority, 365 regulated, heavily privately (1961). question whether L.Ed.2d 45 for resolu- company’s termination of ser- analysis utility tion under such an is whether a owned action, relationship” customer was state held “symbiotic may be said to ex- vice to a See, Bickel, approval Supreme specific g., commission’s e. A. Court and (1970); Nowak, Progress the Idea of 65-70 J. caused the latter to be state Transit’s actions Young, R. Rotunda & J. Constitutional Law action. Id at Tribe, (1978); 473-75 L. American Constitu- case, although Racing In this Commission 18-2, tional Law at 1156-57 § form, received there nothing suggest the record to Pennsylvania 4. Had the all, review, Commission’s if there was specifically approved the terms the stall anything pro but the inves- forma. Unlike agreement implications, argu and their there Poliak, “put tigation in did not ably Commission be under the would state action doctrine weight proposed Pollak, its own on the side of the of Public Utilities Commission v. 343 Co., 451, 813, (1952). practice.” Metropolitan In Jackson v. U.S. Pollak, 96 L.Ed. 1068 Edison Capitol 345, 357, passenger (1974). Transit Com If 419 U.S. 95 S.Ct. at pany, railway and bus a District of Columbia were evidence that the Commission care- there service, enjoin company play sued to fully agreement of the stall reviewed the terms programs radio on its streetcars and buses. approval policy signaled the terms on and its of alleged programs violated his Plaintiff that readily grounds, infer this Court could more rights. op first and fifth amendment Transit’s sought Racing use the to that the Commission extensively regulated erations were the utili goal help to enforce the state’s stall commission; ties and the commission investi disciplining drivers. Short of of inconsistent gated programs, Transit’s use of the radio held however, involvement, this kind of state public hearings, pro and concluded that appear apply. Poliak rationale would not public’s safety, grams fort, impair the com did not Supreme or convenience. The Court held turn, careless, In driving.7 or indifferent whether there is inquiry must be that “the responsi- primary retains Laurel Mountain sufficiently close nexus between State facilities, including the bility the track over regulated challenged action of the and the privately provide authority to contract of the latter entity so that the action for and other services space stall itself.” fairly treated as that of the State the Commissionnor the personnel. Neither 351, 453. In this Id. at 95 S.Ct. at authority to in- secretary judges have and test is majority concludes that the Jackson rela- private these contractual tervene in presiding racing “the satisfied because tions. acting in judge racing secretary, and their Fitzgerald, with In its stall capacities, participated in the deci- official specifically reserved the Laurel expel Fitzgerald.” Majority Opin- sion to Fitzgerald’s privileges, right to terminate ion, supra, (emphasis at 599 original; reason, seventy-two hours notice. any omitted). appli- I believe that this citation management alone exercised The racetrack to the facts of this case is cation Jackson Fitzgerald’s right suspected it because Further, incorrect. I am concerned that inconsistently. major- horses unprece- today’s might decision Lead to an private ity this otherwise would transform degree federal con- dented constitutional Lau- act into state action because Mountain range pri- trol over a broad of heretofore racing judges and the rel consulted with the vate transactions.5 making decision. secretary before hearings conducted district manage- The record indicates court revealed that Mountain and Laurel, upon suspecting of Mountain ment Pennsylvania Harness State horses, driving possess independent, Commission each prudent course only logical took the though complementary, authority often suspicions they confirmed their available: operations. over racetrack The Commission by the persons designated with Com- establishing regu- charged is with rules and monwealth to monitor behavior—the governing lations the conduct races and barren, totally racing judges. The record drivers, trainers, licensing and other however, suggestion judges that the any racing personnel. The licenses racing secretary or the told the track man- employees, racing judges several racetrack agement to terminate racing secretary, daily and a to enforce on a encouraged it to do so. privileges or even regulations basis the rules and of the Com- Rather, the record shows that the sec- mission administer various Commis- asked, judges, retary and when confirmed policies.6 sion Commission Rule section suspicions Mountain Laurel’s and that racing judges discipline alone, Laurel, authorizes the then made the deci- engages inconsistent, agreement. driver who sion to terminate the stall state, ty 5. I am that the also concerned decision reached if it were the it is doubtful wheth- —as majority contrary Supreme er it would hold the activities of a liberally generally Court’s recent refusal to define action ess racetrack to be state action. See involving procedural proc- Choper, Thoughts cases on State Action: The Bros., Flagg claims. both Jackson and Theory” Function” “Government and “Power Brooks, Inc. v. 436 U.S. Approaches, Wash.U.L.Q. 774-80. (1978), L.Ed.2d 185 Court declined find state action in between transactions Pennsylvania Harness See Com- companies they alleged and customers who mission, Regulations, Rules Rule 10- §§ procedural guaran- had been denied the tees of the amendment. fourteenth These may signal part cases a reluctance on the 7. The record does not indicate Com- Supreme impose federal constitutional authority, pursuant mission has any to this rule or private par- standards on the manner in which rule, discipline other to a driver or trainer ties choose to deal with in one another a busi- racing because his horses had been ently. inconsist- Moreover, ness context. if the in Jack- Court Fitzgerald alleges that his stall power company, son declined to treat the privileges were his horses terminated because monopolistic which exercised over two control supra. were “inconsistent.” See note gas supply basic electrici- services—the and Fitzgerald’s power suspend was without to racing judges secretary and Although the in appear him, to have been involved the discus- the license or to and neither secre- fine in Mountain Laurel’s sions that resulted power to tary judges any nor the had termi- Fitzgerald’s priv- decision to terminate stall Although his privileges. nate stall the with the ileges, agree majority I cannot to track’s was communicated Fitz- decision this transmutes the that involvement race- the gerald by racing secretary, secre- the action. The track’s act into state Commis- messenger tary acting in as a effect was for strong sion and the racetrack each has in- employer, The secretary his the racetrack. races are ensuring terests in conducted to no whatsoever possessed power termi- per- and properly and that drivers horses agreement Fitzger- the between nate stall in competitively form each race. fairly and reprimand track, even to him ald and the acts, pursuant The to Rule “driving horses.”9 inconsistent More- discipline engaged pattern to in a drivers over, way sought in no Mountain Laurel to driving in order to vindicate the authority invoke Commission. betting sporting public’s interest in and Laurel, alone, possessed Because Mountain time, honest the same racing. At Mountain agreement, power to the stall terminate expected indepen- Laurel to use its can be involvement of the despite its action— dent as revocation of stall authority —such secretary judges in —remained privileges remove from the horses track —to circumstances, these I can- nature.10 Under suspects racing it in to of inconsistent order agree was a close nexus not there protect integrity goodwill.8 its own between the state involvement—at most The two complementary, actions are but consultation and advice—and chal- this does confluence of interests not mean regulated lenged entity action of the —an that the interests must swallow the state’s decision independently motivated based on short, private right. Mountain Laurel’s authority— exclusive Laurel’s Fitzgerald’s decision terminate stall may fairly such that of the latter the action independently motivated under be termed state action Jackson. own, pursuant and executed to its exclusive authority. disagreement majority’s ap- My with the nexus plication of the Jackson close test

The record is clear that Mountain Laurel itself, the facts of this case is underscored secretary judges, not the or the ter- minated agreement. regarding possible the stall track extension of The concern persuaded twenty years ago recognized 8. Over is for I am not 10. It this reason that secretary, importance testimony racing race of a track’s interest Ken- protecting reputation Marshall, good its it af neth forth footnotes when set majority Judge opinion majority’s opinion. firmed Chief Forman’s and 12 of Martin Club, Jockey F.Supp. testimony Park Monmouth cites this as evidence aff'd, (D.N.J.1956), (3d participated 242 F.2d Cir. officials in the decision termi- 1957). Judge agreement. Forman had noted: nate ny certainly The testimo- established that sport greatest importance In a where consulted in order to officials deter- dissipating should attach to cloud as- driving mine in- whether had been undesirable, sociation with the in which evidence, consistent horses. There is no how- appearance as well as the fact of com- ever, compelled officials or even consideration, plete integrity paramount is of encouraged Fitzger- Mountain Laurel to revoke riding to exclude because of his privileges, any way urged ald’s stall or in understandably record was an ercise of discretion. warranted ex- authority use its termi- nate the stall in order to further the Id. at 441. purposes regulatory Commission’s own Rule involvement, not even In the absence of this kind of state record does establish that the any authority judges Commission has and because neither deal with Rather, racing secretary possessed any regula- nor the “inconsistent horses.” the Commis- tory authority agreement, power appears disciplin- sion’s ing to terminate the stall to be limited to testimony allegedly I do not believe that Mr. Marshall’s the driver for his own errant con- dispositive. supra. duct. See note holding analogous regarding investiga- situations. Two advise the bank their findings. tive examples my apprehension.11 illustrate regulate Similarly, extensively states ca- heavily regulated banks are Commercial sinos, particularly to ensure undesir- governments, by yet they state and federal persons able come to do not control or ma- essentially private pri- remain entities. As nipulate Suppose industry. a casino businesses, they may vate hire and dis- suspects “fixing” employee an a roulette charge employees providing their without having organized wheel or of contacts with hearings. them with Part of the system of crime—matters that would violate state regulation banking state and federal in- gaming inspectors law—and asks state statutory prohibition against cludes a will- investigate. investigation then con- misapplication Suppose ful of bank funds. suspicions, gener- firms the casino’s and the suspects presi- that a bank one of its vice manager al of the casino decides to dis- violating dents of this statute and asks the charge employee based on his conversa- Treasury Department investigate. investigators. again, tions with the Here I investigators presi- conclude that the vice majority’s opinion am troubled that willfully misapplied dent has bank funds in finding action, require would of state violation the statute and meet with bank investigators’ participation because of the officials to inform them of their conclu- discharge in the decision.12 meeting, sions. At this the bank decides Ironically, finding of state action in proper course is to refer the matter types these of situations could well harm Attorney United States and to dis- employees, persons more Fitzger- like charge president. the vice I read the ma- ald, than Employers it benefits. can be jority’s opinion requiring as the bank to expected adopting to balk at panoply by abide procedural requirements procedures by process.13 mandated due If fifth process amendment’s due clause be- consultation regulatory with brings officials cause the bank officers made their decision burden, about this employers may be dis- discharge president the vice conjunc- seeking suaded from advice from those in Treasury tion with the Department investi- any way governmental associated gators. It is also noting worth that in this agencies discharging employees before sus- situation, present as in the only the pected of To the impropriety. extent this authority bank has the to discharge employ- occurs, employees there is risk more ees; officials, the Treasury even if they will discharged summarily be and errone- “participated” decision, in the could only today. ously than is the case analogies given only terpretation majority’s 11. These opinion plausi- are as illustra- although tions. examples It should ble, be noted that being these I read the limited to decision as employer-employee concern relation- regu- industries in latory authority assumed which the state has ships, present case is not an range opera- over a wide employee of Mountain Laurel. tions. apprehensive 12. I am litigants also in fu- employer willing 13. Even if the to sacrifice might attempt today’s ture cases cision to to extend de- expense the additional time and necessitated nonregulated majori- industries. The arbiter, hearings, transcripts, rep a neutral ty does not define the nexus between the discharge resentation employee counsel in order to an general regulation state’s of harness dishonest, may it it believes to be still participation officials’ in Mountain proof be burdened required the standard of that is Laurel’s decision to terminate privileges. might may be before the “state” sanction It be inferred from this that party may imposed. cease majority Whereas significance attaches no with, discharge dealing employ, general from its one regulatory Commonwealth’s ment in the might argue nonregulated business, involve- conduct, illegal suspects industry. litigant whom it or immoral A future thus store, against person grocery not act such a that a the state or other small great discharges is not as an em- where the evidence required would ployee confirming suspicions hearing. after its of his formal See Poisson at a Comm’n, criminal misconduct with local law enforce- Harness 5 Pa. ment procedural officials should be held to the strictures of 287 A.2d Cmwlth.Ct. process. Although such an in-

609 majority their and the base conclusion to majority that sum, agree with the In I the ter- contrary the on the likelihood that relationship Pennsylvania and between agreement, because of of the stall mination every that not act Laurel is such Mountain horses, inconsistency of his will alleged the state. I is to attributable of track “stigmatize” to the loss lead nothing is in Mountain that there agree also interest, future em- tangible of a such as agreement stall rev- Laurel’s exercise regard they In ployment possibilities. nature, implicates that, by its ocation clause 341, Wood, Bishop 426 rely on v. U.S. 96 in the exer- agreement that or the state 2074, (1976); 48 684 Paul v. L.Ed.2d S.Ct. therein. I enumerated cise 1155, Davis, 693, 424 96 47 S.Ct. majority’s determi- disagree only with the (1976); Regents 405 and Board of L.Ed.2d nexus sufficient of there is a nation that Roth, v. 92 408 U.S. S.Ct. quasi-public when private action state and (1971). None of these L.Ed.2d 548 cases in discussions that re- participate officials held, however, the state’s action creat- invoke business’ decision to its sult in a implicate stigma ed a sufficient to a consti- In prerogatives.14 contractual liberty Although some tutional interest. of Laurel, only not the present Mountain opinions may help- of these be language state, preserve integ- acted so as has decisions, Fitzgerald, taken ful as a racing. I do not rity of harness Because whole, provide support. do not much More- “properly its attribut- believe that action over, stigma case for cannot be such Commonwealth, to the I do not able” First, easily articulated. there is considera- it to be state action under the consider question regarding ble the extent color federal Constitution or action under alleged Fitzgerald’s reputation. harm purposes for 1983. § state law district reasoned: impair- . . In the instant case . II. opportunities future ment of business Ias Inasmuch conclude state action not of the defendants’ a result present here—because Laurel Mountain did and, alleged, we conclude acts has been its not terminate with Fitz- sufficiently proved, the likelihood thereof gerald “under color of state law”—it would 8 of the Commis- because under Rule 23 § Fitzgerald was deprived follow that not Regulations, the fact of sion Rules and agree- when right a constitutional the stall expulsion communicat- plaintiff’s must be ment was cancelled. The Constitution does Commission, ed which in turn must to the protect a a private not citizen from party’s every communicate it to associa- simply might acts because such acts have Pennsylvania, tion in the which depriving him the effect of of what would plaintiff’s po- all of virtually assures purposes cogni- recognized be other as a tential clients of it.16 will be aware “liberty” “property” zable or interest. obvious, however, It is not at all that Rule predicated Even if state action on 23, applies to Mountain Laurel’s action § case, however, question of this I the facts here. was not excluded from whether, applicable consonant with Su- pursuant the track to the officials’ cases, Fitzgerald can demon- preme delegated power Commission enforce rules; rather, what amounts to strate that occurred here Mountain Laurel terminated fact, “liberty” deprivation privileges. apparently of a interest without his stall In be- acting it not in a manner process lieving law. Both the district court that was himself, Fitzgerald, Fitzger- had been incon- 14. Laurel terminated sistently. seventy-two hours no- ald’s stall right given agreement. to it It tice —a Bros., Brooks, suspend Flagg v. 436 U.S. did seek to or revoke Inc. not race. it 56 L.Ed.2d 185 state-issued license to Nor did seek to open, were fine him. Such courses open, and remain ultimately Racing, Inc., racing judges they F.Supp. (W.D.Pa.1979). if believed Harness notify it to actions requiring allege Commissionunder he that Mountain Laurel’s 23, 8, Rule Mountain Laurel did not re- defamatory § untrue. were port regarding Fitzgerald its decision Fitzger- weaknesses in light of these Commission, nothing in the record indi- deprived of a “liber- ald’s claim that he was cates that it ever intended to do so.17 interest, ty” I am inclined to doubt whether Second, clear, least, it is not to me at if Fitzgerald prevail could even state action Fitzgerald alleges reputation even that his reject I were established. Inasmuch as the damaged. complaint certainly will be present, conclusion that state action how- premised was not theory. Para- ever, I have no occasion to address defini- graph charge 20 states the of inconsist- tively Fitzgerald’s the likelihood of ultimate ency “any was not based on discrepancy or regard. success in this inconsistency plaintiff but . allegation of solely due to the inconsistency Paragraph of the three horses.”18 24 adds III. that Mountain Laurel “has not formally Putting my disagreement aside the with charged plaintiff wrong- form of majority’s resolution of the state action doing.”19 Similarly, the affidavit filed in question my reservations about the support complaint in para- asserts claim, Fitzgerald’s merits of process I

graph carefully 3: “It must be noted that also believe that the district court failed to plaintiff at no time has said been accused of adhere to the rules of governing this Court misconduct, specific Thus, or otherwise.”20 the issuance preliminary injunctions.21 Fitzgerald’s theory stigma was not that a First, above, part discussed in II I believe him, to relatively would attach but that the has not demonstrated that few harness tracks in the area af- reasonably prevail he is likely to on his forded monopoly Mountain Laurel a virtual Second, claim. I am not convinced that sport, over the and that Mountain Laurel’s irreparable has shown injury to termination of the stall had the himself or that Mountain Laurel and the depriving effect of opportunity him of the public living. injured to make a will be injunction less the than would without it. There Finally, Fitzgerald does not assert that is no the indication that district bal- the charge driving inconsistent horses anced interest in retaining his was false. It be doubted whether privileges against stall the racetrack’s and statements made a state official can be public’s the ensuring interests in that all stigmatize said to defame or one’s reputa- are, be, races appear to competi- run implicate tion so as to a constitutionally Third, tively.22 protected the prelimi- interest when the duration of the truth of such nary injunction statements is not question. beyond called into extends Al- the term of though Fitzgerald does not concede agreement, expired that he stall which Novem- horses, has driven neither does ber ordered, 1978. Mountain Laurel is Moreover, 17. Authority it is at least doubtful whether a 21. In Delaware River Port v. Trans- stigma report could be found even if Inc., such a Transport, had american Trailer 501 F.2d Wood, Bishop supra, been made. (3d 1974), 919-20 longstanding Cir. the Court reiterated the charge was made that the false that, statements issuing prelimi- rule before plaintiff repeated pro- about the spective employers. would be nary injunction, a district court must find that Still, Supreme irreparable injury would suffer if stigma present, part declared that no injunction granted, the plaintiff is not and that because, public there was no announcement of reasonably likely prevail on the alleged discharge. false reasons for the addition, merits. In possibility the court must balance the U.S. at 96 S.Ct. 2074. of harm to the defendant relief, grant denial of and consider App. 18. 9a. public interest as well. App. 11a. supra. 22. See note App. 15a. court, district further action pending Fitzgerald, upon permit issue a stall request, for future sea-

the latter’s

sons, though Fitzgerald’s rights even specifically were limit- Therefore, pre-

ed to the 1978 season. injunction beyond pe- extends

liminary preserve necessary

riod of time the sta- improperly forces quo

tus ante and Moun- permit person to issue a to a

tain legal right

whom it otherwise has the

refuse. judgment

Because I would reverse the prelimi- district court and dissolve the injunction, respectfully I

nary dissent.

UNITED STATES America

HANKIN, Perch, Hankin, Perch P.

Appellant.

No. 79-1675. Appeals, Court of

United States

Third Circuit.

Argued Sept. 1979.

Decided Oct.

As Amended Nov.

Case Details

Case Name: William Fitzgerald v. Mountain Laurel Racing, Inc., Kenneth Marshall and John Knight, Presiding Judge

Court Name: Court of Appeals for the Third Circuit

Date Published: Nov 26, 1979

Citation: 607 F.2d 589

Docket Number: 78-2460

Court Abbreviation: 3rd Cir.