Dutrow v. New York State Gaming Commission

14-3189-cv

Dutrow v. New York State Gaming Commission

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A

SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY

FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.

WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST

CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION

“SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON

ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at

the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New

York, on the 4th day of June, two thousand fifteen.

PRESENT: ROBERT D. SACK,

CHRISTOPHER F. DRONEY,

Circuit Judges,

TIMOTHY C. STANCEU,*

Judge. 1

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RICHARD DUTROW, JR.,

Plaintiff-Appellant,

v. No. 14-3189-cv

THE NEW YORK STATE GAMING COMMISSION, successor in

interest to, THE NEW YORK STATE RACING AND

WAGERING BOARD, JOHN SABINI, in his official and

individual capacities, DANIEL D. HOGAN, in his official and

individual capacities, CHARLES J. DIAMOND, in his official

and individual capacities, THE ASSOCIATION OF RACING

COMMISSIONERS INTERNATIONAL, JOHN AND JANE DOES,

said names being fictitious and unknown to the Plaintiff,

Defendants-Appellees.

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*

Chief Judge Timothy C. Stanceu, of the United States Court of International Trade, sitting by designation.

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FOR PLAINTIFF-APPELLANT: ALAN E. SASH, McLaughlin & Stern,

LLP, New York, NY (Steven J. Hyman,

Jonathan R. Jeremias, McLaughlin &

Stern, LLP, New York, NY; Law Offices

of Mitchell C. Elman, P.C., Port

Washington, NY, on the brief).

FOR DEFENDANTS-APPELLEES THE VALERIE FIGUEREDO, Assistant Solicitor

NEW YORK STATE GAMING General (Barbara D. Underwood,

COMMISSION, THE NEW YORK Solicitor General, Michael S.

STATE RACING AND WAGERING Belohlavek, Senior Counsel, on the brief)

BOARD, JOHN SABINI, DANIEL D. for Eric. T. Schneiderman, Attorney

HOGAN, AND CHARLES J. DIAMOND: General of the State of New York, New

York, NY.

FOR DEFENDANT-APPELLEE THE JEREMIAH A. BYRNE, Frost Brown Todd

ASSOCIATION OF RACING LLC, Louisville, KY (Matthew C.

COMMISSIONERS INTERNATIONAL: Blickensderfer, Frost Brown Todd LLC,

Cincinnati, OH, on the brief).

Appeal from a July 29, 2014 order of the United States District Court for the Eastern

District of New York (Townes, J.).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

AND DECREED that the order of the district court is AFFIRMED.

Plaintiff-Appellant Richard Dutrow, Jr. appeals from a judgment of the United

States District Court for the Eastern District of New York (Townes, J.), granting

Defendants-Appellees’ motion to dismiss. Dutrow brought claims under 42 U.S.C.

§ 1983 and New York state tort law against Defendants-Appellees the New York State

Gaming Commission (successor in interest to the New York State Racing and Wagering

Board (“RWB”)), John Sabini, Daniel D. Hogan, Charles J. Diamond, and the Association

of Racing Commissioners International (“ARCI”), alleging that they violated his due

process rights during an administrative proceeding in which his horse training license was

revoked. We assume the parties’ familiarity with the underlying facts, the procedural

history of the case, and the issues on appeal.

We review de novo the district court’s grant of Defendants-Appellees’ motion to

dismiss under Rule 12(b)(6). Starr v. Sony BMG Music Entm’t, 592 F.3d 314, 321 (2d

Cir. 2010). Upon such de novo review, we affirm for substantially the reasons stated by

the district court in its July 29, 2014 Memorandum and Order.

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The Full Faith and Credit Act, 28 U.S.C. § 1738, requires that federal courts “give

the same preclusive effect to a state-court judgment as another court of that State would

give.” Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 293 (2005). Thus,

New York collateral estoppel principles apply here. 1 Under New York law, issue

preclusion will prevent relitigation of an issue if “(1) the issue in question was actually and

necessarily decided in a prior proceeding, and (2) the party against whom the doctrine is

asserted had a full and fair opportunity to litigate the issue in the first proceeding.”

Vargas v. City of New York, 377 F.3d 200, 205-06 (2d Cir. 2004).

In his Article 78 petition before the New York State Supreme Court, Appellate

Division (“Appellate Division”), Dutrow claimed a cause of action that: “The Board’s

decision was made in violation of lawful procedure and rendered in violation of Mr.

Dutrow’s due process rights.” App’x 151. Dutrow argued that his due process rights

were violated in three ways: (1) by a conflict of interest stemming from Sabini’s serving on

ARCI, which advocated revocation of his license, and Sabini’s chairing of RWB; (2) by

RWB’s decision to revoke Dutrow’s license as a result of that conflict of interest, or a

desire to retaliate against Dutrow for appealing the ninety-day suspension previously

imposed, or both; and (3) by RWB’s applying statutory and regulatory standards that were

unconstitutionally vague. App’x 151-60. In support of his due process claim, Dutrow

alleged in his Article 78 petition, among other things, that Sabini “never denied the conflict

[of interest], nor explained or addressed his dual roles”; that Sabini “refused” to provide an

explanation as to why he declined to recuse himself; that the hearing officer “refused to

address the request that Chairman Sabini be recused”; that the hearing officer “never

personally responded to th[e] recusal request”; and that the hearing officer “failed to fulfill

his duties in a way that comported with due process” because he “deci[ded] to deny the due

process motion without any analysis or reasoning” and “fail[ed] to produce a written

decision” on the recusal motion. App’x 147, 154, 158.

In dismissing Dutrow’s due process claim, the Appellate Division did not explicitly

state that the hearing officer acted appropriately in declining to resolve whether Sabini’s

alleged conflict tainted the license-revocation proceeding. Similarly, the Appellate

Division did not explicitly state that Sabini was not required to provide an on-the-record

response to Dutrow’s request for recusal. But given that Dutrow clearly raised these

issues as part of his due process claim in his Article 78 petition, the Appellate Division

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Dutrow argues that proceedings under Article 78 of New York’s Civil Practice Law and Rules do not

preclude subsequent federal civil rights actions. Although claim preclusion, or res judicata, “generally

does not operate to bar a § 1983 suit following the resolution of an Article 78 proceeding, since the full

measure of relief available in the former action is not available in the latter,” Colon v. Coughlin, 58 F.3d

865, 870 n.3 (2d Cir. 1995), collateral estoppel bars relitigation of issues decided in Article 78 proceedings.

See, e.g., Constantine v. Teachers Coll., 448 F. App’x 92, 93 (2d Cir. 2011) (summary order).

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necessarily determined that the actions of the hearing officer and Sabini during the

proceeding did not violate Dutrow’s due process rights when it concluded that he was not

“denied a fair hearing.” Dutrow v. N.Y. State Racing & Wagering Bd., 97 A.D.3d 1034,

1036 (N.Y. App. Div. 2012).

In any event, Dutrow’s complaint makes clear that his § 1983 claim was not, as he

argues on appeal, merely that the procedure for determining whether there was bias

violated his due process rights. Rather, the complaint alleges that Dutrow was denied due

process because “Sabini was a participant in the decision of ARCI to cause Dutrow’s

license to be revoked”; “Sabini was on both sides of the equation (prosecutor and decision

maker)”; ARCI’s actions “were inextricably entwined with those of Sabini and the RWB”;

and Sabini’s discretion to impose a penalty was “unreasonably affected by the actions of

ARCI while Sabini was its Chairperson of the Board-Elect.” App’x 19-21. Dutrow’s

effort on appeal to recast his underlying injury as a distinct claim—specifically, that the

process of determining whether the proceeding was procedurally unsound was, itself,

procedurally unsound—is merely an attempt to recast the question of whether Sabini’s

involvement in the proceeding constituted a due process violation, the answer to which was

already decided by the Appellate Division: It did not.

In sum, when the Appellate Division decided that Dutrow was not denied a fair

hearing, it actually and necessarily decided the issue of whether the hearing officer’s and

Sabini’s actions during the proceeding constituted due process violations. And because

Dutrow had a full and fair opportunity to litigate that issue (and did litigate that issue) in the

Article 78 proceeding, he was collaterally estopped from relitigating it before the district

court. See Vargas, 377 F.3d at 205-06. Dutrow also claimed to have been deprived of

due process when RWB refused to hold a hearing and create a record upon which the

Appellate Division could review the allegation of Sabini’s bias and conflict of interest.

App’x 21-22. This issue, too, the Appellate Division actually and necessarily decided

when it decided that Dutrow was not denied a fair hearing. Although Dutrow did not

directly raise the issue before the Appellate Division, he nevertheless had a full and fair

opportunity to do so; as a result, collateral estoppel applied to preclude him from

relitigating the issue.

We have considered Dutrow’s remaining arguments and find them to be without

merit. Accordingly, we AFFIRM the judgment of the district court.

FOR THE COURT:

Catherine O’Hagan Wolfe, Clerk of Court

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