John Moody v. Michigan Gaming Control Board

RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit I.O.P. 32.1(b)

File Name: 15a0125p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

_________________

JOHN MOODY; DONALD HARMON; RICK RAY; ┐

WALLY MCILLMURRAY, │

Plaintiffs-Appellants, │

│ No. 14-1511

│

v. >

│

│

MICHIGAN GAMING CONTROL BOARD; RICHARD │

KALM; GARY POST; DARYL PARKER; RICHARD │

GARRISON; BILLY LEE WILLIAMS; JOHN LESSNAU; │

AL ERNST; MICHIGAN DEPARTMENT OF ATTORNEY │

GENERAL, Criminal Division, │

Defendants-Appellees. │

┘

Appeal from the United States District Court

for the Eastern District of Michigan at Flint.

No. 4:12-cv-13593—Gershwin A. Drain, District Judge.

Argued: March 11, 2015

Decided and Filed: June 16, 2015

Before: KEITH, MERRITT, and BOGGS, Circuit Judges.

_________________

COUNSEL

ARGUED: Hugh M. Davis, CONSTITUTIONAL LITIGATION ASSOCIATES, P.C., Detroit,

Michigan, for Appellants. Jason A. Geissler, OFFICE OF THE MICHIGAN ATTORNEY

GENERAL, Lansing, Michigan, for Appellees. ON BRIEF: Hugh M. Davis,

CONSTITUTIONAL LITIGATION ASSOCIATES, P.C., Detroit, Michigan, for Appellants.

Jason A. Geissler, OFFICE OF THE MICHIGAN ATTORNEY GENERAL, Lansing, Michigan,

for Appellees.

1

No. 14-1511 Moody, et al. v. Mich. Gaming Control Bd., et al. Page 2

_________________

OPINION

_________________

BOGGS, Circuit Judge. The Michigan Gaming Control Board (MGCB)1 regulates

harness racing, a form of horse racing, in Michigan. In the course of investigating allegations of

illegal race-fixing, Michigan horse-racing stewards asked Plaintiffs-Appellants John Moody,

Donald Harmon, Rick Ray, and Wally McIlmurray, Jr. (harness drivers) questions that the

harness drivers construed as possibly self-incriminating. Invoking the Fifth Amendment to the

Constitution, the harness drivers refused to answer. Because of this refusal, the MGCB

suspended the harness drivers’ licenses to race and excluded them from horse-racing grounds.

The harness drivers, in addition to seeking relief in state court and administrative fora, sued the

MGCB and its employees in federal district court. That court granted summary judgment to the

MGCB. The harness drivers timely appealed. We affirm the district court’s judgment in part,

reverse in part, and remand for further proceedings.

I

In 2010, the MGCB received an anonymous tip that certain harness-racing drivers were

fixing races in concert with certain known gamblers. On May 19, 2010, Michigan State Police

Detective Thomas DeClercq informed the harness drivers’ then-attorney that the harness drivers

would be arrested, criminally charged, and arraigned following an informal investigative hearing

that had earlier been scheduled for May 20. At that hearing, the harness drivers asserted their

Fifth Amendment right against self-incrimination and refused to answer questions. The

following day,2 the state suspended the plaintiffs’ 2010 licenses to work in horse racing because

they failed “to comply with the conditions precedent for occupational licensing in Michigan as

outlined in R431.1035.”3 Rule 431.1035 provides, in part, “[t]hat the applicant [for an

1

Defendants-Appellees in addition to the Michigan Gaming Control Board include various state employees.

We refer to the defendants-appellees collectively as “the MGCB.”

2

The district court suggested that the administrative ruling was issued on May 20, not May 21.

3

Although each state and Canadian province regulates horse racing separately, the regulators have

reciprocity agreements. Thus, the effect of these suspensions was to suspend plaintiffs from working in horse racing

anywhere in the United States or Canada.

No. 14-1511 Moody, et al. v. Mich. Gaming Control Bd., et al. Page 3

occupational license, such as the license to race horses] . . . shall cooperate in every way . . .

during the conduct of an investigation . . . .” On May 26, the harness drivers appealed their

suspensions administratively. The harness drivers subsequently filed a suit for injunctive relief

in Wayne County Circuit Court. The MGCB delayed the administrative appeal pending the

state-court ruling.4

On November 30, 2010, the MGCB issued “orders of exclusion” as to each harness

driver. The MGCB took the position that it would not lift the exclusion orders unless the

plaintiffs answered questions without legal representation. The harness drivers applied for 2011,

2012, and 2013 licenses without success. In response to the harness drivers’ letters that sought to

appeal “the deni[a]l of 2011 occupational license,” the MGCB indicated that the exclusion orders

precluded their consideration of the harness drivers’ applications. Letter from Alexander Ernst,

Horse Racing Manager, to John R. Moody (Nov. 16, 2011) (Ernst Letter).

In August 2012, the harness drivers filed this suit under 42 U.S.C. § 1983, seeking

damages, costs, fees, and injunctive and declaratory relief. On November 27, 2013, the district

court granted the MGCB’s motion for summary judgment and denied the harness drivers’ motion

for partial summary judgment. The district court held that the Eleventh Amendment barred

plaintiffs’ claims for money damages against MGCB and its officials. And the district court held

that the MGCB was entitled to qualified immunity because the harness drivers failed to identify

the violation of a constitutional right.5 The harness drivers timely appealed.6

“On appeal, this court reviews the district court’s grant of summary judgment de novo.”

T-Mobile Cent. LLC v. Charter Twp. of W. Bloomfield, 691 F.3d 794, 798 (6th Cir. 2012).

Qualified immunity involves a two-step inquiry. Brown v. Lewis, 779 F.3d 401, 417 (6th Cir.

4

The Wayne County Circuit Court heard and decided the case. On appeal, the Michigan Court of Appeals

ultimately did not consider the case until after the plaintiffs’ 2010 licenses had expired, and so dismissed the case as

moot. The MGCB claims that, despite its repeated inquiries, the harness drivers only confirmed on November 27,

2012, their wish to proceed with their administrative appeal.

5

After their 2014 license applications were not accepted, plaintiffs filed a mandamus action in state court.

Moody v. Mich. Gaming Control Bd. (Ingham Cnty. Cir. Ct.) (No. 14-159-AW). The court did not grant preliminary

injunctive relief. Thereafter, defendants processed plaintiffs’ applications. By June 2014, plaintiffs were relicensed.

6

Defendants argue that the plaintiffs have abandoned their claims for monetary relief. But plaintiffs

appealed the district court’s determination that defendants did not violate their constitutional rights. See Reply Br. 8

(“Appellants’ appeal squarely challenges the trial court’s erroneous conclusion that Appellees did not violate their

constitutional rights.”). So they “made no . . . concession as to any qualified immunity the individual Appellees

claim protects them in their individual capacities . . . .” Id. at 7.

No. 14-1511 Moody, et al. v. Mich. Gaming Control Bd., et al. Page 4

2015). We must determine whether the facts viewed in the light most favorable to the plaintiffs

show that a constitutional violation has occurred and whether the violation involved a clearly

established constitutional right of which a reasonable person would have known. See id. at 411.

We may address these steps in either order. Pearson v. Callahan, 555 U.S. 223, 227 (2009).7

We consider five actions that may have violated the harness drivers’ rights:

(1) suspension of license because of refusal to self-incriminate without immunity, (2) exclusion

from horse racing for same reason, (3) suspension without hearing, (4) exclusion without

hearing, and (5) retaliation.

On the self-incrimination claims, we reverse the district court’s grant of summary

judgment. Based on the applicable law, the facts viewed in the light most favorable to the

harness drivers show that the Constitution entitled the harness drivers to refuse to answer

potentially self-incriminating questions, unless the state immunized them from prosecution. To

punish the drivers violated the Constitution, and both suspension and exclusion constitute

punishment. So the MGCB violated the harness drivers’ constitutional rights against self-

incrimination. Whether these rights were clearly established at the time remains a question. We

remand the case for further proceedings. Cf. Dominque v. Telb, 831 F.2d 673, 677 (6th Cir.

1987).

The harness drivers were due hearings on their suspensions and their exclusions. As we

explain below, they were granted due process on their suspensions. We affirm the judgment of

the district court on the due-process claim concerning suspensions. The harness drivers were not

granted due process on their exclusions. But, for reasons explained below, the absence of that

process may have resulted from the harness drivers’ own failure to act. We reverse the grant of

summary judgment on the due-process claims concerning exclusions and remand for further

relevant proceedings.

Finally, the retaliation claims are not properly before us.

7

In our qualified-immunity analysis, we had required plaintiffs to demonstrate the governments’ objective

unreasonableness. See, e.g., Feathers v. Aey, 319 F.3d 843, 848 (6th Cir. 2003). After Pearson v. Callahan,

555 U.S. 223 (2009), we consider reasonableness during our evaluation of the two qualified-immunity factors.

See Brown v. Lewis, 779 F.3d 401, 417 (6th Cir. 2015).

No. 14-1511 Moody, et al. v. Mich. Gaming Control Bd., et al. Page 5

II

A

The privilege against self-incrimination applies more broadly than the bare text of the

Fifth Amendment might suggest. A few examples demonstrate the privilege’s practical reach.

The privilege against self-incrimination applies in civil as well as criminal proceedings. Malloy

v. Hogan, 378 U.S. 1, 11 (1964); see also Fieger v. U.S. Att’y Gen., 542 F.3d 1111, 1120 (6th

Cir. 2008) (observing that “the fulcrum of the Fifth Amendment privilege is the potential for

self-incrimination, not the nature of the instant proceeding” (citing Bialek v. Mukasey, 529 F.3d

1267, 1272 (10th Cir. 2008))). It protects against the use in prosecution of police officers of

incriminating statements that they made when given the choice “to forfeit their jobs or to

incriminate themselves.” Garrity v. New Jersey, 385 U.S. 493, 497 (1967).

When the questioned persons make the inverse choice under the same sort of duress, i.e.,

they prefer to forfeit their jobs rather than incriminate themselves, the privilege protects them.

Cf. id. at 498; Union Pac. R.R. Co. v. Pub. Serv. Commʼn, 248 U.S. 67, 70 (1918). It is “clearly

established . . . that public employers may not coerce their employees to abdicate their

constitutional rights on pain of dismissal . . . .” Clemente v. Valso, 679 F.3d 482, 492 (6th Cir.

2012); see also Spevack v. Klein, 385 U.S. 511 (1967) (holding that the privilege protects a

lawyer who refuses to give testimony that might incriminate himself); Gardner v. Broderick,

392 U.S. 273 (1968) (police officer); Uniformed Sanitation Men Ass’n v. Comm’r of Sanitation,

392 U.S. 284 (1968) (public sanitation employees); Slochower v. Bd. of Educ., 350 U.S.

551 (1956) (public-school teacher). These cases “stan[d] for the proposition that a

governmental body may not require an employee to waive his privilege against self-

incrimination as a condition to keeping his job . . . even [when] no criminal proceedings were

ever instituted against” an employee who was later successful in constitutional claims. Lingler v.

Fechko, 312 F.3d 237, 239 (6th Cir. 2002) (citations omitted).

Nor does the privilege protect only state employees. It protects a contractor, such as an

architect, against the cancellation of state contracts and disqualification from receiving

subsequent contracts. Lefkowitz v. Turley, 414 U.S. 103 (1973). It protects from dismissal from

No. 14-1511 Moody, et al. v. Mich. Gaming Control Bd., et al. Page 6

his position a political-party officer in the same situation. Lefkowitz v. Cunningham, 431 U.S.

801 (1977).8

Here, the MGCB did not offer the harness drivers—state licensees—immunity before the

hearing on May 20, 2010. So the harness drivers had reason to fear that, had they responded to

questions during the 2010 hearing with incriminating answers, prosecutors would use those

answers as evidence, although a court would have been unlikely to admit those answers, given

the law laid out in Garrity and its sequellae. In this situation, the Constitution entitled the

harness drivers to assert the privilege against self-incrimination and thus to refuse to answer the

MGCB’s questions. To ban them from horse racing for refusing to answer was exactly the sort

of “grave consequence solely because [t]he[y] refused to waive immunity from prosecution and

[to] give self-incriminating testimony” that the Supreme Court has said unconstitutionally

compels self-incrimination. Cunningham, 431 U.S. at 807.9

B

The district court relied on Chavez v. Martinez, 538 U.S. 760 (2003), for the proposition

that mere compulsion does not violate the Fifth Amendment. In that case, a man exchanged

gunfire with police and later was interrogated by a police officer while in excruciating pain from

face wounds and in emergency treatment for the same. The state never used the fruits of this

interrogation for any reason. The man sued the police officer under 42 U.S.C. § 1983 for

violating his constitutional rights. The Ninth Circuit held that the officer had violated his rights.

A divided Supreme Court, producing five different opinions, reversed and remanded.

Writing for himself and three colleagues, Justice Thomas characterized the underlying

plaintiff’s position as attempting to turn a failure to provide Miranda warnings into a violation of

the federal constitution. Justice Thomas acknowledged that the law permits a witness to insist on

immunity in order to memorialize the fact that his testimony had been compelled. Chavez,

8

This is true whether or not a criminal investigation was ongoing. As it happens, the harness drivers

clarified at the hearing on May 20, 2010, that they were asserting their rights against self-incrimination because of

DeClercq’s threats of prosecution.

9

The MGCB does not dispute that it did not offer plaintiffs immunity at the time. Moody ultimately was

immunized to some degree, although the parties dispute the extent of that immunity. None of the plaintiffs has been

charged with a crime related to the original criminal and administrative inquiry.

No. 14-1511 Moody, et al. v. Mich. Gaming Control Bd., et al. Page 7

538 U.S. at 772 (plurality op.). But Justice Thomas distinguished permission to assert “the Fifth

Amendment privilege . . . in noncriminal cases” from the constitutional right against self-

incrimination in criminal cases. Ibid. Miranda, Justice Thomas suggested, protected

constitutional rights, but was not the same as those rights.

Justice Souter, writing for himself and Justice Breyer, suggested that the Court’s

“decision requires a degree of discretionary judgment greater than Justice Thomas

acknowledges.” Id. at 777 (Souter, J., concurring). Given the facts presented, however, Justice

Souter agreed with Justice Thomas that the officer had not violated the underlying plaintiff’s

rights.10 Because the Court’s judgment depended on Justice Souter’s fact-specific view of the

law, Justice Thomas’s broader suggestion—that mere compulsion of testimony, without more,

does not violate constitutional rights against self-incrimination—does not bind us in different

situations.

This case presents a situation different from that presented by Chavez. In Chavez, the

underlying plaintiff did answer the police officer’s questions; the state did not use those answers

to incriminate him; the Court held that this state of affairs did not violate the plaintiff’s

constitutional rights. Here, the harness drivers declined to answer questions, standing on their

rights not to incriminate themselves. Solely because the harness drivers asserted these rights, the

MGCB both suspended their occupational licenses and also banned them from receiving new

licenses. Had the state threatened to revoke their licenses but, after the plaintiffs asserted their

rights against self-incrimination, not revoked their licenses at all (or revoked their licenses only

on account of and only after a process proving their involvement in illegal gambling), we would

have a different case. In other words, “Chavez only applies where a party actually makes self-

incriminating statements. . . [T]he Fifth Amendment would be violated if a public employee

10

Justice Kennedy, writing for himself and two of his colleagues, emphasized that “the Self-Incrimination

Clause is a substantive constraint on the conduct of the government . . . .” Chavez, 538 U.S. at 791 (Kennedy, J.,

concurring in part and dissenting in part). Explicitly disagreeing with Justice Thomas, Justice Kennedy argued that

the protection against coercion exists as “a present right.” Ibid. “The Clause provides . . . a continuing right against

government conduct intended to bring about self-incrimination.” Id. at 791-92 (citing Turley, Bram v. United States,

168 U.S. 532, 542-43 (1897); and Counselman v. Hitchcock, 142 U.S. 547, 562 (1892)).

Chavez resulted in a remand to the Ninth Circuit on substantive-due-process grounds. Had Justices

Kennedy, Stevens, and Ginsburg insisted on their “position, there would be no controlling judgment of the Court.”

Chavez, 538 U.S. at 799 (Kennedy, J., concurring in part and dissenting in part). Instead, Justice Kennedy allowed

the Court to dispose of the case by remanding it and suggested that substantive due process could protect most of the

rights outlined in the Self-Incrimination Clause. Ibid.

No. 14-1511 Moody, et al. v. Mich. Gaming Control Bd., et al. Page 8

were fired for refusing to make self-incriminating statements, even though no self-incriminating

statement could ever have been used against the employee.” Aguilera v. Baca, 510 F.3d 1161,

1179 (9th Cir. 2007) (Kozinski, J., dissenting “for the most part”).

The MGCB cites McKinley v. Mansfield, 404 F.3d 418 (6th Cir. 2005), “for the

proposition that an individual does not suffer a Fifth Amendment violation unless compelled to

be a witness against himself in a criminal case.” Appellee Br. 5-6; see also id. at 27. McKinley

concerned a police department’s investigation of unlawful use of police-department scanners.

The department interviewed the underlying plaintiff, explicitly promising not to use his

statements against him in criminal proceedings without his permission. Despite this offer of

immunity, he lied during the interview. The department interviewed him a second time. The

prosecutor later sought to use the plaintiffʼs statements from the second interview in his

prosecution for falsification and obstruction: i.e., not to prove that the plainfiff had used

department scanners unlawfully but to prove that he had lied about not doing so during the first

interview. See McKinley, 404 F.3d at 427. We acknowledged that “Garrity does not preclude

use of such statements in prosecutions for the independent crimes of obstructing the public

employer’s investigation or making false statements during it.” Ibid. However, because we

concluded that there was “a genuine issue of material fact as to whether, at the time of [the

policeman’s] interview, he was the target of an independent falsification and obstruction

investigation, and no longer a mere Garrity witness,” id. at 430, we reversed the district court’s

grant of summary judgment to the police department and city on that claim.

Like Chavez, McKinley does not apply here. As Justice Thomas acknowledged in

Chavez, “governments may penalize public employees and government contractors . . . to induce

them to respond to inquiries [only] so long as the answers elicited . . . are immunized from use in

any criminal case against the speaker.” Chavez, 538 U.S. at 768 (plurality op.) (emphasis

added). Here, plaintiffs asserted their rights clearly on May 20, 2010. But, for four years, the

state declined to offer immunity or to allow plaintiffs to make a living at the racetrack.

The district court cited some cases without precedential authority and inapposite here.

First, the district court cited Aguilera v. Los Angeles, 510 F.3d 1161 (9th Cir. 2007). In Aguilera,

the plaintiffs had been threatened with transfer to less prestigious “job assignments and work

No. 14-1511 Moody, et al. v. Mich. Gaming Control Bd., et al. Page 9

shifts,” not total discharge. Id. at 1171; see also id. at 1173 (distinguishing “re-assignment from

field to desk duty” from “losing one’s job”).11 Here, the district court erred in suggesting that

“similar to the facts in Aguilera, [the harness drivers] were not forced to answer the stewards’

questions . . . .” Moody v. Mich. Gaming Control Bd., 2013 WL 6196947, at *9 (E.D. Mich.

Nov. 27, 2013) (emphasis added). In point of fact, they were.12 To subject plaintiffs to the

choice between self-incrimination, perjury, or dismissal is, at least for Fifth Amendment

purposes, to force them to answer.

The district court also cited Morgan v. Columbus, No. 92-4086, 1993 WL 389954 (6th

Cir. Oct. 1, 1993). In Morgan, the Columbus Police Department investigated the city’s

appointed deputy development director, a former officer with the department who also was a

lawyer. His superior told him to “answer those questions that you can. I’m not asking you to

answer things that you feel would incriminate.” Id. at *4 (emphasis added). During the hearing,

the former officer read a substantial statement that did not mention the Fifth Amendment or the

privilege against self-incrimination, but concluded with “[t]hat is my statement in its entirety

today.” Id. at *6. The city subsequently fired him and he sued under § 1983. We held that the

plaintiff “was not deprived of a constitutional right” because he “was only required to answer

those questions which he did not believe would infringe his constitutional rights,” id. at *21,

whereas here, defendants told plaintiffs that their licenses required them to answer questions and

not to assert their rights against self-incrimination. So Morgan does not dispose of this case.

III

We turn to the process due to the harness drivers prior or subsequent to their suspension

and exclusion. “The touchstone of due process is protection of the individual against arbitrary

action of government.” Wolf v. McDonnell, 418 U.S. 539, 558 (1974) (citing Dent v. West

Virginia, 129 U.S. 114, 123 (1889)). The Supreme Court has explained that identifying

11

Even when the punishment is not equivalent to termination, the Ninth Circuit’s position is not the only

one. In “[t]he Second, Seventh and Federal Circuits[, t]he government must tell public employees that they have

immunity before it can constitutionally punish them for refusing to make self-incriminating statements.” Aguilera,

510 F.3d at 1178 (Kozinski, J., dissenting “for the most part”) (citing Weston v. U.S. Depʼt of Hous. & Urban Dev.,

724 F.2d 943, 948 (Fed. Cir. 1983); Confederation of Police v. Conlisk, 489 F.2d 891, 895 & n.4 (7th Cir. 1973);

and Uniformed Sanitation Men Ass’n v. Comm’r of Sanitation of N.Y., 426 F.2d 619, 621, 627 (2d Cir. 1970)

(Friendly, J.)).

12

For our purposes here, state licensees enjoy the same rights about their licenses that state employees do

about their employment.

No. 14-1511 Moody, et al. v. Mich. Gaming Control Bd., et al. Page 10

the specific dictates of due process generally requires consideration of three

distinct factors: [f]irst, the private interest that will be affected by the official

action; second, the risk of an erroneous deprivation of such interest through the

procedures used, and probable value, if any, of additional or substitute procedural

safeguards; and finally, the Government’s interest, including the function

involved and the fiscal and administrative burdens that the additional or substitute

procedural requirement would entail.

Mathews v. Eldridge, 424 U.S. 319, 335 (1976).

“[T]he ordinary principle [is] that something less than an evidentiary hearing is sufficient

prior to adverse administrative action.” Id. at 343. But the courts, not the state, decide where

that principle applies. A state may not condition a statutory entitlement on a beneficiary’s

acceptance of process so minimal that it fails to satisfy constitutional standards. See Cleveland

Bd. of Educ. v. Loudermill, 470 U.S. 532 (1985).

The district court suggested that plaintiffs do not have a liberty interest in an occupation

in the horse-racing industry and that plaintiffs do not have a property interest in the “mere

expectation of being licensed by the Racing Commissioner” (emphasis added). But the harness

drivers need only to demonstrate property interests—the harness drivers can demonstrate that

they have a property interest in their licenses in two ways.

A

First, the Supreme “Court has consistently held that some kind of hearing is required at

some time before a person is finally deprived of his property interests. The requirement for some

kind of hearing applies to . . . the revocation of licenses . . . .” Wolf, 418 U.S. at 557-58 (citing

Joint Anti-Fascist Refugee Cmte. v. McGrath, 341 U.S. 123, 168 (1951) (Frankfurter, J.,

concurring); and In re Ruffalo, 390 U.S. 544 (1968)). “Suspension of issued licenses . . .

involves state action that adjudicates important interests of the licensees. In such cases the

licenses are not to be taken away without that procedural due process required by the Fourteenth

Amendment.” Bell v. Burson, 402 U.S. 535, 539 (1971). In addition, a state’s establishment of

process means that “state law has engendered a clear expectation of continued enjoyment of a

license absent proof of culpable conduct . . . .” Barry v. Barachi, 443 U.S. 55, 64 n.11 (1979)

No. 14-1511 Moody, et al. v. Mich. Gaming Control Bd., et al. Page 11

(citing Perry v. Sindermann, 408 U.S. 593, 601 (1972); Bd. of Regents v. Roth, 408 U.S. 564

(1972); Bell, 402 U.S. at 539; and Goldberg v. Kelly, 397 U.S. 264 (1970)).

In Michigan, the racing commissioner can license people to participate in horse racing

and wagering and can promulgate rules to that effect. M.C.L. 431.307(1). In addition, “[t]he

racing commissioner may . . . investigate . . . a licensee . . . to ensure compliance . . . .” M.C.L.

431.307(7). To that end,

[u]pon the filing of a written complaint . . . or . . . motion of the racing

commissioner regarding . . . a person issued a[n] occupational license [for harness

driving], the racing commissioner may summarily suspend the occupational

license . . . not more than 90 days pending a hearing and final determination . . .

regarding of the acts or omissions complained of . . . , if the commissioner

determines . . . that the public health, safety, or welfare requires emergency

action. The racing commissioner shall schedule the [hearing to occur] within 14

business days after the [summary suspension.] The hearing shall be conducted in

accordance with the contested case provisions of the administrative procedures

act . . . .

M.C.L. 431.316(7). The Michigan Administrative Procedures Act, in turn, provides that “[t]he

parties [in a contested case] shall be given a reasonable notice of the hearing, which notice shall

include: . . . . [a] reference to the particular sections of the statutes and rules involved” and “the

issues involved.” M.C.L. 24.271(2). Because Michigan has established a process for appealing

suspensions of licenses, the harness drivers had property interests in their licenses.13

B

Second, although a state statute “does not affront the Due Process Clause by authorizing

summary suspensions” of horse-racing licenses “without a presuspension hearing,” Barry,

13

The harness drivers suggest that the Michigan law “sets forth the basic due-process requirements of

contested-case proceeding where the administrative agency intends to suspend an occupational license.” Appellant

Br. 23 (emphasis added). To the extent they mean federal constitutional due-process requirements, they err. It is

true that, “under section 92 of the [Michigan] Administrative Procedures Act, two notices to the licensee are

required before a revocation hearing may be held.” Rogers v. Mich. St. Bd. of Cosmetology, 244 N.W.2d 20, 22

(Mich. Ct. App. 1976). In all, the act requires four steps: (1) issuance of notice, (2) informal opportunity to show

compliance, (3) only if licensee does not offer to comply, issuance of notice of hearing, which commences

proceedings, (4) hearings. Id. at 21-22. The Act requires informal opportunity to show compliance because “the

Legislature intended to delay the revving up of the formal bureaucratic machinery.” Id. at 23. In addition,

“proceedings do not commence . . . when the parties physically assemble [but rather] with the mailing of the notice

of the hearing . . . by analogy [to] the civil forum, [wherein] the filing of the complaint initiates the proceedings.”

Ibid. But while § 1983 provides a remedy for violations of federal rights, the amount and kind of process due to a

licensee under the Constitution is not necessarily equivalent to the process to which a state statute entitles him as a

matter of state law.

No. 14-1511 Moody, et al. v. Mich. Gaming Control Bd., et al. Page 12

443 U.S. at 63, we do not need to apply the Mathews criteria to the harness drivers, because the

Supreme Court already has done so: a suspended harness-horse trainer (and so, we presume, a

harness driver) is due the process of “a prompt postsuspension hearing,” id. at 66.

The harness drivers received a postsuspension hearing in Michigan state court. Whether

or not plaintiffs ought to have received, as matter of Michigan state law, an additional hearing in

front of an administrative agency does not affect the federal constitutional analysis. So we

affirm the district court’s grant of summary judgment insofar as it held that the defendants’

suspension of plaintiffs did not violate the plaintiffs’ due-process rights.

C

In November and December 2010, Richard Kalm, Executive Director of the MGCB,

issued orders of exclusion as to each harness driver. Each order proceeded in the same way.

Each identified the harness driver as a licensee suspended for “failing to comply with the

conditions precedent for occupational licensure . . . .” See, e.g., Kalm, Order of Exclusion In the

Matter of John Moody at 1 (Nov. 30, 2010) (citing M.C.L. 431.316(1); and 1985 M.R. 6, R

431.1035). Reciting that the harness driver had “asserted that he had the right to invoke a 5th

Amendment right against self-incrimination in response to questions asking whether he ever

failed to give his best efforts in a race or ever accepted money to alter the outcome of a race,” the

Order stated that “[b]ased on the continued and ongoing administrative investigation into race

fixing, information that [the plaintiff] was involved in race fixing, and his failure to cooperate,

[he] . . . is to be excluded from horse racing tracks . . . . [Kalm] deems it necessary to be

proactive to preserve the integrity of horse racing in the State of Michigan and to protect the

public health, safety and welfare.” See, e.g., id. at 1-2 (emphasis added).

The harness drivers were due the process of a postexclusion hearing for the two reasons

that they were due the same for their suspensions: the general principle of a hearing before final

or permanent deprivation, and the Barry Court’s holding that the suspension of a jockey’s license

entitles him to a post-deprivation hearing. We also note that the Exclusion Orders seem to

contemplate as much: the Order concluded by acknowledging that “[u]pon written request, [the

plaintiff] has a right to a hearing de novo before the Executive Director.” Ibid. The harness

drivers were due the process of a hearing, which they did not receive.

No. 14-1511 Moody, et al. v. Mich. Gaming Control Bd., et al. Page 13

But the harness drivers would fail on this due-process claim, as well, if they had failed to

request a hearing. On the harness drivers’ account, they “awaited the outcome in the Michigan

Court of Appeals” before requesting a hearing about their exclusion. Appellant Br. 36. That

court issued its decision on July 21, 2011, declaring the issue of the suspension of 2010 licenses

moot. The harness drivers claim that, in August 2011, they “called and met with Defendants

regarding re-licensure . . . .” Ibid. According to the harness drivers, the MGCB ultimately took

the position that the relevant rules and regulations entitled plaintiffs to appeal only within ten

days of the order of exclusion. Ibid. In a letter dated November 16, 2011, the MGCB’s Horse

Racing Manager stated that “the time to appeal the Exclusion Order has long passed.” Ernst

Letter. Similarly, on January 13, 2012, the MGCB told the harness drivers that “an Exclusion

Order was entered against you that you did not appeal. As such, you are excluded indefinitely

from licensure . . . .” See, e.g., Letter from Erik Pedersen, Div. of Horse Racing, Audit &

Gaming Technology, to John R. Moody at 1 (Jan. 13, 2012). This later letter, though, suggested

that the harness drivers might still appeal their 2010 suspension. Id. at 1-2.

The regulation under which the Racing Commissioner excluded the plaintiffs provides

that:

Any person who is ordered to be . . . excluded . . . shall, upon written request,

have the right to a hearing de novo before the commissioner to review the order

. . . unless such a hearing has already been held before the commissioner under

[M.C.L. § 24.201 et seq.] and a final determination made by the commissioner

before issuance of the order under review. Upon such a request, the

commissioner shall schedule . . . the hearing to be held within 14 days . . . . The

hearing shall be held pursuant to [M.C.L. § 24.201 et seq.]. The person shall

remain . . . excluded . . . not more than 90 days after receipt of a request for

review pending the hearing and final determination of the commissioner regarding

the order . . . under review.

Mich. Admin. Code R. 431.1130(3). The language of the regulation seems not to contemplate a

deadline for appeal. The harness drivers do not demonstrate that they ever clearly submitted “a

written request” for review.

That omission still does not end the inquiry. No one disputes that, despite the Exclusion

Orders in late 2010, the harness drivers applied for 2011 licenses (and, subsequently, for 2012,

2013, and 2014 licenses). A reasonable juror might conclude that the MGCB should have

No. 14-1511 Moody, et al. v. Mich. Gaming Control Bd., et al. Page 14

construed those applications as requests for the hearings due to them under the federal

constitution and state regulations. After all, the MGCB seemed to construe the harness drivers’

applications for 2011 licenses as an “attempt[t] to recreate either an administrative or judicial

appeal process.” Ernst Letter. If the MGCB, in point of fact, did construe the harness drivers’

applications as written requests for appeal, then the harness drivers were due the process of a

hearing concerning their Exclusion Orders. Such an outcome makes policy sense. If a licensee

regards his un-reviewed exclusion from licensure to be an error, and so applies for a license, due-

process doctrine favoring hearings prior to final deprivation would seem to require that his

application trigger the review owed to him.

We hold that there is a disputed issue of material fact as to whether the defendants denied

plaintiffs the process they were due or whether the plaintiffs failed to seek that process. We

reverse the grant of summary judgment on plaintiffs’ due-process claims that they were denied

their rights to a hearing after their exclusion and remand the question to the district court.

IV

After discovery, plaintiffs moved to amend their complaint to include a First Amendment

retaliation claim. The district court denied that motion. We do not review the district court’s

denial because, as the MGCB correctly suggests, “the Harness Drivers have not appealed the

District Court’s denial of leave to amend the Complaint” to include a First Amendment

retaliation claim. Appellee Br. 38.

Because we reverse summary judgment, the case will return to the district court. There,

plaintiffs can move for the district court to reconsider its decision to deny plaintiffs’ motion to

amend its complaint. If the district court denies that motion, the plaintiffs can appeal that denial

after final judgment.

V

In conclusion, we AFFIRM the district court’s grant of summary judgment to the MGCB

on the harness drivers’ due-process claims about their suspensions. We REVERSE the district

court’s grant of summary judgment to the MGCB on the harness drivers’ due-process claims

about their exclusions and self-incrimination claims, and REMAND the case to the district court

No. 14-1511 Moody, et al. v. Mich. Gaming Control Bd., et al. Page 15

for further proceedings on these three issues: did the harness drivers request hearings on their

exclusions, did their self-incrimination and due-process claims involve clearly established rights,

and, if so, should an officer in the MGCB’s position have known about those rights? If, on a

pretrial motion or after trial, the district court finds that the MGCB is liable on one or more of the

harness drivers’ claims, the district court should determine what damages the MGCB owes the

harness drivers.