Petition for Writ of Certiorari — Levin v. Parrillo

88-8 66 JUL 12 IH

Tr.

NO.

‘

IN THE

Supreme Court of the United States

OCTOBER TERM, 1988

Howard S. Levin and Sydell R. Kraft

Petitioners,

vs.

Anthony J. Parrillo and R. Lane Stebbins

Respondents

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

HOWARD S. LEVIN

Pro Se

SYDELL R. KRAFT

Pro Se

224 E. 49th Street

New York, NY 10017

212°935°9620

QUESTIONS PRESENTED FOR REVIEW

i. Whether persons engaged in gaming

activities subject to New Jersey's Casino

Control Act are entitled to the protec-

tion of due process of law.

2. Whether a constitutionally protec-

ted liberty interest requires the State

of New Jersey to afford due process of

law before prohibiting business trans-

actions which had been expressly per-

mitted by administrative action over a

several year period.

3. Whether a constitutionally protec-

ted property right develops from contin-

ued adherence to statutory provisions of

New Jersey's Casino Control Act and re-

peated administrative approval of busi-

ness transactions over an extended period

of time.

4. Whether the Burford abstention

doctrine applies to a claim for redress

under 42 U.S.C. § 1983. (Burford v. Sun

Oil Co. 319 U.S. 315 (1943)).

5. Whether the Pullman abstention

doctrine applies to a claim for redress

under 42 U.S.C. § 1983. (Railroad

Commission of Texas v. Pullman Co. 312

U.S. 496 (1941)).

PARTIES

The parties to this appeal are Howard S.

Levin and Sydell R. Kraft who appear pro

se.

Trans Atlantic Games, Inc. and W. Cary

Edwards in his official capacity as

Attorney General of New Jersey were

parties to the proceedings in the lower

courts.

ii

Questio

Parties

Table o

TABLE OF CONTENTS

ns Presented For Review .....

fg 8” PP ere Le ee

Gpinieme BOLO sesccccctscessssesves

Jurisdi

Statute

Stateme

Reasons

I.

Il.

IIt.

SELON ccccccccccsesccesececes

INVOlVed ..cccccccccccecs ecee

nt of the Case ...cccccccccece

for Granting the Writ ......

The Court of Appeals was in

error by affirming the

District Court finding that

petitioners lacked a con-

stitutionally protected

liberty interest ...........

The Court of Appeals was in

error by affirming the

District Court finding that

petitioners lacked a con-

stitutionally protected

property interest ..........

The Court of Appeals was

in error by affirming the

application of the Burford

abstention doctrine. (Bur-

ford v. Sun Oi] Co. 319 U.S.

315 (1943)). e*eeeteeeeneeeeees

iii

13

18

23

Table of Contents, continued

PAGE

IV. The Court of Appeals was in

error by affirming the ap-

plication of the Pullman

abstention doctrine.

Texas v. Pullman Co. 312

Fe ££. (Er 24

Vv. The Court of Appeals was in

error by affirming the

District Court dismissal of

claims entitled to trial

Gm GROLE MOPACS ccccccccccecs 26

GO. 64656066 06606660668666868 29

APPENDIX:

A. Judgment order of the United

States Court of Appeals

(March 3, 1988) .ccccccccceces A-1

B. Denial of Petition for Rehear-

ing in banc by the United

States Court of Appeals

i i ew eneee A-3

C. Oral Opinion of the United

States District Court

(June 12, 1987) ccccccccccceccs A-5

Appendix, Continued

PAGE

D. Opinion of the United States

District Court (July 27,

1987) eoeeeeeveee oeeeeeeeer awe a A-28

E. Order for Summary Judgment of

the United States District

Court (July 27, 1987) ..... eee A-50

F. 42 U.S.C. §1983 wee eceeeeece . A-52

G. NeJ-Se-Ap 5212-92 2c eee eeeeee eo A-53

TABLE OF AUTHORITIES

Cases Cited

Anti-Fascist Refugee Committee

v. McGrath,

341 U.S. 123, 168, 71 S.Ct. 624,

646, 95 L.Ed. 817 ere @# enereneeetee 16

Board of Regents of State Colleges

v. Roth,

408 U.S. 564, 573 (1972) ........- 14,15,

21

Bolling v. Sharpe, 347 U.S. 497,

DT Se 7s ced we ddensvekese due 15

Table of Authorities, continued

PAGE

Burford v. Sun Oj] Co.,

Oo Ss a ar >

D'Iorio v. County of Delaware,

592 F.2d, 681, 686

oe SS er er or 24,25

26

Duva v. World Boxing Association,

548 F.Supp. 710 (D.N.J. 1982) ... 22

Kentucky West Virginia Gas Co. v.

; ‘a Public Utili!

Commission,

791 F.2d 1111, 1115

(3d Cir. 1986) 2.628 6 @2e 828 68° 82 8 2 6 24. 8.¢ 23

Meyer v. Nebraska, 262 U.S. 390,

399 eoeoeveeeeee ee eee erereeeeee eee eeee 15

Paul _v. Davis,

Re es ee PROPER) ccicnccntcess $6,237

Railroad Commission of Texas v.

Pullman Co.,

Dee eee Se TEOEES. ccccicciccsces BA,

Stanley v. Illinois, 405 U.S. 645 . 15

vi

Table of Authorities, continued

PAGE

State ex rel. Grimes et al. vs.

ione fe) it

of Las Vegas et al.,

53 Nev. 364, 372, 373, 1 P.2d 570,

a ask tcc cece 10

State vs. Rosenthal,

CNet tees 11

Wi inv. ¢ u,

I 16

Statutes Cited

42 WebcSe § 1983 eeeseeeees#se#sse#e#ee#e#8eee 3

Nw.JeS.A. 5512-92 ..... een ceccecce 4,19

vii

NO.

IN THE

Supreme Court of the United States

OCTOBER TERM, i988

Howard S. Levin and Sydell R. Kraft

Petitioners,

vs.

Anthony J. Parrillo and R. Lane Stebbins

Respondents

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

OPINION BELOW

The Court of Appeals affirmed without

written opinion the order of the Dis-

trict Court granting summary judgment in

favor of the respondents. (Appendix A).

A petition for rehearing was denied on

April 14, 1988 (Appendix B).

The decision of the United States Dis-

trict Court is unreported. The trans-

cript of an oral opinion of the District

Court is set forth at Appendix Cc. The

written opinion of the District Court

granting summary judgment dismissing

claims of the petitioners is set forth at

Appendix D.

JURISDICTION

The judgment of the Court of Appeals

(Appendix A) was entered on March 3,

1988. A timely petition for rehearing

was filed on March 16, 1988 and was

denied on April 14, 1988 (Appendix 8B).

The jurisdiction of this Court is invoked

under 28 U.S.C. §1254 (1).

STATUTE INVOLVED

This petition involves the interpretation

of the following statute: 42 U.S.C.

§1983.

The statute is set forth in the appendix.

STATEMENT OF THE CASE

Trans Atlantic Games, Inc. ("TAG") is a

New Jersey Corporation formerly engaged

in the distribution of slot machines.

Petititioners Howard S. Levin ("Levin")

and Sydell R. Kraft ("Kraft") are the two

principals of TAG. Levin is the pres-

ident of TAG. Kraft is the secretary/

treasurer of TAG.

TAG filed an application for licensure as

a casino service industry with the New

Jersey Casino Control Commission

("Commission") in or about June, 1982.

3

The Commission, in accordance with

statutory procedures, thereafter referred

TAG's application to the New Jersey

Division of Gaming Enforcement

("Division") for investigation and

report.

Before being licensed, an applicant for

licensure as a casino service industry

may do business with licensed casinos or

others by means of a petition to the

Commission for a “transactional waiver".

(N.J.S.A. 5:12-92 a(2)). In order to

obtain a transactional waiver from the

Commission, the petition must be

supported with a demonstration of “good

cause." Jd. Clearly the transactional

waiver as a means of doing business prior

to licensure is an established policy of

New Jersey.

Between 1982 and 1986 TAG submitted more

than a dozen petitions for transactional

waivers on its own behalf to allow TAG to

furnish slot machines to Atlantic City

casinos. In the same period more than a

dozen additional petitions for trans-

actional waivers were submitted by

licensed Atlantic City casinos to allow

TAG to furnish slot machines for casino

use.

Between 1982 and 1986 the Division rec-

ommended approval of twenty-six applica-

tions for transactional waivers filed by

TAG on its own behalf or filed by

Atlantic City casinos on TAG's behalf.

After reviewing each of the twenty-six

applications the Division recommended

approval of the proposed transaction to

the Commission. The Division based its

recommendation on good cause having been

shown by TAG and the seven licensed

Atlantic City casinos which were TAG's

customers. The Commission approved by

unanimous vote all transactional waivers

recommended by respondents.

On October 14, 1986 respondent Stebbins

on behalf of respondent Parrillo sent a

letter to the Honorable Walter N. Read,

Chairman of the Commission objecting for

the first time to the licensure of TAG.

On November 24, 1986 counsel to TAG noti-

fied respondents of substantial omis-

sions, inaccuracies and misrepresenta-

tions in the material transmitted to the

Commission by them on October 14, 1986.

TAG's application for licensure had been

pending for more than four years. on

October 14, 1986 when respondents first

objected to TAG's licensure. No hearing

6

had been set by the Commission for deter-

mination of TAG's fitness for licensure.

Pending the scheduling of the hearing TAG

continued its normal business operations

and solicited orders from its casino cus-

tomers. TAG and the petitioners antic-

ipated the continued approval of trans-

actional waivers until such a time as

they were allowed the opportunity to de-

fend themselves against the charges made

by the respondents.

On January 28, 1987 Boardwalk Regency

Corporation ("BRC") a licensed Atlantic

City casino sought a transactional waiver

from the Commission for the purchase from

TAG of four blackjack machines and four

slot machines. Additionally, on February

5, 1987 BRC sought a transactional waiver

from the Commission for purchase from TAG

of twenty-five slot machines.

7

On March 5, 1987 respondents Parrillo and

Stebbins notified the Commission of the

Division's opposition to the application

of BRC dated January 28, 1987 for a

transactional waiver. Respondents Par-

rillo and Stebbins in a separate response

dated March 5, 1987 stated opposition to

the application for a transactional

waiver dated February 5, 1987. The op-

position of the respondents was despite

the fact that TAG's qualifications for

licensure as a gaming related casino ser-

vice industry were not yet even scheduled

to be heard by the Commission.

Under date of March 20, 1987, TAG and the

petitioners requested the opportunity to

review certain documents in order to sup-

port the requested transactional waivers.

Respondent Stebbins in a letter dated

March 31, 1987 denied the document re-

ae

ar ee eit E ID

"64

quest and refused any discovery.

During the period that rights of petit-

ioners to discovery were in dispute the

Commission administratively dismissed the

transactional waivers sought by BRC to

purchase blackjack and slot machines from

TAG. TAG abandoned its slot machine busi-

ness at substantial loss after respond-

ents' objections caused BRC and others to

refuse to do business with TAG.

REASONS FOR GRANTING THE WRIT

This appeal centers on denial of due

process of law. Respondents have as-

serted that the petitioners are not en-

titled to due process and cannot be heard

to complain. The District Court agreed.

The District Court found no protectable

liberty or property interests entitling

petitioners to due process of law.

SS

1 ATH AE MHRA YE AIH A

The association of gaming with organized

crime and with other antisocial behavior

has often led to an aversion on the part

of courts toward gaming-related matters.

Perhaps this state of affairs is best re-

flected by a 1931 Nevada case (State ex

rel. Grimes et al. vs. Board of Commis-

sioners of City of Las Vegas et al., 53

Mev. 2664, 3728, 373; 1 BP.ae S70, S7a

(1931)). In 1931 the Nevada court wrote:

We think the distinction drawn betwe-

en a business of the latter character

(liquor) and useful trades, occupa-

tions, or businesses is substantial

and necessary for the proper exercise

of the police power of the state. Gam-

ing as a calling or business is in the

same class as the selling of intoxic-

ating liquors in respect to deleter-

ious tendency. The state may regulate

or suppress it without interfering

with any of those inherent rights of

citizenship which it is the object of

government to protect and secure.

This ancient finding was reaffirmed by

the Supreme Court of Nevada in 1977 when

considering the licensing of "Lefty" Ro-

10

senthal. (State vs. Rosenthal, 559 P.2d

830). Mr. Rosenthal's background included

conviction for conspiracy to bribe an an-

ateur athlete, testimony before a United

States Senate subcomittee that he atten-

pted a bribe to influence the outcome of

a college football game, sworn statements

by police officers that Mr. Rosenthal

corrupted public officials in return for

protection and action by the Florida Rac-

ing Commission to bar him from racetracks

in Florida. Not surprisingly Mr.

Rosenthal remained unlicensed and his

attempts at judicial reversal were marked

with failure.

Gaming is now a “useful trade". Gaming

has become an important segment of the

national economy. Estimates of its gross

revenues for 1987* are as follows:

*Gaming and Wagering Business Vol. 9 No.

5 May 15, 1988 pages 9, 10, 12 and 13.

11

State lottery

gross revenue $12,435,000,000

Thoroughbred handle 8,194,000,000

Nevada casino

gross revenue 3,668,000,000

Off-track betting

and sports books

gross revenues 3,482,000,000

Greyhound handle 3,203,000,000

Atlantic City casino

gross revenue 2,822,000,000

Harness handle 2,576,000,000

Jai-alai handle 707,000,000

$37,087,000,000

Gaming activities regulated by the states

produced more than 37 billion dollars in

gross revenues. Ancillary revenues for

food, lodging, transportation and enter-

tainment no doubt exceed this figure. The

fair regulation of businesses generating

these significant revenues is a matter of

importance deserving consideration by

this Court.

12

It is in the national interest that per-

sons engaged in gaming activities be af-

forded the same constitutional protection

as all other citizens.

I. THE COURT OF APPEALS WAS IN ERROR BY

AFFIRMING THE DISTRICT COURT FINDING

THAT PETITIONERS LACKED A CONSTITU-

TIONALLY PROTECTED LIBERTY INTEREST.

Over a four year period petitioners en-

gaged in the sale of slot machines to

Atlantic City casinos. These sales were

consumated in 26 separate transactions.

Each transaction was specifically autho-

rized by the Commission after a favorable

recommendation by the respondents.

Suddenly the recommendations of respon-

dents to further transactions changed

from favorable to unfavorable. No

hearing was held or even’ scheduled.

Discovery into the basis of the un-

favorable recommendation was denied to

13

petitioners. The chilling effect of

official disapproval resulted in the

inability of petitioners to continue

their business. Petitioners assert that

the pattern of tranactions specifically

permitted created a liberty interest.

The State could deny further transactions

only through due process of law.

In Board of Regents of State Colleges v.

Roth, 408 U.S. 564, 573 (1972) this Court

speaks broadly of liberty. It considers

liberty a broad and majestic term - among

the great constitutional concepts left to

gather meaning from experience.

"While this Court has not attempted to

define with exactness the liberty ...

guaranteed [by the Fourteenth Amend-

ment], the term has received much con-

sideration and some of the included

things have been definitely stated.

Without doubt, it denotes not merely

freedom from bodily restraint but also

the right of the individual to con-

tract, to engage in any of the common

occupations of life, to acquire useful

knowledge, to marry, establish a home

14

gs EN eae RP

and bring up children, to worship God

according to the dictates of his own

conscience, and generally toc enjoy

those privileges long recognized ...

as essential to the orderly pursuit of

happiness by free men." Meyer v. Ne-

braska, 262 U. S. 390, 399. In a Con-

stitution for a free people, there can

be no doubt that the meaning of

"liberty" must be broad indeed. See,

e.g., Bolling v. Sharpe, 347 U. S.

497, 499-500; Stanley v. Illinois, 405

U. S. 645.

id 572

In the Roth case this Court commented

upon “good name, reputation, honor, or

integrity". Id 573. In the case brought

by the petitioners these elements of

freedom have indeed been stigmatized.

The respondents wrote to the Chairman of

the Commission on March 5, 1987 in

separate letters the following statement:

...-the Division believes that approval

of the instant transaction (the sale

of slot machines to BRC) would

unavoidably tend to erode the public

trust and confidence in the

credibility and integrity of the

regulatory process and of casino

operations.

15

FORE PTE He Om eo

:

The petitioners were discredited by the

respondents without notice, without a

hearing and without the opportunity for

discovery.

In Paul _v. Davis, 424 U.S. 693 (1976),

this Court set down the "stigma" standard

for deciding whether a state has infring-

ed on an individual's liberty. Mere

reputation alone does not create a

protectable interest; however, when the

state not only stigmatizes the individual

but acts to interfere with his future

business, a constitutional right does

become involved. Id. Reviewing its prior

decision in Wisconsin v. Constantineau,

400 U.S. 433 (1971) this Court stated:

'(Tjhe right to be heard before being

condemned to suffer grievous loss of

any kind, even though it may not in-

volve the stigma and hardships of a

criminal conviction, is a principle

basic to our society.' Anti-Fascist

j » e628: Wels 223

168 (Frankfurter, J., concurring).

16

“Where a person's good name, rep-

utation, honor, or integrity is at

stake because of what the government

is doing to him, notice and an op-

portunity to be heard are essential."

Id., at 437 (emphasis supplied).

424 U.S. at 708

The Court in commenting on the above

quotation stated:

We think that the italicized language

in the last sentence quoted, "because

of what the government is doing to

him," referred to the fact that the

governmental action taken in that case

deprived the individual of a right

previously held under state law - the

right to purchase or obtain liquor in

common with the rest of the citizenry.

"Posting," therefore, significantly

altered her status as a matter of

state law, and it was that alteration

of legal status which, combined with

the injury resulting from the defama-

tion, justified the invocation of

procedural safeguards.

424 U.S. at 708 - 709

The holding of this Court in Paul v. Da-

vis applies directly to the case at bar.

Petitioners' status was altered by re-

spondents abrupt change from approval to

17

disapproval. The injury resulting from

the change in status was the inability of

the petitioners to do further business

with their customers. A mark of Cain had

been indelibly placed on the foreheads of

the petitioners.

The liberty interests of the petitioners

entitle them to the protection of due

process of law. The scorn of state

disapproval was visited upon the peti-

tioners without the hearing to which they

were entitled.

Il. THE COURT OF APPEALS WAS IN ERROR

BY AFFIRMING THE DISTRICT COURT

FINDING THAT PETITIONERS LACKED A

CONSTITUTIONALLY PROTECTED PROP-

ERTY INTEREST

TAG filed for a gaming related casino

service industry license in 1982 at which

time the petitioners provided full back-

ground information. The Division commen-

ced an investigation and over a four year

18

period cooperated with TAG and the peti-

tioners in their sale of slot machines to

Atlantic City casinos. This cooperation

was manifest by recommending approval for

a series of transactional waivers filed

either by TAG or by casinos with whom TAG

intended to do business. The basis in

the law for transactional waivers is

established by N.J.S.A. 5:12-92(a) and

obviously enacted to allow persons

similarly situated to TAG to do business

with New Jersey casinos pending a hearing

en their licensing application. Over a

four year period TAG sought and obtained

transactional waivers. The Division

recommended these transactional waivers

and the Commission routinely granted the

waivers by unanimous vote.

The District Court held that neither TAG

nor the petitioners had a property inter-

19

est in a request for a transactional

waiver filed by TAG's principle customer

BRC. The court reasoned that TAG was not

a party to the transactional waiver and

hence could not have a protectable prop-

erty interest. Petitioners contend that

the property interest arises from a pat-

tern of transactional waivers beneficial

to petitioners which took place over a

four year period with the support and

cooperation of the Division.

Petitioners held and were entitled to

hold a reasonable expectation that they

could continue to furnish slot machines

to Atlantic City casinos through compli-

ance with procedures established by the

Division pending a licensure decision by

the Commission. Petitioners' compliance

with those procedures as well as the ap-

proval obtained by TAG for more than two

20

ow.

dozen transactional waivers provided

petitioners with a protected property

interest.

Property rights can clearly be created by

existing rules or understandings, Board

of Regents v. Roth, 408 U.S. 564 (1972).

The Court defined a property interest as

follows:

To have a property interest in a bene-

fit, a person clearly must have more

than an abstract need or desire for

it. He must have more than a uni-

lateral expectation of it. He must,

instead, have a legitimate claim of

entitlement to it. It is a purpose of

the ancient institution of property to

protect those claims upon which people

rely in their daily lives, reliance

that must not be arbitrarily under-

mined. It is a purpose of the con-

stitutional right to a hearing to

provide an opportunity for a person to

vindicate those claims.

Id. at 577

Procedures established by state law such

as the transactional waiver in the case

21

at bar amount to "entitlements" protected

by due process.

The same district that dismissed peti-

tioners' claims has ruled broadly on the

existence of protected property inter-

ests. In Duva v. World Boxing Associa-

tion 548 F.Supp. 710 (D.N.J. 1982) the

District Court found a protectable prop-

erty interest was created by procedures

established by an association governing

contention for boxing championships.

Petitioners do not argue that they had an

unconditional right to the approval of a

transactional waiver or that the Division

was bound to mute any objections it had

to petitioners doing business. What

petitioners do argue is that the trans-

actional waiver procedure and the use

made of it by petitioners over a four

year period entitled them to a reasonable

22

expectation of continuance and the right

to due process of law if future trans-

actional waivers are to be denied.

IItl. THE COURT OF APPEALS WAS IN ERROR

BY AFFIRMING THE APPLICATION OF

THE BURFORD ABSTENTION DOCTRINE.

(BURFORD V. SUN OIL CO. 319 U.S.

315 (1943)).

The District Court found the criteria for

invoking the doctrine of abstention under

Burford v. Sun Oi] Co. 319 U.S. 315

(1943) to be clearly present.

The District Court cited Kentucky West

Vi ini Vv sylv

Utility Commission. 791 F.2d 1111, 1115

(3d Cir. 1986) which held the Burford

abstention to be appropriate in two

situations:

(1) “where there have been presented

difficult questions of state law bear-

ing on policy problems of substantial

public import whose importance tran-

scends the result in the case then at

bar," and (2) where “the exercise of

federal review of the question in a

23

case and in similar cases would be

disruptive of state efforts to estab-

lish a coherent policy with respect to

a matter of substantial public con-

cern."

Appendix D, page A-25.

The claims of the petitioners that two

state officials deprived them of consti-

tutionally protected rights is in no way

disruptive of state regulation. Petition-

ers seek to call to account the actions

of the respondents and to obtain redress

if the allegations of malice and bad

faith can be proven by a preponderance of

the evidence.

IV. THE COURT OF APPEALS WAS IN ERROR

BY AFFIRMIMING THE APPLICATION OF

THE PULLMAN ABSTENTION DOCTRINE.

(RAILROAD COMMISSION OF TEXAS V.

PULLMAN CO. 312 U.S. 496 (1941)).

The District Court buttresses its posi-

tion of abstention by reference to

D'Iorio v. County of Delaware, 592, F.2d,

681, 686 (3d Cir. 1978).

24

The District Court found all the elements

of D'Iorio to be present and that absten-

tion under the doctrine Pullman is

mandated.

Thus the District Court considered there

to be:

1. -++ uncertain issues of state law

underlying the federal con-

stitutional claims ...

2 ++. State law issues ... amenable

to an interpretation by the state

courts that would obivate the

need for or substantially narrow

the scope of the adjudication of

the constitutional claims.

3. (possibility that) an erroneous

decision of state law by the

federal court would be disruptive

of important state policies.

Appendix D, page A-28.

To hold, as the District Court did, that

the Pullman abstention applies, is to

hold that respondents are not accountable

for their deprivation of petitioners'

constitutional rights. There are no un-

25

certain issues of state law underlying

constitutional Claims brought in the

federal court. Petitioners contend they

were entitled to due process of law which

was not afforded then.

State law issues are not before this

Court. The assertion of individual rights

cannot be considered disruptive of impor-

tant state policies. The District Court

is wrong in applying D'IJorio to the case

at bar.

The issue petitioners seek to pursue on

its merits is simply whether individuals

acting under color of state law abused

their positions and deprived petitioners

of fundamental rights.

Vv. THE COURT OF APPEALS WAS IN ERROR BY

AFFIRMING THE DISTRICT COURT DISMISSAL

OF CLAIMS ENTITLED TO TRIAL ON THEIR

MERITS

Petitioners contend the existence of con-

26

stitutionally protected liberty and pro-

perty interests. If either of these pro-

tected interests exists petitioners are

entitled to due process of law. The

District Court found no such entitlement

and dismissed the claims of the

petitioners.

Petitioners submit that due process was

clearly denied. Respondents sent their

objection to further business transac-

tions by the petitioners to the Commis-

sion and to BRC. Petitioners were not

informed of respondents intent to do so.

Respondents did not give petitioners any

oppertunity to contest the charges again-

st them or argue against the objections.

Petitioners were condemned but they were

never heard.

Respondents denied discovery to petition-

ers who sought to clear their name. Be-

27

cause of the protracted delay the Commis-

sion administratively dismissed the BRC

application for transactional waiver. The

petitioners were irreparably injured and

forced to abandon their business.

The respondents issued a recommendation

to the Commission and to TAG's principle

customer BRC which destroyed petitioners'

ability to conduct business within New

Jersey. TAG's Atlantic City customers

including BRC subsequently refused to

seek appproval for transactional waivers

as they have done in the past to purchase

slot machines from TAG.

Petitioners assert that respondents' ac-

tions were malicious and in bad faith.

Petitioners seek a trial on the merits of

their claims.

28

CONCLUSION

The Court should review this case because

of the public importance of fairness to

individuals and investors of regulation

of gaming activities by state officials.

Gaming activities in Atlantic City and

Nevada and the revenue produced by state

lotteries and pari-mutuel betting have

created employment and investment op-

portunities on a large scale. It is not

in the public interest for gaming regu-

lation to be an enclave of constitutional

deprivation.

Respectfully submitted,

Dated: HOWARD S. LEVIN

July 11, 1988 Pro Se

SYDELL R. KRAFT

Pro Se

(APPENDIX FOLLOWS)

29

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 87-5591

TRANS ATLANTIC GAMES, INC.

HOWARD S. LEVIN and SYDELL R. KRAFT

ants

Vv.

W. CARY EDWARDS, in his official cap-

acity as Attorney General of the State of

New Jersey, ANTHONY J. PARRILLO, in his

individual capacity, and R. LANE

STEBBINS, in his individual capacity

Appeal from the United States District

Court for the District of New Jersey

D.C. Civil Action No. 87-2144

(Honorable Dickinson R. Debevoise)

A-1 APPENDIX A

Submitted Under Third Circuit Rule 12 (6)

February 25, 1988

Before: BECKER, HUTCHINSON and SCIRICA,

Circuit Judge

JUDGMENT ORDER

After consideration of all contentions

raised by appellants, it is

ADJUDGED AND ORDERED that the judgment of

the district court be and is hereby

AFFIRMED.

Costs taxed against appellants.

BY THE COURT,

Illegible

Circuit Judge

Attest:

s/ Sally Mrvos___

Sally Mrvos, Clerk MAR - 3 1988

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UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 87-5591

TRANS ATLANTIC GAMES, INC.

HOWARD S. LEVIN and SYDELL R. KRAFT

Appellants

Vv.

W. CARY EDWARDS, in his official cap-

acity as Attorney General of the State of

New Jersey, ANTHONY J. PARRILLO, in his

individual capacity, and R. LANE

STEBBINS, in his individual capacity

(D.C. Civ. No. 87-2144)

SUR PETITION FOR REHEARING

Present: GIBBONS, Chief Judge, SEITZ,

WEIS, HIGGINBOTHAM, SLOVITER, BECKER,

A-3 APPENDIX B

STAPLETON, MANSMANN, GREENBERG,

HUTCHINSON, SCIRICA and COWEN, Circuit

Judges.

The petition for rehearing filed by

appellant in the above-entitled case hav-

ing been submitted to the judges who par-

ticipated in the decision of this Court

and to all the other available circuit

judges of the circuit in regular active

service, and no judge who concurred in

the decision having asked for rehearing,

and a majority of the circuit judges of

the circuit in regular service not having

voted for rehearing, the petition for

rehearing by the panel and the Court in

banc, is denied.

BY THE COURT,

Circuit Judge

Dated: APR 14 1988

A-4

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

Civil 87-2144 (DRD)

tie 2 See eee a ae x

TRANS ATLANTIC GAMES, INC.,

eG a@i.,

Plaintiffs,

Vv.

W. CARY EDWARDS, etc.

ot @i.,

Defendants.

a ee ae ee ae ee ee eee X

TRANSCRIPT OF PROCEEDINGS

June 12, 1987

Newark, New Jersey

BEFOR E:

HON. DICKINSON R. DEBEVOISE,

United States District Judge.

A-5 APPENDIX C

APPEARANCE S:

RAVIN, SARASHON, COOK, BAUMGARTEN, FISCH

& BAIME,

By: GEORGE R. HIRSCH,

Attorney for Plaintiffs.

W. CARY EDWARDS, Attorney General

By: BENJAMIN CLARKE,

R. LANE STEBBINS,

Assistant Attorneys General.

Pursuant to Section 753 Title 28 United

States Code, the following transcript is

certified to be an accurate record as

taken stenographically in the above-

entitled proceedings.

s/ Larry Hennefeld

Larry Hennefeld, Official Court Reporter

0 OO, eC

AGES = N

THE COURT: Let me rule on the applica-

tion. The plaintiffs in this action are

Trans Atlantic Games, Inc., which I will

refer to as TAG, Howard S. Levin and

Sydell R. Kraft. TAG is in the business

of selling and servicing siot machines.

Levin and Kraft are principals of TAG.

The defendants are W. Cary Edwards, named

in his official capacity as Attorney Gen-

eral of the State of New Jersey, Anthony

J. Parrillo, named individually and who

is Director of the New Jersey Division of

Gaming Enforcement, and R. Lane Stebbins,

who is named individually as a Deputy

Attorney General of the State of New

Jersey.

The New Jersey Legislature has enacted

the Casino Control Act, N.J.S.A. 5:12-1,

et seq., which establishes a Casino Con-

trol Commission as the administrative

agency charged with regulating the gaming

industry in New Jersey. The statute also

establishicd within the Department of Law

and Public Safety the Division of Gaming

Enforcement as the primary enforcement

agency under the Act.

The Commission has the responsibility to

hear and decide ali license, registra-

tion, certificate and permit applications

and the Division of Gaming Enforcement

has the responsibility to investigate all

licensure applications to enforce the Act

and to prosecute before the Commission

all proceedings for violations of the

Act.

In June of 1982 TAG applied for licensure

as a casino service industry, that is, an

industry or agency which could do busi-

ness with licensee casinos who have been

authorized to conduct business under the

Act. After the application for TAG's

licensure was made the Division of Gaming

Enforcement commenced to investigate its

qualifications for licensure.

During the pendency of the application

and while the Division's investigation

was proceeding, various casino licensees

petitioned the Commission for permission

to transact business with TAG, in accord-

ance with the provisions of N.J.S.A.

5:12-92(a). On numerous occasions the

petitions were granted and the casino li-

censees were authorized to engage in par-

ticular transactions with TAG.

By letter dated October 14, 1986 the Di-

vision of Gaming Enforcement transmitted

to the Commission its report and recon-

mendation with respect to TAG's licensure

application. The factual information

contained in the report was drawn from

the sources through which the Division

investigated TAG. It included financial

information supplied by the Securities

and Exchange Commission, tax filings and

information submitted by TAG and by its

principals, Mr. Levin and Miss Kraft.

It was the ultimate conclusion of the

Division that TAG appeared “unable to de-

monstrate by clear and convincing evid-

dence its financial stability, integrity

and responsibility," as required by

N.J.S.A. 5:12-89(b) (1).

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By letter dated November 24, 1986 counsel

for TAG contested certain of the factual

information contained in the Division's

letter of October 14, 1986. The Division

responded to this letter by advising TAG

that the factual disputes were properly

the subject of a licensing proceeding

before the Commission.

By letter dated May 20, 1987 the Commis-

sion advised TAG that in view of the

Division of Gaming Enforcement's report

of October 14, 1986 there was a substan-

tial possibility that TAG's licensure

application would be denied and further

advised TAG that it had 15 days in which

to request a hearing contesting the mat-

ter before the Commission. TAG was fur-

ther advised that if it did not request a

hearing within 15 days its licensure ap-

plication might be denied by the Commis-

sion.

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