202 F.Supp.3d 756 (E.D.Mich. 2016), 12-cv-13593, Moody v. Michigan Gaming Control Board

Docket Nº:12-cv-13593
Citation:202 F.Supp.3d 756
Opinion Judge:Hon. Gershwin A. Drain United States District Court Judge
Party Name:JOHN MOODY, DONALD HARMON, RICKY RAY and WALLY MCILLMURRAY, Plaintiffs, v. MICHIGAN GAMING CONTROL BOARD, RICHARD KALM, GARY POST, DARYL PARKER, RICHARD GARRISON, BILLY LEE WILLIAMS, JOHN LESSNAU and AL ERNST, Defendant
Attorney:No. 12-cv-13593 For John Moody, Donald Harmon, Rick Ray, Wally McIllmurray, Plaintiffs: Cynthia Heenan, Hugh M. Davis, Jr., Constitutional Litigation Associates, Detroit, MI. For Michigan Gaming Control Board, Richard Kalm, Gary Post, Daryl Parker, Richard Garrison, Billy Lee Williams, John Lessn...
Judge Panel:HON. GERSHWIN A. DRAIN, United States District Judge. UNITED STATES MAGISTRATE JUDGE, STEPHANIE DAWKINS DAVIS.
Case Date:August 15, 2016
Court:United States District Courts, 6th Circuit, Eastern District of Michigan

Page 756

202 F.Supp.3d 756 (E.D.Mich. 2016)

JOHN MOODY, DONALD HARMON, RICKY RAY and WALLY MCILLMURRAY, Plaintiffs,

v.

MICHIGAN GAMING CONTROL BOARD, RICHARD KALM, GARY POST, DARYL PARKER, RICHARD GARRISON, BILLY LEE WILLIAMS, JOHN LESSNAU and AL ERNST, Defendant

No. 12-cv-13593

United States District Court, E.D. Michigan, Southern Division

August 15, 2016

For John Moody, Donald Harmon, Rick Ray, Wally McIllmurray, Plaintiffs: Cynthia Heenan, Hugh M. Davis, Jr., Constitutional Litigation Associates, Detroit, MI.

For Michigan Gaming Control Board, Richard Kalm, Gary Post, Daryl Parker, Richard Garrison, Billy Lee Williams, John Lessnau, Al Ernst, Defendants: Felepe H. Hall, MI Dept of Attorney General, Lansing, MI; Jason A. Geissler, Michigan Attorney General, Lansing, MI.

For Michigan Department of Attorney General, Criminal Division, Defendant: Michael G. Frezza, LEAD ATTORNEY, Michigan Department of Attorney General, Criminal Division, Detroit, MI; Jason A. Geissler, Michigan Attorney General, Lansing, MI.

For Thomas DeClercq, Interested Party: Mark E. Donnelly, Michigan Department of Attorney General, Tort Defense Division, Lansing, MI.

HON. GERSHWIN A. DRAIN, United States District Judge. UNITED STATES MAGISTRATE JUDGE, STEPHANIE DAWKINS DAVIS.

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OPINION AND ORDER DENYING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT [138] AND GRANTING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT [144]

Hon. Gershwin A. Drain United States District Court Judge

I.

Introduction

Plaintiffs commenced this action on August 14, 2012. See Dkt. No. 1. The Complaint

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alleges several civil rights claims against the Defendants under 42 U.S.C. § 1983: (1) Deprivation of Liberty Interest Pursuant to the 5th Amendment; (2) Deprivation of Property Without Due Process of Law; and (3) Unconstitutional Conditions. Id.

On October 15, 2015, the Plaintiffs filed their Motion for Summary Judgment. See Dkt. No. 138. On November 4, 2015, the Defendants filed their Motion for Summary Judgment. See Dkt. No. 144. A hearing on both motions was held August 9, 2016 at 10:00 a.m. For the reasons discussed herein, the Court will GRANT the Defendants' Motion IN PART, and DENY the Plaintiffs' Motion.

II.

Background

In 2010, the Michigan Gaming Control Board (" 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, 2010. At that hearing, the harness drivers asserted their Fifth Amendment right against self-incrimination and refused to answer questions. The following day, 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." Rule 431.1035 provides, in part, " [t]hat the applicant [for an 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.

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 licenses without success. In response to the harness drivers' letters that sought to appeal " the denial 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) (herein referred to as " 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 Court granted the MGCB's motion for summary judgment and denied the harness drivers' motion for partial summary judgment. The Court held that the Eleventh Amendment barred plaintiffs' claims for money damages against MGCB and its officials, and that the MGCB was entitled to qualified immunity because the harness drivers failed to identify a violation of a constitutional right. Moody v. Michigan Gaming Control Board, No. 12-cv-13593, 2013 WL 6196947 (E.D. Mich. November 27, 2013). The harness drivers appealed.

The Sixth Circuit affirmed in part and reversed in part the judgment of the Court. The Sixth Circuit held that the suspension and exclusion of the harness-drivers constituted a violation of the Plaintiffs' Fifth-Amendment rights against self-incrimination. Moody v. Michigan Gaming Control Board, 790 F.3d 669, 673 (6th Cir. 2015). The Sixth Circuit further held there

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was a genuine dispute of material fact over whether the Plaintiffs were given due process before being excluded. Id. at 680. The case was remanded for further proceedings. Shortly afterward, the parties filed these cross-motions for summary judgment.

III.

Legal Standard

Federal Rule of Civil Procedure 56(c) " directs that summary judgment shall be granted if there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Cehrs v. Ne. Ohio Alzheimer's Research Ctr., 155 F.3d 775, 779 (6th Cir. 1998) (quotations omitted). The court must view the facts, and draw reasonable inferences from those facts, in the light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). No genuine dispute of material fact exists where the record " taken as a whole could not lead a rational trier of fact to find for the non-moving party." Matsushita Elec. Indus., Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Ultimately, the court evaluates " whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson, 477 U.S. at 251-52.

IV.

Discussion

A. Eleventh Amendment Sovereign Immunity

As an initial matter, neither party disputes that the doctrine of sovereign immunity protects the Michigan Gaming Control Board from suits for money damages. The Sixth Circuit did not reverse this holding.

B. Fifth Amendment Qualified Immunity

The Sixth Circuit has already held that the Plaintiffs' Fifth Amendment rights were violated. Moody, 790 F.3d at 673. The Sixth Circuit remanded the case back to the District Court to determine whether the Fifth Amendment violation involved a clearly established right which a reasonable person in the Defendants' position would have known. Id. " [T]he objective (albeit fact-specific) question [is] whether a reasonable officer could have believed" the actions taken " to be lawful, in light of clearly established law . . . ." Anderson, 483 U.S. at 641.

The Plaintiffs argue that the right to assert the Fifth Amendment in an administrative proceeding without suffering costly sanctions has been clearly established. Dkt. No. 156 at 22-25 (Pg. ID No. 4042-45). The Defendants, on the other hand, define the right as being more specific. The Defendants contend that a regulatory agency's punishment of a licensee who, based on the Fifth Amendment, refused to answer regulatory-related questions has never before been held to be a violation of the Fifth Amendment. Dkt. No. 144 at 21 (Pg. ID No. 3710).

The Supreme Court has " repeatedly told courts . . . not to define clearly established law at a high level of generality, since doing so avoids the crucial question whether the official acted reasonably in the particular circumstances that he or she faced." Occupy Nashville v. Haslam, 769 F.3d 434, 443 (6th Cir. 2014). " For a right to be clearly established, '[t]he contours of the right must be sufficiently clear that a reasonable official would understand that what he is doing violates that right. [I]n the light of pre-existing law the unlawfulness must be apparent.'" Id. (quoting Anderson v. Creighton, 483 U.S. 635, 640, 107 S.Ct. 3034, 97 L.Ed.2d 523 (1987)). " In other words, 'existing precedent must have placed the statutory or constitutional question . . . beyond debate.'" Id. (quoting Plumhoff v. Rickard, 134 S.Ct. 2012, 2023, 188 L.Ed.2d 1056 (2014)

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(internal quotation marks omitted)). " [B]inding precedent from the Supreme Court, the Sixth Circuit, [or] the district court itself" can provide such clarity; persuasive authority from " other circuits that is directly on point" may also demonstrate that a law is clearly established. Holzemer v. City of Memphis, 621 F.3d 512, 527 (6th Cir. 2010). Notwithstanding those helpful indicators, " [a] court need not have previously held illegal the conduct in the precise situation at issue because officials can still be on notice that their conduct violates established law even in novel factual circumstances." Sutton v. Metro. Gov't of Nashville, 700 F.3d 865, 876 (6th Cir. 2012) (internal quotation marks omitted).

It is clear that licensees may not be required to choose between forfeiting their livelihood and criminal prosecution. See Spevack v. Klein, 385 U.S. 511, 87 S.Ct. 625, 17 L.Ed.2d 574 (1967). However, employers may take disciplinary actions...

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