Crissman v. Dover Downs Entertainment, Inc.

• Decision Date: 05 December 2000
• Docket Number: No. 00-5178,00-5178
• Citation: 239 F.3d 357
• Parties: (3rd Cir. 2001) CHARLES CRISSMAN; WENDY CRISSMAN; <A HREF="#fr1-*" name="fn1-*">* CHRISTINE CRISSMAN, APPELLANTS v. DOVER DOWNS ENTERTAINMENT INC.; DOVER DOWNS, INC. Argued:
• Court: U.S. Court of Appeals — Third Circuit

Page 357

239 F.3d 357 (3rd Cir. 2001)

CHARLES CRISSMAN; WENDY CRISSMAN;^* CHRISTINE CRISSMAN, APPELLANTS v. DOVER DOWNS ENTERTAINMENT INC.; DOVER DOWNS, INC.

No. 00-5178

U.S. Court of Appeals, Third Circuit

Argued: December 5, 2000

Filed January 29, 2001

Vacated June 25, 2001.

On Appeal from the United States District Court for the District of Delaware (C.A. No. 99-CV-00755) District Judge: Honorable Roderick R. McKelvie

Jeffrey J. Clark (Argued) Noel E. Primos Schmittinger & Rodriguez 414 South State Street P.O. Box 497 Dover, DE 19903, for Appellants.

Thomas P. Preston (Argued) Reed Smith 1201 Market Street, Wilmington, DE, for Appellees.

Before: MCKEE, ROSENN and CUDAHY,^** Circuit Judges.

OPINION OF THE COURT

ROSENN, Circuit Judge.

In this appeal, we return to familiar terrain to determine whether the expulsion of three state-licensed horse-trainers and horse owners by a privately owned harness racing association from its racetrack without a hearing constitutes state action for purposes of 42 U.S.C. S 1983.¹ The District Court concluded that no state action was present and granted summary judgment in favor of Dover Downs, the racetrack operator. Because the plaintiffs presented conclusive evidence that the track enjoyed a symbiotic relationship with the State of Delaware, we reverse.

I.

Appellee, Dover Downs, Inc. (Dover Downs), is a subsidiary of Dover Downs Entertainment Inc., a publicly held corporation operated for profit. Dover Downs is licensed by the Delaware Harness Racing Commission (HRC) to conduct harness races at its track in Dover, Delaware. It conducts harness racing meets six months out of every year, during which time no other track in Delaware holds harness racing meets.² Dover Downs also operates video lottery gambling and other entertainment activities at its facility.

Court's dismissal of that component of Weston's hostile work environment claim, and remand for further discovery and proceedings. Finally, in regard to Weston's averments as to a hostile environment created as a result of verbal harassment on the part of inmates, while we agree with the District Court that those allegations, as they currently stand, do not suffice to state a Title VII claim, we reverse the court's dismissal, and remand with instructions to grant Weston a specified period of time in which to amend (and amplify) that portion of his complaint.

Harness racing is a heavily regulated business in Delaware, as it is in most states. The State of Delaware plays an active role in the management of the harness racing operation at Dover Downs. The State requires that 14 harness racing officials assigned to Dover Downs, with titles ranging from "equipment checker" to "state veterinarian," be licensed by the HRC. Although Dover Downs pays and supervises these officials, HRC rules set forth their duties and job descriptions in detail. Moreover, HRC rules require Dover Downs to "enforce the [Harness Racing] Act and the rules and orders of the Commission."

In 1993, Delaware passed the "Horsemen's Revitalization Act," whose stated purpose was to rejuvenate the declining Delaware horse-racing industry. See 29 Del. C. S 4801(b)(1). To achieve this goal, the legislature authorized harness racetracks such as Dover Downs to operate "video lottery machines", commonly known as slot machines, on the premises. The State, rather than Dover Downs, owns or leases the slot machines, which are directly connected to the Delaware State Lottery Office for monitoring and control. See 29 Del. C. S 4819. Dover Downs, as a "video lottery agent," is responsible for securing and operating the machines, and is free to determine the number of machines it chooses to house, up to the statutory maximum of 1000 machines. See 29 Del. C. S 4820. Nonetheless, a Delaware statute plainly states that the video lottery is operated "by the State Lottery Office." 29 Del. C. S 4815(b)(2).

The State also exercises complete control over the distribution of revenue from the slot machines. A Delaware statute requires Dover Downs to send all revenue from the lottery machines, net of payouts to patrons, to an account controlled by the State Lottery Office. See Del. C. S 4815(b). The funds received by this account are then distributed in accordance with Delaware statute, which is painstakingly specific. First, the State pays administrative costs associated with the operation of the lottery, including the salaries of state lottery personnel. Next, Gamblers Anonymous and similar programs receive a share. The State then receives a large percentage share of the money that remains. The statute then directs that a percentage of the remaining funds be given to racetracks such as Dover Downs "to be applied under the direction of the Delaware Harness Racing Commission to purses for races conducted at such agent's racetrack." 29 Del. C. S 4815. Finally, Dover Downs, as a video lottery agent, receives a statutorily designated "commission." See 29 Del. C. S 4815(b)(4) c & d.

Charles, Wendy, and Christine Crissman are, and at all relevant times have been, duly licensed by the state of Delaware to own and train race horses. In October 1997, Charles Lockhart, the newly-appointed general manager of Dover Downs, informed the Crissmans that they were no longer welcome at Dover Downs and that Dover Downs would no longer permit them to race horses there. Lockhart offered the Crissmans no explanation for their exclusion and no opportunity to be heard. Lockhart's deposition in this proceeding discloses that he expelled the Crissmans because he had heard unconfirmed rumors that the HRC was investigating Charles Crissman for certain alleged improprieties. Lockhart decided to exclude Wendy and Christine Crissman only because they had applied jointly with Charles Crissman to race at Dover Downs. The Crissmans, however, were all licensed in good standing and there is no indication of record that they had violated Delaware's harness racing rules.³

The Crissmans filed suit against Dover Downs under 42 U.S.C. S 1983 in the United States District Court for the District of Delaware. The complaint alleged that Dover Downs had denied the plaintiffs due process of law in violation of the Fourteenth Amendment to the United States Constitution. The plaintiffs sought damages, as well as preliminary and permanent injunctive relief restraining the defendants from denying them access to the racetrack. When they filed their complaint, the Crissmans moved for a temporary restraining order. The District Court denied the motion, holding that the Crissmans were unlikely to prevail on the merits. Dover Downs then moved for summary judgment. The District Court granted the motion, holding that the Crissmans had failed to adduce sufficient evidence that Dover Downs acted under color of state law as required by 42 U.S.C. S 1983.

II.

The primary question presented by this lawsuit is whether Dover Downs' exclusion of the Crissmans constituted state action, a necessary element of a successful section 1983 suit. The starting point for our state action analysis is the seminal case of Burton v. Wilmington Parking Authority, 365 U.S. 715, 81 S.Ct. 856 (1961). In that case, the plaintiff sued a privately owned restaurant for racial discrimination. The restaurant leased the land on which it stood from a state agency, which ran the adjacent public parking garage. After examining the close relationship between the restaurant and the state agency, the Supreme Court concluded that state action was present. The Burton Court enunciated a "symbiotic relationship" test. It provides that when the state has not clearly directed the private act of discrimination, but it "has so far insinuated itself into a position of interdependence" with the private actor, the state "must be recognized as a joint participant in the challenged activity." Id. at 725; Fitzgerald v. Mountain Laurel Racing, Inc., 607 F.2d 589, 594 (3d Cir. 1979). The Court emphasized that "only by sifting facts and weighing circumstances can the nonobvious involvement of the state in private conduct be attributed its true significance." Id. at 722.

The Court later refined the symbiotic relationship test in Moose Lodge No. 107 v. Irvis, 407 U.S. 163, 92 S.Ct. 1965 (1972). There, the Court held state action to be absent in a case challenging racial discrimination by a private club that was heavily regulated by the Pennsylvania Liquor Control Board. The essence of the Court's holding was that extensive and detailed regulation of a private entity is generally insufficient to convert that entity into a state actor. See id. at 176-177. The Court distinguished the situation in Moose Lodge from that in Burton on the ground that, unlike the private restaurant in Burton, the Moose Lodge was a private club operating on private land and that the regulation of the Moose Lodge, detailed as it was in some particulars, could not be said "to in any way foster or encourage racial discrimination." Id. at 176-177. In addition, the court noted that, in spite of the regulation to which the State subjected the Moose Lodge, the State could not be said to be "a partner or even a joint venturer in the club's enterprise." Id. at 177.

III.

Summary judgment is appropriate only when the record could not lead a reasonable jury to find for the non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). The court making this determination must view the evidence in the light most favorable to the non-movant. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986).

Dover Downs attempts to portray its relationship to the State as one consisting solely of "regulations and revenue." Such a relationship is generally insufficient to constitute a symbiotic relationship under Burton. See Jackson v. Metropolitan Edison Co., 419 U.S. 345, 350 (1974); Hadges v. Yonkers Racing Corp., 918 F.2d 1079, 1082 (2d Cir. 1990). However, we believe that...