Hotchkiss v. State Racing Com'n

• Decision Date: 09 November 1998
• Docket Number: No. 97-P-0248,97-P-0248
• Citation: 45 Mass.App.Ct. 684,701 N.E.2d 642
• Parties: Malcolm HOTCHKISS v. STATE RACING COMMISSION.
• Court: Appeals Court of Massachusetts

Page 642

701 N.E.2d 642

45 Mass.App.Ct. 684

Malcolm HOTCHKISS v. STATE RACING COMMISSION.

No. 97-P-0248.

Appeals Court of Massachusetts,

Suffolk.

Argued May 27, 1998.

Decided Nov. 9, 1998.

Candies Pruitt, Assistant Attorney General, for defendant.

Rosemary Curran Scapicchio, for plaintiff.

Before BROWN, GREENBERG and LAURENCE, JJ.

LAURENCE, Justice.

Justice Holmes once stated a corollary to one of our most familiar legal apothegms:

"Great cases like hard cases make bad law. For great cases are called great, not by reason of their real importance in shaping the law of the future, but because of some accident of immediate overwhelming interest which appeals to the feelings and distorts the judgment."

Northern Sec. Co. v. United States, 193 U.S. 197, 400, 24 S.Ct. 436, 48 L.Ed. 679 (1904) (Holmes, J., dissenting). Malcolm Hotchkiss's effort to overturn the State Racing Commission's (commission's) decision to eject him from Suffolk Downs racetrack and, following a Superior Court judge's ruling in Hotchkiss's favor, the commission's determination to vindicate that ejection by its appeal to this court hardly seem the stuff of greatness, or even of overwhelming interest, in the course of legal events. They do, however, suggest a variation on Justice Holmes's observation: "Sympathetic cases make bad law"; at least they do when, as here, a judicial effort to right a perceived wrong to a worthy individual is at odds with principles governing review of administrative agency action.

Factual and procedural background. Hotchkiss, a Revere resident, was hired as a mutuel clerk in late 1995 by Suffolk Downs, a licensed thoroughbred pari-mutuel racetrack (see generally Wonderland Greyhound Park, Inc. v. State Racing Commn., 45 Mass.App.Ct. 226, 696 N.E.2d 964 [1998] ), located in Revere. Mutuel clerks are nonlicensed racetrack employees responsible for collecting cash from members of the public placing bets on the results of horse races held at the racetrack and for delivering tickets to bettors reflecting their wagers. Clerks such as Hotchkiss may handle tens of thousands of dollars each day, have access to the racetrack "money room," and can accept or cancel wagers that can affect the odds and payoffs on races.

On March 24, 1996, Hotchkiss reported to his supervisor that he had received a counterfeit twenty dollar bill. As a result of this incident, Hotchkiss came to the attention of Brian Mulhern, a Massachusetts State police sergeant assigned to the State Racing Commission and to Suffolk Downs. (See G.L. c. 128A, § 8.) Mulhern recognized Hotchkiss's name from a prior State police investigation. After conducting a check of Hotchkiss's probation record, Mulhern discovered that Hotchkiss had a criminal record from the late 1970's and early 1980's involving two convictions for drug possession and several charges of other offenses (including larceny, assault and battery, firearm possession, and insurance violations) that did not result in convictions.

Mulhern's check also revealed that Hotchkiss was then under indictment in both Massachusetts and Federal courts for fencing or assisting in the operations of fences, conspiring to transport stolen goods in interstate commerce, and transporting stolen goods. Those indictments related to a large-scale theft operation with multiple defendants (many from Revere) operating throughout the northeastern United States, with Hotchkiss's role described as that of an intermediary or courier of stolen merchandise and cash. ¹

Based upon Mulhern's investigation and findings, a State police official acting as representative of the commission on May 11, 1996, ordered Hotchkiss off the Suffolk Downs premises and denied him access to any other racing establishment in the State. ² Hotchkiss, claiming that he had informed the person who hired him at Suffolk Downs about his criminal record and the pending indictments, appealed his ejection to the full commission, which held an evidentiary hearing on May 27, 1996, as required by the ejection statute. Mulhern, other State police officers assigned to the commission, and Hotchkiss testified at that hearing. On May 30, 1996, the commission notified Hotchkiss that it had decided to uphold his ejection until his outstanding criminal matters had been resolved, after which he could petition the commission for such remedial action as then might appear appropriate.

On July 10, 1996, the commission issued its formal findings, conclusions, and orders in Hotchkiss's case. In addition to confirming Mulhern's findings regarding Hotchkiss's earlier criminal record and all of the reported information regarding the pending theft and conspiracy indictments, the commission found that an identified agent of the Federal Bureau of Investigation had advised Mulhern that Hotchkiss "has associations with organized crime members." It further found that in a prior investigation Mulhern had been told by a confidential informant who was involved in bookmaking activities that "there was a large scale bookmaking office that took sports bets at two telephone numbers in Revere ... both [of which, Mulhern discovered,] ... were listed to Malcolm Hotchkiss." ³ Those findings--most significantly, Hotchkiss's "alleged contacts and associations with organized crime figures" and his charged involvement in massive thefts occurring in the virtual shadow of Suffolk Downs--were combined by the commission with (a) the fact of Hotchkiss's "integral" position handling large amounts of money and (b) its own statutory "responsibility to the public to insure that all persons who participate in racing are honest and trustworthy" to form the basis for the order affirming the propriety of the ejection action.

The Superior Court review. Hotchkiss challenged the commission's decision under G.L. c. 30A, § 14, and obtained a favorable forum in Suffolk Superior Court. There, the stated reasons for vacating the commission's ejection order barely concealed judicial displeasure with what appeared an injustice done Hotchkiss: "[H]e reported to his employer, as he was supposed to, that he had received a counterfeit twenty dollar bill. The reward for this honesty was the loss of his job." The judge saw the ejection decision as unsupported by substantial evidence. Hotchkiss's past criminal record was "ancient history" and "entirely unrelated to racing." Similarly irrelevant were his pending indictments, which "did not arise out of actions at the track" and had not yet resulted in any actual convictions. Further detracting from the commission's conclusion that Hotchkiss's presence was detrimental to racing were three circumstances: (a) the praiseworthy motivation of the act that brought him to police attention--he "took steps to protect the integrity of the betting process"; (b) the encomium his union gave him (in a letter its lawyer wrote to the commission) as "an exemplary employee and union member"; and (c) his voluntary revelation of his criminal past and pending indictments to the person hiring him at Suffolk Downs. The judge also concluded, based on the same perceived lack of nexus between Hotchkiss's criminal conduct (both actual and alleged) and "the racing industry itself," that the commission's decision reflected unspecified "errors of law" and an arbitrary and capricious action amounting to an abuse of discretion. ⁴

Our review of the record convinces us that the commission's decision to confirm the ejection of Hotchkiss was supported by substantial evidence, was within its unusually broad discretion, and reflected no error of law. ⁵ It merits affirmance on the basis of that evidence, in light of the peculiar features of the racing industry, the breadth of the commission's discretionary authority, the proper limits on judicial review under G.L. c. 30A, § 14, and the restrictive nature of the "substantial evidence" test of c. 30A, § 14(7)(e ). Reversing the commission's determination would amount to substitution of judicial judgment for that of an expert agency which had made a rational, discretionary choice in implementing the statutory scheme it has been empowered by the Legislature to oversee--an outcome reviewing courts must especially eschew in our system of separation of powers. See Barrington Fair Assn., Inc. v. State Racing Commn., 27 Mass.App.Ct. 1159, 1161, 539 N.E.2d 554 (1989); Lisbon v. Contributory Retirement Appeal Bd., 41 Mass.App.Ct. 246, 257-258, 670 N.E.2d 392 (1996), and cases cited. ⁶

The unique regulatory background. Long celebrated as the sport of kings and a respectable diversion of the leisure class, horse racing had become by the second half of the twentieth century an extensive entertainment and gambling business sufficiently tarnished by roguish participants (at least in Massachusetts) to require "a complete and integrated plan for the regulation and control of horse racing and legalized wagering thereon." Landers v. Eastern Racing Assn., Inc., 327 Mass. 32, 45, 97 N.E.2d 385 (1951). The chief reason for such enhanced regulation of racing was a "substantial public concern about the manner in which, and by whom, it is conducted." Bay State Harness Horse Racing & Breeding Assn., Inc. v. State Racing Commn., 342 Mass. 694, 700, 175 N.E.2d 244 (1961). Because of "all of the many perils, pitfalls, temptations and traps for the unwary ... [and] the occasions for corruption for the participants, all of which are inherent in any gambling operation of such proportions," the Legislature gave the commission "very broad powers necessary" to regulate the industry to prevent "these dangers." Colella v. State Racing Commn., 360 Mass. 152, 159, 274 N.E.2d 331 (1971).

Consistently with those "full power[s]," conferred upon the commission in G.L. c. 128A "in the broadest possible language" because of the peculiar susceptibility of racing "to fraud and corruption," Fioravanti v. State Racing Commn., 6 Mass.App.Ct. 299, 303, 305, 375 N.E.2d 722 (1978), the Legislature...