Moody v. Mich. Gaming Control Bd., Case No. 12-cv-13593

CourtUnited States District Courts. 6th Circuit. United States District Court (Eastern District of Michigan)
Writing for the CourtGERSHWIN A. DRAIN
PartiesJOHN MOODY, et al., Plaintiffs, v. MICHIGAN GAMING CONTROL BOARD, et al., Defendants.
Docket NumberCase No. 12-cv-13593
Decision Date27 November 2013

JOHN MOODY, et al., Plaintiffs,

Case No. 12-cv-13593


Dated: November 27, 2013




Plaintiffs, John Moody, Donald Harmon, Rick Ray, and Wally McIlmurray, Jr., filed the instant 42 U.S.C. § 1983 action on August 14, 2012 seeking declaratory and injunctive relief concerning the legality of the suspension of their harness racing occupational licenses by Defendants, the Michigan Gaming Control Board ("MGCB"), Richard Kalm, Gary Post, Daryl Parker, Richard Garrison, Billy Lee Williams, John Lessnau and Al Ernst. Presently before the Court is Defendants' Motion for Summary Judgment, filed on June 3, 2013. Also before the Court is Plaintiffs' Amended Motion for Partial Summary Judgment, filed on July 2, 2013. These matters are fully briefed and a hearing was held on September 10, 2013. For the reasons that follow, the Court grants Defendants' Motion for Summary Judgment and denies Plaintiffs' Amended Motion for Partial Summary

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Plaintiffs have been involved in harness racing throughout the United States, including in Michigan. In 2009, Defendant Gary Post, then Operations Manager of the Horse Racing Section of the MGCB, received an anonymous tip about several drivers, trainers, and gamblers involved in a race fixing scheme that took place in 2008 and 2009. Following this telephone call, Post immediately began an investigation and enlisted steward Robert Coberley to help in reviewing suspicious races. Initially, Coberley and Post focused their attention on eight harness races which included the Plaintiffs as participants. After investigating these races, the MGCB reported its findings to the Michigan State Police ("MSP").

Thereafter, MSP conducted an investigation and later executed search warrants for certain owners, trainers and gamblers, including Plaintiff Arthur McIlmurray. On March 11, 2010, the MSP interviewed McIlmurray, who identified Plaintiffs John Moody, Donald Harmon, Wally McIlmurray, Jr. and others as being key participants in a race-fixing scheme where drivers would finish fifth place or lower in certain races to benefit known gamblers. For their participation in the scheme, these drivers were paid by gamblers Haitham Shamoun and Saleh Summa. The MSP interviewed Plaintiff John Moody on March 12, 2010, wherein Moody implicated not only himself but the other Plaintiffs in these activities. Moody admitted that in fifteen to twenty races he did "not drive very, very aggressive" and estimated Summa paid him roughly $5,000.00 total for his participation in the race fixing scheme. The Plaintiffs have since repudiated these statements claiming they were coerced by the MSP into admitting wrongdoing.

Thereafter, the MGCB summoned each of the Plaintiffs for administrative stewards hearings,

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which took place on May 20, 2010. Plaintiffs received advance notice of the hearings, and each summons identified the purpose of the hearing, its time and location and what documents were to be produced. The summonses further advised the Plaintiffs that they were entitled to have an attorney represent them at the hearing if they chose to retain counsel.

Thereafter, Plaintiffs met with and retained Joseph Niskar to represent them. Plaintiffs claim that on several occasions prior to their appearance at the hearings, Sergeant Thomas DeClerq of the MSP advised Niskar that the Plaintiffs were suspects in a race-fixing scheme and that they would be arrested at the conclusion of the hearings. Plaintiffs further maintain that prior to the hearings, Niskar informed Post that the Plaintiffs intended to invoke their Fifth Amendment rights at the hearings and this constituted "just cause" within the meaning of Michigan Compiled Laws 431.307(8).

Moody's hearing was first. Post, as well as representatives from the Michigan Attorney General, attended the hearing. When Moody, a catch driver for the industry, was asked whether "he ever failed to put forth his best effort in a race," or took "any money or anything else of value in exchange . . . for the outcome of a race," he replied, "[o]n the advice of my attorney I refuse to answer this question and I invoke my Fifth Amendment right against self-incrimination." When asked whether he knew Summa or Shamoun, he again asserted his Fifth Amendment rights. Lastly, when asked about the occupational license application he signed, Moody also invoked his Fifth Amendment rights. The license application states in relevant part:

I expressly agree to be subject to the subpoena powers of the Michigan Gaming Control Board (MGCB), Horse Racing Section or a written request issued in lieu of a subpoena and to provide the MGCB Horse Racing Section with any and all such information or documents which the MGCB Horse Racing Section may so request as authorized under the Michigan Racing Law and rules. I further consent to be subject to the searches provided for in Public Act 279 of 1995, Section 16(4) that authorizes personal inspections including urine and breathalyzer tests, inspections of any personal property, and inspections of premises and property related to my

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participation in a race meeting by persons authorized by the MGCB Horse Racing Section. I agree to fully cooperate with the MGCB Horse Racing Section regulatory investigations and law enforcement investigations related to racing. I also agree to report racing violations and/or criminal activity occurring at or away from the track to the MGCB Horse Racing Section or local, state, and federal law enforcement agencies.

The other Plaintiffs provided similar answers during their hearings. They all invoked their Fifth Amendment rights and refused to acknowledge whether they knew Shamoun or Summa or whether they were aware of anybody else that may have engaged in race-fixing. Plaintiffs also relied on the Fifth Amendment when they refused to bring their 2008 and 2009 bank records that the MGCB requested in its summons for each individual.

Unlike Moody, the other Plaintiffs acknowledged signing the license application form and agreed they were required to cooperate with any investigation as a condition precedent to obtaining and maintaining their occupational licenses. Further, Plaintiffs were advised that failure to cooperate with the investigation could subject them to suspension or revocation of their licenses.

On May 20, 2010, the stewards issued their rulings. The rulings suspended the Plaintiffs' occupational licenses until December 31, 2010-at which time the occupational licenses expired and a renewal application was required to be filed in order to maintain their occupational licenses. The reasons given for each Plaintiff's suspension was the same in each decision issued by the stewards. Specifically, the stewards concluded that the Plaintiffs had "failed to comply with the conditions precedent for occupational licensing in Michigan as outlined in R431.1035."1

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After their suspensions, Plaintiffs filed an appeal of their suspensions with the MGCB, as well as filed an Emergency Motion for Declaratory, Injunctive Relief and for a Temporary Restraining Order (TRO) in the Wayne County Circuit Court. Because the Plaintiffs had filed an action in state court, the Defendants determined it was reasonable to delay the administrative appeal until the state court ruled on the Plaintiffs request for injunctive relief. The Honorable John Murphy denied Plaintiffs request for a TRO but scheduled a show cause hearing on June 4, 2010. Plaintiffs argued that they satisfied the four requirements for injunctive relief. Judge Murphy disagreed, concluding that there was no likelihood of success on the merits and that the public harm involved in granting injunctive relief was greater than the harm to Plaintiffs. Id., Ex. 5. The Michigan Court of Appeals affirmed Judge Murphy's decision. The Michigan Court of Appeals determined that Plaintiffs' appeal was moot, and that even if it were not moot, they failed to address all of the requirements for injunctive relief. The court did not address Plaintiffs' constitutional violation arguments. Plaintiffs did not file an application for leave to appeal to the Michigan Supreme Court.

After the Court of Appeals' decision, Defendants asked Plaintiffs on several occasions whether they wanted to pursue their administrative appeal. However, it was not until November 27, 2012, after the initiation of the instant action, that Plaintiffs confirm they wished to...

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