Peterson v. Com., Pennsylvania State Horse Racing Com'n

• Decision Date: 18 August 1982
• Citation: 68 Pa.Cmwlth. 353,449 A.2d 774
• Parties: Michael PETERSON and Calvin Peterson, Petitioners, v. COMMONWEALTH of Pennsylvania, PENNSYLVANIA STATE HORSE RACING COMMISSION, Respondent.
• Court: Pennsylvania Commonwealth Court

Page 774

449 A.2d 774

68 Pa.Cmwlth. 353

Michael PETERSON and Calvin Peterson, Petitioners, v. COMMONWEALTH of Pennsylvania, PENNSYLVANIA STATE HORSE

RACING COMMISSION, Respondent.

Commonwealth Court of Pennsylvania.

Argued Feb. 5, 1982.

Decided Aug. 18, 1982.

Daniel F. Wolfson, Penny Blackwell, Wolfson & Woodbury, York, for petitioner.

Samuel F. Meisenhelder, York, for respondent.

Before BLATT, WILLIAMS and CRAIG, JJ.

OPINION

BLATT, Judge.

The petitioner, Michael J. Peterson, appeals from an order of the Pennsylvania State Horse Racing Commission (Commission) which sustained his ejection from Penn National Race Track (Penn National) and suspended his licensure privileges and the privilege of access to all race track grounds within the Commonwealth until the end of 1982.

On April 17, 1981, track security personnel at Penn National conducted a search of a step van owned by Mike Loe's Saddlery ¹ from which the petitioner, the manager of the saddlery, had been selling his employer's wares in the race track enclosure. Two weeks earlier, when the petitioner had driven the van into the enclosure as was his weekly custom, the director of security at the track had checked his records and determined that neither the saddlery nor the petitioner had a current vendor's license, as is required of all vendors who seek entry to the track enclosure, a restricted area of the race track. Section 9 of the Administrative Rules of the Commission, 58 Pa.Code § 165.79. ² When the petitioner made his next weekly visit to the track on April 10 1981, the security personnel kept the van under surveillance and "decided the next Friday [they] would hope to obtain authorization to search this vehicle to see what he was selling or what he did have in his possession." On April 17, 1981, the director of security obtained authorization from the State Steward to conduct a search. The search produced a loaded .22 caliber pistol and vials of injectable vitamins and, upon further search, five vials of injectable medications, sodium iodide and sodium salicytate were found within the van in a box with curry combs. The director of security then ejected the petitioner ³ from the track for not having a valid 1981 vendor's license, for carrying a firearm onto the grounds and for possession of injectable substances. Following a hearing, the Commission affirmed the ejection and suspended the petitioner's licensure and track-access privileges through 1982. The petitioner then filed an application for rehearing and a request for a supersedeas with the Commission and concurrently filed a petition for review with this Court. The Commission denied the petitioner's requests whereupon he sought a stay from this Court, which was denied. He then petitioned the Pennsylvania Supreme Court for a stay, which petition was also denied. The appeal from the order of the Commission is presently before us.

Our scope of review in these cases is limited to determining whether or not constitutional rights were violated, the adjudication was in accord with law, procedural rules were violated or whether or not necessary findings of fact were supported by substantial evidence. Daly v. Pennsylvania State Horse Racing Commission, 38 Pa.Commonwealth Ct. 77, 391 A.2d 1134 (1978).

In Lanchester v. Pennsylvania State Horse Racing Commission, 16 Pa.Commonwealth Ct. 85, 325 A.2d 648 (1974), we drew upon the standards and considerations governing warrantless regulatory searches set forth in United States v. Biswell, 406 U.S. 311, 92 S.Ct. 1593, 32 L.Ed.2d 87 (1972), and recognized horse racing, like liquor and firearms, to be a highly regulated enterprise within this state and, as such, a field within which warrantless statutorily-authorized searches do not violate the reasonable expectations of privacy protected by the Fourth Amendment of the Federal Constitution U.S.Const. amend. IV. In Colonnade Catering Corp. v. United States, 397 U.S. 72, 90 S.Ct. 774, 25 L.Ed.2d 60 (1970), the United States Supreme Court, in addressing searches in the liquor industry, recognized that because the liquor industry had long been "subject to close inspection," Congress possessed "broad power to design such powers of inspection ... as it deems necessary to meet the evils at hand," Id. at 76-77, 90 S.Ct. at 776-777, and that Court recently reiterated the principle that, in the realm of administrative searches, the " 'reasonableness of a warrantless search ... will depend upon the specific enforcement needs and privacy guarantees of each statute' " and that some statutes " 'apply only to a single industry, where regulations might already be so pervasive that a Colonnade-Biswell exception to the warrant requirement could apply.' " Donovan v. Dewey, 452 U.S. 594, 101 S.Ct. 2534, 2539, 69 L.Ed.2d 262 (1981) (quoting Marshall v. Barlow's Inc., 436 U.S. 307, 321, 98 S.Ct. 1816, 1824, 56 L.Ed.2d 305 (1978)). While the search which occurred here was not specifically authorized by the Act ⁴ itself as then in effect, the right of the Stewards or their designees to enter into places within the race track grounds and to inspect and examine the personal property and effects of any persons who were within those places was conferred by Rules ⁵ enacted pursuant to a legislative mandate that the Commission "shall prescribe rules and regulations for effectually preventing the use of improper devices, the administration of drugs or stimulants, or other improper acts for the purpose of affecting the speed of horses in races in which they are about to participate." Section 1(b)(2) of the Act, 15 P.S. § 2652(b)(2). Lanchester. The Commission has been invested with authority to adopt rules and regulations by which to carry out the purposes and provisions of the Act and to prevent circumvention and evasion of it. Section 1(a) of the Act, 15 P.S. § 2652(a), and it is well-settled that properly authorized rules and regulations have the force and effect of law. Good v. Wohlgemuth, 15 Pa.Commonwealth Ct. 524, 327 A.2d 397 (1974). In Lanchester, this Court upheld the validity of a forceable warrantless search of a trainer's truck which was present on the racing grounds during a meet on the basis that such a search did not intrude upon the justifiable expectations of privacy of one who, by entering and continuing in a heavily-regulated endeavor such as horse racing, was aware that he would be subject to frequent and unannounced inspections. In such cases, "[t]he potentiality for abusive searches is limited, and, given the obvious impossibility of effectually preventing the future use of illegal drugs and devices were a warrant required before a search, the governmental interest must prevail." Id., 16 Pa.Cmwlth. at 94, 325 A.2d at 653 (emphasis in original). The director of security testified that he had obtained approval from the State Steward prior to initiating the search and, here, as in Lanchester, a vehicle located within the restricted area of the track is an appropriate object of a search conducted under the authorization conferred by Section 15.09 of the Rules of Racing, 58 Pa.Code § 163.312.

The petitioner here, however, points to Section 15.09 of the Rules of Racing, and contends that inasmuch as he had not procured a 1981 vendor's license, ⁶ he had not voluntarily consented to a search of the van. Section 15.09 provides in pertinent part that:

[E]very person who is hereafter granted a license by the Commission, by accepting his license, does consent to such search, and to the seizure of ... any drugs, stimulants or narcotics, apparently intended to be or which could be, used in connection therewith ... of such nature as could affect the speed or racing condition of a horse.

In Lanchester we said that by submitting his signed application for a license, the trainer had given written consent to a search. In so stating, we recognized, however, that this was merely "[a]n additional ground," Id. at 94, 325 A.2d at 653 (emphasis added), upon which to sustain the validity of the search.

Where an individual entering a traditionally regulated licensed field such as horse racing consents [by submitting his license application and accepting his license] to a warrantless search of his person or premises directly related to or involved in that endeavor, his consent is held to constitute a waiver of his Fourth Amendment protections within the limits of valid regulation.

Id. at 95, 325 A.2d at 653. However, in a closely regulated industry where "[l]arge interests are at stake, and inspection is a crucial part of the regulatory scheme," Biswell, 406 U.S. at 315, 92 S.Ct. at 1596, the validity of a search does not rest upon consent. "In the context of a regulatory inspection system of business premises that is carefully limited in time, place, and scope the legality of the search depends not on consent but on the authority of a valid statute." Id. In Pennsylvania, pervasive regulation of the horse racing industry by the State has been accomplished by statute and by rules promulgated thereunder by the Commission, a statutorily created arm of the state.

The element which distinguishes these enterprises from ordinary businesses is a long tradition of close government supervision, of which any person who chooses to enter such a business must already be aware. "... The businessman in a regulated industry in effect consents to the restrictions placed upon him."

Marshall v. Barlow's, 436 U.S. at 313, 98 S.Ct. at 1820 (quoting from Almeida-Sanchez v. United States, 413 U.S. at 266, 271, 93 S.Ct. at 2535, 2538, 37 L.Ed.2d at 596 (1973)). The petitioner here had obtained vendor's licenses in 1979 and 1980 and was certainly no stranger to the fact that horse racing was a "closely regulated" industry "long subject to close supervision and inspection," Colonnade, 397 U.S. at 77, 90 S.Ct. at 777, and his participation in it, brought him within the restrictions attendant upon it, including a relinquishment of his expectation of...