State v. Rosenthal

Decision Date30 October 1991
Docket NumberNo. 21216,21216
PartiesSTATE of Nevada and State of Nevada Gaming Commission, Appellants, v. Frank ROSENTHAL, Respondent.
CourtNevada Supreme Court

Frankie Sue Del Papa, Atty. Gen., James J. Rankl, Deputy Atty. Gen., Carson City, for appellants.

Goodamn, Stein, & Chesnoff, Las Vegas, for respondent.

OPINION

YOUNG, Judge:

This is an appeal from an order of the district court granting respondent's petition for judicial review and expunging respondent from appellants' List of Excluded Persons, the so-called "Black Book." For the reasons set forth below, we reverse the district court.

THE FACTS

Respondent Frank "Lefty" Rosenthal ("Rosenthal") is a former executive at the Stardust Hotel-Casino in Las Vegas and is also a former host of a television sports betting information program which aired live from the Stardust in the early 1980s. Rosenthal is well known to the authorities in several states. By his own admission, Rosenthal has associated with organized crime figures for many years, including the late Anthony Spilotro who was placed on the List of Excluded Persons in 1978. Rosenthal has a record of gambling-related arrests dating back over thirty years. Despite his frequent arrests, Rosenthal was only convicted once, in 1963, for attempting to fix the outcome of a college basketball game in North Carolina. He has also been banned from race tracks in Florida.

Rosenthal is also well known to this court; this is his third trip here. His first two appeals concerned denial of his application for licensing by the State Gaming Commission ("Commission") as a "key figure" employee at the Stardust. Both denials were appealed to this court, which affirmed the Commission's license denial. State v. Rosenthal, 93 Nev. 36, 42, 559 P.2d 830, 834 (1977) ("Rosenthal I "); Rosenthal v. State ex rel. Gaming Comm'n, 96 Nev. 959, 962, 620 P.2d 874, 876 (1980) ("Rosenthal II "). Both opinions allowed Rosenthal to retain his casino work card for employment at the Stardust in a non-gaming capacity. Rosenthal I, 93 Nev. at 46, 559 P.2d at 837; Rosenthal II, 96 Nev. at 962, 620 P.2d at 876.

The Gaming Control Board ("Board") first nominated Rosenthal for inclusion on the List of Excluded Persons in 1979. No action was taken on this nomination. In 1988, the Board again nominated Rosenthal for the list. In January 1989, the Commission unanimously approved the nomination. Rosenthal filed suit in the district court to enjoin the Commission's actions. The district court concluded that the exclusion order deprived Rosenthal of due process of law because substantial prejudice resulted from the Commission's delay in following through with the proceedings initiated in 1979. Applying the doctrines of laches and equitable estoppel, the court ruled that the government was barred from taking administrative action where significant due process rights were at stake. The court also held that the Commission had improperly considered Rosenthal's 1963 North Carolina conviction and that the gaming statutes were unconstitutional as applied to Rosenthal. The court ordered that Rosenthal's name be expunged from the list.

The Commission appeals from the district court's order, contending that: (1) the court erred in ruling that the Commission's decision to include Rosenthal on the List of

Excluded Persons was arbitrary and capricious; (2) the district court employed an improper standard of review; (3) the court erred in ruling the Commission improperly considered Rosenthal's prior criminal [107 Nev. 775] conviction; (4) the statutes and regulations governing the List of Excluded Persons were constitutionally applied to Rosenthal; and (5) the doctrines of laches and equitable estoppel were inapplicable to Rosenthal's administrative hearing.

DISCUSSION

Appellants first argue that the decision to include Rosenthal on the List of Excluded Persons was not arbitrary and capricious as the decision was based on criteria set forth in NRS 463.151(3). 1 A finding of any one of the criteria set forth in this statute is sufficient for inclusion on the List of Excluded Persons. Nev. Gaming Comm'n Reg. 28.010(2) (1989).

We find that all three subsections of NRS 463.151(3) cited by appellants are applicable to Rosenthal. First, subsection (a) applies because of Rosenthal's 1963 conviction for attempting to bribe college basketball players. Second, subsection (c) applies because of Rosenthal's admitted association with organized crime figures. Finally, subsection (d) applies because of Rosenthal's ban from Florida race tracks. The existence of all three of these statutory considerations was established by substantial evidence. The Commission was therefore within its authority when it included Rosenthal on the List of Excluded Persons. We find nothing arbitrary or capricious about this aspect of the Commission's decision. We hold that the lower court erred to the extent its ruling was based on misapplication of NRS 463.151(3).

The district court's standard of review.

Appellants secondly assert that the district court utilized a standard of review that was contrary to express statutory provisions and the previous decisions of this court. In reversing the Commission's decision to include Rosenthal on the List of Excluded Persons, the lower court held that exclusion could only be supported by "an objective so manifestly in the public interest as to strongly justify the impairment or limitation." Appellants assert that the district court's standard of review was excessive in light of this court's holding in Spilotro v. State ex rel. Gaming Commission, 99 Nev. 187, 661 P.2d 467 (1983). Judicial review of a decision by gaming authorities to include a person on the List of Excluded Persons is governed by statute. NRS 463.317(3). 2 Appellants cite this court's recent decision in Clark County Liquor and Gaming v. Simon & Tucker, 106 Nev. 96, 97, 787 P.2d 782, 783 (1990), for authority that a court's role in reversing an agency decision is limited to determination of whether the decision was arbitrary and capricious or an abuse of discretion.

Despite the district court's reference to a "more exacting" standard, a review of the record indicates that the court's decision to reverse the Commission was actually premised upon factors found in NRS 463.317(3); namely, that the Commission's decision was arbitrary and capricious and unsupported by substantial evidence. The language in the court's order to which appellants object really amounts to nothing more than a rhetorical flourish on the part of the trial court. Accordingly, we hold that the district court employed the proper standard of review in evaluating the Commission's action.

The 1963 conviction for basketball fixing.

Appellants also contend the district court erroneously ruled that Rosenthal's 1963 North Carolina conviction for basketball fixing could not be considered as a basis for exclusion. The court's ruling was based upon two factors: (1) the conviction was entered upon a plea of nolo contendere; and (2) Rosenthal's civil rights were subsequently restored by the North Carolina court that accepted the plea.

Where statutes authorize disciplinary action or license denial or revocation upon conviction of a crime, as a general rule, the conviction may be considered even when based upon a plea of nolo contendere. There is ample authority upholding administrative license or entitlement denials where the applicant had previously pled nolo contendere to a crime. See Bear v. Nicholls, 142 Ariz. 560, 691 P.2d 326 (Ariz.Ct.App.1984) (real estate broker's license); Kentucky Bar. Assoc. v. Taylor, 549 S.W.2d 508 (Ky.1976) (law license); Eisenberg v. Commonwealth Dep't of Public Welfare, 512 Pa. 181, 516 A.2d 333 (1986) (medicaid eligibility). We believe these cases are analogous to the present administrative action.

With regard to the restoration of Rosenthal's civil rights, our decision in Patt v. Nevada State Bd. of Accountancy, 93 Nev. 548, 571 P.2d 105 (1977), is controlling. Proceedings to suspend or revoke business or professional licenses are not included among the penalties and disabilities that are released by an honorable discharge from probation. Id. at 549, 571 P.2d at 106. We believe the Patt holding is applicable to administrative action by the Gaming Commission and that the district court erred in ruling that Rosenthal's 1963 conviction could not be considered for exclusionary purposes because his civil rights were subsequently restored.

Vagueness of the statutes and regulations governing the List

of Excluded Persons.

Appellants next contend that the district court erred in concluding that the statutes and regulations governing the List of Excluded Persons were unconstitutionally vague as applied to Rosenthal. In determining whether a statute is unconstitutional for vagueness, this court's review is limited to determining whether the...

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