2001 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

6-5-2001

Crissman v. Dover Downs Ent., Inc

Precedential or Non-Precedential:

Docket 00-5178

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Recommended Citation

"Crissman v. Dover Downs Ent., Inc" (2001). 2001 Decisions. Paper 123.

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Filed January 29, 2001 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

No. 00-5178 

CHARLES CRISSMAN; WENDY CRISSMAN; 

*CHRISTINE CRISSMAN, 

 Appellants 

v. 

DOVER DOWNS ENTERTAINMENT INC.; 

DOVER DOWNS, INC. 

* (Dismissed as Party per Court's 11/8/2000 Or der)

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 

Argued: December 5, 2000 

Before: McKEE, ROSENN, and CUDAHY,* 

Circuit Judges. 

(Filed: January 29, 2001) 

 Jeffrey J. Clark (Argued) 

 Noel E. Primos 

 Schmittinger & Rodriguez 

 414 South State Street 

 P.O. Box 497 

 Dover, DE 19903 

 Counsel for Appellants 

_________________________________________________________________ 

* Hon. Richard D. Cudahy, Senior Judge, United States Court of Appeals 

for the Seventh Circuit, Sitting by Designation. 
 Thomas P. Preston (Argued) 

 Reed Smith 

 1201 Market Street 

 Suite 1500 

 Wilmington, DE 19801 

 Counsel for Appellees 

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 plaintif fs 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 

_________________________________________________________________ 

1. 42 U.S.C. S 1983 provides: "Every person who, under color of any . . . 

regulation . . . of any state . . . subjects, or causes to be subjected, 

any 

citizen of the United States . . . to the deprivation of any rights, 

privileges, or immunities secured by the Constitution and laws, shall be 

liable to the party injured in an action at law, suit in equity, or any 

other 

proper proceeding for redress." 

2. Harrington Raceway, the only other licensed harness racing facility in 

Delaware, conducts races during the six months each year that Dover 

Downs does not. 

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video lottery gambling and other entertainment activities at 

its facility. 

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 r equires 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 "enfor ce 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 dir ectly 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 contr ol over the

distribution of revenue from the slot machines. A Delaware 

statute requires Dover Downs to send all r evenue 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 

 3 
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 ar e, 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 W endy 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 pr ocess of law in 

violation of the Fourteenth Amendment to the United States 

Constitution. The plaintiffs sought damages, as well as 

preliminary and permanent injunctive r elief 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 

_________________________________________________________________ 

3. On or about November 1, 2000, Christine Crissman stipulated to a 

dismissal of her appeal with prejudice. 

 4 
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 r estaurant 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 inter dependence" 

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 r elationship 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 

 5 
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 r egulation 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 r ecord 

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 nonmovant. 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 the r ecord in this case 

shows that the affairs of the State and the racetrack were 

much more than a regulatory relationship between the 

State and a private gambling enterprise. For instance, the 

slot machines used by Dover Downs, like the leased 

restaurant building in Burton, ar e the property of, or leased 

by, the State. Cf. Fulton v. Hecht, 545 F.2d 540, 542-43 

(5th Cir. 1977)(finding symbiotic r elationship absent and 

emphasizing that private party was not a lessee of state 

property). The State maintains control over these slot 

machines by directly connecting them to the central

computer system at the State Lottery Office. In addition, 

and perhaps most important to the symbiotic r elationship 

analysis, Dover Downs is the State's agent in the video 

lottery enterprise. Because of this agency r elationship, the 

State stands to gain or lose substantial revenue as a result 

of business decisions made by Dover Downs.4 The situation 

_________________________________________________________________ 

4. As it turns out, the stakes are quite high. In 1998, slot machines from 

Delaware's three video lottery agents br ought $206 million into 

Delaware's General Fund. 

 6 
here is even more striking than the symbiotic relationship 

found in Burton, where the State primarily acted as

landlord to the privately-owned restaurant and had no 

direct stake in its financial success beyond its ability to pay 

rent. 

Dover Downs urges this court to view the video lottery 

operation in which, Dover Downs concedes, the State is 

heavily involved, as separate from its har ness-racing 

activities. It argues that, because the Crissmans were 

banned from participating in harness races, this court 

should only analyze the State's connection to Dover Downs' 

harness racing operation. This argument misses the point 

of the symbiotic relationship test,5 which predicates state 

action not merely on its participation in the challenged 

conduct, but on the overall involvement of the State in the 

affairs of the private entity. See Braden v. University of 

Pittsburgh, 552 F.2d 948, 958 (3d Cir. 1977)(holding that 

symbiotic relationship test does not require that the state 

be involved in the challenged action). The purpose behind 

the Burton decision was to recognize a state as "a joint 

participant in the challenged activity" when it has

"insinuated itself into a position of inter dependence with" 

the private actor. Burton, 365 U.S. at 725. When such a 

relationship of interdependence exists, aS 1983 plaintiff 

need not show state participation in the challenged activity. 

See id. at 958. 

Moreover, Dover Downs' contention that we should ignore 

the State's involvement in the video lottery is not persuasive 

because the record reflects that video lottery is inextricably 

linked with Dover Downs' harness-racing operation. The 

State of Delaware created the video lottery for the express 

purpose of providing "assistance in the for m of increased 

economic activity and vitality for Delaware's harness and 

thoroughbred horse racing industries, which activity and 

vitality will . . . cause increased employment." See 29 Del.C. 

_________________________________________________________________ 

5. Dover Downs' argument is more in tune with the "close nexus" test, 

articulated by the Supreme Court in Jackson v. Metropolitan Edison Co., 

419 U.S. 345 (1974), which held that, in the absence of a symbiotic 

relationship, state action may be found if the state was a participant in 

the challenged activity. 

 7 
S 4801(b)(1). Under Delaware law, Dover Downs would not 

be permitted to operate a video lottery if it did not conduct 

harness racing meets. See 29 Del. C.S 4819(a). To 

effectuate the stated purpose of the statute, Delaware gives 

a portion of the lottery's revenue to Dover Downs to be 

applied to harness racing purses "under the direction of the 

Delaware Harness Racing Commission." 29 Del. C. 

S 4815(b)(3) b.2. Thus, the recipients of harness racing 

purses are direct beneficiaries of r evenues derived from the 

video lotteries jointly operated by the State and the race 

track. Furthermore, Dover Downs also specifically 

participates in the revenues generated by the video lottery. 

Finally, we note that the State of Delaware is involved in 

Dover Downs' harness racing activities. Ther e are many 

positions which Dover Downs is not permitted to fill 

without State approval. The HRC requir es no fewer than 14 

harness racing officials to be licensed 6 and it reserves the 

right to designate other positions that requir e licenses. 

Although Dover Downs pays and supervises these officials, 

HRC rules describe their duties and responsibilities in 

detail. Most importantly, HRC rules requir e Dover Downs 

not only to abide by, but also to "enfor ce the [Harness 

Racing] Act and the rules and orders of the Commission." 

(App. at 67)(emphasis added). In Jackson, the Supreme 

Court stated that the petitioner's case for state action 

would have been stronger if the private actor had 

"exercise[d] . . . some power delegated to it by the State 

which is traditionally associated with sover eignty." Jackson, 

419 U.S. at 352-53. The power to enforce laws is one such 

power, the delegation of which converts Dover Downs into 

an executive arm of the HRC. Of course, heavy state

regulation alone of a private entity does not necessarily give 

rise to a Burton symbiotic relationship. However, the 

undisputed facts here show such a deliberate entwining 

and interdependence between the State and Dover Downs, 

not only in the operation of the State Lottery but also in the 

_________________________________________________________________ 

6. The following individuals must be licensed by the HRC: state steward, 

board of judges, racing secretary, paddock judge, horse identifier and 

equipment checker, clerk of the course, official starter, official 

charter, 

official timer, photo finish technician, patrol judge, program director, 

State veterinarian, and LASIX veterinarian. (App. at 59). 

 8 
harness racing operations at the track. The State's

concerns in the "economic activity and vitality" of the 

racetrack operation is a matter of statutory expr ession. The 

overall involvement of the State in the affairs of the race 

track is manifest. We reject, ther efore, Dover Downs' 

arguments that the State specifically must be involved in 

the challenged activity or that the lottery activities can be 

insulated from the race track operations. 

For all of the reasons discussed above, the Crissmans 

have established that a symbiotic relationship exists 

between Delaware and Dover Downs. The District Court's 

grant of summary judgment for Dover Downs on the state 

action issue will therefore be reversed. 

IV. 

Our inquiry does not end with the state action analysis 

because, even if state action is present, the Crissmans 

must also demonstrate a triable issue of material fact as to 

whether their constitutional right to Due Pr ocess was 

violated. We must now consider whether the Crissmans 

made such a showing, a question which the District Court 

did not address. 

In Fitzgerald v. Mountain Laurel Racing , supra, this Court 

held that a horse trainer who had been summarily evicted 

from the track where he previously raced had made out a 

case of deprivation of due process. This court recognized 

that "Fitzgerald had a liberty interest in his employment 

reputation protected by the Due Pr ocess Clause of the 

fourteenth amendment." Id. The court further noted his 

liberty interest in earning a livelihood, stating, 

 Mountain Laurel had officially recognized Fitzgerald's 

 status as a state licensed trainer and driver by allowing 

 him to perform these activities at the track. His 

 summary expulsion significantly altered a`status 

 previously recognized by state law' and denied him the 

 opportunity of earning a livelihood. W e, therefore, agree 

 that Fitzgerald has a cognizable liberty inter est. 

Id., quoting Paul v. Davis, 424 U.S. 693, 711 (1976). 

 9 
The facts of this case bear considerable similarity to 

those in Fitzgerald. Like Fitzgerald, the Crissmans are and 

have been at all relevant times, licensed by the state of 

Delaware to train and race horses. Prior to the challenged 

expulsion, Dover Downs had recognized that status by 

allowing them to race their horses there. Mor eover, the 

expulsion "significantly altered a status previously 

recognized by state law" by prohibiting them from using 

their Delaware racing licenses during the six months each 

year when Dover Downs conducts the only harness racing 

meets in the state. 

Dover Downs argues that it "has not taken any action to 

impede Appellants from pursuing their employment at any 

other track."7 However, it is not necessary under Fitzgerald 

for the Crissmans to prove that they can no longer race 

anywhere in order to make out a S 1983 case. Fitzgerald, 

like the Crissmans, was only evicted from one track. There 

is nothing in the opinion to indicate that he was banned 

from racing anywhere or even that he was banned from 

racing throughout Pennsylvania. Although the Crissmans 

are still free to race their horses at Harrington Raceway and 

at tracks in other states, their Delaware racing licenses are 

of no use to them for half of every year because of Dover 

Downs' summary expulsion. 

Dover Downs also disputes whether the Crissmans' 

reputations were damaged by their exclusion from the 

_________________________________________________________________ 

7. Dover Downs cites Greene v. McElr oy, 360 U.S. 474 (1959) as support 

for the proposition that the denial of an employment opportunity does 

not amount to a liberty or property right unless the plaintiff is entirely 

deprived of his ability to earn a living in his chosen profession. 

However, 

Greene erects no such barrier to Due Process claims based on the denial 

of employment opportunities. Rather, it mer ely noted that in that case, 

the plaintiff 's career had been "seriously affected, if not destroyed" by 

the government's action. Id. at 492. It then stated that the right "to 

follow a chosen profession free fr om unreasonable governmental 

interference comes within the liberty and property concepts of the Fifth 

Amendment." Id. at 492. It is consistent with Greene to hold that eviction 

from a track in a state where one is licensed to race constitutes an 

unreasonable interference with the pursuit of one's chosen profession, 

particularly when that track is the only place in the state that one can 

practice one's profession from November through April. 

 10 
track. It accurately points out that, in Fitzgerald, a 

Pennsylvania Racing Commission Rule requir ed the track to 

notify the Commission of all people excluded ther efrom. 

Delaware, it seems, has no comparable r egulation. Dover 

Downs seizes on this distinction and maintains that, except 

to the extent that the Crissmans themselves publicized 

their exclusion, their reputations have not been damaged 

by this incident. On the other hand, their exclusion in all 

probability would be known to the other owners and 

trainers of race horses at the Dover Downs track, and those 

associated with them. In our view, the Crissmans have 

presented sufficient evidence to warrant trial on this issue. 

Dover Downs acknowledges that the HRC was notified 

orally of the Crissmans' expulsion. Although Dover Downs 

tries to downplay the significance of this notification, 

Fitzgerald held that the notification of the r elevant 

regulatory agency amounts to a deprivation of the 

plaintiff 's liberty interest in his employment reputation. See 

Fitzgerald, 607 F.2d at 602. Moreover, Charles Lockhart's 

deposition reveals that this notification was only given after 

an HRC employee asked him whether Mr. Crissman had 

been excluded from the track. Apparently, the HRC agent 

asked "because he had heard that [Crissman] had been 

[excluded]." (App. at 260). This testimony demonstrates that 

the expulsion of the Crissmans from Dover Downs has, at 

some point, been the subject of conversation in Delaware 

harness racing circles. Although it r emains possible that 

the Crissmans themselves are primarily r esponsible for the 

publicity surrounding their exclusion, we believe, viewing 

the evidence in the light most favorable to the Crissmans, 

that there is a genuine issue of fact as to whether Dover 

Downs' expulsion adversely affected their r eputation. 

We conclude that the Crissmans have pr esented a triable 

issue of fact as to whether their expulsion fr om Dover 

Downs amounted to a deprivation of a liberty inter est 

cognizable under S 1983 and an injury to their liberty 

interest in employment reputation. The question then 

remains whether they received due pr ocess of law. Under 

Fitzgerald, a suspended harness racing trainer is entitled, 

at the very least, to a reasonably prompt post-suspension 

hearing. See Fitzgerald, 607 F.2d at 603. It is undisputed 

 11 
that the Crissmans never received any hearing. 

Accordingly, the District Court erred in granting summary 

judgment for Dover Downs and we will remand this case for 

trial. 

V. 

Finally, the Crissmans ask this court to reverse the 

District Court's denial of their motion for a pr eliminary 

injunction. A court ruling on a motion for a pr eliminary 

injunction must consider the following four factors: 

 1) whether the movant has shown a reasonable

 probability of success on the merits; 2) whether the 

 movant will be irreparably injured by denial of the 

 relief; 3) whether granting preliminary r elief will result 

 in even greater harm to the nonmoving party; and 4) 

 whether granting the preliminary relief will be in the 

 public interest. 

Allegheny Energy, Inc. v. DQE, Inc., 171 F.3d 153, 158 (3d 

Cir. 1999). We review the denial of a preliminary injunction 

only for "an abuse of discretion, a clear error of law, or a 

clear mistake on the facts." Id. 

In light of our determination that a symbiotic relationship 

existed between the State of Delaware and Dover Downs 

and based on substantial evidence presented by the 

Crissmans that they were denied due process of law, we 

believe they had a reasonable chance of succeeding on the 

merits. 

The other three factors also cut in favor of the 

Crissmans. The Crissmans have suffered irreparable harm 

due to the denial of the injunction "because the nature of 

harness racing is such that no adequate r emedy exists at 

law to compensate [them] for losses to income and 

reputation sustained from an unlawful suspension." 

Fitzgerald, 607 F.3d at 601. Ther e is no evidence that Dover 

Downs would be harmed if the Crissmans wer e allowed to 

race. Finally, there is no evidence that the public would be 

adversely affected if the Crissmans wer e reinstated at Dover 

Downs. Thus, the District Court's denial of the Crissmans' 

motion for preliminary injunctive relief will be reversed. 

 12 
VI. 

Accordingly, for the reasons set forth above, summary 

judgment in favor of Dover Downs, Inc. will be r eversed and 

the case remanded to the District Court, with directions to 

grant plaintiffs' motion for preliminary injunctive relief, and 

for such further proceedings as are consistent with this 

opinion. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

 13