2008 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Third C irc uit 2-20-2008 

# Hu s ain v . C a sino C ontr C omm P re c e de nt i al or N on-P re c e de nt i al : N on-P re c e de nt i al D ocke t N o . 07-3636

F o llow thi s and a ddit ion al works at : http://d i git alc ommon s .l a w . vill anova . e du/thirdc irc uit_2008

Thi s de c i sion i s brou ght t o you for f re e and ope n a c c e s s by the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Third C irc uit at V ill anova U nive r sity S choo l of L a

w Di git al Reposit ory

. It h as be e n a c c ept e d for inclusion in 2008 D e c i sion s by an authori z e d a dmini s trat or of V ill anova U nive r sity S choo l of L a

w Di git al Reposit ory

. F or more inform at ion, p le as e c ont a ct Be n j amin . C arl s on@l a

w . vill anova . e du . Re c omme nde d C it at ion " Hus ain v . C asino C ontr C omm" (2008). 2008 D e cisio n s . P ape r 1565. http://di git alc ommon s .l a

w . vi ll anova . e du/thirdc irc uit_2008/1565NOT P RE CE DE NT I AL UN I TED STATES CO UR T OF A PP EALS F O R T H E T H IR D C IR C U IT

___________ N o. 07- 3636

___________ S YE D M . HUS AI N, A ppel l ant v. CA S I NO C ONT RO L CO M M I S S I ON; C. G. AL L E N, Co mm i s s i o n I n s p e c t o r ; L I NDA M. KA SS EKER T, a n i n d i v i d u a l ; M I CH AEL A . FEDO RK O, a n i n d i v i d u a l ; W I LLI AM T. S OM M E L I NG, a n i n d i v i d u a l ; M I CH AE L C. E P P S , a n i n d i v i d u a l ; RA L P H G. F RU L I O, i ndi vi dual ; E SQ . SE T H H . B R I L I A N T , an i ndi vi dual ; D I A N N A W . FA U N T L E R O Y , an i n d i v i d u a l ; SALV ATO RE ESP OSI TO, Pi tM a n a g e r , Sh o wbo a tCa s i n o ; TOM SCOTT,

D i r ect orof Sur vei l l ance , Show boatC as i no

________________________ A p p ea l from the U n it ed S tat es D istri ct C o u rt forthe D i s tr i ctof N ew J er s ey ( D . C . C i vi l N o. 06- cv- 04923 ) D i s tr i ctJ udge: H onor abl e R enee M ar i e B um b

_______________________ Subm i tt ed Pur s uantt o T hi r d C i r cui tL A R 34. 1( a)

February7, 2008 B efor e: R E N D E L L , J O R D A N and G A R T H , C i r cui tJ udges

(F il ed F eb rua ry2 0 , 2 0 0 8 )

___________ OPI NI ON O F THE COURT

___________ P E R C UR I AM S y ed M . H u sain ap p ea ls pro se f rom an o rde r of

the U n it ed S tat es D istri ct C o u rt2

forthe D i s tr i ctof N ew J er s eydeny i ng hi s m ot i on fordefa ul tj udgm entand gr ant i ng D efe ndant s ’ r es pect i ve mot i ons t o di s m i s s . W e w i l l aff i r m the j udgm entof the D i s tr i ct C o u rt. I . T hi s cas e ar i s es outof an a l l eged i nci denton A ugus t14, 2006, atthe Show boat C as i no ( “C as i no”) . A ccor di ng t o H us ai n, he w as pl ay i ng bl ackj ack a ta $25 t abl e w hen a r epr es ent at i ve of the C as i no acc us ed hi m of che at i ng. D eny i ng thathe eve rchea t ed, H us ai n compl ai ned t o R egi nal d A l l en, an i ns pect oratthe C as i no C ontr ol C om m i s s i on ( “C om m i s s i on”) booth, w ho then fi l ed an i nci dentr eport . D i s s at i s fi ed w i th the r eportand h is a lleg e d in a b ili tyto o b tain f u rth e r in f

o rm a tio n f

ro m th e C o m m iss io n , H u sa in comm ence d a pr o s e ac t i on i n the D i s tr i ctC our t . H e i dent i fi ed the C om m i s s i on i t s el f, the in d iv id u a l C o m m iss io n e rs, A llen , an d C o m m iss io n a tto rn e y s a s “ S e c o n d P a rty D efe ndant s ” ( col l ect i vel y“C om m i s s i on D efe ndant s ”) . H e furthernamed t w o C as i no e m p lo y e e s a s “ T h ird P a rtyD e f e n d a n ts” (c o llec tiv e ly“ C a sin o D e f e n d a n ts” ). In h is amended compl ai nt , H us ai n cl ai m ed thatthe C om m i s s i on D efe ndant s vi ol at ed hi s fede r al due pr oces s and equa l pr ot ect i on r i ght s . T he D i s tr i ctC our tal s o cons trued hi s pl eadi ng as cont ai ni ng s t at e- l aw cl ai m s , s uch as fori nt ent i onal and negl i genti nfl i ct i on of emot i onal dis tres s, againstthe C om m i ssi on D efen dan t s and, possi bly , the C asi no D efen dan t s. In a n o rde r en tered o n F eb rua ry6 , 2 0 0 7 , the M ag istrate Ju d g e g ran ted H u sain ’s m oti on t o fil e the am end ed co m plai nt. H usai n then m ov ed fo r a defaultj ud gm ent agai nstT h e C o u r th a s a p p e l l a t e j u r i s d i c t i o n o v e rth i s m a t t e ru n d e r2 8 U . S . C . § 1 2 9 1 . We 1 re v ie w th e d e n ia l o f

a m o tio n f

o r d e f a u lt ju d g m e n t f

o r a b u s e o f

d is c re tio n . S e e , e .g ., Jo rde n v . N at’l G u ard B u rea u , 8 7 7 F . 2 d 2 4 5 , 2 5 0 -51 (3d C ir . 1 9 8 9 ). W e e x erc ise p lena ry re v ie w o v e r a d is tr ic t c o u rt ’s d e c is io n to g ra n t a m o tio n to d is m is s u n d e r R u le 1 2 (b )( 6 ). S e e , e .g ., G re e n v . A m e ri c a O n lin e , 3 1 8 F .3 d 4 6 5 , 4 7 0 (3 d C ir . 2 0 0 3 ). 3 the C om m i s s i on D efe ndant s on M ar ch 6, 2007. H avi ng ear l i ers oughtthe di s m i s s al of H us ai n’ s i ni t i al compl ai nt , the C om m i s s i on D efe ndant s m oved t o di s m i s s hi s amended compl ai nt , i ni t i al l yon M ar ch 2, 2007, and aga i n on M ar ch 12, 2007. T he C as i no D efe ndant s l i kew i s e fi l ed a mot i on t o di s m i s s . I n an or derent er ed on A ugus t15, 2007, the D i s tr i ctC our tdeni ed H us ai n’ s m ot i on fordefa ul tj udgm entand gr ant ed the mot i ons t o di s m i s s . I tdi s m i s s ed w i th pr ej udi ce H us ai n’ s fede r al cl ai m s agai ns tthe C om m i s s i on D efe ndant s underFeder al R ul e of Ci vi l Pr ocedur e 12( b) ( 6) . T he D i s tr i ctC our tfurther di s m i s s ed w i thoutpr ej udi ce hi s s t at e- l aw cl ai m s agai ns tboth s et s of D efe ndant s pur s uant t o 28 U . S. C . § 1367( c) ( 3) . H us ai n t i m el yappea l ed, and he ha s fi l ed a mot i on t o s tr i ke the C om m i s s i on D efe ndant s ’ appel l at e br i ef. II. H u sa in a rg u e s th a t th e D istric t C o u rt e rre d in d e n y in g h is m o tio n f o r d e f a u lt ju d g m e n t ag a in st th e C o m m iss io n D e f e n d a n ts, c laim in g th a t th e yf a iled to re sp o n d to h is amended compl ai ntw i thi n the tw enty - dayper i od i n w hi ch t o do s o. N everthel es s , as the 1 D istri ct C o u rtn o ted, en tryo f d ef au ltb ythe C lerk u n d er F ed era l R u le of C ivil P roc ed u re 5 5 (a ) c o n stitu tes a g e n e ra l p re re q u isite f o r a su b se q u e n t d e f

a u lt j u d g m e n t u n d e r R u le 55( b) . See, e. g. , 10A C har l es A l an W r i ghtetal . , Feder al Pr act i ce a nd Pr ocedur e § 26824

(2 0 0 7 ) (“ P rio r to o b tain in g a d e f a u lt j u d g m e n t u n d e r e ith e r R u le 5 5 (b )(1 ) o r R u le 5 5 (b )(2 ), th e re m u st b e a n e n tryo f d e f a u lt as p ro v id e d b yR u le 5 5 (a ).” ( f o o tn o te o m itt e d )). C o n tra ryto H u sa in ’s c h a ra c ter iza tio n s, th e C ler k d id n o t en tere ith e r a d e f a u lt ora def aul tj udgm entw hen i tdocket ed hi s m ot i on fordefa ul tj udgm enton M ar ch 6, 2007, ors etthe r eturn dat e forhi s m ot i on on the fol l ow i ng day . A r evi ew of the D i s tr i ct C our tdocketconfi r m s thatno defa ul tw as everent er ed aga i ns tthe C om m i s s i on D efe ndant s , and the D i s tr i ctC our tacc or di ngl yw as corr ectt o denyH us ai n’ s m ot i on for d e f a u lt ju d g m e n t. S e tti n g a sid e th e iss u e o f e n tryo f d e f a u lt, th e D istric t C o u rt’s d e n ial o f d e f a u lt j u d g me n twas n e v e r th e l e s s a p p r o p r i a t e o n o th e rg r o u n d s . Se e , e . g . , Hi Te c h Tr a n s , LLC v. N ew J er s ey , 382 F. 3d 295, 297 n. 3 ( 3d C i r . 2004) ( s t at i ng thatcourtof appe al s m ay a f f irm f o r a n yre a so n su p p o rte d b yre c o rd ). In d e c id in g w h e th e r to g ra n t a d e f a u lt j udgm ent , a courtm aycons i derw hether : ( 1) a deni al w oul d pr ej udi ce the pl ai nt i ff; ( 2) the defe ndantappea r ed t o have a l i t i gabl e def ens e; and ( 3) the def

endant ’ s del ayw as caus ed b ycu lpab le co n d u ct. S ee , e.g., C h am b erlain v . G iam p ap a, 21 0 F . 3 d 1 5 4 , 1 6 4 (3d C ir . 2 0 0 0 ). H u sa in h im se lf

a p p e a re d to su f

f e r litt le, if

a n y , p re ju d ice f ro m th e d e n ial o f

h is m o ti o n , an d there is no rea l i n d icati o n that the C o m m issi o n D ef en d an ts’ relati v elysh o rt del ayi n r es pondi ng t o hi s amended compl ai ntw as due t o anym i s conduct . O n the con trary , the d ock etreveal s that the C om m i ssi on D efen dan t s vi go rousl ydefe nd ed ag ai nst H us ai n’ s cl ai m s thr oughoutthi s l i t i gat i on. Fori ns t ance , theyfi l ed a mot i on t o di s m i s s the5

a m e n d e d c o m p lain t o n M a rc h 2 , 2 0 0 7 , les s th a n a m o n th a f terth e e n tryo f

th e M a g istra te Ju d g e ’s o rd e r g ra n tin g lea v e to f ile a n a m e n d e d c o m p lain t an d f o u r d a y s b e f

o re H u sa in e v e n f i l e d h i s d e f

a u l tj u d g me n tmo t i o n . As we d i s c u s s b e l o w, Hu s a i n ’ s o wn c l a i ms la c k e d m e ri t, a n d th e C o m m is s io n D e f e n d a n ts th e re f

o re p o s s e s s e d , a t th e v e ry le a s t, a stro n g d e f

e n se to h is c laim s. In th e e n d , the D istric t C o u rt’s u lti m a te d isp o sitio n o f th is c a se w a s c o n sis ten t w ith o u r w e ll-es tab lish e d p o licyo f “ d isf a v o rin g d e f

a u lt j u d g m e n ts and enc our agi ng deci s i ons on the mer i t s . ” H ar ad v. A etna C as . & Sur . C o. , 839 F. 2d 979, 9 8 1 (3 d C ir . 1 9 8 8 ) ( c ita tio n o m itte d ). Itis un clea r w h ethe r H u sain ac tuallych all en g es o n ap p ea l th e D istri ct C o u rt ’s d i s mi s s a l wi th p r e

j u d i c e f o rf a i l u r e t o s t a t e a c l a i m u n d e rRu l e 1 2 ( b ) ( 6 ) . I n a n yc a s e , we concl ude thatthe D i s tr i ctC our tpr oper l ydi s m i s s ed hi s fede r al due pr oces s and equa l prot ect i on cl ai m s agai nstthe C om m i ssi on D efen dan t s. T he D i s tr i ctC our tdi s m i s s ed H us ai n’ s due pr oces s cl ai m s on the gr ounds thathe f a iled to e sta b lish th a t th e C o m m iss io n D e f e n d a n ts’ c o n d u c t im p lica ted a f e d e ra lly p ro tec ted rig h t. O n a p p e a l, H u sa in d o e s n o t sp e c if yth e lib e rtyo r p ro p e rtyin ter e sts a lleg e d lya t issu e h e re , an d h e f a ils to a d d re ss th e D istric t C o u rt’s a c tu a l f in d in g w ith r es pectt o the abs ence of a c ons t i tut i onal l ypr ot ect ed i nt er es t . W e' ve pr evi ous l yobs erved th a t th e re is n o c o n stitu tio n a llyp ro tec ted p ro p e rtyin ter e st in th e o p p o rtu n ityto g a m b le and that , ther efor e, eff

or t s l i ke thos e of the C om m i s s i on D efe ndant s i n thi s cas e do not vi ol at e due pr oces s r i ght s . D oug G r ant , I nc. v. G r eat e B ayC as i no C orp. , 232 F. 3d 173,W e furthernot e thatthe r egul at i ons do r equi r e ca s i nos t o have the c a p a b ili ty of 2 m o n ito ri n g e v e ry g a m in g ta b le . S e e N .J . A d m in . C o d e § 1 9 :4 5 -1 .1 0 (b )1 (i ). 6 1 8 9 -9 0 (3 d C ir . 2 0 0 0 ). H us ai n al l eged thathi s equal pr ot ect i on r i ght s w er e vi ol at ed bya gami ng r egul at i on r equi r i ng thatcas i nos conductr ecor ded s urvei l l ance onl y o f g a m in g tab les w ith pos t ed mi ni m um w ager s of $1 00 . 00 or m ore as oppos ed t o m andat i ng s uch s urvei l l ance of a llb la c k

ja c k ta b le s re g a rd le s s o f th e w a g e r. S e e N .J . A d m in . C o d e . § 1 9 :4 5 -1 .1 0 (d ). A ccor di ng t o H us ai n, the C om m i s s i on D efe ndant s ther ebycr eat ed an unc ons t i tut i onal d ist inction w ith in the sam e c lass o f b lack jack tables. H o w ev er, as the D istri ct C o u rt p o inted o u t, there is no fu n d am en tal co n sti tuti o n al ri g h t t o g am b le or to h av e o n e’s g a m b lin g e f

f o rts u n d e r su rv e ill a n c e , an d re lativ e p o v e rtyo r w e a lth a lo n e d o n o t co n stitu te “s us pectcl as s es ” forpurpos es of the Equal Pr ot ect i on C l aus e. See, e. g. , A bdul - A kbarv. M c K e lv ie , 2 3 9 F .3 d 3 0 7 , 3 1 7 (3 d C ir . 2 0 0 1 ) ( e n b a n c ); D o u g G ra n t, I n c ., 2 3 2 F .3 d a t 1 8 9 . Fi nal l y , the D i s tr i ctC our tpr oper l yconcl uded thatthe s urvei l l ance r egul at i on s at i s fi ed the appl i cabl e “r at i onal bas i s ” s t andar d. C f. D oug G r ant , I nc. , 232 F. 3d at189 ( appl y i ng 2 r at i onal bas i s t es tand conc l udi ng thatant i - car d- count i ng m eas ur es adopt ed bycas i nos a n d a p p ro v e d b yC o m m iss io n w e re ra tio n a llyre late d to leg iti m a te s tate in ter e st in p rotec ti n g ca sino ind u stry ’s fina n cial viab il ity ). T urni ng t o the r emai ni ng s ubs t ant i ve cl ai m s i n thi s l i t i gat i on, H us ai n does not chal l enge on appeal the D i s tr i ctC our t ’ s di s m i s s al w i thoutpr ej udi ce of hi s s t at e- l awH us ai n as s ert s , i nt eral i a, thatthe C om m i s s i on D efe ndant s ’ appel l at e br i ef c ont ai ns 3 num er ous fr audul ents t at ement s and thatthe br i ef i t s el f w as unt i m el y . N everthel es s , the al l eged i ns t ance s of fr aud amount , atbes t , t o m er e di s agr eement s betw een the part i es r egar di ng s uch mat t er s as the purpos e of the l i t i gat i on, the under l y i ng fac t s , the p ro c e d u ra l h is to ry in th e D is tr ic t C o u rt , a n d th e p ro c e d u ra l ru le s a n d c a s e la w . Fur therm or e, the C om m i s s i on D efe ndant s r eques t ed and w er e gr ant ed an e xt ens i on of t i m e t o f i l e th e i rb r i e f

, a n d th e i rb r i e f

w a s f i l e d w i th i n th e e x t e n d e d t i m e p e r i o d . F i n a l l y, w e not e thatw e w oul d have r eac hed the s ame r es ul ti n thi s appea l even w i thoutthe b e n e f it o f th e C o m m is s io n D e f

e n d a n ts ’ b ri e f.

7 caus es of ac t i on agai ns tthe C om m i s s i on and the C as i no D efe ndant s . W i th r es pectt o the C a sin o D e f

e n d a n ts, h e a d m its th a t h e o n lyin c lu d e d th e m a s p a rties in o rd e r “ to o b tain relev an t i n fo rm ati o n . ” (A p p ell an t’ s R ep lyB r. at 12 . ) A cc o rdin g ly , the D istri ct C o u rt p ro p e rlyd e c lin e d to e x e rc ise ju risd ictio n o v e r su p p lem e n tal s tate -la w c laim s a f terit d ism issed all claim s “o v er w h ich it has o ri g inal juri sd ict ion . ” 2 8 U . S . C . § 1 3 6 7 (c)(3). III . Forthe for egoi ng r eas ons , w e conc l ude thatthe D i s tr i ctC our tcomm i t t ed no r ever s i bl e err orbydeny i ng H us ai n’ s m ot i on fordefa ul tj udgm entand gr ant i ng the re s p e c tiv e m o tio n s to d is m is s o f th e C o m m is s io n D e f

e n d a n ts a n d th e C a s in o D e f e n d a n ts . L ik e w ise , h is p e n d in g m o tio n to strik e th e a p p e llate b rie f o f th e C o m m iss io n D e f

e n d a n ts i s DE NI E D. 3