Warren E. Burger: We'll hear arguments next in 803, Barry against Barchi. Mr. Hammer, you may proceed whenever you're ready.
Robert S. Hammer: Mr. Chief Justice and may it please the Court. The question presented by this case is whether a statute which provides for the summary suspension of the occupational license of a harness racing participant prior to any hearing on disciplinary charges denies such licensee due process or equal protection of the laws. A statutory District Court for the Southern District of New York held that it indeed it did. We respectfully disagree. We have appealed and we asked this Court to reverse. On June 22nd of 1976, a horse named Be Alert which was trained by the plaintiff run second in a race at Monticello Raceway. Prior to the race, a blood test was conducted to determine whether any drugs were in the horse's system. That test was passed, however, subsequent to the race, a urine test was conducted and traces of a drug called Lasix were found in the horse's urine. At page 6a of the jurisdictional statement note 5 in the opinion of the three-judge court, the Court pointed out that Lasix is a diuretic and may in fact enhanced the performance of the animal. Under the rules of the Racing and Wagering Board, no such drug may be given to the horse within 48 hours of a race. As I indicated, this race was conducted on June the 22nd, two days later, the post race test results came back and Mr. Barchi, the plaintiff was called before the stewards. He was given word of this test results and was asked for an explanation. Subsequently, both at his initiative and at the initiative of the Racing and Wagering Board, two separate polygraph test were taken. Apparently, the polygraph indicated that Mr. Barchi was being truthful in his statements and despite the efforts of the Board to find out exactly what happened to the horse an inconclusive investigation in sued. On the 8th of July, the trainer's license was suspended on the basis of what is called the trainers responsibility rule as in the case of a ship's captain who is responsible for everything that goes on board, the trainer likewise is responsible for the health and condition of his horse. Now, we had the opportunity as we indicated for an informal conference at the time he was originally confronted with the results of the test and we suggest that this would come within the Rule of Goss against Lopez. Under the statute, Section 8022 of our unconsolidated laws, he could have had a full quasi judicial hearing within a few days, however, he did not avail himself of this opportunity to be heard and as a result, this case was brought. Under Section 8022, a licensee is the prime mover of any hearing conducted as a result of disciplinary action taken against him. Only he may demand the hearing and he must demand it within 10 days.
John Paul Stevens: General Hammer, could I just ask one question about when they find the drug -- evidence of drug in the horse and it's presumed that the drug affected the performance of the animal in the race as I understand your rules, does that mean that something is done with the race itself or the results change or is there anything to undo the harmful consequence to the public of the race itself?
Robert S. Hammer: Well, Your Honor, nothing can be done. At that time, the pari-mutuel pay off is immediate and the results of the race are not affected.
John Paul Stevens: But is there any discipline against anyone other than the trainer if we held to that finding in that presumption.
Robert S. Hammer: The presumption is a rebuttable presumption which relates only to the trainer. However, Mr. Justice Stevens, the -- if for example it were found that a third party a track tout or someone else's groom drug the horse then of course --
John Paul Stevens: I do mean supposing it's a mystery as to what really happened but just from the presumption itself which includes the presumption that performance of the animal was affected by it which of course would affect the owner's record and all the rest of it, nothing happens to anyone except to the trainer as a result of that presumption.
Robert S. Hammer: That's correct, Your Honor.
William H. Rehnquist: Sometimes you see the inquiry sign go up on the tote board, you know and then it stays on for about 20 minutes or half an hour and then it's replaced by an official sign and they put up the odds. What's the -- do they have that at Monticello?
Robert S. Hammer: Yes, that would be a standard part of the tote board. I'm advised by my colleague Mr. Dailey that where in fact it is determined that the race was affected by drugging and then it is within the power of the Racing and Wagering Board to take back the purse. However, the pari-mutuel results aren't affected because of the immediate pay off of on the pari-mutuel bets.
Warren E. Burger: I think you may have been overbroad. At least I should think you were in responding to Mr. Justice Stevens. If it was demonstrated affirmatively that the owner and not the trainer had drugged the horse and that the owner had done this without the trainer's knowledge then surely, the trainer would not be punished, would he?
Robert S. Hammer: Yes, in fact I made that point to Mr. Justice Stevens that this relates where in fact it is found that a third person -- a third party or an outsider whether it would be from another owner --
Warren E. Burger: But this is a presumption to get the matter started and that can be rebutted by other evidence.
Robert S. Hammer: Absolutely, Your Honor. This is a permissive presumption that it is a rule of evidence, nothing more.
John Paul Stevens: General Hammer can I also clear up one thing. Does the first automatically become forfeited with just on the basis of the presumption? That you said he had power to forfeit the purse but is it the routine practice that for example in this case was the purse forfeit done?
Robert S. Hammer: No Your Honor, it was not.
Warren E. Burger: We'll resume at one o'clock. You may resume, Mr. Hammer.
Robert S. Hammer: Thank you, Mr. Chief Justice and if the Court please. Just prior to the luncheon recess, Mr. Justice Stevens asked about what happens when a drug is found to be -- a horse is found to have been drugged and I took the opportunity to look up the rule of the Racing and Wagering Board and its Rule 4120.10 and it does provide for a mandatory forfeiture of the purse where a horse has in fact been drugged and the drugging could have affected the outcome of the race.
Potter Stewart: But was the purse forfeited here?
Robert S. Hammer: I believe it was, Your Honor.
Potter Stewart: One can assume that it was.
Robert S. Hammer: I think we can so assume.
Potter Stewart: In the law as you said it.
Robert S. Hammer: This was not in the case but I would assume that it was forfeited. Now the statute in question is Section 8022 of the New York unconsolidated laws and it's reproduced at page 3 of the appellant's brief. It provides that where the stewards imposed any sanction such as a fine or suspension, the licensee may demand a hearing within 10 days. Thereafter, the Racing and Wagering Board must schedule a prompt hearing and must render a final decision within 30 days. This administrative determination is reviewable in an action -- in a special proceeding under Article 78 of the New York Civil Practice Law rules which would be in the nature of certiorari. The statute provides that pending the final determination, the suspension or revocation remains in effect, however, there is no specific prohibition upon the Racing and Wagering Board sua sponte in its own discretion granting a stay of its own punishment. The statutory history of Section 8022 and the rest of the racing laws is a rather interesting one and we've set it out at pages 6 through --
Byron R. White: So I have it in mind, what was imposed here?
Robert S. Hammer: A 15-day suspension Your Honor.
Byron R. White: So that was the total punishment.
Robert S. Hammer: That's all, sir.
Byron R. White: And it was not permanent.
Robert S. Hammer: Absolutely not.
Byron R. White: So by the time there could be any review, the suspension the entire punishment would have been over.
Robert S. Hammer: Not necessarily, Your Honor.
Byron R. White: Well 15 days is 15 days but -- and you had 30 days. There are 30 days for a review, I take it.
Robert S. Hammer: The statute grants the Board up to 30 days to render its decision. What happens in practice in cases of this kind is that the process is accelerated to a much greater degree. In this instance and there is a companion case Daniel which we refer to, he was offered a hearing within two days and turned it down. The plaintiff here never even requested a hearing.
Warren E. Burger: Let me go back to your administrative proceedings. If he had requested a hearing, he could have asked for and could have received a stay of the suspension until the decision was made. Is that right? Is that what you were talking?
Robert S. Hammer: It is our position Your Honor that although the statute itself is somewhat unclear --
Byron R. White: So it says -- it says that the suspensions will stay in effect, doesn't it?
Robert S. Hammer: That's what it says, however, in practice and there was an offer of proof on the record, Your Honor, which the District Court did not see fit to take us up on. We were prepared to show and it is contained in part in the affidavit of John Dailey who at that time was chief counsel to the Racing and Wagering Board that in practice, the Board does in a proper case stay its own action.
Byron R. White: Well, I suppose the Board could say -- to tell somebody that we're considering any suspension and just not impose it until there is a hearing.
Robert S. Hammer: Well, in harness racing, this doesn't work that way. The sanction is imposed initially by the state steward. At that point, the licensee has the right within 10 days to demand the hearing. The statutory --
William J. Brennan, Jr.: But the language is rather explicit isn't it that pending such hearing --
Robert S. Hammer: That's true.
William J. Brennan, Jr.: -- the action suspending a license shall remain in full force and effect and you said that doesn't mean what it says.
Robert S. Hammer: That's correct, Your Honor. Anomalous as it sounds --
William J. Brennan, Jr.: Where does that appear other than you're telling us so?
Robert S. Hammer: It appears in the record in the affidavit of John Dailey which appears --
Warren E. Burger: Is that in the operative of proof?
Robert S. Hammer: As well as in -- yes and also on the record, the transcript of the hearing --
Byron R. White: So is it just that they regularly disobey the statute, is that it?
Robert S. Hammer: Let's put it this way that the statute is construed administratively to in such a way as to achieve substantial justice in meritorious cases.
Byron R. White: And you're representing the State of New York, I take it.
Robert S. Hammer: That's correct, Your Honor. I would take further answer your honest Mr. Justice White at page 20 of our brief, we cited Mr. Dailey's affidavit. Page 34a of the Appendix, reference was also made at page 28a of the jurisdictional statement as well and we made the offer of proof on pages 27 through 30 of the transcript of the argument before the three-judge court.
Thurgood Marshall: What is the significance of a regulation, a statute or any provision which says one thing and we have assurance that the present people in office won't enforce it. What effect does that have on this Court?
Robert S. Hammer: If it were merely the fact -- an assurance that the present people in office do not enforce --
Thurgood Marshall: Well, I don't -- is there anything in there that said what the future people will do?
Robert S. Hammer: I think in this case --
Thurgood Marshall: There's no way --
Robert S. Hammer: In this case --
Thurgood Marshall: There's no way you can predict what a future official do.
Robert S. Hammer: Except Your Honor by the established administrative practice of the agency which I think had -- we've been given the opportunity we could have proven as a matter of fact.
Thurgood Marshall: Proven what?
Robert S. Hammer: That as a matter of well-established administrative interpretation stays was indeed granted.
Thurgood Marshall: Always?
Robert S. Hammer: As a matter of -- in the discretion of the Board.
Thurgood Marshall: Oh, in the discretion?
Robert S. Hammer: When I -- Your Honor apply to this Court for stays of lower court judgments and Your Honor as circuit justice has to exercise discretion. Your Honor has the power --
Thurgood Marshall: I have never -- please, I have never suspended a jockey.
Robert S. Hammer: What I'm saying -- no. What I'm suggesting Your Honor is that in your capacity as circuit justice, you have the discretionary authority to grant me a stay.
Thurgood Marshall: I have the discretionary authority to ignore a statute?
Robert S. Hammer: Not ignore it Your Honor, interpret it.
Thurgood Marshall: To interpret it and say no when it says yes.
Robert S. Hammer: Well, statutes --
Thurgood Marshall: That's larger than the chance to a foot. I've never seen a chance with a foot that large before.
Robert S. Hammer: Well, I can only suggest Your Honor that the record as established below indicates that we offer to prove this is a matter of fact.
William H. Rehnquist: Mr. Hammer, it does seem to me that we do have a problem of New York law here that reading this language that some of my Brother have questioned you about pending such hearing and final determination there on the action the commission refusing to grant or evoking or suspending a license or on imposing a bunch of many full force and effect seems kind of incongruous with the Commission's initial determination. Is it possible that pending since is directed to the courts of New York rather than to the commission?
Robert S. Hammer: It is a conceivably a possible interpretation of the statute. There has -- simply has been relatively little case law on this point.
John Paul Stevens: General Hammer, could I ask you another question about this language. You point out that the affidavit of John Dailey indicates there is a practice. Now, the statute refers an action of the commission. But Dailey's affidavit refers to a suspension of any penalty imposed by track judges pending administrative review. What are track judge -- track judges?
Robert S. Hammer: The track -- the track judges are the state stewards who make the initial determination. What the statute is referring to --
John Paul Stevens: Are they the commission?
Robert S. Hammer: No. The statute refers to the determination of the Commission after a hearing.
John Paul Stevens: Well, but what I'm suggesting is that there is no inconsistency between the statute and the affidavit because the affidavit talks about staying a penalty imposed by track judges whereas the statute refers to an order that the commission remaining in effect.
Robert S. Hammer: I think that's correct, Your Honor.
John Paul Stevens: So then we just accept the statute and there is no conflict in the record at all.
Robert S. Hammer: I think that indeed resolves the problem.
John Paul Stevens: Mr. Hammer may I get a question into this particular sentence in the statute has not been construed by your state courts, has it?
Robert S. Hammer: We have the Tafas case which was referred to in the opinion of the three-judge district court. The Tafas involved merely a fine. It did not involve a suspension. The --
Harry A. Blackmun: Well, in your jurisdictional statement, you made an abstention argument based on the Pullman case.
Robert S. Hammer: Right.
Harry A. Blackmun: I see no similar argument in your brief on the merits. Have you abandoned this approach now?
Robert S. Hammer: We have not entirely abandoned it. It was felt after some review and discussion within the office that perhaps the abstention argument was not quite as strong as we initially thought it was. I think abstention -- my personal view is that perhaps abstention might indeed be appropriate. I don't think Tafas which was the New York Court of Appeals opinion really addressed itself to the issue at hand.
William H. Rehnquist: Tafas didn't deal with 8022, did it?
Robert S. Hammer: Tafas was a harness licensee and I think Tafas in fact did deal with 8022.
William H. Rehnquist: Well, do you think the Pullman issue is before us now?
Robert S. Hammer: I think the issue remains before Your Honors.
William J. Brennan, Jr.: Why you don't argue it?
Robert S. Hammer: Well, it was raised on the jurisdictional statement. I don't think it's the most important issue in the case. I think arguably it is a position that Your Honor might find appropriate.
William J. Brennan, Jr.: Even though you don't press at your --
Robert S. Hammer: I don't press it vigorously but I do believe it is in the case.
Thurgood Marshall: What happens if the majority of this Court noted it on -- just on the Pullman point because you don't know, do you?
Robert S. Hammer: Well, I --
Thurgood Marshall: I'm talking about alleging something in your jurisdictional statement and then not following it. That's what I'm talking about.
Robert S. Hammer: I think frankly, Your Honor, insofar as following it up.
Thurgood Marshall: Yeah.
Robert S. Hammer: The cases on point Pullman, Carey against Sugar layout a very simple and rather straightforward rule of law. I don't think I could have added anything to it. What I think is terribly important here really is the cornerstone of our argument is the fact that the astringent racing laws that prevail in New York were adopted after a legislative finding based upon its investigation and upon a governor's (Inaudible) investigation which demonstrated a need for the strictest kind of policing in supervision. It is interesting to note that until 1940, there was no pari-mutuel betting on harness races. It was a county fare pastime. 1940 pari-mutuel betting was legalized and within less than 15 years, the criminals had moved in, the labor rocketeers had moved in. There were cases of kickbacks, there were number of homicides and in order to police the sport, in order to preserve public confidence in the sport, the legislature have to act and one of the ways in which they acted was to crackdown hard, to impose what to some may seem even a draconian form of regulation. But we think it's justified as a matter of constitutional law. We're not dealing with the common occupations or professions. We're not dealing with the license of a plumber. We're not dealing with the situation where -- we don't take pari-mutuel bets on the outcome of surgery or whether -- or the size of my colleagues next verdict but we do take bets on horses.
Warren E. Burger: Are you suggesting that this is analogous to the summary proceedings that are sometimes employed to take a dangerous drug off the market or a medicine or food stuff when it's discovered that it is dangerous that there is a summary suspension and then a hearing.
Robert S. Hammer: I would suggest Mr. Chief Justice that the state interest is in taking a probably -- a licensee was probably misconducted himself off the track is of equal constitutional value and dimension here. I think your analogy is quite apt.
Warren E. Burger: Well, I'm not making an analogy. I was inquiring about it.
Robert S. Hammer: Well, I think your inquiry presents the proper analogy. We would go so far although we don't rely upon it entirely. We would go so far as to suggest that the plurality of this Court -- the plurality opinion of this Court in our Arnett against Kennedy provides a proper framework. Racing -- pari-mutuel racing is an activity which would have been illegal but for legislative sanction. The licensee didn't have to become a harness trainer. He could have been a shoe salesman but he chose to be a harness trainer and he takes the limitations of his license when he applies for it.
Byron R. White: What -- under what Section did the steward issues a suspension?
Robert S. Hammer: The steward --
Byron R. White: I mean what authorized him to issue the suspension?
Robert S. Hammer: The steward suspended the license under the racing regulations that is found in Title IX of the New York Codes, Rules And Regulations which is the state analog to the CFR and it's reprinted and --
Byron R. White: But who issued the regulations?
Robert S. Hammer: The Racing and Wagering Board.
Byron R. White: So is that the Commission?
Robert S. Hammer: The steward is the agent of the Board.
Byron R. White: Is that the Commission? Is that the --?
Robert S. Hammer: Yes.
Byron R. White: Is that -- in Section 8022, it refers to a racing commission.
Robert S. Hammer: Right.
Byron R. White: That's the Board?
Robert S. Hammer: That's correct because --
Byron R. White: And they'd issued regulations?
Robert S. Hammer: The harness racing commission was subsumed under the state racing --
Byron R. White: And their stewards are their agents authorized to make the suspensions?
Robert S. Hammer: Yes sir.
Byron R. White: So the suspension in effect was issued by the Commission here?
Robert S. Hammer: It was issued by an authorized agent of the Commission subject to review at the request of the licensee by the full Commission or full Board.
Byron R. White: Thank you.
John Paul Stevens: I'm not sure you completed your answer to Justice White. Precisely, what section of the regulations authorized the suspension? I think you started to tell us.
Robert S. Hammer: The suspension was authorized -- it was for violation of Sections 4116.11, 4120.05 and 4120.6 of the Rules of harness racing and they're reprinted at --
John Paul Stevens: On page 5a.--
Robert S. Hammer: at 5a of our jurisdictional state.
John Paul Stevens: But none of those Sections refer to suspension of a trainer.
Robert S. Hammer: There is an earlier Section of the racing rules which authorized suspension for violation of these other rules. I think that this is not contested.
John Paul Stevens: But is there a standard set forth in that earlier regulation of when there shall be a suspension? In other words, is it automatic? Is it after a finding that he had something to do with it or what is the standard?
Robert S. Hammer: This is within the discretion of the steward.
John Paul Stevens: I see.
Byron R. White: So, do you have the Section?
John Paul Stevens: No. The Section is -- I'm sorry. Section 8009 of the unconsolidated laws --
Byron R. White: Now that gives -- I take it that that refers to the Board or the Commission.
Robert S. Hammer: It refers to the judges of the -- who have been appointed by the Racing and Wagering Board.
William J. Brennan, Jr.: I gather that it's not printed anywhere here.
Robert S. Hammer: No sir.
Byron R. White: Well, that's alright. We can -- we got it. Thank you.
John Paul Stevens: Just to make one point clear. You do not contend that there is any flat rule that requires suspension of the trainer whenever a drug is found in a horse that he trained.
Robert S. Hammer: We contend that this is a rule which is enforced as a matter of discretion.
John Paul Stevens: Thank you.
Robert S. Hammer: That while the trainer's responsibility rules are rules of law in practice and this was our intention before the three-judge court which appears in the transcript which is filed with Your Honors that the stewards nevertheless have discretion in enforcing it.
John Paul Stevens: Does that mean to put it bluntly that if the track judges or the commissioners have decided to believe the lie detector results and thought this man was totally innocent, they could have not suspended him without violating any state law they could have had.
Robert S. Hammer: That's correct.
John Paul Stevens: But then does the record that tells us why they did suspend them.
Robert S. Hammer: The record does not so show. It's something that would had a hearing been held and if the plaintiff had indeed requested a hearing, it could have been developed at that hearing. I think what's important here is to remember that even though there is some possible element of a reparable injury and we don't deny it. How much injury through loss of earnings we can of course not tell, not with any accuracy speculative but this Court in its decisions in the Bob Jones case and the Enochs case which we cite has laid down a rule that even where a reparable injury even total destruction of the enterprise may result. You can establish a law here, in that case for mere administrative convenience, which would preclude pre-hearing stays or pre-hearing injunctions against a determination? I just want to touch briefly upon the equal protection question. It's our position that it should not even have been decided by the District Court since they'd already held the statute unconstitutional on other grounds. This was a matter of constitutional overkill as it were. It was unnecessary under the rule of Peters against Harvey. As we've indicated in our brief, there is a rational basis for the statute in terms of its statutory history. On the other hand, in practice, the -- both harness and thoroughbred trainers are treated alike. In a section of the thoroughbred rules, the thoroughbred licensees are treated in the same way and that all penalties as the Section 4013.13 under the rules all penalties imposed by the stewards remain in effect pending judicial or administrative review. If the Court please, I'll simply reserve the last few minutes for rebuttal.
Warren E. Burger: Alright, very well. Mr. Faraldo.
Joseph A. Faraldo: Mr. Chief Justice and may it please the Court. I represent John Barchi, the appellee in this case and seek the affirmance of the decision of the three-judge court constitutional court below which struck down New York Section 8022 of the unconsolidated laws as unconstitutional both as the deprivation of due process of law and equal protection of the law. Mr. Barchi had a very substantial interest in continuing in his livelihood something which he had built up before a long period of time. The race that we are talking about occurred on June the 22nd of 1976 and on June the 24th, Mr. Barchi was called to the track steward's office and the track steward as my brother has stated is an armor extension or agent of the Commission itself, the actions of that judge and the actions of the Commission for all in terms and purposes the same. On the 24th he was called into the office and informed by the judge that he had have a positive Lasix, in other words, Lasix, a foreign substance was found in the horse's urine. He denied any knowledge or participation in the event. The next contact that we had in this case was on or about the 27th day of June when we were requested to take a polygraph exam. We did take a polygraph exam. I believe it was on the 29th day of June. My client voluntarily took a polygraph exam in order to profess his innocence which he had professed from the very beginning. He passed the polygraph exam that was given privately and on the following day at the request of the New York State Racing and Wagering Board, he took and passed the second polygraph exam.
William H. Rehnquist: You say that he took a polygraph exam. What questions relevant to this inquire did he or was he asked and then did he answer?
Joseph A. Faraldo: I believe that they are part of the appendix in this case -- he was asked to whether or not he had given Lasix to this horse. Whether or not he had directed anyone to give Lasix to this horse, whether or not he knew if anyone indeed had given Lasix to this horse or if he knew any of the circumstances how this prohibited substance got into this particular horse.
William H. Rehnquist: If the Commission believed him as to all those answers, would that make Rule 4120.6 the trainer's responsibility rule inapplicable to him?
Joseph A. Faraldo: The way it has been interpreted by the New York State Racing and Wagering Board and some of the jurisdictions around the nation, the answer to that is no. It has been my experience that this has been interpreted as an absolute rule of liability -- and some of the jurisdictions, not all.
William H. Rehnquist: Didn't the District Court which generally ruled in your favor say that that was a proper rule?
Joseph A. Faraldo: They said that it was a rebuttable presumption or at least some of them were rebuttable. However, there is a presumption in one of the rules under which my client was suspended which says that he administered, it shall be presumed that the trainer administered the drug to the horse with the intent to affect the speed or outcome of a horse race. In addition, it says that upon the mere finding of the presence of a drug in a horse's system, there is a presumption that it was given to the horse within 48 hours of his race. Now, how anyone could rebut those presumptions behind me since we have never seen the sample. We were never confronted by the sample that was taken from the horse.
Warren E. Burger: Did you ask for it in an administrative hearing?
Joseph A. Faraldo: It's never given, Your Honor. The entire -- excuse me.
Warren E. Burger: Did you ask for it?
Joseph A. Faraldo: No, we did not ask for it.
Warren E. Burger: Well then you can't complain about not getting it, can you?
Joseph A. Faraldo: Well, we're not aware of the fact that they were going to suspend my client without any type of a hearing whatsoever at that point in time. They led us to believe that they were continuing some sort of investigation and then in the latter part of the week we were hit with the notice of suspension. We never sought or were confronted with how the sample was taken, what the analysis show.
Warren E. Burger: But going into an administrative hearing, you would have been able to challenge that right away, would you not?
Joseph A. Faraldo: That is correct, Your Honor. But at that point in time, I think the administrative remedy is meaningless if there is no stay and while there has been an illusion made to this Court that they do posses the discretion to grant a stay --
Warren E. Burger: Did you say that various -- very rapidly that how are we to know now but if you would ask for the administrative hearing that the statute provides for that you might not had your man cleared then there never would have been any lawsuit.
Joseph A. Faraldo: Well, Your Honor, since I stop grooming horses and became a lawyer, I've never seen one instance where a stay was granted by this Board. After this case, this particular case was argued before the Honorable Mr. Justice Goettel in the District Court seeking the convocation of a three-judge court. I had a client suspended for 15 days. I requested a stay in that case that is then your case which my brother makes reference to, the stay was refused. They did say to me on that occasion, we will give you a prompt hearing but if there is no stay and then you all had a 15-day suspension identical to Barchi and the question would be moved. They're not providing my client with an opportunity -- for a meaningful opportunity to be heard in a meaningful time and that's all I ask for. That was not given to Barchi, I agree we did not asked and then when we did asked two days after argument on Barchi, we were flatly refused again. I have represented a number of harness horse trainers. In the record before this Court in May of 1976, five trainers were suspended up at Monticello on the same facts. Proof of the presence of a drug in the system is a suspension to the trainer. Now, they hold out a writ of justice by saying to us, Come, file your notice of appeal within 10 days and we shall promptly schedule you a hearing.? That has never happened. None of the five trainers of Monticello Raceway suspended in May of 1976 and not a single solitary one of them avail themselves of the so-called meaningful opportunity to be heard because this is not a meaningful opportunity.
Warren E. Burger: I'm not sure what that has to do with this case but let me ask you another question, neither of you as far as I observe have cited the case of Securities and Exchange Commission against Sloan which was decided in this Court in May of this year. There, the federal statute in the Securities Act authorized a 10-day suspension summary proceeding for a violation of certain trading provisions and how would you distinguish what New York does here to -- in the racing area from the securities suspension procedure of 10 days.
Joseph A. Faraldo: Well, not having the case before me Your Honor, it makes it pretty difficult. However, there is one thing in Barchi which is very significant and that is a irremediable loss to Mr. Barchi. The fact that different from the cases in this Court such as --
Warren E. Burger: -- suspended from training for 10 days, that's quite of a loss tp him, isn't it, in the stock market?
Joseph A. Faraldo: Yes, I would agree but this bears upon an individual's right to earn a livelihood in the horse racing business as soon as you are suspended as the trainer, the owner automatically loses the purse. If the owner wishes to continue with you, he is banned also from racing. Barchi is banned from racing all throughout the United States of America. He cannot earn his livelihood anywhere. All of the owners that he has accumulated over a course of years as a result of his own expertise in this area are gone. He is stigmatized --
Thurgood Marshall: -- his refusal to ask for a hearing.
Joseph A. Faraldo: Excuse me.
Thurgood Marshall: Isn't a part of that his refusal to ask for a hearing?
Joseph A. Faraldo: I would agree with that if the hearing were meaningful.
Thurgood Marshall: All of this that is going to happen to the rest of his life, he could have --
Joseph A. Faraldo: But Your Honor, if he did ask for the hearing without a provision for a stay given to harness racing licensees while there is one given to thoroughbred racing licensees, then the hearing is meaningless at that point in time.
Thurgood Marshall: Help me with this.(Voice Overlap)
Byron R. White: 15 days. A suspension here is 15 days.
Joseph A. Faraldo: That is correct but during that period of time, Your Honor, these horses --
Byron R. White: I understand that but after the 15 days expired, he is free to practice this free trade again.
Joseph A. Faraldo: Yes he is but during the 15 days, he loses all the owners whose horses have to race during that 15-day period because so long as they employ him as trainer, their horses will not race so he cannot earn a portion of the purse which the trainer gets and once those horses are given to another trainer, it would be like an attorney suspended from the practice of law. He is not going to hold on to his clients during the interim. If it's in the middle of a trial, he has to get himself another attorney.
William H. Rehnquist: But if you want to stay, you're going to have some sort of hearings on the stay aren't you?
Joseph A. Faraldo: A hearing on the issue of the stay?
William H. Rehnquist: Yes. I mean, you say that the invalidity of this rule in statute is that it doesn't allow the commission to grant a stay of the suspension. Well, are you saying that the stay should be automatic?
Joseph A. Faraldo: I'm saying that parallel to Section 401 of the State Administrative Procedure Act that there certainly are instances where stays do not have to be given in emergency situation.
William H. Rehnquist: If there are instances where stays don't have to be given, then there must be some sort of a hearing that the commission would have to hold to decide whether your clients is one of those instances or not. And inevitably, you're going to have a certain lapse of days in there, are you not?
Joseph A. Faraldo: Yeah, I would believe so, yes.
William H. Rehnquist: But you just say 15 is too many.
Joseph A. Faraldo: Well, 15 of course is an irremediable loss to the trainer.
Warren E. Burger: How about 10 -- 10 days?
Joseph A. Faraldo: 10 days will probably work -- 10 days would probably not work as great a detriment but it would come very close because these horses race once a week. So if you lose, 15 days, you're losing two weeks or racing.
Warren E. Burger: What you're really --
Joseph A. Faraldo: -- Your Honors will not tolerate it.
Warren E. Burger: What's you're really arguing is that there can't be any suspension by a summary process.
Joseph A. Faraldo: I'm arguing that from the decision in this case below and from the due process decisions of this Court before where there is no ability for retroactive payments where there is not something that can be restored by a post-termination hearing. I think that due process would require some kind of hearing. What was given to my client was absolutely no hearing. I've heard my brother refer to it as a conference type informal hearing but we were not given at that stage if we had -- if that is indeed what that was any evidence of the positive. We still don't know whether or not this horse had the substance they claim in its system. We have no way of knowing that and if we had been given some kind of hearing maybe we could at least establish that fact.
Byron R. White: What do you think the standard would be in a hearing -- in a pre-suspension hearing or hearing within 48 hours of the suspension? Would the pending some full evidentiary hearing with the standard be simply probable cause to believe? That's all it was in Bell against Burson.
Joseph A. Faraldo: Yeah, I think there would be a question of probable cause to believe sir at the very minimum, yes.
Byron R. White: But that would satisfy, do you think?
Joseph A. Faraldo: I think at the very minimum but I think that in view of the type of injury that is caused --
Byron R. White: Well, I know but in Bell against Burson, probable cause to believe that you've -- that fall to an accident, you lose your driver's license, you may lose your job because you can't get there.
Joseph A. Faraldo: Yes but under the presumptions if the Court accepts the presumptions as a rebuttable presumptions then the probably cause that something was found in the same would end the entire case. Innocence or guilt of the party would not be relevant at that junction.
Thurgood Marshall: Well suppose it showed that he was in the hospital for the past three days?
Joseph A. Faraldo: Under the terms of the rule as interpreted by New York and some other jurisdictions, he would be suspended no matter where he was, no matter what he had to do with it.
Thurgood Marshall: At least he could show that at the hearing.
Joseph A. Faraldo: Well, so long as -- yes, he could show that at a hearing but so long as he was the trainer of the horse he again would be suspended under the interpretation of this statute. Now, my brother has argued that as a matter of cause, these stays are given to trainers and the Board has the power in its discretion to grant stays. I think that was in the response to a question of Mr. Justice Rehnquist. In the cases that I have had with this Board, they have argued vigorously before state courts that the statute absolutely prohibited their granting a stay under any circumstances. They have also argued to the courts of our state that the statute prohibited the courts from issuing a stay.
William H. Rehnquist: What have the state courts responded to those arguments?
Joseph A. Faraldo: In some instances, the state courts have gone along with the argument of the New York State Racing and Wagering Board and refuse to grant any stays.
William H. Rehnquist: What about in the other instance?
Joseph A. Faraldo: In the instances of thoroughbred racing, the stays are commonly granted in New York. And Section 401 of the State Administrative Procedure Act which became effective after this case says that summary suspensions are allowed in instances where there is a finding made that an emergency exists or that the health welfare of society commands a summary suspension. So what we have been given in Barchi by the three-judge court below has now been codified in our state law. My brother makes reference to a case, Gerard v. Barry which applied Section 401 to another racing incident. That case, he notes in his brief was an application by the Appellate Division of that Section to this horse racing industry which was erroneous and he points to the fact to the Court of Appeals that there was an appeal pending in that case to the Court of Appeals. That decision of the Court of Appeals, they have dismissed the application of the attorney general in that Court to construe that statute otherwise.
William H. Rehnquist: Did they have the result of overturning the decision of the Appellate Division?
Joseph A. Faraldo: No, the Appellate Division which went in the same vane as Barchi and the three-judge court below was sustained by the Court of Appeals of the State of New York on the dismissal of this appeal of Gerard v. Barry.
William H. Rehnquist: Was that a construction of the statute?
Joseph A. Faraldo: That was a construction of a statute which has come into existence paralleling the decision of Barchi, Section 401(3) of the State Administrative Procedure Act. And that has been given the official imprimatur or our courts, our highest courts, Court of Appeals.
Byron R. White: So 8022 is no longer in effect?
Joseph A. Faraldo: Excuse me?
Byron R. White: Does the statute involved here is no longer in effect?
Joseph A. Faraldo: No, the statute has not been changed by the New York State Legislature.
Byron R. White: I see.
Joseph A. Faraldo: But Section 401 of the State Administrative Procedure Act which gives the same kind of guarantees that the three-judge constitutional court gave to these licensees has now been the law and has now been made the law in the State of New York.
Byron R. White: Would you suggest it would be unconstitutional of New York simply made trainers liable for the condition of the horse and suspended them without proof of fault?
Joseph A. Faraldo: I believe that in each situation where --
Byron R. White: If a trainer has custody of the horse, the state says if the horse has its proof to have drugs in it, that's the end of the matter, that's the trainer's responsibility.
Joseph A. Faraldo: I think that you have made one assumption in your statement and that is if the trainer had control of the horse.
Byron R. White: Yes.
Joseph A. Faraldo: Had the trainer the exclusive care custody in control of the horse, I have no objection for that.
Byron R. White: Or if the state made in responsible for the exclusive care and custody.
Joseph A. Faraldo: Well, by legislative field, I don't think that they could deprive him of his constitutional rights. In other words, if they establish such a presumption or enacted such a statement of strict liability, they still would have to show some control.
Byron R. White: Of course, I understand that the District Court, it didn't say the presumptions were irrebuttable, it said they were rebuttable.
Joseph A. Faraldo: Yes, I believe --
Byron R. White: Which means that it turns on some kind of fault doesn't it, rather than some absolute liability?
Joseph A. Faraldo: Yes it does but I think that the Section that the court below was taking into consideration was the one that says that the trainer is responsibility and must guide and care for his horse. Upon oral argument when I was asked if that were rebuttable, I myself agreed that that rebuttable presumption but the presumptions that the drug just finding a foreign substance in the horse's urine was administered, raises a presumption that it was administered within 48 hours of a race. I find no rational connection with that on the mere fact of the finding of foreign substance in the horse's urine.
William H. Rehnquist: Mr. Faraldo, my home State of Arizona has a statute that makes the registered owner of an automobile liable for damage caused by anyone operating it unless it's actually stolen and you don't have to show that he loaned it to anybody, you don't have to show that he had anything to do with the operation of it or knowledge of it. Do you think that sort of a statute is unconstitutional?
Joseph A. Faraldo: Well, I think that that has been -- I think that that has dictated to us by insurance considerations and other considerations. It doesn't become then a taking from that individual per se --
William H. Rehnquist: Well --
Joseph A. Faraldo: -- unless Arizona has something other than mandatory insurance.
William H. Rehnquist: Well, Arizona is bombed by the United States Constitution the same way New York is and the same way the District Court that the same Constitution that the District Court was interpreting in this case. Do you think New York can't make a trainer absolutely liable for any horse which he undertakes to train?
Joseph A. Faraldo: No, I do not because I do not see a rational connection with the fact of his control. All of these statutes are strict liability in my opinion based upon the fact that the person who is held liable or responsible has the control or has the control of the thing which caused the injury in a particular case. Now, it maybe a little more remote in the case of an automobile but in the case of a harness racing trainer or any trainer of horses, the facts shows that many people have access, many people have control, many people for whatever reasons can in some way get some substance to a horse. If a trainer slept with his horse for 24 hours a day the dissent in Sandstrom versus California which was a California Supreme Court decision. If he slept with his horse 24 hours a day, I could see a rational basis to do it but it's not within human experience to do such a thing.
Thurgood Marshall: We're dealing with dumping of horses, how would you handle it to prevent it?
Joseph A. Faraldo: Well, I think that the state of the scientific art in the horse racing and chemistry is sufficient enough to place the time of administration within fixed parameters. I believe that within those fixed parameters, a trainer who generally is at or in attendance of his horse during certain periods of time can be held liable upon proof of administration during the period of time when he generally is about and has control of the horse.
Thurgood Marshall: He had to prove that he administered the drug?
Joseph A. Faraldo: No, I think that on that basis, you would --
Thurgood Marshall: Because I have never heard of it --
Joseph A. Faraldo: No.
Thurgood Marshall: -- out in the public to do with that. That maybe something --
Joseph A. Faraldo: I think what you would have to prove is that the drug was apparently administered during a period of time when he had control and/or custody of the horse.
Warren E. Burger: Well, we can't review -- we are not here to review the medical question counsel. I'm sure you know that. This regulation is presumptively valid and we have to assume that it was based on some medical veterinarian's advice. So that's not an issue in this case here.
Joseph A. Faraldo: No but the assumption as far as questions --
Thurgood Marshall: I'm sorry Mr. Faraldo, I ask you the question. Let's regard to it.
Joseph A. Faraldo: The presumption so far as it puts the liability from the mere finding of the substance in the horse's urine I think is part of the case. As a result of the inquiry by Mr. Justice White as to whether or not a probable cause hearing would suffice. I think since the State of New York has established procedures to give a fully judicatory proceeding although not a meaningful time that there is no additional course or expense of burden to the State of New York. In this particular case, they let 18 days go by while they spouse in this Court, the need for summary action. For 18 days, there was no action taken by this Commission in this case.
Byron R. White: They gave you a couple of test or at least one and as far as we know, they investigate it.
Joseph A. Faraldo: And as far as I know, they did absolutely nothing. So far as I know, they asked us if we're to take a polygraph exam and as customary in racing commissions that if a person should fail a polygraph exam, they will hold him responsible and if he does pass a polygraph exam, they will discard the results.
Byron R. White: How did you know -- so what you say you pass the exam, what did they say to you, anything?
Joseph A. Faraldo: They said we pass the exam and if they knew we had nothing to do with it but they insisted on suspending us anyway. They alleged the need to protect the public. I don't see how --
Byron R. White: Is that the part of the record, what they said to you at the time.
Joseph A. Faraldo: Well, in the affidavit of Mr. Dailey which has been alluded to before, there is a statement that when it was not able to be determined who was responsible for this incident, Mr. Barchi was suspended under the basis of the trainers responsibility role. I think that's pretty much a fair quote of his statement.
William J. Brennan, Jr.: Mr. Faraldo, I'm not sure I'm clear about this change in the New York procedure, what do you call it?
Joseph A. Faraldo: The State Administrative Procedure Act sir.
William J. Brennan, Jr.: Now what's the effect of that -- does that mean in the future, 8022 suspensions must be proceeded by a hearing?
Joseph A. Faraldo: Well, what -- yes sir that is an essence to what it means. It means that unless there is a finding that the public welfare or safety is in jeopardy by continuing this licensee --
William J. Brennan, Jr.: Well, help me out this way, suppose that law -- that moment have been in effect when all these happened, what would Mr. Barchi have gotten?
Joseph A. Faraldo: Mr. Barchi would have got a full judicatory hearing prior to the taking.
William J. Brennan, Jr.: When would that have been --
Joseph A. Faraldo: That would have been --
William J. Brennan, Jr.: In the context of this case.
Joseph A. Faraldo: Well, I don't quite understand.
William J. Brennan, Jr.: It would have been before -- there was an 18-day period of investigation before the suspension, wasn't there?
Joseph A. Faraldo: Yes.
William J. Brennan, Jr.: Now, and what would have happened if that amendment had been in effect in this case?
Joseph A. Faraldo: Well, Mr. Barchi would have been given notice of charges and an opportunity to respond --
William J. Brennan, Jr.: Some time in that 18-day period I take it though.
Joseph A. Faraldo: Yes sir.
William J. Brennan, Jr.: Before there was any suspension?
Joseph A. Faraldo: Yes sir.
William J. Brennan, Jr.: There would have been a full judicatory hearing?
Joseph A. Faraldo: That is correct as which is now provided for now but only post termination. It would have been pre-termination. That is the effect of that statute.
Byron R. White: Unless they make a finding.
Joseph A. Faraldo: Unless they make a finding that the public welfare safety or health is in jeopardy by continuing the license of that individual.
William J. Brennan, Jr.: A finding based on what?
Joseph A. Faraldo: That is a question that has not been answered by the New York State Court.
William J. Brennan, Jr.: This finding that I gather, the commission could make without giving you any hearing.
Joseph A. Faraldo: Well, if they could substantiate that then in a court action for a violation under Section 401(3) of the State Administrative Procedure law, I would agree with that, yes sir.
William H. Rehnquist: And all that you ask for here was a declaratory judgment that the then the existing New York procedures were you know unconstitutional?
Joseph A. Faraldo: On the grounds of due process and on the grounds of violating the equal protection of law and I would like to address myself to that issue. The Thoroughbred statute or the statute that governs thoroughbred racing is New York unconsolidated law 7915. It is identical to the language of Section 8022 but in 7915, one very serious sentence is left out and that is pending a full review by the commission. The action of the judges or the agents of the commission shall remain in full force and effect. That section is completely omitted from that which governs thoroughbred racing in the State of New York. Now, while the attorney general argues that they need the summary power while they waited 18 days in this case, the parallel section governing thoroughbred racing to which the state should have the same interest does not contain the statutory prohibition and on that basis in the equal protection argument was made on the grounds that it denied equal protection of law to people engaged in the harness racing. It's the same industry. The only difference is one man sits behind the horse and other sits the top. It's gambling, it's pari-mutuel wagering, it's everything that is involved in thoroughbred racing. To take one class of thoroughbred racing personnel and give them just about the rights that I feel are guaranteed under the Due Process Clause of the United States Constitution and take another group in the same industry with all the same considerations and the same ramifications and say that they should not be given due process of law.
William J. Brennan, Jr.: Well, is it there are some suggestions though that has been corruption around harness racing that is not been through of thoroughbred racing?
Joseph A. Faraldo: The statement made by the attorney general is that in 1954, there were some labor union disruptions or activities at Yonkers Raceway I believe it was or in harness racing in the State of New York. What does has to do with trainers and owners who participated out the race track itself I cannot understand if it had some rational relationship if as they say harness racing were more corrupt than thoroughbred racing then I could see a need for some more severe modes of procedure vis-à-vis harness racing licensees but I don't see a rational connection between what is asserted to be labor union activities in the 1950s and the denial of a hearing to a harness racing trainer. I cannot make that connection. I believe that the equal protection argument is a substantial argument and --
William J. Brennan, Jr.: Your statutes did develop separately, didn't they?
Joseph A. Faraldo: Yes they did and as a matter of fact, the state investigation commission in June of 1976 noted that there were procedural differences which did not have any rational basis and that once the State Racing and Wagering Board was consolidated, in other words, once the harness racing commission and thoroughbred commission were brought under one roof that the New York State Racing and Wagering Board ought to work to alleviate those reference where they appear but there is no factual, there is no factual basis for treating the harness racing personnel different than thoroughbred racing personnel. And I think the equal protection argument is very substantial here.
William J. Brennan, Jr.: I suppose the equal protection doesn't demand identity, does it all the way through. It didn't have some mile differences?
Joseph A. Faraldo: Yes, I would agree with that.
William H. Rehnquist: You don't agree that thoroughbred racing can be distinguished because it's for the improvement of the breed?
Joseph A. Faraldo: No. I'm sorry I cannot. I've been involved in harness racing too long to think that there are any real differences between licensees --
Thurgood Marshall: Well, why don't you do something to breakdown the inference that harness racing horses aren't thoroughbreds?
Joseph A. Faraldo: Excuse me, breakdown the inference that harness racing horses are not thoroughbreds?
Thurgood Marshall: Are not thoroughbreds.
Joseph A. Faraldo: Well, they are not thoroughbreds.
Thurgood Marshall: Why not?
Joseph A. Faraldo: They are different breed altogether. They were developed in this country to do work. They were developed in this country to take people to and from --
Thurgood Marshall: I thought a thoroughbred mentioned knew your mom and your papa.
William J. Brennan, Jr.: I'm a little curiuos. Does Illinois have similar provisions with respect to the client?
Joseph A. Faraldo: In respect to what sir?
William J. Brennan, Jr.: To the racing that declined. Is it the Hambletonian?
Joseph A. Faraldo: The Hambletonian is a Du Quoin and it's under the jurisdiction of the Illinois Racing Board.
William J. Brennan, Jr.: Well, I'm asking. Do you know whether Illinois have statutes or regulations similar to those of New York?
Joseph A. Faraldo: Well, they do not. They have -- as a matter of fact, they have struck down as unconstitutional the strict liability provision holding that in Illinois versus -- Brennan versus Illinois Racing and Wagering Board in 19 -- I believe it's 69 case. Illinois struck it down saying that the only thing that it protects against is something over which the trainer has no opportunity to guard against anyway and has left Illinois with a rule based upon the negligence of the trainer or his actual culpable conduct.
William J. Brennan, Jr.: I think that your New York trainers go to Illinois for the Hambletonian.
Joseph A. Faraldo: Yes we do. Thank you.
Warren E. Burger: Thank you. You have just about one minute left Mr. Hammer.
Lewis F. Powell, Jr.: Mr. Attorney General, before you start. Let me ask you a question about Gerard. You mentioned it and your opponent also mentioned it. I understand that your opponent takes the view that Gerard has held in effect that Section 401(3) of the administrative procedure act and amended 1976 and as construed by the Court in Gerard qualifies 8022 so that the law in New York -- State Law in New York is now in agreement with the decision of the three-judge court in this case.
Robert S. Hammer: I would disagree with that Mr. Justice Powell.
Lewis F. Powell, Jr.: Have I stated his position correctly?
Robert S. Hammer: I believe you have stated counsel's position correctly but I believe he has misconstrued what the New York Court of Appeals did. The New York Court of Appeals simply dismissed an appeal and later denied leave to appeal on procedural grounds. This was a decision of an intermediate appellate court.
Lewis F. Powell, Jr.: The Appellate Division.
Robert S. Hammer: That's correct.
Lewis F. Powell, Jr.: What did the New York Court of Appeals say?
Robert S. Hammer: The New York Court of Appeals were on purely procedural grounds unrelated to the substance of the statute.
Lewis F. Powell, Jr.: Does the opinion make that clear?
Robert S. Hammer: All you have are single orders without any opinion whatever.
Lewis F. Powell, Jr.: But does the order make that clear?
Robert S. Hammer: As a matter of New York jurisprudence, any New York lawyer would understand this that --
William J. Brennan, Jr.: What about us?
Robert S. Hammer: I think it would be clear from the examination of the New York statutes. It would be Article 56 of the New York civil practice law and rules relating to the jurisdiction of the New York Court of Appeals. I think Cohen and Karger powers of the New York Court of Appeals which is somewhat dated but it is the definitive treaties would also make this clear that just as a denial of certiorari is not the --
John Paul Stevens: Mr. General Hammer, would it be true that the decision of the appellate division of the New York Supreme Court was consistent with Mr. Justice Powell's understanding of New York law or suggested understanding?
Robert S. Hammer: No sir. I would have to disagree because in our view, a drugged horse situation would automatically qualify as a ground for summary suspension of a licensee. Even if indeed the New York State Administrative Procedure Act applies and I think there is still a substantial question whether it's a matter of New York law whether the Administrative Procedure Act would apply to this case notwithstanding Gerard.
John Paul Stevens: And that would be your view even if the Appellate Division decision had been by the Court of Appeals rather than the Appellate Division.
Robert S. Hammer: Well, if the Court of Appeals -- if it had been the Court of Appeals, the Court of Appeals is the last word on New York law --
John Paul Stevens: I understand that but --
Robert S. Hammer: -- but this was not.
John Paul Stevens: But you're saying the opinion itself doesn't hold what counsel said it holds.
Robert S. Hammer: The opinion counsel is correct in his summarization of what the appellate division held but this is not we submit what New York law is or should be and this will have --
Lewis F. Powell, Jr.: Because the Appellate Division is not the Court a last resort.
Robert S. Hammer: That is correct, Your Honor.
Lewis F. Powell, Jr.: But it is the court, the highest court of the State of New York which spoke into this issue of state law.
John Paul Stevens: That is correct.
William H. Rehnquist: Well, is it also because the appellate division case did not involve a drugged horse?
Robert S. Hammer: In this case, the appellate division involved the so-called the Gerstein case switching where the veterinarian was ultimately convicted on some violations and in fact sentenced to prison for a year. I would simply say that counsel in his presentation has alluded toward many things which are to hold the record or which really raise the questions of fact. This we feel as we had urged the three-judge court should have held further hearings. Yes, there is a reparable injury perhaps when a trainer is summarily suspended but we would submit Your Honors that the decisions of this Court and more important the rationale of these decisions uphold such a suspension as a matter of due process and we would accordingly urge that the judgment below be reversed.
Warren E. Burger: Thank you gentlemen. The case is submitted. We'll hear arguments next in --