Opinion ID: 551485
Heading Depth: 2
Heading Rank: 2

Heading: Close Nexus

Text: 14 While the symbiotic relationship test focuses on the state's overall relationship with the private actor, the close nexus test specifically examines the state's link to the challenged action. See Jackson, 419 U.S. at 351, 95 S.Ct. at 453-54. Hadges does not contend that a State official was directly involved in YRC's denial of Hadges's request. 3 Instead, Hadges offers three other arguments to support his theory. Specifically, Hadges contends that the State's pervasive regulatory control over YRC, the State's alleged delegation, via N.Y.Comp.Codes R. & Regs. tit. 9, Sec. 4119.8 (1985), of its authority to exclude undesirable persons from Yonkers Raceway to YRC, and YRC's sometime monopoly over harness racing in the New York metropolitan area satisfy the close nexus test. We believe that these arguments are untenable because in each instance the State's link to the challenged action is too tenuous to fall within Jackson. 15 In Jackson, Metropolitan Edison (Metropolitan ), a privately-owned utility, terminated Jackson's electricity because plaintiff's account was in arrears. See Jackson, 419 U.S. at 346-47, 95 S.Ct. at 451-52. Plaintiff filed suit pursuant to section 1983 claiming that the termination constituted state action depriving her of property without due process of law. See id. at 347-48, 95 S.Ct. at 451-52. Jackson's state action claim rested on the state's extensive regulation of the utility, the monopoly status that the state had allegedly conferred upon Metropolitan, the essential nature of the utility service, and the state's alleged approval of Metropolitan's termination practice. See id. at 351-55, 95 S.Ct. at 453-56. The Court found that the state's involvement in Metropolitan's affairs was insufficient to create a close nexus between Metropolitan and the state such that the action of the [utility] may be fairly treated as that of the State itself. Id. at 351, 95 S.Ct. at 453. 16 Jackson specifically refutes appellant's contention that the presence of state regulation alone transmutes a private actor's conduct into state action. See id. at 350, 95 S.Ct. at 453. As mentioned above, there is no evidence that a State official participated in YRC's decision to deny Hadges's application. The district court, therefore, correctly distinguished the instant case from Fitzgerald v. Mountain Laurel Racing, Inc., 607 F.2d 589 (3d Cir.1979), cert. denied, 446 U.S. 956, 100 S.Ct. 2927, 64 L.Ed.2d 814 (1980), in which the Third Circuit held that if a State official personally and actively participated in a racetrack's decision to expel a driver, state action existed. Id. at 599. Although YRC's denial of Hadges's application was based in part on the State's suspension of Hadges's license, YRC did not act at the behest of a State official and was not enforcing a violation of State racing law. Thus, the line between the State, as regulator of the harness racing industry, and YRC, as a private corporation acting in what it believed to be its own best interest as well as the best interest of the harness racing industry, remained distinct. As such, appellant's regulatory argument fails under Jackson. See Jackson, 419 U.S. at 350, 95 S.Ct. at 453. 17 Appellant seizes upon Jackson dicta regarding delegation by the state of state power to a private actor as the second ground for his close nexus argument. Specifically, appellant attaches weight to the comment that, [i]f we were dealing with the exercise by Metropolitan of some power delegated to it by the State which is traditionally associated with sovereignty ... our case would be quite a different one. Id. at 352-53, 95 S.Ct. at 454. Hadges argues that, via N.Y.Comp.Codes R. & Regs. tit. 9, Sec. 4119.8 (1985), the State delegated to YRC its authority to exclude undesirable persons from Yonkers Raceway. 18 While declaring that the power to exclude a person for no reason from a privately owned racetrack is clearly a power 'traditionally associated with sovereignity,'  however, appellant produces no evidence to support this conclusory statement. Indeed, section 4119.8, providing that the private owner of a harness racetrack may exclude any person without reason, provided that the exclusion is not based on race, creed, color or national origin, N.Y.Comp.Codes R. & Regs. tit. 9, Sec. 4119.8 (1985), simply codifies the racetrack owner's common law right to exclude undesirable persons from the track. See, e.g., Madden v. Queens County Jockey Club, Inc., 296 N.Y. 249, 72 N.E.2d 697, cert. denied, 332 U.S. 761, 68 S.Ct. 63, 92 L.Ed. 346 (1947); People v. Licata, 28 N.Y.2d 113, 320 N.Y.S.2d 53, 268 N.E.2d 787 (1971). Moreover, this private right is different in kind, nature, and origin from the State Racing Board's power to enforce State racing law through license suspensions. N.Y.Rac. Pari-Mut. Wag. & Breed. Law Sec. 309 (McKinney 1984 & Supp.1990). Appellant's delegation argument thus unsuccessfully attempts to transform a private proprietary right into a State regulatory power. 19 Finally, appellant's last argument--that YRC's alleged monopoly status in the New York metropolitan area satisfies the close nexus test--also lacks merit. As a preliminary matter, we question whether Hadges has produced sufficient evidence to support his allegation that YRC has a monopoly over harness racing in the New York metropolitan area. Leaving aside the Meadowlands operation, there is no indication that the State ever granted or guaranteed YRC such a monopoly. Jackson, 419 U.S. at 351 & n. 8, 95 S.Ct. at 454 & n. 8. 4 While State law limits the number of harness racing licenses that the Racing Board can issue to eight per year, N.Y.Rac. Pari-Mut. Wag. & Breed. Law Sec. 305 (McKinney 1984), the minimal impact of this limit does not confer a monopoly on YRC. See Moose Lodge No. 107, 407 U.S. at 177, 92 S.Ct. at 1973. The existence of the alleged monopoly is therefore dubious at best, and it will be remembered that for many years Yonkers Raceway and Roosevelt Raceway operated in tandem. 20 Even assuming, however, that Hadges has established that YRC holds such a monopoly, this case still would not satisfy the close nexus test. Under Jackson, Hadges must establish a relationship between YRC's actions and its monopoly status. See Jackson, 419 U.S. at 351-52, 95 S.Ct. at 453-54. While Hadges claims that, because of YRC's monopoly status, its denial of his request effectively revoked his license to work at harness racetracks in the State, Hadges offers us no credible evidence supporting such a de facto revocation. 5 Likewise, he produces no evidence of any other link between YRC's denial of his request and its alleged monopoly. Hadges's recipe for a case that meets the close nexus test therefore lacks a basic ingredient--a nexus. See id. at 351, 95 S.Ct. at 453-54. 21 Accordingly, we affirm the judgment of the district court.