Plaintiff Dr. Galvin is a veterinarian with a racetrack practice. As a result of an incident in which he was observed tubing a horse at the track, the defendant New York Racing Association (NYRA), which runs the three racetracks in New YorkBelmont Park, Aqueduct and Saratoga Springsinstituted proceedings to suspend his permission to practice at those tracks.
NYRA held an administrative hearing and suspended Dr. Galvins permission to practice at the tracks for 60 days. He obtained a stay of that suspension and filed this lawsuit seeking a injunction against the suspension on the grounds his rights to due process of law were violated by lack of notice of the charges made against him.
In this opinion, the U.S. District Court adopts the findings and recommendations of the magistrate who conducted a hearing in this case. The findings are that NYRA violated due process of law by failing to give adequate notice of the charges it was going to try at the hearing. NYRA informed Dr. Galvin that it was trying the tubing incident and other unspecified incidents of misconduct. Accordingly, the District Court entered an order prohibiting the suspension from going into effect pending a new hearing by the NYRA.
On March 27, 1998, plaintiff, Dr. Michael Galvin ("Dr.Galvin"), a professional equine veterinarian specializing in thoroughbred racehorses, was present in Barn 38 at the Belmont Park racetrack, treating horses that were under the supervision of trainer Mitch Friedman ("Friedman"). At that time, George Cary, an investigator for the New York State Racing and Wagering Board, reportedly observed Dr. Galvin 'tubing' [FN1] a horse Cary identified as 'Hip Wolf', presumably for the purpose of improperly administering performance- enhancing drugs. Following an investigation, in April, 1998, the three track officials who supervise Belmont Park, known as the Stewards, suspended Dr. Galvin's license for sixty days, the maximum penalty they could impose. That suspension was stayed, however, pending referral of the matter for review by the Racing and Wagering Board.
FN1. 'Tubing' is the use of a plastic tube inserted through the nostril for the administration of drugs directly into the stomach of a horse.
Defendant New York Racing Association ("NYRA") is a non-profit body organized for the purpose of supervising the three principal racetracks in the state of New York, Belmont Park, Saratoga Springs, and Aqueduct. By letter dated May 6, 1998, NYRA officials informed Dr. Galvin that the NYRA was instituting its own proceedings against him, concerning not only the incident involving 'Hip Wolf' but also previous acts of alleged misconduct.
After a four day hearing that spanned the period from May 9 to May 19, 1998, the NYRA suspended, until the end of 1998, Dr. Galvin's NYRA "credentials", a determination that had the effect of immediately terminating Dr. Galvin's access to all racetracks controlled by the NYRA. Thereafter, on June 8, 1998, Dr. Galvin commenced this proceeding pursuant to 42 U.S.C § 1983. He alleged, in part, that the NYRA and the individual defendants, all of them NYRA officials, had violated his due process rights in the hearing that resulted in the suspension of his NYRA credentials. Upon filing his complaint, he sought preliminary injunctive relief pending the conclusion of the lawsuit, as well as a temporary restraining order. This court denied the application for a temporary restraint, finding the record as of that time insufficient to demonstrate that Dr. Galvin would be irreparably harmed absent relief pending the determination of his motion for a preliminary injunction. The court then referred the preliminary injunction motion to Magistrate Judge Marilyn Dolan Go to conduct an evidentiary hearing and issue a report and recommendation pursuant to 28 U.S.C. § 636(b)(1). After three days of hearings, on August 14, 1998, Judge Go issued her report and recommendation, concluding that the preliminary injunction should issue.
Defendants have submitted extensive objections to virtually all aspects of Judge Go's report. As required by § 636(b)(1), the court now reviews Judge Go's report and recommendation de novo as to all findings of fact and conclusions of law to which timely objection has been made.
The legal requirements for the grant of a preliminary injunction are not disputed. A preliminary injunction will issue only upon a demonstration of "irreparable harm, and 'either (1) a likelihood of success on the merits of [the] case or (2) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in favor [of the moving party].' " Polymer Technology v. Mimran, 37 F.3d 74, 77-78 (2d Cir.1994), quoting Coca-Cola Co. v. Tropicana Prods., Inc., 690 F.2d 312, 314-15 (2d Cir.1982). Finding both irreparable harm and a likelihood of success on the merits, Judge Go did not address the alternate prong of the test for preliminary injunctive relief involving a balance of the hardships. The court has conducted a de novo review of the entire record. For the reasons that follow and, except insofar as otherwise indicated, for the reasons persuasively expressed by Judge Go in her well-reasoned and thorough report, the court adopts Judge Go's recommendation and orders the entry of a preliminary injunction.
I. Irreparable Harm
In concluding that Dr. Galvin would suffer irreparable harm absent preliminary injunctive relief, Judge Go rejected Dr. Galvin's arguments that the denial of constitutional rights per se constituted irreparable harm, Report and Recommendation, at 190-91, and found, rather, that the damage that the NYRA suspension would inflict upon Dr. Galvin's veterinary practice sufficed to constitute irreparable harm. In so doing, she declined to impose the stringent standard governing preliminary injunctions in the context of the termination of employment, applying, rather, the standard that the Second Circuit has adopted in cases "where a party is threatened with the loss of a business." Id. at 190, quoting Tom Doherty Associates, Inc. v. Saban Entertainment, Inc., 60 F.3d 27, 37 (2d Cir.1995). Judge Go explained the rationale underlying the distinction between irreparable injury in the context of termination of employment and in the context of the termination of a business principally on the ground that "a plaintiff subject to adverse action in employment ... has the ability to recover lost income and reinstatement should he prevail. In contrast, a monetary award will not necessarily enable Dr. Galvin to regain his clients and reestablish his practice at NYRA tracks, the profession he has been developing for the past ten years." Report and Recommendation, 191-92.
The NYRA disputes Judge Go's conclusions. It argues that even under the irreparable injury standard applied in the context of the termination of a business, the injury suffered by Dr. Galvin is speculative, and better characterized as lost customers and profits than as the true termination of a business. Defendants' Mem. Of Law, at 14. In any event, the NYRA contends, Dr. Galvin can compensate for any injury from his lost practice on NYRA racetracks by moving his practice to other tracks and servicing horses off- track. Id. at 17. The NYRA also seeks to distinguish those authorities defining irreparable injury in the context of loss of a business. It urges that Dr. Galvin's flexibility and mobility make his situation analogous to that of an employee who has been removed from his position, rendering applicable the more stringent irreparable injury standard for granting a preliminary injunction. Id. at 18-22. Finally, the NYRA disputes that Dr. Galvin will in fact suffer lasting harm as a result of the seven month NYRA suspension. Id. at 22-25.
The courts of this circuit have generally found that the loss of an individual's opportunity to practice his trade in a particular position, typically, in the employer-employee context, does not present 'irreparable harm', see, e.g., Shady v. Tyson, 5 F.Supp.2d 102 (E.D.N.Y.1998), but that the termination of most or all of a business is 'irreparable harm'. See, e.g., Roso-Lino Beverage Distributors, Inc. v. The Coca-Cola Bottling Company of New York, Inc., 749 F.2d 124 (2d Cir.1984). The initial question posed is thus whether the suspension of Dr. Galvin's credentials, and consequently his inability to practice at NYRA-operated tracks, is better characterized as the loss of an employment opportunity, as defendants argue, or as the termination of a business, as Judge Go concluded.
It is undisputed that Dr. Galvin is not an employee of NYRA, nor is the NYRA a 'supplier' of a 'product' to Dr. Galvin. Rather, by giving credentials to Dr. Galvin, the NYRA acts as a regulatory body, providing him with an opportunity to ply his trade. No business relationship as such exists between Dr. Galvin and the NYRA.
As noted, the NYRA contends that Dr. Galvin's practice is not analogous to that of the businesses to which the more lenient standard of irreparable injury has been applied. The NYRA asserts that because Dr. Galvin's operation is not "stationary" but rather operates "from his vehicle", he is "capable of conducting his veterinary practice anywhere." Defendants' Mem. Of Law, at 16- 17. The distinction the NYRA would draw is without legal import. The irreparable harm inquiry as applied by this circuit addresses the actual injury to the movant's business--a factor affected minimally, if at all, by the mobility of that business.
The NYRA's argument that Dr. Galvin's suspension is more akin to the loss of employment is similarly specious. Defendants' Mem. Of Law, 18. As Judge Go found, Report and Recommendation, 190-91, the key distinction between the termination of an employment relation and the termination of a fundamental business relationship is the effectiveness of a permanent injunction in returning the respective plaintiffs to the status quo ante. An unlawfully discharged employee can be reinstated and given money damages to remedy the loss of wages during the period of unemployment. A business that has been disrupted by the illegal termination of a critical contract, however, cannot so easily be returned to its previous status. The great difficulty in calculating exactly what has been lost, in terms of the value of the business as a going concern and the goodwill it has developed, makes equitable relief appropriate.
For this reason, the loss of Dr. Galvin's livelihood is appropriately judged by the business termination standard, and the irreparable harm requirement will be satisfied, if, in fact, his suspension during the pendency of this case will destroy or seriously disrupt his practice as a veterinarian specializing in thoroughbred racehorses.
In order to demonstrate irreparable injury under the business termination standard, the lost business relationship must be one that was vital to the continuation of the business. "Where the availability of a product is essential to the life of the business or increases the business of the plaintiff beyond sales of the product--for example, by attracting customers who make purchases of other goods while buying the product in question--the damages caused by loss of the product will be far more difficult to quantify than where sales of one of many products is the sole loss. In such cases, injunctive relief is appropriate." Tom Doherty Associates, Inc. v. Saban Entertainment, 60 F.3d 27, 38 (2d Cir.1995).
The total loss of a business clearly constitutes irreparable injury. Semmes Motors, Inc. v. Ford Motor Co., 429 F.2d 1197 (2d Cir.1970) (withdrawal of Ford franchise from company that sold only Ford automobiles); Roso-Lino Beverage Distributors, Inc. v. Coca-Cola Bottling Co. of New York, Inc., 749 F.2d 124 (2d Cir.1984) (withdrawal of Coca-Cola franchise from company that only bottled Coca-Cola products). But the loss of business need not be total, so long as it is so great as to seriously compromise the company's ability to continue in its current form. The risk that a company's customers would turn to competitors who stocked a market- dominating product created the potential for injury which could not be rectified by money damages and thus constituted "irreparable harm". Jacobson & Company v. Armstrong Cork Co., 548 F.2d 438, 444-45 (2d Cir.1977). However, when the product whose distribution is to be terminated represents only a small, and non-critical, fraction of the plaintiff's business, then no "irreparable harm" is threatened, and no injunction will issue. Jack Kahn Music Co., Inc. v. Baldwin Piano & Organ Co., 604 F.2d 755, 763 (2d Cir.1979) (loss of Baldwin piano line not irreparable when it neither constituted bulk of plaintiff's business nor was core attraction to potential customers); accord P. J. Grady, Inc. v. General Motors Co., 472 F.Supp. 35, 37 (E.D.N.Y.1979) (termination of Buick dealership not irreparable harm when plaintiff still operated Chevrolet dealership).
The NYRA disputes that the suspension of Dr. Galvin's suspension will cause significant harm to his business. The NYRA argues that "Judge Go's conclusion that Dr. Galvin's veterinary practice has been 'effectively destroyed' by the suspension (Report at 30) is simply not supported by the record[,]" because Dr. Galvin "failed to name a single client who has been, or imminently will be, lost due to his suspension." Defendants' Mem. Of Law, 20- 21. These NYRA arguments mischaracterize the record. In fact, the uncontradicted testimony at the hearing before Judge Go demonstrated both the injury that the suspension of Dr. Galvin's NYRA credentials will inflict upon his current practice and the significant difficulty he would confront in rebuilding a similar practice during or after the suspension.
Three veterinarians, including Dr. Galvin, testified before Judge Go concerning the effect that the NYRA suspension would have on Dr. Galvin's practice. Dr. Belden, an experienced equine veterinarian, testified that, in 1982, he had closed his private practice for eight months while serving as the chief veterinarian of the NYRA. Hearing Tr. 59. According to Dr. Belden, during the eight month hiatus from private practice, his clients moved permanently to other veterinarians. Hearing Tr. 60. Turning to Dr. Galvin's suspension, Dr. Belden opined, based on lengthy experience in the field, that Dr. Galvin's clients too would use other veterinarians during his suspension, and that it would be difficult, if not impossible, to recover that lost business following the suspension Hearing Tr. 65. Testifying as to the stigmatizing effect of the loss of NYRA credentials, Dr. Belden stated that "if you're a racetrack veterinarian, you lose your badge to the racetrack, substantially you're out of business .... in a very, very short period of time his [Dr. Galvin's] practice will be history." Hearing Tr. 64. In short, it was Dr. Belden's opinion that the likely effect of the NYRA suspension would be that Dr. Galvin's practice would be "completely destroyed." Hearing Tr. 76.
Dr. Belden also explained the difficulties confronted in building a practice in a related field:
Q And is it a career change when you have--when you've built up a thoroughbred practice, would it be a career charge to go into the standardbred industry?
A In two respects, yes. Certainly the rules of racing and the conduct of practice are different or very different, and that's not an insurmountable obstacle. The difficult obstacles are the acquisition really of clients, and that's-- any time you come into a new community, particularly a closed community like a racetrack, there are a finite number of--finite number of patients and a finite number of clients, and assuming that the veterinary community is near saturation, it's going to be very, very difficult to carve a substantial practice in a situation like that without having something extraordinary.
Hearing Tr. 91-92.
Dr. Nixon, an equine surgeon at Cornell University, testified that "[h]is [Dr. Galvin's] practice here on these tracks I think will be harmed for a considerable period of time." Hearing Tr. 118-119. As to the stigma associated with a NYRA ban, Dr. Nixon attested that "[i]f there is any evidence at all, even a suspicion, a rumor that someone is not following the rules, people will look elsewhere for their veterinary help, and there are a lot of veterinarians on these tracks." Hearing Tr. 118.
Dr. Galvin testified that in the week before the suspension went into effect, he treated between three hundred and three hundred and fifty horses. In the week immediately after the suspension, he treated eleven horses. Hearing Tr. 378. Dr. Galvin attested that he worked almost exclusively at NYRA tracks, and that only occasionally would he treat horses off-track. Hearing Tr. 381. He testified that "98 percent" of his veterinary work took place on NYRA-operated tracks. Hearing Tr. 382. As to the effect of the suspension on his practice, he explained, "the veterinary practice and me professionally, I will be ruined in this line of medicine." Hearing Tr. 390.
Defendants' characterization of this evidence as "speculative" and "anecdotal" is groundless. Defendants' Mem. Of Law, 23. Each of the veterinarians who testified before Judge Go had many years of experience practicing as an equine veterinarian in the State of New York. While predictions of future business are by definition opinions, nothing in the record suggests that this uncontradicted testimony was not credible or factually accurate. Because Dr. Galvin has demonstrated that his equine veterinary practice will be substantially damaged, if not destroyed, during the pendency of this lawsuit, he has satisfied the irreparable injury prong of the preliminary injunction standard.
II. The Existence Of A Property Interest Protected By Due Process
Procedural due process generally requires "notice and opportunity to be heard prior to the deprivation of a property interest." United States v. Monsanto, 924 F.2d 1186, 1192 (2d Cir.1991). The Fourteenth Amendment, however, does not by itself create a property interest. Sanitation and Recycling Industry, Inc. v. City of New York, 928 F.Supp. 407, 419 (S.D.N.Y.1996) (citation omitted). Rather, the property interests protected by the Due Process Clause of the Fourteenth Amendment are defined by "existing rules or understandings that stem from an independent source such as state law." Board of Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548 (1972). The parties do not dispute the legal standards governing the creation of a legally protected property interests, but they do dispute whether Dr. Galvin has a property interest that has been affected in this case.
Judge Go found that the suspension of Dr. Galvin's NYRA credentials infringed a property interest protected by New York state law, and that, as a consequence, the NYRA could not suspend those credentials without affording due process. Report and Recommendation, 34. In so holding, Judge Go relied upon the determination of the New York Court of Appeals in Jacobson v. New York Racing Ass'n, Inc., 33 N.Y.2d 144, 149-150, 350 N.Y.S.2d 639, 642, 305 N.E.2d 765 (1973) that: "Given NYRA's 'virtual monopoly power over thoroughbred racing in the State of New York,' its decision to exclude a licensee from its tracks 'is tantamount to barring [the licensees] from the only places in the State where he may ply his trade ...' ". Report and Recommendation, 192. As in Jacobson, Judge Go found Dr. Galvin's exclusion from all NYRA premises tantamount to a termination of Dr. Galvin's interest in his New York Racing and Wagering Board License, concededly a protected property interest. Id.
The NYRA objects to Judge Go's findings on two principal grounds. First, the NYRA argues that Judge Go failed adequately to distinguish between the credentials issued by the NYRA, which it contends are not constitutionally protected property interests, and the licenses issued by the New York State Racing and Wagering Board. Defendants' Mem. Of Law, 27-28. Unlike the licenses issued by the New York State Racing and Wagering Board, defendants argue, "the NYRA's discretionary authority to ban or permit access to its private racetracks is unfettered by rules or regulations." Defendants' Mem. Of Law, 28. Because the NYRA is bound by no rules or regulations, the argument continues, Dr. Galvin has no entitlement to NYRA credentials, and hence, no property interest in them. Defendants' Mem. Of Law, 29.
The NYRA also objects to Judge Go's conclusion by attempting to distinguish the two leading New York Court of Appeals cases addressing NYRA credentials, Jacobson v. New York Racing, Ass'n, Inc., 33 N.Y.2d 144, 350 N.Y.S.2d 639, 305 N.E.2d 765 (1973) and Saumell v. New York Racing Ass'n, Inc., 58 N.Y.2d 231, 460 N.Y.S.2d 763, 447 N.E.2d 706 (1983). According to the NYRA: "In contrast to the plaintiffs in Jacobson and Saumell, Dr. Galvin and many other individuals licensed by the Board engage in professions that are not specific to thoroughbred racing." Defendants' Mem. Of Law, 32. Because Dr. Galvin, the NYRA argues, unlike a trainer or jockey, can practice in places other than NYRA-operated racetracks, the "restriction can in no way be said to deny plaintiff the ability to 'ply his trade'." Defendants' Mem. Of Law, 33.
The court finds NYRA's objections to Judge Go's conclusion unpersuasive. As to the NYRA's first argument, the courts of New York have consistently found that the suspension of NYRA credentials implicates property interests, specifically the interests of holders of New York State Racing and Wagering Board occupational licenses in continuing to enjoy the use of those licenses. See 9 NYRCRR § 4002.1. The state courts have interpreted the Racing, Wagering and Breeding Law to mean that "[a] license, for any aspect of the racing business, including petitioner's ... may only be revoked for cause, and then only after a hearing. (Racing, Pari-Mutuel Wagering and Breeding Law § 213(2), (3) 9 NYCRR §§ 4002.9, 4002.10)[.]" Murphy v. New York Racing Ass'n, Inc., 138 Misc.2d 735, 525 N.Y.S.2d 548, 551 (1988). "Thus 'state law has engendered a clear expectation of continued enjoyment of a license absent proof of culpable conduct,' and has created a property interest in the license." Id., quoting Barry v. Barchi, 443 U.S. 55, 64 n. 11, 99 S.Ct. 2642, 2649 n. 11, 61 L.Ed.2d 365 (1979). The property interest in these state-issued licenses cannot be infringed by a state body, including the NYRA, without affording due process of law. Id.
As to the NYRA's second objection, the court finds persuasive the reasoning and conclusion of the New York Supreme Court in Murphy:
The fact that petitioner may in theory be able to pursue his trade [as a farrier] without access to respondent's [the NYRA's] property also does not sufficiently distinguish this case from Saumell to obviate the need for a hearing. Petitioner claims to have done most, if not all, of his work on- track. Clearly, to bar him from the track effectively denies him access to his customers, and viewed from the standpoint of fact, and not theory, prevents him from working. This aside, Saumell itself did not rely on the jockey's need for track access in order to find a property right in his license.... It is this property interest, which, when coupled with the respondent's 'state action' ... entitles the petitioner to a hearing.
Murphy, 525 N.Y.S.2d at 551 (emphasis added) (holding that farrier's property interest was affected by the suspension of his NYRA credentials). The court agrees with Judge Go, and finds that, by suspending Dr. Galvin's NYRA credentials, defendants have effectively deprived Dr. Galvin of a protected property interest, the use of his New York Racing and Wagering Board occupational license, and that the proceedings resulting in such a deprivation thus should have complied with due process. Barry v. Barchi, 443 U.S. 55, 64 n. 11, 99 S.Ct. 2642, 2649 n. 11, 61 L.Ed.2d 365 (1979).
III. The Constitutional Adequacy Of The Process Afforded Dr. Galvin
The parties do not dispute the fundamental principles of due process. The essence of due process is that "a deprivation of life, liberty or property 'be preceded by notice and opportunity for hearing appropriate to the nature of the case.' " Cleveland Board of Ed. v. Loudermill, 470 U.S. 532, 542, 105 S.Ct. 1487, 1493, 84 L.Ed.2d 494 (1985), quoting Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 313, 70 S.Ct. 652, 656, 94 L.Ed. 865 (1950). This principle requires that there be "some kind of ... hearing" prior to the termination of a legally cognizable property interest. Board of Regents v. Roth, 408 U.S. 564, 569-570, 92 S.Ct. 2701, 2705, 33 L.Ed.2d 548 (1972). But, "due process is flexible and calls for such procedural protections as the particular situation demands." Morrissey v. Brewer, 408 U.S. 471, 481, 92 S.Ct. 2593, 2600, 33 L.Ed.2d 484 (1972). The amount of process that is due is dependent on the relative strengths of the interests involved:
First, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government's interest, including the function involved and the fiscal and administrative burdens that the additional or substitute requirement would entail.
Mathews v. Eldridge, 424 U.S. 319, 324, 96 S.Ct. 893, 905, 47 L.Ed.2d 18 (1976).
Judge Go found plaintiff likely to succeed on the merits of his claim that the NYRA failed to comply with the requirements of due process when it suspended his NYRA credentials, in part because the NYRA did not give Dr. Galvin sufficient notice to prepare a defense against its allegations of misconduct. Applying the three Mathews factors, Judge Go found that "Dr. Galvin's interests in being able to make a full presentation of his defense clearly outweighed the NYRA's interest in speedy resolution of the matter," Report and Recommendation, 192, and that the three day notice that the NYRA provided to Dr. Galvin to prepare for the suspension hearing was "woefully inadequate[.]" Id. at 193. Judge Go also found that this procedural deprivation was exacerbated not only by the NYRA's refusal to permit Dr. Galvin to submit post-hearing submissions, Id. at 194, but also by the lack of specificity of the charges in the May 6 notice. Id.
The NYRA disputes these findings, arguing that its substantial interest in preserving the integrity of racing justified the short notice given to Dr. Galvin. Defendants' Mem. Of Law, 38. Further, the NYRA argues that even if the three day preparation period provided to Dr. Galvin was itself inadequate, the length of the hearings, comprising twenty five hours of testimony over a ten day period, afforded him ample time to prepare a defense. Id. at 195. As to Judge Go's finding concerning the lack of specificity of the notice, the NYRA advances two contentions. First, the NYRA argues that the Stewards' earlier investigation into the March 27, 1998 Hip Wolf incident alerted Dr. Galvin to the misconduct with which he was being charged. Id. at 196. Second, the NYRA asserts its May 6, 1998 letter satisfied the notice requirement of due process, because "due process [does not] require a full particularization if all of the charges, ... [but] need only reasonably convey the information required for a party to make an appearance on his or her behalf." Id. at 196.
The notice delivered to Dr. Galvin on May 6, 1998, informed him that the NYRA suspension hearing would be held on May 9, 1998 at 9:00 a.m. NYRA Hrg.Exh. 1. As to the charges that the NYRA was pursuing against him, Dr. Galvin was told:
The New York Racing Association Inc. ("NYRA") is currently investigating an incident at its Belmont Park Racetrack on March 27, 1998 involving the filly Hip Wolf, which it believes may have a detrimental impact on the integrity of racing.
Further, we have and continue to investigate other of your veterinary activities at NYRA's racetracks.
Id. By letter dated the next day, May 7, 1998, Dr. Galvin's counsel, Karen Murphy ("Murphy"), requested an adjournment to allow her time to prepare a defense against what she described as the "as-yet-unspecified charges." Tr.Exh. 3; NYRA Hrg.Exh. A at 1. In the same letter, Murphy requested a particularization of the charges being brought against Dr. Galvin, as well as discovery of materials to assist her in the preparation of a defense. Id. at 2. On May 8, 1998, the day before the scheduled hearing, Martin Lieberman, counsel for the NYRA, denied the requested adjournment in a letter that failed to address Murphy's request for specification of the charges. At the outset of the NYRA hearing on May 9, Murphy twice reiterated her request for an adjournment; both requests were denied. NYRA Hrg. 20-21; 129. Most significantly, on numerous occasions during the hearings, Murphy precisely detailed how the lack of advance notice of the specific charges against Dr. Galvin had hampered her ability to prepare a defense. NYRA Hrg. 9-15; 122- 133; 140-141; 257-258; 263; 415; 424; 683; 726; 1005.
Judge Go found this notice inadequate because it failed to give Dr. Galvin either adequate time or adequate information to prepare a defense. Report and Recommendation, 193-94. The NYRA objects to these findings. Relying on Plaza Health Laboratories, Inc. v. Perales, 878 F.2d 577, 582-83 (2d Cir.1989), the NYRA argues that the investigation carried out by the Stewards concerning Dr. Galvin's treatment of the horse Hip Wolf on March 27, 1998, and the sixty day suspension imposed on Dr. Galvin by the Stewards on April 29, 1998, was more than sufficient to notify Dr. Galvin of the subject matter of the NYRA's own disciplinary hearing. Defendants' Mem. Of Law, 42-43.
The NYRA's reliance on Plaza Health Laboratories is misplaced. Insofar as the hearings that commenced on May 9, 1998 addressed the treatment of Hip Wolf on March 27, 1998, the notice in the NYRA's own letter may have been sufficient, under all the circumstances, to give Dr. Galvin adequate notice of the charges against him. However, there was no contemporaneous inquiry into any other past misconduct of Dr. Galvin apart from the investigation being conducted by the NYRA itself. This is particularly significant because there was substantial evidence adduced against Dr. Galvin at the NYRA hearing unrelated to the Hip Wolf incident. This evidence, consisting of numerous investigations and reports of Dr. Galvin's veterinary practice over the past seven years formed, at least in part, the basis of the panel's decision to suspend his credentials. [FN2] Though Dr. Galvin should have been informed of these charges in advance of the hearing, nothing other than the NYRA's own letter could have provided the essential notice. NYRA's notice, however, advised only that the hearing would concern "other of your veterinary activities at NYRA's racetracks." NYRA Hrg.Exh. 1.
FN2. The NYRA panel's ultimate decision in Dr. Galvin's case was based upon "all of the evidence presented [at the hearing]", Tr.Exh. 6, including the evidence as to Dr. Galvin's misconduct apart from his treatment of Hip Wolf on March 27, 1998. See also NYRA Hearing, at 7-9 (opening remarks of NYRA counsel). When asked at the preliminary injunction hearing why the NYRA panel had chosen to suspend Dr. Galvin's credentials, Terence Meyocks, the president of the NYRA and the chairman of the panel, testified: "He tubed a horse; he injected a horse when he shouldn't have been injected. He tubed previous other horses. He mentioned he tubed, I mean, milkshaked a horse called Head Trip previously. He done a lot of things in there that he shouldn't have been doing." Hearing Tr. 159.
The NYRA counters that Dr. Galvin's knowledge of his own past practices sufficed to convey 'notice' of these charges. Defendants' Mem. Of Law, 45. The law, however, is otherwise: "One cannot assume an accused is guilty, with knowledge of his own dereliction. Although the framer of these charges may well have had specific incidents in mind, as written they did not give Gleason the information needed to conduct a meaningful investigation and prepare a defense." Gleason v. Chain Service Restaurant, 422 F.2d 342, 343 (2d Cir.1970) (per curiam). [FN3]
FN3. Defendant's dismissal of Gleason as pertaining to the Labor Management Reporting and Disclosure Act of 1959 ignores that, in its opinion, the Second Circuit specifically identifies the interests at stake as "the fundamental notions of due process". Gleason, at 343.
The adequacy of notice in this case thus turns on whether the statement, "Further, we have and continue to investigate [sic] other of your veterinary activities at NYRA's racetracks[,]" made three days before the scheduled hearing, met the requirements of due process, given the particular circumstances of Dr. Galvin's NYRA hearing.
"Notice, to comply with due process requirements, must be given sufficiently in advance of scheduled court proceedings so that reasonable opportunity to prepare will be afforded and it must 'set forth the alleged misconduct with particularity.' " In re Gault, 387 U.S. 1, 33, 87 S.Ct. 1428, 1446, 18 L.Ed.2d 527 (1967). The particularity with which alleged misconduct must be described varies with the facts and circumstances of the individual case. "In most cases, due process notice contemplates accusations of specific acts or patterns of conduct unequivocally identified rather than general charges relating to attitudes and behavior patterns unsupported by specific factual allegations." Wagner v. Little Rock School Dist., 373 F.Supp. 876, 883 (W.D.Ark.1973). The exact evidence to be presented need not be included in the notice, so long as the allegations are sufficient to alert the accused to the misconduct with which he is being charged. Patterson v. Ramsey, 413 F.Supp. 523, 536 (D.Md.1976) (citations omitted).
The specificity and timing of adequate notice also varies with the importance of the interests at stake. See, e.g., Goss v. Lopez, 419 U.S. 565, 582, 95 S.Ct. 729, 740, 42 L.Ed.2d 725 (1975) ('notice' may be contemporaneous with hearing for public school disciplinary infractions); Wolff v. McDonnell, 418 U.S. 539, 564, 94 S.Ct. 2963, 2978, 41 L.Ed.2d 935 (1974) (at least twenty four hours notice required for hearing as to prisoner's loss of good-time credit); In re Gault, 387 U.S. 1, 31, 87 S.Ct. 1428, 1445, 18 L.Ed.2d 527 (1967) (some notice must given prior to juvenile delinquency proceedings); Crook v. Baker, 813 F.2d 88, 97 (6th Cir.1987) (written notice of specific charges three months prior to hearing for withdrawing of academic degree was adequate); Patterson v. Ramsey, 413 F.Supp. 523, 537 (D.Md.1976) (specific written notice of charges thirty days before hearing for termination of school superintendent adequate); Nelson v. Diversified Collection Services, Inc., 961 F.Supp. 863, 868 (D.Md.1997) (mailing of notice thirty days before garnishment adequate notice for collection of defaulted student loans).
The interest at stake in Dr. Galvin's NYRA hearing has already been identified: if his NYRA credentials are suspended, Dr. Galvin will lose his practice. The interest in the practice of one's chosen profession is "substantial[.]" Barry v. Barchi, 443 U.S. 55, 64, 99 S.Ct. 2642, 2649, 61 L.Ed.2d 365 (1979). Though the NYRA is correct that it too has a strong interest, that of preserving the integrity of racing, Lindemann v. American Horse Shows Ass'n, 164 Misc.2d 937, 955, 624 N.Y.S.2d 723, 734 (1994), an interest that may require swift action, Gilmour v. New York State Racing and Wagering Board, 405 F.Supp. 458, 461 (S.D.N.Y.1975) (Weinfeld, J.), the NYRA's contention that the seriousness of Dr. Galvin's alleged misconduct necessitated swift action here is not persuasive. Defendants' Mem. Of Law, 40. Indeed, the claim is flatly belied by the six weeks of delay between the event immediately precipitating the NYRA action, the alleged 'milkshaking' of the horse Hip Wolf on March 27, 1998, and the notice of the hearing the NYRA delivered to Dr. Galvin on May 6, 1998.
As noted, the inadequacy of the notice is most blatant with regard to Dr. Galvin's alleged misconduct prior to the March 27, 1998 'milkshaking' incident. John Tierney, the Director of Security for the NYRA, testified that Dr. Galvin had twice been sanctioned by the barn area violations panel, once for an incident that occurred on September 3, 1993, and subsequently, for an incident that occurred in March of 1994. NYRA Hearing, 51-52. Through Tierney, the NYRA offered into evidence NYRA investigative reports prepared prior to Tierney's tenure as a Security Director concerning a September 22, 1994 incident involving a horse named Mr. Baba. NYRA Hearing, 52-65. The report, which was accepted into evidence, contains allegations of nine previous incidents, dating from January, 1991, to March, 1994, involving potential violations of NYRA rules by Dr. Galvin ("Tierney Report"). [FN4] NYRA Hearing, Exh. 3. Additionally, an investigator for the Thoroughbred Racing Protective Bureau, Peter Lang, testified to seven incidents of alleged misconduct involving Dr. Galvin dating from January 7, 1998 to March 6, 1998. NYRA Hrg. 242-256. His report, which was also admitted into evidence, contained additional allegations regarding eight other incidents of alleged misconduct by Dr. Galvin, dating from July, 1992 to June 7, 1995 ("Lang Report"). NYRA Hearing, Exh. 9. [FN5]
FN4. This exhibit is actually an amalgamation of eight NYRA Investigation Reports, one interoffice memorandum and one witness affidavit. Two of the incidents described in these reports, indicated as occurring in September, 1993 and March, 1994, are apparently the same ones that John Tierney described in his testimony.
FN5. Some uncertain number of the incidents described in the Tierney Report overlap with those described in the Lang Report.
Although the NYRA argues that any deficiency in its initial notice was cured by the lengthy hearings, ("[T]here can be no doubt that NYRA's full evidentiary pre-deprivation hearing, extending 25 hours over four days in a ten day period and including oral and written testimony and cross-examination, provided plaintiff with all the process he was due under any circumstances." Defendants' Mem. Of Law, 40), a thorough examination of the NYRA hearing transcript proves otherwise. The transcript demonstrates the numerous difficulties that the ambiguous and precipitate notice created for Murphy. The Tierney Report was not made available to her until the hearing, on May 9, 1998, giving her at most ten days to prepare a defense to the misconduct described in it before the hearing ended on May 19. The Lang Report similarly was made available to her three days later, on May 12, 1998, leaving her only seven days to prepare a response. The defendants' bald assertion that "[t]he conduct of the NYRA hearing ... provided plaintiff with an appropriate and fair opportunity to present his case," Defendants' Mem. Of Law, 46, is unconvincing.
Seven or nine days to prepare a defense against at least twelve separate charges of misconduct occurring over seven years is clearly insufficient. In that time, Murphy could not have performed a background investigation into these allegations of misconduct, much less located and prepared witnesses for the hearing. The difficulty of mounting an adequate defense caused by this short notice was aggravated by the vague descriptions of some of the incidents. For example, one incident report reads in its entirety as follows: "September, 1992--Found inside a stall with a horse that was scheduled to race that day under circumstances which indicated he was about to 'milkshake' the horse." NYRA Hrg.Exh. 3. [FN6]
FN6. The use of this type of written evidence is itself problematic. "Particularly where credibility and veracity are at issue ... written submissions are a wholly unsatisfactory basis for decision." Goldberg v. Kelly, 397 U.S. 254, 269, 90 S.Ct. 1011, 1021, 25 L.Ed.2d 287 (1970). Many of the incident descriptions in the Tierney Report do not even indicate whether they were the result of personal observation by NYRA investigators or were simply records of racetrack gossip and innuendo.
These difficulties were further compounded by the absence of opportunity for effective cross-examination as to the incidents described in the Tierney and Lang Reports. Tierney testified that all of the incidents described in the Tierney Report predated his employment at the NYRA, which began in April of 1996. NYRA Hrg. 54. Indeed, NYRA counsel argued that Tierney was competent to submit the report solely as a custodian of the NYRA investigative records. NYRA Hrg. 61-62. The Lang Report presented similar difficulties for Murphy. Investigator Lang admitted that he had no personal knowledge of any of the incidents described in that report that occurred prior to 1998. NYRA Hrg. 568. The NYRA panel, in fact, barred Murphy from cross-examination of Lang as to any of the incidents in the Lang Report which Lang had not personally observed, although it allowed the descriptions of these incidents to be admitted into evidence. In ruling the entire report admissible, Terence Meyocks, chairman of the panel, explained: "Many of these incidents were from the NYRA investigations, so we will accept it for our decision making." NYRA Hrg. 577.
"In almost every setting where important decisions turn on questions of fact, due process requires the opportunity to confront and cross- examine adverse witnesses." Goldberg v. Kelly, 397 U.S. 254, 269, 90 S.Ct. 1011, 1021, 25 L.Ed.2d 287 (1970). [FN7] The NYRA's failure to present evidence of these prior acts of misconduct through competent witnesses, coupled with the panel's reliance on the Lang Report notwithstanding its infirmities, deprived the defense of effective cross-examination. The combination of the short time Murphy was given to prepare a defense to charges that were wholly unknown to her prior to the hearing, and the lack of effective cross- examination due to the NYRA's failure to present its investigative reports through competent witnesses, made these allegations of wrongdoing essentially irrebuttable. [FN8] The presentation of evidence in this manner is not consonant with due process.
FN7. Cross-examination is not required in every hearing mandated by due process. Signet Construction Corp. v. Borg, 775 F.2d 486, 490 (2d Cir.1985). The court need not address this issue in this case, however, because cross-examination was permitted to NYRA counsel. Under these circumstances, fundamental fairness required that effective cross- examination also be available to the defense. For this reason, the NYRA cannot rely upon Baden v. Koch, 799 F.2d 825 (2d Cir.1986), as to the appropriateness of decision making based on paper records. Defendants' Mem. Of Law, 47.
FN8. Dr. Galvin did testify in his own defense concerning the incidents described in the Lang Report. NYRA Hrg. 771-809. However such testimony, standing alone, cannot be considered an adequate substitute for the testimony of disinterested witnesses.
The short notice also limited Murphy's ability to call witnesses in Dr. Galvin's defense. At least four potentially key witnesses were not available to Murphy. Although Mitch Friedman ("Friedman"), the trainer who secretly tape-recorded Dr. Galvin talking about the March 27, 1998 incident, testified for the NYRA, Murphy's cross-examination of Friedman was limited to exploring the chain of custody of the tape-recording, and Friedman was not made available to her as a defense witness. NYRA Hrg. 358, 413-414. John Joyce, one of the Stewards who had initially suspended Dr. Galvin's license, also refused to appear as a defense witness. NYRA Hrg. 413-414. [FN9] The failure of these witnesses to appear may have been more a result of the individuals' own reluctance to testify than Murphy's limited time to prepare. The NYRA, however, made no effort to ameliorate the situation by using its influence to encourage the attendance of these witnesses. NYRA Hrg. 437- 438. Moreover, two other witnesses, Leo O'Brien and Gary Sciacca, would likely have testified for the defense had Murphy been provided with sufficient time to secure their attendance at the hearing. The NYRA panel, however, refused to grant Murphy sufficient time to do so, either before or during the hearing. NYRA Hrg. 723, 848-849. [FN10]
FN9. Because it was an informal, administrative hearing, Murphy lacked the power to compel witnesses to attend.
FN10. The court also adopts Judge Go's conclusion that the NYRA further aggravated the difficulties presented by the May 6 notice by denying Murphy the opportunity to submit papers after the conclusion of the hearings. NYRA Hrg. 263.
The NYRA's arguments that any deficiencies in its procedure were counterbalanced by the length of the hearings are completely without merit.
That "[p]laintiff called five witnesses, offered eight exhibits, and created a transcript of 1,031 pages," Defendants' Mem. Of Law, 48, does not insure that Dr. Galvin was afforded a meaningful, as opposed to a lengthy, hearing.
The procedural deficiencies caused by the abrupt and vague notice given to Dr. Galvin on May 6, 1998 themselves satisfy the 'likelihood of success' requirement for a preliminary injunction on Dr. Galvin's procedural due process claim. Applying the Mathews factors, the court is in full agreement with Judge Go that the process the NYRA afforded Dr. Galvin at the suspension hearing was constitutionally insufficient. At relatively little cost or inconvenience, the NYRA could have provided Murphy with copies of the Lang and Tierney Reports sufficiently in advance of the hearing to allow her to summon witnesses and marshal evidence in defense of Dr. Galvin as to the numerous charges they contained. Given the gravity of the penalty imposed, and the substantial risk that the admission of such irrebuttable allegations could have resulted in the erroneous deprivation of Dr. Galvin's NYRA credentials, due process required no less.
Because the court finds that the notice of the NYRA hearing given to Dr. Galvin was inconsistent with the requirements of due process, the court declines to address Judge Go's findings regarding the participation of the NYRA president, Terence Meyocks, on the panel, and the inference of bias that Judge Go drew from events occurring after the NYRA hearing.
ORDERED, that plaintiff's motion for a preliminary injunction be, and the same hereby is, GRANTED; and it is further
ORDERED that the New York Racing Association reinstate Dr. Galvin's NYRA credentials pending the conclusion of this case.
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