ANDREA HILL v. NEW JERSEY RACING COMMISSION

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

ANDREA HILL,

Appellant,

v.

NEW JERSEY RACING

COMMISSION,

Respondent,

_______________________________________

Submitted April 23, 2013 Decided

Before Judges Yannotti and Hayden.

On appeal from a Decision by the New Jersey Racing Commission, OAL Docket No. RAC 11662-2009N.

Michael Deutsch and Carlo Fisco (Law Offices of Carlo Fisco) of the California Bar, admitted pro hac vice, attorneys for appellant (Mr. Deutsch and Mr. Fisco, on the brief).

Jeffrey S. Chiesa, Attorney General, attorney for respondent (Lewis A. Scheindlin, Assistant Attorney General, of counsel; Julie D. Barnes, Deputy Attorney General, on the brief).

PER CURIAM

Andrea Hill (Hill) appeals from a final determination of the New Jersey Racing Commission (Commission), which disqualified her horse from his win in a race held at the Meadowlands Racetrack on June 13, 2009, and ordered that the purse be redistributed. We affirm.

This appeal arises from the following facts, which are essentially undisputed. On May 6, 2008, a horse named "Jeremy's Successor" (JS) tested positive for the presence of an illegal blood-doping agent called Darbepoetin-Alfa (also known as Darbepo). The Board of Judges at Freehold Raceway suspended JS's trainer and owner.

The Freehold judges also declared that JS could not race in this State from May 6, 2008 through and including September 2, 2008. Thereafter, the horse was ineligible to compete in racing until the owner or trainer made a written request to the State Steward for testing and the horse tested negative for, among other things, any blood-doping agent such as Darbepo.

On May 6, 2008, New Jersey's State Steward Richard O'Donnell (O'Donnell) placed JS on the Steward's List. O'Donnell informed the racing secretary's office of his action. That office is responsible for transmitting the information to the United States Trotting Association (USTA), which is the national

organization and repository for all racing statistics and violations.

The USTA maintains registration papers for each racehorse. Among other things, the USTA's records contain the horse's racing history and any disqualification decisions. The USTA's report for JS dated May 6, 2008, indicates that JS had been placed on the New Jersey Steward's List, as a result of the positive test for a banned substance.

Sometime in early 2009, Hill purchased JS and turned the horse over to Dean Eckley (Eckley) for training. In March 2009, Eckley entered JS to race in Illinois. Before permitting JS to race, Illinois racing officials required that JS be tested and have negative testing results. JS tested negative. On March 21, 2009, JS raced without incident at Balmoral Park in Chicago. Thereafter, JS raced eight more times at the Chicago track without incident.

On June 9, 2009, Michael McCarthy (McCarthy), the presiding racing judge at the Meadowlands racetrack, supervised a "draw" or selection of post positions for a race to be run on June 13, 2009. Among other things, the racing officials were required to verify that the horses were eligible to race. To determine a horse's eligibility, the racing officials use information on the

USTA database. JS was determined to be eligible to run in the June 13, 2009 race. JS ran the race and won a purse of $14,000.

On June 15, 2009, O'Donnell was informed that JS may have run in the race without complying with N.J.A.C. 13:71-23.15(f) and the May 6, 2008 ruling of the Freehold judges. The regulation and ruling required that JS be tested under the supervision of New Jersey's racing officials before being permitted to race again in this State.

O'Donnell noted that the USTA eligibility certificate printed on June 15, 2009, did not indicate that JS was on the Steward's List due to the May 6, 2008 positive test for a banned substance. O'Donnell contacted the USTA and was informed that JS's placement on the Steward's List had been deleted as a result of a computer error. The USTA corrected the error and JS's placement on the list was again noted on the USTA's database.

On June 24, 2009, JS was again tested for banned substances in New Jersey. The test results were negative and O'Donnell thereafter directed the Meadowlands program director to remove JS from the Steward's List. On July 7, 2009, the horse was officially removed from the list. The USTA's eligibility certificate for July 9, 2009, confirmed that JS had been taken off of the Steward's List in New Jersey.

Following a hearing, the Meadowlands Board of Judges issued a ruling dated August 20, 2009, finding that JS was ineligible to enter the race on June 13, 2009, because the horse had previously been declared ineligible to race in New Jersey and had not been retested for banned substances, as required by N.J.A.C. 13:71-23.15(f) and the May 8, 2008 ruling of the Freehold judges. The Meadowlands judges ordered the purse redistributed.

Hill appealed from the ruling to the Commission, which referred the matter to the Office of Administrative Law for a hearing before an Administrative Law Judge (ALJ). On October 17, 2011, the ALJ issued an initial decision in which she found that, while under different ownership, JS tested positive for the presence of a banned substance and was placed on the Steward's List on May 6, 2008.

The ALJ noted that the Freehold judges had declared JS ineligible to compete in New Jersey for 120 days and could not race in this State until retested at a location determined by the State Steward. The ALJ pointed out that this requirement was set forth in the ruling of the Freehold judges and codified in N.J.A.C. 13:71-23.15(f). The ALJ found that Hill failed to comply with these regulatory requirements.

The ALJ rejected Hill's contention that she substantially complied with the aforementioned requirements because JS was tested in Illinois prior to the June 13, 2009 race at the Meadowlands. The ALJ wrote that N.J.A.C. 13:71-23.15(f) does not allow for testing by another jurisdiction. The ALJ added:

Although the test utilized in Illinois may be the same test used in New Jersey, the test was not administered under the auspices of the [Commission], which clearly has an interest in ensuring the reliability and accuracy of the testing procedures, such as the chain of custody of the test samples, in order to safeguard the public confidence in the integrity of the horses that are racing within the state. It is further of no consequence that JS was permitted to race in other jurisdictions before he was officially removed from the New Jersey Steward's List. Apart from the uncertainty as to whether the Steward's List notation could have been gleaned from the USTA database at the time of some of those races, as explained by O'Donnell and McCarthy, the [Commission] has no jurisdiction to enforce its regulations and rulings outside of New Jersey and cannot control whether other jurisdictions will give reciprocity to the New Jersey Steward's List notation.

The ALJ also rejected Hill's contention that JS should not have been disqualified from the June 13, 2009 race because the presiding judge at the Meadowlands had determined that JS was eligible to race. The ALJ found that the horse had not been permitted to race because of an error or negligence on the part of the Commission's racing officials. The ALJ stated that JS was

permitted to race because the USTA's eligibility papers did not reflect his placement on the Steward's List.

The ALJ wrote, however, that this did not absolve Hill "of her responsibility to comply with the regulations." The ALJ stated that all of the Commission's licensees, including owners and trainers, must abide by New Jersey law and the Commission's regulations. As the new owner for JS, Hill was "charged with knowledge of the [Commission's] regulations that must be followed, as well as the prior ruling against her horse."

The ALJ additionally found that the ruling disqualifying JS from the race and redistributing the purse was appropriate under the circumstances. The ALJ noted that the State Steward and the judges have authority to impose penalties for a violation of the Commission's rules. The ALJ concluded that the order disqualifying JS from the June 13, 2009 race and requiring redistribution of the purse was a proper exercise of the Commission's regulatory authority.

On November 16, 2011, the Commission considered the matter and decided to adopt the ALJ's decision as its final determination. The Commission's decision was memorialized in a ruling dated November 22, 2011. This appeal followed.

Hill argues that that the Commission's decision is inconsistent with our decision in Hartman v. New Jersey Racing

Commission, 352 N.J. Super. 490 (App. Div. 2002). She also argues that the Commission's decision ordering forfeiture of the purse is invalid because no licensee was found to have violated the Commission's regulations.

The scope of our review of a final determination of an administrative agency is limited. The agency's decision may not be disturbed unless it has been shown to be arbitrary, capricious or unreasonable. Brady v. Bd. of Review, 152 N.J. 197, 210 (1997) (citing In re Warren, 117 N.J. 295, 296 (1989)). Our review is limited to the following inquiries:

(1) whether the agency's decision offends the State or Federal Constitution;

(2) whether the agency's action violates express or implied legislative policies;

(3) whether the record contains substantial evidence to support the findings on which the agency based its action; and

(4) whether in applying the legislative policies to the facts, the agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors.

[Id. at 211 (citing George Harms Constr. v.

Turnpike Auth., 137 N.J. 8, 27 (1994)).]

We are satisfied that there is substantial evidence in the record to support the Commission's action, and its decision is consistent with the applicable law. R. 2:11-3(e)(1)(D). Hill's arguments on appeal are without sufficient merit to warrant

discussion in a written opinion. R. 2:11-3(e)(1)(E). However, we add the following brief comments.

Hill maintains that the Commission's decision is inconsistent with our decision in Hartman. We do not agree. In Hartman, the New York State Race and Wagering Board suspended a trainer for fifteen days after one of the horses he trained tested positive for a banned substance. Hartman, supra, 352 N.J. Super. at 492. During the suspension, the trainer's horses ran in races in New Jersey and won. Id. at 492, n.1. The Commission suspended and fined the trainer and ordered the owners to return the purse monies won in the races. Id. at 492. The owners appealed. Ibid.

We reversed the Commission's decision. Id. at 500. We noted that the State Steward was not informed of the trainer's out-of-state suspension until after the races were run, and there was no evidence showing that the owners knew or should have known of the suspension. Id. at 497. We stated that the Commission could "under certain circumstances" order an owner to forfeit a purse if the owner allowed a trainer who was suspended in another jurisdiction to run a horse in a race in New Jersey. Id. at 498. We concluded, however, that "basic principles of procedural due process and fundamental fairness militate against the imposition of such a sanction against them." Ibid.

We noted that the owners did not have sufficient notice of the trainer's suspension to support imposition of penalties upon them. Id. at 499. We added that:

it is not sufficient to say that the owner must rely on a trainer to keep his or her employer advised of suspensions. If there were ready means of verifiable access to accurate information about suspensions, then it might be fair and permissible to hold an owner liable for not checking the status of a trainer. However, the record reflects the finding that in this case the owners were all unaware of the status of [the] trainer . . . at the time of the respective races. More recent advances in technology may have made possible much speedier methods of communication between the USTA, the various state racing authorities and participants in the racing business. These include the increased reliance on, and use of, the Internet, email, fax machines and other electronic technology devices. However, before strict liability could be imposed in such a situation, owners have to be put on notice of where and how they can obtain such information quickly and accurately, especially when they are charged with the knowledge even before the New Jersey racing authorities had it . . . .

[Id. at 499-500.]

We are satisfied that Hartman is factually distinguishable and Hill's reliance upon that decision is misplaced. It is undisputed that on May 6, 2008, JS tested positive for the presence of Darbepo, an illegal blood-doping substance, and was placed on the New Jersey Steward's List. That information was noted on the USTA's electronic database. The parties stipulated

that placement of this information on the USTA electronic registration papers "is notice to the entire harness racing universe of the presence of the derogatory and disqualifying ruling."

Hill purchased JS in early 2009. While notification that JS had been placed on the New Jersey Steward's List was deleted from the USTA's database at some point before the horse ran in the race at the Meadowlands on June 13, 2009, there is no evidence that this information was deleted from the USTA database before Hill purchased the horse. Thus, Hill was properly charged with notice that JS had been placed on the Steward's List and could not race in this State until he was retested here under the supervision of New Jersey's racing officials.

We are convinced that the Commission did not abuse its discretion by disqualifying JS and ordering Hill to forfeit the purse won in the June 13, 2009 race. As the ALJ stated, Hill "had an affirmative duty to be familiar with and to abide by the NJRC testing rules." The ALJ also noted that Eckley admitted at the hearing before the Meadowlands judges that he knew JS tested positive and had to be retested before racing again in New Jersey. While Eckley denied knowing that the test had to take place in New Jersey, the Freehold ruling and the Commission's

regulation provided Eckley and Hill with sufficient notice of that requirement.

Hill also argues that forfeiture of the purse is invalid because the Commission determined that no licensee committed a regulatory violation. Again, we disagree. As the ALJ found, JS's entry into the June 13, 2009 race was a clear violation of N.J.A.C. 13:71-23.15(f).

Moreover, McCarthy explained at the hearing before the ALJ that the Meadowlands judges decided not to penalize Hill or Eckley because they were not involved when JS tested positive in May 2008 and was placed on the Steward's List. The judges determined, however, that disqualification of JS from the June 13, 2009 race and forfeiture of the purse were appropriate measures to address what McCarthy said was a unique situation. The ALJ and the Commission agreed.

We are satisfied that, under the circumstances, the Commission had the authority to order Hill to forfeit the purse won by JS in the June 13, 2009 race and its decision was not arbitrary, capricious or unreasonable.

Affirmed.

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