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Moody v. Michigan Gaming Control Board

United States Court of Appeals, Sixth Circuit

September 11, 2017

John Moody; Donald Harmon; Rick Ray; Wally McIllmurray, Plaintiffs-Appellees/Cross-Appellants,
v.
Michigan Gaming Control Board, et al., Defendants, Al Ernst; John Lessnau, Defendants-Appellants/Cross-Appellees.

          Argued: July 26, 2017

         Appeal from the United States District Court for the Eastern District of Michigan at Flint. No. 4:12-cv-13593-Gershwin A. Drain, District Judge.

         ARGUED:

          Jason A. Geissler, OFFICE OF THE MICHIGAN ATTORNEY GENERAL, Lansing, Michigan, for Appellants/Cross-Appellees.

          Hugh M. Davis, CONSTITUTIONAL LITIGATION ASSOCIATES, P.C., Detroit, Michigan, for Appellees/Cross-Appellants.

         ON BRIEF:

          Jason A. Geissler, OFFICE OF THE MICHIGAN ATTORNEY GENERAL, Lansing, Michigan, for Appellants/Cross-Appellees.

          Hugh M. Davis, Cynthia Heenan, Scott Mackela, CONSTITUTIONAL LITIGATION ASSOCIATES, P.C., Detroit, Michigan, for Appellees/Cross-Appellants.

          Before: COLE, Chief Judge; BATCHELDER and MOORE, Circuit Judges.

          OPINION

          KAREN NELSON MOORE, Circuit Judge.

          In 2010, the Michigan Gaming Control Board ("MGCB"), a state entity that regulates horse racing, held a hearing to determine whether certain drivers were involved in an illegal race-fixing scheme. At the hearing, Plaintiffs John Moody, Donald Harmon, Rick Ray, and Wally McIllmurray, Jr. ("Plaintiffs"), four drivers licensed by the MGCB, declined to answer questions and invoked their Fifth Amendment right against self-incrimination. The MGCB later suspended the Plaintiffs' licenses and issued orders excluding them from the race tracks, citing the Plaintiffs' refusal to cooperate at the hearing. The Plaintiffs filed suit, alleging violations of their procedural due process and Fifth Amendment rights. In these appeals, which revisit issues considered by a prior panel of this court, the Defendants challenge the district court's denial of qualified immunity on the procedural due process claim, and the Plaintiffs challenge the district court's grant of qualified immunity on the Fifth Amendment claim.

         For the following reasons, we AFFIRM the denial of qualified immunity on the procedural due process claim, REVERSE the grant of qualified immunity on the Fifth Amendment claim, and REMAND the case for further proceedings.

         I. BACKGROUND

         Upon receiving an anonymous tip, the MGCB began to investigate allegations of a race-fixing scheme involving certain gamblers and harness-racing drivers. As part of this investigation, the MGCB held an administrative investigatory hearing on May 20, 2010, with the Plaintiffs, all of whom were licensed by the MGCB as harness drivers. The hearing, referred to by some as the "Steward's hearing, " was held to determine whether these drivers were involved in the scheme. At the hearing, all four drivers declined to answer questions and invoked their Fifth Amendment right against self-incrimination. R. 18-5 (Moody MGCB Hr'g Tr. at 5-8)(Page ID #197-200); R. 18-6 (Harmon MGCB Hr'g Tr. at 5-13) (Page ID #212-20); R. 18-7 (McIllmurray MGCB Hr'g Tr. at 6-10) (Page ID #230-34); R. 18-8 (Ray MGCB Hr'g Tr. at 7- 11) (Page ID #245-49). The next day, the MGCB suspended the Plaintiffs' licenses, citing their failure "to comply with the conditions precedent for occupational licensing in Michigan as outlined in R431.1035." R. 18-9 (Stewards Hr'g Ruling) (Page ID #254-57). This rule provides that an applicant for an occupational license must "cooperate in every way . . . during the conduct of an investigation, including responding correctly, to the best of his or her knowledge, to all questions pertaining to racing matters." Mich. Admin. Code R. 431.1035. Later, on November 30, 2010, the MGCB issued orders of exclusion banning the drivers from all state race tracks, again citing their "'failure to cooperate' at the time of the Steward's Hearing in May 2010." R. 85-16 (Ernst Letters) (Page ID #1377-79). The Plaintiffs' applications for 2011, 2012, and 2013 licenses were also denied.

         In August 2012, the Plaintiffs brought suit under 42 U.S.C. § 1983, claiming violations of their procedural due process and Fifth Amendment rights. On November 27, 2013, the district court held that the Defendants were entitled to qualified immunity because the Plaintiffs had failed to identify a constitutional violation. It therefore granted the Defendants' motion for summary judgment and denied the Plaintiffs' motion for partial summary judgment. On appeal, we affirmed in part and reversed in part the district court's holding with respect to Plaintiffs' procedural due process claim, and held that although Plaintiffs had received due process with respect to their license suspensions, there was a disputed issue of material fact as to whether the Plaintiffs were denied due process on their exclusion from the race tracks. Moody v. Michigan Gaming Control Bd., 790 F.3d 669, 680 (6th Cir. 2015) ("Moody I"). Specifically, we found that the Plaintiffs were due a post-exclusion hearing, which they did not receive, and that there was a genuine dispute as to whether or not Plaintiffs were themselves at fault for failing to request a hearing. Id. at 679-80. As to the Plaintiffs' Fifth Amendment claim, we reversed the district court's holding that Plaintiffs had failed to identify a constitutional violation. We held that the "Constitution entitled the harness drivers to refuse to answer potentially self-incriminating questions, unless the state immunized them from prosecution. To punish the drivers violated the Constitution, and both suspension and exclusion constitute punishment." Id. at 673. We therefore found that the Defendants had violated the drivers' constitutional rights against self- incrimination, and remanded to the district court to consider the question of whether that right was clearly established at the time of the violation. Id.

         On remand, the parties filed renewed cross-motions for summary judgment. The Defendants argued that we erred in concluding that the Plaintiffs did not receive a post-exclusion hearing, because Plaintiffs received a hearing on April 25, 2013, two years before our initial remand. The Plaintiffs, in response, conceded that a post-exclusion hearing took place on that date, but argued that the hearing, which occurred two years after the exclusion orders were issued, was not timely. On the Fifth Amendment claim, the Defendants argued, once again, that the Plaintiffs had failed to identify a constitutional violation, and that the right to be offered immunity against self-incrimination was not clearly established at the time of the violation.

         The district court held that the Defendants' argument with respect to the April 2013 hearing was irrelevant to the question on remand, and re-emphasized our holding that there was "a dispute of fact regarding whether the 2011 license applications constituted hearing requests." R. 172 (Dist. Ct. Order at 12) (Page ID #4144). It concluded once again that neither party was entitled to summary judgment on the procedural due process claim. The district court also held that the Fifth Amendment violation identified in Moody I was not clearly established at the time of the violation, because "before the Sixth Circuit's decision in Moody [I], a reasonable officer could have believed, as the [district c]ourt did, that they were not required under the Fifth Amendment to offer immunity." Id. at 10 (Page ID #4142). It held that the Defendants were entitled to qualified immunity on the Fifth Amendment claims, and dismissed those Defendants whose personal involvement extended only to that claim. Id. at 10, 14 (Page ID #4142, 4146).

         Both parties now appeal. Defendants argue that the district court erred in denying their motion for summary judgment, because Plaintiffs now concede that they did receive a post-exclusion hearing. The Plaintiffs argue that they were nonetheless denied due process because that hearing was not timely, and the Plaintiffs challenge the district court's holding that the Fifth Amendment right identified in the initial appeal was not clearly established at the time of the violation.

         II. ANALYSIS

         A. Standard of Review

         We review de novo a district court's grant or denial of summary judgment on the basis of qualified immunity. United States v. Ohio, 787 F.3d 350, 353 (6th Cir. 2015). Summary judgment is proper where "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). In considering a motion for summary judgment, we must draw all inferences "in the light most favorable to the party opposing the motion." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (internal quotation marks omitted).

         Where a defendant raises the defense of qualified immunity, "it is the plaintiff's burden to show that the defendants are not entitled to qualified immunity." Burgess v. Fischer, 735 F.3d 462, 472 (6th Cir. 2013). To determine whether qualified immunity applies, this court applies a two-part test and asks: (1) whether the officer violated a constitutional right, and (2) whether that constitutional right was clearly established such that "a reasonable official would understand that what he is doing violates that right." Saucier v. Katz, 533 U.S. 194, 201-02 (2001) (internal quotation marks omitted), abrogated in part by Pearson v. Callahan, 555 U.S. 223, 236 (2009). Courts have discretion to decide which of the two parts to apply first. Pearson, 555 U.S. at 227.

         B. Defendants' Appeal

         1. Law-Of-The-Case Doctrine

         Before reaching the merits of the Defendants' appeal, it is necessary that we determine whether review of the procedural due process claims is barred by the law-of-the-case doctrine. "The law-of-the-case doctrine precludes reconsideration of issues decided at an earlier stage of the case." Caldwell v. City of Louisville, 200 Fed.Appx. 430, 433 (6th Cir. 2006). The doctrine applies only to issues that were actually decided, whether explicitly or by necessary implication. Id. (citing McKenzie v. BellSouth Telecomms., Inc., 219 F.3d 508, 513 n.3 (6th Cir. 2000). It does not extend to issues that should have been raised, or to ...


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