On appeal from the Superior Court of New Jersey, Chancery Division, Mercer County, Docket No. C-39-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued: November 19, 2008
Before Judges Cuff, Fisher and Baxter.
On August 6, 2008, a judge entered an order enjoining the New Jersey Racing Commission (Racing Commission) from adopting regulations regarding the proper use of certain identified steroids in horses. The judge ordered this extraordinary relief because the Racing Commission had not adopted rules of procedure governing its administrative rulemaking process. We granted leave to appeal this order and reverse.
At its February 6, 2008 meeting, the Racing Commission decided to proceed with regulations regarding the use of certain steroids in horses. Therefore, it authorized publication in the New Jersey Register of proposed regulations pursuant to N.J.S.A. 52:14B-4(a)(1); N.J.A.C. 1:30-5.2(a)2. Once the regulations were published, the public, including horse owners and trainers, would have had the opportunity to submit comments concerning the proposed regulations.
Before the Racing Commission could proceed, plaintiffs New Jersey Thoroughbred Horsemen's Association (NJTHA) and Arlene London filed a Verified Complaint and sought an order to show cause to enjoin the administrative rulemaking process. The NJTHA is an advocate for the thoroughbred racing community in this State. Plaintiff London is a licensed thoroughbred owner. In their Verified Complaint, plaintiffs contended that the Racing Commission violated the Administrative Procedure Act (APA), N.J.S.A. 52:14B-1 to -15, the Open Public Meetings Act (OPMA), N.J.S.A. 10:4-6 to -21, and the New Jersey Civil Rights Act, N.J.S.A. 10:6-1 to -2. The Racing Commission, established by N.J.S.A. 5:5-22, is authorized to "regulat[e] horse racing, [and] to advocate the growth, development and promotion of the horse racing industry in the State." Frank Zanzuccki is the Executive Director of the Racing Commission.*fn1
Plaintiffs asserted that the NJTHA secured permission from the Racing Commission to contribute substantial funds to partially underwrite a study regarding steroids naturally occurring in the horse and to establish a uniform and scientifically justified testing regimen which recognizes this fact and the differences among colts, geldings, fillies and any other appropriate distinctions common to horses. Nevertheless, plaintiffs alleged that the Racing Commission agreed with horse racing authorities and organizations outside New Jersey to adopt regulations regarding the use of steroids in horses and proposed to hurriedly adopt regulations prior to completion of the study. Moreover, plaintiffs alleged that the Racing Commission was committed to adopting regulations concerning steroid use in horses contrary to the interests of plaintiffs and without any discussion with plaintiffs about the content of these regulations.
Based on these allegations, plaintiffs asserted that the Racing Commission violated the APA because, by discussing and agreeing with third parties to adopt regulations prior to and outside of the procedures prescribed by the APA, the Racing Commission used a procedure that is not prescribed or permitted by N.J.S.A. 52:14B-3(2) and the rules adopted by the Racing Commission pursuant to N.J.A.C. 1:30-2.9(a)2. Plaintiffs further asserted that the Racing Commission abdicated its regulatory authority and failed to engage in rulemaking as required by the APA and N.J.A.C. 1:30-5.1 by holding meetings outside New Jersey with private individuals and public officials and committing itself to a regulatory course without notice to and comment by the regulated community in this State. Plaintiffs also asserted that the out-of-state meetings and various other meetings violated the OPMA and the New Jersey Civil Rights Act. To remedy these various violations, plaintiffs sought a preliminary injunction restraining and enjoining the Racing Commission from any further activity pertaining to the proposal or adoption of regulations concerning the use of steroids in horses.
An order entered on March 12, 2008, required the Racing Commission and its Director to show cause on April 22, 2008, why a preliminary injunction should not issue. In a written opinion dated June 17, 2008, the judge found that the Racing Commission and its Director have not adopted... the procedures whereby the public may obtain information or make submissions or requests before a regulation is drafted and proposed and thereafter advertised. Defendants have also failed to adopt or cite a rule which provides definite standards to the term "sufficient public interest" as it applies to the granting of an extension of the comment period or to the holding of a public hearing on the proposed rule. Such rules describing agency procedures are important because such rules "provide notice of the agency's procedures to interested parties and assure that proceedings before the agency are conducted uniformly and fairly."
The judge held that the Racing Commission must adopt rules of practice on these procedures and standards before it could take further action on the proposed steroid rules. The judge did hold, however, that pre-proposal notice is discretionary rather than mandatory.
The judge also held that the meetings and discussions with organizations and public officials in other states regarding the regulations of steroid use in horses and the decision by the Racing Commission to propose a regulation governing steroid use violated the terms of OPMA. The judge decided to enter a preliminary injunction because plaintiffs' rights under the APA and OPMA "would be violated without any recourse" and the Racing Commission and its Director could proceed to adopt the proposed rules "despite violating these rights." Therefore, by order dated June 17, 2008, the judge enjoined and restrained [the Racing Commission] from any further activity pertaining to the proposal or adoption of regulations addressing the use of steroids until the New Jersey Racing Commission establishes procedures and standards that are in compliance with the [OPMA], the APA and due process requirements. The Commission is hereby required to abandon the current proposal and commence the issue ab initio once appropriate procedures are adopted and followed.
The Racing Commission promptly filed a motion for reconsideration. It argued, but the judge disagreed, that her reliance on In the Matter of Consider Distribution of the Casino Simulcasting Special Fund, 398 N.J. Super. 7 (App. Div. 2008) was misplaced. Moreover, the judge noted the action by the Racing Commission to adopt rules governing the practices and procedures of the agency in compliance with the Casino Simulcasting Special Fund opinion and then expressed reservations about the sufficiency of these proposed rules. She noted that because the proposed rules did not appear "to address how members of the public could obtain information or make requests, or describe the forms and instructions used by the Commission," the rules may be insufficient. On the other hand, noting that the rules were in the proposal stage, "it would be inappropriate at this stage to make a ruling on this issue."
The judge did reconsider her ruling that the Racing Commission did not have definite standards to define the term "sufficient public interest," and as to that contention advanced by plaintiffs, the judge held that the Racing Commission had not violated N.J.S.A. 52:14B-4(a)(3). The judge also reconsidered her decision that meetings between the Director of the Racing Commission and other executives of racing agencies from other states violated the OPMA. The judge noted that neither the Executive Director nor the single Racing Commission member in attendance at the out-of-state meeting of racing officials could take any action to bind the Racing Commission, and that plaintiffs had submitted no evidence of secret meetings prior to the February 6, 2008 meeting of the ...