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Ross A. Croghan v. New Jersey Racing Commission

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


January 26, 2011

ROSS A. CROGHAN, APPELLANT,
v.
NEW JERSEY RACING COMMISSION, RESPONDENT.

On appeal from a Final Decision of the New Jersey Racing Commission.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued October 19, 2010 - Decided Before Judges Payne and Baxter.

Ross Croghan, a horse owner, trainer and driver, appeals from (1) a June 18, 2008 decision of the New Jersey Racing Commission (the Commission) adopting a decision by an administrative law judge (ALJ) to deny Croghan's motion to compel discovery; (2) a December 1, 2009 decision of the Commission adopting the ALJ's initial decision to suspend Croghan's license and impose other penalties; (3) a February 1, 2010 decision denying Croghan's request to stay his suspension pending appellate review; and (4) a February 23, 2010 decision denying Croghan's application for a 2010 trainer's license.

On appeal, Croghan raises the following issues:

POINT I THE APPELLANT HAS A CONSTITUTIONALLY-PROTECTED PROPERTY RIGHT THAT CANNOT BE TAKEN WITHOUT DUE PROCESS OF LAW.

POINT II THE APPELLANT WAS WRONGFULLY DENIED NECESSARY DISCOVERY.

A. "Overly Burdensome" is Not a Basis to Deny Factual Discovery.

B. The TCO2 Rule is Based Upon Hypotheses and Assumptions.

C. The Denial of Discovery Denied Due Process to the Appellant.

POINT III THE APPELLANT HAS NOT RECEIVED DUE PROCESS.

A. The Summary Disposition Denied the Appellant the Right to Confront and Cross-Examine the Commission's Witnesses.

B. The "Absolute Trainer Liability" Rule is Unconstitutional and Improper as Applied to the Appellant Via the TCO2 Testing Regime.

POINT IV THE EXECUTIVE DIRECTOR WRONGFULLY ENHANCED THE PENALTY.

POINT V THE EXECUTIVE DIRECTOR WRONGFULLY DENIED THE APPELLANT A STAY PENDING JUDICIAL APPEAL. POINT VI THE APPELLANT WAS WRONGFULLY DENIED HIS 2010 TRAINER'S LICENSE.

I.

This case involves an alleged violation of the medication rules promulgated by the Commission as applicable to horses engaged in harness racing in New Jersey, their owners and their trainers. N.J.A.C. 13:71-23.1(a) sets forth the intent of the rules, stating:

(a) It shall be the intent of these rules to protect the integrity of horse racing, to guard the health of the horse, and to safeguard the interests of the public and racing participants through the prohibition and/or control of all drugs and/or substances foreign to the natural horse. For the purpose of these rules, a drug and/or substance administered to a horse is foreign to the natural horse irrespective of whether the said drug and/or substance is also naturally occurring to the horse.

Among the performance-enhancing substances that the regulations prohibit from being administered to a horse prior to a race is sodium bicarbonate or baking soda. N.J.A.C. 13:71-23.1(b)10.

To determine whether such administration has occurred, a process known as "milkshaking,"*fn1 the regulations provide for preand post-race testing of any horse entered to start at any licensed race meeting. N.J.A.C. 13:71-23.2. Whether milkshaking has taken place is determined by measuring the total carbon dioxide (tCO2) present in the horse's blood plasma following a minimum period of one-hour standing at rest after the completion of the race. N.J.A.C. 13:71-23.3A(a).

Testing is conducted using a "Clinical Auto Analyzer that applies an ion selective electrode method (ISE) for measuring tCO2 in blood." Ibid. If levels in excess of thirty-seven millimoles per liter for horses that are not competing on Lasix, a diuretic, or in excess of thirty-nine millimoles per liter for horses that are competing on Lasix are found, and it is not determined that such tCO2 levels are physiologically normal to the horse, enumerated penalties are required. N.J.A.C. 13:71-23.3A(a) and (b). In that regard, N.J.A.C. 13:71-23.3A(b)1 provides:

1. The trainer, as the absolute insurer of the horse responsible for the condition of a horse within his or her care and custody pursuant to N.J.A.C. 13:71-23.6, shall for a first violation have his or her license suspended for a 75 day period, be ordered to pay a $1,000 fine and be denied the privileges of all grounds subject to the jurisdiction of the Commission during the suspension period. For a second violation, the license of the trainer shall be ordered suspended for a 180 day period, a $2,500 fine shall be ordered and the trainer shall be denied the privileges of all grounds subject to the jurisdiction of the Commission during the suspension period.

See also N.J.A.C. 13:71-23.6, the trainer responsibility rule, making the trainer "the absolute insurer" of the condition of a horse within the trainer's care and custody.

The regulations further provide that if a tCO2 reading in excess of authorized levels is obtained, the owner or trainer may, within three days of the notification of the test results, submit a written request that the horse be held in guarded quarantine for a period of up to seventy-two hours, during which the horse may be periodically retested. N.J.A.C. 13:71-23.3A(c). If the judges are satisfied that the elevated tCO2 levels are physiologically normal for the horse, then regulatory penalties will not be imposed. Ibid.

On June 6, 2007, a horse named "Cammabis" that was trained by Croghan won the eleventh race at the Meadowlands Racetrack. Following the race, a blood gas test performed on the horse revealed a mean tCO2 reading of 40.5 millimoles per liter. A confirmatory test, following recalibration of the instrumentation, yielded a mean reading of 39.7 millimoles per liter,*fn2 thereby exceeding the limit for a Lasix treated horse by

0.7 millimoles per liter. According to the Commission, this was the only excess reading obtained during 2007.*fn3 Croghan did not request that quarantining and retesting occur.

On June 26, 2007, after considering the tCO2 test results, the Commission's Board of Judges found Croghan in violation of the trainer's responsibility regulation, N.J.A.C. 13:71-23.6, and because it was Croghan's second tCO2 violation in New Jersey, the first having occurred in 2000, the judges ordered a 180-day suspension from July 9, 2007 to January 4, 2008, a fine of $2,500 and a forfeiture of the horse's race winnings. Subsequent rulings by Frank Zanzuccki, the Executive Director of the Commission, postponed the commencement of the suspension until later in July.

On appeal, the matter was transferred to the Office of Administrative Law (OAL) for a hearing before an ALJ. We granted a stay of the suspension pending disposition of the matter in the OAL, and the winnings have been held in escrow.

According to the certification of Philip Lorimer, the Supervising Forensic Scientist for the New Jersey State Police and an expert for the Commission in this and other matters, the tCO2 levels adopted by the Commission were derived from tests he performed on 231 randomly selected race horses in training at harness tracks in New Jersey. Blood gas samples, taken on a non-racing day, disclosed a mean tCO2 level of 30 millimoles per liter, with only one horse having a tCO2 reading in excess of 34.0 millimoles per liter. The regulatory limit established for non-Lasix horses of 37.0 millimoles per liter was four standard deviations above the mean. See also Campbell v. N.J. Racing Comm'n, 169 N.J. 579, 583 (2001).

In the OAL, Croghan, supported by an associate professor of physiology at the University of Guelph in Canada, Michael I.

Lindinger, Ph.D., sought to challenge, among other things, the methodology utilized by the Commission in setting existing regulatory limits, arguing that the tCO2 levels of horses having completed a race would be naturally higher than the levels found among the horses utilized in the study, which were in training but had not just engaged in competition. For that reason, the limits were too low.

To provide a factual basis for this hypothesis, Croghan requested, in interrogatories served on the Commission, the results of 100 tCO2 tests conducted on horses that placed first or second in harness races and were trained by persons other than Croghan and of 129 tCO2 tests conducted on horses that placed first or second that were trained by him, all of which were within the legal limits. The Commission declined to provide the discovery, arguing that it was "unduly burdensome, overbroad and cumbersome," immaterial, and irrelevant. The Commission noted that to produce these records, which were not electronically recorded, would involve substantial efforts by several different individuals.*fn4

On March 3, 2008, following Croghan's motion to compel responses to these interrogatories, the matter was argued before the ALJ assigned to the matter. At that time, counsel for Croghan argued that the existing standards were based on "junk science" and that, if given the opportunity to do so, Croghan's expert, Lindinger, would validate his "theorem" that the mean tCO2 level was higher at the Meadowlands and was probably in the range of thirty-three to thirty-five millimoles per liter. Further, counsel argued that the tCO2 levels of a horse that won or placed second would be higher than those of a horse who finished further back. Thus, it would be shown that the tCO2

limits of thirty-seven and thirty-nine millimoles per liter were "no longer reliable for purposes of the kind of penalties that are going to be imposed here."

Following argument, the ALJ issued a written opinion denying the relief that Croghan sought. On June 18, 2008, the Commission denied Croghan's motion for interlocutory review and adopted the ALJ's decision. We denied leave to appeal on July 31, 2008.

An exchange of expert reports then occurred. Lindinger identified his objections to the current rule by stating that the rule provided no means for conducting a split analysis to permit testing for substances in the horse's blood that might lead to an abnormal tCO2 reading; the tCO2 ranges that were used as a foundation for the rule were too narrow; independent confirmatory analysis was not permitted; the Beckman EI-ISE instrument utilized for tCO2 testing was inaccurate at the high end of its range; and tCO2 testing was valid only in conjunction with other tests of the horse and the horse's blood plasma that the Commission did not require. In conclusion, Lindinger stated:

TCO2 is a measured physiological variable that is dependent upon many variables within the body and, accordingly, has a very wide normal range (Gaussian distribution) within the population. There are many naturally occurring factors that can result in a normal elevation in a horse's tCO2. It is scientifically erroneous to assume that a high tCO2 reading in a horse occurs only because the horse has been tampered with. The rationale that the likely cause of a high tCO2 reading can only be a result of tampering is not supported within the scientific community. Hence, using tCO2 testing alone is irrational and has no basis in valid scientific, veterinary and medical practice and should not be used by any racing jurisdiction as the sole basis for determining if an alkalinizing agent was administered.

The Commission's expert, Kenneth McKeever, Ph.D., disagreed with Lindinger. He concluded in a December 24, 2008 report that "an extensive amount of published scientific research has established that the measurement of plasma tCO2 concentration is a scientifically valid method for detecting the administration of alkalinizing agents to horses" and that "plasma tCO2

concentration alone is valid for the detection of the administration of alkalinizing agents, and that inclusion of the other variables mentioned by Dr. Lindinger [is] not needed."

Dr. McKeever further noted that data published in scientific literature had led to an acceptance of the tCO2 method of analysis used in New Jersey by the national and international scientific community.

The Commission's other expert, Lorimer, also issued a report in which he noted that Cammabis had been previously tested on March 18, 2007 after racing and produced a normal tCO2

level of 33.7 millimoles per liter. Additionally, he engaged in a point-by-point refutation of issues raised by Lindinger, noting that: "[M]ost racing laboratories enforce a 37/39 [millimole per liter] threshold level rule, since frequency distributions of normal race horse populations in the U.S., Australia, Hong Kong and Canada . . . have objectively established that the average resting plasma tCO2 in horses is approximately thirty millimoles per liter . . . . Threshold levels are set four standard deviations . . . from this mean to exempt normal horses."

On June 26, 2009, the Commission moved for summary decision. Its motion was argued on July 30, 2009, and on September 14, 2009, the ALJ granted summary decision in the Commission's favor. In doing so, she concluded that Croghan's challenge to the tCO2 rule constituted a facial constitutional challenge that Croghan was required to institute in the Appellate Division, rather than raise as a defense in an enforcement proceeding. Turning to the facts of the matter, the ALJ determined that the Commission had met its burden of proving, without contradiction, that Cammabis did in fact exhibit excess levels of tCO2 in violation of N.J.A.C. 13:71-23.3A(a) and that Croghan was liable, having violated the trainer responsibility rule, N.J.A.C. 13:71-23.6. Thus, the ALJ imposed on Croghan the penalties that we have previously described.

Following the receipt of exceptions to the ALJ's opinion and responses to the exceptions, the matter was reviewed by the Commission at a hearing conducted on November 18, 2009. The Commission voted unanimously to adopt the ALJ's decision, and it declined to stay the penalties pending appellate review. A memorializing order was entered on December 1, 2009. Croghan's suspension was scheduled to run from April 1, 2010 through and including September 27, 2010 and thus consecutive to a sixty-day suspension of his New York trainer's license from November 29, 2009 to January 27, 2010 as the result of a high tCO2 reading for one of his horses racing at the Yonkers Raceway.*fn5 An appeal was filed.

Motions by Croghan to run the two suspensions concurrently and to stay penalties pending appeal were denied on February 1, 2010. In connection with the request for a stay, Executive Director Zanzuccki stated:

Croghan's failure to carry out his responsibility to guard a horse entrusted to his care against the administration of prohibited drugs or foreign substances has serious ramifications for the horse racing industry, the safety of those who compete in racing, and the public's interest in the integrity of the sport. The grant of a stay under the circumstances here presented would be detrimental to the public's confidence. Again, this tCO2 infraction regarding "CAMMABIS" constitutes Croghan's second tCO2 rule violation in this State. As the testing program related to this rule was developed to protect against a serious threat to the integrity of racing, this repeated violation of this rule itself warrants a stay denial. In addition to constituting a second violation of the tCO2 rule, however, a stay denial is further warranted because of Croghan's overall penalty record.*fn6 Clearly, a substantial likelihood exists that allowing Croghan to compete in racing under a stay would allow for, and likely result in, further attempts to seek chemical advantages in races. . . .

The safety of the competitors and the need to protect the integrity of the sport mandates that the instant stay application be denied, and it would be adverse to the best interest of racing and inimical to the integrity of the sport to allow Croghan to continue to participate in racing in this State pending the appeal.

On February 15, 2010, Croghan applied to the Commission's State Steward for a 2010 trainer's license, but he was informed that licensure would not be recommended in light of his prior violation history in New Jersey and elsewhere. On February 17, 2010, an informal hearing of the matter was held before Commission Deputy Director Michael Vukcevich, and on February 23, 2010, Croghan's application was denied. Without exhausting his administrative remedies, Croghan appealed that denial to us.

Thereafter, we denied Croghan's motion to be granted a trainer's license for 2010, to amend the date of his suspension to December 17, 2009, to stay the remainder of his suspension and other penalties pending appeal, and to compel the Commission to file a statement of items comprising the record on appeal.*fn7

We also denied the Commission's motion to dismiss the appeal as to the February 23, 2010 denial of licensure as the result of Croghan's failure to exhaust administrative remedies.

II.

Our review of the record in this matter satisfies us that, in large measure, Croghan attempted to assert in the OAL a facial constitutional challenge to the post-race blood gas testing program of N.J.A.C. 13:71-23.3A(a); the safe-harbor quarantine provisions of N.J.A.C. 13:71-23.3A(c); and the imposition of strict liability upon trainers under N.J.A.C. 13:71-23.3A(b) and N.J.A.C. 13:71-23.6. We agree with the ALJ and the Commission that such a challenge was improperly presented in the OAL and that, pursuant to Rule 2:2-3(a)(2), Croghan was required to institute his challenge in the Appellate Division, which possesses the authority to order the factfinding necessary for Croghan's challenge to be properly considered. See 37 New Jersey Practice, Administrative Law and Practice § 3.2 at 96-97 (Steven L. Lefelt, Anthony Miragliotta & Patricia Prunty) (2000) ("challenges to the facial validity of a regulation are within the purview of the Appellate Division and not the Office of Administrative Law."); Pascucci v. Vagott, 71 N.J. 40, 52 (1976); New Jersey Educ. Ass'n v. Librera, 366 N.J. Super. 9, 13 (App. Div. 2004).

Because the discovery sought by Croghan and denied by the ALJ and the Commission was relevant only to Croghan's facial challenge, we affirm the determination that its production was not required. We do not address whether production would be required in connection with factfinding ancillary to an action in the Appellate Division pursuant to Rule 2:2-3(a)(2).

We find one exception to our determination that Croghan's constitutionally-based regulatory challenge was instituted in the wrong forum. In opposition to the Commission's motion for summary determination, Croghan submitted the certification of Dr. Lindinger, which was filed in response to a June 25, 2009 certification by Lorimer, in which Dr. Lindinger stated at paragraph two:

Regarding the testing at issue in this case, it is my opinion that the results are flawed and erroneous as establishing the horse in question's tCO2 level was above the 39 limit. My reasons are as follows.

(A) Based on the data provided it is evident that the instrument was testing high on both occasions that sample 552693 was tested. Lorimer stated that the NERL*fn8 "linearity test solutions" are "aqueous re[a]gents with tCO2 concentrations prepared at 10, 20, 30, and 40 [milli]moles/L" and that these "NERL solutions quality control the measurement system and verify the instrument is operating with a high degree of accuracy, precision and linearity."

(B) Exhibit F.*fn9 The NERL solution of 40 mmole/L returned values of 42.0 and 42.0, and 42.3; values obtained from using a 25 mmole/L 'standard' or 'control' returned readings of 25.6, 25.7 and 25.1. Values for the 30 mmole/L NERL solution do not appear to be reported at this point in time. Importantly, on average the 40 mmole/L NERL Standard returned 41.8 mmole/L, and thus on average 1.8 mmole/L higher than expected value of 40. The instrument was clearly reading high, and the results are not precise and accurate as Dr. Lorimer would have us believe.

Following this statement, Dr. Lindinger offered similar observations based on another exhibit, and he concluded:

E) Based on these results of instrument performance, the tCO2 of sample 552693 was tested too high by between 1.0 and 1.8 mmole/L. Accordingly, the average value of 39.7 mmole/L for sample 552693 (page 87) was between 37.9 and 38.7 mmole/L. If the higher average value of 40.5 (page 81) is used, then the actual tCO2 could have been as low as 38.7 mmole/L.

Our review of the briefing and arguments in opposition to summary disposition that were presented on Croghan's behalf before the ALJ and the Commission satisfies us that the issue presented by Dr. Lindinger was advanced by Croghan's counsel, but was not addressed by either the ALJ or the Commission. Because that issue was factual in nature and related directly to the accuracy of the tests that led to Croghan's suspension and other sanctions, its resolution is required.

N.J.A.C. 1:1-12.5, which sets forth the requirements for summary decision, permits such relief to be granted only when: the papers and discovery which have been filed, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to prevail as a matter of law.

Although an evidentiary hearing is not required when there are no disputed issues of material fact, Frank v. Ivy Club, 120 N.J. 73, 98 (1990), cert. denied, 498 U.S. 1073, 111 S. Ct. 799, 112 L. Ed. 2d 860 (1991), here a dispute existed as to whether the equipment utilized to analyze Cammabis's blood plasma sample was "reading high" at the time of the relevant analyses, and if so, whether a correct reading would have disclosed a violation of the limits established by N.J.A.C. 13:71-23.3A(a). We thus reverse and remand for an evidentiary hearing as to this one issue.

III.

Croghan additionally contests the timing of his suspension, the denial of a stay of that suspension, and the denial of his 2010 trainer's license. We decline to address the issues raised in connection with Croghan's suspension, determining that, because the suspension has been served, those issues have become moot. We note only that Rule 22 section 5 of the United States Trotting Association, upon which Croghan relies in the absence of a Commission rule governing the subject, N.J.A.C. 13:71-1.1; Moiseyev v. N.J. Racing Comm'n, 239 N.J. Super. 1, 12-13 (App. Div.), certif. denied, 117 N.J. 666 (1989), provides that a suspension becomes effective when given "unless otherwise specified." In this case, a different date was specified in order to give full force and effect to New York's penalties prior to the inception of those imposed by New Jersey. N.J.A.C. 13:71-1.10.

Further, we reject the argument that, when delaying the effective date of the suspension, Frank Zanzuccki, Executive Director of the Commission, lacked the power to act on the Commission's behalf. Such power is conveyed by the regulations. See N.J.A.C. 13:71-1.1(c) ("the Executive Director . . . shall possess the same authority of the Racing Commission stewards and judges with respect to all provisions contained in the Administrative Code governing racing in New Jersey."); N.J.A.C. 13:71-1.19 ("The steward and the Board of Judges may fine, suspend or rule off any person who, in their opinion, has acted to the detriment of racing or violated the rules."); N.J.A.C. 13:71-2.3(b) (empowering judges to schedule suspensions "to encompass the maximum number of live race days there [sic] possible" and, where application of prescribed formulas would be impractical, to "determine the continuous dates over which the suspension is to be served"); and N.J.A.C. 13:71-8.22 (empowering judges to impose fines and penalties as prescribed by the Commission).

Addressing Croghan's appeal from the denial of a 2010 trainer's license by Deputy Director Vukcevich, we agree with the Commission's position that Croghan failed to exhaust his administrative remedies, not having requested an administrative hearing, and thus the issues raised by him are not ripe.

Campione v. Adamar of N.J., Inc., 155 N.J. 245, 261 (1998); City of Atlantic City v. Laezza, 80 N.J. 255, 265 (1979).

Affirmed in part; reversed in part and remanded.


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