In the Matter of Mark Ford, et al., Appellants,v.New York State Racing and Wagering Board, Respondent.BriefN.Y.November 19, 2014To be Argued by: ANDREW J. TURRO (Time Requested: 20 Minutes) APL-2013-00325 Appellate Division, Third Department Docket No. 514622 Schenectady County Clerk’s Index No. 0303/2010 Court of Appeals of the State of New York In the Matter of the Application of MARK FORD, RICHARD BANCA, JOHN BRENNAN, GEORGE CASALE and STANDARDBRED OWNERS ASSOCIATION, INC., Petitioners-Appellants, For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules – against – THE NEW YORK STATE RACING AND WAGERING BOARD, Respondent-Respondent. BRIEF FOR PETITIONERS-APPELLANTS Of Counsel: ANDREW J. TURRO KIERAN X. BASTIBLE MEYER, SUOZZI, ENGLISH & KLEIN, P.C. Attorneys for Petitioners-Appellants 990 Stewart Avenue, Suite 300 P.O. Box 9194 Garden City, New York 11530 Tel.: (516) 741-6565 Fax: (516) 741-6706 Date Completed: January 2, 2014 DISCLOSURE STATEMENT Pursuant to 22 NYCRR § 500.1(£), it is hereby disclosed that the following entities are affiliates of Standardbred Owners Association, Inc., a domestic not-for- profit corporation: Standardbred Owners Association Welfare Fund, Standardbred Owners Association Retirement Fund, Standardbred Owners Association Pension Fund, and Standardbred Owners Association Emergency Welfare Fund. Table of Contents DISCLOSURE STATEMENT Table of Authorities .................................................................................................. iv Preliminary Statement ............................................................................................... 1 STATEMENT OF JURISDICTION AND PRESERVATION OF LEGAL ISSUES .............................................................. 8 QUESTIONS PRESENTED ................................................................................... 10 STATEMENT OF FACTS ...................................................................................... 14 The New York County Supreme Court Proceedings ......................................... 14 The Schenectady County Supreme Court Proceedings ...................................... 16 The Supreme Court's Judgment ......................................................................... 16 The Third Department's Order ........................................................................... 20 Proceedings Leading Up to the Instant Appeal .................................................. 23 ARGUMENT .......................................................................................................... 25 POINT I ................................................................................................................... 25 IN CONTRAVENTION OF THE SEPARATION OF POWERS DOCTRINE OF THE NEW YORK STATE CONSTITUTION AND WELL-SETTLED RULES OF STATUTORY CONSTRUCTION, THE THIRD DEPARTMENT COMMITTED REVERSIBLE ERROR BY (1) DISREGARDING THE PLAIN AND UNAMBIGUOUS LANGUAGE OF THE UNDERLYING ENABLING LEGISLATION MANDATING THAT EQUINE DRUG TESTING BE CONDUCTED PROXIMATE TO A RACE MEET IN WHICH A HORSE COMPETES AND (2) INSTEAD UPHOLDING THE RULES WHICH VEST THE BOARD WITH SWEEPING, UNBRIDLED AUTHORITY IN EXCESS 1 Table of Contents (continued) OF ITS JURISDICTION AS DELEGATED BY THE LEGISLATURE POINT II .................................................................................................................. 33 SECTION 4120.17(b) OF THE RULES, WHICH ALLOWS THE BOARD TO SELECT FOR TESTING ANY HORSE "AMONG THOSE ANTICIPATED TO COMPETE AT NEWYORK TRACKS WITHIN 180 DAYS," IS ILLUSORY IN THAT IT VESTS THE BOARD WITH THE UNFETTERED AUTHORITY TO CONDUCT EQUINE DRUG TESTING AT ANY TIME WITHOUT NOTICE, GEOGRAPHIC LIMITATION, OR FACTUAL BASIS -- IN EXCESS OF ITS DELEGATED AUTHORITY AND, THE REGULATION'S STATED "TIME FRAME" IS ALSO ARBITRARY AND WITHOUT ANY RATIONAL OR SCIENTIFIC BASIS POINT III ................................................................................................................ 39 THE THIRD DEPARTMENT COMMITTED REVERSIBLE ERROR IN REINSTATING THE RULES -- AND IN PARTICULAR SECTION 4120.17(g) -- BY WHICH THE BOARD HAS UNILATERALLY EMPOWERED ITSELF WITH THE UNBRIDLED AUTHORITY TO CONDUCT RANDOM WARRANTLESS SEARCHES, ON LICENSEES AND NON-LICENSEES ALIKE, AT ANY TIME WITHOUT NOTICE OR FACTUAL PREDICATE, AND WITHOUT ANY GEOGRAPHIC LIMITATION A. The Warrantless Searches Authorized by The Rules Are Constitutionally Invalid as to Both Licensees and Non-Licensees and Exceed the Appropriate Jurisdiction of the Board ............................................................................................................. 40 B. For Additional Reasons, the Enforcement of the Rules Against Individuals Not Licensed by the Board is Constitutionally Infirm and Otherwise Illegal .............................................. 46 11 Table of Contents (continued) POINT IV ................................................................................................................ 51 THE THIRD DEPARTMENT'S REINSTATEMENT OF THE RULES' SANCTIONING PROVISIONS AS TO NON-LICENSEES AND LICENSEES ALSO MUST BE REVERSED A. The Third Department's Reinstatement of Section 4120(g)'s Provisions Authorizing the Board to Sanction Non-Licensees for Failing to Cooperate With the Board's Enforcement of the Rules is Based on a Patently Incorrect and Unwarranted Reading ofRacing Law Section 310 ............................................................. 52 B. The Third Department's Reinstatement of the OCTR Sanctioning Provisions That Relate to Licensees is Also Unwarranted and Should be Reversed .......................................................... 54 POINTV .................................................................................................................. 56 SECTION 4120.17(c) OF THE RULES UNDULY EXPANDS THE COMPULSORY POWER OF THE BOARD BEYOND THIS STATE'S BORDERS AND INTO CANADA IN EXCESS OF THE BOARD'S JURISDICTION CONCLUSION ....................................................................................................... 58 lll TABLE OF AUTHORITIES CASES Anobile v. Pelligrino, 303 F.3d 107 (2d Cir. 2002) ............................................................................... 41 Cahen v. Boyland, 1 N.Y.2d 8 (1956) .............................................................................................. 30 Donovan v. Dewey, 452 u.s. 594 (1981) ......................................................................... 41, 42, 43,44 Dutchess/Putnam Restaurant and Tavern Assoc. v. Putnam County Dept. of Health, 178 F.Supp. 2d 396 (S.D.N.Y. 2001) ................................................................. 27 Equine Practitioners Assn. v. New York State Racing and Wagering Board, 105 A.D.2d 215 (1st Dep't 1984) modified, 66 N.Y.2d 786 (1985) ............ 38,48 Glenwood TV, Inc. v. Ratner, 103 A.D.2d 322 (2d Dep't 1984), aff'd, 65 N.Y.2d. 642 (1985) ....................... 45 LaChance v. NY.S. Racing and Wagering Ed., 118 A.D.2d 262 (1st Dep't 1986) ....................................................................... 56 Laterza v. N Y.S. Racing & Wagering Ed., 68 A.D.3d 1509 (3d Dep't 2009) ....................................................................... 37 Matter of Union Indemn. Ins. Co. of NY., 92 N.Y.2d 107 (1998) ........................................................................................ 27 New York Automobile Ins. Plan v. New York Schools Insurance Reciprocal, 262 A.D.2d 152 (1st Dep't 1999) ....................................................................... 27 New York Statewide Coalition of Hispanic Chambers ofCommerce v. New York City Dept. of Health and Mental Hygiene, 110 A.D.2d 1 (1st Dep't 2013) ........................................................................... 26 IV New Yorkv. Burger, 482 u.s. 691 (1987) ........................................................................................... 45 Nicholas v. Kahn, 47 N.Y.2d 24 (1979) .......................................................................................... 27 People v. Quackenbush, 88 N.Y.2d 534 (1996) ........................................................................................ 42 Ralston v. Blum, 105 Misc.2d 357 (Sup. Ct. Tompkins Co. 1980) ............................................... 27 Rent Stabilization Assn. of New York City v. Higgins, 83 N.Y.2d 156 (1993) cert denied, 512 U.S. 1213 (1993) ................................ 26 Sokolov v. Village of Freeport, 52 N.Y.2d 341 (1981) ........................................................................................ 50 Spevackv. Klein, 385 U.S. 511 (1967) .................................................................... 56 Swint v. City of Wadley, Alabama, 51 F.3d 988 (11th Cir. 1995) ..................................................... ; ........................ 44 United States v. Biswell, 406 u.s. 311 (1972) ........................................................................................... 44 Village of Fairport v. Teremy, 266 A.D.2d 909 (4th Dep't 1999) ...................................................................... 47 STATUTES CPLR 2221 .............................................................................................................. 23 CPLR 5601(b)(l) ....................................................................................................... 8 CPLR 5 602 .............................................................................................................. 23 Pari-Mutuel Revenue Law §36 ................................................................................ 43 Racing Law Section 101(1) ......................................................................... 10, 28,43 Racing Law Section 1 04(1) ............................................................................... 28, 43 Racing Law Section 301(2)(a) ......................................................................... Passim v Racing Law Section 31 O ................................................................................... Passim Racing Law Section 902(1) .............................................................................. Passim OTHER AUTHORITIES 71 IAC 8-3-5(e) ....................................................................................................... 46 9 NYCRR Part 4120.2 ............................................................................................. 31 9 NYCRR §4113.5 .................................................................................................. 35 9 NYCRR § 4113.6 ................................................................................................. 35 9 NYCRR § 4120.1(g) ............................................................................................... 1 9 NYCRR § 4120.2 ......................................................................................... 3, 4, 18 9 NYCRR § 4120.17(a) ..................................................................................... 23,44 9 NYCRR §§ 4120.17(a)-(j) ...................................................................................... 1 9 NYCRR § 4120.17(b) .................................................................................... Passim 9 NYCRR § 4120.17(c) ................................................................. 6, 9, 13, 15, 18, 56 9 NYCRR § 4120.17(e)(3) ...................................................................... 3, 18, 20, 58 9 NYCRR § 4120.17(g) ..................................................................... 9, 12, 39, 51, 52 9 NYCRR § 4120.17(i) ...................................................................................... 51, 54 N.J.A.C. 13:70-14a.13(b) ........................................................................................ 46 N.Y. Const. art. III § 1 ....................................................................................... 25, 26 VI Preliminary Statement This appeal concerns the long-standing challenge of the Petitioners- Appellants ("petitioners") 1 to the out-of-competition testing regulations governing the harness race horse industry as promulgated by the Respondent New York State Racing and Wagering Board2 and as set forth in 9 NYCRR §§ 4120.17 (a)-G) and 9 NYCRR § 4120.1(g) (hereafter the "Rules" and/or the "OCTR").3 As a threshold matter, the petitioners challenge the legal validity of the Rules and not the wisdom of equine drug testing. Indeed, as has been emphasized below, petitioners firmly support drug testing and recognize the importance of assuring fairness and integrity in horse racing. However, drug testing rules must be reasonable and fair to all concerned. While throughout these proceedings the Board has repeatedly sought to justify its regulatory scheme based on the breadth of its jurisdiction over horse racing activities, the plain and unambiguous language of the relevant enabling 1 Each of the individual petitiOners are Board-licensed race horse owners and/or trainers, petitioner Banca and petitioner Ford each own private horse farms within New York State, and Standardbred Owners Association, Inc. is a domestic not-for-profit corporation representing owners, trainers, drivers, caretakers, blacksmiths, and farm owners as active and associate members who race harness horses at all seven New York State pari-mutuel race tracks and county fairs, including non pari-mutuel fairs where state funded races distribute purses. 2 In 2012, the Legislature consolidated the Respondent Board and the State Lottery Commission into a single agency, the New York Gaming Commission. L 2012, ch. 60. For purposes ofthis brief, respondent is refelTed to as "the Board" for consistency with the record references. 3 A copy of 9 NYCRR §§ 4120.17(a)-G) appears at pages 47-48 of the Record on Appeal submitted herewith and 9 NYCRR § 4120.1(g) appears at page 46 ofthe Record on Appeal. statutes confirm that its authority is not unlimited. The challenged Rules constitute an unprecedented sweeping and overly broad regulatory scheme in this State through which the Board has unilaterally empowered itself with, among other things, the authority to: • conduct equine drug testing on virtually any race horse owned or trained by a licensee without any advance notice or any factual predicate at any location -- including across state and international borders-- regardless of a horse's purportedly prospective participation in a particular race meet within a six-month time frame (which participation the Board claims that it is somehow able to "anticipate"); • conduct random, warrantless searches of properties of both licensees and non-licensees (including [i] owners of private horse farms within this jurisdiction who are not licensed by the Board, and [ii] any other off-track location, including those beyond state and national borders) at any time and without any advance notice or any factual predicate; • issue an absolute, blanket prohibition on all "protein and peptide- based drugs" despite the fact that many such substances have recognized, acceptable therapeutic uses, and notwithstanding that numerous substances banned by the OCTR are otherwise specifically 2 permitted to be used under the Board's restricted medication rules set forth at 9 NYCRR § 4120.2; impose sanctions on private unlicensed individuals who are not subject to the Board's jurisdiction and not participating in a race meet for their failure to cooperate with its Rules; and compel any horse of a licensed owner or trainer that is stabled out-of- state and within 100 miles of a New York race track -- including such race horses stabled in Canada -- to be promptly transported and returned to New York and made available for drug testing at the Board's whim, without any factual predicate and at the sole cost of the owner. By Judgment dated August 10, 2011, and entered August 15, 2011, the Supreme Court, Schenectady County (Powers, J.) annulled the Rules in their entirety on constitutional and other legal grounds and permanently enjoined the Board from enforcing them (see R. 5-28).4 The Board thereafter appealed to the Appellate Division, Third Department which, by Memorandum and Order dated and entered June 6, 2013 (the "Third Depmiment's Order") [R. 451-460]), modified the Supreme Court's Judgment by reinstating the Board's entire regulatory scheme, except for its annulment of9 NYCRR § 4120.17(e)(3) which, it 4 Parenthetical page references preceded by "R." are to the Record on Appeal filed herewith. 3 agreed, improperly seeks to ban all "protein and peptide-based drugs," including numerous medications widely-accepted by veterinarians to have therapeutic value and that are expressly permitted to be administered within certain time frames under other Board regulations (see 9 NYCRR § 4120.2 [R. 389-396]). By Order decided and entered on October 22, 2013, this Court determined, inter alia, that petitioners' appeal of the Third Department's Order "lies as of right" (R. 463) and by Notice of Appeal dated November 6, 2013 and filed November 7, 2013 (R. 448-461), petitioners appealed to this Court. The Third Department's reversal of the Supreme Court's determination that the Board in promulgating the Rules exceeded its delegated authority and appropriate jurisdiction establishes an alarming, undesirable legal precedent that endorses agency regulations that provide for, among other things, random, limitless and unpredictable warrantless intrusions without providing safeguards long recognized, by holdings of this Court and the United States Supreme Court, as being necessary to ensure that agency conduct comports with the requirements of the State and Federal Constitution. While the relevant enabling legislation confers upon the Board ce1iain regulatory powers to advance the public interests in maintaining the integrity of horse racing, that authority is not boundless. Indeed, as further discussed herein, the Third Department's reversal not only fails to consider the unambiguous language of the very statutory authority the Board 4 purportedly relies on in justifying the Rules, but it also overlooks the countervailing compelling interests in preserving an individual's privacy rights and ensuring that the right to be free from illegal searches and seizures is not compromised by a state agency's unauthorized and arbitrary conduct. For example, as detailed in Point I infra, the Third Department, by upholding rules through which the Board has unilaterally vested itself with the unfettered power to test any horse under the care of a New York trainer, has ratified a constitutionally infirm regulatory scheme and disregarded the plain language of the enabling legislation directing equine drug testing to be conducted proximate to a race meet in which the horse is to compete. As discussed in Point II below, by reinstating the Board's related provision set forth in 9 NYCRR § 4120.17(b), which purports to circumscribe the Board's testing authority to a 180-day time frame, the Appellate Division committed further reversible error because this "limitation" is wholly illusory and not reconcilable either with the enabling legislation (which specifically authorizes testing relating to horses "about to participate" in a race meet), actual harness racing practice, or other Board regulations relating to a horse's ability to qualify to compete in a race meet. The Third Department also failed to recognize the constitutional infirmities of the warrantless searches authorized by the OCTR. As is reviewed in detail at 5 Point III herein, by reinstating these provisions, the Board is now permitted to conduct warrantless administrative searches and seizures -- without any limitation to time or location, and without any factual predicate (including on privately-owned horse farms within the state that are owned by individuals who are beyond the Board's licensing jurisdiction). And as detailed therein, the Rules do not provide any advance notice or any particularized standards that ensure the safeguarding of an individual's constitutional rights. Furthermore, as discussed in Point IV below, the Third Department's reinstatement of Rules' sanctioning provisions relating to both non-licensees and Board licensees -- including the OCTR' s imposition of sanctions upon non- licensees which is based on a patent misreading of Section 310 of the Racing, Pari- Mutuel Wagering and Breeding Law ("Racing Law"), 5 also requires reversal. Finally, as discussed in Point V below, the Third Department committed further reversible error by reinstating 9 NYCRR § 4120.17(c), which expands the compulsory power of the Board beyond our state and national borders and permits it to compel any horse of any licensee located out-of-state and within 100 miles of a New York race track to return to the state for testing. As discussed herein, the 5 In 2012, upon the merger of the Board into the New York State Gaming Commission, various provisions of the Racing Law were amended and/or renumbered to reflect this transition. Again, for consistency with record references, this brief will refer to the provisions that predated the merger and were in effect at the time the Board promulgated the Rules. 6 scope of this particular rule also exceeds the ambit of the Board's powers as delegated by the Legislature. 7 STATEMENT OF JURISDICTION AND PRESERVATION OF LEGAL ISSUES This Court has jurisdiction to hear this appeal pursuant to CPLR 5601(b)(l). By Order decided and entered October 22, 2013 (R. 463 ), this Court determined, inter alia, that petitioners-appellants' appeal to this Court "lies as of right." As discussed immediately below, each of the legal questions raised herein have been preserved for this Court's review. For example, the manner in which the Rules, as promulgated by the Board, unconstitutionally and unlawfully exceed its appropriate jurisdiction and the authority delegated to it by the Legislature (Point I herein) was raised throughout the proceedings below by the petitioners and is therefore preserved (see, e.g., [R. 15-20, 52, 54-58, 72-74, 81-82, 304-305, 452-454]; see also brief submitted by petitioners to the Appellate Division, Third Department ["Petitioners' Third Department Brief'] pp. 1-2, 8-18, 28).6 The illegal and arbitrary nature of 9 NYCRR § 4120.17(b)'s 180-day time frame (Point II below) was also raised throughout the proceedings below by the petitioners and is likewise preserved (see, e.g., R. 18-20, 58-61, 305-306, 455-456; see also Petitioners' Third Department Brief, pp. 3, 8, 12, 22-24). 6 Copies of the briefs of all parties filed with the Appellate Division, Third Department were previously submitted to this Court with petitioners' August 29, 2013 Leave Application to this Court. 8 Petitioners' challenge to the constitutionality and legal validity to 9 NYCRR § 4120.17(g) which empowers the Board with overbroad and unfettered authority to conduct warrantless searches on both licensees and non-licensees of the Board without notice, factual predicate or geographic limitation [Point III below] was likewise lodged throughout the proceedings below and is therefore preserved (see, e.g., R. 21-22, 55, 308-309, 422, 455-457; see also Petitioners' Third Department Brief, pp. 32-33). The validity of the sanctions imposed by the Board's regulations (9 NYCRR §§ 4120.17[g], [i]), including the provisions authorizing the Board to impose sanctions on non-licensees for failure to cooperate with the Rules, was also challenged below by petitioners and this question has also been preserved (see, e.g., R. 22, 55-56, 72-74, 80-81, 309 at n. 7, 457-458; see also Petitioners' Third Department Brief, pp. 32-33). Finally, throughout the proceedings below, the petitioners have also continuously challenged the legal validity of 9 NYCRR § 4120.17(c), which authorizes the Board to compel any horse of any licensee that is stabled within 100 miles of a State race track to be returned to the state for testing (see, e.g., R. 20-21, 56-58, 307, 421, 456; see also Petitioners' Third Department Brief, pp. 30-31 ). Therefore, this legal question is also fully preserved for this Court's review. 9 QUESTIONS PRESENTED 1. Under the New York Constitution's separation of powers doctrine and established law, an administrative agency may constitutionally exercise its powers by promulgating rules within the boundaries of its legislative delegation. Similarly, pursuant to well-settled Court of Appeals precedent, when engaging in statutory construction, a court wherever practical should give effect to all language employed and not render superfluous the language of a statute. The relevant enabling provisions for the Rules that particularly address the scope of the Board's authority to promulgate regulations concerning the administration of drugs to harness race horses are Racing, Pari-Mutuel Wagering and Breeding Law (the "Racing Law") Sections 101(1), 301(2)(a) and 902(1) and the clear and unambiguous language of these statutes mandate that equine drug testing be conducted proximate to the race meet. More specifically, Section 101 (1) confers to the Board general jurisdiction to horse racing activities "in the state" and Racing Law § 902(1) provides for "equine drug testing at race meetings" and further authorizes the Board "to promulgate regulations necessary to implement" its provisions (emphasis supplied). Similarly, § 301(2)(a) authorizes the Board to prescribe regulations to prevent "the administration of drugs ... for the purpose of affecting the speed of harness horses in races in which they are about to pmiicipate" (emphasis supplied). Notwithstanding this statutory language, the 10 Rules, as promulgated, empower the Board with unfettered authority to conduct equine drug testing, without advance notice or factual predicate, on any race horse under the care or control of a licensed trainer located anywhere in the world and regardless of its ascertainable potential participation in any impending race meet. Did the Supreme Court properly apply the New York State Constitution and Court of Appeals precedent and correctly determine that the Board exceeded its jurisdictional authority as delegated by the Legislature in promulgating the Rules? 2. In the proceedings below, petitioners challenged the basis of Section 4120.1 7 (b)'s provision permitting the Board to conduct drug testing on any horse "anticipated to compete" within 180 days. During these proceedings (a) the Board's only evidence on this issue confirmed that the substances sought to be banned by the Rules were efficacious for a matter of weeks, not six months; (b) it was conclusively demonstrated that the Board's own regulations provide that a harness horse that has not competed in 30 days is not permitted to race without performing satisfactorily in a non-pari-mutuel qualifying race; (c) the undisputed evidence confirmed that as a matter of actual harness racing practice, no race entry is ever made (or ever contemplated) 180 days before an actual contest is to be run; and (d) the Board conceded that Section 4120.17(b)'s expansive 180 day testing time frame is "not based on science per se." Did the Supreme Court correctly determine that the 180 day testing time frame of§ 4120.17(b) was illusory and, in 11 fact, improperly vested the Board with the unfettered power, to conduct equine drug testing in excess of its authority as delegated by the Legislature and delineated by the underlying enabling Legislation? 3. The Rules (§ 4120.17[g]) permit the Board to enter upon the private property of licensees and non-licensees (such as private horse farm owners) alike and to conduct warrantless searches that are limitless, random and unpredictable. Moreover, the Rules fail to provide for any particularized standards to safeguard an individual's legitimate property concerns and constitutional rights as is mandated by the precedent of the United States Supreme Court and this Court. Did the Supreme Court properly determine that § 4120.17(g) is invalid because such searches unduly intrude upon individuals' privacy rights? 4. The Rules authorize the Board to (a) impose sanctions against non- licensees for non-cooperation relating to the warrantless searches despite the clear and unambiguous language of Racing Law§ 310 that expressly limits the Board's power to sanction such private individuals and entities to those "participating in any way in any harness race meet at which pari-mutuel betting is conducted .... " and (b) impose a "minimum penalty" of a ten-year suspension against licensees for a positive test despite (i) the Board's conceded inability to provide a comprehensive list of substances banned under the Rules; and (ii) the wholesale absence of any split-sampling safeguards in the Rules that would allow a licensee 12 to challenge a false positive. Did the Supreme Court correctly determine that the sanctions imposed under the Rules are unduly excessive and otherwise illegal? 5. Pursuant to the Rules (§ 4120.17[c]), the Board has confened upon itself the power to compel the horse of any licensee located out-of-state and within 100 miles from a state racetrack to be returned to New York State for drug testing. Thus, in promulgating this Rule, the Board unilaterally expanded its compulsory power into other states, as well as Canada, and expanded its authority well beyond the scope of the New York State Supreme Court's subpoena power. Moreover, during the proceedings below (i) the petitioners further established through unrebutted sworn proof, that the Board grossly understated the costs of transporting such horses back to New York and (ii) the Board baldly conceded that its only justification for this 100 mile radius rule was that "a line must be drawn somewhere." Did the Supreme Court properly determine that § 4120.17(c)'s 100 mile radius rule, which unduly expands the Board's power beyond this state and the parameters of its authority as delegated by the Legislature, is arbitrary and otherwise illegal? 13 STATEMENT OF FACTS In 2009, the Board promulgated the OCTR which were to go into effect in January 2010. Thereafter, on January 7, 2010, the day before the 2010 harness racing season at Yonkers Raceway was scheduled to commence, the petitioners initiated this action (R. 70). The New York County Supreme Court Proceedings Petitioners commenced this action by Order to Show Cause in the Supreme Court, New York County (Rakower, J.) (the "Enjoining Court") and moved for an immediate injunction to stay the Rules pending the determination of this action (R. 31-140). In support of their application, petitioners established that by promulgating the Rules, the Board had acted arbitrarily, exceeded its jurisdictional authority as conferred to it by the Legislature in violation of the State Constitution, and further demonstrated the provisions of the Rules were unconstitutional and otherwise legally flawed in various respects. Following the January 7, 2010 court proceedings (R. 141-181), the Enjoining Court, based on the compelling proof submitted by the petitioners and the clear legal and factual shortcomings of the Board's position, granted petitioners the requested immediate relief. In so ruling, Justice Rakower expressed grave conce1ns about the unprecedented breadth and intrusiveness of the Rules and commented that they exceed the Board's jurisdiction in several respects. 14 More particularly, Justice Rakower emphatically observed that the Rules "as proposed are overly broad and ... can be arbitrarily enforced" and also concluded that they are overly intrusive, particularly with respect to private farm owners (R. 180). Noting that the Board's Rules subjected non-licensed, private farm owners to unannounced, warrantless searches without any factual predicate, the Enjoining Court further elaborated that "had the Legislature intended for [the Board] to have an opportunity to go to the private farms, they would have made it that the farms would have to be licensed by the Board. But they didn't" (R. 180). Justice Rakower remarked that "to permit these rules and regulations [to be effectuated] the way they are proposed would be to circumvent the Legislature with regard to access and oversight of these private farms, which are not licensed and not under [the Board's] umbrella" (R. 180-181). The Enjoining Court also noted that Section4120.17(b)'s 180-day testing provision that authorizes the Board to test any race horse "anticipated to compete at New York tracks within 180 days . .. " was not based on any rational basis or scientific fact and was "overly broad" because it "really applies almost to any horse" (R. 162-163). Finally, Justice Rakower observed that Section 4120.17(c)'s "1 00 mile radius rule" permitting the Board to compel the prompt transport and return of any horse of a licensee stabled within 100 miles of a state race track 15 unduly expanded the Board's jurisdiction beyond New York State's borders and, in fact, "out of the country" (R. 151 ). On January 12, 2010, the Enjoining Court issued an Order granting the requested stay "restraining [the Board] from enforcement of the [Rules] ... pending a determination on the petition" (R. 182), and the matter was thereafter transferred to the Supreme Court in Schenectady County. The Schenectady County Supreme Court Proceedings The underlying petition was fully submitted to the Schenectady County Supreme Court (Powers, J.) in October 2010 after transfer. On August 10, 2011, the Schenectady County Supreme Comi issued its Judgment annulling the Rules and permanently enjoining the Board from enforcing them (seeR. 5-28). The Supreme Court's Judgment By its August 10, 2011 Judgment, the Schenectady County Supreme Court annulled the Rules and enjoined the Board from enforcing the OCTR. Notably, the Court's determination expressly considered and determined each of the various issues litigated by the parties in the proceedings below. The Supreme Court held that the Rules exceeded the Board's jurisdiction conferred to it by the Legislature and "[b ]y logical extension" constituted "an encroachment upon inherently legislative action" violating the New York Constitution's separation of powers doctrine (R. 17). Among other things, the 16 Supreme Court observed that the Rules are inconsistent with the plain and unambiguous language of the underlying enabling legislation. More specifically, the Supreme Court emphasized (R. 16-17) that Racing Law Section 902(1) contemplates only equine drug testing conducted "at race meetings" and, further observed (R. 18-19) that the Rules' provision allowing the Board to test harness race horses "anticipated to compete" within 180 days is not reconcilable with Racing Law Section 301(2)(a) which expressly delegates to the Board the authority to prescribe regulations to prevent the administration of drugs designed to affect the speed of harness race horses in races in which they are "about to participate" (R. 18). The Com1 further concluded that the Rules' 180-day testing time frame lacks any rational, objective or scientific basis and is illusory because "[t]here is simply no objective criteria upon which to anticipate which horses will compete in the future" and the regulation therefore effectively "allows the Board to test any horse" (R. 18-20). The Court thus annulled this Rule expressly noting that "the Board's enabling legislation does not give the Board the unbridled authority to select horses for testing without any factual predicate" (R. 18). The Supreme Court also observed (R. 22-24) that 9 NYCRR § 4120.17( e)'s absolute and blanket prohibition of all "protein and peptide-based drugs" encompasses specific drugs and substances that the evidence confirmed have 17 widely recognized and accepted therapeutic value and that the Board's regulatory ban also directly conflicts with its own "permitted use" regulations under 9 NYCRR § 4120.2 (see R. 389-396) that specifically authorize certain use of many such drugs. Thus, the Court concluded that this provision also is legally infirm. The Schenectady County Supreme Court further concuned with the New York County Enjoining Court and determined that 9 NYCRR § 4120.17(c) -- which authorizes the Board to require any horse of a licensed trainer or owner stabled out-of-state within 100 miles from a New York race track to be returned to a track for testing - is also wholly arbitrary (R. 20-21 ). And the Supreme Court also correctly concluded that the Rules also unduly infringe upon the privacy rights of both licensees and non-licensees and also authorize sanctions that are illegal and/or unduly excessive (R. 21-22). Additionally, the Supreme Court quite accurately observed that the OCTR are not reasonably related to their enunciated objective of unifonnity, as was urged below by the Board. The Court noted that the OCTR deviated in several significant respects from the other states' out-of-competition regulatory schemes including, most significantly, with respect to the Rules' wholesale omission of any "split- sampling" provision and its absolute, blanket prohibition of "all protein and peptide-based drugs" under §4120.17(e)(3). In so holding, the Court appropriately 18 rejected the Board's claim that its Rules achieve the desired uniformity with other racing jurisdictions that was a purported justification for the Rules (R. 24-25). 7 Finally, in its concluding statement the Supreme Court addressed the unreasonable, unfair and overreaching nature of the Board's regulations. In striking down the Rules, Justice Powers poignantly remarked: (R. 25-26). In this Court's view, there is an inherent unfairness to adopting rules that sweep across an entire industry, looking for one bad apple and subject to all kinds of abuses in implementation and enforcement without any built-in protections for those affected and with disregard for their legitimate concerns. It is disingenuous for the Board to empower itself with, essentially, carte blanche discretion to test whomever, whenever for whatever and then merely pledge to exercise good judgment over such unfettered power. By Notice of Appeal dated September 14, 2011, the Board appealed to the Appellate Division, Third Department (R. 3). 7 While the Board, in an abrupt about-face, subsequently abandoned this argument, the Supreme Court conectly observed that since the issuance of the Regulatory Impact Statement, the Board had defended the Rules "as being substantially similar to the model rule and/or regulations adopted in sister states" (R. 24). Indeed, in its Regulatory Impact Statement, the Board emphasized (R. 106, item 3) that the Rules were similar to out-of-competition rules in New Jersey and Indiana and that they were "based in part on the model rule for out-of- competition testing proposed by the Association of Racing Commissioners" (the "ARCI Model Rule"). In fact, in its own Regulatory Impact Statement, the Board concedes that it did not consider any significant changes to the ARCI Model Rule approach so as to "afford uniformity among the various racing jurisdictions" and further asserted that it "could not identify any compelling reason to deviate from the general standards included in the [ ARCI Model Rule] (R. 106, item 8)." However, as was firmly established below (see, e.g., R. 62-63, 309-311, 419-423), the Rules -- and most notably the lack of any split-sampling provisions and its overbroad, blanket ban on all "protein and peptide-based drugs" -- confirm that the OCTR substantially deviate from other states' regulatory schemes. 19 The Third Department's Order By Memorandum and Order dated and entered June 6, 2013 (R. 451-460), the Third Department modified the Supreme Court's Judgment by reinstating the Board's entire regulatory scheme, except for its annulment of 9 NYCRR § 4120.17(e)(3)'s blanket prohibition of all "protein and peptide-based drugs." Without addressing the overly broad and sweeping nature of the Rules, the Third Department opined (R. 453) that "nothing in the [Racing Law] specifically limits [the Board's] ability to administer drug tests to horses that are either physically located at a state racetrack or immediately scheduled to compete in a race."8 The Third Department thus concluded (R. 454) that in promulgating the OCTR, the Board had acted within the parameters of its authority as delegated by the Legislature and in accordance with the Constitution. As discussed further herein, the Third Department's observation disregards the unambiguous language of the enabling legislation requiring that equine drug testing be conducted proximate to a race meet. Notably, the Third Department's Order overlooks critical evidence that confirms that the Rules' 180 day testing 8 As is discussed further herein (see Point II, infra), this observation by the Third Department does not consider the expansive and overly encompassing character of the Rules which not only fail to provide any objective criteria articulating how the Board can "anticipate" the participation of a horse, or prospective race horse (e.g., one that has never raced before) in a race six months hence, but it also disregards actual harness racing practice and other Board regulations that require certain horses -- before qualifying to participate in a race -- to perform satisfactorily in a non-pari-mutuel qualifying race within 30 days of competing in a pari-mutuel race meet. 20 time frame (purportedly based on a race horse's "anticipated participation in a race meet" six months hence) effectively permits the Board to test any race horse, or potential race horse (i.e., a horse that has not yet competed or qualified), at any time, without any notice or factual predicate, anywhere in the world and thus wholly frustrates the proximity requirements contained in the enabling legislation. The Third Department's reversal also upheld the provisions of the OCTR that permit warrantless entry and searches to be conducted (both inside and outside our state and national borders) -- again without any notice or factual predicate -- not only at the property of virtually every licensed horse owner, trainer and veterinarian in the racing industry, but also at the property of private horse farm owners not required to be licensed and who concededly are private citizens beyond the Board's jurisdiction. As is further detailed below (see Point III, infra), the Third Department's Order invites improper wanantless searches of Board licensees as well as private non-licensees and their respective businesses, without providing any constitutional safeguards that this Comi, the United States Supreme Court, and other courts have held are required by the Fourteenth Amendment. This ruling with respect to private farm owners not within the Board's licensing jurisdiction is particularly troublesome and rests on two dubious propositions. First, it presumes (R. 456-457) that private horse farm owners have a "reduced expectation of privacy" based on a premise that such private individuals are, by association, part 21 of the highly-regulated horse-racing industry (despite the fact that neither horse farms nor the owners thereof are subject to the Board's licensing jurisdiction). Even more problematic is the Third Department's unprecedented and unrealistic conclusion (R. 457) that the Rules provide for adequate notice to such non-licensed individuals because Board-licensed owners and trainers are somehow purportedly obligated to obtain consent in advance from the non-licensee private farm owners for the Board's potential unannounced intrusions upon such property and random warrantless searches. As is further detailed in Point IV below, the Third Department (R. 457-458) also committed error by reinstating the sanctioning provisions of the Rules as against both non-Board licensees and individuals licensed by the Board. For example, the Third Depmiment specifically reasoned (R. 457-458) that the OCTR provisions sanctioning non-licensee private entities and individuals for failing to cooperate with the Rules was authorized by Racing Law Section 310. This conclusion is based on a blatant misreading of that statute. Moreover, in upholding the minimum ten-year suspension period against Board licensees, the Third Depmiment considered neither the unduly severe nature of this penalty, the Board's conceded inability to provide the identity of substances prohibited by the Rules, nor the absence of any safeguards in the OCTR (such as a split-sampling 22 provision) that would afford a licensee a meaningful opportunity to challenge the accuracy of an underlying positive rest result. Finally, the Third Department's Order (R. 456) also authorizes the Board to compel any horse of a licensee located out of state and within 100 miles of a New York State racetrack to be transported and returned to the state for testing at a licensed racetrack at any time within six months of a race in which the Board somehow anticipates it will compete. While the Third Department opined (R.456) that this regulation "is not completely arbitrary," the record evidence confirms otherwise. As discussed in Point V, infra, this Rule, which unduly expands the Board's compulsory power beyond that of the judicial comis of this state, was effectively conceded by the Board itself to have been arrived at in an arbitrary manner. In any event, this regulation, as promulgated, is also in excess of the Board's proper jurisdiction.9 Proceedings Leading Up to the Instant Appeal On June 17, 2013, petitioners moved the Appellate Division, Third Depmiment for an Order granting reargument pursuant to CPLR 2221 or, in the alternative, for permission to appeal to this Court pursuant to CPLR 5602. By Decision and Order dated July 31, 2013, the Third Department denied petitioners' 9 As is further discussed below, the Rules impose no geographic limits whatsoever on the Board's testing activity outside New York and in fact authorize it to enforce its regulations on all horses "stabled off-track grounds" that are "under the care and control of a trainer licensed by the Board." See 9 NYCRR § 4120.17(a). 23 motion in all respects. 10 Petitioners subsequently moved before this Court for Leave to Appeal served on August 29, 2013 and filed with this Court on August 30, 2013. By Order of this Court dated October 22, 2013, this Court issued an Order denying petitioners' motion "upon the ground that an appeal lies as of right" (R. 461 ). By Notice of Appeal served and dated November 6, 2013, and filed with this Court on November 7, 2013 (R. 448-449), petitioners appealed to this Court. 10 A copy of this Decision and Order was previously submitted to this Court on November 15, 2013 as part of petitioners' Preliminary Appeal Statement. 24 ARGUMENT POINT I IN CONTRAVENTION OF THE SEPARATION OF POWERS DOCTRINE OF THE NEW YORK STATE CONSTITUTION AND WELL-SETTLED RULES OF STATUTORY CONSTRUCTION, THE THIRD DEPARTMENT COMMITTED REVERSIBLE ERROR BY (1) DISREGARDING THE PLAIN AND UNAMBIGUOUS LANGUAGE OF THE UNDERLYING ENABLING LEGISLATION MANDATING THAT EQUINE DRUG TESTING BE CONDUCTED PROXIMATE TO A RACE MEET IN WHICH A HORSE COMPETES AND (2) INSTEAD UPHOLDING THE RULES WHICH VEST THE BOARD WITH SWEEPING, UNBRIDLED AUTHORITY IN EXCESS OF ITS JURISDICTION AS DELEGATED BY THE LEGISLATURE In reversing the Supreme Court's determination that the Board, m promulgating the Rules, exceeded its jurisdiction and violated the New York State Constitution, including its separation of powers doctrine (N.Y. Const. art. III § 1 ), the Third Department misapprehended the import of critical statutory language of the enabling legislation that specifically delineates the Board's authority to promulgate equine drug testing regulations. As is further detailed herein, the Third Department's Order ignores well-established canons of statutory construction while overlooking the plain and explicit provisions in the underlying enabling statutes that unambiguously mandate that equine drug testing regulations have a proximate nexus between: (i) the drug testing conducted by the Board; and (ii) a race meet in which the tested horse participates. Because the Board's overreaching regulations disregard and, in fact, violate the proximity requirements mandated by 25 legislation while unduly exposmg horsemen and private citizens to abuse and arbitrary agency enforcement, this Court should reverse the Third Department's Order and reinstate the Judgment of the Supreme Court. As the Supreme Court recognized (R. 16-1 7), the broad and sweepmg powers with which the Board has unilaterally empowered itself by promulgating the Rules must be carefully scrutinized not only with respect to the underlying statutory authorities enacted by the Legislature, but also in conjunction with the constitutional principles, including the separation of powers doctrine of the New York Constitution (N.Y. Const. art. III,§ 1) which establishes the appropriate boundaries of actions of the Legislature, those of administrative agencies, and the delegation of legislative authority to such agencies. "Because the Constitution vests legislative power in the Legislature, administrative agencies may only effect policy mandated by statute and cannot exercise sweeping power to create whatever rule they deem necessary." New York Statewide Coalition of Hispanic Chambers of Commerce v. New York City Dept. of Health and Mental Hygiene, 110 A.D.2d 1, 7 (1st Dep't 2013). See also Rent Stabilization Assn. of New York City v. Higgins, 83 N.Y.2d 156, 169 (1993) cert denied, 512 U.S. 1213 (1993) ("As an arm of the executive branch of government, an administrative agency may not, in the exercise of its rule-making authority, engage in broad-based policy determinations"). 26 Under New York Constitution and its separation of powers doctrine, while the Legislature may not pass on its law-making functions to other bodies, "there is no constitutional prohibition against the delegation of power, with reasonable safeguards and standards, to an agency or commission to administer the law as enacted by the Legislature." Dutchess/Putnam Restaurant and Tavern Assoc. v. Putnam County Dept. of Health, 178 F.Supp. 2d 396, 401 (S.D.N.Y. 2001) quoting Levine v. Whalen, 39 N.Y.2d 510, 515 (1976) (emphasis added); see also Nicholas v. Kahn, 47 N.Y.2d 24, 28 (1979) (observing that an administrative agency may constitutionally exercise its authority by promulgating rules "within the boundaries of its legislative delegation" [emphasis supplied]). Moreover, where, as here, the Legislature's intent is clear "as to the extent of its statutory mandate and as to the limitations upon that mandate, it is not for an administrative agency to countermand the Legislature's intent." New York Automobile Ins. Plan v. New York Schools Insurance Reciprocal, 262 A.D.2d 152 (1st Dep't 1999); Matter of Union Indemn.Ins. Co. of N.Y., 92 N.Y.2d 107, 115 (1998) quoting Kurcsics v. Merchants Mut. Ins. Co., 49 N.Y.2d 451, 459 (1980) (where "the question is one of pure statutory reading and analysis, dependent only on accurate apprehension of legislative intent, there is little basis to rely on any special competence or expertise of an administrative agency"). See also Ralston v. Blum, 105 Misc.2d 357, 363 (Sup. Ct. Tompkins Co. 1980) citing Gibson v. Bd. of 27 Educ. of the Watkins Glen Cent. School Dist., 68 A.D.2d 967 (2d Dep't 1979) (where a statute is "plain and unambiguous, neither the administrative agency charged with its application nor the courts may revise or limit its scope"). According to its own Regulatory Impact Statement (R. 105), the Board's authority to promulgate the Rules is found in Racing Law Sections 101 ( 1 ), 3 01 (2 )(a) and 902( 1 ). 11 While these statutes confer to the Board general jurisdiction over all horse racing activities, the plain language of this legislation make clear that its authority is not limitless. Rather, the unambiguous language of this enabling legislation confirms that the Board may conduct equine drug testing so long as it is conducted reasonably proximate to a race meet, in time and place, in which the harness race horse participates. Racing Law Section 101 (1 ), in pertinent part, vests to the Board "general jurisdiction over all horse racing activities and all pari-mutuel betting activities, both on track and off-track, in the state and over the corporations, associations, and persons engaged therein" (emphasis supplied). Racing Law Sections 902(1) and 11 As noted above (see fn. 5, supra), for the sake of consistency, these statutory references are to the former provisions of the Racing Law that were in effect prior to the Board's merger into the Gaming Commission and at the time the Rules were promulgated by the Board. While Racing Law Sections 301(2)(a) and 902(1) each remain essentially identical to their predecessor statute in all relevant respects, the general jurisdiction section (formerly found at Racing Law Section 101[1]) now appears at Racing Law Section 104(1). Like its predecessor Racing Law Section 1 04(1)' s delegation of authority is geographically confined to statewide activity and it specifically confers to the Gaming Commission "general jurisdiction over all gaming activities within the state and over the corporations, associations and persons engaged therein" (emphasis added). 28 301(2)(a) -- the remaining two enabling statutory authorities relied upon by the Board-- each address the Board's specific authority to promulgate rules relating to the administration of equine drug tests. For example, the plain language of Section 902( 1) of the Racing Law expressly authorizes the Board to implement equine drug testing rules and regulations "at race meets" and provides in relevant part: In order to assure the public's confidence and continue the high degree of integrity in racing at the pari-mutuel betting tracks, equine drug testing at race meetings shall be conducted by a state college within this state with an approved equine science program. The [Board} shall promulgate any rules and regulations necessary to implement the provisions of this section ... (emphasis supplied). The other relevant statutory provisiOn, Racing Law Section 301(2)(a), delineates the specific scope of the Board's authority to issue regulations regarding the administration of drugs to a race horse. Notably, while Section 301(2)(a) empowers the Board to prescribe rules specifically relating to the administration of drugs to harness race horses, it does not grant the Board unbridled power to regulate this particular conduct without regard to a horse's participation in a race meet. To the contrary, Section 301(2)(a) mandates that Board's regulations must relate to the effect of such substances on a horse's ability to perform in an impending race meet. It provides, in relevant part: 29 The [Board] shall prescribe rules and regulations for effectually preventing the use of improper devices, the administration of drugs or stimulants or other improper acts for the purpose of affecting the speed of harness horses in races in which they are about to participate. (emphasis supplied). Taken together, these plain and unambiguous statutory authorities evince the clear legislative intent that Board's equine drug administration regulations require that testing be conducted proximate in time and location to a race meet in which a harness race horse participates. It is, of course, well-settled that "a cardinal principle to be observed in construing legislation [is] that the Court should neither limit nor extend its plain language and that, wherever practical, 'effect must be given to all the language employed.'" Cahen v. Boyland, 1 N.Y.2d 8, 14 (1956) quoting Heerwagen v. Crosstown St. Ry. Co., 179 N.Y. 99, 105 (1904) (emphasis supplied). As this Court emphasized in Cahen, it is a Court's "duty is to presume that each clause ... has a purpose." Id. at 9 quoting Crayton v. Larabee, 220 N.Y. 493, 501 (1917). Notably, prior equine drug testing practices and the Board's own prior regulations fully recognize and conform with the plain and unambiguous language in the enabling legislation mandating proximity between the testing of a race horse and that horse's participation in a race meet. 30 For example, as was demonstrated in the proceedings below, under the established protocols (pre-dating the Board's promulgation of the Rules), the top three finishers of each harness race are tested at the track following each race and, depending on the race format and subject to the track judge's discretion, additional harness horses may be subject to the testing at race meetings at the track on any given day (R. 72, ,-r14). Notably, this practice is fully consistent with the provisions of each enabling statute, including Racing Law Section 301(2)(a) which confers upon the Board the authority to prescribe rules to ensure that the speed for a horse "about to participate" in a race is not affected by the administration of a prohibited substance. Thus, in accordance with the enabling legislation, such established practice ensures that the "equine drug testing" on horses is conducted within the state and "at race meetings" (consistent with §101[1] and as provided in §902[1]) for the purpose of ascertaining whether prior to that race, the horse was "administered drugs or stimulants" for the purpose of "affecting the speed" of that horse in a race in which it is "about to participate" (as required by §301 [2][a]). Similarly, regulations previously promulgated by the Board concerning the administration of drugs to race horses, such as the "Restricted Use" rules set forth at 9 NYCRR Part 4120.2 (R. 390-396) are also consistent with the mandates of underlying legislation. The "Restricted Use" rules: (i) impose prohibitions on the administration of drugs to a race horse for up to one week prior to the start of a 31 racmg program containing a "race in which the horse is to compete;" and (ii) encompass equine drug testing at race meets. Accordingly, these regulations are also fully cognizant of and consistent with the specific proximity requirements expressly mandated by the enabling statutes. As is further detailed in each of the following arguments set forth below (which are incorporated herein by reference and which also constitute independent grounds for reversal), the Third Department's determination that the Rules, as promulgated, fall within the proper scope of the Board's legislatively delegated authority overlooks the clear and unambiguous limitations imposed on that agency by the enabling statutes. Indeed, by validating the Rules, the Third Department effectively ignored and rendered meaningless the provisions of the enabling legislation that mandate both geographical and temporal proximity, 12 and instead reinstated a legally flawed regulatory scheme that exceeds the statutory authority conferred by the Legislature to the Board and violates the separation of powers doctrine of the New York Constitution. 12 For example, the Third Department's Order renders meaningless the statutory language of Racing Law Section 301(2)(a) which unambiguously announces that the central purpose of the Board's authority to prescribe rules and regulations governing the administration of substances to horses is to "prevent ... the administration of drugs ... for the purpose of affecting the speed ofharness horses in races in which they are about to participate" (emphasis added). 32 POINT II SECTION 4120.17(b) OF THE RULES, WHICH ALLOWS THE BOARD TO SELECT FOR TESTING ANY HORSE "AMONG THOSE ANTICIPATED TO COMPETE AT NEWYORK TRACKS WITHIN 180 DAYS," IS ILLUSORY IN THAT IT VESTS THE BOARD WITH THE UNFETTERED AUTHORITY TO CONDUCT EQUINE DRUG TESTING AT ANY TIME WITHOUT NOTICE, GEOGRAPHIC LIMITATION, OR FACTUAL BASIS-- IN EXCESS OF ITS DELEGATED AUTHORITY AND, THE REGULATION'S STATED "TIME FRAME" IS ALSO ARBITRARY AND WITHOUT ANY RATIONAL OR SCIENTIFIC BASIS In a notable departure from its past practice, and in direct contravention of limitations imposed by the underlying statutory authorities upon it, the Board, by promulgating the Rules, has vested itself with unfettered authority to test (without any advance notice or factual predicate) virtually any race harness horse under the care or control of a licensed trainer, located anywhere in the world, and at any time -- and regardless of its supposed potential participation in any ascertainable future race! By reinstating this regulatory provision, the Third Department committed reversible error. Pursuant to its Rules, the Board is permitted to select for drug testing any harness race horse "among those anticipated to compete at New York tracks within 180 days ... " (9 NYCRR § 4120.17[b]). The Supreme Court aptly observed that this provision is fundamentally flawed in two respects. First, the Supreme Court correctly noted that "[t]here is simply no objective criteria upon which to anticipate 33 which horses will compete in the future" and the 180 day window therefore "allows the Board to test any horse." Second, the 180 day period of time is, in any event, an arbitrary time frame designated by the Board and is not reconcilable with its authority to prescribe testing rules for horses "about to participate" as delegated to it by Racing Law Section 301(2)(a) (seeR. 18-20). The Board's six-month testing time frame 1s, as a practical matter, inconsistent with actual harness racing practice as well as other Board regulations that address the manner in which a harness race horse may qualify to compete in pari-mutuel racing in New York. Petitioners' undisputed record proof submitted below (R. 60, 78-79) establishes that harness horses typically race on a week-to-week basis, subject to necessary rest periods. The simple, undisputed fact is that no entry is ever made six months before an actual race meet is to be run! Thus, based on actual harness racing practice, the 180-day limitation is wholly illusory. As the Supreme Court correctly remarked, by promulgating the Rules with this illusory testing "time frame," the Board has effectively conferred to itself limitless authority to conduct out-of-competition testing without any objective predicate and without regard to any particular race in which such horse is "about to participate." 34 The purported six-month testing "time frame" of 9 NYCRR § 4120.17(b) also is inconsistent with the Board's own regulations that allow harness race horses to qualify to compete and enter races. Pursuant to 9 NYCRR §4113 .5 (R. 319), a horse that has not competed in thirty (30) days is not permitted to "compete at New York tracks" unless and until it first performs satisfactorily in a non pari-mutuel qualifying race. See 9 NYCRR § 4113.6 (R. 322). This thirty (30) day qualifying period further establishes the lack of any rational basis for Section 4120.17(b )'s provision which effectively authorizes the Board to select for testing any horse it somehow "anticipate[s] to compete at New York tracks within 180 days." Additionally, as the Supreme Court and the Enjoining Court both also recognized (see, e.g., R. 17-18, 163, 180-182), the 180-day time frame set forth in the OCTR is arbitrary, illusory and effectively allows the Board to abrogate to itself unlimited and unfettered equine testing powers that are simply not compatible with the limitations that are clearly pronounced by the underlying enabling legislation. The lack of any rational basis to support the Rules' six-month testing period under §4120.17(b) is confirmed by the evidence referred to by the Appellate Division's Order itself. 35 For example, in concluding that this six-month testing period is "not wholly arbitrary or capricious" (R. 455), the Third Department expressly relied upon the Board's expert's non-specific affidavit testimony in which he claimed that certain unidentified prohibited substances can potentially remain "efficacious for many weeks or longer" and can potentially "affect performance long after the drug can be detected" (R. 455). Rather than providing support for Section 4120.17(b )' s unduly expansive (and illusory) six-month time frame, this expert testimony actually confirms that the efficacy period for the substances particularly targeted by the Rules is, at best, measured in weeks, not months (much less six months!). Notably, petitioners' expert's unrebutted affidavit testimony (R. 330-331) -- which was not disputed by the Board's expe1i's reply affidavit (R. 414-416) or any other evidence below -- asserted that there exists no "published scientific information or other empirical data that provides any support" for the Board's overbroad six-month testing time frame. And, as the Supreme Court further remarked (R. 18), in the face of petitioners' undisputed proof confirming the lack of any empirical or objective data to support a rational basis for this regulation, the Board itself conceded that its 180-day time frame for testing "is not based per se on science" (R. 162, lines 12-13; R. 330). Simply stated, contrary to the Third Department's determination, the Board's expert's assertion (especially when viewed together with all of the expe1i testimony received below) does not support or otherwise 36 validate the Board's arbitrary six-month time frame for its out-of-competition • 13 testmg. As the Supreme Court observed, the Rules' six-month time frame is not reconcilable with the enabling legislation. Both the Supreme Court and the Enjoining Court correctly concluded that this particular provision effectively confers to the Board unbridled authority and free rein to test any race horse at its whim. Indeed, in noting its concurrence with the Enjoining Court, the Supreme Court appropriately and accurately noted: The Court concurs with Justice Rakower's apt words regarding the overbroad and vague fixing of a 180 day period that "it's not a red herring because it is a very large net . . . it may be that you only want to ensnare the ones who are going to be competing in that way but where it becomes overly broad is when it casts beyond those that you hope to catch and really applies almost to any horse." (R. 18; see also R. 163) (emphasis in original). 13 The validity ofthe Board's stated premise for this entire regulatory scheme in general, and for the Rules' 180-day testing period in particular (i.e., that illicit blood doping is undetectable by current race-day testing procedures and practices), is highly questionable in light of the Third Department's decision and underlying findings in Laterza v. NYS. Racing & Wagering Bd., 68 A.D.3d 1509 (3d Dep't 2009). In Laterza, the relevant harness race horse submitted to routine post-race urine testing on April 17, 2007 (almost seven years ago). While the Appellate Division annulled the suspension imposed upon the trainer in that case, it specifically upheld as legally reliable a new equine drug test, referred to as an ELISA anti-body screening test, that detects the presence of blood doping agents (e.g., rhEPO/DPO) that the Board today continues to claim are not detectable by race-day testing. 68 A.D.3d at 1511. The Board's purported "justification" for this Rule is thus also based on outdated science (as of almost seven years ago!) and for this additional reason, the Third Department's reinstatement of 9 NYCRR § 4120.17(b) should be reversed. 37 Equine Practitioners Assn. v. New York State Racing and Wagering Board, 105 A.D.2d 215 (1st Dep't 1984) modified, 66 N.Y.2d 786 (1985), cited by the Third Department on this point (R. 456), does not require a different result. In that case, the First Department expressly noted that the challenged rules before it involved the administration of specified drugs to a race horse within a week "prior to the start of a program containing a race in which the horse is to compete" 105 A.D.2d at 216. The First Department further observed that "the [challenged] regulations apply only to horses participating in a race" (1 05 A.D.2d at 218 [emphasis supplied]). Thus, the equine drug administration regulations at issue in Equine Practitioners, unlike those at issue here, fully conformed with the temporal proximity requirements mandated by the Legislature's enabling legislation. 14 Accordingly, for all of the foregoing reasons, the Third Department's reinstatement of the Rules-- and, in particular, its validation of Section 4120.17(b) and its 180-day testing time frame provision -- should be reversed in all respects. 14 Furthermore, as discussed in Point III below, because the Rules (9 NYCRR § 4120.17[a]) authorize the Board to conduct equine drug testing on any horse "stabled off-track grounds" without any geographic limitation, so long as it is "under the care or custody of a trainer or owner licensed by the Board," they also are not reconcilable either with the temporal or geographic proximity requirements contained in the enabling legislation discussed at Point I, supra. 38 POINT III THE THIRD DEPARTMENT COMMITTED REVERSIBLE ERROR IN REINSTATING THE RULES -- AND IN PARTICULAR SECTION 4120.17(g) -- BY WHICH THE BOARD HAS UNILATERALLY EMPOWERED ITSELF WITH THE UNBRIDLED AUTHORITY TO CONDUCT RANDOM WARRANTLESS SEARCHES, ON LICENSEES AND NON-LICENSEES ALIKE, AT ANY TIME WITHOUT NOTICE OR FACTUAL PREDICATE, AND WITHOUT ANY GEOGRAPHIC LIMITATION In promulgating the OCTR, the Board has unilaterally abrogated to itself the authority to conduct random warrantless administrative searches and seizures at any time without any geographic limitations and without any notice or factual predicate. This purported authority encompasses private horse farms not subject to the Board's licensing jurisdiction as well as locations beyond our state and national borders. Section 4120.17(g) specifically provides "that the failure or refusal to cooperate [with the OCTR] by any licensee or other person shall subject the licensee or person to penalties, including license suspension or revocation, the imposition of a fine and exclusion from track or facilities subject to the jurisdiction of the Board" (emphasis supplied). 15 15 The unlawful nature of the regulations permitting the Board to impose sanctions on private, non-licensees not participating in a race meet is fully discussed at Point IV, infra. 39 The Third Department reversed the Supreme Court's determination that the Rules "are overly intrusive and infringe upon the fundamental right to privacy" (R. 17) and instead upheld this regulatory scheme as legally valid. Notably, with respect to private farm owners, the Third Department reasoned (R. 456-457) that because the horse racing is a highly regulated industry, private farm owners (despite being outside of the Board's licensing jurisdiction) "have a reduced expectation of privacy" that must yield to the Board's "substantial interest" in entering private property to detect performance-enhancing drugs. The Third Department further opined (R. 457) that because Board licensees purportedly have an affirmative "obligation to obtain permission from property owners for possible unannounced visits by the [Board's] representatives," these non-licensed private owners have adequate notice of any such Board action. As discussed below, the Third Department's Order should be reversed because the Rules are invalid as to licensees as well as private individuals beyond the Board's licensing jurisdiction. A. The Warrantless Searches Authorized by The Rules Are Constitutionally Invalid as to Both Licensees and Non-Licensees and Exceed the Appropriate Jurisdiction of the Board As a preliminary matter, the Rules permitting the Board to conduct random, warrantless administrative searches and seizures at any time and without notice or factual basis or geographic limitation (as to licensees and non-licensees alike), do 40 not provide adequate safeguards to protect individuals' privacy rights. Indeed, in upholding the Rules' provisions authorizing warrantless searches, the Third Department misconstrued Donovan v. Dewey, 452 U.S. 594 (1981) and Anobile v. Pelligrino, 303 F.3d 107 (2d Cir. 2002), which each expressly recognize that even in highly regulated industries, "warrantless inspections of commercial property may be constitutionally objectionable if their occurrence is so random, infrequent or unpredictable that the owner, for all practical purposes, has no real expectation that his property will from time to time be inspected by government officials" (Donovan v. Dewey, supra, 452 at 599) and further emphasize that a regulatory statute providing for a warrantless search must provide "a constitutionally adequate substitute for a warrant" that ensures the discretion of the agents is "carefully limited in time, place and scope" (Anobile v Pelligrino, supra, 303 F.3d at 118 [emphasis supplied] [citations omitted]). The warrantless searches authorized by the Rules fail to protect against unchecked and arbitrary conduct of Board agents as is required by well-settled precedent of both this Court and the United States Supreme Court. Indeed, this Court has emphatically observed that specific rules must govern warrantless administrative searches such as those searches authorized by the Rules so as "to guarantee the 'certainty and regularity of ... application' [and] 'provide either a meaningful limitation on the otherwise unlimited discretion the statute affords or a 41 satisfactory means to minimize the risk of arbitrary and/or abusive enforcement."' People v. Quackenbush, 88 N.Y.2d 534, 542 (1996) quoting People v. Scott, 79 N.Y.2d 474, 499-500 (1992). Similarly, in addressing the provisions of the Federal Mine and Health Act, the United States Supreme Court in Donovan v. Dewey, 452 U.S. 594, 603, 604 (1981) emphasized that to satisfy the Fourth Amendment, warrantless administrative search programs must provide sufficient "certainty" and "predictability" to constitute a constitutionally adequate substitute for a warrant. The Rules here do not provide adequate limitations or safeguards against arbitrary and abusive Board enforcement. For example, the occurrence of the searches under the Rules is completely unpredictable. The selection of which horses are to be tested is left to the sole discretion of "State judges or any Board representative"(§ 4120.17[a]) and the only purpmied limitation on that discretion is to choose among those "anticipated to compete at NewYork tracks within 180days" (see §4120.17[b]) --which as has been demonstrated above (see Point II, supra) is illusory and provides no limitation or safeguard against arbitrary and/or abusive enforcement by the Board. As discussed above, (see Point II, supra), the Rules provide no standards for 42 "anticipating" which horses will race and the 180-day testing period effectively allows the Board to test any harness race horse anywhere and at any time! 16 Further, the Rules provide no standards for the time, place and scope of the searches. They vest the Board with virtually unlimited authority. The decision of whether a search will be performed is completely discretionary and subjective. Additionally, the Rules permit the testing of any horse, whether located at a racetrack, or stabled elsewhere but under the control of a licensed trainer (even if stabled outside of New York State or beyond our nation's borders!). Such provisions stand in stark contrast to those at issue in cases such as Donovan v. Dewey, supra, where the underlying regulatory scheme affords "certainty and 16 On its appeal to the Third Department, the Board asserted that because Racing Law Section 101(1) conferred upon it "general jurisdiction over all horse racing activities and all pari-mutuel betting activities, both on-track and off-track in the state," its reference to "off- track" justified its out of competition regulations. As previously noted, the statute's inclusion of the term "off track" was never intended to expand the geographic scope of its drug-testing authority. This language was part of a 1973 amendment which enlarged the Board's jurisdiction from beyond harness racing activities in the state (which Pari-Mutuel Revenue Law §36, enacted in 1953, had conferred to the state Harness Racing Commission [the predecessor to the Board]) to specifically encompass "all pari-mutuel betting activities, both on-track and off-track, in the state." That the 1973 amendment's inclusion of "off-track" refers to pari- mutuel betting activities is confirmed by the fact that reference to "off-track" in the underlying legislature materials pertains exclusively to off-track betting activities (see generally L.1973, ch.346 and Governor's Memorandum reprinted in 1973 N.Y.S. Legislative Annual 58). In any event, even if the amendment is read to justify the Board's effmi to unduly and unlawfully expand equine drug testing jurisdiction to horses stabled off-track, this provision nonetheless confirms that the reach of the Board's authority is to be confined to such activities "in the state" - thus fmiher reaffirming the excessive and overreaching nature of the Board's sweeping regulatory scheme which encompasses and allows for extensive out-of-state regulatory activity by the Board. Significantly, as noted above at fn. 11, supra, this statute's successor, current Racing Law Section 301(2) circumscribed by the state's borders by giving it "general jurisdiction over all gaming activities within the state and over corporations, associations and persons engaged therein." 43 regularity of its application [and] a constitutionally adequate substitute for a warrant." Donovan, 452 U.S. at 603; see also United States v. Biswell, 406 U.S. 311, 315 ( 1972) (statute authorizing warrantless administrative search must be "carefully limited in time, place and scope"); Swint v. City of Wadley, Alabama, 51 F.3d 988,998 (11th Cir. 1995) quoting Donovan, 452 U.S. at 601) ("[W]here an act authorizing administrative inspections . . . 'does not provide any standards to guide inspectors either in their selection of establishments to be searched or in the exercise oftheir authority to search,' a search warrant will be required"). In fact, nothing in the Rules prevents Board representatives from entering into other states, or a foreign country, to perform unannounced, warrantless searches and seizures. Notably, the Rules impose no geographic limitation on the Board's testing activities beyond our state borders. Indeed, under 9 NYCRR § 4120.17(a), the Rules purpmi to authorize the Board with the authority to test any race horse that is "stabled off-track grounds" so long as it is "under the care and control of a trainer licensed by the Board" (and who may well be licensed simultaneously by several sister state racing jurisdictions). As such, the Rules as promulgated give the Board unprecedented and unwarranted authority to perform 44 warrantless administrative searches outside New York State and, in fact, beyond our national borders. 17 Also significant is that the Rules provide for random searches without any advance notice or any particularized standards (see§ 4120.17[a]). Notably, even where courts have determined that warrantless administrative searches are permissible without advance notice, they have emphasized that such searches must be governed by particularized standards. See, e.g., New York v. Burger, 482 U.S. 691, 711 ( 1987) (inspections limited to "regular and usual business hours"); Donovan v. Dewey, 452 U.S. 594, 603-04 (1981) ("Act requires inspection of all mines and specifically defines the frequency of inspection ... [such that] the frequency and purpose of inspections [was not left] to the unchecked discretion of Government officers, [and] the Act establishe[ d] a predictable and guided . . . regulatory presence" and "provide[ d] a specific mechanism for accommodating any special privacy concerns that a specific mine operator might have"); Glenwood TV, Inc. v. Ratner, 103 A.D.2d 322, 330 (2d Dep't 1984), aff'd, 65 N.Y.2d. 642 (1985) (searches "limited to ... the licensees' public areas, [and] the statutory 17 The "100-mile" provision in the Rules(§ 4120.17[c]) discussed below (see PointY, infra), addresses only the Board's claimed authority to compel an owner or trainer to bring a horse that is stabled out-of-state within 100 miles of a track, back to a state track for testing. Notably, however, the 1 00-mile provision does not in any way limit the manner in the Rules permit Board representatives to conduct searches and seizures on any out-of-state, privately owned premises where a licensee's horse may be stabled. Thus, under the OCTR, the 100-mile provision provides an alternative method, and not the exclusive method, for the Board to test horses stabled out of state. 45 safeguards were sufficient to protect legitimate privacy concerns"). Again, here, the Rules are woefully inadequate as they provide no particularized standards to safeguard an individual's legitimate privacy concems. 18 Put simply, the Rules permit the Board to conduct limitless, random and unpredictable searches. They do not comport with the legal requirements for administrative warrantless searches and they fail to comply with the clear directives of the United States Supreme Court, this Court, and other courts concerning the standards required to ensure the safeguarding of an individual's constitutional rights. Accordingly, the Third Depmiment's reinstatement of the Rules on this ground must be reversed. B. For Additional Reasons, the Enforcement of the Rules Against Individuals Not Licensed by the Board is Constitutionally Infirm and Otherwise Illegal In addition to the foregoing reasons outlined in subsection (A) above that apply to Board licensees and non-licensees alike, for the reasons set fmih below, the Rules are constitutionally infirm and otherwise illegal with respect to non- licensees, such as private horse farm owners. 18 While not determinative of the underlying issues concerning the Board's authority under New York law or the legal validity of the Rules, it is instructive that in contrast to the Board's Rules, several sister racing jurisdictions impose express restrictions on the time, place and scope of equine drug testing at off-track facilities. See, e.g., [Kentucky] 810 KAR 1:110 Section 4( 4) (limiting testing period on private facility to between 7:00a.m. and 6:00p.m.); [Indiana] 71 lAC 8-3-S(e) (limiting off-track testing on private facility to "only between the hours of 7:00a.m. and noon"); [New Jersey] N.J.A.C. 13:70-14a.13(b) (permitting testing at only those facilities subject to its State Racing Commission's licensing jurisdiction). 46 While the Third Department's Order acknowledged that private farm owners are not within the Board's jurisdiction, it nonetheless opined that the regulations were valid as they relate to private farm owners/non-licensees because: (i) private farm owners are part of horse racing which is "a highly regulated industry" (R. 456-457); (ii) "the regulation [itself] provides adequate notice to private farm owners that such testing may occur ... " (R. 457); and (iii) 4120.17G) provides that licensed owners and trainers "shall take any steps necessary to authorize access by Board representatives to such off-track premises" (R. 457). In so holding, the Third Department overlooked several substantial legal deficiencies in the Rules and also failed to recognize that a non-licensee's privacy rights cannot be compromised based upon a licensee's regulatory obligation, or his presumed compliance therewith. First of all, the Third Department's Order fails to consider the true nature of private horse farms in this state. To be sure, settled law confirms that " [ w] arrantless administrative searches will be upheld where the premises sought to be inspected are 'subject to a long tradition of pervasive government regulation ... "' Village of Fairport v. Teremy, 266 A.D.2d 909, 910 (4th Dep't 1999) quoting People v. Quackenbush, 88 N.Y.2d 534, 541-542 (1996) (emphasis added). Significantly, however, in New York, private horse farms (and their owners) are not and never have been subject to pervasive government regulation. 47 They are, in fact, outside of the ambit of the Board's licensing jurisdiction. The Third Department's conclusion is without legal basis. 19 And, because private farm owners are not subject to the Board's jurisdiction/0 the Third Department's determination (R. 457) that "the [Rules] provide[] adequate notice to private horse farm owners that such testing may occur if they house horses under the care and control of licensed race horse owners and trainers," is unreasonable, unrealistic, and unwarranted. The Third Department's reasonmg (R. 457) that the regulations do not impermissibly infringe on the legal rights of such private property owners because the provisions of § 4120.17 (j) direct a licensee "to take any steps necessary to authorize [Board] access" to privately owned farms is also without any legal basis. While the Third Depmiment posited (R. 457) that the Board's regulatory scheme is legally valid because it imposes upon its licensees "an obligation to obtain permission from property owners for possible unannounced visits by the [Board's] 19 Notably, in Equine Practitioners Association, Inc., supra, 105 A.D.2d at 221, the First Department, in observing that racetrack veterinarians were "participants in [the] pervasively regulated business" of horse racing reasoned that each of these Board-licensed professionals "has voluntarily chosen to subject himself to a full arsenal of governmental regulations." Because private horse farm owners in New York (and in other jurisdictions) are not licensed by the Board, a similar conclusion with respect to such individuals is unwananted. 20 In other racing jurisdictions, such as New Jersey, this is not the case. In New Jersey, for example, horse farms are subject to the New Jersey Racing Commission's licensing regulations (see, e.g., New Jersey Dept. of Law and Public Safety§ 13:71-7.26 [seeR. 79, 114-115]). 48 representatives, thereby placing the burden on licensed individuals rather than individuals who are not licensed," this reasoning is flawed on several grounds. As discussed above (see Point III(A), supra), because the Rules do not constitute a constitutionally adequate substitute for a warrant, they do not provide a valid basis for permissible warrantless administrative searches. Moreover, even accepting the Third Department's proposition that all license applicants, including owners and trainers, are deemed to consent to off-track searches and are "required to 'take any steps necessary to authorize"' off-track searches (R. 457), this "burden" on licensees does not eviscerate a private farm owner's (and non-licensee's) Fourth Amendment rights. Although a licensee might be subject to a regulatory duty to "obtain permission from the property owners for possible unannounced visits," there is no assurance that the licensee will seek such consent. Moreover, a licensee's own consent cannot be deemed to constitute consent for another (i.e., a non-licensee private farm owner). Nor is there any legal basis validating the Third Depmiment's underlying premise that one's personal right to be free from illegal searches and seizures can be waived by a regulation of an agency that lacks jurisdiction over the very individual upon whose privacy rights it threatens to infringe. A private farm owner has a constitutional right to object to impermissible warrantless searches, and the Board cannot coerce horse farm owners to consent to 49 such searches by imposing penalties on them for their failure to cooperate. As this Court observed in Sokolov v. Village of Freeport, 52 N.Y.2d 341 (1981 ): !d. at 346. [Lawmakers] may not compel [an] owner's consent to a warrantless inspection upon the theory that these searches are a burden which a property owner must bear in exchange for the right to open his property to the general public for rental. It is beyond the power of the State to condition an owner's ability to engage his propetiy in the business of ... rental upon his forced consent to forego certain rights guaranteed to him under the Constitution. * * * In sum, the Rules fail to provide adequate standards that ensure constitutionally permissible warrantless administrative searches and the regulatory obligations of licensees cannot be deemed to compromise a non-licensee's privacy rights. The Third Department's contrary determination conflicts with established precedent of this Court and that of the United States Supreme Court. Indeed, because the Rules authorize the Board to engage in improper searches that unduly infringe upon the constitutional rights and privacy interests of licensed individuals as well as private individuals beyond that agency's licensing jurisdiction, this portion of the Third Department's Order must likewise be reversed. 50 POINT IV THE THIRD DEPARTMENT'S REINSTATEMENT OF THE RULES' SANCTIONING PROVISIONS AS TO NON-LICENSEES AND LICENSEES ALSO MUST BE REVERSED In annulling the OCTR, the Supreme Court (R. 18) invalidated 9 NYCRR § 4120.17(g) which expressly provides that the Board may impose penalties, including fines, upon individuals other than Board licensees who fail or refuse to cooperate with the Board's testing procedures under the Rules, as well as sanctions imposed against Board licensees, including 9 NYCRR § 4120.17(i)'s "minimum penalty" of a ten-year suspension against a licensed trainer or owner should a horse test positive under the Rules. In reversing the Supreme Court Judgment, the Third Department improperly reinstated each of these sanctioning provisions. As further discussed below, the Third Department's reinstatement of 9 NYCRR § 4120.17(g)'s provisions, authorizing the imposition of sanctions against private, unlicensed individuals not participating in a race meet and beyond the Board's jurisdiction, is based on a clear misreading of Racing Law Section 310. Likewise, the Appellate Division's reversal of the Supreme Court's Judgment invalidating the Rules' sanctioning prov1s1ons relating to licensees is also unwarranted and should likewise be reversed. 51 A. The Third Department's Reinstatement of Section 4120(g) 's Provisions Authorizing the Board to Sanction Non-Licensees for Failing to Cooperate With the Board's Enforcement of the Rules is Based on a Patently Incorrect and Unwarranted Reading of Racing Law Section 310 The Third Department's reversal of the Supreme Court's annulment of 9 NYCRR § 4120.17(g), which authorizes the Board to sanction private non- licensees for failing to cooperate with the Board's enforcement of the Rules, is premised on a blatant misreading of Section 310 of the Racing Law. Notably, although the Third Department initially emphasized that § 4120.17(g)'s "cooperation" provisions applied only to non-licensed "designees of licensed trainers and owners" (R. 457), it acknowledged that this provision (1) permits the Board "to impose fines and penalties on 'any licensee or other person' who fails or refuses to cooperate ... " (R. 457); and (2) "does not explicitly apply to farm owners" (R. 457). 21 Nonetheless, without ever addressing this lack of clarity in the Rules, or the delineating their proper scope, the Third Department facilely concluded that any seeming inconsistency in the regulatory language may be resolved by resorting to Section 310 of the Racing Law -- which it erroneously 21 While the Third Department noted that private horse farm owners are not specifically identified in the OCTR, the Rules clearly contemplate their participation and cooperation acting on behalf of licensees. The relevant regulatory provisions require that individuals: (1) assist "in the immediate location and identification of a horse selected for out-of-competition testing" (subdivision [g][l]; (2) provide the Board with "a stall or safe location" (subdivision [g][2]); (3) assist in "procuring samples" (subdivision [g][3]; and (4) obey "any instruction" of the Board in furtherance of the Rules' testing procedures (subdivision [g][4]). 52 interpreted to authorize the Board "to impose fines or penalties on anyone 'participating in any way' in harness racing" (R. 457-458). Based on this clear misreading of the statute, the Third Department erroneously concluded that "leasing prope1iy to licensed owners and trainers of race horses constitutes participating [in harness racing] 'in any way' for purposes of that statute" (R. 458). The Third Department's determination of this issue should be reversed because it relies on an incomplete and inaccurate reading of the statutory language. The relevant language of Section 310 confirms that the Board's power to impose such sanctions is actually far more limited than suggested by the Third Department. The plain and unambiguous language of Racing Law Section 31 0 explicitly provides that the Board may only sanction those entities and individuals "participating in any way in any harness race meet at which pari-mutuel betting is conducted .... " (emphasis added). Clearly, even when stabling horses of licensed trainers and owners -- an unlicensed private farm owner is not "participating in ... a harness race meet ... " Section 310 thus provides no basis for the Board to impose sanctions upon such private individuals and reversal of the Third Department's Order on this ground is therefore required. 53 B. The Third Department's Reinstatement of the OCTR Sanctioning Provisions That Relate to Licensees is Also Unwarranted and Should be Reversed The Third Department also improperly reversed the Supreme Court's Judgment's annulment of the OCTR sanctioning provisions concerning Board licensees. With respect to Section 4120.17(i)'s "minimum penalty" of a 10-year suspension, the Supreme Court deemed this provision to be, in all but the most extreme situations of horse doping, unlawfully disproportionate to the conduct involved (R. 22). In reversing this determination, the Third Department asserted (R. 458) that because the Rules provide for a possibility that a trainer may receive a lesser penalty by demonstrating "'extraordinary mitigating circumstances' ... [a] 1 0-year suspension, while lengthy, is not so disproportionate to the offense as to shock the conscience ... " The Third Department's reversal overlooks the Board's own acknowledged concessions concerning its inability to provide a comprehensive list identifying the substances banned by its own Rules and also unduly minimizes the significance of the absence of any split sampling procedures in the Rules. As the Supreme Court emphasized (R. 22), in view of the Board's own expert's concessions (R. 255-258) that (1) "a comprehensive list of prohibited substances is not even available;" and (2) "the validity of test results is not necessarily confirmable with the Board's 54 present resources," the penalty set forth in Rules (including its draconian "minimum penalty of a ten [10] year suspension" absent a showing of "extraordinary mitigating circumstances") is clearly excessive. Moreover, the Third Department's suggestion that this ten-year minimum suspension is not excessive because the Rules provide a possible downward departure upon a showing of "extraordinary mitigation of circumstances" is unpersuasive given the overall character of the Board's regulatory scheme. Because the Rules do not provide for any split-sampling procedures, a trainer faced with a violation and who wishes to contest the accuracy of a Board's positive test results has no meaningful method to challenge such a finding. As discussed below (see, e.g., R. 81, 116-118), in two recent Kentucky cases, trainers charged with EPO violations were able to vindicate themselves only by recourse to split-sampling procedures, conducted at the University of Pennsylvania, that conclusively proved that EPO was not present in their horses as had been determined by the Kentucky Racing Commission. Under the Rules here, such owners and trainers not only are deprived of a complete list of banned substances, but face a minimum ten-year suspension and are left with no procedure to exonerate themselves from a false positive test. The Third Depmiment also improperly reversed the Supreme Court's determination (R. 22) that the Rules are further invalid because they permit the 55 Board "to revoke the license of an owner/trainer because he asserts his Fourth Amendment rights." Such a regulatory provision is contrary to established law. As was made clear in LaChance v. N. Y.S. Racing and Wagering Bd., 118 A.D.2d 262 (1st Dep't 1986), a licensee cannot be compelled to waive his constitutional rights and cooperate with the Board in order to avoid the suspension or revocation of his license. See also Spevack v. Klein, 385 U.S. 511 (1967). Accordingly, the Third Department's Order should be reversed on this ground as well. POINTY SECTION 4120.17(c) OF THE RULES UNDULY EXPANDS THE COMPULSORY POWER OF THE BOARD BEYOND THIS STATE'S BORDERS AND INTO CANADA IN EXCESS OF THE BOARD'S JURISDICTION The Third Department's determination reinstating and upholding 9 NYCRR § 4120.17(c), which authorizes the Board to compel any horse of any licensee located out-of-state and within 100 miles from a New York racetrack to be compelled to return to the state for testing, also requires reversal. This Rule runs afoul of the enabling legislation's proximity requirements discussed above and, moreover, expands the Board's compulsory powers beyond this jurisdiction into other states and into Canada as well -- which also exceeds the scope of the subpoena power of our state courts! As a practical matter, this Rule authorizes the 56 Board to compel a horse in a pasture in Canada to be immediately brought to New York (to Buffalo or Batavia, for example) for testing?2 In upholding this 1 00-mile radius rule, the Third Department commented that the regulation is "not completely arbitrary" (R. 456) notwithstanding that: ( 1) the Board arrived at its determination based on its "paltry justification" conceding "[a] line has to be drawn somewhere" (R. 20, 287-288); and (2) the sworn, unrebutted testimony presented by petitioners confirmed that the Board's Regulatory Impact Statement deceptively and substantially understates the true costs of transporting horses and the unreasonable burden it imposes on horsemen (R. 74-76). As the Supreme Court recognized (R. 20-21), the arbitrariness of this 1 00-mile radius rule is plain: it creates two classes of harness race horses stabled off track that are treated differently based upon a randomly-selected distance and will inevitably encourage unscrupulous owners or trainers to stable their horses at locations strategically beyond of the radius of this rule. Insofar as the Third Department's Order upholds this clearly excessive and concededly arbitrary regulation that now unduly extends the reach of the Board's compulsory power in an unprecedented manner beyond our state and national 22 This unwarranted and overreaching aspect of the Rules is, of course, in addition to the Board's attempt to unilaterally empower itself with the authority to conduct random, warrantless searches, without notice, any factual predicate, or any geographic limitation, beyond both our state and national borders (see, Point II, supra). 57 borders (and beyond the reach of our own state courts' subpoena power), it must also be reversed. CONCLUSION For all of the foregoing reasons, the Third Department's Order reversing so much of the Supreme Court's Judgment that annulled and enjoined enforcement of all portions of 9 NYCRR § 4120.17(e)(3) should be reversed and the Supreme Court's Judgment should be reinstated by this Court in all respects. Dated: 973283 Garden City, New York January 2, 2014 Respectfully submitted, MEYER, SUOZZI, ENGLISH & KLEIN, P.C. Andrew J. Turro Kieran X. Bastible Attorneys for Petitioners-Appellants 990 Stewart Avenue, Suite 300 P.O. Box 9194 Garden City, New York 11530-9194 Tel: 516-741-6565 Fax: 516-741-6706 58