Metropolitan News-Enterprise


Tuesday, February 27, 2024


Page 3


Ninth Circuit:

State Agency’s Decision Does Not Bar Federal Lawsuit

Opinion Says California Horse Racing Board Is Barred by State Constitution From Deciding Constitutional Issues, Rendering Its Gratuitous Rejection of First Amendment Claim Without Legal Force, Precluding Preclusive Effect


By a MetNews Staff Writer


The Ninth Circuit U.S. Court of Appeal held yesterday that the decision of a California state administrative agency governing the laws, rules and regulations of horse racing does not preclude a 42 U.S.C. §1983 action in the District Court because the agency does not have jurisdiction over the First Amendment claim raised in a lawsuit over the name of a race horse.

The plaintiff similarly was also not precluded from filing suit in the District Court by virtue of failing to first seek review of the administrative decision in state court.

Circuit Judge Daniel A. Bress wrote for a three-judge panel in reversing the judgment of District Court Judge Fred W. Slaughter of the Central District of California.

Name Causes Dispute

Jerry Jamgotchian and Theta Holdings I, Inc. own a thoroughbred racehorse named Malpractice Meuser. California law requires that thoroughbred race horses be registered with the Jockey Club of New York in order to participate in any California races, and Jamgotchian applied to register the horse with that organization.

Believing the horse to be named after Michael D. Meuser, a Kentucky lawyer specializing in equine law, the club refused registration. It cited Rule 6.F.11 of the “Principal Rules and Requirements of the American Studbook,” which forbid names “designed to harass, humiliate, or disparage a specific individual.”

Jamgotchian was encouraged to seek registration for the horse under a different name.

He never did so, but still sought to enter Malpractice Meuser in a race at the Los Alamitos race track. The Los Alamitos Board of Stewards denied entry over the failure to register.

Administrative Decision

Jamgotchian appealed the denial to the California Horse Racing Board (CHRB). Among other claims, he alleged that the Board of Stewards’ enforcement of the requirement that the horse be registered with the Jockey Club resulted in viewpoint discrimination prohibited by the First Amendment.

The CHRB affirmed the Board of Stewards’ decision that Malpractice Meuser could not race without the proper registration. The agency went on to offer commentary as to why it believed the constitutional claims were invalid, but noted that it lacks jurisdiction to decide such claims.

The board advised Jamgotchian that a California superior court would have authority over his claims.

District Court

Jamgotchian did not seek review of the CHRB’s decision in state court, and instead brought the §1983 suit in federal court against individual stewards and CHRB members.

Although no parties raised the issue in the District Court, Slaughter requested briefing on whether the administrative proceedings were preclusive of Jamgotchian’s constitutional claims.

After the briefings, Slaughter held that the agency had already considered the constitutional claims, and as Jamgotchian did not challenge the agency’s decision in state court, the CHRB’s decision precluded the §1983 lawsuit, and his complaint was dismissed with prejudice.

Preclusive Effect

In his opinion reversing that decision, Bress noted that “the Supreme Court has held that, as a matter of federal common law, federal courts must sometimes accord preclusive effect” but that under the 1966 U.S. Supreme Court decision in United States v. Utah Construction and Mining Co., one requisite for doing so is that the agency resolved disputed issues of fact or law that were properly before it. He wrote:

“Here, the CHRB expressly recognized that it lacked the authority to decide Jamgotchian’s constitutional claims, because California law provides that state agencies like the CHRB have ‘no power’ to refuse to enforce a statute on constitutional grounds, or to declare a statute unconstitutional unless a court has already done so….The CHRB thus did not, and could not, ‘properly’ resolve those disputed issues….”

State Review Unnecessary

Jamgotchian’s failure to seek review of the board’s ruling in state court also did not preclude the suit in federal court, Bress said, explaining:

“[B]y treating the CHRB decision as preclusive of issues it could not decide because Jamgotchian did not seek mandamus review in state court, the district court imposed an exhaustion-type requirement of the sort that contravenes Supreme Court precedent on § 1983.”

Noting that a decision to the contrary would create a preclusion trap, which has been clearly rejected by U.S. Supreme Court decisions, Bress wrote:

“The result would be that Jamgotchian—with his constitutional claims yet undecided by any jurisdictionally competent body—could not assert those claims in federal court without going to state court first. Yet, if the state court rejected Jamgotchian’s claims, he would then be precluded from bringing them in federal court.”

Contention Rejected

He rejected the argument that Slaughter’s ruling did not set a preclusion trap because Jamgotchian chose to appeal the Board of Steward’s decision to the CHRB rather than suing first in federal court, which then subjected him to a requirement that he pursue state court relief.

“When the CHRB lacked jurisdiction, as here, its decision lacked preclusive effect under Utah Construction. Any requirement that Jamgotchian go to state court before filing suit under § 1983 would amount to an improper exhaustion prerequisite,” he said.

Bress distinguished case law relied upon by Slaughter by the fact that the issue of whether or not the agency had jurisdiction over the claims being litigated was not dispositive in those cases. Bress wrote:

“We have never held that an agency’s jurisdiction-wanting non-decision has preclusive effect in a later §1983 suit. Nor have we held that the failure to pursue state court review of such a non-decision precludes a corresponding § 1983 claim in federal court. Those propositions are inconsistent with settled precedent.”

The case is Jamgotchian v. Ferraro, 23-55735.


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