Jackson, plaintiff's electricity service was terminated by
Metropolitan Edison, a privately owned utility, because of
non-payment of bills. Plaintiff brought suit under section 1983
claiming she was entitled to notice and a hearing before her
services could be terminated. Plaintiff claimed that the
pervasive regulation of the utility, the virtual monopoly
granted to the utility by the state in the relevant geographic
area, and the essential nature of the service being provided
created state action. Moreover, plaintiff contended that since
the utility's tariff, which was filed with the state, permitted
the utility to cancel a customer's account upon non-payment,
state action existed when such a termination was effectuated.
Notwithstanding these arguments, the Court found these factors
insufficient to establish a "close nexus" between the utility
and the state such that "the action of the [utility] may be
fairly treated as that of the State itself." Id. at 351, 95
S.Ct. at 453. The utility was privately owned and, irrespective
of heavy regulation and a state-granted virtual monopoly, there
was no state action.
We are persuaded by the analysis of the Jackson Court
although we certainly recognize that the plaintiff in Jackson
did not possess a state-issued license as in the case before
us. First, plaintiff contends that both Yonkers and YRC are
heavily regulated by the state, even to a greater extent than
that evident in Jackson. Admittedly, there exists pervasive
regulation by the state of virtually every aspect of the
harness racing business. In fact, without state approval, YRC
could not operate a harness track in the state. N Y
Rac.Pari.-Mut. Wag. & Breed. Law § 307 (1984); N.Y.Comp.Codes
R. & Regs. tit. 9, § 4101.1 (1985). Nonetheless, the Jackson
Court emphatically stated that regulation alone, even if
"extensive and detailed," will not satisfy the close nexus
test. Jackson, 419 U.S. at 350, 95 S.Ct. at 453; see also Lugar
v. Edmondson Oil Co., 457 U.S. 922, 938, 102 S.Ct. 2744, 2754,
73 L.Ed.2d 482 (1982) (government regulation must be connected
to the private entity's decision). Moreover, mere licensing by
the state of YRC is not sufficient to establish state action.
Moose Lodge No. 107 v. Irvis, 407 U.S. 163, 171-72, 92 S.Ct.
1965, 1970-71, 32 L.Ed.2d 627 (1972). Plaintiff further
contends that the monopoly power granted to YRC in the
metropolitan area, especially since Roosevelt Raceway has now
closed, is further evidence of the requisite close nexus
between the state and YRC's decision. Once again, however, the
Jackson Court resolved this issue, stating that plaintiff must
show a relationship between the defendant's actions and its
monopoly status. Jackson, 419 U.S. at 352, 95 S.Ct. at 454. No
such showing has been made since plaintiff can still work at
any other track in New York.*fn9 There has been no suggestion
that a ban from Yonkers amounts to a ban from the other
The mere fact that the state allows YRC to continue to
exercise its common law rights is not state action, absent
some state involvement in YRC's denial of privileges to
plaintiff. See Jackson, 419 U.S. at 357, 95 S.Ct. at 456-57.
There was no exercise by YRC of a power "traditionally
exclusively reserved to the State." Id. at 352, 95 S.Ct. at
454. Instead, the evidence presented shows that YRC's decision
to exclude plaintiff was based on its own business judgment.
See Gilmour v. New York State Racing & Wagering Bd.,
405 F. Supp. 458, 460 (S.D.N.Y. 1975) ("The owners of the raceways,
no less than the state and its official agency, . . . have a
great stake in maintaining and protecting the sport's integrity
against those who would despoil it."). While we recognize that
are present at each race conducted at Yonkers and that these
officials can conduct inquiries into the performances of
drivers and trainers, there has been no suggestion that these
state officials were involved in YRC's decision to exclude
plaintiff.*fn11 Moreover, the fact that YRC's decision, may,
at least in part, have been based on the same factual
predicates that previously resulted in disciplinary actions by
the state does not turn YRC's actions into state action. It
would be unacceptable if any state action, like an arrest,
could not be relied on by a private entity in making a
decision to grant or deny certain privileges because such
reliance would make the denial of privileges a state decision.
The state must be "responsible" for the defendant's conduct
and this did not occur. See Blum v. Yaretsky, 457 U.S. 991,
1004, 102 S.Ct. 2777, 2785-86, 73 L.Ed.2d 534 (1982).
Therefore, we find that plaintiff has not shown state action
under the close nexus test.
B. Symbiotic Relationship
The second test to be applied in determining the existence
of state action is the so-called "symbiotic relationship"
test. This test, announced in Burton v. Wilmington Parking
Authority, 365 U.S. 715, 81 S.Ct. 856, 6 L.Ed.2d 45 (1961),
provides that there will be state action if "[t]he State has so
far insinuated itself into a position of interdependence with
[the entity] that it must be recognized as a joint participant
in the challenged activity." Id. at 725, 81 S.Ct. at 861-62.
Unlike the close nexus test, the state need not be involved in
the particular decision or action, but rather, the overall
relationship between the state and the ostensibly private
entity is reviewed. Myron v. Consolidated Rail Corp.,
752 F.2d 50, 54 (2d Cir. 1985); Stevens v. New York Racing Ass'n,
665 F. Supp. 164, 171 (E.D.N.Y. 1987). In Burton, a private
restaurant located in a state-owned building refused to serve
plaintiff, a black. The Court agreed there was state action
since the restaurant was a lessee of the Wilmington Parking
Authority, a state agency that owned the building. Moreover,
the responsibility for the upkeep and maintenance of the
building rested with the state. Finally, the Court was
influenced by the apparent incongruity of a state-operated
building being open to the entire public if used for parking,
but limited to certain races when the same building, albeit a
different part, is used for dining. Burton, 365 U.S. at 724-25,
81 S.Ct. at 861-62.
Plaintiff argues that application of the Burton analysis to
the facts before us requires a similar finding of state action.
Again, we disagree. In Burton, the restaurant was an actual
lessee in a building owned by the state and paid for with
public funds. The case at bar presents no such facts. Yonkers
is a privately-owned facility, operated for the profit of YRC's
shareholders. While we recognize the existence of a license
agreement issued by the state to YRC, as well as substantial
regulation by the state, this nowhere approximates the level of
interdependence seen in Burton where the state actually owned
the building. The Jackson Court, in fact, similarly refused to
accept the Burton Court's analysis, concluding that the private
owner, though heavily regulated, was not a joint venturer with
the state. Jackson, 419 U.S. at 358, 95 S.Ct. at 457. Moreover,
in the case before us there is no suggestion of the incongruity
that troubled the Supreme Court in Burton. Finally, the fact
that the state receives significant revenues from the track and
that these revenues increase if the track is prosperous does
not create a symbiotic relationship. See Roberts v. Louisiana
Downs, Inc., 742 F.2d 221, 225 (5th Cir. 1984). It cannot be
said that "the State in any realistic sense [is] a partner or
even a joint venturer in [YRC's] enterprise." Moose Lodge No.
107 v. Irvis, 407 U.S. 163, 176-77, 92 S.Ct. 1965, 1973, 32
L.Ed.2d 627 (1972); see also Lemberos v. Laurel Racecourse,
Inc., 489 F. Supp. 1376,
1383 (D.Md. 1980) (similarly distinguishing Burton because
private funds used to acquire track and profits went to private
Therefore, we conclude that there has been no showing of
state action under the symbiotic relationship test either.
C. Other Authorities
The New York Court of Appeals, as we have noted, has never
ruled on this issue. The highest court in the state that has
considered this question concluded that there was no state
action. Arone v. Sullivan County Harness Racing Ass'n,
90 A.D.2d 137, 457 N.Y.S.2d 958, 959 (3d Dep't 1982). Although we
are certainly not bound by this decision, we are persuaded by
the court's analysis. In Arone, the plaintiffs were excluded
from Monticello Raceway and claimed the exclusion was state
action. The Appellate Division, Third Department, disagreed,
relying on the fact that the defendant, as in the instant
action, was a private corporation operating for the profits of
its shareholders. Moreover, the court found that the
association did not have monopoly power since plaintiffs could
work at any of the state's other harness tracks.
Notwithstanding heavy regulation of the industry, the court
held, the NYSRWB allowed the track's proprietors to retain
their common law power to exclude undesirable persons. Finally,
the court noted, there were no state officials involved in the
defendant's specific decision to exclude the plaintiffs. Id.
457 N.Y.S.2d at 959.
The Arone court rejected an argument, similar to one
seemingly raised by plaintiff in the case at bar, that it
should ignore distinctions between New York's harness and
thoroughbred tracks. As noted, harness tracks are operated by
private organizations with the approval of the NYSRWB.
Moreover, the NYSRWB heavily regulates the activities at these
tracks. On the other hand, the state's major thoroughbred
tracks are owned and operated by the New York Racing
Association ("NYRA"), a not-for-profit racing association,
pursuant to a twenty-five year license issued by the NYSRWB.
Any profits earned through such racing inure to the benefit of
the state. Finally, NYRA has a virtual monopoly in New York's
thoroughbred tracks since it operates three of the four tracks
in New York and the one it does not operate, Finger Lakes
Racetrack in Canadaigua, New York, offers substantially lesser
purses than do the other tracks. Therefore, a licensed driver
or trainer effectively can be barred from plying his trade in
New York if NYRA decides not to grant him privileges. See
Jacobson v. New York Racing Ass'n, 33 N.Y.2d 144, 149-50, 350
N YS.2d 639, 642, 305 N.E.2d 765, 767-68 (1973). All these
factors lead to the inexorable conclusion that a decision by
NYRA is state action. See Stevens v. New York Racing Ass'n,
665 F. Supp. 164, 172 (E.D.N.Y. 1987) (state action under symbiotic
relationship test); Saumell v. New York Racing Ass'n, 58 N.Y.2d
231, 240, 460 N.Y.S.2d 763, 768, 447 N.E.2d 706, 710-11 (1983)
(state action conceded by NYRA). See generally Halpern v.
Lomenzo, 81 Misc.2d 467, 367 N.Y.S.2d 653, 656-60 (N.Y. Sup.
Ct. 1975) (discussion of NYRA). As the Arone court concluded,
however, there are sufficient distinctions between NYRA's
ownership and operation of thoroughbred tracks and a private
corporation's ownership of a harness track. We agree that these
distinctions constitute the difference between state action on
the one hand, and private action on the other.
In finding an absence of state action, we are not persuaded
by the cases plaintiff has cited in support of his argument.
In Fitzgerald v. Mountain Laurel Racing, Inc., 607 F.2d 589 (3d
Cir. 1979), cert. denied, 446 U.S. 956, 100 S.Ct. 2927, 64
L.Ed.2d 814 (1980), one of the primary cases plaintiff relies
on, a licensed harness driver and trainer was denied stall
space by Mountain Laurel Racing, Inc., a private for-profit
corporation that operated the Meadows Race Track in
Pennsylvania. The decision was based upon a determination that
the plaintiff had been driving inconsistently, a violation of
state regulations. The court first held that there was no state
action under the symbiotic relationship test. Although the
defendant was highly regulated, much
like YRC, the court found this insufficient to make "the State
a joint venturer with Mountain Laurel." Id. at 596. The court
went on, however, to discuss the close nexus test, concluding
that state action existed. Specifically, the court determined
that while a private corporation does maintain its common law
right to exclude undesirable persons, in this case the
corporation only reached its decision to exclude plaintiff
following a meeting with state officials who had witnessed the
race in question and confirmed that plaintiff was driving
inconsistently. State officials participated in the decision to
exclude Fitzgerald, thereby putting the weight of the state
behind the decision. Id. at 599.
As we have previously noted, determining the presence or
absence of state action in a particular situation is a fact
specific inquiry. We find the facts of Fitzgerald to be
entirely distinguishable from those presented before us. In the
case at bar, YRC, and YRC alone, made the decision to exclude
plaintiff. Plaintiff has offered no evidence suggesting that
anyone at YRC consulted the state racing officials before
reaching its decision. Moreover, YRC, unlike the corporation in
Fitzgerald, did not decide to exclude plaintiff by relying on a
provision of state law that the NYSRWB is charged with
enforcing. Cf. Sims v. Jefferson Downs Racing Ass'n,
778 F.2d 1068, 1077 (5th Cir. 1985) (similarly distinguishing
Fitzgerald). Thus, we are not persuaded by Fitzgerald. Based on
the facts presented before us, YRC's actions cannot be
considered state action for purposes of the Fourteenth
Amendment and section 1983. See Bier v. Fleming, 717 F.2d 308,
310-12 (6th Cir. 1983), cert. denied, 465 U.S. 1026, 104 S.Ct.
1283, 79 L.Ed.2d 686 (1984).
YRC has established that its denial of privileges to
plaintiff was based strictly on its own business judgment with
no state involvement. Moreover, YRC has also shown that no
symbiotic relationship exists between YRC and the state.
Therefore, plaintiff having failed to offer anything to rebut
the conclusion that there was no state action involved in
YRC's decision to deny privileges to plaintiff, we must grant
summary judgment to the defendant. In turn, we deny
plaintiff's motion for a preliminary injunction.