KIP M. MICUDA, ESQ. (SBA 011921) THE LAW OFFICES OF KIP M

APPELLANT RONALD ALVIN SIMMS’ RESPONSE TO ADOR’S OBJECTION TO PORTIONS OF THE DEPOSITION OF

FORMER DIRECTOR WILLIAM J. WALSH

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KIP M. MICUDA, ESQ. (SBA 011921)([email protected])THE LAW OFFICES OF KIP M. MICUDAP.O. Box 39646Phoenix, Arizona 85069Telephone: (480) 231-9520

MARSHALL B. GROSSMAN (Admitted Pro Hac Vice)([email protected])STACY W. HARRISON (Admitted Pro Hac Vice)([email protected])ORRICK HERRINGTON & SUTCLIFFE LLP777 S. Figueroa Street, Suite 3200Los Angeles, California 90017Telephone: (213) 629-2020Facsimile: (213) 612-2499

Attorneys for AppellantRONALD A. SIMMS

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of an Appeal by

RONALD ALVIN SIMMS

A.D.O.R. Denial of License

Case No. No. 14A-020-RAC

APPELLANT RONALD ALVIN SIMMS’ RESPONSE TO ADOR’S OBJECTION TO PORTIONS OF THE DEPOSITION OF FORMER DIRECTOR WILLIAM J. WALSH

(Assigned to the Honorable M. Douglas)

APPELLANT RONALD ALVIN SIMMS’ RESPONSE TO ADOR’S OBJECTION TO PORTIONS OF THE DEPOSITION OF

FORMER DIRECTOR WILLIAM J. WALSH

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I. INTRODUCTION

ADOR’s “Objection” is to six self-selected deposition segments (and the answers thereto)

from the Director’s 311-page deposition transcript.

The sole ground for each of the objections is the claim that the Director “was questioned,

over the objection of counsel on the mental impressions and mental processes that formed the

bases of his decision to deny Appellant a racing license” and that these privilege objections were

proper and the answers to the questions should be stricken. Objection 1:17-24 (emphasis added).

The sole ground for the claim of privilege is that the Director was not required to answer the

questions because he acted in a “quasi-judicial capacity in formulating his decision to deny [Ron]

a license.” Id.

The newly-filed Objection has several fatal defects; prime among them is that at no time

did the office of the Attorney General make any such objections to the questions and

segments which are the subject of their belated Objection. Therefore, any such privilege

has been waived.

In addition to this fundamental misstatement of the deposition record, ADOR argues with

a forked tongue.1 It was just a few weeks ago that ADOR argued to this Tribunal that “the

Department had no duty to afford Appellant any kind of process during the review of

information that resulted in the denial of his license.” Opposition to Spoliation Motion 7:13-15

(emphasis added). Now ADOR argues that the Director should be treated as a judicial or “quasi-

judicial” officer. It cannot be both. Judicial and quasi-judicial officers must provide fair and due

process of law in reaching their adjudicative decisions. See W. Gillette v. Ariz. Corp. Comm’n,

121 Ariz. 541, 542-43, 592 P.2d 375, 376-77 (App. 1979) (“a ‘fair hearing’ is denied in quasi-

judicial administrative proceedings when the finder of fact reaches his decision after ex parte

1 The Tribunal has now again denied Ron the right to examine the Director live in these proceedings. ADOR argued to this Tribunal that his testimony would be “cumulative” of his deposition testimony. ADOR’s Opposition to Appellant’s Renewed Request for a Subpoena Compelling the Testimony of Now-Former Director Walsh 4:18-6:9. It is some of that very deposition testimony which ADOR now seeks to block altogether. The cumulative intent and effect of ADOR’s late objections if granted is to exclude evidence that the Director’s conduct was arbitrary, capricious and biased in denying Ron his license, a clear violation of Ron’s due process rights in these proceedings.

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communications from one side”); State ex rel. Corbin v. Ariz. Corp. Comm’n, 143 Ariz. 219, 226,

693 P.2d 362, 369 (App. 1984) (“a party’s right to due process is violated when the agency

decision-maker improperly allows ex parte communications from one of the parties to the

controversy”).

On the merits, the Objection should be denied for each and all of the following reasons:

The privilege asserted is not recognized in Arizona. And where recognized it may

not be asserted to shield a judicial officer where, as here, there are charges of

corruption, undue influence, destruction of evidence and other criminal or illegal

misconduct.

The Objection is a motion for reconsideration of this Tribunal having overruled the

same objections made when ADOR objected to the use of the deposition at the

hearing. In denying the objections to the use of Director Walsh’s deposition

testimony in this forum, the Tribunal drew the distinction between protecting the

Director from having to testify live (which it denied) and the admissibility of

relevant testimony provided under oath in another proceeding (which it permitted).

In the civil TP Racing litigation, on March 6, 2014, ADOR filed a Motion to

Quash the deposition subpoena of then-Director Walsh, making the same argument

that “Director Walsh acted in a quasi-judicial capacity” and that he was entitled to

assert his alleged “decisional process privilege.” Ex. A 3:12-13, 3:22-24.

ADOR’s “quasi-judicial” privilege argument was rejected by the Superior Court in

the civil TP Racing litigation. As it did at that time ADOR again cites the

inapposite Stoffel, Grimm, and Morgan cases. And again ADOR argues that

Director Walsh should not be required to testify “regarding the process by which

he reached his decision, including the information he considered.” Objection 3:6-

7.

ADOR has waived any such objections by failing to object to the challenged

testimony at the time of the deposition. This was a deliberate decision because

ADOR did raise such an objection to other questions which are not the subject of

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this Objection. See, e.g., EXH 271-TX 583 at 234:21-235:3, 236:9-21

(instructions not to answer questions regarding grounds included in the Notice of

Denial).

In addition, the Director answered (with no such objections by counsel) hundreds

of questions going to his “impressions and mental processes that formed the basis

of his decision to deny Appellant a racing license.” Therefore, if there was the

legal protection argued for by ADOR it was waived at the time of the Director’s

deposition.

The Director and his counsel have yet again waived any such protection by

embracing and indeed changing deposition testimony to their own advantage in an

“Errata Sheet” provided shortly after the deposition was concluded. Notably, not

one of these changes was to assert any alleged claim of privilege. Ex. C (369-TX

679). In contrast, one significant change was to change a clearly damaging answer

revealing the existence of no deliberative process to an answer describing the

Director’s deliberative process. The Director admitted that he just “toss[es] in[]”

the allegation that an individual is not of good repute or moral character “into

every one of our” notices of denial… “It’s just kind of a catchall.” EXH 314-TX

620 at 220:19-24 (emphasis added). His errata tried to create legitimacy to the

catchall absurdity by changing his answer to read “It’s just kind of a catchall if

there is evidence to support it.” Ex. C (369-TX 679). Yet again, the Director and

ADOR waived any objection they may have had to assert any deliberative process

privilege when they have injected that very process into their defense of the denial.

Likewise, Director Walsh discussed his deliberative process when he tried to

change his admission that nobody had ever determined that Ron Simms lacked

good repute or moral character to state that he made that determination. See EXH

314-TX 620 at 221:8-13.

Even in the federal courts where such a privilege is recognized, it is a conditional

or qualified privilege which is lost where, as here, there is misconduct by the

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judicial or quasi-judicial decision maker.

Recognition of any such privilege here would deny Ron fair and due process.

II. ARIZONA LAW DOES NOT RECOGNIZE ANY “QUASI-JUDICIAL”

PRIVILEGE

ADOR has invoked what is sometimes referred to as a “decisional process” or

“deliberative process privilege” as an objection to the Director having to answer questions

designed to elicit his “deliberative processes” and “mental processes” employed to reach his

decision to issue the Notice of Denial with its unprecedented Divestiture Provision.

Putting aside for the moment that all of the questions to which the Objection is now

directed were answered without any claim of privilege, there is no such privilege in Arizona.

ADOR is asking this Tribunal to create a new privilege.2 It may not properly do so.

The Arizona Court of Appeals has squarely declined to create such a privilege. “As a

threshold matter, the deliberative process privilege has not heretofore been adopted in Arizona

but instead is a federal privilege.” Rigel Corp. v. State, 225 Ariz. 65, 72, 234 P.3d 633, 640 (App.

2010) (citing Ariz. Indep. Redist. Comm’n v. Fields, 206 Ariz. 130, 141, ¶ 33, 75 P.3d 1088, 1099

(App. 2003)); see also Star Publishing Co. v. Pima Cnty. Attorney’s Office, 181 Ariz. 432, 434,

891 P.2d 899, 901 (1994); Arizona ex rel. Goddard v. Frito-Lay, Inc., 273 F.R.D. 545, 552 (D.

Ariz. 2011). Arizona courts recognize that “government agencies do not ordinarily have a

privilege to refuse to produce evidence unless a statute has specifically created an exemption.”

Rigel, 225 Ariz. at 73, 234 P.2d at 641 (citing Gordon v. Indus. Comm’n, 23 Ariz. App. 457, 460,

533 P.2d 1194, 1197 (1975)) (emphasis added). “To date, our legislature has not codified any

such privilege in the Arizona Public Records statutes.” Id. (citing A.R.S. §§ 39–121 to –161

(2001 & Supp. 2008)).

ADOR reaches for authorities which are not on point and which were rejected when

ADOR previously relied on them. ADOR flat out misrepresents the decision in Grimm v. Arizona

2 The term “decisional process privilege” does not appear in Arizona case law. We use the term “deliberative process privilege”—used to describe a federal privilege akin to the privilege the Director asserts here.

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Board of Pardons and Paroles, 115 Ariz. 260, 564 P.2d 1227 (1977), which ADOR claims “is

applicable to and controlling in this matter” and renders Director Walsh’s deposition testimony

“not admissible in the administrative appeal.” Objection 2:5-6, 3:6-8. Not true.

Grimm does not support an argument that the deliberative process privilege applies in

Arizona state courts. Rigel, 115 Ariz. at 73, n.8. Instead, as the Rigel court correctly states:

“[t]he Arizona Supreme Court held in Grimm that the [government] could be liable only for

grossly negligent or reckless release of a prisoner, and thus ‘any inquiry into the mental processes

of a parole decision is improper.’” Id. (citing Grimm, 115 Ariz. at 269, 564 P.2d at 1236). “In

other words, any such inquiry would not be reasonably calculated to lead to the discovery of

admissible evidence.” Id. The court in Grimm based its decision on relevance, not privilege.

ADOR plays loose in its discussion of Grimm by suggesting that the Court recognized such a

privilege and issued a protective order to enforce the privilege. Objections 2:5-12. ADOR has

taken a simple discovery order defining and protecting against discovery of irrelevant material

and twisted it into the creation of a new privilege.

ADOR cites two other cases, neither of which has any bearing on privilege issues in

Arizona. ADOR cites Stoffel v. Ariz. Dep’t of Econ. Security, 162 Ariz. 449, 784 P.2d 275 (App.

1990), for the notion that the Director acted in a quasi-judicial capacity in denying Ron’s

application. Objection p. 2 n.1. That case concerned what procedures are required at an

administrative hearing. Stoffel, 162 Ariz. at 451, 784 P.2d at 277. It did not raise or address any

privilege issues. ADOR cites United States v. Morgan, 313 U.S. 409 (1941), a federal case

decided under federal law; law which has been held inapplicable in Arizona state court

proceedings. Objection 2:9-20. Finally ADOR engages in more double speak.3

3 ADOR grudgingly recognizes that “Arizona courts have declined to apply a deliberative process privilege” but argues that such a ruling “has not been extended to issue [sic] of whether a state official may be compelled to testify regarding the process by which he reached a decision.” Objection p. 2 n.2. This is a nonsensical statement. If there was such a privilege, then it would serve as a shield to questions which run afoul of the privilege. But if there is no privilege, then the party may not assert it to preclude answering the question.

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III. ADOR’S PRIOR CLAIMS OF PRIVILEGE HAVE BEEN DENIED AND SHOULD

BE DENIED YET AGAIN AS A MOTION FOR RECONSIDERATION

SUPPORTED BY NO NEW LAW OR FACTS

On May 30, 2014, pursuant to Judge Rayes’ order, Director Walsh sat for deposition.

During that deposition he freely testified as to a number of items that ADOR claims involve

Director Walsh’s purported “quasi-judicial” work. His lawyer was free to make any objections he

deemed proper. The Director and his counsel made no claim of immunity from answering any of

the questions or segments here at issue.

Now, ADOR wants another bite at the apple, namely, raising the claim of privilege to

these specific questions and segments for the first time almost a year after the deposition was

taken. ADOR’s effort to suppress this critical information is ADOR’s latest attempt to deny Ron

fair and due process before this Tribunal. ADOR also used the same rationale earlier in this

proceeding when it attempted to preclude Director Walsh’s deposition testimony from being

admitted. That attempt failed, and Director Walsh’s deposition testimony was admitted by order

of this Tribunal on September 8, 2014. Video excerpts of Director Walsh’s deposition, including

those objected to now, were played during the hearing on January 23, 2015.

ADOR tried the same arguments on a Motion to Quash before Judge Rayes of the

Superior Court in 2014, to no avail. See Ex. A 3:12-13, 3:22-24 (ADOR argued that “Director

Walsh acted in a quasi-judicial capacity” and that he was entitled to hide behind a “decisional

process privilege”), Ex. A 4:12-15 (ADOR further argued that Director Walsh “should not be

required to testify regarding the process by which he reached his decision, including the

information he considered”); Ex. B p. 3 (“IT IS ORDERED denying [ADOR’s] Motion to Quash

Subpoena for Deposition of William J. Walsh.”).

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IV. ADOR HAS WAIVED ANY CLAIM OF PRIVILEGE BY ALLOWING

DIRECTOR WALSH TO TESTIFY WITHOUT ASSERTING SUCH

OBJECTIONS AT THE TIME OF THE DEPOSITION, EVEN WHEN RAISING

SUCH AN OBJECTION AND REFUSALS TO ANSWER OTHER QUESTIONS

ASKED OF HIM

Contrary to ADOR’s representation in the Objection (1:17-24), the Attorney General’s

office did not object at the time of the deposition to any of the questions or segments here

objected to. In addition ADOR permitted the Director to answer a host of questions which went

to his deliberative process of what to consider and what not to consider in denying the license.

What ADOR has done here is to pick and choose which parts of Director Walsh’s “decision

making process” would be revealed and which would be belatedly objected to at this hearing; it is

blatant gamesmanship which no court should tolerate. Here are some examples of the Director’s

deliberative process to which he testified at deposition without any such objection:

Explaining that the voluminous material provided to him by Jerry Simms, Mr.

Manning and Mr. McDonald over the course of two years did not influence the

Director’s decision to strip Ron Simms of his racing license and property and

contractual rights in TP Racing. EXH 314-TX 620 at 15:7-16:17, 32:5-33:5,

34:16-22, 51:15-53:9, 124:5-20, 125:4-126:6.

Describing how much he “thought and [] thought and [] thought” about issuing the

Notice of Denial, and that he did so because he believed that one of Ron Simms’

attorneys had lied to or “played” him. Id. at 20:21-25, 21:14-29:23, 42:13-25,

83:24-87:3, 87:10-19.

Explaining the process how he went about drafting a notice of revocation and the

Notice of Denial, including its drafting history. Id. at 20:7-20, 30:2-32:4, 50:12-

51:12, 126:9-18, 134:23-135:3, 135:19-136:11.

Testifying that the process he followed was novel: he ordered ADOR employees to

ignore protocol and send Ron Simms’ license application straight to the Director

for his sole consideration. Id. at 43:14-45:11.

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Describing why he did not seek as part of his deliberative process legal advice

from Ms. Williams before issuing the Notice of Denial. Id. at 71:19-72:11.

Explaining the decision making process which led to the inclusion of the

Divestiture Provision in the Notice of Denial and how it was justified because “I

don’t want [Ron] to be part of anything that’s going on out there” at Turf Paradise.

And that he accepted its wording notwithstanding his ignorance of Ron Simms’

contractual rights in J&R Racing and TP Racing and Ron’s lack of participation in

racing meetings, and the fact that the alleged statutory support therefor was

provided by McDonald. Id. at 76:17-25, 77:12-21, 78:20-79:5, 126:19-132:8,

133:23-134:8, 144:12-25, 145:10-24, 150:8-13, 156:8-157:17, 158:1-159:16,

160:2-25, 171:21-172:2.

Identifying information he claims he was aware of which Veriti received from

various sources and provided to ADOR regarding Ron Simms. Id. at 112:6-

114:16, 115:14-116:4.

Describing the circumstances surrounding the only evidence he claims to have

relied upon in denying Ron’s license, which he falsely described as a Veriti Report

and others described as “Bill’s Binder.” EXH 67-TX 254, EXH 314-TX 620 at

119:14-121:3, 282:9-24.

Detailing the time constraints under which he worked (to aid Jerry in litigation) –

including taking the “very, very, very rare[]” step of arriving at his office at 6:00

a.m. – in order to get the Notice of Denial issued on December 6, 2013. Id. at

141:5-142:10.

Explaining his decision why he withheld from production his January 8, 2014

Report and Recommendation in which he recommended the Arizona Racing

Commission grant TP Racing’s permit based in part on Ron Simms’ financial

backing until after the January 23, 2014 hearing on Jerry Simms’ “emergency

motion” to dissolve two injunctions the Superior Court had entered against Jerry.

Id. at 163:1-165:8.

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Explaining that the process he followed was to allow Jerry Simms’ agents the

opportunity to comment on (and ultimately draft portions of) the Notice of Denial

while Ron Simms’ agents were provided no such opportunity. Id. at 170:15-171:6.

Testifying that he has never become aware of any facts contrary to those “facts”

stated in the Notice of Denial yet explaining that he did little, if anything, to try to

find any such facts in ADOR files because “[i]t became too time consuming for”

him, and in fact never went “back and reviewed any of th[e] historical documents”

from ADOR’s files. Id. at 171:12-15, 173:9-174:6, 174:25-175:5, 176:1-21,

185:4-22, 187:2-8.

Testifying that neither ADOR nor Veriti ever gave Ron Simms a chance to “cure”

any alleged defects that existed prior to the issuance of the Notice of Denial, even

when required by law to do so. Id. at 172:3-9.

Testifying that he had no understanding of the Superior Court’s summary

judgment ruling on the promissory note or that it was limited to the four corners of

the note, not the truth or falsity of Ron Simms’ parol evidence which the trial court

never considered. Id. at 187:20-188:11.

Testifying that but for the (false) claim by Manning concerning the circumstances

of the summary judgment grants, neither the issue concerning the Bruin land nor

Ron’s promissory note would have been an issue to him at all in issuing the Notice

of Denial:

Q. So would either the Bruin land or the note have been an issue, had the judge

ruled the other way or not ruled at all [on the summary judgment motions]?

A. If the judge had never ruled, it would not have been an issue at all to me.

EXH 314-TX 620 at 193:23-194:3 (emphasis added).

ADOR seeks a license from this Tribunal to assert privilege to those parts of the

Director’s thought process which it finds most problematic for its case while letting the

presumably helpful or less damaging testimony come in free of objection. That is not the law.

It is elementary that privileges must be asserted and asserted timely for them to serve as a

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valid objection to answering questions under oath. Even when dealing with well-established

privileges, including the attorney-client privilege, one may not selectively reveal part of what is

privileged and then claim privilege when the same subject is further examined. See State v.

Mincey, 141 Ariz. 425, 440, 687 P.2d 1180, 1195 (1984) (failure to object at two trials resulted in

waiver of physician-patient privilege and precluded its later assertion); Gilbert v. McGhee, 111

Ariz. 121, 124, 524 P.2d 157, 160 (1974) (“Having testified on the relevant issue of the amount

and character of the community property, [litigant] could not refuse to disclose further details”);

McGautha v. California, 402 U.S. 183, 215 (1971) (when a party waives a privilege as to some

facts, he waives it as to all facts “reasonably related to the subject matter” of the disclosed facts);

Slade v. Schneider, 212 Ariz. 176, 181-82, 129 P.3d 465, 470-471 (App. 2006); Ariz. R. Evid.

502(a).

V. THE QUESTIONS AND ANSWERS SUBJECT TO THE OBJECTIONS WERE

ANSWERED WITHOUT ANY ASSERTION OF PRIVILEGE

ADOR has no privilege objections identified in its Objections prior to page 189 of the

deposition transcript. It then identifies a few questions and multi-page segments as large as 16

pages long to which it now belatedly objects. No claim of privilege or refusal to answer any of

these questions or segments was made during the deposition. It is too late now.

Since the Director answered all of these questions and segments without any claim of

privilege, any privilege is lost. We here discuss each of the questions and answers which ADOR

now belatedly asks be stricken:

Pages 189:10-191:18

1. Contrary to what is stated in the Objection, no privilege objection was made or

preserved at the deposition.

2. In any event, there is no intrusion into the Director’s reasons for denying the

license.

Pages 191:215-194:7



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2. This section includes one of the most damaging admissions of improper influence

and corruption of the decision making process. The Director was falsely told that in granting

summary judgment on the note and the lease, the court did not buy “Ron’s fabrications.” In fact

the court did not consider any evidence beyond the four corners of the instruments. Manning

knew it and lied to the Director and thus placed the note and land in play to the clear prejudice of

the decision making process and Ron’s license. The Director never sought to verify the truth of

what he was told by Manning.

3. The balance of this section addresses what the Director did not do as required for a

thorough investigation with information readily available to him. And, again, no such privilege

was asserted.

Pages 206:20-207:5



2. This goes to the lack of a thorough investigation of Ron’s license. Rather than

showing the Director’s decision making process, it shows no thinking at all.

Pages 218:2-234:16


preserved at the deposition. There were only two instructions not to answer and they went to the

source of information not the Director’s decision making process. See 229:16-21. Only once was

a mere suggestion that the question called for the basis for the decision to deny but the ADOR

counsel after hearing the question again interposed no objection. See 232:3-17.

Pages 273:13-274:15



Pages 282:9-24



2. The Director’s testimony that he only relied on the so called “Supplemental

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Report” is direct evidence that there was no thorough investigation as required by law; that the

Director’s conduct was arbitrary, capricious and biased; and that there was no substantial

evidence to support the Notice of Denial.

ADOR continues to speak with a forked tongue. It not only failed to make or preserve

any claims of privilege when it was legally obligated to do so, but right after the deposition of

Walsh it filed an Errata which included changes going to information the Director considered or

did not consider when reaching his decision to deny, for example:

Page/Line Before Errata After Errata

141:11-16 Q. If you knew that Ron Simms could

not make any day-to-day decisions, had

no role in them at all, and that it was

exclusively Jerry, would you have

worked the divestiture provision, as we

call it, the same way that it was worded?

A. No.

Q. If you knew that Ron Simms could

not make any day-to-day decisions, had

no role in them at all, and that it was

exclusively Jerry, would you have

worked the divestiture provision, as we

call it, the same way that it was worded?

A. Yes.

174:17-20 Q. So in any event, none of them – no

one brought any of those documents to

your attention if they existed. Is that

correct?

A. No.

Q. So in any event, none of them – no

one brought any of those documents to

your attention if they existed. Is that

correct?

A. No one brought any documents

supportive of Ron Simms’s claims.

192:19-25 Q. Well, what difference does it make

to you whether he did it early or late?

A. I only depended upon what the

Court did in this particular case with

respect to Ron’s note. If the Court had

Q. Well, what difference does it make

to you whether he did it early or late?

A. I only depended upon what the

Court did in this particular case with

respect to Ron’s note. If the Court had

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never acted on that particular aspect of

it, this would have never showed up in

this thing.

never acted on that particular aspect of

it, this would have never showed up in

this reference (A.R.S. § 5-108.A.4)

thing.

193:23-

194:3

Q. So would either the Bruin land or

the note have been an issue, had the

judge ruled the other way or not

ruled at all?

A. If the judge had never ruled, it

would not have been an issue at all to

me.

Q. So would either the Bruin land or the

note have been an issue, had the judge

ruled the other way or not ruled at all?

A. If the judge had never ruled,

A.R.S. § 5-108.A.4 would not have

been an issue at all to me.

220:19-24 Q. Did anybody in the world ever tell

you that Ron Simms was not of good

repute or moral character?

A. That’s a statement that’s in – we just

generally toss into every one of our –

when there’s any type of a – it’s in the

law. It’s just kind of a catchall.

Q. Did anybody in the world ever tell

you that Ron Simms was not of good

repute or moral character?

A. That’s a statement that’s in – we just

generally toss into every one of our –

when there’s any type of a – it’s in the

law. It’s just kind of a catchall if

there is evidence to support it.4

221:8-13 Q. Did anybody tell you, sir, that Ron

Simms was not of good repute or –

A. No.

Q. – moral character?

A. I don’t believe anybody’s ever

Q. Did anybody tell you, sir, that Ron

Simms was not of good repute or –

A. No.

Q. – moral character?

A. I made that judgment myself.

4 The Errata tried to create legitimacy to the indefensible “catchall” answer by changing it. The Director cannot rely on immunity from disclosing his deliberative process when, as here, he seeks to explain it to turn an admission of impropriety into a defense of his conduct.

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made that judgment myself.

The Director had no difficulty materially changing his answers from sense to nonsense or

from night to day or black to white. Most notable, even at the Errata stage he did not try to

belatedly assert any privilege which he failed to assert at the deposition itself.

VI. THE CLAIMED PRIVILEGE, WHERE RECOGNIZED, IS MERELY

CONDITIONAL OR QUALIFIED, AND WOULD HAVE BEEN LOST BY

DIRECTOR WALSH’S CONDUCT

ADOR claims that Director Walsh acted in a “quasi-judicial” capacity regarding the

Notice of Denial and therefore has a “deliberative” privilege to assert. Objection 1:17-24, p. 2

n.1, 3:5. As discussed above, there is no such privilege recognized in Arizona. Even in the

federal system where a privilege is recognized, the privilege is not absolute; it is conditional.

And it is lost where, as here, disclosure of information has the beneficial effect of holding

government officials accountable for their wrongdoing. Ariz. ex rel. Goddard v. Frito-Lay, Inc.,

273 F.R.D. 545, 552, 554 (D. Ariz. 2011); Thomas v. Cate, 715 F. Supp. 2d 1012, 1024-25 (E.D.

Cal. 2010) (showing of bad faith or improper conduct by government agency precludes claim of

privilege); Denver First Church of Nazarene v. Cherry Hill Village, 2006 U.S. Dist. LEXIS

49483, at *20 (D. Colo. 2006) (“as long as plaintiff can set forth any evidence, including

circumstantial evidence of illegal motive, Plaintiff can overcome Defendants’ claim for

deliberative process privilege”); State v. Gause, 107 Ariz. 491, 489 P.2d 830 (1971), judgment

vacated on other grounds, 409 U.S. 815, 93 S. Ct. 192, 34 L. Ed. 2d 71 (1972) (husband charged

with murder of wife cannot claim her attorney-client privilege); State v. Hunt, 2 Ariz. App. 6, 406

P.2d 208 (1965) (parents charged with beating child may not assert child’s physician-patient

privilege).

Director Walsh’s conduct would vitiate the privilege even under federal law.

Some of that conduct engaged in by this self-styled “quasi-judicial” officer, entrusted to

obey and enforce Arizona law, includes his having engaged in the following misconduct:

Collaborated with and facilitated the two-year secret smear campaign against Ron.

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Director Walsh recognized Jerry’s goal: “they’re coming in to trash Ron and to lay

out a path for the Department to deny/revoke his license, thus clearing the path for

Jerry.” EXH 74-TX 303. With full knowledge of Jerry’s goal, Director Walsh

“saw no reason to deny the request” for yet another meeting. Id.

Usurped and circumvented ADOR’s licensing procedure by taking the licensing

application for his own consideration instead of processing it in the normal and

customary manner under the direction of Nolan Thompson, ADOR’s assistant

director of enforcement. Hearing RT 987:9-989:7.

Failed to conduct any investigation of Ron’s application, let alone a “thorough”

investigation as mandated by Arizona law. Id.; A.R.S. § 5-108(A) (EXH 86-TX

380).

Permitted Ron’s litigation adversary, Jerry, through the agency of McDonald to

review and edit a draft Notice of Denial of Ron’s license, thus delegating his

responsibility to Ron’s known litigation adversary.

Compounded that misconduct by asking McDonald to keep their extraordinary

emails a secret and not disclose them to others. EXH 227-TX 538. Their common

goal to destroy Ron was made clear by the “high five” McDonald response: “I

think you did an A+ job in your presentation. The two documents absolutely nails

it.” Id.

Accepted carte blanche McDonald’s Divestiture Provision, which McDonald

headlined as “[t]he most important insert,” for inclusion in the Notice of Denial.

EXH 53-TX 240.

Issued the Notice of Denial to aid Jerry in his litigation with Ron (the dissolution

of injunctions entered to protect Ron against Jerry’s self-dealing). See id.

(McDonald to Director Walsh: “I know that critical issues in the case are being

argued on Tuesday… [t]he earlier the rejection letter went out, the clearer the

direction to the court, and to all parties.”); EXH 55-TX 242 (Manning to Director

Walsh: “[Ron] is attempting to have that mater argued at a hearing next Tuesday

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morning. It would be useful to the parties and to the Court if you are able to

respond to my letter at your earliest convenience.”). Director Walsh issued the

Notice of Denial on December 6, 2013, two business days before McDonald’s and

Manning’s deadline of Tuesday, December 10, 2013. Moreover, he issued it

because he was convinced by Manning that Ron’s lawyer had lied to him even

though the evidence shows otherwise. EXH 271-TX 583 21:1-28:22, 83:24-87:15;

EXH 54-TX 241.

Violated Arizona public record retention laws by not including his emails with

McDonald in the official ADOR records even though he had the software to do so.

And then compounding his cover-up his deleting the December 2, 2013 emails

with McDonald which show Jerry’s role and the source of the Divestiture

Provision. EXH 271-TX 583 90:14-91:1. Director Gonsher described such an

action as illegal and unethical. Hearing RT at 90:1-9. Indeed, the failure to

preserve these ADOR records is punishable under Arizona law as a felony. A.R.S.

§ 38-421 (EXH 247-TX 559).

Perjured himself during his deposition in the related civil proceedings to conceal

his December 1, 2013 email exchange with McDonald. See EXH 271-TX 583

68:23-69:6.

Withheld key evidence to aid Jerry in the related TP Racing litigation – including

Director Walsh’s January 8, 2014 recommendation for the renewal of TP Racing’s

permit based on Ron’s continued financial backing (EXH 65-TX 252) until

January 30, 2014 – after the hearing on Jerry’s “Emergency Motion” to dissolve

the injunctions. When confronted with the delay in producing this document

exculpatory to Ron, the Attorney General’s office brushed off the failure to

produce document with the explanation that it was a mere “mistake.” See EXH

300-TX 611. The truth was, as the Director admitted in his deposition, that the

withholding of the document was an intentional act on his part. EXH 271-TX 583

164:2-165:8.

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Presided over the violation of multiple Superior Court orders, public records laws,

and subpoenas by allowing his Department to withhold, conceal, and “auto-delete”

evidence crucial to Ron’s defense of this action. See Spoliation Motion at 4:11-

17:8.

Ran wiping software on his personal computer just four days before it was turned

over to Det. Paul Lindvay for a court-ordered forensic examination. Spoliation

Motion 10:10-15:3.

ADOR just does not get it. In a recent filing in these proceedings, ADOR argued that

Director Walsh should be excused from testifying live in this Tribunal because “the Court of

Appeals articulated a concern for the appearance of impropriety if a judge, while testifying for

either party, may appear to shed the cloak of impartiality and throw the weight of judicial position

and authority behind one of the two opposing litigants.” ADOR’s Opposition to Appellant’s

Renewed Request for a Subpoena Compelling the Testimony of Now-Former Director Walsh

2:13-17. There is clearly no such risk here. The Director is sullied by the record of bias and

double dealing with Jerry and his counsel. He never bothered with “impartiality” and he used his

“cloak” to conceal his misconduct. The need to retain his deposition testimony as part of this

record (especially since the Tribunal will not require his live testimony) is because Director

Walsh was never impartial and, indeed, “threw his weight… behind” Jerry in the civil litigation

against Ron. To protect Director Walsh as a judicial officer is an affront to the judiciary.

VII. ADOR’S OBJECTION IS CALCULATED TO DENY RON FAIR AND DUE

PROCESS AND SUSTAINING IT WOULD DENY RON FAIR AND DUE

PROCESS

It is disappointing that ADOR and its counsel persist in turning a blind eye to Ron’s right

to fair and due process in these proceedings. The law is well settled that Ron is entitled to each in

these proceedings. See Satellite Broad. Co. v. F.C.C., 824 F.2d 1 (D.C. Cir. 1987); Trinity Broad.

Network v. F.C.C., 211 F.3d 618 (D.C. Cir. 2000); F.C.C. v. Fox Television Stations, 567 U.S. __,

132 S. Ct. 2307 (2012). He was also entitled to same during the so-called investigative process

because it resulted in the abrogation of Ron’s contractual and property rights contrary to the

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teaching of Arizona Downs v. Turf Paradise, Inc., 140 Ariz. 48, 682 P.2d 443 (App. 1984). The

efforts to deny Ron his basic rights in these proceedings build on ADOR’s outrageous claim that

during the “investigation”: “[T]he Department had no duty to afford Appellant any kind of

process during the review of information that resulted in the denial of his license.” Opposition

to Spoliation Motion 7:13-15 (emphasis added). It is this wrong-headed attitude which

emboldens ADOR to claim that Ron has no right to present the Director’s prior deposition

testimony under oath in order to demonstrate that there was no thorough investigation as required

by law; that there was no substantial evidence to support the denial; and that the Director was

guilty of gross misconduct and violations of law during the so-called “investigation” and ultimate

denial of Ron’s license.

Even if ADOR is correct (and it is not) that Ron was entitled no due or fair process during

the Notice of Denial stage, he is certainly entitled to due and fair process now. Yet ADOR wants

to exclude evidence that demonstrates Director Walsh’s arbitrariness and caprice in issuing the

Notice of Denial. ADOR’s attempts should not be rewarded.

If there was ever a “poster boy” stew of facts showing due process violations of Ron’s

right to a fair hearing in these proceedings, it is the application of the burden placed upon Ron to

show an absence of substantial evidence within the framework of a Director who refuses to testify

and who seeks to block his prior testimony under oath because it demonstrates “the bases upon

which [the Director] formulated his decision to deny Applicant a license, including questions

about the information [the Director] considered when formulating his decision.” Objection 3:11-

13. It is the potential relevance of that testimony to the evidence he considered and ignored

which Ron requires in order to meet the unconstitutional (as applied) burden of showing a

complete picture of a lack of substantial evidence. As the record shows, this was the Director’s

show; all others in a decision making or influencing position were ignored. How then does one

protect himself and meet his burden of proof against the decision of a rogue agency head when he

seeks refuge behind a nonexistent privilege?

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RESPECTFULLY SUBMITTED this 10th day of February, 2015.

KIP M. MICUDATHE LAW OFFICES OF KIP M. MICUDA

MAR SHALL B. GROSSMANSTACY W. HARRISONORRICK, HERRINGTON & SUTCLIFFE LLP

/s/STACY W. HARRISON

Attorneys for Appellant

ORIGINAL of the foregoing e-filedThis 10th day of February, 2015 with:

Office of Administrative Hearings

COPY of the foregoing e-mailed and mailedThis 10th day of February, 2015 to:

Mark BrnovichChief Deputy Attorney GeneralMary DeLaat WilliamsAssistant Attorney General1275 W. WashingtonPhoenix, Arizona [email protected]

Kip M. MicudaThe Law Offices of Kip M. Micuda P.O. Box 39646Phoenix, Arizona [email protected]

COPY of the foregoing mailedThis 2nd day of February, 2015 to:Arizona Dept. of Racing1110 W. Washington, Suite 260Phoenix, Arizona 85007

By: /s/ Michelle van Oppen

OHSUSA:761094954.6

Exhibit A

Exhibit B

Michael K. Jeanes, Clerk of Court *** Electronically Filed *** 04/11/2014 8:00 AM

SUPERIOR COURT OF ARIZONA

MARICOPA COUNTY

CV 2010-022308 04/02/2014

Docket Code 020 Form V000A Page 1

CLERK OF THE COURT

JUDGE DOUGLAS L. RAYES T. Springston

Deputy

T P RACING L L L P MICHAEL C MANNING

v.

RONALD A SIMMS, et al. E JEFFREY WALSH

E SCOTT DOSEK

MICHAEL K KENNEDY

NICOLE GOODWIN

JAMES M TORRE

MARY D WILLIAMS

JOHN R TELLIER

MATTERS TAKEN UNDER ADVISEMENT

Central Court Building – Courtroom 704

8:50 a.m. This is the time set for oral argument on the Motions listed below.

Arizona Department of Racing and William J. Walsh’s Motion to Quash Subpoena

for Deposition of William J. Walsh, filed March 6, 2014;

Ron Simms Parties’ (collectively, “Ron”) Motion to Reconsider Ruling Granting

Motion to Dissolve or Suspend Preliminary Injunctions and Alternatively Motion to

Suspend Ruling and Maintain Injunctions Pending Appeal, filed March 4, 2014;

Plaintiff/Counterdefendants Jeremy Simms’ parties’ Motion to Dismiss the Ron

Simms Parties’ Second Amended Verified Counterclaim, filed February 14, 2014;

Counter-Claimants’ Motion for Leave to File Supplemental Counterclaim, filed

March 12, 2014.


MARICOPA COUNTY

CV 2010-022308 04/02/2014


Parties are represented as follows:

Plaintiff/Counterdefendants Jeremy Simms’ parties are represented by counsel,

James M. Torre and Michael C. Manning;

Defendants/Counterclaimants Ron Simms’ parties are represented by counsel,

Nicole Goodwin, Stacy W. Harrison (PHV) and Marshall B. Grossman (PHV).

Also present to observe the proceedings on behalf of the Ron Simms’ parties is

in-house counsel, Sean Carney.

Defendant/Counterclaimant Victoria Simms is represented by counsel, Michael K.

Kennedy;

Arizona Department of Racing (ADOR) is represented by counsel, Mary D.

Williams and John R. Tellier.

Court reporter Cindy Lineburg is present and a record of the proceedings is also made by

audio and/or videotape.

Oral argument is presented on Arizona Department of Racing and William J. Walsh’s

Motion to Quash Subpoena for Deposition of William J. Walsh.

Discussion is held regarding Ron Simms’ Parties’ Emergency Motion for Order

Directing the Preservation of Documents and for Hearing on Forensic Electronic Discovery, filed

April 2, 2014.

ADOR requests 10 days to respond to the emergency Motion. Ron Simms’ parties

request an interim order to preserve the data before the ruling is issued. The Court directs

counsel to discuss the parameters of the interim order.

9:14 a.m. Court stands at recess to allow counsel to meet and confer regarding the

interim order.

9:19 a.m. Court reconvenes with respective counsel and parties present.

Court reporter Cindy Lineburg is present and a record of the proceedings is also made by

audio and/or videotape.


MARICOPA COUNTY

CV 2010-022308 04/02/2014


Counsel inform the Court that they reached an agreement for the parameters of the

interim order. Counsel read the agreement aloud and agree to submit an order to the court

detailing same.

Discussion is held regarding Arizona Department of Racing and William J. Walsh’s


IT IS ORDERED denying Arizona Department of Racing and William J. Walsh’s


Counsel for ADOR, Mary D. Williams and John R. Tellier, are no longer present.

Oral argument is presented on Ron Simms Parties’ (collectively, “Ron”) Motion to

Reconsider Ruling Granting Motion to Dissolve or Suspend Preliminary Injunctions and

Alternatively Motion to Suspend Ruling and Maintain Injunctions Pending.

IT IS ORDERED taking under advisement Ron Simms Parties’ (collectively, “Ron”)

Motion to Reconsider Ruling Granting Motion to Dissolve or Suspend Preliminary Injunctions

and Alternatively Motion to Suspend Ruling and Maintain Injunctions Pending Appeal.

Oral argument is presented on Counter-Claimants’ Motion for Leave to File

Supplemental Counterclaim.

IT IS ORDERED taking under advisement Counter-Claimants’ Motion for Leave to

File Supplemental Counterclaim.

The Court advises counsel that Plaintiff/Counterdefendants Jeremy Simms’ parties’

Motion to Dismiss the Ron Simms Parties’ Second Amended Verified Counterclaim will be

considered after Counter-Claimants’ Motion for Leave to File Supplemental Counterclaim ruling

is issued.

Discussion is held regarding briefing schedules.

The Court directs counsel to call this division after the ruling on Counter-Claimants’

Motion for Leave to File Supplemental Counterclaim is issued to set up a status conference

regarding a briefing schedule for Plaintiff/Counterdefendants Jeremy Simms’ parties’ Motion to

Dismiss the Ron Simms Parties’ Second Amended Verified Counterclaim.

10:18 a.m. Matter concludes.


MARICOPA COUNTY

CV 2010-022308 04/02/2014


BEFORE FILING ANY DISCOVERY MOTION, parties are instructed to contact this

division for an informal teleconference. Division contact information: Judicial Assistant, Mary

Farmer, phone: (602)506-0816.

For copies of hearings or trial proceedings recorded, please call Electronic Records

Services at (602)506-7100. Should an official transcript be required, you may request that the

court prepare it. The party ordering the transcript must pay for it. To request a transcript, call

(602)506-7100 and provide the date of the proceeding, the case number, the case caption, if the

transcript is for an appeal, and your name, address, and telephone number.

Pursuant to Part 1, Chapter 6, Section 1-602 D (4)(a), of the Arizona Code of Judicial

Administration, if a court reporter is present, the court reporter’s record is the official record

and requests for transcripts shall be made by contacting the court reporter at (602)506-6100 or

email request to [email protected].

Effective April 15, 2014 new civil rules and forms are in effect for managing cases

moving to trial. Be sure to review the new Civil Rules 16, 26, 37, 38, 72 through 74 and 77.

mailto:[email protected]

Exhibit C

Appellant Exh. 369 - TX0679


