The opinion of the court was delivered by: DAWSON
This is a motion for a preliminary injunction pending trial in which plaintiff seeks an order enjoining the defendants, their agents, servants or employees, from failing in concert to enter horses in the races scheduled to be held at Yonkers Raceway on June 14, 1957 and thereafter, and from refusing in concert to drive their horses or the horses owned by members of the defendant Association in said races, and from otherwise impeding, obstructing or interfering, by any act or failure to act, with the conduct of said races.
The complaint alleges violations of §§ 1 and 2 of the Sherman Act. 15 U.S.C.A. §§ 1, 2.
The action is one brought under the anti-trust laws for an injunction and damages. 15 U.S.C. §§ 15, 26.
The moving papers establish without substantial dispute:
1. The plaintiff is a New York corporation which since April 1950 has conducted harness horse racing, accompanied by pari-mutuel betting, at Yonkers Raceway at Yonkers, New York, and has a substantial investment in such raceway.
2. Under the New York laws relating to pari-mutuel betting (McKinney's Unconsolidated Laws, § 7603) plaintiff is required to deduct 15% from the pari-mutuel pool and the balance of the pool is paid to the holders of winning tickets. Out of the 15% a certain proportion is paid to the State of New York as tax and the balance is retained by the plaintiff. The plaintiff also derives additional revenue from admission charges, parking fees and concessions. From the money retained by the plaintiff from the parimutuel pool it pays certain amounts to the owners of the horses participating in the races, usually proportioned to the success or lack of success in winning the respective races.
3. The defendant Association is a membership corporation organized in 1951 under the laws of the State of New York and has a membership of approximately 450 owners and drivers of harness horses. The members of the Association engage in the business of owning, training and driving harness horses at Yonkers Raceway and at various other harness tracks and fairs in the State of New York and elsewhere. It is alleged that the membership of the Association includes 90% of the owners and drivers engaged in harness racing in the New York City metropolitan area.
4. The defendant Smith is the president and a director of the Association. The other individual defendants are members of the Association and are either directors of the Association or owners or drivers of harness horses.
5. The activities of harness racing are activities in interstate commerce in that the horses, in going from track to track, go across state lines.
6. Prior to the formation of the Association in 1951 the practice was that in advance of the opening of a race meeting the plaintiff advertised its proposed purse schedule and the drivers and owners electing to compete for the purses filed applications for stall space and thereafter entered their horses in the races and competed for the purses offered. At that time the purses were approximately 18% of the sums retained by the plaintiff out of the pari-mutuel pool.
7. In 1954 the plaintiff entered into negotiations with the Association with reference to the amounts of these purses. As a result of these negotiations the parties entered into a contract by which plaintiff agreed to pay purses totaling 35% of the amount retained by the track out of the pari-mutuel pool. This contract ran for a period of three years from May 25, 1954.
8. Prior to the opening of the Spring, 1957 meeting at Yonkers Raceway, plaintiff advertised that it intended to continue its 35% purse policy. The track distributed applications for stall space which in part provided that the owners and drivers occupying shall space would agree to race for purses of the amount offered. A number of the members of the Association executed such applications.
9. In May 1957 defendant Smith, as president of the Association, and the Board of Directors of the Association demanded that the purses be increased from 35% to 45% of the sums retained by the plaintiff out of the pari-mutual pool. At a meeting of the members of the Association on June 1, 1957 a Committee of three was appointed as a negotiating delegation to represent the Association and its members in connection with this and other demands. When the plaintiff refused to accede to these demands another meeting of the members of the Association was held on June 6, 1957. The members voted unanimously to stand by their proposals as previously submitted and instructed the Committee to notify the plaintiff that the members of the Association would not enter horses for racing at Yonkers Raceway after 6 p.m. on June 9, 1957.
10. In the June 12, 1957 issue of 'The Harness Horse,' a magazine with a circulation among horse owners and horse riders, the defendant Association caused a full page ...