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SARATOGA HARNESS RACING INC. v. VENEGLIA

August 2, 1995

SARATOGA HARNESS RACING INC., Plaintiffs,
v.
PETER VENEGLIA, Individually and as Chairman of UNITED STANDARDBRED HORSEMEN OF NEW YORK; NORTHEASTERN HARNESS HORSEMEN'S ASSOC. Inc.; JOSEPH A. FARALDO; STANDARDBRED OWNERS ASSOC. OF NEW YORK; LEONARD D. POWELL; STANDARDBRED BREEDERS AND OWNERS ASSOC. OF NEW JERSEY, INC., Defendants.



The opinion of the court was delivered by: THOMAS J. MCAVOY

 DECISION & ORDER

 ON January 27, 1995, oral argument was heard on plaintiff's motion for a preliminary injunction and defendants' motions under Fed. R. Civ. P. 12. In a decision delivered from the bench on that date the Court denied plaintiff's motion for a preliminary injunction, denied the rule 12(b)(1) motion to dismiss for lack of subject-matter jurisdiction of all defendants but Standardbred Breeders & Owners Association of New Jersey, and denied the rule 12(b)(2) motion to dismiss for lack of personal jurisdiction of Standardbred Breeders & Owners Association of New Jersey ("SBOA-NJ"). Comes now SBOA-NJ seeking reconsideration of their motion to dismiss for lack of personal jurisdiction.

 I. BACKGROUND

 A. Facts:

 This action stems from failed contract negotiations between plaintiff Saratoga Harness Racing, Inc., which operates a harness race track at Saratoga, New York, and the horse owners who race at Saratoga. Defendant Northeastern Harness Horsemen's Association, Inc. ("NHHA") is the trade organization of horsemen with which Saratoga previously had a contract relating to the terms and conditions of racing at Saratoga. That contract expired on November 30, 1993. Defendant Powell is a vice-president of NHHA. Defendants Faraldo and Veneglia are styled as members, agents and negotiators for defendant NHHA. Defendant Faraldo is also president of defendant Standardbred Owners Association of New York, Inc. ("SBOA-NY"), which represents horsemen at Yonkers racetrack. Defendant Veneglia is also an officer and member of defendant United Standardbred Horsemen of New York ("USH") an unincorporated group of horsemen's associations. Negotiations for a new contract between plaintiff and NHHA took place during the fall of 1993 and the Spring of 1994: those negotiations ultimately failed.

 Plaintiff essentially states two separate antitrust claims against these defendants *fn1" based on their conduct during and since the time that negotiations broke down between plaintiff and the NHHA: 1) that defendant NHHA, through defendants Faraldo, Powell, and Veneglia both individually and through defendant USH, have organized a boycott of Saratoga by their membership and other horsemen, in violation of § 1 of the Sherman Act; and, 2) that these defendants and local horsemen's associations at other tracks have engaged in an illegal "tying" operation, whereby these local associations, in combination with other defendants, threatened to withhold their consent to simulcasting of those other tracks' races if those other tracks simulcasted races to Saratoga.

 One of the reasons such concerted undertakings by horsemen's associations are theoretically possible is because under the Interstate Horseracing Act of 1978, 15 U.S.C. § 3001 et seq., local horsemen's associations are guaranteed a power of consent to interstate simulcasting: that act says that consent of the "host-racing association" (the live-racing track) to interstate simulcasting is valid only if that track has a written agreement with its local horsemen's association, setting forth the terms and conditions of interstate wagering (including simulcasting). The Interstate Horseracing Act gives local horsemen's associations a power of consent meant to be "withdrawn or varied only within the regular contractual process of negotiating an agreement as to terms and conditions between the horsemen's group and the host racing association." See Alabama Sportservice, Inc. v. National Horsemen's Benevolent & Protective Ass'n, 767 F. Supp. 1573, 1579 (M.D. Fla. 1991). "It is the legislative intent of [the act] that [horsemen's associations] give consent in exchange for acceptable 'terms and conditions'--agreements as to money and exclusivity." Id. In short, the act provides consent powers to be negotiated with reference to the contractual relationship between the host racing association and the local horsemen's association.

 Concerning SBOA-NJ, plaintiff alleges that the various defendants caused defendant SBOA-NJ to wrongfully withhold their consent to the simulcasting to Saratoga of harness racing from Meadowlands, Garden State Park and Freehold Raceway, SBOA-NJ's host racing associations' racetracks, whereby Saratoga was deprived of simulcasts from these tracks. *fn2"

 B. Procedural History:

 SBOA-NJ previously claimed that this court lacked the requisite personal jurisdiction over them to adjudicate plaintiff's claims. Plaintiff claimed that long-arm personal jurisdiction was proper under N.Y. Civ. Prac. L. & R. § 302(a)(1) ("contracts anywhere to supply goods or services in the state"), and § 302(a)(3)("commits a tortious act without the state causing injury to person or property within the state"), under both subdivisions (i) and (ii) of that section.

 The Court concluded, construing plaintiff's jurisdictional allegations in the light most favorable to them, that plaintiff had met its prima facie burden of demonstrating that jurisdiction over these defendants was proper under 302(a)(1). The Court found that SBOA-NJ, as the representative body of its horsemen membership, had contracted with its host racing associations to supply services into New York. As part of that conclusion, the Court found that the supplying of simulcasting into New York for purposes of interstate wagering constituted the provision of services into New York within the meaning of § 302(a)(1). The Court also concluded that, as agents and negotiators of the horsemen, SBOA-NJ had agreed to provide its members' services for, and its own negotiated consent to, both the simulcasting of racing in New York and the acceptance of wagers from New York. As such, the Court found that SBOA-NJ's negotiated written consent constituted a contract to provide services into New York.

 II. DISCUSSION.

 Defendant SBOA-NJ now seeks the Court's reconsideration of its decision that it properly had personal jurisdiction over them under New York's long-arm statute. ...


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