University of Vermont AAHS

Anderson v. New York Racing Association

U.S. District Court, New York
2004 WL 60287
January 12, 2004

Summary of Opinion

Plaintiff Anderson is a jockey agent, licensed by the defendant New York Racing Association (NYRA).  NYRA is a private not for profit corporation that operates racetracks at Saratoga, Belmont and Aqueduct.  NYRA has a rule that a jockey agent may represent only one jockey at a time.  Anderson filed this lawsuit to challenge the lawfulness of that rule.  NYRA asked the trial court to dismiss the lawsuit on the ground it is a private corporation that may impose any rule it wishes that does not discriminate in violation of the law.  In this opinion, the trial court denies the motion to dismiss, rejecting the private corporation argument.  It permits the lawsuit to go forward.

Text of Opinion

 In this diversity case, plaintiff Ronald Anderson, a professional jockey agent, sues defendant New York Racing Association, Inc. ("NYRA") for a declaratory judgment that NYRA's rule that no jockey agent may represent more than one jockey--the "single jockey" rule--is unlawful. NYRA moves pursuant to Fed.R.Civ.P. 12(b)(6) to dismiss the complaint for failure to state a claim upon which relief may be granted. For the reasons that follow, the motion is denied.


 A. The Facts

 The facts alleged in the complaint are assumed to be true for purposes of this motion.

 Anderson, a resident of Florida, is a professional jockey agent licensed in New York. (Compl. 1). Jockey agents provide management services for jockeys, including maintaining the jockey's relationship with trainers and owners, identifying promising horses, and obtaining rides for the jockey on those horses. (Id. 13). Jockeys are paid from their share of purses won by the horses they ride. (Id. 11, 12). Agents are paid by the jockeys, typically out of the jockey's share of any purses. (Id. 13).

 Thoroughbred horse racing is a regulated industry in New York. The New York legislature has created an administrative agency called the New York State Racing and Wagering Board (the "Board") and delegated to it "general jurisdiction" over all horse racing activities, including betting, in New York. (Id. 6). See N.Y. Racing, Pari-Mutuel Wagering and Breeding Law 101 (McKinney 2000).

 All participants in thoroughbred horse racing, including jockeys and their agents, must be licensed. See N.Y. Racing, Pari-Mutuel Wagering and Breeding Law 213 (McKinney Supp.2003); N.Y. Comp.Codes, R. & Regs. tit. 9, 4002.1(b) (2003) ("No person shall participate in or at any thoroughbred racing meet as a managing owner, racing owner, trainer, assistant trainer, jockey, apprentice jockey, jockey agent, ... or engage in any occupation or employment at any thoroughbred race meet unless such person shall have received an occupational license from the [B]oard, [with certain exceptions not applicable here]."). The Board is responsible for licensing jockeys and jockey agents as well as the other participants in horse racing. (Compl. 7). See N.Y. Racing, Pari‑Mutuel Wagering and Breeding Law 213 (McKinney Supp.2003). The Board has promulgated regulations setting forth the licensing requirements for jockey agents. See N.Y. Comp.Codes, R. & Regs. tit. 9, 4002.24 (2003). The Board has not promulgated a rule or regulation prohibiting a jockey agent from representing more than one jockey at a time.

 NYRA is a private, not-for-profit association licensed by the State of New York to own and operate three racetracks: Belmont, Aqueduct, and Saratoga. (Compl. 4). By law, NYRA is charged with:

establishing thoroughbred racing and pari-mutuel betting on such racing in New York state on such a footing that it will command the interest as well as the confidence and favorable opinion of the public and so that these activities will provide reasonable revenue for the support of government....

See N.Y. Racing, Pari‑Mutuel Wagering and Breeding Law 208(9)(d)( (iii)(4) (McKinney 2000). As required by N.Y. Comp.Codes, R. & Regs. tit. 9, 4003.50 (2003), NYRA issues its own credentials to persons working on its tracks; even an individual with a state license must have, in addition, a NYRA badge to enter the stable, backstretch, and paddock areas of the NYRA tracks.

 NYRA publishes "Condition Books" for each racing season in New York, which are distributed to licensees. (Compl. 18). For many years the Condition Books have included what has become known as the "single jockey" rule (the "Rule"). (Id. 19). The latest version reads as follows:

Any Licensed Jockey Agent wishing to represent a jockey at NYRA tracks or in connection with NYRA sponsored races shall represent no more than one Journeyman and one Apprentice Jockey. NYRA, in its sole discretion and upon reasonable prior notice may amend or suspend this rule on certain race days.

(Id. 22).

 During the New York racing season, Anderson works as an agent at NYRA's tracks but is restricted, because of the Rule, to representing just one journeyman jockey. (Id. 15). As a consequence of the Rule, Anderson has been forced to abandon several clients for races held on NYRA's tracks and his career and reputation have been irreparably harmed as a result. (Id. 30).

 B. Prior Proceedings

 Anderson and a jockey, Angel Cordero, brought a state court action in 2002 against three individual racing stewards challenging the Rule. Neither the Board nor NYRA was named as a defendant. The claims were settled as to one of the stewards. The remaining two stewards moved to dismiss. The motion was granted and the complaint was dismissed, without prejudice to the filing of a new action against the proper defendants. See Anderson v. Hill, Index No. 112883/02, slip op. at 15‑16 (Sup.Ct. N.Y. Co. June 9, 2003).

 Anderson commenced this diversity action on June 26, 2003 by filing a complaint alleging that NYRA does not have authority to promulgate the Rule. Anderson alleges that only the Board has the power to regulate licensed jockey agents and that the New York legislature did not grant NYRA--a private organization--any rulemaking or licensing authority or any power to regulate the commercial activity of jockey agents. Anderson seeks judgment declaring the Rule null and void and enjoining NYRA from enforcing it.

 This motion followed.


 NYRA moves to dismiss the complaint for failure to state a claim on two grounds: (1) NYRA is a private entity, and therefore it is "free to deal (or not to deal) with whomever it chooses, and on whatever terms it desires (absent discrimination on the basis of race, color or some other explicitly unlawful ground)" (Def. Mem. at 7), and (2) Anderson alleges no facts from which this Court could fashion meaningful relief. (Id. at 12). I address the two arguments in turn.

 A. The Private Actor Argument

 NYRA's principal argument is that because it is a private entity, as long as it does not discriminate unlawfully, it has a "general right" to exclude whomever it chooses from its racetracks and therefore it has the right to determine that it will not deal with jockey agents who purport to represent more than one jockey at a time. (Id. at 9‑11). The argument, as a basis for dismissal at this juncture, is rejected.

 First, NYRA cites numerous cases upholding the right of private entities to exclude individuals based on legitimate, non-discriminatory reasons, see, e.g., Rendell-Baker v. Kohn, 457 U.S. 830, 838‑43 (1982) (right of private school to discharge employees without a hearing, even though school received some federal funding); Madden v. Queens Co. Jockey Club, 72 N.E.2d 697 (N.Y.1947) (right of horse track owner to exclude, without reason or cause (other than illegal discrimination), person from attending races), but these cases are inapposite. The issue before this Court is not whether NYRA has the right to exclude an individual from attending races or from otherwise participating in thoroughbred horse racing at its tracks. Rather, the issue is whether NYRA has the power to regulate the ability of an otherwise licensed jockey agent to conduct his business. The issue is not whether NYRA can decline to deal with a single person, but whether it has the authority to issue a rule that limits the ability of an entire class of individuals to conduct business, when those individuals by law are licensed and regulated by a governmental body--the Board.

 Second, NYRA's reliance on Judge Sand's decision in Murphy v. N .Y. Racing Ass'n, Inc., 76 F.Supp.2d 489 (S.D.N.Y.1999), is also misplaced. There, Judge Sand held that the plaintiff had failed to allege the existence of a "symbiotic relationship" between NYRA and the State of New York sufficient to establish NYRA as a "state actor" for purposes of 42 U.S.C. 1983. Id. at 496-97. Here, Anderson has not sued under 1983. Rather, he has brought this action based on the Court's diversity jurisdiction, and he has conceded that NYRA is a private entity.

 Third, NYRA argues that Anderson has articulated "no discernible legal theory" and cited no "direct legal authority" to support his complaint. (Def. Mem. at 6; Def. Reply Mem. at 6). That is not so. Anderson has both articulated a viable legal theory and cited supporting legal authority.

 In Halpern v. Lomenzo, 367 N.Y.S.2d 653 (Sup.Ct.N.Y.Co.1975), the court held that the New York State Racing Commission (the predecessor to the Board) could not lawfully delegate its "licensing prerogative" to racing stewards. The court held:

[The applicable regulation] grants to the race stewards the right to suspend trainers, jockeys and others licensed by the State Racing Commission from 'acting or riding' for as much as 60 days. The licensing prerogative is 'essentially a sovereign power' ... and a regulation yielding it to another [is] ... 'an unconstitutional relinquishment of legislative power'.... The power to license is a unitary power and as the whole may not be delegated neither may a part. The power to suspend the exercise of rights inherent in a license and the power to reinstate the enjoyment of those rights is a non-severable part of the licensing authority; and the grant to the race stewards contained in this regulation is an unconstitutional delegation of the licensing authority.

Id. at 662‑63 (citations omitted). See also N.Y. State Ass'n of Nurse Anesthetists v. Novello, 753 N.Y.S.2d 615, 619‑20 (3d Dep't 2003) (holding that New York State Department of Health could not delegate to ad hoc committee authority to promulgate "guidelines" that were in fact "regulations" governing "the conduct of professionals conducting surgery in private offices," where state legislature had not authorized such action and had specifically prohibited it).

 Likewise, in Fink v. Cole, 97 N.E.2d 873 (N.Y.1951), the New York State Court of Appeals held that the New York legislature could not lawfully delegate to the Jockey Club, a private corporation, the power to license owners, trainers, and jockeys to participate in horse racing. The court noted that the Jockey Club stewards were "neither chosen by, nor responsible to the State government," were "not sworn as public officers," and were not "removable as such." Id. at 876. The court wrote:

In our view the delegation by the Legislature of its licensing power to The Jockey Club, a private corporation, is such an abdication as to be patently an unconstitutional relinquishment of legislative power in violation of [the state constitution].


 Here, the New York legislature has granted to the Board--a governmental entity that is part of Executive Department--the responsibility of licensing jockey agents and other participants in thoroughbred horse racing, see N.Y. Racing, Pari-Mutuel Wagering and Breeding Law 213 (McKinney Supp.2003), and indeed the Board has promulgated regulations setting forth licensing requirements. See N.Y. Comp.Codes, R. and Regs. tit. 9, 4002.24 (2003). Certainly, then, a fair issue exists as to whether NYRA has the power to create a rule that impacts on a jockey agent's ability to conduct business, when that agent otherwise meets the licensing requirements set forth by the Board. A fair issue also exists as to whether the Board has explicitly or implicitly abdicated a portion of its licensing authority to NYRA.

 NYRA argues that Fink and Halpern are inapposite because Anderson has not alleged that the New York legislature or the Board has attempted to delegate licensing authority to NYRA. (Def. Reply. Mem. at 9). But if Anderson could have argued that NYRA could not exercise licensing authority even with an express delegation of authority, then surely a viable argument can be made that it could not do so in the absence of any such grant of authority. Moreover, as the Board has apparently been aware of the Rule for years, a viable argument can be made that the Board has implicitly delegated its licensing authority to NYRA to this extent.

 Because the parties have not fully briefed these arguments, and because there may be some factual questions (albeit limited ones), the issues are more appropriately addressed following the completion of discovery, either on cross-motions for summary judgment or through a summary trial based on stipulated facts or at a bench trial.

 B. The Ability To Fashion Relief

 NYRA also argues that the complaint must be dismissed because no  "meaningful relief" could be fashioned even if Anderson were to prevail. I disagree. At a minimum, the Court could enjoin enforcement of the Rule, without re-writing the Rule to impose as a limit "a number more to [Anderson's] liking." (Def. Mem. at 13).


 For the reasons set forth above, NYRA's motion to dismiss is denied. To be clear, at this juncture, I am not holding that Anderson is entitled to relief. Rather, I am simply permitting him to proceed with his claims. Counsel for the parties shall appear for a pretrial conference on January 23, 2004, at 11 a.m., in Courtroom 11A of the United States Courthouse at 500 Pearl Street. I note also that the court in the state court action concluded that the Board was an indispensable party. The parties should be prepared to discuss this issue at the conference.


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