Florida Horsemen Benevolent & Protective Ass'n v. Rudder

738 So. 2d 449, 1999 Fla. App. LEXIS 9911, 1999 WL 516253
District Court of Appeal of Florida·Decided July 22, 1999·No. No. 98-2414·Published·Cited by 1 cases

Opinion

ALLEN, J.

The appellant challenges a final summary judgment declaring section 550.2614, Florida Statutes, unconstitutional as an unlawful exercise of the state’s police power. We affirm.

The appellant is an association representing a majority of thoroughbred racehorse owners and trainers in the state of Florida. The appellees are three Florida thoroughbred owners who do not belong to the association. The appellees filed a declaratory action against the Division of Pari-Mutuel Wagering of the Department of Business and Professional Regulation [hereinafter “the division”] seeking to have section 550.2614 declared unconstitutional and to enjoin the division from enforcing the statute. Section 550.2614 * provides that each race track shall deduct one percent of the total purse pool and pay that amount to the horsemen’s association representing the majority of the thoroughbred racehorse owners and trainers. § 550.2614(1), Fla. Stat. [hereinafter “the one percent provision”]. It also provides that owners and trainers are automatically enrolled in the majority association upon receipt of an occupational license from the division, unless the owner or trainer declines membership in writing within 30 days of receiving the license. Id. § 550.2614(3) [hereinafter “the membership provision”].

After the division declined to defend the action, the appellant successfully intervened. The appellees then filed a motion for summary judgment. Following a hear[451] ing on the motion, the court entered a final summary judgment declaring section 550.2614 an unlawful exercise of the police power because the one percent provision “does not provide a requirement that the monies received by the association be used for a justifiable state objective and does not describe how the funds paid to the association are to be spent.” The court further concluded that the membership provision could not be severed from the one percent provision because it “is not an act complete in itself, as the reference therein to ‘a horsemen’s association as defined in (1)’ would be a reference to a nonexistent subsection.” The court accordingly declared the statute in its entirety unconstitutional on its face and enjoined the division from enforcing its provisions.

As an initial matter, the appellant argues that the appellees do not have standing to challenge the statute. Under the plain language of the statute, however, clearly they do. Section 550.2614(1) requires each racetrack to deduct one percent of the total purse pool and pay that amount to a horsemen’s association representing the majority of the thoroughbred racehorse owners and trainers. It is undisputed that the appellees are thoroughbred racehorse owners. Thus, the purses that the appellees would otherwise receive are diminished by the one percent deduction made in favor of the appellant. These appellees therefore satisfy the general standing requirement that the case involve an actual controversy as to the issue or issues presented. See Department of Revenue v. Kuhnlein, 646 So.2d 717, 720 (Fla.1994).

The appellant nevertheless contends that only the purses of its members are diminished by the one percent deduction, and that the appellees are not members so their purses are not diminished. The appellant points to contracts between the appellant and the racetracks which direct the racetracks not to deduct the one percent from the purses of nonmembers. We are unpersuaded by this argument because the plain language of the statute at issue does not recognize an exception from the one percent provision for nonmembers. Indeed, these contracts must be viewed ■with some skepticism since they would appear to be contrary to the dictates of the statute.

The appellant also argues that the appellees are estopped to challenge the statute because they have accepted the benefits of the statute. As a factual basis for this argument, the appellant again points to contracts between the appellant and south Florida racetracks pursuant to which owners are entitled to receive larger purses than would otherwise be paid under the pari-mutuel laws. But the statute does not provide for these contract provisions or for any other benefit to owners or trainers. As will be discussed below, the statute places no obligation upon the association as to how funds deducted pursuant to the statute are to be expended and it specifies no benefit that is to be received by owners or trainers. This distinguishes the present case from decisions' such as Billings v. City of Orlando, 287 So.2d 316 (Fla.1973), and makes principles of estop-pel inapplicable.

On the merits, the appellant argues that the trial court erred in relying upon Horsemen’s Benevolent & Protective Association v. Division of Pari-Mutuel Wagering, 397 So.2d 692 (Fla.1981), in holding the one percent provision in the current statute unconstitutional. In Horsemen’s, the supreme court accepted the association’s argument that the improvement of racing in Florida so as to enhance state revenues would be a valid reason for enacting a statute similar to the statute at issue in the present case. But the court found

no reasonable relationship between the stated objective of the statute and the form of the statute chosen by the legislature to advance this purpose. Section 550.2615 contains no provision for how the funds paid to the horsemen’s associ[452] ation must be spent or that they must be spent in furtherance of the legitimate state objective herein advanced. It merely requires that they be spent in accordance with articles of association which may be amended at any time and which need not espouse goals consistent with the stated public purpose for the statute. This statute effectually requires payment of money to a private association to do with as it chooses. This is an unlawful exercise of the police power.

Id. at 695. The appellant argues that the present statute is constitutional because it, unlike the statute at issue in Horsemen’s, allows owners and trainers to opt out of membership in the association and thereby avoid payment under the one percent provision. But this argument again ignores the clear language of the statute’s one percent provision which does not exclude nonmembers from payment. And, in any event, the focus of the Horsemen’s holding was not upon the fact that payment to the association was compelled. As the above-quoted language demonstrates, the essential holding of Horsemen’s was that the statute was unconstitutional because the withheld funds could be spent by the association without regard to any permissible objective under the state police power.

Section 550.2614 suffers from the same constitutional infirmity suffered by the statute addressed in Horsemen’s. We agree with the trial court’s following analysis:

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Florida Horsemen Benevolent & Protective Ass'n v. Rudder, 738 So. 2d 449, 1999 Fla. App. LEXIS 9911, 1999 WL 516253 (Fla. Ct. App. 1999).

738 So. 2d 449 (Florida Horsemen Benevolent & Protective Ass'n v. Rudder) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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