March 26, 1993
UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT
No. 92-2260
STERLING SUFFOLK RACECOURSE LIMITED PARTNERSHIP,
Plaintiff, Appellant,
v.
BURRILLVILLE RACING ASSOCIATION, INC.,
Defendant, Appellee.
ERRATA SHEET
The opinion of this Court issued March 25, 1993, is amended as follows:
Remove duplicated "BEFORE" from cover page of opinion. BEFORE
March 25, 1993 [SYSTEMS NOTE: For version of this opinion with the appendix included, please contact the Clerk's Office, United States Court of Appeals for the First Circuit. This version of the opinion DOES NOT contain the appendix.]
UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT
No. 92-2260
STERLING SUFFOLK RACECOURSE LIMITED PARTNERSHIP,
Plaintiff, Appellant,
v.
BURRILLVILLE RACING ASSOCIATION, INC.,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Hon. Ronald R. Lagueux, U.S. District Judge]
Before
Selya, Cyr and Stahl, Circuit Judges.
E. Randolph Tucker, with whom Michael D. Ricciuti, David B.
Crevier, Joshua M. Davis, and Hill & Barlow were on brief, for
appellant. Kent E. Mast, with whom Peter J. McGinn, Tillinghast Collins
& Graham, and Kilpatrick & Cody were on brief, for appellee.
SELYA, Circuit Judge. In this appeal, we confront two SELYA, Circuit Judge.
issues of novel impression at the appellate level. First, we
must determine whether the Interstate Horseracing Act (IHA), 15
U.S.C. 3001-3007 (1988), the full text of which is set out in
the appendix, contains an implied private right of action in
favor of racetracks situated within sixty miles of a display
track, i.e., a track that accepts interstate off-track wagers on
races to be run at distant tracks and then simulcasts the actual
races. Second, we must determine whether certain alleged
violations of the IHA comprise a pattern of racketeering activity
falling within the ambit of the Racketeer Influenced and Corrupt
Organizations Act (RICO), 18 U.S.C. 1961-1968 (1988 & Supp.
III 1991). Believing, as we do, that the court below correctly
answered both inquiries in the negative, we affirm.
I. AT THE STARTING GATE
The relevant facts are not in dispute. Plaintiff-
appellant Sterling Suffolk Racecourse Limited Partnership
(Suffolk) conducts live horseracing at Suffolk Downs, a track in
the metropolitan Boston area. Approximately fifty miles away, in
Lincoln, Rhode Island, defendant-appellee Burrillville Racing
Association, Inc. (Lincoln) operates a greyhound track (Lincoln
Greyhound Park) and an off-track betting (OTB) office, see 15
U.S.C. 3002(8), for, inter alia, accepting interstate off-track
wagers, see 15 U.S.C. 3002(3). This means, in short, that
Lincoln accepts bets on horseraces to be run at distant tracks
and, employing telephone and wire linkages, effectively places
these wagers in the host track's parimutuel pool. When a race is
run, closed circuit television transmission enables Lincoln's
patrons to witness it. Lincoln then settles with the bettors,
pays a percentage to the host track, and retains the balance.
While this form of wagering is legal under the relevant
laws of all states involved here, 15 U.S.C. 3004(a) prohibits
such wagering at OTB offices unless three parties consent: (1)
the track which conducts the live race; (2) the racing commission
having jurisdiction to regulate racing within the state where the
live race occurs; and (3) the racing commission having
jurisdiction over race wagering in the state where the simulcast
occurs.1 The host racing association, in turn, must obtain the
consent of the trade association representing the owners of
horses running in the live race before signalling its
acquiescence.2 See id. Lincoln procures the consent of these
parties for every race on which it accepts wagers.
A separate subsection of the IHA also requires OTB
offices to obtain the approval of "all currently operating tracks
within 60 miles" or, if there are no such tracks, "the closest
currently operating track in an adjoining State," 15 U.S.C.
3004(b)(1), before accepting interstate off-track wagers. It is
1In the parlance of the IHA, these three entities are called the "host racing association," "host racing commission," and "off-track racing commission," respectively. See 15 U.S.C.
3002(9)-(11). We refer the reader to the statutory appendix for more precise definitions of each term.
2The trade association is called the "horsemen's group." See 15 U.S.C. 3002(12).
no secret that Lincoln regularly violates this provision by
accepting wagers against Suffolk's wishes.3
Disgruntled at being shut out in this fashion, Suffolk
sued Lincoln in the United States District Court for the District
of Rhode Island. It sought to curtail Lincoln's practice of
accepting wagers on races run at out-of-state tracks. Suffolk
advanced two theories, asseverating that Lincoln's activities
transgressed the IHA and also constituted a pattern of indictable
activity under federal gambling laws, see, e.g., 18 U.S.C.
1084(a) (1988), and, therefore, justified injunctive relief under
RICO. See 18 U.S.C. 1961(1), 1962(a). The district court
rejected this two-pronged assault. It held that Suffolk lacked
standing to assert a claim under the IHA and that Lincoln's
acceptance of interstate off-track wagers without Suffolk's
blessing was not the stuff from which a RICO suit could be
fashioned. See Sterling Suffolk Racecourse Ltd. Partnership v.
Burrillville Racing Ass'n, Inc., 802 F. Supp. 662, 669-71 (D.R.I.
1992). Hence, the district court denied Suffolk's prayer for
injunctive relief and granted Lincoln's motion for summary
judgment. Id. at 673. This appeal ensued.
II. OFF AND RUNNING
We devote our initial explicatory efforts to the
leading question in the case: Does the IHA give so-called "60-
mile tracks," i.e., tracks operating within sixty miles of an OTB
3In December 1991, Lincoln sought Suffolk's approval, but made no sufficiently spectacular bid. Hence, the parties failed to reach an accord.
office, an implied right of action for injunctive relief?
Because this issue is purely legal, we consider it de novo. See,
e.g., Liberty Mutual Ins. Co. v. Commercial Union Ins. Co., 978
F.2d 750, 757 (1st Cir. 1992).
In determining whether a private cause of action is
implied in a federal statute, a court's central focus must be on
congressional intent. See, e.g., Karahalios v. National Fed'n of
Fed. Employees, 489 U.S. 527, 532-33 (1989) ("Unless . . .
congressional intent can be inferred from the language of the
statute, the statutory structure, or some other source, the
essential predicate for implication of a private remedy simply
does not exist.") (citation and internal quotation marks
omitted); Stowell v. Ives, 976 F.2d 65, 70 n.5 (1st Cir. 1992)
("There is a presumption against implied rights of action a
presumption that will endure unless the plaintiff proffers
adequate evidence of a contrary congressional intent."). To
discern this intent, courts employ the customary tools of
statutory interpretation, see, e.g., Thompson v. Thompson, 484
U.S. 174, 179 (1988); Touche Ross & Co. v. Redington, 442 U.S.
560, 575-76 (1979), frequently asking, however, three questions
which often have special salience in connection with implied
rights of action. These queries are: (1) Is the plaintiff one of
the class for whose especial benefit the legislation was enacted?
(2) Is the remedy sought consistent with the underlying purposes
of the legislative scheme? (3) Is the cause of action one
traditionally relegated to state law? See Thompson, 484 U.S. at
179; Cort v. Ash, 422 U.S. 66, 78 (1975); Latinos Unidos de
Chelsea v. Secretary of HUD, 799 F.2d 774, 792 (1st Cir. 1986).4
Here, the district court followed this roadmap
expertly. See Sterling, 802 F. Supp. at 666-69. Its opinion is
astute. Its views are articulated with clarity and precision.
It builds upon other persuasively reasoned caselaw reaching the
identical result. See, e.g., New Suffolk Downs Corp. v.
Rockingham Venture, Inc., 656 F. Supp. 1190, 1194 (D.N.H. 1987).
Under these auspicious circumstances, we see no need to reinvent
the wheel. Rather, we affirm the lower court's holding that the
IHA implies no private right of action in favor of 60-mile tracks
for essentially the reasons elucidated in the opinion below. We
pause, however, to add some observations and clarifications.
First: Although we concur in Judge Lagueux's bottom- First:
line assessment that the IHA does not give 60-mile tracks a
private right of action, and in his related evaluation of two of
the three Cort factors the remedy that Suffolk seeks seems to
be at odds with the IHA's underlying purposes and the cause of
action questions what activities may lawfully be carried out at a
state-regulated gambling facility, a matter traditionally
4To be sure, the Cort Court also asked a fourth question:
Is there evidence of legislative intent to create or deny a private right of action? See Cort, 422 U.S. at 78; see also
Latinos Unidos, 799 F.2d at 792. The Justices have since made
clear, however, that the fourth question is really a tote board for tallying the answers to all the other inquiries and, therefore, need not be considered separately. See Thompson, 484
U.S. at 179; California v. Sierra Club, 451 U.S. 287, 293 (1981);
see also Royal Business Group, Inc. v. Realist, Inc., 933 F.2d
1056, 1060 (1st Cir. 1991).
relegated to state law we think it is advisable to begin by
remarking a point of disagreement. Unlike Judge Lagueux, 802 F.
Supp. at 667, we believe Congress, even though it did not choose
to confer a private right of action, see infra, nevertheless
designed section 3004(b)(1)(A) for the benefit of 60-mile tracks.
See Cort, 422 U.S. at 78; see also Royal Business Group, Inc. v.
Realist, Inc., 933 F.2d 1056, 1061-62 (1st Cir. 1991) (discussing
"especial benefit" test).
The especial benefit inquiry in implied right of action
cases need not be a search for a single class of plaintiffs the
class which the entire statute is most directed toward assisting.
Rather, different parts of a statutory scheme can be aimed at
benefitting different classes of persons. See, e.g., Cohen v.
Massachusetts Bay Transp. Auth., 647 F.2d 209, 212 (1st Cir.
1981) (noting that a particular section of a statute primarily
benefitted consumers while a different section of the same
statute primarily benefitted transit workers); Comtronics, Inc.
v. Puerto Rico Tel. Co., 553 F.2d 701, 705 (1st Cir. 1977)
(discussing a statute that especially benefitted two separate
groups). The inquiry, then, focuses on whether any language in
the statute sufficiently indicates a motivating congressional
purpose to benefit the class in question as opposed to, say, a
mere congressional expression of knowledge anent, or passive
approval of, a tangential benefit. See California v. Sierra
Club, 451 U.S. 287, 294 (1981); Cannon v. University of Chicago,
441 U.S. 677, 690-94 (1979). Properly conducted, this type of
investigation weeds out statutes which protect a general public
interest and only incidentally create advantages for particular
people. See, e.g., Cannon, 441 U.S. at 690; Arroyo-Torres v.
Ponce Fed. Bank, 918 F.2d 276, 278 (1st Cir. 1990).
When we shine the light of this understanding on the
IHA, we think that 60-mile tracks meet the "especial benefit"
criterion. Section 3004(b)(1)(A) requires an OTB office to
procure the approval of all 60-mile tracks before accepting
interstate off-track wagers. This requirement, by its own terms,
adequately evinces congressional intent to safeguard the
interests of 60-mile tracks and, therefore, must be viewed as
redounding to their especial benefit. The legislative history
fortifies this conclusion. See, e.g., S. Rep. No. 1117, 95th
Cong., 2d Sess. 4-5 (1978), reprinted in 1978 U.S.C.C.A.N. 4144,
4147-48. No more is exigible. See Cannon, 441 U.S. at 690-94
(finding especial benefit conferred by language more general than
that contained in the IHA).
Still, we hasten to add that this fact alone does not
strike the gold. In this case, the especial benefit element is
at most a dim counterpoint to the bold-faced evidence of
congressional intent intricately interwoven into the IHA's
language and structure. Therefore, the district court's
miscalculation constitutes harmless error.
Second: We turn now to the other indicators of Second:
legislative intent. It is a familiar precept that, in cases of
statutory interpretation, the language of the statute enjoys
preeminence. See Northwest Airlines, Inc. v. Transport Workers,
451 U.S. 77, 91 (1981); Transamerica Mortgage Advisors, Inc. v.
Lewis, 444 U.S. 11, 15-16; Touche Ross, 442 U.S. at 568. Here,
notwithstanding the especial benefit point, the words of the
statute speak strongly against implying a private right of
action. We explain briefly.
When a statute expressly provides remedies, courts must
be extremely reluctant to expand its sweep by augmenting the list
of prescribed anodynes. To the exact contrary, a court
confronted with such a situation should ordinarily conclude that
the legislature provided precisely the redress it considered
appropriate. See, e.g., Karahalios, 489 U.S. at 533 (collecting
cases); Middlesex County Sewerage Auth. v. Sea Clammers, 453 U.S.
1, 14-15 (1981); Nashoba Communications, Ltd. v. Town of Danvers,
893 F.2d 435, 440 (1st Cir. 1990). This is such a case. The IHA
explicitly identifies the parties entitled to bring actions for
damages or injunctions, see 15 U.S.C. 3006 and 60-mile tracks
are not among them. When discussing the potential liability of
violators and outlining the damages they must pay, the IHA
identifies as potential recipients of damage awards only these
same parties. See 15 U.S.C. 3005. And, moreover, the statute
employs a damage calculation formula, see id., that is totally
irrelevant to entities like 60-mile tracks. It strains credulity
to argue that these serial omissions are serendipitous.
The IHA's venue and jurisdictional provisions point in
the same direction. The statute provides that venue is
appropriate only in a district in which either the host track or
the display track is located. See 15 U.S.C. 3007(b). It
further provides that jurisdiction is appropriate only in the
courts of the host state or the off-track state.5 See 15 U.S.C.
3007(c). In particular contexts, a statute's silence can be
informative. So it is here: the absence of any provision for
venue or jurisdiction based on the location of an aggrieved 60-
mile track tells a tale.
In sum, given the language of the statute what the
IHA says and what it shies away from saying there is no sure
footing for the implication of a private right of action favoring
non-consenting 60-mile tracks.
Third: The structure of a statute can also be of Third:
inestimable value in its interpretation. See Crandon v. United
States, 110 S. Ct. 997, 1001 (1990); Greenwood Trust Co. v.
Massachusetts, 971 F.2d 818, 824 (1st Cir. 1992), cert. denied,
113 S. Ct. 974 (1993). In this instance, the statute's structure
seems highly significant. The provision requiring OTB offices to
secure the approbation of the horsemen's group, host racing
association, host racing commission, and off-track racing
commission is set conspicuously apart from the provision
requiring display tracks to seek the approval of 60-mile tracks.
Compare 15 U.S.C. 3004(a) with 15 U.S.C. 3004(b).
The language of the statutory provisions bolsters the
5The "off-track State" is the state in which the "interstate off-track wager is accepted." 15 U.S.C. 3002(6).
conclusion that these structural differences are pregnant with
meaning. Congress phrased the former provision as an absolute
condition precedent to off-track wagering across state lines, see
15 U.S.C. 3004(a) (an "interstate off-track wager may be
accepted by an off-track betting system only if consent is
obtained from [four entities]") (emphasis supplied), but phrased
the latter provision merely as a directive to a private party.
See 15 U.S.C. 3004(b)(1) ("any off-track betting office shall
obtain the approval of [tracks within a 60-mile radius]"). As
the Court has indicated, a statutory provision phrased as a
command to specific people, like the one upon which Suffolk rests
its hopes, is unlikely to breed an implied private right of
action because such language usually evinces a congressional
concern with instructing the putative violator rather than with
providing a remedy to the putative victim. See, e.g.,
Universities Research Ass'n v. Coutu, 450 U.S. 754, 772-73 & n.23
(1981); Cannon, 441 U.S. at 690-93.
Fourth: In this case, the whole is certainly no less Fourth:
than the sum of its constituent parts. The language of almost
every section of the IHA, and the structure of the pivotal
provisions, strongly suggest that Congress did not intend to
provide disapproving 60-mile tracks with a private right of
action against display tracks. Having discerned so striking an
indication of congressional intent, deeply rooted in the text of
the statute itself, we find Suffolk's reliance on fragmentary
excerpts from the legislative history to be little more than
grains of desert sand in the teeth of a haboob. Even clear
legislative history and the history here is less than pellucid
must yield to a contrary implication easily derivable from a
statute's text. See Puerto Rico Dep't of Consumer Affairs v.
Isla Petroleum Corp., 485 U.S. 495, 501 (1988); see also 2A
Norman J. Singer, Sutherland Statutory Construction 46.04,
46.07 (5th ed. 1992) (concluding that courts, when construing
statutes, must adhere primarily to language and structure).
Fifth: We reject appellant's plea that denying an Fifth:
implied right of action will render nugatory the statutory
provisions dealing with 60-mile tracks. Appellant's reliance
upon a finding of especial benefit, see supra pp. 6-8, to prove
this point is misplaced. That Congress purposely sought to
confer a benefit on entities like Suffolk does not imply that
such was the only or even the overriding motive for enacting
the statute. See, e.g., Cort, 422 U.S. at 81-82 & n.13; Cohen,
647 F.2d at 212. Nor does Congress's intent to benefit 60-mile
tracks inevitably imply that Congress deemed a private right of
action to be a necessary or advisable means of accomplishing its
goal. See Coutu, 450 U.S. at 771 (explaining that "[t]he fact
that an enactment is designed to benefit a particular class does
not end the inquiry; instead it must also be asked whether the
language of the statute indicates that Congress intended that it
be enforced through private litigation"); accord Daily Income
Fund, Inc. v. Fox, 464 U.S. 523, 540-41 (1984); Transamerica, 444
U.S. at 24.
By making manifest that OTB offices operating without
the approval of 60-mile tracks are flouting federal law, Congress
supplied other parties with a potential defense should they
cancel contracts with the offending facility or withhold consent
to interstate off-track wagering at such a facility. Cf., e.g.,
Alabama Sportservice, Inc. v. National Horsemen's Benevolent &
Protective Ass'n, Inc., 767 F. Supp. 1573, 1579-80 (M.D. Fla.
1991) (suggesting that withholding of consent on reasonable
grounds would not be an actionable restraint of trade).
Moreover, creating the framework for assertion of such a defense
benefits the 60-mile tracks by furnishing an incentive for
display tracks to comply with the requirement.6 See generally
Daily Income Fund, 464 U.S. at 535, 541 & n.11 (explaining that
the statutory objective to benefit a class may be served by
giving other parties the right to sue). Similarly, display
tracks and 60-mile tracks are frequently located in the same
state and, therefore, subject to the same regulatory authority.
Where that occurs, the IHA has the effect of permitting the
racing commission either to insist on pre-approval or to work out
some other satisfactory solution. Even when a 60-mile track does
not have this home field advantage, the off-track racing
commission may well be persuaded to take regulatory action
against a display track which, like Lincoln, scorns a federal
6Lincoln itself has been hoist on this petard. Several organizations withdrew consent because of Lincoln's failure to obtain Suffolk's approval, thereby depriving Lincoln of the right to accept wagers on races originating at the non-consenting tracks.
mandate. Cf., e.g., CBS Inc. v. FCC, 453 U.S. 367, 373-75
(1981); FCC v. Pacifica Foundation, 438 U.S. 726, 730-31 (1978).
In sum, our holding that no private right of action
exists does not sanction blatant disregard of federal law or
render the approval requirement without worth to the 60-mile
tracks. It merely ensures that negotiations for a green light
from market-area tracks will occur in the context Congress
envisioned, with neither party completely beholden to the other.
After all, were we to infer a right of action along the lines
that Suffolk delineates, we would hand 60-mile tracks an
important veto power over the operation of nearby OTB offices
and, in the bargain, tilt the delicate balance Congress so
painstakingly constructed.
We will not belabor the point. In the long run,
Congress may well have thought that the indirect benefits flowing
from a right of approval that had little bite were preferable to
the potential vices involved in granting 60-mile tracks the right
to gnaw at will. See generally Jerry L. Mashaw, Textualism,
Constitutionalism, and the Interpretation of Federal Statutes, 32
Wm. & Mary L. Rev. 827, 842 (1991) (suggesting that implied
private rights of action can eclipse the important role of
agencies in weighing conflicting concerns); Frank H. Easterbrook,
Foreword: The Court and the Economic System, 98 Harv. L. Rev. 4,
45-51 (1984) (warning that courts, in venturing to alter the
particular personality which Congress has chosen to embody in
statutes, may shift the balance of entitlements and sire
overdeterrence).
III. THE HOME STRETCH
We turn next, albeit briefly, to the question of
whether appellant, on these facts, framed a cognizable claim
under the RICO statute. Suffolk argues that Lincoln's unapproved
acceptance of wagers constitutes a pattern of indictable activity
under federal gambling laws and, therefore, violates the RICO
statute. The court below did not agree. See Sterling, 802 F.
Supp. at 669-70. We think the lower court reached the right
result: Lincoln's acceptance of wagers on distant races without
Suffolk's consent does not constitute a crime which can carry the
weight of a RICO complaint.7
RICO targets the use, in connection with any enterprise
affecting interstate commerce, of income derived "from a pattern
of racketeering activity." 18 U.S.C. 1962(a). The term
"racketeering activity" is defined in 18 U.S.C. 1961(1).
Included in the definition is any act indictable under 18 U.S.C.
1084, a statute which criminalizes, inter alia, utilization of
a wire facility for the "transmission in interstate . . .
commerce of . . . information assisting in the placing of bets .
. . on any sporting event." 18 U.S.C. 1084(a). Conceding,
withal, that wagering of the sort transacted at Lincoln's
facility is permissible under the relevant laws of all interested
states, appellant pins its RICO-related hopes on section 1084(a).
7Here, again, the issue is purely legal and appellate review is plenary.
But, section 1084(a) carves out a specific exception for
circumstances in which wagering on a sporting event is legal in
both the sending state and the receiving state. See 18 U.S.C.
1084(b). That exception applies here.
Leaving the IHA to one side, appellant has no case.
The legislative history of section 1084 shows beyond peradventure
that Congress enacted section 1084(b) for the express purpose of
allowing off-track betting in venues where states chose to
legalize such activity (thereby reserving to individual states
some measure of control over what forms of gambling could occur
within their borders). See H.R. Rep. No. 967, 87th Cong., 1st
Sess. (1961), reprinted in 1961 U.S.C.C.A.N. 2631, 2632-33.
Thus, given that the operation of Lincoln's OTB office does not
offend relevant state law, we have no non-IHA-related reason to
declare that the actions complained of in this suit constitute
indictable conduct under section 1084.
Appellant tells us that the IHA makes a dispositive
difference. But, we do not understand how this can be true. All
available evidence indicates that Congress intended the IHA to
have purely civil consequences. For instance, the IHA's
enforcement and remedies sections specifically exclude the
possibility of governmental involvement and/or the specter of
criminal penalties. See 15 U.S.C. 3005, 3006. The section
dealing with jurisdiction and venue refers only to "civil
action[s]." 15 U.S.C. 3007. The legislative history teaches
that Congress intended there to "be no Government enforcement" of
the IHA; and further intended that "[a]ny person accepting an
interstate wager other than in conformity with the act will
instead be civilly liable in a private action for damages to the
host State, the host racing association, and the applicable
horsemen's group." S. Rep. No. 1117, 1978 U.S.C.C.A.N. at 4146
(emphasis supplied); see also H.R. Rep. No. 1733, 95th Cong., 2d
Sess. 3 (1978) (same). In the face of this imposing array,
Suffolk's argument that the IHA serves as a fulcrum to
criminalize Lincoln's activities must fail.
To recapitulate, we think it clear that Congress, in
adopting section 1084, did not intend to criminalize acts that
neither the affected states nor Congress itself deemed criminal
in nature. Lincoln's acts fall into this chiaroscuro category
perhaps not right, but certainly not felonious. It follows that
these acts, not indictable under section 1084, cannot constitute
a pattern of racketeering activity within RICO's definitional
parameters. Hence, the court below properly granted summary
judgment on the RICO count.8
IV. AT THE WIRE
We need go no further. Simply stated, Congress's
discernible intent precludes us from inferring a private right of
8The district court held, in the alternative, that RICO does not confer a right to sue for equitable relief on private plaintiffs and that, therefore, even if Suffolk had raised a colorable RICO claim, no injunction could issue. See Sterling,
802 F. Supp. at 670-71; see also Lincoln House, Inc. v. Dupre,
903 F.2d 845, 848 (1st Cir. 1990) (expressing doubts about the availability of such relief). Because we affirm, without caveat, the district court's primary holding concerning the RICO claim, we do not address this alternate ground.
action in appellant's favor. Because this is so, and because
appellant's complaint likewise fails to limn a cognizable
racketeering claim, the judgment below, to invoke the name of a
very famous racehorse, must be
Affirmed.