United States Trotting Ass'n v. Chicago Downs Ass'n

665 F.2d 781
CourtCourt of Appeals for the Seventh Circuit
DecidedDecember 8, 1981
DocketNos. 80-1948 to 80-1950
StatusPublished
Cited by37 cases

This text of 665 F.2d 781 (United States Trotting Ass'n v. Chicago Downs Ass'n) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States Trotting Ass'n v. Chicago Downs Ass'n, 665 F.2d 781 (7th Cir. 1981).

Opinions

CUMMINGS, Chief Judge.

Plaintiff United States Trotting Association (USTA) brought these three actions against Chicago Downs Association, Inc. and Fox Valley Trotting Club, Inc., alleging that they had unlawfully appropriated USTA’s property. The three actions were consolidated in the district court and remain consolidated here.

In the first suit (district court number 77-C-3312; our number 80-1948) USTA alleged that Chicago Downs, an Illinois management corporation that sponsors race meetings at Sportsman’s Park, a harness race track in Cicero, Illinois, used USTA registration and eligibility certificates during 1975 and 1977 when Chicago Downs was not affiliated with USTA and thereby unlawfully appropriated USTA’s property. In the second suit (district court number 77— C-3313; our number 80-1949) USTA made the same allegation against Fox Valley, another Illinois management corporation sponsoring harness horse-racing meetings at Sportsman’s Park, with respect to meetings conducted in 1975 and 1977. Both suits sought an accounting, a money judgment and an injunction against continuing misappropriation. USTA’s third suit (district court number 78-C-1258; our number 80-1950) sought to enjoin Fox Valley from using USTA certificates during and after the 1978 racing season.

[783]*783Fox Valley filed an answer and then a counterclaim in the third of the suits. Count I of its counterclaim charged USTA with instigating a group boycott against it in violation of Section 1 of the Sherman Act. Count II charged USTA with tor-tiously interfering with the contractual and business relations between Fox Valley and the Illinois Harness Horsemen’s Association (IHHA).1

Conceding for the time being that there were no material factual issues in dispute, the parties filed motions for summary judgment on all issues. The district court granted defendants' motion for summary judgment on USTA’s misappropriation claim because USTA had failed to show that it owned the registration and eligibility certificates. 487 F.Supp. 1008, 1012-1014 (N.D.Ill.1980). Fox Valley’s motion for summary judgment on its antitrust counterclaim was granted on the ground that USTA’s conduct was a group boycott per se violating Section 1 of the Sherman Act. 487 F.Supp. at 1014-1016. As to Count II of Fox Valley’s counterclaim, Judge Aspen held that it was entitled to summary judgment since USTA’s actions amounted to tortious interference “with the business relationship existing between the tracks and the horsemen.” 487 F.Supp. at 1016-1017. A permanent injunction was subsequently entered barring USTA from invoking any of its by-laws or rules “to sanction any of its horseowner or driver members solely by reason of their participation in any future Fox Valley harness race meetings while Fox Valley is neither a USTA member nor contract track.” Various racing associations have filed amici curiae briefs urging reversal.2 We reverse the district court’s summary judgments and remand for further proceedings consistent with our opinion. We also vacate the permanent injunction awarded to Fox Valley.

I. Background of Litigation

USTA is an Ohio incorporated, non-profit service organization. • It was founded in 1939 to counteract widespread problems in harness racing. Before that time a plethora of local sanctioning organizations had produced inconsistent regulations; record-keeping was spotty; penalties proved unenforceable; and the sport had fallen into general disrepute. The purpose of USTA was to develop comprehensive national records and to promulgate uniform rules and standards. USTA has never had any interest in breeding, buying, selling, or racing horses, nor any investment in race tracks or race meetings. It operates solely as a sanctioning organization and information bank. Since its inception, USTA has grown in size and influence. In 1977 it had 40,861 active members,3 including 426 fair race tracks and 65 parimutuel tracks. Only members can register standardbred horses with the USTA and obtain eligibility certificates documenting a horse’s performance in a given racing season. Only members can vote on matters of USTA governance. Nonetheless, tracks that do not wish to become USTA members can affiliate as “contract tracks,” paying to use USTA services on the same basis as member tracks, i.e., a percentage of the parimutuel [784]*784take for each racing day, not in excess of $330 per day. See United States Trotting Association Charter, By-Laws, Rules, and Regulations (“Rules”) Art. I, § 4 and Art. VII, § 1.

Owner members of USTA register their standardbred horses with USTA. USTA issues a registration certificate to the owner that describes in detail the horse’s physical markings and pedigree, and identifies its owner and breeder. The reverse side of the certificate provides space to record any transfers of ownership of the horse. In addition, USTA maintains central records of the information on the registration certificates and of any transfers of title, so that attempts to tamper with the certificates can be detected.

USTA also issues an eligibility certificate for each registered horse. This certificate contains performance information compiled from the horse’s last eight starts in the prior racing season. Throughout the current season, pertinent information about the horse’s performance in each of its races is added to the certificate by the clerk of the racecourse, a track employee who is licensed by USTA. The clerk of the course also records the same information on a “Judge’s Sheet” which is forwarded to USTA, thus making it possible to detect discrepancies or alterations in the eligibility certificates.

Eligibility certificates are used by track officials to select competitive horses for balanced race fields. Registration certificates are chiefly important in insuring accurate identification and honest transfers of harness horses. They also play a limited role in actual racing activities. Many tracks, including Chicago Downs and Fox Valley, run “claiming races,” in which a price is established at which the winning horse can be purchased or “claimed.” Such tracks, including Chicago Downs and Fox Valley, require that the USTA registration certificate be surrendered to the new owner before the claiming amount is disbursed. The purpose of the claiming race is to keep owners from entering superior horses in mediocre fields, again to foster competitive races.

In Illinois the legislature has relied on the offices of USTA as an integral part of its regulatory scheme. Illinois law requires that all horses entering harness races be “registered as [harness or standardbred horses] with and meet[] the requirements of and [be] approved by the United States Trotting Association.” Ill.Rev.Stat.chap. 8 § 37-3.06(c) (1979). In addition the Illinois Racing Board Rules provide that any harness horse entered at a parimutuel track have a current USTA eligibility certificate (Rule 9.01), that all matters relating to registration of harness horses be governed by USTA rules (Rule 9.02), that all horses be tattooed with their USTA identification number (Rule 7.08), that persons suspended by USTA be barred from participating in harness race meetings (Rule 5.10), and that clerks of the course send race information to USTA and the Illinois Racing Board (Rule 6.18). The thirteen other states that allow parimutuel harness racing have similarly incorporated USTA standards in their regulatory systems (App. 304-305).

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Cite This Page — Counsel Stack

Bluebook (online)
665 F.2d 781, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-trotting-assn-v-chicago-downs-assn-ca7-1981.