Confederación Hípica De P.R., Inc. v. Confederación De Jinetes Puertorriqueños, Inc.
| Decision Date | 04 April 2022 |
| Docket Number | s. 19-2201,20-2172 |
| Parties | CONFEDERACIÓN HÍPICA DE PUERTO RICO, INC.; Camarero Racetrack Corp., Plaintiffs, Appellees, v. CONFEDERACIÓN DE JINETES PUERTORRIQUEÑOS, INC.; Abner Adorno; Carlos Quiñones; Cindy Soto; David Rosario; Edwin Castro; Héctor Berríos; Héctor Rivera; Jomar García; Kennel Pellot; Luis Negrón; Mario M. Sánchez; Pedro González; Sasha Ortiz; Steven Fret; Miguel A. Sánchez, Defendants, Appellants, Alexis Valdés; Anardis Rodríguez; David Ortiz; Erik Ramírez; Ismael Peréz; Israel O. Rodríguez; José A. Hernandez; Juan Carlos Díaz; Jorge G. Robles; Javier Santiago; Misael Molina; Kevin Navarro ; Pablo Rodríguez; Alfonso Claudio; Jonathan Agosto; Yashira Tolentino; José M. Rivera; Alvin Colón; Jesús Guadalupe; Jan Carlos Suárez; Asociacion de Jinetes de Puerto Rico, Inc.; Ramón Sánchez; Conjugal Partnership Adorno-doe; Conjugal Partnership Doe-soto; Conjugal Partnership Ortiz-doe; Conjugal Partnership H. Doe-tolentino; Conjugal Partnership Adorno-Doe; Conjugal Partnership Valdés-Doe; Conjugal Partnership Claudio-Doe; Conjugal Partnership Colón-Doe; Conjugal Partnership Quinones-Doe; Conjugal Partnership Doe-Soto; Conjugal Partnership Ortiz-Doe; Conjugal Partnership Aleman-Doe; Conjugal Partnership Castro-Doe; Conjugal Partnership Delpino-Doe; Conjugal Partnership Berríos-Doe; Conjugal Partnership Rivera-Doe; Conjugal Partnership Cepeda-Doe; Conjugal Partnership Peréz-Doe; Conjugal Partnership Rodríguez-Doe; Conjugal Partnership Suárez-Doe; Conjugal Partnership Santiago-Doe; Conjugal Partnership Guadulupe; Conjugal Partnership García-Doe; Conjugal Partnership Davila-Doe; Conjugal Partnership Robles-Doe; Conjugal Partnership Hernandez-Doe; Conjugal Partnership Cabreradoe; Conjugal Partnership Díaz-Doe; Conjugal Partnership Pellot-Doe; Conjugal Partnership Navarro-Doe; Conjugal Partnership Negrón-Doe; Conjugal Partnership Sánchez-Doe; Conjugal Partnership Sánchez-Doe 30; Conjugal Partnership Molina-Doe; Conjugal Partnership Rodríguez-Doe 24; Conjugal Partnership González-Doe; Conjugal Partnership Sánchez-Doe 29; Conjugal Partnership Ortiz-Doe 26; Conjugal Partnership Fret-Doe; Conjugal Partnership Doe-Tolentino; Jane Does ; Jane Does 2-4; 6-35 John Does 1-2, Defendants. |
| Court | U.S. Court of Appeals — First Circuit |
Axel A. Vizcarra-Pellot and Peter J. Porrata, with whom the Law Offices of Peter John Poratta was on brief, for appellants.
Manuel Porro-Vizcarra and Roberto Lefranc Morales, with whom Luz Yanix Vargas-Perez and Martínez-Álvarez Menéndez Cortada & Lefranc Romero, PSC were on brief, for appellees.
Before Lynch and Kayatta, Circuit Judges, and Woodlock,* District Judge.
The Sherman Antitrust Act usually forbids would-be competitors from staging a group boycott. 15 U.S.C. § 1 ; see Nw. Wholesale Stationers, Inc. v. Pac. Stationery & Printing Co., 472 U.S. 284, 290, 105 S.Ct. 2613, 86 L.Ed.2d 202 (1985). Federal statutes and controlling Supreme Court case law create an exemption for certain conduct, commonly called the labor-dispute exemption. See 15 U.S.C. § 17 ; 29 U.S.C. §§ 52, 101, 104, 105, 113.
In this action, brought by an association of horse owners ("Hípica") and the owner of a racetrack ("Camerero") against a group of jockeys who demanded higher wages and refused to race, the district court erroneously determined that the labor-dispute exemption does not apply. The district court preliminarily and permanently enjoined the work stoppage, awarded summary judgment against the jockeys, their spouses and conjugal partnerships, and an association representing them ("inetes"), and imposed $1,190,685 in damages.
Confederación Hípica de Puerto Rico v. Confederación de Jinetes Puertorriqueños, Inc., 419 F. Supp. 3d 305, 311, 313 (D.P.R. 2019) ; Confederación Hípica De Puerto Rico, Inc. v. Confederación De Jinetes Puertorriqueños, Inc., 296 F. Supp. 3d 416, 421, 423-26 (D.P.R. 2017).
We reverse the district court's entry of summary judgment against the jockeys and direct, on remand, dismissal of the case. We also vacate sanctions that the district court imposed against the defendants.
We briefly recount the background to this dispute.
Puerto Rico is home to one horse-racing track, the Hipódromo Camarero in Canóvanas, which is operated by plaintiff Camarero. Horse owners hire jockeys on a race-by-race basis. Since 1989, the jockeys have been paid a $20 mount fee for each race they participate in. The fortunate jockeys who finish in the top five positions in each race share in the "purse" -- the prize money for the top five horses. A Puerto Rico government agency, established in its current form in 1987, regulates the sport. See P.R. Laws Ann. tit. 15, § 198e. It embodied the compensation structure we have described in regulations in 1989. See Confederación Hípica de Puerto Rico, No. JH-88-12 (P.R. Admin. of the Racing Sport & Indus. Racing Bd. Mar. 28, 1989).
The jockeys have long chafed at their employment conditions. They object to the mount fee, which is about one-fifth what jockeys receive in the mainland United States. They also complain about pre-race weigh-in procedures and about the conduct of racing officials.
In early June 2016, those long-simmering grievances boiled over. On June 10, several jockeys delayed the start of a race to demand that racing officials discuss the weigh-in procedures. As a result of that delay, the officials fined those jockeys. The jockeys responded through a pair of associations: defendant Jinetes and a second smaller group ("AJP"). On behalf of dozens of jockeys, the associations disputed the fines and objected to jockey compensation. The associations then attempted to negotiate employment conditions with plaintiff Hípica, the representative of the horse owners. Those negotiations resolved none of the issues, and the racing regulators declined the jockeys' request to mediate.
After negotiations failed, in pursuit of their demands for increased compensation, thirty-seven jockeys refused to race for three days. Jinetes claimed credit for organizing the work stoppage. As no jockeys had registered to ride on June 30, July 1, and July 2, 2016, Camerero canceled the races scheduled for those days.
Hípica and Camerero sued the jockeys, their spouses and conjugal partnerships, and Jinetes, alleging that the defendants engaged in a group boycott in violation of federal antitrust law.1 See 15 U.S.C. § 1. The defendants counterclaimed, alleging that the plaintiffs violated federal civil rights and antitrust law. See id.; 42 U.S.C. §§ 1981, 1983.
The plaintiffs sought and the district court granted a temporary restraining order on July 1 to direct the jockeys back to work.2 Although the order came too late to restore the July 2 racing calendar, the jockeys otherwise complied. The district court then held an extended preliminary and permanent injunction hearing. On the first day of the hearing, the district court sanctioned Jinetes, requiring the association to pay some of the plaintiffs' attorney's fees because it concluded sua sponte that defense counsel failed to meet and confer with plaintiffs' counsel as ordered. After the hearing, the district court granted a preliminary and permanent injunction, holding that the jockeys are independent contractors, that they had acted in concert to restrain trade, and that they could not benefit from the labor-dispute exemption because of their independent-contractor status. The district court reasoned that a 1979 decision of this court, San Juan Racing Ass'n, Inc. v. Asociacion de Jinetes de Puerto Rico, 590 F.2d 31 (1st Cir. 1979), controlled its determination.
Proceeding to the damages stage, the district court granted summary judgment to the plaintiffs. After trebling the plaintiffs' losses, it awarded $602,466 in damages to Camarero and $588,219 in damages to Hípica. The defendants appealed.
The defendants also moved to reconsider the judgment. They contended that the plaintiffs failed to join indispensable parties because they had never actually served the jockeys' wives and conjugal partnerships. The district court denied the motion, and the plaintiffs separately appealed from that denial.
We start our analysis with the antitrust issues.
As this dispute turns on a question of law, we review de novo both the district court's grant of summary judgment and its issuance of the injunction. Spectrum Ne., LLC v. Frey, 22 F.4th 287, 291 (1st Cir. 2022) (citing Lawless v. Steward Health Care Sys., LLC, 894 F.3d 9, 21 (1st Cir. 2018) ).
"[T]here is an inherent tension between national antitrust policy, which seeks to maximize competition, and national labor policy, which encourages cooperation among workers to improve the conditions of employment." H. A. Artists & Assocs., Inc. v. Actors' Equity Ass'n, 451 U.S. 704, 713, 101 S.Ct. 2102, 68 L.Ed.2d 558 (1981). Most of the time, antitrust law forbids would-be competitors from colluding to increase prices. When the price is a laborer's wage, however, a different set of rules apply. That must be so, lest antitrust law waylay ordinary collective bargaining. See Brown v. Pro Football, Inc., 518 U.S. 231, 236-37, 116 S.Ct. 2116, 135 L.Ed.2d 521 (1996). Thus a pair of exemptions -- one statutory and one nonstatutory -- shield legitimate labor conduct from antitrust scrutiny. We deal here with the statutory exemption.
The statutory labor-dispute exemption flows from both the Clayton Act and the Norris-LaGuardia Act. H.A. Artists & Assocs., 451 U.S. at 706 n.2, 101 S.Ct. 2102 (citing 15 U.S.C. § 17 and 29 U.S.C. §§ 52, 104, 105, 113 ). Through those two statutes, Congress exempted labor disputes from antitrust law. See Milk Wagon Drivers' Union, Loc. No. 753 v. Lake Valley Farm Prods., 311 U.S. 91, 101-03, 61 S.Ct. 122, 85 L.Ed. 63 (1940) ; Apex Hosiery Co. v. Leader, 310 U.S. 469, 503, 60 S.Ct. 982, 84 L.Ed. 1311 (1940).
The Clayton Act declares that "[t]he labor of a human being is not a commodity or article of commerce," subject to antitrust law. 15 U.S.C. §...
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