Appalachian Racing, LLC v. Commonwealth, 2016-SC-000206-MR

Decision Date15 December 2016
Docket Number2016-SC-000206-MR
PartiesAPPALACHIAN RACING, LLC, AND FLOYD COUNTY, KENTUCKY, REAL PARTIES IN INTEREST APPELLANTS v. COMMONWEALTH OF KENTUCKY, KENTUCKY HORSE RACING COMMISSION, AND HONORABLE JOHNNY RAY HARRIS, JUDGE, FLOYD CIRCUIT COURT APPELLEES
CourtUnited States State Supreme Court (Kentucky)

APPALACHIAN RACING, LLC, AND FLOYD COUNTY,
KENTUCKY, REAL PARTIES IN INTEREST APPELLANTS
v.
COMMONWEALTH OF KENTUCKY,
KENTUCKY HORSE RACING COMMISSION,
AND HONORABLE JOHNNY RAY HARRIS,
JUDGE, FLOYD CIRCUIT COURT APPELLEES

2016-SC-000206-MR

Supreme Court of Kentucky

DECEMBER 15, 2016


TO BE PUBLISHED

ON APPEAL FROM COURT OF APPEALS
CASE NO. 2015-CA-001808
FLOYD CIRCUIT COURT NO. 15-CI-00836

OPINION OF THE COURT BY CHIEF JUSTICE MINTON

AFFIRMING

Appalachian Racing, LLC, appeals to this Court from the Court of Appeals' order granting the Kentucky Horse Racing Commission a writ of prohibition barring the Floyd Circuit Court from enforcing its restraining order that prohibited the Commission from considering a license application. The Court of Appeals issued the writ because it determined the circuit court violated Kentucky's stringent separation of powers doctrine in issuing the order. We agree for slightly differing reasons and affirm the Court of Appeals.

Page 2

I. FACTUAL AND PROCEDURAL BACKGROUND.

Keeneland Association, Inc., entered into a contract with Appalachian Racing to preserve its interest in purchasing Appalachian Racing's ownership of Thunder Ridge, a quarter-horse racing track in Prestonsburg, Kentucky. The contract prohibited Appalachian Racing from taking any action that would amount to an effort to enter negotiations to sell the track to anyone else for approximately one year. Floyd County, Kentucky, also had an interest in this contract because it held bonds that were to be paid upon Keeneland's purchase of Thunder Ridge.

While the contract was pending, Keeneland applied for a license with the Commission on behalf of Cumberland Run, LLC, to operate a quarter-horse racing track in Corbin, Kentucky. The Commission issued public notice on November 23, 2015, that it would review this application for racing and wagering on December 1—an eight-day turnaround—to determine whether Keeneland's proposal complied with the regulatory prerequisites to opening a new racing facility.

Two days after the Commission's public notice Appalachian Racing, joined by Floyd County, sued the Commission in the Floyd Circuit Court on a theory of aiding and abetting fraud and tortious interference with a prospective advantage. In addition to its complaint, Appalachian Racing sought two other forms of immediate relief: (1) declaratory judgment that the Commission violated its right to intervene in Keeneland's application with the Commission and the Commission violated its obligation to provide twenty days' notice of its

Page 3

proceeding, and (2) a temporary restraining order to prevent the Commission from issuing Keeneland a license. The circuit court issued a restraining order on December 1, 2015, "prohibiting the Commission from considering or taking any action on the license application identified as 'Keeneland's application to establish Quarter Horse Race Track (Cumberland Run) in Corbin and to offer wagering on Historical Horse Races[.]'". The Commission then filed an original action in the Court of Appeals seeking a writ of prohibition to prevent the Floyd Circuit Court from enforcing its restraining order.

The Court of Appeals granted the Commission's request for a writ of prohibition. The appellate panel concluded that there was no irreparable injury if the trial court's restraining order remained in place, but instead issued the writ under the "special cases" writ category—a limited category of writs granted in instances when the "orderly administration of justice" so requires. In issuing the writ, the panel determined that the trial court's order threatened the integrity of the robust separation of powers enshrined in the Kentucky Constitution, so this matter is most accurately deemed a "special case" warranting this form of equitable relief. Appalachian Racing disagrees, and now appeals to this Court as a matter of right, asking us to determine whether the Court of Appeals overreached in prohibiting the circuit court from enforcing its order. We conclude it did not.

Page 4

II. ANALYSIS.

A. Standard of Review.

We employ a three-part analysis in reviewing the appeal of a writ action. We review the Court of Appeals' factual findings for clear error.1 Legal conclusions we review under the de novo standard.2 But ultimately, the decision whether or not to issue a writ of prohibition...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT