Capital Dist. Regional Off-Track Betting Corp. v. Northeastern Harness Horsemen's Ass'n

• Decision Date: 25 November 1977
• Docket Number: OFF-TRACK
• Citation: 399 N.Y.S.2d 597,92 Misc.2d 232
• Parties: CAPITAL DISTRICT REGIONALBETTING CORPORATION, Plaintiff, v. NORTHEASTERN HARNESS HORSEMEN'S ASSOCIATION, Defendant.
• Court: New York Supreme Court

Page 597

399 N.Y.S.2d 597

92 Misc.2d 232

CAPITAL DISTRICT REGIONAL OFF-TRACK BETTING CORPORATION, Plaintiff, v. NORTHEASTERN HARNESS HORSEMEN'S ASSOCIATION, Defendant.

Supreme Court, Schenectady County.

Nov. 25, 1977.

Francis E. Dorsey, Brackett, Eddy & Dorsey, Saratoga Springs, for defendant.

Philip Stillman, Hershkowitz, Rodriquez & Stillman, P. C., Schenectady, for plaintiff.

ARTHUR C. AULISI, Justice.

This is a motion by defendant pursuant to Rule 3211(a) of the Civil Practice Law and Rules for a judgment dismissing the complaint in the above entitled action.

The plaintiff is a public benefit corporation organized under the provisions of the Regional Off-Track Betting Corporation Law of the State of New York (McKinney's Unconsolidated Laws, Section 8113, subd. 1) and engages in the conduct and operation of a system of off-track pari-mutual betting on horse races (id., Section 8114, subd. 10). Defendant is a not-for-profit corporation whose members have an interest in harness racing (Matter of Northeastern Harness Horsemen's Association v. New York State Racing and Wagering Board, 90 Misc.2d 328, 329, 394 N.Y.S.2d 377, 378-379).

In this action, the plaintiff seeks to recover damages for alleged defamatory statements published in the April 1977 issue of the Newsletter distributed by the defendant to its members which accused the plaintiff of "flagrant violations of law, such as questionable auditing practices, continuous zoning violations and ignoring pari-mutuel revenue statutes".

Presented for determination on this motion is the question of whether plaintiff, in view of its status as a governmental corporation, may maintain an action for defamation against the defendant.

The memorandums of law submitted by counsel for the respective parties do not cite, and the research of the Court does not disclose any reported case in this State dealing with the question involved. In other jurisdictions, however, the rule is that a municipal corporation cannot maintain an action for libel against one who publishes malicious and false statements with the intent to destroy its credit and financial standing, even to the extent that the publication affects it in its proprietary capacity (City of Chicago v. Tribune Co., 1923, 307 Ill. 595, 139 N.E. 86, 28 A.L.R. 1368; City of Albany v. Meyer, 1929, 99 Cal.App. 651, 279 P. 213; see also 35 N.Y.Jur. Libel and Slander, section 148). The rule is predicated upon considerations inherent in the freedom of speech and freedom of the press provisions of the constitutions of the States, as well as the First Amendment to the Constitution of the United States, as applied to the States by the Fourteenth Amendment. The principle of City of Chicago v. Tribune Co., supra, that "prosecutions for libel on government have (no) place in the American system of jurisprudence" (28 A.L.R. at p. 1372) has been cited with approval by The Supreme Court of The United States in the case of New York Times v. Sullivan, 1964, 376 U.S. 254, 291, 84 S.Ct. 710, 732, 11 L.Ed.2d 686, 713, 95 A.L.R.2d 1412, 1441.

Although the rule has received critical comment in treatises and certain law review articles (Prosser on Torts, 2nd ed., p. 579, note 95), no American court which...