Catrone v. Thoroughbred Racing Associations of North America, Inc.

• Decision Date: 01 August 1990
• Docket Number: No. 90-1071,90-1071
• Citation: 929 F.2d 881
• Parties: Patrick CATRONE, Plaintiff, Appellant, v. THOROUGHBRED RACING ASSOCIATIONS OF NORTH AMERICA, INC., et al., Defendants, Appellees. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 881

929 F.2d 881

Patrick CATRONE, Plaintiff, Appellant, v. THOROUGHBRED RACING ASSOCIATIONS OF NORTH AMERICA, INC., et

al., Defendants, Appellees.

No. 90-1071.

United States Court of Appeals, First Circuit.

Heard Aug. 1, 1990.

Decided April 11, 1991.

David L. Kelston, with whom Friedman & Atherton, was on brief, Boston, Mass., for plaintiff, appellant.

Jack Kaplan, with whom Carter, Ledyard & Milburn, New York City, Michael J. Liston, Palmer & Dodge, Boston, Mass., and Elizabeth A. Bryson, were on brief, New York City, for defendants, appellees.

Before TORRUELLA and CYR, Circuit Judges, and RE, ^* Judge.

CYR, Circuit Judge.

Appellant Patrick Catrone, a professional trainer of thoroughbred racehorses, appeals from summary judgments entered in favor of Thoroughbred Racing Protective Bureau, Inc. ("Protective Bureau") and its parent, Thoroughbred Racing Associations of North America, Inc. ("TRA"), on Catrone's state-law claims for defamation and for intentional interference with advantageous business relationships. ¹ The district court concluded that Catrone's claims were either barred by the Massachusetts statute of limitations or predicated on privileged communications. We affirm the district court judgments.

I BACKGROUND

TRA is a trade association whose members operate racetracks throughout the United States and Canada. The Protective Bureau, TRA's wholly-owned subsidiary, provides investigative and security services for TRA-member tracks. The Protective Bureau investigates alleged wrongdoing in thoroughbred horse racing, including rules violations at member tracks, and compiles various types of reports for dissemination among TRA-track managements and state racing commissions. ² Protective Bureau Catrone's alleged participation in various illegal activities has been the subject of numerous Protective Bureau reports since the early 1970's. In 1971, the Protective Bureau investigated allegations that Catrone was involved in running "ringers" at several TRA tracks. ³ Following that investigation, Catrone was indicted by a federal grand jury in Massachusetts and suspended from racing in New Jersey. He was acquitted of the federal charge, and the New Jersey racing suspension was vacated by court order. The Protective Bureau submitted investigative information to the New Hampshire Racing Commission during 1976, which led to the denial of Catrone's New Hampshire license application. Massachusetts followed suit and denied Catrone a license in 1977. In late 1981, however, after Catrone had been relicensed in Massachusetts and had resumed racing at Suffolk Downs, a non-TRA track, he was banned from Suffolk Downs, based in part on information provided by the Protective Bureau. The Massachusetts Appeals Court upheld the Suffolk Downs ban. Catrone v. State Racing Commission, 17 Mass.App.Ct. 484, 459 N.E.2d 474 (1984). Since 1985 Catrone has been the subject of Protective Bureau investigations into incidents at TRA tracks in New Hampshire and Florida.

reports normally are not distributed to non-TRA officials, except on request and in confidence. It is TRA policy that Protective Bureau reports not contain information more than seven years old.

Catrone commenced the present action on May 16, 1986, alleging, inter alia, that various Protective Bureau reports were defamatory and constituted intentional interferences in advantageous business relationships Catrone enjoyed as a professional trainer. Among the six operative communications distilled from among the more than 1,000 documents produced during discovery, Catrone's claims based on two communications--a 1974 special report and a 1978 newsletter--were debarred by the district court under the three-year statute of limitations, see Mass.G.L. ch. 260 Sec. 2A (intentional interference), Sec. 4 (defamation). Concluding that the four remaining reports were privileged, the district court entered summary judgment against Catrone on all claims.

Catrone contends on appeal that the defamation and intentional interference claims are not time barred, as the confidential contents of the 1974 special report and the 1978 newsletter remained "inherently unknowable" to Catrone until well within the three-year limitations period, and that the four other reports either were not within the scope of the qualified privilege or, in the alternative, that the privilege was abused and forfeited by the appellees.

II DISCUSSION

Summary Judgment

Summary judgments are subject to plenary appellate review, Siegal v. American Honda Motor Co., 921 F.2d 15, 17 (1st Cir.1990); Petitti v. New England Tel. & Tel. Co., 909 F.2d 28, 30-31 (1st Cir.1990); E.H. Ashley & Co. v. Wells Fargo Alarm Services, 907 F.2d 1274, 1277 (1st Cir.1990), under the same standards that govern the trial court, Jensen v. Frank, 912 F.2d 517, 520 (1st Cir.1990). Summary judgment is warranted only when the record, viewed favorably to the nonmoving party, evinces no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). See, e.g., Siegal, 921 F.2d at 17; Jensen, 912 F.2d at 520.

The nonmoving party can fend off a motion for summary judgment by setting forth specific facts sufficient to demonstrate that every essential element of its claim or defense is at least trialworthy. See Siegal, 921 F.2d at 17. A summary judgment issue is not trialworthy unless there is enough evidence for a jury to return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S.Ct. 2505, 2510-11, 91 L.Ed.2d 202 (1986) (citations omitted). "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Id.

Massachusetts' Discovery Rule

The district court concluded that Catrone's claims stemming from the 1974 special report and the 1978 newsletter are barred since those communications occurred more than three years before the commencement of the present suit in 1986. Catrone does not question the applicability of the three-year limitations period under Mass.G.L. ch. 260 Secs. 2A and 4, but relies instead on the Massachusetts discovery rule which provides that a cause of action for the redress of an "inherently unknowable" wrong does not accrue until the harm becomes known, or in the exercise of reasonable diligence should have become known, to the injured party. See Flynn v. Associated Press, 401 Mass. 776, 519 N.E.2d 1304, 1307 (1988) (describing various applications of "discovery rule"); Maggio v. Gerard Freezer & Ice Co., 824 F.2d 123, 130-131 (1st Cir.1987) (once on "notice" of possibility of fraud, plaintiff was required to act "in a reasonably diligent manner" to discover "facts" underlying claim).

Under the Massachusetts discovery rule, the running of the statute of limitations is delayed while "the facts," as distinguished from the "legal theory for the cause of action," remain "inherently unknowable" to the injured party. Gore v. Daniel O'Connell's Sons, Inc., 17 Mass.App.Ct. 645, 461 N.E.2d 256, 259 (1984) ("if the action is based on an inherently unknowable wrong, it accrues when the injured party knew, or in the exercise of reasonable diligence, should have known of the factual basis of the cause of action.") (personal injury action); see also Cornell v. E.I. Du Pont de Nemours & Co., 841 F.2d 23 (1st Cir.1988). The plaintiff bears the burden of presenting facts sufficient to take the case outside the statute of limitations. Franklin v. Albert, 381 Mass. 611, 411 N.E.2d 458, 463 (1980).

Catrone concedes that the 1978 newsletter was widely disseminated among racetrack managements and state racing commissions. ⁴ The 1978 newsletter specifically identified Catrone as the subject of the 1974 special report [i.e., "Special Report Subject # 113"], "a particularly nefarious character" among "racing's most undesirable figures." ⁵ The district court concluded that Catrone was on notice that the 1978 newsletter had been widely disseminated and that it related highly derogatory information. The court determined that Catrone, "employing some diligence," should have learned of the dissemination of the 1974 special report as well as the 1978 newsletter. Accordingly, the fact that the 1978 newsletter and the 1974 special report contained highly derogatory information about Catrone could not have remained "inherently unknowable" until May 15, 1983.

Summary judgment is appropriate where there is "no dispute as to essential evidentiary facts" controlling the application of the discovery rule. Fidler v. E.M. Parker Co., 394 Mass. 534, 476 N.E.2d 595, 602 (1985). The summary judgment record, viewed most favorably to Catrone, reveals that Catrone had actual knowledge, not later than 1976, that the Protective Bureau was publishing derogatory reports about him, as demonstrated by the uncontroverted fact that, at his license application hearing before the New Hampshire Racing Commission in August 1976, Catrone was confronted with allegations of serious wrongdoing, principally concerning the running of "ringers." The record indicates that these allegations were based almost entirely on Protective Bureau investigative reports. ⁶ Although the precise content of the reports with which Catrone was confronted at the license hearing is not entirely clear, the Commission's letter to Catrone, explaining its denial of a license, states that Catrone had been asked at the hearing "to respond to several serious allegations ... supported in investigative reports which the Commission had received from the Thoroughbred Racing Protective Bureau, Inc." and that Catrone had denied these allegations. In fact, the Commission letter expressly referred to each of the "ringer" incidents related in the 1974 special report (involving "El Toro Tortuga," "Ritter," "Dared to Talk," and "Choice Dare"). See supra note 5.

Thus, not later than September 1976, Catrone knew, or reasonably should have known, "the factual basis for...