Gulfstream Park Racing Ass'n v. Tampa Bay Downs

• Decision Date: 07 November 2003
• Docket Number: No. 803CV135T30EAJ.,803CV135T30EAJ.
• Citation: 294 F.Supp.2d 1291
• Parties: GULFSTREAM PARK RACING ASSOCIATION, INC., a Florida corporation, Plaintiff, v. TAMPA BAY DOWNS, INC., a Florida corporation, et al., Defendants.
• Court: U.S. District Court — Middle District of Florida

294 F.Supp.2d 1291

GULFSTREAM PARK RACING ASSOCIATION, INC., a Florida corporation, Plaintiff, v. TAMPA BAY DOWNS, INC., a Florida corporation, et al., Defendants.

No. 803CV135T30EAJ.

United States District Court, M.D. Florida, Tampa Division.

November 7, 2003.

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Leslie III Joughin, Akerman Senterfitt, Tampa, FL, Keith E. Rounsaville, Akerman Senterfitt, Orlando, FL, Lawrence D. Silverman, Akerman Senterfitt, Miami, FL, for Gulfstream Park Racing Association, Inc., a Florida corporation, plaintiff.

David Thomas Knight, Lara J. Tibbals, Hill, Ward & Henderson, P.A., Tampa, FL, Robert W. Clark, Smith, Clark, Delesie, Bierley, Mueller & Kadyk, Tampa, FL, for Tampa Bay Downs, Inc, a Florida corporation, defendant.

James Maxwell Landis, Jon P. Tasso, Foley & Lardner, Tampa, FL, for Florida Jai-Alai, Inc., Jacksonville Greyhound Racing, Inc., Investment Corp. of Palm Beach.

J. Stephen Menton, Div. of Admin. Hearings. Tallahassee, FL, Harold F. X. Purnell, Rutledge, Ecenia, Purnell & Hoffman, P.A., Tallahassee, FL, for Daytona Beach Kennel Club, Inc., Sports Palace, Inbc., Hartman-Tyner, Inc., West Flagler Associates, Inc., Southwest Florida Enterprises, Inc., St. Petersburg Kennel Club, Inc. and Associated Outdoor Clubs, Inc., Washington County, Sarasota Kennel Club, Inc.

George Lee Waas, Atty. General's Office, Tallahassee, FL, Ralf Edgar Michels, law Office of Ralf E. Michels, Tallahassee, FL, for State of Fla.

ORDER

MOODY, District Judge.

THIS CAUSE comes before this Court upon:

1. Gulfstream Park Racing Assn., Inc.'s ("Gulfstream") Motion for Summary Judgment on counts 3 and 5 of its second amended complaint (Dkt.# 92) and Tampa Bay Downs, Inc.'s ("TBD") response (Dkt.# 133) thereto;

2. Gulfstream's Motion for Summary Judgment on counts 2 and 3 of TBD's counterclaim (Dkt.# 90) and TBD's response (Dkt.# 133) thereto;

3. TBD's Motion for Summary Judgment on all counts of Gulfstream's second amended complaint and count 1 of its counterclaim (Dkt.# 88) and Gulfstream's response (Dkt.# 117) thereto;¹

4. Gulfstream's Motions to Strike Expert Reports of Eugene Christiansen and Louis Guth (Dkts.# 63, 69) and TBD's response (Dkt.# 81) thereto;

5. Gulfstream's Motion to Exclude Declarations of Guth and Christiansen (Dkt.# 87) and TBD's response (Dkt.# 110) thereto;

6. Gulfstream's Motion to Strike or Exclude certain portions of declarations and depositions (Dkt.# 138) and TBD's response (Dkt.# 148) thereto; and

7. Gulfstream's Emergency Motion to Exclude Evidence of Damages for Violation of Mandatory Disclosure Requirements (Dkts.# 151, 152) and TBD's response (Dkt.# 158) thereto.

I. BACKGROUND

This is an action between two competing thoroughbred racetracks.² Plaintiff/Counter-defendant, Gulfstream, operates a thoroughbred racetrack in Hallandale, Florida, which conducts live horse racing from January through April each year. Defendant/Counter-plaintiff, TBD, operates a thoroughbred racetrack in Tampa, Florida, which conducts live horse racing from December of one year through May of the next year.

A. FLORIDA'S PARI-MUTUEL INDUSTRY

Both racetracks are part of Florida's pari-mutuel industry. The pari-mutuel industry mainly consists of venues conducting pari-mutuel sports such as horse racing, jai alai, and greyhound racing.³ A number of state statutes and regulations as well as some federal statutes form a comprehensive regulatory regime, governing nearly every aspect of the industry.

Individuals who attend events at a parimutuel venue can either wager: (a) on live races or contests that are taking place at that venue; or (b) on non-live races or contests occurring elsewhere both inside and outside of Florida that are simulcast to those racetracks. The non-live simulcast events are subdivided⁴ into: (1) races or contests occurring at other venues in Florida, referred to as intertrack wagering ("ITW"), Fla. Stat. § 550.002(17); (2) out-of-state thoroughbred horse races simulcast to a Florida thoroughbred racetrack then conducting live racing; (3) out of-state thoroughbred horse races simulcast to a pari-mutuel venue not conducting live thoroughbred horse racing,⁵ referred to as intertrack wagering simulcasting ("ITWS").⁶

In order to bring in an out-of-state racetrack's signal into Florida, Florida law requires an out-of-state thoroughbred racetrack and an in-state thoroughbred racetrack (which is conducting live racing) to enter into a contract to provide simulcasts and to accept wagers on out-of-state horse races.⁷ See Fla. Stat. § 550.3551(5). In other words in Florida, an out-of-state racetrack cannot contract directly with an ITWS site, like a jai alai fronton or greyhound racetrack. The in-state racetrack contracts with ITWS sites. In addition, an ITWS site within sixty miles of an instate racetrack (which is conducting live racing) must obtain that racetrack's approval before it can accept wagers on ITWS signals. See 15 U.S.C. § 3004(b)(1)(A).

In Florida, there are five thoroughbred racetracks.⁸ Except for TBD, all of the thoroughbred racetracks are located in south Florida near Miami. During the entire length of TBD's racing season, one of the other four thoroughbred racetracks is operating.⁹

In addition to the five thoroughbred racetracks, there are twenty six other pari-mutuel venues in Florida. TBD and the other thoroughbred racetracks cannot compete to accept wagers from the ITWS sites within sixty miles of their competitor's site, because Section 3004(b) of the Interstate Horseracing Act, 15 U.S.C. § 3001, et seq. (the "IHA"), requires an ITWS site within sixty miles of a thoroughbred racetrack to obtain that tracks approval before the site can accept ITWS wagers. In Florida, this regulation prevents competition between TBD and the other racetracks on twelve of the twenty six venues, because twelve venues are within sixty miles of either TBD (four) or the other thoroughbred racetracks (eight). The remaining fourteen pari-mutuel venues (the "outside ITWS sites") can contract for the right to wager on ITWS signals with whichever of the thoroughbred racetracks is then currently operating.

When an individual places a wager at an ITWS site,¹⁰ most of that wager is placed in a pari-mutuel pool, a portion of which is paid to individual winners. The amount placed in the pari-mutuel pool is referred to as the "handle." See Fla. Stat. § 550.002(13). The remaining portion of the wager goes to pay taxes, other statutorily created fees (i.e. breeders' awards), the out-of-state racetrack, the in-state racetrack, the ITWS site, the out-of-state horsemen's group, and for purses at the racetracks. See, e.g., Fla. Stat. § 550.6305(9). This portion of the wager is referred to as the "takeout." See Fla. Stat. § 550.002(34).

B. EXCLUSIVE DISSEMINATION AGREEMENTS

In 1996, Florida relaxed its laws regulating simulcasting to allow what is known as "full card" simulcasting.¹¹ Beginning in 1997, Gulfstream began negotiating with racetracks in New York, Louisiana, California, Kentucky, Arkansas, Pennsylvania, Texas, and West Virginia¹² for exclusive dissemination rights to the outside ITWS sites.¹³ Each racetrack which granted Gulfstream exclusive disseminate for its signal executed an identical addendum to their simulcasting agreements.¹⁴ The addendum states that "[t]he Host Track [out of state thoroughbred horse track] agrees to ... limit the dissemination rights to such other thoroughbred racetrack located within the State of Florida in the manner aforesaid [to the sixty mile zone around the other thoroughbred racetrack]."¹⁵ TBD was the only thoroughbred racetrack whose racing season overlapped with Gulfstream's racing season. In compliance with their obligations under the addendum, the out-of-state racetracks limited TBD's dissemination rights to ITWS sites within sixty miles of TBD.

On several occasions between 1997-2002, TBD and several of the outside ITWS sites attempted to evade Gulfstream's exclusive dissemination rights. In each case, Gulfstream or the out-of-state racetracks (typically at Gulfstream's urging) threatened to terminate the outside ITWS sites' signal, sue for damages, or otherwise enforce the exclusive dissemination agreements.¹⁶

C. THE DECLARATORY STATEMENT AND ITS RESULT

On September 14, 2002, The State of Florida, Department of Business Regulation, Division of Pari-Mutuel Wagering (the "Division") issued a declaratory statement.¹⁷ The declaratory statement interpreted Florida Statutes Section 550.6305(9)(g)1 and determined whether exclusive dissemination agreements violated Florida Statutes Sections 550.615(3), 550.6305(9)(g)1, and Florida Administrative Code rule 61D-9.001. The Division concluded that Section 550.6305(9)(g)1 obliged TBD to make its ITWS signals available to outside ITWS sites because it accepted wagers on out-of-state thoroughbred races. The Division also concluded that exclusive dissemination agreements that prohibit or operate to restrain rebroadcast of a simulcast signal violate Sections 550.615(3), 550.6305(9)(g)1, and Rule 61D-9.001. The declaratory statement did state, however, that "[n]othing in this declaratory statement should be construed as a statement by the Division that Gulfstream Park has, in fact, violated Section 550.615(3), Florida Statutes or Rule 61D-9.001, Florida Administrative Code."

During the 2002-2003 racing season, TBD entered into agreements with and accepted wagers from a number of outside ITWS sites on out-of-state thoroughbred races, including tracks for which Gulfstream had exclusive dissemination rights. TBD's conduct purportedly breached its agreement with the out-of-state racetracks¹⁸ and interfered in Gulfstream's exclusive dissemination agreements.

D. PROCEDURAL BACKGROUND

On January 27, 2003, in response to the administrative decision, Gulfstream filed this action seeking this Court to declare certain Florida Statutes and rules preempted by federal copyright law,...