Murphy v. New York Racing Ass'n, Inc., 99 Civ. 2559.

• Decision Date: 06 December 1999
• Docket Number: No. 99 Civ. 2559.,99 Civ. 2559.
• Citation: 76 F.Supp.2d 489
• Parties: Karen A. MURPHY, Esq., Plaintiff, v. The NEW YORK RACING ASSOCIATION, INC. ("NYRA"); Kenneth Noe, Jr., as Chairman of the Board of Trustees and Chief Executive Officer of NYRA and individually; Terence Meyocks, as President and Chief Operating Officer of NYRA and individually; Timothy M. McGinn, as Vice Chairman of the Board of Trustees an individually; Joseph V. Shields, Jr., as Vice Chairman of the Board of Trustees and individually; H. Douglas Barclay, as Trustee of the Board ("Trustee") and individually; Chester Broman, Sr., as Trustee and individually; Joseph M. Cornacchia, as Trustee and individually; Allan R. Dragone, as Trustee and individually; Robert S. Evans, as Trustee and individually; Albert Fried, Jr., as Trustee and individually; Richard L. Gelb, as Trustee and individually; Charles E. Hayward, as Trustee and individually; James P. Heffernan, as Trustee and individually; John A. Hettinger, as Trustee and individually; Peter F. Karches, as Trustee and individually; J Bruce Llewellyn, as Trustee and individually; Earle I. Mack, as Trustee and individually; John W. Meriwether, as Trustee and individually; Paul F. Oreffice, as Trustee and individually; Ogden Mills Phipps, as Trustee and individually; Dolph Rotfeld, as Trustee and individually; Lewis Rudin, as Trustee and individually; Peter G. Schiff, as Trustee and individually; Barry K. Schwartz, as Trustee and individually; Delbert Staley, as Trustee and individually; Daniel P. Tully, as Trustee and individually; Peggy Vandervoort, as Trustee and individually; Charles V. Wait, as Trustee and individually, Defendants.
• Court: U.S. District Court — Southern District of New York

76 F.Supp.2d 489

Karen A. MURPHY, Esq., Plaintiff, v. The NEW YORK RACING ASSOCIATION, INC. ("NYRA"); Kenneth Noe, Jr., as Chairman of the Board of Trustees and Chief Executive Officer of NYRA and individually; Terence Meyocks, as President and Chief Operating Officer of NYRA and individually; Timothy M. McGinn, as Vice Chairman of the Board of Trustees an individually; Joseph V. Shields, Jr., as Vice Chairman of the Board of Trustees and individually; H. Douglas Barclay, as Trustee of the Board ("Trustee") and individually; Chester Broman, Sr., as Trustee and individually; Joseph M. Cornacchia, as Trustee and individually; Allan R. Dragone, as Trustee and individually; Robert S. Evans, as Trustee and individually; Albert Fried, Jr., as Trustee and individually; Richard L. Gelb, as Trustee and individually; Charles E. Hayward, as Trustee and individually; James P. Heffernan, as Trustee and individually; John A. Hettinger, as Trustee and individually; Peter F. Karches, as Trustee and individually; J Bruce Llewellyn, as Trustee and individually; Earle I. Mack, as Trustee and individually; John W. Meriwether, as Trustee and individually; Paul F. Oreffice, as Trustee and individually; Ogden Mills Phipps, as Trustee and individually; Dolph Rotfeld, as Trustee and individually; Lewis Rudin, as Trustee and individually; Peter G. Schiff, as Trustee and individually; Barry K. Schwartz, as Trustee and individually; Delbert Staley, as Trustee and individually; Daniel P. Tully, as Trustee and individually; Peggy Vandervoort, as Trustee and individually; Charles V. Wait, as Trustee and individually, Defendants.

No. 99 Civ. 2559.

United States District Court, S.D. New York.

December 6, 1999.

COPYRIGHT MATERIAL OMITTED

Kim P. Bonstrom, Bonstrom & Murphy, New York City, for Plaintiff.

Patricia Farren, Cahill Gordon & Reindel, New York City, for Defendants.

OPINION

SAND, District Judge.

Plaintiff Karen A. Murphy ("Plaintiff") brings this action against The New York Racing Association ("NYRA"), two of NYRA's executive officers (Kenneth Noe, Jr. and Terence Meyocks), and NYRA's Board of Trustees, asserting numerous causes of action under the Civil Rights Act, 42 U.S.C. § 1983, and tortious interference with prospective economic advantage under New York State law. Presently before the Court is the Joint Motion to Dismiss Plaintiff's First Amended Complaint, pursuant to Federal Rule of Civil Procedure 12(b)(6), brought by the named NYRA Board of Trustees members, excepting Mr. Noe (collectively, "the Board Members" or "the Board Defendants").

Background

The following facts are drawn from Plaintiff's First Amended Complaint, documents explicitly referenced therein, the parties' submissions pursuant to this Motion, and the transcripts of the oral arguments on this Motion, see Koppel v. 4987 Corp., 167 F.3d 125, 128 (2d Cir.1999); Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 47-48 (2d Cir.1991), and are assumed to be true for purposes of considering the Board Defendants' Motion.

Plaintiff is an attorney licensed to practice law in the State of New York, and the holder of a separate license issued by the New York State Racing and Wagering Board ("NYSRWB"). (See 1st Am.Comp. ¶¶ 2, 98.) Since approximately 1993, Plaintiff has represented individuals employed, engaged, or otherwise associated with thoroughbred horse racing in the State of New York. (See id. ¶ 39.) In January 1997, Plaintiff was appointed General Counsel for the New York Thoroughbred Horsemen's Association, Inc. ("NYTHA"), whose mission is the provision of benevolent assistance to individuals who work in the stable area of NYRA's race tracks. (See id. ¶ 40.)

The Board Defendants are members of the Board of Trustees of NYRA, a New York stock corporation organized as a nonprofit racing association under the authority of New York Racing, Pari-Mutuel Wagering & Breeding Law § 202. (See id. ¶ 9.) New York State has granted NYRA an exclusive franchise to operate the three main thoroughbred horse racing tracks in New York: Belmont Park, Aqueduct, and Saratoga. All profits earned by NYRA are turned over to the State, and, upon its dissolution, all its assets are to be distributed by the Governor of New York. Every aspect of the day-to-day activities at NYRA's race tracks is supervised by the State. (See id. ¶¶ 66-68.) Eight of NYRA's twenty-eight Trustees are appointed by the Governor of New York. (See id. ¶ 122.) Pursuant to New York State law and NYRA's By-Laws, the Trustees have the duty to "`remove or dismiss, after specification of and hearing on charges, any director or Trustee or executive officer of [NYRA] for inefficiency, neglect of duty, misconduct or malfeasance in office or waste or action considered not to be in the best interests of racing generally.'" (Id. ¶ 121 (quoting N.Y. Racing Law § 202).)

In the fall of 1997, Board Defendant Schwartz allegedly permitted Defendants Noe and Meyocks (N.Y.RA's executive officers) to falsely register the ownership of two of his horses in the name of their undercover investigator — pursuant to an investigation of Dr. Michael J. Galvin, a State-licensed equine veterinarian. On the basis of this investigation, Defendants NYRA, Noe, and Meyocks commenced an allegedly rigged disciplinary proceeding against Dr. Galvin. (See id. ¶¶ 126-28.)

On or about March 27, 1998, Dr. Galvin retained Plaintiff to represent him in connection with proceedings, brought by NYSRWB and NYRA, arising out of an incident that occurred on that date involving alleged "race-day treatment" of a filly named "HIP WOLF." (See id. ¶ 41.) In May 1998, Plaintiff again represented Dr. Galvin in an administrative hearing before a panel of NYRA officers, including Defendant Meyocks. Following four days of proceedings, the Panel voted to terminate Dr. Galvin's NYRA credentials. (See id. at ¶ 43.)

On the date the termination of Dr. Galvin's NYRA credentials was to take effect (June 8, 1998), Plaintiff, on behalf of Dr. Galvin, commenced a civil rights action in Federal District Court against Defendants NYRA, Noe, and Meyocks, and sought a temporary restraining order and preliminary injunction to prevent NYRA from terminating Dr. Galvin's credentials. The District Court denied the application for a temporary restraining order and referred the matter to a Magistrate Judge for a hearing on the preliminary injunction, which hearing commenced on June 18, 1998. (See id. ¶¶ 44-46.) On that same day, the NYTHA Board voted summarily to terminate Plaintiff as NYTHA General Counsel. Plaintiff alleges that immediately after this vote was taken, she was informed that she had been terminated because of her representation of Dr. Galvin. (See id. at ¶ 47.)

On June 20, 1998, Defendants Noe and Meyocks allegedly informed NYTHA's President that NYRA would not proceed with a planned NYTHA-sponsored day care center for stable employees so long as Plaintiff was involved with that project, and that, because of her representation of Dr. Galvin, NYRA would not have any further dealings with Plaintiff. On June 22, 1998, during the hearing on Dr. Galvin's preliminary injunction motion, Defendant Meyocks repeated these two claims and added that they were based on his belief (shared by Defendant Noe) that Plaintiff's representation of Dr. Galvin was not in the best interests of horse racing. (See id. ¶¶ 48, 49.)

Shortly after Dr. Galvin's administrative hearing in May 1998, Plaintiff was interviewed by Chester Broman, a member of the Board of Directors of the New York Thoroughbred Breeders, Inc. ("NYTB") regarding a vacancy on the NYTB Board. NYTB is a private association made up of breeders of thoroughbred race horses in New York. Mr. Broman allegedly informed Plaintiff of the Board's intention to offer the recently-vacated position on the Board to Plaintiff. (See id. ¶ 50.)

On June 20, 1998, however, Defendant Noe allegedly informed Mr. Broman that Plaintiff, because of her representation of Dr. Galvin, "was not to be appointed to the [NYTB] Board," and was "anti-NYRA." At the June 23, 1998 Board meeting, Broman allegedly conveyed to the Board Defendant Noe's negative remarks about Plaintiff. Plaintiff's proposed appointment to the NYTB Board was thereafter withdrawn. (See id. ¶¶ 52, 54, 55.)

On September 28, 1998, the District Court granted Dr. Galvin's motion for a preliminary injunction ordering NYRA to reinstate Dr. Galvin's credentials. On December 23, 1998, the Second Circuit affirmed. (See id. ¶¶ 58, 59.)

On December 4, 1998, while at NYRA's Belmont Park Racetrack to meet with Dr. Galvin on his case, as well as to transact business with other clients, Plaintiff was arrested and forcibly ejected from the Racetrack, despite allegedly being in possession of (i) a NYSRWB-issued license, (ii) NYRA credentials, and (iii) a NYRA-issued one-day visitor's pass. Plaintiff was allegedly later informed by NYRA's Director of Security that the arrest had been ordered by "legal or above"; i.e., either NYRA's General Counsel or even more senior executive officers. (See id. ¶¶ 60-63.)

Plaintiff commenced this action on April 8, 1999. On June 2, 1999, the Board Defendants moved to dismiss, and, on June 24, 1999, an oral hearing was held on that motion. On July 1, 1999, the Court granted Plaintiff leave to file an amended complaint, and Plaintiff filed her First Amended Complaint on July 23, 1999. The Board Defendants moved to dismiss the First Amended Complaint on August 11, 1999, and oral argument on the motion was heard on September 9, 1999.

Plaintiff's First Amended Complaint asserts that the Court has subject matter jurisdiction pursuant to 42 U.S.C. § 1983 and 28 U.S.C. §§ 1331, 1343(3) and 1334(4), in that Plaintiff seeks redress for the violation of her constitutional and civil rights. Plaintiff asserts the following seven causes of action: (1) First Amendment retaliation; (2) violation of Fourteenth Amendment Due Process rights; (3) violation of Fourteenth Amendment...