OCALA BREEDERS' v. Florida Gaming Centers, 97-4783.

• Decision Date: 03 March 1999
• Docket Number: No. 97-4783.,97-4783.
• Citation: 731 So.2d 21
• Parties: OCALA BREEDERS' SALES COMPANY, INC., a Florida Corporation and the State of Florida, Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering, Appellants, v. FLORIDA GAMING CENTERS, INC., d/b/a Ocala Jai Alai, Appellee.
• Court: Florida District Court of Appeals

731 So.2d 21

OCALA BREEDERS' SALES COMPANY, INC., a Florida Corporation and the State of Florida, Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering, Appellants, v. FLORIDA GAMING CENTERS, INC., d/b/a Ocala Jai Alai, Appellee.

No. 97-4783.

District Court of Appeal of Florida, First District.

March 3, 1999.

Rehearing Denied April 14, 1999.

Daniel S. Pearson, William F. Hamilton and Linda Collins Hertz of Holland & Knight, LLP, Miami, for Appellants.

William P. Cagney, III, of William P. Cagney, III, P.A., Miami and James S. Alves of Hopping, Green, Sams & Smith, P.A., Tallahassee, for Appellee.

PADOVANO, J.

At issue in this appeal is the constitutionality of section 550.615(9) Florida Statutes, which enables one thoroughbred horse breeder operating within the state to obtain an exclusive license to conduct parimutuel wagering at its sales facility. The trial court held that the statute is unconstitutional because it is a special law enacted in the guise of a general law, and because the classifications that determine entitlement to the license violate the constitutional guarantee of equal protection of the law. We agree on both points and affirm.

Ocala Breeders Sales Company, Inc. operates a thoroughbred horse sales facility in Marion County, where it has conducted thoroughbred horse sales for twenty-four years. In addition to the permits necessary to sell and race thoroughbred horses, Ocala Breeders obtained a license under section 550.615(9) to conduct intertrack wagering. Florida Gaming Centers, Inc., operates the Ocala Jai Alai Fronton under a license to conduct pari-mutuel wagering in Marion County. The parties are now aligned on opposite sides of a constitutional issue, but the underlying controversy involves the financial impact of intertrack wagering.

As its name suggests, intertrack wagering is a form of pari-mutuel wagering in which the patrons at one racetrack or fronton can bet on a race or event taking place at another. The patrons in the remote location are allowed to place bets on the televised events occurring at the host location, and the proceeds are split according to a statutory formula. Intertrack wagering is available only at a licensed parimutuel wagering facility and is generally not authorized in other remote facilities.

Section 550.615(9), Florida Statutes (Supp.1996), extends intertrack wagering beyond pari-mutuel wagering facilities by allowing remote betting at a facility operated by a thoroughbred horse breeder. The statute requires the Division of Pari-Mutuel Wagering to issue an intertrack wagering license to one thoroughbred horse breeder based on the following criteria:

(9)(a) Upon application to the division on or before January 31 of each year, any quarter horse permit holder that has conducted at least 15 days of thoroughbred horse sales at a permanent sales facility for at least 3 consecutive years, and conducted at least one day of nonwagering thoroughbred racing, with a purse structure of at least $250,000 per year for 2 consecutive years prior to such application, shall be issued a license to conduct intertrack wagering ... provided that no more than one such license may be issued.

The possibility that more than one applicant will claim entitlement to the license is addressed in the next section of the statute, which the parties have aptly referred to as the tiebreaker provision.

(b) If more than one permit holder applies, the division shall determine which permit holder shall be granted the license. In making its determination, the division shall consider the length of time the permit holder has been conducting thoroughbred horse sales in this state, the length of time the applicant has had a permanent location in this state, and the volume of sales of thoroughbred horses in this state, giving the greater weight to the applicant that meets these criteria.

Among the other provisions of the statute, only section (e) is material to the issues presented here. Section (e) allows the holder of a quarter horse racing permit to qualify for a license to conduct intertrack wagering even if grounds exist to revoke the permit.

Ocala Jai Alai challenged the constitutionality of section 550.615(9) in a declaratory judgment suit in the circuit court.¹ When the pleadings were closed, Ocala Jai Alai presented the constitutional issue to the court on a motion for summary judgment. In support of the motion, Ocala Jai Alai advanced two separate but related arguments: (1) the statute is invalid as a special law because it creates a class that is closed to all but one prospective licensee; and (2) the statute violates the right to equal protection of the law, because the criteria for obtaining a license bear no reasonable relationship to the object of the law.

On December 5, 1997, the trial court rendered a final summary judgment declaring section 550.615(9) unconstitutional. Based on the undisputed facts presented on the motion for summary judgment, the court found that Ocala Breeders was the only horse breeder conducting at least fifteen days of thoroughbred horse sales for at least three years, and the only such breeder with a permanent sales facility. The court also found that Ocala Breeders is the only horse breeder that had ever applied for or obtained a license to conduct nonwagering thoroughbred racing. Finally, the court found that, although Ocala Breeders holds a quarter horse racing permit, it had never used the permit to conduct live quarter horse racing. The failure to conduct live racing is a ground for revoking a quarter horse permit, but, as section 550.615(9)(e) provides, it does not disqualify the holder of a quarter horse permit from obtaining a license to conduct intertrack wagering.

These facts led the trial court to conclude that the statutory classification in section 550.615(9) is based on criteria that only Ocala Breeders could ever meet. As a matter of law, the court determined that the statutory criteria for obtaining an intertrack wagering license were arbitrary and not related to a legitimate public purpose. The court held that the statute is a special law enacted as a general law and that it violates the right to equal protection of the law. Ocala Breeders then filed this appeal.

A trial court decision on the constitutionality of a state statute presents an issue of law that is reviewed by the de novo standard of review. The appellate court is not required to defer to the judgment of the trial court. Although trial court decisions are presumed to be correct, there is also a strong presumption in the law that a state statute is constitutionally valid. In re Estate of Caldwell, 247 So.2d 1 (Fla.1971). Florida appellate courts have resolved these conflicting presumptions by deferring to the legislature in the enactment of the law. When a trial court has declared a state statute unconstitutional, the reviewing court must begin the process of appellate review with a presumption that the statute is valid. See State v. Slaughter, 574 So.2d 218 (Fla. 1st DCA 1991).

We need not defer to the trial court, however, to conclude that section 550.615(9) is a special law enacted in the guise of a general law. The criteria for awarding the one state license that is available under the law are drawn so narrowly that they could only be applied, now or in the future, to Ocala Breeders. Because the statutory class of potential licensees is effectively closed to only one thoroughbred horse breeder, the statute should have been enacted as a special law.

Special laws can operate in a limited geographic area within the state or they can regulate the conduct of a limited class of persons within the state. In this respect, they differ from general laws. As the supreme court explained in State ex rel. Landis v. Harris, 120 Fla. 555, 562-63, 163 So. 237, 240 (1934):

[A] special law is one relating to, or designed to operate upon, particular persons or things, ... or one that purports to operate upon classified persons or things when classification is not permissible or the classification adopted is illegal ...; a local law is one relating to, or designed to operate only in, a specifically indicated part of the State ..., or one that purports to operate within classified territory when classification is not permissible or the classification is illegal.... (citations omitted).

See also Dept. of Bus. Reg. v. Classic Mile, Inc., 541 So.2d 1155 (Fla. 1989).

Special laws are subject to procedural requirements that do not apply to general laws. A special law affecting only one county or district can be properly enacted only if the legislature provides notice of its intention to enact the law, or if the proposed law has been approved by a vote of the electors in that county or district. These procedural requirements are set out in the Florida Constitution in the following language:

No special law shall be passed unless notice of intention to seek enactment thereof has been published in the manner provided by general law. Such notice shall not be necessary when the law, except the provision for referendum, is conditioned to become effective only upon approval by vote of the electors of the area affected.

Art. III, § 10 Fla. Const. (1968)

A general law is one that "operates universally throughout the state, uniformly upon subjects as they may exist throughout the state, or uniformly within a permissible classification." See Classic Mile, supra, at 1157; State ex rel. Landis, supra. This Court has explained that "[u]niformity of operation does not require that a law operate upon every person in the state, but that every person brought within the circumstances provided for is fairly and equally affected by the law," and that "[g]eneral laws may apply to specific areas if their classification is permissibly and reasonably related to the purpose of the statute." See State, Dept. of Natural Resources v. Leavins, 599 So.2d 1326, 1336 (Fla. 1st...