Sterling Suffolk Racecourse Ltd. Partnership v. Burrillville Racing Ass'n, Inc.

• Citation: 989 F.2d 1266
• Decision Date: 04 February 1993
• Docket Number: No. 92-2260,92-2260
• Parties: RICO Bus.Disp.Guide 8258 STERLING SUFFOLK RACECOURSE LIMITED PARTNERSHIP, Plaintiff, Appellant, v. BURRILLVILLE RACING ASSOCIATION, INC., Defendant, Appellee. . Heard
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

Page 1266

989 F.2d 1266

RICO Bus.Disp.Guide 8258

STERLING SUFFOLK RACECOURSE LIMITED PARTNERSHIP, Plaintiff, Appellant, v. BURRILLVILLE RACING ASSOCIATION, INC., Defendant, Appellee.

No. 92-2260.

United States Court of Appeals, First Circuit.

Heard Feb. 4, 1993.

Decided March 25, 1993.

E. Randolph Tucker, with whom Michael D. Ricciuti, David B. Crevier, Joshua M. Davis, and Hill & Barlow were on brief, for plaintiff, appellant.

Kent E. Mast, with whom Peter J. McGinn, Tillinghast Collins & Graham, and Kilpatrick & Cody were on brief, for defendant, appellee.

Before SELYA, CYR and STAHL, Circuit Judges.

SELYA, Circuit Judge.

In this appeal, we confront two issues of novel impression at the appellate level. First, we must determine whether the Interstate Horseracing Act (IHA), 15 U.S.C. §§ 3001-3007 (1988), the full text of which is set out in the appendix, contains an implied private right of action in favor of racetracks situated within sixty miles of a display track, i.e., a track that accepts interstate off-track wagers on races to be run at distant tracks and then simulcasts the actual races. Second, we must determine whether certain alleged violations of the IHA comprise a pattern of racketeering activity falling within the ambit of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961-1968 (1988 & Supp. III 1991). Believing, as we do, that the court below correctly answered both inquiries in the negative, we affirm.

I. AT THE STARTING GATE

The relevant facts are not in dispute. Plaintiff-appellant Sterling Suffolk Racecourse Limited Partnership (Suffolk) conducts live horseracing at Suffolk Downs, a track in the metropolitan Boston area. Approximately fifty miles away, in Lincoln, Rhode Island, defendant-appellee Burrillville Racing Association, Inc. (Lincoln) operates a greyhound track (Lincoln Greyhound Park) and an off-track betting (OTB) office, see 15 U.S.C. § 3002(8), for, inter alia, accepting interstate off-track wagers, see 15 U.S.C. § 3002(3). This means, in short, that Lincoln accepts bets on horseraces to be run at distant tracks and, employing telephone and wire linkages, effectively places these wagers in the host track's parimutuel pool. When a race is run, closed circuit television transmission enables Lincoln's patrons to witness it. Lincoln then settles with the bettors, pays a percentage to the host track, and retains the balance.

While this form of wagering is legal under the relevant laws of all states involved here, 15 U.S.C. § 3004(a) prohibits such wagering at OTB offices unless three parties consent: (1) the track which conducts the live race; (2) the racing commission having jurisdiction to regulate racing within the state where the live race occurs; and (3) the racing commission having jurisdiction over race wagering in the state where the simulcast occurs. ¹ The host racing association in turn, must obtain the consent of the trade association representing the owners of horses running in the live race before signalling its acquiescence. ² See id. Lincoln procures the consent of these parties for every race on which it accepts wagers.

A separate subsection of the IHA also requires OTB offices to obtain the approval of "all currently operating tracks within 60 miles" or, if there are no such tracks, "the closest currently operating track in an adjoining State," 15 U.S.C. § 3004(b)(1), before accepting interstate off-track wagers. It is no secret that Lincoln regularly violates this provision by accepting wagers against Suffolk's wishes. ³

Disgruntled at being shut out in this fashion, Suffolk sued Lincoln in the United States District Court for the District of Rhode Island. It sought to curtail Lincoln's practice of accepting wagers on races run at out-of-state tracks. Suffolk advanced two theories, asseverating that Lincoln's activities transgressed the IHA and also constituted a pattern of indictable activity under federal gambling laws, see, e.g., 18 U.S.C. § 1084(a) (1988), and, therefore, justified injunctive relief under RICO. See 18 U.S.C. §§ 1961(1), 1962(a). The district court rejected this two-pronged assault. It held that Suffolk lacked standing to assert a claim under the IHA and that Lincoln's acceptance of interstate off-track wagers without Suffolk's blessing was not the stuff from which a RICO suit could be fashioned. See Sterling Suffolk Racecourse Ltd. Partnership v. Burrillville Racing Ass'n, Inc., 802 F.Supp. 662, 669-71 (D.R.I.1992). Hence, the district court denied Suffolk's prayer for injunctive relief and granted Lincoln's motion for summary judgment. Id. at 673. This appeal ensued.

II. OFF AND RUNNING

We devote our initial explicatory efforts to the leading question in the case: Does the IHA give so-called "60-mile tracks," i.e., tracks operating within sixty miles of an OTB office, an implied right of action for injunctive relief? Because this issue is purely legal, we consider it de novo. See, e.g., Liberty Mutual Ins. Co. v. Commercial Union Ins. Co., 978 F.2d 750, 757 (1st Cir.1992).

In determining whether a private cause of action is implied in a federal statute, a court's central focus must be on congressional intent. See, e.g., Karahalios v. National Fed'n of Fed. Employees, 489 U.S. 527, 532-33, 109 S.Ct. 1282, 1286, 103 L.Ed.2d 539 (1989) ("Unless ... congressional intent can be inferred from the language of the statute, the statutory structure, or some other source, the essential predicate for implication of a private remedy simply does not exist.") (citation and internal quotation marks omitted); Stowell v. Ives, 976 F.2d 65, 70 n. 5 (1st Cir.1992) ("There is a presumption against implied rights of action--a presumption that will endure unless the plaintiff proffers adequate evidence of a contrary congressional intent."). To discern this intent, courts employ the customary tools of statutory interpretation, see, e.g., Thompson v. Thompson, 484 U.S. 174, 179, 108 S.Ct. 513, 515, 98 L.Ed.2d 512 (1988); Touche Ross & Co. v. Redington, 442 U.S. 560, 575-76, 99 S.Ct. 2479, 2488-89, 61 L.Ed.2d 82 (1979), frequently asking, however, three questions which often have special salience in connection with implied rights of action. These queries are: (1) Is the plaintiff one of the class for whose especial benefit the legislation was enacted? (2) Is the remedy sought consistent with the underlying purposes of the legislative scheme? (3) Is the cause of action one traditionally relegated to state law? See Thompson, 484 U.S. at 179, 108 S.Ct. at 515; Cort v. Ash, 422 U.S. 66, 78, 95 S.Ct. 2080, 2087, 45 L.Ed.2d 26 (1975); Latinos Unidos de Chelsea v. Secretary of HUD, 799 F.2d 774, 792 (1st Cir.1986). ⁴

Here, the district court followed this roadmap expertly. See Sterling, 802 F.Supp. at 666-69. Its opinion is astute. Its views are articulated with clarity and precision. It builds upon other persuasively reasoned caselaw reaching the identical result. See, e.g., New Suffolk Downs Corp. v. Rockingham Venture, Inc., 656 F.Supp. 1190, 1194 (D.N.H.1987). Under these auspicious circumstances, we see no need to reinvent the wheel. Rather, we affirm the lower court's holding that the IHA implies no private right of action in favor of 60-mile tracks for essentially the reasons elucidated in the opinion below. We pause, however, to add some observations and clarifications.

First: Although we concur in Judge Lagueux's bottom-line assessment that the IHA does not give 60-mile tracks a private right of action, and in his related evaluation of two of the three Cort factors--the remedy that Suffolk seeks seems to be at odds with the IHA's underlying purposes and the cause of action questions what activities may lawfully be carried out at a state-regulated gambling facility, a matter traditionally relegated to state law--we think it is advisable to begin by remarking a point of disagreement. Unlike Judge Lagueux, 802 F.Supp. at 667, we believe Congress, even though it did not choose to confer a private right of action, see infra, nevertheless designed section 3004(b)(1)(A) for the benefit of 60-mile tracks. See Cort, 422 U.S. at 78, 95 S.Ct. at 2087; see also Royal Business Group, Inc. v. Realist, Inc., 933 F.2d 1056, 1061-62 (1st Cir.1991) (discussing "especial benefit" test).

The especial benefit inquiry in implied right of action cases need not be a search for a single class of plaintiffs--the class which the entire statute is most directed toward assisting. Rather, different parts of a statutory scheme can be aimed at benefitting different classes of persons. See, e.g., Cohen v. Massachusetts Bay Transp. Auth., 647 F.2d 209, 212 (1st Cir.1981) (noting that a particular section of a statute primarily benefitted consumers while a different section of the same statute primarily benefitted transit workers); Comtronics, Inc. v. Puerto Rico Tel. Co., 553 F.2d 701, 705 (1st Cir.1977) (discussing a statute that especially benefitted two separate groups). The inquiry, then, focuses on whether any language in the statute sufficiently indicates a motivating congressional purpose to benefit the class in question as opposed to, say, a mere congressional expression of knowledge anent, or passive approval of, a tangential benefit. See California v. Sierra Club, 451 U.S. 287, 294, 101 S.Ct. 1775, 1779, 68 L.Ed.2d 101 (1981); Cannon v. University of Chicago, 441 U.S. 677, 690-94, 99 S.Ct. 1946, 1954-56, 60 L.Ed.2d 560 (1979). Properly conducted, this type of investigation weeds out statutes which protect a general public interest and only incidentally create advantages for particular people. See, e.g., Cannon, 441 U.S. at 690, 99 S.Ct. at 1954; Arroyo-Torres v. Ponce Fed. Bank, 918 F.2d 276, 278 (1st Cir.1990).

When we shine the light of this understanding on the IHA, we think that 60-mile tracks meet the "especial benefit" criterion. Section 3004(b)(1)(A) requires an OTB office to procure the approval of all 60-mile tracks before...