The opinion of the court was delivered by: MARSH
The plaintiff, a Pennsylvania corporation which operates a harness horse racetrack, has brought this action alleging that the defendants, acting through the Pennsylvania Harness Horsemen's Association (PHHA), have violated the Sherman Act, 15 U.S.C. § 1, by attempting to restrain trade and to boycott the plaintiff's business. The PHHA is a non-profit corporation whose membership is made up of owners, trainers, drivers, and breeders of harness horses as well as other persons interested in harness horse racing. Plaintiff alleges that the defendants have sought to restrain the trade of plaintiff until the plaintiff accedes to the defendants' demands that the plaintiff recognize the PHHA as the sole bargaining entity for purposes of contracting with the plaintiff. Defendants have argued that the PHHA is a labor organization involved in a labor dispute, and thus, under the Norris-LaGuardia Act, 29 U.S.C. § 101, PHHA is exempt from the anti-trust laws.
The action is now before the court on plaintiff's motion for a preliminary injunction. After due consideration of the testimony of the witnesses and the arguments of counsel, this court concludes that the injunction should be granted.
Plaintiff Washington Trotting Association (WTA) operates a harness horse racetrack in Washington County, Pennsylvania, known as The Meadows. WTA is licensed by the Commonwealth of Pennsylvania to conduct harness racing for 100 days in each calendar year. The Meadows' main source of income is the commission (approximately 11.5%) which it receives from the money wagered by the public at the track. From this pari-mutuel commission, The Meadows pays a purse to the owners of the horses that finish first through fifth in each race. In 1976, about 44.9% of the commission was paid out as purses to the owners of horses. This season, which began January 14, 1977, The Meadows is paying out about 50% of the commission in purses.
The Meadows attracts betting patrons from Pennsylvania, Ohio, West Virginia, and other states, and more than half of the 1300 to 1500 owners who race horses at The Meadows come from outside of Pennsylvania.
The Meadows provides stall space in several barn areas for the horses that are raced at the track. Stall assignments are made by WTA.
WTA makes purse payments only to owners of horses. In some instances, the owner of a horse acts as his own trainer and driver. In other cases, the owner places his horse with a trainer. If an owner places a horse with a trainer, the trainer receives his compensation from the owner, not from the track.
Defendant PHHA is a state-wide organization with about 1350 members. Defendant Western Pennsylvania Harness Horsemen's Association is a chapter of PHHA with about 550 members. Defendants Wall, Beinhauer, McCandless and O'Brien are directors of PHHA. Defendant Imel is executive vice president of PHHA. Defendant Dempster, the PHHA representative at The Meadows, and defendant Quaglietta are employees of PHHA. Defendants Wall, Katcher, Caumo, Stofan, Romanetti, and other individual defendants own, train and/or drive harness horses and have raced at The Meadows in past seasons.
WTA formerly had a contract with PHHA which governed the size of purses to be paid to owners who raced horses at The Meadows. The contract, which expired on December 31, 1976, also addressed several other matters related to purse distribution. WTA has taken the position that it will not negotiate another contract with PHHA because PHHA is not representative of the group of owners who race at The Meadows. WTA contends that on economic matters it deals directly with owners and not with trainers or drivers, and that PHHA is a state-wide organization whose membership includes individuals who are not owners and individuals who do not race at The Meadows. Twelve of the sixteen PHHA directors are from areas of the state other than Western Pennsylvania. WTA further contends that the 550 members of WPHHA include only a portion of the 1300 to 1500 owners who race at The Meadows. WTA asserts that it is willing to negotiate an agreement as to the size of purses with an organization made up of the owners who race at The Meadows.
Prior to the beginning of this racing season, PHHA held several meetings at a hotel near The Meadows. At these meetings, PHHA directors, representatives of harness horsemen's organizations from other states, and officials of Harness Horsemen's International (HHI) spoke to the owners, trainers and drivers in attendance. PHHA is one of the member groups of HHI. On January 7, 1977, at one of these meetings, defendant Charles Caumo said he would not enter horses in races at The Meadows unless PHHA had a contract with WTA. At the same meeting, defendant George Beinhauer stated that a complaint filed by PHHA with the state racing commission seeking revocation of WTA's license had been filed as a bluff to force the WTA to negotiate with PHHA.
Defendant James Imel spoke at meetings in the hotel and in the paddock. An owner who had attended the meetings testified that the speakers emphasized that if the horsemen would stick together as a group and refuse to race, then eventually the horsemen would win and a contract with PHHA would be signed. The owner testified that although Mr. Imel had said that each individual should make his own choice, it was clear that PHHA wanted the owners to refuse to race until a contract was signed. There was also testimony that owners were lead to believe that if they raced at The Meadows, they might jeopardize opportunities to race at other tracks and memberships in other harness horsemen's associations.
In early January, several full-page advertisements sponsored by other harness horsemen's associations appeared in nationally-circulated racing magazines. An advertisement signed by the Kentucky Harness Horsemen's Association and entitled "In Support of Pennsylvania Harness Horsemen's Association" read as follows:
Your horsemen's association is your strength. To race as individuals without an association will leave you without strength. You are as individuals being tempted by the 50 per cent horsemen's purse account offered ...