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October 27, 1989

LARA, INC., Plaintiff,

The opinion of the court was delivered by: HUYETT


 Defendants South Whitehall Township, four Township Commissioners and the Township Secretary *fn1" ("Township defendants") have moved for summary judgment. Plaintiff LARA, Inc. ("LARA") was the operator of stock car and "midget car" races under a license agreement with defendant Dorney Park Coaster Co., Inc. ("Dorney"), the owner of the land upon which the races were held. Pursuant to an agreement between Dorney and the Township defendants, entered into as part of a comprehensive settlement of litigation concerning the payment of the South Whitehall Township's amusement tax, auto racing at Dorney Park was terminated. LARA alleges that the settlement illegally deprived it of liberty and property rights under the due process clause of the fourteenth amendment of the United States Constitution, contrary to 42 U.S.C. § 1983. Jurisdiction is vested in me pursuant to 28 U.S.C. § 1331 and 28 U.S.C. § 1343(a)(3). For the reasons expressed below, I shall deny the Township defendants' motion for summary judgment.


 From 1960 to 1972, LARA's predecessor corporation sponsored automobile races on the one fifth mile racetrack located on Dorney's property in South Whitehall Township. On April 16, 1979, LARA and Dorney executed the third *fn2" of three agreements relating to the promotion of automobile racing at Dorney Park. *fn3" Paragraph 15 of the agreement provided as follows: "the Licensor [Dorney] hereby grants to the Licensee [LARA] the option of renewing this License provided that written notice of its intention to do so is given to the Licensor not later than October 15 for each successive year." The agreement further provided for its termination only upon the happening of either certain specified events or the breach of a condition contained therein. The record presently before me does not suggest that LARA ever encountered any difficulty from Dorney in renewing its option under this clause or from South Whitehall Township concerning its racing activities. LARA's sole business activity was the races at Dorney Park.

 In 1985, Dorney and South Whitehall Township became involved in several lawsuits involving the validity of the Township's amusement tax and the amounts owed by Dorney. Later that year, through negotiations between a representative of Dorney and Township Commissioners MacKenzie and Okun, the parties settled their differences. On December 9, 1985, the parties executed a settlement agreement which in part stated "that all racing at Dorney Park which utilizes motor vehicles with internal combustion engines shall be terminated absolutely as of November 1, 1986. . . ." The settlement agreement further provided that no party could make any public statement regarding the content of the agreement. The settlement agreement was signed by defendant Charles MacKenzie as Chairman of South Whitehall Township, and approved and authorized by the other Township Commissioners. In addition, pursuant to the request of Dorney and the Township, the settlement agreement was filed under seal in the Lehigh County Court of Common Pleas.

 Unaware of the settlement agreement, LARA gave written notice to Dorney that it was exercising its option to renew the license agreement for the 1987 racing season on September 8, 1986. Shortly thereafter, Jerome Fried, the President of LARA, met with Dorney executives and was advised that Dorney would not renew the license for the following racing season. *fn4" At this time, the Dorney executives merely explained that this decision was prompted by a settlement agreement between South Whitehall Township and Dorney. On October 23, 1986, LARA received a letter from Dorney which informed LARA that auto racing at Dorney Park would be terminated effective November 1, 1986. LARA had already announced, with Dorney's consent, that the 1987 racing season would commence on April 18, 1987.

 During the month of November, Fried confronted the Township defendants at public hearings with questions concerning the settlement agreement between the Township and Dorney. The Township Commissioners would not divulge any information concerning the agreement upon the advice of the Township's attorney. Instead, the Commissioners directed Mr. Fried to consult Dorney, because the Township did not "have a voice in it." LARA's efforts to obtain a copy of the settlement agreement were hindered by the order of the Court of Common Pleas placing the agreement under seal. LARA was unable to verify the existence of the settlement agreement or ascertain the reason for the termination of racing at Dorney Park until the publication of an article in the March 6, 1987 edition of The Morning Call. *fn5"

 On October 21, 1988, LARA filed the instant action against the Township defendants and Dorney. The first count of the complaint alleges that the Township deprived LARA of its property and liberty interests in violation of due process of law. The second count claims that Dorney also violated these interests by acting as an agent of the Township defendants. The third count claims that the Township defendants tortiously interfered with the contract between Dorney and LARA. The last count alleges that Dorney's conduct constituted a breach of contract. On May 10, 1989, I denied the Township defendants' motions to dismiss LARA's complaint, except insofar as I dismissed the allegations in Count III as they apply to the defendant South Whitehall Township.

 The Township defendants' motion for summary judgment argues as follows: (1) that LARA did not have a liberty or property interest in the continued use of the race track at Dorney Park; (2) that there was no violation of LARA's substantive due process rights because the Township defendants acted in a rational manner in seeking to terminate auto racing at Dorney Park; (3) that the Township defendants lacked any knowledge of LARA's interest in continued auto racing at Dorney Park; and (4) that LARA's claims are barred by the applicable two year statute of limitations.


 Summary judgment is appropriate if there exists no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Small v. Seldows Stationery, 617 F.2d 992, 994 (3d Cir. 1980). The court does not resolve questions of disputed fact, but simply decides whether there is a genuine issue of fact which must be resolved at trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986); Ettinger v. Johnson, 556 F.2d 692, 696-97 (3d Cir. 1977). The facts must be viewed in the light most favorable to the opposing party, and reasonable doubt as to the existence of a genuine issue of material fact is to be resolved against the moving party. Continental Insurance Co. v. Bodie, 682 F.2d 436, 438 (3d Cir. 1982). However, "there is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-50 (citations omitted). The inquiry is whether the evidence presents a sufficient disagreement to require submission to the jury, or whether it is so one-sided that one party must prevail as a matter of law. Id. at 252.

 A. LARA's Property Interest

 To establish a claim under § 1983, LARA must demonstrate that the conduct complained of was committed by a person acting under the color of state law *fn6" and that the conduct deprived a person of rights, privileges or immunities guaranteed by the Constitution or laws of the United States. Robb v. Philadelphia, 733 F.2d 286, 290-91 (3d Cir. 1984). The Township defendants argue that "LARA, Inc., as a contractor with Dorney Park Coaster Company, did not have a protectable property interest in continuing to promote races at Dorney Park, inasmuch as its license with Dorney Park Coaster Company was terminable at will," and that LARA "did not have a protected liberty interest." See Township Defendants' Motion, paras. 3-4 at 1-2. The Township defendants merely repeat arguments which I ...

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