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Guerrero v. Bensalem Racing Ass'n, Inc.

United States District Court, E.D. Pennsylvania

June 4, 2014

JUAN CARLOS GUERRERO, Plaintiff,
v.
BENSALEM RACING ASSOCIATION, INC., et al., Defendants

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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For JUAN CARLOS GUERRORO, Plaintiff: MAX J. ERNST, LEAD ATTORNEY, Ferndale, PA; ALAN PINCUS, HARRISBURG, PA.

For BENSALEM RACING ASS'N INC. KEYSTONE TURN CLUB INC., JOINTLY D.B.A. PARX RACETRACK AND PHILADELPHIA PARK, LANCE MORELL, AS AN INDIVIDUAL AND IN HIS OFFICIAL CAPACITY AS DIRECTOR OF SECURITY FOR PARX RACETRACK AND PHILADELPHIA PARK, FRANCIS MCDONNELL, AS AN INDIVIDUAL AND IN HIS OFFICIAL CAPACITY AS ATTORNEY FOR PARX RACETRACK AND PHILADELPHIA PARK, Defendants: ANDREW J. KRAMER, LEAD ATTORNEY, KANE, PUGH, KNOELL & DRISCOLL, NORRISTOWN, PA; KARA DOUGHERTY, KANE PUGH KNOELL TROY & KRAMER LLP, NORRISTOWN, PA.

For PENNSYLVANIA THOROUGHBRED HORSEMEN'S ASS'N, Defendant: GRANT S. PALMER, JUSTINA LEE BYERS, LEAD ATTORNEYS, BLANK ROME COMISKY & McCAULEY, LLP, PHILADELPHIA, PA; PATRICK J. DORAN, LEAD ATTORNEY, GARY D. FRY, ARCHER & GREINER PC, PHILADELPHIA, PA; ANDREW J. KRAMER, KANE, PUGH, KNOELL & DRISCOLL, NORRISTOWN, PA.

For MICHAEL BALLEZZI, AS AN INDIVIDUAL AND IN HIS OFFICIAL CAPACITY AS DIRECTOR OF THE PENNSYLVANIA THOROUGHBRED HORSEMEN'S ASS'N, Defendant: ANDREW J. KRAMER, LEAD ATTORNEY, KANE, PUGH, KNOELL & DRISCOLL, NORRISTOWN, PA; GRANT S. PALMER, JUSTINA LEE BYERS, LEAD ATTORNEYS, BLANK ROME COMISKY & McCAULEY, LLP, PHILADELPHIA, PA; PATRICK J. DORAN, LEAD ATTORNEY, GARY D. FRY, ARCHER & GREINER PC, PHILADELPHIA, PA.

OPINION

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JOEL H. SLOMSKY, J.

Table of Contents

I. INTRODUCTION

II. BACKGROUND

A. The Complaint

B. The State Court Action

III. STANDARD OF REVIEW

IV. ANALYSIS

A. The Rooker-Feldman Doctrine Bars Plaintiff's Claims

B. Plaintiff Does Not Allege a Plausible Sherman Act Claim

1. Plaintiff Fails to Allege an Antitrust Injury

2. Plaintiff Fails to Allege an Unreasonable Restraint of Competition

3. Plaintiff Fails to Allege a Conspiracy to Eject Him for Ten Years

C. Plaintiff Fails to Allege a Plausible Civil Rights Claim

1. Parx is Not a State Actor Because Parx Does Not Have a Symbiotic Relationship With the State

2. Parx is Not a State Actor Because a Sufficiently Close Nexus Does Not Exist Between Pennsylvania's Racing Laws and the Term of Plaintiff's Ejection

3. Plaintiff Fails to Allege that Morell is a State Actor

D. Tortious Interference Claim

V. CONCLUSION

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I. INTRODUCTION

On December 18, 2013, Juan Carlos Guerrero (" Plaintiff" ) filed a Complaint against the Bensalem Racing Association, Inc. and Keystone Turf Club, Inc., jointly doing business as Parx Racetrack and Philadelphia Park (" Parx" ), Lance Morell, Francis McDonnell, Esquire, the Pennsylvania Thoroughbred Horsemen's Association, and Michael Ballezzi (all collectively " Defendants" ), alleging antitrust and civil rights violations, as well as state claims for tortious interference with contract and business relationships. (Doc. No. 1.) On January 8, 2014, Defendants Bensalem Racing Association, Keystone Turf Club, Lance Morell, and Francis McDonnell, Esquire (the " Parx Defendants" ) filed a Motion to Dismiss the Complaint. (Doc. No. 3.) On February 13, 2014, the remaining Defendants, the Pennsylvania Thoroughbred Horsemen's Association and Michael Ballezzi (the " PTHA Defendants" ), also moved to dismiss the Complaint. (Doc. No. 11.) Responses were filed to both Motions which are now ripe for disposition.[1]

II. BACKGROUND

A. The Complaint

The following facts are taken from the Complaint and are accepted as true for purposes of deciding the Motions to Dismiss. Plaintiff is a licensed thoroughbred race horse trainer who was the leading trainer at Parx racetrack. (Doc. No. 1 at ¶ 1.) Bensalem Racing Association and Keystone Turf Club are the corporate entities that conduct horse racing at Parx. (Id. ¶ 3.) Lance Morell (" Morell" ) is the Director of Security for Parx, and Francis McDonnell (" McDonnell" ) is Parx's corporate counsel. (Id. at ¶ ¶ 4-5.) The Pennsylvania Thoroughbred Horsemen's Association (" PTHA" ) is an organization that represents the horsemen at Parx, and Michael Ballezzi (" Ballezzi" ) is the PTHA's Executive Director. (Id. at ¶ ¶ 6-7.)

As of December 20, 2011, Plaintiff had more than forty (40) stalls at Parx, where he quartered horses during meets, free of charge. (Id. at ¶ ¶ 15-16.) According to Plaintiff, the ability to occupy free stall space gives a competitive advantage to trainers. (Id. at ¶ 15.) Plaintiff was a

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successful race horse trainer. In 2010, his horses earned $2,522,306, and in 2011, his horses earned $3,400,295. (Id. at ¶ 17.) The majority of this money was earned at Parx, where Plaintiff was the leading trainer in terms of races won. (Id.)

According to Plaintiff, his unparalleled success as a horse trainer led competitors and Defendants to suspect him of cheating. (Id. at ¶ 18.) However, none of his horses ever tested positive for illegal drugs. (Id. at ¶ 19.) Plaintiff alleges that despite his clean record, Defendants and other competitors were looking for any pretense to eliminate him from the racetrack. (Id.)

On December 20, 2011, Plaintiff was accused of brushing the buttock of a female employee of the PTHA. (Id. at ¶ 20.) After this incident, Plaintiff was ejected from the racetrack for a period of ten years. (Id. at ¶ 24.) The Notice of Ejection set forth the following as a basis for Plaintiff's removal:

On Wednesday, November 16, 2011, you physically assaulted a 22-year-old female Licensee while in the racetrack's administration building. There is a similar accusation from a female jockey of unlawful sexual harassment. This pattern of conduct is not in the best interest of racing and is undesirable per § 165.933 [sic] of the rules of racing.[2]

Guerrero v. Dep't of Agric., Pennsylvania State Horse Racing Comm'n, 1378 C.D. 2012, 2013 WL 6578970, *1 (Pa. Commw. Ct. Dec. 13, 2013). Plaintiff contends that this accusation was merely a pretense that Defendants used to eliminate him as a competitor. (Doc. No. 1 at ¶ ¶ 21, 30.) Plaintiff challenged his ejection in state court, the details of which are provided below.

According to Plaintiff, the PTHA and Parx had agreed that before Parx ejects a licensee from the racetrack, a three-person panel will hold a conference to hear the surrounding facts and will render an opinion before any action is taken. (Id. at ¶ 27.) Ballezzi or some other PTHA representative would advocate for the licensee, while a member of Parx management would represent the interests of the racetrack. (Id. at ¶ 28.) The panel would also include an independent third-party. (Id.) No pre-ejection conference was held before Plaintiff was ejected from Parx, and rather than advocate for Plaintiff, Ballezzi advocated against him. (Id. at ¶ 29.)

Plaintiff contends that his ejection from Parx was part of a conspiracy by his competitors to eliminate Plaintiff as a competitor. (Id. at ¶ 30.) He claims that some of his main competitors sit on the board of directors of PTHA and benefit financially from his removal from Parx. (Id.) After his ejection, Plaintiff immediately lost his stall space at Parx. (Id. at ¶ 31.) As a result, the majority of the horse owners he worked with had to find new trainers, and Plaintiff had to look for other places to race. (Id.) Because he was ejected from Parx, many other racetracks would not let Plaintiff compete at their facilities. (Id. at ¶ 32.) In the few jurisdictions in which he was allowed to compete, Plaintiff found his horses to be non-competitive. (Id. at ¶ 33.) Owners abandoned Plaintiff, and in 2012, the horses he trained earned $566,128. (Id. at ¶ 34.) In 2013, the horses only earned $149,924. (Id.) Due to Plaintiff's ejection from Parx, his " business has been virtually destroyed and he has been deprived of millions of dollars that he would have otherwise earned." (Id. at ¶ 37.)

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B. The State Court Action

Prior to filing the instant action, Plaintiff challenged his ejection from Parx before the State Horse Racing Commission (" the Commission" ), a division of the Department of Agriculture. Guerrero, 2013 WL 6578970 at *1. On January 17, 2012, the Commission held a hearing on the matter, and a hearing officer made the following findings of fact:

On November 16, 2011, Stephanie Nicole Smith encountered [Plaintiff] in the hallway of the Administration Building located within the race grounds and enclosure operated by Parx. Ms. Smith is an outgoing and affectionate person, who frequently exchanges hugs and kisses with people she greets, and she had a friendly, joking relationship with [Plaintiff], whom she met a few months after she began working in the Administration Building for the [PTHA]. [Plaintiff] questioned Ms. Smith as to whether she was going into one of the nearby offices, suggested she do so, and then pushed her into the empty office by placing his hand on her back. [Plaintiff], standing between Ms. Smith and the door, next put his arm around her, held her face and kissed her, and groped her buttock. Ms. Smith protested and pulled away from [Plaintiff], the two exchanged words, and Ms. Smith returned to her office.

Id. (internal citations omitted).

The hearing officer also found that Plaintiff similarly had assaulted another woman at Parx. During the course of a Parx internal investigation in December 2011, Carie Kifer, an apprentice jockey, informed Defendant Morell that:

[I]n August 2010 and again in October 2010, [Plaintiff] took advantage of a hug between colleagues by rubbing her back, buttocks, and attempting to kiss her. In both instances, Ms. Kifer communicated to [Plaintiff] that his sexual touching was unwelcome, unconsented to, and inappropriate, and that she was there as a professional to ride horses.

Id. (internal citations omitted). Based on these facts, the hearing officer found that Plaintiff's ten-year ejection from Parx was warranted. Id. On June 21, 2012, the Commission issued an Order affirming the Notice of Ejection. Id.

Plaintiff appealed the ejection order to the Commonwealth Court of Pennsylvania. Id. On December 13, 2013, the court affirmed the Commission's decision to uphold the Notice of Ejection, noting that " [i]t is clear from the record that [Plaintiff] engaged in serious and offensive sexual misconduct that warranted an ejection." Id. at *6. The court found, however, that the Commission's affirmance of the ten-year term of the ejection was an abuse of discretion and remanded the case to the Commission to reconsider the term imposed. Id. On January 28, 2014, the Commission held another hearing to determine an appropriate ejection period. (Doc. No. 15-2.) On March 5, 2014, the Commission issued an Order reducing the ejection period from ten years to thirty months. (Id. at 28.) Plaintiff appealed this Order, and his appeal is pending before the Commonwealth Court.

Next, Plaintiff filed the instant action on December 18, 2013, five days after the Commonwealth Court of Pennsylvania affirmed his ejection from Parx. (Doc. No. 1.) He raises three claims in the Complaint: 1) violation of the Sherman Antitrust Act, 15 U.S.C. § 1, against all Defendants (Count I); 2) violation of 42 U.S.C. § 1983 against the Parx Defendants only (Count II); and 3) tortious interference with contract and business relations against all Defendants (Count III). (Id.) All Defendants in this case have filed Motions to Dismiss. (Doc. Nos. 3, 11.) Plaintiff

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opposes the Motions. (Doc. Nos. 12-13.) For reasons that follow, the Court will grant the Motions and dismiss the Complaint in its entirety.

III. STANDARD OF REVIEW

The motion to dismiss standard under Federal Rule of Civil Procedure 12(b)(6) is set forth in Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). After Iqbal it is clear that " threadbare recitals of the elements of a cause of action, supported by mere conclusory statements do not suffice" to defeat a Rule 12(b)(6) motion to dismiss. Id. at 663. See also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). " To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ethypharm S.A. France v. Abbott Labs., 707 F.3d 223, n.14 (3d Cir. 2013) (citing Sheridan v. NGK Metals Corp., 609 F.3d 239, n.27 (3d Cir. 2010)). " A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Applying the principles of Iqbal and Twombly, the Third Circuit in Santiago v. Warminster Twp., 629 F.3d 121 (3d Cir. 2010), set forth a three-part analysis that a district court in this Circuit must conduct in evaluating whether allegations in a complaint survive a 12(b)(6) motion to dismiss:

First, the court must " tak[e] note of the elements a plaintiff must plead to state a claim." Second, the court should identify allegations that, " because they are no more than conclusions, are not entitled to the assumption of truth." Finally, " where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief."

Id. at 130 (quoting Iqbal, 556 U.S. at 675, 679). " This means that our inquiry is normally broken into three parts: (1) identifying the elements of the claim, (2) reviewing the complaint to strike conclusory allegations, and then (3) looking at the well-pleaded components of the complaint and evaluating whether all of the elements identified in part one of the inquiry are sufficiently alleged." Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011).

A complaint must do more than allege a plaintiff's entitlement to relief, it must " show" such an entitlement with its facts. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (citing Phillips v. Cnty. of Allegheny, 515 F.3d 224, 234-35 (3d Cir. 2008)). " [W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged -- but it has not 'shown' -- 'that the pleader is entitled to relief.'" Iqbal, 556 U.S. at 679. The " plausibility" determination is a " context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id.

When determining whether a claim is plausible, a district court may also consider any affirmative defenses raised by the moving party. " Technically, the Federal Rules of Civil Procedure require that affirmative defenses be pleaded in the answer." Robinson v. Johnson, 313 F.3d 128, 135 (3d Cir. 2002) (citing Fed.R.Civ.P. 12(b)). However, the so-called " Third Circuit Rule" allows affirmative defenses to be raised in a 12(b)(6) motion. Id. See also Ball v. Famiglio, 726 F.3d 448, 459 n.16 (3d Cir. 2013) cert. denied, 134 S.Ct. 1547, 188 L.Ed.2d 565 (U.S. 2014) (" [A] number of affirmative defenses that are not listed in Rule 12(b) [can] still be made by motion, provided that the basis of

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the defense [is] apparent on the face of the complaint." ); Bethel v. Jendoco Constr. Corp., 570 F.2d 1168, 1174 (3d Cir. 1978) (" [A]n affirmative defense may be raised on a 12(b)(6) motion if the predicate establishing the defense is apparent from the face of the complaint." ). For instance, a statute of limitations defense may be raised in a motion to dismiss if " the time alleged in the statement of a claim shows that the cause of action has not been brought within the statute of limitations." Robinson, 313 F.3d at 135 (quoting Hanna v. U.S. Veterans' Admin. Hosp., 514 F.2d 1092, 1094 (3d Cir. 1975)). See also Eddy v. Virgin Islands Water & Power Auth., 256 F.3d 204, 210 n.3 (3d Cir. 2001) (" qualified immunity may be raised in a motion to dismiss at the pleading stage . . . ." ); Hartmann v. Time, Inc., 166 F.2d 127, 140 n.3 (3d Cir. 1947) (explaining that the defense of res judicata may be raised in the answer or in a motion to dismiss).

IV. ANALYSIS

On January 8, 2014, the Parx Defendants filed a Motion to Dismiss, seeking dismissal of Counts I to III. (Doc. No. 3.) They argue that all of Plaintiff's claims should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief may be granted. On February 13, 2014, the PTHA Defendants also filed a Motion to Dismiss, seeking dismissal of Counts I and III, which apply to them.[3] (Doc. No. 11.) In addition to arguing that Plaintiff has failed to state claims upon which relief can be granted, the PTHA Defendants contend that Plaintiff's Complaint is barred by the Rooker-Feldman doctrine, collateral estoppel, and res judicata.[4] The Court will address these threshold issues before turning to the sufficiency of Plaintiff's pleading.

A. The Rooker-Feldman Doctrine Bars Plaintiff's Claims

In their Motion to Dismiss, the PTHA Defendants argue that under the Rooker-Feldman doctrine, the Court does not have jurisdiction over Plaintiff's claims. (Doc. No. 11-1 at 6-9.) This doctrine derived its name from two Supreme Court cases which established the principle that federal district courts may not exercise jurisdiction over suits that are essentially appeals from state-court judgments. Rooker v. Fid. Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923); D.C. Court of Appeals v. Feldman, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983). In these decisions, the Supreme Court explained that " [t]he Rooker-Feldman doctrine . . . is confined to cases . . . brought by state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments." Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284, 125 S.Ct. 1517, 161 L.Ed.2d 454 (2005). Following this line of cases, the Third Circuit created a four-part test to determine when the doctrine divests a federal district court of jurisdiction to consider a plaintiff's claim.

[T]here are four requirements that must be met for the Rooker-Feldman doctrine to apply: (1) the federal plaintiff

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lost in state court; (2) the plaintiff 'complain[s] of injuries caused by [the] state-court judgments'; (3) those judgments were rendered before the federal suit was filed; and (4) the plaintiff is inviting the district court to review and reject the state judgments. The second and fourth requirements are the key ...

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