United States District Court, M.D. Pennsylvania
JOHN E. JONES III JUDGE.
before the Court are cross motions for summary judgment.
(Docs. 18, 20). Plaintiffs brought this action claiming that
58 Pa. Code §163.255 (“Rule 163.255”)
violates the dormant Commerce Clause and seeking declaratory
and injunctive relief. The constitutionality of Rule 163.255
is a matter of first impression before this Court. For the
reasons explained below, we will deny Plaintiffs' Motion
for Summary Judgment and grant Defendants' Motion for
facts of this case are uncomplicated and undisputed. They
arise against the backdrop of claiming races - a common
practice in the world of thoroughbred horse racing. In a
claiming race, each horse in a given race is available to be
purchased (or “claimed”) for a price posted
before the race. Each horse in a single race will post for
roughly the same price, which dissuades owners from entering
strong horses to compete against a weaker field or risk
losing a good horse for less than it is worth. This
“leveling” of the field helps to ensure
interesting, competitive races and fosters greater excitement
for the local horse racing market. Through claiming races,
owners have an effective way of buying and selling horses
while racetracks enjoy a consistent stable of horses to race.
More races of better quality leads to higher gambling
revenues and a stronger industry. Pennsylvania, among other
states, has implemented rules to regulate claiming races,
including Rule 163.255, which is the subject of this lawsuit.
Rule 163.255, as we will more fully discuss later,
establishes what is known as “claiming jail, ”
which is a temporary limitation on where owners may race
newly claimed horses.
challenge to Rule 163.255 begins with Plaintiff
Jamgotchian's participation in claiming races at Presque
Isle Downs near Erie, Pennsylvania. On August 29, 2016,
Plaintiff Jamgotchian claimed the horse Super Humor for $25,
000 at Presque Isle Downs. (Doc. 21, ¶ 6). Plaintiff
Jamgotchian requested a claiming jail waiver pursuant to Rule
163.255 on September 1, 2016, which the Pennsylvania Horse
Racing Commission (PHRC or Commission) granted. (Doc. 19,
¶9; Doc. 21, ¶ 7). The following week, on September
8, 2016, Plaintiff Jamgotchian claimed the horse Tiz a Sweep
for $25, 000 in a claiming race at Presque Isle Downs and
requested a claiming jail waiver. (Doc. 19, ¶ 10; Doc.
21, ¶¶ 9, 10). The PHRC informed Plaintiff
Jamgotchian that they were reviewing the waiver request.
(Doc. 19, ¶ 11; Doc. 21, ¶11). In October 2016,
after the claiming period had ended, Defendant Chuckas
notified Plaintiff Jamgotchian that the waiver request was
moot because Rule 163.255 no longer applied. (Doc. 19, ¶
11; Doc. 21, ¶ 11).
issue before the court is whether Rule 163.255 violates the
dormant Commerce Clause.
initiated this action by filing a three-count Complaint on
October 7, 2016. (Doc. 1). Plaintiffs sought declaratory
judgment and injunctive relief in Counts I and II, claiming
that Rule 163.255 violates the dormant Commerce Clause. Count
III seeks injunctive relief under 42 U.S.C. §1983 for
violating the dormant Commerce Clause and “depriv[ing]
Plaintiffs of the rights, privileges, and immunities secured
to them by the Constitution and laws of the United
States.” (Doc. 1). Following discovery, Defendants
filed a Motion for Summary Judgment and a Statement of Facts
on May 1, 2017. (Docs. 18, 19). The same day, Plaintiffs also
filed a Motion for Summary Judgment and a Statement of Facts.
(Docs. 20, 21). Both sides filed supporting briefs on May 15,
2017. (Docs. 25, 26). The parties then filed answers to the
opposing side's statement of facts, (Docs. 28, 31), and
opposition briefs on June 5, 2017. (Docs. 29, 30). On June
19, 2017, the parties filed their reply briefs. (Docs. 32,
33). Having been fully briefed, the Motions are ripe for our
STANDARD OF REVIEW
judgment is appropriate if the moving party establishes
“that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of
law.” Fed.R.Civ.P. 56(a). A dispute is
“genuine” only if there is a sufficient
evidentiary basis for a reasonable jury to find for the
non-moving party, and a fact is “material” only
if it might affect the outcome of the action under the
governing law. See Sovereign Bank v. BJ's Wholesale
Club, Inc., 533 F.3d 162, 172 (3d Cir. 2008) (citing
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986)). A court should view the facts in the light most
favorable to the non-moving party, drawing all reasonable
inferences therefrom, and should not evaluate credibility or
weigh the evidence. See Guidotti v. Legal Helpers
Debt Resolution, L.L.C., 716 F.3d 764, 772 (3d
Cir. 2013) (citing Reeves v. Sanderson Plumbing Prods.,
Inc., 530 U.S. 133, 150 (2000)).
the moving party bears the burden of demonstrating the
absence of a genuine dispute of material fact, and upon
satisfaction of that burden, the non-movant must go beyond
the pleadings, pointing to particular facts that evidence a
genuine dispute for trial. See Id. at 773 (citing
Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986)).
In advancing their positions, the parties must support their
factual assertions by citing to specific parts of the record
or by “showing that the materials cited do not
establish the absence or presence of a genuine dispute, or
that an adverse party cannot produce admissible evidence to
support the fact.” Fed.R.Civ.P. 56(c)(1).
should not grant summary judgment when there is a
disagreement about the facts or the proper inferences that a
fact finder could draw from them. See Reedy v.
Evanson, 615 F.3d 197, 210 (3d Cir. 2010) (citing
Peterson v. Lehigh Valley Dist. Council, 676 F.2d
81, 84 (3d Cir. 1982)). Still, “the mere existence of
some alleged factual dispute between the parties
will not defeat an otherwise properly supported motion for
summary judgment.” Layshock ex rel. Layshock v.
Hermitage Sch. Dist., 650 F.3d 205, 211 (3d Cir. 2011)
(quoting Anderson, 477 U.S. at 247-48) (internal
quotation marks omitted).
case turns on the constitutionality of Rule 163.255, which
If a horse is claimed, it may not
be sold or transferred to anyone wholly or in part, except in
a claiming race, for a period of 30 days from the date of
claim, nor may it, unless reclaimed, remain in the same
stable or under the control or management of its former owner
or trainer for a like period, nor may it race
elsewhere until after the close of the meeting at which it
was claimed. The Commission has the authority
to waive this section upon application and demonstration that
the waiver is in the best interest of horse racing in this
58 Pa. Code §163.255 (emphasis added). Plaintiffs are
challenging the emphasized portions, which impose what is
known as a “claiming jail” period. The parties
agree on all material facts but disagree on whether the
claiming jail provision of Rule 163.255 violates the dormant
Commerce Clause (or other theories of unconstitutionality
advanced by Plaintiffs) by preventing owners from racing
claimed horses out of state during the claiming jail period.
We will resolve both Motions in this Memorandum and Order.
Before discussing the constitutionality of Rule 163.255,
however, we first address two preliminary questions raised
separately by the parties: (1) whether Plaintiffs have
standing to bring their claims, and (2) whether Defendants
are “persons” under 42 U.S.C. §1983, which
pertains to Count III of the Complaint.