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Jamgotchian v. State Horse Racing Commission

United States District Court, M.D. Pennsylvania

August 29, 2017

STATE HORSE RACING COMMISSION; THOMAS CHUCKAS, JR., in his official capacity as Bureau Director, Thoroughbred Racing; RUSSELL C. REDDING, in his official capacity as Chairman, State Pennsylvania Horse Racing Commission; and SALVATORE M. DeBUNDA, RUSSELL B. JONES, JR., DR. CORRINE SWEENEY, THOMAS JAY ELLIS, C. EDWARD ROGERS, JR., MICHELE C. RUDDY, DR. JOHN EGLOFF, ROBERT F. LARK, and DARRYL BRENISER, in their official capacities as Commissioners, State Pennsylvania Horse Racing Commission, Defendants.



         Presently 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 Summary Judgment.


         The 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.

         Plaintiffs' 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).

         The issue before the court is whether Rule 163.255 violates the dormant Commerce Clause.


         Plaintiffs 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 review.


         Summary 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)).

         Initially, 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).

         A court 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).

         IV. ANALYSIS

         This case turns on the constitutionality of Rule 163.255, which states:

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 Commonwealth.

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.

         1. Plaintiffs' ...

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