Acra Turf Club, LLC v. Zanzuccki

March 31, 2014 by Justia

New Jersey enacted the 2002 Off-Track and Account Wagering Act, N.J. Stat. 5:5-127, providing for establishment of 15 off-track wagering (OTW) facilities. The Act authorized a license for the N.J. Sports and Exposition Authority, conditioned upon NJSEA entering into a participation agreement with other entities that held horse racing permits in 2000 (ACRA and Freehold). NJSEA, ACRA, and Freehold entered into an agreement, allocating permit rights. By 2011, only four facilities had opened. NJSEA had leased control of its tracks to the New Jersey Thoroughbred Horsemen’s Association (NJTHA) and another. The 2011 Forfeiture Amendment provided that permit holders would forfeit rights to any OTW not licensed by 2012, unless they demonstrated “making progress” toward establishing an OTW; forfeited rights would be available to other “horsemen’s organizations” without compensation to the permit holder. NJTHA qualified for forfeited rights. The 2012 Deposit Amendment extended the forfeiture date and allowed a permit holder to make a $1 million deposit for each OTW facility not licensed by December 31, 2011, retaining the “making progress” exception. The Pilot Program Act allowed installation of electronic wagering terminals in some bars and restaurants, by lessees or purchasers of NJSEA-owned racetracks, who could exchange unused OTW licenses to install electronic terminals. NJTHA secured such a license. ACRA and Freehold submitted challenged the constitutionality of the amendments under the Contracts, Takings, Due Process, and Equal Protection Clauses. The Commission determined that both ACRA and Freehold had made progress toward establishing their unlicensed OTW facilities and absolved them of the obligation to submit deposits. The district court dismissed a suit under 42 U.S.C. 1983 and 1988 on Younger abstention grounds. Subsequently, the Supreme Court decided Sprint Communications v. Jacobs, (2013), clarifying the Younger abstention doctrine. The Third Circuit reversed, finding that the action does not fit within the framework for abstention. View "Acra Turf Club, LLC v. Zanzuccki" on Justia Law