Harlan YOUST, Plaintiff and Appellant, v. Gerald LONGO, Defendant and Respondent.
The issue to be decided in this case is whether plaintiff-appellant, owner of a racehorse, can state a cause of action in tort for loss of winnings in a horse race that he allegedly would have received had his horse's stride not been interfered with by defendant-respondent jockey of another horse running in the same race.
Because respondent has failed to file a reply brief, we will “accept as true the statement of facts in the appellant's opening brief.” (Cal.Rules of Court, rule 17(b).) Appellant's opening brief sets forth the statement of facts as follows:
On October 24, 1982, appellant's horse, Bat Champ, a standardbred trotter, participated in the eighth race at Hollywood Park in Inglewood, California. Also entered in the race was The Thilly Brudder driven by defendant-respondent, Gerald Longo (Longo). During the race, Longo drove The Thilly Brudder into Bat Champ's path and whipped Bat Champ with his whip, thereby causing Bat Champ to break stride. Bat Champ finished the race in fifth place. Thereafter, the Horse Racing Board, by and through the track steward, reviewed the events of the race and disqualified The Thilly Brudder.
On December 3, 1982, plaintiff-appellant filed a complaint for damages against Longo in which he asserted three causes of action: (1) that Longo negligently interfered with Bat Champ, (2) that Longo intentionally interfered with Bat Champ, and (3) that Longo and unidentified individuals (Does I through X) conspired to interfere with Bat Champ's progress in the race.
Thereafter, the complaint was served and Longo demurred thereto, alleging that the Los Angeles Superior Court had no subject matter jurisdiction of the causes of action based upon Business and Professions Code section 19440, and that each and every cause of action failed to state facts sufficient to constitute a cause of action. Longo's demurrer was sustained without leave to amend on the latter grounds. Plaintiff now appeals, from the order of dismissal, arguing that the complaint does state facts sufficient to constitute a cause of action, or could be so pled to set forth facts sufficient to constitute a cause of action. We disagree.
As a preliminary matter, we again note that respondent has not filed a brief. Thus,
“[R]ule 17(b) of the California Rules of Court is applicable to this appeal. Courts have differed in the application of this rule with some taking a strict view and holding that the failure to file a brief was in effect a consent to a reversal (Grand v. Griesinger (1958) 160 Cal.App.2d 397 [325 P.2d 475] ), or an abandonment of any attempt to support the judgment. (Roth v. Keene (1967) 256 Cal.App.2d 725 [64 Cal.Rptr. 399].) Since the burden is always on the appellant to show error, other courts have taken the position that the failure to file a brief does not require an automatic reversal. (Perfection Paint Products v. Johnson (1958) 164 Cal.App.2d 739 [330 P.2d 829]; Kriegler v. Eichler Homes, Inc. (1969) 269 Cal.App.2d 224 [74 Cal.Rptr. 749].) The better rule and the one which we follow is to examine the record on the basis of appellant's brief and to reverse only if prejudicial error is found. (Baldwin v. Baldwin (1944) 67 Cal.App.2d 175 [153 P.2d 567]; Jarvis v. O'Brien (1957) 147 Cal.App.2d 758 [305 P.2d 961].)” (Votaw Precision Tool Co. v. Air Canada (1976) 60 Cal.App.3d 52, 55, 131 Cal.Rptr. 335; see also Walker v. Porter (1974) 44 Cal.App.3d 174, 177, 118 Cal.Rptr. 468.)
In his brief, appellant argues that the legislature has never vested exclusive jurisdiction in the California Horse Racing Board for the regulation of horse races. To the contrary, he asserts “it is clear that the California legislature did not intend the California Horse Racing Board to have exclusive jurisdiction.” In support of this argument appellant maintains that the legislature has neither expressly nor impliedly limited claims involving the conduct of a horse race to remedies provided by the California Horse Racing Board.
We find that the opinion of the California Supreme Court in Flores v. Los Angeles Turf Club (1961) 55 Cal.2d 736, 13 Cal.Rptr. 201, 361 P.2d 921, discovered through our own research, is on point in assessing the merits of appellant's argument. Although that case involved a claim significantly different from the one at bench (plaintiff therein sought an injunction and damages for exclusion from a race track), the Supreme Court discussed at length several statutory provisions which also apply to this case.
The court in Flores stated that:
“[P]ursuant to article IV, section 25a of the California Constitution, the Legislature has enacted a comprehensive scheme of legislation designed to regulate almost every aspect of legalized horse racing and wagering. Section 19420 of the Business and Professions Code provides: ‘Jurisdiction and supervision over meetings in this State where horse races with wagering on their results are held or conducted, and over all persons or things having to do with the operation of such meetings, is vested in the California Horse Racing Board.’ Business and Professions Code, section 19562 (formerly § 19561) provides that the racing board ‘may prescribe rules, regulations, and conditions, consistent with the provisions of this chapter, under which all horse races with wagering on their results shall be conducted in this State.’ The delegation of such rule-making power to the racing board, and the delegating legislation, was upheld in Sandstrom v. California Horse Racing Board  31 Cal.2d 401, 413 [189 P.2d 17]. In implementation of this delegation of power, the racing board has promulgated rules providing for the exclusion of certain persons from places where racing and wagering are held and establishing, under section 19561.5, a system of administrative hearings in order that such persons may be afforded the opportunity to contest its rulings. The results of such hearings are, as provided by statute, subject to judicial review.” (Id., at pp. 745–746, 13 Cal.Rptr. 201, 361 P.2d 921.)
Similarly, section 19440 of the Business and Professions Code provides as follows:
“The board shall have all powers necessary and proper to enable it to carry out fully and effectually the purposes of this chapter. Responsibilities of the board shall include, but not be limited to:
“(2) Administration and enforcement of all laws, rules and regulations affecting horseracing and parimutuel wagering;
“(3) Adjudication of controversies arising from the enforcement of those laws and regulations dealing with horseracing and parimutuel wagering;
“The board may delegate to stewards such of its powers and duties as is necessary to carry out fully and effectuate the purposes of this chapter.
“Commissioners shall personally review hearings of any case referred to the board by the stewards, or appealed to the board from stewards' decisions. If requested by an appellant, the board chairman shall assign two commissioners to hear an appeal at a time and place convenient to the appellant and to the board․”
Pursuant to this delegation of power, the racing board has promulgated rules relating to the conduct of participants during a horse race:
“During the running of the race:
“(a) A leading horse is entitled to any part of the course but when another horse is attempting to pass in a clear opening the leading horse shall not impede that passing horse by crossing over so as to compel the passing horse to shorten its stride.
“(b) A horse shall not interfere with or cause any horse to lose stride, lose ground or lose position in a part of the race where the horse interfered with loses the opportunity to place where he might be reasonably expected to finish.
“(c) A horse which interferes with another and thereby causes any other horse to lose stride, lose ground, or lose position, when such other horse is not in fault and when such interference occurs in a part of the race where the horse so interfered with loses the opportunity to place where he might, in the opinion of the stewards, be reasonably expected to finish, may be disqualified and placed behind the horse so interfered with.
“(d) A jockey shall not ride carelessly or willfully so as to permit his or her mount to interfere with or impede any other horse in the race.
“(e) A jockey shall not willfully strike or strike at another horse or jockey so as to impede, interfere with, intimidate, or injure the other horse or jockey.
“(f) If a jockey rides in a manner contrary to this rule, his or her mount may be disqualified and he or she may be suspended or otherwise disciplined.” (Cal.Admin.Code, tit. 4, § 1699.)
An owner of a horse is then given an opportunity to make a claim of interference with his horse immediately after a race:
“A jockey, trainer or owner of a horse, who has reasonable grounds to believe that his horse was interfered with or impeded or otherwise hindered during the running of the race, or that any riding rule was violated by any other jockey or horse during the running of the race, may immediately make a claim of interference or foul with the clerk of scales, the stewards or their delegate before the race has been declared official. The stewards may thereupon hold an inquiry into the running of the race. No person shall make any claim of interference or foul knowing the same to be inaccurate, false or untruthful.” (Cal.Admin.Code, tit. 4, § 1702.)
The steward is given the express authority to punish a horse and those who are licensed by the board and are found to have violated a riding rule:
“The stewards shall determine the extent of disqualification in cases of fouls or riding or driving infractions. They may place the offending horse behind such other horses as in their judgment it interfered with, or they may place it last.” (Cal.Admin.Code, tit. 4, § 1543.)
“The stewards' jurisdiction in any matter commences at such time as entries are taken for the first day of racing at the meeting and extends until 30 days after the close of such meeting. The stewards may suspend the license of anyone whom they have the authority to supervise or they may impose a fine or they may exclude from all enclosures in this State or they may suspend, exclude and fine. All such suspensions, fines or exclusions shall be reported immediately to the Board.” (Cal.Admin.Code, tit. 4, § 1528.)
However, contrary to appellant's assertion, the applicable statutes do provide for more than punishment for the wrongdoing jockey. In addition to the foregoing provisions relating to punishment of a jockey who violates the riding rules, broad powers have been delegated to the Horse Racing Board for adjudication of controversies arising from a horserace meeting (Bus. & Prof.Code, § 19440, subd. (3)), which to a large extent have subsequently been delegated to the stewards:
“Should any case occur which may not be covered by the Rules and Regulations of the Board or by other accepted rules of racing, it shall be determined by the stewards in conformity with justice and in the interest of racing.” (Cal.Admin.Code, tit. 4, § 1530.)
We hold that this latter provision vests in the stewards the power to decide claims such as the one appellant seeks to assert in state court. To the extent that a horse which is interfered with is not put in as good of a position had he not been interfered with by the measures which are expressly conferred on the steward, such as disqualifying the offending horse from the race, the Rules and Regulations of the Board do not cover a particular case, bringing it within the purview of section 1530. This section is in direct contrast with appellant's argument that the rules of the Horse Racing Board do not cover his claim because it expressly grants the stewards the authority to determine cases, such as the instant one, involving a claim for compensatory and punitive damages for interference with one's horse “in conformity with justice and in the interest of racing.”
Furthermore, even if we did not construe section 1530, ibid., as granting such broad powers to the stewards to decide a controversy such as the instant one, it is beyond dispute that they have the power to refer it to the Board if they found that there was “good and sufficient cause” to do so:
“The stewards may refer any matter within their jurisdiction to the Board when the penalty the stewards have jurisdiction to impose is insufficient when a hearing cannot be held under the conditions or in the manner prescribed, when a hearing is impractical due to conclusion of the meeting, or for other good and sufficient cause, and they may order the suspension of the licensee pending further Order of the Board. In such event, the Board shall accept the matter for hearing and adjudication or such other action as the Board deems to be in the best interests of justice.” (Cal.Admin.Code, tit. 4, § 1529.)
Compensating an aggrieved racehorse owner for the interference of the progress of his horse which causes the horse to place in a higher position than he otherwise would have would certainly “be in the best interests of justice.” Indeed, such an act by the Board would comport with its responsibility, inter alia, to adjudicate “controversies arising from the enforcement of those laws and regulations dealing with horseracing and parimutuel wagering.” (Bus. & Prof.Code, § 19440, subd. (3).)
Thus, we agree with the Flores court in finding that exclusive jurisdiction for the regulation of horse races has been vested in the California Horse Racing Board. Furthermore, as the Supreme Court stated therein:
“In the face of so pervasive a system of administrative procedure, it would appear difficult to maintain that the Legislature did not intend that this system provide the exclusive initial recourse for persons aggrieved by the operation of its regulatory legislation. And, in similar instances, the courts have withheld judicial relief from those who have not first availed themselves of the administrative remedies provided. (United States v. Superior Court, 19 Cal.2d 189, 194 [120 P.2d 26]; Abelleira v. District Court of Appeal, 17 Cal.2d 280, 291–293 [109 P.2d 942, 132 A.L.R. 715]; Cardoso v. Department of Alcoholic Beverage Control, 162 Cal.App.2d 277, 278 [327 P.2d 591]; Fiscus v. Department of Alcoholic Beverage Control, 155 Cal.App.2d 234, 236 [317 P.2d 993]; Louis Eckert Brewing Co. v. Unemployment Reserves Com., 47 Cal.App.2d 844, 848 [119 P.2d 227].)” (Flores v. Los Angeles Turf Club, supra, 55 Cal.2d at pp. 746–747, 13 Cal.Rptr. 201, 361 P.2d 921.)
We also agree with the Flores court in holding that appellant must have first pursued the administrative remedies discussed above before seeking relief in state court. As our Supreme Court has stated, the policy considerations underlying the exhaustion requirement are compelling in a case for damages such as the instant one:
“In the first place, ․ an exhaustion of remedies requirement serves the salutary function of eliminating or mitigating damages․
“Moreover, by insisting upon exhaustion even in these circumstances, courts accord recognition to the ‘expertise’ of the organization's quasi-judicial tribunal, permitting it to adjudicate the merits of the plaintiff's claim in the first instance. [Citation omitted.] Finally, even if the absence of an internal damage remedy makes ultimate resort to the courts inevitable [citation omitted], the prior administrative proceeding will still promote judicial efficiency by unearthing the relevant evidence and by providing a record which the court may review.” (Westlake Community Hosp. v. Superior Court (1976) 17 Cal.3d 465, 476, 131 Cal.Rptr. 90, 551 P.2d 410; see also Morton v. Hollywood Park, Inc. (1977) 73 Cal.App.3d 248, 256–257, 139 Cal.Rptr. 584.)
Having not availed himself of the administrative procedure and broad remedial powers vested in the California Horse Racing Board and the track stewards, appellant cannot now obtain judicial relief.
Appellant nevertheless argues that “exhaustion of an administrative remedy is not a condition precedent to filing a complaint in Superior Court within the instant statutory framework ․ because an administrative remedy is wholly lacking to Appellant.” He then cites Orloff v. Los Angeles Turf Club (1947) 30 Cal.2d 110, 180 P.2d 321, for the proposition that no plaintiff shall be limited to a statutory remedy where the relief provided thereby is inadequate.
Contrary to appellant's argument in this respect, his administrative remedy is not wholly lacking. As discussed earlier in this opinion, the legislature has delegated exclusive adjudicatory power to the Horse Racing Board over controversies arising from the enforcement of horse racing rules and regulations. Similarly, the Board has vested much of this authority in the track stewards. This power includes, inter alia, the authority to decide controversies such as the instant one involving claims of interference during a race by a racehorse owner. Indeed, nothing in the delegation of powers to the Horse Racing Board and track stewards precludes the award of a remedy to an aggrieved racehorse owner. Thus, we hold that exhaustion is required in the instant case.
Furthermore, appellant's reliance on Orloff is misplaced. In that case, plaintiff was permitted to state a claim for injunctive relief, in addition to the compensatory damages and $100 penalty he was entitled to seek pursuant to statute (Civ.Code, § 52), for unlawful ejection from a horse racing course. Despite the absence of an express provision allowing injunctive relief for such a claim under the relevant statute, the court allowed plaintiff therein to state such a claim because, inter alia, “[a] recovery of compensatory damages and $100 is plainly inadequate relief in a case of this character.” (Orloff v. Los Angeles Turf Club, supra, 30 Cal.2d at pp. 113–114, 180 P.2d 321.)
By contrast, appellant in the case at bench was not at all limited in the relief he could have sought from the Horse Racing Board and the track stewards. The only limitation put on the Horse Racing Board in deciding a claim of interference such as the instant one is that the Board act “in the best interests of justice.” (Cal.Admin.Code, tit. 4, § 1529.) Similarly, the track stewards must act on such a case “in conformity with justice and in the interest of racing.” (Cal.Admin.Code, tit. 4, § 1530.) Thus, the administrative remedy that appellant could have sought was in no way limited as to type or amount, as was the case in Orloff.
We turn now to consider the legal sufficiency of the third cause of action. The first two causes of action were properly demurred to, without leave to amend, in that the California Horse Racing Board has exclusive jurisdiction to determine the rights and liabilities of the parties. The superior court lacks jurisdiction.
The third cause of action alleges the intentional tort of civil conspiracy. There in reality is no separate tort of civil conspiracy and there is no civil action for conspiracy to commit a recognized tort, unless the wrongful act itself is committed and damages result therefrom. (Unruh v. Truck Insurance Exchange (1972) 7 Cal.3d 616, 102 Cal.Rptr. 815, 498 P.2d 1063.) Witkin further states:
“The labeling of an action as ‘complaint for conspiracy to defraud’ or conspiracy to commit some other tort is misleading. Conspiracy (the agreement) is ordinarily not actionable by itself․” (3 Witkin, Cal.Procedure (2d ed. 1971) Pleading, p. 2389.)
In Neblett v. Elliott (1941) 46 Cal.App.2d 294, 115 P.2d 872, the court said on the issue:
“It is only when plaintiff can show that a defendant was united or cooperated with others to inflict a wrong upon him that he is entitled to a joint recovery of damages against them․”
In the instant case, we note that appellant incorporates all of the allegations set forth in the second cause of action, which in turn had incorporated paragraphs 1–6 of the first cause of action. Since both of these causes of action were properly ruled upon by the trial court, can the third cause stand on its own, or is it for all intents and purposes fatally defective?
We determine that it is fatally defective and cannot be amended. The appellant has to plead facts of a civil wrong committed by Longo, the respondent, that would give rise to an independent action. The appellant cannot do this because the conduct of Longo is governed by the California Horse Racing Board and cannot be determined by the superior court.
The appellant is left with the bare averment of conspiracy which is not ordinarily actionable.
For the foregoing reasons we affirm the decision of the trial court.
With some reservations, I am willing to concur in the result of the majority opinion as to the first two causes of action. However, I respectfully dissent on the third. I would hold the trial court erred in dismissing the complaint without leave to amend this third count of the complaint.
As to the first two causes of action, I am less confident than the majority that compensatory and punitive damages were available to appellant through the Horse Racing Board. In his brief and documents in the clerk's transcript, appellant alleges the board's rules do not provide for damages of any kind when a jockey intentionally or negligently knocks a competing horse out of a race. Interestingly, respondent in his opposition below appears to concede this point. Instead he attempts to justify the board's rule which limits the remedy to disqualification of the horse driven by the offending jockey. Thus it appears quite likely the board indeed adheres to the practice of not considering the award of damages in these situations. It may do so because it feels it lacks jurisdiction to order one licensee to pay compensatory and punitive damages to another. (If the board has this view, the majority is informing it otherwise in this case.) On the other hand, the board may decline to consider awarding damages as a matter of policy.
But whatever the board's reason for refusing to consider granting this form of relief, appellant could be deemed to have exhausted his administrative remedies before filing this lawsuit. This is a Rule 17(b) case. Hence this court properly accepts as true the contents of appellant's representations on appeal. Under the unchallenged allegations in appellant's brief and accompanying documents, the stewards have already adjudicated appellant's complaint and awarded him the only relief available under the rules and practices of the Horse Racing Board. Thus it would have been “futile” for him to have lodged a plea for the additional relief of damages with the Horse Racing Board. Since it would have been futile to pursue that course of action appellant should not be required to do so in order to satisfy the requirement of exhausting his administrative remedies. (Civ.Code, § 3532, Elevator Operators, etc. Union v. Newman (1947) 30 Cal.2d 799, 186 P.2d 1; Ogo Associates v. City of Torrance (1974) 37 Cal.App.3d 830, 835, 112 Cal.Rptr. 761; Lachman v. Cabrillo Pacific University (1981) 123 Cal.App.3d 941, 945, 177 Cal.Rptr. 21; Jacobs v. State Bd. of Optometry (1978) 81 Cal.App.3d 1022, 1030, 147 Cal.Rptr. 225.)
Were this the only problem with appellant's first two causes of action I would be dissenting on these counts, too. I would be urging appellant be allowed to amend his complaint to allege how and why he already has exhausted the administrative remedies available to him. (Of course, at a later stage of the proceedings, such as motion for summary judgment, respondent Longo might well introduce evidence the Horse Racing Board will at least consider damage awards for the type of injuries plaintiff alleges in this case. If this were shown, the first two causes of action could be dismissed for failure to exhaust this administrative remedy.)
In any event, I have a different reason for concurring in the majority's decision to affirm the dismissal of the first two causes of action. These first two counts allege the kind of acts a sports competitor can be assumed to risk when he voluntarily participates in an athletic event. An aggressive—or even over aggressive—opponent may well interfere with a competitor's chances of winning. But that does not create a cause of action for negligence or gross negligence. (Cf. Strand v. Conner (1962) 207 Cal.App.2d 473, 24 Cal.Rptr. 584; Hoyt v. Rosenberg (1947) 80 Cal.App.2d 500, 182 P.2d 234; Annot., 77 A.L.R.3d 1300, 1307–1308; 4 Witkin, Summary of Cal. Law (8th Ed.) §§ 726, 727.)
The third cause of action, however, is an entirely different matter. It is not the sort of risk a sports participant can be expected to assume. In this third cause of action, plaintiff alleges a civil conspiracy between unknown “Does” and the jockey, Longo, to cause plaintiff's horse to lose the race. (It is of some interest this was not “just another race.” Rather it was the feature race and involved a total purse of $100,000 with $50,000 of that sum going to the winner, $25,000 to the place horse, $12,000 to the show horse, $8,000 for fourth and $5,000 for fifth.)
The majority correctly points out there is no separate tort of civil conspiracy. The conspirators must agree to commit some act which is otherwise classified as a “civil wrong.” (Unruh v. Truck Insurance Exchange (1972) 7 Cal.3d 616, 631, 102 Cal.Rptr. 815, 498 P.2d 1063.) In essence the majority argues the act alleged as the means of achieving the goals of this conspiracy is the same act alleged in the other two counts. Consequently, the conspiracy claim falls under the jurisdiction of the Horse Racing Board just as did the other two counts.
Admittedly, plaintiff's third count is worded rather loosely. It describes the means of achieving the conspiracy in language which parallels the two earlier counts and combines notions of intentional tort, negligence and gross negligence. That is, the “Does” and Longo are charged with conspiring to have Longo intentionally, or in the alternative negligently, interfere with plaintiff's horse. If one accepts the majority's broad reading of the powers of the Horse Racing Board, the jockey's negligence or gross negligence is a matter within the exclusive purview of the Horse Racing Board. However, it appears difficult if not impossible to conspire to be negligent or even grossly negligent. Thus, realistically this count of the complaint must be construed as an attempt to allege a cause of action for a civil conspiracy to commit an intentional tort against plaintiff.
Indeed if one closely examines the conspiracy paragraph of this count it becomes evident plaintiff sought to charge an agreement to commit an intentional act. In this paragraph, plaintiff alleges: “Prior to the running of the eighth race at Hollywood Park on October 24, 1982, defendants Longo and Does 1 through 10 knowingly, intentionally and wilfully conspired among themselves and agreed that in the event plaintiff's horse Bat Champ appeared as though he might win or finish second in the eighth race at Hollywood Park that defendant Longo would drive his horse The Thilly Brudder in such a way and manner as to prevent Bat Champ from winning or finishing second in said race.”
This paragraph alleges a conspiratorial plot. It has nothing to do with negligence or gross negligence. True, the actions the conspirators supposedly plan for Longo to take may be ones which sometimes occur when jockeys drive negligently or with gross negligence. But here it is alleged he is to do these things intentionally. He is to do them only if Bat Champ looks like a winner. And he is to do so for a specific purpose—to prevent Bat Champ from winning or coming in second. Thus the reallegation of the negligence and gross negligence language from the earlier counts is inappropriate. Indeed it may be inconsistent and misleading. But this is the sort of problem which generally is curable by amendment.
Still, two other issues must be confronted before deciding plaintiff could amend his complaint to state a cause of action cognizable in the courts. First, what is the nature of this intentional tort Longo and the “Does” conspired to commit? Secondly, assuming they did conspire to commit this tort, is their conspiracy nevertheless within the exclusive jurisdiction of the Horse Racing Board? In the sections which follow I conclude a cause of action would lie for a civil conspiracy to intentionally deprive plaintiff of a prospective economic advantage—the opportunity to win one of the substantial financial prizes awarded the win, place and show horses. I also conclude that if the co-conspirators included one or more individuals who are not under the jurisdiction of the Horse Racing Board—a bookie, for example—the claim is not within the exclusive jurisdiction of the board. (Whether the provable facts will support a complaint amended in this manner is not properly before our court on review of a demurrer granted without leave to amend. I do note, however, appellant's counsel represented at oral argument a belief the co-conspirators alleged in Count 3 included persons beyond the jurisdiction of the board.)
I do not reach these conclusions easily. This case admittedly poses fundamental policy issues about the appropriate role of tort law and the courts in professional athletic contests. Although there are good arguments against any intervention whatsoever in these arenas, I am satisfied the instant case represents a narrow but important class of cases where tort remedies are not only appropriate but nearly essential. Moreover, it is a class of cases where the courts can grant relief without diminishing the independence—or the joy—of sports competition.
A. It Is Possible to State a Valid Cause of Action for Intentional Interference With Prospective Advantage Where Someone Uses Unlawful Means to Interfere With a Participant's Opportunity to Win a Substantial Financial Prize in a Horse Race
The allegations of the third cause of action charge a civil conspiracy to interfere with the progress of plaintiff's horse in this high stakes race. Although imperfectly pleaded, this count appears amenable to state a valid cause of action for conspiracy to commit the tort of intentional interference with prospective advantage.
The tort of intentional interference with prospective advantage generally requires the tortfeasors act either with an improper motive or through unlawful means, or both, to deprive plaintiff of a reasonably probable economic expectancy. (Prosser and Keeton on Torts (1984) at pp. 1005–1010.) “ ‘ “(T)he cases have turned almost entirely upon the defendant's motive or purpose, and the means by which he has sought to accomplish it․ (A)ny manner of intentional invasion of the plaintiff's interests may be sufficient if the purpose is not a privileged one. Apart from this, however, the means adopted may be unlawful in themselves; ․” ’ ” (A.F. Arnold & Co. v. Pacific Professional Ins. Inc. (1972) 27 Cal.App.3d 710, 716, 104 Cal.Rptr. 96.) “There can be no recovery unless the plaintiff shows that, except for the tortious interference, there was a reasonable probability that the ․ profit would have been obtained. (Citations omitted.)” (4 Witkin, Summary of Cal.Law, supra, at p. 2647, italics added.)
In this case, the alleged means of interference easily satisfy any requirement of unlawfulness. If the events suggested by the complaint occurred, the co-conspirators plotted to have a jockey drive his horse into the path of a competing horse and to strike the other horse with his whip. The goal was to cause this other horse to break stride and thus lose its chance to win the race. These acts could be considered “dirty” and unlawful even if they did not violate any specific legal provision. However, as the majority points out, the Horse Racing Board has enacted regulations prohibiting this very conduct. (Cal.Admin.Code, tit. 4, § 1699(b), (c), (d), (e) quoted at page 450 ante.)
Plaintiff does not allege any specific motive for this unlawful conduct. However, under California law where the means are unlawful the motive need not be improper. (Rickel v. Schwinn Bicycle Co. (1983) 144 Cal.App.3d 648, 659, 192 Cal.Rptr. 732 (“[t]his wrongfulness may lie in the method used”) and authorities cited therein.) Nor is it necessary for the plaintiff to allege the conduct was unjustified. Justification or privilege is an affirmative defense to be pleaded by the defendant. (Rickel v. Schwinn Bicycle Co., supra, 144 Cal.App.3d at pp. 657–660, 192 Cal.Rptr. 732.)
In any event, it is hard to imagine any proper motive for what amounts to a conspiracy to “fix” a horse race. It appears irrelevant whether the co-conspirators were competing horse owners who sought to enhance their own chances of victory by eliminating one of the favorites or some bookies who had accepted a large number of bets on Bat Champ and wanted to make sure they did not have to pay off on those bets. Even when the motive is only to win the race—a clearly proper and indeed commendable goal in sports and economic competition—the means used to win must be lawful. Otherwise the means may constitute a tortious interference with prospective advantage.
A more serious question is whether plaintiff was deprived of a reasonably probable prospective advantage. To put it another way, can it really be said that Bat Champ would have won this horse race—or ended up in another prize winning position—if defendants had not interfered. Prosser and Keeton summarize the prevailing rule and the rationale in sports contests as follows:
“When the attempt has been made to carry liability ․ into such areas as ․ deprivation of the chance of winning a contest, ․ recovery has been denied; and it is significant that the reason usually given is that there is no sufficient degree of certainty that the plaintiff ever would have received the anticipated benefits.” (Prosser and Keeton On Torts (1984) p. 1006.)
This passage does not accurately capture California law on this subject, however. In contrast to many other jurisdictions, the only California court to confront this issue applied the tort of intentional interference with prospective advantage to contests. In Gold v. Los Angeles Democratic League (1975) 49 Cal.App.3d 365, 122 Cal.Rptr. 732, a candidate for Los Angeles City Controller claimed the defendants had interfered with his opportunity to win the race for that political office. The defendants included several political supporters of his opponent who had sent out a false and misleading mailing to voters stating their candidate, not plaintiff, was the officially endorsed candidate of the Democratic Party.
The trial court granted defendants' demurrer. However, in a two-to-one decision Division Five of this court reversed, specifically holding these alleged acts stated a cause of action for the tort of intentional interference with prospective advantage. In that case, the prospective economic advantage was deemed to be the salary plaintiff would have earned had he won the election. Moreover, the majority was not concerned about what some might call the “speculative nature” of plaintiff's injury. Actually plaintiff had lost the election by a four-to-one margin.1 Had our Court of Appeal embraced the prevailing rationale summarized in Prosser and Keeton this would have been an easy case to disapprove plaintiff's cause of action. It seems most unlikely plaintiff would have won election and the economic advantage of serving in that office even if defendants had refrained from sending out this one misleading brochure. But this factor did not bother the California court. It upheld the cause of action for interfering with a contestant's opportunity to win a contest with the following language:
“(D)efendants, with knowledge of plaintiff's candidacy, mailed to prospective voters a pamphlet which falsely gave the impression that Charles Navarro, rather than plaintiff, was the candidate for city controller officially endorsed by the Democratic Party; defendants knew the representation was false and made such misrepresentation with the intent to interfere with plaintiff's opportunity for election to the office of city controller; as a result of the misrepresentation and interference, plaintiff was not elected, and thereby suffered damage ․ By analogy to the elements of a cause of action for inducing a breach of contract, the foregoing allegations state a cause of action for defendants' intentional interference with plaintiff's opportunity to be elected to the office of city controller.” (49 Cal.App.3d at p. 375, 122 Cal.Rptr. 732.)
True, Gold v. Los Angeles Democratic League involved a political contest not an athletic one. But in terms of the rationale for exempting “contests” from the tort of intentional interference with prospective advantage there appears to be no reason to distinguish politics from sports. In all other respects the present case fits more clearly within this tort than does Gold. What the defendants did in Gold comes close to constitutionally protected speech.2 But unless and until whipping an opponent's horse becomes “symbolic speech” it is hard to argue what defendants allegedly did falls within the penumbra of First Amendment protection.
To shift to the other main element of the tort of intentional interference with prospective advantage, Gold's prospect of winning in the absence of interference appears to have been rather dismal. He lost by a four-to-one margin and might well have lost nearly as badly if defendants had never even thought of sending out their misleading mailer. In contrast, Bat Champ was in or near the lead as the horses entered the final stretch before Longo's maneuvers and whipping forced him to break stride and fall out of contention. Thus, it would be much easier and more reasonable for a jury to find Youst had been denied the economic fruits of victory in this horse race than to find Gold would have won the economic fruits of victory in his election contest.
Our research has uncovered no California case which limits Gold to political contests. Nor have we found any California cases which expressly exempt athletic contests from the tort of intentional interference with prospective advantage. On the other hand, we have found cases from other jurisdictions suggesting a rationale which would support recovery for some contestants in athletic competitions but not for others. These were cases awarding damages to competitors who were deemed to have a high probability of winning. (Chaplin v. Hicks (1911) 2 K.B. 786 (beauty contest prize); Wachtel v. National Alfalfa Journal Co. (Iowa 1920) 176 N.W. 801 (magazine contest prize); Kansas City, M. & O. Ry. Co. v. Bell, (Tex.1917) 197 S.W. 322 (prize at stock show); Mange v. Unicorn Press (S.D.N.Y.1955) 129 F.Supp. 727 (encyclopedia puzzle contest prize).) Prosser and Keeton likewise comment the absence of certainty of success “is not necessarily a reason for refusing to protect such non-commercial expectancies, at least where there is a strong probability that they would have been realized.” (Prosser and Keeton on Torts, supra, at p. 1007.) (See also Schaefer, Uncertainty and the Law of Damages, 19 Wm. & M.L.Rev. 719 (1978) arguing damages should be allowed for the value of the lost chance of benefit. Under this approach, plaintiff would not recover the full value of the lost prize but the value of that prize discounted by the probability of winning it in the absence of defendant's interference.)
Again these non-California cases involved competitions outside the sports venue. Yet this principle seems to make sense in sports contests which award financial prizes on the basis of a contestant's order of finish. Unless for some reason the contestant has no chance of winning a prize he should be allowed to recover compensation from a tortfeasor who deliberately used unlawful means to knock him out of the competition. However, that recovery should be discounted by the probability the contestant would have won a financial prize without this interference.
B. The Courts Have Jurisdiction Over a Tort Arising Out of a Horse Race Where One or More of the Tortfeasors Is Not Within the Jurisdiction of the Horse Racing Board
For purposes of the following discussion I will assume the majority is correct in holding appellant Youst could have sought compensatory and punitive damages from the Horse Racing Board for his first two causes of action. Even accepting this premise, however, the Horse Racing Board may not have had jurisdiction to grant adequate relief as to the third cause of action.
The majority has supplied a thorough and, I would say more than generous, exposition of the powers of the Horse Racing Board. They construe certain language in the enabling statutes to allow the board to order an offending licensee to pay full compensation to another licensee he has injured. In the instant case the board presumably would have been authorized to order the jockey, Longo, and any horse owner or other licensee who had conspired with him to reimburse Youst an amount equal to the winner's purse in this race. In addition, the majority appears to be holding the board is empowered to require Longo and his licensed co-conspirators to pay punitive damages to Youst. (Ante, [maj. opin.] at pp. 452–453)
The California Supreme Court has made it clear the courts have no place in disputes arising out of horse racing events where the Horse Racing Board has jurisdiction to grant the requested relief. (Flores v. Los Angeles Turf Club (1961) 55 Cal.2d 736, 13 Cal.Rptr. 201, 361 P.2d 921.) Conversely, however, they have made it equally clear the courts retain jurisdiction in those cases where the Horse Racing Board lacks the power to grant some or all of the relief plaintiff seeks. (Orloff v. Los Angeles Turf Club (1947) 30 Cal.2d 110, 180 P.2d 321.) Here, count three of the complaint charges a conspiracy involving a jockey, who is a licensee and thus within the board's jurisdiction, and unnamed conspirators, one or more or all of whom could be non-licensees. Merely to illustrate, all of them could be illegal bookies who bribed Longo to knock Bat Champ out of the race.
The majority suggests the Horse Racing Board has the power to order those allegedly responsible for plaintiff's loss to pay him compensation. Admittedly, the Horse Racing Board has the power to order licensees to pay money to someone they have conspired to injure. A licensee would have to comply or risk his license. However, the board is in no position to require non-licensees to compensate anyone. According to the Administrative Code it has jurisdiction only to “independently punish any misconduct of any person connected with racing.” (Cal.Admin.Code, tit. 4, § 1405; italics added.) The board does not purport to reach—nor could it reach—the activities of bookies or gamblers who place large bets with bookies or others who have no legal connection with racing yet may have every reason to seek to fix races.
Perhaps the board could order the jockey Longo to pay compensation to plaintiff, assuming of course he had the financial resources to do so. Or if some of the alleged co-conspirators turned out to be horse owners, trainers, or anyone else subject to the jurisdiction of the Horse Racing Board that remedy might be available. But if the only solvent conspirators are persons outside the jurisdiction of the Horse Racing Board plaintiff cannot look to the board to award him damages from these persons. This requires the broader coercive powers of the judiciary. Thus if any of the unnamed “Does” in reality are not licensees, the Horse Racing Board lacks jurisdiction to grant plaintiff Youst all of the relief he seeks. It follows Youst is entitled to pursue this relief in the courts at least against any co-conspirators who are not subject to the jurisdiction of the Horse Racing Board.
Accordingly, I would remand this case to allow appellant Youst to amend his complaint. As a practical matter, the feasibility and scope of an amended complaint would depend upon the actual facts Youst believes he can prove. There appear to be at least three possibilities. First, assuming the Horse Racing Board indeed adheres to an invariable policy of refusing to consider awarding damages even where a licensee has deliberately fixed a race, Youst would be entitled to file an amended complaint against all the conspirators, licensed and unlicensed, as to this third cause of action. The second possibility assumes the majority is correct and Youst was entitled to pursue damages before the Horse Racing Board against any licensed co-conspirators but failed to exhaust this administrative remedy. In this instance, his amended complaint would have to be confined to unlicensed co-conspirators who are not within the jurisdiction of the board. The third possibility, of course, is that damages were available from the Horse Racing Board against licensed co-conspirators and no unlicensed co-conspirators were involved. In that instance, Youst would not be able to amend his third cause of action and the entire complaint could be dismissed.
I realize this is a close question, as a matter of policy, at least. In a sense the position I advocate would bring the court to the horse race and the horse race into the courtroom.
On the one side it might be said we should not clutter up the courts with disputes over mere sports contests rather than problems of real life. Under this view contestants should take their chances someone will try to cheat them of their chances for victory. However, judicial relief could be granted in the instant case without opening broad scale intrusion of the courts into horse racing. As framed in this dissent this cause of action would be available only when non-licensees attempted to manipulate the outcome of a horse race through the use of unlawful means or for an improper purpose.
I want to emphasize, moreover, what I would not hold were I in the majority. I am not suggesting the courts second guess the stewards. Whatever fouls they call or discipline they impose should remain final. Moreover, whichever horse they declare to be the winner should remain the winner for all purposes. The same goes for place, show and the remaining order of finish they certify. Thus, the outcome of this lawsuit would not affect the division of prize moneys among the horse owners whose horses participated in the race. Nor would it disturb the distribution of moneys in the betting pool among those who placed bets on this race. Judgment for the plaintiff in this case would not retroactively declare his horse the winner or the place or show horse and thereby entitle him to the prize moneys that went to the win, place, or show horse in this field. Rather the judgment would be for damages against those who intentionally deprived the plaintiff's horse of the opportunity to end up “in the money” and who are beyond the reach of the Horse Racing Board.
The principle advocated in this dissent is simple. Corruption should not pay. Those who would fix a horse race should know they may have to give up their ill-gotten gains—and more—to those they set out to cheat. Where the Horse Racing Board is unable to apply this dose of legal medicine, I feel the courts should offer relief. Otherwise the victims will remain uncompensated while the fixers go scot free.
1. In this primary election Navarro, the winner, received 357,681 votes to plaintiff Gold's mere 81,665. Taking account of the votes polled by other candidates Gold would have had to earn another 67,043 votes in the primary just to force a runoff against Navarro. He then would have had to win this second race to have achieved the office he sought. (Gold v. Los Angeles Democratic League, supra, 49 Cal.App.3d 365, 380 fn. 5, 122 Cal.Rptr. 732 (dissent).)
2. See, e.g., Wilson v. Superior Court (Watson) (1975) 13 Cal.3d 652, 662, 119 Cal.Rptr. 468, 532 P.2d 116 in which the California Supreme Court struck down a preliminary injunction prohibiting distribution of a misleading political “newsletter.” The Court held this injunction “violated petitioner's rights of freedom of expression under” both the United States and California Constitutions.
PICKARD, Associate Justice *. FN* Assigned by the Chairperson of the Judicial Council.
THOMPSON, Acting P.J., concurs.