Jes Properties Inc. v. Usa Equestrian, Inc.

Page 1273

253 F.Supp.2d 1273

JES PROPERTIES, INC. d/b/a Cypress Trails Farm, a Florida corporation, and Michael W. Gallagher, Plaintiffs, v. USA EQUESTRIAN, INC. (formerly the American Horse Show Association), Dave Burton a/k/a/ Dave Burton, Sr. a/k/a Dave E. Burton a/k/a Dave E. Burton Sr., Burton and Sons, Inc., David Burton a/k/a David Burton, Jr., a/ka David E. Burton a/k/a David E. Burton, Jr., Littlewood Fences, Inc., Bob Bell, Classic Company, Ltd., and Kernan Hodges a/k/a Mrs. George H. Hodges, Jr. Defendants.

No. 8:02-CV-1585-T-24MAP.

United States District Court, M.D. Florida, Tampa Division.

March 28, 2003.

Robin S. Trupp, Robin S. Trupp, P.A., Tampa, FL, for JES Properties, Inc., a Florida corporation dba Cypress Trails Farm, Michael W. Gallagher, plaintiffs.

Chris S. Coutroulis, David Matthew Allen, Carlton Fields, P.A., Tampa, FL, Ira A. Finkelstein, Tenzer Greenblatt LLP, New York City, Edward C. Larose, Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis, P.A., Tampa, FL, Brent G. Siegel, Brent G. Siegel, P.A., Gainesville, FL, Lawrence E. Richter, Jr., David K. Haller, Richter & Holler, LLC, Mount Pleasant, SC, Paul M. Harden, Law Office of Paul M. Harden, Jacksonville, FL, David Thomas Knight, Hill, Ward & Henderson, P.A., Tampa, FL, for USA Equestrian, Inc. fka American Horse Show Assoc., Dave Burton aka Dave Burton, Sr. aka Dave E. Burton aka Dave E. Burton, Sr., Burton & Sons, Inc., David Burton aka David Burton, Jr. aka David E. Burton aka David E. Burton, Jr., Littlewood Fences, Inc., Bob Bell, Classic Co., Ltd., Kernan Hodges aka George H. Hodges, Jr., defendants.

ORDER

BUCKLEW, District Judge.

This cause comes before the Court for consideration of the following motions: Defendants', David E. Burton, Sr., David E. Burton, Jr., Burton and Sons, Inc. and Littlewood Fences, Inc. (collectively "the Burton Defendants"), Motion to Dismiss (Doc. No. 16, filed October 25, 2002); Defendant USA Equestrian, Inc.'s (the "Federation") Motion to Dismiss (Doc. No. 17, filed October 25, 2002); Defendants', Bob Bell and Classic Company Ltd. (collectively "Bell"), Motion to Dismiss and/or Motion for More Definite Statement and Defendant's, Kernan Hodges, a/k/a Mrs. George H. Hodges, Jr. ("Hodges") Motion to Dismiss (Doc. No. 21, filed October 28, 2002). Plaintiffs filed a Request for Oral Argument and Memorandum in Opposition to Defendants' Motions to Dismiss on December 6, 2002 (Doc. No. 24)(hereinafter "Response to Motions to Dismiss"). In concluding their Response to Motions to Dismiss, Plaintiffs request leave to amend Count III to assert their claim under section 16 of the Clayton Act, citing a scrivener's error. Plaintiffs did not attach a copy of the proposed Amended Complaint to their Response to Motions to Dismiss.

In reply to Plaintiffs' Response to Motions to Dismiss, Defendant USA Equestrian, Inc. (the "Federation") filed a Motion for Leave to File Reply Brief in Support of Motion to Dismiss (Doc. No. 26, filed December 18, 2002). The Burton Defendants filed Joinder in USA Equestrian, Inc.'s Motion (Doc. 27, filed December 19, 2002). Plaintiffs filed a Response to Motions to File Reply Brief (Doc. 28, filed December 23, 2002). Subsequently, Defendants Bell filed Joinder in USA Equestrian, Inc.'s Motion (Doc. 29, filed December 30, 2002). At the Preliminary Pretrial Conference held January 30, 2003, the Court issued an oral order granting Defendants' Motion for Leave to File Reply Brief in Support of Motion to Dismiss.

I. Background

Plaintiff JES Properties, Inc. d/b/a/ Cypress Trails Farm (hereinafter "Cypress Trails") is a Florida corporation which owns real property in Hillsborough County, Florida where it holds horse shows. See Complaint ¶¶ 3 and 38. Plaintiff Michael W. Gallagher ("Gallagher") is a natural person residing in Florida who promotes horse shows. See Complaint If 114 and 39.

Defendant, USA Equestrian, Inc. (the "Federation") is a New York not-for-profit corporation that has more than 80,000 members ("Members") and annually recognizes more than 2,800 horse shows nationwide ("Recognized Horse Shows"). The Federation governs all aspects of Recognized Horse Shows, including educating and licensing all judges, stewards, and technical delegates who officiate at Recognized Horse Shows. On an annual basis, the Federation provides its Members a Competition calendar which lists the Federation's Recognized Horse Shows for the year. See Complaint ¶¶ 5 and 6. The Federation writes and enforces its national rules ("Federation Rules") which govern the breeds and disciplines of Recognized Horse Shows. The Federation Rules may only be used by Federation Recognized Horse Shows, or by a non-recognized horse show with the Federation's prior written permission.

Chapter IV, entitled "Competition" of Rule II of the Federation Rules ("Competition Rules") sets forth how a Recognized Horse Show is established. Article 208 of the Competition Rules sets forth the privileges of being a Recognized Horse Show ("Horse Show Privileges"). Article 210 of the Competition Rules entitled "General" sets forth how one makes an application to become a Recognized Horse Show. Article 212 of the Competition Rules entitled "Procedures" sets forth the procedures a party must follow to secure dates to hold a Recognized Horse Show. See Complaint 11 H 29, 31, 31¹ and 32.

Particularly at issue in the present case is the Federation's limitations on the permissible distances between different classifications of Recognized Horse Shows. Article 214 of the Competition Rules entitled "Mileage" sets forth the Federation's mileage limitations ("Mileage Rule"). The Mileage Rule provides that in the States of Maine, New Hampshire, Vermont, Connecticut, Rhode Island, New Jersey, New York and Pennsylvania, it is not permissible for two "A" rated hunter/jumper Recognized Horse Shows to be held on the same dates within 125 miles of each other unless permission is given by the first horse show to become a Recognized Horse Show to the second horse show wishing to become a Recognized Horse Show. The Mileage Rule provides that in all other States, "A" rated hunter/jumper horse shows must be held at least 250 miles apart absent obtaining a waiver by the first horse show to become a Recognized Horse Show to the second horse show wishing to become a Recognized Horse Show. See Complaint 11133, 34 and 35. Certain events are exempted from the Mileage Rule. See Complaint 1136.

The Burton Defendants put on or manage "A" rated hunter and jumper Recognized Horse Shows in the State of Florida. See Complaint ¶¶ 9, 10, 11 and 12. Defendant, the Classic Company, Ltd. is in the business of managing and producing "A" rated hunter and jumper Recognized Horse Shows in the State of Florida. See Complaint ¶ 13. Defendant Bob Bell is a natural person who acts as a manager and/or promoter of "A" rated hunter and jumper Recognized Horse Shows in the State of Florida! See Complaint 1114. Defendant Hodges is a natural person who acts as a promoter of "A" rated hunter and jumper Recognized Horse Shows in the State of Florida. See Complaint 1115.

Plaintiffs state that it was their intent to promote "A" rated hunter and jumper Recognized Horse Shows at which different exhibitors can compete. See Complaint 139. The Plaintiffs attempted to secure dates from the Federation to hold "A" rated hunter and jumper Recognized Horse Shows on certain dates and at certain locations. See Complaint ¶ 40. During 2000, 2001, 2002 and 2003, Plaintiff Cypress Trails applied for certain dates and locations to hold "A" rated hunter and jumper Recognized Horse Shows. The Federation denied certain dates and locations which Cypress Trails applied for on the basis that the Federation had already approved another promoter those dates for locations within 250 miles of the locations for which Cypress Trails had applied (the "Cypress Trails Refusal Dates"). See Complaint 141. Likewise, during 2000, 2001, 2002 and 2003, Plaintiff Gallagher applied for certain dates and locations to hold "A" rated hunter and jumper Recognized Horse Shows which would be recognized by the Federation. The Federation denied certain dates and locations which Gallagher applied for on the basis that the Federation had already approved another promoter for those dates for locations within 250 miles of the location which Gallagher had applied (the "Gallagher Refusal Dates")². See Complaint 1142. Plaintiffs concede that the Federation approved some of the dates and locations for which Cypress Trails and Gallagher applied.

Plaintiff Cypress Trails attempted to seek written consent from the Burton Defendants, the Defendants Bell and Defendant Hodges to hold its shows within 250 miles of their previously approved shows but the Mileage Rule was not waived. See Complaint 1! 45.

In their Complaint, Plaintiffs assert that the Mileage Rule is one of the most destructive forces in the horse show world today because it gives the Federation, horse show promoters and managers a virtual monopoly over the ability to hold "A" rated hunter and jumper Recognized Horse Shows. Plaintiffs assert that the Mileage Rule is a restraint of trade and imposes an unreasonable restraint on competition. See Complaint ¶ 61. Plaintiffs further allege that there is no logical explanation to support the Federation maintaining different mileage distance requirements in different states. Plaintiffs assert that with use of the Mileage Rule, the Federation, the Burton Defendants, the Defendants Bell and Defendant Hodges have prevented Plaintiffs from entering into the marketplace of conducting "A" rated hunter and jumper Recognized Horse Shows. See Complaint 111146 and 47. Plaintiffs further allege that Defendants, and other unnamed parties, possess a dominant market power to exclude competitors conducting "A" rated hunter and jumper Recognized Horse Shows. See Complaint 11148 and 62. Plaintiffs state that all of Defendants acted as part of...