Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.

In the Matter of

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


June 2, 2011

IN THE MATTER OF RECONSIDERATION OF THE DISTRIBUTION OF THE CASINO SIMULCASTING SPECIAL FUND

On appeal from the New Jersey Racing Commission.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

(AMOUNTS ACCUMULATED IN 2005, 2006, 2007 and 2008) PURSUANT TO N.J.S.A. 5:12-205(d).

Submitted March 15, 2011

Before Judges Wefing, Baxter and Koblitz.

New Jersey Thoroughbred Horsemen's Association appeals from a July 13, 2009 order of the New Jersey Racing Commission (the Commission) distributing surplus revenue from the Casino Simulcasting Special Fund (Special Fund) for 2005 through 2008. In addition to arguing that the Commission's choice of recipients, and the amount of money awarded to each, was arbitrary and capricious, appellant also maintains that the Commission violated the Open Public Meetings Act (OPMA or the Act), N.J.S.A. 10:4-6 to -21. We agree with appellant's claim that the Commission's perfunctory discussion of the 2005 and 2006 distribution was not sufficient to cure the 2006 OPMA violation we addressed in In re Casino Simulcasting Special Fund, 398 N.J. Super. 7, 17-21 (App. Div. 2008).*fn1 We therefore vacate the 2005 and 2006 awards and remand for a redistribution of those funds in an OPMA-compliant manner.

As to the distribution of the 2007 and 2008 funds, the July 13, 2009 distribution does not suffer from the same history of behind-closed-doors discussion that caused us to invalidate the distribution of funds for 2005 and 2006. We conclude that the Commission's reliance on a lengthy written report for the 2007 and 2008 distributions, a report that was not distributed to the public in advance of the June 17, 2009 voting meeting, does not violate the OPMA merely because the public discussion of that report was scant.

Turning to appellant's substantive challenge to the actual distribution of the 2007 and 2008 Special Funds, we do not agree with its contention that the choice of recipients, or the amount of the awards, was arbitrary or capricious. We therefore affirm the 2007 and 2008 distribution.

I.

The Special Fund was established by the Casino Simulcasting Act (CSA), N.J.S.A. 5:12-191 to -210. A percentage of monies wagered at Atlantic City casinos on "out-of-State" horse races is deposited into the Special Fund. N.J.S.A. 5:12-203 and 5:12-205. The Commission is responsible for annually distributing the Special Fund in accordance with N.J.S.A. 5:12-205. Pursuant to N.J.S.A. 5:12-205(a), (b) and (c), the Commission is required to make non-discretionary distributions, after which the remaining funds must be distributed to eligible racetracks and "horsemen's organizations." N.J.S.A. 5:12-205(d). N.J.S.A. 5:12-205(d) sets forth the criteria for making those distributions:

d. From any amounts remaining after the payments required by subsections a., b. and

c. of this section are made, the New Jersey Racing Commission shall compensate, in such amounts as that commission deems appropriate, the following entities in the following order of priority:

(1) any racetrack in this State which can demonstrate to the satisfaction of that commission that its financial well-being has been negatively affected by casino simulcasting;

(2) any racetrack in this State which that commission finds to be financially distressed;

(3) any horsemen's organization which will use the money to fund a project which that commission determines will be beneficial to the racing industry; and

(4) all racetracks located in this State on an equal basis.

The "racetracks located in this State" are the Atlantic City Race Course (AC Race Course), Freehold Raceway, and two tracks operated by the New Jersey Sports and Exposition Authority (NJSEA), Meadowlands Racetrack and Monmouth Park.

On January 22, 2008, we reversed the Commission's distribution of $1,820,669 from the Special Fund for the year 2005, finding that the Commission 1) held private deliberations in violation of the OPMA, and 2) did not adopt appropriate procedures to distribute the surplus from the Special Fund as required by the Administrative Procedure Act (APA), N.J.S.A. 52:14B-1 to -25. Casino Simulcasting, supra, 398 N.J. Super. at 16-19. After receiving that opinion, the Commission requested a remand of its distribution of the accumulated surplus for 2006, which we granted by order of August 3, 2008.

We now describe the original Commission proceedings to distribute the 2005 Special Fund, which occurred prior to our remand, as the procedures used there have a distinct bearing on our analysis of the 2009 Commission proceedings that are the subject of this appeal. Prior to the public meeting at which the Commission considered distribution of the 2005 Special Fund, the Commission had received distribution requests from New Jersey's four racetracks and from three horsemen's organizations. Id. at 13. After receiving those submissions, the members of the Commission met privately to discuss them prior to the Commission's public meeting. Id. at 16.

When the Commission commenced its public meeting, the chairman immediately announced that a member of the Commission would make a motion. Id. at 14. The motion, which was in written form, was not read. Ibid. Instead, the chairman simply stated the amount of each of the seven shares he proposed, and noted that his reasons for those proposed distributions were stated in the written motion, which would be distributed to the public "at a later date." Id. at 14-15. Appellant's attorney asked the chairman whether he would be permitted to orally present his client's request, at which time the chairman responded that counsel would be permitted to speak only "after the vote [was] taken." Id. at 15.

Without any further discussion or explanation, the Commission voted to distribute the surplus from the Special Fund in the precise amounts set forth in the chairman's written motion. Ibid. After the vote, appellant's attorney stated that the vote just taken violated the provision of the OPMA. Ibid. Disagreeing, the chairman observed that the procedure used by the Commission was identical to the procedures used in prior years and all of the stakeholders were "'aware of' the ground rules." Ibid. He described that process as follows: "[e]veryone submitted their written information that was requested[,] and we reviewed it[,] and we discussed it[,] and we acted upon it[,] and we made a distribution." Ibid. Commenting that the Commission had already voted, the chairman brought the meeting to a close without permitting appellant's attorney to make any remarks. Ibid.

We held that the procedures utilized to distribute the 2005 Special Fund did not comply with the OPMA because the Commission "made its decision based on a discussion that did not take place at a public meeting," and which could not be justified by an exception in N.J.S.A. 10:4-12(b). Id. at 17. We reasoned that as a result of the Commission's private meeting, the Commission's public meeting, at which it voted, violated the public access that the OPMA is designed to achieve. Ibid. In particular, the procedure utilized by the Commission contravened the OPMA because a public body's discussion, and not only its voting and explanation, must be held at a public meeting. Ibid.

Following our remand, and in keeping with our requirement that the Commission adopt rules of practice to distribute the Special Fund, id. at 18-19, the Commission adopted rules for distribution, which are codified at N.J.A.C. 13:70-1.32 to -1.41 and N.J.A.C. 13:71-1.27 to -1.36.*fn2

In November 2008, after adopting the rules, the Commission solicited from the four racetracks, and from three horsemen's organizations, the Thoroughbred Breeders' Association (Breeders' Association), the Standardbred Breeders and Owners Association (SBOA), and appellant, their requests for shares of the surplus from the 2007 Special Fund. The Commission also notified those racetracks and horsemen's organizations of its intent to reconsider distributions for 2005 and 2006 to comply with our decision in Casino Simulcasting, supra. The surplus to be distributed from the Special Fund for the year 2005 was $1,820,669; for 2006, $1,904,927; for 2007, $1,892,946; and for 2008, $1,624,453.

In January 2009, the Commission also accepted proposals from the AC Race Course, the Freehold Raceway and the NJSEA, for shares of the 2007 surplus. AC Race Course requested $1,250,000, citing the negative impact of casino simulcasting and its general financial distress caused by the economy. Freehold Raceway requested $900,000 to defray the cost of major capital improvements and expenses, also citing the negative impact and financial distress provisions of N.J.S.A. 5:12-205(d). NJSEA requested $1,000,000, citing declining revenues from casino simulcasting and the need for financial assistance "to maintain operations, make capital improvements and remain competitive . . . ."

The Commission also received requests from the horsemen's organizations for shares of the 2007 surplus. On January 12, 2009, appellant requested $2,130,902 to defray the cost of winter stabling for owners and trainers, to subsidize awards for restricted New Jersey stakes, and to fund medical and workers' compensation benefits for "backstretch" employees. SBOA requested $400,000 to "supplement [its] Health & Welfare Program" for the employees of Freehold Raceway. The Breeders' Association asked for $975,000 to fund its "incentive awards program."

On March 13, 2009, the Commission solicited requests from the racetracks and horsemen's organizations for shares of the 2008 surplus, which was $1,624,453. AC Race Course requested $1,350,000; Freehold Raceway requested $900,000; and NJSEA requested $1,000,000. On March 25, 2009, appellant requested a total allocation of $2,905,902 for 2007 and 2008, which it stated was "42% of the funds available;"*fn3 the Breeder's Association requested $500,000; and SBOA requested $375,000. The reasons given by the parties to justify the amounts were unchanged from 2007. The parties did not submit proposals for 2005 and 2006, instead relying upon documents already submitted.

On April 29, 2009, the Commission held a public hearing to discuss the allocation of the surplus from the Special Fund for 2005, 2006, 2007 and 2008 pursuant to N.J.S.A. 5:12-205(d). The chairman opened the floor to public comment from the racetracks and horsemen's organizations that had submitted written requests, and all of the racetracks and two of the three horsemen's organizations availed themselves of that opportunity. At the conclusion of their remarks, the chairman closed the record.

After noting that a transcript of that day's proceedings would be sent to each commissioner, the chairman explained that he intended "to craft a proposal on each of the years in question . . . [and] make that available to each of the commissioners." He explained that he was "crafting [his] proposal . . . so that [at the] next meeting [the Commission] could come to a final determination on this issue," and that his written proposal would be a "starting point" for deliberations at the next meeting. One of the commissioners then warned against private discussions. At that point, the chairman moved, and the commissioners voted, to consider the chairman's written proposal, as well as any written proposal from any other commissioner, at the next meeting on June 17, 2009.

At the beginning of the June 17, 2009 Commission meeting, the chairman announced that each of the commissioners had "received a document outlining [his] personal views in terms of . . . distribution of the simulcast money" in advance of the meeting. The chairman stated that he had not discussed the contents of the material with any of his fellow commissioners, and that the proposal contained his "personal views and not the views of the Commission itself." The chairman's proposal was twenty-nine pages in length and was not read into the record. The chairman explained that the proposal would "be made available at a point in the future to any interested party who wants to read the handy craft [sic] that I have done here."

The chairman then proceeded to read his recommended allocations for 2005, noting that his recommended allocation was intended to be identical to the distribution made by the Commission in 2006 prior to our decision in Casino Simulcasting. He then invited discussion of his written recommendations by the other commissioners; however, before that discussion began, appellant's attorney interjected, asking if he would be permitted to question the amount of the intended allocation to his client.

The Executive Director responded by stating that the record had been closed at the conclusion of the last meeting, but he permitted appellant's attorney to state the question. The chairman answered counsel's question by explaining that the distribution to appellant was intended to be the same as before the remand. After a brief comment by one commissioner to the effect that he had thoroughly studied the record of the Commission's last meeting six weeks earlier, and intended to vote in favor of the chairman's written recommendations, the vote began. There was no further discussion. The Commission voted to adopt the chairman's proposal for distributing the 2005 surplus, which was the same allocation that was made prior to our remand.

Next, the chairman read his recommended allocations for 2006 and moved for discussion. After a brief comment by one of the commissioners, the Commission voted and approved the chairman's recommendation for allocating the 2006 surplus, which, like the 2005 surplus, was in the same amounts as prior to our remand.

Immediately thereafter, the chairman read his recommended allocations for 2007 and moved for discussion. Three commissioners commented on the proposed allocation, as did the chairman. Appellant's attorney inquired whether the Commission would allow discussion "by the public or the groups or the commissioners." The Commission denied further public comment, with one commissioner stating that the record was closed. The Commission approved the chairman's proposal for allocating the 2007 surplus, with one commissioner dissenting.

Last, the chairman read his recommended allocations for 2008 and moved for discussion. Two commissioners commented on the proposal. Appellant's attorney interjected with a statement: "I ask the record reflect that I asked to [make] . . . comments today, but I was foreclosed. I assume I am going to be foreclosed again." A commissioner responded that appellant's attorney was "correct" because the "record was closed at the last meeting." The Commission then voted to approve the chairman's proposal for allocating the 2008 surplus. The chairman concluded the hearing by stating that when his proposal was "finalized and viable, it will be available to interested parties." By final order of July 13, 2009, the Commission memorialized the 2005 through 2008 distributions that had been approved at the June 17, 2009 meeting.*fn4

On appeal, appellant argues: 1) the Commission's July 13, 2009 final decision is fatally flawed and must be vacated, because it failed to comply with the requirements of the OPMA; 2) the distribution to the AC Racetrack should be voided because it was not eligible to receive any distribution for the four years in question; 3) the horsemen's organizations demonstrated that they were "financially distressed" within the meaning of N.J.S.A. 5:12-205(d)(1) and therefore should have been awarded a portion of the funds that went to the four racetracks; and 4) the awards to the racetracks should be vacated because any financial distress they have experienced is the result of "other trends in the industry" and "the failing economy of the State of New Jersey" having nothing to do with the impact of casino simulcasting.

The Commission, in turn, urges us to affirm the order under review, arguing that its allocation of the Special Fund for 2005 through 2008 was consistent with the applicable statutory scheme and satisfied all requirements of the OPMA. The AC Race Course likewise urges us to uphold the Commission's July 13, 2009 order, arguing that appellant "merely is disgruntled because its organization did not receive as much of the Special Fund as it had hoped to receive," when in fact "[a]pellant could have received nothing under the applicable statute."

II.

In point one, appellant argues that the Commission violated the OPMA at its June 17, 2009 meeting by 1) barring public comment, and 2) not deliberating in public and not disclosing the chairman's written proposal.

The OPMA provides the public with "the right . . . to be present at all meetings of public bodies, and to witness in full detail all phases of the deliberation, policy formulation, and decision making of public bodies . . . ." N.J.S.A. 10:4-7. However, absent exceptions not relevant here, the Act does not provide the public with a right to comment at the meetings of public bodies. N.J.S.A. 10:4-12(a).*fn5 Thus, a public body such as the Commission has discretion under the OPMA "to permit, prohibit or regulate the active participation of the public at any meetings . . . ." N.J.S.A. 10:4-12 (emphasis added).

Here, the Commission prevented appellant's attorney from making comments at its June 17, 2009 meeting because the record had already been closed at the April 29 meeting, and because the June 17 meeting was dedicated solely to the deliberation and voting phases of the Commission's decision-making process. Because the OPMA authorizes the Commission to regulate, or indeed prohibit, public comment, ibid., the Commission did not violate the OPMA when it chose to preclude public comment at its June 17, 2009 meeting, especially since that meeting was intended as a voting session. We therefore reject appellant's contention that the Commission abused the discretion afforded it by N.J.S.A. 10:4-12(a) when it chose to bar public comment.

We turn to appellant's further argument in point one, that the Commission violated the Act by not deliberating in public and not disclosing the chairman's proposal. As we have already noted, the Act provides the public with the right "to witness in full detail all phases of the deliberation, policy formulation, and decision making of public bodies . . . ." N.J.S.A. 10:4-7. Nonetheless, despite that statutory guarantee, the Act is silent on the extent to which a public body must deliberate.

On the question of whether the Commission must deliberate in detail before voting, different considerations inform our analysis of the 2005 and 2006 allocations of the Special Fund than our analysis of the 2007 and 2008 allocation. That difference is attributable to the special requirements we imposed on the remand proceedings, which affect the 2005 and 2006 distribution of the Special Fund, but not the 2007 and 2008 distributions. In particular, because of the OPMA violation involving the private meeting the Commission held to discuss the 2005 Special Fund, our remand in Casino Simulcasting required the Commission to reconsider its distributions for 2005 de novo at a public meeting held in conformity with the OPMA. Casino Simulcasting, supra, 398 N.J. Super. at 17-18. This requirement also applied to the distribution of the 2006 Special Fund, after it too was remanded. Thus, the 2005 and 2006 allocations had to be made after curing the past violation. We turn to an analysis of whether the Commission's June 17, 2009 distributions satisfied the de novo standard we imposed.

A public vote, without deliberation, does not cure a past violation of the OPMA. S. Harrison, Twp. Comm. v. Bd. of Chosen Freeholders, 210 N.J. Super. 370, 378-79 (App. Div.) (citing Polillo v. Deane, 74 N.J. 562, 578 (1977)), certif. denied, 105 N.J. 566 (1986). This rule has been applied in those cases in which the public body's decision was public but its discussions leading to the decision were held in private. See ibid. (rejecting claim that a public vote could cure a prior violation); Casino Simulcasting, supra, 398 N.J. Super. at 17 (public vote, without deliberation, could not cure the Commission's prior violation).

Turning to the question of whether the Commission's June 17, 2009 hearing satisfied the de novo standard we imposed, we note that at that meeting, one commissioner commented on the proposal, stating that "nothing [] has been submitted by any of the parties and discussed either in writing or orally at the last meeting [to] give[] me any pause but to conclude that the Racing Commission's decision for 2005 was the right decision." The Commission then approved the proposal without further discussion.

For allocations for the 2006 Special Fund, two commissioners commented on the proposal during the June 17 meeting. One commissioner supported the proposal because "the racetracks need [the money] most," while a second stated that "the decision reached in 2006 was the right decision and the distribution should, in fact, go forward in accordance with what we ruled in 2006 . . . ." The Commission voted to adopt the proposal without further discussion or explanation.

As the scant discussion during the June 17, 2009 meeting makes clear, the Commission did not discuss any facts relevant to the distributions, did not discuss reasons to support the distributions, and voted to adopt them in reliance on the unread motion, after the chairman disclosed only the amounts of the allocations that he proposed. This procedure was not enough to cure the past violation we considered in Casino Simulcasting. Consequently, we conclude that the perfunctory discussion of the distribution of the 2005 and 2006 Special Fund during the June 17, 2009 meeting fell far short of the de novo deliberations that we required in Casino Simulcasting, supra, 398 N.J. Super. at 17. What occurred during the June 17 meeting was nothing more than a public vote, without deliberation, which is insufficient to cure a past OPMA violation. S. Harrison, supra, 210 N.J. Super. at 378-79. The commissioners did nothing other than reiterate their earlier conclusion from before the remand, essentially incorporating it by reference. This was plainly insufficient. We are therefore constrained to void the Commission's action for 2005 and 2006, and remand to the Commission yet again. The deliberations on remand must include a public discussion that considers, and applies, the statutory criteria contained in N.J.S.A. 5:12-205(d)(3).

We turn now to the Commission's discussion during its June 17, 2009 meeting of the distribution of the 2007 and 2008 Special Fund. For the allocations for those two years, the Commission discussed the racetracks' operating losses and the abbreviated racing schedule at the AC Race Course, consisting of only four racing days, which, according to the commissioners, justified giving that track less money. At one point, one of the commissioners appeared to conclude that appellant's proposed program for winter stabling was beneficial to the racing industry, but the Commission's final order rejects the stabling program as discriminatory. The Commission did not discuss the extent of its intended distributions to the horsemen's organizations, nor did it analyze any of the criteria in N.J.S.A. 5:12-205(d)(3). The Commission then voted to adopt the chairman's proposals for 2007 and 2008. The final order contains detailed explanations in support of the Commission's findings. These explanations were not mentioned, much less discussed, by the commissioners at the June 17 public meeting. These explanations appear to be verbatim quotations from the chairman's written proposal.

Our research does not disclose any reported decision in which a court invalidated action of a public body because it did not discuss all of the findings contained in its final order. Further, there is no provision in the OPMA mandating that the members of a public body verbally discuss all of the facts on which the ultimate vote is based. We recognize that the commissioners' reliance on a written document that was not released to the public in advance of the public meeting made it virtually impossible for the public to understand the reasons underlying the members' votes at the June 17 meeting. We also recognize, as we have already noted, that the OPMA entitles the public to "witness in full detail all phases of the deliberation, policy formulation, and decision making of public bodies[.]" N.J.S.A. 10:4-7. Nonetheless, in the absence of any explicit requirement in the Act, we are unwilling to conclude that the commissioners' approval of a private document, not released to the public, violates the Act merely because the discussion of the document was perfunctory. "[I]nvalidation of public action is an extreme remedy which should be reserved" for the most blatant violations of the OPMA. Liebeskind v. Mayor and Mun. Council of Bayonne, 265 N.J. Super. 389, 394 (App. Div. 1993).

Although in Casino Simulcasting, supra, 398 N.J. Super. at 17, we disapproved of the Commission voting at a public meeting and later explaining the result, we did so in the context of the Commission's failure to cure a past violation of the OPMA after it held a private discussion. Here, there is no evidence that the Commission engaged in secret meetings in the weeks preceding its discussion of the 2007 and 2008 distributions at the June 17, 2009 meeting.

We do, however, encourage the Commission in the future to discuss, at least to some extent, how the criteria of N.J.S.A. 5:12-205(d) apply to the distribution requests it has received. See Donato v. Gibson, 178 N.J. Super. 163, 170 (App. Div. 1981) (finding no violation of the OPMA but expressing disapproval of the procedure used by the municipality in giving the public notice).

Thus, to summarize, we void the distribution of the 2005 and 2006 Special Fund in light of the Commission's failure to properly cure the OPMA violation discussed in Casino Simulcasting, supra. In contrast, we reject appellant's argument of an OPMA violation concerning the distribution of the 2007 and 2008 Special Fund. We therefore turn to appellant's substantive attack on the 2007 and 2008 allocations of the Special Fund.

III.

In points, two, three and four, appellant maintains that the racetracks in general, and the AC Race Course in particular, received excessive distributions that shortchanged the horsemen's organizations, which had far greater financial needs. We turn first to appellant's claim that the Commission erred in distributing surplus to the AC Race Course because the AC Race Course did not "race the required amount of days to be eligible." In 2005 through 2008, the AC Race Course only raced four days per year.

A racetrack is automatically eligible to receive a share of the surplus from the Special Fund under N.J.S.A. 5:12-205(d)(4). If a balance remains after the Commission makes allocations under N.J.S.A. 5:12-205(a), (b), (c) and (d)(3), it must be allocated to "all racetracks located in this State on an equal basis." N.J.S.A. 5:12-205(d). Nothing in N.J.S.A. 5:12-205 conditions a racetrack's eligibility to share in the surplus from the Special Fund on the number of races that it schedules or conducts.

Appellant does not cite any provision in the relevant statutes to support its argument, and does not offer a legal argument for this court to consider. However, appellant's attorney argued at the April 29, 2009 hearing that because a racetrack must conduct five racing days in any given year before it is eligible to simulcast races under N.J.S.A. 5:12-195, the racetrack is not eligible for surplus unless it conducts those five races. We disagree. The minimum race requirement in N.J.S.A. 5:12-195 does not control whether a racetrack obtains money from the Special Fund. N.J.S.A. 5:12-205(d), which governs the allocation of the Special Fund, contains no requirement that a racetrack must be eligible to simulcast before it may share in the Special Fund. Rather, "any racetrack" is eligible to receive surplus from the Special Fund. See N.J.S.A. 5:12-205(d).

Here, AC Race Course is "any racetrack"; thus, whether the Commission could approve it to simulcast races does not preclude it from receiving funds under N.J.S.A. 5:12-205(d). However, AC Race Course is not entitled to an equal share. The Commission found that "[r]acetracks who offer meaningful and viable live racing" are "harmed more by the negative impacts of casino simulcasting." The Commission gave the AC Race Course a smaller share for racing four days, while allocating a greater share to racetracks "whose management strive to offer meaningful live racing . . . ." This finding warrants deference. See Matturri v. Bd. of Trs., Judicial Ret. Sys., 173 N.J. 368, 381 (2002) (an agency's reasonable interpretations of a statute it is charged with enforcing are given substantial deference). We therefore reject appellant's claim that the Commission erred by making an allocation to the AC Race Course.

IV.

Next, appellant contends that the racetracks are not negatively impacted by simulcasting, and are therefore ineligible under the statute to obtain priority over the horsemen's organizations or to receive a greater share of the Special Fund's surplus.

Appellant argues that racetracks in New Jersey are not affected by simulcasting, but rather are affected by various factors that have arisen since the enactment of the Casino Simulcasting Act. The argument is therefore a challenge to the Legislature's findings underlying the Casino Simulcasting Act, which is not an argument we are inclined to entertain. See Roman Check Cashing, Inc. v. N.J. Dep't of Banking & Ins., 169 N.J. 105, 110-11 (2001) (observing that a legislative enactment is presumed valid absent evidence that it was arbitrary, capricious or unreasonable, and a court will not "second-guess the Legislature").

Further, even if a racetrack were to be ineligible under N.J.S.A. 5:12-205(d)(1), a racetrack is still eligible for funding under N.J.S.A. 5:12-205(d)(2) if it is "financially distressed." The "financially distressed" clause of the statute does not require a distressed racetrack to show that simulcasting is the cause of any such financial problem. See N.J.S.A. 5:12-205(d)(2) (a racetrack is entitled to priority if the Commission "finds [it] to be financially distressed"). Here, the Commission found that the four racetracks were financially distressed in 2007 and 2008, which appellant does not dispute. We therefore reject appellant's argument that the racetracks suffered financial distress from causes other than simulcasting, and were therefore not entitled to a distribution from the Special Fund.

V.

Last, appellant contends that the Commission improperly allocated the surplus from the Special Fund because its findings were unsupported by the record. Appellate review of agency determinations is limited. Aqua Beach Condo. Ass'n v. Dep't of Cmty. Affairs, 186 N.J. 5, 15 (2006). An agency's determination will be upheld unless it was "arbitrary, capricious or unreasonable, or that it lacked fair support in the evidence . . . ." Id. at 16. Nevertheless, in reviewing agency action, an appellate court is "'in no way bound by the agency's interpretation of a statute or its determination of a strictly legal issue.'" In re Carter, 191 N.J. 474, 483 (2007) (quoting Mayflower Sec. Co. v. Bureau of Sec., 64 N.J. 85, 93 (1973)). However, if the agency's decision is supported by the evidence, a court may not disturb the agency's findings and substitute its own judgment for that of the agency, even if the court might have reached a different result. Ibid.

Here, the racetracks and horsemen's organizations submitted proposals to receive a share of the surplus from the Special Fund. The applications submitted by the racetracks detailed the extent of their financial distress caused by casino simulcasting and other factors. The Commission considered the growing "tentacles" of Atlantic City casinos that affected all racetracks throughout the State. This, in the Commission's judgment, justified allocating shares of the Special Fund's surplus to all the racetracks under N.J.S.A. 5:12-205(d)(1), as opposed to only the racetracks in proximity to Atlantic City. The Commission supported this conclusion with statistics from each of the years under review showing that total racetrack wagers and attendance declined as Atlantic City's tourism industry improved. The Commission acknowledged that it did not have "direct attendance figures for casino simulcast parlors," but noted that simulcasting win totals at Atlantic City casinos exceeded the total spent on all racetrack wagers. The Commission also properly found that the AC Race Course was not entitled to an equal share of the surplus due to its abbreviated race schedule, which did not advance the interests of the industry.

Further, the Commission did not indiscriminately award surplus to the racetracks under the "financial distress" prong of N.J.S.A. 5:12-205(d)(2). For 2007 and 2008, the evidence of declining revenues due to the "prevailing economy" was sufficient to enable the Commission to find that the racetracks were "financially distressed." Again, the Commission did not award as much of the surplus to the AC Race Course because the track did not establish that it was as distressed as the other racetracks in light of "the financial benefits it achieves through its reduced race offering."

The Commission also considered appellant's proposals. The Commission concluded that appellant's proposal to reimburse trainers and owners who do not win horse races was "wholly insufficient" because "[r]acing is a competitive sport." It also found that appellant's proposal to fund a winter stabling program was discriminatory, because that cost should be borne by the owners as a "cost[] associated with the decision to own a racehorse." The Commission concluded that only one of appellant's proposals would be beneficial to the racing industry, namely, its direct benefits and welfare program.

Therefore, the Commission distributed a share of the surplus from the Special Fund to appellant to support this program.

Having considered all of appellant's contentions in light of the record and applicable law, we are satisfied that the distributions for 2007 and 2008 were neither arbitrary nor capricious. We reject appellant's claims to the contrary.

VI.

Affirmed in part. Reversed and remanded in part.


Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.