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In the Matter of

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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION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 ...


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