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Cherry Hill Towne Center Partners, LLC v. GS Park Racing, L.P.

United States District Court, D. New Jersey, Camden Vicinage

September 4, 2019


         [Docket No. 17]

          BROWN & CONNERY, LLP William M. Tambussi, Esq. Mark P. Asselta, Esq. Andrew S. Brown, Esq. Counsel for Plaintiff.

          BALLARD SPAHR LLP Roberto A. Rivera-Soto, Esq. Counsel for Defendants.



         Plaintiff, Cherry Hill Towne Center Partners, LLC (“Cherry Hill Towne Center”) would like to open and operate a sports wagering facility on its property in New Jersey. Problematic for Plaintiff is the fact that its property is subject to a Declaration of Restrictive Covenants (“Restrictive Covenant”) that runs to the exclusive benefit of Defendant GS Park Racing, L.P. (“GSPR”).[1] The Restrictive Covenant provides, “Horse racing, simulcasting, off-track betting, wagering activities and gambling and gaming of any sort (collectively, ‘Gaming9;) anywhere on the GSP Property at any time by any party other than GSPR and its successors and assignees is hereby prohibited (‘Covenant9;).” (Rivera-Soto Cert. Ex. C).

         In this action, Cherry Hill Towne Center seeks a declaration that the Restrictive Covenant is unenforceable, and asks this Court to permanently enjoin GSPR from enforcing the restriction. GSPR has responded by filing a Motion for Preliminary Injunction asking this Court to enjoin Cherry Hill Towne Center “from and against opening and operating a sports wagering lounge or engaging in the business of sports wagering at or within the GSP Property.” [Proposed Preliminary Injunction Order, Dkt. No. 17-9].

         For the reasons stated herein, the Court holds that GSPR will likely prevail on its position that the Restrictive Covenant is enforceable. The Court will, however, deny the Motion for Preliminary Injunctive Relief because GSPR has not established that, absent provisional injunctive relief, immediate irreparable harm will result before this Court can render a final judgment on the merits.

         I. BACKGROUND

         On June 11, 2018');">18');">18');">18');">18');">18');">18');">18 the New Jersey Sports Wagering Act of 2018');">18');">18');">18');">18');">18');">18');">18, N.J.S.A. 5:12A-10 to -19, became effective. Importantly for the instant case, the law does not allow sports wagering to take place just anywhere in the state. Rather, the law allows sports wagering to occur only at “casinos” and “racetracks” that have obtained a sports wagering license. N.J.S.A. 5:12A-11. Cherry Hill Towne Center owns the property that was formerly Garden State Park (“the GSP Property”), where horse racing took place until 2001. (Rivera-Soto Cert. ¶ 10) Because the Sports Wagering Act9;s definition of “racetrack” “includes any former racetrack, ” N.J.S.A. 5:12A-10, Cherry Hill Towne Center is eligible to apply for a sports wagering license.

         Just 11 days after the Sports Wagering Act went into effect, on June 22, 2018');">18');">18');">18');">18');">18');">18');">18, GSPR9;s attorney sent Cherry Hill Towne Center a letter, via certified mail, concerning the Restrictive Covenant. (Rivera-Soto Cert. Ex. E) The letter stated in relevant part,

GSPR is the beneficiary under that certain Declaration of Restrictive Covenants dated January 28, 1999. . . . You are an owner of property subject to the Restrictive Covenants.
For ease of reference, a copy of the Restrictive Covenants is enclosed. . . .
In light of the recent enactment of sports wagering legislation which applies to certain former racetracks in New Jersey, and because you are the owner of record of part of the [Garden State Park] Property, and therefore, are subject to the restrictions set forth in the Restrictive Covenants, we wanted to bring this matter to your attention and inform you that GSPR attaches significant importance and value to the rights it holds under the Restrictive Covenants. Anticipating that you would be interested in discussing this matter with our client, our client will be happy to arrange a meeting at your and our clients9; mutual convenience.


         If Cherry Hill Towne Center responded to GSPR, the response is not in the record before this Court. It would appear that, rather than accepting GSPR9;s invitation to “discuss [the] matter, ” Cherry Hill Towne Center raced to the courthouse and, on June 31, 2018');">18');">18');">18');">18');">18');">18');">18, filed this suit. The “Complaint for Declaratory Judgment and Injunctive Relief” asserts two counts: (1) “declaratory judgment invalidating the entirety of the Declaration of Restrictive Covenants and for injunctive relief”; and (2) “declaratory judgment providing that the Declaration of Restrictive Covenants does not prohibit sports wagering and for injunctive relief.” The complaint was filed in the Superior Court of New Jersey, Chancery Division. GSPR timely removed on the basis of diversity of citizenship.[2] Thereafter, the parties participated in private mediation, but they were unable to resolve their disputes.

         GSPR filed the instant Motion for Preliminary Injunction in mid-December 2019. After briefing was complete, the Court issued a letter order directing the parties to submit supplemental briefs addressing, among other things, the issue of Article III ripeness.[3] Supplemental briefing was recently completed. The parties9; supplemental briefs state that Cherry Hill Towne Center has not applied for a sports wagering license, however, Cherry Hill Towne Center maintains that it “intends to do so as soon as possible.” [Supplemental Brief, Dkt. No. 26, p. 1');">p. 1].


         To obtain a preliminary injunction, the moving party must show: (1) a likelihood of success on the merits, (2) a likelihood that the moving party will suffer irreparable harm, (3) that the balance of equities weighs in the moving party9;s favor, and (4) that injunctive relief is in the public interest. Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). If the moving party has established the first two “most critical” factors, Nken v. Holder, 18');">18');">18');">18');">18');">18');">18');">18');">556 U.S. 418');">18');">18');">18');">18');">18');">18');">18, 434 (2009), the court then performs a “balancing of the factors, ” Reilly v. City of Harrisburg, 858 F.3d 173, 18');">18');">18');">18');">18');">18');">18');">180 n.5 (3d Cir. 2017), to determine whether the prongs, “taken together, balance in favor of granting the requested preliminary relief, ” id. at 179.

         “The court may issue a preliminary injunction only on notice to the adverse party.” Fed.R.Civ.P. 65(a)(1).

         III. ANALYSIS

         A. Ripeness

         As very recently explained by the Third Circuit,

Ripeness is a justiciability doctrine that derives from Article III of the United States Constitution. The function of the ripeness doctrine is to determine whether a party has brought an action prematurely. The doctrine counsels that we should abstain until such time as a dispute is sufficiently concrete to satisfy the constitutional and prudential requirements of the doctrine. We have recognized the following considerations that underpin the ripeness doctrine:
[A]re the parties in a sufficiently adversarial posture to be able to present their positions vigorously; are the facts of the case sufficiently developed to provide the court with enough information on which to decide the matter conclusively; and is a party genuinely aggrieved so as to avoid ...

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