The Fourth Appellate District affirmed a judgment. The court held that state law setting aside funding for off-site stabling of horses at race meetings did not confer on a particular stable the right to a share of that off-site stabling business.
In 1990, the California legislature enacted legislation establishing a fund to reimburse race associations for the costs associated with providing off-site “overflow” stabling of horses during race meetings, and setting up an organization to manage that fund. San Luis Rey Racing, Inc. (SLRR), which provided off-site stabling, was one of the beneficiaries of the new laws. By December 2009, though, horse racing revenues had decreased and the fund was operating at a deficit. The fund management organization agreed to stop providing reimbursement for off-site stabling at SLRR and another auxiliary facility, while continuing to provide reimbursements for off-site stabling at Santa Anita and Hollywood Park, both of which conducted their own race meetings and provided off-site stabling for each other during their off seasons. SLRR filed a grievance with the California Horse Racing Board (CHRB). Unable to reach a resolution with either the fund management organization or the CHRB, SLRR filed a complaint and petition for writ of mandamus, asserting claims for unfair competition, interference with contracts, and interference with prospective economic advantage, among others. SLRR alleged that that the fund management organization was illegally using the fund to subsidize Santa Anita and Hollywood Park, making it impossible for SLRR to compete for business.
The trial court sustained defendants’ demurrers to SLRR’s complaint, and later denied SLRR’s writ petition for lack of standing.
The court of appeal affirmed, holding that SLRR did not have a direct interest sufficient to confer standing. SLRR’s stated interest was competitive in nature. It essentially asserted it could not fairly compete for off-site stabling business because the fund management organization was improperly using funds to subsidize the cost of off-site stabling at competing facilities. However, the 1990 legislation was not intended to address competition. Instead, the legislation was created for the specific purpose of reimbursing race associations for additional costs incurred for off-site stabling. When the demand for off-site stabling later decreased, the fund management organization opted to limit reimbursement to facilities other than SLRR’s. Although SLRR may have had a direct interest in competing for off-site stabling business, it had no right to that business. The race associations were free to choose facilities other than SLRR’s.