Brian Green, Jerry Vaughan, Tad Leggett, And Rodger Smith Vs. Racing Association Of Central Iowa ( 2006 )

IN THE SUPREME COURT OF IOWA
No. 11 / 04-0758
Filed May 5, 2006
BRIAN GREEN, JERRY VAUGHAN,
TAD LEGGETT, and RODGER SMITH,
Appellants,
vs.
RACING ASSOCIATION OF CENTRAL
IOWA, d/b/a PRAIRIE MEADOWS
RACETRACK & CASINO,
Appellee.
________________________________________________________________________
Appeal from the Iowa District Court for Polk County, Carla T.
Schemmel, Judge.
Appeal from a district court judgment granting summary judgment
to defendant on due-process and tortious-interference-with-contract
claims. AFFIRMED.
Rick L. Olson, Des Moines, for appellants.
Thomas W. Foley and Debra L. Hulett of Nyemaster, Goode, West,
Hansell & O’Brien, P.C., Des Moines, for appellee.
2
CADY, Justice.
Four jockeys sued the Racing Association of Central Iowa, d/b/a
Prairie Meadows (hereinafter RACI), alleging a violation of their due
process rights and interference with their existing and prospective
contracts when RACI excluded the jockeys from Prairie Meadows
Racetrack & Casino. The district court granted RACI’s motion for
summary judgment, finding RACI was not a state actor, and that the
jockeys’ claim of tortious interference was insufficient as a matter of law.
We affirm.
I. Background Facts and Proceedings
This case arose from allegations by a RACI employee, Ray
Famous, 1 that four jockeys, Brian Green, Jerry Vaughn, Tad Leggett, and
Rodger Smith, racially harassed him on August 6, 2002 at Prairie
Meadows. The exact nature of the allegations does not affect this appeal,
but they involved extremely offensive and threatening conduct. After
Famous reported the incident to RACI human resources personnel, RACI
notified the jockeys that they were “denied entrance and access to the
facility of Prairie Meadows pending the outcome of a stewards hearing on
the incident.” 2 Furthermore, they were informed if they attempted to
enter Prairie Meadows, they would be deemed trespassers and would be
subject to arrest or citation. The Board of Stewards conducted an
1Famous was the jockey room custodian, a racing official under Iowa
Administrative Code rule 491—10.4(11) (2001).
2Stewards are “racing official[s] appointed or approved by the [Racing and
Gaming C]ommission to perform the supervisory and regulatory duties relating to pari-
mutuel racing.” Iowa Admin. Code r. 491—4.2(17A). The stewards are responsible for
“monitor[ing], supervis[ing], and regulat[ing] the activities of occupational and pari-
mutuel racetrack licensees,” including investigating possible violations of racing and
gaming rules by licensees. Id. r. 491—4.6(2). The jockeys are licensees. See id. r.
491—6.2(1) (“All persons participating in any capacity at a racing or gaming facility,
with the exception of certified law enforcement officers while they are working for the
facility as uniformed officers, are required to be properly licensed by the commission.”).
3
investigation into the claim of misconduct. It interviewed Famous, the
jockeys, and other witnesses. On August 19, the Board concluded “the
investigation did not reveal evidence of a rule violation committed by an
IRGC licensee.” Immediately following the Board decision, RACI gave the
jockeys notice that they were denied entrance or access to Prairie
Meadows “pending an independent investigation by Prairie Meadows of
alleged harassment.”
RACI completed its investigation of the alleged incident on August
20. RACI concluded Jerry Vaughn would be allowed to re-enter Prairie
Meadows with no further action taken. It decided Tad Leggett could re-
enter if he apologized to Famous. However, Rodger Smith was banned
from Prairie Meadows for the remainder of the season and could not
return for the 2003 season unless he completed a diversity class. RACI
permanently banned Brian Green from Prairie Meadows. The different
actions were taken based on the different roles of the jockeys in the
incident as determined by the investigation.
The jockeys filed a petition against RACI asserting a claim of
intentional interference with contractual relations. On August 30, 2002,
they amended their petition to add a claim that RACI violated their due
process rights under the Iowa and United States Constitutions. 3
3Presumably, the action was meant to be brought under 42 U.S.C. § 1983,
although the amended petition did not refer to that statute. See 42 U.S.C. § 1983
(2004) (“Every person who, under color of any statute, ordinance, regulation, custom, or
usage, of any State . . . subjects . . . any citizen of the United States . . . to the
deprivation of any rights, privileges, or immunities secured by the Constitution and
laws, shall be liable to the party injured in an action at law, suit in equity, or other
proper proceeding for redress . . . .”).
A plaintiff in a § 1983 action must establish (1) that the
defendants deprived the plaintiff of a right secured by the Constitution
and laws of the United States, (2) that the defendant acted under color of
state law, (3) that the conduct was a proximate cause of the plaintiff’s
damage, and (4) the amount of damages.
4
Following a hearing, the district court issued a temporary injunction on
September 30, enjoining RACI from excluding Green and Smith from
Prairie Meadows. RACI then moved for summary judgment. On April 7,
2004, the district court granted summary judgment in favor of RACI and
dissolved the temporary injunction. The jockeys appeal.
II. Standard of Review
We have previously defined our standard of review from orders
granting summary judgment. Our review is for correction of errors at
law. Otterberg v. Farm Bureau Mut. Ins. Co., 696 N.W.2d 24, 27 (Iowa
2005). In reviewing the record, we are mindful that
[a] motion for summary judgment should only be granted if,
viewing the evidence in the light most favorable to the
nonmoving party, “the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to a
judgment as a matter of law.”
Id. (citations omitted).
III. Due Process
The jockeys claim RACI deprived them of procedural due process
when it excluded them from Prairie Meadows without prior notice and a
hearing. They claim this action violated their rights under the
Fourteenth Amendment to the United States Constitution and article I,
sections 1 and 9 of the Iowa Constitution. Both constitutions prohibit
the State from depriving a person of “property, without due process of
law.” U.S. Const. amend. XIV, § 1; Iowa Const. art. I, § 9. Yet, the
provisions only limit state action. Jensen v. Schreck, 275 N.W.2d 374,
________________________
Dickerson v. Mertz, 547 N.W.2d 208, 214 (Iowa 1996) (citations omitted).
5
384 (Iowa 1979). They do not refer to individual activity. Id. Thus, RACI
can only be liable under a due process claim if it was a state actor. 4
It is undisputed that RACI is a private, nonprofit corporation,
licensed to do business in Iowa and licensed by the Iowa Racing and
Gaming Commission to conduct racing and gaming activities at Prairie
Meadows Racetrack & Casino in Altoona, Iowa. Nevertheless, “ ‘when it
can be said that the State is responsible for the specific conduct of which
the plaintiff complains,’ ” conduct of a private actor may be deemed state
action and subjected to constitutional standards. Brentwood Acad. v.
Tenn. Secondary Sch. Athletic Ass’n, 531 U.S. 288, 295, 121 S. Ct. 924,
930, 148 L. Ed. 2d 807, 816-17 (2001) (quoting Blum v. Yaretsky, 457
U.S. 991, 1004, 102 S. Ct. 2777, 2786, 73 L. Ed. 2d 534, 546 (1982)).
If the Fourteenth Amendment is not to be displaced, . . . its
ambit cannot be a simple line between States and people
operating outside formally governmental organizations, and
the deed of an ostensibly private organization or individual is
to be treated sometimes as if a State had caused it to be
performed. Thus, we say that state action may be found if,
though only if, there is such a “close nexus between the
State and the challenged action” that seemingly private
behavior “may be fairly treated as that of the State itself.”
Id. (quoting Jackson v. Metro. Edison Co., 419 U.S. 345, 351, 95 S. Ct.
449, 453, 42 L. Ed. 2d 477, 484 (1974)); accord Principal Cas. Ins. Co. v.
4The Supreme Court has repeatedly stated:
“In cases under § 1983, ‘under color’ of law has consistently been
treated as the same thing as the ‘state action’ required under the
Fourteenth Amendment.” The ultimate issue in determining whether a
person is subject to suit under § 1983 is the same question posed in
cases arising under the Fourteenth Amendment: is the alleged
infringement of federal rights “fairly attributable to the State?”
Rendell-Baker v. Kohn, 457 U.S. 830, 838, 102 S. Ct. 2764, 2769-70, 73 L. Ed. 2d 418,
426 (1982) (citations omitted); accord Lugar v. Edmondson Oil Co., 457 U.S. 922, 929,
102 S. Ct. 2744, 2749, 73 L. Ed. 2d 482, 490 (1982) (“[I]n a § 1983 action brought
against a state official, the statutory requirement of action ‘under color of state law’ and
the ‘state action’ requirement of the Fourteenth Amendment are identical.”).
6
Blair, 500 N.W.2d 67, 70 (Iowa 1993) (“Our inquiry must be whether
there is a sufficiently close nexus between the state and the challenged
action of the regulated entity so that the action of the latter may be fairly
treated as the action of the state.” (citing Jackson, 419 U.S. at 358, 95
S. Ct. at 457, 42 L. Ed. 2d at 488)).
The Supreme Court has held that a sufficiently close nexus
between the State and the challenged conduct to establish state action
exists when the State and a private corporation are joint participants in
the challenged activity based on their interdependence. Burton v.
Wilmington Parking Auth., 365 U.S. 715, 81 S. Ct. 856, 6 L. Ed. 2d 45
(1961). In Burton v. Wilmington Parking Authority, an African-American
man claimed his rights under the Fourteenth Amendment were violated
when a coffee shop in a city parking garage denied him service. Id. at
720, 81 S. Ct. at 859, 6 L. Ed. 2d at 49. The Wilmington Parking
Authority, an agency of the State of Delaware, leased space in one of its
parking garages to the business, a private corporation called Eagle Coffee
Shoppe, Inc. Id. at 716, 81 S. Ct. at 857, 6 L. Ed. 2d at 47. The
Authority provided gas and heat to Eagle and provided various repairs.
Id. at 719-20, 81 S. Ct. at 858, 6 L. Ed. 2d at 49. In addition,
improvements Eagle made to the premises were tax-exempt. Id. The
Authority benefited from the lease arrangement by virtue of the $28,700
in rent it received annually from Eagle. Id. at 723, 81 S. Ct. at 861, 6
L. Ed. 2d at 51. Without the rent received from commercially leased
portions of the parking buildings, they would have been an
“ ‘unprofitable enterprise.’ ” Id.
The Supreme Court found state action, reasoning,
The State has so far insinuated itself into a position of
interdependence with Eagle that it must be recognized as a
joint participant in the challenged activity, which, on that
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account, cannot be considered to have been so “purely
private” as to fall without the scope of the Fourteenth
Amendment.
Id. at 725, 81 S. Ct. at 862, 6 L. Ed. 2d at 52. The Court observed that
“the relationship of the restaurant to the parking facility in which it is
located confers on each an incidental variety of mutual benefits.” Id. at
724, 81 S. Ct. at 861, 6 L. Ed. 2d at 51. In a later case, the Court called
the arrangement between the parking authority and the coffee shop in
Burton a “symbiotic relationship.” Moose Lodge No. 107 v. Irvis, 407 U.S.
163, 175, 92 S. Ct. 1965, 1972, 32 L. Ed. 2d 627, 638 (1972).
It is under this “symbiotic relationship” theory that the jockeys
argue RACI is a state actor to which the Constitution applies. The
jockeys claim RACI has a symbiotic relationship with Polk County
because: (1) Prairie Meadows operates on public property leased from
Polk County; (2) some members of RACI’s board of directors are
“appointed by and are intended to represent the Polk County Board of
Supervisors”; (3) RACI “pays property taxes only by way of agreement
with Polk County”; (4) Polk County receives lease payments in amounts
the jockeys believe are excessive; (5) “The stated primary purpose of the
operation of Prairie Meadows is to stimulate the economy of Polk County
and the surrounding area”; and (6) Polk County depended on RACI “for
revenue to pay off existing bonds that financed the purchase and
building of” Prairie Meadows, which Polk County owns as realty.
RACI submitted several exhibits along with its statement of
undisputed material facts showing the relationship between RACI and
Polk County. Although RACI and Polk County initially functioned under
an operating agreement, it was terminated in 1998 and replaced with a
lease agreement. In the lease agreement, Polk County leased the Prairie
Meadows premises (real estate and improvements) to RACI in exchange
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for $1 million per month in rent for five years. In addition, RACI was to
pay to Polk County the first $15 million of its net receipts generated in
each calendar year from 1998 to 2000, the first $15.5 million of its net
receipts generated in 2001, and the first $16 million of its net receipts
generated in 2002. The lease further provided that Polk County had no
obligation to make repairs or improvements or perform maintenance, and
that RACI was responsible for paying all utilities for Prairie Meadows.
Polk County would pay all real estate taxes, and RACI would pay any and
all personal property taxes and special assessments. Further, the lease
reserved the power for a county representative to enter Prairie Meadows
and have access to RACI’s books and records “in furtherance of [Polk
County’s] responsibility to the public and in protection of its property.”
Finally, the lease stated: “Nothing contained in this Lease shall
constitute or be construed to be or create a partnership or joint venture
between [Polk County], on the one part, and [RACI], on the other part.”
Generally, a lease between a government entity and a private
corporation “is insufficient, standing alone, to show state action.”
Harvey & Corky Corp. v. Erie County, 392 N.Y.S.2d 116, 118 (App. Div.
1977) (citing Golden v. Biscayne Bay Yacht Club, 530 F.2d 16, 33 (5th
Cir. 1976)); see also NBC v. Comm’ns Workers of Am., AFL-CIO, 860 F.2d
1022, 1028 (11th Cir. 1988) (lease did not provide “nexus or joint action
sufficient to constitute state action”); Greco v. Orange Mem’l Hosp. Corp.,
513 F.2d 873, 880 (5th Cir. 1975) (lease insufficient when the private
lessee “is ultimately responsible for the daily maintenance, upkeep, and
operation of the facility,” must “maintain and operate the hospital at its
own expense and to hold the lessor harmless from any liability incurred
in operating the facility,” and must “provide adequate fire, tornado, and
explosion insurance and in the event of any damage to use the proceeds
9
to repair the hospital”). Instead, it is only when there has been
governmental involvement or a mutual conferring of benefits between the
governmental lessor and the private lessee that courts have usually
found state action. See Ludtke v. Kuhn, 461 F. Supp. 86, 93-94 (S.D.N.Y.
1978) (New York Yankees found to be state actors, in equal-protection
action brought by female journalist excluded from Yankee locker-room,
because they leased the stadium from the City of New York, “the annual
rentals to be paid to the City for use of the stadium depend directly on
the drawing power of Yankee games, and the City has in turn invested
substantial sums of public money to enhance that drawing power by
modernizing and improving the stadium itself,” and “[a]dvertising and
massive publicity about the Yankees and individual Yankee ballplayers is
essential to the profitability of the Yankee Stadium”); Niswonger v. Am.
Aviation, Inc., 424 F. Supp. 1080, 1081 (E.D. Tenn. 1976) (private
corporation operating airport in premises leased from city and county
was a state actor because “the operation of airports and air navigation
facilities in Tennessee is declared to be a public purpose,” and the
corporation was performing a public function).
In this case, the only evidence of county involvement in RACI’s
operations was that four of RACI’s thirteen members on the board of
directors were appointed by the Polk County Board of Supervisors.
Other courts have found that the appointment of some of the corporate
board members by a governmental entity does not transform the action
of the corporation into action of the governmental entity. See Kiracofe v.
Reid Mem’l Hosp., 461 N.E.2d 1134, 1138 (Ind. Ct. App. 1984) (no state
action although “the hospital’s Board of Directors consist[ed] of twenty-
one members, four of which are appointed by the Richmond City
Council, the Wayne County Council, the Wayne Township Trustee, and
10
the Wayne County Commissioners”); Renforth v. Fayette Mem’l Hosp.
Ass’n, 383 N.E.2d 368, 374 (Ind. Ct. App. 1978) (no state action when
three of hospital’s board of trustees were appointed by governmental
entities; evidence was they “acted independently and did not report to the
governmental bodies which elected them”); Weston v. Carolina Medicorp,
Inc., 402 S.E.2d 653, 658 (N.C. Ct. App. 1991) (“The appointment right
[of county commissioners] of some but not all of the [hospital’s board of]
trustees, though indicative of state action, does not alone compel the
conclusion that the suspension and revocation of [hospital doctor’s] staff
privileges constituted state action in this case.”); see also Crowder v.
Conlan, 740 F.2d 447, 451 (6th Cir. 1984) (no state action although two
of hospital’s thirteen-member board of trustees were public officials).
However, the Supreme Court has considered it to be a factor in
determining whether the private and public entities are so entwined that
the private entity may be deemed a state actor. See Brentwood Acad.,
531 U.S. at 300, 121 S. Ct. at 932, 148 L. Ed. 2d at 820 (considering fact
that “State Board members are assigned ex officio to serve as members of
the board of control and legislative council”).
With respect to the issue of whether Polk County and RACI
mutually confer benefits on one another, it is obvious that Polk County
benefits financially from the lease agreement with RACI, both directly,
though rent and net-receipts payments, and indirectly, through
stimulation of the local economy. In addition, RACI benefited from the
original arrangement with Polk County in that when the legislature
amended chapter 99F to allow slot machines at racetracks, Polk County
issued more then $26 million in revenue bonds to pay for remodeling of
Prairie Meadows to accommodate slots, acquisition of slot machines, and
other start-up costs.
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However, this mutual benefit does not mean that the state-action
requirement is satisfied. Burton was the high watermark by the Supreme
Court in the state-action arena, considering that the Wilmington Parking
Authority was not directly involved in the Eagle Coffee Shoppe’s decision
to deny service to African-American customers. See Burton, 365 U.S. at
725, 81 S. Ct. at 861, 6 L. Ed. 2d at 52 (“But no State may effectively
abdicate its responsibilities by either ignoring them or by merely failing
to discharge them whatever the motive may be.”). In later cases, the
Court has significantly tempered its Burton holding, repeatedly stating
that “where the impetus for the discrimination is private, the State must
have ‘significantly involved itself with invidious discrimination[]’ in order
for the discriminatory action to fall within the ambit of the constitutional
prohibition.” Moose Lodge No. 107, 407 U.S. at 173, 92 S. Ct. at 1971,
32 L. Ed. 2d at 637 (quoting Reitman v. Mulkey, 387 U.S. 369, 380, 87
S. Ct. 1627, 1634, 18 L. Ed. 2d 830, 838 (1967)); see Brentwood
Acad., 531 U.S. at 295, 121 S. Ct. at 930, 148 L. Ed. 2d at 816-17
(“[C]onstitutional standards are invoked ‘when it can be said that the
State is responsible for the specific conduct of which the plaintiff
complains.’ ” (Citation omitted; second emphasis added.)); Am. Mfrs. Mut.
Ins. Co. v. Sullivan, 526 U.S. 40, 52, 119 S. Ct. 977, 986, 143 L. Ed. 2d
130, 145 (1999) (“Whether such a ‘close nexus’ exists, our cases state,
depends on whether the State ‘has exercised coercive power or has
provided such significant encouragement, either overt or covert, that the
choice must in law be deemed to be that of the State.’ Action taken by
private entities with the mere approval or acquiescence of the State is not
state action.” (Citations omitted.)); Nat’l Collegiate Athletic Ass’n v.
Tarkanian, 488 U.S. 179, 195, 109 S. Ct. 454, 464, 102 L. Ed. 2d 469,
486-87 (1988) (“Neither UNLV’s decision to adopt the NCAA’s standards
12
nor its minor role in their formulation is a sufficient reason for
concluding that the NCAA was acting under color of Nevada law when it
promulgated standards governing athlete recruitment, eligibility, and
academic performance.”); Blum, 457 U.S. at 1004-05, 102 S. Ct. at 2786,
73 L. Ed. 2d at 546-47 (“[A] State normally can be held responsible for a
private decision only when it has exercised coercive power or has
provided such significant encouragement, either overt or covert, that the
choice must in law be deemed to be that of the State. Mere approval of
or acquiescence in the initiatives of a private party is not sufficient to
justify holding the State responsible for those initiatives under the terms
of the Fourteenth Amendment.” (Citations omitted.)); Jackson, 419 U.S.
at 357, 95 S. Ct. at 456-57, 42 L. Ed. 2d at 487 (“Approval by a state
utility commission of such a request from a regulated utility, where the
commission has not put its own weight on the side of the proposed
practice by ordering it, does not transmute a practice initiated by the
utility and approved by the commission into ‘state action.’ ”). The key to
Burton was that Eagle affirmatively contended that to serve African
Americans “would injure its business.” Burton, 365 U.S. at 725, 81
S. Ct. at 861, 6 L. Ed. 2d at 51. The Wilmington Parking Authority
directly profited from Eagle’s discrimination, and those profits were
“indispensable elements in[] the financial success of a governmental
agency.” Id.
In this case, there is no indication Polk County profited at all from
RACI’s exclusion of the jockeys without notice or hearing. Furthermore,
there is no indication Polk County or the county-appointed directors on
the RACI board of directors participated in the decision to exclude the
jockeys from Prairie Meadows. Rather, the undisputed evidence was that
RACI’s director of human resources made the decision to issue the
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trespass notices to the jockeys. This evidence is significant because
there must be some connection between the government and “ ‘the
specific conduct of which the plaintiff complains’ ” for the government to
be held responsible for the private actor’s conduct. Brentwood
Acad., 531 U.S. at 295, 121 S. Ct. at 930, 148 L. Ed. 2d at 816-17
(citation omitted; emphasis added); accord Gilmore v. City of Montgomery,
417 U.S. 556, 573, 94 S. Ct. 2416, 2426, 41 L. Ed. 2d 304, 319 (1974)
(stating the overriding concern is “whether there is significant state
involvement in the private discrimination alleged” (citations omitted)).
Our role in ascertaining this connection has been described as follows:
The judicial obligation is not only to preserve an area of
individual freedom by limiting the reach of federal law and
avoid the imposition of responsibility on a State for conduct
it could not control, but also to assure that constitutional
standards are invoked when it can be said that the State is
responsible for the specific conduct of which the plaintiff
complains.
Brentwood Acad., 531 U.S. at 295, 121 S. Ct. at 930, 148 L. Ed. 2d at
816-17 (citations, quotation marks, and brackets omitted); see also
Putensen v. Hawkeye Bank, 564 N.W.2d 404, 408 (Iowa 1997)
(“Constitutions were not designed to micromanage disputes between
citizens, and, to resolve most lawsuits, citizens must resort to statutes
and the common law. A state due process clause becomes implicated at
the point where the power of the state is called upon by a private party in
such a way as to deprive another of life, liberty or property.”). Here,
there was no evidence that Polk County controlled RACI’s decision to
exclude the jockeys. Moreover, when the connection is based on a
benefit received by the county, it is not enough under Burton and its
progeny to show that Polk County benefited generally from RACI’s
operation of Prairie Meadows. Rather, the jockeys had to show Polk
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County benefited from the constitutional violation alleged. Only then
could we say Polk County was responsible for the violation. There was
simply insufficient involvement with Polk County, as a matter of law, to
fairly attribute RACI’s action to exclude the jockeys from Prairie Meadows
to Polk County. The district court correctly granted summary judgment
in favor of RACI on the jockeys’ constitutional claim.
IV. Intentional Interference with Existing and Prospective
Contractual Relations
The jockeys also claim RACI tortiously interfered with existing and
prospective riding contracts the jockeys had with horse-owners and
trainers. The district court granted summary judgment to RACI on both
claims. On appeal, the jockeys abandoned the claim of prospective
contractual relations, and we consequently only consider the claim of
interference with existing contracts.
The elements of the tort of intentional interference with an existing
contract are:
“ ‘(1) plaintiff had a contract with a third-party; (2) defendant
knew of the contract; (3) defendant intentionally and
improperly interfered with the contract; (4) the interference
caused the third-party not to perform, or made performance
more burdensome or expensive; and (5) damage to the
plaintiff resulted.’ ”
Gibson v. ITT Hartford Ins. Co., 621 N.W.2d 388, 399 (Iowa 2001) (quoting
Jones v. Lake Park Care Ctr., Inc., 569 N.W.2d 369, 377 (Iowa 1997)).
RACI conceded for purposes of summary judgment that the jockeys had
contractual relationships with horse-owners and trainers, and RACI did
not dispute that it knew of the relationships. Rather, RACI claimed it
was entitled to summary judgment because there were no facts
pertaining to the claim to establish the third element: intentional and
improper interference. Thus, the crux of the argument on appeal boils
15
down to whether there are any facts associated with the jockeys’ claim
from which a rational jury could find intentional and improper
interference. Wilson v. Darr, 553 N.W.2d 579, 582 (Iowa 1996) (“[T]he
moving party may establish a right to summary judgment by establishing
the limits of the other part[y’s] proof. If those limits reveal that the
resisting party has no evidence to factually support an outcome
determinative element of that party’s claim, the moving party will prevail
on summary judgment.” (citing Griglione v. Martin, 525 N.W.2d 810, 813-
14 (Iowa 1994))); accord Mason v. Vision Iowa Bd., 700 N.W.2d 349,
353 (Iowa 2005) (stating that to generate a genuine issue of material fact,
the nonmoving party must present some evidence from which a
reasonable fact-finder could find in that party’s favor).
The intent to interfere with a contract does not make the
interference improper. Berger v. Cas’ Feed Store, Inc., 543 N.W.2d 597,
599 (Iowa 1996) (citing Restatement (Second) of Torts § 767 cmt. d
(1979)). The interference must be both intentional and improper. For
purposes of a claim for intentional interference with a contract, the
factors used to help determine if the challenged conduct was improper
include:
1. The nature of the conduct.
2. The Defendant’s motive.
3. The interests of the party with which the conduct
interferes.
4. The interest sought to be advanced by the Defendant.
5. The social interests in protecting the freedom of action of
the Defendant and the contractual interests of the other
party.
6. The nearness or remoteness of the Defendant’s conduct
to the interference.
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7. The relations between the parties.
Revere Transducers, Inc. v. Deere & Co., 595 N.W.2d 751, 767 (Iowa
1999); accord Restatement (Second) of Torts § 767, at 26-27.
In Berger, we quoted from Restatement (Second) of Torts section
767 comment d:
“[I]f there is no desire at all to accomplish the interference
and it is brought about only as a necessary consequence of
the conduct of the actor engaged in for an entirely different
purpose, his knowledge of this makes the interference
intentional, but the factor or motive carries little weight
towards producing any determination that the interference
was improper.”
Berger, 543 N.W.2d at 599 (quoting Restatement (Second) of Contracts
§ 767 cmt. d). Thus, conduct is generally not improper if it was merely a
consequence of actions taken for a purpose other than to interfere with a
contract. See id. (“[A] party does not improperly interfere with another’s
contract by exercising its own legal rights in protection of its own
financial interests.” (citing Wilkin Elevator v. Bennett State Bank, 522
N.W.2d 57, 62 (Iowa 1994))).
In this case, RACI supported its motion for summary judgment
with evidence that the only reason it acted to exclude the jockeys from
the track was to responsibly respond to the allegations that the jockeys
racially harassed the jockey room custodian. It contends this
undisputed fact means that if its conduct did interfere with the jockeys’
riding contracts, the interference was not improper but only a
consequence of actions taken for the purpose of satisfying its obligation
under the law as an employer. See Farmland Foods, Inc. v. Dubuque
Human Rights Comm’n, 672 N.W.2d 733, 744 (Iowa 2003) (noting that
an employer’s failure to take proper remedial action in response to
harassment by a nonsupervisory employee is an essential element of a
17
hostile-work-environment claim under the civil rights acts); see also
Taylor v. Jones, 653 F.2d 1193, 1199 (8th Cir. 1981) (“[E]mployer
toleration of a discriminatory atmosphere alone gives rise to a cause of
action by the [employee].”).
We recognize a legitimate need of an employer to investigate the
allegations of harassment in the workplace and, based upon the results
of an investigation, to take responsible action against employees who
harass other employees. See Taylor, 653 F.2d at 1199; Farmland Foods,
Inc., 672 N.W.2d at 744. Thus, we agree with RACI that if the evidence
in this case only shows it acted for the purpose of satisfying its legal
obligation to protect the interests of employees and to maintain a
hostility-free work environment, then there can be no viable claim for
interference with a contract. The factors used to determine the existence
of improper conduct support this conclusion. See Revere Transducers,
Inc., 595 N.W.2d at 767 (listing factors). If the sole motive is a legitimate
purpose derived from the law, then any interference is not improper as a
matter of law. See Berger, 543 N.W.2d at 599 (“[A] party does not
improperly interfere with another’s contract by exercising its own legal
rights in protection of its own financial interests.” (Citation omitted.)).
See generally Restatement (Second) of Torts § 767 cmt. b, at 28 (“The
rules stated in §§ 768-774 show[] the results of the balancing process in
some specific situations that have been the subject of judicial decision;
but they do not constitute an exhaustive list of situations in which it has
been determined that an intentional interference with contractual
relations is not improper.”).
When a motion for summary judgment is properly supported, the
nonmoving party is required to respond with specific facts that show a
genuine issue for trial. See Hlubeck v. Pelecky, 701 N.W.2d 93, 95-96
18
(Iowa 2005) (“[T]he nonmoving party may not rest upon the mere
allegations of his pleading but must set forth specific facts showing the
existence of a genuine issue for trial.” (citing Iowa R. Civ. P. 1.981(5);
Hoefer v. Wis. Educ. Ass’n Ins. Trust, 740 N.W.2d 336, 338-39 (Iowa
1991))). This means the jockeys in this case were required to set forth
some facts in resisting RACI’s motion for summary judgment that could
support the existence of an improper motive.
The jockeys failed to point to any facts in resisting the motion for
summary judgment to show RACI’s motive was improper. In fact, they
offered no facts bearing on the issue of motive in resisting the summary
judgment motion, but only made conclusory allegations that RACI’s
actions were improper. Moreover, the jockeys did not remedy this
deficiency when they provided the trial judge with a copy of the complete
temporary-injunction record at the summary judgment hearing. Our
rules require a nonmoving party to identify the specific facts that show
the existence of a genuine issue for trial. Iowa R. Civ. P. 1.981(5). When,
as in this case, a party resisting summary judgment seeks to generate a
fact issue on an actor’s motive, that party must identify specific facts
that reveal the alleged underlying motive. See Hoefer, 470 N.W.2d at
338-39 (“While intentional torts . . . are generally poor candidates for
summary judgment because of the subjective nature of motive and intent
the rule is not absolute and, . . . ‘there is no genuine issue of fact if there
is no evidence.’ Put another way, the party resisting summary judgment
‘may not rest upon the mere allegations or denials of his pleading.’ The
resistance must set forth specific facts constituting competent evidence
to support a prima facie claim.” (Citations omitted.)).
Notwithstanding, the jockeys argue that an inference of an
improper motive can be drawn from the undisputed facts offered by RACI
19
in its motion for summary judgment. They claim RACI’s threat to arrest
the jockeys and the severity of the RACI’s responsive action, as well as
RACI’s decision to pursue an independent investigation following the
stewards’ investigation, all support an inference of an improper motive.
We recognize that a nonmoving party is entitled to all reasonable
inferences in a motion for summary judgment. See Perkins v. Wal-Mart
Stores, Inc., 525 N.W.2d 817, 818 (Iowa 1994) (“[S]ummary judgment is
like a directed verdict: Every legitimate inference that reasonably can be
deduced from the evidence should be given to the nonmoving party.”).
However, the requirement to identify specific facts in response to a
summary judgment motion includes the requirement to identify those
facts that support the inference sought to be drawn. The jockeys have
not done so.
V. Conclusion
RACI was entitled to summary judgment on the jockeys’ due
process claim because RACI is not a state actor. RACI was also entitled
to summary judgment on the jockeys’ tortious interference claims. We
affirm the judgment of the district court.
AFFIRMED.
All justices concur except Wiggins, J., who takes no part.