Hazel Park Racing Ass'n v. Racing Commissioner

Butzel, J.

Petitioner, plaintiff Hazel Park Racing Association, Inc., seeks original writ of mandamus to compel defendant James H. Inglis, Michigan racing commissioner, to grant it 3 more days of horse racing plus 6 days for charity meets' which, if granted, would give plaintiff a season equal to that which defendant granted a “competitor” track.

There are 2 major racing tracks in the Detroit area, plaintiff’s and that of the Michigan Racing Association, Inc., hereinafter referred to as MRA. In 1953 the 2 tracks agreed to request an equal number of days in the racing season, one track to run its meet in the late spring and early summer and the other in the late summer and early autumn. A schedule covering a period of 10 years was drawn up. Por the first 5 years it allocated a fixed number of days for the early meet to MRA and an equal number of days for the late meet to plaintiff. There is no claim that this agreement is binding upon defendant racing commissioner though he and his predecessor in office have acted substantially in accordance with its terms until the present year.

Plaintiff was duly licensed to operate a racing-track in 1949 and thereafter conducted annual racing-meets. In 1953 defendant objected to the character and reputation of certain of plaintiff’s shareholders and refused to issue a license until they disposed of their stock. We issued mandamus ordering defendant to issue the license. Hazel Park Racing Association, Inc., v. Racing Commissioner, 336 Mich 508. Plaintiff alleges, and it is not denied, that even after our opinion was handed down defendant required that a certified copy of the Court’s mandamus be served upon him before he would issue the license. The following year, 1954, defendant again refused for similar reasons to issue plaintiff a- meet license. He sought the opinion of the attorney general who advised him to issue the license, saying:

“The premises upon which the question aforesaid are based were duly considered in the preparation of the pleading and briefs by this department in your behalf in the case of Hazel Park Racing Association, Inc., v. Racing Commissioner, 336 Mich 508, and you were then advised that such matters are extraneous to the issues involved. * * * There is no doubt in my mind that you are controlled by the opinion of the Supreme Court in the cause above cited.”

The preceding facts are set forth in Hazel Park’s petition to this Court in order to show the animus of defendant toward it and to support its contention of unjust discrimination against it in the instant case.

■ Early in 1955 the defendant proposed to allot 56 days of racing to MRA, 53 days to plaintiff, and 6 days to Michigan Racing Charities, Inc., the latter to be run at MRA. A hearing on this proposal was held before the commissioner. The matter was considered and in particular the charity racing dates were discussed, plaintiff having asked for a similar number of extra days for charity meets. The defendant, however, made final his original determination as to dates of meets and charity allocations and denied permission to plaintiff to hold charity meets. Thereupon this proceeding was brought.

Plaintiff’s plant was approved by the authorities when it began racing operations in 1949 and there has been improvement in it since that time. Defendant makes no claim that petitioner’s plant is unsatisfactory but cites many facts to show that the plant of MRA is superior. The track at MRA is 1 mile in length while plaintiff’s is 5/8 of a mile. The net depreciated valuation of MRA’s physical assets is almost twice that of plaintiff’s. Defendant also emphasizes that MRA has more comfortable seats with wider aisles between them, pari-mutuel facilities which accommodate bettors more efficiently and other minor advantages. We think, however, that this is best and adequately answered by the fact .that attendance at petitioner’s track and the revenue from wagering (and consequently the amount that the State derives as its share) are both larger than at MRA. It is shown that the State of Michigan derived a revenue of $9,781,558 from the plaintiff’s operations during the last 4 years and a lesser amount, $9,501,312, from MRA. The attendance at plaintiff’s track during tlxe same period was 2,667,810 people with a lower number at MRA.

Defendant further calls attention to his “important obligation * * * to consider the views of a large segment of the public in Michigan who are strongly opposed to any horse racing which includes legalized pari-mutuel wagering.”

A full answer to the latter argument is that it is not the province of the commissioner or the court to encourage or discourage legalized wagering at race tracks. Any public sentiment against it is a matter for consideration by the legislature which has spoken in no uncertain terms.

By his decision the defendant in effect subtracted 3 days from plaintiff’s former schedule and gave them to Michigan Racing Charities, Inc. These 3 days, together with the 2 charity days run in 1954 plus an increase in the total season from 114 to 115 days, equals 6 days of charity racing scheduled for 1955. MRA retained the same number of days it had in 1954. We do not believe that the commissioner may increase the number of charity days at the expense of plaintiff’s season. While worthy causes no doubt receive substantial benefit from charity racing and the charity meets both advertise and add to the good will of a racing track, we must consider the investment which plaintiff has in its facilities and the expectation of gain which prompted persons to become its stockholders. It was shown that the 3 additional days would bring in a large revenue to plaintiff and consequently to the State: To allow the''commissioner. to consider charity applications as paramount to those of racing associátions organized for profit, would be to sanction a possible confiscation of property and investment. The powers of the commissioner cannot be construed to extend that far.

The statute, CL 1948, § 431.9 (Stat Ann 1953 Cum Supp §18.949), provides:

“Any person or persons desiring to conduct a racing meet within the State of Michigan, shall apply to the commissioner for a license to do so. Such application shall be filed with the secretary of the commission at least 10 days prior to the first day of each horse-racing meeting, which such person or persons propose to hold or conduct. Such application shall specify the day or days on which such racing is desired to be conducted or held, and such application shall be in such form and supply such data and information as the commissioner shall prescribe. The commissioner shall have the power to reject any application for a racing-meet license for any cause which he may deem sufficient, which rejection may be appealed to the circuit and Supreme Court.”

In People, ex rel. Empire City Trotting Club, v. State Racing Commission (1907), 190 NY 31, 34, 35 (82 NE 723), a case involving a refusal to grant a license, the court said of the New York statute:

“The object of the statute vesting authority in the commission was to insure that racing in this State was properly and honestly conducted, not to prevent competition between the several racing associations, nor to secure any special pecuniary benefit to any of them. There is no provision in the statute authorizing the .commission to allot particular dates on which races on the various tracks may be run, but merely to grant or refuse a license to hold races.”

While the New York statute is dissimilar to ours, we too find no provision in' the Michigan statute authorizing defendant to act in the arbitrary manner here shown.

The differences in plant and facilities appear to be things on which each track must take a business chance. The public seems to favor plaintiff’s track. Pacing is still essentially a private enterprise and if one track is better than another the various indicia of public support would determine how long a season the track can maintain. If one track by reason of being inferior suffers in attendance, wagering revenues, willingness of owners to race, et cetera, it would, in time, seek a shorter season or improve its facilities.

Whether because of increased charity dates and/or a difference in facilities we do not think that under the facts in the instant case the length of the season or the individual dates should be subject to the arbitrary control here exerted by defendant in favor of one track over another — at least in the absence of a statute indicating otherwise. As was further said in People, ex rel. Empire City Trotting Club, v. State Racing Commission, supra (p 35):

1 “If the theory on which the commissioners have acted in this case were to be approved, new incumbents of the office might arbitrarily favor other race tracks and deny the associations owning the present tracks, in which large sums of money have been invested, a license to hold races. Surely, the legislature, when it authorized the incorporation of racing associations, never contemplated that the capital invested in the building of the tracks should be subject to such arbitrary destruction.”

The Michigan legislature was careful to provide an appeal from the rejection of the commissioner.' Though defendant has a right to reject an application for good cause, he admits, and we have said, that the cause must be reasonable. See Leach v. Racing Commissioner, 340 Mich 202; Hazel Park Racing Association, Inc., v. Racing Commissioner, supra. Reasonable good cause was not shown in this case and it was abuse of defendant’s discretion not to allow plaintiff the 3 extra days of October 6, 7 and .8,1955, on which dates no other meets are scheduled.

The commissioner awarded 6 charity days, all to the Michigan Racing Charities, Inc., to be run at the MRA track. Plaintiff also seeks equal charity dates. Two groups, Michigan Racing Charities, Inc., and the Youth Benefit Fund, both representing a number of worthy charities, were interested in obtaining charity racing days. The commissioner’s reason for refusing the latter any days was that its application came too late, arriving the day after the hearing before the commissioner on this controversy. However, a week prior to the hearing, the petitioner replied to a letter from the Youth Benefit Fund. The plaintiff stated that it would be happy to allow the fund to use the track facilities without charge for 6 days, subject to the commissioner’s approval. Plaintiff further advised the fund to make formal application to the commissioner. A copy of this reply was sent to the commissioner with the words:

“We respectfully urge that if you do allocate charity racing dates in Michigan that you favorably consider the application of the Youth Benefit Fund.”

While the fund did not make formal application until after the hearing, its representatives were there and the whole matter of charity..racing was discussed with specific reference to the Fund’s desire to have some dates.

The statute, CL 1948, § 431.9 (Stat Ann 1953 Cum Supp §18.949), requires that meet license applications be filed with the secretary of the commission at least 10 days prior to the first day of each horse-racing meeting which snch person or persons propose to hold or conduct. The hearing was held and the application submitted in February, months before the season commenced and many more months before the particular days requested would be held. The commissioner himself stated at the hearing that “I don’t always receive a formal letter requesting. dates.” He further said that the Michigan Racing Charities’ application was verbally received over a year prior to the hearing and that he considered such to have been its formal application. Therefore, defendant’s refusal because of the lack of a timely,' formal, written application is not warranted by the record or his own policy in that regard. The defendant was fully apprised of all the facts prior to making his final decision. Defendant’s action in regard to charity dates has been set forth, not for the purpose of ordering him to grant charity dates to plaintiff’s track, but for the purpose of further substantiating our view that he acted arbitrarily in this whole matter.

The lateness of this petition plus the time necessary to reach a decision precludes any action in regard to charity racing dates. It is to be noted that PA 1955, No 240, not given immediate effect, prohibits the issuance of a license to conduct a horse-racing meeting: “to any organization organized for a charitable purpose or organized for the purpose of distributing its profits or income to charitable organizations.”

In view of this statute any unjust discrimination in regard to charity racing dates and consequent loss of benefits derived therefrom cannot recur.

Mandamus will issue ordering defendant to grant; plaintiff the 3 additional days of racing. No. costs, a public question being involved.

Carr,' C. J., and Boyles, Dethmers, and Kelly, JJ., concurred with Butzel, J. Reid, J., concurred in the result.