Opinion
Review Granted Oct. 3, 1985.
Opinion on pages 1-74 omitted.
REVIEWS GRANTED
John K. Van de Kamp, Atty. Gen., and N. Eugene Hill, Asst. Atty. Gen., and Talmadge R. Jones, Deputy Atty. Gen., as amicus curiae.
[215 Cal.Rptr. 579]Freidberg Law Corp., R. Parker White and Rex-Ann S. Gualco, Sacramento, for plaintiff and appellant.
Sheryll Layne Myrdall, Los Angeles, for defendant and respondent.
Jackson & Nash and Roger D. Smith and Christopher S. Rooney, New York City, as amicus curiae.
JOHNSON, Associate Justice.
This case raises fundamental issues about the ability of a race horse owner to obtain compensation when a competing jockey intentionally or negligently prevents his horse from winning a cash prize in the race. We conclude the third count of the owner's complaint, which in effect alleges a conspiracy to fix a horse race, does make out a valid cause of action for intentional interference with prospective economic advantage. However, we also conclude the Horse Racing Board now offers an administrative remedy of compensation for this sort of economic loss and has jurisdiction to enforce that remedy against non-licensed as well as licensed defendants. Accordingly, we affirm the demurrer for failure to allege exhaustion of administrative remedies and remand with instructions the horse owner be given an opportunity to seek compensation before the Horse Racing Board.
FACTS AND PROCEEDINGS BELOW
Because respondent has failed to file a reply brief, we will "accept as true the statement of facts in the appellant's opening brief." (Cal. Rules of Court, rule 17(b).) Appellant's opening brief sets forth the statement of facts as follows:
On October 24, 1982, appellant's horse, Bat Champ, a standardbred trotter, participated in the eighth race at Hollywood Park in Inglewood, California. Also entered in the race was The Thilly Brudder driven by defendant-respondent, Gerald Longo (Longo). During the race, Longo drove The Thilly Brudder into Bat Champ's path and struck Bat Champ with his whip, thereby causing Bat Champ to break stride. Bat Champ finished the race in fifth place. Thereafter, the Horse Racing Board, by and through the track steward, reviewed the events of the race and disqualified The Thilly Brudder.
On December 3, 1982, plaintiff-appellant filed a complaint for damages against Longo in which he asserted three causes of action: (1) that Longo negligently interfered with Bat Champ, (2) that Longo intentionally interfered with Bat Champ, and (3) that Longo and unidentified individuals (Does I through X) conspired to interfere with Bat Champ's progress in the race.
Thereafter, the complaint was served and Longo demurred, alleging the Los Angeles Superior Court had no subject matter jurisdiction of the causes of action based upon Business and Professions Code section 19440, and that each and every cause of action failed to state facts sufficient to constitute a cause of action. Longo's demurrer was sustained without leave to amend on the latter grounds.
Plaintiff then appealed from the order of dismissal, arguing the complaint does state facts sufficient to constitute a cause of action, or could be pled to set forth facts sufficient to constitute a cause of action. On October 25, 1984, this court filed a majority opinion and a concurring and dissenting opinion in this appeal. We granted a rehearing and vacated these opinions on November 16, 1984. Subsequently, we invited [215 Cal.Rptr. 580] amicus curiae briefs from organizations interested in horse racing regulation. Two such briefs were filed--one from the Horse Racing Board and the other from the Jockey's Guild.
Both in its brief and during oral argument, the Horse Racing Board conceded that as of the time the court sustained the demurrer in this case the Board did not grant compensation to horse owners whose horses were improperly--or even intentionally--prevented from winning prizes in a race. However, the Board did indicate it was willing to grant this form of relief in appropriate cases in the future pursuant to the interpretation of its powers set forth in this court's vacated original majority opinion. (We reiterate this interpretation in the instant opinion.)
DISCUSSION
In this opinion, we first consider whether Youst's complaint alleges facts constituting a cause of action cognizable in the courts. We then determine whether the Horse Racing Board offers an administrative remedy for that loss which Youst must exhaust before seeking relief in the judicial forum.
I. OF THE THREE COUNTS IN PLAINTIFF'S COMPLAINT, ONLY COUNT THREE STATES A CAUSE OF ACTION COGNIZABLE IN THE COURTS EVEN IF PLAINTIFF WERE NOT REQUIRED TO EXHAUST HIS ADMINISTRATIVE REMEDIES OR DOES EXHAUST THOSE REMEDIES IN THE FUTURE
None of the three counts in this complaint states a damage claim for physical injuries suffered by the plaintiff, his jockey or his horse. Nor do they seek recovery for direct damage to plaintiff's property. Instead, although not expressly so labeled, all three counts attempt to allege defendants deprived plaintiff of a prospective economic advantage--the opportunity to win one of the substantial financial prizes awarded the win, place and show horses. We hold counts one and two fail to state a viable cause of action for interference with prospective economic advantage, although the third one does.
A. The Tort of Interference with Prospective Economic Advantage in the Context of a Contest
The tort of intentional interference with prospective advantage generally requires the tortfeasors act either with an improper motive or through unlawful means, or both, to deprive plaintiff of a reasonably probable economic expectancy. (Prosser and Keeton, Torts (5th ed. 1984) § 130, pp. 1005-1010.) " '(T)he cases have turned almost entirely upon the defendant's motive or purpose, and the means by which he has sought to accomplish it.... (A)ny manner of intentional invasion of the plaintiff's interests may be sufficient if the purpose is not a privileged one. Apart from this, however, the means adopted may be unlawful in themselves; ....' " (A.F. Arnold & Co. v. Pacific Professional Ins., Inc. (1972) 27 Cal.App.3d 710, 716, 104 Cal.Rptr. 96.) However, "(t)here can be no recovery unless the plaintiff shows that, except for the tortious interference, there was a reasonable probability that the ... profit would have been obtained. (Citations omitted.)" (4 Witkin, Summary of Cal.Law (8th ed. 1974) § 394, p. 2647, italics added.)
A serious threshold question arises whether plaintiff was deprived of a reasonably probable prospective advantage. To put it another way, can it really be said that Bat Champ would have won this horse race--or ended up in another prize winning position--if defendant had not interfered. Prosser and Keeton summarize the prevailing rule and the rationale in sports contests as follows:
"When the attempt has been made to carry liability ... into such areas as ... deprivation of the chance of winning a contest, ... recovery has been denied; and it is significant that the reason usually given is that there is no sufficient degree of certainty that the plaintiff ever would have received the anticipated [215 Cal.Rptr. 581] benefits." (Prosser and Keeton, Torts, (5th ed. 1984) § 130, p. 1006.)
This passage does not accurately capture California law on this subject, however. In contrast to many other jurisdictions, the only California court to confront this issue applied the tort of intentional interference with prospective advantage to contests. In Gold v. Los Angeles Democratic League (1975) 49 Cal.App.3d 365, 122 Cal.Rptr. 732, a candidate for Los Angeles City Controller claimed the defendants had interfered with his opportunity to win the race for that political office. The defendants included several political supporters of his opponent who had sent out a false and misleading mailing to voters stating their candidate, not plaintiff, was the officially endorsed candidate of the Democratic Party.
The trial court granted defendants' demurrer. However, in a two-to-one decision Division Five of this court reversed, specifically holding these alleged acts stated a cause of action. In that case, the prospective economic advantage was deemed to be the salary plaintiff would have earned had he won the election. Moreover, the majority was not concerned about what some might call the "speculative nature" of plaintiff's injury. Actually plaintiff had lost the election by a four-to-one margin. Had our Court of Appeal embraced the prevailing rationale summarized in Prosser and Keeton this would have been an easy case to disapprove plaintiff's cause of action. It seems most unlikely plaintiff would have won election and the economic advantage of serving in that office even if defendants had refrained from sending out this one misleading brochure. But this factor did not bother the California court. It upheld the cause of action for interfering with a contestant's opportunity to win a contest with the following language:
In this primary election Navarro, the winner, received 357,681 votes to plaintiff Gold's mere 81,665. Taking account of the votes polled by other candidates Gold would have had to earn another 67,043 votes in the primary just to force a runoff against Navarro. He then would have had to win this second race to have achieved the office he sought. (Gold v. Los Angeles Democratic League, supra, 49 Cal.App.3d 365, 380 fn. 5, 122 Cal.Rptr. 732 (dissent).)
"(D)efendants, with knowledge of plaintiff's candidacy, mailed to prospective voters a pamphlet which falsely gave the impression that Charles Navarro, rather than plaintiff, was the candidate for city controller officially endorsed by the Democratic Party; defendants knew the representation was false and made such misrepresentation with the intent to interfere with plaintiff's opportunity for election to the office of city controller; as a result of the misrepresentation and interference, plaintiff was not elected, and thereby suffered damage.... By analogy to the elements of a cause of action for inducing a breach of contract, the foregoing allegations state a cause of action for defendants' intentional interference with plaintiff's opportunity to be elected to the office of city controller." (49 Cal.App.3d at p. 375, 122 Cal.Rptr. 732.)
True, Gold v. Los Angeles Democratic League involved a political contest not an athletic one. But in terms of the rationale for exempting "contests" from the tort of intentional interference with prospective advantage there appears to be no reason to distinguish politics from sports. In all other respects the present case fits more clearly within this tort than does Gold. What the defendants did in Gold comes close to constitutionally protected speech. But unless and until whipping an opponent's horse becomes "symbolic speech" it is hard to argue what defendant Longo allegedly did falls within the penumbra of First Amendment protection.
See, e.g., Wilson v. Superior Court (Watson ) (1975) 13 Cal.3d 652, 662, 119 Cal.Rptr. 468, 532 P.2d 116 in which the California Supreme Court struck down a preliminary injunction prohibiting distribution of a misleading political "newsletter." The Court held this injunction "violated petitioner's rights of freedom of expression" under both the United States and California Constitutions.
To shift to another main element of the tort of intentional interference with prospective advantage, Gold's prospect of winning [215 Cal.Rptr. 582] in the absence of interference appears to have been rather dismal. He lost by a four-to-one margin and might well have lost nearly as badly if defendants had never even thought of sending out their misleading mailer. In contrast, Bat Champ was in or near the lead before Longo's maneuvers and whipping forced him to break stride and fall out of contention. Thus, it would be much easier and more reasonable for a jury to find Youst had been denied the economic fruits of victory in this horse race than to find Gold would have won the economic fruits of victory in his election contest.
Our research has uncovered no California case which limits Gold to political contests. Nor have we found any California cases which expressly exempt athletic contests from the tort of intentional interference with prospective advantage. On the other hand, we have found cases from other jurisdictions suggesting a rationale which would support recovery for some contestants in athletic competitions but not for others. These were cases awarding damages to competitors who were deemed to have a high probability of winning. (Chaplin v. Hicks (1911) 2 K.B. 786 [beauty contest prize]; Wachtel v. National Alfalfa Journal Co. (1920) 190 Iowa 1293, 176 N.W. 801 [magazine contest prize]; Kansas City, M. & O. Ry. Co. v. Bell, (Tex.Civ.App.1917) 197 S.W. 322 [prize at stock show]; Mange v. Unicorn Press (S.D.N.Y.1955) 129 F.Supp. 727 [encyclopedia puzzle contest prize].)
Prosser and Keeton likewise comment the absence of certainty of success "is not necessarily a reason for refusing to protect such non-commercial expectancies, at least where there is a strong probability that they would have been realized." (Prosser and Keeton, Torts, (5th ed. 1984) § 130, p. 1007.) In Schaefer, Uncertainty and the Law of Damages, (1978) 19 Wm. & M.L.Rev. 719 the author argues damages should be allowed for the value of the lost chance of benefit. Under this approach, plaintiff would not recover the full value of the lost prize but the value of that prize discounted by the probability of winning it in the absence of defendant's interference.
Again these non-California cases involved competitions outside the sports venue. Yet this principle seems to make sense in sports contests as well as others which award financial prizes on the basis of a contestant's order of finish.
B. Count One Alleges Negligent Interference With Prospective Economic Advantage Which Is Not a Recognized Cause of Action in California Except in Unusual Circumstances Not Present Here
Count one of Youst's complaint alleges the jockey Longo negligently interfered with his horse's progress in the race, thus in effect interfering with Youst's opportunity of winning a prospective economic advantage--a substantial cash prize. However, except in situations not approached here, the law does not generally recognize a cause of action for negligent--as opposed to intentional--interference with prospective economic advantage. (Prosser and Keeton, Torts (5th ed. 1984) § 130, pp. 1008-1009.) For discussion of the several factors which must be satisfied before California courts will allow a cause of action for negligent interference with prospective economic advantage, see J'Aire Corp. v. Gregory (1979) 24 Cal.3d 799, 808, 157 Cal.Rptr. 407, 598 P.2d 60, especially as amplified and applied in Pisano v. American Leasing (1983) 146 Cal.App.3d 194, 194 Cal.Rptr. 77; Huang v. Garner (1984) 157 Cal.App.3d 404, 203 Cal.Rptr. 800; and Ales-Peratis Foods Internat., Inc. v. American Can Co. (1985) 164 Cal.App.3d 277, 285-87, 209 Cal.Rptr. 917.) Accordingly, the demurrer can be sustained easily as to count one independent of Youst's alleged failure to exhaust his administrative remedies before the Horse Racing Board.
C. Count Two Alleges Actions a Horse Owner Can Assume to Be a Natural Concomitant of Sports Competition and Cannot Be the Basis of Recovery for Interference with Prospective Economic Advantage
Count two alleges defendant Longo "intentionally, maliciously, wantonly, recklessly [215 Cal.Rptr. 583] and with a willful and reckless disregard for the possible consequences" interfered with Youst's horse. On its face, this count appears to be an attempt to state a cause of action for intentional interference with prospective economic advantage which, as discussed earlier in this opinion, is a recognized tort in California. (See pp. 580-582 ante.) However, we hold these allegations are insufficient to state a cause of action in the special circumstances of sports competition.
Horse races like many athletic contests pit participants against each other in close, emotion charged physical confrontations. Inevitably, the desire to win coupled with the heat of competition will lead to aggressive behavior, indeed occasionally to overly aggressive behavior on the part of one or more competitors. Moreover, it is reasonable to anticipate that not infrequently a competitor will intentionally do something which violates the rules in an effort to win the contest himself. (In the heat of the fray, in fact, it often be hard to tell whether a competitor acted this way deliberately or because he became over-enthusiastic in his attempt to win.) In any event, if he is successful the rule violator not only will win himself, he also will cause others to lose.
In horse racing, as in most other sports, rule-breaking behavior of this sort is not only anticipated it is punished. The violator, if detected, is sanctioned, typically by losing any advantage gained through his bad conduct. And, those competitors harmed by his behavior usually receive some compensatory advantage--a free throw in basketball, 15 yards closer to the goal line in football, and the like.
A horse owner who decides to compete in professional horse racing knows this sort of rule-breaking behavior is quite common. Some jockeys sometimes will become overly aggressive in striving to win a race. It is a normal concomitant of this form of competition and the competitive urges it generates. A horse owner also knows the sport itself imposes certain sanctions on those who yield to those urges. But he, in effect, assumes the risk he will be occasionally harmed economically when a competitor pushes too hard for victory in the heat of competition.
We find it irrelevant whether the allegations of count two, in some general sense, can be said to fit the verbal formula of a cause of action for intentional interference with prospective economic advantage. As a matter of public policy we refuse to recognize as a tort an owner's loss of revenue attributable to the sort of physical jostling--intentional or otherwise--which is a regular concomitant of another competitor's attempt to win. It would not be wise to burden the courts with deciding whether every dirty play during a professional sports event costs some competitor a chance to win some money.
We emphasize this holding applies only to horse owners' claims for economic losses. We do not mean to suggest a jockey or other person who is physically injured through the intentional acts of some other competitor will necessarily be foreclosed from stating a cause of action in tort for this injury. See, e.g., Hackbart v. Cincinnati Bengals, Inc. (10th Cir.1979) 601 F.2d 516, 520-21, cert. den. 444 U.S. 931, 100 S.Ct. 275, 62 L.Ed.2d 188 (1979) holding a football player is entitled to recover damages for physical injuries sustained when opposing player intentionally struck him in the back of the head after play had stopped in their area of the field. See also Compensating Injured Professional Athletes: The Mystique of Sport Versus Traditional Tort Principles, 55 N.Y.U.L.Rev. 971 (1980); Torts in Sports: "I'll See You In Court!" 16 Akron L.Rev. 537; Restatement of Torts 2d, section 50b.
D. Count Three Alleges Facts Which Would Constitute the Tort of Intentional Interference with Prospective Economic Advantage Even in the Context of a Sports Contest
The third cause of action is an entirely different matter from the other two. It alleges an injury of the sort a horse owner cannot be expected to risk even within the context of competitive professional sports. In this third cause of action, plaintiff alleges a civil conspiracy between unknown "Does" and the jockey, Longo, to cause plaintiff's horse to lose the race. (It [215 Cal.Rptr. 584] is of some interest this was not "just another race." Rather it was the feature race and involved a total purse of $100,000 with $50,000 of that sum going to the winner, $25,000 to the place horse, $12,000 to the show horse, $8,000 for fourth and $5,000 for fifth.)
There is no separate tort of civil conspiracy. The conspirators must agree to commit some act which is otherwise classified as a "civil wrong." (Unruh v. Truck Insurance Exchange (1972) 7 Cal.3d 616, 631, 102 Cal.Rptr. 815, 498 P.2d 1063.) Plaintiff's third count is worded rather loosely. It describes the means of achieving the conspiracy in language which parallels the two earlier counts and combines notions of intentional tort, negligence and gross negligence. That is, the "Does" and Longo are charged with conspiring to have Longo intentionally, or in the alternative negligently, interfere with plaintiff's horse. However, it appears difficult if not impossible to conspire to be negligent or even grossly negligent. Thus, realistically this count of the complaint must be construed as an attempt to allege a cause of action for a civil conspiracy to commit an intentional tort against plaintiff.
Indeed if one closely examines the conspiracy paragraph of this count it becomes evident plaintiff sought to charge an agreement to commit an intentional act. In this paragraph, plaintiff alleges: "Prior to the running of the Eighth race at Hollywood Park on October 24, 1982, defendants Longo and Does 1 through 10 knowingly, intentionally and wilfully conspired among themselves and agreed that in the event plaintiff's horse Bat Champ appeared as though he might win or finish second in the Eighth Race at Hollywood Park that defendant Longo would drive his horse The Thilly Brudder in such a way and manner as to prevent Bat Champ from winning or finishing second in said race."
This paragraph alleges a conspiratorial plot. It has nothing to do with negligence or gross negligence. Nor does it allege the sort of intentional acts which are a normal part of athletic competition. True, the actions the conspirators supposedly plan for Longo to take may be ones which sometimes occur when jockeys drive negligently or with gross negligence. But here it is alleged he is to do these things intentionally. He is to do them only if Bat Champ looks like a winner. And he is to do so for a specific, malevolent purpose--to prevent Bat Champ from winning or coming in second. Thus the reallegation of the negligence and gross negligence language from the earlier counts is inappropriate. Indeed it may be inconsistent and misleading. But this is the sort of problem which generally is curable by amendment.
As mentioned earlier, the tort of intentional interference with prospective advantage generally requires the tortfeasors act either with an improper motive or through unlawful means, or both, to deprive plaintiff of a reasonably probable economic expectancy. (Prosser and Keeton, Torts (5th ed. 1984) § 130, pp. 1005-1010.) In this case, the alleged means of interference easily satisfy any requirement of unlawfulness. If the events suggested by the complaint occurred, the co-conspirators plotted to have a jockey drive his horse into the path of a competing horse and to strike the other horse with his whip. The goal was to cause this other horse to break stride and thus lose its chance to win the race. These acts could be considered "dirty" and unlawful even if they did not violate any specific legal provision. However, the Horse Racing Board has enacted regulations prohibiting this very conduct. (Cal.Admin.Code, tit. 4, § 1699(b), (c), (d), (e) quoted at pp. 585-586, post.)
Plaintiff does not allege any specific motive for this unlawful conduct. However, it is hard to imagine any proper motive for what amounts to a conspiracy to "fix" a horse race. It appears irrelevant whether the co-conspirators were competing horse owners who sought to enhance their own chances of victory by eliminating one of the favorites or some bookies who had accepted a large number of bets on Bat Champ and wanted to make sure they did not have to pay off on those bets or some people [215 Cal.Rptr. 585] who merely had it in for Youst and did it for spite. If the allegations of the third count are true, what they conspired to do satisfies the elements of an intentional interference with prospective economic advantage.
II. APPELLANT FAILED TO STATE A CAUSE OF ACTION FOR INTENTIONAL INTERFERENCE WITH PROSPECTIVE ECONOMIC ADVANTAGE OR CONSPIRACY TO DO SO SINCE HE FAILED TO ALLEGE EXHAUSTION OF HIS ADMINISTRATIVE REMEDIES BEFORE THE HORSE RACING BOARD
The California Supreme Court has made it clear the courts have no place in disputes arising out of horse racing events where the Horse Racing Board has jurisdiction to grant the requested relief. (Flores v. Los Angeles Turf Club (1961) 55 Cal.2d 736, 13 Cal.Rptr. 201, 361 P.2d 921.) Conversely, however, they have made it equally clear the courts retain jurisdiction in those cases where the Horse Racing Board lacks the power to grant some or all of the relief plaintiff seeks. (Orloff v. Los Angeles Turf Club (1947) 30 Cal.2d 110, 180 P.2d 321.) Here, count three of the complaint charges a conspiracy involving a jockey, who is a licensee and thus within the board's jurisdiction, and unnamed conspirators, one or more or all of whom could be non-licensees.
This court has concluded the third count of Youst's complaint alleges facts which constitute a conspiracy to commit the tort of intentional interference with prospective economic advantage. Nevertheless, we affirm the demurrer against this count--as well as the other two--because we hold Youst could pursue an administrative remedy of financial compensation before the Horse Racing Board and failed to do so. Consequently, the complaint fails to allege Youst exhausted his administrative remedies before seeking relief in the courts.
A. The Horse Racing Board Has Broad Powers to Supervise The Conduct of Horse Racing In California
In Flores v. Los Angeles Turf Club, supra, 55 Cal.2d 736, 13 Cal.Rptr. 201, 361 P.2d 921, the California Supreme Court emphasized the extraordinarily broad mandate the Legislature conferred on the Horse Racing Board.
"[P]ursuant to article IV, section 25a of the California Constitution, the Legislature has enacted a comprehensive scheme of legislation designed to regulate almost every aspect of legalized horse racing and wagering. Section 19420 of the Business and Professions Code provides: 'Jurisdiction and supervision over meetings in this State where horse races with wagering on their results are held or conducted, and over all persons or things having to do with the operation of such meetings, is vested in the California Horse Racing Board.' Business and Professions Code, section 19562 (formerly § 19561) provides that the racing board 'may prescribe rules, regulations, and conditions, consistent with the provisions of this chapter, under which all horse races with wagering on their results shall be conducted in this State.' The delegation of such rule-making power to the racing board, and the delegating legislation, was upheld in Sandstrom v. California Horse Racing Board, supra, 31 Cal.2d 401, 413 [189 P.2d 17]." (Id., at pp. 745-746, 13 Cal.Rptr. 201, 361 P.2d 921.)
Section 19440 of the Business and Professions Code carries forward this same theme of large responsibilities and generous powers.
"The board shall have all powers necessary and proper to enable it to carry out fully and effectually the purposes of this chapter. Responsibilities of the board shall include, but not be limited to:
"...
"(2) Administration and enforcement of all laws, rules and regulations affecting horseracing and parimutuel wagering
[215 Cal.Rptr. 586]"(3) Adjudication of controversies arising from the enforcement of those laws and regulations dealing with horseracing and parimutuel wagering
"...
"The board may delegate to stewards such of its powers and duties that are necessary to carry out fully and effectuate the purposes of this chapter."
Pursuant to this delegation of power, the racing board has promulgated rules relating to the conduct of participants during a horse race:
"During the running of the race:
"(a) A leading horse is entitled to any part of the course but when another horse is attempting to pass in a clear opening the leading horse shall not impede that passing horse by crossing over so as to compel the passing horse to shorten its stride.
"(b) A horse shall not interfere with or cause any other horse to lose stride, lose ground or lose position in a part of the race where the horse interfered with loses the opportunity to place where he might be reasonably expected to finish.
"(c) A horse which interferes with another and thereby causes any other horse to lose stride, lose ground, or lose position, when such other horse is not in fault and when such interference occurs in a part of the race where the horse so interfered with loses the opportunity to place where he might, in the opinion of the stewards, be reasonably expected to finish, may be disqualified and placed behind the horse so interfered with.
"(d) A jockey shall not ride carelessly or willfully so as to permit his or her mount to interfere with or impede any other horse in the race.
"(e) A jockey shall not willfully strike or strike at another horse or jockey so as to impede, interfere with, intimidate, or injure the other horse or jockey.
"(f) If a jockey rides in a manner contrary to this rule, his or her mount may be disqualified and he or she may be suspended or otherwise disciplined." (Cal.Admin.Code, tit. 4, § 1699.)
An owner of a horse is given an opportunity to lodge a claim someone interfered with his horse. This complaint is to be filed immediately after the race:
"A jockey, trainer or owner of a horse, who has reasonable grounds to believe that his horse was interfered with or impeded or otherwise hindered during the running of the race, or that any riding rule was violated by any other jockey or horse during the running of the race, may immediately make a claim of interference or foul with the clerk of scales, the stewards or their delegate before the race has been declared official. The stewards may thereupon hold an inquiry into the running of the race. No person shall make any claim of interference or foul knowing the same to be inaccurate, false or untruthful." (Cal.Admin.Code, tit. 4, § 1702.)
The stewards are given express authority to punish a jockey or horse owner or anyone else who is licensed by the Board and is found to have violated a riding rule:
"The stewards shall determine the extent of disqualification in cases of fouls or riding or driving infractions. They may place the offending horse behind such other horses as in their judgment it interfered with, or they may place it last." (Cal.Admin.Code, tit. 4, § 1543.)
"The stewards' jurisdiction in any matter commences at such time as entries are taken for the first day of racing at the meeting and extends until 30 days after the close of such meeting. The stewards may suspend the license of anyone whom they have the authority to supervise or they may impose a fine or they may exclude from all enclosures in this State or they may suspend, exclude and fine. All such suspensions, fines or exclusions shall be reported immediately to the Board." (Cal.Admin.Code, tit. 4, § 1528.)
In the instant case, Youst lodged a claim of interference with the stewards. They sustained this claim and attempted to make Youst whole to the extent of their powers, that is, by repositioning Longo's mount in [215 Cal.Rptr. 587] the official order of finish. As a result, Youst's horse moved up from fifth to fourth.
B. The Horse Racing Board Has Jurisdiction to Award Compensation to Horse Owners Whose Prospects of Winning a Cash Prize Are Substantially Harmed by a Jockey's Negligent or Intentional Acts
This case presents a rather unique sequence of events. At the time the trial court sustained a demurrer against appellant's complaint for failure to exhaust his administrative remedies before the Horse Racing Board, it appears the Board followed a policy of not awarding compensation for the type of injury appellant allegedly experienced. To the extent the Board could do anything to give him an administrative remedy it already had done so by repositioning the horse Longo had driven. But this did not compensate Youst for the lost opportunity to win first or second prize and the Board at that time did not offer the further remedy of financial compensation. Accordingly, to the extent the Horse Racing Board offered Youst an administrative remedy he had exhausted it. It would have been a futile act for Youst to have pursued the further remedy of financial compensation in this non-judicial forum.
The fact Youst already had pursued and thus exhausted the available administrative remedies offered by the Horse Racing Board distinguishes this case from opinions holding a litigant ordinarily must exhaust his non-pecuniary remedies in the administrative arena before seeking damages in the courts. (Westlake Community Hosp. v. Superior Court (1976) 17 Cal.3d 465, 131 Cal.Rptr. 90, 551 P.2d 410 [hospital employee required to exhaust administrative remedy of reinstatement or admittance to staff before suing for damages in court].)
The law does not require litigants to engage in "futile, useless and idle acts." (Thorman v. Intl. Alliance etc. Employees (1958) 49 Cal.2d 629, 320 P.2d 494 [not required to exhaust administrative remedy where this would have been "futile, useless and idle act"]; Elevator Operators etc. Union v. Newman (1947) 30 Cal.2d 799, 186 P.2d 1; Ogo Associates v. City of Torrance (1974) 37 Cal.App.3d 830, 112 Cal.Rptr. 761.) "It is settled that the rule requiring exhaustion of administrative remedies does not apply where an administrative remedy is unavailable (citation omitted) or inadequate (citations omitted)." (Tiernan v. Trustees of Cal. State University & Colleges (1982) 33 Cal.3d 211, 217, 188 Cal.Rptr. 115, 655 P.2d 317; San Diego Teachers Assn. v. Superior Court (1979) 24 Cal.3d 1, 9, 154 Cal.Rptr. 893, 593 P.2d 838; Endler v. Schutzbank (1968) 68 Cal.2d 162, 65 Cal.Rptr. 297, 436 P.2d 297.) Accordingly, as of the time Youst filed his action and even when the trial court sustained the demurrer appellant Youst was entitled to seek relief in the courts without showing he had exhausted a non-existent administrative remedy--at least as to any claims the courts recognize as legitimate causes of action.
On appeal, however, a majority of the members of this court held the Horse Racing Board indeed possesses the legal authority to award compensation for the type of injury appellant allegedly suffered during this horse race. Then this court granted a petition for rehearing and vacated the original opinion. It also invited amicus curiae briefing from interested entities within the horse racing industry.
In its amicus brief and at oral argument, the Horse Racing Board indicated its willingness to begin considering compensation awards to owners whose horses are wrongfully deprived of a reasonably probable opportunity to win a cash prize. As a result, it appears an administrative remedy is presently available to appellant for the loss Youst allegedly suffered.
As it did in its earlier vacated majority opinion, this court construes the Board's expansive legal authority to include the power to award compensation to horse owners who are victimized by unlawful conduct during horse race meetings. The broad mandate is exemplified by section 19440 of the Business and Professions Code which states, "The board shall have all powers necessary and proper to enable [215 Cal.Rptr. 588] it to carry out fully and effectually the purposes of this chapter." The California Administrative Code, in turn, provides:
"Should any case occur which may not be covered by the Rules and Regulations of the Board or by other accepted rules of racing, it shall be determined by the stewards in conformity with justice and in the interest of racing." (Cal.Admin.Code, tit. 4, § 1530.)
The Administrative Code further authorizes the stewards to refer to the Board situations where they are unable to offer adequate relief.
"The stewards may refer any matter within their jurisdiction to the Board when the penalty the stewards have jurisdiction to impose is insufficient, ... or for other good and sufficient cause, and they may order the suspension of the licensee pending further Order of the Board. In such event, the Board shall accept the matter for hearing and adjudication or such other action as the Board deems to be in the best interests of justice." (Cal.Admin.Code, tit. 4, § 1529.)
We hold these provisions vest the Board with the power to decide claims such as the one appellant seeks to assert in state court. This could happen whenever the measures which are expressly available to the stewards cannot adequately remedy the owner's economic loss.
To illustrate the problem, assume the horse in second place interferes with the leading horse down the stretch and thus wins the race. After detecting the foul, the stewards are empowered to place the offending horse in second position--or worse. In this hypothetical case, the effect would be to move the victimized horse up to first. This step effectively compensates the victimized horse owner since he, rather than the owner of the offending horse, receives the winner's purse. When respondent Longo and the Horse Racing Board initially contended the Board indeed afforded compensation to victimized horse owners, this is the one and only method of "compensation" they envisioned. But what if, as alleged in Youst's complaint, the interference occurred earlier in the race and for the specific purpose of preventing one promising horse from becoming a factor. In this event, both the offending horse and the victimized horse may well end up out of the money. If they do, the Board cannot compensate the victimized horse owner merely by placing the offending horse behind his. Indeed, in the instant race the stewards did just that. All it meant was Youst's horse moved up from fifth position to fourth, hardly adequate compensation if, as Youst claims, his horse would have won first or second place money except for Longo's interference.
In a situation where repositioning the offending horse behind the victimized horse does not compensate the victimized horse owner, the rules and regulations of the Board do not cover a particular case. But such a case does involve a claim where an award of damages to the victimized owner is appropriate "in the best interests of justice" and in the "interest of racing." This brings it squarely within the purview of sections 1529-1530.
Compensating an aggrieved racehorse owner for the interference with his horse which causes the horse to place lower than he otherwise would have certainly appears to be "in the best interests of justice." It also is in the "interest of racing" since it simultaneously punishes the offender and compensates the victim. Victims will have more incentive to help the Board develop evidence they were unlawfully deprived of the financial fruits of victory. And those who would contemplate fixing a horse race may have second thoughts when they know they will have to compensate those they tried to cheat--not merely give back the ill gotten prize--if they indeed are found out.
To this court, it seems the Horse Racing Board itself--rather than the stewards--should adjudicate horse owners' claims for compensation. Deciding whether and who is liable and how much compensation is appropriate will require a full-scale hearing. Moreover, these issues often will turn on evidence about events which did not occur on the race track or in front of the stewards. Despite our own preference, however, we leave these administrative and procedural matters to the good judgment of the Horse Racing Board.
[215 Cal.Rptr. 589]C. The Horse Racing Board Has Jurisdiction to Decide and Enforce Compensation Claims Against Non-Licensees Who Unlawfully Interfere or Cause Others to Unlawfully Interfere with a Horse Race
We have held Youst's third count alleges a recognized tort. However, we have further held the Horse Racing Board is authorized to award compensation for the type of injury alleged in this complaint. The remaining issue is whether the Board has the power to adjudicate and enforce this award against persons who are not licensed by the board nor employed by licensees.
The third count of Youst's complaint alleges respondent Longo and unidentified individuals conspired to interfere with Bat Champ's progress in the race. Clearly, the Horse Racing Board has exclusive jurisdiction over the claim to the extent the unidentified individuals are also licensees of the Horse Racing Board. If a jockey--or owner or other licensee--were ordered to pay damages to another licensee, he would have to comply or face loss of his license. However, if an alleged conspirator is not a licensee of the Board--a bookie, for example--the Board's power to make and enforce an award is less obvious. And, if the Horse Racing Board lacks the power to make an enforceable award of compensation against non-licensees, a cause of action would lie in the courts against any non-licensed co-conspirators who participated in the acts alleged in the third count of Youst's complaint. Thus, we now turn to examine the powers of the Horse Racing Board over non-licensees.
The jurisdictional and enforcement provisions of the Horse Racing Chapter of the Business and Professions Code are quite expansive. Section 19420 of the code states that, "Jurisdiction and supervision over meetings in this State where horses races with wagering on their results are held or conducted, and over all persons or things having to do with the operation of such meetings, is vested in the California Horse Racing Board." Section 19442 of the code further requires that "[t]he Attorney General and every district attorney shall enforce this chapter in their capacities as law enforcement officers."
Broadly construed, section 19420, as well as granting the Board jurisdiction over licensees, gives the Board jurisdiction over anyone attempting to influence a race whether this person is a licensee or not. For example, a bookie or other non-licensee who bribed a jockey to throw a race would by that act become a "person[ ] ... having to do with the operation of" a horse race meeting. It is difficult to argue that someone who attempts to fix a horse race is not having something to do with the race. That something may be entirely negative. Nonetheless, it represents an act deliberately aimed at directly affecting the conduct and outcome of the horse race meeting.
The Horse Racing Board's incidental powers clause found in section 19440 of the Business and Professions Code states "[t]he board shall have all powers necessary and proper to enable it to carry out fully and effectually the purposes of this chapter." One of the express intents of the chapter as set forth in section 19401 is to "allow parimutuel wagering on horse races, while: (a) Assuring protection of the public." Surely, a non-licensee's fixing a horse race would be against the interest of horse racing and the public. So would any other attempt to unlawfully influence the outcome of the race.
The Horse Racing Board needs jurisdiction over the non-licensed briber as well as the licensed bribee in order to adequately discharge its broad responsibilities to horse racing and the public. Surely the non-licensed briber, having voluntarily attempted to affect the horse race, cannot be heard to complain the Board is assuming unjustified jurisdiction over him. Indeed by his own act he has brought himself within the category of persons "having to do" with the [215 Cal.Rptr. 590] horse race meeting and thereby subjected himself to Board jurisdiction.
Courts have allowed other administrative agencies to exercise jurisdiction over "non-licensees" or their equivalent. For example, in El Rancho Unified School District v. National Education Association (1983) 33 Cal.3d 946, 192 Cal.Rptr. 123, 663 P.2d 893, the California Supreme Court dismissed for lack of jurisdiction a tort action against uncertified labor unions for damages resulting from a teachers' strike led by the unions. The Court found that the Public Employees Relations Board (PERB) had exclusive jurisdiction over activities prohibited by the act even where conducted by uncertified organizations--the rough equivalent of non-licensed individuals "having to do" with horse racing. This decision expanded the Court's opinion in San Diego Teachers Assn. v. Superior Court, supra, 24 Cal.3d 1, 154 Cal.Rptr. 893, 593 P.2d 838, which had held that the PERB has exclusive jurisdiction over actions to enjoin strikes by public school employee organizations certified as exclusive representatives under the Education Employment Relations Act. (Gov. Code, § 3540 et seq.) Thus, the Court's focus was on the actions prohibited under the act rather than the status of the groups alleged with violating the act. The Court in part justified this emphasis by examining the Legislature's goal of "foster[ing] constructive employment relations" and "the long range minimization of work stoppages." (Id. at p. 13, 154 Cal.Rptr. 893, 593 P.2d 838.)
Assuming the Horse Racing Board found a non-licensee had unlawfully influenced a horse race and assessed a damage award against him, the next issue is whether the Board could enforce that award. We have discovered a substantial body of authority supporting the conclusion it can. The relevant case law provides that whenever an administrative agency has the authority to hear and determine a question, its determination is in effect a judgment having all the incidents and properties attached to a similar judgment pronounced by a court of limited jurisdiction acting within the bounds of its authority. (Mogan v. Police Commissioners (1929) 100 Cal.App. 270, 279 P. 1080.)
Administrative agencies generally may not punish for contempt in their own right, (Marcus v. Workmen's Comp. Appeals Bd. (1973) 35 Cal.App.3d 598, 604, 111 Cal.Rptr. 101), nor may the California courts delegate their power to punish for contempt to non-judicial officers (Crocker v. Conrey (1903) 140 Cal. 213, 73 P. 1006). However, a procedure has been set up which punishes the contempt of an administrative agency. Agencies under part II of the California Administrative Procedure Act (Gov. Code, §§ 11370 et seq.) are empowered to petition the superior court for an order directing a recalcitrant party to appear before the court and show why he should not be punished for contempt. Specifically, section 11500(a) defines the agencies governed by the Administrative Procedure Act to include those enumerated in section 11501(b). The California Horse Racing Board is among the enumerated agencies.
Section 11525 of the act is the most relevant for this discussion and provides that, "if any person in proceedings before an agency disobeys or resists any lawful order ... the agency shall certify the facts to the superior court in and for the county where the proceedings are held. The court shall thereupon issue an order directing the person to appear before the court and show cause why he should not be punished as for contempt. The order and a copy of the certified statement shall be served on the person. Thereafter the court shall have jurisdiction of the matter. The same proceedings shall be had, the same penalties may be imposed and the person charged may purge himself of the contempt in the same way, as in the case of a person who has committed a contempt in the trial of a civil action before a superior court." (Gov. Code, § 11525, italics added.)
Using this contempt procedure the Horse Racing Board can enforce its compensation awards against non-licensees whose actions have brought them within the Board's jurisdiction. [215 Cal.Rptr. 591] Thus, assume the Board found some non-licensee had conspired to prevent Youst's horse from finishing in the money. By this act the non-licensee would have brought himself within the jurisdiction of the Horse Racing Board. The Board's jurisdiction includes its new-found powers to compensate horse owners whose steeds have been unlawfully denied the opportunity to win financial prizes. Accordingly, assume the Board orders the non-licensee to pay Youst a substantial sum, as "damages" for this unlawful act. This would be a "lawful order" of an administrative agency listed in section 11501(b). If the non-licensee refused to pay the financial award to Youst, the Board could bring a contempt action against him in superior court. In that proceeding, the non-licensee would be subject to the same penalties as if he had committed contempt of a superior court instead of the Horse Racing Board.
CONCLUSION
We hold the Horse Racing Board now apparently offers the remedy of financial compensation and has jurisdiction to adjudicate and enforce claims seeking this remedy against non-licensees as well as licensees. Accordingly, we rule at this stage Youst must exhaust this administrative remedy before pursuing his cause of action in the courts even though no such remedy existed at the time he initially filed suit. (Cf. Frisco Land & Mining Co. v. State of California (1977) 74 Cal.App.3d 736, 755, 141 Cal.Rptr. 820.)
This is a close question, as a matter of policy, at least. In a sense we are giving the Horse Racing Board an opportunity to adequately compensate those who are economically injured through unlawful conduct during races. This allows us to do justice without bringing the courts to the horse race or the horse race to the courtroom.
We relegate Youst to his remedies before the Horse Racing Board only because we understand the Board now recognizes it has jurisdiction to award compensation to horse owners who are unlawfully deprived of their opportunity to win a substantial cash prize. We further understand this compensation will no longer be limited to the situations where the owner is made whole merely by repositioning the offending horse in the order of finish.
The Board concedes that as a matter of policy and practice it did not offer such compensation at the time Youst filed his complaint in the courts nor did it do so at the time the trial court sustained the demurrer in this case. If Youst is to have a fair opportunity to obtain this newly available administrative remedy of financial compensation he must be allowed to file his request with the Board within a reasonable time after this court's opinion becomes final. Accordingly, we direct the Board to waive any time limits which may have expired since Youst first sustained the alleged economic loss on the day of the race. He cannot be faulted for being untimely in pursuing what he knew to be--and indeed was--a non-existent administrative remedy.
This order is supported not only by common notions of justice and equity but by the well-established doctrine of equitable tolling of periods of limitation. (See, e.g., Elkins v. Derby (1974) 12 Cal.3d 410, 414, 115 Cal.Rptr. 641, 525 P.2d 81; Addison v. State of California (1978) 21 Cal.3d 313, 146 Cal.Rptr. 224, 578 P.2d 941; Jones v. Tracy School Dist. (1980) 27 Cal.3d 99, 165 Cal.Rptr. 100, 611 P.2d 441; Collier v. City of Pasadena (1983) 142 Cal.App.3d 917, 191 Cal.Rptr. 681.)
We emphasize, moreover, that we are not foreclosing the possibility of judicial intervention entirely, at least where attempts are made to fix horse races as the third count of Youst's complaint alleges happened here. At the pleading stage we, of course, do not know whether anyone actually conspired to eliminate Bat Champ from contention. But we are concerned about this general class of conduct. Those who would fix a horse race should know they may have to give up their ill-gotten gains--and more--to those they set out to cheat. If the Horse Racing Board proves unable or unwilling, for some reason, to apply this dose of legal medicine, the courts may be [215 Cal.Rptr. 592] forced to offer relief. Otherwise the victims would remain uncompensated while the fixers go scot free.
DISPOSITION
The judgment sustaining a demurrer is affirmed. The Horse Racing Board is directed to waive any time limits on filing and processing a request for relief before that agency which may have expired since appellant Youst first experienced this alleged loss and to consider any such request consistent with the views expressed in this opinion.
LILLIE, P.J., and THOMPSON, J., concur.