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Monarch Content Management LLC v. Arizona Department of Gaming

United States District Court, D. Arizona

October 4, 2019

Monarch Content Management LLC, et al., Plaintiffs,
Arizona Department of Gaming, et al., Defendants.


          Honorable John J. Tuchi United States District Judge

         At issue is the Motion to Intervene filed by Arizona Downs, LLC (Doc. 42, Mot.), to which Plaintiffs Monarch Content Management LLC (“Monarch”) and Laurel Racing Association, Inc. (“Laurel Park”) filed a Response in opposition (Doc. 53, Resp.), and Arizona Downs filed a Reply (Doc. 55, Reply). The Court will decide the present Motion without oral argument. See LRCiv 7.2(f).

         I. BACKGROUND

         On June 7, 2019, the Arizona Legislature passed House Bill (“HB”) 2547 and the Governor signed it into law. HB 2547 amends A.R.S. § 5-112 by, among other things, requiring providers of live horse racing simulcasts for the purpose of pari-mutuel wagering, whether originating in Arizona or out of state, to offer the simulcasts at a reasonable price to all live horse racing permittees and off-track betting (OTB) sites in Arizona. HB 2547 vests the Arizona Racing Commission with the exclusive authority to determine the charge that any simulcast provider may levy on live racing permittees and OTB sites in Arizona. The law went into effect on August 27, 2019.

         Plaintiffs are out-of-state providers of live horse racing simulcasts; Monarch distributes simulcasts for 13 out-of-state racetracks, including Laurel Park. Monarch has entered into a contract for the provision of simulcasts to Turf Paradise, a live horse racing permittee with OTB sites in Arizona, but does not provide its simulcasts to Arizona Downs, the only other such permittee with OTB sites in Arizona. Monarch alleges that it made a business decision not to distribute its simulcasts to Arizona Downs because such distribution “would create dilution of the wagering product and depress the overall consumption of content.” (Doc. 1, Compl. ¶ 43.)

         On August 9, 2019, Plaintiffs filed this action against the Arizona Department of Gaming-the Arizona agency charged with regulating gaming-and the Arizona Racing Commission, as well as the individual directors and commissioners of each. Plaintiffs seek a declaration that enforcement of A.R.S. § 5-112, as amended by HB 2547, violates the Contract Clauses of the U.S. and Arizona Constitutions, the Dormant Commerce Clause, and Plaintiffs' free speech rights under the U.S. and Arizona Constitutions; is preempted by the Interstate Horse Racing Act of 1978, 15 U.S.C. §§ 3001 et seq.; and is void for vagueness. Plaintiffs seek an Order permanently enjoining enforcement of A.R.S. § 5-112, as amended by HB 2547. On August 13, 2019, Plaintiffs filed a Motion for Temporary Restraining Order (“TRO”) with Notice (Doc. 20), which remains pending.

         On August 30, 2019, Arizona Downs filed the present Motion to Intervene, which the Court will now resolve.


         Federal Rule of Civil Procedure 24 provides for two types of intervention: intervention as of right and permissive intervention. The Ninth Circuit outlines four requirements for intervention as of right under Rule 24(a)(2):

(1) the motion must be timely; (2) the applicant must claim a “significantly protectable” interest relating to the property or transaction which is the subject of the action; (3) the applicant must be so situated that the disposition of the action may as a practical matter impair or impede its ability to protect that interest; and (4) the applicant's interest must be inadequately represented by the parties to the action.

United States v. Aerojet Gen. Corp., 606 F.3d 1142, 1148 (9th Cir. 2010) (quoting Cal. ex rel. Lockyer v. United States, 450 F.3d 436, 440 (9th Cir. 2006)). The movant's failure to satisfy any single one of these four factors is fatal to a motion to intervene under Rule 24(a)(2). Perry v. Proposition 8 Official Proponents, 587 F.3d 947, 950 (9th Cir. 2009).

         Rule 24(b) governs permissive intervention. An applicant must demonstrate: “‘(1) independent grounds for jurisdiction; (2) [that] the motion is timely; and (3) [that] the applicant's claim or defense, and the main action, have a question of law or a question of fact in common.'” S. Cal. Edison Co. v. Lynch, 307 F.3d 794, 803 (9th Cir. 2002) (quoting United States v. City of L.A., 288 F.3d 391, 403 (9th Cir. 2002)). Even where those three elements are satisfied, however, the district court retains the discretion to deny permissive intervention. Id. (citing Donnelly v. Glickman, 159 F.3d 405, 412 (9th Cir. 1998)). In exercising its discretion, a court must consider whether intervention will unduly delay or prejudice the original parties and should consider whether the applicant's interests are adequately represented by the existing parties and judicial economy favors intervention. Venegas v. Skaggs, 867 F.2d 527, 530-31 (9th Cir. 1998).

         III. ANALYSIS

         A. ...

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