The global COVID-19 pandemic is reason enough for a two-year-old lawsuit to disappear, operators of a Philadelphia-area mall told a federal court recently.
But the former operators of the Garden State Park racetrack, who see the case as being near the finish line with them prevailing, continue to insist on concluding the battle.
“A motion for voluntary dismissal should be granted unless it would create ‘substantial prejudice to the defendant,’” an attorney for the Cherry Hill mall countered to the court on Monday.
“Plaintiff seeks to voluntarily dismiss this action because, as a result of the global pandemic and concomitant governmental restrictions, it is not currently feasible from a cost, safety, and time perspective to open and operate a ‘bricks-and-mortar’ sports wagering facility on its property in Cherry Hill, New Jersey.
“Consequently, even if successful in this litigation, Plaintiff’s right to open and operate a sports wagering facility (subject to licensure) would be of no great value, at least for the foreseeable future. To obtain that right, Plaintiff would be forced to spend additional resources resolving a discovery dispute stemming from defense counsel improperly instructing witnesses not to answer deposition questions, redeposing Defendants’ representatives, engaging in motion practice, and filing appeals.
“Based on these facts and circumstances, Plaintiff concluded it was in the best interest of the parties to end this litigation at this time.”
How ‘restrictive’ is the covenant?
The dispute stems from a decades-old “restrictive covenant” that seems to prevent operation of a sportsbook by Cherry Hill Towne Partners without the approval of former track operators GS Park Racing and Greenwood Racing.
State law allows for sportsbooks to be opened at any Atlantic City casino
, at the three operating racetracks, and at the site of former racetracks in Cherry Hill and in Hamilton Township, the former home of Atlantic City Race Course.
But the covenant bars “horse racing, simulcasting, off-track betting, wagering activities, and gambling of any sort (collectively, “Gaming”) anywhere on the GSP property.”
While the mall operators described the clause as “overly broad” and noted that sports betting is not specifically mentioned, federal Judge Renee Bumb last fall concluded that the former owners “will likely prevail on its position that the Restrictive Covenant is enforceable.”
That’s why those former owners seek a quick resolution to the case. The mall owners, however, would prefer the case to be dismissed “without prejudice.” They would thus avoid paying opposing legal fees and could leave the door open, perhaps for years down the road, to try again under better economic circumstances.
“Defendants argue that ‘plaintiff’s explanation is wholly insufficient’ because ‘the pandemic has affected us all, but it has not affected the facts or law germane to this case.’
COVID-19 takes the stand
“Plaintiff finds this argument to be callous and lacking a true understanding of the hardship this pandemic has and will continue to cause. Millions of people have lost their jobs in the span of months. Businesses, both large and small, have been forced to shutter their doors. Many people, justifiably so, are afraid to go out to restaurants and retail businesses.
“These are factors that Plaintiff considered before seeking to voluntarily dismiss this action, and Plaintiff diligently filed the instant motion once it determined that now is not the appropriate time to open and operate a sports wagering facility where people come to congregate and socialize.”
The former track operators had a rebuttal:
“Granting plaintiff’s motion results in plain legal prejudice to defendants for several reasons. In particular: This action has been pending for two years, and defendants’ summary judgment motion — filed exactly five months ago — is ripe for decision. The discovery deadline — as extended at plaintiff’s request — has expired.
“The parties have engaged in significant pretrial practice, including responsive pleadings, preliminary injunction briefing (resulting in a determination by the Court that defendants have demonstrated a substantial likelihood of success on the merits), multiple status conferences, two mediation sessions, informal settlement discussions between the parties, the exchange of written discovery, two corporate designee depositions, and summary judgment briefing.
“In the end, the lack of merit to plaintiff’s case has been exposed. Plaintiff’s motion is nothing more than a desperate eleventh-hour attempt to avoid a ruling on the merits. In these circumstances, it is unfair to permit plaintiff — which so cavalierly has consumed so much of the Court’s and defendants’ time and resources in connection with this unsupportable dispute — to sidestep a resolution on the merits.
“Defendants will be prejudiced by plaintiff’s gamesmanship here: defendants have expended significant resources in defense of this case, only for plaintiff to back out of the litigation when faced with the very real prospect of an unfavorable judgment.”
But attorneys for the mall operator disputed the idea that the case is a fait accompli.
“While this case is not in its infancy, it has not advanced to the geriatric stage,” the attorneys wrote. “No trial date has been set, no pretrial conference has been held or scheduled, and there is no indication that the evidence discovered thus far would be either unnecessary or unusable in a future action.”
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