The Paulick Report received the following open letter from attorney Douglas E. Lieb on behalf of trainer Rene Allard. Meadowlands owner Jeff Gural released a statement earlier this week revealing that Allard, who is under federal indictment, was continuing to train horses and that horses under his care would be excluded from stakes races at The Meadowlands, Tioga Downs and Vernon Downs. Further, Gural's statement declared that owners who have or had horses in Allard's stable this past winter would have all horses owned wholly or in part excluded from participation at the three tracks.
Allard was named as part of a superseding indictment filed near the end of 2020 in a case of drug adulteration and misbranding along with co-defendants Louis Grasso, Donato Poliseno, Thomas Guido III, and Richard Banca, many of whom were part of the first wave of federal indictments regarding drugs in racing from March 2020.
Conditions of bail for Allard state that, among other conditions, he may not “train horses entered in any races” and is “to have no contact with racehorses outside the presence of third-party owner or delegated representative of the owner of the premises where racehorse is located.” When asked where Allard was operating and what the arrangements were for his supervision by a horse or facility owner, Lieb said, “Mr. Allard has complied at all times with his release conditions in the criminal case and continues to do so. We have no further information to provide at this time.”
Dear Mr. Gural:
This firm is civil counsel to Rene Allard. Last week, you further escalated your long-running campaign to blacklist Mr. Allard from his chosen profession. Mr. Allard has every right to make a living. He has every right to continue training horses, which is his passion and his life's work. All of his current professional activities are specifically permitted by court order. We demand that you cease and desist from your tortious interference with — and your efforts to organize a group boycott of — Mr. Allard's business. Your actions are not just unlawful, but wrong.
You began your campaign against Mr. Allard in 2013 by excluding him from your racetracks. You then employed a private investigative firm that harassed and threatened others in the harness racing industry unless they provided negative information about Mr. Allard. You then caused unreliable information generated by those investigators to be turned over to the United States Government, leading to Mr. Allard's arrest. As a result of your actions, Mr. Allard is the subject of a pending criminal prosecution in which he fully intends to clear his name.
In the latest escalation, you have now demanded that all horse owners who do business with Mr. Allard stop doing so as a condition of doing business with you. On March 6, 2021, the Meadowlands media relations department issued a statement (the “March 6 statement”) that the three racetracks you control—The Meadowlands, Tioga Downs, and Vernon Downs, which account for a significant portion of harness racing opportunities in the Northeast and include harness racing's flagship track—will “exclude any horse being trained or that has been trained” by Mr. Allard in Florida. The March 6 statement also notes that for owners who “currently have or have had horses in Mr. Allard's stable this winter,” “all horses owned wholly or in part by them will be excluded” from these three tracks and “deemed ineligible . . . for any/all administered stake races . . . for a minimum of three years.” Owners who have done business with Mr. Allard must also divest their interest from any horses not trained by Mr. Allard in which they are minority owners by March 15 in order for those horses to race at your tracks. The ban would likely affect dozens of owners and hundreds of horses that have never been trained by Mr. Allard.
Thus, in addition to banning horses trained by Mr. Allard, the March 6 statement effectively provides that any owners who have any business relationship with Mr. Allard must agree to cease doing business with him as a condition of doing unrelated business with your tracks. The pressure on owners is severe. Owners who agree to the policy announced in your March 6 Statement would need to immediately sell their ownership interest in horses that are not trained by Mr. Allard, which would likely mean selling those horses at a loss. Owners who do not agree to the policy would presumably lose the stakes money they have already paid to race at the Meadowlands this year and any purses they may have won from racing there.
It is difficult to envision a clearer example of tortious interference with business relations. You are engaged in “deliberate interference” with Mr. Allard's existing contractual relationships with owners in an effort to induce owners to breach their contracts with Mr. Allard. NBT Bancorp Inc. v. Fleet/Norstar Fin. Grp., Inc., 87 N.Y.2d 614, 621 (1996). You are also making statements that “impugn[] the basic integrity” of Mr. Allard's business. Amaranth LLC v. J.P. Morgan Chase & Co., 71 A.D.3d 40, 48 (1st Dep't 2009) (“[Plaintiff] has adequately pleaded the elements of tortious interference with prospective economic advantage. It is well settled that where a statement impugns the basic integrity . . . of a business, an action lies and injury is conclusively presumed.”). And you are exerting severe economic pressure on owners by threatening to freeze them out of the most important opportunities in their field if they have any economic relations with Mr. Allard in the future. See, e.g., Carvel Corp. v. Noonan, 3 N.Y.3d 182, 193-94 (2004) (severe economic pressure on third parties who do business with plaintiff may constitute tortious interference with plaintiff's prospective economic relations).
You are also, in potential violation of the Sherman Act, attempting to orchestrate a group boycott of Mr. Allard in plain sight. A group boycott is an agreement among participants in the relevant market not to deal, or only to deal on discriminatory terms, with a competitor. See, e.g., NYNEX Corp. v. Discon, Inc., 525 U.S. 128, 134 (1998). Such boycotts are per se unlawful—meaning that they are illegal irrespective of whether they actually have an anticompetitive effect or a legitimate business rationale—where they involve horizontal agreements among competitors. See, e.g., Fashion Originators' Guild of Am., Inc. v. FTC, 312 U.S. 457 (1941). You are both an owner of racetracks and an owner of horses. Should you succeed in your efforts to induce other horse owners to agree not to do business with Mr. Allard as a condition of doing business with you, you would be entering into such horizontal agreements.
The improper purpose of the March 6 statement is further confirmed by your history of targeting Mr. Allard — and others in your industry who defy your edicts.
In 2013, after Mr. Allard won several significant races at your tracks and was having an excellent season (including a training UDRS of .367), you excluded him from racing at any of your tracks without explanation. As you have acknowledged, banning trainers — especially winning ones — from the Meadowlands can help your bottom line. That is so in part because you and your close associates sometimes have stakes in horses competing in those same races.
A trainer has previously testified under oath that you banned him from your racetrack because he was winning races. After another trainer spoke out publicly against that ban, you banned him too. When a trainer worked to defeat legislation that would have expressly authorized the practice of allowing horses you own to race on your tracks, you banned him — and then banned other horsemen who were merely members of the association that opposed the proposed bill.
Even after you banned Mr. Allard from your racetracks, Mr. Allard continued his long track record of success. You, in turn, continued taking measures that would harm his career. You engaged a private investigative firm, 5 Stones Intelligence, to investigate Mr. Allard. 5 Stones used aggressive, unlawful tactics in an attempt to coerce witnesses into incriminating others in the industry. When witnesses refused to participate and told 5 Stones that they were not aware of any wrongdoing, 5 Stones threatened their careers in the industry.
You then gave the Government the information that 5 Stones collected through these questionable means. As you noted in the March 6 statement: “We, along with the Thoroughbred Jockey Club, spent much time and money employing the Five Stones investigators to prepare a case to get the feds interested which led to all of those indictments,” referring to the indictment against Mr. Allard and others. Your own words suggest that your purpose in retaining 5 Stones was not to uncover the truth. It was to produce information, whether true or false, that would “get the Feds interested” and lead the Government to indict Mr. Allard. In other words, you worked with 5 Stones to “lead the FBI in the right direction.” That the Government charged Mr. Allard on the basis of information provided at least in part by yourself and 5 Stones — after your years-long campaign against Mr. Allard, and after 5 Stones' repeated harassment of witnesses — raises serious doubt about the criminal charges that Mr. Allard now faces.
Despite Mr. Allard's arrest, owners have continued to employ him to train their young, non-racing horses because they are confident in his integrity and future success. As you are surely aware, Mr. Allard has been permitted by prosecutors and the Court to continue making a living by engaging in this work while the criminal case is pending. You, however, have continued your efforts to put Mr. Allard out of business entirely. Even before the March 6 Statement, you contacted owners directly to pressure them to end their business with Mr. Allard. Those private communications were consistent with your thinly veiled public comments that “anyone who used these people who were indicted cannot be sleeping well” and that “some might find it in their interest to cooperate.”
We hereby demand that you formally retract the March 6 Statement. We further demand that you state in writing that will not seek to require owners to stop doing business with Mr. Allard as a condition of entering horses into races at tracks you control.
You, your corporate entities, your affiliates, your employees and agents, and others acting at your direction, including but not limited to 5 Stones Intelligence, must also preserve all documents and correspondence concerning the investigation of Mr. Allard; your direct and indirect communications with others in the industry about Mr. Allard's business and/or conduct; and/or the March 6 Statement.
This letter is not an exhaustive recitation of Mr. Allard's legal claims, rights, or remedies, all of which we expressly reserve.
Sincerely yours,
Douglas E. Lieb
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