Hadges v. Yonkers Racing Corp.

Hadges (plaintiff) was a racehorse driver, trainer, and owner. His license from the New York State Racing Board was suspended and revoked in 1974, reissued in 1976, and then suspended again for 6 months in 1989. After the license was reissued again, many racetracks refused to let Hadges work for them. Hadges was, however, able to race at one track, Monticello, five times in 1991 and seven times in 1993. Hadges brought suit against Yonkers Racing Corporation (YRC) in both state and federal court for banning him from working at its track. The federal court dismissed the case based in part on an affidavit stating that Hadges was able to work at other tracks in the area. Because of the affidavit, the court ruled that there was no state action and dismissed the case. The state court ruled in favor of YRC. Hadges then filed a Rule 60(b) motion in the federal suit, seeking to have the dismissal vacated because the affidavit was fraudulent. As part of the motion, Hadges and his attorney, William Kunstler, signed statements that Hadges had not worked in over four years. They also neglected to mention the state suit, which Hadges had appealed. When YRC brought forth evidence about Hadges’s work at Monticello he admitted that he had worked there, but stated that he had only made $100 total in the 12 races so it was as if he had not really worked at all. Hadges also brought forth a document purportedly indicating that the New York State Racing Board had barred him from a race in 1989 after his license had been reissued. However, YRC proved that the document was actually from a 1987 race. The district court denied the Rule 60(b) motion and imposed Rule 11 sanctions on Hadges for the two misrepresentations. The court also censured Kunstler under Rule 11 for “failing to make adequate inquiry as to the truth of Hadges’s affidavits and for failing to inform the court of the pending state court litigation.” Hadges and Kunstler appealed.