Baltimore moves to seize Preakness Stakes race

Baltimore mayor Catherine Pugh has filed suit seeking to seize the famed Preakness Stakes race — trademarks, business deals, and all — through eminent domain. I’ve got a few things to say about that in Monday’s Wall Street Journal (paywall, sorry). Ilya Somin at Volokh Conspiracy has an analysis that quotes my piece.

For those just catching up with the underlying story, Pamela Wood covers it at the Baltimore Sun/Capital Gazette as does Robert H. Thomas at Inverse Condemnation. See also my 2014 Cato take on an earlier episode in Maryland’s history of “smash and grab” eminent domain methods.

14 Comments

  • At first it sounded ridiculous. But then, after reading Somin’s article, including Baltimore’s history of trying to “condemn” other intellectual property… it sounds dystopian. Or Venezuelan. Horrifying to think an American government would apparently include that sort of tactic in their standard playbook.

  • “If the court awards ownership of the track and the Preakness to the city, “These properties will be used to continue their historic role in the cultural traditions of Baltimore City, to foster employment and economic development in Baltimore, and in particular in the Park Heights Urban Renewal jurisdiction, as well as to protect the health and safety of the people attending the Preakness and other Pimlico events, as well as the employees and horses working there,” the city wrote in the lawsuit.”

    If the court awards ownership of the track and the Preakness to the city, it will become a patronage dump, and will need even more taxpayer money to continue operation.

  • This is simply gangster government. It is what the King used to do in Europe–if he needed $ he just took it out of the banks or seized all the $ of Jews.

  • I guess there are three questions:

    1. Can the city use eminent domain to take over the racetrack and the race? I think the answer is yes.

    2. Should the city be allowed to use eminent domain in this fashion? Maybe so. While governments should not be running businesses, generally, there might exceptions, such as when existing businesses tend to foster crimes or other societal ills. As such, governments running liquor stores may have at one time been justified (but probably not).

    3. If the city can do this, and it should be allowed to do this, should it exercise its discretion and do it? If we are looking for socialist tendencies, this would be one. There is little societal justification for the government telling a business where to conduct its business, or taking over a business because the government does not like the business’s intention to move. Imagine if Baltimore had tried to take ownership over the Colts in 1984.

    CC. this is not what the King used to do in Europe. In theory, the King owned everything. As a result, the King with unfettered power could grant and take away property rights on a whim, because they were his to give or take. Baltimore will have to compensate the racetrack owners when it exercises eminent domain.

    We should all note that this is better than what happened in Kelo, where the city wanted to use eminent domain to confiscate property from one private entity and give it to another private entity. That does not make it right. It just makes it more akin to traditional eminent domain purposes.

    As Inverse Condemnation rightly points out: “And no matter what the courts of Maryland eventually say about this, to us this is about as stupid a use of the power of eminent domain as we can possibly imagine”

    • Allan, I think your point #1 is really two separate questions. Can Baltimore seize the racetrack? Absolutely. Can they seize the intellectual property of the “Preakness Stakes” name, and be the only ones allowed to hold a race of that name, preventing the Stakes from being held elsewhere? That’s a separate, and (I hope) less clear cut question.

      And your last note in point #3, “Imagine if Baltimore had tried to take ownership over the Colts in 1984.” Baltimore did exactly that. The city tried to condemn the Colts franchise. That’s why the team had to flee the state in the middle of the night, packing up their equipment and sending the moving trucks on different routes to evade police detection, so they wouldn’t be subject to Maryland’s eminent domain. Maybe you were being sarcastic – that’s difficult to tell over text, but it was literally what Baltimore did.

      • Parkhorse. I did not realize that is what happened with the Colts. Apparently, the Colts were moved prior to the city taking action. I would think it is harder to move a racetrack than a football team.

  • They should be able to sell the IP since there is no physical location for it. The city should not be able to take any IP in this fashion. Neither trademark, copyright or patent. After all, those are governed federally and outside the jurisdiction of the city… My understanding that eminent domain only covers physical property required for public good. Despite it being called intellectual property, it isn’t property, merely a right and limited monopoly. Also, can a city even “own” trademark, copyright or patent or does that simply place them in the public domain?

    • “nor shall private property be taken for public use, without just compensation”. 5th Amendment. There is nothing that differentiates between real, personal, and intellectual property.

      Governments can and do own intellectual property.

      I would point out that the 5th Amendment protects against the government. If we limit the 5th amendment to only protecting physical property, then anything else is fair game for government expropriation. I do not want the government taking my personal or intellectual property without just compensation.

      Eminent domain is not in the constitution. It is simply assumed that the government has the right to use eminent domain. Just saying.

      • But patent and copyright is already there… And it’s a limited monopoly, not property.

      • “Governments can and do own intellectual property. ”

        There are limits to this. The federal courts have held that the US federal government can not hold a copyright under US law in it’s own work products. I have no idea if that limit has been pushed down to the state/local levels.

        But for purposes of IP and Eminent Domain, the real question isn’t “can a city own IP?”

        Property rights for real and personal property mostly originate from state law, but IP property rights exist exclusively under federal law.. There is a real (and I believe unsettled) question as to whether a state or local government has the power to seize a “property” right that exists wholly under federal law, even under Eminent Domain.

        For example, under the US copyright act a copyright can only be transferred by a written instrument signed by the person transferring the right. Any attempt by a state / local judge under eminent domain to transfer that copyright to the state / local government by court order would be invalid under federal copyright law.

  • “…nor shall private property be taken for public use, without just compensation.”

    They can take my land and build a school, road, military base, courthouse, road maintenance division equipment storage lot, etc – those uses of land are public use.

    They can take my taxi cab or truck and use it to haul soldiers and supplies to the front. That is public use.

    They can take my yacht, man it with Coast Guardsmen and send it out on submarine patrol, or lifeguard patrol or drug interdiction….those are public uses.

    They can take my steel mill and use it to make armor plates for the government shipyard or tank factory. That is public use.

    They can take my patent for the aileron or integrated control system, and use that to design and build fighter planes for war. That is public use.

    ‘Splain to me how, exactly, a horse race can be “for public use”? How does a Government “use” a horse race?

    It says “for public use”…..without a public use, the plain English reading a pretty clear, there can be no taking.

  • so, what prevents the “Horse Racing People” from dropping the Preakness race in favor of another?

    It would set an interesting precedent that my prevent further takings such as this.

    Basically saying, “If you take the park and name, we will simply not play there anymore.”
    I will admit that it would ruin tradition and all, but it may take exactly this kind of action for governments to realize that “we ain’t gonna take it anymore.”

  • The thing that has struck me is that the City wants to take over / seize the Preakness because of the lack of money they say the owners of Pimlico have put into the track and support buildings.

    Yet the Park Heights area surrounding the track has been bad for as long as I can remember. It is not as bad as other areas of the City, but it is terrible.

    To me, this is just another case of the City of Baltimore trying to tell a business what it has to do as far as maintenance, upkeep and upgrades, but at the same time failing to show that the City can do the maintenance, upkeep and upgrades to the City taxpayers and citizens expect.

    Roads are a disaster. The Police are out of control. The City Council is concerned with social issues rather than tangible issues. Schools are failing.

    There is nothing that the City of Baltimore can point to and say “we are doing this well.”

    (Other than corruption.)

    However, they will try like crazy how to tell other companies how to be run and if the companies won’t listen, they’ll pass laws and regulations to make sure they listen.

  • If they only sold books at Pimlico…..

    BALTIMORE (AP) — Baltimore’s embattled mayor announced Monday that she is taking an indefinite leave of absence, just as a political scandal intensifies over what critics call a “self-dealing” book-sales arrangement that threatens her political career.

    Mayor Catherine Pugh’s office says she feels unable to fulfill her obligations as mayor due to deteriorating health brought on by a recent bout of pneumonia. “She’s been advised by her physicians that she needs to take time to recover,” her office’s statement said, adding that the City Council president will take over the Democratic mayor’s day-to-day responsibilities.

    The first-term mayor’s abrupt decision to go on leave indefinitely came the same day that Maryland’s Republican governor asked the state prosecutor to investigate corruption accusations against the leader of Maryland’s biggest city and the state’s comptroller, a Democrat, urged Pugh to resign immediately.

    In a letter to the state prosecutor released Monday, Gov. Larry Hogan said allegations facing Pugh and her questionable no-contract arrangements to sell her “Healthy Holly” children’s books are “deeply disturbing.” Hogan said he was particularly concerned about $500,000 in sales over seven years to a university-based health care system “because it has significant continuing ties with the State and receives very substantial public funding.”

    More at link: https://apnews.com/f60e09055c474765a8ec1f9b3374ce2c

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