MEC Files Countersuit in Oregon

Attorneys for Magna Entertainment Corp. filed countersuit in Multnomah County Circuit Court in Oregon Feb. 18 to formally answer a $1-million breach-of-contract action brought against the company by the Oregon Greyhound Association.

In the counterclaim, MEC, under the name MKC Acquisition Co., asserts the OGA was in material breach of the original contract--known as the Purse and Condition Agreement--and cited misrepresentation and fraudulent inducement as grounds for its rescission. It asked for restitution and reasonable attorney's fees.

The OGA, an organization of the state's dog owners and breeders, originally filed suit against MEC for its failure to renew an operating lease for Multnomah Greyhound Park and for canceling the 2005 dog racing season.

The OGA suit argues MEC was legally obligated to conduct Greyhound racing in 2005, and therefore is still responsible for funding OGA purse accounts traditionally used help the group with adoption and breeding programs for retired racers.

Scott Daruty, chief U.S. counsel for MEC, said the OGA's failure to support legislation allowing MKC's sister company, Portland Meadows, to conduct simulcasting in Oregon on a year-round basis was the cause of contractual breakage.

"We tried to do the responsible thing for racing in Oregon," Daruty said. "It's clear that both tracks racing couldn't be supported by that market. So we made a two-year business arrangement with the Greyhound owners and paid extra money for their purse accounts last year--and were prepared to do so again this year--knowing this would effectively end Greyhound racing, and agreeing the surviving track would be the horse track."

An OGA spokesperson couldn't be reached for comment Feb. 23.

MEC's announcement in December that it wouldn't renew its lease of Multnomah angered the dog group and effectively ended more than 70 years of Greyhound racing in Oregon, currently the only state on the West Coast that allows it. A restrictive covenant on the property worked out with its owner, Art McFadden, keeps any outfit other than MEC from operating it.

McFadden and the OGA are haggling over an adoption kennel on racetrack grounds. According to the Oregonian newspaper, 55 dogs have been brought to the facility since MEC's announcement to cancel racing, and 32 remain.

In an informal agreement, McFadden, who threatened the kennel eviction, said he would allow its workers to stay on two or three months, according to the Oregonian.