Court Opinion

ID: 4250299
Source: CourtListenerOpinion
Date Created: 2018-02-28 21:24:32.658821+00
Date Added: 2024-06-11T14:44:14.691796
License: Public Domain

IN THE SUPREME COURT OF IOWA
                            No. 11 / 04-0758

                           Filed May 5, 2006

BRIAN GREEN, JERRY VAUGHAN,
TAD LEGGETT, and RODGER SMITH,

      Appellants,

vs.

RACING ASSOCIATION OF CENTRAL
IOWA, d/b/a PRAIRIE MEADOWS
RACETRACK & CASINO,

      Appellee.
________________________________________________________________________
      Appeal from the Iowa District Court for Polk County, Carla T.

Schemmel, Judge.

      Appeal from a district court judgment granting summary judgment

to defendant on due-process and tortious-interference-with-contract

claims. AFFIRMED.

      Rick L. Olson, Des Moines, for appellants.

      Thomas W. Foley and Debra L. Hulett of Nyemaster, Goode, West,

Hansell & O’Brien, P.C., Des Moines, for appellee.
                                            2

CADY, Justice.

       Four jockeys sued the Racing Association of Central Iowa, d/b/a

Prairie Meadows (hereinafter RACI), alleging a violation of their due

process rights and interference with their existing and prospective

contracts when RACI excluded the jockeys from Prairie Meadows

Racetrack & Casino.           The district court granted RACI’s motion for

summary judgment, finding RACI was not a state actor, and that the

jockeys’ claim of tortious interference was insufficient as a matter of law.

We affirm.

       I.     Background Facts and Proceedings

       This case arose from allegations by a RACI employee, Ray

Famous, 1 that four jockeys, Brian Green, Jerry Vaughn, Tad Leggett, and

Rodger Smith, racially harassed him on August 6, 2002 at Prairie

Meadows. The exact nature of the allegations does not affect this appeal,

but they involved extremely offensive and threatening conduct.                      After

Famous reported the incident to RACI human resources personnel, RACI

notified the jockeys that they were “denied entrance and access to the

facility of Prairie Meadows pending the outcome of a stewards hearing on

the incident.” 2    Furthermore, they were informed if they attempted to
enter Prairie Meadows, they would be deemed trespassers and would be

subject to arrest or citation.          The Board of Stewards conducted an

       1Famous   was the jockey room custodian, a racing official under Iowa
Administrative Code rule 491—10.4(11) (2001).

       2Stewards    are “racing official[s] appointed or approved by the [Racing and
Gaming C]ommission to perform the supervisory and regulatory duties relating to pari-
mutuel racing.” Iowa Admin. Code r. 491—4.2(17A). The stewards are responsible for
“monitor[ing], supervis[ing], and regulat[ing] the activities of occupational and pari-
mutuel racetrack licensees,” including investigating possible violations of racing and
gaming rules by licensees. Id. r. 491—4.6(2). The jockeys are licensees. See id. r.
491—6.2(1) (“All persons participating in any capacity at a racing or gaming facility,
with the exception of certified law enforcement officers while they are working for the
facility as uniformed officers, are required to be properly licensed by the commission.”).
                                           3

investigation into the claim of misconduct. It interviewed Famous, the

jockeys, and other witnesses. On August 19, the Board concluded “the

investigation did not reveal evidence of a rule violation committed by an

IRGC licensee.” Immediately following the Board decision, RACI gave the

jockeys notice that they were denied entrance or access to Prairie

Meadows “pending an independent investigation by Prairie Meadows of

alleged harassment.”

       RACI completed its investigation of the alleged incident on August

20. RACI concluded Jerry Vaughn would be allowed to re-enter Prairie

Meadows with no further action taken. It decided Tad Leggett could re-

enter if he apologized to Famous. However, Rodger Smith was banned

from Prairie Meadows for the remainder of the season and could not

return for the 2003 season unless he completed a diversity class. RACI

permanently banned Brian Green from Prairie Meadows. The different

actions were taken based on the different roles of the jockeys in the

incident as determined by the investigation.

       The jockeys filed a petition against RACI asserting a claim of

intentional interference with contractual relations. On August 30, 2002,

they amended their petition to add a claim that RACI violated their due
process rights under the Iowa and United States Constitutions. 3

        3Presumably, the action was meant to be brought under 42 U.S.C. § 1983,

although the amended petition did not refer to that statute. See 42 U.S.C. § 1983
(2004) (“Every person who, under color of any statute, ordinance, regulation, custom, or
usage, of any State . . . subjects . . . any citizen of the United States . . . to the
deprivation of any rights, privileges, or immunities secured by the Constitution and
laws, shall be liable to the party injured in an action at law, suit in equity, or other
proper proceeding for redress . . . .”).

               A plaintiff in a § 1983 action must establish (1) that the
       defendants deprived the plaintiff of a right secured by the Constitution
       and laws of the United States, (2) that the defendant acted under color of
       state law, (3) that the conduct was a proximate cause of the plaintiff’s
       damage, and (4) the amount of damages.
                                           4

Following a hearing, the district court issued a temporary injunction on

September 30, enjoining RACI from excluding Green and Smith from

Prairie Meadows. RACI then moved for summary judgment. On April 7,

2004, the district court granted summary judgment in favor of RACI and

dissolved the temporary injunction. The jockeys appeal.

        II.    Standard of Review

        We have previously defined our standard of review from orders

granting summary judgment.            Our review is for correction of errors at

law. Otterberg v. Farm Bureau Mut. Ins. Co., 696 N.W.2d 24, 27 (Iowa

2005). In reviewing the record, we are mindful that

        [a] motion for summary judgment should only be granted if,
        viewing the evidence in the light most favorable to the
        nonmoving party, “the pleadings, depositions, answers to
        interrogatories, and admissions on file, together with the
        affidavits, if any, show that there is no genuine issue as to
        any material fact and that the moving party is entitled to a
        judgment as a matter of law.”

Id. (citations omitted).

        III.   Due Process

        The jockeys claim RACI deprived them of procedural due process

when it excluded them from Prairie Meadows without prior notice and a
hearing.       They claim this action violated their rights under the

Fourteenth Amendment to the United States Constitution and article I,

sections 1 and 9 of the Iowa Constitution. Both constitutions prohibit

the State from depriving a person of “property, without due process of

law.”    U.S. Const. amend. XIV, § 1; Iowa Const. art. I, § 9.             Yet, the

provisions only limit state action. Jensen v. Schreck, 275 N.W.2d 374,

________________________
Dickerson v. Mertz, 547 N.W.2d 208, 214 (Iowa 1996) (citations omitted).
                                             5

384 (Iowa 1979). They do not refer to individual activity. Id. Thus, RACI

can only be liable under a due process claim if it was a state actor. 4
       It is undisputed that RACI is a private, nonprofit corporation,

licensed to do business in Iowa and licensed by the Iowa Racing and

Gaming Commission to conduct racing and gaming activities at Prairie

Meadows Racetrack & Casino in Altoona, Iowa. Nevertheless, “ ‘when it

can be said that the State is responsible for the specific conduct of which

the plaintiff complains,’ ” conduct of a private actor may be deemed state

action and subjected to constitutional standards.                 Brentwood Acad. v.

Tenn. Secondary Sch. Athletic Ass’n, 531 U.S. 288, 295, 121 S. Ct. 924,

930, 148 L. Ed. 2d 807, 816-17 (2001) (quoting Blum v. Yaretsky, 457
U.S. 991, 1004, 102 S. Ct. 2777, 2786, 73 L. Ed. 2d 534, 546 (1982)).

       If the Fourteenth Amendment is not to be displaced, . . . its
       ambit cannot be a simple line between States and people
       operating outside formally governmental organizations, and
       the deed of an ostensibly private organization or individual is
       to be treated sometimes as if a State had caused it to be
       performed. Thus, we say that state action may be found if,
       though only if, there is such a “close nexus between the
       State and the challenged action” that seemingly private
       behavior “may be fairly treated as that of the State itself.”

Id. (quoting Jackson v. Metro. Edison Co., 419 U.S. 345, 351, 95 S. Ct.
449, 453, 42 L. Ed. 2d 477, 484 (1974)); accord Principal Cas. Ins. Co. v.

       4The   Supreme Court has repeatedly stated:

               “In cases under § 1983, ‘under color’ of law has consistently been
       treated as the same thing as the ‘state action’ required under the
       Fourteenth Amendment.” The ultimate issue in determining whether a
       person is subject to suit under § 1983 is the same question posed in
       cases arising under the Fourteenth Amendment:                 is the alleged
       infringement of federal rights “fairly attributable to the State?”
Rendell-Baker v. Kohn, 457 U.S. 830, 838, 102 S. Ct. 2764, 2769-70, 73 L. Ed. 2d 418,
426 (1982) (citations omitted); accord Lugar v. Edmondson Oil Co., 457 U.S. 922, 929,
102 S. Ct. 2744, 2749, 73 L. Ed. 2d 482, 490 (1982) (“[I]n a § 1983 action brought
against a state official, the statutory requirement of action ‘under color of state law’ and
the ‘state action’ requirement of the Fourteenth Amendment are identical.”).
                                        6

Blair, 500 N.W.2d 67, 70 (Iowa 1993) (“Our inquiry must be whether

there is a sufficiently close nexus between the state and the challenged

action of the regulated entity so that the action of the latter may be fairly

treated as the action of the state.” (citing Jackson, 419 U.S. at 358, 95

S. Ct. at 457, 42 L. Ed. 2d at 488)).

      The Supreme Court has held that a sufficiently close nexus

between the State and the challenged conduct to establish state action

exists when the State and a private corporation are joint participants in

the challenged activity based on their interdependence.            Burton v.

Wilmington Parking Auth., 365 U.S. 715, 81 S. Ct. 856, 6 L. Ed. 2d 45

(1961). In Burton v. Wilmington Parking Authority, an African-American

man claimed his rights under the Fourteenth Amendment were violated

when a coffee shop in a city parking garage denied him service. Id. at

720, 81 S. Ct. at 859, 6 L. Ed. 2d at 49.           The Wilmington Parking

Authority, an agency of the State of Delaware, leased space in one of its

parking garages to the business, a private corporation called Eagle Coffee

Shoppe, Inc.    Id. at 716, 81 S. Ct. at 857, 6 L. Ed. 2d at 47.          The

Authority provided gas and heat to Eagle and provided various repairs.

Id. at 719-20, 81 S. Ct. at 858, 6 L. Ed. 2d at 49.             In addition,

improvements Eagle made to the premises were tax-exempt.            Id.   The

Authority benefited from the lease arrangement by virtue of the $28,700

in rent it received annually from Eagle. Id. at 723, 81 S. Ct. at 861, 6
L. Ed. 2d at 51.      Without the rent received from commercially leased

portions   of   the   parking   buildings,   they   would   have   been   an

“ ‘unprofitable enterprise.’ ” Id.

      The Supreme Court found state action, reasoning,

      The State has so far insinuated itself into a position of
      interdependence with Eagle that it must be recognized as a
      joint participant in the challenged activity, which, on that
                                    7
      account, cannot be considered to have been so “purely
      private” as to fall without the scope of the Fourteenth
      Amendment.

Id. at 725, 81 S. Ct. at 862, 6 L. Ed. 2d at 52. The Court observed that

“the relationship of the restaurant to the parking facility in which it is

located confers on each an incidental variety of mutual benefits.” Id. at

724, 81 S. Ct. at 861, 6 L. Ed. 2d at 51. In a later case, the Court called

the arrangement between the parking authority and the coffee shop in

Burton a “symbiotic relationship.” Moose Lodge No. 107 v. Irvis, 407 U.S.
163, 175, 92 S. Ct. 1965, 1972, 32 L. Ed. 2d 627, 638 (1972).

      It is under this “symbiotic relationship” theory that the jockeys

argue RACI is a state actor to which the Constitution applies.         The

jockeys claim RACI has a symbiotic relationship with Polk County

because: (1) Prairie Meadows operates on public property leased from

Polk County; (2) some members of RACI’s board of directors are

“appointed by and are intended to represent the Polk County Board of

Supervisors”; (3) RACI “pays property taxes only by way of agreement

with Polk County”; (4) Polk County receives lease payments in amounts

the jockeys believe are excessive; (5) “The stated primary purpose of the

operation of Prairie Meadows is to stimulate the economy of Polk County
and the surrounding area”; and (6) Polk County depended on RACI “for

revenue to pay off existing bonds that financed the purchase and

building of” Prairie Meadows, which Polk County owns as realty.

      RACI submitted several exhibits along with its statement of

undisputed material facts showing the relationship between RACI and

Polk County. Although RACI and Polk County initially functioned under

an operating agreement, it was terminated in 1998 and replaced with a

lease agreement. In the lease agreement, Polk County leased the Prairie

Meadows premises (real estate and improvements) to RACI in exchange
                                    8

for $1 million per month in rent for five years. In addition, RACI was to

pay to Polk County the first $15 million of its net receipts generated in

each calendar year from 1998 to 2000, the first $15.5 million of its net

receipts generated in 2001, and the first $16 million of its net receipts

generated in 2002. The lease further provided that Polk County had no

obligation to make repairs or improvements or perform maintenance, and

that RACI was responsible for paying all utilities for Prairie Meadows.

Polk County would pay all real estate taxes, and RACI would pay any and

all personal property taxes and special assessments. Further, the lease

reserved the power for a county representative to enter Prairie Meadows

and have access to RACI’s books and records “in furtherance of [Polk

County’s] responsibility to the public and in protection of its property.”

Finally, the lease stated:     “Nothing contained in this Lease shall

constitute or be construed to be or create a partnership or joint venture

between [Polk County], on the one part, and [RACI], on the other part.”

      Generally, a lease between a government entity and a private

corporation “is insufficient, standing alone, to show state action.”

Harvey & Corky Corp. v. Erie County, 392 N.Y.S.2d 116, 118 (App. Div.

1977) (citing Golden v. Biscayne Bay Yacht Club, 530 F.2d 16, 33 (5th
Cir. 1976)); see also NBC v. Comm’ns Workers of Am., AFL-CIO, 860 F.2d
1022, 1028 (11th Cir. 1988) (lease did not provide “nexus or joint action

sufficient to constitute state action”); Greco v. Orange Mem’l Hosp. Corp.,

513 F.2d 873, 880 (5th Cir. 1975) (lease insufficient when the private

lessee “is ultimately responsible for the daily maintenance, upkeep, and

operation of the facility,” must “maintain and operate the hospital at its

own expense and to hold the lessor harmless from any liability incurred

in operating the facility,” and must “provide adequate fire, tornado, and

explosion insurance and in the event of any damage to use the proceeds
                                    9

to repair the hospital”).   Instead, it is only when there has been

governmental involvement or a mutual conferring of benefits between the

governmental lessor and the private lessee that courts have usually

found state action. See Ludtke v. Kuhn, 461 F. Supp. 86, 93-94 (S.D.N.Y.

1978) (New York Yankees found to be state actors, in equal-protection

action brought by female journalist excluded from Yankee locker-room,

because they leased the stadium from the City of New York, “the annual

rentals to be paid to the City for use of the stadium depend directly on

the drawing power of Yankee games, and the City has in turn invested

substantial sums of public money to enhance that drawing power by

modernizing and improving the stadium itself,” and “[a]dvertising and

massive publicity about the Yankees and individual Yankee ballplayers is

essential to the profitability of the Yankee Stadium”); Niswonger v. Am.

Aviation, Inc., 424 F. Supp. 1080, 1081 (E.D. Tenn. 1976) (private

corporation operating airport in premises leased from city and county

was a state actor because “the operation of airports and air navigation

facilities in Tennessee is declared to be a public purpose,” and the

corporation was performing a public function).

      In this case, the only evidence of county involvement in RACI’s
operations was that four of RACI’s thirteen members on the board of

directors were appointed by the Polk County Board of Supervisors.

Other courts have found that the appointment of some of the corporate

board members by a governmental entity does not transform the action

of the corporation into action of the governmental entity. See Kiracofe v.

Reid Mem’l Hosp., 461 N.E.2d 1134, 1138 (Ind. Ct. App. 1984) (no state

action although “the hospital’s Board of Directors consist[ed] of twenty-

one members, four of which are appointed by the Richmond City

Council, the Wayne County Council, the Wayne Township Trustee, and
                                       10

the Wayne County Commissioners”); Renforth v. Fayette Mem’l Hosp.

Ass’n, 383 N.E.2d 368, 374 (Ind. Ct. App. 1978) (no state action when

three of hospital’s board of trustees were appointed by governmental

entities; evidence was they “acted independently and did not report to the

governmental bodies which elected them”); Weston v. Carolina Medicorp,

Inc., 402 S.E.2d 653, 658 (N.C. Ct. App. 1991) (“The appointment right

[of county commissioners] of some but not all of the [hospital’s board of]

trustees, though indicative of state action, does not alone compel the

conclusion that the suspension and revocation of [hospital doctor’s] staff

privileges constituted state action in this case.”); see also Crowder v.

Conlan, 740 F.2d 447, 451 (6th Cir. 1984) (no state action although two

of hospital’s thirteen-member board of trustees were public officials).

However, the Supreme Court has considered it to be a factor in

determining whether the private and public entities are so entwined that

the private entity may be deemed a state actor. See Brentwood Acad.,
531 U.S. at 300, 121 S. Ct. at 932, 148 L. Ed. 2d at 820 (considering fact

that “State Board members are assigned ex officio to serve as members of

the board of control and legislative council”).

      With respect to the issue of whether Polk County and RACI
mutually confer benefits on one another, it is obvious that Polk County

benefits financially from the lease agreement with RACI, both directly,

though   rent   and     net-receipts   payments,   and   indirectly,   through

stimulation of the local economy. In addition, RACI benefited from the

original arrangement with Polk County in that when the legislature

amended chapter 99F to allow slot machines at racetracks, Polk County

issued more then $26 million in revenue bonds to pay for remodeling of

Prairie Meadows to accommodate slots, acquisition of slot machines, and

other start-up costs.
                                     11

      However, this mutual benefit does not mean that the state-action

requirement is satisfied. Burton was the high watermark by the Supreme

Court in the state-action arena, considering that the Wilmington Parking

Authority was not directly involved in the Eagle Coffee Shoppe’s decision

to deny service to African-American customers. See Burton, 365 U.S. at

725, 81 S. Ct. at 861, 6 L. Ed. 2d at 52 (“But no State may effectively

abdicate its responsibilities by either ignoring them or by merely failing

to discharge them whatever the motive may be.”).        In later cases, the

Court has significantly tempered its Burton holding, repeatedly stating

that “where the impetus for the discrimination is private, the State must

have ‘significantly involved itself with invidious discrimination[]’ in order

for the discriminatory action to fall within the ambit of the constitutional

prohibition.” Moose Lodge No. 107, 407 U.S. at 173, 92 S. Ct. at 1971,
32 L. Ed. 2d at 637 (quoting Reitman v. Mulkey, 387 U.S. 369, 380, 87
S. Ct. 1627, 1634, 18 L. Ed. 2d 830, 838 (1967)); see Brentwood

Acad., 531 U.S. at 295, 121 S. Ct. at 930, 148 L. Ed. 2d at 816-17

(“[C]onstitutional standards are invoked ‘when it can be said that the

State is responsible for the specific conduct of which the plaintiff

complains.’ ” (Citation omitted; second emphasis added.)); Am. Mfrs. Mut.

Ins. Co. v. Sullivan, 526 U.S. 40, 52, 119 S. Ct. 977, 986, 143 L. Ed. 2d
130, 145 (1999) (“Whether such a ‘close nexus’ exists, our cases state,

depends on whether the State ‘has exercised coercive power or has

provided such significant encouragement, either overt or covert, that the

choice must in law be deemed to be that of the State.’ Action taken by

private entities with the mere approval or acquiescence of the State is not

state action.” (Citations omitted.)); Nat’l Collegiate Athletic Ass’n v.

Tarkanian, 488 U.S. 179, 195, 109 S. Ct. 454, 464, 102 L. Ed. 2d 469,

486-87 (1988) (“Neither UNLV’s decision to adopt the NCAA’s standards
                                    12

nor its minor role in their formulation is a sufficient reason for

concluding that the NCAA was acting under color of Nevada law when it

promulgated standards governing athlete recruitment, eligibility, and

academic performance.”); Blum, 457 U.S. at 1004-05, 102 S. Ct. at 2786,
73 L. Ed. 2d at 546-47 (“[A] State normally can be held responsible for a

private decision only when it has exercised coercive power or has

provided such significant encouragement, either overt or covert, that the

choice must in law be deemed to be that of the State. Mere approval of

or acquiescence in the initiatives of a private party is not sufficient to

justify holding the State responsible for those initiatives under the terms

of the Fourteenth Amendment.” (Citations omitted.)); Jackson, 419 U.S.

at 357, 95 S. Ct. at 456-57, 42 L. Ed. 2d at 487 (“Approval by a state

utility commission of such a request from a regulated utility, where the

commission has not put its own weight on the side of the proposed

practice by ordering it, does not transmute a practice initiated by the

utility and approved by the commission into ‘state action.’ ”). The key to

Burton was that Eagle affirmatively contended that to serve African

Americans “would injure its business.”      Burton, 365 U.S. at 725, 81

S. Ct. at 861, 6 L. Ed. 2d at 51.     The Wilmington Parking Authority

directly profited from Eagle’s discrimination, and those profits were

“indispensable elements in[] the financial success of a governmental

agency.” Id.

      In this case, there is no indication Polk County profited at all from

RACI’s exclusion of the jockeys without notice or hearing. Furthermore,

there is no indication Polk County or the county-appointed directors on

the RACI board of directors participated in the decision to exclude the

jockeys from Prairie Meadows. Rather, the undisputed evidence was that

RACI’s director of human resources made the decision to issue the
                                    13

trespass notices to the jockeys.     This evidence is significant because

there must be some connection between the government and “ ‘the

specific conduct of which the plaintiff complains’ ” for the government to

be held responsible for the private actor’s conduct.            Brentwood

Acad., 531 U.S. at 295, 121 S. Ct. at 930, 148 L. Ed. 2d at 816-17

(citation omitted; emphasis added); accord Gilmore v. City of Montgomery,

417 U.S. 556, 573, 94 S. Ct. 2416, 2426, 41 L. Ed. 2d 304, 319 (1974)

(stating the overriding concern is “whether there is significant state

involvement in the private discrimination alleged” (citations omitted)).

Our role in ascertaining this connection has been described as follows:

      The judicial obligation is not only to preserve an area of
      individual freedom by limiting the reach of federal law and
      avoid the imposition of responsibility on a State for conduct
      it could not control, but also to assure that constitutional
      standards are invoked when it can be said that the State is
      responsible for the specific conduct of which the plaintiff
      complains.

Brentwood Acad., 531 U.S. at 295, 121 S. Ct. at 930, 148 L. Ed. 2d at

816-17 (citations, quotation marks, and brackets omitted); see also

Putensen   v.   Hawkeye   Bank,    564 N.W.2d 404,   408 (Iowa    1997)

(“Constitutions were not designed to micromanage disputes between
citizens, and, to resolve most lawsuits, citizens must resort to statutes

and the common law. A state due process clause becomes implicated at

the point where the power of the state is called upon by a private party in

such a way as to deprive another of life, liberty or property.”).     Here,

there was no evidence that Polk County controlled RACI’s decision to

exclude the jockeys.    Moreover, when the connection is based on a

benefit received by the county, it is not enough under Burton and its

progeny to show that Polk County benefited generally from RACI’s

operation of Prairie Meadows.      Rather, the jockeys had to show Polk
                                     14

County benefited from the constitutional violation alleged.       Only then

could we say Polk County was responsible for the violation. There was

simply insufficient involvement with Polk County, as a matter of law, to

fairly attribute RACI’s action to exclude the jockeys from Prairie Meadows

to Polk County. The district court correctly granted summary judgment

in favor of RACI on the jockeys’ constitutional claim.

      IV.     Intentional Interference with Existing and Prospective
              Contractual Relations
      The jockeys also claim RACI tortiously interfered with existing and

prospective riding contracts the jockeys had with horse-owners and

trainers. The district court granted summary judgment to RACI on both

claims.     On appeal, the jockeys abandoned the claim of prospective

contractual relations, and we consequently only consider the claim of

interference with existing contracts.

      The elements of the tort of intentional interference with an existing

contract are:

      “ ‘(1) plaintiff had a contract with a third-party; (2) defendant
      knew of the contract; (3) defendant intentionally and
      improperly interfered with the contract; (4) the interference
      caused the third-party not to perform, or made performance
      more burdensome or expensive; and (5) damage to the
      plaintiff resulted.’ ”

Gibson v. ITT Hartford Ins. Co., 621 N.W.2d 388, 399 (Iowa 2001) (quoting

Jones v. Lake Park Care Ctr., Inc., 569 N.W.2d 369, 377 (Iowa 1997)).

RACI conceded for purposes of summary judgment that the jockeys had

contractual relationships with horse-owners and trainers, and RACI did

not dispute that it knew of the relationships. Rather, RACI claimed it

was entitled to summary judgment because there were no facts

pertaining to the claim to establish the third element: intentional and

improper interference. Thus, the crux of the argument on appeal boils
                                     15

down to whether there are any facts associated with the jockeys’ claim

from which a rational jury could find intentional and improper

interference.   Wilson v. Darr, 553 N.W.2d 579, 582 (Iowa 1996) (“[T]he

moving party may establish a right to summary judgment by establishing

the limits of the other part[y’s] proof.    If those limits reveal that the

resisting party has no evidence to factually support an outcome

determinative element of that party’s claim, the moving party will prevail

on summary judgment.” (citing Griglione v. Martin, 525 N.W.2d 810, 813-

14 (Iowa 1994))); accord Mason v. Vision Iowa Bd., 700 N.W.2d 349,

353 (Iowa 2005) (stating that to generate a genuine issue of material fact,

the nonmoving party must present some evidence from which a

reasonable fact-finder could find in that party’s favor).

      The intent to interfere with a contract does not make the

interference improper. Berger v. Cas’ Feed Store, Inc., 543 N.W.2d 597,

599 (Iowa 1996) (citing Restatement (Second) of Torts § 767 cmt. d

(1979)). The interference must be both intentional and improper. For

purposes of a claim for intentional interference with a contract, the

factors used to help determine if the challenged conduct was improper

include:

      1. The nature of the conduct.

      2. The Defendant’s motive.

      3. The interests of the party with which the conduct
      interferes.

      4. The interest sought to be advanced by the Defendant.

      5. The social interests in protecting the freedom of action of
      the Defendant and the contractual interests of the other
      party.

      6. The nearness or remoteness of the Defendant’s conduct
      to the interference.
                                   16
      7. The relations between the parties.

Revere Transducers, Inc. v. Deere & Co., 595 N.W.2d 751, 767 (Iowa

1999); accord Restatement (Second) of Torts § 767, at 26-27.

      In Berger, we quoted from Restatement (Second) of Torts section

767 comment d:

      “[I]f there is no desire at all to accomplish the interference
      and it is brought about only as a necessary consequence of
      the conduct of the actor engaged in for an entirely different
      purpose, his knowledge of this makes the interference
      intentional, but the factor or motive carries little weight
      towards producing any determination that the interference
      was improper.”

Berger, 543 N.W.2d at 599 (quoting Restatement (Second) of Contracts

§ 767 cmt. d). Thus, conduct is generally not improper if it was merely a

consequence of actions taken for a purpose other than to interfere with a

contract. See id. (“[A] party does not improperly interfere with another’s

contract by exercising its own legal rights in protection of its own

financial interests.” (citing Wilkin Elevator v. Bennett State Bank, 522
N.W.2d 57, 62 (Iowa 1994))).

      In this case, RACI supported its motion for summary judgment

with evidence that the only reason it acted to exclude the jockeys from
the track was to responsibly respond to the allegations that the jockeys

racially harassed the jockey room custodian.           It contends this

undisputed fact means that if its conduct did interfere with the jockeys’

riding contracts, the interference was not improper but only a

consequence of actions taken for the purpose of satisfying its obligation

under the law as an employer. See Farmland Foods, Inc. v. Dubuque

Human Rights Comm’n, 672 N.W.2d 733, 744 (Iowa 2003) (noting that

an employer’s failure to take proper remedial action in response to

harassment by a nonsupervisory employee is an essential element of a
                                     17

hostile-work-environment claim under the civil rights acts); see also

Taylor v. Jones, 653 F.2d 1193, 1199 (8th Cir. 1981) (“[E]mployer

toleration of a discriminatory atmosphere alone gives rise to a cause of

action by the [employee].”).

      We recognize a legitimate need of an employer to investigate the

allegations of harassment in the workplace and, based upon the results

of an investigation, to take responsible action against employees who

harass other employees. See Taylor, 653 F.2d at 1199; Farmland Foods,

Inc., 672 N.W.2d at 744. Thus, we agree with RACI that if the evidence

in this case only shows it acted for the purpose of satisfying its legal

obligation to protect the interests of employees and to maintain a

hostility-free work environment, then there can be no viable claim for

interference with a contract. The factors used to determine the existence

of improper conduct support this conclusion. See Revere Transducers,

Inc., 595 N.W.2d at 767 (listing factors). If the sole motive is a legitimate

purpose derived from the law, then any interference is not improper as a

matter of law.    See Berger, 543 N.W.2d at 599 (“[A] party does not

improperly interfere with another’s contract by exercising its own legal

rights in protection of its own financial interests.” (Citation omitted.)).

See generally Restatement (Second) of Torts § 767 cmt. b, at 28 (“The

rules stated in §§ 768-774 show[] the results of the balancing process in

some specific situations that have been the subject of judicial decision;

but they do not constitute an exhaustive list of situations in which it has

been determined that an intentional interference with contractual

relations is not improper.”).

      When a motion for summary judgment is properly supported, the

nonmoving party is required to respond with specific facts that show a

genuine issue for trial. See Hlubeck v. Pelecky, 701 N.W.2d 93, 95-96
                                      18

(Iowa 2005) (“[T]he nonmoving party may not rest upon the mere

allegations of his pleading but must set forth specific facts showing the

existence of a genuine issue for trial.” (citing Iowa R. Civ. P. 1.981(5);

Hoefer v. Wis. Educ. Ass’n Ins. Trust, 740 N.W.2d 336, 338-39 (Iowa

1991))). This means the jockeys in this case were required to set forth

some facts in resisting RACI’s motion for summary judgment that could

support the existence of an improper motive.

      The jockeys failed to point to any facts in resisting the motion for

summary judgment to show RACI’s motive was improper. In fact, they

offered no facts bearing on the issue of motive in resisting the summary

judgment motion, but only made conclusory allegations that RACI’s

actions were improper.       Moreover, the jockeys did not remedy this

deficiency when they provided the trial judge with a copy of the complete

temporary-injunction record at the summary judgment hearing.              Our

rules require a nonmoving party to identify the specific facts that show

the existence of a genuine issue for trial. Iowa R. Civ. P. 1.981(5). When,

as in this case, a party resisting summary judgment seeks to generate a

fact issue on an actor’s motive, that party must identify specific facts

that reveal the alleged underlying motive.      See Hoefer, 470 N.W.2d at

338-39 (“While intentional torts . . . are generally poor candidates for

summary judgment because of the subjective nature of motive and intent

the rule is not absolute and, . . . ‘there is no genuine issue of fact if there

is no evidence.’ Put another way, the party resisting summary judgment

‘may not rest upon the mere allegations or denials of his pleading.’ The

resistance must set forth specific facts constituting competent evidence

to support a prima facie claim.” (Citations omitted.)).

      Notwithstanding, the jockeys argue that an inference of an

improper motive can be drawn from the undisputed facts offered by RACI
                                    19

in its motion for summary judgment. They claim RACI’s threat to arrest

the jockeys and the severity of the RACI’s responsive action, as well as

RACI’s decision to pursue an independent investigation following the

stewards’ investigation, all support an inference of an improper motive.

      We recognize that a nonmoving party is entitled to all reasonable

inferences in a motion for summary judgment. See Perkins v. Wal-Mart

Stores, Inc., 525 N.W.2d 817, 818 (Iowa 1994) (“[S]ummary judgment is

like a directed verdict: Every legitimate inference that reasonably can be

deduced from the evidence should be given to the nonmoving party.”).

However, the requirement to identify specific facts in response to a

summary judgment motion includes the requirement to identify those

facts that support the inference sought to be drawn. The jockeys have

not done so.

      V.    Conclusion

      RACI was entitled to summary judgment on the jockeys’ due

process claim because RACI is not a state actor. RACI was also entitled

to summary judgment on the jockeys’ tortious interference claims. We

affirm the judgment of the district court.

      AFFIRMED.
      All justices concur except Wiggins, J., who takes no part.