05/06/2004 11:00PM

Fair Grounds case takes twist


Embattled Fair Grounds Race Course filed a lawsuit Friday seeking to annul a $90 million judgment rendered against the track in March. The basis of the suit is a 1992 letter Fair Grounds claims is exculpatory, but there is controversy over the relevance of the letter's content.

The letter, dated September 1992, was written by Paul Bonin, then the general counsel of the Louisiana Horsemen's Benevolent and Protective Association, and sent to an attorney for the State of Louisiana. A Fair Grounds press release said Bonin stated that, except on one point, the horsemen's group agreed with the way the state's racetracks were splitting video poker revenue between themselves and the horsemen. In 1994, the horsemen's association sued the state and Fair Grounds over video poker deductions. After lengthy litigation, the state Supreme Court ruled for the horsemen in the spring of 2003, and the suit was the basis for the recent $90 million district court judgment.

But the current general counsel for the horsemen, Jim Jelpy, disputed the Fair Grounds interpretation of the letter. Jelpy claimed that the letter addressed only one deduction wholly unrelated to the two deductions over which the horsemen sued, and that the supposedly exculpatory evidence had been taken out of context.

The new lawsuit is expected to delay resolution of the track's 2003 bankruptcy filing. Fair Grounds was expected to be the subject of an auction in bankruptcy court, but Douglas Draper, an attorney working on the case, said he was uncertain what effect the latest legal action would have.

"If it would wipe out the judgment, it would make a big difference," Draper said.