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Bettors-Vs.-Baffert Suit Transferred to Kentucky

A New Jersey federal judge's order on Tuesday transferred a class-action lawsuit brought by a group of bettors against trainer Bob Baffert to the Western District of Kentucky, meaning that the nearly three-year-old case will now go before its third different court since 2021.

The original federal lawsuit was filed in California. In it, a group of horseplayers alleged they were cheated out of their property by Baffert when his betamethasone-positive trainee, Medina Spirit, crossed the finish wire first in the GI Kentucky Derby and purportedly prevented the plaintiffs from cashing winning tickets on the runner-up.

Baffert has denied those allegations, asked for the case to be dismissed, and has stated in court documents that the plaintiffs have twisted their case so far from reality that their alleged misstatements amount to libel.

Back on Dec. 22, 2023, the judge handling the case in United States District Court (District of New Jersey) ordered both sides to file letters by Jan. 15, 2024, “if either party wishes to explain why this case should NOT be transferred back to the Central District of California.”

But after receiving written rationale from both parties, the judge on Feb. 20 instead mandated that Kentucky was now the proper jurisdiction for the case.

“[B]alancing all the factors, this case should be transferred to the Western District of Kentucky,” U.S. District Judge Michael Farbiarz wrote in his 30-page order.

“This case, simply put, has virtually nothing to do with New Jersey,” the order continued. “And the remoteness from New Jersey is to the point that personal jurisdiction is questionable here–with implications for both cost [and] the certainty of being able to enforce any eventual judgment.

“It is true that the Plaintiffs chose to bring suit in New Jersey [after originally filing in California],” the judge wrote. “But that is less meaningful than is typically the case. This is a putative nationwide class action that has little to do with the state.”

Kentucky, the judge wrote, “is where the claim arose” based on being the host state for the horse race in question.

“And the federal court in Kentucky has recently resolved a case that is factually similar to this one and involves the Defendants in this case,” the order continued.

The original version of the suit that just got transferred was led by Michael Beychok, the winner of the 2012 National Horseplayers Championship. It was filed in California four days after Baffert's May 9, 2021, disclosure that Medina Spirit had tested positive for betamethasone after winning the May 1 Derby.

It wasn't until Aug. 22, 2023, that the Kentucky Horse Racing Commission's disqualification of Medina Spirit from the 2021 Derby-which also affirmed the elevation of runner-up Mandaloun as the official winner-was sustained after a long appeals process.

The more than 30 class members of the Beychok suit chose the Racketeer Influenced and Corrupt Organizations Act (RICO) Act as a tool to try and collect damages from Baffert, plus his incorporated racing stable. The plaintiffs also sought an order from the judge stating that Baffert must divest himself from the sport.

RICO is a sweeping 1970 federal statute initially designed to combat the Mafia. But in a legal sense, it has long since lost its “organized crime” stigma. RICO today is rarely used to go after stereotypical “godfather” figures. Instead, RICO has evolved as a civil litigation component, and is most often asserted by purported victims of white-collar crimes, such as mail and wire fraud.

The Beychok class-action complaint was withdrawn from the California federal court on July 22, 2021. One day later, an amended version of it resurfaced in New Jersey.

The New Jersey complaint from July 23, 2021, alleged that “[Baffert's] multiple and repeated acts of doping and entering horses into Thoroughbred races, including the Kentucky Derby, constituted racketeering activity.”

The separate Kentucky case to which Farbiarz alluded was a different class-action lawsuit initiated against Baffert by another group of horseplayers who alleged negligence, breach of contract, and unjust enrichment because their losing pari-mutuel bets on the 2021 Derby also weren't honored as winners. It was dismissed by a federal judge in Kentucky on July 20, 2023, for failure to state a claim.

Farbiarz explained the significance of that dismissed Kentucky case in his order.

'[T]he Western District of Kentucky has already resolved, on the merits, a case that is closely similar to this one,” Farbiarz wrote.

“There are, in short, fundamental similarities between the Kentucky case and this lawsuit,” Farbiarz continued. “Given the work that has already been invested in the Kentucky case, it would save a good deal of judicial time if this case were sent to Kentucky.

“And returning to the same decision-maker is not just a matter of efficiency,” the New Jersey transfer order summed up. “Having the same court handle both cases would help ensure that like cases-and these are very much like cases-are treated alike. That is a fundamental goal of our justice system.”

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Bettor Suing Baffert Leaving the Racing Game

Michael Beychok has been one of the most visible horseplayers in the sport for a while. He's a winner of the National Handicapping Championship, a horseplayer advocate and a public handicapper for the New Orleans Times-Picayune who has spent the better part of his life betting on the horses. Just not for much longer.

Beychok, who is the leading figure in a class-action lawsuit filed by gamblers who say they would have made money on the 2021 GI Kentucky Derby had it not been won by Medina Spirit (Protonico), says he has grown so disillusioned by the sport that he will stop betting on a regular basis after attending this year's National Handicapping Championship. His future bets will be limited to the handful of times he attends live racing.

“I'm just fed up with the drug cheating,” he said. “I'm fed up with the takeout. I'm fed up that we apparently can't get into a position to implement new and better drug testing. I have more outlets now to gamble. I live in Louisiana, which was a state, up until last year, where the only thing available was horse racing. Now, there is daily fantasy sports, which I enjoy, and the takeout is much, much better. Soon we will have on-line sports betting. I am a consumer. I have just found better products.”

Beychok made headlines last year when filing a suit against Baffert, contending that he would have made more than $50,000 on the Derby had the race been won by Mandaloun (Into Mischief). Mandaloun finished second behind the Baffert-trained Medina Spirit, who tested positive for the banned race-day medication betamethasone. He wants the court to rule that Baffert must compensate gamblers involved in the suit who would have cashed if Medina Spirit did not win.

“My first motivation was as a gambler,” he said. “I was kind of pissed off when it was announced he was positive for a banned race-day drug. Looking back on what had happened in the past with some of Baffert's positives in major races, I just knew that nothing was going to happen. I felt I had to do something because I didn't think anyone else would. I decided I wasn't going to take it anymore. I was going to do something not only for myself but for the more than 250 other bettors who have joined our class action. We're tired of being defrauded by Bob Baffert. In big races, his horses keep turning up positive.”

Beychok insists this isn't about the money.

“Any money that I get from this lawsuit, I'm donating to Thoroughbred aftercare,” he said. “I'm not putting a penny of this money into my pocket. Hopefully, I do get paid. But what I'm trying to do is to raise the point that we cannot, in a game of chance, on a game of gambling, let anybody, be it Bob Baffert, Jason Servis, Jorge Navarro, defraud us as bettors.”

Baffert's legal team has fought back and is seeking to have Beychok's suit thrown out. In a court filing last week, Baffert said Beychok's allegations were libelous and called his actions a matter of a “tinfoil conspiratorial premise.”

“That was for public consumption,” Beychok said. “That's all. I just laughed at it. The judge will look at the law and decide if applies in this case or if it doesn't.”

Beychok said he's not surprised that Baffert is putting up a good fight.

“Bob Baffert is very good at this and he has a very good PR machine,” he said. “He's good at it because he had to do it so many times over the last 15 years when his horses have tested positive. He's got to come up with an excuse, a PR campaign. He's good at this stuff and so are his lawyers.”

Beychok said he would like to see Baffert issue a mea culpa.

“My hope for this game that I do love is that he does what Lance Armstrong did,” Beychok said. “At some point, he needs to come clean and tell the truth. That might preserve some of his legacy.”

While about to step back, Beychok said he's willing to give horse racing another chance, that is if there are meaningful changes.

“I hope it changes because I love the game and the people in it,” he said. “I hope everything changes and I can say I am back. If I ever feel like this is a fair game I will come back.”

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Baffert Attacks ‘Tinfoil Conspiratorial Premise’ of Class-Action Suit

Trainer Bob Baffert told a federal judge Wednesday that a group of bettors who are suing him in a class-action lawsuit alleging a years-long pattern of racketeering based on his purported “doping” of Thoroughbreds have twisted their case so far from reality that their alleged misstatements amount to libel.

In a Jan. 12 filing in United States District Court (District of New Jersey), Baffert stated that the plaintiffs' recent attempt to portray him as the “Lance Armstrong of the horse racing world” is a “desperate conglomeration of highly inflammatory statements…designed to create a smokescreen in an effort to get the Court to take its eye off the ball. This Court should not be distracted.”

Baffert continued: “No matter how much outrageousness Plaintiffs throw on the wall in the hopes that something will stick, they cannot avoid three fundamental black letter law principles that mandate dismissal of their Amended Complaint.

“First, this Court lacks personal jurisdiction over the Defendants. Second, as disgruntled gamblers, Plaintiffs' have no standing and fail to present a justiciable claim. Finally, each and every court that has considered Civil Racketeer Influenced and Corrupt Organizations Act (RICO) claims in the context of gambling losses has rejected those claims as a matter of law…

“Plaintiffs purposefully misrepresent Baffert's Hall of Fame record and make numerous libelous Statements,” Wednesday's filing alleged.

The original version of the suit, led by Michael Beychok, the winner of the 2012 National Horseplayers Championship, was filed four days after Baffert's disclosure that now-deceased Medina Spirit had tested positive for betamethasone after winning the May 1, 2021, Derby. Baffert, plus his incorporated racing stable, are the defendants.

Split-sample testing at two different labs approved by the Kentucky Horse Racing Commission (KHRC) has since confirmed the betamethasone overage. But even after eight months, no KHRC ruling has yet been issued over those findings. On Dec. 6, Medina Spirit collapsed and died after a workout at Santa Anita Park, and his sudden death is under investigation in that state.

The class members of the suit have alleged that they were “cheated out of their property” because they placed wagers on other horses and betting combinations that would have paid off had “the drugged horse” not won the Derby.

The plaintiffs have chosen the RICO Act as a tool to try and collect damages. In addition, they seek an order from the judge stating that Baffert must divest himself from the sport.

RICO is a sweeping and powerful 1970 federal statute initially designed to combat the Mafia. But in a legal sense, it has long since lost its “organized crime” stigma. Despite the statute's original intent, RICO today is only rarely used to go after stereotypical “godfather” figures. Instead, RICO has evolved as a key component in civil litigation, and is most often asserted by purported victims of white-collar crimes, such as mail and wire fraud.

The class-action complaint was subsequently amended and moved from California to a New Jersey federal court. In previous court documents, the plaintiffs explained that New Jersey should be the proper venue. They cited a legal precedent that involved a case in which the act of simulcasting a race into New Jersey from another state “permits the Court to exercise personal jurisdiction over it.” They also alleged that Baffert's purported fraud included his occasional starts at Monmouth Park.

Back in September, when Baffert first moved for dismissal of the suit, his court filing termed that switch from California to New Jersey “blatant forum shopping” because the new venue has “no meaningful connection to the allegations raised in their Complaint. The Defendants are all domiciled in California and the events detailed in the Complaint occurred entirely in either California or Kentucky.”

In the Jan. 12 filing, Baffert's legal team again asserted that the plaintiffs are off base in attempting to litigate the matter in New Jersey.

“The law is clear that there must be case-specific contacts with the forum state,” the filing stated. “That is not established by Baffert's rare and irrelevant New Jersey racing activities. Even if one were to accept Plaintiffs' tinfoil conspiratorial premise that Baffert engaged in a nationwide racketeering scheme to defraud individuals he never met, Plaintiffs would still have to establish that at least some of the alleged illicit conduct actually occurred in New Jersey. They have utterly failed to do so. This matter has zero connection to New Jersey and it must be dismissed.”

Baffert wants the suit thrown out “with prejudice,” which would mean that it can't be brought up again in another form or in a different court.

“Plaintiffs' Amended Complaint should also be dismissed because their claims are not justiciable,” Wednesday's filing stated. “As the Baffert Defendants have explained, there is no current case and controversy because 1) the entirety of Plaintiffs' claims rest on a speculative presupposition that Medina Spirit will be disqualified at some future date potentially years from now; and 2) their exact alleged injury is not recognized as a viable cause of action under both statutory and common law.

“Plaintiffs' state-law claims are equally doomed,” the filing stated. “Plaintiffs' fraud claims are not pleaded with particularity and they have not alleged, nor could they, that the Baffert Defendants intended to defraud them as gamblers and induce their reliance.”

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Hawthorne Faces Class Action Lawsuit Over Violations Of Biometric Privacy Act

A class action lawsuit has been filed against Hawthorne Race Course in Stickney, Ill. alleging track management has violated the state's Biometric Privacy Act (BIPA), reports the Cook County Record.

According to the complaint, Hawthorne's security system uses facial recognition scans to help keep out “unwanted visitors.”

The problem, per the complaint, is that Hawthorne allegedly failed to provide notice or obtain consent before the scans were conducted and shared with a security company for comparison against a database. That is a violation of BIPA, which allows plaintiffs to be awarded damages of $1,000 to $5,000 per individual violation.

Based on attendance figures obtained by the Cook County Record, Hawthorne's potential liability in the case could exceed $200 million.