Report: CDI Files Motion To Dismiss Zedan’s Derby Lawsuit

Churchill Downs, Inc. (CDI) filed a motion Apr. 8 to dismiss a lawsuit by Zedan Racing Stables, Inc., that seeks to lift a CDI-imposed ban against horses trained by Bob Baffert in the GI Kentucky Derby.

Jason Frakes of the Louisville Courier Journal was among the first to report on the motion, which was filed in Kentucky the same morning as a Jefferson County Circuit Court hearing was held on the matter.

That Monday hearing put off until at least Apr. 15 a decision on owner Amr Zedan's request for an injunction or on CDI's motion to dismiss.

“Everybody involved in horse racing is watching this issue, I'm sure,” Judge Mitch Perry was quoted in the Courier Journal.

Zedan owns the GI Arkansas Derby winner Muth (Good Magic), who would be among the Derby favorites if allowed to race.

It is unclear if a ruling in favor of Zedan would allow other Baffert trainees owned by different entities to also participate in the Derby, or if any lifting of the ban would also permit Baffert's trainees to enter the GI Kentucky Oaks.

According to the Courier Journal, CDI's motion stated that “The demand for a last-minute judicial takeover of the world's most storied horse race…is baseless, outrageous and should be immediately rejected.”

After Medina Spirit tested positive for betamethasone in the 2021 Derby, Baffert was banned from CDI's properties for two years. A federal judge in February 2023 denied Baffert a preliminary injunction that the Hall-of-Fame trainer had sought to be eligible to race in the Derby. Last July CDI extended the ban at least through 2024.

Baffert is not a party to this latest lawsuit filed by Zedan in a Kentucky state court.

“CDI's spurious, illegal extension of the suspension does not withstand scrutiny and imperils a host of interested stakeholders,” Zedan's Apr. 3 complaint stated.

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HBPA: Negotiations Between HISA And Sales Companies Equate To ‘Preferential Treatment’ For Breeders

Two days after the Horseracing Integrity and Safety Act (HISA) Authority disclosed at a press conference last week that it had initiated discussions with sales companies in an attempt to bring about voluntary compliance with medication policies throughout the lifetimes of Thoroughbreds, the National Horsemen's Benevolent and Protective Association (NHBPA) went on record with a letter filed in the United States Court of Appeals for the Fifth Circuit alleging that those efforts equate to improper rulemaking by the Authority and “preferential treatment” for breeders.

The purpose of the HISA Authority's Sept. 13 press conference was to go public with a months-in-the-making report on 12 horse deaths at Churchill Downs this past spring, and also for the Authority unveil a wide-ranging “strategic response plan” to predict and halt catastrophes before they occur. According to the report, which also listed numerous other safety proposals, the goal of entering into agreements with Thoroughbred auction houses would be “to more effectively align and coordinate our respective anti-doping and medication control [ADMC] programs.”

The purpose of the NHBPA's Sept. 15 legal filing, by contrast, was to let the court know that as the plaintiffs/appellants in a two-year-old lawsuit that is trying to derail HISA based on alleged constitutional violations, the NHBPA and 12 of its affiliates believed that by entering into such negotiations with sales companies, “the Authority has announced its intention to add another line to the already long list of 20-plus examples of the Authority writing the rules for the industry without going through the rulemaking process.”

The two-page letter written by the NHBPA's attorney, Daniel Suhr, prefaced its legal criticisms of the Authority's discussions with sales companies by first stating that, “The NHBPA Appellants appreciate the policy goal to ensure effective ADMC standards that include breeders: as the advocate for owners of horses, they support measures that ensure full and accurate information from breeders for buyers.

“But as a legal matter, two things are obvious from the announcement,” the NHBPA letter continued. “First, one section of the industry that is included in the scope of the Act is receiving preferential treatment-the breeders get to negotiate their rules through voluntary agreements while other sectors like trainers and racetracks have rules imposed upon them by Authority fiat.

“And second, once again the Authority is engaged in regulatory activity outside the rulemaking process. When the Authority enters into a 'voluntary agreement' with a breeding company, it is not required to publish or publicize the text of that agreement (or provide it if requested through FOIA), receive and consider public comment (including feedback from other affected equine constituencies), or run it by the Federal Trade Commission [FTC],” the NHBPA letter stated.

The allegations by the NHBPA were filed with oral arguments in the highly anticipated Fifth Circuit appeals case coming up soon, on Oct. 4.

A lower federal court already ruled back on May 4 that the rewritten HISA law that went into effect Dec. 29, 2022, is indeed constitutional because it fixes the problems the Fifth Circuit had identified in an earlier version of the law. The NHBPA plaintiffs are arguing for another reversal.

The points of law raised by the NHBPA's Sept. 15 letter, however, won't be considered by the court in their current format.

That's because the letter did not meet the standard for the type of filing that notifies the court of pertinent and significant findings after a party's brief has been filed, according to a docket entry made by the court clerk on Sept. 15. “Therefore, we are taking no action on this letter,” the clerk stated.

If the NHBPA wants its comments on the issue to be considered, the clerk's notation continued,  “A motion seeking leave to file a supplemental brief is required.”

Regardless of its status, the letter was made public within the docket once the court refused to take action on it, and its contents are important to the broader world of horse racing because the objections over the sales company discussions underscore both the ongoing and newly developing rifts between the NHBPA plaintiffs and the HISA and FTC defendants.

A chief point of contention between the two parties is that the Authority has stated that it will negotiate (rather than propose and implement) ADMC rules upon sales companies because its interpretation of the law is that some young horses sold as auction aren't yet “covered horses” under HISA.

Speaking at the Sept. 13 press conference, Lisa Lazarus, HISA's chief executive officer, explained that “a horse becomes a HISA [covered] horse after it's had its first public workout, first timed workout. So some of the 2-year-old sales would certainly fall under HISA's purview. The weanlings and yearlings wouldn't.”

But, Lazarus added last week, “I think we're at the point where if HISA leads the way that we should, and the way that we intend to, that we'll be able to motivate the industry to come under one kind of comprehensive, understandable, kind of ADMC approach.”

The NHBPA, on the other hand, wrote in a footnote to its Sept. 15 letter that under its reading of HISA, it believes breeders do qualify as “covered persons,” and that breeders as a group are included “among equine constituencies.” Thus, the plaintiffs' argument goes, it's allegedly not fair for one sector of covered persons to have a say in negotiating rules while other covered persons don't.

Asked on Sept. 18 if the HISA Authority would like to comment on the NHBPA's assertions in the letter, an Authority spokesperson wrote in an email that, “The NHBPA overlooks the fact that Congress decided that Thoroughbred horses are not covered horses under the Act until their 'first timed and reported workout.' Therefore, it is necessary for the sales companies to voluntarily agree so that we could effectively align and coordinate our respective ADMC programs throughout the lifetime of a horse.”

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HBPA: ‘Best Of Both Worlds’ For HISA Is ‘Worst Of All Worlds’ For Horsemen

With oral arguments in the United States Court of Appeals for the Fifth Circuit now five weeks away, the National Horsemen's Benevolent and Protective Association (NHBPA) filed a legal brief Aug. 25 underscoring that the Horseracing Integrity and Safety Act (HISA) Authority unconstitutionally “wants the best of both worlds” by allegedly portraying itself as both a governmental body or a private organization “depending on which suits its interests on any individual argument.”

“Sometimes [the Authority] wants to be like a government entity, with the power to compel registration, collect mandatory fees, conduct searches, draw blood and urine samples, and impose sanctions with 'the force of federal law,'” stated the 36-page brief filed Friday by the NHBPA and 12 of its affiliates.

“Other times it wants to be a private business league, choosing its own board, running its own corporate affairs, and exempt from the Appointments and Appropriations clauses, the Freedom of Information Act, etc…” the brief continued.

This purported dual nature of the Authority, the NHBPA alleged, “exposes the overall flaw” by which the 2022 rewrite of the HISA law should be struck down.

“Nothing could be more unfair or inequitable than to have a regulator with all the powers of government but exempt from all the democratic accountability and safeguards for liberty imposed on government,” the NHBPA's filing stated.

“The best of both worlds for the Authority is the worst of all worlds for horsemen,” the NHBPA's filing asserted.

The Fifth Circuit oral arguments scheduled for the first week in October represent the latest attempt by the NHBPA to derail the HISA law via an underlying lawsuit that has persisted in the federal court system for nearly 2 ½ years.

In addition to the HISA Authority, personnel from the Federal Trade Commission (FTC) are defendants in that suit.

Back on Aug. 4, the Authority defendants filed their own brief that told the court the continued legal attacks by the NHBPA are futile because “Congress, the Executive, and all three federal courts that have considered the amended Act have reached the same conclusion: HISA is now constitutional…

“Appellants' scattershot attempts to invalidate the Act on other grounds come up short, too,” the Authority's brief continued.

The NHBPA's Aug. 25 filing swatted back at those claims, citing a legal precedent that stated “it is a central tenet of liberty that the government may not…allow private individuals to regulate other private individuals.”

As the NHBPA put it, “That is now what happens every day in horseracing. The district court must be reversed, and the Act declared unconstitutional, again.”

The first time the HBPA plaintiffs attempted to challenge the original 2020 version of the HISA statute in federal court, on Mar. 15, 2021, the suit was dismissed, on March 31, 2022.

The HBPA plaintiffs then appealed, leading to the above-referenced Fifth Circuit Court reversal on Nov. 18, 2022, that remanded the case back to the lower court. In the interim, an amended version of HISA got passed by Congress and was signed into law by President Joe Biden on Dec. 29, 2022.

On May 4, 2023, the lower court deemed that the new version of HISA was constitutional because the rewrite of the law fixed the problems the Fifth Circuit had identified.

The HBPA plaintiffs then swiftly filed another appeal back to the Fifth Circuit, which is where the case stands now.

“The FTC and the Authority continue to tie themselves in knots trying to get around two obvious problems: the Act, even as revised, does not allow the FTC to amend or modify rules when they are proposed by the Authority,” the NHBPA's Aug. 25 filing stated. “And the Act, even as revised, still requires the FTC to approve rules written by the Authority on a consistency basis, which this Court held to be a violation of the private non-delegation doctrine.”

The NHBPA alleged in its filing that the Authority and the FTC's “solution to a lack of public accountability is to find an additional way to eliminate public accountability, making matters worse.”

The NHBPA's filing warned of dire ramifications to society in general if the Fifth Circuit doesn't declare the recently amended HISA law unconstitutional.

“If this Court ratifies this law, we will see more and more of our democracy slip away as Congress increasingly turns to this convenient charade of private self-regulatory corporations to govern entire industries,” the NHBPA's filing stated.

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NYRA, State Want Dismissal Of ‘Meritless’ Lawsuit To Block Belmont Renovation

The New York Racing Association (NYRA) and the state of New York asked the Supreme Court of New York Aug. 18 to dismiss a lawsuit filed by two residents that is attempting to block the $455 million state loan to NYRA that will renovate Belmont Park.

In addition, both the state and NYRA want to quash a motion for preliminary injunction that the plaintiffs initiated back on June 22 to try to halt any state money for the project from flowing to NYRA.

The Belmont renovation was approved back in May when the final New York state budget for fiscal year 2024 included the funding.

Belmont was last significantly updated in 1968, and the current, long-planned refurbishment is being undertaken with an eye toward consolidating all of NYRA's racing at Belmont and Saratoga Race Course, with the state-owned Aqueduct Racetrack property to eventually be sold.

“NYRA's motion to dismiss should be granted, the Court should issue a judgment in favor of Defendants declaring that the Belmont Legislation is constitutional, and the Complaint should be dismissed in its entirety and with prejudice,” stated a memorandum of law that NYRA filed with the court Friday.

“As Plaintiffs claim fails as a matter of law and is not likely to succeed on the merits, and as the challenged appropriation to NYRA serves an important public interest and Plaintiffs cannot establish irreparable harm, or that the equities weigh in their favor, Plaintiffs' motion for a preliminary injunction should be denied,” the NYRA filing continued.

The plaintiffs, Jannette Patterson and John Di Leonardo, each identified themselves in the initial complaint as a “citizen taxpayer of the State of New York who has paid, and is paying, New York State income and sales taxes.” They have asked for a judgment declaring that the state's loan to NYRA “would be an illegal and unconstitutional expenditure, misappropriation, misapplication, or disbursement of State funds.”

The defendants are the State of New York, the New York State Assembly, the New York State Senate, Governor Kathy Hochul, state comptroller Thomas P. DiNapoli, and NYRA.

NYRA's 30-page memorandum stated that the two plaintiffs “contend that the 'plain language' of the Gift and Loan Clause bars the State from appropriating any funds to NYRA.”

The Plaintiffs, however, are wrong “for at least two reasons,” NYRA argued.

“First, Plaintiffs' insistence upon a strict construction of the Gift and Loan Clause betrays an untenable, ostrich-like approach to settled law. Although one would not know it from Plaintiffs' papers, the Court of Appeals long ago ruled that the expenditure of public funds to a private entity is permissible under the Gift and Loan Clause if such expenditure serves a public purpose,” the filing continued.

“Moreover, the Court of Appeals and the Third Department have upheld financing arrangements for the construction and operation of sports venues and facilities that serve a public purpose, notwithstanding the co-existence of an incidental private benefit. Thus, the appropriation to NYRA authorized by the Belmont Legislation cannot be equated to an impermissible gift or loan under [the New York state constitution.],” the filing stated.

“Second, although at one point in their Complaint Plaintiffs correctly describe NYRA as a 'not-for-profit corporation that has the exclusive franchise to operate' Belmont Park, they otherwise refer to, and analyze, NYRA as though it is a run-of-the-mill 'private corporation' for purposes of the Gift and Loan Clause. In doing so, Plaintiffs yet again fail to reference, or even acknowledge, case law from both State and federal courts that uniformly holds that NYRA-as a State-franchisee that operates racing facilities owned by the State on public property pursuant to statute and regulation-is a 'state actor,'” the filing continued.

“In this regard, the funds received by NYRA will be used to renovate public property and facilities owned by the State. Put simply, NYRA-as a 'state actor'-is not the type of 'private corporation' that the Gift and Loan Clause was intended to cover,” the filing stated.

A separate Aug. 18 memorandum filed by the New York Attorney General's office on behalf of the state government defendants told the court that “Plaintiffs are not entitled to a preliminary injunction because they cannot make the required showing of irreparable harm. Plaintiffs urge the Court to maintain the status quo and halt the disbursement of funds so that their constitutional argument may be heard. But Plaintiffs' constitutional argument is meritless and there is no valid basis for the Court to preliminarily enjoin the Challenged Appropriation…”

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