lawsuit | Horse Racing Free Tips

FTC Calls For Dismissal Of Challenge To Horseracing Integrity And Safety Act

Attorneys for the Federal Trade Commission have filed a motion to dismiss a lawsuit filed in the U.S. District Court for Kentucky against the Horseracing Integrity and Safety Act, reports the Daily Racing Form, using similar arguments to those in a dismissal motion against the National HBPA's suit challenging HISA filed in U.S. District Court for the Northern District of Texas.

The Kentucky lawsuit was filed by a trio of states and their respective racing commissions: Louisiana, Oklahoma, and West Virginia. FTC attorneys argued that the creation of the HISA regulatory body does not violate constitutional doctrines regarding Congress' delegation of powers to a private entity.

“Adjudicating the merits of plaintiffs' legal claims now would require the court to evaluate HISA's framework in the abstract, unaided by any concrete facts or interpretative rules from the agency that Congress charged with the statute's implementation,” the motion states. “There is no justification for the court treading this path under any circumstances, and it is doubly improper in a constitutional
challenge.”

Ramsey Files Counterclaim: Wants 30 Horses In Ward’s Care To Stop Incurring Expenses

Owner Ken Ramsey fired back at trainer Wesley Ward in court on Thursday, reports bloodhorse.com, filing a response to the trainer's Aug. 3 motion for summary judgement alleging payments from the Ramseys have stopped.

Trainer Mike Maker also filed a similar motion in Kentucky civil court against the Ramseys in July. The Ramseys were sued earlier this year by both trainers for allegedly failing to pay board and training bills. Ken Ramsey told media and the trainers at the time the lawsuits became public that he intended to catch up on the nearly $2 million he owed Ward and Maker.

Ward's motion for summary judgement, filed in Jessamine Circuit Court on Aug. 3, states that the couple agreed to make minimum monthly payments of $100,000 until the total overdue balance of $974,790.40 was satisfied. Ward alleges he received his May payment of $100,000 as well as miscellaneous amounts from purses and claims, but after that the payments stopped. He also alleges that the couple did not pay all the amounts owed to him from purses and claims.

Ramsey's response claims that there is no written agreement between the owner and Ward which specifies a day rate, whether that rate applies to specific horses or a number of horses, and the timing of payments.

The response also indicates that Ramsey asked Ward to return 30 of his horses on July 5, and that Ward filed for an agister's lien to retain ownership of the horses until the alleged debt is paid. Ramsey has reportedly been unable to race those horses, and the response points out that under Kentucky law, plaintiffs “cannot stand idly by” to allow further damages to be incurred when they could be “easily prevented by the use of reasonable efforts, expense, and diligence to prevent, or arrest, the loss.”

Legal Expert Bennett Liebman on Who Won, Who Lost in Baffert Decision

As a Government Lawyer in Residence at Albany Law School and an adjunct professor of law, attorney and educator, Bennett Liebman has long had his finger on the pulse when it come to racing's rules, regulations and laws. He has written extensively on the subjects of due process and whether or not racetracks have the right to exclude licensees, two key elements of Bob Baffert's lawsuit against NYRA in which he sought injunctive relief to have his suspension temporally overturned. For three years, the New Yorker was Deputy Secretary to the Governor for Gaming and Racing. For more than a decade, he was a member of the New York State Racing and Wagering Board.

The TDN asked Liebman to take a deep dive into the ruling handed down last week by Judge Carol Bagley Amon of the United States District Court, Eastern District of New York that granted Baffert an injunction that will allow him to run horses at the Saratoga meet.

TDN: Baffert got the preliminary injunction he sought that allows him, for now, to race in Saratoga. That was because the judge ruled that Baffert's due process rights had been violated. But NYRA also won when it comes to an important point. The judge ruled that NYRA does in fact have the right to exclude someone, which they may ultimately do with Baffert once he has had a hearing. So which side was the winner and which side the loser?

BL: Baffert was the clear winner here. The only real point he lost on was on NYRA's power to exclude. And I'm not sure if (Baffert's legal team) was really serious about that issue. On all other issues, the judge clearly ruled for Baffert. Other than the power to exclude, everything in this decision could have been written by Baffert's attorneys. Really, everything. It's as if the judge discounted everything that NYRA put in. It was unnecessarily anti-NYRA.

TDN: As already mentioned, the judge made it clear that NYRA does have the right to exclude Baffert, which very well could eventually happen. How, then, is it that Baffert was “the clear winner?” Why isn't the validation of NYRA's right to exclude a bigger deal than you make it out to be?

BL: It was generally assumed all along that NYRA and all the state's racetracks have the power to exclude licensees. If NYRA follows the judge's decision, the course is to hold an unbiased due process hearing on whether they should exclude Baffert. Once that is done they will have the right to exclude him.

TDN: The judge ruled that NYRA violated Baffert's due process rights because it did not give him a hearing before suspending him. Did NYRA make a strategic error by not giving him that hearing?

BL: The judge clearly thought so. It's very hard for me to sit back and judge what NYRA did or should have done. But the judge clearly thought they would have been within their rights to have given him a hearing and that they would have been much better off to have given him a hearing before they made a decision to exclude him.

TDN: At the hearing, NYRA's lawyers said that a decision would be made regarding the terms and lengths of Baffert's suspension following an Aug. 11 meeting of the Board of Directors. What's your take on that?

BL: That's not normally something the Board of Directors does. The Board of Directors' main job is approving the budget. It's not exactly a judicial body of any note. My assumption is that NYRA will likely hire one judge or a panel of hearing officers. You would expect distinguished people, perhaps former judges, and have them make the assessment. Then NYRA management would follow their assessment. You would think that's how it is going to play out. It's hard for me to imagine, although they raised this, that this is a decision that will be made by the Board of Directors. In something like this, a board of directors does not normally get involved.

TDN: Should NYRA eventually suspend Baffert, what can he do to fight back?

BL: I think they would follow the same procedures that were used to get the temporary injunction and go back to federal court. This time, I think they would follow the case of Dr. (Michael) Galvin. He was a veterinarian who got his NYRA exclusion overturned after arguing that the procedures used by NYRA were biased against him.

TDN: A big issue in this case was whether or not NYRA was a state actor. It was largely believed that if it was determined by the court that NYRA was affiliated with the state then there would be limits to what it could and could not do with Baffert vis a vis a privately owned racetrack. How did the court find on this matter?

BL: The court agreed that NYRA was a state actor and that was a huge deal. If the court found that NYRA was not a state actor then what it did would have clearly been ok. But the judge determined that NYRA was a state actor. It's a very contentions issue. I think the judge put her thumb on the scales in favor of state action. But it's always going to be a difficult issue.

TDN: Is that why, to date, Baffert hasn't taken any legal action to have the ban issued by Churchill Downs overturned? Obviously, Churchill is privately owned and not a state agency.

BL: I'm not sure if I can assess Baffert's lawyers' motivation, but Churchill is clearly a private company. The case law in Kentucky clearly gives the tracks there considerable power over licensees. The other part here is they have a bigger issue to deal with with Churchill Downs, which is the disqualification of Medina Spirit in the Derby. They might want to deal with the disqualification issue first before they challenge Churchill on the Baffert suspension.

TDN: Was the court's decision in any way a game-changer? What impact will it have on future decisions regarding due process and the right of racetracks to exclude someone?

BL: Because NYRA is so unique, you can't say this will have a huge impact on other jurisdictions and other racetracks. NYRA's unique circumstances make this a one off when it comes to other cases. What was odd to me was the judge's determination that Bob Baffert will be harmed so extensively if not allowed to race at Saratoga. That's at a track where he normally, over the last 10 years, has raced about five times a meet. On its face, banning Baffert from a track where he rarely appears doesn't seem to be irreparable harm. That's the one issue that I think might have an effect on other cases, that someone who might occasionally show up at a track can argue irreparable harm and get a temporary restraining order if they are banned.

TDN: The Jockey Club filed an amicus brief in support of NYRA. Did that have any impact?

BL: The main reference to the Jockey Club is in a footnote. There's only one other reference, on how over the past 10 years Baffert had never gone a year without racing at a NYRA track. From reading her decision, it doesn't appear as if the Jockey Club brief had much of an impact. It is minimally referred to in the decision.

TDN: Are there any other unanswered questions?

BL: One is whether or not NYRA will appeal (Judge Amon's decision). I don't know. Instead of doing that they can simply go ahead and give him a hearing. Another question is whether or not NYRA will give Baffert stall space? There was nothing in the ruling that covered that. There's an easy way around that. He can easily find some place to stable at off track. I don't think NYRA's exactly going to make Clare Court available to him.

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Baffert Gets Injunction to Race in New York

A federal judge at 5 p.m. Wednesday granted trainer Bob Baffert a preliminary injunction in his lawsuit against the New York Racing Association (NYRA) that will allow him to race at New York's three major tracks pending the resolution of the case.

In a civil complaint filed by Baffert June 14, the seven-time GI Kentucky Derby-winning trainer had alleged that NYRA's banishment of him since May 17 over the issue of his repeated equine drug violations violates his constitutional right to due process. That same day he moved for an order to keep NYRA from enforcing its suspension while the lawsuit played out.

“This suspension is likely to cause multiple irreparable harms,” Judge Carol Bagley Amon of United States District Court (Eastern District of New York) wrote in her 28-page order, which was handed down on the eve of the lucrative Saratoga Race Course season.

The order later continued: “In sum, I find that Baffert has established a likelihood of proving that NYRA's suspension constituted state action, and that the process by which it suspended him violated the Due Process Clause of the Fourteenth Amendment of the United States Constitution.”

Yet Amon also wrote that “although NYRA's actions have functionally deprived Baffert of his trainer's license, NYRA has not formally suspended that license. In sum, it is not likely that Baffert will be able to prevail on his claim that NYRA had no legal authority to take the action that it did.”

Amon addressed Baffert's claims of harm first:

“First is the irreparable harm from the loss of unique competitive opportunities. Part of that harm is monetary….

“Second, Baffert has persuasively argued that NYRA's action will damage his 'reputation and goodwill' in a way that could not readily be remedied should he prevail at trial….

“Finally, to the extent that NYRA contends that Baffert's one-month delay in seeking a preliminary injunction precludes his claim, this argument is unpersuasive,” Amon wrote.

NYRA had excluded the Hall-of-Fame conditioner in the wake of five positive drug tests in horses Baffert has trained over the last 12 months. It has repeatedly termed the suspension “temporary,” but Amon noted the banishment is now nearly two months old, and that “indefinite” would be the more accurate descriptor.

As a threshold matter, Baffert had argued that NYRA lacks the power or authority to suspend him indefinitely from all New York race tracks because the New York State Gaming Commission is the sole entity with general jurisdiction over all gaming activities within the state.

Amon wrote that “In a similar vein, he argues that NYRA failed to follow the procedures set forth in regulations that govern the suspension of trainers' licenses. One such regulation requires an 'adjudicatory proceeding' prior to any action being taken related to the suspension of a licensee. Another requires the provision of formal notice to the licensee. As to this argument, Baffert has not shown a likelihood of success on the merits or serious questions going to the merits.

“The claim that NYRA had no right to take the action it did would appear to be foreclosed by the New York Court of Appeals decision in Saumell v. New York Racing Association,” Amon wrote (see TDN's story from earlier this week on how that legal precedent might affect this case).

“In that case, NYRA summarily excluded a licensed jockey, based on an assertion that he had violated a racing regulation. The jockey contended that NYRA 'was without authority to do so,' because in suspending him NYRA had 'usurped the power of the Board.' The Court of Appeals rejected the jockey's argument. It held that '[t]he common-law right of [NYRA] to exclude persons from its premises includes the right when there is reasonable cause to believe a jockey licensed by the [state] guilty of misconduct to deny him access,'” Amon wrote.

“The fact that NYRA leases rather than owns the tracks does not alter its right of exclusion,” Amon wrote, referring to another issue Baffert's legal team had raised. “The lease agreement for the Saratoga Race Course expressly states that NYRA receives 'all rights, privileges, easements and appurtenances belonging to or in any way pertaining to the Leased Premises…' And a lessee maintains the right to lawfully exclude, even where its lessor is the state.

“Nor does it help Baffert that NYRA's exclusive franchise right is 'subject to appropriate racing laws and regulations.' He contends that the regulations provide that only a state official may suspend a license. The regulation he cites, however, 9 NYCRR § 4022.12, expressly states that “[n]othing in this section shall be construed to limit any racing association or track licensee's power to exclude or deny any individual from its grounds or privileges thereon.'”

Three of Baffert's recent equine drug violations occurred in Grade I stakes. The most recent drug positive, for betamethasone in Medina Spirit (Protonico) after the colt won the GI Kentucky Derby on May 1, has yet to be adjudicated by the Kentucky Horse Racing Commission. Churchill Downs Inc., however, has already barred Baffert from participating at any of the gaming corporation's five Thoroughbred tracks for a period of two years.

“The most significant circumstance–and the one which primarily motivated NYRA here–was the 2021 Kentucky Derby, including Medina Spirit's alleged betamethasone test, Churchill Downs' suspension of Baffert, and Baffert's post-Derby statements,” Amon wrote. “But these events were not so straightforward as to deny Baffert an opportunity to address them before being summarily suspended.

“The allegation that Medina Spirit had tested positive for betamethasone was only an allegation, and one that Baffert contested. He had admitted at most that a 'possible explanation' was that the horse had been given a topical ointment containing the substance. But whether the test result was accurate, what the results would be of the split sample testing, and whether Kentucky would take any action against Baffert were uncertain matters of ongoing investigations. Both Baffert himself and the Kentucky authorities are still investigating the matter. Baffert was entitled to a pre-deprivation hearing to address these claims.”

Amon continued: “Reliance on Baffert's statements to the press following the Kentucky Derby without giving him an opportunity to address them was similarly problematic. The suspension letter stated that Baffert 'provided the media with different accounts and theories as to why Medina Spirit tested positive for betamethasone….' NYRA continues to suggest that Baffert spoke in a duplicitous or at least inconsistent manner in his public statements regarding Medina Spirit….

“NYRA's belief that Baffert's public statements were unreliable put his credibility in issue. When the credibility of a property-holder is in issue, that is exactly the situation when a hearing is necessary so that the individual may be heard directly. At a hearing, Baffert would have the opportunity to present his version of the events, and to address any perceived inconsistencies in the statements he had given to the press. But NYRA's failure to provide a hearing deprived him of a meaningful opportunity to provide his side of the story,” Amon wrote.

“Baffert was likewise denied an opportunity to be heard regarding the four fines from the prior year upon which NYRA partially rested its suspension decision…. NYRA considered only the fact of the violations, rather than the circumstances surrounding them. A hearing would have allowed Baffert to submit evidence and make argument regarding these events.”

Amon continued: “NYRA's reliance on 'other related information' obviously raises a notice problem. Needless to say, the risk that Baffert was suspended for improper reasons–or reasons for which mitigating information existed that he was unable to provide NYRA–increases dramatically when the decision to suspend him was based upon unspecified reasons.

“Baffert should have been given notice of all of the reasons that NYRA intended to suspend him.

I find that in light of the foregoing facts, there was a risk of erroneous deprivation, and the benefits of providing notice and a pre-suspension hearing would likely have been substantial.”

Amon also wrote about the state's interest in the matter.

“NYRA surely has an 'important interest in assuring the integrity of the racing carried on under its auspices.' Also important is the safety of jockeys and horses, which can be put at risk through the use of injury-masking substances such as betamethasone. Although I recognize these weighty concerns, they are somewhat ameliorated here by the existence of numerous New York racing laws (including drug-testing), all of which Baffert would be required to follow in any NYRA races.

“NYRA's assertion of these interests is also to some extent undermined by the fact that apparently it has permitted other trainers with similar or more serious histories of medication violations to continue racing at NYRA racetracks. Likewise undercutting the invocation of integrity and safety here is the fact that Baffert has raced for many years at NYRA racetracks in over one-hundred races, and has never been found to have violated any of the state's regulations.

“Although I recognize the special concern given Baffert's and Medina Spirit's high profile, it is at least of note that when NYRA issued its decision, the horse had run the [GI] Preakness S. two days earlier without any incident,” Amon wrote.

“I accordingly conclude that, although NYRA invokes important interests here, those interests do not outweigh Baffert's weightier interest in being able to practice his chosen profession, especially given the risk of erroneous deprivation and the likelihood that additional procedures would have been valuable,” Amon wrote.

“Even if NYRA had probable cause to suspend Baffert without a pre-deprivation hearing, a 'prompt' post-suspension hearing would have been required. NYRA argues that Baffert cannot bring a due process claim because he was 'provide[d] apparently adequate procedural remedies' but 'has not availed himself of those remedies.' But NYRA has held no hearing–let alone a prompt one. Its after-the-fact offer to Baffert of an opportunity to submit written evidence or arguments within a seven-day window was plainly not a hearing….

“At oral argument, counsel for NYRA indicated that a 'final determination' as to the length and terms of Baffert's suspension would be made by Aug. 11, and that NYRA would provide him with the opportunity for a hearing after that time. Such a timeline cannot reasonably be deemed 'prompt,' especially in light of the upcoming Saratoga meet.

“NYRA has provided no explanation for why it could not have offered Baffert a hearing in the two months since he was suspended, nor any explanation for why it must wait another month to make a 'final determination.'

“With so much on the line, Baffert was entitled to (at least) a 'prompt' post-deprivation hearing which should have already occurred,” Amon concluded.

TDN left several messages with Baffert seeking comment on the decision. Neither yielded a reply prior to deadline for this story.

NYRA issued a press release quoting its president and chief executive, Dave O'Rourke, which read, in part:

“NYRA is reviewing the court's decision today to determine our legal options and next steps. What is clear, however, is that Mr. Baffert's actions and behavior can either elevate or damage the sport. We expect Mr. Baffert to exert appropriate controls over his operation.

“Importantly, the court upheld NYRA's authority to exclude individuals from its racetracks whose conduct is contrary to the best interests of Thoroughbred racing. The court also rejected Baffert's argument that NYRA had no legal authority to take the action that it did,” O'Rourke said.

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