lawsuits | Horse Racing Free Tips

Following is a press release sent on behalf of Spendthrift Farm, Ashford Stud, and Three Chimneys Farm. This is a developing story, and we will be updating as more information, including court filings, is made available.

Three of Kentucky's biggest stud farms have filed a lawsuit challenging The Jockey Club's rule to restrict Thoroughbred stallions from breeding with more than 140 mares each year – the so-called “stallion cap.” The complaint argues that the Kentucky Horse Racing Commission (KHRC) has unlawfully delegated power to The Jockey Club, and that the new rule breaches the Constitutions of Kentucky and the United States as well as federal and state antitrust laws.

The plaintiffs in the complaint are Spendthrift Farm, Ashford Stud and Three Chimneys Farm, who say the stallion cap is a “blatant abuse of power” by The Jockey Club. The suit argues that the rule change is “arbitrary” and “anti-competitive” and will reduce access or drive up prices for many owners of mares looking to access top stallions. The rule also risks driving the best stallions overseas, as no other country with a Thoroughbred stud book imposes a cap.

The plaintiffs believe The Jockey Club's action will have a significant impact on the entire economic structure of the industry by undermining the value of Thoroughbreds throughout the United States, with a consequent impact on jobs and livelihoods. In addition, it places artificial restrictions on breeders' abilities to decide for themselves the best course of action for their stables.

The plaintiffs state there is “no scientific basis” to support The Jockey Club's argument that the rule change is necessary for the health of the Thoroughbred breed or to promote genetic diversity. There are only 42 stallions in the 2020 season who were bred to over 140 mares, and the cap simply means excess demand will move on to the less desirable, less commercial stallions, making it more difficult for breeders to be profitable. Some breeders have stated the new rule will lead them to simply get out of the business rather than tolerate it. No other country has seen a basis for introducing a cap, and the plaintiffs believe such a fundamental change cannot be taken unless supported by robust scientific evidence.

Membership of The Jockey Club is by invitation only, and the decision was made by its Board of Stewards without discussion or a vote at the Club's annual general meeting. The Jockey Club stewards making the decision had clear conflicts of interest, given they also represent or own various breeding and racing entities who stand to benefit now that owners of mares are being denied their first-choice stallion.

Commenting on behalf of the plaintiffs, B. Wayne Hughes of Spendthrift Farm said:

“The introduction of the stallion cap by The Jockey Club is a blatant abuse of power that is bad law, bad science and bad business. A handful of individuals from a private club in New York have been allowed to make a decision that will negatively impact the future of Thoroughbred racing and breeding both in Kentucky and the whole country.

“We have filed this complaint to defend the industry from anti-competitive, un-American and arbitrary decision making that is not based on scientific evidence.

“If they can limit the number to 140, what's to stop them from limiting it to 100 or 80 or any other number down the road? What if your mare isn't one of the 140? We are really concerned about the small breeder's ability to survive this.”

The Jockey Club announced the rule 14c amendment on May 7, 2020, which, beginning with stallions foaled in 2020, limits the number of mares which can be bred to a stallion in a calendar year to 140. The lawsuit was filed in the United States District Court, Eastern District of Kentucky, Central Division.

It argues that the actions of The Jockey Club and KHRC breach sections 1, 2, 3, 8 and 29 of the Constitution of the Commonwealth of Kentucky, which are designed to protect property rights and limit delegations of power by governmental bodies to private entities. In addition, it says the stallion cap violates the due process and equal protection rights of the three stud farms as guaranteed by the 5th and the 14th Amendments to the United States Constitution. The suit also argues the rule violates the Sherman Antitrust Act and suppresses competition.

The post Trio Of Kentucky Farms To Sue Jockey Club, Kentucky Horse Racing Commission Over Stud Book Cap appeared first on Horse Racing News | Paulick Report.

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The New Mexico Horsemen's Association is seeking the return of more than $8 million it alleges the New Mexico Racing Commission has been collecting improperly from horsemen since 2004 to pay liability insurance for jockeys.

The representative organization for both Thoroughbred and Quarter horse owners and trainers in New Mexico filed suit in Bernalillo County District Court on Dec. 2 against the commission – which is a part of the Tourism Department of the state of New Mexico – five commissioners and executive director Ismael “Izzy” Trejo.

The complaint, a petition for declaratory judgment and relief, outlines the responsibilities of the racing commission under New Mexico law, including how retained revenue from wagering on live and simulcast races is to be distributed.

“New Mexico law, N.M.S.A. 1978, 60-1A-19, only allows the money distributed pursuant to the Horse Racing Act, to the Horsemen to be used for two distinct and clear purposes, one for purses and the other for medical benefits of the members of the New Mexico Horsemen's Association,” the complaint states.

The horsemen allege that the New Mexico Racing Commission ordered them to divert a portion of their money to racetracks for liability insurance for jockeys.

According to the complaint, $8,426,181.09 has been taken from the New Mexico Horsemen's Association since 2004 for jockey insurance.

“The Racing Commission has no power or authority to violate the statute or to direct the money received by the Horsemen be used for another purpose other than that which the statute directs,” the complaint states.

In addition, horsemen allege the commission has improperly ordered horsemen to pay a “gate fee or starter's fee” every time a horse races.

“The costs of operating the 'gate' are and always have been an expense of the association putting on the race, that is a cost or expense of the racino and not the owner or trainer of the horse entering the gate for a scheduled race,” the complaint states, adding that “there is no provision in New Mexico law that allows the Racing Commission to access a fee to horsemen for the starter's gate.”

Finally, the complaint alleges that the New Mexico Racing Commission improperly demands the Horsemen's Association pay a fee for a license. “The Horsemen's Association does not race horses, or train horses and is a benevolent, non-profit organization and no license is required,” the complaint alleges

The suit asks the court to “order the New Mexico Racing Commission repay and return $8,426,181.09 to the New Mexico Horsemen's Association.” It also seeks an order that the New Mexico Racing Commission “cease and desist from ever directing monies be spent by the New Mexico Horsemen's that by statute are designated for certain purposes.”

Richard Erhard, executive director of the New Mexico Horsemen's Association, declined to comment on the suit. The New Mexico Racing Commission's executive director, Izzy Trejo, could not be reached for comment.

The post New Mexico Horsemen Sue Racing Commission To Reclaim $8 Million Collected For Jockey Insurance appeared first on Horse Racing News | Paulick Report.

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