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Horsemen File Federal Suit Against New Mexico Commission

Edited Press Release

The New Mexico Horsemen's Association filed suit against the New Mexico Racing Commission in federal court late Monday, charging the regulatory body with depriving racehorse owners and trainers of their civil rights and other violations. The horsemen seek compensatory damages, legal fees and other relief the court deems appropriate.

“The horsemen finally said, 'Hold it. How many constitutional laws can you continue to violate? How many statutes can you continue to ignore?'” said Gary Mitchell, attorney for the New Mexico Horsemen's Association (NMHA). “The horsemen said, 'Enough. We don't have any other place to go but federal court. We need this to stop.'”

The NMHA, which represents about 4,000 Thoroughbred and Quarter Horse horsemen in New Mexico, already has two lawsuits pending in state court against the New Mexico Racing Commission (NMRC).

Previously precluded from communicating with the commission, contacting any commissioners or attending the regulatory agency's public meetings on, the NMHA turned to the federal court–filing against the NMRC, as well as the individual commissioners–under Section 1983 of the Civil Rights Act and the New Mexico Tort Claims Act. The action creates the potential for individual members of the commission to be held personally liable.

“The commissioners are deliberately attempting to do away with the horsemen's association,” Mitchell said. “We're prepared to prove, in court, that this is being done intentionally. They haven't hesitated to do everything in their power to shut out New Mexico's horsemen, and ultimately shut down the NMHA.”

The NMHA filed suit in the Second Judicial District Court in Bernalillo County in December to stop the commission's years-long practice of taking horsemen's purse money to pay the racetracks' liability insurance on jockeys and exercise riders, in clear violation of state law. The NMHA stated the funds amount to over $8 million. The horsemen returned to court in May after the commissioners ordered tracks to shut off the NMHA's revenue stream, derived from access to funds horsemen have earned from purses.

According to the NMHA, the funds in question are used to pay medical fees for its members, the NMHA's Political Action Committee and administrative costs, including the oversight of the purse account for the horsemen and the state's five racetracks.

“We have never taken money from the purse funds to benefit our organization,” Mitchell said. “In fact, we took our own money to pay for the accounting, collection, management, dispersal and annual audits of how this money is handled. The taxpayer was not paying for us to do all of this. We were doing it for free, paying for it through contributions from our members, and the commissioners now say 'stop.'”

He continued, “They wish to get their hands on this money and use it how they see fit–which is basically to pay the costs of running the racetrack, thereby allowing more money to go into the casinos' pockets. Sadly, the commission, which is supposed to be fair and equal to everybody, sees no obligation to be fair to the horsemen.

“Allowing gaming at racetracks in New Mexico was done to save racing,” Mitchell said. “The racetracks cannot have gaming unless they have racing. The law is very clear about it. The gaming compact is clear about it. The Gaming Control Act is clear about it. The Horse Racing Act is clear about it.”

Additionally, the NMHA states that funds have been directed into owners' earnings based on race results.

“When the race is run, the purse is paid and that now becomes the winning horseman's money,” said long-time racehorse owner and NMHA President Roy Manfredi. “By their actions, the racing commission has taken away the NMHA's ability to provide financial assistance to horsemen in need. That's the same as saying you cannot donate to the March of Dimes, the NRA or any other organization, simply because your employer doesn't like the March of Dimes or the other organization. Once the money is paid to an individual who owns a horse, that money is theirs and they can do whatever they want with it. During the pandemic, the NMHA provided $100,000 in alfalfa and grain to the horsemen when we weren't able to run.”

“All we've ever asked them to do is just follow New Mexico state statute, which are laws. This commission considers them suggestions.”

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‘Enough’: New Mexico Horsemen File Federal Lawsuit Against Commission

The NMHA, which represents about 4,000 Thoroughbred and Quarter Horse horsemen in New Mexico, already has two lawsuits pending in state court against the New Mexico Racing Commission (NMRC).

Instead of working with horsemen to settle the dispute, the NMRC subsequently barred the NMHA from communicating with the commission, contacting any commissioners or attending the regulatory agency's public meetings. With no alternative after being deprived of any forum before the commission, the NMHA sought relief in federal court against the NMRC, as well as the individual commissioners, under Section 1983 of the Civil Rights Act and the New Mexico Tort Claims Act. A highly unusual step for a state horsemen's association, the action creates the potential for individual members of the commission to be held personally liable.

Mitchell said the commission is trying to silence the largest advocacy group under its jurisdiction.

The NMHA filed suit in the Second Judicial District Court in Bernalillo County in December to stop the commission's years-long practice of taking horsemen's purse money to pay the racetracks' liability insurance on jockeys and exercise riders, in clear violation of state law. The transfer of purse money to pay track operating expenses has cost horsemen to date more than $8 million.

The horsemen were back in court in May after the commissioners ordered tracks to immediately shut off the NMHA's revenue stream, derived from access to funds horsemen have earned from purses.

The funds in question are used by the NMHA to pay medical fees for its members, the NMHA's Political Action Committee and administrative costs associated with a proper accounting for all expenditures. That includes the critical role of overseeing the purse account for the horsemen and the state's five racetracks.

Mitchell also questioned the commission's motivation.

“They wish to get their hands on this money and use it how they see fit – which is basically to pay the costs of running the racetrack, thereby allowing more money to go into the casinos' pockets,” he said. “Sadly, the commission, which is supposed to be fair and equal to everybody, sees no obligation to be fair to the horsemen.

The NMHA challenges the commission's contention that the horsemen's organization is taking money designated for purses, pointing out that the money in question has transitioned into owners' earnings based on race results.

“All we've ever asked them to do is just follow New Mexico state statute, which are laws. This commission considers them suggestions.”

The horsemen seek compensatory damages, legal fees and other relief the Court may deem appropriate.

The post ‘Enough’: New Mexico Horsemen File Federal Lawsuit Against Commission appeared first on Horse Racing News | Paulick Report.

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Horsemen File Suit Against New Mexico Racing Commission

Edited Press Release

The New Mexico Horsemen's Association has taken additional legal action against the New Mexico Racing Commission after the regulatory body ordered the defunding of the organization that represents about 4,000 Thoroughbred and Quarter Horse owners and trainers in the state.

On May 20, the racing commission ordered tracks to withhold the 1% of purse money that goes to the horsemen's association for administrative costs, about $400,000 a year. Additionally, the commission ordered a halt to the $5 per-starter fee NMHA member owners pay toward medical expenses for horsemen and their employees, as well as a $2 per-starter fee utilized for legislative advocacy.

The horsemen's association responded three days later with its second suit in less than six months filed against the commission in the Second Judicial District Court in Bernalillo County. On Dec. 2, the NMHA went to court to ensure that the state's laws governing the distribution of purse monies are followed.

Horse owners have been charged a $100-$150 starter fee to cover certain track operation costs, including staffing the starting gate. The amount of money siphoned from purses to the racetracks dating to 2004 totals more than $8.4 million, which the horsemen's association is asking to be refunded to the purse account.

“I think we've been very reasonable in trying to negotiate settlements of litigation, and the commission has refused to negotiate in good faith” said Gary Mitchell, the attorney representing the horsemen's association. “It's a matter of people communicating, getting together, but the arrogance of the commissioners stands in the way.”

“This is a small state where we all know one another, as lawyers, as horsemen and as track owners,” Mitchell said. “There's no reason why somebody leading this couldn't get everybody together and say, 'We can iron out these problems.' We do need to figure out some way to insure jockey and exercise riders, outriders and people who work on the tracks, including grooms and such so these people will be safe and have insurance to cover their injuries and work loss. But we have no idea what the tracks are doing. We have no idea what the policies read. We just know that it's cost us a small fortune in purses, over $8 million.”

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New Mexico Horsemen File Suit Against Commission Over ‘Retaliatory’ Defunding Attempt

The New Mexico Horsemen's Association (NMHA) filed an immediate Appeal and Motion to Stay with the Second Judicial District Court in Bernalillo County on May 23 over action taken by the New Mexico Racing Commission (NMRC) at its meeting on May 20, 2021.

On that date, the NMRC unanimously passed a motion that the NMHA “is to immediately discontinue the practice of requiring its membership to pay the 1% purse diversion, the $5.00 Starter Fee and the $2.00 PAC [Political Action Committee] fee stemming from their participation in horseracing in New Mexico. The motion also is to instruct all five (5) racetracks to not provide those improper funds to the New Mexico Horsemen's Association.”

According to a letter written by NMRC in-house counsel Richard Bustamante, “stopping that improper diversion of purse money will translate to the addition of approximately $700,000.00 a year to purse money.”

The Commission's order cannot stand for several reasons, the court filing by the Horsemen alleges. They contend horsemen were not afforded Due Process, the commission has no authority or jurisdiction over donation by horsemen owners to the horsemen, and the order was made in retaliation.

According to the Appeal and Motion to Stay filed by the NMHA: “The true motive behind the order/directive is to deprive the Horsemen of all or a large portion of funding because the Horsemen objected to racetracks using 'purse monies' for operational expenses [insurance], Horsemen objected to the Commission canceling race meets and/or shortening race meets, Horsemen refused to pay from purse money the operational expenses of the racetracks, and Horsemen were demanding racetracks keep the tracks and backsides in good, clean and safe condition.”

In addition, the NMHA plans to amend its current civil lawsuit against the NMRC to include additional causes of action for both discrimination against the NMHA and for ethics violation of public officials based on alleged conflict of interests of commissioners.

On Dec. 2, 2020, the NMHA filed a lawsuit against the Commission seeking the return of more than $8 million it alleges the Commission has been collecting improperly from horsemen since 2004 to pay liability insurance for jockeys.

That complaint, a petition for declaratory judgement and relief, also alleges that 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 Dec. 2 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 commission subsequently filed a Motion to Dismiss for lack of jurisdiction and failure to state a claim, to which the horsemen responded on May 3, 2021.

A portion of that response reads: “In a stunning admission, the New Mexico Racing Commission admits they have taken the Horsemen's purse money, and now suggest the Horsemen have no remedy, not even in the Courts of New Mexico. The Commission suggests the Horsemen can come to them and seek relief, which is akin to asking the fox to return the chicken.”

The response concludes: “Horse racing in New Mexico was saved when each racetrack was allowed to institute casino gaming. The plan, as set forth by statute, was that certain proceeds from casino gaming would go to purses for horse racing. Casino gaming was meant to save horse racing, not the other way around. The New Mexico legislature clearly wrote the money was to be used for purses. Purses are not defined as operating costs of the racetrack/casinos. The rule-regulation of the Commission is not in compliance with the statutes. There is no administrative remedy for the Horsemen and they have attempted, to no avail, to get the Commission to stop allowing racetracks/casinos to use part of the purse money for operating costs. The Horsemen are correct about what the money can be used for, that is, for purses. The Horsemen request the law be complied with and the Court determine not only that it has the jurisdiction but the Horsemen have no remedy but through the Courts.”

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