Tag: TJC Integrity

Opponents of the Horseracing Integrity and Safety Authority and the law that created it lost another round in court on Friday, June 3, when a federal judge in Kentucky dismissed a lawsuit claiming the law forming the independent, non-governmental organization is unconstitutional because it grants legislative powers to the Authority.

Joseph M. Hood, United States District Court Judge for the Eastern District of Kentucky's Central Division in Lexington, dismissed the claim, a little over two months after a federal judge in Texas threw out a similar suit filed by the National Horsemen's Benevolent and Protective Association and a number of its state affiliates.

A variety of organizations brought this action, including  the states of Oklahoma, West Virginia and Louisiana; racing commissions in Oklahoma and West Virginia; the United States Trotting Association and the Hanover Shoe Farm run by the USTA's president, Russell Williams; the Oklahoma Quarter Horse Association; and the operators of Oklahoma racetracks Fair Meadows, Remington Park and Will Rogers Downs.

At the heart of their suit, the plaintiffs assert that the Authority, as a private entity, is unconstitutionally dictating rules and regulations to the Federal Trade Commission, the branch of government that oversees the organization charged with enforcing racetrack safety and anti-doping and medication control programs for Thoroughbred racing in the U.S. The Authority's racetrack safety programs goes into effect July 1, 2022, with the anti-doping and medication control program scheduled to go into effect Jan. 1, 2023.

The Horseracing Integrity and Safety Act that created the Authority gives ultimate power to the FTC to approve or reject proposed rules from the Authority board . Plaintiffs, however, felt the law puts the FTC, as Hood wrote in his opinion, in a “ministerial role where the FTC is forced to act as a rubber stamp for the Authority's proposed rules.”

The legislation that led to the Authority is modeled on the Maloney Act, a 1938 law amending the Securities Exchange Act by creating the Financial Industry Regulatory Authority (FINRA) that developes and enforces rules in the securities markets. Like the Authority, FINRA is a non-governmental independent agency. In both cases, the government entities that oversee the Authority and FINRA may only approve proposed rules and regulations if they are consistent with the requirements of the laws that created them.

If the FTC does not approve the rules and regulations proposed by the Authority, it may make recommendations to modify them.

“In the event the Authority fails to incorporate the FTC's recommended modifications,” Hood wrote in his order, “the FTC has the power to disapprove the proposed rule until the Authority makes the recommended modification, meaning the FTC retains the ability to control what becomes a binding rule and can contribute to the language of the proposed rule through recommendations that must be made for the Authority to resubmit.”

Plaintiffs also objected that the Authority operates with “self interest” because four of the nine board members are from within the Thoroughbred industry – even though none is allowed to have any direct involvement or vested interest. Hood found that argument lacks merit for the same reason, namely that even if the Authority is “comprised of self-interested competitors,” it “is subordinate to the FTC in the regulatory process.”

Hood also rejected plaintiffs' allegations that HISA unconstitutionally commandeers states by requiring them to fund the Authority's operations. According to the law, states “may elect” to remit fees on behalf of their members but are not required to do so.

“The provision neither requires the states to collect fees from covered persons nor does it involve state funds,” Hood wrote. “Instead, it is merely a requirement on private entities, i.e., the covered persons, to remit fees to the Authority. … Under HISA, the consequence of a state not opting to collect the remitted fees from its members is that the state may not collect funds for related regulation of their own because HISA provides 'exclusive national authority' over covered activities and state(s) that Authority rules 'shall preempt any provision of state law or regulation with respect to matters within the jurisdiction of the Authority under this Act.”

Hood's order granted a motion by the defendants (the Authority, the Federal Trade Commission and numerous FTC officers) to dismiss the action based on “failure to state a claim upon which relief can be granted.”

Like the Texas suit that was also dismissed, Hood's order is expected to be appealed.

The post Federal Judge Dismisses Second Lawsuit Claiming HISA Is Unconstitutional appeared first on Horse Racing News | Paulick Report.

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Trainer Peter Miller has been suspended seven days and fined $10,000 by California Horse Racing Board stewards for violating the CHRB's rule prohibiting program training. The ruling, issued on Saturday and resulting from a stipulated agreement and mutual release with the CHRB, said Miller violated Rule No. 1502 during a period from Dec. 23, 2021 through March 24, 2022, when he said he was taking a hiatus from training while holding an owner's and stable agent's license.

Miller stepped away from active training last November, citing personal reasons, and transferred most of his stable to former assistant Ruben Alvarado. He took what he called a voluntary hiatus after having five horses in his stable die and receiving three sanctions for phenylbutazone overages.

A May 23 complaint against Miller and Alvarado said that Miller “has engaged in behavior consistent with the duties of a trainer at the San Luis Rey training center … including entering horses, conducting endoscopy exams, giving instruction to riders, examining horses, consulting with veterinarians, controlling and accessing bank accounts purported to belong to Ruben Alvarado Racing Stables, assigning jockeys and creating training charts.”

Miller had one starter race in his name in 2022, Respect the Code, who finished eighth in an allowance race at Churchill Downs on May 29. He said at the time that he would be returning to training in Southern California for the upcoming Los Alamitos and Del Mar meets and planned to race at Santa Anita following the conclusion of those meets.

The suspension, which runs from June 6 through June 12, precludes Miller from having access to all premises under CHRB jurisdiction. Regulatory rulings of this type are reciprocated in other racing states.

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A Superior Court judge in Los Angeles has overturned a jury's verdict awarding $1.5 million in damages and interest to horse owner-trainer Carlo Vaccarezza and his wife, Priscilla, who sued equine veterinarian Dr. Vincent Baker and his Equine Medical Center for negligence in a case dating back to 2014.

Judge Richard J. Burdge Jr. threw out the jury's Feb. 25, 2022, decision in a rarely used legal ruling, a Judgment Notwithstanding the Verdict (JNOV), stating that an expert witness retained by the plaintiffs had failed to establish that Baker fell short of the recognized standard of care expected of a licensed veterinarian in California at the time of the alleged negligence.

Lisa J. Brown, the attorney representing Baker, had filed for a JNOV ruling along with a motion for a new trial after the jury voted 11-1 that Baker failed “to use the level of skill, knowledge and care that other reasonably careful veterinarians would use in same or similar circumstances.”

Burdge affirmed the JNOV request and denied the motion for another trial. The case will now move to the Court of Appeal, said James Morgan, attorney for the Vaccarezzas. Instead of Baker filing an appeal over the jury's verdict, however, the Vaccarezzas will be appealing whether the judge overstepped his bounds when granting the JNOV motion.

The dispute involves Baker's care for the Vaccarezzas' Little Alexis leading up to the 2014 Breeders' Cup Filly & Mare Sprint at Santa Anita in Arcadia, Calif. The filly developed a noticeable bump on her neck where a catheter had been placed to treat her with an anti-inflammatory, electrolytes and a vitamin jug. She also developed an elevated temperature of 103.2 degrees on the day before her race. Baker subsequently did bloodwork on Little Alexis that showed an elevated white blood cell count and a serum amyloid A test that registered an exceedingly high 2,534 against a normal range in horses of 0-15. Serum amyloid A test results can reflect inflammation or other health problems.

Baker did not convey the test results to Vaccarezza or anyone on his team at Santa Anita.

By the morning of Little Alexis' race, the bump and elevated temperature had responded to another anti-inflammatory and treatment with hot and cold compresses. Baker told Vaccarezza, “You'll be OK to run,” but Little Alexis performed poorly in the Breeders' Cup, beaten 9 ¼ lengths. She came out of the race, according to testimony, with an even higher fever of 104.7 and a bump on her neck that was larger than before.

Carlo Vaccarezza testified that the condition prevented him from sending Little Alexis to sell at a mixed sale two days later in Kentucky, where he had been led to believe by bloodstock experts the filly would bring $1.5 million or more. When she sold a year later for $440,000, the Vaccarezzas sued Baker and his clinic for the difference in the two prices. The jury agreed, awarding $1,060,000 in damages and just $500,000 in interest dating back to the date of the intended sale on Nov. 3, 2014.

In his ruling, Burdge called into question the testimony of the plaintiffs' expert witness, Dr. Michael Chovanes, pointing out that while he testified to being licensed in Pennsylvania, New York, Kentucky and Maryland, he was not licensed in California and had never practiced in California.

Further, Burdge wrote in his order, Chovanes relayed opinions about his “personal practices” during testimony when asked about “standard of care” by a veterinarian receiving test results with extremely high serum amyloid A levels. Burdge reacted similarly to Chovanes' answer to a question about whether the “standard of care” would permit a horse with similar blood test results to run. Chovanes said he would “scratch the horse unequivocally.”

Burdge wrote: “(Chovanes) was never asked, and he did not testify, that essentially every 'veterinarian of ordinary skill and knowledge from the relevant community' would give that same answer or balance the risks and interests involved in the same way. If another qualified practitioner in the exercise of professional judgment might have answered that question differently, Dr. Chovanes' answer does not establish a standard to which any other practitioner must always adhere.”

While attorneys for both sides said an affirmative JNOV ruling is extremely rare, Burdge has been involved in at least one other case where he overturned a jury's verdict in a civil lawsuit.  That involved a $71 million judgement against NBC Universal over how profits were distributed from the 1970s detective series, “Columbo.” In that case, decided in 2019, Burdge ordered a new trial. The Court of Appeal recently upheld that decision.

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The Texas Racing Commission has said pari-mutuel wagering will not be conducted at Texas racetracks on live or simulcast wagering if the Horseracing Integrity and Safety Authority asserts control over regulatory supervision on July 1, 2022, as scheduled.

The Paulick Report obtained a copy of a May 20 letter to HISA chief executive officer Lisa Lazarus from Amy F. Cook, executive director of the Texas Racing Commission, in which Cook asked to be provided “specific dates, races, and horses that the Authority intends to regulate … within the jurisdiction of Texas.”

Cook cited the Texas Racing Act in stating that “no pari-mutuel wagering is permitted for live or simulcast export wagering for races our Commission does not supervise. Accordingly, there will be no such pari-mutuel wagering or simulcast wagering in Texas on those dates which the Authority asserts jurisdiction.”

Cook said if Lazarus does not notify the Texas Racing Commission of HISA's intentions, “the agency will assume the Authority does not intend to assert jurisdiction and to regulate scheduled Texas 'covered horseraces' pursuant to the Horseracing Integrity and Safety Act.”

Cook said “uncertainty created by your lack of communication,” impaired the commission and racetracks from planning races.

“My expectation is that you will extend to me the professional courtesy of notifying me in writing of your private entity's intentions, pursuant to the Act,” Cook added.

In a May 24 reply to Cook also obtained by the Paulick Report, Lazarus wrote, “As has been the case with every other state racing commission, we have made numerous attempts to engage with the Texas Racing Commission on the Authority's implementation of HISA rules and stand ready to work with you to ensure that Thoroughbred racing flourishes in Texas and across this country.

“Your letter appears to take the position that if the Authority acts as Congress directed, the Texas Racing Commission may effectively shut down Thoroughbred racing in Texas,” Lazarus continued. “If this is correct, it is unfortunate and unnecessary. It is is hard to imagine that Texas takes the same approach to other regulatory areas where the federal government exercises concurrent or limited jurisdiction.”

Lazarus referred to a portion of the enabling federal legislation stating, “The rules of the Authority promulgated in accordance with [the statute] shall preempt any provision of State law or regulation with respect to matters within the jurisdiction of the Authority under the chapter.”

Lazarus added, “Accordingly, while State laws are preempted with respect to matters on which the FTC (Federal Trade Commission) has approved and promulgated a final rule, Texas law will continue to regulate matters on which the FTC has not yet approved and promulgated a final rule. …

“Beginning July 1, 2022, all Covered Persons and all Covered Horseraces (as defined in HISA) are required to comply with the FTC approved regulations of the Authority. This means that any Thoroughbred horserace in Texas that exports its pari-mutuel signal will be governed by HISA as set forth above. Should Texas choose not to conduct Thoroughbred horseraces that export their signal after July 1, then there will not be any Covered Horseraces in Texas to which HISA will apply.”

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