Federal Judge Rules Twinspires.com Cannot Accept Bets from Texas

The United States District Court of the Western District of Texas (Austin Division) recently held that Churchill Downs subsidiary website, Twinspires.com, is prohibited from accepting wagers from persons living in Texas.

Churchill Downs brought action against the Texas Racing Commission seeking a declaration that the Texas Racing Act’s in-person requirement, under which only a person inside the enclosure where a race meeting was authorized may wager on a race, violated the dormant Commerce Clause. The dormant Commerce Clause precludes states from enacting laws or regulations that excessively burden interstate commerce. 

The Texas Racing Commission is a state agency charged with enforcing the statutory and regulatory provisions of the Texas Racing Act. Churchill Downs moved for permanent injunction to prevent the Texas Racing Commission from enforcing the Act to prohibit Texans from placing wagers on Twinspires.com. The in-person requirement has been on the books in Texas since 1986.  Nevertheless, Twinspires.com continued to accept wagers from Texans through its website.

The court, Judge James R. Nowlin, presiding, found that the Act did not violate the dormant Commerce Clause and entered judgment for the Texas Racing Commission. With respect to the legitimate state interests furthered by the in-person requirement, Judge Nowlin remarked,

[E]very regulatory challenge that gambling has always posed to the state has been made that much more daunting by the advent of the internet. Gambling has always been addictive, but before the internet, at least the addicts had to go to the trouble of driving somewhere to place his bet. The internet allows the addict to get his fix 24/7/365, all without leaving the comfort of his own home . . . Along the same lines, underage patrons looking to get in on the action have always tried to evade detection with fake IDs and the like, but with the advent of the internet, all they need to place a bet is Dad’s credit card and date of birth . . . Finally, gambling—especially horse racing—has always attracted crooked individuals hoping to clean their money. With the advent of the internet, though, criminal elements are better able to hide behind the anonymity afforded by the computer screen.”

Churchill Downs has appealed this case to 5th Circuit Court of Appeals.

Case InformationChurchill Downs, Inc. v. Trout, No. 1:12-CV-00880-JRN, 2013 WL 5799694 (W.D. Texas Sept. 23, 2013).

Court Will Enter Injunction Forcing AQHA to Register Clones & Their Offspring

On August 12, 2013, an evidentiary hearing was held on Plaintiffs’ request for attorneys’ fees and for injunctive relief that would require the AQHA to register clones and their offspring. 

Following the hearing, U.S. District Judge Mary Lou Robinson informed counsel that she would grant an injunction requiring the AQHA to register horses produced by cloning and their offspring.

On August 14, 2013, the court entered an order (which can be accessed here) setting forth specific changes and additions to AQHA rules and regulations, which, according to the order, the judge is considering for inclusion in the injunction. The order requires that any objections to the proposed rule changes be submitted by noon on August 19, 2013.

The court has not yet ruled on Plaintiffs’ request for nearly $900,000 in attorneys’ fees. The court ordered the Plaintiffs to furnish their billing statements to AQHA, and also ordered AQHA to file any objection to the request for attorney’s fees, by August 14, 2013. A copy of AQHA’s objection to Plaintiffs’ attorneys’ fees, filed yesterday, can be found here.  

AQHA’s primary objection to Plaintiffs’ fee request is the fact that the jury did not award any damages to Plaintiffs. Plaintiffs had sought $5.7 million in damages and sought to treble those damages under the antitrust laws for a total of $17.1 million. However, the jury awarded Plaintiffs zero damages.

At this point, the court has not yet entered final judgment in favor of Plaintiffs. According to this press release, AQHA will file a Motion for Judgment as a Matter of Law after entry of final judgment. In that motion, AQHA will request that the Court enter a take nothing judgment in favor of AQHA based on the fact that the jury’s verdict was not supported by the evidence. Should the court not grant AQHA’s motion, AQHA will file a notice of appeal thereby starting the appellate process.

Case Information: Abraham & Veneklasen Joint Venture, et al v. American Quarter Horse Association; Cause No. 2:12-CV-00103-J in the U.S. District Court for the Northern District of Texas (Amarillo Division)

Related Posts:

Federal Jury Rules Against AQHA in Cloning Suit

Federal Lawsuit Alleges AQHA Cloned Horse Registration Policy Violates Antitrust Law

Federal Jury Rules Against AQHA in Cloning Suit

Today, a 10-person jury in the U.S. District Court for the Northern District of Texas, Amarillo Division ruled that AQHA Rule REG106.1, which prohibits the registration of cloned horses and their offspring in AQHA’s breed registry, violates federal and state anti-trust laws. The jury awarded no damages.

In a statement published today on AQHA’s website, AQHA Executive Vice President Don Treadway, Jr. said,

When individuals with shared interests, goals and values come together to form a voluntary association to serve a common purpose, the members have a right to determine the rules for their association. The wisdom of our membership –which is largely not in favor of the registration of clones and their offspring—has not been upheld by this verdict.

Whether nor not clones will be able to be registered with the AQHA in the foreseeable future is still up in the air. According to AQHA President Johne Dobbs,

We will meet with our legal counsel and executive committee regarding our appeal options in continuing to fight for our members’ rights and announce our decision in that regard in the near future.

The plainitffs in the case have requested injunctive relief, in which they have asked the court to order the AQHA to register their cloned horses.  They have also requested that the court order the AQHA to pay at least a portion of their legal fees.  A hearing on the injunctive relief and fees request has not yet been held.  The jury’s verdict has not been reduced to a final judgment, nor has the court issued an opinion in the case at this time.  

Case InformationAbraham & Veneklasen Joint Venture, et al v. American Quarter Horse Association; Cause No. 2:12-CV-00103-J in the U.S. District Court for the Northern District of Texas (Amarillo Division)

Related Post

Federal Lawsuit Alleges AQHA Cloned Horse Registration Policy Violates Antitrust Law

Cat Breeder Jim Smith Explains Evils of Texas Puppy Mill Bill In Response to Texas Tribune Article

Audrey White of the Texas Tribune authored this news story concerning the federal lawsuit over the Texas Puppy Mill Bill. The article reports that the Humane Society of the United States and the Texas Humane Legislation Network filed an amicus brief in the suit supporting the Bill.

The story contains a quote from a representative of the Humane Society’s Texas Branch, as well as some quotes from two breeders who are not involved in the lawsuit. Neither of the breeders quoted in the article expressed the due process concerns raised by the plaintiffs in the suit.

With respect to the plaintiffs, the article states, “calls to plaintiffs in the case were not immediately returned.”

Jim Smith, a cat breeder and one of the plaintiffs in the case, posted this response in the comments section of the online article this morning. According to Smith,

I am one of the plaintiffs in the Puppy Mill and Kitten Mill case. I was called by Ms. White and asked for comments, but I told her that because there was legal actions pending, I needed to clear things with my attorney first. He told me that there was no reason why I couldn't address the issues, so I called Ms White back (several times), got no answer, and she never returned my call. I called her back within an hour or two of her call.

Mr. Smith went on to explain his due process concerns, saying,

There are several reasons why this is bad law. First and foremost, even a meth dealer or porn publisher is afforded more rights under Texas Law than a Kitten or Puppy Breeder. The law is written in such a way that agents from the Texas Department of Licensing and Regulations can enter my property, with or without me being present, enter my private residence, confiscate my computer, files or other property, or my animals simply on their own recognizance. They do not need a warrant, and there is no oversight by any actual law enforcement agency or court. Once they seize my animals or property, there is no appeals process developed for me to protest their actions. The TLDC can also employ "Third Party Inspectors", such as members of Animal Rights organizations to do these functions for it.

Smith also hinted that legislation of this nature could eventually effect the equine and ranching industries, stating,

HB 1451 is part of a nationwide push by animal rights organizations to deny us the ability to keep pets, have horses and ranching, rodeos and many other traditional Texas activities because it offends their vegetarian and vegan beliefs. It's their attempt to enforce their personal and religious beliefs on the rest of us.

Horse breeders, what do you think of the new Puppy Mill Bill? I welcome you to post your thoughts and insights in the comments section to this post.

Fort Worth Court of Appeals Partially Reverses Final Judgment in Whitmire v. NCHA

Yesterday, the Fort Worth Court of Appeals reversed and rendered in part and affirmed in part the judgment of the 236th District Court of Tarrant County, Texas in Whitmire v. NCHA. 

In the underlying suit, the jury returned a verdict for Lainie Whitmire for $70,000 in damages for breach of oral contract and $0 in damages on her false imprisonment claim. Lainie requested that the trial court enter judgment in accordance with the jury’s verdict and also requested attorneys’ fees for prevailing on her breach of contract claim.

On motion of the NCHA, the trial court entered a judgment notwitstanding the verdict (JNOV), holding that Lainie take nothing on her breach of oral agreement claim and awarding her no attorneys’ fees. The final judgment also ordered that the NCHA recover $302,000 in attorneys’ fees from Lainie and $45,000 in attorneys’ fees from her husband, Ray.

The Whitmires filed a timely notice of appeal.

A panel of the Fort Worth Court of Appeals, consisting of Dauphinot, Walker, and Gabriel, JJ., held on appeal that the trial court erred by disregarding the jury’s findings that the NCHA breached an oral agreement with Lainie and that Lainie sustained $70,000 in damages as a result. The court of appeals reversed that portion of the judgment and rendered judgment in favor of Lainie for $70,000. 

The court of appeals also sustained the Whitmires’ issue on the NCHA’s attorneys’ fees, and modified the trial court’s judgment to delete the NCHA’s recovery of attorneys’ fees of $302,000 from Lainie and $45,000 from Ray. The court of appeals affirmed the remainder of the judgment.

Case InformationWhitmire v. National Cutting Horse Ass’n, No. 02-11-00170-CV, 2012 WL 4815413 (Tex. App.—Fort Worth, Oct. 11, 2012, no pet. h.).

Related post

NCHA Litigation Update: NCHA Wins Again

Texas "Puppy Mill Bill" Challenged in Federal Court

The constitutionality of the hotly-contested “Puppy Mill Bill” passed in the 2011 Texas Legislature has been challenged in a federal suit filed in Austin on October 1, 2012.  A copy of the complaint can be downloaded here.

The new law, commonly referred to as the “Puppy Mill Bill”, was passed as HB 1451 and codified as Chapter 802 of the Texas Occupations Code . The title given to the codified act is “The Dog and Cat Breeders Act”. As part of the Act, the Texas legislature charged the Texas Department of Licensing and Regulation with the task of creating a regulatory and licensing scheme for dog and cat breeders in Texas. The rules related to the Act are set forth in Title 16, Texas Administrative Code, Chapter 91.

The plaintiffs in this week’s suit challenging the Act and related rules include Responsible Pet Owners’ Association Texas Outreach Inc.; Teresa Arnett, a Boston Terrier breeder in Rosansky; Sharleen Pelzl, a cat breeder in Dripping Springs; and James Smith, a cat breeder in Georgetown. The plaintiffs are represented by Steven Thornton of the firm of Westerburg & Thornton, P.C. in Dallas.

Could horse breeders be the next target of "Puppy Mill Bill" type legislation?

Included among the plaintiffs’ complaints about the “Puppy Mill Bill” and related rules are the following:

·       The Act allows inspectors to enter breeders’ facilities without a warrant. 

·       The Act allows inspectors to enter the private residence of a breeder without first obtaining a warrant.

·       The Act exempts dogs bred primarily to be used for purposes such as herding livestock, hunting, field trials, and other performance events. But the Act does not give a reason for a disparate treatment of breeders of different types of dogs, nor does it specify whether it is the intent of the breeder or the end purchaser that controls the analysis.

·       The Rules allow applications for breeders’ licenses to be denied with no possibility of appeal.

·       The Rules related to licensure of breeders require the successful completion of a “criminal background check.” However, the Rules do not specify what constitutes successful completion.

Animal cruelty and animal neglect have been illegal in the state of Texas for a long time. Some question why Act was even necessary, while others view the Act as nothing more than a vehicle to allow rescue groups (with the help of the authorities) to enter property of others and seize animals without a warrant. I believe that if such regulations are allowed to stand, it is only a matter of time before the animal welfare lobby will push for similar regulations applicable to horse breeders.

DVM News Magazine and others have expressed reservations about the “unintended consequences” of “puppy mill laws” passed in other states.  And just this morning, some pure bred dogs were abandoned in a rural area near Flower Mound around 1:00 AM. Some have suggested that the “Puppy Mill Bill” is to blame because these new laws are so draconian that no commercial breeder is able to comply with them.

Updates will be posted as this case progresses.

Legal Background of Horse Slaughter in Texas

Did you know that horse slaughter for human consumption has technically been illegal in the State of Texas from 1949 to the present? The laws surrounding horse slaughter in the United States are complicated, and they vary from state to state. Below is an overview of the legal history of horse slaughter in Texas, from 1949 to present.

Photo:  Silhouette of a horse before a North Texas sunset

1949: 51st Texas Legislature passes a law that makes it a criminal offense for a person to 1) sell horsemeat as food for human consumption; 2) possess horsemeat intending to sell it as food for human consumption; and 3) transfer horsemeat to a person who intends to sell it as food for human consumption or who knows or reasonably should know that the person receiving the horsemeat intends to sell it as food for human consumption. See Article 719e of Vernon’s Texas Penal Code (now repealed). The 51st Legislature placed jurisdiction to investigate within the Board of Health’s powers as a matter related to the public health. However, Article 719e did not expressly authorize any particular entity to enforce the law.

1950: A news article quotes the “state health officer,” Dr. George W. Cox, as stating that the Department of Health was prosecuting “every violator we could find.” Health Officer Tells How to Stop Horse Meat Sales, Dallas Morning News, Mar. 17, 1950.

1952: Another news article quotes the same Dr. Cox, “state health officer”, as saying that sausage containing horsemeat “can’t be sold in Texas”. Neigh? Nay! Texans Can’t Horse Around with Sausage, Dallas Morning News, May 23, 1952.

1973The substance of Article 719e was transferred to Texas Revised Civil Statutes and again placed with statutes related to public health. It was not substantively changed.

Mid 1970’s: Horse slaughter companies Beltex (Fort Worth, Texas) and Dallas Crown (Kaufman, Texas) began marketing and processing horse-meat intended for human consumption in foreign countries. 

1991The statute prohibiting horse slaughter was codified as Chapter 149 of the Texas Agriculture Code (where it resides today). It was not substantively changed. Nothing in the current statute expressly authorizes any entity or agency to enforce the law.

2002: Texas State Representative Tony Goolsby requested that the Texas Attorney General clarify the enforceability of Chapter 149, which on its face prohibits the processing, sale or transfer of horsemeat for human consumption. AG John Cornyn issued this opinion, stating that Chapter 149 is applicable to the slaughterhouses in Texas and was not preempted by federal law. According to the opinion, Texas Department of Agriculture has no authority to investigate or assist in prosecuting violations of Chapter 149, but local prosecutors may investigate and prosecute alleged violations of Chapter 149.

2007: When the slaughterhouses learned of the 2002 AG opinion, and that Beltex and Dallas Crown were facing imminent prosecution, they brought a case in the United States District Court for the Northern District of Texas, seeking a declaration of legal rights and responsibilities and to enjoin any potential prosecution of them under Chapter 149. The slaughterhouses generally asserted that Chapter 149 had been implicitly repealed and/or it was preempted by federal law. The trial court permanently enjoined the state from prosecuting the slaughterhouses under Chapter 149. On appeal, the 5th Circuit Court of Appeals vacated the trial court’s judgment and injunction in favor of the slaughterhouses, finding that Chapter 149 had not been repealed, was not preempted by federal law, and that it did apply to the slaughterhouses. See Empacadora de Carnes de Fresnillo, S.A. de C.V. v. Curry, 476 F.3d 326 (5th Cir. 2007). As a result of this decision, Beltex and Dallas Crown shut down their operations in Texas.

2008: Attorney General Greg Abbott issued this opinion, stating that it is illegal under Chapter 149 for a foreign corporation to transport horsemeat for human consumption in-bond through Texas for immediate export to foreign destinations. Abbott made clear that neither federal law nor the U.S. Constitution invalidated this application of Chapter 149.

July 2012:  As discussed in this prior post, the Texas Senate Committee on Agricultural and Rural Affairs met to hear testimony on the economic impact of the closure of Texas's slaughterhouses.  According to this news story, some believe that a repeal of Chapter 149 could be on the table next legislative session.

Unless Chapter 149 is repealed or revised, horse slaughter remains illegal in Texas—though it can ostensibly be carried out in other U.S. jurisdictions barring the passage of any federal law that directly or indirectly prohibits it. Whether U.S. horse slaughter, in my opinion, remains a viable option from a legal prospective will be the topic of an upcoming post.

Federal Lawsuit Alleges AQHA Cloned Horse Registration Policy Violates Antitrust Law

On April 23, 2012, AQHA member Jason Abraham and two related business entities sued the American Quarter Horse Association (AQHA) in the U.S. District Court for the Northern District of Texas, Amarillo Division.

The complaint asks the court to order the AQHA to revoke AQHA Rule 227(a), on the basis that an outright restriction on the registration of cloned horses and their offspring allegedly violates federal antitrust laws.

Rule 227(a) was approved in 2004 by the AQHA board of directors, which prohibits all cloned horses and their offspring from being included in the AQHA’s breed registry. 

Other breed registries, such as the Jockey Club and the Paso Fino Horse Association, have also ruled that cloned horses and their offspring are not eligible for registration.

As discussed in this prior post, Texas law (which may or may not be deemed applicable in this case) favors a policy of judicial non-intervention with respect to the internal affairs of voluntary associations, such as the AQHA. An exception to Texas’s policy of judicial non-intervention can apply in cases where a valuable right or property interest is at stake in a lawsuit, and cases where a voluntary association’s rules violate the law.

For more information, see the following articles:

Lawsuit Challenges AQHA Cloned Horse Registration Policy

Suit Filed: Claims AQHA Ban on Cloned Horses Violates Antitrust Law

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Supreme Court of Texas Denies Petition for Review in Gaughan v. NCHA

On March 30, 2012, the Supreme Court of Texas denied review of Paula Gaughan’s lawsuit against the National Cutting Horse Association (“NCHA”). 

We first covered the Gaughan case in a post back in August of 2011, shortly after the Fort Worth Court of Appeals affirmed the trial court’s judgment in favor of the NCHA. The trial court’s now completely final judgment awards the NCHA $75,000 in attorneys’ fees and denies Gaughan’s request that certain NCHA financial records be judicially declared available for inspection by all NCHA members. For more information, see this article.

The Justices of the Supreme Court of Texas

The NCHA is a Texas nonprofit corporation. The Gaughan case dealt primarily with a company’s duties under the Texas Non-Profit Corporation Act to maintain and, in some cases, allow members to inspect the nonprofit's books and records. The trial and appellate courts held that the NCHA complied with the portions of the Act that were at issue in the lawsuit.

While we’re on the topic of a member’s suit against a horse association, it is a convenient time to point out that the NCHA would likely be deemed a “voluntary association” under Texas law. Here are some “fun facts” about voluntary associations:

  • It is the right of a voluntary association to manage, within legal limits, its own affairs without interference from the courts. This is what they call the “policy of judicial nonintervention.”
  • Review of a voluntary association’s actions is severely limited under Texas law. Courts will not interfere with the internal management of a voluntary association so long as the governing bodies of such association do not act totally unreasonably, contravene public policy, break the law, or violate the association’s own rules and procedures.
  • An individual, by becoming a member of a voluntary association, subjects himself or herself, within legal limits, to the association’s power to administer its rules as well as its power to make its rules.
  • An exception to the policy of judicial nonintervention can be made where a valuable right or property interest is at stake in a lawsuit.

Although the policy of judicial nonintervention did not directly come up in the Gaughan case, these issues often preclude or limit the ability of a court to interfere in disputes between members and horse industry associations. 

Related Post:  NCHA Litigation Update:  NCHA Wins Again

Fort Worth Court of Appeals Affirms Dismissal of Trainer's Claims in APHA Case

The Fort Worth Court of Appeals has affirmed the 348th District Court of Tarrant County’s dismissal of horse trainer Rebecca “Becky” George’s lawsuit against Adam Deardorff and Lana Wirsig, holding that the trial court lacked personal jurisdiction over Wirsig and Deardorff.

Becky George of Tomball, Texas alleged that statements by Deardorff and Wirsig were submitted to the American Paint Horse Association (APHA), which caused the APHA to revoke George’s status as an official APHA judge and suspend her from APHA competitions for six months. George alleged that the suspension caused her to lose more than half of her clients.

All parties agreed that Deardorff was a resident of Pennsylvania, and Wirsig was a resident of Missouri. The trial court dismissed George's claims against Deardorff and Wirsig on jurisdictional grounds. According to the Court of Appeals, George did not meet her burden to allege facts sufficient to give the trial court personal jurisdiction over Deardorff and Wirsig, because:

1) George asserted in her pleadings that another defendant named Harlan Hall (and not Deardorff or Wirsig) submitted Deardorff and Wirsig’s statement to the APHA (which is based in Fort Worth). 

2) George alleged that Deardorff had engaged in negotiations with Hall regarding the possibility of Hall hiring Deardorff to become the Hall family’s horse trainer in Texas. But George did not allege where these negotiations occurred or allege any other facts about these negotiations.

3) Even if Deardorff and/or Wirsig had submitted their statements to the APHA, this allegation is not sufficient to establish personal jurisdiction because it “was too is too random or isolated to constitute purposeful availment and does not show that Deardorff or Wirsig sought some benefit, advantage, or profit by availing themselves of Texas.”

 4) George’s claim asserting a civil conspiracy among Deardorff, Wirsig, and Hall (a Texas resident) did not impute Hall’s acts to Deardorff and Wirsig. The court held that George had to establish jurisdiction over Deardorff and Wirsig individually and not based on the acts of another person as part of a conspiracy.

5) George argued that Deardorff and Wirsig attended APHA events and that Wirsig competed in APHA-sponsored events, and because the APHA is headquartered in Texas, these acts constitute doing business in Texas. The Court of Appeals overruled this argument because George did not allege that Deardorff and Wirsig attended any of these events in Texas, much less that their contacts with Texas in connection with these events constituted purposeful availment of the laws of Texas.

6) George claimed that Wirsig was a customer of George, and George’s business is located in Texas. But George never alleged that Wirsig ever did business with George in Texas or other facts showing that Wirsig purposefully invoked the benefits of Texas laws by using George’s services.

As you can see, a defendant's isolated or indirect contacts with Texas do not always give rise to jurisdition in Texas.  The defendant must usually be shown to have committed a tort in Texas, to have done busniess in Texas, or to have otherwise purposefully availed himself of the protections of Texas law to in order to submit to the jurisdiction of Texas courts.  Plaintiffs should always plead jurisdictional facts against out-of-state defendants in a detailed manner to demonstrate the defendant's specific acts undertaken in Texas.

Plaintiffs to litigation against defendants who reside in other states should carefully consider jurisdictional factors before deciding where to bring suit. Filing suit in the correct forum to begin with can expedite the litigation process and save attorneys’ fees and court costs. Typically, jurisdiction is proper in the state and county were the defendant resides. If a defendant has a possible “quick way out” of a lawsuit by challenging personal jurisdiction, a defendant will usually take advantage of this.  If a defendant's suit is dismissed on jurisdictional grounds, the plaintiff must then sue them again in a proper forum.  But the plaintiff must act expediently in doing so to ensure that the statute of limitations does not expire before the new suit is filed.

Case informationGeorge v. Deardorff, No. 02-11-00173-CV, 2012 WL 335854, (Tex. App.—Fort Worth, Feb. 2, 2012).

U.S. Supreme Court says States Cannot Regulate Activities at Slaughter Plants

On January 23, 2012, the U.S. Supreme Court ruled that while states may be able to enact laws banning the slaughter of horses, states cannot impose their own laws governing how animals are handled and processed at federally-regulated slaughterhouses.   A link to the U.S. Supreme Court’s opinion can be found here.

This opinion was handed down in National Meat Association v. Harris, the “pig case” I discussed back in November 2011 when the case was in the oral arguments phase. This prior post discussed that case’s possible indirect effects on the horse slaughter debate:

Could the U.S. Supreme Court Unwittingly Decide the Fate of Horse Slaughter?

Photo:  Punxsutawney Phil declared today that winter is far from over.

 

In a nutshell, the Court held in Harris that a state law in California requiring all slaughterhouses to “immediately euthanize” any nonambulatory animal on its premises is preempted by the Federal Meat Inspection Act (FMIA) because the FMIA regulates slaughterhouses’ handling and treatment of animals upon their arrival at a slaughterhouse. 

The Court was not persuaded by the argument that the treatment of nonambulatory pigs could be regulated by states because the Fifth and Ninth Circuits have upheld state laws banning the slaughter of horses. The court made clear that the FMIA applies to a broad range of activities at slaughterhouses, but it does not address the specific species of animals that are allowed to be processed in the first place. With respect to the federal circuit cases upholding state bans on horse slaughter, Justice Kagan, speaking for the Court, stated:

We express no view on those decisions, except to say that the laws sustained there differ from [the California law requiring the immediate euthanization of nonambulatory animals] in a significant respect…Unlike a horse slaughtering ban, the statute thus reaches into the slaughterhouse’s facilities and affects its daily activities. And in so doing, the California law runs smack into the FMIA’s regulations. So whatever might be said of other bans on slaughter, [the challenged California law] imposes requirements within—and indeed at the very heart of—the FMIA’s scope.”

The question I posed in my prior post about Harris was:

“What if one or more states were to enact laws that made illegal the so-called 'evils' of slaughter that opponents of horse processing find so unsavory? Would the opponents of horse slaughter be opposed to the humane processing of horses in those states?"

The answer to this question, per the Court’s ultimate opinion in Harris, is “it doesn’t matter now, because it is now clear that states cannot make their own laws governing how animals are handled at slaughterhouses that are governed by the FMIA.”

Also, we can now assume that if the processing of horse meat for human consumption is to be resumed in any state where it is still legal under state law, FMIA regulations (and not any regulations that the states may attempt to promulgate) will govern how horses are handled and processed in those states.

For another take on the Harris case and its possible effects on horse slaughter, see the following post by Milt Toby on Horses and the Law:

Horses and Cattle and Pigs, Oh My

Follow me on Twitter @alisonmrowe

2011 Equine Law Year in Review

Happy New Year, Equine Law Blog readers!  Here's to the hope that you and yours find all opportunities for joy and happiness, as well as prosperity in abundance in 2012.

2011 brought a number of significant legal events / changes that will affect many people involved in the Texas horse industry.  The "Top Seven of 2011" (it rhymes!), are as follows:

1.  The Texas Supreme Court decided a case involving the Texas Equine Limitation of Liability Act.

  • Loftin vs. Lee was the case.  The opinion was handed down on on April 29, 2011.
  • The Supreme Court upheld the defendant's immunity pursuant to the Act.
  • This was the first time the Texas Supreme Court has taken up a case concerning the scope of the Act.
  • Related blog post

2.  The Texas Legislature expanded the immunities provided under the Texas Equine Limitation of Liability Act to cover all farm animals and expanded immunity to cover veterinarians.

  • Governor Perry singned the bill into law on June 17, 2011, and it became effective immediately upon signing.
  • Warning signs should be updated to reflect the new law.
  • The new law is called the Texas Farm Animal Limitation of Liability Act.
  • Related blog posts can be found here and here.
     

3.  The Texas Legislature passed a new sales tax exemption certificate requirement for the purchase of tax-exempt agricultural goods.

  • The bill was passed during 2011 legislative session, but first became effective on January 1, 2012.
  • All persons purchasing tax-exempt ag supplies must now apply for a registration number with the Texas Comptroller.
  • Horse and feed sales are still exempt without a number, but some training and boarding businesses may not qualify for a registration number that is now required to purchase other goods.
  • Related blog post.

4.  The Texas Legislature passed a bill affecting equine dentistry.

  • There is (as of September 1, 2011) a licensing requirement for lay dentists in Texas.
  • Related blog posts can be found here and here.
     

5.  Congress and President Obama passed a budget bill that removed ban on federal funding of horse slaughter inspectors.

  • Bill was signed by the President on November 18, 2011.
  • Horse slaughter is, by virtue of this bill, again a possibility in some U.S. states.
  • Related blog post.
     

6.  100% Bonus Depreciation ended on December 31, 2011

  • Some believe this tax benefit caused a surge in sales for yearling markets last year.
  • For new goods or qualified horses purchased on January 1, 2012 and after, 50% bonus depreciation will be available instead of the 100% rate that was available in 2011.
  • Related blog post.

7.  New medication rules were adopted by a number of horse organizations

  • Performance and race horse medications were a hot topic in 2011.  Among other organizations, the Breeders' Cup decided to phase out the use of Lasix, and NRHA initiated random testing protocols and adopted a new medications rule in 2011.
  • Related blog posts can be found here and here.

 Follow me on Twitter @alisonmrowe

American Horse Council Opposes Changes to Federal Child Labor Regulations

On December 15, 2011, the American Horse Council (AHC) issued a news release publicizing its opposition to the Department of Labor's (DOL) proposed child labor regulations concerning children working on farms because of its potential negative impacts on the horse community. 

The AHC was organized in 1969 to represent the horse industry in Washington before Congress and the federal regulatory agencies.  It is a non-profit corporation that represents all segments of the equine industry.

According to the AHC, the proposed rule would effectively bar minors under the age of 16 from working in most capacities in agriculture, especially around horses and other livestock.

On November 30, 2011, the AHC filed comments with the DOL expressing its concerns with the proposed rule.  A link to the AHC’s full comments can be found here

According to the AHC:

The proposed rule would expand the number and scope of Hazardous Occupation Orders (HOs) to such an extent that young people not working on a farm or ranch owned by their parents would be precluded from working in agriculture.  The proposed rule would prohibit herding livestock on horseback or foot in confined spaces such as pens and corrals.  Furthermore, the DOL would prohibited youth from engaging or assisting in almost all common animal husbandry practices, such as branding, breeding, dehorning, vaccinating, castrating livestock, or treating sick or injured animals including horses.  All these activities combined represent a great deal of the work performed in association with livestock.”  

The proposed DOL rule does include an exemption for children working on farms and ranches owned by their parents, but the AHC believes this exemption is too narrow in scope:

The AHC does not believe the proposed rule recognizes the reality that many family farms and ranches are held as LLCs or partnerships with other family members.  We believe there is no reason to believe it has ever been the intent of Congress to excluded farms owned by two siblings or multiple generations of a family from the parental exemption.  Doing so would impact thousands of family farms and ranches and unnecessarily deprive young people of the opportunity to work on a family farm or ranch and all the benefits associated with such work…”

Texas Farm Bureau has also recently published these blog posts featuring the concerns of family farmers who believe the proposed rule would rob many children of the valuable lessons that they could learn working in agriculture and around livestock:

DOL Could Change the Value of Hard Work

New Rules Robbing Our Kids?

In an age where most kids in the United States spend most of their free time in front of a TV set, an I-Pad or a computer, it is hard for me to imagine that so many kids are getting hurt working on farms that a new federal law is required to protect them from “exploitation”.  Do any of you readers know what the real motivation behind this proposed rule really is?  Please feel free to leave your ideas in the comments section.

In next week’s post, I’ll cover the most significant legal developments of 2011 that affect Texas horse owners.  I wish all of you a very Merry Christmas and safe travels this weekend!

Multiple Agendas Revealed in Legal Battle over New York Carriage Horse Industry

Most of you have already read about the heated legal battle over the horse-drawn carriage industry in New York City, where some groups have been pushing for decades to outlaw carriage rides. On its face, the battle seems to be about whether or not the industry is inherently cruel or dangerous for the horses. But more recently, some facts have surfaced pointing to other interests and agendas that may be fueling the push to banish the carriage industry from New York.

Emily B. Hager authored a story published last week in the New York Times that delves into underlying interests of some who are attempting to ban carriage rides in New York City. A link to the article can be found here.

One issue raised in the Times article are allegations of foul play related to the ASPCA’s involvement in the efforts to outlaw the horse-drawn carriage industry. According to Ms. Hager’s article, Dr. Pamela Corey (chief equine veterinarian for the ASPCA), said her supervisors pressured her to distort her findings about the death of a carriage horse in order to turn public opinion against the carriage industry. After Dr. Corey spoke out, the ASPCA suspended her. Dr. Corey has since filed a complaint with the state attorney general’s office, in which she states that she had been pressured on several occasions to slant her professional opinion to help achieve a ban.

Ms. Hager also points out that while the ASPCA is one of the groups leading the effort to ban horse-drawn carriages, it is also one of three entities that regulate the carriage industry in New York. 

The ASPCA’s president, Ed Sayres, is also reported in the Times to have teamed up with Stephen Nislick, chief executive of the development company Edison Properties, to develop a plan to replace carriage rides with electric-powered replicas of antique cars. Sayres and Nislick are reported to have started a nonprofit organization, known as NY-Class, that has collected more than 55,000 signatures backing city ordinances that would end the carriage horse industry in New York. NY-Class was allegedly started up through a $400,000 donation from the ASPCA and a contribution from Mr. Nislick.

With respect to these potential conflicts of interest, Ed Sayres is quoted in the Times as saying, “I don’t see it as a conflict. If we don’t bring forward the risk factor that we are observing, then it would be negligent.”

Real estate developers (including Mr. Nislick) are alleged to be involved in the movement to outlaw the carriage industry because they covet the land on the Far West Side where the horses have long been stabled.  

According to Ms. Hager’s article, some carriage owners acknowledge carrying out a campaign to infiltrate the activist groups and secretly record their strategy sessions. In one recording, Mr. Nislick is said to describe efforts to gain the support of city politicians by giving them campaign contributions. 

The carriage industry is reported to have filed its own complaints with the city and state agencies against the ASPCA and NY-Class.

The Times article includes some stats on drivers’ earnings, which reportedly range from $40,000 to $100,000 annually, depending primarily on whether they own their horses, whether they work the day or night shift, and how bad the weather and economy are.  If you know how much it costs to live in Manhattan, you know that even $100,000 per year before taxes can be hard to live on there. One would think that the last thing the carriage drivers would want to do is abuse or mistreat their horses if their livelihood depended upon them.

These latest allegations are definitely thought-provoking.  One must wonder whether those who donate money to the ASPCA hoping to fund food, medicine, and shelter for unwanted animals know that the Society has spent at least $400,000 on this political campaign.

Also, should the ASPCA still be one of the regulatory bodies governing the NY carriage industry, given the conflicts and allegations that have now arisen?

Finally, what would happen to the horses if those pushing for a ban were successful? According to Dr. Nena Winand, an equine veterinarian from upstate New York who is a member of the American Association of Equine Practitioners, “If we banned the carriage horse industry tomorrow, they would go straight to slaughter. There is no big field out there, there is no one to pay the bills.”

As discussed in this prior post, mistreatment of or cruelty to horses is already illegal in State of New York. Given these latest allegations, this fact does cause one to ponder whether animal welfare is the real impetus behind the movement to outlaw the carriage industry in New York City.

Obama Lifts Horse Slaughter Ban--PETA Says It's A Good Idea

Pigs are flying, or they must be somewhere in the world. President Barack Obama (while campaigning for his second term in office, I might add) has signed a bill essentially re-legalizing horse slaughter, and PETA is happy about it!  Had you told me this a couple of weeks ago, I would have thought these events as likely an Occupy Wall Street protester taking an investment banking job at Goldman Sachs.

The recent bill reinstituting federal funding for horse slaughter plant inspections has been covered ad nauseam in a number of news stories, so I won’t belabor the details.  It is important to note at the outset that there was never a federal law "banning" horse slaughter in the U.S.  In a nutshell, there was law prohibiting federal funding of USDA horse meat inspections put in place in 2006, and that law esentially ended horse slaughter for human consumption in the U.S.  The 2006 "USDA defunding" provision was lifted on November 18, 2011 as part of a Congressional bill signed by President Obama. As a result, horse slaughter plants are already being considered several states and may be operational in 30 to 90 days. But plants specifically designed for horse slaughter cannot be developed in Texas, California, Illinois and Oklahoma, where state laws specifically prohibit horse slaughter plant operations. For more information, see this article.

But the real news story, to me, is the astounding fact that PETA believes resuming horse slaughter in the U.S. will reduce overall horse suffering, and supports the move. Yes, we’re talking about PETA--the same, often controversial animal rights group known for campaigns like “fur is murder” and the lawsuit filed against Sea World for "enslaving" killer whales. 

In a Christian Science Monitor interview, PETA founder Ingrid Newkirk said PETA believes the United States never should have banned domestic horse slaughter because “the amount of suffering that it created exceeded the amount of suffering it was designed to stop.” 

According to the Christian Science Monitor article, “PETA says the optimal solution is to ban both consumption slaughter and the export of horses, but it supports reintroducing horse slaughterhouses in the U.S., especially if accompanied by a ban on exporting any horses at all to other countries.” Really? A ban on exporting any horses at all to other countries? Does anyone know if PETA really proposes that we make it illegal to export any horse to any country outside the U.S., for any purpose? If so, how would this possibly work and what would it do to our horse industry? 

These questions aside, at least proponents of horse slaughter can be glad that for once, an association like PETA agrees with them. 

Compare PETA’s position to that of Forbes contributor Vickery Eckhoff, who blasts the Thoroughbred industry in an article this week for allegedly being “silent” with respect to the fate of ex-race horses that end up being slaughtered (and tortured in the process, according to Ms. Eckhoff). 

As an aside, it should be noted that many Thoroughbred racing industry associations are members and sponsors of the Unwanted Horse Coalition (UHC), whose goal it is to reduce the numbers of unwanted horses in the U.S. so that fewer end up being slaughtered…or worse (yes, I consider many fates worse than slaughter, such as dying of starvation, dehydration, or illness in the back pasture). For a list of the current member associations of the UHC, click here.

Ms. Eckhoff, like many in the “anti-slaughter” camp, believes horse slaughter should be banned because is inherently cruel and abusive and it cannot be made humane, even if it is done in accordance with USDA regulations.  Anti-slaughter groups and individuals often place the blame on breeders, and urge the government or others to penalize people for over-breeding instead of allowing horses to be slaughtered. How would this be done, I wonder, and at what cost? And is there really no way a horse slaughter facility can be designed to make the slaughter process as humane for horses as it is for other livestock? I welcome your thoughts.

Could the U.S. Supreme Court Unwittingly Decide the Fate of Horse Slaughter?

Next Wednesday (November 9, 2011) the U.S. Supreme Court will hear oral arguments on a case where the main issue is States’ rights to impose their own regulations on federally-inspected slaughterhouses. The case is National Meat Association v. Harris (Docket No. 10-244). Though the case involves swine instead of horses, the Court’s decision might ultimately affect the horse slaughter debate currently being waged in Congress.

The issue before the Court is whether a state law in California requiring all slaughterhouses to “immediately euthanize” any nonambulatory animal on its premises is preempted by the Federal Meat Inspection Act (FMIA). The National Meat case deals with a California law governing slaughterhouses in that state that was passed in 2008, after the Humane Society of the United States released a video of so-called “downer cows” being pushed with a forklift, kicked, electrocuted, and dragged with chains at a slaughterhouse.

If the Court ultimately finds that California (and, presumably, all other states) can impose its own regulations on slaughterhouses to which the FMIA applies within their respective states, this might ultimately affect the current battle over horse slaughter being waged in the United States. An interesting question raised by this case, in my mind, is this:

What if one or more states were to enact laws that made illegal the so-called 'evils' of slaughter that opponents of horse processing find so unsavory? Would the opponents of horse slaughter be opposed to the humane processing of horses in those states?"

It’s an interesting question, and I’m torn. While I generally don’t like to see new red tape and new regulations unduly imposed on any industry, I tend to think that most issues such as this are best dealt with on the state level. If the Supreme Court finds that states can, in fact, impose their own laws on federally-inspected slaughterhouses, I am somewhat encouraged that this might ultimately provide vehicle whereby a “win-win” resolution of the horse slaughter battle may be reached.  If humane horse slaughter can be reintroduced in the United States, many horse industry groups believe that that this would have a positive economic impact on the overall horse industry.

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Federal Judge in Florida Issues 80 Page Opinion in Polo Horse Case

You rarely ever see a trial court sign an 80-page order…especially in a horse case. 

But on September 12, 2011, U.S. District Judge Timothy J. Corrigan of the Middle District of Florida signed an 80-page order on a motion for permanent injunction in a case stemming from an April 2009 incident involving 21 Venezuelan polo horses that died in Florida. The 21 polo horses died after receiving a compound prepared by Franck’s Compounding Laboratory of Ocala, Florida. A link to the 80-page order can be found here.

In the lengthy order, Judge Corrigan denied the Food and Drug Administration’s petition for a permanent injunction to keep Franck’s from producing and distributing animal medications compounded from bulk ingredients without the FDA’s approval.

Judge Corrigan ruled that the FDA does not have the authority to regulate state-licensed veterinary pharmacy compounding, stating:

The FDA has long been on notice that its statutory authority to regulate traditional, state-licensed veterinary pharmacy compounding was questionable. It has decided to proceed with this enforcement action, asserting a ‘maximalist’ interpretation of its authority.”

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NRHA Adopts New Animal Welfare and Medications Rule

As discussed in a prior post, reining has hit the international scene like wildfire. Not unlike the sports of Thoroughbred racing and eventing, high-level reining events are now being held in a number countries outside North America that have differing customs regarding acceptable medications and dosage levels for equine athletes during performances.

The National Reining Horse Association (“NRHA”) issued a press release on Sunday announcing the vote of their Board of Directors to implement an “Animal Welfare and Medications” rule. This vote occurred after many discussions with NRHA membership both in the United States and abroad. 

This move is widely viewed as being in the best interest of the reining horse and the Association as a whole. The additional benefits are that it accommodates the internationalization of the sport of reining, and it will provide more clearly-understood and uniform medication rules applicable in all nations participating in NRHA events.

The NRHA will soon begin a multi-phase testing and research program to collect data specific to reining and help the Association implement a program that is suitable for the reining industry. Horses at NRHA-sanctioned events may be tested at random to determine which medications reining horses are currently competing on, and the amount of medications that are typically being used. The tests will include physical exams and drug testing by licensed veterinarians or technicians. 

The new rule includes a description of substances that horses are not allowed to compete on, as well as the acceptable limits for approved medications. Christa Morris, NRHA Sr. Director of Marketing, says of the new rules:

The prohibited substances include drugs that are considered to be in the category of a stimulant, depressant, tranquilizer, local anesthetic, psychotropic substance, or other drug which might affect the performance of a horse. Providing a complete list of forbidden substances is problematic, because new drugs frequently come onto the market. For that reason, this definition in the rule will act as a guideline for members.  We will provide an example list of prohibited substances, but it is not intended to be an exhaustive list.” 

The full rule has not been released to the public to-date, but members can access it on the NRHA website by logging in.

The new rule will be included in the 2012 NRHA Handbook. According to Morris, a “medications handbook” providing additional guidance to members to help them navigate the new rules will be provided to members along with the 2012 NRHA Handbook. 

NRHA exhibitors should remember to read labels on herbal and other over-the-counter supplements, to make sure they don’t contain any of the substances prohibited by the new rules.

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Race Horse Trainers "Guilty Until Proven Innocent"

"Absolute insurer rules" and "trainer liability rules," common in horse racing and other equine sports, presume that trainers are responsible when their horses test positive for illegal substances.  In effect, the rules make trainers guilty unless proven innocent.

The effect of this presumption is to shift the burden of proof from the governing body to the trainer, who must prove innocence by showing  that he or she did not negligently administer a prohibited substance to the horse or did not negligently allow someone else to interfere with the horse.  These rules can result in the imposition of a penalty against the trainer and/or the horse's owner without actual proof of guilt.

Courts have uniformly upheld the absolute insurer rules, despite the fact that they appear to violate the due process of law.

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