Baffert v. Churchill Downs, Inc.
| Decision Date | 17 February 2023 |
| Docket Number | Civil Action 3:22-cv-123-RGJ |
| Parties | BOB BAFFERT, AND BOB BAFFERT RACING STABLES, INC Plaintiffs v. CHURCHILL DOWNS, INC., WILLIAM C. CARSTANJEN, and R. ALEX RANKIN Defendants |
| Court | U.S. District Court — Western District of Kentucky |
Plaintiffs Bob Baffert (“Baffert”) and Bob Baffert Racing Stables, Inc. (together with Baffert “Plaintiffs”) moved for a preliminary injunction against Defendants Churchill Downs, Inc. (“CDI”) William C. Carstanjen (“Carstanjen”), and R. Alex Rankin (“Rankin” together with CDI and Carstanjen, “Defendants”) regarding Plaintiffs' suspension from CDI tracks. [DE 41]. Defendants responded [DE 50] and Plaintiffs replied [DE 54]. Defendants moved to dismiss Plaintiff's Complaint. [DE 36]. Plaintiffs responded in opposition [DE 39] and Defendants replied [DE 40]. Plaintiffs also moved unopposed for leave to exceed the page limitation in their response. [DE 37]. For the reasons below, Plaintiffs' Request for Leave to File Brief in Excess of 25 Pages [DE 37] is GRANTED, Defendants' Motion to Dismiss [DE 36] is GRANTED in PART and DENIED in PART, and Plaintiffs' Renewed Motion for a Preliminary Injunction [DE 41] is DENIED.
Baffert is a resident of California and a nationally recognized thoroughbred trainer. [DE 1 at 5]. He holds a license issued by the Kentucky Horse Racing Commission (“KHRC”) to enter horses into races and apply for stall occupancy at all racetracks in Kentucky. [Id. at 6]. CDI is a for-profit corporation with its principal place of business in Louisville, Kentucky. [Id.]. CDI is in the business of horseracing, online wagering, and gaming entertainment. [Id. at 10]. Its flagship events include the Kentucky Derby and the Kentucky Oaks at its Churchill Downs Racetrack in Louisville. [Id. at 6]. The Churchill Downs racetrack is owned by the City of Louisville and leased to CDI on a 30-year term that expires on December 31, 2032. [Id. at 9]. Defendant Carstanjen is CDI's chief executive officer, and Defendant Rankin serves as chairman of CDI's board of directors. [Id. at 7].
Plaintiffs entered Medina Spirit in the 147th running of the Kentucky Derby. [Id. at 19]. As a condition for entry, Baffert signed the Rules and Conditions for Racing and Training, which expressly incorporated all KHRC rules and regulations. [DE 51 at 3226]. The Rules and Conditions also expressly incorporated the Spring Meet 2021 Condition Book. [Id. at 3219]. Baffert also signed the CDI Stall Application that included conditions for stabling horses and entering races. [DE 51-8]. The KHRC approved Tyler Picklesimer (“Picklesimer”) as the third steward for the race. [DE 1 at 19].
On May 1, 2021, Medina Spirt won the Kentucky Derby. [Id.]. Following the race, pursuant to 810 KAR 8:060, a KHRC veterinarian took samples from Medina Spirit to test for prohibited substances. [Id. at 20]. On May 8, 2021, it became known to CDI that Medina Spirit had tested positive for betamethasone. [Id. at 20-21]. Betamethasone is labeled as a Class C prohibited substance by the KHRC. [Id. at 21].
On May 9, 2021, CDI issued a statement that CDI has come to understand that Medina Spirit's post-race sample violated the Commonwealth of Kentucky's equine medication protocols. [Id. at 22]. As a result, Baffert would be immediately suspended from entering any horses at Churchill Downs Racetrack for an indefinite period of time. [Id. at 22-23]. CDI cited the seriousness of the offense and noted that if the KHRC's findings were confirmed, then the results of the 2021 Kentucky Derby would be invalidated. [Id.].
On June 2, 2021, CDI announced that Baffert, and any trainer directly or indirectly employed by Plaintiffs, was suspended from entering horses in races or applying for stall occupancy at all CDI-owned racetracks for two years. [Id. at 23]. CDI reserved the right to extend the period of its suspension. [Id.]. This decision followed the confirmation by Plaintiffs' attorneys that Medina Spirit had tested positive for betamethasone following the 2021 Kentucky Derby. [Id. at 23-24]. CDI's suspension makes Plaintiffs' horses ineligible for race entries and stabling privileges. [Id.]. The terms of CDI's suspension do not prevent Baffert from entering the grounds or limit his right of access as a member of the general public to observe races on CDI properties. [Id. at 23-24]. Plaintiffs allege that they have been targeted where more severe violations by other trainers remain unpunished by CDI. [Id. at 25].
On September 10, 2021, CDI instituted a new rule, which prohibits any horse trained by a person suspended from running at Churchill Downs from earning points to qualify for the Kentucky Derby or the Kentucky Oaks, even if those races were not held at CDI properties. [Id.]. Baffert alleges that he is the only trainer affected by the new rule and that CDI created the rule with the “singular aim of destroying Baffert's career.” [Id. at 25-26]. He further alleges that CDI has caused significant damage to Baffert's ability to conduct his customary business on a national scale. [Id. at 26].
Plaintiffs requested additional testing on Medina Spirit's biological samples in an effort to prove that the betamethasone detected was not the result of a prohibited injection. [Id. at 28]. They hoped to prove, instead, that the betamethasone present in Medina Spirit bloodstream following the 2021 Kentucky Derby was the result of a topical ointment applied before the race. [Id. at 26-28].
After Medina Spirit tested positive for betamethasone, Plaintiffs were provided with notice from the KHRC of the suspected violation and informed of their right to an evidentiary hearing before the stewards. [Id.]. In Kentucky, the “absolute insurer” or “trainer responsibility” rule places the responsibility for a positive test on the horse's trainer. [Id. at 29]. This is because it is difficult to determine the source of the medication and the circumstances surrounding its administration. [Id.]. Picklesimer, who Plaintiffs allege is a compensated by CDI as the racing director at Turfway Park, sat as the third steward at the Stewards hearing. [Id. at 28]. The Stewards hearing occurred on February 14, 2022. [Id. at 29]. The stewards recommended a 90-day suspension and disqualified Medina Spirit as the winner of the 2021 Kentucky Derby. [Id.]. The KHRC denied Plaintiffs' request for a stay of the suspension. [Id. at 29-30]. Plaintiffs' attempts to stay the suspension in Kentucky State Court were unsuccessful.[1] [DE 33-3; DE 33-4; DE 335]. The KHRC's adjudication of the 90-day suspension remains ongoing. [DE 41 at 1371].
On February 28, 2022, Plaintiffs filed this action in the Western District of Kentucky. [DE 1]. The Complaint articulates eight causes of action: Count 1 violation of 42 U.S.C. § 1983 against CDI and Carstanjen and Rankin in their individual capacities, Count 2 unlawful exclusion against CDI, Counts 3 unlawful conspiracy in restraint of trade pursuant to 15 U.S.C. §§ 1, 15, and 26 against Defendants, Count 4 unlawful use of monopoly power pursuant to 15 U.S.C. §§ 2, 15, and 26 against Defendants, Count 5 tortious interference with contractual relations against CDI and Carstanjen, Count 6 tortious interference with prospective business relations against CDI and Carstanjen, Count 7 asks for a declaratory judgment against Defendants, and Count 8 asks for a preliminary and permanent injunction. [Id.].
On March 1, 2022, Plaintiffs filed their first motion seeking injunctive relief from CDI's suspension. [DE 5]. Plaintiffs also moved to expedite briefing in an effort to secure a preliminary injunction before the 2022 Kentucky Oaks and Kentucky Derby. [DE 6]. The Court promptly scheduled an evidentiary hearing for April 15, 2022. [DE 32]. On April 4, 2022, Plaintiffs moved to withdraw their motion for a preliminary injunction. [DE 33]. Plaintiffs explained that the stewards had imposed a 90-day suspension independent of CDI's that would begin on April 4. [Id. at 1125]. Plaintiffs sought judicial relief in Franklin County Circuit Court and the Kentucky Court of Appeals. [Id.]. However, neither court would stay the KHRC's suspension. [Id.]. Because Plaintiffs would have to resolve the KHRC's suspension independently from CDI's suspension to race in the 2022 Kentucky Oaks and Kentucky Derby, Plaintiffs decided to withdraw their first motion without prejudice. [Id.]. The KHRC's suspension expired on July 2, 2022. [Id.].
On December 15, 2022, Plaintiffs renewed their motion for a preliminary injunction. [DE 41]. The Court held an evidentiary hearing on February 2 and 3, 2023 regarding Plaintiffs' Renewed Motion for a Preliminary Injunction. [DE 65]; Feb. 2-3, 2023, Hrg. Tr., 1:1-2. During the hearing, the parties spent a great deal of time discussing the merits of claims before the KHRC, which are not at issue here. After the hearing, Plaintiffs filed an “Advice to the Court” explaining new guidance from the Racing Medication and Testing Consortium related to screening for betamethasone. [DE 64]. The Court understands the Plaintiffs' desire to cite this new guidance and the Court has reviewed it, but as the Court instructed at the beginning of the hearing on February 3, whether Plaintiffs violated the KHRC rules and regulations is irrelevant. See Feb. 23, 2023, Hrg. Tr., 138:21-139:19. The Court will only examine whether Defendants acted within their rights to suspend Plaintiffs pursuant to federal and state law or any contracts between the parties. Therefore, the Court will not decide whether Plaintiffs violated KHRC rules and regulations by treating Medina Spirit with betamethasone because this issue is not before the Court.
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