Veitch v. Ky. Horse Racing Comm'n

• Decision Date: 25 October 2013
• Docket Number: NO. 2012-CA-001610-MR,2012-CA-001610-MR
• Parties: JOHN VEITCH APPELLANT v. KENTUCKY HORSE RACING COMMISSION APPELLEE
• Court: Kentucky Court of Appeals

JOHN VEITCH APPELLANT v. KENTUCKY HORSE RACING COMMISSION APPELLEE

NO. 2012-CA-001610-MR

Commonwealth of Kentucky Court of Appeals

RENDERED: OCTOBER 25, 2013

NOT TO BE PUBLISHED

APPEAL FROM FRANKLIN CIRCUIT COURT

HONORABLE THOMAS D. WINGATE, JUDGE

ACTION NO. 12-CI-00313

OPINION

AFFIRMING IN PART, REVERSING IN PART,

AND REMANDING

** ** ** ** **

BEFORE: CAPERTON, DIXON, AND STUMBO, JUDGES.

CAPERTON, JUDGE: John Veitch appeals from the Franklin Circuit Court's affirmation of the final order of the Kentucky Horse Racing Commission ("KHRC"), wherein the KHRC suspended Veitch for one year based on findings that he violated KHRC regulations. On appeal, Veitch argues that the regulations that he was accused of violating and the KHRC order are unconstitutional. After athorough review of the parties' arguments, the record, and the applicable law, we affirm in part, reverse in part, and remand for further proceedings.

On November 5, 2010, Veitch was serving as KHRC's Chief Steward at the 2010 Breeders' Cup World Championships ("Breeders' Cup") taking place at Churchill Downs in Louisville, Kentucky. The Breeders' Cup is an annual culmination of the thoroughbred racing season in North America and features the most elite equine athletes from around the world with more than twenty-five million dollars in purse money given away over two days of racing. The Breeders' Cup is held at different North American tracks each year.

The KHRC¹ is charged with regulating pari-mutuel horse racing "of the highest quality and free of any corrupt, incompetent, dishonest, or unprincipledhorse racing practices...." KRS 230.215(2).² The KHRC utilizes the board of stewards to carry out this legislative mandate. The board is comprised of the chief state steward, who is hired by the KHRC, and two association stewards who are supplied by the racing track. The chief steward is the embodiment of the KHRC at the track.

As noted, Veitch served as the Chief Steward on November 5, 2010. Mr. Brooks Becraft and Mr. Richard Leigh also served as stewards during this two-day event; they were supplied by Churchill Downs. The tenth race on November 5^th was the Ladies' Classic which was the final and biggest race of the day with a $2,000,000 purse awarded to the winner. On November 5, 2010, the second betting favorite in the race was Life at Ten due to her recent racing success and consecutive wins in major stakes races.

Approximately five minutes before the race, ESPN commentator Jerry Bailey interviewed Life at Ten's jockey, John Velazquez, while he was aboard the horse and on the track preparing her to race. Velazquez was asked how Life at Ten was warming up and he stated, "Right now, I'm not sure, Jerry, to tell you the truth. She's not warming up the way she normally does." These comments led the ESPN commentators to speculate about the horse's fitness to run.

Immediately after Velazquez³ made these comments ESPN Producer Amy Zimmerman called Veitch. Zimmerman testified that she said, "Judge are you listening to this? Johnny said his horse ain't right" and that he should turn on the ESPN feed. Veitch testified that he recalled Zimmerman simply telling him to turn on ESPN.⁴ After watching ESPN after Zimmerman's call, Veitch testified that that he believed that Velazquez stated his opinion that his horse was "dull," whichhe took to mean that Life at Ten was not focused. Veitch went out to the stewards' stand on the sixth floor of the track and used binoculars to look at Life at Ten. Veitch testified that he believed Life at Ten looked fine.⁵

Becraft testified that when the stewards were informed of Velazquez's statements he suggested to Veitch that they ask a veterinarian⁶ to look at Life at Ten. Veitch responded that if they called a veterinarian the horse might as well be scratched.⁷ Becraft stated that if something was wrong with the horse, she should be scratched, but made no further individual effort to call a veterinarian or otherwise convince Veitch or Leigh to do so. Becraft testified that Veitch, as the KHRC Chief Steward, had authority over these kinds of decisions. A veterinarian was not called to evaluate Life at Ten before the race.

Life at Ten finished the race at a distant last. After the race, Life at Ten walked without any apparent discomfort or distress back to her barn and was not examined or sampled following her surprising performance.⁸ Becraft and Leigh testified that there was no discussion among the stewards whether to have Life at Ten sampled. Veitch and the stewards did not begin an investigation into Life at Ten's performance until two days after the Ladies' Classic took place. TheKHRC quickly turned the investigation over to the Office of Inspector General in the Transportation Cabinet. The investigation involved over ninety interviews and hundreds of documents reviewed. Following this investigation, the KHRC charged Veitch with five regulatory violations.

A three-day hearing was held before a hearing officer. According to the hearing officer, Veitch gave conflicting versions of the events, beginning with the telephone call from Zimmerman. The hearing officer found Veitch to not be a credible witness. Additionally, the hearing officer found that Veitch had attempted to mislead KHRC investigators by claiming Becraft had not requested that a veterinarian examine the horse. This led the hearing officer to determine that the change in Veitch's prehearing discovery response and his explanation for the change was deceptive and self-serving, and was calculated to provide the appearance that all the stewards supported Veitch's decision to not call the veterinarians. The hearing officer concluded that the deceptive answer and explanation reduce the probative value which can be assigned to Veitch's testimony.

Veitch's explanation for the inconsistencies in his statements to the investigators and his testimony at the hearing was that, "At the time I could not remember that I said that. But I do remember now." The hearing officer found that Veitch violated five regulations based upon the evidence in the record and recommended a penalty of a one-year suspension. The KHRC adopted the hearingofficer's findings and recommended order⁹ and imposed the recommended suspension of Veitch's license for one year.

Veitch appealed the KHRC's final order to the Franklin Circuit Court. Following briefing and oral argument, the court affirmed the KHRC's final order which found that the order was supported by substantial evidence, that its conclusions were not arbitrary, and that the penalty was proper and constitutional. Additionally, the court concluded that the regulations at issue were not void for vagueness. It is from this that Veitch now appeals.

On appeal, Veitch argues: (1) the regulations which he is accused of violating are unconstitutional as they are void for vagueness; (2) the KHRC's order violates equal protection and due process guarantees; and (3) that KHRC's order is arbitrary and capricious, and is not supported by substantial evidence within the record.

In response, KHRC argues that: (1) the regulations pass constitutional muster; (2) the punishment imposed on Veitch is lawful; (3) ample evidence supports each of the KHRC findings; (4) the KHRC order is based on established fact and is within its authority. With these arguments in mind we now turn to our appellate standard of review.

Concerning our review of an administrative action, the court in American Beauty Homes Corp. v. Louisville and Jefferson County Planning and Zoning Commission, 379 S.W.2d 450 (Ky. 1964) held:

Basically, judicial review of administrative action is concerned with the question of arbitrariness....The above three grounds of judicial review, (1) action in excess of granted powers, (2) lack of procedural due process, and (3) lack of substantial evidentiary support, effectually delineate its necessary and permissible scope....In the final analysis all of these issues may be reduced to the ultimate question of whether the action taken by the administrative agency was arbitrary.

American Beauty Homes Corp. at 456-57 (internal citations omitted).

Generally speaking:

The circuit court's role as an appellate court is to review the administrative decision, not to reinterpret or to reconsider the merits of the claim, nor to substitute its judgment for that of the agency as to the weight of the evidence. Thus, the circuit court must determine both "[i]f the findings of fact are supported by substantial evidence of probative value" and "whether or not the administrative agency has applied the correct rule of law to the facts so found." "The test of substantiality of evidence is whether ... it has sufficient probative value to induce conviction in the minds of reasonable [persons]." Further, " 'the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence.' " As long as there is substantial evidence in the record to support the agency's decision, the court must defer to the agency, even if there is conflicting evidence.

An administrative agency, such as the Cabinet, is "afforded great latitude in its evaluation of the evidence heard and the credibility of witnesses appearing before it" [citation omitted]. "[A]lthough a reviewing court may arrive at a different conclusion than the trier of fact in its consideration of the evidence in the record, this does not necessarily deprive the agency's decision of support by substantial evidence" [citation omitted]. Further, even if this Court would have come to a different conclusion if itheard the case de novo, it must affirm the administrative agency's decision if supported by substantial evidence. "[I]t is the exclusive province of the administrative trier of fact to pass upon the credibility of witnesses, and the weight of the evidence" [citation omitted]. Indeed, an administrative agency's trier of facts may hear all the evidence " 'and

...