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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowIndiana’s rule barring horses purchased in claiming races from racing outside the state for 60 days was struck down by a federal judge Wednesday as an impermissible restriction of interstate commerce. The judgment may impact similar rules in other states.
Race horse owner Jerry Jamgotchian won summary judgment in a civil lawsuit challenging the Indiana Horse Racing Commission’s administrative rule. District Judge William T. Lawrence wrote that commission’s rule, 71 Ind. Admin. Code 6.5-1-4(h), “contravenes the dormant Commerce Clause” that generally prohibits discrimination against interstate commerce.
The commission and its agents “are enjoined from taking any action to implement or enforce Section 4(h) against the Plaintiffs or any other Indiana horse owners or trainers,” Lawrence concluded in the order in the District Court for the Southern District of Indiana, Indianapolis Division.
In a claiming race, any of the entered horses may be purchased or “claimed” before the race for an advertised price. Claiming races are typically structured so that six to nine horses offered for sale at about the same price compete. Lawrence wrote there were about 494 claiming races in Indiana in 2016, 144 of which involved claiming prices of $20,000 or higher.
Jamgotchian and trainer Eric Reed sued the commission over the rule and its establishment of what they termed a “claiming jail.” The challenged rule provides “No horse claimed out of a claiming race shall race outside the state of Indiana for a period of sixty (60) days without the permission of the stewards and racing secretary, or until the conclusion of the race meet.”
Jamgotchian, who owns more than 50 thoroughbreds around the country, purchased a horse named Majestic Angel for $25,000 in a claiming race at Indiana Grand Race Course in Shelbyville. The day of the purchase, Jamgotchian entered the filly for a race the next month at Mountaineer Racetrack in Chester, West Virginia.
After Majestic Angel competed in West Virginia, Indiana racing steward Tim Day became aware the horse had not been cleared to race outside Indiana. Jamgothian subsequently purchased two more thoroughbreds at Indiana Grand claiming races, and when he sought the permission of stewards to run the horses outside the state before the 60-day period in “claiming jail” expired, the regulators denied his request, prompting this suit.
The state horse racing commission defendants argued that the rule was not protectionist discrimination. “They point to the duties of the Indiana Horse Racing Commission … to protect horse racing’s integrity and promote fairness, and explain that the rules are meant to deter frivolous claims and deter aggressive claiming practices,” Lawrence wrote. “However, they fail to explain how allowing a horse to race within Indiana but prohibiting it from racing outside of Indiana accomplishes this goal.”
The court also rejected defense arguments that the voluntary, sports-related nature of the agreement that purchasers at claiming races abide by the rule places it outside the reach of the dormant Commerce Clause.
“Defendants argue that, if the Court finds that Section 4(h) is discriminatory, its purposes could not be achieved with a nondiscriminatory alternative. They point to Indiana’s interest in having sufficient horses to fill claiming races, explaining that, prior to the enactment of Section 4(h), owners would claim horses and immediately take them to race in other states,” Lawrence wrote. “They note the danger that Indiana claims racing would become a purse-bidding war. They also point to the limited time frame of the ban and the fact that surrounding states also restrict where claimed horses can race for specific time periods. Applying the strict scrutiny standard, the Defendants have not shown that Section 4(h) advances a legitimate local purpose that cannot be adequately served by reasonable nondiscriminatory alternatives. Rather, they evince the type of economic protectionism that the dormant Commerce Clause is designed to prevent.”
The case is Jamgotchian, et al. v. Indiana Horse Racing Commission, et al., 1:16-cv-02344.
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