Disqualified Derby Horse Owners Lose Appeal

09/10/2020 | Business Litigation

Just in time for the 2020 Kentucky Derby on the first Saturday in May September, the U. S. Court of Appeals for the Sixth Circuit upheld the dismissal of a lawsuit filed by the owners of Maximum Security, the first-place finisher of 2019’s Kentucky Derby who was infamously disqualified for a racing foul after the race.

While the 2020 Kentucky Derby felt surreal, with no fans and late-summer weather, it pales in comparison to 2019 when the Kentucky Racing Stewards overturned the results and disqualified Maximum Security 22 minutes after the race. The disqualification came after two other riders lodged objections against Maximum Security for drifting out of his lane and affecting to progress of other horses. It was the first-ever disqualification in Kentucky Derby history and resulted in Country House, a 65-1 odds horse, winning the race.

The disqualification led Maximum Security’s owners, Gary and May West, to file a lawsuit in federal court the week after the 2019 Derby, arguing the disqualification was the result of a an “arbitrary and capricious” government action. The racing stewards are employees of the Kentucky Horse Racing Commission, a state government entity.

The Wests’ lawsuit was dismissed in November 2019 by a federal judge in Lexington, finding the Racing Commission’s statutes and regulations do not allow for judicial review of disqualifications. Several horse industry experts anticipated the result, pointing to a similar case for a horse named Chilly Peppa, who was moved from second to third after a racing violation at Indiana’s Hoosier Park. In Chilly Peppa’s case, famed Judge Frank Easterbrook wrote for a federal appeals court panel in 2005 that stewards “are no more bound to offer hearings than are referees of the National Football League.”

The Wests appealed the November 2019 ruling, hoping to reverse the dismissal. On August 28, 2020, the U. S. Court of Appeals for the Sixth Circuit, based in Cincinnati, upheld the dismissal. Judge John K. Bush, a Louisville native, wrote the court’s opinion, whimsically writing that “what should have been the fastest two minutes in sports turned into over a year of litigation” and concluded “neither Kentucky law nor the Fourteenth Amendment allows for judicial second-guessing of the stewards’ call.”

Judge Bush continued with various horse racing references, writing: “right out of the gate, the Wests fall behind,” and “the regulations are clear that the stewards have unbridled discretion in determining whether a racing foul occurred.” He wrote, “Perhaps only a racehorse itself could tell us whether he was fouled during a race,” referencing the 1960’s TV show “Mr. Ed,” specifically the line “Go right to the source and ask the horse. He’ll give you the answer that you’ll endorse.”

Judge Bush concluded by writing: “Heading down the final stretch, the Wests argue that because Maximum Security was the first horse in the 145-year history of the Kentucky Derby to ever be disqualified for a foul committed during the race, the custom and practice was to declare the horse that crossed the finish line first the winner. Even though Maximum Security’s disqualification was unprecedented, the fact remains that the stewards have always had the discretion to call fouls in horse races; this just happens to be the first time that they exercised this discretion in the Kentucky Derby.”

Importantly, even if the Wests had won their lawsuit and reversed the disqualification, it would have no impact on those placing bets on the race. The laws in Kentucky and every state with pari-mutuel racing say that once the results are declared official, the race is over, as far as betting is concerned. So, there is no use in holding on to your Maximum Security tickets, except for a keepsake.

At the end of the day, the question has been answered—if a horse is disqualified from a race, can the owners bring a lawsuit to reverse it? The answer most definitely is “Neigh.”