Balance of Power

by Douglas L. McSwain and Derrick T. Wright

(Originally published in the December 17, 2011 issue of The Blood-Horse magazine. Feel free to share your own thoughts and opinions at the bottom of the column.)

Doug McSwain is general counsel to the National HBPA, which participated in this case. Derrick Wright and McSwain are with the Sturgill, Turner, Barker and Moloney law firm.

The West Virginia Supreme Court of Appeals recently called a high-profile turf contest between the West Virginia Racing Commission and the Charles Town racetrack. The stakes were for the control of horse racing.

The racing commission won. The result is official in West Virginia, but a recent article by Bob Heleringer questions whether the high court’s decision will “imperil racing purity.” Mr. Heleringer’s critique, however, stumbles at the gate (The Blood-Horse of Dec. 3, page 3406).

PNGI Charles Town Races & Slots, LLC v. Lawrence Reynolds, et al., arose from an investigation of seven jockeys who failed to report accurate weights to the clerk of scales. The stewards at Charles Town fined and suspended all of the riders. The jockeys then appealed to the racing commission but were unsuccessful. They continued their appeals into court, and the trial judge stayed their punishments until their appeals concluded.

Before the appeal process was over, Charles Town went ahead and ejected the jockeys, first excluding Lawrence Reynolds and later attempting to ban all of them from the racetrack’s grounds. The jockeys protested Charles Town’s ejections, claiming the judge’s stay of their punishments would be wholly ineffective if Charles Town could ignore it and act unilaterally. The trial judge agreed and ordered Charles Town to abide by its stay.

Charles Town appealed the ruling to West Virginia’s highest court. It claimed the ejections were not subject to the court’s order or to the racing commission’s oversight or review because those exclusions were founded on Charles Town’s “common law” right, as a private property owner of the racetrack, to exclude any person from its premises for any non-discriminatory reason. Charles Town’s refusal to submit its ejections to review by the racing commission set up a showdown.

The racing commission had a better position over Charles Town. State racing rules provide that “all occupational permit-holders who are ejected have the right of appeal to the racing commission.” West Virginia’s high court thus held that racetracks cannot have an “unfettered right” to eject permit-holders or else this “right of appeal” is “meaningless.”

Permit-holders include jockeys as well as racehorse owners and trainers, but the “right of appeal” is not applicable to racetrack employees or non-permitted patrons.

West Virginia’s high court recognized that state law grants “plenary power and authority” to the racing commission and that racetracks cannot possess “private” rights “inconsistent” with West Virginia’s licensing and regulatory oversight of the racing industry. Through this state licensing and regulatory scheme, Charles Town
effectively yielded any “common law” right to eject permit-holders to review by the racing commission.

West Virginia’s exclusion issue implicates the entire racing industry, not just the seven jockeys in that case. An unchecked and unreviewable power to eject licensed jockeys, owners, or trainers would effectively empower racetracks with dual—and potentially inconsistent—control over all horse racing participants. The court decision confirms that such dual control is incompatible with the racing commission’s “plenary power and authority” and cannot stand.

Mr. Heleringer’s article asserts that the “legal right to eject” by racetracks “was settled law” and “formerly impregnable.” He claims the West Virginia case is an “aberration” and criticizes it for overlooking “decades-old precedents” in support of an “inherent” right of racetracks to eject persons “detrimental to the best interests of horse racing.” However, his survey of relevant “precedents” is too narrow.

West Virginia has properly required that the power of racetracks to exclude must be submitted to due process review by its racing commission, consistent with precedents in numerous important racing jurisdictions, including Arkansas (Evans v. Arkansas Racing Commission), California (Greenberg v. Hollywood), Louisiana (Wolf v. Louisiana State Racing Commission), Illinois (Cox v. National Jockey Club), New York (Jacobson v. NYRA), and also Canada (Ontario Harness Horse Association v. Ontario Racing Commission).

With all due respect to Mr. Heleringer, these precedents reveal the modern and better-reasoned trend in the law to be that state racing commissions must have the final say over any racing matter, particularly disputes between co-licensees of the commission, such as between racetracks and jockeys, owners, or trainers. These precedents further show that West Virginia’s recent case does not chart a “new direction” in equine regulatory law. It simply reinforces the racing commission’s full and complete control over all things racing, including a racetrack’s power to eject licensed racing participants.

The West Virginia high court clearly made the correct call, supported by the maxim “power corrupts, and absolute power corrupts absolutely.” An unchecked, unreviewable (virtually absolute) power of racetracks to eject licensed racing participants will inevitably lead to corruption—or loss of integrity—unless the racing commission retains the final check over such power to uphold integrity and ensure the “best interests” of racing. In the final stretch, horseracing’s “purity” is best protected by an unbiased racing commission that provides “due process of law” to resolve disputed racing issues, including whether a racetrack properly ejected a licensed jockey, owner, or trainer.

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