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Monday, August 1, 2011

Claiming Rules and Ownership Rights

Chris E. Wittstruck, Esq. writes an interesting analysis of a current Kentucky case regarding a state's right to hold a horse in state or at a track as a result of it being claimed.  In this case, an owner is fighting a court case against Kentucky where their racing rules require a horse to remain at a certain track for thirty days or until the last set of entries are drawn at the track; in this case Churchill Downs.  As Mr. Wittstruck writes, this case has consequences for the standardbred industry.

In the particular case Mr Wittstruck is describing, one Mr. Jamgotchian is claiming his property rights are being violated by Kentucky and is unconstitutional under the interstate commerce clause of the United States constitution.  Mr. Whittstruck makes no prediction regarding the outcome of this case but Judge Pacingguy, who if defending himself in court would be called a fool for not using a lawyer will make his own ruling in this case and would find for the State of Kentucky.

Yes, an owner has property rights waives his rights provided a disclosure is made ahead of time.  If you go to a horse auction which excepts personal checks, title of the horse is often not passed until the check clears so while you may take possession of the horse and be responsible for the horse, you don't get title until the check clears.  Well, the same thing applies in a state with a stated claiming rule.  As a claimant, you are responsible for knowing the rules of that state with regards to claiming (though it would be helpful if such restrictions were printed on the claiming form).  Mr Jamgotchian claimed the rule knowing or should have known the rules of Kentucky does not release a horse from racing elsewhere until the current race meet concludes.  It is a factor he should have considered when making the purchase (i.e., claim) and made that claim based on these rules.  Hence, by claiming the said horse, he willing enters into a contract with the state of Kentucky that he would not move the horse until the Churchill Downs meet concluded. Hence, I would rule there is no violation of his ownership rights.  If he found the conditions laid down by the State of Kentucky to be so onerous, he should have bypassed the horse in question and sought out a horse in another state with less restrictive turns.

To expand on Mr. Wittstruck's excellent piece, why is this relevant to harness racing?  With the shortage of horses in the Northeast, other states or tracks may be interested in instituting such jail rules in order to keep their racing stock constant if not already so.  Mr. Wittstruck's piece describes the harness rules in New York, Delaware, and Indiana for example.  Should a state like New Jersey wish to institute such rules in an order to keep the racing stock in New Jersey more stable, they might write such a regulation prefixed with "Effective with claims as of [such date] any horse claimed must remain racing in the State of New Jersey for a period of 60 days or until the last standardbred meet has concluded" thus exempting prior claims from the restriction.

In other words, whether you buy a horse at auction or through the claiming game, you should know what the rules are and plan on accepting those rules.  These are natural impigments on ownership rights that the purchaser (auction) or claimant (claiming) accept.  If they are unwilling to accept these rules, a prospective purchaser should either go to another state or secure a private purchase of the horse where such rules don't apply.


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