Derby Lawsuit Dismissed by Federal Judge

A federal judge on Friday dismissed the GI Kentucky Derby lawsuit filed by the owners of Maximum Security (New Year's Day) that sought to overturn the controversial stewards' disqualification of the colt who crossed the finish wire first but was deemed to have caused a foul in the 2019 running of America's most important horse race.

Six months ago, Gary and Mary West sued the three stewards assigned to Churchill Downs, plus the 14 board members and the executive director of the Kentucky Horse Racing Commission (KHRC), based on allegations that “the final [Derby] order is not supported by substantial evidence on the whole record” and that the DQ violated the plaintiffs' Fourteenth Amendment rights. On July 8, the defendants filed a motion to dismiss the suit.

“The Wests ask[ed] this Court to reverse that decision and to also find that the decision violated their constitutional rights to due process,” United States District Court Judge Karen Caldwell wrote in her 29-page opinion and order. “Kentucky's regulations make clear that the disqualification is not subject to judicial review. Further, the disqualification procedure does not implicate an interest protected under the Due Process Clause of the U.S. Constitution. Accordingly, the Court must grant the motion to dismiss.”

An appeal of this decision appears likely. Barry Stilz, an attorney for the Wests, wrote in an email to TDN that “As regards the result, I can say that we are disappointed and believe that we have strong arguments for a successful appeal.”

Although the judgment does not make specific mention of who the winner of the 2019 Derby officially is, Country House (Lookin At Lucky), who crossed the wire second and was elevated to first place via the DQ process, stands to remain recognized as the official Derby winner.

The final page of Caldwell's judgment describes how the case has come to closure, as follows:

“1) the defendants' motion to dismiss is GRANTED; 2) the plaintiffs' motion for summary judgment is DENIED as moot; and 3) Finding no hearing on this motion necessary, the Court further hereby ORDERS that the plaintiffs' motion for a hearing is DENIED.”

Caldwell began her ruling by affirming that her court in the Eastern District of Kentucky “obviously has federal-question jurisdiction over the Wests' claims that the defendants violated their due process rights under the U.S. Constitution.

“With Counts I through V of the complaint, however, the Wests ask this Court to review and reverse the stewards' decision pursuant to KRS 13B.150, which…is a state statute that provides for judicial review of the final orders of state agencies. While Count II asserts that the stewards' decision should be reversed because the stewards violated the Constitution in reaching the decision, the rest of these counts could not be viewed as raising any federal question…

“The Wests ask the Court to reverse the stewards' 'final order' pursuant to various provisions of KRS § 13B.150,” the order continues. “The state regulations governing the determinations of fouls and disqualifications of horses explicitly provide, however, that the stewards' decision is final and not subject to appeal….In their response, the Wests do not explain why the Court should simply ignore this regulation and conduct an appellate review of the stewards' decision.

Caldwell also noted that “the stewards' decision disqualifying Maximum Security was not the product of an 'administrative hearing.' There was no 'formal adjudicatory proceeding.' There is no provision in…any of the other regulations governing the determination of fouls and disqualifications in the running of a horse race that requires a formal adjudicatory process with regard to such determinations.

“Whether this procedure violates due process as the Wests argue is a separate question from whether the applicable statutes and regulations grant the Wests the right to judicial review of the stewards' decision,” Caldwell wrote.

“The next issue is which defendants the Wests assert this constitutional claim against,” Caldwell wrote, noting that the law does, in fact, provide for the liability of every “person” who, acting under the color of state law, deprives any citizen of his or her constitutional rights.

Then she added: “In Count VII, the Wests state the constitutional claim is against the “Defendants” generally. But they cannot assert a…claim against the commission itself. This is because the commission is a state agency, and the Supreme Court has held that [the provision the Wests were citing] does not allow claims directly against a state.”

Regarding the Wests' due process claims as a whole, Caldwell wrote that “To succeed on these due process claims, the Wests must establish that a 'life, liberty, or property' interest is implicated by the government's conduct. The Wests have not made this showing. Accordingly, their claims based on the Due Process Clause must be dismissed…

“The Wests [also] assert they have a protected property interest in 'any and all of the financial and other benefits that they would otherwise have received as the result of Maximum Security winning the Derby,'” Caldwell wrote.

But, she explained, to have a property interest in a benefit, “a person clearly must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it,” Caldwell wrote, citing a legal precedent.

The judge continued: “Constitutionally protected property interests are not created by the Constitution itself but rather by existing rules or understandings that stem from an independent source such as state law.” She cited another precedent that said “[A] party cannot possess a property interest in the receipt of a benefit when the state's decision to award or withhold the benefit is wholly discretionary.”

 Thus, Caldwell continued, in order to establish a constitutionally protected property interest in 'all the financial and other benefits' of winning the Kentucky Derby, the Wests “must point to some policy, law, or mutually explicit understanding that both confers the benefit and limits the discretion of the [state] to rescind the benefit. The Wests fail to do this.”

Caldwell also didn't buy the Wests' argument that the stewards' alleged failure to comply with Kentucky's state regulations conferred on the Wests any sort of property interest.

“An aggrieved party may have some cause of action where the state fails to abide by its own regulations,” the judge wrote. “But the issue here is whether the Wests have asserted a particular kind of cause of action—a violation of their Constitutional due process rights. In order to assert that kind of claim, the Wests must allege that the state deprived them of something to which they were entitled.

“To that end, the Wests also argue that under [two Kentucky statutes] the stewards had no discretion in whether to award the Wests the benefits of winning the Kentucky Derby,” Caldwell wrote.

“Again, [one state statute] deals with 'fouls' during a race. [the other statute] deals with the procedures that apply when a race result is placed in dispute,” Caldwell wrote. “This provision does not confer on the Wests the benefits of winning the Derby or limit the stewards' discretion in determining who the winner of the Derby is. In fact, it grants the stewards complete discretion in determining whether a foul 'alters the finish of a race' and provides that, if in the stewards' 'opinion' it did, then the stewards 'may' disqualify the offending horse…

“The Wests have not established that the defendants' conduct deprived them of a protected life, liberty, or property interest,” Caldwell summed up. “Accordingly, their procedural due process claim based upon how the stewards arrived at the decision to disqualify Maximum Security must be dismissed.”

In the 2019 Derby, Maximum Security led almost every step and crossed the wire first.

But there was bumping and shifting in close quarters behind Maximum Security as he led the pack off the final turn. Two jockeys filed post-race objections, but there was no posted stewards' inquiry.

The three stewards who officiated the Derby—chief state steward Barbara Borden, state steward Brooks “Butch” Becraft, and Churchill Downs steward Tyler Picklesimer—launched a post-Derby adjudication process that played out on national TV as they debated whether Maximum Security's shifting out while leading on the far turn caused crowding that affected rivals in close pursuit and almost triggered a clipping-of-heels accident.

After 22 agonizing minutes, Maximum Security was judged to have fouled Long Range Toddy (Take Charge Indy), and thus placed behind that rival in 17^th  place.

The Wests' May 14 suit claimed that they were denied their allegedly rightful part of the $1,860,000 share of the Derby purse “as well as a professional accomplishment that any horseman would cherish for life, plus the very substantial value that a Kentucky Derby winner has as a stallion.”

Beyond the three Churchill stewards named above, the other defendants in the suit were KHRC executive director Marc Guilfoil, chairman Franklin King, vice chair Mark Simendinger, and board members Gatewood Bell, Jr., Larry Bisig, Stuart Brown II, DVM, Kerry Cauthen, Kiki Courtelis, Pat. Day, Douglas Hendrickson, Lesley Ann May Howard, Kenneth Jackson, Bret Jones, Foster Northrop, DVM, and J. David Richardson.