As mentioned in Part 1 of this blog, a district court in Kentucky recently dismissed the appeal brought by Maximum Security’s owners to overturn his first place disqualification in the 2019 Kentucky Derby. Part I of this blog explained the court’s dismissal of the Wests’ state law claims.
The court also dismissed Plaintiffs’ due process claims, primarily on the grounds that the Wests were not deprived of any due process rights. Id. at 9-10. The Due Process Clause prohibits the government from depriving “any person of life, liberty, or property, without due process of law.” U.S. Const. amend. XIV, 1. To succeed on a due process claim, plaintiffs must necessarily establish that a “life, liberty, or property” interest is implicated. Id. at *10. The Wests failed to make that showing. Id. The Wests argued that they had a protected property interest in any and all of the financial and other benefits that they would have otherwise received if Maximum Security had finished first. Id.
“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.” Id. The regulations granted the stewards complete discretion in determining whether a foul ‘alters the finish of a race.’ Id. at *11. Where the state’s decision to award or withhold a benefit is discretionary, a party has no property interest in the receipt of that benefit. Id. at *10-11. A party must have more than an expectation or abstract desire for a property interest to exist – he must actually be entitled to that property. Because the racing stewards had discretion to determine to disqualify a horse if a foul occurred, the Wests were never entitled to the financial and other benefits of winning the Kentucky Derby and therefore had no property interest. Id. at *11. Further, the Court found that the Wests did not have to forfeit any money and were never entitled to the purse money because Maximum Security did not win the race. Id. at *12.
An Idaho court applied a similar due process analysis in a Quarter Horse racing dispute. See Idaho Quarterhorse Breeders Ass’n, Inc. v. Ada County Fair Bd., 101 Idaho 339, 342 (1980) (finding that deprivation of “increased purse money, which their horses might win, and the increase in the value of their horses, and an increase in stud fees which their horse may produce…are not property to which plaintiffs have any present title or vested rights.”) (internal quotes omitted).
But all hope is not lost when it comes to challenging racing commission determinations. Courts have found due process interests in other racing commission contexts, such as where a trainer’s license is at issue, where contract rights are deprived, and where a person’s good name, reputation, honor, or integrity is at stake. See, e.g., Mumaw v. Ohio State Racing Commission, 2015 WL 1471945, *5, 8 (N.D. Ohio 2013) (discussing viable due process claims in racing context); Bier v. Fleming, 538 F.Supp. 437, 4N47 (N.D. Ohio 1981), overturned on other grounds, 717 F.2d 308 (6th Cir. 1983) (holding that a trainer has a liberty interest in his occupation and a property interest in his racing license).
Nor are challenges to racing commission determinations limited to due process interests. Depending on the circumstances, other claims may apply such as breach of contract, defamation, and tortious interference with a contract or prospective business.
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