By T. D. Thornton
The New Jersey-based lawsuit in which a group of bettors are alleging they were cheated out of their property by Bob Baffert when his betamethasone-positive trainee, Medina Spirit, crossed the finish wire first in the 2021 GI Kentucky Derby and purportedly prevented the plaintiffs from cashing winning tickets on the runner-up is on the cusp of being transferred back to a federal court in California where it was first initiated 2 1/2 years ago.
In a Dec. 22 filing in United States District Court (District of New Jersey), the judge in the case ordered both sides to file letters by Jan. 15 “if either party wishes to explain why this case should NOT be transferred back to the Central District of California.”
The judge explained his rationale: “This case relates entirely, or all-but-entirely, to alleged events at a 2021 horse race in Kentucky,” the judge wrote. “And this case was originally filed by the Plaintiffs in the Central District of California, before the Plaintiffs voluntarily dismissed their claims and re-filed them here. This is a case, in short, that has little, if anything, to do with New Jersey.”
The original version of the suit, led by Michael Beychok, the winner of the 2012 National Horseplayers Championship, was filed in California four days after Baffert's May 9, 2021, disclosure that Medina Spirit had tested positive for betamethasone after winning the May 1 Derby.
It wasn't until Aug. 22, 2023, that the Kentucky Horse Racing Commission's disqualification of Medina Spirit from the 2021 Derby–which also affirmed the elevation of runner-up Mandaloun as the official winner–was sustained after a long administrative appeals process.
Baffert, plus his incorporated racing stable, were named as the defendants back in 2021, and the plaintiffs' California-filed version of the suit made it a point to note that “Venue is also proper for these claims in this Court because Defendants reside and transact their affairs and conduct business in the State of California and, specifically, through this District.”
The more than 30 class members of that suit chose the Racketeer Influenced and Corrupt Organizations Act (RICO) Act as a tool to try and collect damages. In addition, they sought an order from the judge stating that Baffert must divest himself from the sport.
RICO is a sweeping 1970 federal statute initially designed to combat the Mafia. But in a legal sense, it has long since lost its “organized crime” stigma. RICO today is rarely used to go after stereotypical “godfather” figures. Instead, RICO has evolved as a civil litigation component, and is most often asserted by purported victims of white-collar crimes, such as mail and wire fraud.
Two months after its initial filing, the class-action complaint was withdrawn from the California federal court on July 22, 2021. One day later, an amended version of it resurfaced in New Jersey.
The New Jersey complaint from July 23, 2021, alleged that, “[Baffert's] multiple and repeated acts of doping and entering horses into Thoroughbred races, including the Kentucky Derby, constituted racketeering activity.”
In subsequent court documents, the plaintiffs explained why they believed New Jersey should now be the proper venue. They cited a legal precedent that involved a case in which the act of simulcasting a race into New Jersey from another state “permits the Court to exercise personal jurisdiction over it.”
The plaintiffs also alleged that Baffert's purported doping fraud included his occasional starts at Monmouth Park.
But as far back as September 2021, when Baffert first moved for dismissal of this lawsuit, his court filing termed that switch from California to New Jersey “blatant forum shopping” because the new venue has “no meaningful connection to the allegations raised in their Complaint.”
The term “forum shopping” refers to the practice of litigants angling to get their case heard in the court thought most likely to result in a winning outcome. It is not illegal or unethical to forum shop, but judges can and do let parties know if they believe lawyers are stretching legal boundaries by trying to get their cases heard in venues that are most favorable to them.
Another Baffert filing, on Jan. 12, 2022, again alleged that the plaintiffs were off base in attempting to litigate the matter in New Jersey.
“The law is clear that there must be case-specific contacts with the forum state…” that filing stated. “Even if one were to accept Plaintiffs' tinfoil conspiratorial premise that Baffert engaged in a nationwide racketeering scheme to defraud individuals he never met, Plaintiffs would still have to establish that at least some of the alleged illicit conduct actually occurred in New Jersey. They have utterly failed to do so. This matter has zero connection to New Jersey and it must be dismissed.”
Earlier this year, a federal judge in Kentucky dismissed a similar (but entirely separate) class-action lawsuit initiated against Baffert by a group of horseplayers who alleged negligence, breach of contract, and unjust enrichment because their losing pari-mutuel bets on the 2021 Derby also weren't honored as winners.
Baffert's attorney in the New Jersey case, W. Craig Robertson III, made sure the judge in New Jersey was aware of that Kentucky dismissal when considering the motion to dismiss, which is still active and has yet to be ruled upon.
“Identical to this case, the [federal complaint in Kentucky] was commenced by a purported class of aggrieved gamblers against [Baffert] asserting claims connected to pari-mutuel payouts from the 2021 Kentucky Derby,” Robertson wrote in a July 26, 2023, letter to the U. S. District Court of New Jersey.
“The Western District of Kentucky dismissed those claims as a matter of law,” Robertson continued. “Specifically, the Court held that Kentucky's Rules of Racing govern all bets placed on the Kentucky Derby and because the Rules are clear that all payouts are final based on official race-day results, aggrieved gamblers have no injury at law and no viable cause of action even if race results are later altered.
“Similarly here, [Baffert seeks] dismissal of the case before Your Honor due to a lack of cognizable injury, whether under the RICO statute or otherwise,” Baffert's attorney wrote.
Counsel for the plaintiffs responded with their own letter to the judge Aug. 7, writing that the Kentucky decision “has no relevance or merit to the present matter” and that the “causes of action brought by the present Plaintiffs in this action are separate, distinct, and dissimilar from the claims brought by separate parties” in the dismissed Kentucky lawsuit.
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