Bettors-Vs.-Baffert Suit Transferred to Kentucky

A New Jersey federal judge's order on Tuesday transferred a class-action lawsuit brought by a group of bettors against trainer Bob Baffert to the Western District of Kentucky, meaning that the nearly three-year-old case will now go before its third different court since 2021.

The original federal lawsuit was filed in California. In it, a group of horseplayers alleged they were cheated out of their property by Baffert when his betamethasone-positive trainee, Medina Spirit, crossed the finish wire first in the GI Kentucky Derby and purportedly prevented the plaintiffs from cashing winning tickets on the runner-up.

Baffert has denied those allegations, asked for the case to be dismissed, and has stated in court documents that the plaintiffs have twisted their case so far from reality that their alleged misstatements amount to libel.

Back on Dec. 22, 2023, the judge handling the case in United States District Court (District of New Jersey) ordered both sides to file letters by Jan. 15, 2024, “if either party wishes to explain why this case should NOT be transferred back to the Central District of California.”

But after receiving written rationale from both parties, the judge on Feb. 20 instead mandated that Kentucky was now the proper jurisdiction for the case.

“[B]alancing all the factors, this case should be transferred to the Western District of Kentucky,” U.S. District Judge Michael Farbiarz wrote in his 30-page order.

“This case, simply put, has virtually nothing to do with New Jersey,” the order continued. “And the remoteness from New Jersey is to the point that personal jurisdiction is questionable here–with implications for both cost [and] the certainty of being able to enforce any eventual judgment.

“It is true that the Plaintiffs chose to bring suit in New Jersey [after originally filing in California],” the judge wrote. “But that is less meaningful than is typically the case. This is a putative nationwide class action that has little to do with the state.”

Kentucky, the judge wrote, “is where the claim arose” based on being the host state for the horse race in question.

“And the federal court in Kentucky has recently resolved a case that is factually similar to this one and involves the Defendants in this case,” the order continued.

The original version of the suit that just got transferred was led by Michael Beychok, the winner of the 2012 National Horseplayers Championship. It 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 appeals process.

The more than 30 class members of the Beychok suit chose the Racketeer Influenced and Corrupt Organizations Act (RICO) Act as a tool to try and collect damages from Baffert, plus his incorporated racing stable. The plaintiffs also 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.

The Beychok 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.”

The separate Kentucky case to which Farbiarz alluded was a different class-action lawsuit initiated against Baffert by another 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. It was dismissed by a federal judge in Kentucky on July 20, 2023, for failure to state a claim.

Farbiarz explained the significance of that dismissed Kentucky case in his order.

'[T]he Western District of Kentucky has already resolved, on the merits, a case that is closely similar to this one,” Farbiarz wrote.

“There are, in short, fundamental similarities between the Kentucky case and this lawsuit,” Farbiarz continued. “Given the work that has already been invested in the Kentucky case, it would save a good deal of judicial time if this case were sent to Kentucky.

“And returning to the same decision-maker is not just a matter of efficiency,” the New Jersey transfer order summed up. “Having the same court handle both cases would help ensure that like cases-and these are very much like cases-are treated alike. That is a fundamental goal of our justice system.”