THE ABSOLUTE INSURER RULE Maintaining the integrity of racing
![Absolute liability is defined as: “liability without fault – liability for which there is no excuse.”1 In the case of a trainer, absolute liability is imposed when a horse entered in an official workout or race tests positive for a prohibited medication or substance, or test results reveal permitted medication in excess of the maximum allowable levels. When such a positive test result occurs, it is prima facie evidence of a violation of the WORDS: PeteR J. SacOPulOS PHOtOS: SHutteRStOcK, HORSePHOtOS ALL racing states have the lynchpin of maintaining integrity in our sport. The trainer responsibility rule is not a modern rule premised on a specific event or series of events. On the contrary, the accountability of trainers dates back to the prohibition against the use of banned or controlled medications in the 1930s. Once strict enforcement began, it was not long until such rules were challenged. In fact, one of the earliest challenges to a penalty imposed for violation of a trainer responsibility rule was in an appeal filed by Tom Smith, trainer of the famous Seabiscuit.2 Despite many challenges, attacks, and appeals over decades, Illinois and Maryland are the only two jurisdictions to have held the absolute insurer rule to be unconstitutional. Illinois did so in the case of Brennan vs. Illinois Racing Board 42 Ill. 2nd 352, 247 NE 2d 881 (1969) and Maryland in the 1946 decision in Mahoney vs. Byer 187 Md 81, trainer responsibility rule/absolute insurer rule. equivalent of such a rule, and these rules are among the most important in horseracing. These rules are, in many ways, the 48 A2d 600 (1946). Both states have since rewritten and/or modified these regulations and have in place an absolute insurer rule, as do all states that presently have horseracing. Although all states’ trainer responsibility rules have similarities, it is both difficult and dangerous to classify any one as typical. This said, California’s absolute insurer rule provides a good example of the trainer responsibility standard. It states, in pertinent part: “(a) The trainer is the absolute insurer of and responsible for the condition of the horses entered in a race, regardless of the acts of third parties, except as otherwise provided in this article. If the chemical or other analysis of urine or blood test samples or other tests, prove positive showing the presence of any prohibited drug substance defined in Rule 1843.1 of this division, the trainer of the horse may be fined, his/her license 1 Wheatland Irrigation Dist. v. McGuire, 537 P.2d 1128 2 Smith v. Cole, 62 N.Y.S. 2nd 266 (1946) suspended or revoked, or be ruled off. In addition, the owner of the horse, foreman in charge of the horse, groom, and any other person shown to have had the care or attendance of the horse, may be fined, his/her license suspended, revoked, or be ruled off. The owner of a ship-in horse is the joint-absolute insurer of and is equally responsible for the condition of the horse entered in a race.” 4 CCR 1887. California’s rule has been and continues to be challenged. One example involved a California trainer who argued it was unconstitutional for him to be held liable for a prohibited substance violation, pursuant to California absolute insurer rule, when the trainer’s brother administered the prohibited substance without his knowledge. The California Court of Appeals rejected the trainer’s argument and held that regarding delegated tasks, even where the agent disobeys express instruction, the principal/ trainer is liable for the act of the agent. The California Court of Appeals in this case determined the trainer’s constitutional challenge to be without merit, stating: “A trainer cannot disclaim responsibility for the performance of his duties merely because he assigns a task to another – whether a brother, an employee, or anyone else – who fails to properly perform the task. An innocent principal or employer is liable for the torts committed by an agent or employee while acting within the scope of the agency or employment, even if the agent or employee acts in excess of the authority or contrary to instructions.” Stokes vs. California Horse Racing Bd., 119 Cal. Rptr. 2d 792, 98 Cal. App. 4th 477. New York’s trainer responsibility rule contains similar absolute insurer language. However, New York’s rule specifically addresses licensed trainers’ duties and responsibilities regarding both the use and recording of corticosteroid joint injections. That specific provision is found at 9 NYCRR 4043.4 and states: “Trainers shall maintain accurate records of all corticosteroid joint injections to horses trained by them. The record(s) of every corticosteroid joint injection shall be submitted, in a form and manner approved by the commission, by the trainer to the commission within 48 hours of the treatment. The trainer may delegate this responsibility to the treating veterinarian, who shall make the reports when so designated. The reports shall be accessible to the examining veterinarian for the purpose of assisting with pre-race veterinary examinations.” See 9 NYCRR 4043.4. A recent high - profile case involving administrative action taken by a commission based on the trainer responsibility rule is seen in the New York case of Dutrow vs. New York State Racing and Wagering Bd. 949 N.Y.S.2d 241, 244, 97 A.D. 3d 1034, 1036- 37 (App. Div. 3d Dep’t 2012). In this case, the trainer appealed an adverse decision by the Board revoking his license for 10 years for violation of the trainer responsibility rule on the ground that there was no “substantial evidence” of the charges, being that samples were not tested to eliminate the possibility of cross contamination. The Appellate Division denied this point of error, however, noting that in light of the rebuttable presumption of trainer responsibility that arises under the rule, the tribunal below properly rejected the speculative “contamination” argument, instead relying upon positive test results, veterinary records, and the testimony of a veterinarian-pharmacologist to support the accusation. Indiana’s trainer responsibility rule states that a trainer is responsible for the condition of the horse entered in an official: (1) workout; or (2) race. Indiana’s rule, consistent with both California and New York’s rules, states that a positive test for a prohibited substance or a positive test in excess of the maximum allowable level of therapeutic medication is prima facie evidence of violation and, absent: “substantial evidence to the contrary” the trainer, “shall be responsible.” 71 IAC 5-3-2 and 71 IAC 5.5-3-2. The Indiana Horseracing Commission has consistently and aggressively enforced Indiana’s trainer responsibility rule. A recent example involved a trainer arguing Indiana’s rule to be in violation of his due process rights is found “Although all states’ trainer responsibility rules have similarities, it is both difficult and dangerous to classify any one as typical ” in the decision in P’Pool vs. Indiana Horse Racing Commission 916 N.E.2d 668, 674- 77 (Ind.Ct.App. 2009). In this case, the trainer sought review of a decision from the Indiana Horse Racing Commission imposing a six-year suspension and a substantial fine for violation of the state’s trainer’s responsibility rule. Specifically, this case involved multiple violations based on multiple positive tests for Dexamethasone. The trainer argued that the six-year suspension and stiff fine were arbitrary and capricious, and that Indiana’s trainer responsibility rule violated his constitutionally guaranteed right to due process. The Indiana Court of Appeals rejected both of the trainer’s arguments and affirmed the Indiana Horse Racing Commission’s decision. This decision clearly demonstrates that Indiana’s trainer responsibility rule is, in fact, an absolute insurer rule and that both the Indiana Horse Racing Commission and the Indiana courts have not, to date, been persuaded by a licensee with a positive test result arguing the rule violates his or her state or federal constitutional rights. As such, the best and perhaps only affirmative attack to Indiana’s absolute insurer rule is in assembling and presenting substantial evidence, that being, for example, that the positive was a result of environmental contamination, that there is no science to support the permissible level in an excess case, and/or other exculpatory evidence. Kentucky’s trainer responsibility rule is similar to those previously discussed, and the Kentucky Horse Racing Authority and Kentucky’s state and appellate courts have consistently enforced the rule and found licensees’ constitutional challenges unpersuasive. An example is seen in the case of Allen vs. Kentucky Horse Racing Authority, 136 S.W.3d 54 (KY Ct.App. 2004). In this case, a horse owner/trainer appealed from a decision of the Franklin Circuit Court that had affirmed a decision of Kentucky Horse Racing Authority disqualifying the horse as a winner of two races. The Kentucky Court of Appeals held, in part, that Kentucky’s trainer responsibility rule, making the trainer of a racehorse the sole insurer of the horse for any violation including the presence of a prohibited substance, was and is constitutional. The trainer argued that the rule was unconstitutional because it could hold trainers liable for factors out of their control (such as environmental contamination), but the appeals court rejected that argument, stating that such regulations are applied similarly nationally and because the rule is a reasonable means to promote the safety in the sport. An additional interesting case involving Kentucky’s absolute insurer rule involved a horse owner who admitted he had placed Prozac into an Equinyl bottle he fed to his horse before a race, an action the owner stated was done without the knowledge of the trainer. The trainer was held liable, pursuant to Kentucky’s absolute insurer rule, and suspended for 150 days. The trainer appealed, arguing, in part, that: (a) the burden of proof of his culpability should fall on the Commission, not on him, and; (b) the penalty was excessive. The Appeals Court denied both assignments of error. Significantly, this court affirmed Kentucky’s trainer responsibility rule holding it was a rational means to accomplish the goal of preventing use of prohibited substance, and enforcing violations. In doing so, the Kentucky Court held: [T]he trainer responsibility rule is a practical and effective means of promoting these State interests— both in deterring violations and in enforcing sanctions. The imposition of strict responsibility compels trainers to exercise a high degree of vigilance in guarding their horses and to report any illicit use of drugs, medications or other restricted substances by other individuals having access to their horses. Additionally, the rebuttable presumption of responsibility facilitates “Florida’s courts have consistently enforced the Trainer’s Responsibility Rule. In doing so, they have provided the state’s rationale and reasoning for strict adherence to the absolute insurer rule ” the very difficult enforcement of the restrictions on the use of drugs and other substances in horse racing. Indeed, it would be virtually impossible to regulate the administering of drugs to race horses if the trainers, the individuals primarily responsible for the care and condition of their horses, could not be held accountable for the illicit drugging of their horses or for the failure either to safeguard their horses against such drugging or to identify the person actually at fault. It is not surprising, therefore, that trainer responsibility rules have been upheld, almost without exception, in other jurisdictions. Deaton, 172 S.W.3d 803 at 806. Florida’s courts have also consistently enforced the Trainer’s Responsibility Rule. In doing so, they have provided the state’s rationale and reasoning for strict adherence to the absolute insurer rule. Illustrative of this position is the decision of Hennessey vs. Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering, 818, So.2d 697, 699-700 (Fla. 1st DCA 2002). The final order in this case upholding the validity of Florida’s trainer responsibility rule reflects careful consideration of the facts presented to the Administrative Law Judge and the Department’s actions in firmly enforcing the absolute insurer rule. In this decision, the Florida court set forth its rationale and reasoning as follows: “. . . Horse racing, at its best, is difficult to control, and would be practically impossible to regulate if every governing rule and regulation were made dependent for validity upon the knowledge or motives of the person charged with a violation. It would be almost impossible to prove guilty knowledge or intent in cases involving a reported positive test for an impermissible substance. . . . . . The trainer is singularly the best individual to hold accountable for the condition of a horse. The trainer is either going to be with the horse at all time or one of his or her employees or contractors is going to be with the horse at all times, whether the horse is racing on an individual day or is merely stabled at the track. . . At no time prior to a race is a trainer or his employer prohibited from seeing to the security of the horse in the paddock. While there are other persons who come in contact with the horse prior to a race, the trainer due to his responsibility for the care and supervision of the animal stands in the best overall position to prevent improper medication of the horse. . . .” Hennessey v. Department of Business and Professional Regulation, Div. Of Pari-Mutuel Wagering, 818 S0.2d 697, 699-700 (Fla. 1st DCA 2002). The Florida Supreme Court, in a separate decision that was written nearly four decades ago and is still heavily relied upon today for enforcement of this state’s absolute insurer rule, set forth the policy rationale that underpins implementation of the “absolute insurer” trainer responsibility rule and demonstrates why Florida’s rule has been and continues to be held constitutional. The Florida Supreme Court, in Division of Pari-Mutuel Wagering, Dept. Of Business Regulation v. Caple, 362 So.2d 1350, 1354-56 (Fla.1978), to this point, held, in part, “On review, we are now persuaded that Florida should align itself with the well-reasoned majority view. To protect the integrity of this unique industry, it is really immaterial whether “guilt” should be ascribed either directly or indirectly to the trainer. The rules were designed, and reasonably so, to condition the grant of a trainer’s license on the trainer’s acceptance of an absolute duty to ensure compliance with reasonable regulation governing the areas over which the trainer has responsibility. Whether a violation occurs as a result of the personal acts of the trainer, of persons under his supervision, or even of unknown third parties, the condition of licensure has been violated by the failure to provide adequate control, and the consequence of the default is possible suspension of the trainer’s license or a fine. We have no doubt that a rule which both conditions a license and establishes with specificity reasonable precautionary duties within the competence of the licensee to perform is both reasonable and constitutional.” Despite numerous multi-state attacks on the trainer responsibility rule/absolute insurer rule, over many decades, Illinois and Maryland appear to be the only two jurisdictions that have (previously) held the absolute insurer rule to be unconstitutional. No challenge, on constitutional grounds, has been successful in nearly five decades. In summary, constitutionality of state trainer responsibility rules have most often been upheld on the grounds that (a) the rule is a rational application of state police powers to regulate an industry inherently subject to corruption, and (b) liability is not premised upon holding trainers responsible regardless of any fault or negligence, but instead upon the trainer’s negligence in failing to adequately guard the horse, and verify the contents of medicines or ingestibles, prior to raceday. This having been said, it appears the trainer responsibility rule/absolute insurer rule is here to stay whether it is viewed as being “un-American” or not. n](https://static1.squarespace.com/static/517636f8e4b0cb4f8c8697ba/t/5718d97722482e47d3e76dcf/1461334570877/)
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This article appeared in North American Trainer - issue 40 (May to July 2016)
CLICK ON IMAGE ABOVE TO READ THE ARTICLE
This article appeared in North American Trainer - issue 40 (May to July 2016)