09/17/2012 3:48PM

New York judge rejects motion to dismiss lawsuit against Thoroughbred Retirement Foundation

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A New York state Supreme Court justice has denied the Thoroughbred Retirement Foundation’s motion to dismiss a lawsuit the state’s attorney general filed against the nation’s largest charity for ex-racehorses.

New York Attorney General Eric Schneiderman has sued TRF, alleging the group’s directors violated their fiduciary duties and allowed a number of the estimated 1,000 horses in its care to become neglected. The TRF has vigorously denied those allegations. Schneiderman seeks, among other things, removal of the TRF board.

In a motion filed Monday, state Supreme Court Justice Anil Singh wrote that the TRF had not “carried their burden of showing that the NYAG has failed to state a cause of action. . . . The defendants have not addressed the right of the NYAG to bring any of these claims, but instead call upon the court to dismiss the action based upon the credibility of their witnesses.”

Singh rejected the TRF’s attempts to have the case dismissed based on the documentary evidence the TRF provided and for failure to state a cause of action upon which relief can be granted. The TRF had argued that Schneiderman’s case should be dismissed because it was, they alleged, based on falsehoods and distortions that directly contradicted such documentary evidence as the TRF horses’ recent evaluations by veterinarians. The charity also invoked the business judgment rule, alleging that the attorney general had not “alleged or proven bad faith or self-dealing on the part of the individuals, and as such, the business judgment rule protects the decisions of the board and the individuals.”

But Singh called the TRF’s argument invoking protection under the business judgment rule “misguided” in his refusal to dismiss the case. He also referred to TRF’s “oblique reference” to the statutes cited in Schneiderman’s case as “clearly erroneous” in the TRF’s assertion that the attorney general had not alleged a lack of good faith as required under the statute regarding violation of duties of care and loyalty by corporate directors. Singh said that Schneiderman’s complaint “is replete with such allegations.”

“Justice Singh recognized the substantiality of the defenses the TRF has to the NYAG complaint, but concluded that he couldn’t dismiss the NYAG’s complaint because on a motion to dismiss the court has to accept the allegations of the complaint, even if those allegations turn out to be utterly false as is the case here,” TRF attorney Barry Ostrager said in an e-mailed statement Monday afternoon. “The TRF is reviewing the decision to determine whether to appeal.”

Singh’s order directs attorneys for both sides to appear for conference at 9:30 a.m. Nov. 7.

Susan Huart More than 1 year ago
Without knowing all the facts, it still appears to be a disaster for our retired racehorses. It's a charity, C'mon. Sometimes there has to be someone sane enough in the legal world to just stop with frivolous lawsuits. Is NY going to pay for the upkeep and care of 1000 racehorses while a court wastes time? Jeez! This is just painful to read.
LenihanPatricia More than 1 year ago
He said, she said. How about full disclosure and transparency? The TRF is a 501c3. Why don't they simply open all their ledgers going back to when the Mellon estate handed over the first $5 million. Then everyone can see where all the money has been spent for the past decade or so. It sounds like they haven't budgeted wisely for a long time!
Brigitte de Saint Phalle More than 1 year ago
I don't know the legal issues and the statement that makes the result seem outrageous is a statement from TRF's lawyer. However, the legal assault on TRF began when NYS leaked information to the NY Times, which put the allegations against TRF on the front page. Similarities to the campaign against NYRA is not coincidental. NYS is targeting all money allocated to Thoroughbred racing, even to the retirement of race horses. TRF will be spending lots and lots of time in court. If they win this case there'll be another. TRF is a charity, run by volunteers who are likely to give up eventually. Chad Mc Rory, if NYS gets control TRF will become a charity for old political war horses.
chad mc rory More than 1 year ago
You do mean the two-legged ones, no doubt. I want Al Capone back!
Thomas Cook More than 1 year ago
This is obsurd. Basically, the judge is saying these allegations seemto be false but TRF is attacking the wrong legal issues?? No veterinary exams to show neglect. Just some wild accusations from God knows who?? Am I reading this correctly? The attorney generals office is attacking TRF WITHOUT ANY EVIDENCE?
Kristen Neiding More than 1 year ago
The article makes it sound that way because it fails to give a good overview of the legal process for non-legal people. This case is very early in the proceedings. The nyag files the complaint, the trf has to answer and it's very common to also move to dismiss. However, there is a very high standard for dismissal at this stage. The defendant (trf) would have to prove that there's no possible way that plaintiffs could win. This is before the period in the case called "discovery" where each side gathers facts from the other. So any determination at this point has nothing to do with the facts. What the judge is saying here is that we need to proceed with the case to gather the facts because we can't tell right now who should win. Motions to dismiss are hardly ever granted at this point.
chad mc rory More than 1 year ago
And to Dave, below, New York State wants to grab every penny and run. Who does NYS propose will care for these Racehorses - and those to come when this mess is all done?
Dave More than 1 year ago
So an org devoted to saving horses from death is sued while horse slaughter goes on all over the country..... what a country!
walesfoodmusic More than 1 year ago
and much of the slaughter will move to the back 40 where nobody can see what's going on
William Waters More than 1 year ago
Dave, I believe horse slaughter is currently illegal in almost every state, if not every state. That's why the killers often ship the horses to Canada. Then, I believe, much of the meat is exported to, you guessed it, the French.
idesofice More than 1 year ago
There is no slaughter in this country-Canada & Mexico only.
laura ban More than 1 year ago
Even though we don't slaughter horses like they do in mexico and other places, we still have an active market for horse meat, they're called kill buyers, - a rose by any other name because it works out the same! Nevada was or is doing that to the wild horses. So much for laws.
Susan Huart More than 1 year ago
Well said. It's disgraceful and inhumane.