Judge strikes down Indiana's claiming ‘jail' rule in federal court

A federal judge in Indiana has ruled that the state racing commission’s jail rule preventing claimed horses from racing outside of Indiana for 60 days after a claim is a violation of the Commerce Clause of the U.S. Constitution.

The ruling, in a lawsuit brought by the Thoroughbred owner Jerry Jamgotchian – who has made a fight into overturning jail rules something of a crusade over the past five years – states that the Indiana Horse Racing Commission failed to show that the rule “advances a legitimate local purpose that cannot be adequately served by reasonable nondiscriminatory alternatives,” in rebutting arguments by the state that the rule is necessary to protect tracks’ business interests.

“Rather, [the defendants] evince the type of economic protectionism that the dormant Commerce Clause is designed to prevent,” the judge, William T. Lawrence of the U.S. District Court for the Southern District of Indiana, wrote. The ruling will prevent the state from enforcing the jail-time rule “against the plaintiffs or any other Indiana horse owners or trainers.”

Jail rules are common in most racing jurisdictions, as a way to prevent owners and trainers from raiding local horse populations and shipping horses out of state. According to recent remarks made at a meeting of the California Horse Racing Board – which is currently considering putting a jail rule back on the books – 27 of 38 racing jurisdictions in the United States currently enforce some kind of jail rule.

Jamgotchian had previously challenged the jail rule in Kentucky, but the Kentucky Supreme Court in 2016 upheld the state’s rule that prevents a claimed horse from racing anywhere but the track where it was claimed until the track’s meet has ended. In that ruling, the court stated bluntly that the rule does not conflict with the Commerce Clause, in part by stating that a potential claimant “has voluntarily chosen a form of purchase that is closely regulated.”

In a statement, Jamgotchian, a lawyer, called the Indiana ruling a “victory for every horse owner in America,” and he predicted that the ruling would lead to the dissolution of similar rules in other racing jurisdictions. Jamgotchian also has recently challenged jail rules in Pennsylvania and West Virginia.

“It’s time for the tracks and racing commissions to stop controlling our horses, and this important ruling now sends them a clear message to follow the Commerce Clause and not impose discriminatory restrictions,” Jamgotchian wrote.

In July, the CHRB sent a rule for review to its Legislative, Legal, and Regulations Committee that would put in place a 60-day jail rule, even though most tracks in the state currently enforce jail time as house rules. The CHRB’s legal counsel said at the July meeting that the commission felt confident in the legal basis for the rule, citing “a dramatic change” in how the U.S. Supreme Court had recently ruled on issues affecting interstate commerce.

In 2009, Jamgotchian sued the CHRB over its jail rule, and the agency removed the rule from its books in a settlement of the suit.