Hearing: Divide on Florida Sales Rules
by Ryan Conley
Date Posted: 4/9/2008 2:43:41 PM
Last Updated: 4/10/2008 11:06:14 PM

Owner-breeder Earle I. Mack.
Photo: Benoit

It is clear following an April 7 public forum in Florida that published rules concerning horse sales in the state did little to quiet those on opposite sides of the arguments over disclosure and transparency.

About 40 members of the Florida equine industry gathered in Tallahassee to voice opinions on proposed rules published by the Florida Department of Agriculture and Consumer Services in January. The rules were written in response to a Florida law passed in 2007 that mandated the agency promulgate such regulations on public and private horse sales in the state.

Some of those in attendance at the hearing, which was moderated by the FDACS, said the agency didn’t go far enough in writing the rules. While providing rules to regulate the deceptive practice of dual agency, the FDACS said rules on medical disclosure, ownership disclosure, and agent licensing went beyond the scope of the legislation.

But owner-breeder Earle I. Mack, who championed the original legislation, said the law “mandated” rules be written to cover the aforementioned integrity issues.

“As the draft rule currently stands it fails to address the legislative mandate in three critically important respects,” Mack said in a statement read into the record at the hearing. “First, the ownership disclosure is simply set aside with the assertion that 'ownership would not required since it would not create a deceptive or unfair practice.' That assertion is inaccurate.

“Second, the draft rule fails to require any meaningful disclosure of the medical history and condition of the horse, nor does it provide a mechanism for the delivery of such information to prospective buyers. Finally, the draft rule fails to provide any remedial and/or punitive measures that would ensure compliance with its terms.”

Among others who appeared to voice support for stricter rules were Guy Lamothe, executive director of the Thoroughbred Owners of California; owner-breeder Joseph Allen; trainer Kenny McPeek; Dr. Daniel Duncan, veterinary director for Frank Stronach’s Adena Springs farms and Stronach Stables; Mike Rogers, business manager for Adena Springs; and Hank Stout, a Houston attorney who represented owner Jim McIngvale in a high-profile fraud lawsuit against trainers and consignors.

Lamothe said the TOC represents 10,000 licensed owners in California, some of whom purchase many horses in Florida.

“The policies you develop in Florida have a direct impact on buyers in California, and any other location for that matter,” Lamothe wrote in a statement, noting the TOC had in January published its positions for full disclosure on ownership and medical history. “Buyers want to be assured of meaningful access to market information, and a level playing field.”

McPeek backed rules for medical disclosure. He related a story regarding 2007 Horse of the Year Curlin, who the trainer, acting as an agent for Midnight Cry Stable, purchased for $57,000 at the 2005 Keeneland September yearling sale. McPeek said ankle surgery on Curlin had been disclosed in the Keeneland repository, which helped him make a decision on purchasing the son of Smart Strike  .

“Without the disclosure of this surgery, the radiographs and the vet reports on file, I may not have been so interested in the horse,” he said in a written statement, noting Ocala Breeders’ Sales Co. no longer houses a repository. “It is hard to say that I would have passed on a horse like this -- hindsight makes it even harder -- but it did make a positive difference that there was disclosure … I was confident the seller was not trying to hide anything.”

Tom Ventura, general manager and director of sales at OBS, was one of several people who supported the rules as they are written. He noted OBS’s February and March sales set new records under new company guidelines the company implemented on anabolic steroid testing.

“The sales companies in general have done a good job changing their conditions of sale to respond to these concerns,” Ventura said in an April 8 telephone interview. “The (law) didn’t require rules be written for every single issue. It required an examination, including of those (integrity) areas, and then a writing of the rules. The dual-agency rule does have some teeth in it, as does the one that is in place in Kentucky.”

Mack believes OBS set records at this year’s 2-year-old sales in large part because of his and other’s efforts to address integrity issues.

“I thought that could be one of the reasons they had record sales,” said Mack, a former U.S. ambassador to Finland. “I bought three out of the sale, and bought with more confidence than at any of their previous sales. I applaud them, and agree with them that this is a good first step.”

A comment period will remain open until April 11, and then the FDACS will consider all testimony and suggestions before deciding its next step, said Kerry Flack, the agency’s assistant director of marketing and development.

The FDACS can leave the rule as it is, or add amendments, she said. There will likely be more public comment periods, but eventually, the rule will be published as final. From there, those wanting to challenge the rules will either have to appeal to the Florida Division of Administrative Hearings or submit new bills to the state legislature.

The originator of the proposed rule, Flack said the agency feels some issues go beyond the scope of the legislation. In particular, she said, the Florida legislature would need to appropriate funds for drug testing, and a library to provide results for the test, as well as adding additional staff that is not already in place.

Flack suggested to those in attendance at the hearing that they get together and work out solutions.

“If they really are serious, and I believe them all to have intentions that are honorable, to come together,” she said. “They all have different wants, but all want a clean industry.”

To date, no additional bills or amendments involving horse sales are being dealt with in the Florida legislature. The current session ends May 2.



Copyright © 2014 The Blood-Horse, Inc. All Rights Reserved.

SUBSCRIBE to The Blood-Horse magazine TODAY!