Racetrack Exclusions Get Tested in WV

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The right of racetrack exclusion is being tested in West Virginia, where Charles Town Races & Slots is seeking to keep the state racing commission from holding hearings to consider granting three individuals reinstatement to the facility.

The case has the potential to be precedent-setting, an attorney involved in the legal proceedings said.

In a petition for writ of prohibition filed March 27 in Kanawha County Circuit Court, Charles Town owner Penn National Gaming Inc. asks the court to prohibit the West Virginia Racing Commission from holding hearings on track management’s decision to eject Dick and Janene Watson and Patty Burns, who each filed appeals of their exclusion in September 2008. The WVRC, during a Feb. 12 meeting, granted the Watsons and Burns a right to hearings under the Administrative Procedures Act.

The filing is the latest move in cases that date back about five years. In 2004, Dick Watson, then president of the Charles Town Horsemen’s Benevolent and Protective Association, was sued by the organization for allegedly misappropriating funds. The suit alleged his wife Janene, then executive director of the local HBPA, was a co-conspirator.

The suit was settled after Dick Watson apologized and admitted loaning himself HBPA money without approval of the board of directors. In August 2005, Dick Watson’s membership in the Charles Town HBPA was suspended, and three weeks later, Charles Town barred the Watsons from track property.

The couple have bred, owned, and trained horses at Charles Town for more than 25 years. They lost their stalls when the ejection order was issued.

Burns, according to court documents, was arrested in February 2007 for being a party in an altercation in the Charles Town barn area, and in July of that year, track officials found syringes in Burns’ barn after an inspection. The board of stewards suspended Burns, a trainer, for 30 days, but in February 2008, Charles Town management ejected her.

PNGI, which is based in Pennsylvania, contends the three-member WVRC has overstepped its authority regarding reinstatement of individuals barred from private property. “This position by the racing commission violates the specific directive of the legislature and the decisional law of this state, and represents a classic scenario where a lower tribunal has exceeded its legitimate powers,” the company’s petition states.

PNGI in its filing notes the WVRC on previous occasions had held hearings on the Watsons’ ejection and ruled Charles Town had the authority to take such action. PNGI didn’t object to the commission holding hearings.

The Watsons had been granted one-year occupational permits and have been licensed to race at West Virginia tracks. They have on occasion raced horses at Mountaineer Casino, Racetrack & Resort.

The WVRC March 7 denied the PNGI motion to dismiss the appeals by the Watsons and Burns. In the order, WVRC chairman Fred Peddicord said the "burden of proof shall be on Charles Town Races & Slots to prove by a preponderance of the evidence that it had just cause to eject" the Watsons and Burns.

Doug McSwain, general counsel for the National HBPA and special litigation counsel to the Watsons and Burns, has cited other cases throughout North America in taking his position that the WVRC has the right to consider reinstatement of the barred individuals.

McSwain said there is an Arkansas case in which the state’s high court agreed the Arkansas Racing Commission had the power to consider a horseman’s exclusion from Oaklawn Park, even though it ultimately upheld the ejection. In Kentucky in early 1990s, he and the late Don Sturgill appealed Keeneland’s ejection of jockey Billy Phelps, who ultimately was granted permission by the Kentucky Racing Commission to ride at the Lexington track.

McSwain said the West Virginia case has “broad relevance” for the entire racing industry because “house rules” are becoming commonplace at racetracks, and are being encouraged by the National Thoroughbred Racing Association Safety and Integrity Alliance. The attorney said horsemen support the alliance and racetracks’ efforts to improve health and safety for all participants, but are concerned they may not be afforded due process.

“The interest of horsemen in the fair and non-discriminatory application of ‘house rules’ is of tremendous importance for obvious reasons,” McSwain said.

In its petition, PNGI lists numerous federal and state court cases to support its right to exclusion. PNGI attorneys argue that racing associations “have a common law right to exclude or eject individuals, whether patrons or permit-holders, from their business premises,” and that “West Virginia law specifically recognizes the authority of a racing association to eject persons from its business premises.”

PNGI attorneys also argue that under West Virginia racing rules, the WVRC doesn’t have the authority to readmit an ejected individual to a racetrack. The petition cites a rule that states “any person ejected by the stewards or the association from the grounds of an association shall be denied admission to the grounds until permission for his or her re-entry has been obtained from the association and the racing commission.”

The petition also claims appeals only deal with stewards’ rulings, not decisions made by private racing associations.

McSwain argued the WVRC agreed with horsemen that Charles Town’s action was subject to appeal. He said the case could set precedent, at least in West Virginia but perhaps nationally.

“The implicit meaning of the ruling is that the commission—if it ultimately agrees with the Watsons and Burns that their exclusions have gone on long enough—possesses the power to order the Watsons and/or Burns back onto the track,” McSwain said. “The exclusions, if overruled on appeal, therefore, represent a classic power struggle between who controls racing: the racetracks or the racing commissions.

“Horsemen submit that the final say in all racing matters, including ejections and exclusions, lies with the racing commission.”