Bettors urge appeals court to reinstate claims against horse trainer Bob Baffert

CINCINNATI (CN) — Churchill Downs, the host of America's most important annual horseracing event, the Kentucky Derby, should never have allowed legendary trainer Bob Baffert to enter his horse Medina Spirit in the 2021 race, according to arguments made Tuesday by a class of bettors.

The Sixth Circuit accepted the appeal after a federal judge dismissed the case in July 2023 and ruled that even if the racetrack owed bettors a duty of care, they could not establish causation.

Medina Spirit crossed the finish line first in the 147th running of the Kentucky Derby on May 1, 2021, but failed a post-race blood test and tested positive for betamethasone, a result confirmed by another, split-sample test.

On Feb. 21, 2022, Churchill Downs officially disqualified Medina Spirit and released the new order of finish as Mandaloun, Hot Rod Charlie and Essential Quality.

However, betting payouts on the race were based on the unofficial results that included Medina Spirit, and under Kentucky law those weren't altered when the official order of finish was changed following the disqualification.

A class of individuals who made pari-mutuel, or pool, bets on the race sued Baffert, his company Bob Baffert Racing Inc. and Churchill Downs Inc., and claimed the racetrack never should have allowed Baffert to enter his horse, given his history of doping violations.

U.S. District Judge David Hale, an Obama appointee, dismissed the suit in its entirety and determined the bettors' damages were entirely speculative in nature. He also rejected their claim that a contract was established with Churchill Downs when they made their wagers.

Hale cited Kentucky's horseracing regulations when he dismissed the consumer law claims and found they imposed no requirement on horse tracks to deny entry to individuals with past doping violations.

In their brief to the appeals court, the bettors disputed Hale's finding that they would need to prove the horses would have finished in the same order had Medina Spirit been disqualified before the race.

"Appellants require no conjecture or speculation or a rerunning of the race to determine the order of finish," they argued. "Appellants claim damages in the form of unpaid winning wagers completely and solely due to the new official order of finish. ... That event, the new official order of finish, could not and would not have ever occurred but for appellees' negligent or wrongful conduct in breach of a duty."

Attorney William Nefzger from the Louisville firm Bahe, Cook, Cantley, and Nefzger PLC argued Tuesday on behalf of the bettors and told the panel Baffert and Churchill Downs should not be permitted to "hide behind regulations as some sort of immunity."

U.S. Circuit Judge Eric Clay, a Clinton appointee, asked the attorney how he can establish harm on behalf of his clients.

"The regulations say you bet at your own risk and that the order of finish prevails," Clay said. "How do you get past that? You know what those rules are in advance."

Nefzger emphasized that his clients do not seek payouts for pari-mutuel wagers on the race, but rather damages for breaches of duty by Baffert and the racetrack.

In its brief Churchill Downs accused the class of cherry-picking portions of Kentucky's horseracing laws and argued the bettors' theory of the case — that Baffert's horse never should have been allowed to run — renders their suit "the essence of speculation."

Attorney Jeffrey Moad of the Louisville firm Stites Harbison PLLC argued on behalf of Churchill Downs and said Kentucky law provides a single avenue for bettors to win at the horse track.

"There is one way to have a winning wager in Kentucky and that is to have your pari-mutuel ticket match the order of finish on the day of the race," Moad said. "Subsequent changes to the order of finish may be important for the record books and trophies, but have no bearing on the wagers."

U.S. Circuit Judge Rachel Bloomekatz, a Biden appointee, asked if Churchill Downs and other tracks could ever be held liable to bettors under a negligence claim, even if they engaged in fraudulent activity.

Moad said there was no fraud on the part of his client, but in such a hypothetical scenario, the track would have "serious problems" with regulators and the Kentucky attorney general, never mind liability to bettors.

Attorney Michael Meuser of the Lexington, Kentucky firm Miller, Griffin, and Marks PSC split his time with Moad Tuesday and argued on behalf of Baffert.

"The rules of wagering are more than just regulations and reflect the creation of public policy without which we could not have pari-mutuel wagers," the trainer's attorney said.

Meuser disputed his opposing counsel's claim regarding a duty of care under Kentucky law and called the bettors' claims "totally speculative" and based on the finish of a hypothetical race that was never run.

"The plaintiffs' real complaint here is that they don't like the rules," he told the court. "There is no legal duty between a horse trainer and a bettor. That's pretty simple."

In his rebuttal, Nefzger reiterated that Churchill Downs violated a contract established with bettors when it allowed an ineligible horse to run in the 2021 Kentucky Derby.

"So no matter how careful they were [with testing]," Judge Bloomekatz asked, "they are strictly liable under contract law?"

"No, you don't even have to go that far," the attorney answered. "They did nothing."

Senior U.S. Circuit Judge R. Guy Cole Jr. rounded out the panel, which did not set a timetable for its decision.

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