Court of Appeals, Fifth Circuit
2006 WL 1886167
July 10, 2006
Summary of Opinion
A horse trained by
was found to have
raced with a prohibited substance in its body. Based on the absolute insurer rule which provides that a trainer shall
ensure that a horse that runs a race while in his care and custody is free from
all prohibited drugs,
was held responsible even though there was no evidence supporting his
appealed. This court held that
did not show that the absolute insurer
rule establishes an irrebuttable presumption that would violate the due process
clause. The court said that although
harsh, the rule is not unconstitutional.
Text of Opinion
This appeal involves an issue of
first impression, whether the
absolute insurer rule, 16 TEX. ADMIN. CODE § 311.104(b), which provides, inter
alia, that "[a] trainer shall ensure that a horse ... that runs a race
while in the care and custody of the trainer ... is free from all prohibited
drugs, chemicals, or other substance," violates the due process clause. We
hold that it does not and therefore affirm the judgment of the district court.
James Hudson is licensed by the Texas Racing
Commission (the "Commission") as an owner and trainer of race horses. [FN1]
Horse racing came to
with the passage
of the Texas Racing Act ("the Act") in 1986. See Acts 1986,
69th Leg., 2nd C.S., ch. 19, § 1. The
express purpose of the Act is "to provide for the strict regulation of
horse racing and greyhound racing and the control of pari-mutuel wagering in
connection with that racing." Tex.Rev.Civ. Stat. Ann. art. 179e, § 1.02 (
Supp.2005). A Commission was created and the Act mandated that
[t]he commission shall
regulate and supervise every race meeting in this state involving wagering on
the result of greyhound or horse racing. All persons and things relating to the
operation of those meetings are subject to regulation and supervision by the
commission. The commission shall adopt rules for conducting greyhound or horse
racing in this state involving wagering and
shall adopt other rules to administer this Act that are consistent with this
Act. The commission shall also make rules, issue licenses, and take any other
necessary action relating exclusively to horse racing or to greyhound racing.
Id. § 3.02(a). The Act permits the commission or a
section of the commission to appoint a committee of experts, members of the
public, or other interested parties to advise the commission or a section of
the commission about a proposed rule.
Id. § 3.02(f). The Act further mandates that
the commission, in adopting rules and in the supervision and conduct of racing,
shall consider the statewide effect of a proposed commission action on the
state's agricultural, horse breeding, and horse training industries.
Id. § 3.02(g).
On June 8, 2002, the horse named
St. Martin's Cloak, which was owned and trained by
and in his custody and care, finished first in the sixth race at
, thereby earning a
share of the purse money. A post-race urine sample obtained from
's Cloak tested positive for Torsemide, a
prohibited drug. A split sample analyzed by
positive for Torsemide.
received notice that the Board of Stewards (the "Stewards") at
would conduct a
participated in the hearing along with his counsel. Following the hearing, the
for sixty days,
declared St. Martin's Cloak unplaced in the race, and ordered that the purse
money won by
's Cloak be
timely appealed the Stewards' ruling to the Commission.
A hearing was conducted before an
administrative law judge ("ALJ"). The ALJ determined that a prima
facie case was made that
participated in a race with a prohibited drug in its body, in violation of
Commission rules. The ALJ determined that it was irrelevant that there was no
intent or overt act in administering the Torsemide. The ALJ further determined
that the facts supported a finding that the absolute insurer rule had been
violated. The ALJ recommended that the ruling of the Stewards should be upheld.
The Commission adopted the ALJ's findings and
upheld the Stewards' ruling.
then filed a
petition in a
state district court seeking judicial review of the Commission's decision. He
claimed that, inter alia, that the absolute insurer rule violated the
due process clause.
The Commission timely removed the action to
federal district court. The district court, proceeding sua sponte, granted
summary judgment in favor of the Commission on
's federal constitutional claims. The
district court determined, inter alia, that the absolute insurer rule did not violate due process. This appeal
The sole issue on appeal is whether the
rule, 16 TEX. ADMIN. CODE § 311.104(b), both facially and as applied,
violates the due process clause.
argues that the district court erred in granting summary judgment in favor of
the Commission on his claim that the absolute insurer rule violates due
Section 311.104(b) of the Texas Administrative
Code, entitled "Absolute Insurer," provides:
(1) A trainer shall ensure
the health and safety of each horse or greyhound that is in the care and
custody of the trainer.
(2) A trainer shall ensure
that a horse or greyhound that runs a race while in the care and custody of the
trainer or kennel owner is free from all prohibited drugs, chemicals, or other
(3) A trainer who allows a
horse or greyhound to be brought to the paddock or lockout kennel warrants that
the horse or greyhound:
(A) is qualified for the
(B) is ready to run;
(C) is in a physical
condition to exert its best efforts; and
(D) is entered with the
intent to win.
claims that the absolute insurer rule,
facially and as applied to him, violates due process. He argues that the rule
"creates a conclusive, mandatory, and irrebuttable" presumption that
a trainer has committed a violation when a horse tests positive for a
prohibited substance, irrespective of who actually administered the drug to the
horse or the intent of the trainer.
contends that the rule deprives a trainer of the right to negate his
responsibility regarding administration of a prohibited drug.
To establish a due process violation under 42
U.S.C. § 1983,
must first show that he was denied a
constitutionally-protected property right. This court has held that such property rights
must be established by state law.
The Supreme Court has determined that a horse
trainer licensed in
had a property interest in his racing license. Examining
law, the Court noted that a racing license "may not be revoked or suspended
at the discretion of the racing authorities." The Court determined that "state law has engendered a clear expectation of
continued enjoyment of a license absent proof of culpable conduct by the
trainer." This gave the trainer a
"legitimate claim of entitlement ... that he may invoke at a
This court has not addressed
whether a horse trainer licensed by the Commission has a
constitutionally-protected property right. Certain provisions of
law, however, lead us to conclude that such a right exists. The Texas
Administrative Code provides that a license issued by the Commission may be
denied, suspended, or revoked after notice and a hearing. Section 311.6(b) enumerates several grounds
for the denial, revocation, and suspension of racing licenses, including, among
others, violations of racing rules, a felony conviction, a conviction of a
crime of moral turpitude that is reasonably related to the licensee's fitness
to hold a license, and providing false information in a license application. Based
on the above provisions, we conclude that
has a protected property interest in his racing license. See Barry, 443
& n. 11, 99 S.Ct. at 2649 & n. 11.
We turn to
's two substantive due process
first argues that § 311.104(b) violates
substantive due process because it creates an irrebuttable presumption of
fault. He contends that whenever a prohibited substance is found in a horse's
system, the absolute insurer rule creates an irrebuttable presumption that the
trainer of the horse administered the substance. We disagree. The absolute
insurer rule, as it name implies, makes a trainer of a horse that is entered in
a race the absolute insurer that the horse is free from all prohibited
substances. No presumption of trainer fault is created when the presence of a
prohibited substance is found. The absolute insurer rule does not assign fault,
but instead, requires the trainer to bear the responsibility of the horse's
condition, as a contingency to being licensed as
a trainer by the state.
Hudson also argues that the absolute insurer rule violates
substantive due process because it subjects a trainer to disciplinary action
without a showing of wrongdoing. In essence,
contends that the state lacks the
power to impose absolute liability. This argument is also without merit. It has
long been held that due process does not require proof of guilty knowledge
before punishment may be imposed. In areas
of activity requiring strong police regulation to protect public interests,
strict liability may be imposed upon individuals "otherwise innocent but
standing in responsible relation to a public danger." Horse racing requires strong police
regulation to protect the public interests.
Because horse raising for money
can be prohibited all together in
the legislature may condition a license to engage in legalized racing upon
compliance with any regulation that is reasonably appropriate to the
accomplishment of the Act. To ensure the health of the horse, to protect the
integrity of the sport, and to protect the betting public, the state has a
valid objective in seeking to prevent the doping of horses. The absolute
insurer rule for horse trainers is a reasonable and valid exercise of the
state's police power to achieve that objective.
The majority of jurisdictions have upheld the
same or similar absolute insurer rule.
are the only jurisdictions that have held the
absolute insurer rule to be unconstitutional. We agree with the majority of jurisdictions that
the absolute insurer rule does not violate due process. While the absolute
insurer rule may be harsh, it is constitutional.
We affirm the judgment of the district court
has not shown that the
absolute insurer rule establishes an irrebuttable
presumption of guilt, and (2) the absolute insurer rule is a reasonable
regulation that does not violate due process either facially or in its