Monthly Archives: July 2013

Federal Jury Verdict in Antitrust Case Against Horse Registration Association

On July 30, 2013, a federal jury in the Northern District of Texas unanimously found that the American Quarter Horse Association (AQHA) had conspired to bar cloned horses from the organization’s horse registry, and monopolize the U.S. market for high quality registered Quarter Horses, in violation of Sections 1 and 2 of the Sherman Act (15 U.S.C. §§ 1 and 2), and Sections 15.05(a) and 15.05(b) of the Texas Free Enterprise and Antitrust Act of 1983 (Tex. Bus. & Comm. Code §§ 15.05(a)-(b)). The jury, however, award zero damages.

The AQHA is the world’s largest equine breed registry and membership organization. Among other things, it records the pedigrees of the American Quarter Horse to preserve the breed. This includes maintenance of a DNA registry and the issuance of registration accreditation. In 2004, the AQHA adopted a rule that rendered horses produced by any cloning process ineligible for registration. Registration is an alleged prerequisite to participate in horse shows, races, and other events.

The plaintiffs are a rancher and a joint venture that breed cloned horses. In their original complaint, filed on April 23, 2012, the plaintiffs alleged that the AQHA refused to changes its rule prohibiting registration of cloned horses. The plaintiffs claimed that, by instituting and maintaining its rule against registering cloned horses, the AQHA had monopolized or attempted to monopolize the market for “high quality registered Quarter Horses” in the United States, in violation of Section 2 of the Sherman Act and the Texas state law analogue. The plaintiffs subsequently amended their complaint to add claims under Section 1 of the Sherman Act and Section 15.05(a) of the Texas Free Enterprise and Antitrust Act. The plaintiffs further alleged that certain AQHA officers or committee members influenced AQHA’s decisionmaking to ban cloned horses because they have a financial incentive to block competition in races and other events from the plaintiffs and others who breed, show, sell, or race cloned horses. Without AQHA registration, the plaintiffs alleged, their otherwise elite Quarter Horses were “virtually worthless.”

On May 24, 2013, the district court granted summary judgment in part, and denied it in part. It held that the plaintiffs’ conspiracy claims could proceed on the theory that the AQHA itself “is the conspiracy, because it is in fact controlled by competitors with interests to ban clones.” Mem. & Order (ECF 60), at 5 (emphasis original). The court also found that genuine issues of material fact precluded summary judgment on the monopolization claims, though it did grant summary judgment on the attempted monopolization claims. See id. at 8-10.

A jury trial commenced on July 26, 2013. The jury rendered its unanimous verdict for the plaintiffs on all counts on July 30, 2013. See Verdict (ECF 122) at 2. The jury found that the AQHA had caused damage to each of the plaintiffs, but did not award any damages. Post-trial proceedings, including the nature and form of the requested injunctive relief, likely will follow.

The case is Abraham & Veneklasen Joint Venture, et al., v. American Quarter Horse Association, et al., No. 2:12-cv-0103 (N.D. Tex.).