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.).


2 responses to “Federal Jury Verdict in Antitrust Case Against Horse Registration Association

  1. It is clear that the court did not read the full bill or in particular Section 202 d):
    which prohibits
    (d) Sell or otherwise transfer to
    or for any other person
    or buy or
    otherwise receive from or for any
    other person
    any article for the pur-
    pose of or with the effect of manipu-
    lating or controlling prices
    or of cre-
    ating a monopoly in the acquisition
    or dealing in
    or of restraining commerce

    Clearly the shutting of these complexes by Pilgrim’s Pride to JBS did this and the liability follows to JBS in their purchase of Pilgrim’s Pride.

    One really has to wonder why these judges are allowed to sit on the bench when all they do is make excuses for meat processors.

    Section a) and b) of the Packers and Stockyards Act clearly regulates the relationship between the packer or poultry suppliers so the packer does not use its market power to capture the value of the poultry producers (farmers) and use it in the competition game or use that captured value to make monopoly profits. This court and others like it are allowing it to do both.
    The courts have been allowing a) and b) prohibited actions to occur if it is to the benefit of the meat packer when no such provisions are in the law. It is judicial activism at its worst. Poultry integrators are using the value and colluding with other market players to do the same which creates a barrier to entry for others who do not already have farmers whose value they can harvest.to. This will continue to concentrate the markets as it has in the last 15 years.. The courts, in some of their worst judicial opinions have decided to allow this behavior with a plethora of the best excuses money can buy, this most recent one being a prime example. By moving the standards every time there is a case, they make sure that the law can not or will not be enforced.

    The Packers and Stockyards Act came out of a time when market power was used to capture the value family farmers brought to the market and their collusion with other meat packers in the marketplace lead to both monopoly profits and control of the industry. The recent actions of the federal courts are returning us to these times despite one of the best written market laws the United States has produced.

    Section a) and b) regulate the activities between the meat packers and their suppliers and the other sections deal with other market factors and competition. Unlike the federal judges sitting on the bench today, those who who wrote and passed the bill into law knew the difference between “and” and “or”.

    There was real damage to the economy as a whole when corporations were allowed free reign in the economy. Before the Great Depression, most income flows in the economy were captured through the abuse of market power and financialized by Wall Street or private investors. These instruments and companies were then leveraged by the capitalists of the day until it crashed the economy and we went into the Great Depression. We are reentering that time even with the best laws that captured and bottled the faults of our capitalist system.

    Our federal judges are leading us back to that time because they seem to believe in the rule of gold over the golden rule. Traditional Judeo-Christian values of the law are giving way the worst vices of capitalism as our federal judges seek every excuse offered to them to deny justice.