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  • Congress Blocks Slaughter of Horses in United States (Again) -

    The resumption of commercial horse slaughter in the United States was blocked on Friday, January 17, when President Obama signed a congressional budget bill that removed funding for USDA inspection of horse slaughter plants. This action on the part of Congress and the President effectively takes horse slaughter in this country off the table for now.

    A similar federal budget measure passed in 2006 shuttered the industry in 2007. Money for federal inspections of horse meat was restored in 2011, and several proposed plants have received USDA permits. However, court orders in suits brought by animal rights activists and others have stopped any horse slaughter plants from opening.

    The latest of these lawsuits is a suit in New Mexico state court brought by New Mexico Attorney General Gary King. King sued Valley Meat Co., a permit holder who wished to convert its former beef slaughterhouse into an equine processing plant, after the U.S. Court of Appeals for the 10th Circuit ruled that Valley Meat could commence slaughter operations. That suit is still pending. 

    Blair Dunn, attorney for Valley Meat and another plant in Missouri, told news sources, “I don’t see them opening now. No matter what, they are not going to violate the law.” However, Dunn says Valley Meat will continue to wage a legal fight to convert its cattle processing plant to the slaughtering of horses.  According to Dunn, the federal move to withhold money for meat inspections could cause U.S. trade violations.  Valley Meat is also trying to disqualify Judge Matthew Wilson, the New Mexico district judge presiding over the state court suit, because of comments posted by horse slaughter opponents on a Facebook page for the judge’s election campaign.

    Related Posts:

    10th Circuit Allows Horse Slaughter Plants to Commence Operations

    Humane Society, et al File Appeal after Federal Judge Dismisses Horse Slaughter Suit

    Federal Court Blocks Horse Slaughter at Two Plants



  • 10th Circuit Allows Horse Slaughter Plants to Commence Operations -

    In an order dated December 13, 2013, a copy of which can be downloaded here, the United States Court of Appeals for the Tenth Circuit denied an emergency motion for injunction pending appeal filed by the Humane Society of the United States (HSUS) and other animal rights groups. The motion sought to halt horse slaughter operations at three U.S. plants pending the final resolution of the animal rights groups’ appeal.

    The HSUS and other animal rights groups had originally filed suit in New Mexico federal court seeking to permanently enjoin officials from the United States Department of Agriculture (USDA) and the Food Safety Inspection Service (FSIS) from carrying out federal meat inspections at three horse slaughter facilities. The district court entered a temporary restraining order that halted slaughter operations while the merits of the case could be decided. Ultimately, the district court rejected the arguments of the animal rights groups, denied their request for permanent injunctive relief, and dismissed their case with prejudice.

    The animal rights groups appealed the case to the 10th Circuit court of appeals, and sought an emergency injunction staying horse slaughter operations until the appeal could be heard. The 10th Circuit denied the animal rights groups’ motion, holding that the animal rights groups failed to establish a likelihood of success on appeal or irreparable harm to the plaintiffs. 

    Horse slaughter operations may now commence under the trial court’s decision, even though the merits of that decision are currently being considered by the 10th Circuit. Operations may continue indefinitely unless and until the 10th Circuit, after considering full merits briefing and oral argument, ultimately ends up siding with the animal rights groups.

    Related Posts:

    Humane Society, et al File Appeal after Federal Judge Dismisses Horse Slaughter Suit

    Federal Court Blocks Horse Slaughter at Two Plants

    Case Information: Front Range Equine Rescue, et al v. Tom Vilsack, et al, Cause No. 1:13-cv-00639-MCA-RHS (D.N.M. Nov. 1, 2013); Front Range Equine Rescue, et al v. Tom Vilsack, et al, Cause No. 13-2187 (10th Cir.)



  • Humane Society, et al File Appeal after Federal Judge Dismisses Horse Slaughter Suit -

    As discussed in this prior post, the Humane Society of the United States and a variety of other groups and individuals brought suit to permanently enjoin the slaughter of horses at two plants that had been granted Food Safety Inspection Service permits. 

    On November 1, 2013, after originally granting a temporary injunction staying operations at the plants, U.S. District Judge Christina Armijo denied the plaintiffs’ request for permanent injunction and dismissed the lawsuit with prejudice. A copy of the court’s Memorandum Opinion and Order can be downloaded here. Accordingly, the temporary injunction previously issued by the court expired, allowing horse slaughter operations to commence at the plants who had been issued permits.

    On November 1, 2013, the Humane Society of the United States, et al, appealed the case to the Tenth Circuit Court of Appeals, and moved for a temporary stay of Judge Armijo’s Memorandum Opinion and Order. On November 4, 2013, the Tenth Circuit temporarily stayed the district court's Memorandum Opinion and Order, to allow the court "adequate time to consider the matter.” The Tenth Circuit’s order can be downloaded here

    Until the Tenth Circuit acts, the horse slaughter plants currently holding permits cannot commence operations. 

    Valley Meat Company’s attorney, Blair Dunn, told The Horse that death threats had been made against Valley Meat Company’s owners.

    Case InformationFront Range Equine Rescue, et al v. Tom Vilsack, et al, Cause No. 1:13-cv-00639-MCA-RHS (D.N.M. Nov. 1, 2013); Front Range Equine Rescue, et al v. Tom Vilsack, et al, Cause No. 13-2187 (10th Cir.)



  • Federal Judge Rules Twinspires.com Cannot Accept Bets from Texas -

    The United States District Court of the Western District of Texas (Austin Division) recently held that Churchill Downs subsidiary website, Twinspires.com, is prohibited from accepting wagers from persons living in Texas.

    Churchill Downs brought action against the Texas Racing Commission seeking a declaration that the Texas Racing Act’s in-person requirement, under which only a person inside the enclosure where a race meeting was authorized may wager on a race, violated the dormant Commerce Clause. The dormant Commerce Clause precludes states from enacting laws or regulations that excessively burden interstate commerce. 

    The Texas Racing Commission is a state agency charged with enforcing the statutory and regulatory provisions of the Texas Racing Act. Churchill Downs moved for permanent injunction to prevent the Texas Racing Commission from enforcing the Act to prohibit Texans from placing wagers on Twinspires.com. The in-person requirement has been on the books in Texas since 1986.  Nevertheless, Twinspires.com continued to accept wagers from Texans through its website.

    The court, Judge James R. Nowlin, presiding, found that the Act did not violate the dormant Commerce Clause and entered judgment for the Texas Racing Commission. With respect to the legitimate state interests furthered by the in-person requirement, Judge Nowlin remarked,

    [E]very regulatory challenge that gambling has always posed to the state has been made that much more daunting by the advent of the internet. Gambling has always been addictive, but before the internet, at least the addicts had to go to the trouble of driving somewhere to place his bet. The internet allows the addict to get his fix 24/7/365, all without leaving the comfort of his own home . . . Along the same lines, underage patrons looking to get in on the action have always tried to evade detection with fake IDs and the like, but with the advent of the internet, all they need to place a bet is Dad’s credit card and date of birth . . . Finally, gambling—especially horse racing—has always attracted crooked individuals hoping to clean their money. With the advent of the internet, though, criminal elements are better able to hide behind the anonymity afforded by the computer screen.”

    Churchill Downs has appealed this case to 5th Circuit Court of Appeals.

    Case InformationChurchill Downs, Inc. v. Trout, No. 1:12-CV-00880-JRN, 2013 WL 5799694 (W.D. Texas Sept. 23, 2013).



  • Court Will Enter Injunction Forcing AQHA to Register Clones & Their Offspring -

    On August 12, 2013, an evidentiary hearing was held on Plaintiffs’ request for attorneys’ fees and for injunctive relief that would require the AQHA to register clones and their offspring. 

    Following the hearing, U.S. District Judge Mary Lou Robinson informed counsel that she would grant an injunction requiring the AQHA to register horses produced by cloning and their offspring.

    On August 14, 2013, the court entered an order (which can be accessed here) setting forth specific changes and additions to AQHA rules and regulations, which, according to the order, the judge is considering for inclusion in the injunction. The order requires that any objections to the proposed rule changes be submitted by noon on August 19, 2013.

    The court has not yet ruled on Plaintiffs’ request for nearly $900,000 in attorneys’ fees. The court ordered the Plaintiffs to furnish their billing statements to AQHA, and also ordered AQHA to file any objection to the request for attorney’s fees, by August 14, 2013. A copy of AQHA’s objection to Plaintiffs’ attorneys’ fees, filed yesterday, can be found here.  

    AQHA’s primary objection to Plaintiffs’ fee request is the fact that the jury did not award any damages to Plaintiffs. Plaintiffs had sought $5.7 million in damages and sought to treble those damages under the antitrust laws for a total of $17.1 million. However, the jury awarded Plaintiffs zero damages.

    At this point, the court has not yet entered final judgment in favor of Plaintiffs. According to this press release, AQHA will file a Motion for Judgment as a Matter of Law after entry of final judgment. In that motion, AQHA will request that the Court enter a take nothing judgment in favor of AQHA based on the fact that the jury’s verdict was not supported by the evidence. Should the court not grant AQHA’s motion, AQHA will file a notice of appeal thereby starting the appellate process.

    Case Information: Abraham & Veneklasen Joint Venture, et al v. American Quarter Horse Association; Cause No. 2:12-CV-00103-J in the U.S. District Court for the Northern District of Texas (Amarillo Division)

    Related Posts:

    Federal Jury Rules Against AQHA in Cloning Suit

    Federal Lawsuit Alleges AQHA Cloned Horse Registration Policy Violates Antitrust Law



  • Federal Court Blocks Horse Slaughter at Two Plants -

    On August 2, 2013, judge Christina Armijo of the United States District Court for the District of New Mexico in Albuquerque granted a 30-day temporary restraining order preventing the commencement of horse slaughter at two plants—Valley Meat Co. LLC in Roswell, New Mexico and Responsible Transportation in Sigourney, Iowa.

    Earlier this summer, both of those plants had received Food Safety Inspection Services (FSIS) permits, which allow placement of USDA personnel at processing plants to carry out horsemeat inspections. Horse processing was slated to begin at both plants on August 5, 2013.

    This would have been the first time horse slaughter had taken place in the U.S. since 2007, when a combination of court rulings and legislation caused the closure of the last two domestic processing plants operating in Illinois and Texas.

    The lawsuit against the slaughter plants was brought by the Humane Society of the United States and other groups who oppose horse slaughter.

    According to some sources, the court’s ruling was based on an allegedly flawed environmental review of one or both of the plants. Further, the court has reportedly prohibited USDA inspectors from further involvement with the plants. 

    Arsonists set fire to Valley Meat Company’s plant on or around July 30, 2013, just before the plant was scheduled to commence operations. “They tried to burn the place down,” Valley Meat Co. owner Rick De Los Santos said in reference to opponents who have been making threats against the company over the past year.

    A bond hearing is scheduled for today, whereby the court will determine the amount of money the plaintiffs must put up as a bond to cover the plants’ economic losses, in the event that plaintiffs lose the suit.



  • Federal Jury Rules Against AQHA in Cloning Suit -

    Today, a 10-person jury in the U.S. District Court for the Northern District of Texas, Amarillo Division ruled that AQHA Rule REG106.1, which prohibits the registration of cloned horses and their offspring in AQHA’s breed registry, violates federal and state anti-trust laws. The jury awarded no damages.

    In a statement published today on AQHA’s website, AQHA Executive Vice President Don Treadway, Jr. said,

    When individuals with shared interests, goals and values come together to form a voluntary association to serve a common purpose, the members have a right to determine the rules for their association. The wisdom of our membership –which is largely not in favor of the registration of clones and their offspring—has not been upheld by this verdict.

    Whether nor not clones will be able to be registered with the AQHA in the foreseeable future is still up in the air. According to AQHA President Johne Dobbs,

    We will meet with our legal counsel and executive committee regarding our appeal options in continuing to fight for our members’ rights and announce our decision in that regard in the near future.

    The plainitffs in the case have requested injunctive relief, in which they have asked the court to order the AQHA to register their cloned horses.  They have also requested that the court order the AQHA to pay at least a portion of their legal fees.  A hearing on the injunctive relief and fees request has not yet been held.  The jury’s verdict has not been reduced to a final judgment, nor has the court issued an opinion in the case at this time.  

    Case InformationAbraham & Veneklasen Joint Venture, et al v. American Quarter Horse Association; Cause No. 2:12-CV-00103-J in the U.S. District Court for the Northern District of Texas (Amarillo Division)

    Related Post

    Federal Lawsuit Alleges AQHA Cloned Horse Registration Policy Violates Antitrust Law



  • Court Affirms Judgment Allowing Boarders to Move Horses Due to Stable Employee's Smoking in Barn -

    On July 18, 2013, the Austin Court of Appeals issued a memorandum opinion affirming in part a trial court judgment which held that a stable employees’ smoking while working in the barn was a material breach of the boarding agreement, allowing several boarders to move out without notice.

    After a boarder saw and photographed a stable employee smoking while working in the barn at Tamara Ramaker’s stables, several boarders removed their horses from the stables. They did not give 30 days notice before leaving, and did not pay for the month after removing their horses as prescribed by their boarding contract with Ramaker.

    The court of appeals upheld the trial court’s decision that the employee’s smoking in the barn was a material breach of the agreement that excused the boarders from further compliance with the boarding contract. In its materiality analysis, the court pointed out that Ramaker agreed when testifying that her “sole job in taking in other’s animals for boarding is to give those animals a safe place to live,” and agreed that “fire is a danger to the care and safety of horses.” Further, Ramaker’s barn rules, which were incorporated into the boarding contract by reference, included the statement, “No smoking in the barns”.  The smoking ban was included in a rule entitled “Safety”. The court found that this general prohibition banned everyone in the barn from smoking, not just the horse owners.

    The court reversed and remanded the remainder of the suit, which had to do with Ramaker’s riding instructor agreement with Amber Ross. Ross had given riding lessons at Ramaker’s stables for the boarders involved in the suit who had left the barn with their horses. Ross’s lessons were covered by a written riding instructor agreement that required Ross to pay a fee when she taught a lesson at Ramaker’s stables. Ross did not pay Ramaker any fees for lessons conducted during March 2009, though there was evidence that Ross gave lessons during that month. The court of appeals reversed the trial court’s decision that Ross did not breach the riding instructor agreement, and remanded that portion of the case to the trial court to determine the amount of fees Ross owed to Ramaker.

    Take Aways:  Owners of boarding stables should take care to ensure that all stable employees, as well as friends and guests of the stable ower, comply with all written rules and regulations prescribed by the stable.  If a stable employee or a guest or friend of the stable owner violates barn rules, boarders may be legally entitled to terminate their boarding contracts immediately under certain circumstances.  This may be true even if the stable's rules do not mention whether or not the stable owners are subject to the rules.

    Case InformationTamara Lynn Ramaker, Appellant v. Jeanette Abbe, Gary Hobbs, Denise Lackey, Shelly Mattson, Stacy McCoy, Anita Paniagua and Amber Ross, Appellees, ---S.W.3d--, 2013 WL 3791491 (Tex. App.—Austin, Jul. 18, 2013).



  • Guest Post: Sixth Circuit Affirms $65 Million Plaintiffs' Judgment in Case Involving Fraudulent Mare-Leasing Scheme -

    The latest case featuring ClassicStar and GeoStar’s mare-leasing scheme featured the defendants leasing out mares they didn’t own and leasing less-valuable quarter horses and misrepresenting them to be Thoroughbred mares. On July 18, 2013, the Sixth Circuit Court of Appeals affirmed a $65 million award to victims of the scheme. In re ClassicStar Mare Lease Litig., --- F.3d ---, 2013 WL 3476220 (6thCir. July 18, 2013). Guest blogger B. Paul Husband wrote about ClassicStar’s litigation with the IRS in 2011.

    In the recent case, a group of investors sued the ClassicStar defendants in federal district court in Kentucky. They alleged that the defendants had violated the Racketeer Influenced and Corrupt Organizations Act (“RICO”) by persuading them to invest in the mare-leasing program in order to profit from various tax deductions. They also asserted common-law fraud and breach-of-contract claims.

    The basic tax concept was that investors would lease a breeding mare for a single season. The mare would be paired with a stallion for breeding purposes, and investors could keep any resulting foals. If investors kept their foals for at least two years before selling them, the sale would be taxed at the lower capital-gains tax rate.

    The district court granted summary judgment for the plaintiffs, ruling that the undisputed facts established violations of the RICO statute, as well as fraud and breach of contract. The Sixth Circuit affirmed, noting that the investors did not know “that the assets which formed the basis of the touted tax deductions were dramatically undervalued and, in some cases, wholly fictitious.” 

    The appellate court made the critical point that, “[a]lthough investors were repeatedly told that they were leasing actual horses, ClassicStar never owned anywhere near the number of horses purportedly being leased.” In other words, the defendants leased out horses they didn’t own or that didn’t exist. 

    The court continued, “[t]o disguise the shortfall and convince investors that they were purchasing interests in actual horses, Defendants substituted less valuable quarter-horses for the Thoroughbreds that were supposed to be part of the packages, and in many cases, simply did not name the horses that investors believed they were purchasing.”

    The Sixth Circuit affirmed the award of $49.4 million plus $15.6 million in prejudgment interest. The damages were three times the amount of the plaintiffs’ investments, as treble damages are available under the RICO statute. Collecting the judgment, however, may be complicated by ClassicStar’s bankruptcy and extensive other litigation against ClassicStar.

    About the Author:   Toby Galloway is a partner in the Fort Worth office of Kelly Hart & Hallman LLP.  Before joining Kelly Hart, he served as an attorney for the United States Securities and Exchange Commission (the "SEC") for over 11 years.  Find Toby's full biography here.



  • Petition For Review Denied in Hilz v. Riedel -

    Today, the Supreme Court of Texas denied review in Hilz v. Riedel, a Fort Worth Court of Appeals decision reversing a summary judgment granted pursuant to Chapter 87 of the Texas Civil Practice & Remedies Code. 

    As such, the Fort Worth Court of Appeals' opinion will stand and the case will proceed to trial on remand to the trial court.

    A detailed discussion of the Fort Worth Court of Appeals' opinion is contained in this prior post.



  • Equine Law Webinar Archive Now Available -

     

     

    In case you missed our webinar entitled "Top Three Things that Cause Equine Litigation and How to Avoid Them," you can still view the entire archived webinar which can be accessed by following this link

    If you did not previously register for the webinar, you should be able to access the webinar with the above link after filling out the quick registration questionnaire.

     Have a great weekend!



  • Cat Breeder Jim Smith Explains Evils of Texas Puppy Mill Bill In Response to Texas Tribune Article -

    Audrey White of the Texas Tribune authored this news story concerning the federal lawsuit over the Texas Puppy Mill Bill. The article reports that the Humane Society of the United States and the Texas Humane Legislation Network filed an amicus brief in the suit supporting the Bill.

    The story contains a quote from a representative of the Humane Society’s Texas Branch, as well as some quotes from two breeders who are not involved in the lawsuit. Neither of the breeders quoted in the article expressed the due process concerns raised by the plaintiffs in the suit.

    With respect to the plaintiffs, the article states, “calls to plaintiffs in the case were not immediately returned.”

    Jim Smith, a cat breeder and one of the plaintiffs in the case, posted this response in the comments section of the online article this morning. According to Smith,

    I am one of the plaintiffs in the Puppy Mill and Kitten Mill case. I was called by Ms. White and asked for comments, but I told her that because there was legal actions pending, I needed to clear things with my attorney first. He told me that there was no reason why I couldn't address the issues, so I called Ms White back (several times), got no answer, and she never returned my call. I called her back within an hour or two of her call.

    Mr. Smith went on to explain his due process concerns, saying,

    There are several reasons why this is bad law. First and foremost, even a meth dealer or porn publisher is afforded more rights under Texas Law than a Kitten or Puppy Breeder. The law is written in such a way that agents from the Texas Department of Licensing and Regulations can enter my property, with or without me being present, enter my private residence, confiscate my computer, files or other property, or my animals simply on their own recognizance. They do not need a warrant, and there is no oversight by any actual law enforcement agency or court. Once they seize my animals or property, there is no appeals process developed for me to protest their actions. The TLDC can also employ "Third Party Inspectors", such as members of Animal Rights organizations to do these functions for it.

    Smith also hinted that legislation of this nature could eventually effect the equine and ranching industries, stating,

    HB 1451 is part of a nationwide push by animal rights organizations to deny us the ability to keep pets, have horses and ranching, rodeos and many other traditional Texas activities because it offends their vegetarian and vegan beliefs. It's their attempt to enforce their personal and religious beliefs on the rest of us.

    Horse breeders, what do you think of the new Puppy Mill Bill? I welcome you to post your thoughts and insights in the comments section to this post.



  • Kelly Hart to Host Free Equine Law Webinar -

    On December 6, 2012, we will be putting on a free equine law webinar for clients and potential clients involved in the horse industry. Details are below.

    Title: Top Three Things That Cause Equine Litigation & How to Avoid Them

    Date: Thursday, December 6, 2012

    Time: 12:00PM to 1:00PM CST

    Those who wish to participate should click on this link to pre-register: Pre-Register for Webinar

     

    Photo:  My husband Rick and I at Santa Anita for Breeders' Cup 2012



  • Fort Worth Court of Appeals Partially Reverses Final Judgment in Whitmire v. NCHA -

    Yesterday, the Fort Worth Court of Appeals reversed and rendered in part and affirmed in part the judgment of the 236th District Court of Tarrant County, Texas in Whitmire v. NCHA. 

    In the underlying suit, the jury returned a verdict for Lainie Whitmire for $70,000 in damages for breach of oral contract and $0 in damages on her false imprisonment claim. Lainie requested that the trial court enter judgment in accordance with the jury’s verdict and also requested attorneys’ fees for prevailing on her breach of contract claim.

    On motion of the NCHA, the trial court entered a judgment notwitstanding the verdict (JNOV), holding that Lainie take nothing on her breach of oral agreement claim and awarding her no attorneys’ fees. The final judgment also ordered that the NCHA recover $302,000 in attorneys’ fees from Lainie and $45,000 in attorneys’ fees from her husband, Ray.

    The Whitmires filed a timely notice of appeal.

    A panel of the Fort Worth Court of Appeals, consisting of Dauphinot, Walker, and Gabriel, JJ., held on appeal that the trial court erred by disregarding the jury’s findings that the NCHA breached an oral agreement with Lainie and that Lainie sustained $70,000 in damages as a result. The court of appeals reversed that portion of the judgment and rendered judgment in favor of Lainie for $70,000. 

    The court of appeals also sustained the Whitmires’ issue on the NCHA’s attorneys’ fees, and modified the trial court’s judgment to delete the NCHA’s recovery of attorneys’ fees of $302,000 from Lainie and $45,000 from Ray. The court of appeals affirmed the remainder of the judgment.

    Case InformationWhitmire v. National Cutting Horse Ass’n, No. 02-11-00170-CV, 2012 WL 4815413 (Tex. App.—Fort Worth, Oct. 11, 2012, no pet. h.).

    Related post

    NCHA Litigation Update: NCHA Wins Again



  • Texas "Puppy Mill Bill" Challenged in Federal Court -

    The constitutionality of the hotly-contested “Puppy Mill Bill” passed in the 2011 Texas Legislature has been challenged in a federal suit filed in Austin on October 1, 2012.  A copy of the complaint can be downloaded here.

    The new law, commonly referred to as the “Puppy Mill Bill”, was passed as HB 1451 and codified as Chapter 802 of the Texas Occupations Code . The title given to the codified act is “The Dog and Cat Breeders Act”. As part of the Act, the Texas legislature charged the Texas Department of Licensing and Regulation with the task of creating a regulatory and licensing scheme for dog and cat breeders in Texas. The rules related to the Act are set forth in Title 16, Texas Administrative Code, Chapter 91.

    The plaintiffs in this week’s suit challenging the Act and related rules include Responsible Pet Owners’ Association Texas Outreach Inc.; Teresa Arnett, a Boston Terrier breeder in Rosansky; Sharleen Pelzl, a cat breeder in Dripping Springs; and James Smith, a cat breeder in Georgetown. The plaintiffs are represented by Steven Thornton of the firm of Westerburg & Thornton, P.C. in Dallas.

    Could horse breeders be the next target of "Puppy Mill Bill" type legislation?

    Included among the plaintiffs’ complaints about the “Puppy Mill Bill” and related rules are the following:

    ·       The Act allows inspectors to enter breeders’ facilities without a warrant. 

    ·       The Act allows inspectors to enter the private residence of a breeder without first obtaining a warrant.

    ·       The Act exempts dogs bred primarily to be used for purposes such as herding livestock, hunting, field trials, and other performance events. But the Act does not give a reason for a disparate treatment of breeders of different types of dogs, nor does it specify whether it is the intent of the breeder or the end purchaser that controls the analysis.

    ·       The Rules allow applications for breeders’ licenses to be denied with no possibility of appeal.

    ·       The Rules related to licensure of breeders require the successful completion of a “criminal background check.” However, the Rules do not specify what constitutes successful completion.

    Animal cruelty and animal neglect have been illegal in the state of Texas for a long time. Some question why Act was even necessary, while others view the Act as nothing more than a vehicle to allow rescue groups (with the help of the authorities) to enter property of others and seize animals without a warrant. I believe that if such regulations are allowed to stand, it is only a matter of time before the animal welfare lobby will push for similar regulations applicable to horse breeders.

    DVM News Magazine and others have expressed reservations about the “unintended consequences” of “puppy mill laws” passed in other states.  And just this morning, some pure bred dogs were abandoned in a rural area near Flower Mound around 1:00 AM. Some have suggested that the “Puppy Mill Bill” is to blame because these new laws are so draconian that no commercial breeder is able to comply with them.

    Updates will be posted as this case progresses.



  • Honky Tonk Prevails in Mechanical Bull Injury Case -

    Are your liability release contracts sufficient to sustain a successful motion for summary judgment? Texas courts generally hold releases of liability to fairly high standards. Release cases are very fact specific, and often come down to extremely technical points about the contents of the release document. As such, the proper drafting of these contracts is a must. A recent case gives us a glimpse into how Texas courts interpret liability releases.

    A man by the name of Revel Thom decided to ride the mechanical bull while he was hanging out at Rebel’s Honky Tonk, a country bar on 5th Street in Austin. Before riding the bull, Mr. Thom signed a document entitled “PARTICIPANT AGREEMENT, RELEASE AND ASSUMPTION OF RISK.” The release had Thom acknowledge the risks of riding the mechanical bull, disclose any pre-existing health conditions, and release and indemnify Rebel’s and related parties. 

    Unless you're Ty Murray, don't expect to stay on one of these things...especially if you've been drinking!

    However, Mr. Thom failed to inform the mechanical bull operator that he had suffered from chronic back pain for four to five years requiring him to receive annual epidurals to numb the pain. Mr. Thom fractured his T-12 and L-1 vertebrae in his back as a result of being bucked off the mechanical bull. Thom subsequently sued Rebel’s Honky Tonk for his injuries. 

    The honky tonk filed a motion for traditional summary judgment, arguing that they conclusively established the affirmative defenses of release and assumption of the risk. The honky tonk also sought a no-evidence summary judgment on Thom’s claims of negligence and negligent supervision. The trial court granted the honky tonk’s motion for summary judgment without stating the basis for its ruling.

    Overruling all of Thom’s points of error, the Austin Court of Appeals affirmed the trial court’s dismissal of Thom’s case on summary judgment. 

    The court of appeals found Thom’s argument that he did not read the release to be unconvincing, stating,

    It is well established that one is presumed to know the contents of the contract that they are signing and are bound by its legal effects.

    The court of appeals also found that the release language was sufficiently conspicuous, because the release was contained in a stand-alone document, was not written in minuscule font, and contained bolded and underlined warnings.

    The language listing Rebel’s Honky Tonk and its “owners” as released parties was upheld by the court of appeals to be specific enough to release additional defendants Rainbow Cattle Company, Inc. (the honky tonk’s owner) and Zack Truesdell (Rainbow’s president). The court found the the case cited by Thom inapplicable, as the release at issue in that matter purported to release an “unlimited, general class of potential defendants.”

    Hat tip to Nick Farr over at Abnormal Use for the heads up on this case.

    Case Information:

    Thom v. Rebel’s Honky Tonk, No. 03-11-00700-CV, 2012 WL 3793181 (Tex. App.—Austin, Aug. 30, 2012, no pet. h.)



  • Supreme Court of Texas Denies Petition for Review in Young v. McKim -

    Last Friday, the Supreme Court of Texas denied Brenda Young’s petition for review. The 14th Court of Appeals’ holding that Chapter 87 can immunize defendants against suits brought by independent contractors will stand. 

    The Court’s notice regarding the denial of the petition for review can be downloaded here.

    The Supreme Court did not give a reason for denying the petition. One reason could have been that the Court found no reversible error in the 14th Court’s opinion. As such, the denial may be yet another indication that the Supreme Court agrees with me and other practitioners who believe Chapter 87 applies to suits brought by workers (both independent contractors and employees), subject to its exceptions.

    As far as I know, no court of last resort in any state has ever taken up the issue of whether an equine or farm animal immunity statute applies to suits brought by workers.

    Related Posts:

    Young v. McKim Appealed to Supreme Court of Texas

    Texas Supreme Court May Be Inclined to Grant Chapter 87 Immunity to Employers

    Another Appellate Court Holds Chapter 87 Immunity Act Applies to Suits Brought by Independent Contractors



  • Horse Business Found Liable for Unpaid Employment Taxes -

    Do you withhold payroll taxes from your farm help’s wages? A recent tax case illustrates the bad things than can happen when a horse business incorrectly calls its farm workers “independent contractors”, and fails to withhold payroll taxes from their wages.

    Are your farm workers really independent contractors?

    Case Background:

    Twin Rivers Farm, Inc., a Tennessee S Corporation, was engaged in the business of raising, training, and showing horses for anticipated sale or lease.

    Twin Rivers hired Adam Lopez Morales and Nallhelyo Ruiz (workers) to work on the property where it ran its horse business. Morales and Ruiz lived in a trailer on the property and did not pay rent during the three years at issue in the case.

    Morales and Ruiz’s primary job duties included: cleaning stalls, the barn area, the barn offices, the restroom, and the tack room; grooming horses; watering the horses; and moving the horses between pastures. The workers also occasionally fixed fence and mowed.  The equipment Morales and Ruiz used to perform their job duties was owned by Twin Rivers.

    Twin Rivers paid both workers by check, with Morales receiving $300 per week, and Ruiz receiving $150 per week. With respect to the years at issue, Twin Rivers did not make deposits of employment tax, nor did it file Forms 1099 with respect to the workers.

    Holding:

    Over farm owner Diana Militana’s objections, the court found that Morales and Ruiz were employees of the farm and not independent contractors. As a result of the farm's misclassification of the employees, the court found Militana liable for approximately $30,000 in unpaid employment taxes and penalties for a three year period.

    Case Info

    Twin Rivers Farm, Inc. v. Commissioner; T.C. Memo 2012-184; Docket No. 14074-10 (July 2, 2012)

    Related Posts:

    Employee v. Independent Contractor: Pitfalls of Misclassification (Part 1)

    Employee v. Independent Contractor: Pitfalls of Misclassification (Part 2)



  • Divorce Case Illustrates Importance of Accurate Equine Valuation Methods at Trial -

    A Lubbock County district court held that approximately 130 head of horses it allocated to the husband in a divorce action were worth $520,000. The husband disagreed.

    The husband, Robert “Greg” Collier, objected to the court’s valuation at trial and in two separate appeals of the divorce decree. According to Greg, the trial court’s allocation of $520,000 worth of divorce assets to him in the form of the horses was an abuse of discretion, because the horses were actually worth far less than that amount. Despite Greg’s objections, the Amarillo Court of Appeals did not find that the trial court abused its discretion with respect to its valuation of the horses.

    When the honeymoon's over, can you prove the value of your horses with reasonable certainty?

    According to the court of appeals, the trial court seems to have based its valuation on an "appraisement and inventory" proffered by the wife, Leanne Farrell Collier. Leanne alleged that Greg possessed "approximately" 130 head of quarter horses that could sell for between $200 at a livestock auction to $7,500, if sold privately with a little training put into the horse. 

    The trial court apparently multiplied the number of horses (130) by one of Leanne’s estimates of what the horses could be sold for ($4,000) to arrive at the $520,000 figure.

    Though the court of appeals noted that Greg’s testimony was more specific and “would support a different valuation”, Greg’s testimony was similar to Leanne’s in that it was full of estimates and guesses. At the end of the day, the evidence Greg used to support his objections to Leanne’s valuation was not specific enough for the trial court.

    Because neither party provided the trial court with specific information regarding the number of horses owned by Greg, the trial court was left in a position of assessing the credibility of the parties’ estimated values. 

    How could Greg have avoided this dilemma? The parties could have kept better books and records with respect to the number of horses owned by the couple and related business entities. Furthermore, Greg might have retained a professional equine appraiser to determine the true value of the herd.  A well-researched independent third-party appraisal is typically given more weight than the estimates and guesses of interested parties.

    Well-founded appraisals are invaluable not only in divorce matters, but in any lawsuit where a horse’s value is at issue.

    Related Cases:

    In the Matter of the Marriage of Leanne Farrell Collier and Robert Greg Collier and in the Interest of R.C.C., a Child, No. 07-12-00084-CV, 2012 WL 3762475 (Tex. App.—Amarillo, Aug. 30, 2012, no pet. h.)

    In the Matter of the Marriage of Leanne Farrell Collier and Robert Greg Collier and in the Interest of R.C.C., a Child, No. 07-09-00146-CV, 2011 WL 13504 (Tex. App.—Amarillo, Jan. 4, 2011, no pet.)



  • Why Banning Horse Slaughter is Such a Terrible Idea -

    Author’s Note: This post is purely editorial in nature. The views expressed in this post are 100% mine. I have not canvassed my clients or the other members of my firm to get their take on horse slaughter, nor do I intend to do so. My views are not necessarily the views of my clients, my firm, or the other lawyers who practice at my firm.

    First off, I cannot express in words how much I detest the word “ban.” I dislike it so much that I wish Merriam-Webster would take it out of the dictionary. Why? Because “it ought to be banned!” has become the battle cry of the self-righteous busybodies, some of whom are multi-million dollar concerns, and others who are just individuals who have far too much spare time on their hands. The do-gooders who relish the phrase “it ought to be banned!” are known to meddle in other people’s business, usually with the goal of using our government to force their will upon us, their fellow citizens. 

    Photo:  A horsemeat sandwich, as served by street vendors in Venice, Italy

    Let’s for a moment put the word “ban” in perspective. Killing people is not “banned” in the United States. Our citizens may kill another person in self-defense. Police officers and members of our Armed Forces may kill people, and do so regularly. Similarly, the use and distribution of powerful, addictive narcotics is not “banned” in this country. Doctors administer and prescribe opioids and other powerful drugs daily. Yet some people think there out to be an outright “ban” on horse slaughter in this country. 

    The road to Hell is paved with good intentions. That's about where we’re headed if our federal government kowtows to the radical powerful anti-horse-slaughter lobby, and enacts an outright prohibition of horse slaughter.

    Unintended Consequences of the Closure of the U.S. Plants

    To generally summarize this June 2011 Government Accountability Office report, the horse market tanked after the closure of the U.S. horse slaughter plants in 2007. The GAO gave multiple reasons for the decline—including the drought and the economy, but the cessation of domestic slaughter was clearly indicated as a factor in the report. Veterinarians surveyed by the GAO reported that horse welfare declined across the board, with a 50% or greater increase in abandonment and neglect cases in some states. The nationwide capacity of horse rescue facilities is about 6,000 head of horses, and the vast majority of these are already full. Legislative prohibitions on using federal funds for inspecting horses prior to slaughter impede USDA’s and APHIS’s ability to oversee the transport and welfare of U.S. horses intended for slaughter. The number of horses shipped to Mexico and Canada for slaughter increased by 660% and 148%, respectively, after the closure of the slaughter plants. This resulted in total distance travelled by slaughter horses to increase by approximately 200 miles. Once a horse crosses the border into Canada or Mexico, APHIS no longer has authority to oversee their welfare, and our laws related to the humane slaughter of animals no longer apply.

    While some anti-slaughter advocates place blame on market forces and irresponsible owners, PETA generally agrees with the GAO’s conclusion that horse suffering has increased due to the closure of the slaughter plants. But what is PETA’s answer? “Let’s ban horse slaughter…and let’s also ban the export of horses to other countries for slaughter!” There is certainly a lot of banning going on with this seemingly untenable position. 

    Flawed Logic

    I never understood why is it suddenly inhumane to slaughter a horse, but not other mammalian livestock such as a pig, cow, or sheep.  One reason opponents give is that horses are "pampered", and are used to being treated as pets.  Even if this were true of all horses, what of the FFA and 4-H show animals that go to slaughter each year?  There is no outcry to ban the slaughter of these animals.  Further, it is also puzzling to me that the majority of people who believe horse slaughter is barbaric support abortion in humans.

    Fact: there is an unwanted horse problem in this country. There are simply some horses who are not adoptable—perhaps because they are dangerous, or perhaps because the cost to “repurpose” them and care for them throughout their life far outweighs their potential usefulness to humans. Some anti-horse-slaughter advocates outright deny the unwanted horse problem. They argue that virtually every horse is adoptable, and that the ones who are not adoptable should be euthanized by a veterinarian and disposed of properly.  Some statistics on the high cost of euthanasia and proper disposal have been published here.  In general, anti-slaughter advocates are short on pragmatic or realistic solutions to the unwanted horse problem.

    If virtually all horses were adoptable, there would be no need for horse slaughter. The U.S. slaughtered approximately 105,000 horses in 2006, the last full year the Texas and Illinois plants were operational. See GAO report at 8. This is a manageable number, especially when you look at the amount of money that has been poured into the “horse slaughter ban” efforts. The Humane Society of the United States, which is just one of the many animal rights advocacy groups in this country, had approximately $150 million in revenue for 2010 alone. These numbers, on their face, seem to indicate that the HSUS could have, possibly single-handedly, rehomed those horses that were adoptable, and caused those that were not adoptable to be euthanized and properly disposed of. Meanwhile, the HSUS has paid lawyers and lobbyists untold amounts to promote its political agendas such as a federal ban on horse slaughter and horse export for slaughter.  

    According to this HSUS publication, horse slaughter was costly to taxpayers. But even if the slaughter companies paid all costs associated with horse slaughter through a fee-for-service program or the like, HSUS says it should still be banned. But the HSUS has not published estimated figures on what it would cost our taxpayers to enforce their proposed ban on the export of horses for slaughter. It is common knowledge that we cannot even control the movement of illegal immigrants or illegal drugs across our borders, and we’re spending millions of taxpayer dollars on those efforts. Also, the HSUS is silent on the amount of domestic revenue and jobs that were lost when the slaughterhouses shut their doors.

    Obstacles to Re-Implementation of Horse Slaughter in the U.S.

    If I were an investor looking to put up the capital to build a new horse slaughterhouse in this country, I would first determine solutions to the serious economic and political hurdles currently facing this industry in the United States. Namely,

    ·       New European Union regulations that will become effective on July 31, 2013 will require all non-EU countries to provide lifetime medication records for all horses entering the EU food chain. Furthermore, horses that have been given certain commonly-used drugs, such as phenylbutazone, must be excluded from the EU food chain.

    ·       The threat of domestic terrorism on the slaughter facilities by animal rights activists. If you do not believe this problem exists, a federal law was enacted to address the issue.

    ·       The possibility of future legislative changes that may directly or indirectly hinder operations. The federal government has already pulled the rug out from under the slaughterhouses once. There’s no telling whether they’ll do it again.

    ·       The ever-presence of the shrill, combative, mostly female anti-slaughter advocates who will stop at nothing to turn public opinion against the slaughterhouses, no matter where they decide to set up shop. If you do not believe these women exist, I urge you to do a Google search for “horse slaughter”, or check out some of the comments to this previous post.  While the presence of these "hecklers" is really nothing more than an annoyance, the unwitting or naive in local communities sometimes give in to them---if for no other reason than to shut them up.

    Conclusion

    If the European Union no longer wants our horsemeat, and the Asian or South American demand is not enough to sustain the industry, the free market economy will bring an end to horse slaughter. The anti-slaughter advocates agree—indeed, this is the only real economic issue they have latched onto. But if this is something that will go away on its own, why do we need a ban? Your guess is as good as mine. I would think that given the amount of money and time the anti-slaughter camp has spent to bring about anti-slaughter legislation, they can’t stop now. It would be unthinkable to them that they threw away millions trying to force their will upon us, instead of using their time and money to save the adoptable horses that either died of neglect or were inhumanely butchered in Mexico as a result of their efforts.

    It is a myth that horse suffering has decreased now that slaughter is no longer an option. I applaud organizations such as the self-sustaining equine sanctuaries and rescues, veterinary associations, and the Unwanted Horse Coalition for doing what they can to reduce the amount of unwanted horses. If we want to improve horse welfare, we should be spending our time and money helping these organizations help horses—not on political agendas. 

    And if we must regulate the industry, let’s keep regulating horse transportation and institute methods of humane slaughter such as those proposed by Temple Grandin for the cattle industry. But we can only control how horses are treated as long as we allow them to be slaughtered within our borders.

    Jane Smiley, contributor to the New York Times Horse Racing Blog, may have put it best when she said:  

    We must recognize that there is a market for horse meat (not only for human consumption, but also for zoo and circus-animal consumption) and that in a starving world, a source of protein should not go to waste for sentimental reasons. It is sentimentality that has resulted in profounder cruelty to our horses - because we don’t accept that they are animals and have a utilitarian purpose, we hide from what happens to them, and so what happens to them happens in secret.

    Related Posts

    Current Status of Federal Laws Affecting Horse Slaughter

    Legal Background of Horse Slaughter in Texas



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