NON-RESIDENT ALIEN IMMIGRANT HORSES: MEAT ON THE BONE

          My March 29, 2013, blog article captioned "Importing Horses into the United States of America" included the following text:

If you are the buyer/importer and you totally trust the exporter/seller, and you are satisfied that as to each, your word is your bond, you may some day be the proud owner of a horse imported into the United States which is euthanized by the United States Department of Agriculture because it harbored a prohibited disease. At least try to take pictures of the horse while it is vital and breathing, something to cherish. But if you are even slightly anal, do due diligence. Identify the diseases endemic to the area from which your target horse originates. Understand which of the diseases are treatable and which are not. Have thorough and complete testing done, and make sure the purchase contract does not become binding unless the horse gets a clean bill of health. Find out who will be doing the testing and certification, and decide whether you are willing to trust the results. Check out each link in the logistics chain from start to finish. Make sure there is no chance of infection or re-infection resulting from a contaminated link in the logistics chain. And then hold your breath. And when you start breathing again, mount up and ride, Ladies and Dudes.

          In September of 2014 I received documentary materials from the Animal and Plant Health Inspection Service of the United States Department of Agriculture in response to my earlier Freedom of Information Act request. I sought documentation regarding the importation of horses from abroad into the United States through the port of Miami, Florida during calendar year 2013. For those who are interested, I now share with you some of the findings.

          One thousand nine hundred forty horses entered into the United States through Miami in 2013. The dominant geographic area of origin was Western Europe. The dominant breed classification was "warmblood". No horses coming through Miami were identified as originating in Africa, the Middle East, Asia, Russia or Australia. Almost none of the horses were identified as originating in Eastern Europe. I am seeking from APHIS documentation as to foreign horses entering through Los Angeles in 2013.

          With the exception of Argentina, almost no horses were identified as originating in Latin America or the Caribbean. There is some indication that Argentina successfully exports into the United States polo ponies.

          My conclusion from the data is that the horses which came into Miami were of sufficient value to justify the underlying transactions and represent considerable dollar value in the aggregate. I expect that the results from the data on entries in 2013 through Los Angeles likewise will show scarce representation of horses from Africa, the Middle East, Asia, Russia or Australia. And I suspect that the overriding explanation for the lack of imports from those regions of the world is directly related to the presence of endemic equine disease which would result in positive testing at APHIS facilities for diseases which would bar the entry of horses from many of those regions upon their arrival in the Unitted States.

          As a consequence of inhibitions to commerce arising from probable positive test results upon arrival in the United States, some of the most beautiful and desirable horses living on this planet can be found in only symbolic numbers in the United States, horses such as the Marwari from India, the Akhal-Teke from Turkemenistan, the Criollo from Chile and Brazil, and even different categories of Paso Fino, in general well represented in the U.S., from some countries in the Western Hemisphere.

          Beyond those more or less exotic breeds, it seems likely that some of the finest Arabian and Thoroughbred bloodstock will never achieve entry into the United States because of the presence of equine disease in their countries of origin.

          In the year 2013 eight horses were denied entry into the USDA/APHIS facility in Miami having tested positive for equine piroplasmosis. One international equine transportation company is identified as the importer. One of the horses was a warmblood gelding from Germany, five are identified as mares from the Netherlands, one is listed as a mare from the UK, and one is listed as a mare from Ecuador.

          Eight horses rejected vs. one thousand nine hundred forty arrivals. Not bad, right? Unless you had skin in the game and the horse associated with your transaction was returned to its country of origin at considerable expense or euthanized and plans and dreams died at the port of Miami.

          I hope to clarify whether or which of the eight horses were shipped back or euthanized. But what concerns me is, how could this happen? Who dropped the ball? Who was responsible? How were any of these horses able to get on a plane in a foreign country and arrive in the United States with failure awaiting?

          The answers to those questions are not necessarily available through a Freedom of Information Act request and I do not expect identifiable involved parties to voluntarily provide the answers. So trust, but verify. And go back and read my March 29, 2013, blog article captioned "Importing Horses into the United States of America".

Until next time: Mount up, Ladies and Dudes!

Gary

INTERIM LEGAL ADVICE

My last blog was a hypothetical scenario involving thoroughbred horses actively racing, a trainer, an owner, and liens. As we wait with baited breath on the analysis of legal solutions for the trainer’s concerns, this brief note is intended to provide some immediate sound legal advice to those already involved in the equine industry and to those who wish to enter the business.

Advice:

Due diligence: be familiar with all of the physical characteristics of the male horse you think might be a good boyfriend for your mare whose clock is ticking.

Follow up:

Look up the word "gelding" in the dictionary.

Never BUY breeding rights to a gelding. This can lead to heartbreak. And even if the male horse can sing all of the tenor parts, he will produce no offspring that can sing in the choir.

Never SELL breeding rights to a gelding. This can lead to very bad food and having to share an exercise yard (and less ample facilities) with people not known previously to you.

It’s the law.

Mount up, Ladies and Dudes

                                                           Gary D. Malfeld

Equine Law Hypothetical

    Studds Croe Bateman is an established thoroughbred race horse trainer.  Colts, fillies and mature horses trained by Studds have won major stakes races at major tracks from Saratoga down through the East Coast tracks; Kentucky, Southern California and South Florida.  Studds has a team of assistant trainers, exercise and stable personnel that deal with every physical and emotional need of horses under his care and tutelage.

    Studds has been accused of doping, of using prohibited chemicals to enhance the performances of his charges, but has avoided suspension by various racing commissions through intervention and dazzling representation by Charles Haas, considered by many to be the top lawyer in legal aspects of the racing industry.

    Two years ago Studds signed a trainer deal with oil billionaire Sheikh Ben Abu Ben Ben to care for, train and campaign seven of the Sheikh’s most promising two and three year olds (not always the same seven horses at any given time).  The Sheikh is a national of Saudi Arabia but lives most of the time in Dubai. The agreement between Studds and Sheikh Ben Abu Ben Ben requires the Sheikh to pay Studds top dollar for feed, care, stable, grooms, transportation and all other aspects of Studd’s duties with the exception of training fees for which Studds is to receive 15% of all winnings.   It is a three year agreement with earlier termination provisions agreed upon.   Most of the understanding between owner and trainer originally was oral, but there are email exchanges which confirm many key aspects of the commitments of each to the other. 

    Three weeks  ago, in a surprise move, the Sheikh removed physical custody and control of his horses from Studds and turned them over to another trainer.  At the time of the surprise move there were roughly $279,000,00 in invoices submitted by Studds to the Sheikh which remain unpaid independent of any share of winnings to which Studds may be entitled.  There is a dispute between the Sheikh and Studds regarding accounting procedures to be followed in determining Studds’share of winnings.   During the first few months of their joint activities the Sheikh paid Studds $27,375.00 as his share of winnings, which Studds accepted while reserving the right to confirm actual amount to which he is or may be entitled after computation issues are resolved.  The Sheikh has made no further payment of winnings to Studds although the horses being trained by Studds have enjoyed varying degrees of success over time.

    The horses which were under Studds’ care and tutelage are stabled at Gulfstream Park located in Hallandale Beach, Broward County, Florida.  Sheikh Ben Abu Ben Ben will be visiting in Broward County, Florida for the next three weeks.


    Bateman has decided to proceed with a lawsuit against the Sheikh to recover $279,000,00 in invoices plus interest, and to seek from the Court an accounting as to how much Bateman is entitled to as his share of purses won and any other damages of any kind a skilled lawyer might recover for him.



    The fact pattern may be of interest to  a lawyer or lawyers and business people in the racing industry.  There are layers of questions for which there must be layers of answers.  Here are some of the considerations, the relevance of which are of greater or lesser significance:

    Bateman has a series of practical problems.  First, the person who owes the money to Bateman is a citizen and resident of another country.  Bateman does not know where the Sheikh keeps his major assets.  Even if Bateman wins a judgment against the Sheikh, Bateman has to find wealth that a court judgment can reach and be acted upon in a way that puts money in Bateman’s pocket.  Otherwise, Bateman will end up eating the Big Enchilada and the Big Enchilada will be purely symbolic with no nutritional benefit to Bateman.  So where are the assets?

    Well, there are seven horses owned by the Sheikh living in stables in Gulfstream Park.  The horses have value.  Seeking to execute a judgment upon them is a good place to start.  But in a few days the horses will be shipped to another location outside of Florida.  Then what?  The Empty Enchilada.  So the horses have to be kept in Florida.

    The Sheikh will be leaving.  It would be most convenient and reassuring to sue the Sheikh while he is in Florida and serve the lawsuit upon him while he is in Florida.  Then Bateman will have some leverage.

    What law, whose law, applies?  There are laws sometimes known as Agisters’ Liens which provide that those who care for livestock can impose liens on the livestock so that sale of the livestock can be a source of some recovery for the lienholder.  Bateman has cared for the seven horses through several states, and the lien laws of not only Florida, but New York, Maryland, Kentucky, California, and perhaps elsewhere may apply to different time periods corresponding to the care and maintenance of the horses as to each separate state.  So Bateman is faced with proving that he is entitled to enforce liens from distinct laws which may be similar but not identical among them..  And the court where the lawsuit is filed has to be able to follow those laws.

    Within Florida itself there are two lien laws with possible applicability to Bateman’s situation.  Florida Statue 713.65 provides for liens for care and maintenance of animals, in favor of all persons feeding or caring for the horse or other animal of another, including all keepers of livery, sale or feed or feed stables, for feeding or taking care of any horse or other animal put in their charge; upon such horse or other animal. 

    Florida Statute 713.66 provides for liens for feed, etc., for racehorses [and] polo ponies . . . . in favor of any person who shall furnish corn, oats, hay, grain or other feed or feedstuffs or straw or bedding material to or upon the order of the owner, or the agent, bailee, lessee, or custodian of the owner, of any racehorse [or] polo pony. . . for the unpaid portion of the price of such supplies upon every racehorse [or] polo pony . . . which consumes any part of such supplies. All racehorses . . . of such owner which are accustomed to consume supplies of the character delivered, which are at the time of the delivery of such supplies upon the premises to which delivery is made, shall be deemed prima facie to have consumed such supplies. Such lien shall remain valid and enforceable for a period of 1 year from the dates of the respective deliveries of  such corn, oats, hay, grain, feed or feedstuffs, or straw; and such liens are to be enforced in the manner provided for the enforcement of other liens on personal property in this state. Said liens shall be superior to any and all claims, liens and mortgages, whether recorded or unrecorded, including, but not limited to, any lessor’s or vendor’s lien, and any chattel mortgage, which theretofore may have been or thereafter may be created against such racehorse [or] polo pony or race dog, and to the claims of any and all purchases thereof.





    Statute 713.65 requires that the animal be put in the charge of the lienor, which in this instance would be Bateman.  But Bateman’s  care and charge of the horses was terminated by the Sheikh, and Bateman did not take timely action to enforce his lien as a possessory lien, placing in doubt his ability to enforce an essentially possessory lien. 

    With regard to any indebtedness by the Sheikh to Bateman arising from the presence of the race horses in Florida, Florida Statute 713.66 would appear to have usefulness to Bateman in seeking recovery of the amounts owed to him by the Sheikh.

    And then there are the lien provisions of several other states which must be confronted and understood by Bateman if he is to have some level of dominion over all of the legal issues which he confronts.

    Bateman has a major concern in securing in Florida economic resources owned by the Sheikh which will be available to Bateman should he be successful in winning the lawsuit.  The horses most likely will be moved to another location far from the reach of Florida courts, either State or Federal, and might even be exported outside the United States.

    Bateman might be advised to seek an Ex Parte Temporary Restraining Order With Asset Freeze which will keep the Sheik’s race horses in Florida until such time as the litigation is resolved through settlement or a final judgment.  Achieving that order on race horses is not quite the same as getting an asset freeze on a bank account.  Horses need to be stabled, fed; cared for. And there may be issues as to their participation in races to which binding commitments already have been made.  Who foots the feed and care bill while the horses are detained?

    Will the Court require Bateman to post a bond to protect the Sheikh against loss and damage as a consequence of the horses being treated as frozen assets?  Can the Sheikh post a bond with the Court which would allow the Court to terminate the restraining order while protecting Bateman?

    What Should Bateman’s lawyer, Charley Haas do?  What possible costs, benefits, and potential complications should Haas explain to Bateman?  Which laws should Haas rely upon to make his case and to provide guidelines for his legal initiatives.?

    Tune in next time.

Mount up, Ladies and Dudes

Gary D. Malfeld

Equine Law Hypothetical