Darrell Vienna, Esq. [SBN 173694] LAW OFFICE of DARRELL J

1 Darrell Vienna, Esq. [SBN 173694] LAW OFFICE OF DARRELL J. VIENNA 2 5256 S. Mission Road, Suite 703- 808 Bonsall, CA 92003 3 Telephone: 626.590.9999 Facsimile: 626.470.9973 4 Email: [email protected]

5 Carlo Fisco, Esq. [SBN 166274] Attorney at Law 6 P.O. Box 2554 Culver City, CA 90231-2554 7 Telephone: 310.390.3311 Email: [email protected] 8 Attorneys for Petitioner 9 Mick Ruis

10 SUPERIOR COURT OF THE STATE OF CALIFORNIA 11 FOR THE COUNTY OF LOS ANGELES, CENTRAL DISTRICT 12

13 ) Case No.: RUIS RACING, LLC, ) 14 ) VERIFIED PETITION FOR WRIT OF Petitioner, ) MANDATE AND DAMAGES 15 ) vs. ) 1. Petition for Writ of Mandate and Damages 16 ) (CCP §§ 1085, 1095) CALIFORNIA HORSE RACING BOARD, ) 17 ) 2. Petition for Writ of Mandate and Damages ) (CCP §§ 1094.5, 1095) 18 ) ) 3. Statutory Violation (Govt. Code § 815.6) 19 Respondent. ) ) 20 ) ) 21 ) ) 22 )

24 By way of this petition for writ of mandate and damages, petitioner, Ruis Racing, LLC,

25 (“RUIS” or “Petitioner”) alleges:

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VERIFIED PETITION FOR WRIT OF MANDATE AND DAMAGES - 1

1 INTRODUCTION

2 1. One of the top international news stories in the horse racing industry in 2018 was the

3 victory by the horse “Justify” in the Triple Crown races thus becoming only the 13th horse to do so

4 since the series began in 1875. Justify began his Triple Crown pursuit by winning the Santa Anita

5 Derby at Santa Anita Racetrack in Arcadia, CA on April 7, 2018. What the international racing

6 community did not know was that Justify returned a positive test result for a prohibited substance

7 after the $1,000,000 Santa Anita Derby. The public did not learn of this positive test because the

8 California Horse Racing Board (“CHRB”) decided to keep it secret. Without any public notice,

9 public comment or other standard, mandatory procedures meant to ensure public participation and

10 protection, the CHRB decided, in a secretive, closed session of its Board, to dismiss the matter

11 against Justify and his trainer Bob Baffert. The public had no knowledge of the drug positive and

12 subsequent secret dismissal.

13 2. A year later in September 2019 a story written by racing journalist, Joe Drape,

14 appeared in the New York Times entitled, “Justify Failed a Drug Test Before Winning the Triple

15 Crown.” Drape exposed that a prohibited drug substance, scopolamine, was detected in the urine and

16 blood samples taken from Justify after his win in the Santa Anita Derby. Drape further wrote how

17 the CHRB, upon receiving confirmation of the disqualifying sample, went about hiding and then

18 dismissing the matter against Justify and the trainer, Bob Baffert, without any public disclosure,

19 hearing, comment or participation.

20 The Drape article exposing these facts follows:

22 Justify Failed a Drug Test Before Winning the Triple Crown

23 nytimes.com/2019/09/11/sports/horse-racing/justify-drug-test-triple-crown-kentucky-derby.html Joe Drape, September 11, 2019 24 /// /// 25 /// 26 /// 27 /// 28

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VERIFIED PETITION FOR WRIT OF MANDATE AND DAMAGES - 2

15 On June 9, 2018, a colt named Justify thundered home to the full-throated cheers of a capacity crowd to win the 150th running of the Belmont Stakes and claim horse racing’s 16 Triple Crown, one of the most storied achievements in sports.

18 It was the perfect ending to an improbable journey for a talented horse, his eclectic ownership group, and his Hall of Fame trainer, Bob Baffert. 19 Only a few people, however, knew the secret that Baffert carried with him into the winner’s 20 circle that day: Justify had failed a drug test weeks before the first race in the Triple Crown, 21 the Kentucky Derby. That meant Justify should not have run in the Derby, if the sport’s rules were followed. 22

23 They were not, according to documents reviewed by The New York Times. Instead of the failed drug test causing a speedy disqualification, the California Horse Racing Board took 24 more than a month to confirm the results. Then, instead of filing a public complaint as it usually does, the board made a series of decisions behind closed doors as it moved to 25 drop the case and lighten the penalty for any horse found to have the banned substance 26 that Justify tested positive for in its system.

27 By then, Justify had become just the 13th Triple Crown winner in the last 100 years, and his

28 owners had sold his breeding rights for $60 million.

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VERIFIED PETITION FOR WRIT OF MANDATE AND DAMAGES - 3

14 The jockey Mike Smith, pictured last year at the Belmont Stakes, celebrated his Triple Crown win aboard Justify.Credit...Victor J. Blue for The New York Times 15 16 Only a handful of racing officials and people connected to Justify knew about the failed drug test, which occurred April 7, 2018, after Justify won the Santa Anita Derby. He tested 17 positive for the drug scopolamine, a banned substance that veterinarians say can enhance 18 performance, especially in the amount that was found in the horse.

19 Justify was undefeated at the time, but he still needed to finish first or second in the Santa Anita Derby to qualify for the Kentucky Derby, on May 5. While the colt won at Santa Anita, 20 the failed drug test would mean disqualification and forfeiture of both the prize money and 21 the entry into the Kentucky Derby that came with the victory.

22 None of that happened, though.

23 Test results, emails and internal memorandums in the Justify case show how California 24 regulators waited nearly three weeks, until the Kentucky Derby was only nine days away, to notify Baffert that his Derby favorite had failed a doping test. 25 Four months later — and more than two months after Justify, Baffert and the horse’s 26 owners celebrated their Triple Crown victory in New York — the board disposed of the 27 inquiry altogether during a closed-door executive session. It decided, with little evidence, that the positive test could have been a result of Justify’s eating contaminated food. The 28

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VERIFIED PETITION FOR WRIT OF MANDATE AND DAMAGES - 4 board voted unanimously to dismiss the case. In October, it changed the penalty for a 1 scopolamine violation to the lesser penalty of a fine and possible suspension.

2 Baffert did not respond to multiple attempts to contact him for this article. 3 Rick Baedeker, the executive director of the California Horse Racing Board, acknowledged 4 that it was a delicate case because of its timing. He said regulators moved cautiously 5 because scopolamine could be found in jimson weed, which can grow wildly where dung is present and become inadvertently mixed in feed, and that “environmental contamination” 6 is often used as a defense.

7 “We could end up in Superior Court one day,” he said. 8 “There was no way that we could have come up with an investigative report prior to the 9 Kentucky Derby,” he added. “That’s impossible. Well, that’s not impossible, that would have been careless and reckless for us to tell an investigator what usually takes you two months, 10 you have to get done in five days, eight days. We weren’t going to do that.” 11 The documents reviewed by The Times do not show any evidence of pressure or 12 tampering by Justify’s owners. Horse racing, however, is uniquely insular.

13 The chairman of the California Horse Racing Board, Chuck Winner, owns an interest in 14 horses trained by Baffert. Two other board members employ trainers and jockeys they regulate. 15 Justify’s owners included power brokers in the sport such as Kentucky-based WinStar 16 Farm, owned by Kenny Troutt, a billionaire commercial thoroughbred breeder; the 17 mysterious China Horse Club, whose 200 members from mainland China and beyond have paid $1 million to join; and an equine investment fund with ties to the billionaire investor 18 George Soros. Baffert is America’s pre-eminent trainer. He has won the Kentucky Derby five times. In 2015, he trained American Pharoah, the first horse to win the Triple Crown 19 after Affirmed won in 1978. 20 With Justify, Baffert was faced with a late-developing colt who did not race as a 2-year-old. 21 The last horse to win the Derby without starting as a 2-year-old was Apollo in 1882. 22 As is customary, blood and urine samples from Justify and 34 other horses who competed 23 on the day of the Santa Anita Derby were delivered on April 10 to a lab at the University of California, Davis. 24

25 The lab sent notice on April 18, two and a half weeks before the Kentucky Derby, that Justify had tested positive for scopolamine, which is normally used to treat stomach or 26 intestinal problems, such as nausea and muscle spasms, in humans.

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VERIFIED PETITION FOR WRIT OF MANDATE AND DAMAGES - 5 Horse racing has a long history of trainers’ repurposing drugs in pursuit of a performance 1 edge. Frog and cobra venom, Viagra, cocaine, heart medicines and steroids have all been

2 detected in drug tests.

3 Scopolamine cases have resulted in disqualifications, purse reimbursements, fines and suspensions over the decades. 4

5 Dr. Rick Sams, who ran the drug lab for the Kentucky Horse Racing Commission from 2011 to 2018, said scopolamine can act as a bronchodilator to clear a horse’s airway and 6 optimize a horse’s heart rate, making the horse more efficient. He said the amount of scopolamine found in Justify — 300 nanograms per milliliter — was excessive, and 7 suggested the drug was intended to enhance performance. 8 “I think it has to come from intentional intervention,” he said. 9 Baffert and other trainers in California were well aware that scopolamine was a banned 10 substance and that it could occasionally be found in jimson weed, though the plant’s strong 11 odor and foul taste makes it unappealing. In November 2016, Dr. Rick Arthur, the racing board’s equine medical director, warned horsemen to be alert to jimson weed in their feed 12 and hay, saying that a positive test for the drug is “totally avoidable.”

13 “Now, the likelihood under our current procedures of getting a positive from environmental 14 contamination is rather low,” Dr. Arthur said at the time.

15 On April 20, two days after learning of Justify’s positive test, Dr. Arthur wrote in an email circulated to Baedeker, the board’s executive director, its lawyers and its interim chief 16 investigator that the case would be “handled differently than usual.” He asked for further 17 testing and review of the data.

18 In an interview, Baedeker, speaking on behalf of Dr. Arthur, said he believed Dr. Arthur meant that the investigation had to be thorough. 19

20 Other doping cases have moved swiftly through California’s racing bureaucracy. In March, an employee of a trainer, William Morey, was caught on surveillance giving a prohibited 21 drug to a horse. Lab tests were conducted, an investigation completed and a complaint 22 filed and made public 28 days later.

23 On the morning of April 26, four days before Justify was to ship to Louisville, Ky., for the Kentucky Derby, Baffert received notification that Justify had tested positive for 24 scopolamine. Baffert, as was his right, asked that another sample from that test be sent to 25 an approved independent lab.

26 It was sent on May 1, four days before the Derby, and that lab confirmed the result on May 8. (By then, Justify had won the Derby, the first leg of the Triple Crown.) The same day, 27 Baedeker notified the board members that Justify had tested positive for scopolamine. 28

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VERIFIED PETITION FOR WRIT OF MANDATE AND DAMAGES - 6 “The C.H.R.B. investigations unit will issue a complaint and a hearing will be scheduled,” 1 he told them in a memorandum obtained by The Times.

2 No one ever filed a complaint and the hearing never took place. 3 Instead, on Aug. 23, 2018, more than four months after the failed test, Baedeker said he 4 presented the Justify case directly to the commissioners of the California Horse Racing 5 Board in a private executive session, a step he had never taken in his five-and-a-half-year tenure. The board voted unanimously not to proceed with the case against Baffert. 6 Without a formal complaint, Baedeker said state law prohibited him from discussing in 7 detail the evidence of environmental contamination. In a written response, Baedeker said 8 that a handful of other horses may have been contaminated, but he offered little supporting evidence. 9 “The other horses had the presence of scopolamine but below the screening level and 10 therefore were not positive tests,” he said in a written response. 11 The California racing board, along with the horse racing industry at large, has been under 12 fire because of the death of 30 racehorses since Dec. 26 at Santa Anita Park. The Los Angeles district attorney is investigating the deaths, and the state legislature has held 13 hearings and considered changes to improve how horses are treated and tracks regulated. 14 California statutes do not prohibit active horse owners from being appointed to the 15 regulatory board overseeing the sport. Beyond the chairman’s owner-trainer relationship with Baffert, the board’s vice chairwoman, Madeline Auerbach, and another commissioner, 16 Dennis Alfieri, employ trainers and jockeys in California. 17 Joe Gorajec, a former chairman of the Association of Racing Commissioners International, 18 a trade group of industry commissioners, said the system was doomed to fail in California and other states in which the regulators are in business with the people they are there to 19 police. 20 “Minimal prohibitions should preclude active horse owners, trainers, breeders and jockeys, 21 or anyone else that derives income from the business, to serve on a commission,” said 22 Gorajec, who was executive director of the Indiana Horse Racing Commission.

23 “Commissioners should be prohibited from wagering in the state they serve.”

24 In the months that followed the decision to drop the case against Justify, the racing board 25 moved to lessen the penalty for a scopolamine violation from disqualification and forfeiture of purse to only a fine and suspension. 26 Baedeker said regulators had been considering a move to the lesser standard. He said the 27 plan was to appeal for the lesser classification if the matter came before a hearing. 28

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VERIFIED PETITION FOR WRIT OF MANDATE AND DAMAGES - 7 1 “Our staff failed to bring those changes to the board — we admit that,” he said.

2 Baffert has endured previous regulatory proceedings in California 3 In 2013, after seven horses in his care died over a 16-month period, he was the subject of 4 a report by the board, which revealed he had been giving every horse in his barn a thyroid 5 hormone without checking to see if any of them had thyroid problems.

6 Baffert told the investigators that he thought the medication would help “build up” his horses even though the drug is generally associated with weight loss. In that case, the 7 board’s report found no evidence “that C.H.R.B. rules or regulations have been violated.” 8 In retirement, Justify mates as often as three times a day. Coolmore, the international 9 breeding concern that bought Justify’s breeding rights, receives as much as $150,000 for a mating, or $450,000 a day over a five-month breeding season. That means Coolmore has 10 already recouped its $60 million investment. 11 Justify is currently in Australia. Owners there have their mares lined up in the hope of 12 getting what is supposed to be the perfect seed from the perfect racehorse.

14 3. Despite several requests from the public, in general, and Petitioner, in particular, to 15 disclose what happened behind closed doors or hold a public hearing into the incident, the CHRB 16 refused. What little is known about the secretive session points to, among other things, the CHRB 17 intentionally failing to discharge a mandatory public duty to utilize the Horse Racing Law and proper 18 CHRB regulations when dismissing the positive test and then hiding it from the public. 19 4. Petitioner, Ruis Racing LLC, owned the horse “Bolt d’Oro” which finished 2nd in the 20 Santa Anita Derby. The difference between the winning purse ($600,000) and the 2nd place purse 21 ($200,000) is $400,000. 22 5. This lawsuit is about the CHRB cover-up which violated its mandatory statutory duty 23 to follow the law and abrogated Ruis’ constitutional, statutory and regulatory rights. CHRB’s 24 malfeasance was the proximate cause of Ruis’ damages including, without limitation, the loss of 25 purse caused by the CHRB’s failing to disqualify Justify and re-distribute the purse for the positive 26 test result. 27

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VERIFIED PETITION FOR WRIT OF MANDATE AND DAMAGES - 8 1 PARTIES

2 6. Petitioner is a business entity duly registered to do business in California and doing

3 business in this County. It has a principal place of business in the State of Montana. It is licensed by

4 the respondent CHRB as a racing stable owner. Petitioner business entity is owned by Alvin M.

5 (“Mick”) Ruis, Jr. and his wife, Wendy T. Ruis, both licensees of the CHRB. Petitioner was, at the nd 6 relevant time, the owner of the horse “Bolt d’Oro” who finished 2 to Justify in the 2018 Santa Anita

7 Derby at Santa Anita Racetrack in Arcadia, CA.

8 7. Respondent CHRB is the governmental agency overseeing horse racing in this State,

9 including in this County. (Bus.& Prof. Code § 19420) CHRB maintains an office in this judicial

10 district. JURISDICTION AND VENUE 11 8. The Court has jurisdiction over this matter pursuant to Article VI §10 of the California 12 Constitution and Code of Civil Procedure §§ 410.10, 410.50, 1085, 1094.5. 13 9. Venue is proper as the Office of the Attorney General has an office in this judicial 14 district as per Code of Civil Procedure §§ 393, 394 and 395. 15 GENERAL ALLEGATIONS 16 10. On April 7, 2018, the Santa Anita Derby was conducted at Santa Anita 17 Race Track, Arcadia, California. The Derby with a purse of $1,000,000 is considered a stepping 18 stone to the Kentucky Derby as the winner of the race is assured a spot in the Kentucky Derby field. 19 11. Justify, a horse trained by Bob Baffert, won the Santa Anita Derby. Following the 20 running of the race official blood and urine samples were collected from Justify and sent to the 21 official CHRB testing laboratory at University of California, Davis. 22 12. Petitioner is and was the owner of the horse “Bolt d’Oro” who finished second to 23 “Justify” in the subject race, the Santa Anita Derby. The prize money for finishing second was 24 $200,000. The prize money for finishing first was $600,000. Hence, because of the malfeasance by 25 CHRB in failing to disqualify Justify and re-distribute the purse, Petitioner was deprived of the 26 winner’s prize or $400,000. 27

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VERIFIED PETITION FOR WRIT OF MANDATE AND DAMAGES - 9

1 13. On April 10, 2018, official blood and urine samples collected from Justify following

2 the running of the 2018 Santa Anita Derby were delivered to the official CHRB laboratory at the

3 University of Davis, California. 1 4 14. On April 18, 2018, the laboratory reported that scopolamine, a prohibited substance ,

5 was detected in the official urine sample collected from Justify following the running of the Santa

6 Anita Derby. CHRB rules require that such results be immediately reported to both the CHRB

7 Executive Director and the CHRB Equine Medical Director.

8 15. On April 20, 2018, CHRB Equine Medical Director Rick Arthur emailed CHRB

9 Executive Director Rick Baedeker, CHRB counsel, and the CHRB Chief Investigator stating that the

10 Justify case needs to be “handled differently than usual.”

11 16. On April 26, 2019, trainer Baffert is notified of the detection of scopolamine and

12 requested testing of a split sample.

13 17. On May 1, 2018, at Baffert’s request, a split sample from Justify’s official sample was 2 14 sent to Truesdail Laboratories for testing.

15 18. On May 5, 2018, Justify wins the Kentucky Derby.

16 19. On May 8, 2018, scopolamine is confirmed in Justify’s split sample. Executive

17 Director Rick Baedeker notifies CHRB members. He tells CHRB members “The C.H.R.B.

18 investigations unit will issue a complaint and a hearing will be scheduled.”

19 20. On May 19, 2018, Justify wins the Preakness Stakes.

20 21. On May 24, 2018, The NY Times reported the sale of Justify for $60 million and “a

21 bonus of about $25 million would also kick in if Justify pulled off a Triple Crown sweep by winning

22 the Belmont Stakes on June 9.”

23 1 CHRB Rule 1843.1 Prohibited Drug Substances. For purposes of this division, prohibited drug 24 substance means: 25 (a) any drug, substance, medication or chemical foreign to the horse, whether natural or synthetic, or a metabolite or analog thereof, whose use is not expressly authorized in this article. 26 (b) any drug, substance, medication or chemical authorized by this article in excess of the authorized level or other restrictions as set forth in this article. 27 2 28 Split Sample testing of the official sample can be requested by the owner or trainer of a horse in which a prohibited substance is detected in the official sample.

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VERIFIED PETITION FOR WRIT OF MANDATE AND DAMAGES - 10 1 22. On an unspecified day in May, 2018, the CHRB drafts an amendment to its drug

2 classification rules. In the draft of the proposed amendments, scopolamine will be lowered from a

3 Class 3/Penalty B violation to a Class 4/Penalty C violation. This change will lower the penalty

4 associated with the violation and remove the requirement for disqualification of the horse and

5 forfeiture of the purse. On the day of the collection of the official sample (April 7, 2018),

6 however, the CHRB classification for a scopolamine violation was a Class 3 Penalty category B

7 which requires forfeiture of the purse.

8 23. On June 9, 2018, Justify wins the Belmont and the Triple Crown.

9 24. On or about August 23, 2018, based on information and belief, the CHRB held a

10 closed or executive session meeting to consider the matter of the trainer Bob Baffert and the horse,

11 Justify. Based on information and belief, at that meeting during which CHRB Executive Director

12 Rick Baedeker recommended that the matter be dismissed, there was no factual or legal information

13 presented to the Board members in support of that recommendation. Based on information and

14 belief, all Board members and other CHRB agents who attended and/or participated in the meeting,

15 knew or should have known that the CHRB classification for a scopolamine positive test was a Class

16 3/Penalty B which would have required, at a minimum, the disqualification of the horse and forfeiture

17 of the winning purse.

18 25. On August 23, 2018, Executive Director Baedeker said “. . . he presented the Justify

19 case directly to commissioners of the CHRB in a private executive session, a step he had never taken

20 in his five-and-a-half year tenure. The board voted unanimously not to proceed with the case against

21 Baffert. Without a formal complaint, Baedeker said state law prohibited him from discussing in 3 22 detail the evidence of environmental contamination”

23 APPLICABLE LAW

24 26. The Horse Racing Law (Business and Professions Code §§ 19400-19668) specifically

25 directs the CHRB to disqualify a horse and re-distribute any purse money upon the finding of a

26 positive test. (§ 19582.5) Section 19582.2 states,

27 3 28 Only 4 Board Members were present: Chuck Winner (Chairman), Madeline Auerbach (Vice Chair), Jesse Choper (Commissioner), and Fred Mass (Commissioner).

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VERIFIED PETITION FOR WRIT OF MANDATE AND DAMAGES - 11 The board may adopt regulations that prohibit the entry in a race of a horse that tests 1 positive for a drug substance in violation of Section 19581. Upon a finding of a prohibited drug substance in an official test sample, a horse may be summarily 2 disqualified from the race in connection with which the drug sample was taken. Upon the 3 disqualification of a horse pursuant to these regulations, any purse, prize, award, or record for that race shall be forfeited. However, the board, including its hearing officers 4 and stewards, shall have the authority to order, in the interests of justice, that a jockey be 5 permitted to keep his or her share of the purse, prize, or award for that race upon a finding that a person, other than the jockey, willfully, and with flagrant disregard for 6 recommended veterinary practice and the regulations of the board, administered the prohibited substance. Such an order may provide that the jockey’s share of the purse, 7 prize, or award shall be paid by the person or persons determined to be responsible for 8 willfully administering the prohibited substance.

9 27. CHRB regulations also provide in Rule 1859.5, 10 A finding by the stewards that an official test sample from a horse participating in any 11 race contained a prohibited drug substance as defined in this article, which is determined 12 to be in class levels 1-3 under Rule 1843.2 of this division, unless a split sample tested by the owner or trainer under Rule 1859.25 of this division fails to confirm the presence of 13 the prohibited drug substance determined to be in class levels 1-3 shall require disqualification of the horse from the race in which it participated and forfeiture of any 14 purse, award, prize or record for the race, and the horse shall be deemed unplaced in that 15 race. Disqualification shall occur regardless of culpability for the condition of the horse. [Emphasis added.] 16

17 28. The standard CHRB procedure for handling an official test sample is (1) testing at the

18 official laboratory; (2) Notice to the trainer or owner of a positive finding for a prohibited substance

19 or a finding in excess of the allowable level for an authorized substance and the opportunity for split

20 sample testing; (3) testing of the split sample or waiver by the owner or trainer of split sample testing;

21 (4) notice to the trainer and owner of the result of the split sample testing, if any, was requested; (5)

22 filing of a CHRB Complaint for disciplinary action; (6) filing of a separate complaint for

23 redistribution of the purse; and, (6) a hearing on each of the Complaints. Here, the CHRB and its

24 agents intentionally deviated from the standard procedure for reasons, based on information and

25 belief, of personal gain and notoriety.

26 29. No statute in the Horse Racing Law authorizes the dismissal of the disqualification of

27 purse complaint as the CHRB did here. Based on information and belief, CHRB will assert that its

28 actions were authorized by Business and Professions Code section 19577. In fact, the Legislative

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VERIFIED PETITION FOR WRIT OF MANDATE AND DAMAGES - 12 1 history of Business and Professions Code § 19577 exposes an unequivocal intent by the Legislature

2 to maintain strict adherence to the standard procedure for handling positive test samples and not

3 tolerate any deviation therefrom. Based on information and belief, in the instant matter the CHRB

4 significantly deviated from the standard procedure by utilizing the wrong penalty classification and

5 engaging in un-official, external testing, all of which was done without justification beyond the

6 typical, official procedure for handling a positive test result. In essence, CHRB was utilizing a non- rd 7 existent rule (i.e. underground regulation) allowing for secret 3 party testing without any of the 4 8 public rulemaking participation required by the Administrative Procedure Act.

9 30. On September 5, 2018, CHRB Asst. Executive Director, Jacqueline Wagner, submits

10 to the Office of Administrative Law CHRB’s Notice of Publication/Regulations Submission

11 (Regulation Action Number: 2018-0906-02S). When finalized, this regulation changes the penalty

12 level for the prohibited substance scopolamine from a B level (automatic disqualification and

13 forfeiture of purse money) to a C level (no disqualification or forfeiture of purse).

14 31. On October 18, 2018, the office of the Secretary of State ‘endorsed- approved’ the

15 regulation. However, it did not take effect until January 1, 2019.

16 32. On January 1, 2019, the CHRB regulation becomes official thus lowering the penalty

17 for scopolamine from a Drug Class 3/Penalty B to a Class 4/Penalty C eliminating an automatic

18 disqualification and forfeiture. But at the time of the Justify positive test the CHRB level and

19 penalty for scopolamine was Class 3/Penalty B which requires an automatic disqualification

20 and forfeiture.

21 33. On June 20, 2019, CHRB leaves ARCI as a member. Chairman Winner said, “We

22 believe that by participating in ARCI, that’s sort of a conflict with what we’re doing. For us to be

23 part of that organization (ARCI) is somewhat troubling for us.”

25 4The Administrative Procedures Act provides that a state agency shall not “issue, utilize, enforce, or 26 attempt to enforce any guideline, criterion, bulletin, manual, instruction, order, standard of general application, or other rule. . .unless the guideline, criterion, bulletin, manual, instruction, order, 27 standard of general application, or other rule has been adopted as a regulation and filed with the 28 Secretary of State . . . .” Gov’t. Code § 11340.5.

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VERIFIED PETITION FOR WRIT OF MANDATE AND DAMAGES - 13 1 34. On July 26, 2019, Chairman Chuck Winner’s term expires. He is not reappointed to

2 the CHRB.

3 35. On August 5, 2019, a Los Angeles Times article stated, “Joint stake in horse by state

4 regulator and Santa Anita raises executive questions.” The reporter went on to write, “The fact that

5 state regulator Madeline Auerbach and Tim Ritvo, who runs Santa Anita, were business partners in

6 the ownership of a horse is seemingly the most basic of conflicts of interest. Auerbach is vice chair 5 7 of the CHRB, the agency that regulates racetracks in the state, and this year likely will be chairman.”

8 36. On September 11, 2019, The New York Times story runs. It is entitled “Justify Failed

9 a Drug Test Before Winning the Triple Crown.”

10 37. On September 11, 2019, following media reports of the detection of scopolamine in

11 the official samples collected from “Justify” after the running of the 2018 Santa Anita Derby, CHRB

12 Chairman Chuck Winner is quoted as follows:

13 Furthermore, under ARCI guidelines scopolamine is a class 4c substance, which would not trigger disqualification or redistribution of 14 a purse. Under CHRB Rule 1843.2 classifications are based on the 15 ARCI guidelines, unless specifically modified by the Board. The Board never modified that designation. 16

17 38. On September 12, 2019, ARCI issues, “Media Advisory: Scopolamine” – “The ARCI 18 Classification and Penalty Guidelines which classify scopolamine as a Class 4, Penalty Class C drug. 19

20 According to ARCI penalty guidelines, if scopolamine is found in a post-race sample

21 “Disqualification and loss of purse in the absence of mitigating circumstances. Horse must pass

22 commission-approved examination before being eligible to run.” The advisory also said, “It is 23 incumbent on the CHRB to release to the public as much information about why the 24

27 5Commissioner Auerbach is the co-founder of CARMA and enlisted Bob Baffert as a sponsor at her 28 annual event last June. She also is involved as a breeder in partnership with Baffert.

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VERIFIED PETITION FOR WRIT OF MANDATE AND DAMAGES - 14 recommended penalty mitigation was justified in order to lay to rest questions concerning this 1 .” [Emphasis added.] 2 matter and to reinforce public confidence in its actions

3 39. On September 12, 2019, The San Diego Union Tribune’s column, Lesson from horse

4 racing’s Justify, Triple Crown mess: Fix CHRB states, “When former CHRB chairperson Chuck 5 Winner served in a decision-making capacity, he owned a minority share in a horse Justify’s trainer, 6 Bob Baffert, worked with as well.” Also, “Winner maintains he not only checked with CHRB 7

8 lawyers before being involved in the Justify decision because of that connection, but also revealed the

9 potential conflict to the NY Times reporter.

10 40. On September 12, 2019, CHRB Commissioner Fred Maas stated to the San Diego 11 Union Tribune “without violating any closed-session rules, it’s fair to say what was presented to us 12 was an open-and-closed investigation that had come to a conclusion,” Maas said. “That’s about as 13

14 much as I can say.”

15 41. On September 23, 2019, California Governor Gavin Newsom comments to the New

16 York Times, “What happened last year (2018) was unacceptable, and all of the excuses be damned. 17 We own that going into next season, and we’re going to have to do something about it. I’ll tell you, 18 talk about a sport whose time is up unless they reform. That’s horse racing. Incredible abuses to 19

20 these precious animals and the willingness to just spit these animals out and literally take their lives is

21 a disgrace.” The Governor added, “The more you realize what’s really going on, the more intolerant

22 you become of certain behaviors. If you don’t reform yourself, you’re going to get run over and 23 others are going to reform for you in ways that you don’t like.” 24

25 42. On September 27, 2019, Mick Ruis asks the CHRB to take up the Justify matter. The

26 Board does not respond.

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VERIFIED PETITION FOR WRIT OF MANDATE AND DAMAGES - 15 43. On October 20, 2019, Mick Ruis reiterates his written request for CHRB intervention. 1 The Board does not respond. 2

3 44. On November 4, 2019, CHRB Executive Director Rick Baedeker announces via email

4 his retirement for “sometime before next Spring.” 5 45. On November 8, 2019, Asst Exec Dir, Jacqueline Wagner retires from the CHRB. 6 46. On November 11, 2019, Madeline Auerbach, Vice Chair of the CHRB resigns. 7

8 47. On November 19, 2019, Mick Ruis requests that the CHRB place the issue of a

9 rehearing of the Justify matter on the agenda for a December 12, 2019, meeting of the Board.

10 48. On November 23, 2019, Commissioner Maas announces that he will not seek 11 reappointment to CHRB. 12 EXHAUSTION OF ADMINISTRATIVE REMEDIES 13

14 49. On December 20, 2019, CHRB Counsel Brodnik advises counsel for Petitioner by

15 letter that the CHRB Board has considered and rejected the request to place the Justify matter on the

16 agenda for the upcoming CHRB Board meeting. 17 50. Petitioner has timely filed a claim for damages with the Victim Compensation and 18 Government Claims Board pursuant to Government Code §§900, et seq. 19

20 51. Petitioner now brings this timely petition seeking a peremptory writ of mandate to set

21 aside the illegal CHRB decision to dismiss the finding of a positive test against the horse Justify and

22 for failing to order a disqualification and re-distribution of the purse money. This action also seeks 23 damages pursuant to Code of Civil Procedure § 1095 and Government Code § 815.6 for the 24

25 violations described herein in that CHRB failed, among other things, to discharge mandatory duties

26 to follow all laws and regulations appurtenant to its authority.

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VERIFIED PETITION FOR WRIT OF MANDATE AND DAMAGES - 16 52. CHRB’s malfeasance caused Petitioner harm in that the purse of the race was not re- 1 distributed. Petitioner also suffered significant reputational and business harm because the horse 2

3 cannot be advertised as a Grade 1 winner of the Santa Anita Derby, for breeding purposes. Petitioner

4 also seeks redress for its attorneys’ fees and costs. 5 FIRST CAUSE OF ACTION 6 (Petition for Writ of Mandate CCP § 1085) 7 53. Petitioner incorporates by reference all preceding paragraphs as if fully restated here. 8 54. California Code of Civil Procedure § 1085 authorizes courts to issue a writ of mandate 9 to compel the performance of an act that the law specifically enjoins. (CCP § 1085, subd. (a).) Writ 10 relief is available to compel a public officer to perform a mandatory ministerial act. Id. Pursuant to 11 California Code of Civil Procedure § 1085, writ relief is also available to correct a legislative or 12 administrative decision that is arbitrary, capricious, entirely lacking in evidentiary support, contrary 13 to established public policy, unlawful, or procedurally unfair. 14 55. The CHRB failed to comply with the procedural and substantive requirements of 15 applicable law. Such failures include, but are not limited to applying the incorrect penalty 16 classification as set forth in CHRB Rule 1843.3, conducting external and un-official testing which 17 deviated from the standard testing procedure and failing to order, at a minimum, re-distribution of the 18 winning purse pursuant to CHRB Rule 1859.5 and Business and Professions Code § 19582.5. 19 56. By failing to follow the procedures applicable to findings of a positive test under the 20 aforementioned rules and statutes, the CHRB acted arbitrarily and capriciously and failed to proceed 21 in the manner required by law. 22 57. Petitioner has no plain, speedy, and adequate remedy other than issuance of a writ of 23 mandate to invalidate the CHRB action. Petitioner is beneficially interested because it owns the 24 horse which finished second in the subject race, and is the beneficiary of the protections in Horse 25 Racing Law and CHRB Regulations. Petitioner is entitled to a writ of mandate commanding 26 defendant CHRB to set aside its decision to dismiss the finding of a positive test without ordering, at 27 a minimum, re-distribution of the winning purse of $600,000. 28

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VERIFIED PETITION FOR WRIT OF MANDATE AND DAMAGES - 17

1 58. As a result of the acts described herein with regards to the mandatory duties owed by

2 the CHRB, Petitioner has suffered damages flowing directly from seeking issuance of the writ

3 pursuant to Code of Civil Procedure § 1095 in an amount to be determined at trial.

4 59. Petitioner further alleges that the flagrant defects of CHRB’S actions alleged above

5 were arbitrary and capricious, and entitle Petitioner to attorney’s fees under California Government

6 Code § 800.

7 SECOND CAUSE OF ACTION

8 (Petition for Writ of Mandate CCP § 1094.5)

9 60. Petitioner incorporates by reference all preceding paragraphs as if fully restated here.

10 61. The CHRB has a mandatory duty to follow all laws and regulations which includes

11 laws and rules pertaining to positive test results. CHRB admitted that it utilized a non-existent rule

12 and an un-official, external and illegal testing procedure when dealing with the Justify positive test.

13 The particular risk in doing this was the exercise of illegal, abusive and random discretion resulting in

14 the denial of due process to Petitioner and the other licensees similarly situated as Petitioner.

15 62. As such, CHRB prejudicially abused its discretion in, based on information and belief,

16 the findings made and evidence used in the final decision to dismiss the finding of a positive test.

17 (C.C.P. § 1094.5(b)) CHRB made and/or caused to become official findings in the final decision

18 without utilizing the prevailing rules or proceeding in a manner required by law. CHRB also made

19 its illegal findings without any public participation, transparency or disclosure.

20 63. CHRB further abused its discretion in Petitioner’s case because the final decision is

21 based on non-existent, illegal and un-official rules or procedures. CHRB used the wrong drug and

22 penalty classification and an external testing procedure not prescribed by the statutes and regulations.

23 In violation of prevailing statutes and regulations, CHRB, nonetheless, made findings based on a

24 selective, prejudicial and capricious presentation of evidence, failed to produce evidence for

25 Petitioner or the public to challenge, and concluded its dismissal of the positive test without

26 disqualification and forfeiture of the purse was proper in cursory fashion.

27 64. The clandestine final decision rests on unlawful findings and/or information and, as

28 such, is a flagrant abuse of discretion. CHRB applied a secret, un-official standard to deny Petitioner

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VERIFIED PETITION FOR WRIT OF MANDATE AND DAMAGES - 18

1 his constitutional and regulatory rights in its final decision. Under the regulations, a beneficiary’s

2 right to disqualification and re-distribution of the purse is automatic regardless of the culpability of

3 the trainer of the horse with the positive test meaning, according to CHRB’s own rules, Justify should

4 have been disqualified and the purse money redistributed regardless of the culpability of trainer

5 Baffert. As the Legislature has made clear, the CHRB has no discretion to dismiss the positive

6 finding of a prohibited substance portion of the matter.

7 65. Petitioner has no plain, speedy, and adequate remedy to obtain CHRB’s compliance

8 with the law other than relief sought by this Petition. Under Code of Civil Procedure § 1094.5,

9 Petitioner is entitled to a writ of administrative mandamus reversing the CHRB’s decision and

10 ordering, at a minimum, redistribution of the purse.

11 66. As a result of the abuse of discretion described herein with regards to the acts done

12 and mandatory duties owed by the CHRB, Petitioner has suffered damages flowing directly from

13 seeking issuance of the writ pursuant to Code of Civil Procedure § 1095 in an amount to be

14 determined at trial.

15 67. Petitioner further alleges that the flagrant defects of CHRB’S actions alleged above

16 were arbitrary and capricious, and entitle Petitioner to attorney’s fees under California Government

17 Code § 800.

18 THIRD CAUSE OF ACTION

19 (Statutory Violation Gov. Code § 815.6)

20 68. Petitioner incorporates by reference all preceding paragraphs as if fully restated here.

21 69. Upon information and belief, CHRB knew or reasonably should have known that its

22 intentional use of the wrong penalty classification and an un-official testing procedure, and then

23 engaging in a fraudulent and misrepresentative campaign to legitimize this malfeasance was in

24 blatant violation of laws, regulations and the clear Legislative mandate to the CHRB, namely, to

25 protect the integrity of the horse racing industry.

26 70. CHRB had a mandatory duty to comply with both state and federal law and its own

27 regulations and to provide reasonable supervision of its agents, servants and/or employees.

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VERIFIED PETITION FOR WRIT OF MANDATE AND DAMAGES - 19

1 71. CHRB negligently failed to adequately supervise agents, servants and employees who,

2 in turn, failed to discharge mandatory duties and who directed and supervised this unconstitutional

3 and illegal conduct towards Petitioner to its great detriment.

4 72. As a direct and proximate result of the above-described conduct, Petitioner has

5 suffered and continues to suffer damages including but not limited to business losses, reputational

6 losses, embarrassment, loss of goodwill, loss of prospective advantage and opportunity and other

7 damages which were clearly foreseeable to the CHRB.

8 73. CHRB engaged in these acts alleged herein and/or condoned, permitted, authorized,

9 and/or ratified the conduct of its agents, servants and/or employees and is vicariously liable for the

10 wrongful conduct of its agents and/or employees for this cause of action.

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VERIFIED PETITION FOR WRIT OF MANDATE AND DAMAGES - 20 1 PRAYER

2 WHEREFORE, Petitioner prays judgment against defendants as follows:

3 AS TO EACH CAUSE OF ACTION WHERE AND AS APPLICABLE:

4 1. Enter judgment against Respondent, CHRB;

5 2. For a peremptory writ of mandate ordering the CHRB to set aside its decision to

6 dismiss the finding of a positive test for the horse Justify; and furthermore, order a

7 disqualification of the horse with a redistribution of the purse;

8 3. For damages per CCP § 1095 incidental to and flowing from the writ of mandate;

9 4. For special and general damages according to proof;

10 5. For attorney’s fees pursuant to CCP §1021.5, CCP § 1028.5, Govt. Code § 800, or any

11 other applicable law;

12 6. For costs of suit herein;

13 7. For any such other and further relief as the court deems just and proper.

14 Date: January 8, 2020 15

17 ______18 Carlo Fisco, Esq. Darrell J. Vienna, Esq. 19 Attorney for Petitioner Attorney for Petitioner Ruis Racing, LLC Ruis Racing, LLC 20

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VERIFIED PETITION FOR WRIT OF MANDATE AND DAMAGES - 21

1 VERIFICATIONS

2 I, Alvin M. Ruis, Jr. certify and declare that I am the owner and legal representative of

3 Petitioner, Ruis Racing LLC, in this action. I hereby affirm that I am authorized to make this

4 verification on behalf of my company.

5 I have read and prepared this Petition, know its contents, and believe them to be true within

6 my personal knowledge.

7 I declare under penalty of perjury under the laws of the State of California that the foregoing

8 is true and correct.

9 Executed on ______, at ______. 10

11 ______12 Alvin M. Ruis, Jr. 13 14

15 I, Wendy T. Ruis, certify and declare that I am the owner and legal representative of 16 Petitioner, Ruis Racing LLC, in this action. I hereby affirm that I am authorized to make this 17 verification on behalf of my company. 18 I have read and prepared this Petition, know its contents, and believe them to be true within 19 my personal knowledge. 20 I declare under penalty of perjury under the laws of the State of California that the foregoing 21 is true and correct. 22 23 Executed on ______, at ______. 24

25 ______26 Wendy T. Ruis

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VERIFIED PETITION FOR WRIT OF MANDATE AND DAMAGES - 22