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Animal Law Update Commentary on Animal Law and Legal Issues

Federal Jury Finds AQHA Violated Antitrust Laws By Barring Cloned Horses From Registration

Posted in Animal

On July 30, 2013, a ten-person jury in the U.S. District Court for the Northern District of Texas, Amarillo Division, rendered a verdict in the case of Abraham v. Veneklasen Joint Venture, et al. v. American Quarter Horse Association, finding that American Quarter Horse Association (AQHA) Rule REG106.1 (formerly Rule 227(a)), which prohibits the registration of cloned horses or their offspring in the AQHA breed registry, violates federal and state anti-trust laws, specifically the federal Sherman Antitrust Act and the Texas Free Enterprise and Antitrust Act.

The lawsuit was filed in April 2012 by American Quarter Horse breeder Jason Abraham and veterinarian Gregg Veneklasen, DVM, against the AQHA, arguing that the AQHA’s rule preventing the registration of cloned horses gave it a monopoly over the Quarter Horse breeding industry in violation of federal and state anti-trust laws.

Plaintiffs argued that cloning is vital to Quarter Horse breeders and that, by not allowing clones to be registered, the AQHA was reducing the supply of top Quarter Horses in the market. Plaintiffs argued that their cloning process, known as somatic cell nuclear transfer, is similar to in vitro fertilization and artificial insemination, breeding processes the AQHA does permit when registering horses. During the somatic cell nuclear transfer process, the nucleus of a body cell (a cell that is not a sperm or an egg) is removed from a horse, inserted into an egg cell and developed into an embryo that is then transferred to a recipient mare.

The AQHA took the position that a cloned horse is not the result of breeding a registered sire (father) and registered dam (mother), as required by AQHA rules for registration. The AQHA argued that cloning fails to improve the breed; rather, it simply makes a Xerox copy of the same horse, preventing the breed from moving forward.

Plaintiffs argued that registration is necessary in order for a Quarter Horse to have value. Without registration, cloned Quarter Horses would be excluded from all AQHA-sanctioned races, shows and other events. The plaintiffs sought up to $6 million in damages; however, the jury did not award any monetary damages. Nor does the jury verdict mean that cloned horses will automatically be registered. The plaintiffs have sought injunctive relief, requesting the court to order the AQHA to register cloned horses.

The AQHA is the world’s largest equine breed registry and membership organization and functions as the official record keeping and governing body of the American Quarter Horse industry. It has registered more than 5 million American Quarter Horses and serves more than 350,000 worldwide members. On July 30, 2013, AQHA published a statement on their website, in which AQHA Executive Vice President Don Treadway, Jr. stated: “We are deeply disappointed by the outcome of this trial… It continues to be our position that our rule prohibiting the registration of clones and their offspring is both reasonable and lawful.” On August 1, 2013, the AQHA announced their intention to appeal the verdict.

While at least two major registries, Studbook Zangersheide and the Anglo European Studbook, accept clones, the Jockey Club does not. At present, the United States Equestrian Federation (USEF) has no rule preventing cloned horses from competing, and the Fédération Équestre International permits cloned horses to compete in FEI-sanctioned competitions (a reversal of its previous position). Several top show-jumpers have been cloned, including Olympic horses Gem Twist and Sapphire.