A disturbing new trend has been developing on Facebook: raffling off animals. For example, a well-bred registered Quarter Horse yearling was recently offered for sale through a raffle on a local North Carolina equestrian page. The seller offered 100 spots, each selling for $40. Bidders paid the seller directly through PayPal for a slot, and when all of the slots were filled and paid in full, the seller held a random drawing and a winner was announced. The winner got herself a yearling for $40 and the seller pocketed $4,000 for a horse she struggled to sell through traditional avenues at a lower price.

Does this new sales trend seem too good to be true? It is. In most instances, it violates Facebook and PayPal rules, as well as state gambling laws. It also implicates tax issues and raises animal health concerns.

A raffle is a form of gambling. Most states regulate raffles and online gambling. For example, in North Carolina, where I practice, a “raffle” is defined as “a game in which the prize is won by random drawing of the name or number of one or more persons purchasing chances.” N.C. Gen. Stat. § 14-309.15(b).

North Carolina permits only non-profit organizations and government agencies to hold raffles, and those raffles are subject to certain restrictions. N.C. Gen. Stat. § 14-309.15(a). Any person who conducts an impermissible raffle is guilty of a Class 2 misdemeanor. Id. Thus, unless you are a non-profit organization or a government entity, raffling off your animal online is most likely illegal in North Carolina.

Further, because the IRS considers a raffle to be a form of lottery or gambling, there may be reporting requirements and tax withholding requirements. See IRS, Tax-Exempt Organizations and Raffle Prizes – Reporting Requirements and Federal Income Tax Withholding, Notice 1340 (March 2005), available at https://www.irs.gov/pub/irs-tege/notice_1340.pdf.

Both Facebook and PayPal also have rules regarding raffles. Facebook’s guidelines state that “Pages, Groups, and Events must not facilitate or promote online gambling, online real money, games of skill, or online lotteries without our prior written permission.” See Facebook Policies available at https://www.facebook.com/policies/pages_groups_events/. Raffles are not permitted on personal Facebook timelines. Id. PayPal also requires pre-approval to accept payment for activities involving “gambling, gaming, and/or any other activity with an entry fee and a prize.” See PayPal’s Acceptable Use Policy, available at https://www.paypal.com/va/webapps/mpp/ua/acceptableuse-full. PayPal also prohibits the use of its services for activities that violate any law, statute, ordinance or regulation. Id.

Of course, there are also concerns about where your animal may end up when raffled off. Someone who bought a horse for $40 is far less likely to invest in maintaining its health and well-being than someone who bought the horse for $4,000. Thus, before you decide to list your horse for sale through a raffle drawing, ask yourself if that’s the best decision you can make for the animal. At the very least, check your local state gambling laws to make sure it’s even legal and be sure to comply with the online platform’s raffle requirements.

Contact us for questions relating to the sale of your animals, including help drafting sales and lease agreements.

Without clear statutory authority, FDA has proposed to expand its legal authority over veterinarians and veterinary compounding pharmacies in its newly released “Revised Draft Guidance on Compounding Animal Drugs from Bulk Drug Substances,” (#256) as announced on November 19, 2019.

FDA continues to describe the use of certain compounded medications for animals as violations of the Federal Food, Drug, and Cosmetic Act (FD&C Act), which it will not enforce under certain prescribed circumstances.

As stated in Guidance #256

The policies described in this document aim to protect human and animal health by limiting the use of animal drugs compounded from bulk drug substances primarily to situations in which a veterinarian is acting within a valid veterinarian client-patient relationship (VCPR) 3 and there is no medically appropriate drug that is FDA approved, conditionally approved, or on the Index of Legally Marketed Unapproved New Animal Drugs for Minor Species (indexed) to treat the animal.

While FDA states that the “FD&C Act does not generally distinguish between compounding animal drugs from bulk drug substances and other methods of animal drug manufacturing . . . [t]he law permits compounding of animal drugs [only] when the source of the active ingredient is a finished FDA-approved drug, and not a bulk drug substance.”  (Emphasis added).

FDA proposed certain labeling and adverse reporting requirements for drugs compounded pursuant to patient-specific prescriptions for nonfood-producing animals, drugs compounded for office stock for nonfood producing animals, and drugs compounded for use as antidotes for food-producing animals.  Veterinarians administering or dispensing antidotes used for food-producing animals must also provide scientifically-based withdrawal times.

Also, without statutory authority, FDA requests input from the purportedly regulated community about a “List of Bulk Drug Substances for Compounding Office Stock Drugs for Use in Nonfood-Producing Animals or Antidotes for Food-Producing Animals.

The proposed list includes:


Apomorphine hydrochloride – Indication: For the induction of emesis in dogs. Dosage form: 6.25 mg subconjunctival tablets, 3.125-6.25 mg/ml subconjunctival solution, and 2.5 mg/ml injectable solution.

Cisapride – Indication: For management of gastrointestinal disorders in cats, including: general constipation and constipation from megacolon. Dosage form: 2.5 and 5 mg oral tablets or capsules, and 5-10 mg/ml oral suspension.

Dipyrone – Indication: For the treatment of severe, acute fever in Shar-Pei dogs and Shar-Pei mixed breed dogs suffering from Shar-Pei fever. Dosage form: 250 and 500 mg/ml injectable solution.

Guaifenesin – Indication: For muscle relaxation in the horse during anesthetic induction and/or surgery. Dosage form: 50 g soluble powder to be reconstituted into a solution for IV infusion with the addition of 500 ml (10%) or 1000 ml (5%) sterile diluent.

Metronidazole benzoate – Indication: For the treatment of feline inflammatory bowel disease in cats. Dosage form: 80 mg/ml suspension.

Miconazole nitrate – Indication: For treatment of fungal keratitis in horses. Dosage form: 1% or 2% miconazole nitrate ophthalmic solution or ophthalmic ointment.

Potassium bromide – Indication: For initiation of treatment for seizures in dogs. Dosage form: 250 mg/ml oral solution.

Tacrolimus – Indication: For treatment of dogs with keratoconjunctivitis sicca (KCS) that is non-responsive to cyclosporine. Dosage form: 0.01– 0.03% tacrolimus ophthalmic drops.


Awaiting nominations


Awaiting nominations

Interested parties should submit nominations for additional bulk drug substances as described in the #256 Appendix.

As mentioned in Part 1 of this blog, a district court in Kentucky recently dismissed the appeal brought by Maximum Security’s owners to overturn his first place disqualification in the 2019 Kentucky Derby. Part I of this blog explained the court’s dismissal of the Wests’ state law claims.

The court also dismissed Plaintiffs’ due process claims, primarily on the grounds that the Wests were not deprived of any due process rights. Id. at 9-10. The Due Process Clause prohibits the government from depriving “any person of life, liberty, or property, without due process of law.” U.S. Const. amend. XIV, 1. To succeed on a due process claim, plaintiffs must necessarily establish that a “life, liberty, or property” interest is implicated. Id. at *10. The Wests failed to make that showing. Id. The Wests argued that they had a protected property interest in any and all of the financial and other benefits that they would have otherwise received if Maximum Security had finished first. Id.

“In order to establish a constitutionally protected property interest in ‘all the financial and other benefits’ of winning the Kentucky Derby, the Wests ‘must point to some policy, law, or mutually explicit understanding that both confers the benefit and limits the discretion of the [state] to rescind the benefit.” Id. The regulations granted the stewards complete discretion in determining whether a foul ‘alters the finish of a race.’ Id. at *11. Where the state’s decision to award or withhold a benefit is discretionary, a party has no property interest in the receipt of that benefit. Id. at *10-11. A party must have more than an expectation or abstract desire for a property interest to exist – he must actually be entitled to that property. Because the racing stewards had discretion to determine to disqualify a horse if a foul occurred, the Wests were never entitled to the financial and other benefits of winning the Kentucky Derby and therefore had no property interest. Id. at *11. Further, the Court found that the Wests did not have to forfeit any money and were never entitled to the purse money because Maximum Security did not win the race. Id. at *12.

An Idaho court applied a similar due process analysis in a Quarter Horse racing dispute. See Idaho Quarterhorse Breeders Ass’n, Inc. v. Ada County Fair Bd., 101 Idaho 339, 342 (1980) (finding that deprivation of “increased purse money, which their horses might win, and the increase in the value of their horses, and an increase in stud fees which their horse may produce…are not property to which plaintiffs have any present title or vested rights.”) (internal quotes omitted).

But all hope is not lost when it comes to challenging racing commission determinations. Courts have found due process interests in other racing commission contexts, such as where a trainer’s license is at issue, where contract rights are deprived, and where a person’s good name, reputation, honor, or integrity is at stake. See, e.g., Mumaw v. Ohio State Racing Commission, 2015 WL 1471945, *5, 8 (N.D. Ohio 2013) (discussing viable due process claims in racing context); Bier v. Fleming, 538 F.Supp. 437, 4N47 (N.D. Ohio 1981), overturned on other grounds, 717 F.2d 308 (6th Cir. 1983) (holding that a trainer has a liberty interest in his occupation and a property interest in his racing license).

Nor are challenges to racing commission determinations limited to due process interests. Depending on the circumstances, other claims may apply such as breach of contract, defamation, and tortious interference with a contract or prospective business.

Fox Rothschild is available to help defend your rights before a racing commission or other equestrian-related entity.

Maximum Security’s owners cannot challenge the Kentucky racing officials’ disqualification of Maximum Security in the Kentucky Derby, according to a recent federal court decision. West v. Kentucky Horse Racing Comm., No. 5:19-211, 2019 WL 6053014 (E.D. Ky. Nov. 15, 2019). As you may remember, Maximum Security finished first in the Kentucky Derby earlier this year, but his first-place finish was unanimously disqualified by the racing stewards after it was determined that the horse interfered with the travel of two other horses during the race. The first-place disqualification was the first in Kentucky Derby history and captivated the American audience and social media for several weeks after the race.

Within days after the race, Maximum Security’s owners, Gary and Mary West, filed a lawsuit seeking to overturn that disqualification and reinstate his first-place finish.

The Wests requested that the Court review the disqualification pursuant to a state statute that governs judicial review of final orders by administrative agencies. See West Compl. 17-29, May 14, 2019, Dkt. No. 1; KRS § 13B.150. This statute provides that the court may overturn an agency decision if it violates the constitution or a statute, exceeds the agency’s authority, is without support of substantial evidence on the whole record, is arbitrary, capricious, or an abuse of discretion, or if it is otherwise deficient (the “judicial review claims”). Id. The Wests also asserted claims alleging various violations of their due process rights under the U.S. Constitution (the “due process claims”) which will be discussed in an upcoming blog. West at *3.

In dismissing the lawsuit last week, the Court held that (1) Kentucky’s regulations make clear that the disqualification is not subject to judicial review, and (2) the disqualification procedure does not implicate a constitutional due process interest. Id. at *1.

As an agency of the state, the Kentucky Horse Racing Commission is authorized “to prescribe necessary and reasonable administrative regulations and conditions under which horse racing at a horse race meeting shall be conducted in this state.” KRS §230.260(8). Racing stewards are charged with the “immediate supervision, control, and regulation of racing at each licensed race meeting on behalf of and responsible only to the commission.” 810 KAR 1:004 § 3.[1]

In determining whether a foul has occurred in a disputed race, “[a] leading horse if clear is entitled to any part of the track. If a leading horse or any other horse in a race swerves or is ridden to either side so as to interfere with, intimidate, or impede any other horse or jockey, or to cause the same result, this action shall be deemed a foul. If a jockey strikes another horse or jockey, it is a foul. If in the opinion of the stewards, a foul alters the finish of a race, an offending horse may be disqualified by the stewards.” 810 KAR 1:016 § 12.

The Court dismissed the judicial review claims on the grounds that the state regulations explicitly provide that the stewards’ decision is final and not subject to appeal. West at *6-7. Section 4 of 810 KAR 1:017 (“Section 4”) requires stewards to:

  1. Make all findings of fact as to all matters occurring during and incident to the running of a horse race;
  2. Determine all objections and inquiries based on interference by a horse, improper course run by a horse, foul riding by a jockey, and all other matters occurring during and incident to the running of a race; and
  3. Determine the extent of disqualification, if any, of horses in a race for a foul committed during the race.

810 KAR 1:017 § 4(1)(a)-(c). These findings and determinations are “final and shall not be subject to appeal.” Id. § 4(2). Prior state case law had determined that this regulation is dispositive on the issue of appeal. See March v. Kentucky Horse Racing Comm., No. 2013-CA-000900-MR, 2015 WL 3429763, 2 (Ky. Ct. App. Feb. 10, 2016) (determining that Section 4 provides that the stewards’ decision to disqualify a horse is “final and non-appealable”). Further, Chapter 13B.150 states that only “final orders” of an agency are subject to judicial review. West at *7. A “final order” must be a final disposition of an administrative hearing. KRS § 13B.010(6). The stewards’ decision was not the product of an administrative hearing. West at *7. Thus, because the Wests have no right to judicial review of the disqualification, the court dismissed the judicial review claims. Id.

In a statement to the media last week, Gary West expressed his intent to file an appeal of the dismissal. He feels the decision puts stewards above the law. West stated “[t]he transparency and reviewability of decisions by stewards is essential to the integrity of racing in America and is critical to the public’s confidence in the sport. Sadly, the Court’s Opinion allows secret deliberations by Kentucky’s stewards that affect millions of people and billions of dollars to forever go unreviewable by any court; indeed, by anyone, no matter how negligent, reckless or nefarious such secretly made decisions may be.”

Part 2 of this blog post will cover the court’s dismissal of the Wests’ due process claims.

The district court decision can be found here.

The West Complaint can be found here.

Gary West’s Statement can be found here.


Our Animal Law practice group has experience in representing parties in horse racing commission disputes and can assist in navigating the laws implicated by such disputes.

[1] Amendments to Kentucky’s horse racing regulations went into effect on May 31, 2019, after the Kentucky Derby. The Court cited to the regulations in effect at the time of the race and this blog post does the same.

As reported by the Associated Press on November 7, 2019, Sandra, a 33-year-old orangutan that was granted legal personhood by a judge in Argentina has moved to the Center for Great Apes in central Florida after being quarantined at a different zoo in Kansas, upon importation.

Judge Liberatori reportedly ruled that Sandra is legally a non-human person, and is “entitled to some legal rights enjoyed by people, and better living conditions [because the Judge] wanted to tell society something new, that animals are sentient beings and that the first right they have is our obligation to respect them.”

If Sandra was declared a non-human person in Argentina—person being the notable term—what is she to be considered in the US?  Presumably, she entered the US with an international health certificate for animals and not a visa or other document used for the entry of non-US citizens.  She was quarantined at the Sedgwick County Zoo in Kansas, a process not typically required for humans (although there was the nurse quarantined in New Jersey after she was exposed to Ebola patients in West Africa).


It will be interesting to see what animal activist groups will make of Sandra’s status in the US.  I would expect there to be an attempt to apply her status in Argentina here in the US, under an international long arm statute or similar legal argument if any apply.

As a learned colleague said, no bad bill goes away [forever].

Moose’s Law S861, one of the worst of the worst bills, has resurfaced and will be heard by the Senate Environment and Energy Committee on Monday, November 18, 2019 – 10:00 AM, at Committee Room 6, 1st Floor, State House Annex, Trenton, NJ.

For any animal facility except academic research facilities and livestock operations̶—that would be exempt if the law is adopted—private research facilities, veterinary practices, animal shelters, zoos, pet stores, and any other animal facility will have to adopt draconian hiring and employment practices that will make volunteering and other employment opportunities at these facilities nearly impossible.

The Department of Health will have to conduct criminal background checks and other reviews of potential volunteers and employees, based on information that is simply not available within the State of New Jersey and impossible to obtain about potential acts conducted outside the State—whether an individual has been convicted or not.

No one wants someone who will intentionally and cruelly treat an animal to be placed in a position, as an employee or volunteer, to conduct such acts, but this bill, if adopted, is simply unworkable.  And it will handicap those animal facilities, including veterinary practices, where students have historically begun their training as aspiring veterinarians.

With the shortage of veterinarians in the country, particularly in rural areas where large animal practitioners are desperately needed, this bill would end up harming—not protecting—animals in need of veterinary care.

An alternate means to protect animals should replace this well-intentioned bill that falls woefully short.

Kim Kavin, author of “The Dog Merchants” has started to uncover some of the truths in the world of dog rescues.  Not that all rescues are bad, of course, but fact that rescues (and to some extent shelters) have largely replaced pet stores as a source of dogs and puppies for the eight (8) million households in the US seeking to purchase/adopt a new dog.  Rescue organizations, typically with not for profit status despite charging customers for their dogs, are often minimally regulated if they are regulated at all.  This, in sharp comparison to the highly USDA and state regulated breeders, dealers and pet stores they have replaced.

As Kim noted in “When ‘Puppy Mill Rescue’ Blurs The Line Between Saving And Selling Dog,” published on July 14, 2019 in HuffPost, some of the most “prestigious” rescue organizations, like National Mill Dog Rescue, are purchasing dogs and puppies from commercial dog breeders, including USDA licensed breeders, so are not shutting these businesses down, but are supporting them.

Not to suggest that humanely raised USDA-licensed or exempt breeders should be shut down.  The opposite is true.  And, if rescues serve as an outlet for breeding dogs or puppies have some defect or are too old to sell from those pet stores that are still able to do so (which usually require a warranty of health for specified periods of time) then they serve a valuable purpose.  But they should inform their customers about the source of the dog and any potential health issue they are aware of, just like pet stores are required to do.

As reported by Kavin, “the dogs coming from breeders [to National Mill] throughout 2017 and 2018 were far younger, and healthier, than multiple commercial breeding experts and activists suggest they would be in a ‘rescue’ situation.”

The reporting shows that questionable practices at National Mill aren’t limited to marketing. Two agencies in Colorado — the state Department of Regulatory Agencies and a division of the state Department of Agriculture — have opened investigations into the nonprofit following complaints that Jene Nelson, National Mill’s former marketing director-turned-whistleblower, filed with the state in early 2019. Those complaints allege that National Mill has trafficked dogs across state lines without legally required veterinary paperwork, falsified rabies certificates prior to dogs being offered for adoption or transferred to other shelters, and more than once delayed or failed to provide needed veterinary treatment.

This should be cause for concern.  Dogs, increasingly imported (legally or otherwise) into the US from other countries, including those with endemic canine rabies and other zoonotic diseases, poses a hazard to people and pets in the communities where they find their “forever homes.”

The public has been duped into believing that rescues are offering dogs bred in horrible puppy mills that must be shut down.  Truth is that the animal rights groups perpetuating those myths believe all purpose-bred dog breeders are puppy mills.

As Kavin notes, “[t]he virtue signaling around shelters and dog rescue is loud and clear.”  It is long-overdue that the truth about animal rescue is revealed.

A newly introduced bill in New Jersey, S4156 and sister bill A5404 would establish civil action for damages for injury or death of certain animals in certain circumstances.

Those circumstances would include any unlawful and intentional or negligent act of a person that results in the injury or death of a pet dog or pet cat normally maintained in or near the household of the owner, or the injury or death of any service animal or guide dog or a search and rescue dog.

The remedies would not be available for “any governmental agency, or its employees, negligently causing the death of an animal while acting on behalf of public health or animal welfare . . .[or] for professional negligence against a licensed veterinarian.”

So, it appears that this would provide for non-economic damages for veterinary malpractice, or if a government run shelter mistakenly or prematurely euthanized a pet.

For the remaining potential situations in which damages would be applicable, those damages “may include, but are not limited to, the monetary value of the animal, veterinary expenses incurred on behalf of the animal, any other expenses incurred by the owner in rectifying the effects of the cruelty, pain, and suffering of the animal, and, as set forth in subsection c. of this section, compensation for emotional distress suffered by the owner.  If the killed or injured animal was a service animal or guide dog or a search and rescue dog, then the value of that animal may include the cost of any specialized training the animal received.”

Noneconomic damages available if this bill is enacted would be limited to $5000.

Animal rights organizations pressure animal agriculture businesses to include such statements, ostensibly to avoid negative publicity campaigns and protests. Targets include producers of beef, dairy products, eggs,poultry and pork, as well as goat and sheep farmers. Similarly, food manufacturers, distributors and restaurant chains are pressed to advertise that their suppliers comply with certain animal welfare standards.

Of course, the humane care of livestock and poultry is of primary concern to producers and the food sector, but businesses should be aware that many animal rights activists believe that any treatment of animals raised for human consumption is inhumane.

Several of these organizations target farmers, biomedical research facilities and animal breeders in undercover investigations after obtaining employment under false pretenses. They claim that their Constitutional First Amendment rights protect this conduct.

In federal litigation in North Carolina, the Animal Legal Defense Fund (ALDF) and People for the Ethical Treatment of Animals (PETA) admitted that they have used undercover investigators to gather video and audio evidence of what they believe to be unethical or illegal treatment of animals.

AnimalRecoveryMission (ARM), another activist organization, also conducts undercover investigations. Following their undercover investigation at Fair Oaks Farms, a dairy farm in Indiana, Newton County Prosecutor Jeff Drinski said, “Detectives had evidence that ARM’s undercover investigator coerced or encouraged workers to hurt calves for the sake for a series of videos.”

Despite that, Fair Oaks, its affiliates and joint venture partner were named as defendants in class action lawsuits filed after release of the videos, alleging violations of state deceptive and false advertising statutes as well as unfair competition and fraud. The suits cited the defendants’ promises of humane care and animal welfare advertising, alleging that consumers relied on those promises when purchasing their products, and that the videos taken by ARM revealed the statements to be deceptive, constituting false advertising.

Plaintiffs attorneys trolling for class actions related to product labeling claims is nothing new. But these lawsuits present a troubling new twist by capitalizing on the pressure placed on animal agriculture producers, intermediate manufacturers and end retailers to commit to animal welfare statements and labels. This is now increasingly combined with video created by undercover activists — whether accurately portrayed or not.

In light of this trend, businesses should carefully review their animal care and handling statements, policies and related labeling and should remind relevant staff of the criticality of proper and humane care. Security at farms and hiring practices should also be reviewed.

An increasing tactic of animal rights organizations (AR) is to mine public records in the hopes of finding ammunition to use against universities, pharmaceutical companies, contract research organizations and associated vendors.

People for the Ethical Treatment of Animals has used data from public records to launch a database of universities, grading them “bad” to “worse,” even if they do not currently house animals involved in research.

Although the filing of many public documents is mandatory, there are steps researchers can take to minimize the impact of these adverse tactics.

The statistics are illuminating, revealing that many ARs are well funded and laser focused on filing requests under the Freedom of Information Act and similar state laws. The National Institutes of Health and the U.S. Department of Agriculture have seen sharp upticks in recent years in FOIA requests from these groups:

  • People for the Ethical Treatment of Animals
  • National Anti-Vivisection Society
  • Stop Animal Exploitation Now
  • New England Anti-Vivisection Society
  • American Society for the Prevention of Cruelty to Animals

The mission statements of these ARs is to end the use of animals in research. Their tactics for accomplishing this mission include public relations campaigns and litigation, as well as undercover operations in which activists infiltrate research facilities, posing as employees, with the hopes of gathering or creating evidence, especially in the form of video.

This places ARs squarely at odds with many researchers in academia, nonprofits and a wide range of industries, particularly pharmaceuticals. For researchers, animals remain the only way to ensure certain drugs and devices are safe and efficacious for use in humans, but they endeavor to reduce, replace and refine the use of animals, as ethically and legally required.

Public records are increasingly used by ARs as a starting point for waging battles with researchers. SAEN and others file complaints with the USDA and other agencies requesting violations or fines to be assessed and elimination of animal studies. Some also target individual researchers, universities, specific programs, contract research organizations and vendors related to all and attempt to bully them into ceasing operations.

What protective measures can you take?

All documents and information provided to any governmental agency should be designated as confidential and proprietary as applicable. This information should be routinely handled in the same manner to ensure adequate protection. Trade secret information and other information that, if publicly released, would result in competitive harm should be redacted before disclosure to a requesting entity, in addition to personal data. Confidentiality agreements between vendors, licensees and the like should also be kept up to date.

Security efforts should also extend to your standard operating procedures, including physical security of your facility and protectable information, hiring practices, employee training and policies that restrict access to protectable information and animals.

Staff should be required to report any animal-handling or care-related concerns immediately and respond promptly to correct any deviations from proper care. Planning for response to intrusions from AR should also be included in the organization’s disaster planning.