AQHA Loses Battle Against Clones

In August, 2013, the United States District Court for the Northern District of Texas  decided a case regarding the registration of cloned horses into a breed registry in favor of Plaintiffs, who are equine enterprises and breeders who sell cloned horses. The Plaintiffs had sued the American Quarter Horse Association (“AQHA”) because the AQHA prohibited the registration of clones, and therefore the Plaintiffs were prevented from registering their clones.

The Plaintiffs sued under the Sherman Anti-Trust Act, a statute which was passed in the early 20th century to prevent large corporations from monopolizing their respective industries. The Plaintiffs used the Sherman Act to argue that by refusing to register clones, the AQHA was unfairly restricting trade or commerce. In order for a business to restrict trade, it must have a legitimate reason for the restraint.

The jury entered a verdict for the Plaintiffs and on appeal, the court affirmed the verdict. The breeder Plaintiffs in this case argued that since there was no difference between the genetics of a AQHA registered horse and a clone, there was no legitimate reason for prohibiting the registration of clones. The Plaintiffs also argued that the AQHA already allowed registration of twins, which are genetically identical. Therefore, clones should be treated as twins that are merely separated by time.

The other strong arguments offered by the Plaintiffs were that the AQHA’s conduct violated the Anti-Trust act when, in part, the AQHA went beyond defining the breed to restricting the breeding methods. There was not a sufficiently reasoned debate among AQHA members to justify the restriction because the AQHA also did not have strong evidence of a vote on the matter by the board of directors, but rather it appeared as a decision that was made by a few individuals behind closed doors.

Currently, the AQHA does not have to register clones while the matter is going up on appeal, however if the court again sides with the Plaintiffs, they may have to open the registry doors. This poses an interesting warning for other breed registries which currently prevent the registration of clones.

That is not to say that breed registries will have to allow the registration of clones in their organizations. The lesson is that if they choose to prohibit clones they must first 1) have a legitimate reason for preventing the registration of clones and 2) allow sufficient notice for a discussion to be made, particularly by board members, regarding the association’s clone policy. Breed registries may yet be able to restrict clones if they have a legitimate reason for doing so and reach a decision following open debate and commentary among the members.

The cite for the case discussed above can be found at: Abraham & Veneklasen Joint Venture v. Am. Quarter Horse Ass’n, No. 12 Civ. 00103 (N.D. Tex. Aug. 22, 2013)

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