Opening Arguments Heard in Cloning Lawsuit

By Jim McBride, Amarillo Globe News

A multimillion-dollar legal battle over the role of cloning in the elite quarter horse industry opened Wednesday in an Amarillo federal courtroom in an antitrust case pitting two area horse breeders against the 280,000-member American Quarter Horse Association.

Last year, rancher Jason Abraham of Canadian and Amarillo veterinarian Gregg Veneklasen sued the AQHA, seeking to overturn the association’s Rule 227a, which bars cloned horses from the AQHA registry. The plaintiffs are seeking more than $6 million in damages.

Nancy Stone, attorney for the plaintiffs, argued that the association, through its Stud Rule Book committee and top AQHA officials, violated federal antitrust laws by preventing cloning registration and abused its authority by exercising monopoly control over the industry.

Stone cited as an example, a statement from Frank Merrill, a former AQHA president, who said during an AQHA meeting that the association would allow registration of cloned horses “over my dead body.”

Stone told jurors that registration with the AQHA is vital to elite horse breeders and that AQHA is reducing the supply of elite quarter horses in the overall market by not allowing clones in its registry.

“The big money is in breeding,” she said. “Registration is absolutely essential for a quarter horse to be worth anything.”

The plaintiffs argue that their cloning process — somatic cell nuclear transfer — is the most recent method of selective breeding, similar to in vitro fertilization and artificial insemination processes widely used in animal reproduction.

Wade Arnold, an attorney for the AQHA, rejected the plaintiffs’ claims that the organization’s top officials maintained monopoly control over the quarter horse industry and said rule changes require a vote by a 350-person board of directors. The AQHA, as a private organization, should be able to control its own affairs.

“They ought to have the right to make their own rules if those rules are reasonable and lawful,” Arnold said in his opening statement to the jury.

The association, he said, surveyed about 3,000 of its members a few years ago and more than 86 percent of the 1,000 people who responded said they were against cloning.

Cloned horses, he said, do not have a sire and a dame and therefore are not eligible to be registered. Although the organization has allowed horse breeders to register horses conceived through other means, such as embryo transfer, cloning is “a completely different animal,” he said.

The plaintiffs, Arnold argued, could establish their own registry that could someday compete with AQHA.

Arnold also said the plaintiffs and Austin-based ViaGen, which owns the patents to its horse cloning technology, said to reap substantial sums if the plaintiffs prevail.

Abraham, he said, has a contract that will grant him 10 percent of ViaGen’s royalties for cloned horses if the plaintiffs win their case.

“This is big money,” he said.

The case is expected to take more than two weeks to try.

The AQHA issues and maintains pedigree records of all American Quarter Horses. The American Quarter Horse market features thousands of sanctioned races each year, and those events doled out more than $131.5 million in purse money last year, according to the AQHA.