The Horseracing Integrity and Safety Authority and Federal Trade Commission were granted partial stays on Monday by the United States Court of Appeals that will allow the Authority to continue to enforce almost all of its racetrack safety rules in all states conducting interstate wagering on Thoroughbred racing.
The order follows last week's temporary administrative stay.
A panel of three judges for the U.S. Court of Appeals for the Fifth Circuit in New Orleans, La., ordered the stay of a July 25 injunction from a U.S. District Court judge that would have prohibited the Authority from enforcing its racetrack safety regulations in Louisiana and West Virginia. The lower court ruling was in response to a lawsuit from the two states, their racing commissions, the Jockeys' Guild, Inc., and several horsemen's organizations and individuals who claimed HISA rules were not promulgated in compliance with federal law or went beyond the language in the statute that created HISA.
Specifically, the lawsuit claimed the FTC – which oversees HISA – did not provide sufficient time for public comment before approving certain regulations. The Court of Appeals wrote that the “the stay elements are met with respect to the insufficiency of the 14-day period of notice.”
The suit also claimed HISA regulations go beyond the enabling legislation in certain areas:
-Assessments to the states, which statute says are determined by total starts. HISA adopted a funding formula beneficial to states with lower purses by creating a blended formula that takes into account total starts and total purses. (Rule 8510)
-Definition of covered horses varied slightly between statute and approved HISA regulations. (Rule 2010)
-Investigatory powers in approved HISA regulations also differed from statute regarding search and seizure. (Rule 8400).
The Court of Appeals denied the HISA/FTC request for stays in those specific areas, meaning the funding formula for Louisiana and West Virginia now will be based on total starts and not purses. That may lead to higher assessments for both states.
Elements of the “covered horse” definition cannot be enforced in Louisiana and West Virginia, specifically the provisions saying a horse must be registered by the date of a horse's nomination or entry in a race. Horses will still need to be registered in order to race in all states, including Louisiana and West Virginia.
The current Investigatory Powers regulations may not be enforced in Louisiana or West Virginia, although HISA and the FTC are already in the process of changing those rules to comply with statute.
The Court of Appeals also ordered that the appeal by HISA and the FTC be expedited to a September 2022 oral argument sitting.
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