Federal Trade Commission | Horse Racing Free Tips

FTC Publishes Resubmitted HISA Anti-Doping and Medication Control Rules

Edited Press Release

The Federal Trade Commission (FTC) has published the resubmitted Horseracing Integrity and Safety Authority (HISA) Anti-Doping and Medication Control (ADMC) rules to the Federal Register, initiating a 14-day public comment period, according to a press release from HISA Friday morning. The FTC now has 60 days to approve or deny the proposed rules.

HISA's draft ADMC rules were initially rejected by the FTC in late 2022 due to ongoing legal uncertainties. HISA resubmitted the rules for consideration by the FTC to give the agency more authority over HISA in order to address constitutional questions raised by the Fifth Circuit Court of Appeals. That bill passed both houses of Congress in December and was signed into law by President Biden.

Now that the rules have been resubmitted and posted to the Federal Register, HISA said that they anticipated that its ADMC Program would go into effect March 27, 2023, pending FTC approval. The resubmitted rules include a small number of minor revisions from the version submitted in August, 2022. A clean version of the proposed rules is available on the Federal Register now and a red-lined version will be available on HISA's website within the next 48 hours, the Authority said. In its December, 2022 order, the FTC stated it would consider all previously posted comments on the Federal Register as well as any updated or new comments.

Upon implementation, the ADMC Program will be administered and enforced by the Horseracing Integrity & Welfare Unit (HIWU). The development of the ADMC rules included an initial public comment period, numerous open discussions and meetings with industry organizations and individuals, as well as the careful consideration of more than 200 comments submitted by racing participants and the general public.

Included in the rules package are the Equine Anti-Doping and Controlled Medication Protocol, the Prohibited List, Definitions, Arbitration Procedures, Equine Testing and Investigation Standards, and Equine Standards for Laboratories and Accreditation.

“The establishment of uniform, nationwide anti-doping rules in Thoroughbred racing will strongly enhance the safety and integrity of our sport and is a step many in our industry have long advocated for,” said HISA CEO Lisa Lazarus. “The health and safety of horses is our paramount concern, and the consistent enforcement and efficient resolution of rule violations will transform how we protect our equine athletes. We deeply value the input we've received from racing participants throughout the development of these rules, and I encourage all participants to continue to share their thoughts with us moving forward.”

HISA's ADMC Program will advance and modernize anti-doping practices across the sport with components including out-of-competition testing, uniform lab accreditation, a uniform results management process, a robust intelligence and investigations arm and consistent penalties.

As HIWU prepares for the ADMC Program's launch, the organization will continue to publish and share educational material with industry stakeholders, available at hiwu.org, and will host meetings with groups of racing participants to further educate on the new rules and answer questions.

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Sixth Circuit Parties Argue Whether New HISA Law Renders Anti-Constitutionality Claims Moot

Parties on both sides of a Sixth Circuit United States Court of Appeals case that seeks to reverse a lower court's decision to dismiss a constitutional challenge of the Horseracing Integrity and Safety Act (HISA) argued via written briefs Thursday as to whether or not a pro-HISA law passed at the tail end of 2022 renders as “moot” any constitutionality claims in the under-appeal lawsuit.

The Jan. 12 briefs were filed in accordance with a Dec. 30 request from the Sixth Circuit to explain how the Dec. 29 signage of the new law (which amended the operative language of HISA) might affect the oral arguments both sides had made in the Sixth Circuit case Dec. 7.

Not surprisingly, the plaintiffs appealing the lower court's ruling–led by the states of West Virginia, Oklahoma and Louisiana–told the court that the anti-constitutionality claims are still relevant.

The defendants–primarily the HISA Authority and the Federal Trade Commission (FTC)–informed the panel of judges that the new law has smoothed over any alleged constitutional issues and paves the way for HISA to move forward.

“The recent amendment to HISA addresses only one of these many constitutional problems,” stated a joint brief filed by all of the plaintiffs, which also include the Oklahoma and West Virginia racing commissions, three Oklahoma tracks, the Oklahoma Quarter Horse Association, the U.S. Trotting Association, and Hanover Shoe Farms, a Pennsylvania Standardbred breeding entity.

“All of HISA's other constitutional defects, however, remain unremedied,” the plaintiffs contended.

The HISA Authority defendants saw it differently, writing that, “Congress's response obviates the principal basis for Plaintiffs' private nondelegation claim in this case, which is predicated on a prior version of HISA that no longer exists.”

In a separate brief, the FTC defendants put it this way: “Congress's recent amendment eliminates any doubt that the private Horseracing Authority 'function[s] subordinately' to the [FTC] in satisfaction of the private-nondelegation doctrine….Congress's grant of general-rulemaking authority to the [FTC] resolves the 'core constitutional defect' plaintiffs purported to identify in support of their private-nondelegation claim….”

The underlying case that the plaintiffs are trying to get overturned via appeal dates to Apr. 26, 2021, when they alleged in a federal lawsuit that “HISA gives a private corporation broad regulatory authority.”

On June 2, 2022, that claim was dismissed by a judge in U.S. District Court, Eastern District of Kentucky (Lexington) for failure to state a claim of action. The plaintiffs then appealed to the Sixth Circuit.

While that Sixth Circuit appeal was pending, the Fifth Circuit came out with its own decision in a similar case against HISA that was led by the National Horsemen's Benevolent and Protective Association (HBPA).

That Nov. 18 Fifth Circuit ruling stated that HISA is unconstitutional because it “delegates unsupervised government power to a private entity,” and thus “violates the private non-delegation doctrine.” The order remanded the case back to U.S. District Court (Northern District of Texas) for “further proceedings consistent with” the Appeals Court's reversal.

But in the interim after the Fifth Circuit ruled and the Sixth Circuit heard oral arguments, Congress in late December amended the operative language of HISA to fix the alleged constitutional defect the panel had identified, and President Biden signed the measure into law as a tiny part of a vastly larger year-end spending bill.

An expected Jan. 10, 2023, mandate issuance date for the Fifth Circuit to enforce its order, has come and gone without any directive from that court that seeks to enforce its anti-constitutionality ruling against HISA. So now the next major court decision on HISA's constitutionality is expected to come when Sixth Circuit issues its order.

The plaintiffs cited specifics about why they believed the new law doesn't alter HISA's alleged unconstitutionality.

“In particular, the FTC still lacks front-end ability to veto the Authority's proposals for policy reasons, a crucial power that the Securities and Exchange Commission (SEC) enjoys when reviewing proposed rules of the self-regulatory organizations that it supervises…” the brief stated.

“The amendment also continues to permit the Authority to exercise numerous executive powers without any supervision or control by the FTC,” the plaintiffs continued. “The Authority continues to have unfettered discretion to bring enforcement actions in federal court and expand HISA's regulatory scope to include any non-Thoroughbred horse breed.

“Finally, and crucially, the amendment does nothing to cure HISA's anticommandeering violation. HISA still pushes the costs of administering HISA onto the States by requiring them to fund the Authority's operations or lose the ability to collect fees for matters that the Authority isn't even regulating.”

The FTC brief also made a comparison between HISA and the SEC, but in a different light.

Because of the new law, the FTC brief stated, “the [FTC's] oversight power is 'now also materially identical' to that of the SEC, a statutory scheme that 'has been upheld against constitutional challenge on many occasions.'”

At a different point, the FTC wrote, “It is unclear whether plaintiffs will continue to press secondary arguments in support of their private-nondelegation doctrine claim. The government has explained either why those arguments fail on the merits, why plaintiffs lack…standing to press them, or both. If plaintiffs continue to urge their arguments despite Congress's amendment to the statute, the Court should reject them…”

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HBPA Rips HISA’s Request for ‘Emergency’ Court Action

The National Horsemen's Benevolent and Protective Association (NHBPA) and 12 of its affiliates have filed a legal challenge to a Jan. 3 “emergency” motion made by the Horseracing Integrity and Safety Act (HISA) Authority that had asked for the United States Fifth Circuit Court of Appeals to vacate its recent HISA unconstitutionality order.

In essence, the horsemen's opposition to the request for emergency treatment stated that no pressing need or harm exists to speed up what would usually be a full 10 days for the NHBPA and other co-plaintiffs from the underlying lawsuit to respond to the motion to vacate the unconstitutionality order.

In the spring of 2022, the Fifth Circuit court had taken this case on appeal from a Mar. 31, 2022, ruling out of U.S. District Court (Northern District of Texas) that affirmed HISA's constitutionality by stating “the law as constructed stays within current constitutional limitations as defined by the Supreme Court…”

Then on Nov 18, a Fifth Circuit panel overturned the lower court's decision by ruling that HISA was indeed unconstitutional because it “delegates unsupervised government power to a private entity,” and thus “violates the private non-delegation doctrine.”

But on Dec. 29, President Biden signed into law a massive, year-end spending bill that included a small bit of language inserted by HISA supporters in Congress that amended the operative language of HISA to fix the constitutional defect the Fifth Circuit had identified.

The passage of that law prompted the HISA Authority's Jan. 3 motion asking the Fifth Circuit to “vacate its opinion and the judgment of the Court forthwith to prevent the serious harms that mount each day [and to] rehear this case in light of the intervening congressional amendment.”

Later on Tuesday (beyond TDN's deadline for this original story), the NHBPA filed its objection to the “emergency” nature of the motion.

“[T]he Authority Appellees come to this Court–on the very last day of their unusually long window to petition for rehearing–and demand that it reverse its prior decision, vacate its opinion, and issue a new opinion and the mandate 'forthwith,' namely, by Jan. 13, 2023. No crisis or irreparable harm justifies this accelerated treatment or a rushed briefing schedule that shortens Appellants' time to respond to the motion.

“The Authority Appellees have had since at least Dec. 5, 2022, to formulate their legal strategy (that being the first day the potential amendment was publicly reported in the news; it is possible the Authority knew much earlier). They have had since at least Dec. 20, 2022, when the omnibus language was first made public, to work on drafting the particulars of their motion (again, they may have seen it before it was made public, or even had a hand in writing the amendment's language).”

At a later point, the NHBPA filing continued: “[T]his is not a motion that can be dealt with in a quick two or three pages, like a motion for an extension of time to file a brief or hold a case in abeyance. This is a motion that seeks to vacate a published opinion of this Court. Such an important motion, in such an important case no less, deserves the full time authorized for a thoughtful, thorough response.

“Appellees point to no crisis or irreparable harm that justifies shortening the normal schedule. … Appellees do not even try to show 'irreparable harm,' even though this Circuit's rule for emergency motions requires that the motion 'state the nature of the emergency and the irreparable harm the movant will suffer if the motion is not granted.'

“If anything, this entire episode once again prompts the question Appellants have been asking all along: Who is really driving the train here, the Authority or the [Federal Trade] Commission? It is the Authority, not the Commission, that…is now filing the motion to vacate and the petition for rehearing. It is the Authority, not the Commission, asking this Court to take a decision that was briefed, argued, and decided over the course of months and toss it all aside in 10 days.”

The NHBPA's filing summed up: “The entire narrative only confirms that the Commission lacks any independent policy interest in the Act's administration or survival; it sees itself as humble minister of everyone else's will.”

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HISA, FTC File to Get Fifth Circuit Opinions Vacated, Cases Reheard

Citing the year-end passage into law of a bill that included language giving the Federal Trade Commission (FTC) more rule-making authority in the Horseracing Integrity and Safety Act (HISA), officials from HISA and the FTC who are defendants in two lawsuits before the Fifth Circuit United States Court of Appeals filed four separate documents on Tuesday seeking to vacate two opinions related to constitutionality issues and get rehearings in both cases.

In one lawsuit initiated by the National Horsemen's Benevolent and Protective Association (NHBPA) and 12 of its affiliates against personnel from the HISA Authority and the FTC, the Fifth Circuit ruled on Nov. 18 that HISA was unconstitutional because it “delegates unsupervised government power to a private entity,” and thus “violates the private non-delegation doctrine.” In this case, the defendants fired back with a pair of “emergency” motions and petitions Jan. 3.

Those filings essentially said that Congress and the President have done their parts to clear up any lingering constitutional ambiguity, and now the Fifth Circuit is obliged to do its duty to “say what the law is” with regard to HISA.

“This is the rare case where critical 'dialogue between and among the branches of Government,' has worked in real time both to advance Congress's pressing policy goals and to address the judiciary's asserted constitutional concerns,” the HISA and FTC defendants stated, referring to how swiftly–just over a month–the legislative and executive branches reacted to the Fifth Circuit's unconstitutionality ruling on HISA.

“Since their July 1 effectiveness date, the new [HISA] regulations have brought much-needed safety reforms to the benefit of horses and horseracing participants and, in turn, have begun to restore integrity to the sport,” the defendants stated.

“A few weeks ago, however, this Court held that HISA violates the private-nondelegation doctrine…. Because (in the panel's view) the FTC lacked 'the final word on the substance of the rules, the panel concluded that the Authority did not 'function subordinately to the agency.'”

The motion to vacate continued: “Congress heard this Court's concern and acted swiftly to resolve it. On Dec. 23 Congress again enacted, and on Dec. 29 President Biden signed into law, bipartisan legislation–this time amending the operative language of HISA to fix the alleged constitutional defect the panel had identified…

“Accordingly, the [Fifth Circuit] panel opinion–predicated on a prior version of HISA that no longer exists and that Congress purposefully replaced–cannot stand. Congress's direct response to the constitutional concern at the heart of the panel opinion–obviating the principal basis for Plaintiffs-Appellants' constitutional objection–strongly supports affirmance of the district court's judgment.

“But regardless of how and when the Court ultimately adjudicates this appeal, the panel should vacate its opinion and the judgment of the Court forthwith to prevent the serious harms that mount each day from the now-moot holding that the former version of the Act is facially unconstitutional…

“The panel should rehear this case in light of the intervening congressional amendment HISA and reverse the district court's grant of a preliminary injunction,” the filing concluded.

That last line refers to a Mar. 31, 2022, ruling in United States District Court (Northern District of Texas) that affirmed HISA's constitutionality by stating “the law as constructed stays within current constitutional limitations as defined by the Supreme Court and the Fifth Circuit.”

The HISA and FTC defendants also made related Jan. 3 filings in a separate Fifth Circuit case. This one involves the states of Louisiana and West Virginia, plus other “covered persons” under HISA, alleging unconstitutionality and federal rulemaking procedure violations.

Unlike the two filings in the above-referenced HBPA case, these were not labelled “emergency” motions or petitions. But they did ask for the panel's previously issued opinion to be vacated, the reinstation of a previously issued stay pending further appeal, and a panel rehearing.

“The district court's order preliminarily enjoining enforcement in Louisiana and West Virginia of all then-existing rules promulgated under HISA directly undermines Congress's goal of providing for uniform regulations to protect horseracing participants (equine and human) and restore integrity to the sport nationwide,” the defendants' filing stated.

“This Court appropriately stayed that order, finding that each of 'the stay elements are met' with respect to the district court's (manifestly flawed) conclusion that the Administrative Procedure Act forecloses the 14-day notice period the FTC formally provided…

“The stay pending appeal was necessary to 'allow [the Court] to bring 'considered judgment' to the matter before [it] and 'responsibly fulfill [its] role in the judicial process.' Yet the panel's subsequent decision to remand the case and lift the stay short-circuits that process, not based on the merits of the district court's order–which have never been adjudicated–but on the sole ground that a panel in a 'separate cases held that 'HISA is facially unconstitutional.'”

The filing summed up: “This Court should vacate its panel opinion and judgment, and reinstate the Court's stay pending further adjudication of this appeal…. The Court should grant [a] panel rehearing and reverse the district court's grant of a preliminary injunction.”

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