Federal Trade Commission | Horse Racing Free Tips

HISA Rules Back in Force Nationwide After Appeals Court Ruling

A temporary “administrative stay” ruling issued Wednesday night by a panel of three judges from the United States Court of Appeals for the Fifth Circuit means that “pending further consideration,” Horseracing Integrity and Safety Act Authority (HISA) rules are back in effect nationwide.

The Aug. 3 court order trumps a preliminary injunction issued July 26 by a lower U.S. District Court (Western District of Louisiana) judge that had halted the HISA rules in Louisiana and West Virginia pending the outcome of an underlying lawsuit in that court.

In that June 29 civil case, the HISA Authority, the Federal Trade Commission (FTC), and board members and overseers of both entities are alleged to have violated the Fourth, Seventh and Tenth Amendments to the Constitution, plus the Administrative Procedure Act (APA), which governs the process by which federal agencies develop and issue regulations.

The plaintiffs are the state of Louisiana, its racing commission, the Louisiana Horsemen's Benevolent and Protective Association, the Louisiana Thoroughbred Breeders Association, the Jockeys' Guild, the state of West Virginia, its racing commission, and five individuals regulated as “covered persons” under the HISA Act.

The Aug. 3 temporary ruling at the Appeals Court level didn't state a specific timetable for how long it might be in effect.

In addition to setting aside the injunction pertaining to the HISA rules, the stay from the Appeals Court will also put a hold on the lower court making any sort of ruling on a dispute over the wording in the injunction itself.

Plaintiffs and defendants have different interpretations of whether the geographic scope of the injunction applied to entities in just Louisiana and West Virginia or also included all Guild-member jockeys, regardless of where they ride. The defendants had asked the lower court to issue a clarification.

In support of its request that the Appeals Court stay the lower court's injunction, the FTC defendants wrote in an Aug. 1 filing that, “Both the government and the public will be irreparably harmed if the district court's preliminary injunction setting aside the Commission's regulatory program in its entirety in two States remains in effect until this Court resolves this appeal on the merits.

“The Commission's regulations, particularly the approximately five dozen rules addressing racetrack safety, are designed to protect and promote the health of horses, jockeys, and other horseracing participants. The district court's order eliminates those protections, impeding the Commission's ability to accomplish the Act's public purpose and threatening the very harms the regulations are aimed at preventing.”

The FTC filing continued: “The district court's order, entered three weeks after the Commission and Authority began implementing the Commission's regulations, also threatens to sow confusion within the horseracing industry with respect to the rules governing horse races, undermining the Commission's and Congress's interest in a uniform and predictable set of rules governing the conduct of horseracing. Conversely, any harm to plaintiffs from a stay will be slight, if it exists at all.”

In opposition to the motion to stay, the plaintiffs disagreed in an Aug. 3 Appeals Court filing:

“The irreparable harm Plaintiffs would suffer from a stay puts the public interest and balance of harms beyond doubt. Any harm to Defendants' nonexistent interest in furthering an illegal regulatory scheme is easily outweighed by Plaintiffs' irreparable harms,” the plaintiffs wrote.

The post HISA Rules Back in Force Nationwide After Appeals Court Ruling appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

Source of original post

Injunction Halts HISA Rules, But Only in Louisiana and West Virginia

The plaintiff states of Louisiana and West Virginia won a preliminary injunction in federal court Tuesday that will keep the Horseracing Integrity and Safety Act (HISA) Authority's rules from being implemented in those two states until a lawsuit challenging the constitutionality of HISA gets decided in full.

“This court believes the threatened harm to Plaintiffs outweighs any harm that may result to the Defendants and that a preliminary injunction will not undermine the public interest,” wrote Judge Terry Doughty of U.S. District Court (Western District of Louisiana).

“This Court is only ruling on the adoption of the rules by HISA, not the constitutionality of the Act,” Doughty was quick to add.

“The geographic scope of the injunction shall be limited to the states of Louisiana and West Virginia, and as to all Plaintiffs in this proceeding,” Doughty wrote.

The defendants, who consist of the HISA Authority, the Federal Trade Commission (FTC), and board members and overseers of both entities, are alleged in the June 29 suit to have violated the Fourth, Seventh and Tenth Amendments to the U.S. Constitution, plus the Administrative Procedure Act (APA), which governs the process by which federal agencies develop and issue regulations.

Lisa Lazarus, the chief executive officer of the HISA Authority, told TDN in an emailed statement that read, in part, “[Tuesday's] ruling from the Western District of Louisiana relates only to the FTC rules, is limited in geographic scope to Louisiana and West Virginia…and does not question HISA's constitutionality or validity. The Authority remains focused on implementing the Racetrack Safety program and drafting Anti-Doping and Medication Control rules for implementation in January 2023….

“The reality is that the majority of racing participants support the Authority's mission to protect those who play by the rules and hold those who fail to do so accountable in order to keep our equine and human athletes safe and the competition fair. The immense collaboration with state racing commissions, stewards, veterinarians, racetracks, trainers, and other horsemen that has taken place to date is evidence of this support, and we intend to continue to fulfill our mandate and work to make the industry safer,” Lazarus continued.

The plaintiffs, led by the states of Louisiana and West Virginia, plus the Jockeys' Guild and various Louisiana-based “covered persons” under HISA rules, had told the judge that it was imperative to obtain an injunction before the case winds its way through the legal system, lest they be exposed to the alleged harms of the rules. These types of federal court cases can often linger in the legal system for years without resolution.

In a 28-page memorandum explaining his ruling, Doughty noted that two civil suits attempting to get HISA struck down based on alleged unconstitutionality have already failed in federal courts and are currently pending appeal, and that those suits shared some common plaintiffs with the case that is now before his court.

But a key difference, Doughty wrote, is that, “This suit is the third attempt at stopping enforcement of HISA but the first to address the legality of the rules enacted.”

Doughty wrote that he first had to determine whether his court has judicial power to hear this case under the doctrine of “standing.” A federal court has judicial power only where a plaintiff has demonstrated that it 1) suffered an injury in fact; 2) is fairly traceable to the challenged conduct of the defendant, and 3) is likely to be redressed by a favorable decision. The party invoking federal jurisdiction has the burden of establishing those three elements.

Once the first phase of rules (covering racetrack safety, enforcement, and financial assessment methodology) went into effect July 1, Doughty wrote “All Plaintiffs allege they will suffer injuries 'in the form of vast destruction of the horseracing industry through individual penalties and systematic changes to the longstanding regulatory structure and revenue model. They argue that there will be financial costs so great that numerous participants will be driven out of business if the rules are enforced.”

On the other side, Doughty wrote, “Defendants argue there is no injury to Plaintiffs because 1) none of the alleged injuries have 'transpired over the two weeks in which the rules have already been in effect'; 2) the harms are self-inflicted under the rules; 3) there is not a challenge to the Act's scope; 4) the injuries derive from the Act enacted by Congress itself, not any of the implemented rules, and 5) the mere apprehension or fear of future harm does not establish a concrete injury.”

Doughty reconciled those conflicting viewpoints this way: “The applicable time period under this element is not whether the injury has occurred since the implementation of the rules, but whether it was imminent at the time the complaint was filed. While Defendants' argument that the injuries have not occurred and that the private Plaintiffs' fear of future injury might go to the success on the merits, they do not negate Plaintiffs' standing. Plaintiffs are challenging the legality of government action and are objects of said action. All Plaintiffs are participants in the horseracing industry, making them directly affected by regulation actions.”

Doughty wrote that the “fairly traceable” link requirement was straightforwardly accomplished by the plaintiffs.

“Here, there is an obvious link between the HISA rules and Plaintiffs' alleged injuries,” Doughty wrote. “All the above alleged injuries are 'fairly traceable' to the rules enacted thus far by HISA and the FTC.”

The plaintiffs also had to prove the “redressability element of standing,” which requires demonstrating “a substantial likelihood” that the requested relief will remedy the alleged injury.

“Because Plaintiffs are challenging the legality of government action in the form of HISA and the FTC approving and implementing rules, Plaintiffs have demonstrated a substantial likelihood that the requested relief would remedy the alleged injuries in fact,” Doughty wrote. “If Plaintiffs are successful in having the HISA rules declared invalid, this would redress their alleged injuries.”

At a later point in the memorandum, Doughty wrote that “Obtaining a preliminary injunction is an 'extraordinary and drastic remedy'” that a movant is only entitled to if four factors are established.

They are: 1) a substantial likelihood of success on the merits; 2) the movant is likely to suffer irreparable harm without preliminary relief; 3) the possible injury to the movant outweighs the possible harm to the other party, and 4) an injunction is in the public interest.

“Plaintiffs have satisfied all four elements required for a preliminary injunction to be issued. After considering all factors, this Court has determined that a preliminary injunction shall be issued by Plaintiffs against the Defendants,” Doughty wrote.

The injunction shall be in effect, Doughty wrote, “pending the final resolution of this case,” adding that the final ruling could extend all the way up to an appeal before the United States Supreme Court.

The post Injunction Halts HISA Rules, But Only in Louisiana and West Virginia appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

Source of original post

Mulling HISA Injunction, Judge Says No to Lengthy Hearing

After receiving back-and-forth written briefs from both parties on whether or not to impose a preliminary injunction that would halt the Horseracing Integrity and Safety Act (HISA) Authority's rules until a lawsuit challenging them gets decided in full, the judge in charge of the case on Friday denied a request by the plaintiffs to hold a potentially lengthy in-person hearing to debate the issue any further.

The plaintiffs, led by the states of Louisiana and West Virginia, plus the Jockeys' Guild and various Louisiana-based “covered persons” under HISA rules, had told the judge Thursday that it was imperative to allow them to plead their case for an injunction in person.

The plaintiffs wrote in a July 21 court document that they were prepared to produce at least 10 witnesses to testify to the “extreme level of disruption that the HISA rules are inflicting on the States, racing commissions, industry, and its participants.”

That witness list consisted of Louisiana-based horsemen's group and racing commission executives, plus racing officials, veterinarians, owners, trainers, jockeys, a state steward, and two Jockeys' Guild representatives. Some of the proposed witnesses were also plaintiffs in the case.

Judge Terry Doughty of U.S. District Court (Western District of Louisiana) wasn't persuaded that he needed to hear all of that testimony before making up his mind. Writing in a July 22 order, he stated that his pending decision on whether or not to grant a preliminary injunction will be based solely on the written pleadings.

The defendants, who consist of the HISA Authority, the Federal Trade Commission (FTC), and board members and overseers of both entities, are alleged to have violated the Fourth, Seventh and Tenth Amendments to the United States Constitution, plus the Administrative Procedure Act (APA), which governs the process by which federal agencies develop and issue regulations.

The defendants have already survived the plaintiffs' motion for a temporary restraining order that accompanied the original lawsuit. That complaint got filed two days before the July 1 effective date for the first phase of HISA's new rules that are now in effect nationwide.

At that time, Doughty wrote that “issuing a temporary restraining order regarding an Act of Congress would be inappropriate.” But he added that the asked-for preliminary injunction could still be a possibility.

The preliminary injunction question the judge must now decide is fundamentally different, but it still has the potential to halt HISA's rules like a temporary restraining order would have.

A temporary restraining order is generally an “emergency” type of injunction to ward off immediate harm, and it has an expiration date. A preliminary injunction, on the other hand, is often used to restrain a party from taking a certain action while a case is pending, and it usually remains in force until the case gets settled in its entirety.

On July 15, the HISA-led defendants wrote in a filing opposing the injunction that, “The vast majority of stakeholders in the horseracing industry recognize the need for uniform regulations and are cooperating with the Authority and the FTC to ensure a smooth transition to this new congressionally mandated regime. But a small contingent of outliers, including Plaintiffs, have long opposed the Act on policy grounds and are growing increasingly desperate in their attempts to thwart its implementation.”

Not so, responded the plaintiffs in their July 22 filing:

“The facts on the ground further expose the flaws in Defendants' description of the horseracing industry since July 1, when HISA's rules took effect. The industry is in chaos because of HISA's hastily adopted and imprudent regulatory scheme. The FTC shares blame for this chaos because it failed to provide proper oversight of a private, nonprofit corporation's takeover-by-regulation of the horseracing industry; its token consideration and rubberstamp approval of HISA's rules fall far short of the substantive and procedural consideration required,” the document stated.

The post Mulling HISA Injunction, Judge Says No to Lengthy Hearing appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

Source of original post

Feds: Last-Minute HISA Suit An ‘Emergency of Plantiffs’ Own Making’

A federal judge on Thursday opted not to immediately grant the “expedited consideration” restraining order or injunction that opponents of the Horseracing Integrity and Safety Act (HISA) alleged was needed to stave off the “irreparable harm” from “illegal rules” that are set to go into effect at midnight Friday.

But within several hours of learning June 30 that Judge Terry Doughty of U.S. District Court (Western District of Louisiana) had given HISA and other defendants two weeks to file a response to the restraining order motion, the lead plaintiffs from the states of Louisiana and West Virginia made a separate plea to the court, asking for an “immediate” status conference to address “the chaos created by HISA.”

The judge granted that request, and according to the court docket, a telephone conference was to have happened at 5:30 p.m. Eastern, some 6 1/2 hours before the first set of HISA rules was to go into effect. As of 7:30 p.m. Thursday, there were no notations within the docket that the court made any new orders as the result of that status conference.

For details on the new federal lawsuit filed June 29 that seeks to block the HISA rules from going into effect, click here.

“[T]hese issues are extremely urgent,” the plaintiffs stated in the motion requesting the urgent conference. “Plaintiffs face severe and irreparable harm if not granted a temporary restraining order before the legally deficient rules purportedly take effect tomorrow, July 1.”

The Department of Justice, which represents the Federal Trade Commission (FTC), one of the defendants in the case, stated in a June 30 filing that “The FTC Defendants oppose Plaintiffs' requests. The three rules Plaintiffs challenge were approved on [Mar. 3, Mar. 25, and Apr. 1], All three were stipulated to take effect on July 1 by statute. Plaintiffs' eleventh-hour challenge to those rules on the eve of the statutory deadline is therefore an emergency of their own making. Having waited three months to come to Court, Plaintiffs are not entitled to abrogate the two-weeks that the Court has already allotted Defendants for their response briefs.”

The post Feds: Last-Minute HISA Suit An ‘Emergency of Plantiffs’ Own Making’ appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

Source of original post