As expected, lawyers for the two sides stuck to the finer points of constitutionality law, and there were only several passing references related to horse racing. The arguments centered on the non-delegation doctrine, which is a legal principle that holds that Congress cannot delegate the power to legislate to executive agencies or private entities.

The panel of three judges–the same trio that declared a previous version of HISA unconstitutional last November, leading to an amended version of HISA that became law in December–did not overtly tip their hands as to which arguments they might be favoring based on the questions they asked of the attorneys. Nor did the judges conclude the session by declaring any timetable for issuing their decision.

The National NHBPA, 12 of its affiliates, and a number of Texas-based racetrack entities, plus the state of Texas itself and its racing commission, are the plaintiffs/appellants.

The HISA Authority, the Federal Trade Commission (FTC), and officials from each organization  are the defendants/appellees.

“Congress did not, with this meager amendment, fix the fatal non-delegation problems plaguing HISA,” said William Cole, an attorney for the state of Texas who was among those who argued for the appellants.

“Again, there's at least three areas where the lawmaking power is not sufficiently subordinated, because, as we've mentioned time and again, the Authority's rules govern unless they can shove a rule through notice-and-comment rulemaking. The upshot is that for years, it's likely going to be the case that the Authority's rules govern, not the FTC's,” Cole said.

Joseph Busa, an attorney for the FTC, argued that the appellees believe the Fifth Circuit already settled the outstanding non-delegation issues when the same panel identified the constitutional flaws that led to Congress's rewrite of HISA.

“What [the appellants] are presenting to you, is they are saying no private entity can wield this kind of power, regardless of how subordinate they are, regardless of the degree of supervision that the public agency has over them. That is squarely inconsistent with almost 100 years of Supreme Court precedent,” Busa said.

The panel of judges referenced the “voluminous” number of pre-argument briefs filed by both sides in the case.

The HBPA had written in a pre-argument brief that it has problems with the Authority allegedly portraying itself as both a governmental body or a private organization “depending on which suits its interests on any individual argument,” according to an Aug. 25 court filing.

“Sometimes [the Authority] wants to be like a government entity, with the power to compel registration, collect mandatory fees, conduct searches, draw blood and urine samples, and impose sanctions with 'the force of federal law,'” the HBPA brief stated.

“Other times it wants to be a private business league, choosing its own board, running its own corporate affairs, and exempt from the Appointments and Appropriations clauses, the Freedom of Information Act, etc…” the brief continued.

This purported dual nature of the Authority, the HBPA alleged, “exposes the overall flaw” by which the 2022 rewrite of the HISA law should be struck down.

“Nothing could be more unfair or inequitable than to have a regulator with all the powers of government but exempt from all the democratic accountability and safeguards for liberty imposed on government,” the HBPA's filing stated.

The Authority defendants had asserted to the Fifth Circuit in their own pre-argument brief filed Aug. 4 that the HBPA's “feeble attempts” to contrast HISA with other statutes upheld against private non-delegation challenges rest on supposed differences that are either factually inaccurate or constitutionally irrelevant.

The Authority's brief put it this way: “Congress, the Executive, and all three federal courts that have considered the amended Act have reached the same conclusion: HISA is now constitutional. As every court to consider Congress's amendment has held, HISA no longer violates the private-nondelegation doctrine because the Authority is now subordinate to the FTC,” the filing stated.

The first time the HBPA plaintiffs attempted to challenge the original 2020 version of the HISA statute in federal court, on Mar. 15, 2021, the suit was dismissed, on March 31, 2022.

The HBPA plaintiffs then appealed, leading to the above-referenced Fifth Circuit Court reversal on Nov. 18, 2022, that remanded the case back to the lower court. In the interim, an amended version of HISA got passed by Congress and was signed into law by President Joe Biden on Dec. 29, 2022.

On May 4, 2023, the lower court deemed that the new version of HISA was constitutional because the rewrite of the law fixed the problems the Fifth Circuit had identified.

The HBPA plaintiffs then swiftly filed another appeal back to the Fifth Circuit, which led to an  “expedited” scheduling of the Oct. 4 oral arguments.

The three judges on this Fifth Circuit panel are Stuart Kyle Duncan and Kurt D. Engelhardt (both nominated to their positions by President Donald Trump in 2018) and Carolyn Dineen King (who was nominated by President Jimmy Carter in 1979).

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“Congress, the Executive, and all three federal courts that have considered the amended Act have reached the same conclusion: HISA is now constitutional,” the Authority defendants stated in the Aug. 4 filing.

“As every court to consider Congress's amendment has held, HISA no longer violates the private-nondelegation doctrine because the Authority is now subordinate to the Federal Trade Commission [FTC],” the filing continued.

“Appellants' scattershot attempts to invalidate the Act on other grounds come up short, too,” the Authority's brief stated.

“The district court correctly rejected Appellants' due-process claim,” the brief continued. “Alongside ample statutory safeguards, a trial revealed 'no evidence of actual, unconstitutional self-dealing.' The contention that HISA violates the President's appointment (and removal) powers-which all Appellants concede is 'mutually exclusive' with the private-nondelegation claim-also fails under Supreme Court precedent.

“The Authority's private creation and control confirm what this Court's prior opinion made clear: the Authority's Board members are private individuals rather than 'Officers of the United States'-and thus 'the Appointments Clause says nothing' about them,” the brief stated.

“Finally, NHBPA's feeble attempts to contrast HISA with other statutes upheld against private-nondelegation challenges rest on supposed differences that are either factually inaccurate or constitutionally irrelevant,” the Authority's filing stated.

Back on July 5, the NHBPA, along with 12 of its affiliates, told the Fifth Circuit Court in their own brief that even after being amended by Congress, the December 2022 version of HISA remains “patently unconstitutional,” and that the Authority overseeing the sport “is basically a private police department” whose sweeping powers equate to “oligarchic tyranny.”

In addition to the HISA Authority, personnel from the FTC are defendants in the lawsuit.

The first time the HBPA plaintiffs attempted to challenge the original 2020 version of the HISA statute in federal court, on Mar. 15, 2021, the suit was dismissed on March 31, 2022.

The HBPA plaintiffs then appealed, leading to a Fifth Circuit Court reversal on Nov. 18, 2022, that remanded the case back to the lower court. In the interim, an amended version of HISA got signed into law Dec. 29, 2022.

On May 4, 2023, the lower court deemed that the new version of HISA was constitutional because it fixed the problems the Fifth Circuit had identified.

The HBPA plaintiffs then swiftly filed another appeal back to the Fifth Circuit, underscoring in the July 5 brief that, “This Court's job is to again tell Congress-'No.'”

The Fifth Circuit is hearing this appeal on an expedited basis, with oral arguments tentatively scheduled for the week of Oct. 2.

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Last year, the TXRC argued that it was statutorily barred from joining HISA, and because the enabling federal legislation gave the HISA Authority regulatory jurisdiction over the interstate simulcasting of races, the commission prohibited Texan tracks from exporting their signals.

“I called the Sam Houston Park general manager this morning and asked him to provide me an export request, and I've already approved them,” said TXRC executive director Amy Cook, who also wrote in a memo Wednesday to licensees that the Fifth Circuit's decision finding the law “facially unconstitutional” meant it has no effect on the State of Texas.

Chris McErlean, vice president of racing for Penn Entertainment, Sam Houston's parent company, confirmed that the simulcast signal will be beamed to its out-of-state partners when racing resumes this Friday. Sam Houston's current season began on Jan. 6 and ends Apr. 8.

“We have multiple racetracks, so, our contracts cover all our tracks. Everybody was ready to go as soon as there was some change in the status,” said McErlean. “It's literally the flick of a switch to get it going. We welcome the change. Sam Houston's a good wintertime meet on the schedule for a lot of people, and we're glad people will be able to see it live to bet on.”

When asked to comment on the TXRC's actions, HISA spokesperson Mandy Minger wrote in an email: “The Fifth Circuit's decision concerns only the prior version of HISA, before Congress amended it to remedy the constitutional concern the Fifth Circuit identified. No court has expressed any constitutional concern about, let alone enjoined, the current version of HISA now in effect. We look forward to working with the Texas Racing Commission and Texas racetracks should they resume operations falling within HISA's jurisdiction.”

Early last year, the State of Texas and the TXRC joined as intervener plaintiffs on one of the cases before the Fifth Circuit, led by the National Horsemen's Benevolent and Protective Association (NHBPA).

On Jan. 3, the HISA Authority asked for the Fifth Circuit's Nov. 18, 2022, anti-constitutionality order to be vacated based on a federal rewrite of the HISA law in December.

On Tuesday, the Fifth Circuit panel of judges denied this motion and also shot down separate motions for a rehearing of the case made by both the HISA Authority and the Federal Trade Commission (FTC).

After ruling on those two motions, the Fifth Circuit then issued a mandate that stated, “It is ordered and adjudged that the judgment of the District Court is reversed and remanded to the District Court for further proceedings in accordance with the opinion of this Court.”

The Fifth Circuit encompasses the states of Texas, Louisiana and Mississippi.

Cook explained that her policy decision last year to prohibit the export of simulcast signals from the state's tracks was made “hoping for the legal outcome that HISA has no legal jurisdiction in our state.

“We have avoided HISA jurisdiction because we didn't think that regulatory scheme was constitutional as a policy decision, and now we've avoided it in a legal decision as well,” Cook added. “We were certain that we were going to prevail, but I needed to provide certainty.”

Cook wrote in a memo Wednesday to licensees that, “All horseraces in Texas will continue to be conducted in accordance with the Texas Racing Act and the Texas Rules of Racing.”

This means that Texan racetracks continue to operate in a similar position to those in West Virginia and Louisiana, in that they are bound under the state's regulations and not HISA's safety regulations that went into effect in July last year.

With no simulcast signals beamed out of the state for months, concerns have understandably surrounded the impact on purses from a massive drop in handle.

In early January, the Daily Racing Form reported total wagering had dropped from $11.75 million on six days of live racing in 2022 to $1.04 million on seven days of live racing in 2023. The average per-race handle reportedly declined 92.3%.

The TDN's Bill Finley reported that Saturday's handle at Sam Houston for the Houston Racing Festival was $488,385. Last year, when the races were run on a Sunday, the handle was $5,698,052–a decline of 91.4%.

Cook was unable to provide specific figures as to the numerical hit on the state's purse account, but she played down the impact by saying that out-of-state simulcasting at Texas tracks accounts for roughly 15% of the total purses, the latter of which is bolstered by state subsidies and an increased percentage of on-track handle.

“It's not that we don't think [HISA] has an admirable goal, it's the way they're going after the goal,” said Cook, raising alternative uniform regulatory approaches to HISA, like a “cooperative agreement” model.

“It's not personal,” Cook added. “I told Lisa [Lazarus, HISA CEO] that when she came to Texas. I invited her. She came June 8. I drove her round in my pickup truck, and I said, 'It's not personal but you have a problem. You don't have a sustainable resource model here.'”

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This story has been updated.

The Fifth Circuit United States Court of Appeals on Tuesday denied a motion by the Horseracing Integrity and Safety Act (HISA) Authority for that court to vacate its recent opinion that HISA is unconstitutional.

Back on Jan. 3, the HISA Authority had asked for the Fifth Circuit's Nov. 18, 2022, anti-constitutionality order to be vacated based on a federal rewrite of the HISA law in December.

Also on Tuesday, separate motions for a rehearing of the case made by both the HISA Authority and the Federal Trade Commission (FTC) were shot down by the same Fifth Circuit panel of judges.

And after ruling on those two motions, the Fifth Circuit then issued a mandate that stated, “IT IS ORDERED and ADJUDGED that the judgment of the District Court is REVERSED and REMANDED to the District Court for further proceedings in accordance with the opinion of this Court.”

The flurry of Fifth Circuit court action Jan. 31 bolstered the case for a plaintiff team led by the National Horsemen's Benevolent and Protective Association (NHBPA), which two weeks ago urged the court not to grant either the vacated order or the rehearings because the new federal law that amended the operative language of HISA did not “fix” all the alleged constitutionality issues that plaintiffs have raised in federal lawsuits.

“We view this as additional strong evidence as to the valid concerns we have been raising all along and this should remind everyone that constitutionality isn't optional,” Eric Hamelback, the chief executive officer of the NHBPA, said in a statement.

“We have made it very clear that the one-sentence so-called fix tucked into Congress's must-pass year-end spending bill did not address all the legal questions created in the HISA corporation's enabling legislation,” Hamelback continued.

“With that said, it's extremely gratifying that the Fifth Circuit Court of Appeals has denied the HISA corporation's motion to vacate the Appellate Court's original unanimous opinion that found the Horseracing Integrity & Safety Act unlawful,” Hamelback said.

Asked to comment on Tuesday's court orders and the mandate, Mandy Minger, HISA's director of communications, wrote in an email that, “In the aftermath of the recent Congressional amendment, and without opining on the newly amended HISA law, the Fifth Circuit has sent the case back to the district court. Outside Louisiana and West Virginia, the Authority will continue enforcing the Racetrack Safety Program and preparing for the implementation of its Anti-Doping and Medication Control Program on March 27, subject to the Federal Trade Commission's approval of the rules.”

At a later point in the NHBPA statement, Hamelback took umbrage with the HISA Authority's recent resubmission of those medication rules while constitutional questions remained in limbo.

“Citing the legal uncertainties in the wake of the Fifth Circuit's ruling, the FTC issued an order on Dec. 12 of 2022 disapproving the Anti-Doping and Medication Control proposed rules submitted by the HISA corporation until those questions regarding constitutional challenges are resolved,” Hamelback said. “Therefore, it was the height of arrogance for the HISA corporation to recently resubmit such rules on the pretext that the so-called fix actually was one. As we see it now more than ever, the Fifth Circuit Court made it clear significant constitutional questions remain with HISA.”

Hamelback continued: “To be clear, absolutely nothing has changed in the Fifth Circuit Court of Appeals since the FTC originally rejected these rules, and the FTC must wait on the outcome of ongoing litigation to be resolved. Along with a bipartisan group of U.S. Senators and Congressmen, we believe the FTC must reject these again based on the unconstitutional uncertainty.”

Prior to reaching the Fifth Circuit on appeal, the underlying lawsuit was initiated by the NHBPA and 12 of its affiliates against personnel from the HISA Authority and the FTC on Mar. 15, 2021, bringing anti-constitutionality claims under the private-nondelegation doctrine, public-nondelegation doctrine, Appointments Clause, and the Due Process Clause.

On Mar. 31, 2022, a U.S. District Court judge dismissed that suit, writing in an order that “despite its novelty, [HISA] as constructed stays within current constitutional limitations as defined by the Supreme Court and the Fifth Circuit.”

The HBPA plaintiffs appealed that decision, leading to the Fifth Circuit's reversal on Nov. 18.

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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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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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   Here are the most widely read stories of 2022:

1. Fifth Circuit Court of Appeals Finds HISA Unconstitutional

by TDN Staff. 162,916 views.

It was mid-November and HISA was just a month and half away from taking over the functions of drug testing and enforcing medication rules for the entire sport. The wind was at its back, at least until a bombshell ruling in a federal court. The United States Court of Appeals for the Fifth Circuit ruled that the Horseracing Integrity and Safety Act (HISA) is unconstitutional because it “delegates unsupervised government power to a private entity,” and thus “violates the private non-delegation doctrine.” It was a major blow for HISA and, in time, may prove to be the beginning of the end when it comes to efforts to unify the sport under one umbrella group responsible for regulating many vital aspects of the game.

2. Chris Oakes Sentenced to Three Years

by Bill Finley, 138,313 views.

As has been the case since the indictments in the doping scandal were announced in March of 2020, TDN readers could not get enough of coverage of this story. In March of 2022, standardbred trainer Chris Oakes was sentenced to three years in prison after pleading guilty to one count of misbranding and drug adulteration with intent to defraud or deceive. Oakes was not only doping his own horses, but worked closely with Navarro and provided him with performance-enhancing drugs. Though the subject was a harness trainer, the story of Oakes's sentencing was easily the second most read TDN story of 2022.

3. Owner Hits Jackpot With First Horse

by Bill Finley, 41,777 views

Not everything the TDN reported on in 2022 was about scandals or a matter of gloom and doom. The third story on the list was a feel-good story about 83-year-old owner Pat Kearney. Kearney got involved in the sport late in life and the very first horse he purchased turned out to be Kathleen O. (Upstart), who won the GII Gulfstream Park Oaks and the GII Davona Dale S. “It has been an amazing, exciting, energizing experience,” said Kearney, who races under the name of Winngate Stables.

4. Chad Brown Arrested in Saratoga on 'Obstruction of Breathing' Charge

by Bill Finley, Mike Kane and Sydney Kass, 29,360 views.

Perhaps the most shocking story of the year occurred in August when future Hall-of-Fame trainer Chad Brown was arrested and charged with criminal obstruction of breathing. It was alleged that Brown choked and then pushed a former girlfriend down some stairs who had entered his house uninvited. Brown later pled guilty to the lesser charge of harassment, which allowed him to avoid any jail time.

5. Flightline Retired to Lane's End

by TDN staff, 26,262 views

After Flightline won the GI Breeders' Cup Classic there was a flicker of hope that he would race in 2023 as a 5-year-old. But, in the end, the realities of the economics of the sport made it so that he was far more valuable as a sire than as a racehorse and his connections announced his retirement less than 24 hours after he won the Classic.

6. Green Light Go Euthanized After Belmont Workout

by TDN staff, 23,849 views

No one wants to see a horse have to be euthanized, particularly one who enjoyed success on the racetrack. Green Light Go (Hard Spun), who won the 2019 GII Saratoga Special S., had to be put down after breaking a sesamoid bone in his right foreleg during a workout at Belmont in April.

7. Parx Investigation Finds Contraband Suspensions Expected

by Bill Finley, 20,635 views

It was the weekend of the GI Pennsylvania Derby at Parx, but not all the news was made on the racetrack. Investigators set up shop at the Parx backstretch gate, checking cars and individuals for illegal contraband. They uncovered a number of syringes and caught a jockey possessing a battery. Two trainers and the jockey were suspended.

8. 2022 Kentucky Race Dates Set

by T.D. Thornton, 19,444 views

With the rise in purses in Kentucky, it's no wonder that this story, which reported on the Kentucky Horse Racing Commission awarding of dates for 2022, was the eighth most-read story of the year in 2022.

9. Trainer Doug O'Neill Suspended 60 Days

by TDN staff, 18,946 views

In November, O'Neill was suspended 60 days, fined $10,000, and put on probation for one year stemming from a medication positive by his starter Worse Read Sanchez (Square Eddie) at Golden Gate Fields May 1.

10. After McCarthy Spill, Migliore Points to the NY Stewards

by Bill Finley, 18,779 views

There are a lot of people, retired jockey Richard Migliore among them, who believe the New York stewards are too lenient when it comes to penalizing jockeys for rough and careless riding. After Trevor McCarthy went down in a spill in November, fracturing his collar bone and pelvis, Migliore called out the stewards.  “It's irresponsible on the part of the rider but they are not being held accountable,” Migliore said. “When that happens, it's human nature. The more you can get away with, the rougher it's going to get. The stewards need to really crack down and lay down the law. No more nonsense.”

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The language is designed to address a ruling in the Fifth Circuit Court of Appeals from November, which found the law as written doesn't afford the FTC enough latitude in the rule-making process.

The Senate voted in favor of the bill 68-29, but it must first pass the House of Representatives before heading to the president's desk.

It's currently unclear what specific language the Senate's version of the $1.7-trillion spending bill includes regarding HISA and the FTC's modified role.

But language in a prior version of the bill allows the FTC to “abrogate, add to, and modify the rules of the Authority promulgated in accordance with this Act as the Commission finds necessary or appropriate to ensure the fair administration of the Authority, to conform the rules of the Authority to requirements of this Act and applicable rules approved by the Commission, or otherwise in furtherance of the purposes of this Act.”

Currently, the FTC can only accept or reject a proposed rule constructed by the Horseracing Integrity and Safety Authority, the private entity given broad umbrella power over implementing the act.

In a statement immediately following the news, National Horsemen's Benevolent and Protective Association (HBPA) CEO, Eric Hamelback, praised last-minute efforts by a group of lawmakers led by Senator Chuck Grassley to strip the language from the omnibus spending bill.

“We know there were several Senators who would have supported removal language. However, the amendment did not get that opportunity and the HISA “fix” language remains in the Omnibus bill. With that said we are on firm ground to remain focused as the “fix” language changes very little about the Act as it remains unconstitutional,” wrote Hamelback.

HISA spokesperson, Mandy Minger, said that the Authority would have a comment after the bill is signed.

If enacted into law, questions swirl about what this legislative fix possibly means for HISA. Various avenues were detailed in a recent conversation with constitutional law expert, Lucinda Finley.

Last week, the FTC announced that it had disapproved “without prejudice” the program's anti-doping and medication control (ADMC) rules because of the law's constitutional holes.

In the near-term, with this new language HISA can resubmit the ADMC rules with the FTC. It would then take approximately 60 days for these rules to go into effect, “assuming that the FTC was going to approve them substantively,” HISA CEO Lisa Lazarus previously explained.

There remains a ruling pending in the Sixth Circuit Court of Appeals concerning similar constitutional questions to the Fifth Circuit. It is currently unclear when that ruling will land.

But if the amended language in the omnibus spending bill is sufficient in the judgement of the Fifth Circuit, it could essentially render the current cases before the Fifth and Sixth Circuits legally moot in a practical sense.

It could also make the possibility of the Supreme Court taking them up altogether highly unlikely.

Even then, don't expect the legal fireworks to end, with a case in the U.S. District Court of Texas–Northern District, Amarillo Division–a potentially nasty looking legal blackthorn for the law.

Finley told the TDN that the case raises several additional constitutional arguments that the Fifth and Sixth Circuits did not rule on, including HISA's investigative, subpoena and punishment power as a private body, and the way in which individuals on the HISA board are appointed.

“It argues that the whole structure is a delegation of not only too much executive authority, but can amount to a delegation of legislative and judicial authority as well,” Finley explained.

If the judge in the case agrees that HISA indeed delegates too much power to a private entity, the plaintiffs in the case are seeking an injunction to suspend enforcement of the law, said Finley.

Would such an injunction apply nationwide or just in Texas?

“You've actually asked what is one of the most raging controversies in U.S. law,” Finley replied, leaving the answer open-ended.

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“No Good Cause Exists to Stay This Action,” wrote U.S. District Judge Matthew Kacsmaryk (Northern District of Texas, Amarillo Division) in his Dec. 12 order. “This is not one of the 'rare' circumstances in which Plaintiffs should be compelled to stand aside while Defendants litigate another case. Defendants make no showing of 'hardship or inequity' in complying with the briefing schedule they previously agreed to. Defendants were already aware of the then-pending appeal in [the Fifth Circuit] when they agreed to the schedule.

“The Court recognizes that the Fifth Circuit's decision [declaring HISA unconstitutional] could moot this challenge or clarify some of the issues,” the judge continued. “But Plaintiffs advance seven distinct constitutional challenges to HISA-including the nondelegation doctrine. Plaintiffs argue HISA violates the doctrine on three alternate bases. [The Fifth Circuit decision] considered only one of those bases. Thus, the Court does not anticipate that the final resolution of [the Fifth Circuit decision] will necessarily clarify the issues in this case by much.

“Additionally, Defendants are considering whether they will petition for a writ of certiorari before the Supreme Court. Hence, it could be months or even years before [the Fifth Circuit decision] reaches finality. Until then, a stay could unfairly harm Plaintiffs because [that order] only binds the parties in that case,” the judge wrote.

The judge did, however, give the HISA Authority 60 days of extra time by mandating a revised briefing schedule that now calls for the HISA and FTC defendants to file their combined responses to the plaintiffs' motion for summary judgment on or before Mar. 6, 2023, which in effect grants the defendants' motion in part.

The plaintiffs in the case are Global Gaming LSP, a limited liability company that owns Lone Star Park; Gulf Coast Racing LLC, the owner of a greyhound track in Nueces County, and both LRP Group Ltd. and Valle De Los Tesoros, which are two limited partnerships separately looking to operate new horse tracks in south Texas. They collectively filed their suit July 29, seeking declaratory and injunctive relief and a preliminary injunction against HISA.

The Fifth Circuit suit was initiated by the National Horsemen's Benevolent and Protective Association (NHPBA) back in 2021. That case was dismissed by a federal judge Mar. 31, 2022, but the Fifth Circuit reversed that decision Nov. 18.

That NHBPA lawsuit is separate from a similar 2021 anti-HISA complaint, again over alleged constitutional issues, headed by racing commissions and attorneys general in Oklahoma and West Virginia. That case, too, was dismissed by a federal judge on June 3, 2022, but the plaintiffs appealed the decision to the Sixth Circuit, which heard arguments on reversing that decision Dec. 7.

A fourth lawsuit, in which both HISA and the FTC are defendants in a complaint initiated by the states of Louisiana and West Virginia, plus the Jockeys' Guild, alleges unconstitutionality and federal rulemaking procedure violations regarding HISA's initial framework of regulations that went into effect July 1. According to the electronic court docket, there has been no filing activity in that case since Sept. 7.

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The bombshell decision Friday out of the United States Court of Appeals for the Fifth Circuit that ruled that the Horse Racing Integrity and Safety Act (HISA) was unconstitutional has opened up a pandora's box of problems and had legal experts scrambling to make sense of the opinion and figure out what is the best path forward for HISA after a resounding setback in court.

“We have a chaotic situation right now,” said attorney Alan Foreman, an expert in equine law and the Chairman/CEO of the Thoroughbred Horsemen's Association. “That's probably the easiest way to describe it. HISA is still in effect, the anti-doping program is anticipated to go into effect on Jan. 1 and now we have a court ruling that declares HISA unconstitutional. And there are still legal maneuvers that can take place. It would have happened regardless of who prevailed at this level because it is clear that the HBPA, its affiliates and those who joined in the lawsuit would have taken it further if there was an adverse ruling. Now it is HISA that has to take it to the next step.”

According to Frank Becker, a private Kentucky-based attorney, the next step for HISA will be to either petition the Supreme Court to take the case or to seek an “en banc” hearing before the Fifth Circuit. Friday's ruling was handed down by a panel of judges, while an en banc hearing would require the case to be heard by the full circuit court.

The Supreme Court hears oral arguments in fewer than 100 cases a year, but Becker thought the court might take this case.

“They might take this one because it's so unusual,” he said.

Foreman agreed.

“When you have different circuits issuing different rulings as has been the case with this those cases often ultimately end up in the Supreme Court,” he said. “I think this case will ultimately wind up with the Supreme Court and a lot of people feel that way. I think they will take the case. It's got to get there first and there has to be a reason for them to take the case, but what has happened so far has set the stage for them to take it.”

Attorney Bennett Liebman, a Government Lawyer in Residence at Albany Law School, said it was a tossup as to whether or not the Supreme Court would take the case, but said that if it does there are far from any guarantees that the court will rule in favor of HISA.

“This has never been a case from the HISA standpoint that you want to end up in the Supreme Court because the court is obviously very conservative and you just don't know how they are going to rule on this,” he said.

In the meantime, Foreman said, HISA will have to get a stay. Otherwise, it will have to disband on Jan. 10 when Friday's ruling goes into effect.

“Unless there is a stay HISA has to stop in its tracks,” Foreman said.

Foreman said he didn't see a problem getting a stay. Becker disagreed and said he is skeptical HISA will succeed in getting a stay on the ruling in the interim.

Liebman added that there is another way for HISA to prevail. The Fifth Circuit ruling was based on its findings that HISA is ultimately in charge and not the Federal Trade Commission (FTC). “But the Authority is not subordinate to the FTC,” the ruling read. “The reverse is true. The Authority, rather than the FTC, has been given final say over HISA's programs.”

Liebman suggested that HISA could go back to drawing board and ask Congress to rewrite the legislation so that the FTC is clearly put in charge.

“The obvious solution is to try to get Congress to remedy what the Fifth Circuit thought was the problem, that the FTC does not have enough power,” Liebman said. “You could make sure that the FTC had significant power over the rules of the Authority. They could in effect make the rules. They could take recommendations from Authority, but still but make the rules. That is the way to go, but can we achieve that? The way the government works these days, I don't know.”

Becker didn't see that happening.

“Have you seen Congress at work lately?” he said. “Congress is going to be in chaos for the next year or so.”

All three attorneys agreed that the plaintiffs picked the right court when deciding to take their case to the Fifth Circuit.

“It's the Fifth Circuit, which is an extremely conservative circuit, even more conservative as a general rule than the Supreme Court,” Liebman said. “In that sense, this decision is not surprising coming out of the Fifth Circuit. The judge (Circuit Judge Stuart Kyle Duncan) who wrote the decision is ultra conservative.”

Said Foreman: “The experts thought it was constitutional and now it has been declared unconstitutional. I suspect that has something to do with the Supreme Court and this whole focus on the federal government versus states rights. The one circuit that would have reversed the decision and declared it unconstitutional is this circuit. That's why they went there.  They were the ones most likely to declare it unconstitutional. The plaintiffs brought this case to the Fifth Circuit for a reason. They know this partuclar court has been very, very anti-government and very anti-regulation.”

In the days and weeks ahead, the industry will no doubt hear more from HISA and its plan of attack. But Friday was not a good day for the Authority. Can it survive and what will it take to do so? Amid the chaos, that appears to be anyone's guess.

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