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Lucinda Finley Q&A: HISA Critics Throwing `Everything” Until Something “Sticks’

After a series of false starts, the Horseracing Integrity and Safety Act's (HISA) signature anti-doping and medication control (ADMC) program is now set to go into effect on May 22.

Continuing to play out against this latest development are a handful of lawsuits seeking to derail the law—a complex legal landscape evolving at seemingly vertigo-inducing speed.

In a ruling delivered last week, judge James Hendrix of the Lubbock Division of the Northern District of Texas found the version of the act amended by Congress at the end of last year to pass constitutional muster. A separate lawsuit filed in the Amarillo Division of the Northern District of Texas had been rolled into this case.

The plaintiffs immediately announced they would appeal the decision, which means the case will go back up to the U.S. Fifth Circuit Court of Appeals.

In a case led by the states of Oklahoma, West Virginia and Louisiana, the U.S. Sixth Circuit Court of Appeals earlier this year also found the version of HISA Congress amended at the end of 2022 to be constitutional. The plaintiffs subsequently petitioned for a rare en banc rehearing of the case. If granted, the hearing would go before all judges within that Court of Appeals.

Another case led by the State of Louisiana is currently before the Lafayette Division of the Western District of Louisiana.

Two new HISA-related lawsuits have also recently been filed, one in the Eighth Circuit led by Bill Walmsley, Jon Moss, and the Horsemen's Benevolent and Protective Association (HBPA) for Iowa.

The other is led by officers of the Thoroughbred Racing Association of Oklahoma, in a suit filed in the Tenth Circuit.

To discuss what these various lawsuits mean for HISA's future both in the near and long term, TDN spoke once again with constitutional and appellate law expert Lucinda Finley, Frank Raichle Professor of Trial and Appellate Advocacy, and director of Appellate Advocacy at the University of Buffalo Law School.

The following has been edited for brevity and for clarity from two separate conversations.

TDN: Judge James Hendrix recently issued a ruling finding the version of HISA amended by Congress at the end of last year to be constitutional. What is the significance of this ruling?

LF: First, it's important to point out that this is the same district judge [Hendrix] who had ruled the previous version of the statute to be constitutional. The Fifth Circuit disagreed, so he was revisiting that in light of the Fifth Circuit decision. He came to the same conclusion as the Sixth Circuit U.S. Court of Appeals that Congress fixed the constitutional problem.

So, the significance of the ruling is that we now have the only two federal courts to thus far consider the constitutionality of the HISA statute after Congress amended it have come to the same conclusion. We've had the three judges of the Sixth Circuit U.S. Court of Appeals and judge Hendrix unanimously agree that Congress cured the constitutional problem when it amended the HISA statute last December. So that's very significant.

Ultimately, it will be up to the U.S. Court of Appeals for the Fifth Circuit to see if they agree.

TDN: You're referring to the plaintiff's immediate response to appeal.

LF: Yes. Of course, whenever any side loses a case in court, they always say they're going to appeal. But the plaintiffs have already won once before the Fifth Circuit and are, I think, strategically correct in trying again.

Let's see what the Fifth Circuit thinks about whether the congressional changes fix the problem the Fifth Circuit previously identified.

TDN: Do you think they've got strong legal legs in this appeal?

LF: No, I do not. I think the Sixth Circuit decision is very thorough and well-reasoned.

The Fifth Circuit had found the primary problem to be that the pre-amendment version of the HISA statute did not give the [Federal Trade Commission] FTC the ability to reject or modify proposed rules by the authority. But the newly amended statute clearly says that the FTC can completely abrogate or modify any proposed rule by the authority.

Congress tailored their amendment directly to what the Fifth Circuit said was the problem. So, I think it's unlikely that the Fifth Circuit would say, 'well, we really meant more than what we've said before.'

TDN: Does this ruling have any bearing on the separate case before the Lafayette Division of the Western District of Louisiana, pertaining to the states of Louisiana and West Virginia currently operating outside of HISA's jurisdiction?

LF: Not officially. The opinion of the Texas federal district court is not binding on the Louisiana District Court. But it is an influential precedent, just like the Sixth Circuit decision is an influential president.

Ultimately, the appeal of this new ruling by Judge Hendrix from the Lubbock Division of the Texas Federal District Court to the Fifth Circuit—the Fifth Circuit's decision whether the amended version of HISA is constitutional or not—will be the ruling that affects the injunction against enforcing HISA in West Virginia and Louisiana that the federal district court in Louisiana issued. I know it gets very complicated. 'This court said this. This court said that.'

TDN: Just to be clear, when the Fifth Circuit Court of Appeals rules on the appeal from the Lubbock case, that decision will essentially guide whether the current injunction preventing HISA from being enforced in West Virginia and in Louisiana stays or goes?

LF: Yes. I think legally it would. There would be a couple of little steps officially. They would remand that case and the district court would have decide how the Fifth Circuit ruling affected the previous ruling.

What I'm saying is that what the Fifth Circuit decides about whether the congressional amendments to the HISA statute last December—whether they cured the constitutional problem or not—will be the really significant legal decision here for Texas, West Virginia, Louisiana, Arkansas, Arizona and the states that were involved in the case that Judge Hendrix just ruled on, as well as the case before the Louisiana Federal District Court.

TDN: Texas is still taking the stance that state law bars them from allowing federal jurisdiction of races run in their state. Where does this decision leave Texas?

LF: It leaves them with the same choice they're currently facing. Texas can continue to insist that it will not adopt federal rules and as a consequence lose the right to interstate simulcast wagering, or it can choose to adopt the federal rules and rejoin interstate wagering, which is financially essential to the continuation of horse racing in Texas.

You would surmise that perhaps the Texas Racing Commission's insistence that it couldn't agree to follow HISA's regulations was being taken in a strategic hope that federal courts would ultimately find it unconstitutional, and it could continue to be the sole regulator for racing in Texas. But every court ruling now after the Congressional amendments to HISA is cutting the legs out from under that strategy.

It is looking increasingly less likely that a federal court will find the amended version of HISA to be unconstitutional. So, if the Fifth Circuit agrees that the Congressional amendments cured the constitutional problem, the Texas Racing Commission essentially will be faced with an existential choice.

Do they want to fall on their sword, continue to allow the state authority to determine the rules for racing in Texas without any federal uniform rules? If they fall on that sword, they are basically dooming the economic future of racing in Texas as we've seen with the dramatic decreases in betting handle [because of] Texas tracks being barred from participating in interstate simulcasting wagering.

TDN: More generally, the industry is gearing up for the ADMC program to once again go into effect on May 22. From here on in and given the latest lawsuits filed, how realistic do you think it is that HISA's flagship drug and medication enforcement program could be halted through legal intervention?

LF: We clearly have a strategy by the groups that are opposed to HISA to file as many different court cases as they can in different federal courts around the U.S. in different appellate circuits in the hope that one of them might result in a judge issuing a nationwide injunction to halt HISA and its rules.

In a way, it's 'throw everything you can at a lot of different walls in the hope that something will stick somewhere.'

What would potentially put the medication program in jeopardy is if in one of these newly filed or still pending federal cases, a judge issued a nationwide injunction against HISA which would [apply] not just in the state where the case was filed, and not just for the parties that brought the case, but throughout the entire country. It would say that HISA is unconstitutional and cannot enforce its rules.

If that were to happen, then the legal response of the federal government would be to seek a stay of that injunction first in the circuit court, and then potentially in the U.S. Supreme Court, while the overall litigation and appeals processes are played out.

It's similar to what just happened with Judge [Matthew] Kacsmaryk and his ruling against the abortion pill, mifepristone. He said the FDA approval was ineffective everywhere. When the Fifth Circuit only partially stayed that ruling, the government went immediately to the U.S. Supreme Court to say, 'please put a stay or suspension on the ruling while the appellate process goes into play.' And the Supreme Court did that. A similar strategy would play out with HISA.

It's a very long way of coming around to your question. I think that the longer the medication program goes on in effect, the more it takes hold and the more states and tracks are operating under it, the stronger the government's argument would be to put a stay or suspension on the effectiveness of any court ruling against HISA by saying, 'it is upsetting a regulatory status quo that people are already relying on.'

TDN: What can you tell us about the two new lawsuits filed in the Eighth and Tenth Circuits?

LF: They essentially raise the same arguments that have been raised in other cases.

They argue that even with the changes to the statute, it still delegates too much rulemaking authority to the private authority—an argument that the Sixth Circuit rejected. They argue that it violates the appointment process for federal officials. But that one is kind of subsumed by the delegation of authority argument. They argue that the enforcement mechanism [is unconstitutional] because people who are not federal judges get to adjudicate disputes. But that's an argument that basically challenges the entire regulatory system.

TDN: What do you make of the plaintiff's request for an “en banc” hearing in the Sixth Circuit case led by the states of Oklahoma, West Virginia and Louisiana?

LF: I assume they assessed the likelihood of the Supreme Court taking the case and said, 'no, there really isn't a conflict with the Fifth Circuit. So why not try to get the entire Sixth Circuit to reconsider the case? And if they do, fine.' You've got a lot more judges to convince. If they don't, then your clock for appealing to the Supreme Court runs afresh. But I don't think it's very likely that the Sixth Circuit will agree to take the case 'en banc.'

TDN: What are the chances one of these cases will still make it to the Supreme Court?

LF: I think the chances are entirely determined by whether the Fifth Circuit disagrees with the Sixth Circuit.

If the Fifth Circuit overruled Judge Hendrix's ruling and says, 'no, we don't think Congress cured the problem,' then you would have a direct conflict with the Sixth Circuit about the constitutional validity of a federal statute. In that situation, I think the Supreme Court would have to take the case.

But if the Fifth Circuit affirms Judge Hendrix's new ruling, you'll have no conflict in the circuit, and I do not think the Supreme Court would intervene and take the case.

TDN: If the Fifth Circuit affirms the constitutionality of HISA, you're saying it's significantly less likely that the Eighth and Tenth Circuits will find it unconstitutional?

LF: That's correct. I guess what I'm saying is that if the Fifth Circuit affirms Judge Hendrix's new ruling and holds that the congressional amendment fixed the constitutional problem, the legal game is very close to being over for the opponents of HISA.

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Federal Judge Rules HISA Constitutional After Law’s Rewrite

The revamped Horseracing Integrity and Safety Act (HISA) statute that got signed into law back in December was judged to be constitutional late on Thursday by the Texas federal district judge handling the case on remand from the United States Court of Appeals for the Fifth Circuit.

“Congress answered the call-identifying the three constitutional concerns that led the Fifth Circuit to hold HISA unconstitutional and rectifying each with the amendment,” wrote United States District Court Judge James Wesley Hendrix in his May 4 order out of the Northern District of Texas (Lubbock Division).

“The Federal Trade Commission (FTC) can now initiate rulemaking according to its own policy preferences,” Hendrix wrote.

“Given the Court's findings of fact and conclusions of law, the plaintiffs fail to establish that HISA, as amended following the Fifth Circuit's opinion, continues to violate the Constitution,” Hendrix wrote. “The Court denies all other requested relief.”

The HISA Authority issued a statement in the aftermath of the ruling that said, “We appreciate the Federal District Court's re-affirmation of HISA's constitutionality. The urgent need for nationwide, uniform rules to enhance the safety and integrity of Thoroughbred racing has never been clearer. We look forward to the resumption of HISA's Anti-Doping and Medication Control program on May 22, as ordered by the FTC.”

The court order delivers a legal blow to efforts by the National Horsemen's Benevolent and Protective Association (NHBPA), which had initiated the underlying lawsuit along with 12 of its affiliates in 2021. But Thursday's ruling won't end the case.

“We plan an immediate appeal of this decision, and we remain confident in our legal arguments,” Daniel Suhr, the lead attorney representing the NHBPA, stated in a press release. “Congress cannot abdicate its authority to a private corporation. Challenging this law is critical to protecting democratic accountability enshrined in our constitution.”

Eric Hamelback, the NHBPA's chief executive officer, stated in the same release that, “We've been down this road before. After a loss in the district court, we secured a win in the Fifth Circuit Court of Appeals. We will win there again, We will fight to protect horsemen and their constitutional rights all the way to the Supreme Court if needed.”

The NHBPA's case was later joined by other intervenors in Texas and private racetrack entities in that same state who had their case recently transferred to the Lubbock Division because of the overlapping nature of the complaints. The defendants are personnel from the HISA Authority and the FTC.

Hendrix was the same judge who, back on March 31, 2022, dismissed the NHBPA's underlying lawsuit, 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 NHBPA plaintiffs appealed that decision, leading to the Fifth Circuit's reversal on Nov. 18, 2022. That ruling stated HISA was unconstitutional because it “delegates unsupervised government power to a private entity,” and thus “violates the private non-delegation doctrine.”

But the Fifth Circuit's order also remanded the case back to the Lubbock Division for “further proceedings consistent with” the Appeals Court's reversal.

In the interim, Congress passed and President Biden signed into law on Dec. 29 an amendment to HISA designed to bring the law into constitutional compliance consistent with the Fifth Circuit's identified flaws.

“The Court finds that the congressional amendment to § 3053(e) cured the constitutional issues identified by the Fifth Circuit,” Hendrix wrote in his May 4 order. “First, the Fifth Circuit identified that HISA improperly granted the Authority 'sweeping rulemaking power,' but the FTC's new power to 'abrogate, add to, and modify' the 'rules of the Authority' closed the necessary gap in the relative rulemaking power between the FTC and the Authority.

“Second, the Fifth Circuit noted that the FTC's review of Authority rulemaking was limited to so-called consistency review, which gave the Authority the final word on policy. But because the FTC now has the right to make its own policy choices, the amendment remedied that concern,” Hendrix wrote.

“In sum, the only fair reading of the statute is that the FTC can create new rules as necessary to accomplish its policy preferences,” Hendrix wrote.

“It is no secret that Congress amended HISA in response to the Fifth Circuit's opinion. For Congress to amend the law without addressing one of the critical issues identified by the Fifth Circuit would be, to say the least, unusual,” Hendrix wrote.

“For all these reasons, the Court rejects the plaintiffs' arguments and conclude that Congress cured the unconstitutional aspects of HISA's original approach,” Hendrix wrote

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HISA Authority Challenges ‘Piggyback’ Strategy in Amended Louisiana Lawsuit

The recently amended federal lawsuit spearheaded by the state of Louisiana against the Horseracing Integrity and Safety Act (HISA) Authority and the Federal Trade Commission (FTC) is facing a new challenge from the HISA Authority defendants, who filed a Mar. 6 motion to strike the latest version of the complaint based on allegations that the plaintiffs are “improperly” attempting to use federal rules of civil procedure to turn the case to their advantage.

The chief beef in the HISA Authority's Mar. 6 “motion to strike” filed in U.S. District Court (Western District of Louisiana) centers on the addition of an expanded slate of new plaintiffs to the lawsuit initially filed on June 29, 2022.

The plaintiffs had amended that complaint on Feb. 6, 2023, and changes to the lawsuit included the addition of 14 new individual Horsemen's Benevolent and Protective Association (HBPA) affiliates, plus a wide swath of states, racing commissions, and individual racetracks.

“Plaintiffs, having obtained a preliminary injunction from this Court that redresses their alleged harms, now seek to add a 'vast number of organizations' and States as new plaintiffs in a blatant attempt to 'extend the injunction nationwide,'” the HISA Authority's Monday filing stated.

These new plaintiffs, the HISA Authority's motion stated, “have already been litigating challenges to HISA in other federal courts for almost two years. Plaintiffs' gamesmanship is transparent. Their tactic? To use [federal civil procedure rules] to dodge [the legal] standard that dooms the pending intervention motion these same would-be parties previously filed now that the Court has issued a preliminary injunction in Plaintiffs' favor.”

The HISA Authority's motion continued: “Their strategy? To use the geographic 'range, literally from coast-to-coast,' of the new parties as justification for a shotgun request that the Court 'extend the injunctive relief currently in effect to provide nationwide relief.' Their end goal? To dismantle nationwide regulatory reforms that Congress recently amended and reaffirmed after the Fifth Circuit's opinion reinstating the preliminary injunction.

“Allowing the would-be parties–representing thousands of industry members from across the country–to piggyback on the favorable relief Plaintiffs already secured would undermine principles of justice, encourage forum shopping, prejudice Defendants, and set a dangerous precedent for future litigants looking to parlay any single plaintiff's preliminary win into an expansive nationwide class action that topples congressionally mandated regulations before any briefing on dispositive motions.”

That outcome, the HISA Authority argued, “is particularly unwarranted given that a prior stay order entered by the Fifth Circuit and intervening administrative actions by the FTC (on top of Congress's recent amendment reinforcing its commitment to the HISA regime) cast substantial doubt on the continued viability of the claims underlying the preliminary injunction presently in effect.”

The HISA Authority summed up: “The Court should strike Plaintiffs' amended complaint-at least as to the addition of the 'vast number' of new parties seeking to expand the existing relief into a nationwide preliminary injunction.”

The plaintiffs, back on Feb. 6, articulated the revised version of the lawsuit this way:

“This First Amended Complaint seeks to prevent HISA from continuing to exercise 'unchecked government power' through its FTC-approved rules or any other rules that the FTC may approve now that the Fifth Circuit has issued its mandate [in a separate, but related, case headed by the National HBPA].

“The broad collection of plaintiffs from around the country further justifies Plaintiffs' request for nationwide injunctive relief herein,” the plaintiffs' amended complaint continued.

“And this Court has already recognized that the challenged HISA rules offend the Administrative Procedure Act and HISA's statutory authority,” the plaintiffs stated.

“The Fifth Circuit has further cemented the rightfulness of that decision by rejecting Defendants' appeal of the preliminary injunction order and denying Defendants' requests for additional appellate review in this case that came after Congress tweaked the HISA Act, just as the Fifth Circuit did in [the National HBPA appeal],” the plaintiffs' amended complaint stated.

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`Sometimes, Government Works’: Sixth Circuit Rules HISA Constitutional

“Sometimes, government works.” With those words, the United States Court of Appeals for the Sixth Circuit has upheld the constitutionality of the Horse Racing Integrity and Safety Act (HISA), setting up a potential court battle in the U.S. Supreme Court.

In short, the Sixth Circuit has ruled that the language added to the bill at the end of 2022 to address concerns of unconstitutionality were sufficient to alleviate those concerns.

The plaintiffs in the Sixth Circuit case were comprised of the state of Louisiana; Oklahoma and its racing commission, plus West Virginia and its racing commission. Three Oklahoma tracks–Remington Park, Will Rogers Downs, and Fair Meadows–are also plaintiffs, as are the Oklahoma Quarter Horse Association, the U.S. Trotting Association, and Hanover Shoe Farms, a Pennsylvania Standardbred breeding entity. On the other side of the aisle were the United States of America, the HISA Authority, and six individuals acting in their official capacities for the Federal Trade Commission (FTC).

The key issues surrounded the FTC's rule-making power, and whether the Act gave them enough power to keep it from being subordinate to the the Horseracing Authority.

After the United States Court of Appeals for the Fifth Circuit ruled that HISA was unconstitutional because it “delegates unsupervised government power to a private entity,” and thus “violates the private non-delegation doctrine” back in November, lawmakers added language to the bill to address those concerns.

The three judges on the Sixth Circuit panel–Jeffrey Sutton, Richard Allen Griffin and R. Guy Col Jr.–delivered a unanimous opinion, written by Chief Judge Sutton.

“In response,” reads Friday's opinion from the Sixth Circuit, “Congress amended the Act to give the Federal Trade Commission discretion to `abrogate, add to, and modify' any rules that bind the industry. The Constitution anticipates, though it does not require, constructive exchanges between Congress and the federal courts. A productive dialogue occurred in this instance, and it ameliorated the concerns underlying the non-delegation challenge. As amended, the Horseracing Act gives the FTC the final say over implementation of the Act relative to the Horseracing Authority, allowing us to uphold the Act as constitutional in the face of this non-delegation challenge as well as the anti-commandeering challenge.”

The ruling continues, “After the Fifth Circuit issued its decision and after we heard oral argument in our case, Congress enacted, and the President signed into law, an amendment to the Act that increased the FTC's oversight role. The amendment eliminated the FTC's interim-rule authority and instead gave sweeping power to the FTC to create rules that `abrogate, add to, and modify the rules of the Authority.'”

The ruling cites prior cases which, “taken together, draw a line between impermissible delegation of unchecked lawmaking power to private entities and permissible participation by private entities in developing government standards and rules.”

In its ruling, the court said that the central question was whether or not the Authority was inferior to the FTC. “The Horseracing Authority is subordinate to the agency,” they write. “The Authority wields materially different power from the FTC, yields to FTC supervision, and lacks the final say over the content and enforcement of the law—all tried and true hallmarks of an inferior body.”

The opinion goes on to say why HISA is subordinate to the FTC in two specific instances:

Rulemaking. As amended, the Horseracing Act gives the FTC supervision over the rules that govern the horseracing industry. At the outset, the Horseracing Authority drafts rules on racetrack safety and anti-doping matters, and the FTC must approve those proposals if they are consistent with the Act. But, critically, as the FTC “deems necessary or appropriate,” it “may abrogate, add to, and modify the rules.” The FTC's power to abrogate and change the Authority's rules creates “a clear hierarchy.”
Enforcement. A similar conclusion applies to enforcement of the Act. The Horseracing Authority's enforcement duties are extensive, granted. The Authority implements the Act, investigates potential rule violations, and enforces the rules through internal adjudications and external civil lawsuits. Even so, the FTC's rulemaking and rule revision power gives it “pervasive” oversight and control of the Authority's enforcement activities, just as it does in the rulemaking context.

In its arguments before the court, the State of Oklahoma objected that the amendments to the language, “does not change one feature of the Act—that the FTC has power only to review proposed rules by the Authority for `consistency' with the Act, a standard of review that, it says, does not pick up policy disagreements.”

The judges disagreed. “Maybe so,” they write. “But even if that is the case, the FTC's later authority to modify any rules for any reason at all, including policy disagreements, ensures that the FTC retains ultimately authority over the implementation of the Horseracing Act.”

HISA issued a statement that said, “HISA is grateful to the Sixth Circuit for recognizing and affirming HISA's constitutionality. We remain focused on preparing for the launch of HISA's Anti-Doping and Medication Control (ADMC) Program on March 27 pending final approval by the FTC. Once launched, the combined ADMC and Racetrack Safety programs will, for the first time in racing's history, see national, uniform integrity and safety rules applied consistently to every Thoroughbred horse, racing participant and racetrack in the country.”

The National HBPA, one of the plaintiffs in the Fifth Circuit case, issued a statement as well. “Today, we stand firmly on our victory in the Fifth Circuit, however we are disappointed in the Sixth Circuit ruling. We have stated from the onset that there are multiple aspects of unconstitutionality plaguing HISA. The Fifth Circuit ruled on the arguments presented to them, and the Sixth Circuit ruled on the arguments they were presented. With that, we remain confident in our arguments and committed to our case. As seen now, the shifting legal uncertainty only upholds more confusion ahead for the industry and should lead everyone to agree we need a new bill to correct this uncertainty. We will keep fighting all the way to the Supreme Court if necessary to protect our industry and make sure our rules and regulations are built on a legal foundation.”

Statement from NTRA President and CEO Tom Rooney

“The decision today by the Sixth Circuit Court affirming the constitutionality of HISA is not only the right decision, but the critical step we needed to move forward in the sport of Thoroughbred Racing. Later this month, HISA will begin the implementation of the Anti-Doping and Medication Control Program and will be fully functional. Now is a time for unity within the industry. HISA is the law of the land, and we must all come together to support its initiatives so that HISA can continue its mission to improve the sport with uniform standards of safety and fairness across the country.”

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