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HISA Submits Proposed Racetrack Safety Rule Changes to FTC for Approval

Edited Press Release

The Horseracing Integrity and Safety Authority (HISA) has submitted proposed rule changes to its Racetrack Safety Program to the Federal Trade Commission (FTC) for review. A red-lined document noting these proposed changes is available here. The FTC will subsequently post the proposed rules to the public register for public comment.

Until changes to the rules are approved by the FTC, the previously approved version of HISA's Racetrack Safety rules, which took effect July 1, 2022, will remain in place. Those rules are available in full on HISA's Regulations Page.

HISA's proposed changes to the Racetrack Safety rules were developed after months of dialogue with and feedback from racing participants across the country, including HISA's Horsemen's Advisory Group. During this time, the proposed rules were shared with industry members for two rounds of informal comments and published on HISA's website for additional industry input. All in, HISA's Racetrack Safety Committee received, reviewed and considered more than 600 comments from racing participants. The proposed changes submitted to the FTC today were reviewed and approved by HISA's Racetrack Safety Committee and full Board of Directors.

When and if these rule changes are approved by the FTC, HISA will undertake robust educational efforts to ensure horsemen nationwide are fully aware of these changes and well-equipped to comply with them before they go into effect.

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HBPA: Negotiations Between HISA And Sales Companies Equate To ‘Preferential Treatment’ For Breeders

Two days after the Horseracing Integrity and Safety Act (HISA) Authority disclosed at a press conference last week that it had initiated discussions with sales companies in an attempt to bring about voluntary compliance with medication policies throughout the lifetimes of Thoroughbreds, the National Horsemen's Benevolent and Protective Association (NHBPA) went on record with a letter filed in the United States Court of Appeals for the Fifth Circuit alleging that those efforts equate to improper rulemaking by the Authority and “preferential treatment” for breeders.

The purpose of the HISA Authority's Sept. 13 press conference was to go public with a months-in-the-making report on 12 horse deaths at Churchill Downs this past spring, and also for the Authority unveil a wide-ranging “strategic response plan” to predict and halt catastrophes before they occur. According to the report, which also listed numerous other safety proposals, the goal of entering into agreements with Thoroughbred auction houses would be “to more effectively align and coordinate our respective anti-doping and medication control [ADMC] programs.”

The purpose of the NHBPA's Sept. 15 legal filing, by contrast, was to let the court know that as the plaintiffs/appellants in a two-year-old lawsuit that is trying to derail HISA based on alleged constitutional violations, the NHBPA and 12 of its affiliates believed that by entering into such negotiations with sales companies, “the Authority has announced its intention to add another line to the already long list of 20-plus examples of the Authority writing the rules for the industry without going through the rulemaking process.”

The two-page letter written by the NHBPA's attorney, Daniel Suhr, prefaced its legal criticisms of the Authority's discussions with sales companies by first stating that, “The NHBPA Appellants appreciate the policy goal to ensure effective ADMC standards that include breeders: as the advocate for owners of horses, they support measures that ensure full and accurate information from breeders for buyers.

“But as a legal matter, two things are obvious from the announcement,” the NHBPA letter continued. “First, one section of the industry that is included in the scope of the Act is receiving preferential treatment-the breeders get to negotiate their rules through voluntary agreements while other sectors like trainers and racetracks have rules imposed upon them by Authority fiat.

“And second, once again the Authority is engaged in regulatory activity outside the rulemaking process. When the Authority enters into a 'voluntary agreement' with a breeding company, it is not required to publish or publicize the text of that agreement (or provide it if requested through FOIA), receive and consider public comment (including feedback from other affected equine constituencies), or run it by the Federal Trade Commission [FTC],” the NHBPA letter stated.

The allegations by the NHBPA were filed with oral arguments in the highly anticipated Fifth Circuit appeals case coming up soon, on Oct. 4.

A lower federal court already ruled back on May 4 that the rewritten HISA law that went into effect Dec. 29, 2022, is indeed constitutional because it fixes the problems the Fifth Circuit had identified in an earlier version of the law. The NHBPA plaintiffs are arguing for another reversal.

The points of law raised by the NHBPA's Sept. 15 letter, however, won't be considered by the court in their current format.

That's because the letter did not meet the standard for the type of filing that notifies the court of pertinent and significant findings after a party's brief has been filed, according to a docket entry made by the court clerk on Sept. 15. “Therefore, we are taking no action on this letter,” the clerk stated.

If the NHBPA wants its comments on the issue to be considered, the clerk's notation continued, “A motion seeking leave to file a supplemental brief is required.”

Regardless of its status, the letter was made public within the docket once the court refused to take action on it, and its contents are important to the broader world of horse racing because the objections over the sales company discussions underscore both the ongoing and newly developing rifts between the NHBPA plaintiffs and the HISA and FTC defendants.

A chief point of contention between the two parties is that the Authority has stated that it will negotiate (rather than propose and implement) ADMC rules upon sales companies because its interpretation of the law is that some young horses sold as auction aren't yet “covered horses” under HISA.

Speaking at the Sept. 13 press conference, Lisa Lazarus, HISA's chief executive officer, explained that “a horse becomes a HISA [covered] horse after it's had its first public workout, first timed workout. So some of the 2-year-old sales would certainly fall under HISA's purview. The weanlings and yearlings wouldn't.”

But, Lazarus added last week, “I think we're at the point where if HISA leads the way that we should, and the way that we intend to, that we'll be able to motivate the industry to come under one kind of comprehensive, understandable, kind of ADMC approach.”

The NHBPA, on the other hand, wrote in a footnote to its Sept. 15 letter that under its reading of HISA, it believes breeders do qualify as “covered persons,” and that breeders as a group are included “among equine constituencies.” Thus, the plaintiffs' argument goes, it's allegedly not fair for one sector of covered persons to have a say in negotiating rules while other covered persons don't.

Asked on Sept. 18 if the HISA Authority would like to comment on the NHBPA's assertions in the letter, an Authority spokesperson wrote in an email that, “The NHBPA overlooks the fact that Congress decided that Thoroughbred horses are not covered horses under the Act until their 'first timed and reported workout.' Therefore, it is necessary for the sales companies to voluntarily agree so that we could effectively align and coordinate our respective ADMC programs throughout the lifetime of a horse.”

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Judge Halts Anti-HISA Suit in Louisiana Pending Outcome of HBPA Case in U.S. Appeals Court

A federal judge has stayed a 14-month-old lawsuit initiated by the states of Louisiana and West Virginia that is trying to wipe out the Horseracing Integrity and Safety Act (HISA) via alleged constitutional violations, ordering the case to be “administratively terminated” until the United States Fifth Circuit Court of Appeals makes a ruling in a separate suit in which the Horsemen's Benevolent and Protective Association (HBPA) is also alleging HISA is unconstitutional.

However, U.S. District Court (Western District of Louisiana) Chief Judge Terry Doughty wrote in his Sept. 14 ruling that, “This Order shall not be considered a dismissal or disposition of this matter,” and that he was halting the case while the Fifth Circuit decision played out “without prejudice to the right of the parties to reopen the proceedings.”

This means the plaintiffs (the two states are joined by the Louisiana racing commission, the Louisiana HBPA, the Louisiana Thoroughbred Breeders Association, West Virginia's racing commission, and five individuals regulated as “covered persons” under HISA) and the defendants (the HISA Authority, the Federal Trade Commission [FTC], plus overseers of both entities) must now await the decision–likely to be issued months from now–that will result from the Fifth Circuit oral arguments scheduled Oct. 4.

In 2 1/2 weeks, the National HBPA and 12 of its affiliates will be trying to prove claims that the 2022 rewrite of the HISA law remains “patently unconstitutional,” and that the Authority overseeing the sport “is basically a private police department” whose sweeping powers equate to “oligarchic tyranny.”

The HISA Authority and the FTC will go into those same arguments backed by a lower court's opinion issued in May that ruled HISA is indeed constitutional, because “Congress cured the unconstitutional aspects of HISA's original approach.”

It's also on the judicial record that the U.S. Court of Appeals for the Sixth Circuit upheld the constitutionality of HISA back in March.

One day prior to Judge Doughty's ruling, Magistrate Judge David Ayo wrote in a report that recommended staying the Louisiana case that the multiple, overlapping anti-HISA lawsuits currently swirling in the court system are clogging federal dockets.

“After an exhaustive review of the landscape of suits challenging the Act, this Court concludes that [an amended complaint the plaintiffs had filed] is the result of deliberate strategy” that equated to “an abuse of procedure and an impermissible use of judicial resources,” Judge Ayo wrote in his Sept. 13 report.

The original lawsuit in this case was filed June 29, 2022, alleging that HISA violates the Fourth, Seventh and Tenth Amendments to the U.S. Constitution, plus the Administrative Procedure Act, which governs the process by which federal agencies develop and issue regulations.

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HBPA: ‘Best Of Both Worlds’ For HISA Is ‘Worst Of All Worlds’ For Horsemen

With oral arguments in the United States Court of Appeals for the Fifth Circuit now five weeks away, the National Horsemen's Benevolent and Protective Association (NHBPA) filed a legal brief Aug. 25 underscoring that the Horseracing Integrity and Safety Act (HISA) Authority unconstitutionally “wants the best of both worlds” by allegedly portraying itself as both a governmental body or a private organization “depending on which suits its interests on any individual argument.”

“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,'” stated the 36-page brief filed Friday by the NHBPA and 12 of its affiliates.

“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 NHBPA 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 NHBPA's filing stated.

“The best of both worlds for the Authority is the worst of all worlds for horsemen,” the NHBPA's filing asserted.

The Fifth Circuit oral arguments scheduled for the first week in October represent the latest attempt by the NHBPA to derail the HISA law via an underlying lawsuit that has persisted in the federal court system for nearly 2 ½ years.

In addition to the HISA Authority, personnel from the Federal Trade Commission (FTC) are defendants in that suit.

Back on Aug. 4, the Authority defendants filed their own brief that told the court the continued legal attacks by the NHBPA are futile because “Congress, the Executive, and all three federal courts that have considered the amended Act have reached the same conclusion: HISA is now constitutional…

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

The NHBPA's Aug. 25 filing swatted back at those claims, citing a legal precedent that stated “it is a central tenet of liberty that the government may not…allow private individuals to regulate other private individuals.”

As the NHBPA put it, “That is now what happens every day in horseracing. The district court must be reversed, and the Act declared unconstitutional, again.”

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 is where the case stands now.

“The FTC and the Authority continue to tie themselves in knots trying to get around two obvious problems: the Act, even as revised, does not allow the FTC to amend or modify rules when they are proposed by the Authority,” the NHBPA's Aug. 25 filing stated. “And the Act, even as revised, still requires the FTC to approve rules written by the Authority on a consistency basis, which this Court held to be a violation of the private non-delegation doctrine.”

The NHBPA alleged in its filing that the Authority and the FTC's “solution to a lack of public accountability is to find an additional way to eliminate public accountability, making matters worse.”

The NHBPA's filing warned of dire ramifications to society in general if the Fifth Circuit doesn't declare the recently amended HISA law unconstitutional.

“If this Court ratifies this law, we will see more and more of our democracy slip away as Congress increasingly turns to this convenient charade of private self-regulatory corporations to govern entire industries,” the NHBPA's filing stated.

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