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Bill Walmsley, Iowa HBPA File Suit Against FTC Over HISA

Bill Walmsley, Jon Moss, and the Horsemen's Benevolent and Protective Association for Iowa filed suit against the Federal Trade Commission to “stop the illegally constituted Horseracing Integrity and Safety Authority (HISA)” on Thursday, according to a press release from the National HBPA.

The case, Bill Walmsley, et. al. v. Federal Trade Commission, was filed in United States District Court for the Eastern District of Arkansas.

“Congress cannot outsource regulatory authority to a private organization–unaccountable to the American people–that has the power to create rules, levy fines, and adjudicate disputes,” said John Kerkhoff, an attorney at Pacific Legal Foundation. “The Horseracing Integrity and Safety Authority plainly violates the separation of powers embodied in our Constitution.”

The Pacific Legal Foundation is a conservative non-profit legal organization that describes itself as defending “Americans threatened by government overreach and abuse.” They say they are fighting the case in court at no charge.

The FTC has been at the center of recent battles between the National HBPA and other horsemen's groups and the implementation of the Horse Racing Integrity and Safety Act. On November 18, 2022, 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,” thereby violating the private non-delegation doctrine.

On December 29, 2022, Congress passed a so-called “HISA fix” that tweaked the law by giving the FTC limited ability to modify Authority rules. As a result, the Authority resubmitted the medication control rules and issued a public statement saying they were hopeful and optimistic that they would be able to implement them around mid-March. And in fact, due to the resubmitted rules giving the FTC more authority, the United States Sixth Circuit upheld the constitutionality of HISA and its Anti Doping and Medication Controls went into effect March 27. But just last Friday, horsemen had another court victory when a federal judge in Texas delayed the implementation for 30 days due to a violation of the Administrative Procedures Act, which requires most rules to be published for 30 days before their implementation. The ADMC is currently scheduled to go back into effect on May 1.

Friday's press release from the NHBPA reads:

“HISA is a private nonprofit organization. But the Constitution does not permit unaccountable, private actors to wield regulatory authority. Regulators must be accountable to the people, through their representatives in government. The Constitution ensures this by requiring that officers of the United States be appointed by the president or head of an executive department.

In fact, HISA violates the separation of powers in myriad ways:

1. It violates the principle of nondelegation. Congress cannot delegate its power to make the law — especially to a private organization that is not accountable to the president.

2. It violates the Appointments Clause. The Constitution requires that regulations be approved by officers of the United States, and that those officers be nominated by the president and confirmed by the Senate. The members of HISA are not officers of the United States; they are not nominated by the president, and they are not confirmed by the Senate.

3. It violates due process, by requiring that industry participants — owners, trainers, racetrack owners, and others — regulate and oversee their competitors. In practice, HISA is controlled by large industry players.

4. It violates Article III by assuming judicial powers to adjudicate disputes and impose fines. HISA doesn't have to make its case in federal court. Instead, it only needs to convince its in-house tribunal, and appeals go to HISA itself. At no point do the accused have the benefit of meaningful judicial review.”

Somewhat more dramatically, Pacific Legal Foundation's website reads, “The Horse Act's penalties and onerous testing and safety standards could very well force people like Bill (Walmsley) and Jon (Moss), who are not among horseracing's elite or wealthy, out of the sport altogether.”

The PLF says that it has won 15 of the 17 cases it has brought before the Supreme Court, typically fighting against `government overreach' by entities such as the EPA's Clean Water Act, the National Forest Service, and affirmative action.

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Judge Orders Gulf Coast vs. HISA Case Transferred To Same Division As NHBPA Suit

An Amarillo Division federal judge in Texas on Thursday ordered the most recently filed lawsuit out of four active nationwide cases all trying to overturn the Horseracing Integrity and Safety Act (HISA) to be transferred to the Lubbock Division that is currently handling the National Horsemen's Benevolent and Protective Association (NHBPA)'s similar and recently remanded complaint.

The Apr. 6 order by U.S. District Judge Matthew Kacsmaryk (Northern District of Texas, Amarillo Division) comes more than eight months after the litigation was initiated on July 29, 2022, and just one day after the plaintiffs in the Amarillo case asked for a temporary restraining order and motion for preliminary injunction to halt the enforcement of HISA.

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 that no longer conducts live racing 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.

The defendants are the HISA Authority and the Federal Trade Commission.

“Here, Plaintiffs have asked for extraordinary relief in asking for a TRO and a preliminary injunction,” the judge wrote. “Aside from the merits, at issue in the TRO is whether [the] NHBPA [case's 30-day injunction out of the Lubbock Division] remains binding on Defendants.”

The judge outlined the chronology of the two cases that led to his decision.

“In November 2022 the Fifth Circuit held that HISA violated the private nondelegation doctrine [in the NHBPA appeal]. On Dec. 23, 2022, Congress enacted legislation amending the operative language of HISA to purportedly cure the constitutional defect. The amendment was signed into law by President Biden on Dec. 29. Defendants then filed a motion to vacate the Fifth Circuit panel opinion and a petition for panel rehearing. On Jan. 31, 2023, the Fifth Circuit denied Defendants' motions and remanded the case to the Lubbock Division.”

The judge continued: “Because the Fifth Circuit remanded that case back to Lubbock, the Lubbock Division is in the best position to answer these questions. The issues raised by this case and the Lubbock Action substantially overlap. Both cases involve plaintiffs representing the horseracing industry. Both cases involve the same defendants. Both challenge the constitutionality of HISA. The proof adduced to resolve these claims will likely be identical. And the plaintiffs in both cases share the same ultimate objective.

“The Lubbock Action was filed more than a year before this case was filed and the Lubbock Division is much more familiar with the applicable law,” the judge's order continued. “Thus, the principles that underlie the first-to-file rule justify transferring this case to the Lubbock Division.

Quoting from precedents, the judge stated the legal basis for transferring the case.

“Under the first-to-file rule, when related cases are pending before two federal courts, the court in which the case was last filed may refuse to hear it if the issues raised by the cases substantially overlap. The rule rests on principles of comity and sound judicial administration. The concern manifestly is to avoid the waste of duplication, to avoid rulings which may trench upon the authority of sister courts, and to avoid piecemeal resolution of issues that call for a uniform result.”

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FTC Approves HISA’s Anti-Doping And Medication Rule

Edited Press Release

New and enhanced anti-doping regulations took effect in U.S. Thoroughbred horse racing Monday following the Federal Trade Commission's approval of the Horseracing Integrity and Safety Authority's (HISA) Anti-Doping and Medication Control (ADMC) Program.

HISA's ADMC Program, administered by the Horseracing Integrity & Welfare Unit (HIWU), brings all testing and results management under one national authority, standardizes the categories of substances laboratories test for and institutes clear and consistent penalties for violations.

In its authority as the independent administrator of the ADMC Program, HIWU is introducing to the sport a new paperless sample collection system, strategic out-of-competition testing nationwide and centralized adjudication processes to facilitate swift rulings.

“Having a uniform anti-doping program in place for the first time ever will be a game changer for American horse racing,” said HISA CEO Lisa Lazarus. “HISA's ADMC Program is the modern, rigorous yet fair regulatory framework the sport deserves. Its rules, philosophical approach and professional implementation will help ensure the integrity of the competition and demonstrate the seriousness of the industry's commitment to equine welfare.”

HIWU is led by Executive Director Ben Mosier. Among other members of HIWU's leadership team are experts with decades of experience working in anti-doping, including in Thoroughbred racing, as well as in federal law enforcement.

“The HIWU team is proud to partner with HISA in the administration of the ADMC Program, which represents a major advancement in how the sport governs anti-doping enforcement,” said Mosier. “HIWU has been working with state racing commissions and racing participants for months to educate all the sport's stakeholders on the new rules, including through in-person and virtual presentations and the library of resources on our website. I am grateful to all who are working with us, particularly the local sample collection personnel, laboratories and other officials operating under the new uniform procedures now in place.”

The ADMC Program's Prohibited Substances List is divided into two categories: 1) Banned Substances that are never permitted in a horse and 2) Controlled Medications that are permitted outside specified periods. Horses will now be tested for these substances following races as well as outside competition windows through an intelligence-based testing system developed by HIWU. The ADMC Program incorporates internationally recognized standards set by organizations including the Association of Racing Commissioners International (ARCI), World Anti-Doping Agency (WADA) and Federation Equestre Internationale (FEI).

The Horseracing Integrity and Safety Act, passed into federal law by a bipartisan act of Congress, grants HISA jurisdiction over all Thoroughbred horse races in the U.S. that are the subject of interstate off-track or advance deposit wagers.

The ADMC Program is the second of HISA's two regulatory programs to be implemented. HISA's Racetrack Safety Program, which established uniform operational safety rules and racetrack accreditation standards, took effect upon receiving approval from the FTC on July 1, 2022.

National HBPA Statement in Response to ADMC Rules Approval

The National Horsemen's Benevolent and Protective Association released a statement in response to the FTC's approval the Anti-Doping and Medication Control rules, while also committing to filing a motion to stop the rules from going into effect.

“The Authority is barreling forward to implement HISA, and the FTC is enabling it by rubber-stamping another set of seriously flawed rules,” said National HBPA President Doug Daniels, DVM. “Industry concerns must be taken into account, and we believe no one at the FTC is listening. That's why the Fifth Circuit Court of Appeals ruled HISA unconstitutional in our lawsuit. Without our efforts, I fear for our future. Today, we plan to file a motion with the Northern District of Texas court asking the judge immediately to stop these rules from going into effect.”

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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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