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Tag: FTC
FTC Publishes Resubmitted HISA Anti-Doping and Medication Control Rules
Edited Press Release
The Federal Trade Commission (FTC) has published the resubmitted Horseracing Integrity and Safety Authority (HISA) Anti-Doping and Medication Control (ADMC) rules to the Federal Register, initiating a 14-day public comment period, according to a press release from HISA Friday morning. The FTC now has 60 days to approve or deny the proposed rules.
HISA's draft ADMC rules were initially rejected by the FTC in late 2022 due to ongoing legal uncertainties. HISA resubmitted the rules for consideration by the FTC to give the agency more authority over HISA in order to address constitutional questions raised by the Fifth Circuit Court of Appeals. That bill passed both houses of Congress in December and was signed into law by President Biden.
Now that the rules have been resubmitted and posted to the Federal Register, HISA said that they anticipated that its ADMC Program would go into effect March 27, 2023, pending FTC approval. The resubmitted rules include a small number of minor revisions from the version submitted in August, 2022. A clean version of the proposed rules is available on the Federal Register now and a red-lined version will be available on HISA's website within the next 48 hours, the Authority said. In its December, 2022 order, the FTC stated it would consider all previously posted comments on the Federal Register as well as any updated or new comments.
Upon implementation, the ADMC Program will be administered and enforced by the Horseracing Integrity & Welfare Unit (HIWU). The development of the ADMC rules included an initial public comment period, numerous open discussions and meetings with industry organizations and individuals, as well as the careful consideration of more than 200 comments submitted by racing participants and the general public.
Included in the rules package are the Equine Anti-Doping and Controlled Medication Protocol, the Prohibited List, Definitions, Arbitration Procedures, Equine Testing and Investigation Standards, and Equine Standards for Laboratories and Accreditation.
“The establishment of uniform, nationwide anti-doping rules in Thoroughbred racing will strongly enhance the safety and integrity of our sport and is a step many in our industry have long advocated for,” said HISA CEO Lisa Lazarus. “The health and safety of horses is our paramount concern, and the consistent enforcement and efficient resolution of rule violations will transform how we protect our equine athletes. We deeply value the input we've received from racing participants throughout the development of these rules, and I encourage all participants to continue to share their thoughts with us moving forward.”
HISA's ADMC Program will advance and modernize anti-doping practices across the sport with components including out-of-competition testing, uniform lab accreditation, a uniform results management process, a robust intelligence and investigations arm and consistent penalties.
As HIWU prepares for the ADMC Program's launch, the organization will continue to publish and share educational material with industry stakeholders, available at hiwu.org, and will host meetings with groups of racing participants to further educate on the new rules and answer questions.
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Texas Federal Judge Won’t Grant Briefing Stay to HISA
Facing a United States Court of Appeals decision from the Fifth Circuit that the Horseracing Integrity and Safety Act (HISA) is unconstitutional and battling three similar lawsuits in various stages within the federal court system, the HISA Authority and the Federal Trade Commission (FTC) were informed Monday that a U.S. District Court judge in Texas won't grant those defendants a requested stay that would halt the briefing schedule in that case pending a final resolution of the Fifth Circuit order.
“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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HISA Opponents Spar On Fifth Circuit’s Unconstitutionality Ruling
With the United States Court of Appeals for the Sixth Circuit set to hear oral arguments Dec. 7 in a case that seeks to reverse a lower court's decision to dismiss a constitutional challenge of the Horseracing Integrity and Safety Act (HISA), the two opposing sides have filed new documentation pertaining to a separate but related Nov. 18 decision by the Fifth Circuit that did, in fact, declare HISA unconstitutional.
Although it's tough at this stage to get a consensus on what might happen with HISA over the next six weeks until an expected Jan. 10 mandate gets issued by the Fifth Circuit to enforce its order (petitions for legal stays, rehearings, or potential actions by Congress are all in play), there is one issue that HISA proponents and opponents seem to agree on: If the Sixth Circuit renders an opinion that is in direct conflict with the one the Fifth Circuit just came up with, HISA's fate could very well end up getting decided by the U.S. Supreme Court.
In the Sixth Circuit case, the plaintiffs are 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.
The defendants are the United States of America, the HISA Authority, and six individuals acting in their official capacities for the Federal Trade Commission (FTC).
On Apr. 26, 2021, the plaintiffs had sued, alleging that “HISA gives a private corporation broad regulatory authority.” On June 2, 2022, that claim was dismissed by a judge in U.S. District Court, Eastern District of Kentucky (Lexington) for failure to state a claim of action. The plaintiffs then appealed to the U.S. Sixth Circuit.
While that Sixth Circuit appeal was pending, the Fifth Circuit came out with its decision in the similar case against HISA that was led by the National Horsemen's Benevolent and Protective Association (NHBPA).
That Nov. 18 ruling stated that HISA is unconstitutional because it “delegates unsupervised government power to a private entity,” and thus “violates the private non-delegation doctrine.” The order remanded the case back to U.S. District Court (Northern District of Texas) for “further proceedings consistent with” the Appeals Court's reversal.
So naturally, both parties prepping for the Dec. 7 oral arguments in the Sixth Circuit case wanted to let that court know of this similar U.S. Appeals Court order, with each side putting its own spin on the recently issued unconstitutionality decision.
The plaintiffs/appellants led off with a Nov. 21 filing.
“The Fifth Circuit reversed the Northern District of Texas's decision on which Defendants-Appellees and the district court below relied, and the court emphatically rejected the very arguments that Defendants-Appellees assert in defense of HISA here,” the document stated.
“The Fifth Circuit held that HISA violates the Constitution's private nondelegation doctrine because 'the Authority is not subordinate to the FTC' [and] 'Congress has given a private entity the last word over what rules govern our nation's Thoroughbred horseracing industry' [and the] 'Authority's power outstrips any private delegation the Supreme Court or our court has allowed.'”
The plaintiffs' filing summed up: “The Fifth Circuit cogently rejected all of the arguments that Defendants-Appellees' raise here. This Court should do the same and reverse the judgment of the district court.”
The U.S., HISA and FTC defendants had a different interpretation in their own Nov. 28 filing.
“The Fifth Circuit panel's decision to invalidate HISA rests on at least two fundamentally mistaken premises,” the pro-HISA reply stated.
“First, the panel determined that 'the FTC's consistency review does not include reviewing the substance of the rules themselves.' That is untrue: HISA requires the FTC to apply its independent judgment in reviewing the substance of all proposed rules for consistency with HISA's standards.
“Whether characterized as an exercise of policy discretion or evaluation for statutory compliance, the FTC (not the Authority) ultimately decides, e.g., if a proposed medication amount is 'the minimum necessary to address the diagnosed health concerns identified during the examination and diagnostic process,' or if a proposed racetrack-safety standard is 'consistent with the humane treatment of covered horses…'”
“Second, the panel determined that the FTC lacks power to modify HISA rules,” the pro-HISA filing continued. “That contradicts (without addressing) the FTC's interpretation of its independent rulemaking authority [and] turns constitutional avoidance on its head….”
The pro-HISA reply summed up: “For both reasons, the Fifth Circuit panel's decision is wrong-and stands at odds with not only the two other federal courts that have upheld HISA, but also 80 years of precedent from the Supreme Court [and] the courts of appeals.”
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