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FTC Calls For Dismissal Of Challenge To Horseracing Integrity And Safety Act

Attorneys for the Federal Trade Commission have filed a motion to dismiss a lawsuit filed in the U.S. District Court for Kentucky against the Horseracing Integrity and Safety Act, reports the Daily Racing Form, using similar arguments to those in a dismissal motion against the National HBPA's suit challenging HISA filed in U.S. District Court for the Northern District of Texas.

The Kentucky lawsuit was filed by a trio of states and their respective racing commissions: Louisiana, Oklahoma, and West Virginia. FTC attorneys argued that the creation of the HISA regulatory body does not violate constitutional doctrines regarding Congress' delegation of powers to a private entity.

“Adjudicating the merits of plaintiffs' legal claims now would require the court to evaluate HISA's framework in the abstract, unaided by any concrete facts or interpretative rules from the agency that Congress charged with the statute's implementation,” the motion states. “There is no justification for the court treading this path under any circumstances, and it is doubly improper in a constitutional
challenge.”

McConnell, Barr, Tonko File Brief Asking Court To Dismiss HBPA Lawsuit Against Horseracing Integrity And Safety Act

Attorneys representing three Congressional proponents of the Horseracing Integrity and Safety Act (HISA) have filed an amici curiae brief in support of a motion by defendants to dismiss a federal lawsuit by the National Horsemen's Benevolent and Protective Association and several affiliates alleging that the federal law establishing national oversight on medication and safety policies for horse racing is unconstitutional.

Attorneys Eric Grant of Texas and Paul E. Salamanca of Kentucky submitted the “friend of the court” brief on behalf of Kentucky Sen. Mitch McConnell, who pushed for the passage of HISA as part of omnibus funding bill in December while serving as Senate majority leader; Kentucky Rep. Andy Barr; and New York Rep. Paul Tonko. Barr and Tonko were the primary sponsors of HISA in the House of Representatives. The bill was signed into law by former President Donald Trump.

The brief pushes back against a partial motion to dismiss from HBPA attorneys filed April 30 seeking the court to declare HISA unconstitutional and order an injunction preventing the Horseracing Integrity and Safety Authority, the agency created by the law, from operating as a national oversight body.

The three points of contention countering the HBPA position is that 1) HISA is vital legislation; 2) HISA is the result of extensive legislative deliberation; and 3) HISA is structurally constitutional.

The brief argues that the racing industry recognized that an “acute safety crisis was creating an existential crisis of public confidence” and that HISA was Congress' response to that crisis.

“HISA's mandate to create national, uniform equine health and safety rules is vital to the stability and growth of horseracing,” the brief reads. “Like any regulatory regime, not everyone agrees with HISA's objectives or the means by which the statute achieves those objectives. But the question for this court is only whether Congress had an adequate and legitimate basis for enacting HiSA.”

On the second point, the brief explains the history of previous efforts to pass legislation similar to HISA, with numerous Congressional hearing taking place over the last decade, including one in 2018 and another in 2020. Among the 14 witnesses who testified in the latter two hearings, the brief contends, were four opponents of the legislation, including the CEO of the National HBPA.

The HBPA alleged in its lawsuit that HISA passed the House of Representatives on a voice vote with no debate and that it was never discussed in committee or on the floor of the Senate.

The final point of the brief states that HISA is structurally constituted and modeled on the Maloney Act, which authorized the Financial Industry Regulatory Authority (FINRA) to regulate federal securities markets. FINRA is under the auspices of the Securities and Exchange Commission, which can approve, reject or modify its policies.

Similarly, HISA will operate under the auspices of the Federal Trade Commission, which can approve, reject or modify policies. As a private entity, HISA would “propose, not promulgate” rules to the FTC, according to the brief.

“For the foregoing reason,” the brief states, “this court should grand defendants' motion to dismiss (the lawsuit).”

The McConnell-Barr-Tonko brief was not the only one submitted to the court. The North American Association of Racetrack Veterinarians (NAARV) filed a brief contending that the establishment of the Authority would deny due process to its members.

The suit was filed in U.S. District Court for the Northern District of Texas, Lubbock Division.

The post McConnell, Barr, Tonko File Brief Asking Court To Dismiss HBPA Lawsuit Against Horseracing Integrity And Safety Act appeared first on Horse Racing News | Paulick Report.

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NTRA: ‘Contrary To HBPA’s Hyperbole, HISA Is Neither Unprecedented Nor Unconstitutional’

Following Monday's announcement that the National Horsemen's Benevolent and Protective Association (NHBPA) is filing a lawsuit against the Horseracing Integrity and Safety Act (HISA), the National Thoroughbred Racing Association (NTRA) issued the following response:

Contrary to HBPA's hyperbole, HISA is neither unprecedented nor unconstitutional. HISA emulates the long-established FINRA/SEC model, with even greater protections for all stakeholders. It is disappointing that the HBPA—an entity whose mission is supposedly the welfare of horses and horsemen—would seek to undo much needed reforms to protect the industry's participants.

“HISA, a well-crafted and comprehensive piece of legislation, creates the national framework that addresses our industry's critical need for consistent, forceful anti-doping control and equine safety standards,” said Alex Waldrop, President and CEO of the NTRA. “The NTRA Board of Directors, which consists of representatives from tens of thousands of breeders, owners and trainers from more than 40 states, as well as thousands of horseplayers and virtually every major racetrack in the United States, voted to support HISA. We plan to work tirelessly on behalf of our members and a broad array of interested parties and stakeholders to support HISA's successful launch in July 2022.”

In 2020, the U.S. Congress overwhelmingly passed, and the President signed into law, the Horseracing Integrity and Safety Act (HISA). Through this landmark legislation, HISA recognizes and empowers the Horseracing Integrity and Safety Authority (Authority) to protect the safety and welfare of Thoroughbred horseracing's most important participants—its horses—by delivering commonsense medication reforms and track safety standards.

The NHBPA, along with several of its state affiliates, seeks to upend this historic and bipartisan effort to protect Thoroughbred horses and ensure the integrity of horseracing. The HBPA has recently filed a baseless lawsuit in federal court in Texas, seeking to declare HISA unconstitutional on its face. Setting aside its fatal threshold deficiencies—including the lack of any concrete or imminent harm—the HBPA's lawsuit is meritless. HISA is constitutionally and legally sound. On behalf of a broad spectrum of organizations underlying the sport of Thoroughbred horseracing, we offer the following responses to the various claims by HBPA.

1. HBPA Claim: HISA violates the constitutional “non-delegation doctrine.”

Reality: HISA does not violate the non-delegation doctrine because the United States Supreme Court has long recognized that Congress may rely on private entities so long as the government retains ultimate decision-making authority as to rules and enforcement. HISA recognizes and empowers the Authority to propose and enforce uniform national anti-doping and equine safety standards, but only upon review, approval and adoption by the Federal Trade Commission (FTC). Though this is a first for the Thoroughbred horseracing industry, HISA's structure is not new. HISA follows the FINRA/SEC model of regulation in the securities industry, and, like that model, is constitutional because any action the Authority undertakes is subject to the FTC's approval and oversight.

2. HBPA Claim: The HISA runs afoul of the Appointments Clause.

Reality: The Authority is a private entity, independently established under state law, and recognized by HISA. As such, it is simply not subject to constitutional restraints on appointments (or removal) of its Board members. Indeed, any such claim is at war with HBPA's non-delegation theory premised on the fact that the Authority is a private entity. On the one hand, the HBPA claims that the Authority cannot take action because it is private entity, but then argues, on the other hand, that the Authority cannot appoint its own Board members because it is effectively a public entity. These two HBPA arguments are in conflict, but have one important thing in common: they are both wrong.

3. HBPA Claim: HISA violates due process protections.

Reality: The HBPA's due process theory also falls flat. Though the HBPA complains of equine industry participants regulating their competitors, a strong bipartisan majority of the House and the Senate made clear in HISA that a majority of the Authority's Board members must be from outside the equine industry. To be sure, a minority of the Authority's Board members will have industry experience and engagement. But it is difficult to understand how that statutory recognition of the value of informed voices constitutes a deprivation of due process. What's more, with respect to the minority industry Board members, HISA expressly provides for equal representation among each of the six equine constituencies (trainers, owners and breeders, tracks, veterinarians, state racing commissions, and jockeys). Furthermore, the committee tasked with nominating eligible candidates for Board and standing-committee positions is made up of entirely non-industry members. HISA further imposes broad conflicts-of-interest requirements to ensure that all of its Board members (industry and non-industry alike) as well as non-industry standing committee members (not to mention their employees and family members) are required to remain free of all equine economic conflicts of interest.

Beyond these robust safeguards, established precedent confirms what common sense indicates: even when a private entity is engaged in the regulatory process, agency authority and surveillance protect against promotion of self-interest. Under HISA, for example, the FTC has the authority to decline the Authority's proposed rules and overrule any sanctions—ensuring that neither the Authority nor the individuals making up its Board can use their position for their own advantage in violation of constitutional restraints.

HISA has broad support from the Thoroughbred industry, including: organizations such as the Breeders' Cup, National Thoroughbred Racing Association, The Jockey Club, The Jockeys' Guild, American Association of Equine Practitioners and the Thoroughbred Owners and Breeders' Association; the nation's leading racetracks, including Churchill Downs, Del Mar Thoroughbred Club, Gulfstream Park, Keeneland, The Maryland Jockey Club, Monmouth Park, The New York Racing Association and Santa Anita; leading horsemen's organizations such as the Thoroughbred Horsemen's Association and the Thoroughbred Owners of California; prominent Thoroughbred owners Barbara Banke, Anthony Beck, Arthur and Staci Hancock, Fred Hertrich, Barry Irwin, Stuart S. Janney III, Rosendo Parra and Vinnie Viola; leading Thoroughbred trainers Christophe Clement, Neil Drysdale, Janet Elliot, Claude “Shug” McGaughey, Bill Mott, Todd Pletcher and Nick Zito; grassroots organization Water Hay Oats Alliance, with more than 2,000 individual members; international organizations the International Federation of Horseracing Authorities and The Jockey Club of Canada; and prominent animal welfare organizations American Society for the Prevention of Cruelty to Animals, Animal Wellness Action and the Humane Society of the United States.

The post NTRA: ‘Contrary To HBPA’s Hyperbole, HISA Is Neither Unprecedented Nor Unconstitutional’ appeared first on Horse Racing News | Paulick Report.

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Feds Slam Alleged Dopers’ Assertion That HISA Creates Loophole

Prosecutors in the racehorse doping conspiracy case that ensnared 29 racetrackers, veterinarians and pharmaceutical brokers one year ago tried to convince a federal judge Friday that recent motions made by some of the defendants to dismiss drug alteration and misbranding charges are “without merit” and represent “an effort to invent a statutory limitation where none exists.”

The government's memorandum of law filed Mar. 5 in United States District Court (Southern District of New York) addresses a number of alleged legal flaws in the defendants' motions to dismiss, including several that prosecutors state would be more appropriately argued when the case goes to trial, not before it.

The defendants' motions, prosecutors allege, “do not actually seek the dismissal of the Indictment, but are more accurately described as premature motions regarding the sufficiency of the Government's evidence to be presented at trial…. The Second Circuit makes clear that a challenge to whether a statutory element has been satisfied is a matter for trial.”

The government's filing continues: “Defendants Seth Fishman, Lisa Giannelli, Jordan Fishman, Rick Dane, Jr., Christopher Oakes, Jorge Navarro, and Erica Garcia each ask that this Court insert novel, unsupported, and self-serving language into the text of [federal drug laws] in an effort to avoid felony liability for their illegal misbranding conspiracies.” The memo notes that a dismissal motion filed by defendant Michael Tannuzzo on different grounds should also not be granted.

The filing takes aim at the defendants' creative assertion that government prosecutors are overstepping their legal boundary by bringing charges under the applicable federal statute–the Food Drug and Cosmetic Act (FDCA)–when instead, the defendants argue, the case should instead fall under the authority of the Federal Trade Commission (FTC).

Back on Feb. 5, the defendants made the somewhat surprising legal argument that the Horseracing Integrity and Safety Act of 2020 (HISA)–which was signed into law a full nine months after the arrests were made–allegedly gives “plenary authority,” or absolute regulatory power, to the FTC in all federal matters pertaining to horse racing.

The government's Mar. 5 filing laced into that assertion: “The defendants' respective discussions of the passage of what is commonly referred to as [HISA] in the Fishman Motion and the Oakes Motion shed no light on the purpose or application of the FDCA. That is because the 116th Congress's passage of the HISA in 2020 has no bearing upon the intent of the 75th Congress's passage of the FDCA in 1938, and no implication for the plain language of the FDCA's provisions criminalizing misbranding and adulteration of animal drugs.

“As an initial matter, the Supreme Court disfavors reliance on subsequent legislative history in assessing the language and meaning of prior statutes,” the government's filing continues. “In particular, while 'subsequent legislation can of course alter the meaning of an existing law for the future' and 'can even alter the past operation of an existing law' (constitutional objections aside) if it makes that retroactive operation clear…it cannot inferentially amend the purpose behind passage of a prior statute, as defendants wish.

“The dangers of such post-hoc analysis are plain here. Congress did not–in either the FDCA or the HISA–indicate its intent either to acknowledge or create a 'racehorse industry' exception to the criminal prohibition against the distribution of adulterated and misbranded drugs with the intent to defraud or mislead in the FDCA, nor did it so indicate with respect to any other federal criminal law.

“The defendants' arguments in this respect reflect what seems to be a purposeful misreading of both the HISA and the charges against them: the defendants are not charged with violating state racing anti-doping rules and regulations, for which no federal analogue existed prior to the passage of the HISA; they are charged with felony misbranding and adulteration of drugs in interstate commerce in violation of the FDCA. No interpretative gymnastics are required to 'make sense' of one statute in light of the other.”

The government's filing sums up: “The HISA contains no criminal penalties because Congress determined sufficient criminal penalties were already provided for in existing federal criminal laws, laws which the HISA expressly does not modify. Ultimately, though, no reading of the Congressional tea leaves is required. There is no contradiction between the FDCA and the HISA, and no retrospective ambiguity in the text of the former arises from the text of the latter.”

Other counts of the government's case against the alleged dopers are not affected by this recent series of motion to dismiss, and trials are expected to begin in the second half of 2021. But one defendant, Scott Robinson, who has already pleaded guilty to conspiring to unlawfully distribute adulterated and misbranded drugs for the purpose of doping racehorses, has a sentencing hearing scheduled Mar. 9.

The multi-state simultaneous sting netted the high-profile arrests of trainers Navarro and the 2019 GI Kentucky Derby-disqualified trainer Jason Servis, plus a vast network of co-conspirators who allegedly manufactured, mislabeled, rebranded, distributed and administered PEDs to racehorses all across America and in international races.

The post Feds Slam Alleged Dopers’ Assertion That HISA Creates Loophole appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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