Last year, the TXRC argued that it was statutorily barred from joining HISA, and because the enabling federal legislation gave the HISA Authority regulatory jurisdiction over the interstate simulcasting of races, the commission prohibited Texan tracks from exporting their signals.

“I called the Sam Houston Park general manager this morning and asked him to provide me an export request, and I've already approved them,” said TXRC executive director Amy Cook, who also wrote in a memo Wednesday to licensees that the Fifth Circuit's decision finding the law “facially unconstitutional” meant it has no effect on the State of Texas.

Chris McErlean, vice president of racing for Penn Entertainment, Sam Houston's parent company, confirmed that the simulcast signal will be beamed to its out-of-state partners when racing resumes this Friday. Sam Houston's current season began on Jan. 6 and ends Apr. 8.

“We have multiple racetracks, so, our contracts cover all our tracks. Everybody was ready to go as soon as there was some change in the status,” said McErlean. “It's literally the flick of a switch to get it going. We welcome the change. Sam Houston's a good wintertime meet on the schedule for a lot of people, and we're glad people will be able to see it live to bet on.”

When asked to comment on the TXRC's actions, HISA spokesperson Mandy Minger wrote in an email: “The Fifth Circuit's decision concerns only the prior version of HISA, before Congress amended it to remedy the constitutional concern the Fifth Circuit identified. No court has expressed any constitutional concern about, let alone enjoined, the current version of HISA now in effect. We look forward to working with the Texas Racing Commission and Texas racetracks should they resume operations falling within HISA's jurisdiction.”

Early last year, the State of Texas and the TXRC joined as intervener plaintiffs on one of the cases before the Fifth Circuit, led by the National Horsemen's Benevolent and Protective Association (NHBPA).

On Jan. 3, the HISA Authority asked for the Fifth Circuit's Nov. 18, 2022, anti-constitutionality order to be vacated based on a federal rewrite of the HISA law in December.

On Tuesday, the Fifth Circuit panel of judges denied this motion and also shot down separate motions for a rehearing of the case made by both the HISA Authority and the Federal Trade Commission (FTC).

After ruling on those two motions, the Fifth Circuit then issued a mandate that stated, “It is ordered and adjudged that the judgment of the District Court is reversed and remanded to the District Court for further proceedings in accordance with the opinion of this Court.”

The Fifth Circuit encompasses the states of Texas, Louisiana and Mississippi.

Cook explained that her policy decision last year to prohibit the export of simulcast signals from the state's tracks was made “hoping for the legal outcome that HISA has no legal jurisdiction in our state.

“We have avoided HISA jurisdiction because we didn't think that regulatory scheme was constitutional as a policy decision, and now we've avoided it in a legal decision as well,” Cook added. “We were certain that we were going to prevail, but I needed to provide certainty.”

Cook wrote in a memo Wednesday to licensees that, “All horseraces in Texas will continue to be conducted in accordance with the Texas Racing Act and the Texas Rules of Racing.”

This means that Texan racetracks continue to operate in a similar position to those in West Virginia and Louisiana, in that they are bound under the state's regulations and not HISA's safety regulations that went into effect in July last year.

With no simulcast signals beamed out of the state for months, concerns have understandably surrounded the impact on purses from a massive drop in handle.

In early January, the Daily Racing Form reported total wagering had dropped from $11.75 million on six days of live racing in 2022 to $1.04 million on seven days of live racing in 2023. The average per-race handle reportedly declined 92.3%.

The TDN's Bill Finley reported that Saturday's handle at Sam Houston for the Houston Racing Festival was $488,385. Last year, when the races were run on a Sunday, the handle was $5,698,052–a decline of 91.4%.

Cook was unable to provide specific figures as to the numerical hit on the state's purse account, but she played down the impact by saying that out-of-state simulcasting at Texas tracks accounts for roughly 15% of the total purses, the latter of which is bolstered by state subsidies and an increased percentage of on-track handle.

“It's not that we don't think [HISA] has an admirable goal, it's the way they're going after the goal,” said Cook, raising alternative uniform regulatory approaches to HISA, like a “cooperative agreement” model.

“It's not personal,” Cook added. “I told Lisa [Lazarus, HISA CEO] that when she came to Texas. I invited her. She came June 8. I drove her round in my pickup truck, and I said, 'It's not personal but you have a problem. You don't have a sustainable resource model here.'”

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This story has been updated.

The Fifth Circuit United States Court of Appeals on Tuesday denied a motion by the Horseracing Integrity and Safety Act (HISA) Authority for that court to vacate its recent opinion that HISA is unconstitutional.

Back on Jan. 3, the HISA Authority had asked for the Fifth Circuit's Nov. 18, 2022, anti-constitutionality order to be vacated based on a federal rewrite of the HISA law in December.

Also on Tuesday, separate motions for a rehearing of the case made by both the HISA Authority and the Federal Trade Commission (FTC) were shot down by the same Fifth Circuit panel of judges.

And after ruling on those two motions, the Fifth Circuit then issued a mandate that stated, “IT IS ORDERED and ADJUDGED that the judgment of the District Court is REVERSED and REMANDED to the District Court for further proceedings in accordance with the opinion of this Court.”

The flurry of Fifth Circuit court action Jan. 31 bolstered the case for a plaintiff team led by the National Horsemen's Benevolent and Protective Association (NHBPA), which two weeks ago urged the court not to grant either the vacated order or the rehearings because the new federal law that amended the operative language of HISA did not “fix” all the alleged constitutionality issues that plaintiffs have raised in federal lawsuits.

“We view this as additional strong evidence as to the valid concerns we have been raising all along and this should remind everyone that constitutionality isn't optional,” Eric Hamelback, the chief executive officer of the NHBPA, said in a statement.

“We have made it very clear that the one-sentence so-called fix tucked into Congress's must-pass year-end spending bill did not address all the legal questions created in the HISA corporation's enabling legislation,” Hamelback continued.

“With that said, it's extremely gratifying that the Fifth Circuit Court of Appeals has denied the HISA corporation's motion to vacate the Appellate Court's original unanimous opinion that found the Horseracing Integrity & Safety Act unlawful,” Hamelback said.

Asked to comment on Tuesday's court orders and the mandate, Mandy Minger, HISA's director of communications, wrote in an email that, “In the aftermath of the recent Congressional amendment, and without opining on the newly amended HISA law, the Fifth Circuit has sent the case back to the district court. Outside Louisiana and West Virginia, the Authority will continue enforcing the Racetrack Safety Program and preparing for the implementation of its Anti-Doping and Medication Control Program on March 27, subject to the Federal Trade Commission's approval of the rules.”

At a later point in the NHBPA statement, Hamelback took umbrage with the HISA Authority's recent resubmission of those medication rules while constitutional questions remained in limbo.

“Citing the legal uncertainties in the wake of the Fifth Circuit's ruling, the FTC issued an order on Dec. 12 of 2022 disapproving the Anti-Doping and Medication Control proposed rules submitted by the HISA corporation until those questions regarding constitutional challenges are resolved,” Hamelback said. “Therefore, it was the height of arrogance for the HISA corporation to recently resubmit such rules on the pretext that the so-called fix actually was one. As we see it now more than ever, the Fifth Circuit Court made it clear significant constitutional questions remain with HISA.”

Hamelback continued: “To be clear, absolutely nothing has changed in the Fifth Circuit Court of Appeals since the FTC originally rejected these rules, and the FTC must wait on the outcome of ongoing litigation to be resolved. Along with a bipartisan group of U.S. Senators and Congressmen, we believe the FTC must reject these again based on the unconstitutional uncertainty.”

Prior to reaching the Fifth Circuit on appeal, the underlying lawsuit was initiated by the NHBPA and 12 of its affiliates against personnel from the HISA Authority and the FTC on Mar. 15, 2021, bringing anti-constitutionality claims under the private-nondelegation doctrine, public-nondelegation doctrine, Appointments Clause, and the Due Process Clause.

On Mar. 31, 2022, a U.S. District Court judge dismissed that suit, 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 HBPA plaintiffs appealed that decision, leading to the Fifth Circuit's reversal on Nov. 18.

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Both entities are defendants in an underlying lawsuit that alleges unconstitutionality and federal rulemaking procedure violations regarding HISA's initial framework of regulations that went into effect July 1.

The Appeals Court docket previously indicated a September oral argument date was being planned.

At issue in the appeal is whether a lower court (U.S. District Court, Western District of Louisiana) erred in preliminarily enjoining HISA regulations that were purportedly harming the plaintiffs, who are led by the states of Louisiana and West Virginia, plus the Jockeys' Guild.

The Appeals Court ordered Aug. 8 that with the exception of three specifically contested HISA rules, HISA's legal authority would once again be valid in the two plaintiff states until that court heard “expedited” oral arguments from the two sides.

What happens in the Appeals Court will affect other actions in the lower court that are currently pending.

One such motion that had been outstanding was the plaintiffs' motion for the defendants to be held in contempt of court for allegedly violating terms of the preliminary injunction.

But on Aug. 15, Judge Terry Doughty of the district court denied that motion on the basis that, “The filing of a notice of appeal confers jurisdiction on the Court of Appeals and divests this Court over their aspects of the case. Once jurisdiction has divested, this Court may not take any action that would alter the status of the case as it rests before the Court of Appeals. Because the appeal involves the Preliminary Injunction at issue, this Court lacks jurisdiction to enforce the preliminary injunction or hold Defendants in contempt.”

Separately, a Tuesday filing in the district court stated that a pending “motion to intervene” involving 14 affiliates of the Horsemen's Benevolent and Protective Association and several other entities that want to join the lawsuit as plaintiffs has been assigned an Oct. 13 court date.

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On Friday, the anti-HISA parties filed what is known as a “motion to intervene” in United States District Court (Western District of Louisiana). If accepted by the judge, it would grant the petitioners status in the case alongside the lead plaintiffs from the states of Louisiana and West Virginia.

An “intervenor” designation allows outside parties who have a personal stake in the outcome of a civil suit to participate in a case, even if their interests don't align exactly with those of the original plaintiffs.

“[Our] interests will be seriously impaired if Defendants prevail in their effort to enforce the enjoined HISA Rules beyond Louisiana and West Virginia,” the movants wrote in their Aug. 12 court filing. “Intervenors are not adequately represented by the parties to this action. Intervenors therefore respectfully request that this Court grant their motion to intervene as plaintiffs to protect their and their members' interests.

“Specifically, Intervenors seek to ensure that HISA does not kneecap the horseracing industry as a whole or themselves with the implementation and enforcement of defective HISA Rules,” the filing continued.

HISA and the FTC have consistently denied the allegations listed in the underlying June 29 lawsuit, which was filed two days before the federally mandated July 1 start date for HISA's first set of rules.

“Plaintiffs' eleventh-hour challenge to those rules on the eve of the statutory deadline [is an] emergency of their own making,” the defendants wrote in court documents just after the complaint was filed, noting that the plaintiffs waited a full three months after the approval of the rules to challenge them in court as being immediately harmful.

The HBPA affiliates wanting in on the suit are Arizona, Arkansas, Illinois, Iowa, Indiana, Kentucky, Minnesota, Nebraska, Ohio, Oklahoma, Pennsylvania, Washington, Charles Town and Tampa Bay Downs. The Colorado Horse Racing Association, which is that state's statutorily recognized horsemen's group for all racing breeds, also wants to be an intervenor.

Three of the four opting-in racetracks are in Nebraska: Fonner Park, Horsemen's Park, and the recently approved racino that will go by the name Legacy Downs. The fourth is Arizona's Turf Paradise.

The North American Association of Racetrack Veterinarians, plus the state of Oklahoma and its racing commission, round out the list of potential intervenors.

“Intervenors seek to join this action to protect their interests and those of their members or citizens in avoiding severe economic harms to the horseracing industry generally and to Intervenors specifically through the enforcement of HISA Rules that suffer from fatal procedural and substantive defects,” the Aug. 12 filing stated.

“Intervenors further seek intervention to address HISA's exercise of regulatory power against Intervenors and the threat of severe sanctions that HISA is currently imposing on Intervenors,” the filing continued.

“Intervenors interests may not–indeed, will not–be adequately represented by the existing parties because they have a different ultimate objective from the [existing plaintiffs] by covering a different portion of the United States and of the horseracing industry,” the filing stated.

Beyond the states of Louisiana and West Virginia, the Jockeys' Guild and various Louisiana-based “covered persons” under HISA rule are the existing plaintiffs.

Friday's motion to intervene asked for “expedited” consideration. But that might not be possible because aspects of the underlying lawsuit have been appealed to a higher court.

When cases go under appeal, the lower-court judge has limited power to change anything in the underlying case until the appeals process has been completed. The movants in Friday's filing wrote that they recognized that fact.

“Of course, Intervenors understand that though this Court's preliminary injunction order is on appeal to the Fifth Circuit, which partially stayed the injunction pending the outcome of an expedited appeal,” the filing stated. “At a minimum, the Court could hold the motion to intervene in abeyance, pending the resolution of the appeal.”

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Plaintiffs led by Louisiana, West Virginia, and the Jockeys' Guild moved for a federal judge to issue an immediate order to enforce its July 26 injunction to keep Guild-member jockeys from being subject to HISA rules nationwide. The plaintiffs also want the judge to make the HISA defendants explain to the court why they should not be held in contempt for “flagrantly violating this Court's injunction within a mere four days after this Court entered it.”

A series of filings Aug. 2 in United States District Court (Western District of Louisiana) centers on different interpretations the two sides have regarding what Judge Terry Doughty meant when he wrote in that July 26 injunction that, “The geographic scope of the injunction shall be limited to the states of Louisiana and West Virginia, and as to all Plaintiffs in this proceeding.”

The plaintiffs-most specifically, the Guild-believe the judge's words apply to “all of the members of the Jockeys' Guild, regardless of the U.S. jurisdiction in which the jockey is riding.”

The HISA defendants have steadfastly maintained that individual members of the Guild are clearly not plaintiffs in the lawsuit, and to consider them that way “would wreak havoc on the sport. For example, many jockeys are not Guild members, such that different rules would apply to jockeys riding in the same race.”

Separately, the defendants have made a formal motion asking for a clarification of the wording in the injunction, but the court docket indicates the judge might not offer one until next week, unless Doughty opts to expedite the matter.

And beyond that, the defendants' appeal of their turned-down request to put a stay on the entirety of the July 26 preliminary injunction is headed for the Fifth Circuit Court of Appeals.

Confused yet? There's more. This case is only one of four lawsuits initiated at the federal level this year to keep HISA rules from going into effect nationwide. The first two got tossed out by judges but are in the process of being appealed. The fourth just got filed on Monday in a Texas court.

According to Tuesday's filings, Guild-member jockeys Van Dyke, Vazquez and Gonzalez are just the first three jockeys that the plaintiffs believe are being harmed by the allegedly contemptuous enforcement of HISA safety rules.

“Though the ink has not yet dried on this Court's order preliminarily enjoining Defendants from enforcing HISA's unlawful rules, some Defendants have already decided that they need not follow the Order,” the filing stated. “[D]espite the Order's plain text, the Authority Defendants continue to implement and enforce the enjoined rules against members of Plaintiff Jockeys' Guild.”

According to the filings, on July 27, one day after the allegedly unclear order was issued, a HISA spokesperson stated that “HISA will continue to enforce its rules in all applicable jurisdictions, with the exception of Louisiana and West Virginia. Outside of those states, the court order applies only to the five individuals specifically named in the case.”

And on July 29, the filings stated, the California Horse Racing Board (CHRB) put out an advisory that stated, “Unless and until a federal court clarifies an earlier ruling by indicating otherwise, the CHRB will continue to honor its agreement with HISA by enforcing HISA safety rules, including the rules covering use of the riding crop, as the CHRB has been doing since HISA rules went into effect on July 1.”

Then on July 30, Del Mar stewards issued a ruling against Van Dyke for his use of the riding crop in a July 29 race that they deemed to be in violation of HISA Rule 2280, imposing a $250 fine and one-day suspension.

“The suspension is set to preclude Mr. Van Dyke from racing on Aug. 6, but he must confirm participation on Aug. 3 for that race day,” Tuesday's filing stated. “To be clear, Mr. Van Dyke is a member of Plaintiff Jockeys' Guild and thus Defendants are enjoined from implementing and enforcing the enjoined Racetrack Safety Rules against Mr. Van Dyke.”

The filing continued: “Compounding this problem, over the weekend, Plaintiffs were informed that the HISA stewards at Gulfstream Park in Hallandale, Florida plan to issue multiple rulings against members of Plaintiff Jockeys' Guild for similar violations.”

For actions during July 31 races, the filing stated, “HISA stewards intend to issue written rulings on Aug. 5 against Miguel Vazquez [for] a violation of enjoined HISA Rule 2280 that prohibits a jockey from raising his wrist above a certain point before striking a horse with his riding crop; and Edwin Gonzalez for a violation of enjoined HISA Rule 2280 for a different riding crop violation.”

Both Gulfstream jockeys are expected to receive fines of $250 each, one-day suspensions, and points to escalate penalties for subsequent violations.

“Through these continued enforcement actions, the Authority Defendants thus have made clear that they seek to enforce enjoined rules against Plaintiffs' members throughout the country outside of Louisiana and West Virginia,” the plaintiffs' filing stated.

The plaintiffs are asking the judge to award compensatory damages to cover the allegedly lost purse earnings that the above three riders will incur, plus a “coercive fine of $250 per day for each day any points assessed…as a result of HISA's contempt are not purged from their records.”

The Guild-backed plaintiffs also want those damages to apply to any other Guild members who get subsequently penalized while this issue is contested in the courts.

With regard to how the judge might rule in his clarification of the injunction, the plaintiffs noted in court documents that “nearly 50 years of Supreme Court case law” is on their side, because precedents confirm that “members of associations are entitled to the benefits that their associations obtain in litigation.”

In the overall lawsuit, the HISA Authority, the Federal Trade Commission, and board members and overseers of both entities are alleged to have violated the Fourth, Seventh and Tenth Amendments to the Constitution, plus the Administrative Procedure Act (APA), which governs the process by which federal agencies develop and issue regulations. An adverse ruling against the defendants could mean a reopening of public commentary periods and a rewrite of all existing and in-the-pipeline HISA rules.

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“This court believes the threatened harm to Plaintiffs outweighs any harm that may result to the Defendants and that a preliminary injunction will not undermine the public interest,” wrote Judge Terry Doughty of U.S. District Court (Western District of Louisiana).

“This Court is only ruling on the adoption of the rules by HISA, not the constitutionality of the Act,” Doughty was quick to add.

“The geographic scope of the injunction shall be limited to the states of Louisiana and West Virginia, and as to all Plaintiffs in this proceeding,” Doughty wrote.

The defendants, who consist of the HISA Authority, the Federal Trade Commission (FTC), and board members and overseers of both entities, are alleged in the June 29 suit to have violated the Fourth, Seventh and Tenth Amendments to the U.S. Constitution, plus the Administrative Procedure Act (APA), which governs the process by which federal agencies develop and issue regulations.

Lisa Lazarus, the chief executive officer of the HISA Authority, told TDN in an emailed statement that read, in part, “[Tuesday's] ruling from the Western District of Louisiana relates only to the FTC rules, is limited in geographic scope to Louisiana and West Virginia…and does not question HISA's constitutionality or validity. The Authority remains focused on implementing the Racetrack Safety program and drafting Anti-Doping and Medication Control rules for implementation in January 2023….

“The reality is that the majority of racing participants support the Authority's mission to protect those who play by the rules and hold those who fail to do so accountable in order to keep our equine and human athletes safe and the competition fair. The immense collaboration with state racing commissions, stewards, veterinarians, racetracks, trainers, and other horsemen that has taken place to date is evidence of this support, and we intend to continue to fulfill our mandate and work to make the industry safer,” Lazarus continued.

The plaintiffs, led by the states of Louisiana and West Virginia, plus the Jockeys' Guild and various Louisiana-based “covered persons” under HISA rules, had told the judge that it was imperative to obtain an injunction before the case winds its way through the legal system, lest they be exposed to the alleged harms of the rules. These types of federal court cases can often linger in the legal system for years without resolution.

In a 28-page memorandum explaining his ruling, Doughty noted that two civil suits attempting to get HISA struck down based on alleged unconstitutionality have already failed in federal courts and are currently pending appeal, and that those suits shared some common plaintiffs with the case that is now before his court.

But a key difference, Doughty wrote, is that, “This suit is the third attempt at stopping enforcement of HISA but the first to address the legality of the rules enacted.”

Doughty wrote that he first had to determine whether his court has judicial power to hear this case under the doctrine of “standing.” A federal court has judicial power only where a plaintiff has demonstrated that it 1) suffered an injury in fact; 2) is fairly traceable to the challenged conduct of the defendant, and 3) is likely to be redressed by a favorable decision. The party invoking federal jurisdiction has the burden of establishing those three elements.

Once the first phase of rules (covering racetrack safety, enforcement, and financial assessment methodology) went into effect July 1, Doughty wrote “All Plaintiffs allege they will suffer injuries 'in the form of vast destruction of the horseracing industry through individual penalties and systematic changes to the longstanding regulatory structure and revenue model. They argue that there will be financial costs so great that numerous participants will be driven out of business if the rules are enforced.”

On the other side, Doughty wrote, “Defendants argue there is no injury to Plaintiffs because 1) none of the alleged injuries have 'transpired over the two weeks in which the rules have already been in effect'; 2) the harms are self-inflicted under the rules; 3) there is not a challenge to the Act's scope; 4) the injuries derive from the Act enacted by Congress itself, not any of the implemented rules, and 5) the mere apprehension or fear of future harm does not establish a concrete injury.”

Doughty reconciled those conflicting viewpoints this way: “The applicable time period under this element is not whether the injury has occurred since the implementation of the rules, but whether it was imminent at the time the complaint was filed. While Defendants' argument that the injuries have not occurred and that the private Plaintiffs' fear of future injury might go to the success on the merits, they do not negate Plaintiffs' standing. Plaintiffs are challenging the legality of government action and are objects of said action. All Plaintiffs are participants in the horseracing industry, making them directly affected by regulation actions.”

Doughty wrote that the “fairly traceable” link requirement was straightforwardly accomplished by the plaintiffs.

“Here, there is an obvious link between the HISA rules and Plaintiffs' alleged injuries,” Doughty wrote. “All the above alleged injuries are 'fairly traceable' to the rules enacted thus far by HISA and the FTC.”

The plaintiffs also had to prove the “redressability element of standing,” which requires demonstrating “a substantial likelihood” that the requested relief will remedy the alleged injury.

“Because Plaintiffs are challenging the legality of government action in the form of HISA and the FTC approving and implementing rules, Plaintiffs have demonstrated a substantial likelihood that the requested relief would remedy the alleged injuries in fact,” Doughty wrote. “If Plaintiffs are successful in having the HISA rules declared invalid, this would redress their alleged injuries.”

At a later point in the memorandum, Doughty wrote that “Obtaining a preliminary injunction is an 'extraordinary and drastic remedy'” that a movant is only entitled to if four factors are established.

They are: 1) a substantial likelihood of success on the merits; 2) the movant is likely to suffer irreparable harm without preliminary relief; 3) the possible injury to the movant outweighs the possible harm to the other party, and 4) an injunction is in the public interest.

“Plaintiffs have satisfied all four elements required for a preliminary injunction to be issued. After considering all factors, this Court has determined that a preliminary injunction shall be issued by Plaintiffs against the Defendants,” Doughty wrote.

The injunction shall be in effect, Doughty wrote, “pending the final resolution of this case,” adding that the final ruling could extend all the way up to an appeal before the United States Supreme Court.

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