horseracing integrity and safety act | Horse Racing Free Tips

HBPA Rips HISA’s Request for ‘Emergency’ Court Action

The National Horsemen's Benevolent and Protective Association (NHBPA) and 12 of its affiliates have filed a legal challenge to a Jan. 3 “emergency” motion made by the Horseracing Integrity and Safety Act (HISA) Authority that had asked for the United States Fifth Circuit Court of Appeals to vacate its recent HISA unconstitutionality order.

In essence, the horsemen's opposition to the request for emergency treatment stated that no pressing need or harm exists to speed up what would usually be a full 10 days for the NHBPA and other co-plaintiffs from the underlying lawsuit to respond to the motion to vacate the unconstitutionality order.

In the spring of 2022, the Fifth Circuit court had taken this case on appeal from a Mar. 31, 2022, ruling out of U.S. District Court (Northern District of Texas) that affirmed HISA's constitutionality by stating “the law as constructed stays within current constitutional limitations as defined by the Supreme Court…”

Then on Nov 18, a Fifth Circuit panel overturned the lower court's decision by ruling that HISA was indeed unconstitutional because it “delegates unsupervised government power to a private entity,” and thus “violates the private non-delegation doctrine.”

But on Dec. 29, President Biden signed into law a massive, year-end spending bill that included a small bit of language inserted by HISA supporters in Congress that amended the operative language of HISA to fix the constitutional defect the Fifth Circuit had identified.

The passage of that law prompted the HISA Authority's Jan. 3 motion asking the Fifth Circuit to “vacate its opinion and the judgment of the Court forthwith to prevent the serious harms that mount each day [and to] rehear this case in light of the intervening congressional amendment.”

Later on Tuesday (beyond TDN's deadline for this original story), the NHBPA filed its objection to the “emergency” nature of the motion.

“[T]he Authority Appellees come to this Court–on the very last day of their unusually long window to petition for rehearing–and demand that it reverse its prior decision, vacate its opinion, and issue a new opinion and the mandate 'forthwith,' namely, by Jan. 13, 2023. No crisis or irreparable harm justifies this accelerated treatment or a rushed briefing schedule that shortens Appellants' time to respond to the motion.

“The Authority Appellees have had since at least Dec. 5, 2022, to formulate their legal strategy (that being the first day the potential amendment was publicly reported in the news; it is possible the Authority knew much earlier). They have had since at least Dec. 20, 2022, when the omnibus language was first made public, to work on drafting the particulars of their motion (again, they may have seen it before it was made public, or even had a hand in writing the amendment's language).”

At a later point, the NHBPA filing continued: “[T]his is not a motion that can be dealt with in a quick two or three pages, like a motion for an extension of time to file a brief or hold a case in abeyance. This is a motion that seeks to vacate a published opinion of this Court. Such an important motion, in such an important case no less, deserves the full time authorized for a thoughtful, thorough response.

“Appellees point to no crisis or irreparable harm that justifies shortening the normal schedule. … Appellees do not even try to show 'irreparable harm,' even though this Circuit's rule for emergency motions requires that the motion 'state the nature of the emergency and the irreparable harm the movant will suffer if the motion is not granted.'

“If anything, this entire episode once again prompts the question Appellants have been asking all along: Who is really driving the train here, the Authority or the [Federal Trade] Commission? It is the Authority, not the Commission, that…is now filing the motion to vacate and the petition for rehearing. It is the Authority, not the Commission, asking this Court to take a decision that was briefed, argued, and decided over the course of months and toss it all aside in 10 days.”

The NHBPA's filing summed up: “The entire narrative only confirms that the Commission lacks any independent policy interest in the Act's administration or survival; it sees itself as humble minister of everyone else's will.”

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HISA, FTC File to Get Fifth Circuit Opinions Vacated, Cases Reheard

Citing the year-end passage into law of a bill that included language giving the Federal Trade Commission (FTC) more rule-making authority in the Horseracing Integrity and Safety Act (HISA), officials from HISA and the FTC who are defendants in two lawsuits before the Fifth Circuit United States Court of Appeals filed four separate documents on Tuesday seeking to vacate two opinions related to constitutionality issues and get rehearings in both cases.

In one lawsuit initiated by the National Horsemen's Benevolent and Protective Association (NHBPA) and 12 of its affiliates against personnel from the HISA Authority and the FTC, the Fifth Circuit ruled on Nov. 18 that HISA was unconstitutional because it “delegates unsupervised government power to a private entity,” and thus “violates the private non-delegation doctrine.” In this case, the defendants fired back with a pair of “emergency” motions and petitions Jan. 3.

Those filings essentially said that Congress and the President have done their parts to clear up any lingering constitutional ambiguity, and now the Fifth Circuit is obliged to do its duty to “say what the law is” with regard to HISA.

“This is the rare case where critical 'dialogue between and among the branches of Government,' has worked in real time both to advance Congress's pressing policy goals and to address the judiciary's asserted constitutional concerns,” the HISA and FTC defendants stated, referring to how swiftly–just over a month–the legislative and executive branches reacted to the Fifth Circuit's unconstitutionality ruling on HISA.

“Since their July 1 effectiveness date, the new [HISA] regulations have brought much-needed safety reforms to the benefit of horses and horseracing participants and, in turn, have begun to restore integrity to the sport,” the defendants stated.

“A few weeks ago, however, this Court held that HISA violates the private-nondelegation doctrine…. Because (in the panel's view) the FTC lacked 'the final word on the substance of the rules, the panel concluded that the Authority did not 'function subordinately to the agency.'”

The motion to vacate continued: “Congress heard this Court's concern and acted swiftly to resolve it. On Dec. 23 Congress again enacted, and on Dec. 29 President Biden signed into law, bipartisan legislation–this time amending the operative language of HISA to fix the alleged constitutional defect the panel had identified…

“Accordingly, the [Fifth Circuit] panel opinion–predicated on a prior version of HISA that no longer exists and that Congress purposefully replaced–cannot stand. Congress's direct response to the constitutional concern at the heart of the panel opinion–obviating the principal basis for Plaintiffs-Appellants' constitutional objection–strongly supports affirmance of the district court's judgment.

“But regardless of how and when the Court ultimately adjudicates this appeal, the panel should vacate its opinion and the judgment of the Court forthwith to prevent the serious harms that mount each day from the now-moot holding that the former version of the Act is facially unconstitutional…

“The panel should rehear this case in light of the intervening congressional amendment HISA and reverse the district court's grant of a preliminary injunction,” the filing concluded.

That last line refers to a Mar. 31, 2022, ruling in United States District Court (Northern District of Texas) that affirmed HISA's constitutionality by stating “the law as constructed stays within current constitutional limitations as defined by the Supreme Court and the Fifth Circuit.”

The HISA and FTC defendants also made related Jan. 3 filings in a separate Fifth Circuit case. This one involves the states of Louisiana and West Virginia, plus other “covered persons” under HISA, alleging unconstitutionality and federal rulemaking procedure violations.

Unlike the two filings in the above-referenced HBPA case, these were not labelled “emergency” motions or petitions. But they did ask for the panel's previously issued opinion to be vacated, the reinstation of a previously issued stay pending further appeal, and a panel rehearing.

“The district court's order preliminarily enjoining enforcement in Louisiana and West Virginia of all then-existing rules promulgated under HISA directly undermines Congress's goal of providing for uniform regulations to protect horseracing participants (equine and human) and restore integrity to the sport nationwide,” the defendants' filing stated.

“This Court appropriately stayed that order, finding that each of 'the stay elements are met' with respect to the district court's (manifestly flawed) conclusion that the Administrative Procedure Act forecloses the 14-day notice period the FTC formally provided…

“The stay pending appeal was necessary to 'allow [the Court] to bring 'considered judgment' to the matter before [it] and 'responsibly fulfill [its] role in the judicial process.' Yet the panel's subsequent decision to remand the case and lift the stay short-circuits that process, not based on the merits of the district court's order–which have never been adjudicated–but on the sole ground that a panel in a 'separate cases held that 'HISA is facially unconstitutional.'”

The filing summed up: “This Court should vacate its panel opinion and judgment, and reinstate the Court's stay pending further adjudication of this appeal…. The Court should grant [a] panel rehearing and reverse the district court's grant of a preliminary injunction.”

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Attorney, Trainer Vienna Joins Epistolary Exchanges on HISA

As the deadline looms for congress to insert language into the full year-end omnibus spending bill to fix constitutional question marks surrounding the Horseracing Integrity and Safety Act (HISA), proponents and critics of the law have taken to an epistolary standoff.

Last week, trainers Wesley Ward and Larry Rivelli issued a letter through the National Horsemen's Benevolent and Protective Association (HBPA) critiquing various aspects of the national program for “too many flaws, missteps and costs that could have been averted with true inclusion and transparency in its development.”

Earlier this week, HISA CEO Lisa Lazarus conducted a zoom conference with Ward, along with attorney and former trainer Darrell Vienna, to grapple with the points raised in Ward's letter.

Issued Wednesday, Vienna released his own open letter to Lazarus, addressing six main points that he said were discussed during Monday's zoom conference.

The topics cover Vienna's thoughts on the financial assessments, the way in which therapeutic and illegal substances have been divided, the new system of detection times and screening limits vs. the old system of withdrawal guidelines and thresholds, HISA's environmental contamination policy, industry input into HISA's working framework, and the new whip rules.

Substantively speaking, Vienna's letter overlaps the contents of an open letter Charles Scheeler, the chair of the HISA board of directors, issued Tuesday addressing what he sees as “misinformation” about the law, in the process arguing that HISA's drug testing program protects “good-faith horsemen,” that HISA's rules “seek to protect” small racetracks and racing jurisdictions, and that HISA has “consistently sought feedback from horsemen” across the country. Read Scheeler's full letter here.

In his open letter, Vienna writes that there is “an apparent and obvious inequity” in the way HISA has calculated its fee assessments.

“For example,” writes Vienna, “Charles Town's annual purse money ($35,000,000) and Keeneland's annual purse money ($32,000,000) are similar; however, Keeneland's HISA Assessment is half of Charles Town's HISA assessment.”

Vienna also takes issue with HISA's environmental contamination protocols, which appear to include only a slim number of substances.

“The vast majority of prohibited substances are not subject to the Atypical Findings Policy. The Policy only applies to initial findings of HISA specified substances, endogenous substances, ractopamine, zilpaterol, and substances not listed on the Prohibited Substances list,” Vienna writes.

“Contrary to HISA's assertion of trainer friendliness, HISA's policy is among the most trainer unfriendly contamination policies in horseracing because it excludes a vast number of substances from the Atypical Findings Policy,” Vienna adds.

Ultimately, writes Vienna, “HISA rules have not been so tested and do not appear superior to ARCI model rules. Rather than rewriting the book, it may be better to see those model rules adopted and enforced uniformly throughout racing jurisdictions. If there was a concerted effort toward that goal, I believe that uniform racing and medication rules would already be the law of the land.”

Read Vienna's full letter here.

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Language Amending HISA in Omnibus Spending Bill

Draft language has been inserted into the full-year omnibus spending bill designed to fix a constitutional problem with the Horseracing Integrity and Safety Act (HISA) identified by the Fifth Circuit Court of Appeals, which found in November that the law as written doesn't afford the Federal Trade Commission (FTC) enough authority in the rule-making process.

In short, the draft omnibus spending bill cedes the FTC–the governmental agency which ultimately signs off on any new HISA rule–new autonomy to remove, add to and tweak language in the rules constructed by the Horseracing Integrity and Safety Authority, the private entity given broad umbrella power over implementing the act. Previously, the FTC could only accept or reject a proposed rule.

The FTC may now “abrogate, add to, and modify the rules of the Authority promulgated in accordance with this Act as the Commission finds necessary or appropriate to ensure the fair administration of the Authority, to conform the rules of the Authority to requirements of this Act and applicable rules approved by the Commission, or otherwise in furtherance of the purposes of this Act,” the language states.

The news was first reported by the Paulick Report. Lawmakers have until Friday to pass the spending bill before the make-up of Congress changes shape next year.

After this draft language was released, The National Horsemen's Benevolent and Protective Association (HBPA) CEO Eric Hamelback and General Counsel Peter Ecabert released a joint statement, taking aim at legislation they say was “crafted in the dark of night with no public hearings and virtually no industry input.”

“This amendment does not address other substantive issues, nor does it address the funding disaster that remains in the flawed Act. It is clear from the issues raised in the various lawsuits contesting the legal validity of HISA that this one-sentence 'fix' does not alleviate the glaring constitutional infirmities this law has created.

“The constitutional defects still include a non-federal private entity granted the power to levy taxes in violation of Article I, Tenth Amendment violations for anti-commandeering of states powers, Fourth and Seventh Amendment violations for lack of due process, and violations of the Administrative Procedures Act,” wrote Hamelback and Ecabert.

Hamelback and Ecabert added that, “For all the reasons we state above, the Act itself remains unconstitutional by handing the regulation of an entire industry over to an unelected, unaccountable private corporation. This fight is not over, and the National HBPA will go all the way to the Supreme Court if we have to, in order to protect the interests of horsemen across the country.”

In a rare move for the chair of the HISA board of directors, Charles Scheeler issued his own statement Tuesday, addressing what he sees as “misinformation” about the law, in the process arguing that HISA's drug testing program protects “good-faith horsemen,” that HISA's rules “seek to protect” small racetracks and racing jurisdictions, and that HISA has “consistently sought feedback from horsemen” across the country.

“Some horsemen have recently expressed a desire to scrap the substantial progress made over the last two years and start from scratch on safety and integrity reform. But after failing for decades to create uniform standards, we've finally made real progress and have momentum. In fact, early indications suggest that racing is already getting safer for horses. Starting over would be to risk losing all of that,” wrote Scheeler.

“Getting a federal law passed was a monumental accomplishment, and the progress and momentum since then has been astounding. Thoroughbred racing must take advantage of this moment. Change can be uncomfortable and often comes with growing pains, but the future of the sport depends on its evolution. Let's find the courage to do this together,” Scheeler added.

The year-end omnibus spending bill left the Senate and House Appropriations Committees Tuesday morning, and must now be finalized before this Friday, to avert a governmental shut-down.

During that process, the amendment to HISA could still be removed, though sources say that is extremely unlikely. If this language remains in the bill, however, there are a few different scenarios at play.

Last week, FTC announced that it had disapproved “without prejudice” the program's anti-doping and medication control (ADMC) rules.

But with this new language, HISA could resubmit the ADMC rules with the FTC. It would then take approximately 60 days for these rules to go into effect, “assuming that the FTC was going to approve them substantively,” HISA CEO Lisa Lazarus previously explained.

There remains a ruling pending in the Sixth Circuit Court of Appeals concerning similar constitutional questions to the Fifth Circuit. It is currently unclear when that ruling will land.

But the current language in the omnibus spending bill would essentially render the current cases before the Fifth and Sixth Circuits legally moot in a practical sense, and would make the possibility of the Supreme Court taking them up altogether highly unlikely.

Even then, don't expect the legal fireworks to end, with a case in the U.S. District Court of Texas-Northern District, Amarillo Division-a potentially nasty looking legal blackthorn for the law.

Constitutional law expert Lucinda Finley recently told the TDN that the case raises several additional constitutional arguments that the Fifth and Sixth Circuits did not rule on, including HISA's investigative, subpoena and punishment power as a private body, and the way in which individuals on the HISA board are appointed.

“It argues that the whole structure is a delegation of not only too much executive authority, but can amount to a delegation of legislative and judicial authority as well,” Finley explained.

If the judge in the case agrees that HISA indeed delegates too much power to a private entity, the plaintiffs in the case are seeking an injunction to suspend enforcement of the law.

Would such an injunction apply nationwide or just in Texas?

“You've actually asked what is one of the most raging controversies in U.S. law,” Finley replied, leaving the answer open-ended.

The state of West Virginia is a plaintiff in two lawsuits against HISA that allege unconstitutionality. During a Tuesday morning meeting, the West Virginia Racing Commission (WVRC) discussed the ramifications of the pro-HISA language being added to the federal omnibus spending bill.

“This amendment appears to try to flip the rulemaking authority back to the FTC in a way that HISA can make suggested rules to the FTC, [which would] have the ultimate authority as to whether or not to approve them,” said WVRC commissioner J.B. Akers, who is an attorney.

“On its face, [this] could potentially resolve the constitutional issues, some or all, that were present in the Fifth Circuit case,” Akers said. “What's clear here is that someone has influenced the staffers or politicians who were responsible for writing this 4,000-plus page legislation to put a couple of paragraphs [in the bill] where they're now attempting to 'fix' the Fifth Circuit constitutional analysis so that the FTC has its mandated authority back. Whether or not that would satisfy those constitutional concerns,” Akers added, is unclear.

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