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Judge: ‘Substantial Overlap’ of Plaintiffs In Multiple Anti-HISA Suits ‘Indicative of Improper Motive’

A lawsuit spearheaded by the states of Louisiana and West Virginia that is trying to derail the Horseracing Integrity and Safety Act (HISA) via alleged constitutional violations was dealt a setback Wednesday when a federal judge recommended that an amended version of the complaint be stricken from the record.

That recommendation, if it gets put into place by a final order, would bar 14 individual Horsemen's Benevolent and Protective Association (HBPA) affiliates, plus a wide swath of states, racing commissions, and individual racetracks from becoming parties to the 14-month-old lawsuit.

Magistrate Judge David Ayo of the United States District Court (Western District of Louisiana) also recommended in his 13-page report that the original case be stayed pending the outcome of a separate, but similar Fifth Circuit Court appeal that is headed by the National HBPA and is also trying to stop HISA from operating based on other alleged constitutional violations. Oral arguments in that case are scheduled for Oct. 4, but it could then be months before a Fifth Circuit decision gets issued.

The judge minced no words in his Sept. 13 report, which in part scolded the original and would-be plaintiffs for wasting the court's resources with “substantial overlap of parties” and their “multiple suits challenging the Act,” referring to litigation that is either currently swirling in the federal court system or has already been adversely adjudicated against some of the plaintiffs over the course of the last 2 1/2 years.

“After an exhaustive review of the landscape of suits challenging the Act, this Court concludes that Plaintiffs' amended complaint is the result of deliberate strategy and not excusable neglect and, for that reason, is a 'bad faith amendment' within the Fifth Circuit's interpretation of that term,” the judge wrote.

“Additionally, Plaintiffs' amendment is an abuse of procedure and an impermissible use of judicial resources. Finally, there can be no doubt that the shuffling of plaintiffs from one suit to another in this manner prejudices Defendants. This litigation tactic is duplicative and the very definition of 'piecemeal.'”

The original plaintiffs in the June 29, 2022, lawsuit were the state of Louisiana, its racing commission, the Louisiana HBPA, the Louisiana Thoroughbred Breeders Association, the state of West Virginia, its racing commission, and five individuals regulated as “covered persons” under HISA. The Jockeys' Guild was also an original plaintiff, but it opted out of the lawsuit on Dec. 23, 2022, after Congress had just passed and President Biden was about to sign into law the amended version of HISA that is now in effect.

The defendants, who consist of the HISA Authority, the Federal Trade Commission (FTC), and board members and overseers of both entities, are alleged by the plaintiffs 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,

On Feb. 6, 2023, the plaintiffs filed an amended complaint to the lawsuit, with the chief changes being the addition of the broad new slate of new plaintiffs.

After the defendants moved to strike the amended complaint on Mar. 6, the plaintiffs followed up three weeks later by filing a memorandum in support of allowing the new entities.

“Defendants suggest that Plaintiffs engage in something sinister by seeking amendment to request expanded relief,” the plaintiffs' Mar. 27 court filing stated. “But parties across the country routinely amend to seek expanded relief without issue.”

Not so, rebutted the defendants, who in an Apr. 3 court filing characterized the alleged piling-on of plaintiffs as “maneuvering” intended to “piggyback” upon temporary relief from HISA's rules that had already been granted via a stay to the states of Louisiana and West Virginia.

The Sept. 13 report by Judge Ayo explained why he sided with the HISA Authority and the FTC in recommending that the amended complaint be stricken.

“[G]roups of plaintiffs, including the State of Louisiana and the Louisiana HBPA, have already litigated the constitutionality of the Act, as amended, creating substantial overlap among these suits as to parties and claims,” the judge wrote. “To the extent Plaintiffs would draw a distinction between this suit and those now on appeal to or decided by various circuit courts of appeals based on the inclusion of APA claims, this Court concludes that such argument must fail based on considerations of claim splitting.”

In federal courts, a rule against “claim splitting” prohibits parties from simultaneously initiating multiple suits involving the same subject matter against the same defendants. Application of the rule does not require that the claims or parties be identical in each suit. A court may find improper claim splitting where the claims in the more recent suit arise from the “same nucleus of operative facts” as those advanced in a prior suit.

Judge Ayo continued, writing in a footnote at a different point in the report that, “this Court is mindful of the benefit of allowing an issue to 'percolate' in the various district courts and courts of appeals.

But, the magistrate judge added, “Plaintiffs leapfrogging from one case to another in different district and circuit courts in the wake of unfavorable rulings does little to further this objective.”

Judge Ayo's report and recommendations now go to Chief U.S. District Judge Terry Doughty, who is overseeing the underlying lawsuit. Both sides in the case will have 14 days to file specific, written objections, after which Doughty will issue a final decision at the district court level that will be appealable to the U.S. Court of Appeals.

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Industry Will Pay Twice For HISA Litigation

Barely six weeks into its existence as the sport's national rule enforcer, the Horseracing Integrity and Safety Authority (HISA) has spent $1.8 million defending itself in four separate lawsuits currently pending or under appeal in federal court.

But the true irony behind the spiraling costs of the anti-HISA litigation is that almost all entities–owners, trainers, jockeys, tracks, racing commissions and states–are going to have to pay twice, regardless of the final outcomes of those complex lawsuits.

That's because plaintiffs like the Jockeys' Guild and various horsemen's associations will spend their organizations' money trying to halt HISA on constitutional grounds and federal rulemaking procedures, while at the same time HISA will be using money it collects from federally sanctioned assessments paid by those same industry participants to fight the lawsuits.

Lisa Lazarus, HISA's chief executive officer, disclosed the to-date litigation costs Sunday as the keynote speaker at the 70th annual Round Table Conference on Matters Pertaining to Racing hosted by The Jockey Club in Saratoga Springs, New York.

“As you all know, HISA is industry-funded,” Lazarus said. “So these lawsuits are ultimately being paid for by the industry, and ironically in part by the entities suing us. It is really a shame to see industry dollars that could [otherwise] be spent on positive reforms to make racing safer. It's deeply disappointing because there is so much we could do as an industry for unity.”

Stuart Janney III, The Jockey Club's chairman, didn't try to hide his disdain for the groups trying to derail HISA, terming the plaintiffs in the lawsuits as “certain politically charged states, rogue horsemen's groups, and–'Surprise, surprise!'–the Jockeys' Guild.”

And while the annual Round Table has largely devolved over the years into a two-hour echo chamber of platitudes, preaching-to-the-choir presentations, and a pep rally for pet Jockey Club projects, Janney did give a succinct analysis of where those lawsuits stand from a pro-HISA perspective during his closing remarks.

Janney focused on one of the lawsuits in particular, in which HISA and the Federal Trade Commission (FTC) are alleged to have violated the Fourth and Seventh Amendments to the United States Constitution, plus the Administrative Procedure Act, which governs the process by which federal agencies develop and issue regulations.

The states of Louisiana and West Virginia, plus the Guild, are the lead plaintiffs in that case, and just this past Friday, Aug. 12, 14 affiliates of the Horsemen's Benevolent and Protective Association petitioned a federal judge to be allowed to join the lawsuit.

“Significantly, the Louisiana federal district court found zero constitutional violations,” Janney said. “But it did initially agree with plaintiffs that the Authority's definition of 'covered horse' and its search-and-seizure rules expand beyond the scope of the statute ever so slightly.

“Practically speaking, this portion of the ruling has no impact, because the Authority voluntarily revised both rules to comply with the statute,” Janney said.

“The district court also questioned the Authority's rule on funding, which was actually favorable to the plaintiffs, Louisiana and West Virginia. And amazingly, if the plaintiffs prevail, it will have those two states paying hundreds of thousands more for HISA.

“And finally, [the court] queried the length of the notice and comment period, though it recognized that any of the claimed deficiencies can easily be remedied by the Authority, even if the Authority is ultimately unsuccessful on the merits,” Janney said.

“In other words, in ruling in favor of the Authority's opponents, the Louisiana federal district court nevertheless acknowledged that the implementation of the Authority's rules cannot be stopped,” Janney said.

“So to be clear, none of these issues threaten HISA's long-term viability. But they certainly waste time and money,” Janney said.

“Another federal lawsuit challenging the Authority and HISA was filed in Texas last week,” Janney said. “It recycles many of the failed claims. Like the cases that came before it, and those that will come after it, the new lawsuit merely serves as a distraction and a waste of industry resources,” Janney said.

“Ironically, under HISA, horsemen will be the ones who bear the brunt of these additional legal costs,” Janney said.

Lazarus gave an update on HISA's next steps, acknowledging that she understands HISA needs to build trust within the industry, even among those who already support it.

“We at HISA are accountable to you. We have to listen to everyone and adapt as appropriate,” Lazarus said.

“HISA wants open and collaborative dialogue with everyone in the industry who comes to us in good faith,” Lazarus said.

“Specifically, I will soon be creating several advisory groups, including a horsemen's group, to enhance engaging with stakeholders to ensure we are delivering the best programs to the industry,” Lazarus said.

“We will continue to refine the racetrack safety rules,” Lazarus said. “Future rules will fill in gaps, clarify ambiguities.”

A transition to a new and permanent website will hopefully ease some of the concerns from industry participants who have complained about the user interface when registering with HISA.

The rollout of the Anti-Doping and Medication Control Program (ADMC) is HISA's next high-profile endeavor.

“We've made significant progress on the ADMC program,” Lazarus said. “In recent weeks we have developed and refined, with input from hundreds of racing stakeholders, a comprehensive set of rules. These will be submitted to the FTC this coming week for implementation in January 2023.”

Lazarus continued: “We are building a seasoned, world-class team that will implement the first national anti-doping program in horse racing, with uniform testing and uniform sanctions. It will be tough, but it will be fair. And in time, horses will be able to complete with the comfort of knowing they will not be beaten by someone who is cheating.”

Beyond that, Lazarus explained, “We also see a future where we can marry anti-doping investigations and intelligence with a robust capability that will be deployed nationally in both in- and out-of-competition testing.”

Lazarus also gave an update on HISA's participation levels.

“We are now six weeks into the implementation of the racetrack safety rules. To date we have registered 34,000 horses and 28,000 people. And more importantly, in my view, 90% of horses, jockeys, and trainers that are competing are registered. And if you take the state of Louisiana out of the picture, we're at 95%, because the majority of our non-registered participants are located in Louisiana.

“We've reached voluntary agreements to implement HISA rules in 17 state racing commissions out of a total of 21 that HISA currently governs,” Lazarus added.

HISA is in the process of hiring a national medical director to support tracks nationwide with jockey safety and health protocols, and has already facilitated and paid for concussion testing for riders at 10 tracks, Lazarus said.

“Jockey welfare alongside equine welfare is a major priority for HISA,” Lazarus said.

But the topic of jockey welfare brought up another ironic twist, at least from Janney's perspective.

“If I were a jockey, I'd be very excited about [HISA's safeguards for riders],” Janney said. “But apparently, they're not. Upping the ante, [the Guild] joined with [other plaintiffs in the Louisiana lawsuit] in adding a charge of contempt. It's outrageous. The jockeys are wasting their time and are hurting our sport. I hope they will come to realize that.”

Janney continued: “HISA is a once-in-a-lifetime chance to grow the sport through increased integrity and enhanced safety of horse and rider. This business isn't the same as it was 10, 20, 30 years ago. We all know it. And we now understand the economics… Folks, it's time to get together on HISA. It's good for the sport. HISA is legal. HISA is here to stay.”

Lazarus also concluded her presentation with a plea for unity.

“I don't mean that we are going to agree on every single rule. But I mean that we unify around the governing principle, the core principle, that we need to speak with one voice,” Lazarus said.

“HISA, as I sit here today and address you, is not perfect. And as you know, it is still a work in progress. But I'm incredibly proud of the work done by our small team under the very tight time frame set by Congress and the legislation.

“We have one industry and one chance. Let's have vigorous debate about what the rules should be. Let's never forget that our real adversaries are the bad actors who tarnish our sport, anyone who is cavalier about horse welfare, and those who want to shut down horse racing for good.”

“It's been only six weeks since we have launched HISA. Give us some time. Give us some grace. This effort to enhance the safety and integrity of racing is so important. And if it fails, we all fail. And if it succeeds, we all succeed. It's really that simple,” Lazarus said.

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Three Jockeys to Become Test for Contested HISA Enforcement

The legal rabbit hole deepened on Tuesday in one of four lawsuits designed to derail the Horseracing Integrity and Safety Act Authority (HISA), pulling jockeys Drayden Van Dyke, Miguel Vazquez and Edwin Gonzalez into the fray as plaintiffs alleged new harms resulting from rule enforcement they believe is in contempt of a court order.

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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Texas Track Group Files Latest HISA Lawsuit

A group of entities associated with various racing-related industries in Texas, including the owners of Lone Star Park, has filed a new lawsuit against the Horseracing Integrity and Safety Act (HISA) in which declaratory and injunctive relief is sought along with a request for a preliminary injunction, according to court filing dated July 29.

Submitted to the United States District Court for the Northern District of Texas, Amarillo Division, the suit focuses on the relative power of the Horseracing Integrity and Safety Authority–the umbrella non-profit established by the Act–to implement the program.

This latest filing is in the same district court–but different division–as a separate lawsuit filed by the National Horsemen's Benevolent and Protective Association (NHBPA) in 2021.

Earlier this year, a federal judge threw out that case. The NHBPA subsequently filed an appeal with the Fifth Circuit Court of Appeals, which is pending.

“The 'Authority' is empowered by law to, among other things, subpoena documents and compel testimony, search businesses and private databases and seize documents, conduct adjudicatory proceedings, and prosecute actions in federal court like other federal prosecutors,” the latest filing states.

“No private individuals have such powers. No private individual can show up at one's door and demand documents and testimony under sanction of law. No private individual can conduct a private search and seizure. And no private individual has the power to hale another private citizen into court to enforce offenses against the public. But the “Authority” does,” the filing adds.

So far, the Texas Racing Commission (TRC) has refused to comply with Act, which went into effect at the start of July, arguing that under Texas law only the commission has the authority to oversee horse racing in the state. HISA's current remit covers only Thoroughbred racing.

As a result, the signal from the state's Thoroughbred tracks cannot be sent out of state and advance deposit wagering companies are prevented from taking betting on Texas Thoroughbred races. There are no Thoroughbred meets scheduled in Texas between now and the end of the year.

According to a spokesperson for the Authority, HISA will mount a legal defence “while the Authority's focus remains on implementing the Racetrack Safety program and finalizing Anti-Doping and Medication Control rules.” Implementation for the latter is scheduled for Jan. 2023.

“The majority of racing participants support HISA'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,” wrote the HISA spokesperson.

“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,” the spokesperson added.

The plaintiffs include Global Gaming LSP, a limited liability company which owns Lone Star Park, and Gulf Coast Racing LLC, which owns a greyhound racetrack located in Nueces County, Texas. Gulf Coast Racing is allegedly seeking to redesignate the track as a Class 2 horseracing track, according to the filing.

The other two plaintiffs consist of LRP Group Ltd. a limited partnership working towards “operating an active horseracing track” in the south of the state, the filing states, and Valle De Los Tesoros, a limited partnership similarly looking to operate a horseracing track in South Texas, one currently designated inactive by the TRC.

It's unclear whether the planned racetracks listed in the suit are intended for Thoroughbred racing.

Among the arguments the plaintiffs make is that the legal jurisdiction given the Authority is of government power “in general” and of executive power “in particular,” but that the current design of the Authority renders it unconstitutional, meaning it is exercising “nothing other than naked legislative power.”

The plaintiffs write: “The 'Board' of the 'Authority,' comprising private individuals appointed through a Nominating Committee whose membership is established by the Authority's own incorporation documents, has not been appointed through the constitutionally required mechanisms for the exercise of executive power.”

To argue their position, the plaintiffs reference such historic texts as The Federalist papers of U.S. founding father, Alexander Hamilton, and “Commentaries on the Laws of England,” by William Blackstone, an English jurist from the 18th century who long suffered terrible gout.

This latest lawsuit constitutes the fourth legal challenge to HISA. Aside from the NHBPA filing, a case filed by the state of Oklahoma in the United States District Court, Eastern Division of Kentucky, is similarly ongoing.

Late last month, Louisiana and West Virginia won a preliminary injunction in federal court aimed at keeping HISA from being implemented in those two states until the Act's constitutionality gets decided in full.

HISA has since filed motions for stay pending appeal with the United States Court of Appeals for the Fifth Circuit.

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