HBPA: Negotiations Between HISA And Sales Companies Equate To ‘Preferential Treatment’ For Breeders

Two days after the Horseracing Integrity and Safety Act (HISA) Authority disclosed at a press conference last week that it had initiated discussions with sales companies in an attempt to bring about voluntary compliance with medication policies throughout the lifetimes of Thoroughbreds, the National Horsemen's Benevolent and Protective Association (NHBPA) went on record with a letter filed in the United States Court of Appeals for the Fifth Circuit alleging that those efforts equate to improper rulemaking by the Authority and “preferential treatment” for breeders.

The purpose of the HISA Authority's Sept. 13 press conference was to go public with a months-in-the-making report on 12 horse deaths at Churchill Downs this past spring, and also for the Authority unveil a wide-ranging “strategic response plan” to predict and halt catastrophes before they occur. According to the report, which also listed numerous other safety proposals, the goal of entering into agreements with Thoroughbred auction houses would be “to more effectively align and coordinate our respective anti-doping and medication control [ADMC] programs.”

The purpose of the NHBPA's Sept. 15 legal filing, by contrast, was to let the court know that as the plaintiffs/appellants in a two-year-old lawsuit that is trying to derail HISA based on alleged constitutional violations, the NHBPA and 12 of its affiliates believed that by entering into such negotiations with sales companies, “the Authority has announced its intention to add another line to the already long list of 20-plus examples of the Authority writing the rules for the industry without going through the rulemaking process.”

The two-page letter written by the NHBPA's attorney, Daniel Suhr, prefaced its legal criticisms of the Authority's discussions with sales companies by first stating that, “The NHBPA Appellants appreciate the policy goal to ensure effective ADMC standards that include breeders: as the advocate for owners of horses, they support measures that ensure full and accurate information from breeders for buyers.

“But as a legal matter, two things are obvious from the announcement,” the NHBPA letter continued. “First, one section of the industry that is included in the scope of the Act is receiving preferential treatment-the breeders get to negotiate their rules through voluntary agreements while other sectors like trainers and racetracks have rules imposed upon them by Authority fiat.

“And second, once again the Authority is engaged in regulatory activity outside the rulemaking process. When the Authority enters into a 'voluntary agreement' with a breeding company, it is not required to publish or publicize the text of that agreement (or provide it if requested through FOIA), receive and consider public comment (including feedback from other affected equine constituencies), or run it by the Federal Trade Commission [FTC],” the NHBPA letter stated.

The allegations by the NHBPA were filed with oral arguments in the highly anticipated Fifth Circuit appeals case coming up soon, on Oct. 4.

A lower federal court already ruled back on May 4 that the rewritten HISA law that went into effect Dec. 29, 2022, is indeed constitutional because it fixes the problems the Fifth Circuit had identified in an earlier version of the law. The NHBPA plaintiffs are arguing for another reversal.

The points of law raised by the NHBPA's Sept. 15 letter, however, won't be considered by the court in their current format.

That's because the letter did not meet the standard for the type of filing that notifies the court of pertinent and significant findings after a party's brief has been filed, according to a docket entry made by the court clerk on Sept. 15. “Therefore, we are taking no action on this letter,” the clerk stated.

If the NHBPA wants its comments on the issue to be considered, the clerk's notation continued,  “A motion seeking leave to file a supplemental brief is required.”

Regardless of its status, the letter was made public within the docket once the court refused to take action on it, and its contents are important to the broader world of horse racing because the objections over the sales company discussions underscore both the ongoing and newly developing rifts between the NHBPA plaintiffs and the HISA and FTC defendants.

A chief point of contention between the two parties is that the Authority has stated that it will negotiate (rather than propose and implement) ADMC rules upon sales companies because its interpretation of the law is that some young horses sold as auction aren't yet “covered horses” under HISA.

Speaking at the Sept. 13 press conference, Lisa Lazarus, HISA's chief executive officer, explained that “a horse becomes a HISA [covered] horse after it's had its first public workout, first timed workout. So some of the 2-year-old sales would certainly fall under HISA's purview. The weanlings and yearlings wouldn't.”

But, Lazarus added last week, “I think we're at the point where if HISA leads the way that we should, and the way that we intend to, that we'll be able to motivate the industry to come under one kind of comprehensive, understandable, kind of ADMC approach.”

The NHBPA, on the other hand, wrote in a footnote to its Sept. 15 letter that under its reading of HISA, it believes breeders do qualify as “covered persons,” and that breeders as a group are included “among equine constituencies.” Thus, the plaintiffs' argument goes, it's allegedly not fair for one sector of covered persons to have a say in negotiating rules while other covered persons don't.

Asked on Sept. 18 if the HISA Authority would like to comment on the NHBPA's assertions in the letter, an Authority spokesperson wrote in an email that, “The NHBPA overlooks the fact that Congress decided that Thoroughbred horses are not covered horses under the Act until their 'first timed and reported workout.' Therefore, it is necessary for the sales companies to voluntarily agree so that we could effectively align and coordinate our respective ADMC programs throughout the lifetime of a horse.”

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Six States, Two Without Racing, Join Fight To Derail HISA

The attorneys general from six new states have sided with existing plaintiffs in Oklahoma, West Virginia and Louisiana by filing a Sept. 21 “friend of the court” brief in one of two currently active federal lawsuits aiming to get the Horseracing Integrity and Safety Act (HISA) voided for alleged constitutional violations before HISA even goes into effect.

Curiously, two of those six states–Alaska and Mississippi–have no current forms of legal pari-mutuel horse racing. The other states expressing support for the alleged unconstitutionality of HISA are Arkansas, Idaho, Nebraska and Ohio.

The Tuesday filing in United States District Court (Eastern Division of Kentucky) refers to HISA as “the Horse Act” and terms the HISA Authority board that will craft Thoroughbred racing's new regulatory framework as “the Private Corporation.” The United States Anti-Doping Agency (USADA), which is slated to control the drug testing aspects of HISA, is labelled in the filing as “the Private Consultant.”

Although the Authority and USADA will both fall under the theoretical auspices of the Federal Trade Commission (FTC), which is a pre-existing federal agency within the executive branch, the brief calls into question how this hierarchy will actually function in practice if HISA goes into effect July 1, 2022, as mandated by the 2020 law that created it.

“Which entity is really calling the shots, the Private Corporation or FTC?” the filing asks rhetorically. “The answer is the Private Corporation.”

The filing continues: “The Horse Act unconstitutionally delegates legislative power. That follows from three insights. First, the Private Corporation is a private entity. Second, the Private Corporation wields governmental power. Third, the Private Corporation wields the power as a principal actor–it does not perform mere ministerial or advisory tasks for the federal government…

“The Horse Act gives the Private Corporation the power to act as the federal government.

The Private Corporation writes the rules governing horseracing, enforces those rules, and issues interpretive guidance at will. While a federal agency will oversee the Private Corporation in some instances, that oversight is more symbolic than substantive…

“Because the Constitution forbids allowing private entities to exercise governmental power, the Horse Act is unconstitutional,” the filing states.

The attorneys general wrote that “the Horse Act creates an imbalance of power, and it gives the lion's share to the Private Corporation. This delegation of power undermines the Constitution.”

The filing also asks the court to “remember the importance of accountability,” stating that “Under the Horse Act, the People have no power to hold the Private Corporation to account.”

The filing continues: “The People have no say, even indirectly, in who runs the Corporation: they cannot elect anyone to the Private Corporation's board of directors, and the People's elected representatives similarly have no authority to confirm, remove, or even manage those who sit on the board…

“It is thus the will of the Private Corporation that binds the People. The Constitution tolerates no such thing,” the filing states.

The six states also write in their brief that HISA would also be operating contrary to binding legal precedent.

“When Congress directs a private entity to assist a federal agency, Congress must make the federal agency the commanding regulator,” the filing states. “Congress failed to do that here… the Private Corporation does not 'function subordinately' to the [FTC]…. The Private Corporation is chief policymaker, and that role far exceeds any ministerial or advisory duties.”

Among the plaintiffs in this lawsuit, which was originally filed Apr. 26, are three Oklahoma tracks–Remington Park, Will Rogers Downs and Fair Meadows.

The defendants are the United States of America, the HISA Authority, and six individuals acting in their official capacities for either HISA or the FTC.

This lawsuit is separate from the similar complaint over constitutional issues initiated by the National Horsemen's Benevolent and Protective Association against FTC members.

Both lawsuits are facing motions to dismiss by the defendants that have yet to be ruled upon by the federal judges in each case.

The post Six States, Two Without Racing, Join Fight To Derail HISA appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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Kentucky Horse Council’s Virtual KENA Meeting: Hosting Equine Events During A Pandemic

The Kentucky Horse Council has announced it will host a virtual meeting on September 1 for the Kentucky Equine Networking Association (KENA). The topic for this meeting, presented by WesBanco, will be “Can You Make a Right Call? Equine Events During a Pandemic.” The meeting will happen on Zoom at 6 p.m. on Tuesday, Sept. 1, 2020. Registration is required.

Due to recent event cancellations in Kentucky, this topic is being presented to give exhibitors and participants a glimpse into the decision-making process that event organizers and facility managers are using to determine whether or not to proceed with their horse shows during COVID19. This virtual meeting will feature panelists who will discuss various factors that impacted their decision and the public reaction to their choices.

Anne Guillory, an attorney in the Louisville office of Dinsmore & Shohl, LLP, will discuss the legal issues an event organizer faces during a pandemic as well as the efficacy of waivers. Jen Roytz, Executive Director of the Retired Racehorse Project, will discuss the factors that led to RRP deciding to cancel the Thoroughbred Makeover scheduled for October 7-11, 2020. Justin Billings, Chief Show Officer of the American Quarter Horse Association, will discuss proceeding with the 2020 AQHYA World Show. Nicole Rivera, Sales and Event Manager for the Kentucky Horse Park, will discuss the challenges the international venue faces hosting events during this time.

“2020 has presented incredible challenges to the equine industry, most recently manifested in the cancellation of major horse shows and equine events in Kentucky,” Kentucky Horse Council Executive Director Katy Ross. “We believe this well-rounded panel will provide great insight to the decisions that have been made regarding cancelling or going forward with events due to COVID19.”

KENA is charged with the mission of providing an educational and social venue for equine professionals and horse enthusiasts from all disciplines. Organized by the Kentucky Horse Council, KENA provides the opportunity for attendees to share ideas, business strategies and knowledge, and to obtain up-to-date information on horse and farm management and on issues affecting the equine industry. KENA is made possible by the generous support of sponsors, including Dinsmore Equine Law Group, WesBanco, Neogen, University of Louisville Equine Industry Program, KESMARC Kentucky, and Equine Land Conservation Resources.

The September meeting is presented by WesBanco, a multi-state bank with offices throughout Kentucky. WesBanco is a generous supporter of the KENA dinner series.

The Kentucky Equine Networking Association welcomes all Kentucky horse owners, professionals and enthusiasts to participate in the July meeting.

For more information and to register, click here.

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