National Horsemen's Benevolent and Protective Association

HISA, FTC Link Grim Headlines to HBPA’s Desire for ‘Status Quo’

In two separate court filings Thursday, the Horseracing Integrity and Safety Act (HISA) Authority and the Federal Trade Commission (FTC) both sharply criticized the National Horsemen's Benevolent and Protective Association (NHBPA)'s decision to seek an injunction that would delay the May 22 implementation of the Anti-Doping and Medication Control (ADMC) program.

What stood out was that neither the HISA Authority nor the FTC shied from trying to link the NHBPA's desire to maintain the “status quo” to the grim headlines that have dominated the sport over the past week.

“Seven horses died in the lead up to last weekend's [GI] Kentucky Derby,” the FTC's opening line in the May 11 filing stated. “Reporters, not mincing words, observed that the accidents 'overwhelmed' the [D]erby with 'the stench of death.' Congress passed HISA in 2020 to protect horses and prevent these kinds of tragedies, but the Horsemen Plaintiffs have repeatedly challenged the statute and the FTC's implementing rules.”

Drawing similarly from recent adverse events, the HISA Authority's response referenced a May 9 New York Times story that broke the news of Forte's failed New York State Gaming Commission drug test that ran under the sub-headline, “Horse racing is again caught up in a controversy.”

The HISA Authority alleged that, “Plaintiffs' request for 'state regulation' to forestall the federal regulatory scheme Congress mandated would plunge the industry back into the 'existential crisis' of inconsistent regulation [and] recent headlines provide fresh reminders…”

United States District Court Judge James Wesley Hendrix of the Northern District of Texas (Lubbock Division) will now have to weigh those assertions against those filed by the NHBPA in its May 5 request for the ADMC injunction.

The lawsuit initiated by the HBPA to try and derail HISA on alleged anti-constitutionality grounds is now past the two-year mark. The thrice-delayed ADMC is on target to begin in 10 days.

On Mar. 15, 2021, the NHBPA and 12 of its affiliates sued the FTC and HISA Authority personnel, seeking to permanently enjoin the defendants from implementing HISA, bringing claims under the private-nondelegation doctrine, public nondelegation doctrine, Appointments Clause, and the Due Process Clause.

Judge Hendrix dismissed that suit on Mar. 31, 2022. But the NHBPA plaintiffs appealed, leading to a Fifth Circuit Court reversal on Nov. 18, 2022, that remanded the case back to the Lubbock Division. In the interim, an amended version of HISA was signed into law Dec. 29, 2022. That fix was designed to make HISA compliant with the constitutional defects the Fifth Circuit had identified.

On May 6, 2023, Hendrix validated the newer version of HISA as constitutional. Now the NHBPA is planning another appeal back to the Fifth Circuit, and it wants the ADMC's rollout stopped while that process plays out.

The May 5 filing by the NHBPA explained the reasoning behind its request:

“An injunction is necessary because the industry cannot endure 'seismic change' in the short term that is undone shortly thereafter. The courts should not put the industry on a roller-coaster where the ADMC rules are in effect from May 22 to [some future date when] they go out of effect again if the Fifth Circuit finds the amended law unconstitutional.”

Hendrix, in a May 8 order, told the HISA Authority and the FTC that they had to reply to the NHBPA's motion for an injunction within 72 hours, signaling that he did not plan to let this decision linger.

“Plaintiffs are neither entitled to that relief nor to any other remedy,” the FTC's May 11 filing stated. “And the equities–both equine and otherwise–point decidedly against Plaintiffs.”

The FTC alleged that it “makes no difference that Plaintiffs previously prevailed on their nondelegation challenge before Congress amended HISA. And they do not argue about their chance of success on any of their other theories…. Because Plaintiffs stand almost no chance of success, their motion for a stay should be denied on that basis alone.”

The HISA Authority's filing put it this way: “Congress, the Executive, and both federal courts [have] come to the same correct conclusion: the Act is now constitutional. The HBPA Plaintiffs nevertheless ask for the extraordinary relief of an emergency nationwide injunction pending appeal…

“While Plaintiffs' speculation about irreparable harm from the ADMC rules is at best conflicted, an injunction of the ADMC rules would inflict certain injury on Defendants and the public interest,” the HISA Authority's filing stated.

“These final two factors weigh heavily against halting a federal regulatory scheme that has long been planned and that enjoyed substantial compliance in its brief initial rollout…”

“Because Plaintiffs have not shown that their appeal has substantial merit (let alone a likelihood of success) and have not demonstrated that the balance of equities tilts in their favor at all (let alone heavily), the Court should deny Plaintiffs' motion for an injunction pending appeal,” the HISA Authority's filing stated.

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In Odd Legal Twist, NHPBA Criticizes Decision To Delay ADMC

Even as the National Horsemen's Benevolent and Protective Association (NHBPA) is trying to halt the Horseracing Integrity and Safety Act (HISA) for good, its attorneys filed a response in federal court Thursday that criticized the Federal Trade Commission (FTC)'s Apr. 27 order that mandated the third delay in nearly a year for the implementation of the Anti-Doping and Medication Control (ADMC) program, this time from May 1 to May 22.

The NHBPA told the court that the FTC's issuance of the order to delay the program without first providing a 30-day public comment period on the date switch goes against the provisions set forth in the Administrative Procedure Act (APA), which governs the process by which federal agencies develop and issue regulations.

The NHBPA also stated that the FTC's decision to delay the ADMC program is “totally inconsistent” with the FTC and HISA Authority's previous arguments that the program needed to be implemented as swiftly and as uniformly as possible.

The NHBPA filing also pointed out that although the FTC cited a desire not to cause “confusion” by implementing the ADMC on May 1, five days before the Triple Crown series starts with the May 6 GI Kentucky Derby, the FTC's decision to go with a May 22 start date instead puts the new effective date right in the midst of that series, after the May 20 GI Preakness S. but before the June 10 GI Belmont S.

“The Horsemen will not challenge the Order as lacking good cause because they believe any delay is good for their members, their horses, and their industry-they are seeking a permanent delay in the rule, after all. But they cannot help but note that for a second time in as many months the FTC and Authority have steamrolled over the fundamental principles of notice-and-comment at the heart of the APA,” stated the NHBPA's filing in United States District Court (Northern District of Texas, Lubbock Division).

“The FTC says its order does not need a period of public comment because it has 'good cause' to issue the rule immediately,” the NHBPA filing stated, quoting portions from the FTC order. “'Good cause' is an 'emergency power,' normally reserved for dire circumstances where life and limb are in danger. The mere existence of a statutory deadline doesn't cut it…. The Authority has represented that immediate implementation of the rule is necessary to preserve life and limb; it is hard now to understand how the FTC can find good cause to delay the rule if that's the legal standard. The policy rationale the Order gives is at best thin gruel.”

The FTC's “notice of delay” filed with the same court, also on Thursday, stated that, “Because the ADMC Rule governs the treatment of horses weeks before a covered race, some affected parties who are treating horses in a manner consistent with state requirements may find it difficult to come into compliance in the five days between the ADMC Rule's scheduled effective date and the Kentucky Derby on May 6. Even in the absence of conflicts between the ADMC Rule and applicable state regulations, implementing new testing requirements just days before the start of the Triple Crown creates an appreciable risk of errors, confusion, and inconsistent treatment of similarly situated horses-harms that could frustrate the purposes of the Act.”

The FTC stated that the HISA statute “authorizes the [FTC] to abrogate, add to, or modify the Authority's rules for specified reasons, including 'to ensure the fair administration of the Authority,' [and that while the] APA typically provides for notice-and-comment rulemaking, [that comment period is] not required with respect to a rulemaking when an 'agency for good cause finds…that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.”

The FTC's filing continued: “Here, the [FTC] finds, for good cause, that notice and comment is impracticable and unnecessary with respect to the final rule. Given the short time remaining before commencement of the Triple Crown races, providing advance notice would delay the effect of the final rule until after the Kentucky Derby, defeating the rule's purpose. Obtaining comments after issuance of the rule is unnecessary because the full effect of the Commission's rule-which merely provides for a brief delay in the effective date of the ADMC Rule-will have occurred prior to the Commission's collection and consideration of any comments.”

The NHBPA countered with this explanation in its filing: “As the FTC has reminded us in the past, “[t]he bedrock principle of the Act is the need for uniformity.' [But now] the rules for the three Triple Crown races will not be uniform, because the Defendants have chosen May 22 rather than June 12 as the start date for the ADMC. As a result, the Kentucky Derby and the Preakness will be governed by state law, while the Belmont will be governed by the ADMC (unless it is enjoined or delayed again)…

“Now the FTC is saying that the Authority is not ready to roll?” the NHBPA filing asked rhetorically. “In Kentucky, home state of the Kentucky Derby, where a voluntary state implementation agreement with the Authority and the state racing commission was signed March 21, 2023? Again, if this were before the Court as an APA challenge, would this fly?

“Again, the Horsemen are not going to file an as-applied APA challenge that the Order is inconsistent with the Act's insistence on uniformity, because they believe the delay is good for the Horsemen and the industry,” the NHBPA filing stated. “But they must point out the absolute lack of respect for the Act and their own professed priority shown by Defendants.”

The ADMC program had originally been expected to go into effect July 1, 2022, according to its enabling law. That start date then got pushed back to Jan. 1, 2023. In mid-December 2002, that date got scrapped when the Federal Trade Commission (FTC) declined to approve the rules that would make the program operational by the start of 2023, citing legal issues.

The HISA Authority then ramped up for an expected Mar. 27 start date after receiving FTC clearance. The ADMC went briefly into effect for four days, but on Mar. 31, the federal judge handling this lawsuit issued a 30-day injunction that suspended the program, pushing the ADMC start date out to May 1.

TDN first reported on Apr. 25 that the ADMC's May 1 start date was in jeopardy after hearing testimony about it during Tuesday's Pennsylvania Horse Racing Commission meeting, when an official with that agency stated he had been contacted by HISA Authority officials on Apr. 21, informing him that the new start date was May 22.

The HISA Authority did not initially respond to an Apr. 25 request for confirmation from TDN on the date switch, but the FTC court filing and a subsequent press release on Thursday verified the change, citing a vote taken by FTC commissioners.

The NHBPA also took umbrage with the way that FTC order came about.

“One scratches one's head how it is that the FTC announced this order to the public [on] Apr. 27, but Authority staff was calling state commissions on Apr. 21 telling them that it was being delayed to May 22,” the NHBPA filing stated. “At best, the FTC gave the Authority a heads-up that it was making this delay decision. Much more likely, this was the Authority's decision all along, and the FTC ratified it because the FTC ratifies everything asked of it by the Authority…”

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HISA Authority Challenges ‘Piggyback’ Strategy in Amended Louisiana Lawsuit

The recently amended federal lawsuit spearheaded by the state of Louisiana against the Horseracing Integrity and Safety Act (HISA) Authority and the Federal Trade Commission (FTC) is facing a new challenge from the HISA Authority defendants, who filed a Mar. 6 motion to strike the latest version of the complaint based on allegations that the plaintiffs are “improperly” attempting to use federal rules of civil procedure to turn the case to their advantage.

The chief beef in the HISA Authority's Mar. 6 “motion to strike” filed in U.S. District Court (Western District of Louisiana) centers on the addition of an expanded slate of new plaintiffs to the lawsuit initially filed on June 29, 2022.

The plaintiffs had amended that complaint on Feb. 6, 2023, and changes to the lawsuit included the addition of 14 new individual Horsemen's Benevolent and Protective Association (HBPA) affiliates, plus a wide swath of states, racing commissions, and individual racetracks.

“Plaintiffs, having obtained a preliminary injunction from this Court that redresses their alleged harms, now seek to add a 'vast number of organizations' and States as new plaintiffs in a blatant attempt to 'extend the injunction nationwide,'” the HISA Authority's Monday filing stated.

These new plaintiffs, the HISA Authority's motion stated, “have already been litigating challenges to HISA in other federal courts for almost two years. Plaintiffs' gamesmanship is transparent. Their tactic? To use [federal civil procedure rules] to dodge [the legal] standard that dooms the pending intervention motion these same would-be parties previously filed now that the Court has issued a preliminary injunction in Plaintiffs' favor.”

The HISA Authority's motion continued: “Their strategy? To use the geographic 'range, literally from coast-to-coast,' of the new parties as justification for a shotgun request that the Court 'extend the injunctive relief currently in effect to provide nationwide relief.' Their end goal? To dismantle nationwide regulatory reforms that Congress recently amended and reaffirmed after the Fifth Circuit's opinion reinstating the preliminary injunction.

“Allowing the would-be parties–representing thousands of industry members from across the country–to piggyback on the favorable relief Plaintiffs already secured would undermine principles of justice, encourage forum shopping, prejudice Defendants, and set a dangerous precedent for future litigants looking to parlay any single plaintiff's preliminary win into an expansive nationwide class action that topples congressionally mandated regulations before any briefing on dispositive motions.”

That outcome, the HISA Authority argued, “is particularly unwarranted given that a prior stay order entered by the Fifth Circuit and intervening administrative actions by the FTC (on top of Congress's recent amendment reinforcing its commitment to the HISA regime) cast substantial doubt on the continued viability of the claims underlying the preliminary injunction presently in effect.”

The HISA Authority summed up: “The Court should strike Plaintiffs' amended complaint-at least as to the addition of the 'vast number' of new parties seeking to expand the existing relief into a nationwide preliminary injunction.”

The plaintiffs, back on Feb. 6, articulated the revised version of the lawsuit this way:

“This First Amended Complaint seeks to prevent HISA from continuing to exercise 'unchecked government power' through its FTC-approved rules or any other rules that the FTC may approve now that the Fifth Circuit has issued its mandate [in a separate, but related, case headed by the National HBPA].

“The broad collection of plaintiffs from around the country further justifies Plaintiffs' request for nationwide injunctive relief herein,” the plaintiffs' amended complaint continued.

“And this Court has already recognized that the challenged HISA rules offend the Administrative Procedure Act and HISA's statutory authority,” the plaintiffs stated.

“The Fifth Circuit has further cemented the rightfulness of that decision by rejecting Defendants' appeal of the preliminary injunction order and denying Defendants' requests for additional appellate review in this case that came after Congress tweaked the HISA Act, just as the Fifth Circuit did in [the National HBPA appeal],” the plaintiffs' amended complaint stated.

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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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