HISA the Focus at HBPA, Racing Commissioners Conference

Edited Press Release

Louisiana Attorney General Jeff Landry and Daniel Suhr, managing attorney for the Liberty Justice Center, told an assembly of racehorse owners, trainers and racing regulators Tuesday that they expect the Horseracing Integrity & Safety Act (HISA) to wind up before the U.S. Supreme Court– and they also believe America's highest court will strike down the legislation as unconstitutional.

While the room at the Hotel Monteleone was populated with folks concerned how HISA will impact their industry, Landry and Suhr said the four legal challenges before the Fifth and Sixth Circuits have much broader implications for the country. HISA, originally passed by Congress when slipped into the 2020 Covid relief bill, sets up a private corporation, also known as HISA or the Authority, with broad powers to create, implement and enforce safety rules and drug and medication policies with the Federal Trade Commission providing some measure of oversight.

Landry, who brought suit against HISA in U.S. District Court in the Western District of Louisiana, was the keynote speaker Tuesday on the first of three days of panel discussions and presentations at the National Horsemen's Benevolent & Protective Association (NHBPA) conference being held in conjunction with the Association of Racing Commissioners International (ARCI), which represent pari-mutuel racing regulators.

“If we don't get this thing struck down, you better have this meeting in probably the dining room–and I mean the small dining room here at the Monteleone,” Landry said. “It will be a bunch of folks who have more money in their pockets than they know what to do with. And they're going to control the tracks and horse racing, and the rest of us really won't be able to enjoy the sport. This law is actually designed to eliminate the very fabric of horse racing. And so we stood up.

“I said, 'We are going to keep filing suits, and we're going to find a way to bring this thing to the U.S. Supreme Court if we have to. Guess what? We are there. And I'm glad we're there. I know the Sixth Circuit decision (upholding HISA, in contrast to the Fifth Circuit's appellate court ruling) was not all that great for us. But quite frankly, I think it was. Because it is going to absolutely force this case before the United States Supreme Court.”

Suhr added, “I believe this case is important not just for this industry. I know it is. But I'm here because I believe it's important for our country and our democracy, and I don't say that lightly. Because fundamentally what we're fighting about is accountability, transparency and fairness, which are core guarantees of our Constitution to all of us as citizens. When the government exercises power in our lives, when it comes into our business, our families, it is accountable to voters, it is transparent to the stakeholder community, to the news media and to all of us as citizens. And it is neutral. It is independent and it is fair when it exercises that power.”

Suhr said, based on their written SCOTUS opinions, that he believes there are enough justices to strike down HISA. “There's no such thing as a slam dunk in my business,” he said. “It's a lot like yours. Everything is a little bit of a gamble. But I do this for a living and I can tell you, we brought this case because we believe when it gets to the Supreme Court, those fundamental principles we've been talking about are actually going to decide the day. I think we have a really great shot at this.”

A Tuesday afternoon panel offered concepts that could lead to uniformity without vesting so much control and power in one entity and still utilizing the existing racing commissions.

“As we all look through a different lens now, something has to be established for uniformity,” said National HBPA CEO Eric Hamelback. “We want to make it constitutional and we want to make sure the right participants are helping to make the decisions. I see it as the right participants are in this room. We want uniformity based on science. We want it based on peer-reviewed research. We feel the way the (HISA) legislation was drafted, it doesn't lean toward being based on science. I think there's a lot of opinion in there.”

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Taking Stock: Misbranding Case Doomed By Fed Error

Expeditiously I be on my Grizzly
Feds try to creep me somehow always miss me
–Mr. Fantastik, from the MF DOOM song “Anti-Matter” on the King Geedorah album “Take Me To Your Leader”

If you're not hip to the slang in the lyrics above, Mr. Fantastik is essentially saying that the Feds are after him while he's on his grind, but they can't quite get him. There's an implication in there that the Feds are incompetent, but that's more evident from Mr. Fantastik's delivery.

Trainer Murray Rojas can probably relate to that sentiment now, after a Supreme Court decision was handed down in her favor last week on the Monday before the Breeders' Cup races. It didn't get much publicity in the racing press, perhaps because of the anticipation of the Breeders' Cup, but it should have, because the decision may have ramifications for horse racing-related misbranding cases working their way through the judicial system. Also, the larger issues of “federal overreach” addressed in an amicus brief filed in support of her petition are in the playbook of conservative federal judges, and some of them may hear cases challenging the constitutionality of HISA (the federal Horseracing Integrity and Safety Act, which was signed into law almost a year ago and is meant to oversee the sport at a federally mandated level but is being challenged by the attorneys general of several red states and the National Horsemen's Benevolent and Protective Association {NHBPA}).

A Penn National-based trainer, Rojas had been convicted on 14 felony charges by a jury in federal court on June 30, 2017, for misbranding drugs and conspiracy to misbrand in violation of the Federal Food, Drug, and Cosmetic Act (FDCA), relating to the administering of drugs to horses in her care within 24 hours of races. That act alone was against the rules of racing in Pennsylvania.

The FBI had led a sweeping law enforcement investigation of trainers and personnel at Penn National, and others were prosecuted as well by the U.S. Attorney's Office of the Middle District of Pennsylvania, but Rojas's case was the icing on the cake. On May 16, 2019, Rojas was sentenced to 27 months in prison and two years of supervised release, plus a fine of $5,000–the most severe sentence handed down in this roundup.

Rojas convinced the sentencing judge to grant bail while mounting an appeal, but the U.S. Court of Appeals for the Third Circuit, on January 11 of this year, affirmed the district court conviction and sentence. Things looked bleak for Rojas at that point.

Rojas, however, fired off a Hail Mary pass. On May 13, she filed a petition for a writ of certiorari, or a hearing in the Supreme Court. The highest court grants only about 1% of petitioners a hearing, but Rojas got two important briefs of support to get hers.

Coady photo

One was the aforementioned amicus brief filed on June 17 by the American Conservative Union Foundation (ACUF), which bills itself as an organization that “opposes the increasing application of federal law to matters that are more appropriately addressed by state and local authorities.” ACUF, a nonprofit, is the fundraiser for the American Conservative Union (ACU), which hosts the Conservative Political Action Conference (CPAC).

Joining the ACUF on the brief was The Cato Institute, another organization advocating limited government.

Their brief essentially agreed with the Rojas petition that the lower courts in this case had blurred long-held distinctions in case law between the “dispensing” and “administering” of drugs. Rojas had been convicted by a jury that was instructed that both dispensing and administering amounted to the same thing, and this line of thought had been affirmed in the Third Circuit appeal that she'd lost. The dispensing or sale of drugs is federally regulated in interstate commerce in the FDCA, the brief noted, but the administering of drugs by a veterinarian or medical practitioner in the course of his practice is not. This is what Rojas, who wasn't dispensing drugs, had been arguing all along in fighting the federal charges against her, and it was the centerpiece of her petition.

The brief was a classic conservative treatise on federalism. It disparaged “the aggressive federal criminal prosecution…that historically has been left to state and local regulatory enforcement,” because the alleged crimes that took place were infractions of state law. The Feds, however, had tried to pigeonhole them through a “liberal” reading of FDCA, according to the brief, to fit federal felony laws.

Believe it or not, the second brief supporting Rojas came from the respondent, The United States, in a filing Sept. 17 by the Acting Solicitor General, an Acting Assistant Attorney General, and two Deptartment of Justice attorneys. Perhaps they were convinced by some of the arguments in the ACUF and Cato Institute brief, because they also agreed that misbranding did not occur in this case and Rojas's conviction should be vacated. All said and done, it was a stunning defeat for the Feds, although their brief appears to be constructed in a narrow manner applicable only to this case–perhaps because of the larger Southern District of New York (SDNY) case of misbranding pending against trainer Jason Servis.

Rojas filed a reply Oct. 6 addressing some of these specific concerns, plus larger conservative issues of federalism and states' rights. On Nov. 1, the Supreme Court granted the petition, vacated the judgment against Rojas, and remanded the case “for further consideration in light of the confession of error by the Solicitor General.”

Conservatives vs. Conservatives

Conservatives and libertarians came to Rojas's defense and flexed ideologies that resonated with a conservative court. Someone tweeted recently that racing is a right-wing industry, which may be going a bit too far, but it's probably safe to say that most of the stakeholders in the game are conservatives who would support concepts of federalism and states' rights, as well as vote for the same type of people advocated by organizations like ACUF and the Cato Institute. Yet two notable conservative factions, one led by The Jockey Club (TJC) and the other by the NHBPA, are on opposite sides of HISA, which brings federal heft into racing like never before.

This anomaly is essentially pitting racing people of the same overall political philosophy against each other at the same time as they're probably supporting the same people in political office or in the voting booths.

Both factions, for instance, likely would have supported Donald Trump's three appointments to the Supreme Court that have shifted it to the right.

It's only a matter of time before there's a collision between conservative principles of federalism and HISA. Those that support HISA are likely to end up at odds with high-powered and influential conservative intellectuals outside of racing like those that came to support the Rojas petition. And if a challenge to HISA were to get to the Supreme Court, opponents of it could possibly prevail. For instance, even before two of Trump's three appointees were on the Supreme Court, it ruled in its May 2018 decision that the Professional and Amateur Sports Protection Act (PASPA) was unconstitutional because the “anti-commandeering principle” of the 10th Amendment recognizes limitations of congressional authority over state governments, and there are parts to this that could possibly apply to HISA as well.

A few years ago, while writing in this space about one of the earlier versions of the bill that eventually became HISA, I wrote: “But if it did somehow become law, the constitutional challenges to it in court–certainly in the way it's now written–could set off another round of battles, and in the end, the industry would probably find itself exactly where it is now: battling itself.”

More specifically, I should have warned that it would be a battle of conservatives versus conservatives, and that's something to think about, because mostly liberal lawmakers supported the passage of HISA–it was co-sponsored by 206 Democrats in the House versus 55 Republicans–and liberal and progressive-minded people are mostly the ones behind groups that generally don't support racing.

I'm going to end this with another verse from “Anti-Matter,” this one from MF DOOM himself, because the last line is an apt warning:

Yeah, It's neither here nor there, black
Warfare in your ear, clack-clack-clack-clack-clack
What's that? You're hearing things! Tat-tat-tat-tat-tat
Be wearing your thinking hat

Sid Fernando is president and CEO of Werk Thoroughbred Consultants, Inc., originator of the Werk Nick Rating and eNicks.

 

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Judge Rules Against NJTHA’s Case Seeking ‘Bad Faith’ Damages From Sports Leagues

Judge Freda Wolfson, U.S. Chief District Judge in New Jersey, issued a ruling Dec. 3 in the New Jersey Thoroughbred Horsemen's Association case seeking “bad faith” damages from sports leagues, reports bloodhorse.com. The case stems from the fall of 2014, when those leagues—including the NCAA, NBA, NFL, NHL, and MLB—filed a temporary restraining order against the NJTHA, owners of Monmouth Park, to prevent the track from taking sports wagers.

On May 14, 2018, the U.S. Supreme Court overturned the Professional and Amateur Sports Protection Act, allowing sports wagering to commence in states like New Jersey.

The leagues had set aside $3.4 million in an injunction bond for the case, covering the 28-day period of the restraining order, but the NJTHA was seeking up to $150 million in “bad faith” damages for being unable to hold sports wagering from October of 2014 to May of 2018.

While Judge Wolfson is prepared to consider awarding horsemen the $3.4 million amount of the bond, pending a hearing to determine “provable damages,” she will not consider the “bad faith” damages claim at this time.

Read more at bloodhorse.com.

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