Texas Federal Judge Won’t Grant Briefing Stay to HISA

Facing a United States Court of Appeals decision from the Fifth Circuit that the Horseracing Integrity and Safety Act (HISA) is unconstitutional and battling three similar lawsuits in various stages within the federal court system, the HISA Authority and the Federal Trade Commission (FTC) were informed Monday that a U.S. District Court judge in Texas won't grant those defendants a requested stay that would halt the briefing schedule in that case pending a final resolution of the Fifth Circuit order.

“No Good Cause Exists to Stay This Action,” wrote U.S. District Judge Matthew Kacsmaryk (Northern District of Texas, Amarillo Division) in his Dec. 12 order. “This is not one of the 'rare' circumstances in which Plaintiffs should be compelled to stand aside while Defendants litigate another case. Defendants make no showing of 'hardship or inequity' in complying with the briefing schedule they previously agreed to. Defendants were already aware of the then-pending appeal in [the Fifth Circuit] when they agreed to the schedule.

“The Court recognizes that the Fifth Circuit's decision [declaring HISA unconstitutional] could moot this challenge or clarify some of the issues,” the judge continued. “But Plaintiffs advance seven distinct constitutional challenges to HISA-including the nondelegation doctrine. Plaintiffs argue HISA violates the doctrine on three alternate bases. [The Fifth Circuit decision] considered only one of those bases. Thus, the Court does not anticipate that the final resolution of [the Fifth Circuit decision] will necessarily clarify the issues in this case by much.

“Additionally, Defendants are considering whether they will petition for a writ of certiorari before the Supreme Court. Hence, it could be months or even years before [the Fifth Circuit decision] reaches finality. Until then, a stay could unfairly harm Plaintiffs because [that order] only binds the parties in that case,” the judge wrote.

The judge did, however, give the HISA Authority 60 days of extra time by mandating a revised briefing schedule that now calls for the HISA and FTC defendants to file their combined responses to the plaintiffs' motion for summary judgment on or before Mar. 6, 2023, which in effect grants the defendants' motion in part.

The plaintiffs in the case are Global Gaming LSP, a limited liability company that owns Lone Star Park; Gulf Coast Racing LLC, the owner of a greyhound track in Nueces County, and both LRP Group Ltd. and Valle De Los Tesoros, which are two limited partnerships separately looking to operate new horse tracks in south Texas. They collectively filed their suit July 29, seeking declaratory and injunctive relief and a preliminary injunction against HISA.

The Fifth Circuit suit was initiated by the National Horsemen's Benevolent and Protective Association (NHPBA) back in 2021. That case was dismissed by a federal judge Mar. 31, 2022, but the Fifth Circuit reversed that decision Nov. 18.

That NHBPA lawsuit is separate from a similar 2021 anti-HISA complaint, again over alleged constitutional issues, headed by racing commissions and attorneys general in Oklahoma and West Virginia. That case, too, was dismissed by a federal judge on June 3, 2022, but the plaintiffs appealed the decision to the Sixth Circuit, which heard arguments on reversing that decision Dec. 7.

A fourth lawsuit, in which both HISA and the FTC are defendants in a complaint initiated by the states of Louisiana and West Virginia, plus the Jockeys' Guild, alleges unconstitutionality and federal rulemaking procedure violations regarding HISA's initial framework of regulations that went into effect July 1. According to the electronic court docket, there has been no filing activity in that case since Sept. 7.

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If HISA Goes, Honest Horsemen Will Be The Losers

The National HBPA and its affiliates got their wish Friday. The United States Court of Appeals for the Fifth Circuit ruled that the Horse Racing Integrity and Safety Act (HISA) is unconstitutional. As a result, HISA is on life support and very well could be finished. Within hours of the decision being announced, the National HBPA was taking a victory lap, declaring that this was a win for horsemen across the country.

“Today's ruling shows the HISA regulations are not in the best interest of thoroughbred racing's participants and, as Judge Doughty noted, will cause harm to the participants,” National HBPA CEO Eric Hambelback said in a statement.

That's what Hamelback and anti-HISA forces have been saying all along, while never really clarifying what potential harm would be caused by HISA. They fail to acknowledge that horse racing has a serious integrity problem and the cheaters are winning. HISA is designed not to hurt horsemen, but to rid the sport of its worst actors and in the process protect the overwhelming majority of owners and trainers who play by the rules.

Have we learned nothing from the FBI investigation and the subsequent arrests of Jorge Navarro, Jason Servis and more than two dozen others?  According to the indictments, Servis and Navarro gave virtually every horse in their barns performance-enhancing drugs and did so for years. They won with 30% of their starters not because they were superior horsemen but because they, allegedly, had potent drugs at their disposal.

Servis and Navarro operated under a system where state racing commissions were in charge. They were never caught and never were going to be. It's been proven that the racing commissions do an inadequate job and are helpless to catch the bad guys. That's because with most, the primary tool at their disposal is post-race drug tests. The same tests that never come up with anything more serious than overages of therapeutic medications. With hundreds of undetectable drugs available, it's far too easy to beat the system. Yet, the National HBPA is essentially saying they are fine with the status quo.

HISA was set to replace the old system with a new one under the watch of the Horse Racing Integrity and Welfare Unit, which was going to go well beyond drug testing and have some actual teeth. The plan includes working with 5 Stones Intelligence, which played a large role in the investigation that caught Servis and Navarro.

“The Horse Racing Integrity and Welfare Unit is also building their own internal capability, their own internal investigations team, which is very strong and is going to include some well-known and well-established faces,” HISA CEO Lisa Lazarus said. “I think probably why you ask the question, and it really resonates with me, is that you want to know if the new program is going to be very much intelligence and investigations based. It's not going to be based solely on conducting a whole lot of tests. If you look at all the top-end programs in the world, equine and otherwise, you'll see that the successful ones that really deliver integrity to their sports rely heavily on investigations. That's great. What 5 Stones has uncovered over the past couple of years has really changed this industry for the better. They truly have. They have certainly done a terrific job and we're lucky to have them as part of the sport.”

If HISA can't find a way to reverse the decision that declared it unconstitutional, we will go back to the old way of doing things, with state racing commissions leading the way while failing to do job of adequately policing the sport.

HISA was never going to wipe out all cheating in the sport, but it represented a huge step in the right direction and was sure to make it a lot tougher to break the rules. HISA was going to look out for the same people, HBPA members, who were robbed of purse money every time Jorge Navarro won a race, cheating hundreds of owners and trainers. Who's looking out for them now?

“It is the duty of the National Horsemen's Benevolent and Protective Association to protect horsemen across the country and that is not a responsibility I take lightly,” Hamelback said after the court decision.

He's right. But that means doing everything possible to ensure there is a level playing field and that HBPA members who play by the rules are never at a competitive disadvantage. That should be priority No. 1. If the National HBPA truly wanted to “protect horsemen across the country” then it would be backing HISA, not trying to undermine it.

Why Flightline Has My Horse of the Year Vote

Turf writer Gary West sent in a blistering letter to the editor to the TDN last week in which he wrote that he would not vote for Flightline (Tapit) for Horse of the Year because he did not want to reward his owners after they had retired him after just six career starts.

He wrote: “Whenever owners yield to avarice and whenever they focus on the sales ring rather than the racetrack, the sport shrinks a little more. And horse racing will continue to shrink into insignificance if its leaders, or so-called leaders, will not sacrifice their personal interests for the sport's good. That's why I cannot and will not vote for Flightline.”

West makes a valid point and the rush to retire racing's stars is bad for the sport. That means you can be unhappy with the ownership group but not that you should penalize the horse.

Though he raced just three times during the year, Flightline's accomplishments embody what it means to be the Horse of the Year. He was brilliant and dominating and he captivated the sport like no horse has done since Secretariat. As most would have done if they were in the same position, the owners opted to cash in on the millions coming their way from a stallion career. That's a shame but it is also the reality of what horse racing has become in the modern era. And it takes nothing away from what Flightline accomplished. He will be a very deserving Horse of the Year.

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In Advance of HISA Appeals, Court Date, Two Sides Hone Arguments

In advance of oral arguments scheduled Aug. 30 in the United States Court of Appeals for the Fifth Circuit, the two sides involved in the injunction appeal brought by the Horseracing Integrity and Safety Act Authority (HISA) have filed legal briefs that they hope will sway the court to their side of the case.

Both HISA and the Federal Trade Commission (FTC) are defendants in an underlying lawsuit led by the states of Louisiana and West Virginia, plus the Jockeys' Guild, that alleges unconstitutionality and federal rulemaking procedure violations regarding HISA's initial framework of regulations that went into effect July 1.

At issue in the appeal is whether a lower court (U.S. District Court, Western District of Louisiana) erred in preliminarily enjoining HISA regulations that were purportedly harming the plaintiffs. The issuance of that preliminary injunction favored the plaintiffs, but HISA and the FTC appealed it to the higher court.

The Appeals Court then ordered Aug. 8 that with the exception of three specifically contested HISA rules, HISA's legal authority would once again be valid in the two plaintiff states until that court heard oral arguments on the appeal. What happens in the Appeals Court will affect other actions in the lower court related to the underlying lawsuit.

“The district court had jurisdiction over Plaintiffs' claims,” stated an Aug. 19 brief filed by the plaintiffs. “The district court correctly concluded that Plaintiffs have standing because enforcing HISA's rules will inflict direct economic harm on each category of Plaintiff. Beyond that, the Plaintiff States are entitled to special solicitude, and HISA's rules inflict injuries on the States' sovereign, quasi-sovereign, and pecuniary interests.”

The plaintiffs' brief continued: “On the merits, multiple independent and valid grounds support the preliminary injunction. The HISA rules unlawfully dispensed with the requisite notice-and-comment period. Defendants' failure to provide for adequate notice and comment was not harmless given the significant changes these rules bring about for Plaintiffs, their members, and their citizens who raised substantive concerns that the FTC failed to take into account when it rubberstamped HISA's proffered rules…

“Beyond that, the district court correctly identified substantive flaws with each challenged series of rules–ways that HISA's rules clearly exceed its statutory authority–further amplifying the harms that warrant injunctive relief.

“Finally, the equitable factors support the preliminary injunction because the States cannot recoup their economic losses through an ordinary damages action [and] the public interest lies in ensuring that a private corporation is not unlawfully wielding federal power to implement a regulatory framework unauthorized by federal law.”

Not so, claimed the defendants in their Aug. 23 reply brief.

“Plaintiffs' response falls woefully short of justifying the district court's blunderbuss remedy–a preliminary injunction halting enforcement of all regulations promulgated under HISA at the time Plaintiffs brought this suit,” the defendants stated.

The defendants continued: “For each and every issue, Plaintiffs fail to so much as address critical defects highlighted by Defendants–presumably because they have no meritorious response. Plaintiffs do not even try to meet their burden to show actual and imminent harm for every rule they seek to enjoin, including the three specific rules that both sets of Defendants explained do not present any controversy.

“On the merits, Plaintiffs gloss over the gaping holes in the district court's plainly erroneous notice-and-comment analysis [and] lob a litany of misleading assertions on the assessment methodology…. Plaintiffs offer no meaningful response to the serious countervailing harms the order inflicts on Defendants and the public interest.

“These fatal flaws, independently or taken together, compel reversal of the extraordinary preliminary injunction in its entirety,” the defendants' brief summed up.

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HISA Rules Back in Force Nationwide After Appeals Court Ruling

A temporary “administrative stay” ruling issued Wednesday night by a panel of three judges from the United States Court of Appeals for the Fifth Circuit means that “pending further consideration,” Horseracing Integrity and Safety Act Authority (HISA) rules are back in effect nationwide.

The Aug. 3 court order trumps a preliminary injunction issued July 26 by a lower U.S. District Court (Western District of Louisiana) judge that had halted the HISA rules in Louisiana and West Virginia pending the outcome of an underlying lawsuit in that court.

In that June 29 civil case, the HISA Authority, the Federal Trade Commission (FTC), 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.

The plaintiffs are the state of Louisiana, its racing commission, the Louisiana Horsemen's Benevolent and Protective Association, the Louisiana Thoroughbred Breeders Association, the Jockeys' Guild, the state of West Virginia, its racing commission, and five individuals regulated as “covered persons” under the HISA Act.

The Aug. 3 temporary ruling at the Appeals Court level didn't state a specific timetable for how long it might be in effect.

In addition to setting aside the injunction pertaining to the HISA rules, the stay from the Appeals Court will also put a hold on the lower court making any sort of ruling on a dispute over the wording in the injunction itself.

Plaintiffs and defendants have different interpretations of whether the geographic scope of the injunction applied to entities in just Louisiana and West Virginia or also included all Guild-member jockeys, regardless of where they ride. The defendants had asked the lower court to issue a clarification.

In support of its request that the Appeals Court stay the lower court's injunction, the FTC defendants wrote in an Aug. 1 filing that, “Both the government and the public will be irreparably harmed if the district court's preliminary injunction setting aside the Commission's regulatory program in its entirety in two States remains in effect until this Court resolves this appeal on the merits.

“The Commission's regulations, particularly the approximately five dozen rules addressing racetrack safety, are designed to protect and promote the health of horses, jockeys, and other horseracing participants. The district court's order eliminates those protections, impeding the Commission's ability to accomplish the Act's public purpose and threatening the very harms the regulations are aimed at preventing.”

The FTC filing continued: “The district court's order, entered three weeks after the Commission and Authority began implementing the Commission's regulations, also threatens to sow confusion within the horseracing industry with respect to the rules governing horse races, undermining the Commission's and Congress's interest in a uniform and predictable set of rules governing the conduct of horseracing. Conversely, any harm to plaintiffs from a stay will be slight, if it exists at all.”

In opposition to the motion to stay, the plaintiffs disagreed in an Aug. 3 Appeals Court filing:

“The irreparable harm Plaintiffs would suffer from a stay puts the public interest and balance of harms beyond doubt. Any harm to Defendants' nonexistent interest in furthering an illegal regulatory scheme is easily outweighed by Plaintiffs' irreparable harms,” the plaintiffs wrote.

 

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