A 2 1/2-year-old legal fight led by the National Horsemen's Benevolent and Protective Association (NHBPA) to try and overturn the Horseracing Integrity and Safety Act (HISA) based on alleged constitutional flaws got distilled into one hour of oral arguments on Wednesday in the case's second go-round before the United States Court of Appeals for the Fifth Circuit in New Orleans.
As expected, lawyers for the two sides stuck to the finer points of constitutionality law, and there were only several passing references related to horse racing. The arguments centered on the non-delegation doctrine, which is a legal principle that holds that Congress cannot delegate the power to legislate to executive agencies or private entities.
The panel of three judges–the same trio that declared a previous version of HISA unconstitutional last November, leading to an amended version of HISA that became law in December–did not overtly tip their hands as to which arguments they might be favoring based on the questions they asked of the attorneys. Nor did the judges conclude the session by declaring any timetable for issuing their decision.
The National NHBPA, 12 of its affiliates, and a number of Texas-based racetrack entities, plus the state of Texas itself and its racing commission, are the plaintiffs/appellants.
The HISA Authority, the Federal Trade Commission (FTC), and officials from each organization are the defendants/appellees.
“Congress did not, with this meager amendment, fix the fatal non-delegation problems plaguing HISA,” said William Cole, an attorney for the state of Texas who was among those who argued for the appellants.
“Again, there's at least three areas where the lawmaking power is not sufficiently subordinated, because, as we've mentioned time and again, the Authority's rules govern unless they can shove a rule through notice-and-comment rulemaking. The upshot is that for years, it's likely going to be the case that the Authority's rules govern, not the FTC's,” Cole said.
Joseph Busa, an attorney for the FTC, argued that the appellees believe the Fifth Circuit already settled the outstanding non-delegation issues when the same panel identified the constitutional flaws that led to Congress's rewrite of HISA.
“What [the appellants] are presenting to you, is they are saying no private entity can wield this kind of power, regardless of how subordinate they are, regardless of the degree of supervision that the public agency has over them. That is squarely inconsistent with almost 100 years of Supreme Court precedent,” Busa said.
The panel of judges referenced the “voluminous” number of pre-argument briefs filed by both sides in the case.
The HBPA had written in a pre-argument brief that it has problems with the Authority allegedly portraying itself as both a governmental body or a private organization “depending on which suits its interests on any individual argument,” according to an Aug. 25 court filing.
“Sometimes [the Authority] wants to be like a government entity, with the power to compel registration, collect mandatory fees, conduct searches, draw blood and urine samples, and impose sanctions with 'the force of federal law,'” the HBPA brief stated.
“Other times it wants to be a private business league, choosing its own board, running its own corporate affairs, and exempt from the Appointments and Appropriations clauses, the Freedom of Information Act, etc…” the brief continued.
This purported dual nature of the Authority, the HBPA alleged, “exposes the overall flaw” by which the 2022 rewrite of the HISA law should be struck down.
“Nothing could be more unfair or inequitable than to have a regulator with all the powers of government but exempt from all the democratic accountability and safeguards for liberty imposed on government,” the HBPA's filing stated.
The Authority defendants had asserted to the Fifth Circuit in their own pre-argument brief filed Aug. 4 that the HBPA's “feeble attempts” to contrast HISA with other statutes upheld against private non-delegation challenges rest on supposed differences that are either factually inaccurate or constitutionally irrelevant.
The Authority's brief put it this way: “Congress, the Executive, and all three federal courts that have considered the amended Act have reached the same conclusion: HISA is now constitutional. As every court to consider Congress's amendment has held, HISA no longer violates the private-nondelegation doctrine because the Authority is now subordinate to the FTC,” the filing stated.
The first time the HBPA plaintiffs attempted to challenge the original 2020 version of the HISA statute in federal court, on Mar. 15, 2021, the suit was dismissed, on March 31, 2022.
The HBPA plaintiffs then appealed, leading to the above-referenced Fifth Circuit Court reversal on Nov. 18, 2022, that remanded the case back to the lower court. In the interim, an amended version of HISA got passed by Congress and was signed into law by President Joe Biden on Dec. 29, 2022.
On May 4, 2023, the lower court deemed that the new version of HISA was constitutional because the rewrite of the law fixed the problems the Fifth Circuit had identified.
The HBPA plaintiffs then swiftly filed another appeal back to the Fifth Circuit, which led to an “expedited” scheduling of the Oct. 4 oral arguments.
The three judges on this Fifth Circuit panel are Stuart Kyle Duncan and Kurt D. Engelhardt (both nominated to their positions by President Donald Trump in 2018) and Carolyn Dineen King (who was nominated by President Jimmy Carter in 1979).
The post The Wait Begins: Fifth Circuit Hears HISA Constitutionality Appeal Arguments appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.
