HISA Opponents Spar On Fifth Circuit's Unconstitutionality Ruling

With the United States Court of Appeals for the Sixth Circuit set to hear oral arguments Dec. 7 in a case that seeks to reverse a lower court's decision to dismiss a constitutional challenge of the Horseracing Integrity and Safety Act (HISA), the two opposing sides have filed new documentation pertaining to a separate but related Nov. 18 decision by the Fifth Circuit that did, in fact, declare HISA unconstitutional.

Although it's tough at this stage to get a consensus on what might happen with HISA over the next six weeks until an expected Jan. 10 mandate gets issued by the Fifth Circuit to enforce its order (petitions for legal stays, rehearings, or potential actions by Congress are all in play), there is one issue that HISA proponents and opponents seem to agree on: If the Sixth Circuit renders an opinion that is in direct conflict with the one the Fifth Circuit just came up with, HISA's fate could very well end up getting decided by the U.S. Supreme Court.

In the Sixth Circuit case, the plaintiffs are the state of Louisiana; Oklahoma and its racing commission, plus West Virginia and its racing commission. Three Oklahoma tracks-Remington Park, Will Rogers Downs, and Fair Meadows-are also plaintiffs, as are the Oklahoma Quarter Horse Association, the U.S. Trotting Association, and Hanover Shoe Farms, a Pennsylvania Standardbred breeding entity.

The defendants are the United States of America, the HISA Authority, and six individuals acting in their official capacities for the Federal Trade Commission (FTC).

On Apr. 26, 2021, the plaintiffs had sued, alleging that “HISA gives a private corporation broad regulatory authority.” On June 2, 2022, that claim was dismissed by a judge in U.S. District Court, Eastern District of Kentucky (Lexington) for failure to state a claim of action. The plaintiffs then appealed to the U.S. Sixth Circuit.

While that Sixth Circuit appeal was pending, the Fifth Circuit came out with its decision in the similar case against HISA that was led by the National Horsemen's Benevolent and Protective Association (NHBPA).

That Nov. 18 ruling stated that HISA is unconstitutional because it “delegates unsupervised government power to a private entity,” and thus “violates the private non-delegation doctrine.” The order remanded the case back to U.S. District Court (Northern District of Texas) for “further proceedings consistent with” the Appeals Court's reversal.

So naturally, both parties prepping for the Dec. 7 oral arguments in the Sixth Circuit case wanted to let that court know of this similar U.S. Appeals Court order, with each side putting its own spin on the recently issued unconstitutionality decision.

The plaintiffs/appellants led off with a Nov. 21 filing.

“The Fifth Circuit reversed the Northern District of Texas's decision on which Defendants-Appellees and the district court below relied, and the court emphatically rejected the very arguments that Defendants-Appellees assert in defense of HISA here,” the document stated.

“The Fifth Circuit held that HISA violates the Constitution's private nondelegation doctrine because 'the Authority is not subordinate to the FTC' [and] 'Congress has given a private entity the last word over what rules govern our nation's Thoroughbred horseracing industry' [and the] 'Authority's power outstrips any private delegation the Supreme Court or our court has allowed.'”

The plaintiffs' filing summed up: “The Fifth Circuit cogently rejected all of the arguments that Defendants-Appellees' raise here. This Court should do the same and reverse the judgment of the district court.”

The U.S., HISA and FTC defendants had a different interpretation in their own Nov. 28 filing.

“The Fifth Circuit panel's decision to invalidate HISA rests on at least two fundamentally mistaken premises,” the pro-HISA reply stated.

“First, the panel determined that 'the FTC's consistency review does not include reviewing the substance of the rules themselves.' That is untrue: HISA requires the FTC to apply its independent judgment in reviewing the substance of all proposed rules for consistency with HISA's standards.

“Whether characterized as an exercise of policy discretion or evaluation for statutory compliance, the FTC (not the Authority) ultimately decides, e.g., if a proposed medication amount is 'the minimum necessary to address the diagnosed health concerns identified during the examination and diagnostic process,' or if a proposed racetrack-safety standard is 'consistent with the humane treatment of covered horses…'”

“Second, the panel determined that the FTC lacks power to modify HISA rules,” the pro-HISA filing continued. “That contradicts (without addressing) the FTC's interpretation of its independent rulemaking authority [and] turns constitutional avoidance on its head….”

The pro-HISA reply summed up: “For both reasons, the Fifth Circuit panel's decision is wrong-and stands at odds with not only the two other federal courts that have upheld HISA, but also 80 years of precedent from the Supreme Court [and] the courts of appeals.”