Industry Will Pay Twice For HISA Litigation

Barely six weeks into its existence as the sport's national rule enforcer, the Horseracing Integrity and Safety Authority (HISA) has spent $1.8 million defending itself in four separate lawsuits currently pending or under appeal in federal court.

But the true irony behind the spiraling costs of the anti-HISA litigation is that almost all entities–owners, trainers, jockeys, tracks, racing commissions and states–are going to have to pay twice, regardless of the final outcomes of those complex lawsuits.

That's because plaintiffs like the Jockeys' Guild and various horsemen's associations will spend their organizations' money trying to halt HISA on constitutional grounds and federal rulemaking procedures, while at the same time HISA will be using money it collects from federally sanctioned assessments paid by those same industry participants to fight the lawsuits.

Lisa Lazarus, HISA's chief executive officer, disclosed the to-date litigation costs Sunday as the keynote speaker at the 70th annual Round Table Conference on Matters Pertaining to Racing hosted by The Jockey Club in Saratoga Springs, New York.

“As you all know, HISA is industry-funded,” Lazarus said. “So these lawsuits are ultimately being paid for by the industry, and ironically in part by the entities suing us. It is really a shame to see industry dollars that could [otherwise] be spent on positive reforms to make racing safer. It's deeply disappointing because there is so much we could do as an industry for unity.”

Stuart Janney III, The Jockey Club's chairman, didn't try to hide his disdain for the groups trying to derail HISA, terming the plaintiffs in the lawsuits as “certain politically charged states, rogue horsemen's groups, and–'Surprise, surprise!'–the Jockeys' Guild.

Janney gave a succinct analysis of where those lawsuits stand from a pro-HISA perspective during his closing remarks.

Janney focused on one of the lawsuits in particular, in which HISA and the Federal Trade Commission (FTC) are alleged to have violated the Fourth and Seventh Amendments to the United States Constitution, plus the Administrative Procedure Act, which governs the process by which federal agencies develop and issue regulations.

The states of Louisiana and West Virginia, plus the Guild, are the lead plaintiffs in that case, and just this past Friday, Aug. 12, 14 affiliates of the Horsemen's Benevolent and Protective Association petitioned a federal judge to be allowed to join the lawsuit.

“Significantly, the Louisiana federal district court found zero constitutional violations,” Janney said. “But it did initially agree with plaintiffs that the Authority's definition of 'covered horse' and its search-and-seizure rules expand beyond the scope of the statute ever so slightly.

“Practically speaking, this portion of the ruling has no impact, because the Authority voluntarily revised both rules to comply with the statute,” Janney said.

“The district court also questioned the Authority's rule on funding, which was actually favorable to the plaintiffs, Louisiana and West Virginia. And amazingly, if the plaintiffs prevail, it will have those two states paying hundreds of thousands more for HISA.

“And finally, [the court] queried the length of the notice and comment period, though it recognized that any of the claimed deficiencies can easily be remedied by the Authority, even if the Authority is ultimately unsuccessful on the merits,” Janney said.

“In other words, in ruling in favor of the Authority's opponents, the Louisiana federal district court nevertheless acknowledged that the implementation of the Authority's rules cannot be stopped,” Janney said.

“So to be clear, none of these issues threaten HISA's long-term viability. But they certainly waste time and money,” Janney said.

“Another federal lawsuit challenging the Authority and HISA was filed in Texas last week,” Janney said. “It recycles many of the failed claims. Like the cases that came before it, and those that will come after it, the new lawsuit merely serves as a distraction and a waste of industry resources,” Janney said.

“Ironically, under HISA, horsemen will be the ones who bear the brunt of these additional legal costs,” Janney said.

Lazarus gave an update on HISA's next steps, acknowledging that she understands HISA needs to build trust within the industry, even among those who already support it.

“We at HISA are accountable to you. We have to listen to everyone and adapt as appropriate,” Lazarus said.

“HISA wants open and collaborative dialogue with everyone in the industry who comes to us in good faith,” Lazarus said.

“Specifically, I will soon be creating several advisory groups, including a horsemen's group, to enhance engaging with stakeholders to ensure we are delivering the best programs to the industry,” Lazarus said.

“We will continue to refine the racetrack safety rules,” Lazarus said. “Future rules will fill in gaps, clarify ambiguities.”

A transition to a new and permanent website will hopefully ease some of the concerns from industry participants who have complained about the user interface when registering with HISA.

The rollout of the Anti-Doping and Medication Control Program (ADMC) is HISA's next high-profile endeavor.

“We've made significant progress on the ADMC program,” Lazarus said. “In recent weeks we have developed and refined, with input from hundreds of racing stakeholders, a comprehensive set of rules. These will be submitted to the FTC this coming week for implementation in January 2023.”

Lazarus continued: “We are building a seasoned, world-class team that will implement the first national anti-doping program in horse racing, with uniform testing and uniform sanctions. It will be tough, but it will be fair. And in time, horses will be able to complete with the comfort of knowing they will not be beaten by someone who is cheating.”

Beyond that, Lazarus explained, “We also see a future where we can marry anti-doping investigations and intelligence with a robust capability that will be deployed nationally in both in- and out-of-competition testing.”

Lazarus also gave an update on HISA's participation levels.

“We are now six weeks into the implementation of the racetrack safety rules. To date we have registered 34,000 horses and 28,000 people. And more importantly, in my view, 90% of horses, jockeys, and trainers that are competing are registered. And if you take the state of Louisiana out of the picture, we're at 95%, because the majority of our non-registered participants are located in Louisiana.

“We've reached voluntary agreements to implement HISA rules in 17 state racing commissions out of a total of 21 that HISA currently governs,” Lazarus added.

HISA is in the process of hiring a national medical director to support tracks nationwide with jockey safety and health protocols, and has already facilitated and paid for concussion testing for riders at 10 tracks, Lazarus said.

“Jockey welfare alongside equine welfare is a major priority for HISA,” Lazarus said.

But the topic of jockey welfare brought up another ironic twist, at least from Janney's perspective.

“If I were a jockey, I'd be very excited about [HISA's safeguards for riders],” Janney said. “But apparently, they're not. Upping the ante, [the Guild] joined with [other plaintiffs in the Louisiana lawsuit] in adding a charge of contempt. It's outrageous. The jockeys are wasting their time and are hurting our sport. I hope they will come to realize that.”

Janney continued: “HISA is a once-in-a-lifetime chance to grow the sport through increased integrity and enhanced safety of horse and rider. This business isn't the same as it was 10, 20, 30 years ago. We all know it. And we now understand the economics… Folks, it's time to get together on HISA. It's good for the sport. HISA is legal. HISA is here to stay.”

Lazarus also concluded her presentation with a plea for unity.

“I don't mean that we are going to agree on every single rule. But I mean that we unify around the governing principle, the core principle, that we need to speak with one voice,” Lazarus said.

“HISA, as I sit here today and address you, is not perfect. And as you know, it is still a work in progress. But I'm incredibly proud of the work done by our small team under the very tight time frame set by Congress and the legislation.

“We have one industry and one chance. Let's have vigorous debate about what the rules should be. Let's never forget that our real adversaries are the bad actors who tarnish our sport, anyone who is cavalier about horse welfare, and those who want to shut down horse racing for good.”

“It's been only six weeks since we have launched HISA. Give us some time. Give us some grace. This effort to enhance the safety and integrity of racing is so important. And if it fails, we all fail. And if it succeeds, we all succeed. It's really that simple,” Lazarus said.