With Rehearing Denied, Supreme Court Showdown Over HISA Constitutionality Looms Increasingly Likely

A Monday order out of the United States Court of Appeals for the Fifth Circuit shot down a request for a rarely granted “en banc” procedure that the Horseracing and Safety Integrity Act (HISA) Authority and the Federal Trade Commission (FTC) had asked for last month.

Had the long-shot legal maneuver been successful, it would have granted a rehearing before all of that court's judges to review a July 5, 2024, opinion issued by a panel of three that had declared HISA is unconstitutional because its enforcement provisions violate the private nondelegation doctrine.

Because of the infrequency with which such rehearings are granted at the federal level, the court's denial of the en banc request should not have come as a surprise to any party in the 3 1/2-year-old legal odyssey to overturn HISA that has been spearheaded by the National Horsemen's Benevolent and Protective Association (NHBPA) and 12 of its affiliates

The Fifth Circuit heard between 5,700 and 7,400 appeals in each of the last six years. Over that same period, that court granted only between four and 10 en banc requests per year, according to that court's most recent annual report.

Yet the denial of the rehearing in the Fifth Circuit hardly means the end of the legal road for either side in the fight to firmly establish whether HISA is constitutional or not.

Often, an en banc petition in a federal appeals court merely equates to a necessary legal formality to show the U.S. Supreme Court that a party has exhausted every procedural option at the appeals court level before asking the Supreme Court to resolve a case.

Increasingly, that's where this case seems destined to end up. That's because for two months now, there have been conflicting opinions between two different federal appeals courts over HISA's constitutionality.

The Fifth Circuit panel opined July 5, 2024, that not all of HISA is constitutional, while the Sixth Circuit Court of Appeals opined in a different case Mar. 3, 2023, that Congressional changes to the law in 2022 made HISA completely constitutional.

When two federal appeals courts differ in their opinions like that, it's called a “circuit split,” and the Supreme Court generally takes heightened interest in resolving such conflicts.

The Sept. 9 court order that said no to the en banc request did not address any of the HISA Authority's or FTC's arguments that had been articulated in their Aug. 19 filings.

In a single sentence, the Fifth Circuit order simply stated, “Because no member of the panel or judge in regular active service requested that the court be polled on rehearings en banc, the petitions for rehearing en banc are DENIED.”

Eric Hamelback, the chief executive officer of the NHBPA, had told TDN last month that he didn't believe the en banc petition would prove fruitful for the Authority or the FTC. On Monday, he reiterated his position after the denial of the rehearing was ordered by the court.

“As I stated when this motion was originally filed, all this did was delay the inevitable,” Hamelback wrote in an email. “HISA remains unconstitutional. We can now safely say that 15 other federal court of appeals judges looked at this, and not one of them voted to review [the] decision and opinion. We look forward to the Authority and the FTC abiding by this decision promptly.”

Hamelback wrote that he believes the next step will be for the closing mandate from the Fifth Circuit to be issued around Sept. 17. That will end the case in the Fifth Circuit and transfer it to back the originating lower court in Texas, which, if the lower court deems appropriate, will issue some form of to-be-determined relief to the plaintiffs.

In the interim, while the case plays out in the lower court, Hamelback wrote that, “We would like to believe that [the] HISA [Authority] and Horseracing Integrity and Welfare Unit (HIWU) will take the appropriate and proper action and cease and desist from any further unconstitutional and illegal enforcement activity until the Supreme Court has an opportunity to review this matter.”

TDN asked the HISA Authority to comment on both the en banc denial and what the Authority's next steps might be. The request was acknowledged Monday afternoon by an Authority spokesperson,  but TDN did not receive any statement for publication prior to deadline for this story.

If the HISA Authority and the FTC do opt to petition the Supreme Court to take the case, the deadline for filing is Dec. 9.

Last year, when the plaintiff states of Oklahoma, West Virginia and Louisiana similarly got denied in their Sixth Circuit request for an en banc rehearing after that Sixth Circuit panel upheld HISA's constitutionality, those plaintiffs then petitioned the Supreme Court to take the case. That request, too, got shot down, on June 24, 2024.

But it's important to note that at the time the Supreme Court opted not to take up the Sixth Circuit case, the Fifth Circuit had yet to issue its unconstitutionality ruling.

Once the Fifth Circuit's conflicting opinion was issued July 5, the Sixth Circuit plaintiffs in the Oklahoma, West Virginia and Louisiana case again asked the Supreme Court to reconsider hearing the case.

“This case presents the exceptionally rare situation in which a significant 'intervening circumstance'–the opening of a circuit split on the constitutionality of a federal statute–has arisen within 25 days of this Court's denial of certiorari,” the Sixth Circuit plaintiffs wrote to the Supreme Court on July 18.

“There is now a square, acknowledged conflict between the Sixth Circuit's decision [and] a contrary decision from the Fifth Circuit, which…presents a uniquely clean vehicle for the Court to resolve that conflict,” the Sixth Circuit plaintiffs stated to the Supreme Court.