Category: Federal Trade Commission

HBPA Groups Again Appeal HISA Ruling to Fifth Circuit

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Appeal follows denial of HBPA’s constitutional claims, injunction motion.

 

For the second time the Fifth Circuit Court of Appeals will consider the constitutionality of the Horseracing Integrity and Safety Act after a federal judge shot down efforts by the National Horsemen’s Benevolent and Protective Association, as well as state and local HBPA affiliates, to derail the legislation.

On May 17 the HBPAs filed a notice of appeal after multiple rulings adverse to its legal efforts issued by federal judge James W. Hendrix in United States District Court for the Northern District of Texas.

The case first came before Hendrix last year. He decided HISA was constitutional, but a Fifth Circuit panel reversed the ruling and declared HISA facially unconstitutional for failing to grant sufficient power to the Federal Trade Commission to oversee the Horseracing Integrity and Safety Authority. The authority is a private corporation formed to regulate the horse racing industry for compliance with nationwide safety and medication rules.

 

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Texas judge hears evidence, arguments in HBPA’s HISA suit

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Hamelback: “Rather than strengthening our industry or protecting horses, this law is a threat to our rights and Thoroughbred horseracing”

Private corporation given legislative, executive powers to govern horseracing goes on trial in federal court

Thoroughbred horse owners, trainers sued to block the illegal power shift

LUBBOCK, Texas (April 26, 2023) — Today, in a bench trial in the U.S. Court for the Northern District of Texas, Judge James Wesley Hendrix heard evidence and arguments on whether Congress can grant lawmaking and law enforcement power to a private corporation to govern a nationwide industry. The National Horsemen’s Benevolent and Protective Association (HBPA) and 12 of its affiliates are suing the Federal Trade Commission and the Horseracing Integrity and Safety Authority, a private corporation invested by Congress with governmental powers to write rules, conduct searches and seizures, and levy fees and fines, and issue lifetime suspensions from involvement in the horseracing industry.
The National HBPA filed a federal lawsuit to stop the Horseracing Integrity and Safety Act (HISA) on March 15, 2021. In the subsequent two years of litigation, the U.S. Court of Appeals for the Fifth Circuit has already declared the Act unconstitutional once. The National HBPA and its affiliates are represented by attorney Daniel Suhr and Fernando Bustos.
“We appreciate the opportunity today to fully outline how this law undermines not only 125 years of horseracing governance but also the governing power of Congress as laid out by our founders in the Constitution,” said National HBPA CEO Eric Hamelback. “Rather than strengthening our industry or protecting horses, this law is a threat to our rights and Thoroughbred horseracing. The courts have previously ruled in favor of horsemen’s efforts to stop this illegal law and we hope to be successful again.”
The stakes in National Horsemen’s Benevolent and Protective Association v. Black are incredibly high. Congress passed HISA as part of a Covid aid package in 2020. Congress granted a brand-new private corporation unparalleled governmental power without the democratic transparency and accountability required for government agencies. While Congress tasked the Federal Trade Commission with overseeing the Authority, it handcuffed the FTC by preventing it from exercising pervasive surveillance and control over the Authority.
“This law directly undercuts the principles of federalism and democratic accountability that are core to our constitution,” said Daniel Suhr, lead attorney for the National HBPA and its affiliates. “Congress empowered an unelected, private cooperation to police an entire industry. If left unchecked by the courts, Congress opens the door for more powerful special interest groups to gain unfettered control over other industries. This is a threat to democracy and free enterprise.”
States are also challenging HISA in the courts. The State of Texas joined National Horsemen’s Benevolent and Protective Association v. Black and Oklahoma, Louisiana, and West Virginia are fighting HISA in other federal courts. The states argue HISA ends over a century of state regulation of horseracing and applies top-down standards from a private corporation, rather than politically accountable state officials in cooperation with horsemen.
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Founded in 1940, the National Horsemen’s Benevolent and Protective Association is the world’s largest Thoroughbred horsemen’s organization, representing approximately 30,000 owners and trainers throughout the United States and Canada. The responsibilities of the NHBPA and its affiliates have greatly expanded as the racing industry has become more complex. In addition to its original general benevolence mission, the HBPA is the leading voice for horsemen as well as working towards the advancement of the horseracing industry through safety and integrity initiatives, promoting racing and assisting in the development of aftercare programs for retired racehorses.
Daniel Suhr is lead attorney for the plaintiffs in National Horsemen’s Benevolent and Protective Association v. Black. He is senior legal fellow at the National Opportunity Project, a nonprofit government watchdog and education organization, and president of the National Center for Justice and Liberty, a nonprofit law firm.

HISA Opponents Seek National Injunction

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HISA officials downplay move, say Congress’ amendment has addressed concerns.

 

An amended complaint filed in a Louisiana federal court names a host of new states and other entities seeking a national injunction against oversight of important areas of horse racing by the Horseracing Integrity and Safety Authority.

The case referenced originally was filed by the states and racing commissions of Louisiana and West Virginia, the Louisiana Horsemen’s Benevolent and Protective Association and others. A preliminary injunction issued by Judge Terry Doughty of the U. S. District Court for the Western District of Louisiana led to a halt of rules enforcement in the two named states by HISA and the Federal Trade Commission.

According to the amended complaint, four other states are now involved in the lawsuit: Arkansas, Mississippi, Nebraska, and Oklahoma. Pari-mutuel racing is held in all of those states except Mississippi. In addition to the racing commissions of Louisiana and West Virginia, new plaintiffs include the Oklahoma Racing Commission and Nebraska Racing and Gaming Commission. Although the state of Arkansas is named in the case, the Arkansas Racing Commission is not a plaintiff.

 

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Sam Houston Race Park Puts Simulcasting On Hold

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The Houston track steps back from announcement to resume simulcasting Feb. 3.

 

On the day Sam Houston Race Park intended to resume interstate simulcasting, the Houston racetrack took a step back and has put that plan on hold citing the need for a legal review of the “many complexities” surrounding recent court action and law amendments by Congress related to the Horseracing Integrity and Safety Authority.

“We have determined more time is needed to fully evaluate the many legal complexities surrounding recent court decisions and the HISA amendment enacted by Congress at the end of last year,” said a statement released by Sam Houston Feb. 3.

The decision to resume simulcasting followed a Jan. 31 ruling by the Fifth Circuit Court of Appeals that denied a request by HISA and the Federal Trade Commission to reverse a decision that the HISA is facially unconstitutional. The appellate court had Nov. 18 reversed a decision of the U.S. District Court for the Northern District of Texas that had upheld the constitutionality of the HISA after it was challenged by the National Horsemen’s Benevolent and Protective Association, multiple state HBPA affiliates, the State of Texas, and the Texas Horse Racing Commission. Since the initial Fifth Circuit ruling, Congress amended the language of the Horseracing Integrity and Safety Act to include “clarifying language” that shores up the FTC’s oversight of HISA.

 

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FTC Publishes Resubmitted HISA Anti-Doping and Medication Control Rules to Federal Register

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January 27, 2023 (Lexington, Ky.) – The Federal Trade Commission (FTC) has published the resubmitted Horseracing Integrity and Safety Authority (HISA) Anti-Doping and Medication Control (ADMC) rules to the Federal Register, initiating a 14-day public comment period. The FTC now has 60 days to approve or deny the proposed rules.

HISA’s draft ADMC rules were initially rejected by the FTC in late 2022 due to ongoing legal uncertainties. HISA has resubmitted the rules for consideration by the FTC following a bipartisan act of Congress which addressed the constitutional questions raised by the Fifth Circuit Court of Appeals.

Now that the rules have been resubmitted and posted to the Federal Register, HISA anticipates that its ADMC Program will go into effect March 27, 2023, pending FTC approval. The resubmitted rules include a small number of minor revisions from the version submitted in August 2022. A clean version of the proposed rules is available on the Federal Register now and a red-lined version will be available on HISA’s website within the next 48 hours. In its December 2022 order, the FTC stated it would consider all previously posted comments on the Federal Register as well as any updated or new comments.

Upon implementation, the ADMC Program will be administered and enforced by the Horseracing Integrity & Welfare Unit (HIWU). The development of the ADMC rules included an initial public comment period, numerous open discussions and meetings with industry organizations and individuals, as well as the careful consideration of more than 200 comments submitted by racing participants and the general public.

Included in the rules package are the Equine Anti-Doping and Controlled Medication Protocol, the Prohibited List, Definitions, Arbitration Procedures, Equine Testing and Investigation Standards, and Equine Standards for Laboratories and Accreditation.

“The establishment of uniform, nationwide anti-doping rules in Thoroughbred racing will strongly enhance the safety and integrity of our sport and is a step many in our industry have long advocated for,” said HISA CEO Lisa Lazarus. “The health and safety of horses is our paramount concern, and the consistent enforcement and efficient resolution of rule violations will transform how we protect our equine athletes. We deeply value the input we’ve received from racing participants throughout the development of these rules, and I encourage all participants to continue to share their thoughts with us moving forward.”

HISA’s ADMC Program will advance and modernize anti-doping practices across the sport with components including out-of-competition testing, uniform lab accreditation, a uniform results management process, a robust intelligence and investigations arm and consistent penalties.

As HIWU prepares for the ADMC Program’s launch, the organization will continue to publish and share educational material with industry stakeholders, available at hiwu.org, and will host meetings with groups of racing participants to further educate on the new rules and answer questions.

Sen. Grassley, Rep. Gooden Lead Congressmen Urging FTC to Disapprove HISA Authority Rules

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Five U.S. Senators joined five Congressmen yesterday strongly urging the Federal Trade Commission (FTC) to disapprove the Horseracing Integrity and Safety Act (HISA) proposed Anti-Doping and Medication Control Program Rule that the Horseracing Integrity and Safety Authority (Authority) recently resubmitted. The bipartisan group of lawmakers stated the disapproval from the FTC was necessary to “avoid continued industry-wide confusion and potential inequitable enforcement.”

The FTC already had disapproved the medication control rule on December 12, 2022, until “the legal uncertainty regarding the Act’s constitutionality comes to be resolved,” the commission wrote.

The bicameral letter also strongly encouraged the FTC to clarify that the formerly approved racetrack safety rules are unenforceable at this time because HISA was declared unconstitutional by a unanimous three-judge panel of the U.S. Court of Appeals for the Fifth Circuit in November.

Signing the letter were Senators Chuck Grassley (R-IA), Joe Manchin (D-WV), Ted Cruz (R-TX), John Kennedy (R-LA), and Joni Ernst (R-IA) and Congressmen Lance Gooden (R-TX), Tom Cole (R- OK), Jake Ellzey (R-TX), Vincente Gonzalez (D-TX), and Andy Biggs (R-AZ).

“I applaud Senator Grassley, Representative Gooden and all their co-signers for asking the FTC to state the obvious: HISA is unconstitutional; therefore, its rules cannot be enforced,” said Eric Hamelback, CEO of the National Horsemen’s Benevolent and Protective Association. “Furthermore, the corporation under HISA is still enforcing the racetrack safety rules, even though, as the Congressmen point out, everyone agrees they were submitted and approved in accordance with a law that was ruled unconstitutional.

“The sheer fact that an amendment was written to ‘fix’ HISA proves without a shadow of doubt that the supporters of HISA supported an unconstitutional bill. This obvious disregard for the law is needlessly causing even more confusion. The wise thing for the HISA corporation to do is to take a self-imposed pause and let the courts sort things out before rushing to impose its will on horsemen.”

On December 29, 2022, Congress passed a so-called “HISA fix” that tweaked the law by giving the FTC limited ability to modify Authority rules. As a result, the Authority resubmitted the medication control rules and issued a public statement saying they are hopeful and optimistic that they will be able to implement them around mid-March.

“This blatantly premature statement caused immense confusion throughout the horseracing industry, and does not take into account that the 5th Circuit’s opinion has not been overturned nor has the Court issued a new opinion,” said Dr. Doug Daniels, President and Chairman of the National HBPA. “The FTC cannot be forced into approving the ADMC based on assumptions made from HISA’s corporation.”

Horse-racing constituents applauded the Senators and Congressmen for strongly expressing their concerns to the FTC.

Said Jon Moss, Executive Director for the Iowa HBPA: “We greatly appreciate Senator Grassley for continuing his support and leading the charge for horsemen and women in Iowa as well as throughout the country.”

Amy Cook, Executive Director for the Texas Racing Commission, praised Rep. Gooden, saying, “We appreciate Rep. Gooden recognizing the wide-ranging statutory conflict that exists in Texas. It is critical for all stakeholders to continue to send the message that regulatory certainty is paramount and therefore new federal rules should not be adopted while there is ongoing litigation related to HISA’s constitutionality.”

Grassley/Gooden bicameral letter to FTC

Horseracing Integrity and Safety Authority Submits Prohibited Substances List to the Federal Trade Commission

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October 26, 2022 (Lexington, Ky.) – The Horseracing Integrity and Safety Authority (HISA) has submitted to the Federal Trade Commission (FTC) a technical document listing and categorizing 1,365 Prohibited Substances covered by HISA’s anti-doping and medication control (ADMC) rules and further dividing them into subcategories of Banned Substances and Controlled Medications. The document is now subject to final approval by the FTC ahead of the ADMC Program’s January 1, 2023 implementation date.

This technical document was developed by HISA’s ADMC Standing Committee and approved by the Horseracing Integrity & Welfare Unit (HIWU), which will administer the program. In a memorandum to racing participants, HISA ADMC Committee Chair Adolpho Birch summarized the contents of the document submitted, which underwent several modifications based on substantive feedback from racing participants and experts during a public comment period before submission to the FTC.

“The Prohibited Substances List is the result of extensive consultation with industry and subject matter experts and is informed by established research. Once approved by the FTC, it will serve as the backbone of HISA’s ADMC Program set to take effect in the New Year,” said Birch. “Through our collective efforts led by the ADMC Committee, we are proud to introduce U.S. Thoroughbred racing’s first-ever uniform Prohibited Substances list that will be applied on a national basis to advance integrity, transparency and accountability in the sport.”

“Effective anti-doping programs require clear guidance on prohibited substances, and we are pleased with the document that was submitted to the FTC,” said Ben Mosier, executive director of HIWU. “This list will play a key role in HIWU’s assignment to enforce HISA’s ADMC Program, and we are prepared to take on this critical responsibility on behalf of the Thoroughbred industry.”

In addition to listing and categorizing all prohibited substances covered by the ADMC Program, the document details detection times, screening limits and thresholds. The modified document submitted to the FTC is available on the HISA website.

FTC Notifies Appeals Court of HISA Rule Change Proposal

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By

 

The Federal Trade Commission notified the Fifth Circuit Court of Appeals in New Orleans by a Sept. 2 letter that the Horseracing Integrity and Safety Authority has proposed two rule changes to meet objections raised by two states and others in a federal lawsuit.

The suit originated in U.S. District Court for the Western District of Louisiana, which on July 26 issued a preliminary injunction curbing HISA’s power to enforce FTC safety rules in Louisiana and West Virginia and to all plaintiffs in the case. The ruling was not based on constitutional grounds.

The Fifth Circuit Court of Appeals Aug. 8 ordered that the district court injunction be stayed except for its application to three regulations while it considers an appeal of the injunction. Oral arguments on the merits of the case followed Aug. 30.

 

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Horseracing Integrity and Safety Authority Submits Proposed Anti-Doping and Medication Control Rules to Federal Trade Commission

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August 18, 2022 (Lexington, Ky) – The Horseracing Integrity and Safety Authority’s (HISA) Board of Directors yesterday submitted its proposed rules for HISA’s Anti-Doping and Medication Control (ADMC) Program to the Federal Trade Commission (FTC) for final approval ahead of the program’s January 1, 2023 implementation date. These rules were developed by the Horseracing Integrity and Welfare Unit (HIWU) in consultation with the HISA ADMC Standing Committee before being presented to the HISA Board for approval. This comes after a public comment period and numerous open discussions and meetings with industry organizations and individuals, as well as the careful consideration of more than 200 comments submitted by racing participants and the general public.

“The comprehensive and uniform rules and regulations outlined in HISA’s ADMC Program will truly level the playing field for racing participants and fans across the country,” said HISA CEO Lisa Lazarus. “The ADMC Program’s standardized implementation of the rules and the consistent enforcement and efficient resolution of rule violations by HIWU will make for a fairer, more transparent sport, and horses will be safer as a result.”

The rules submitted to the FTC include the Equine Anti-Doping and Controlled Medication Protocol, the Prohibited List, Definitions, Arbitration Procedures, Equine Testing and Investigation Standards, and Equine Standards for Laboratories and Accreditation. Additionally, HISA recently made a draft Prohibited Substances List (Technical Document) available for public comment and will continue to solicit stakeholder input before submitting that document to the FTC at a later date.

“These rules and enforcement processes are informed by subject matter experts who understand anti-doping and therapeutic medication control, have been involved in creating and managing equine anti-doping and welfare programs, and have unparalleled experience in testing science and research,” ADMC Committee Chair Adolpho Birch said. “Out-of- competition testing, uniform lab accreditation and results management processes, a robust intelligence and investigations arm, and consistent penalties that are commensurate to potential rule violations are just a few of the components of HISA’s ADMC Program that will change thoroughbred horseracing for the better. Importantly, the rules and processes include and build upon successful state programs, such as the Multiple Medications Violations Schedule.”

The FTC’s approval process includes another public comment period during which industry representatives, horsemen, state regulators and the general public can once again weigh in on the proposed rules and regulations. HIWU will immediately begin working with state racing commissions and others across the industry to undertake a thorough stakeholder education process to ensure a smooth transition to implementation of HISA’s ADMC Program and HIWU’s ensuing enforcement. In the future, HISA and HIWU will also work with the industry to evolve the rules based on their feedback and as new data, science and experience on the ground dictates.

Jonathan Taylor, chair of HIWU’s Advisory Council, said: “These new ADMC regulations, incorporating best practice from current equine anti-doping programs and from the World Anti-Doping Code, and reflecting the extensive and helpful feedback received from stakeholders, promise a new beginning for U.S. Thoroughbred racing. The Advisory Council looks forward to overseeing and supporting HIWU’s efforts to implement and enforce these new regulations robustly, consistently, and fairly across the whole of the sport.”

HISA Appeal to be Argued Aug. 30; Judge Denies Contempt Motion

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By T. D. Thornton

The United States Court of Appeals for the Fifth Circuit will now hear oral arguments Aug. 30–slightly earlier than expected–in the injunction appeal brought by the Horseracing Integrity and Safety Act Authority (HISA) and the Federal Trade Commission (FTC).

Both entities are defendants in an underlying lawsuit that alleges unconstitutionality and federal rulemaking procedure violations regarding HISA’s initial framework of regulations that went into effect July 1.

The Appeals Court docket previously indicated a September oral argument date was being planned.

 

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