Conservative Judges in Sixth Circuit Appeals Court “Does Not Bode Well” for HISA

Lucinda Finley | University of Buffalo photo

The conservative bent of two of the three judges on the U.S. Court of Appeals for the Sixth Circuit scheduled to hear another case about the constitutionality of the Horseracing Integrity and Safety Act (HISA) “does not bode well” for the near-term future of the act, said appellate law expert Lucinda Finley.

Oral arguments are set for Dec. 7 in the Sixth Circuit Court of Appeals for an appeal of an earlier ruling in U.S. District Court for the Eastern District of Kentucky.

That district court found that HISA was indeed constitutional, and that the Federal Trade Commission (FTC)—the governmental agency charged with ultimately signing off on the law's rules—wields adequate authority over the private entity charged with implementing the law.

If the Sixth Circuit reverses that district court ruling, it would mirror a decision delivered in the United States Court of Appeals for the Fifth Circuit last week, which ruled HISA unconstitutional because it cedes too much governmental authority to a private entity, and too little rule-making input to the FTC.

An overview of the various legal implications from the Fifth Circuit ruling can be read here.

The three-person panel hearing the case in the Sixth Circuit includes in judges Jeffrey Sutton and Richard Griffin “two of the most conservative judges” on the entire circuit court, said Finley—individuals who could perhaps be expected to take a more “skeptical” attitude towards the constitutionality of the law in its current form, she added.

More pointedly, Chief Judge Sutton is an expert on state constitutions, explained Finley. “Given his strong commitment to letting states handle matters themselves, I would not expect him to come at this new federal regulatory scheme openly sympathetic.”

Judge Ransey Guy Cole, the third judge on the panel, is an appointee from the Clinton administration considered moderate to liberal, explained Finley, and could therefore prove more amenable to the arguments from HISA's attorneys.

“This 2-1 slant of extremely conservative judges—and the conservative position these days seems to be against broad federal regulatory schemes—does not bode well for the fate of HISA before the Sixth Circuit,” said Finley.

Finley explained that it was difficult to prognosticate when a ruling on the case—which was brought by various entities such as the States of Oklahoma, West Virginia, and those states' racing commissions—will be issued.

If the panel of judges fails to rule unanimously, “that always takes longer for the decision to come out,” warned Finley.

That said, “The lawyers might say, as part of their oral argument, that this has caused great uncertainty and tumult, and it would be good to have a decision as soon as possible,” said Finley. “But it also depends on something none of us can know, which is for each of the judges on this particular panel, what other cases in the pipeline are they still working on?”

The messy regulatory roadmap for the start of next year, when HISA's Anti-Doping and Medication Control program is scheduled to go into effect, is already looking fraught with potential hazards, especially for trainers and other industry stakeholders with operations in multiple states.

If HISA fails to get a stay granted on the Fifth Circuit decision—something several legal eagles think is a likely scenario—then the ruling goes into effect on Jan. 10, and will apply to those states under the circuit court's decision, namely Texas, Louisiana and Mississippi, said Finley.

Since Friday's Fifth Circuit decision came out, the same circuit court has also lifted an “administrative stay” on a HISA-related ruling allowing an injunction against the plaintiffs to go into effect. As Finley explains, the injunction essentially prevents HISA from “enforcing its rules” in Louisiana and West Virginia.

Other states beyond the Fifth and Sixth Circuits, therefore, must weigh the decision whether or not to continue abiding by HISA's rules against a backdrop of legal uncertainty surrounding the law's constitutionality.

On Monday, Ed Martin, president of the Association of Racing Commissioners International (ARCI) said that some states, like California, will honor a written agreement they have executed with HISA to enforce its racetrack safety rules.

“Other States, upon the advice of counsel or Attorney General, will revert to state rules that remain on the books, not wanting to jeopardize the outcome of a court challenge to any enforcement action,” Martin added.

A reversal in the Sixth Circuit of the earlier district court decision would only muddy the waters even more. At the same time, said Finley, consistent rulings between the Fifth and Sixth Circuits would make it “significantly less likely” the Supreme Court would eventually take up the case—what is one of the potential legal options open to HISA.

“But I think if the Sixth Circuit disagrees with the Fifth Circuit, then I think it makes it significantly more likely that the Supreme Court takes the case,” said Finley.

The TDN repeatedly pressed HISA for comment on a series of questions about the pathway forward. HISA responded with a statement by Charles Scheeler, chair of HISA's board of directors, which was first issued last week:

“While HISA is disappointed by the Fifth Circuit's decision, we remain confident in HISA's constitutionality and will be seeking further review of this case. If today's ruling were to stand, it would not go into effect until January 10, 2023 at the earliest. We are focused on continuing our critical work to protect the safety and integrity of Thoroughbred racing, including the launch of HISA's Anti-Doping and Medication Control Program on January 1, 2023.”

Finley also emphasized a previously made comment—that arguably the “most successful” route for HISA to legally undergird the act could be to seek a congressional re-write of the rules to cede greater rule-making authority to the FTC.

When asked if greater FTC oversight of the rule-making process would satisfy the Horsemen's Benevolent and Protective Association (HBPA)—the national organization that has spearheaded the legal push against HISA—the organization's general counsel, Peter Ecabert, demurred, citing other problems with the act as written, such as a lack of transparency in meetings unavailable to the public and in the budgetary process.

“One of the things that Congress could do that would be a blessing for the industry would be to fund this,” Ecabert said.

“We all want uniformity,” he added. “But do this in the brightness of the light and not behind closed doors.”

Far from uniformity, however, come the start of 2023 the regulatory playing field could be as fractured, puzzling and complicated as it has ever been for industry participants.

When asked what he would tell the likes of Steve Asmussen and Todd Pletcher—trainers with large sprawling multi-state barns—about operating in this highly confusing environment, Ecabert recommended reaching out to individual state racing commissions.

“Hopefully the racing commissions will give some guidance, or the attorney general for the jurisdiction will say how they're going to treat HISA,” Ecabert said. “It's now a state-specific issue until HISA's ruled to be unconstitutional and unenforceable nationwide.”

Ecabert also pointed to legislation introduced into the U.S. House of Representatives in October of last year seeking to delay the full implementation of HISA until the start of 2024.

HBPA CEO, Eric Hamelback, wrote in a text that the bill currently only has 3 co-sponsors, but that there has been verbal support for the bill among other congressional members, and he expects support to build for it in after Friday's Fifth Circuit decision.

Another plan still in its infancy, Ecabert added, is to introduce into congress a separate and national “medication compact” similar in its framing to the now defunct National Uniform Medication Program (NUMP), but which would mandate “uniformity among the states.”

NUMP ultimately failed, Ecabert conceded. “But we're in a different atmosphere today than we were years ago,” he added. “People now, trainers and owners, have seen how disruptive HISA has been and they're more likely to jump on board.”




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