Federal Judge Rules HISA Constitutional After Law's Rewrite

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The revamped Horseracing Integrity and Safety Act (HISA) statute that got signed into law back in December was judged to be constitutional late on Thursday by the Texas federal district judge handling the case on remand from the United States Court of Appeals for the Fifth Circuit.

“Congress answered the call-identifying the three constitutional concerns that led the Fifth Circuit to hold HISA unconstitutional and rectifying each with the amendment,” wrote United States District Court Judge James Wesley Hendrix in his May 4 order out of the Northern District of Texas (Lubbock Division).

“The Federal Trade Commission (FTC) can now initiate rulemaking according to its own policy preferences,” Hendrix wrote.

“Given the Court's findings of fact and conclusions of law, the plaintiffs fail to establish that HISA, as amended following the Fifth Circuit's opinion, continues to violate the Constitution,” Hendrix wrote. “The Court denies all other requested relief.”

The HISA Authority issued a statement in the aftermath of the ruling that said, “We appreciate the Federal District Court's re-affirmation of HISA's constitutionality. The urgent need for nationwide, uniform rules to enhance the safety and integrity of Thoroughbred racing has never been clearer. We look forward to the resumption of HISA's Anti-Doping and Medication Control program on May 22, as ordered by the FTC.”

The court order delivers a legal blow to efforts by the National Horsemen's Benevolent and Protective Association (NHBPA), which had initiated the underlying lawsuit along with 12 of its affiliates in 2021. But Thursday's ruling won't end the case.

“We plan an immediate appeal of this decision, and we remain confident in our legal arguments,” Daniel Suhr, the lead attorney representing the NHBPA, stated in a press release. “Congress cannot abdicate its authority to a private corporation. Challenging this law is critical to protecting democratic accountability enshrined in our constitution.”

Eric Hamelback, the NHBPA's chief executive officer, stated in the same release that, “We've been down this road before. After a loss in the district court, we secured a win in the Fifth Circuit Court of Appeals. We will win there again, We will fight to protect horsemen and their constitutional rights all the way to the Supreme Court if needed.”

The NHBPA's case was later joined by other intervenors in Texas and private racetrack entities in that same state who had their case recently transferred to the Lubbock Division because of the overlapping nature of the complaints. The defendants are personnel from the HISA Authority and the FTC.

Hendrix was the same judge who, back on March 31, 2022, dismissed the NHBPA's underlying lawsuit, writing in an order that “despite its novelty, [HISA] as constructed stays within current constitutional limitations as defined by the Supreme Court and the Fifth Circuit.”

The NHBPA plaintiffs appealed that decision, leading to the Fifth Circuit's reversal on Nov. 18, 2022. That ruling stated HISA was unconstitutional because it “delegates unsupervised government power to a private entity,” and thus “violates the private non-delegation doctrine.”

But the Fifth Circuit's order also remanded the case back to the Lubbock Division for “further proceedings consistent with” the Appeals Court's reversal.

In the interim, Congress passed and President Biden signed into law on Dec. 29 an amendment to HISA designed to bring the law into constitutional compliance consistent with the Fifth Circuit's identified flaws.

“The Court finds that the congressional amendment to § 3053(e) cured the constitutional issues identified by the Fifth Circuit,” Hendrix wrote in his May 4 order. “First, the Fifth Circuit identified that HISA improperly granted the Authority 'sweeping rulemaking power,' but the FTC's new power to 'abrogate, add to, and modify' the 'rules of the Authority' closed the necessary gap in the relative rulemaking power between the FTC and the Authority.

“Second, the Fifth Circuit noted that the FTC's review of Authority rulemaking was limited to so-called consistency review, which gave the Authority the final word on policy. But because the FTC now has the right to make its own policy choices, the amendment remedied that concern,” Hendrix wrote.

“In sum, the only fair reading of the statute is that the FTC can create new rules as necessary to accomplish its policy preferences,” Hendrix wrote.

“It is no secret that Congress amended HISA in response to the Fifth Circuit's opinion. For Congress to amend the law without addressing one of the critical issues identified by the Fifth Circuit would be, to say the least, unusual,” Hendrix wrote.

“For all these reasons, the Court rejects the plaintiffs' arguments and conclude that Congress cured the unconstitutional aspects of HISA's original approach,” Hendrix wrote

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