FTC Delays Implementation of HISA's Drug and Doping Program

Lisa Lazarus | Carley Storm photo

By

In an order Monday, the Federal Trade Commission (FTC) announced that the Horseracing Integrity and Safety Act's (HISA) anti-doping and medication control (ADMC) program would not go into effect as scheduled Jan. 1 due to swirling legal uncertainty.

“The bedrock principle of the Act is the need for uniformity,” wrote the FTC in the order, adding that “the Commission's approval of the Anti-Doping and Medication Control proposed rule would not result in uniformity because the Horseracing Integrity and Safety Act has been held unconstitutional by a panel of the United States Court of Appeals for the Fifth Circuit.”

Oral arguments similarly surrounding HISA's facial constitutionality were held last week in a separate case before the Sixth Circuit Court of Appeals.

“The Commission therefore disapproves the proposed rule without prejudice. If the legal uncertainty regarding the Act's constitutionality comes to be resolved, the Authority may resubmit the proposed rule or a similar rule, and the Commission will consider all comments filed in this proceeding as well as any updated or new comments and filings.

“In the meanwhile, and until any future proposed rule on the subject is approved by the Commission, State law will continue to regulate the matters that the proposed rule would have covered,” the order states.

According to HISA's CEO Lisa Lazarus, who held an impromptu press conference Monday afternoon, this means that the current regulatory “status quo” will remain in place at the start of 2023.

“They made reference to the fact that, since the FTC has not approved any ADMC rules under HISA's authority, that means all the state rules remain in full force and effect,” said Lazarus, stressing that this was her “interpretation” of the FTC order.

“If there wasn't a clear statement on this issue quickly, then we might get to Jan. 1, and there might be some uncertainty around who actually has the authority. It's important for the states to know now that they're going to continue to be the ones in charge of testing on Jan. 1,” Lazarus added.

When it comes to the financial implications from Monday's announcement, HISA will refrain from collecting any of the 2023 fee assessments, designated for the individual states or, alternately, the racetracks, said Lazarus.

“The vast majority of those fees relate to the anti-doping program,” said Lazarus, explaining that the 2023 fees will be collected once the legal uncertainty has been resolved.

“There are still assessments being paid for 2022 that obviously are still required for the state racing associations who opted in, and the racetracks to cover, because those costs have already been incurred, or are in the process of being incurred,” she added.

Ben Mosier, executive director of the Horseracing Integrity & Welfare Unit (HIWU), the enforcement arm of HISA's ADMC program, released a statement explaining that HIWU will continue its education and outreach efforts “to all stakeholders in the Thoroughbred industry,” despite the delay in implementation.

“As HISA re-submits the draft ADMC rules for the FTC's approval, HIWU will use any additional time before implementation as an opportunity to ensure the industry is even more prepared for an efficient rollout of this Program, which will promote fair competition in the sport of Thoroughbred racing and the safety and welfare of our human and equine athletes,” wrote Mosier.

According to Lazarus, “So long as that preparatory work doesn't extend beyond two to three months, [HIWU's work] would still be covered by the 2022 budget.” However, “if it extends longer, we would have to revisit that issue.”

As for potential timelines moving forward, Lazarus explained that once the ADMC rules have been resubmitted with the FTC, it would take approximately 60 days for them to then go into effect, “assuming that the FTC was going to approve them substantively.”

Lazarus also broached a number of different scenarios in what appears to many in the industry a swirling morass of unpredictability and confusion.

Last month, the Fifth Circuit Court of Appeals found the law facially unconstitutional due to the lack of rule-making authority ceded to the FTC. That mandate is set to go into effect Jan. 10.

But if HISA is able to secure a stay on the Fifth Circuit's ruling in the interim, “we would then go back to the FTC [with the ADMC rules] and seek approval on that basis,” said Lazarus.

A similar case questioning HISA's constitutionality is also before the Sixth Circuit Court of Appeals. According to Lazarus, a ruling in the Sixth Circuit is expected “in the next month or two.”

If the Sixth Circuit issues a ruling favourable to HISA, “it would potentially give us the ability to continue with our program in those jurisdictions the Sixth Circuit covers,” said Lazarus.

“And it would also potentially lead to the [U.S.] Supreme Court hearing the case,” said added.

Nevertheless, even if the Sixth Circuit issues a friendly ruling on HISA, the FTC still might prove reluctant to allow HISA's ADMC to go into effect in those jurisdictions as the new law wouldn't be implemented uniformly, said Lazarus.

“For that reason, it's very possible the FTC would maintain the position that we shouldn't resubmit our rules until we have clear ability to move forward and launch across the whole country,” said Lazarus.

Another potential fix to the current knot of legal problems is a congressional re-write of the rules to cede more rule-making power to the FTC. Lazarus declined to speculate on the likelihood and possibility of that option.

A number of experts have questioned whether the legal uncertainty surrounding HISA's constitutionality puts into jeopardy the law's racetrack safety rules, already in effect. Lazarus said that Monday's order has no effect on the racetrack safety prong of the program.

“This related solely to the ADMC rules, and also, it was not a substantive review,” said Lazarus. “It was a statement on their perspective with regards to the legal uncertainties and ensuring there's clarity before we launch the new program.”

Ed Martin, the Association of Racing Commissioners International's (ARCI) president and CEO, referenced a letter the organization sent last week to the FTC highlighting “a real Catch-22” come Jan.1 concerning the legality of HISA's ADMC program.

“We are appreciative that the FTC listened and considered the request of the Association of Racing Commissioners International not to create regulatory uncertainty on Jan. 1 by approving the proposed HISA rules,” Martin told the TDN.

“Whoever got brought up on a charge could potentially have appealed it ad nauseam, and maybe win, which means there might be no rules in effect. That was the danger here,” Martin speculated. “They might be mad at me for bringing it up, but it needed to be brought up.”

The following is HISA's full statement in response to the FTC order:

“HISA appreciates the Federal Trade Commission's (FTC) decision to deny HISA's draft Anti-Doping and Medication Control (ADMC) rules without prejudice as we actively seek to resolve current legal uncertainties. HISA is eager to launch Thoroughbred racing's first and long-awaited national, uniform ADMC program and stands ready to do so. We will re-submit the draft ADMC rules to the FTC for their review as soon as these legal uncertainties are resolved, and once approved, we will implement the program through the Horseracing Integrity and Welfare Unit (HIWU). In the meantime, HIWU will continue to work toward the implementation of a uniform, independent anti-doping and medication control program that is administered consistently and fairly across the United States.”

In a statement, National HBPA CEO Eric Hamelback wrote, “The recent FTC decision is another positive step forward for horsemen in our battle against the unconstitutional takeover of our industry. The strength of our legal arguments led to a unanimous decision in the Fifth Circuit, and now the FTC has done the right thing in declining to defy a federal court that has found HISA unconstitutional. The FTC order is clear: state law continues to govern medication issues until our final victory in this case.”

 

Not a subscriber? Click here to sign up for the daily PDF or alerts.

Copy Article Link

Liked this article? Read more like this.

  1. Weekly Stewards and Commissions Rulings, May 8 – May 15
  2. Weekly Rulings: Apr. 24-30
  3. FTC Affirms Wong Suspension and Fine, Case Heads to Federal Court
  4. HISA Trialing New 44-Factor Computer Generated Risk Model at Churchill Downs
  5. Weekly Stewards and Commissions Rulings, Apr. 10-17
X

Never miss another story from the TDN

Click Here to sign up for a free subscription.