Lucinda Finley Q&A: HISA Critics Throwing `Everything” Until Something “Sticks'

Lucinda Finley | courtesy of Lucinda Finley

After a series of false starts, the Horseracing Integrity and Safety Act's (HISA) signature anti-doping and medication control (ADMC) program is now set to go into effect on May 22.

Continuing to play out against this latest development are a handful of lawsuits seeking to derail the law—a complex legal landscape evolving at seemingly vertigo-inducing speed.

In a ruling delivered last week, judge James Hendrix of the Lubbock Division of the Northern District of Texas found the version of the act amended by Congress at the end of last year to pass constitutional muster. A separate lawsuit filed in the Amarillo Division of the Northern District of Texas had been rolled into this case.

The plaintiffs immediately announced they would appeal the decision, which means the case will go back up to the U.S. Fifth Circuit Court of Appeals.

In a case led by the states of Oklahoma, West Virginia and Louisiana, the U.S. Sixth Circuit Court of Appeals earlier this year also found the version of HISA Congress amended at the end of 2022 to be constitutional. The plaintiffs subsequently petitioned for a rare en banc rehearing of the case. If granted, the hearing would go before all judges within that Court of Appeals.

Another case led by the State of Louisiana is currently before the Lafayette Division of the Western District of Louisiana.

Two new HISA-related lawsuits have also recently been filed, one in the Eighth Circuit led by Bill Walmsley, Jon Moss, and the Horsemen's Benevolent and Protective Association (HBPA) for Iowa.

The other is led by officers of the Thoroughbred Racing Association of Oklahoma, in a suit filed in the Tenth Circuit.

To discuss what these various lawsuits mean for HISA's future both in the near and long term, TDN spoke once again with constitutional and appellate law expert Lucinda Finley, Frank Raichle Professor of Trial and Appellate Advocacy, and director of Appellate Advocacy at the University of Buffalo Law School.

The following has been edited for brevity and for clarity from two separate conversations.

TDN: Judge James Hendrix recently issued a ruling finding the version of HISA amended by Congress at the end of last year to be constitutional. What is the significance of this ruling?

LF: First, it's important to point out that this is the same district judge [Hendrix] who had ruled the previous version of the statute to be constitutional. The Fifth Circuit disagreed, so he was revisiting that in light of the Fifth Circuit decision. He came to the same conclusion as the Sixth Circuit U.S. Court of Appeals that Congress fixed the constitutional problem.

So, the significance of the ruling is that we now have the only two federal courts to thus far consider the constitutionality of the HISA statute after Congress amended it have come to the same conclusion. We've had the three judges of the Sixth Circuit U.S. Court of Appeals and judge Hendrix unanimously agree that Congress cured the constitutional problem when it amended the HISA statute last December. So that's very significant.

Ultimately, it will be up to the U.S. Court of Appeals for the Fifth Circuit to see if they agree.

TDN: You're referring to the plaintiff's immediate response to appeal.

 LF: Yes. Of course, whenever any side loses a case in court, they always say they're going to appeal. But the plaintiffs have already won once before the Fifth Circuit and are, I think, strategically correct in trying again.

Let's see what the Fifth Circuit thinks about whether the congressional changes fix the problem the Fifth Circuit previously identified.

TDN: Do you think they've got strong legal legs in this appeal?

 LF: No, I do not. I think the Sixth Circuit decision is very thorough and well-reasoned.

The Fifth Circuit had found the primary problem to be that the pre-amendment version of the HISA statute did not give the [Federal Trade Commission] FTC the ability to reject or modify proposed rules by the authority. But the newly amended statute clearly says that the FTC can completely abrogate or modify any proposed rule by the authority.

Congress tailored their amendment directly to what the Fifth Circuit said was the problem. So, I think it's unlikely that the Fifth Circuit would say, 'well, we really meant more than what we've said before.'

TDN: Does this ruling have any bearing on the separate case before the Lafayette Division of the Western District of Louisiana, pertaining to the states of Louisiana and West Virginia currently operating outside of HISA's jurisdiction?

LF: Not officially. The opinion of the Texas federal district court is not binding on the Louisiana District Court. But it is an influential precedent, just like the Sixth Circuit decision is an influential president.

Ultimately, the appeal of this new ruling by Judge Hendrix from the Lubbock Division of the Texas Federal District Court to the Fifth Circuit—the Fifth Circuit's decision whether the amended version of HISA is constitutional or not—will be the ruling that affects the injunction against enforcing HISA in West Virginia and Louisiana that the federal district court in Louisiana issued. I know it gets very complicated. 'This court said this. This court said that.'

TDN: Just to be clear, when the Fifth Circuit Court of Appeals rules on the appeal from the Lubbock case, that decision will essentially guide whether the current injunction preventing HISA from being enforced in West Virginia and in Louisiana stays or goes?

LF: Yes. I think legally it would. There would be a couple of little steps officially. They would remand that case and the district court would have decide how the Fifth Circuit ruling affected the previous ruling.

What I'm saying is that what the Fifth Circuit decides about whether the congressional amendments to the HISA statute last December—whether they cured the constitutional problem or not—will be the really significant legal decision here for Texas, West Virginia, Louisiana, Arkansas, Arizona and the states that were involved in the case that Judge Hendrix just ruled on, as well as the case before the Louisiana Federal District Court.

TDN: Texas is still taking the stance that state law bars them from allowing federal jurisdiction of races run in their state. Where does this decision leave Texas?

LF: It leaves them with the same choice they're currently facing. Texas can continue to insist that it will not adopt federal rules and as a consequence lose the right to interstate simulcast wagering, or it can choose to adopt the federal rules and rejoin interstate wagering, which is financially essential to the continuation of horse racing in Texas.

You would surmise that perhaps the Texas Racing Commission's insistence that it couldn't agree to follow HISA's regulations was being taken in a strategic hope that federal courts would ultimately find it unconstitutional, and it could continue to be the sole regulator for racing in Texas. But every court ruling now after the Congressional amendments to HISA is cutting the legs out from under that strategy.

It is looking increasingly less likely that a federal court will find the amended version of HISA to be unconstitutional. So, if the Fifth Circuit agrees that the Congressional amendments cured the constitutional problem, the Texas Racing Commission essentially will be faced with an existential choice.

Do they want to fall on their sword, continue to allow the state authority to determine the rules for racing in Texas without any federal uniform rules? If they fall on that sword, they are basically dooming the economic future of racing in Texas as we've seen with the dramatic decreases in betting handle [because of] Texas tracks being barred from participating in interstate simulcasting wagering.

TDN: More generally, the industry is gearing up for the ADMC program to once again go into effect on May 22. From here on in and given the latest lawsuits filed, how realistic do you think it is that HISA's flagship drug and medication enforcement program could be halted through legal intervention?

LF: We clearly have a strategy by the groups that are opposed to HISA to file as many different court cases as they can in different federal courts around the U.S. in different appellate circuits in the hope that one of them might result in a judge issuing a nationwide injunction to halt HISA and its rules.

In a way, it's 'throw everything you can at a lot of different walls in the hope that something will stick somewhere.'

What would potentially put the medication program in jeopardy is if in one of these newly filed or still pending federal cases, a judge issued a nationwide injunction against HISA which would [apply] not just in the state where the case was filed, and not just for the parties that brought the case, but throughout the entire country. It would say that HISA is unconstitutional and cannot enforce its rules.

If that were to happen, then the legal response of the federal government would be to seek a stay of that injunction first in the circuit court, and then potentially in the U.S. Supreme Court, while the overall litigation and appeals processes are played out.

It's similar to what just happened with Judge [Matthew] Kacsmaryk and his ruling against the abortion pill, mifepristone. He said the FDA approval was ineffective everywhere. When the Fifth Circuit only partially stayed that ruling, the government went immediately to the U.S. Supreme Court to say, 'please put a stay or suspension on the ruling while the appellate process goes into play.' And the Supreme Court did that. A similar strategy would play out with HISA.

It's a very long way of coming around to your question. I think that the longer the medication program goes on in effect, the more it takes hold and the more states and tracks are operating under it, the stronger the government's argument would be to put a stay or suspension on the effectiveness of any court ruling against HISA by saying, 'it is upsetting a regulatory status quo that people are already relying on.'

TDN: What can you tell us about the two new lawsuits filed in the Eighth and Tenth Circuits? 

LF: They essentially raise the same arguments that have been raised in other cases.

They argue that even with the changes to the statute, it still delegates too much rulemaking authority to the private authority—an argument that the Sixth Circuit rejected. They argue that it violates the appointment process for federal officials. But that one is kind of subsumed by the delegation of authority argument. They argue that the enforcement mechanism [is unconstitutional] because people who are not federal judges get to adjudicate disputes. But that's an argument that basically challenges the entire regulatory system.

TDN: What do you make of the plaintiff's request for an “en banc” hearing in the Sixth Circuit case led by the states of Oklahoma, West Virginia and Louisiana?

LF: I assume they assessed the likelihood of the Supreme Court taking the case and said, 'no, there really isn't a conflict with the Fifth Circuit. So why not try to get the entire Sixth Circuit to reconsider the case? And if they do, fine.' You've got a lot more judges to convince. If they don't, then your clock for appealing to the Supreme Court runs afresh. But I don't think it's very likely that the Sixth Circuit will agree to take the case 'en banc.'

TDN: What are the chances one of these cases will still make it to the Supreme Court?

LF: I think the chances are entirely determined by whether the Fifth Circuit disagrees with the Sixth Circuit.

If the Fifth Circuit overruled Judge Hendrix's ruling and says, 'no, we don't think Congress cured the problem,' then you would have a direct conflict with the Sixth Circuit about the constitutional validity of a federal statute. In that situation, I think the Supreme Court would have to take the case.

But if the Fifth Circuit affirms Judge Hendrix's new ruling, you'll have no conflict in the circuit, and I do not think the Supreme Court would intervene and take the case.

TDN: If the Fifth Circuit affirms the constitutionality of HISA, you're saying it's significantly less likely that the Eighth and Tenth Circuits will find it unconstitutional?

 LF: That's correct. I guess what I'm saying is that if the Fifth Circuit affirms Judge Hendrix's new ruling and holds that the congressional amendment fixed the constitutional problem, the legal game is very close to being over for the opponents of HISA.

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