Fifth Circuit again rules HISA unconstitutional * The Racing Biz

The National Horsemen’s Benevolent & Protective Association (HBPA) issued the following press release Friday evening, July 5:

Today, the National Horsemen’s Benevolent & Protective Association (HBPA) and twelve state affiliates won their second court victory as the Horseracing Integrity and Safety Act (HISA) was found unconstitutional yet again. The United States Fifth Circuit Court of Appeals ruled unanimously that HISA violated the private non-delegation doctrine. The Court reasoned that Congress unlawfully gave executive governmental power to regulate the horse-racing industry over to a private corporation, called the HISA Authority. It called HISA a “radical delegation” of governmental enforcement powers to a private corporation.

The Court ruled that the Federal Trade Commission (FTC) was given “scant oversight” of the Authority, which could execute many governmental functions on its own. In dismissing a central legal argument from the HISA Authority that HISA was based on the relationship between the Securities and Exchange Commission and the Financial Industry Regulatory Authority, the Court explained that HISA “differs materially from the SEC-FINRA relationship because the FTC lacks any tools to ensure that the law is properly enforced.” The Court of Appeals concluded, “In sum, we agree with the Horsemen that the FTC lacks adequate oversight and control over the Authority’s enforcement power.”

This marks the second time the Fifth Circuit has ruled in favor of HBPA in its lawsuit. On November 18, 2022, the same three-judge panel unanimously ruled HISA unconstitutional. That time, the Court ruled that HISA violated the private non-delegation doctrine because Congress gave the private corporation legislative governmental powers. In response, Congress passed a one-sentence tweak to HISA in an effort to nullify the decision. In March of last year, the Sixth Circuit Court of Appeals ruled that the tweak solved the problem of giving legislative powers to the Authority. Today, the Fifth Circuit agreed with that ruling but found another fatal problem: even after the tweak, HISA still gives unlawful executive powers to the Authority. HISA still violates the Constitution.

In September 2020 Jockey Club general counsel, Marc Summers, called the HBPA’s constitutional objections to HISA an “unfounded attack,” claiming that “HISA is carefully crafted and constitutionally sound” and “has been rigorously vetted,” and concluding that “HISA is on solid footing.” 

Today, Daniel Suhr, president of the Center for American Rights and HBPA lead counsel, responded, “This is a huge victory for horsemen and for the rule of law in this country. Our Constitution protects our freedom by ensuring regulatory power is exercised through transparent and accountable government agencies. The Constitution does not allow HISA to run a private police department that enforces federal law.”

Eric Hamelback, CEO of the National HBPA, concurred, “The courts have proven once again that HBPA was right in our fight to protect horsemen across the country and their constitutional rights. Last year’s tweak to HISA was nothing but a meaningless attempt to appease the industry. HISA has done nothing but impose exorbitant costs and headaches on horsemen and women with little to no benefit for the health of horses. It is time to recognize the reality that HISA is fundamentally broken and cannot be fixed. For the survival of our industry, we must move on to the Racehorse Health and Safety Act (RHSA). Passing the RHSA will bring safety and integrity to the industry.”

Hamelback continued, “RHSA is the much better alternative to the unconstitutional HISA. RHSA works from the ground up and brings all horse-racing industry entities to the table. The goal to achieve uniformity must be initiated with a collaborative, veterinary science based, consensus-driven approach that sets horse racing up for success over the long-term.”

To read the Fifth Circuit opinion, click here.

The RHSA was introduced last year by Rep. Clay Higgins (LA-03), and it establishes an interstate compact that develops and enforces scientific medication control rules and racetrack safety rules, allowing only participating states to export simulcast signals for interstate, offsite betting.

Congressman Higgins stated, “This is a victory for horses, horsemen and for state sovereignty. Constitutional rights are worth fighting for. My RHSA legislation is far superior in every way to the current law. With the help of American horsemen who are actually devoted to the industry and the beautiful horses we love, I will lead the Congressional mission to repeal the unconstitutional law that is currently crippling the horse industry. HISA is going down, and RHSA is standing up.”

Hamelback concluded, “The RHSA will be far less costly for horsemen than HISA because it will be utilizing resources already existing in the states. And it will be constitutional and representational, allowing everyone in the industry a voice in the rulemaking process.”

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