Just over a month before the race-safety component of the Integrity and Safety Act (HISA) went into effect, two separate lawsuits cast a shadow over the program’s operational and legal future.
One of the suits that challenged the constitutionality of HISA was submitted by the National Horsemen Protection and Benevolence Association (NHBPA).
In March, Judge James Wesley Hendrix of the United States District Court dismissed the case’s conclusion that while HISA pushes the boundaries of public-private partnerships, the legislation it built remains within current constitutional limits. onion. NHBPA then filed an appeal with the Fifth Circuit Court of Appeals.
Another federal lawsuit was filed by the state of Oklahoma in the United States District Court, Eastern Division of Kentucky. That case has yet to be heard.
To better understand the status of the two cases, along with the implications of the HBPA ruling, TDN spoke with Bennett Liebman, government attorney in residence at Albany Law School’s Government Law Center. Previously, he served as deputy secretary for games and racing for Governor Andrew Cuomo and a member of the state’s Racing and Payroll Board.
The biggest lesson from the conversation? Liebman said that a ruling from earlier this week in the Fifth Circuit Court of Appeals regarding the Securities and Exchange Commission (SEC) essentially threw HISA into a curve.
In summary, the Fifth Circuit judges ruled that the congressional authorization of legislative power to the SEC was unconstitutional because it failed to “develop an intelligible principle by which the SEC would exercise its powers.” assigned force”.
Replace the SEC with the Federal Trade Commission (FTC) – the government agency with ultimate oversight over HISA – and the ruling makes sense for the HBPA case as it awaits trial before the Thursday Circuit , Liebman said.
TDN: Where do the two lawsuits stand now?
BL: The national HBPA case has been appealed to the 5th Circuit. The other case, the Oklahoma case, remains before the district court in Kentucky.
TDN: You mentioned that there was a new ruling in Round 5 that you said could be very problematic for HISA. What is that case and why could it matter?
BL: The fifth round of a decision in Jarkesy’s case against the Security and Exchange Commission found that Congress unconstitutionally delegated legislative powers to the SEC by failing to lay out an understandable principle. under which the SEC can exercise its powers. These powers have traditionally been considered constitutional.
Now, the mandate for HISA – what appears to be a non-governmental agency – is actually broader than that of the SEC. So at least for the Fifth Circuit, often considered the most conservative of the federal circuits, the constitutionality of HISA will face a very, very uphill battle.
By this, I mean that their standard of authorization will be very, very difficult for HISA advocates to maintain. HISA will have a tough match in the fifth round.
TDN: For those like me and some of our readers who are scratching their heads about the easy-to-understand principle, can you point out what the easy-to-understand principle is, and why is it important?
BL: Since 1928, the U.S. Supreme Court has said that while only Congress can make laws, Congress can also delegate its powers to the president and to administrative agencies. So as long as there is an understandable principle by which the president or administrative agencies act, the authorization is valid. This standard should not be considered a difficult requirement. Since the Depression, the Supreme Court has not rescinded the rule of not making an intelligible principle.
Often, in the world of horse racing, a delegation “in the best interests of horse racing” is enough at the government level to become an understandable principle. But this [new ruling] is a very in-depth look at limiting authorizations [by Congress]. And it could, especially with regards to the HBPA case, prove that HISA is problematic.
TDN: What are you saying essentially that this ruling can serve as a precedent when the Fifth Court hears the HBPA’s appeal?
BL: Yeah sure. This is a very broad ruling that essentially limits Congressional authorization to agencies, as well as to non-governmental agencies affiliated with [government] like HISA with FTC.
It can really cause trouble for HISA. Other circuits may disagree. But at least at the fifth Microchip level, this has now become a very difficult case for HISA constitutional advocates.
TDN: Could this prove the death knell for HISA? Or are there changes they can make to adjust and arrange its fix, framework?
BL: They may try to adjust. Even if [courts] find HISA unconstitutional, they can stay. They might try to find some way to get it to the Supreme Court as quickly as possible. Obviously this isn’t the death knell, but it’s really troubling.
TDN: Regarding the HBPA’s appeal, what are some of the potential outcomes?
BL: They can confirm the decision of the trial court. They may find it completely unconstitutional. They can find parts of it unconstitutional and cut those parts off from the rest of the law. Look [Fifth Circuit] yesterday’s decision really has the potential to cause huge damage to HISA. I don’t think I can understand it.
TDN: Can the SEC case or the HBPA case finally be brought before the Supreme Court?
BL: They certainly can, and if they do, we can better understand the Supreme Court’s position on delegating administrative powers and agencies like HISA.
In fact, a majority of Supreme Court justices are now opposed to testing the intelligibility principle, according to which most delegations have been deemed constitutional for the past 85 years. And so, you know, you don’t know what could come out of the Supreme Court review of HISA.
TDN: But again, are there any fixes that can be made to HISA’s structural framework?
BL: My thinking is that even if the Supreme Court or the appellate court finds aspects of HISA unconstitutional, it can be rectified with certain legislative actions.
Currently, the FTC does not have the power to issue its own rules about drugs and safety. You can give them [that] power. You can empower the FTC over the terms and conduct of members of HISA. You can add multiple, independent, non-affiliated members to the agency.
The remaining problem, of course, is that we don’t have a sound congressional system that can make these corrections to keep HISA going. So, as always in the law, we just don’t know what will happen next.
TDN: Did this ruling from yesterday or the previous decision in the HBPA case have any impact on the Oklahoma case?
BL: The Kentucky court reviewing the Oklahoma case could certainly cite the lower court’s decision in the HBPA case and use that as a precedent to uphold HISA. I don’t think they will go into the Fifth Street decision on the Securities and Exchange Commission.
TDN: Has a date been set for the 5th Street appeal hearing?
BL: Not that I can determine. I am limited to a very limited review of the documents that have been submitted. I mean, the parties to the case will know what’s going on.
TDN: Before the SEC’s decision this week, which of the two cases, the Oklahoma case or the HBPA case, do you think is most likely to go before the Supreme Court?
BL: It seems the Oklahoma case is perhaps the more important one. Considering all parties involved in that case, including all amicus curiae summaries submitted by everyone, from the sponsors of the law, the Jockey Club, the famous owners, Famous breeders, against the other side are a lot of states and the United States Association of Boots. I would have thought there would be more substantial legal interests in the Oklahoma case.
I think I pointed out in my speech to ARCI that the name of the case was Oklahoma against the United States, but there’s actually more to it than the characters in the musical, Oklahoma.
TDN: But now you’re saying all bets are off thanks to yesterday’s verdict?
BL: It’s correct. I mean, as far as I can tell, this is really a big 5th Street decision to limit how Congress allocates power to the administrative agencies.
TDN: As you said earlier, the Supreme Court’s current makeup is there…
BL: Majority is denied at various points – and that does not include justice [Amy Coney] Barrett – a reliance on an understandable standard of principle. But will they make it all the way to the Fifth Round? Who knows?
TDN: If so, this could take years to happen, right? What happens to HISA in the meantime?
BL: Oh my God, who knows? That is the law; It’s not something you should bet on.
