Churchill deaths become part of court argument over HISA

Federal influence after a springtime spike in deaths at Churchill Downs around Kentucky Derby time was the new wrinkle Wednesday in familiar, legal arguments over whether the Horseracing Integrity and Safety Authority is constitutional.

The case brought by the National Horsemen’s Benevolent and Protective Association and 20 other plaintiffs against HISA, the Federal Trade Commission and 14 other defendants was heard again by the Fifth Circuit Court of Appeals in New Orleans.

In the wake of the now 13 confirmed horse deaths before and during the spring meet, HBPA attorney Daniel Suhr said HISA leaned hard on Churchill Downs Inc., which he said had followed all the rules and recommendations made by the federal regulator.

“The authority said publicly that it needed the power to be able to shut down racetracks through an enforcement order. That’s a power that the authority has that it has threatened to use against racetracks,” Suhr said. “In that circumstance the racetrack decided to voluntarily suspend (racing) operations, perhaps not unsurprising after its regulator threatened doing something more significant.”

Suhr said that was further evidence HISA overreaches the constitutional limits of its authority as a private agent of the FTC. In other words, HISA was telling the FTC what it would do rather than accepting that the FTC has the last word.

The FTC argued that was not true, saying it has demonstrated time and again it is in charge of HISA in a relationship written into the federal law that is being challenged in this and four other court cases.

Asked by the three-judge panel if HISA really could shut down a racetrack on its own, FTC attorney Joe Busa said, “On the face of the statute, the FTC is in the saddle. It created a rule of the authority.” He later added, “No private entity can wield this kind of power regardless of how subordinate they are, regardless of the degree of supervision the public agency has over them. That is really inconsistent with 100 years of Supreme Court precedent. Almost 100.”

Both Busa and HISA lawyer Pratik Shah were insistent the FTC really is the boss of the racing authority. To that end, they said anyone having a problem with a HISA ruling could appeal to the FTC.

Shah said that was not even the issue the court should be weighing.

“It’s not how the agency exercises its discretion,” Shah said. “It’s whether Congress gave them the tools to do that.”

He cited a legal victory HISA won in the Sixth Circuit Court of Appeals seven months ago in Cincinnati, where Jeffrey Sutton led those judges in endorsing a lower-court decision saying the horse-racing was constitutional.

“(Sutton) said the statute is constitutional, because it empowers the FTC to act whether or not it acts in every hypothetical situation that they want to come out. That’s the fundamental, legal principle here.”

Late in Wednesday’s 66-minute session, Shah made a claim likely to be challenged by HISA critics when he said, “There is still no allegation that any plaintiff has been harmed by the enforcement procedures.” Represented by HBPAs, horsemen who have been fined and suspended since the federal regulations took effect might beg to differ.

The plaintiffs used their four minutes left for rebuttal at the end of the tightly structured hearing to refute the FTC and HISA arguments about an congressional amendment passed last year. That action addressed the Fifth Circuit judges’ November ruling that HISA was unconstitutional, because the FTC could not modify regulations already put into place.

“Congress did not with this meager amendment fix the fatal, non-delegation problems plaguing HISA,” said Billy Cole, an attorney for the state of Texas. He later said, “The upshot is that for years it’s likely to be the case that the authority’s rules govern, not the FTC’s.”

In the end the federal judges were asked to rule on whether the law that was passed by Congress in late 2020 and amended two years later allows HISA to continue its administration of racetrack safety and medication regulations.

“After today’s oral argument, we feel even more confident in our legal argument that it was illegal for Congress to give the regulation of our entire industry over to a private corporation,” NHBPA CEO Eric Hamelback said in a written statement Wednesday night. “We feel that the Fifth Circuit will find HISA unconstitutional once again, and we expect that, if this case goes to the Supreme Court, they will agree.”

“We are confident in our case before the Fifth Circuit and believe the court will affirm HISA’s constitutionality as the Sixth Circuit and other courts did earlier this year,” a HISA spokesperson said in a written statement later Wednesday. “We remain focused on enforcing and improving upon HISA’s racetrack-safety and anti-doping and medication-control programs to advance safety and integrity in the sport.”

Chief judge Carolyn King, 85, who was appointed to the court in 1979 by President Carter, and Kyle Duncan, 51, and Kurt Engelhardt, 63, both named in 2017 by President Trump, were in charge of Wednesday’s session. Engelhardt was the only one involved in the earlier Fifth Circuit hearing. He and Duncan did all the questioning of the five attorneys who made arguments.

A ruling will come on an undetermined date.