Supreme Court returns HISA cases to lower courts for review
Monday the Supreme Court sent all three cases regarding the constitutionality of the Horseracing Integrity and Safety Act back down to lower courts for further consideration, citing a ruling the court released Friday.
In short, similar orders called summary dispositions, the Supreme Court vacated previous judgments and granted further judicial review to cases from the Fifth, Sixth and Eighth Circuit Courts of Appeals considering the constitutionality of HISA. However, instead of reviewing the cases itself, the Supreme Court instead sent each case back down to the court of appeals that had previously reviewed it to consider it again after a Friday ruling in another case that tied into one of the core legal principles in the HISA cases. The summary dispositions were previously reported by T. D. Thornton of Thoroughbred Daily News.
Opponents of HISA have argued that HISA violates public and private nondelegation doctrines. The public nondelegation doctrine prohibits Congress from shifting the power to legislate to other agencies, while the private nondelegation doctrine prohibits the federal government from allowing a non-governmental entity to govern.
The Fifth Circuit Court of Appeals ruled HISA unconstitutional under the private nondelegation doctrine in 2022. In response, a section was added to the Horseracing Integrity and Safety Act to explicitly give the FTC authority to "abrogate, add to, and modify" rules governing the racing industry, more explicitly giving that government agency the final say over HISA, which is not a government agency.
The Sixth Circuit Court of Appeals ruled in 2023 that HISA was constitutional once that provision extending FTC authority was added. A 2024 ruling in the Eighth Circuit mirrored the Sixth Circuit, denying an injunction to stop enforcing HISA rules in the circuit.
In 2024, the Fifth Circuit Court of Appeals ruled that HISA's enforcement powers still violated the private nondelegation doctrine even with the explicit FTC oversight, though the rest of the law was upheld. However, under an October ruling from the Supreme Court, a temporary stay kept HISA's enforcement power in force pending further action from that body. Monday's ruling vacated the lower court decisions in all three circuits, including the Fifth Circuit Court of Appeals ruling against the enforcement provision.
The Friday ruling cited by the Supreme Court, in the case of FCC v. Consumers' Research, involves a different instance of a government agency working with a non-governmental entity to perform a function. The court held that the Universal Service Fund, a system of subsidies that promote broader access to telephone and broadband service, does not violate the public and private nondelegation doctrines. The fees are collected and administered by the non-governmental Universal Service Administrative Company, a private nonprofit corporation owned by an association of telecommunications carriers for the purpose of managing the fund.
In the majority opinion of FCC v. Consumers' Research, Justice Kagan says, "as long as an agency thus retains decision-making power, it may enlist private parties to give it recommendations." The majority ruled that the contribution factors set by the USAC were advisory, and the FTC alone had decision-making authority, meaning it was constitutional under the private nondelegation doctrine.
HISA released a statement Monday expressing optimism that its constitutionality will be upheld. "We are encouraged by the Supreme Court’s orders, which preserve the status quo and leave the act undisturbed. HISA remains fully operational and will continue to be the national regulatory body overseeing safety and integrity in Thoroughbred racing while legal proceedings continue."
"In today’s orders, the Supreme Court vacated the judgments of the appellate courts and returned the cases to those courts for further consideration. As a result, the sole adverse decision from the Fifth Circuit (which the Supreme Court had previously paused) is now off the books, and the opinions of the federal district courts – all of which upheld the act’s constitutionality in full – remain valid and operative.
"The Supreme Court’s ruling in FCC v. Consumers’ Research rejected a constitutional challenge under the private nondelegation doctrine. That ruling aligns with what every district court has already said in the HISA cases: the private nondelegation doctrine challenges against the act have no merit."
On the other hand, in a news release Monday, the National Horsemen's Benevolent and Protective Association expressed confidence that HISA will be declared unconstitutional. The National HBPA is a party to the HISA case in the Fifth Circuit Court of Appeals.
"We are confident that the Fifth Circuit, once again, will declare HISA to be unconstitutional." Eric Hamelback, CEO of the National HBPA, said in the Monday statement. "Our well-founded arguments regarding HISA remain unchanged – it is a deeply flawed, unconstitutionally delegates governmental authority to a private corporation and places unfair burdens on horsemen."
"The Supreme Court’s action should not change the prior opinion of the Fifth Circuit holding HISA to be unconstitutional" Peter Ecabert, general counsel of the National HBPA, said in the Monday statement. "HISA is fundamentally different from and more flawed than the statute in the Consumers Research case. Under HISA, the FTC cannot appoint or remove Authority board members; plus the Authority was unlawfully granted sweeping enforcement powers that were not at issue in Consumers Research. I am confident the Fifth Circuit will find HISA unconstitutional a third time. Further, a beneficial development with this Supreme Court action is to permit any cases that have been held in abeyance awaiting Supreme Court guidance freedom to proceed."