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Fifth Circuit Again Slaps Down HISA, FTC

Language in the law authorizing HISA was amended in Congress.

Dustin Orona Photography

The Fifth Circuit Court of Appeals on Jan. 31 flatly denied a request by the Horseracing Integrity and Safety Authority and the Federal Trade Commission to put the brakes on the appellate court's ruling that HISA is facially unconstitutional.

After the adverse ruling was handed down by the Fifth Circuit in November, HISA and the FTC had a door opened to seek relief when Congress amended the Horseracing Integrity and Safety Act to give the FTC more authority to oversee HISA regulations and enforcement in an effort to meet the Fifth Circuit's objections to the original legislation.

Once the amendment was signed into law, HISA and the FTC asked the panel to vacate its ruling and for a rehearing. The Fifth Circuit panel was unmoved.

"The motion to vacate the panel's opinion is denied," wrote the panel in similar two-paragraph orders in a pair of cases challenging HISA originally brought in federal district courts in Texas and Louisiana. "The motions for panel rehearing are denied. The case is remanded to the district court for further proceedings. Any further appeal will be to this panel. The mandate shall issue forthwith."

The orders mean the Fifth Circuit will not at this time alter its opinion in light of the statutory amendment.

Tuesday's decision also means that a preliminary injunction against enforcement of HISA rules issued by a federal district court in Louisiana, an injunction that had been partially stayed by the Fifth Circuit until it held HISA unconstitutional in November, remains in full force and effect. The injunction prohibits the imposition of HISA rules in Louisiana and West Virginia. HISA has stayed out of the horse racing business in the two states since the November ruling.

The case in Texas was brought by the National Horsemen's Benevolent and Protective Association and state affiliates. The federal district court for the Northern District of Texas ruled HISA constitutional, but the ruling was reversed by the Fifth Circuit.

The case brought by Louisiana, West Virginia, and others in the Western District of Louisiana alleged violations of the Administrative Procedures Act. That litigation was cut short when the Fifth Circuit made its ruling in the case that originated in Texas, but it would not be surprising to see the Louisiana case go forward. It challenges HISA on grounds different than those asserted in the Texas case.

Another case challenging HISA is pending in the Sixth Circuit Court of Appeals. A lawsuit brought by the state of Oklahoma and others in federal court in the Eastern District of Kentucky was denied and appealed. A ruling is expected from the Sixth Circuit in due course.

A HISA spokesperson told BloodHorse, "In the aftermath of the recent Congressional amendment, and without opining on the newly amended HISA law, the Fifth Circuit has sent the case back to the district court.  Outside Louisiana and West Virginia, the Authority will continue enforcing the Racetrack Safety Program and preparing for the implementation of its Anti-Doping and Medication Control Program on March 27, subject to the Federal Trade Commission’s approval of the rules."

"We view this as additional strong evidence as to the valid concerns we have been raising all along and this should remind everyone that constitutionality isn’t optional," National HBPA CEO Eric Hamelback said in an email. "We have made it very clear that the one-sentence so-called fix tucked into Congress’ must-pass year-end spending bill did not address all the legal questions created in the HISA corporation’s enabling legislation.

"With that said, it’s extremely gratifying that the Fifth Circuit Court of Appeals has denied the HISA corporation’s motion to vacate the Appellate Court’s original unanimous opinion that found the Horseracing Integrity & Safety Act unlawful....

"To be clear, absolutely nothing has changed in the Fifth Circuit Court of Appeals since the FTC originally rejected these rules, and the FTC must wait on the outcome of ongoing litigation to be resolved. Along with a bipartisan group of U.S. Senators and Congressmen, we believe the FTC must reject these again based on the unconstitutional uncertainty."

The cases will now go back to their respective federal district courts for further handling, including consideration of the the amendment to HISA, making it unlikely the U. S. Supreme Court will be asked by any of the parties to step in at this juncture. In the words of the Fifth Circuit orders entered today, "Any further appeal will be to this panel."

--Byron King also contributed to this story.