A lawsuit filed by veteran trainer Philip Serpe against the Horseracing Integrity and Safety Authority and its oversight agency, the Federal Trade Commission, appears to be the first of its kind in an ongoing string of litigation against the horse racing regulators.
The suit filed Oct. 17, which revolves around an alleged clenbuterol positive detected in a Serpe trainee after racing at Saratoga Race Course in August, not only claims HISA is facially unconstitutional but also challenges the Authority's constitutionality as applied in his case. In certain circumstances it is possible for a law to be deemed constitutional on its face but illegal as applied.
For more than three years a number of federal courts have dealt with multiple lawsuits seeking to have HISA invalidated. All of those challenges have come up short on the issue of the legality of HISA's rule-making authority. One of them, originating in a Texas federal district court, resulted in the Fifth Circuit Court of Appeals ruling HISA's enforcement powers do not pass constitutional muster as written.
Serpe's lawsuit, which is proceeding in United States District Court for the Southern District of Florida, seeks the same outcome on the enforcement issue—a ruling that it is facially unconstitutional—but adds a new wrinkle by claiming that HISA's enforcement power is being applied in an unconstitutional manner and that he is entitled to a jury trial. Serpe's complaint asks the court to "enter a judgment declaring the Authority’s enforcement action against Serpe under HISA and the HISA Rules, as applied, to be unconstitutional under the private nondelegation doctrine."
The suit alleges HISA's application of its enforcement power obliges it to bring its claim against Serpe via a jury trial in federal court, not in a private hearing as demanded by HISA, in order to avoid a violation of the Seventh Amendment to the U.S. Constitution. That amendment, part of the U.S. Constitution's Bill of Rights, says in a pertinent part, "In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved..."
Serpe's lawsuit cites the recently decided landmark case of Securities and Exchange Commission v. Jarkesy in which the U.S. Supreme Court decided George Jarkesy Jr. and his financial firm, which were accused of fraud, were unlawfully deprived of a jury trial on the penalties he faced. An administrative law judge had adjudicated the case. The high court's ruling upended a disciplinary scheme in the financial system that had been in place for decades.
Among the avenues of relief sought in Serpe's complaint is a request that a provisional suspension imposed by the Authority against Serpe be dissolved.
"Serpe has been injured, and will continue to be injured, as a direct and proximate result of the Authority’s delegation under HISA to enforce an alleged...violation outside an Article III court," the complaint alleges. "Indeed, Serpe’s right to a jury trial under the Seventh Amendment has been denied and will continue to be denied until the Authority is enjoined from taking further enforcement action against Serpe."
The existence of the Serpe case was first reported Oct. 18 by Thoroughbred Daily News. In that story HISA declined a request to comment.
